BANK URALSIB IH2008 Financial Results under IFRS Analysts presentation

Transcription

1 BANK URALSIB IH2008 Financial Results under IFRS Analysts presentation Moscow, October 27 th, 2008.

2 Disclaimer The statements and financial information of OJSC BANK URALSIB (including, for avoidance of doubt, OJSC BANK URALSIB as well as its predecessor banks, including but not limited to Avtobank-NIKoil Bank, NIKoil IBG Bank, Bryansky Narodny Bank, Kuzbassugolbank, Ural-Siberian Bank), have been derived from audited and/or un-audited consolidated and unconsolidated accounts for BANK URALSIB, as these were available at the time of preparation of this document. Quarterly updates are based on management accounts. Some statements and/or other information included in this document may be deemed to be forward looking within the meaning of United States federal securities laws. Forward looking statements include statements concerning BANK URALSIB s plans, objectives, goals, strategies, and future operations and performance, and the assumptions underlying these forward looking statements. Sometimes these statements will use words such as anticipates, estimates, expects, believes, intends, plans, may, will, should, and other similar expressions. These forward looking statements are used widely in this presentation, especially in the sections that include plans, outlook, projections, trends and forecasts. These statements are not guarantees of our future performance. BANK URALSIB has based these forward looking statements on the view of its management only as of the date that they initially were made with respect to future events and financial performance. These views reflect the best judgment of the BANK URALSIB s management but involve uncertainties and are subject to certain risks and uncertainties, the occurrence of which could cause the actual results to differ materially from those projected in the BANK URALSIB s forward-looking statements. Factors that could cause actual results to differ materially from current expectations include, without limitation, the BANK URALSIB s ability to implement its strategic initiatives, economic, political and market conditions, government regulation, interest rate risk and competition. Given these uncertainties, you should not rely on forward-looking statements. BANK URALSIB expressly disclaims a duty to provide updates to any forward-looking statements, and the estimates and assumptions associated with them, to reflect events or circumstances or changes in expectations or the occurrence of anticipated events after the date they initially were made. The financial information contained herein has been derived from un-audited [consolidated and unconsolidated] accounts for OJSC "BANK URALSIB" (the "Bank") as prepared independently by the Bank, as these were available at the time of preparation of this document "URALSIB" means the group comprising OJSC "Financial Corporation URALSIB" and each of its subsidiaries. 2

3 BANK URALSIB. Profile BANK URALSIB lh2008 financial results under IFRS Appendix 3

4 Financial Corporation URALSIB Financial Corporation URALSIB Subholdings Commercial banking Leasing Private banking (1) Asset management Investment banking Retail banking Leasing Private banking Asset management Brokerage Corporate banking Regional business Debt collection Mutual funds Pension funds management Private equity Corporate finance (ECM, DCM) Analytic surveys Note: (1) allocated as separate subholding in

5 Bank Profile Financials lh2008, as of June 30, 2008 bln. rub. Assets Equity 50.8 Loan portfolio (gross) (1) Customer accounts (2) Net interest income (3) 12.9 Net fee and commission income 1.8 Net income 2.4 Infrastructure as of June 30, 2008 Sales points (4) 578 ATMs 1,908 POSs (th.) 8.5 Credit cards (mln.) 3.5 Personnel (4) 14,990 BANK URALSIB is one of the Russian leading national financial institutions. It consolidates 12 banks. Established on September 20, 2005, through the merging of 5 banks : OJSC UralSib, OJSC JSCB AVTOBANK-NIKOIL, CB Bryanskiy Narodny Bank (OJSC), IBG NIKoil (OJSC), OJSC JSCB Kusbassugolbank OJSC JSCB Stroyvestbank established through integration of 6 regional banks in Establishment of mono-product mortgage bank OJSC Bashprombank together with the Bashkortostan Republic. Headquarters in Moscow, distant office in Ufa. Full product range for retail and corporate customers. Participation in the largest regional social projects. Credit ratings Moody s Ва Standard & Poor s ВВ Fitch Ratings В Note: (1) before allowance for impairment; (2) corporate and individual accounts; (3) before provisions for loan losses (4) in accordance with IFRS consolidation principles, including OJSC BANK URALSIB, JSC AKB Stroyvestbank and URALSIB Leasing company 5

