Bank Aval Overview and Strategic Considerations

Transcription

1 Bank Aval Overview and Strategic Considerations Herbert Stepic, CEO October 2005 Unique Consolidation Opportunity in a High Growth Country has very high potential: Population: ~ 47.3 mn Real GDP growth rate of 12% in 2004; more than 6x rate of the Eurozone Strong and increasing demand for financial products Overview of Ukrainian banking sector (2004): 19.6 bn total assets 182 banks Market share of foreign owned banks ~ 7% Average interest spread 7.8% Bank assets/gdp only 43% Source: Raiffeisen Research Slide 42 Investor's Handbook Bank Aval Presentation Page 23

2 Has Considerable Catch Up Potential Credits to households, in % of GDP BH UA BG RO SM BY RU HR PL SK HU CZ SL Eurozone 5,000 10,000 15,000 20,000 25,000 GDP per capita (at Purchasing Power Parities), in Data as of 2004 Source: Local central banks, Raiffeisen RESEARCH Slide 43 Strong banking asset growth in Total banking assets, in % of GDP Eurozone (2004): 202% 73.9% 78.1% 58.3% 41.3% 43.4% 33.4% 42.5% 23.6% CE SEE CIS Russia Source: Local central banks, Raiffeisen RESEARCH Slide 44 Investor's Handbook Bank Aval Presentation Page 24

3 Accelerating Asset Growth Total banking asset growth, % yoy in bn 45% 35% 25% 15% 5% 28.5 bn bn 11.5 bn bn HY 2005 Russia Source: Local central banks, Raiffeisen RESEARCH Slide 45 Creating Value Through a Perfect Strategic Fit With and Bank Aval we will form the No. 1 banking group in Fast growing banking sector with a total asset growth of over in 2004 Combining Raiffeisen s strong corporate banking franchise with the superior retail position of Bank Aval One of the largest branch networks in the country Key Financials 2004 ( mn) Raiffeisen Aval * Total Assets 627 1,573 Loans to Customers 475 1,098 Deposits from Customers 257 1,167 Equity (incl. consolidated profit) Operating Income Profit before Tax Profit after Tax Cost/Income ratio 35.5% 71. RoE pre-tax 32.1% 32.6% RoE post-tax 23.4% 22.9% A solid retail customer base of approximately 3 mn retail customers Number of Outlets 14 1,378 Number of Employees ,933 * In accordance with IFRS standards, Year 2004 audited by Deloitte & Touche Slide 46 Investor's Handbook Bank Aval Presentation Page 25

4 Transaction Details Purchase of 93.5% of the Joint Stock Post Pension Bank Aval for $ 1,028 million (Net cost of acquisition $ 999 million) Sold by 12 former managers of Bank Aval Listed on the Kiev Stock Exchange Undertaking to purchase shares from remaining minority shareholders Signing date: 20th August 2005 Closing date: Not later than 15th December 2005 Escrow account for indemnities Slide 47 A Short History of Bank Aval 1992 Bank Aval, established in the form of a public joint-stock company with 3 branches 1994 Bank Aval won the tender to service the state Pension Fund and Ukrainian Post Office 1994 Underwent first international audit 1996 Bank Aval's own processing centre UPC commenced operations 1996 Bank Aval won the tender for providing services to the State Customs and Excise Authority 1997 Western Union recognised Bank Aval as its best partner in Eastern Europe 2002 Entered the list "Top 100 banks of Central and Eastern Europe" of the rating agency Standard & Poor's The International magazine of financial markets Euromoney in its annual rating of best banks of the world "Awards for Excellence 2003" named Bank Aval the Best Bank of 2005 IFC and EBRD due diligence and credit facilities (IFC subordinated loan) Source: Aval Bank Slide 48 Investor's Handbook Bank Aval Presentation Page 26

5 Dynamic Growth of Total Assets, Deposits and Loans ($ mn) Total Assets Customer Deposits Customer Loans HY 2005 Source: IFRS and local accounting standards Slide 49 Achieving Leadership in Retail & Corporate Banking (in $ mn) Corporate 2004 Retail 2004 Loans* PrivatBank State Exim Bank Ukrsibbank Oschadny Deposits* Ukrsibank Oschadny State Exim Bank 346 Ukrsibank 266 Source: Association of Ukrainian Banks * Note: Excluding Prominvest as data is not publicly available Slide 50 Investor's Handbook Bank Aval Presentation Page 27

6 Bank Aval Aided Brand Recognition No. 1 at almost Bank Aval Oschadbank Nadra Prominvestbank Pravex-bank Source: GFK Group, Research of Banking Services Market for Personal Clients Winter Spring UkrSibbank Arkada Alfa-bank Mriya Ukrprombank Finance and Credit Ukreximbank Slide 51 Bank Aval Unaided Brand Recognition No. 1 at over Bank Aval Oschadbank Prominvestbank Nadra Pravex-bank Source: GFK Group, Research of Banking Services Market for Personal Clients Winter Spring UkrSibbank Arkada Alfa-bank Mriya Ukrprombank Finance and Credit Ukreximbank Slide 52 Investor's Handbook Bank Aval Presentation Page 28

7 Trust Survey: 75% of Respondents Trust Raiffeisen 8 7 Bank Aval Raiffeisen Ukreximbank Source: Independent Sociological Centre in, 2005 Ukrsibbank Nadra Forum ING Savings Bank Prominvest Finance & Credit First Ukr. Int. Agrocombank Pivdenny Khershatik Slide 53 Next Steps In the transformation phase, which will last months, the two banks will concentrate on their strengths. During this period the back office and support functions of the two banks will be combined step-by-step: will focus on: corporate, treasury and existing VIP clients Bank Aval will focus on: SME and private individuals Transformation steps: Strategy, organisational set-up, earnings improvement initiatives, efficiency improvement initiatives Full operational merger considered in 2007 or 2008, basic options to be evaluated in the next few months Slide 54 Investor's Handbook Bank Aval Presentation Page 29