6 Sales network 46 regions 3 by sales points in Russia Sales points (1) St. Petersburg and North-West Siberia and Far East 5 71 Moscow and Central Region OJSC "URALSIB" JSC AKB Stroyvestbank Leasing Banks by sales points (1) Sberbank 20,476 Rosselkhoz 1,367 URALSIB 578 South region RosBank Bank of Moscow URSA Uralskiy region Raiffeisen 246 Azerbaijan Promsvyazbank Gazprombank Privolzhskiy region Vozrozhdenie 174 Note: * as of

7 Key events in IH2008 June 2008 May 2008 The AGM elected the new Supervisory Board of the Bank. Standard & Poor s upgraded the Bank s credit rating to BB-, outlook stable. Bank URALSIB mandated BayernLB, Credit Suisse, Emirates NBD, ING Bank and National Bank of Oman to arrange USD 150 mln. syndicated loan facility. April 2008 Leasing company URALSIB signed USD 27 mln. syndicated loan facility. Leasing company URALSIB secured the next tranche totaling USD 39.4 mln. of USD 200 mln. syndicated loan facility. The medium-term and long-term strategy of the Bank developed jointly with The Boston Consulting Group consultants was approved. Financial Corporation URALSIB was divided into five subholdings: commercial banking, leasing, private banking, asset management, investment banking. March 2008 January 2008 URALSIB CAPITAL s analysts team is in top-10 (EMEA) by Institutional Investor. URALSIB Bank 121 recognized as the Best Private Bank in Russia. Leasing company URALSIB signed USD 20 mln. syndicated loan facility (arranger - VTB Bank (Austria) AG). 7

8 Key events after reporting date September 2008 July 2008 OJSC Financial Corporation URALSIB acquired 4.1% of Bank URALSIB. Deutsche Bank and Morgan Stanley acquired 2.1% each of Bank URALSIB. The EGM approved KPMG as the new auditor of the Bank. Bank URALSIB secured USD 313 mln. syndicated loan facility. Bank URALSIB increased its stake in the share capital of Stroyvestbank to 86.77%. The bonds issued by Leasing company URALSIB were placed on the MICEX in the volume of RUB 5 bln. 8

9 Current status of shareholding structure Shareholding structure of Bank URALSIB before До 5 September, сентября 2008 after После September, 5 сентября Companies of the URALSIB Financial Corporation Republic of 90.4% Bashkortostan 94.6 % Free float September 5, 2008, OJSC Financial Corporation URALSIB acquired 4.1% of Bank URALSIB minority stake, earlier belonging to the Republic of Bashkortostan. September 2008, Morgan Stanley (2.1%) and Deutsche Bank (2.1%), the Bank s consultants on capital markets, became the shareholders of Bank URALSIB. At present OJSC Financial Corporation URALSIB and other companies of the Financial Corporation URALSIB own in aggregate 94.6% of the Bank's share capital. 9

10 BANK URALSIB. Profile BANK URALSIB lh2008 financial results under IFRS Appendix 10

11 Consolidation principles Financial Reporting Standards IFRS-8 Auditor KPMG (2) Reporting Currency Russian Rubles Annual Financial Statements from 2004 Interim (semi-annual) Financial Statements from 2007 Interim (quarterly) Financial Statements from 2009 Company Ownership, % Country Date of incorporation Date of receiving control OJSC «BANK URALSIB» OJCS AKB «Stroyvestbank» 86.77% Russia (1) LLC Uralsib Leasing Company 87.61% Russia LLC Region Leasing Ufa 86.73% Russia LLC Region Leasing Consult 86.73% Russia NIKOIL Leasing company LLC 100% Azerbaijan Note: (1) August, 2007, witnessed the completion of the reorganization in the form of 6 regional banks unification on the basis of OJSC AKB Stroyvestbank (OJSC Bank Dorozhnik, OJSC AKB Evrazia, OJSC Tumenprofbank, OJSC Volgoinvestbank and OJSC AKB Dzerjinsky ), (2) The Bank s EGM held on September 9, 2008, approved KPMG as the new Auditor of the Bank in accordance with the plan of auditor rotation. 11

12 Key tasks/achievements in IH2008 Tasks Indicators Increasing the share of core banking income in the overall banking income 2 Change in assets structure, credit portfolio and customer accounts growth, lowering dependence on volatile financial instruments Operating expenses coverage by core banking income Equity securities (1) /total assets Loan portfolio (2) /total assets 142.3% 1.1% 67.8% 120.1% 2.9% 66.5% 96.8% 2.5% 66.6% Customer accounts/total liabilities 73.1% 65.8% 65.9% 3 Administrative and operating expenses control Cost-to-Income (C/I) 59.6% 78.3% 125.8% Note: (1) including equity investments and share participation in limited liability companies, (2) including corporate and retail loans, as well as net investment in finance leases 12

13 Key financials mln. RUB IH2008 IH2007 Change, % Income statement Pre-tax income 3,293-3,453 - Net income 2,411-2,849 - Net operating income 11,833 4, % Net interest income after provision for loan losses 10,377 4, % Net fee and commission income 1,772 2,284-22% Net trading loss from financial instruments, securities, foreign currencies and precious metals ,775 81% Other net operating income % Operating expenses 8,540 7,468 14% Balance sheet As of June 30, 2008 As of Dec 31, 2007 Change, % Assets 421, ,714 12% Equity 50,755 48,242 5% Loan portfolio (gross) (1) 271, ,404 14% Corporate loans 194, ,587 11% Loans to individuals 76,928 63,816 21% Securities 48,563 47,379 3% Debt securities 37,489 30,973 21% Equity securities 4,467 10,787-59% Mutual funds 2,856 1,805 58% Promissory notes 3,751 3,814-2% Investments in finance leases 26,261 20,480 28% Customer accounts 270, ,012 26% Corporate accounts 196, ,377 36% Individual accounts 74,330 70,635 5% Note: (1) before provision losses 13

14 Key financial ratios IH2008 IH2007 Profitability Return on assets (RoA) (1) 1.2% -1.8% Return on equity (RoE) (1) Cost/Income (C/I) 9.7% 59.6% -12.9% 125.8% Core banking income (2) /operating expenses 142.3% 96.8% Net interest margin 7.5% 5.6% Note: (1) figures annualized, (2) including net interest income after allowance for impairment and net fee and commission income 14

15 Assets structure Assets (bln. rubles) Assets structure Loans to banks Other assets Debt securities (1) Equity securities (2) % -41.3% % -59.0% +13.2% quick assets (1) loans to customers (2) debt securities (3) equity securities 1.1% 2.9% 2.5% 13.3% 13.9% 13.4% 10.5% 9.8% 10.4% 59.8% 66.7% 66.6% Loans to customers net (3) % loans to banks 0.8% 0.6% 3.3% Quick assets other assets 6.6% 6.3% 7.4% Note: (1) including bonds, promissory notes and mutual funds; (2) including share participation in limited liability companies and equity investments; (3) include retail and corporate loans, as well as investments in finance leases after allowance for impairment 15

16 Liabilities Liabilities (bln. rubles) Liabilities structure % % Other liabilities Borrowed funds (1) Customer accounts Banks accounts 19.8% 23.8% 26.3% 65.9% 70.2% 73.1% Banks accounts Borrowed funds (1) 5.5% 6.0% 4.7% Customer accounts Other liabilities 1.7% 1.8% 1.3% Note: (1) including promissory notes, certificates of deposit and issued debt securities (bonds and CLN) 16

17 Securities portfolio Securities portfolio (bln. rubles) (1) OJSC NK Lukoil shares in securities portfolio (bln.rubles) + 2.5% -75.3% Mutual funds Promissory notes Shares (1) % 7.9 Debt securities % П % 4.0% Share in securities portfolio Note: (1) including equity securities and share participation in limited liability companies 17

18 Operating expenses Core banking income covers operating expenses (bln. rubles) Operating expenses structure (2) (bln. rubles) 142% % % % +48.7% Other expenses Administrative expenses % Personnel expenses lh2007 lh2008 lh2007 lh2008 core banking income (1) (2) operating expenses Note: (1) including net interest income after allowance for impairment and net fee and interest income; (2) including personnel expenses, administrative and other expenses 18

19 Operating efficiency Operating income structure (bln.rubles) Net income (bln.rubles) % Other non-interest income (2) Net fee and commission income Net interest income (1) 4.0 0,8 2,3 5,0 +108% ,1 1,8 10,4 IH Net gains/losses from trading securities -4,0-1,5 IIH2007 lh2008 lh2007 lh pre-tax income net income Note: (1) after allowance for impairment (2) including net gains from foreign currencies, precious metals and revaluation of property 19

20 Net income Dupontanalysis IH2008 IH2007 Net interest income 3.24% 2.17% Allowance for impairment -0.63% -0.61% Net fee and commission income 0.45% 0.72% Core banking income 3.05% 2.28% Operating expenses -2.15% -2.36% Net core banking income 0.91% -0.08% Gains/(losses) from trading securities -0.37% -1.26% Other volatile income 0.29% 0.24% Pre-tax income 0.83% -1.09% Income tax -0.22% 0.19% Net income 0.61% -0.90% 20

21 Credit portfolio Credit portfolio (bln.rubles) (1) Credit portfolio structure %* 64.1%* corporate loans retail loans 66.8%* Individuals Trading enterprises Financial services Real estate construction Manufacturing Food processing Machine-building Gold mining Agriculture Transport Other (2) 1.6% 1.8% 1.1% 1.1% 1.0% 1.1% 4.0% 3.6% 3.9% 4.6% 2.4% 3.0% 9.6% 11.4% 7.9% 8.4% 15.0% 15.4% 26.7% 28.3% 23.8% 26.5% * Share of loans to individuals + SME in credit portfolio % 6% share of 10 largest third-party borrowers in credit portfolio Note: (1) after allowance for impairment (2) including industries with the share < 1% - telecommunications, government and municipal bodies, services, metal mining and refinery, light industry, metallurgy, chemical, energy industry and leasing 21

22 Customer accounts Customer accounts (bln. rubles) Customer accounts structure % corporate customers 67.1% % % 32.9% % retail customers 27.5% current accounts deposits % 18% Share of 10 largest customers in total customer accounts 45% 40% Deposits share in total customer accounts 22

23 Corporate banking Loans to corporates (bln.rubles) (1) Corporate accounts (bln.rubles) % % Budget and state companies % Private companies % П2008 current accounts deposits 52% 54% 56% 49% SME share in loan portfolio Deposits share in total customer accounts Note: (1) before allowance for impairment 23

24 Retail banking Loans to individuals (bln.rubles) (1) Individual accounts (bln.rubles) % % % % 24.6% % 48.0% 43.8% П П Mortgages Consumer loans Car loans Cards Others current accounts deposits 67% 72% Deposits share in total individual accounts Note: (1) before allowance for impairment 24

25 Funding Loan portfolio coverage by customer accounts (bln.rubles) Funding structure (bln.rubles) time deposits and loans % 104.4% (2) syndicated loans 14.9% 31.4% % promissory notes and certificates of deposits (3) subordinated loan 6.2% 5.8% 15.1% 13.9% current accounts 5.9% 4.6% repurchase agreements 0.5% 2.9% П Customer accounts Loan portfolio (1) (4) 5.1% Leasing (CLN, bonds) 2.7% Note: (1) after allowance for impairment (2) including loans to Russian, OECD and other countries banks and non-credit institutions (3) $US 250 mln. at par value (4) Ruble bonds and CLNs (4) 25

26 BANK URALSIB. Profile BANK URALSIB lh2008 financial results under IFRS Appendix BANK URALSIB lh2008 financials BANK URALSIB in the Russian banking system 26

27 Income statement mln. rubles IH2008 IH2007 Change, % Interest income 21,452 13, % Interest expenses 8,573 6, % Net interest income 12,879 6, % Net interest income after allowance for impairment 10,377 4, % Fee and commission income 2,582 2, % Fee and commission expenses % Net fee and commission income 1,772 2, % Net trading loss from financial instruments -1,499-4, % Net realised gain from available-for-sale securities % Net gain from foreign currencies % Net gain from operations with precious metals % Other non-interest income % Total other non-interest income , % Net operating income 11,833 4, % Operating expenses 8,540 7, % Personnel expenses 4,241 4, % Administrative expenses 3,967 2, % Other expenses % Income before tax 3,293-3,453 - Income tax Net income 2,411-2,849-27

28 Balance sheet mln.rubles Change, % Assets Quick assets 55,937 51, % Credit institutions accounts 3,306 2, % Securities portfolio 48,563 47, % Debt securities 37,489 30, % Equity securities 4,467 10, % Mutual funds 2,856 1, % Promissory notes 3,751 3, % Loans to customers 259, , % Loans to corporate entities (gross) 194, , % Loans to individuals (gross) 76,928 63, % Less: Impairment allowance -12,467-10, % Derivatives 677 1, % Investment in finance leases 26,261 20, % Other assets 27,199 22, % Total assets 421, , % Liabilities Amounts due to customers 270, , % Amounts due to corporate customers 196, , % Amounts due to individuals 74,330 70, % Amounts due to banks 73,202 85, % Derivatives % Other borrowed funds 20,273 19, % Other liabilities 5,455 4, % Total liabilities 370, , % Equity 50,755 48, % Total equity 421, , % 28

29 BANK URALSIB. Profile BANK URALSIB IH2008 financial results under IFRS Appendix BANK URALSIB IH2008 financials BANK URALSIB in the Russian banking system 29

30 Key goals for 2009 Business development: Retain market share in the target markets Increase and stabilize revenues via: assets structure diversification and optimization by reducing volatile instruments and high risk loans share further increase of loans to SME and individuals share in the credit portfolio Implement new public-private partnership projects Increase of operating efficiency: Efficiency improvement of the Bank s regional network improvement of sales and personnel performance cost reduction by reducing unprofitable sales points and operating expenses Implementation of a comprehensive cost reduction program: Risk management: reduction of administrative costs in Headquarters by simplifying the organizational structure and eliminating redundant and duplicating functions reduction of operating expenses in the regional network investment program reduction item-by-item cost reduction reduction of problem assets by increasing quality of underwriting reduction of assets and liabilities concentration risks 30

31 Bank URALSIB: position in the Russian banking system (I) Market share: assets Market share: capital Sberbank VTB Gazprombank Rosselkhozbank Bank of Moscow Alfa Bank Raiffeisenbank Unicredit VTB 24 Rosbank Bank URALSIB Promsvyazbank MDM Bank URSA Bank Russkiy Stansart Vozrozhdenie 2,7% 2,5% 2,5% 2,0% 1,9% 1,9% 1,8% 1,7% 11 1,6% 1,3% 1,0% 0,7% 0,6% 3,9% 24,4% 7,7% Sberbank VTB Gazprombank Alfa Bank Bank of Moscow Unicredit Raiffeisenbank VTB 24 Bank URALSIB MDM Bank Rosselkhozbank Rosbank Promsvyazbank Russkiy Standart URSA Bank Vozrozhdenie 1,9% 1,7% 1,6% 1,5% 1,5% 1,5% 9 1,2% 1,2% 1,2% 1,1% 0,9% 0,7% 0,5% 3,6% 24,6% 12,3% Market share: loans Market share: deposits Sberbank VTB Gazprombank Alfa Bank Bank of Moscow Rosselkhozbank Unicredit Raiffeisenbank VTB 24 Rosbank Promsvyazbank Bank URALSIB MDM Bank Russkiy Standart URSA Bank Vozrozhdenie Note: as of ,5% 2,2% 2,1% 2,0% 1,9% 1,8% 1,8% 12 1,3% 1,0% 0,9% 0,7% 3,4% 3,2% 3,2% 6,8% 32,1% Sberbank VTB Gazprombank Bank of Moscow Alfa Bank Rosbank VTB 24 Bank URALSIB Raiffeisenbank Unicredit Rosselkhozbank Promsvyazbank MDM Bank 3,0% 2,8% 2,2% 2,1% 2,1% 8 1,7% 1,7% 1,6% 1,5% 1,0% 4,1% 32,3% 5,5% 31

32 Bank URALSIB: position in the Russian banking system (II) Market share: corporate deposits Market share: retail deposits Sberbank VTB Gazprombank Alfa Bank Bank of Moscow Bank URALSIB Unicredit Rosbank Rosselkhozbank Promsvyazbank Raiffeisenbank MDM Bank URSA Bank Russkiy Standart VTB 24 Vozrozhdenie 2,6% 2,5% 2,4% 2,4% 2,0% 1,6% 1,4% 1,1% 0,9% 0,8% 0,6% 3,9% 3,6% 6 5,8% Market share: loans to corporates 9,3% 18,9% Sberbank VTB 24 Bank of Moscow Rosbank Raiffeisenbank Gazprombank Bank URALSIB Alfa Bank Vozrozhdenie Promsvyazbank URSA Bank Rosselkhozbank Unicredit MDM Bank VTB 2,2% 2,0% 1,9% 1,7% 1,3% 7 1,3% 0,9% 0,8% 0,7% 0,6% 0,5% 0,4% 0,3% Market share: loans to individuals 50,3% 3,8% Sberbank VTB Gazprom Alfa Bank Bank of Moscow Rosselkhozban Unicredit Raiffeisenbank Promsvyazbank Bank URALSIB Rosbank MDM Bank Vozrozhdenie VTB 24 URSA Bank Russkiy Note: as of ,9% 2,8% 2,4% 2,1% 2,0% 1,7% 10 1,5% 1,4% 0,7% 0,7% 0,6% 0,2% 4,1% 3,7% 8,9% 32,3% Sberbank VTB 24 Russkiy Standart Rosbank Bank of Moscow Bank URALSIB Raiffeisen Unicredit Alfa Bank URSA Bank Rosselkhozbank Promsvyazbank Gazprombank MDM Bank Vozrozhdenie 3,5% 3,1% 2,5% 2,1% 7 2,1% 1,8% 1,7% 1,7% 1,4% 1,3% 1,1% 1,1% 0,5% 31,8% 6,1% 32

33 Bank URALSIB: position in the Russian banking system (III) Mortgage loans, bln.rubles Credit cards, mln. Sberbank Sberbank 8.2 VTB Alfabank 4.5 URALSIB URALSIB DeltaCredit 11.8 RosBank 3.4 AbsolutBank 11.5 TransCredit 2.8 KIT Finance 11.5 Russian Standart 2.7 BSGV 6.8 VTB Raiffeisen 6.2 HomeCredit 1.5 TransCreditBank 6.0 Raiffeisen 1.0 Gazprombank 5.9 URSA 0.9 Note: as of June 30, Source: 33

34 Contacts Head of Investor Relations Albert Avetikov Tel