Investor Presentation

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1 Investor Presentation February 2017 Investor Presentation January 2018

2 Disclaimer This presentation may contain forward-looking statements, which are statements related to the future business and financial performance and future events or developments involving CREDIT BANK OF MOSCOW. Such forward-looking statements are based on the current expectations and certain assumptions of CREDIT BANK OF MOSCOW management, and, therefore, should be evaluated with consideration taken into of risks and uncertainties inherent in CREDIT BANK OF MOSCOW s business. A variety of factors, many of which are beyond CREDIT BANK OF MOSCOW s control, can materially affect the actual results, which may differ from the forward-looking statements. This presentation includes information presented in accordance with IFRS, as well as certain information that is not presented in accordance with the relevant accounting principles and/or that has not been the subject of an audit. CREDIT BANK OF MOSCOW does not make any assurance, expressed or implied, as to the accuracy or completeness of any information set forth herein. Past results may not be indicative of future performance, and accordingly CREDIT BANK OF MOSCOW undertakes no guarantees that its future operations will be consistent with the information included in the presentation. CREDIT BANK OF MOSCOW accepts no liability whatsoever for any expenses or loss connected with the use of the presentation. Please note that due to rounding, the numbers presented may not add up precisely to the totals provided and percentages may not precisely reflect the absolute figures. Information contained in the presentation is valid only as at the stated date on the cover page. CREDIT BANK OF MOSCOW undertakes no obligation to update or revise the information or any forward-looking statements in the presentation to reflect any changes after such date. This presentation is for information purposes only. This presentation does not constitute an offer or sale of securities in any jurisdiction or otherwise constitute an invitation or inducement to any person to underwrite, subscribe for or otherwise acquire securities of CREDIT BANK OF MOSCOW. If this presentation is provided to you in electronic form, although reasonable care was used to prepare and maintain the electronic version of the presentation, CREDIT BANK OF MOSCOW accepts no liability for any loss or damage connected to the electronic storage or transfer of information. 2

3 Introduction 3 Strategy and Business Overview 10 Financial Performance 15 Appendix 23 3

4 CREDIT BANK OF MOSCOW at a glance #9 bank in Russia by total assets 1 In the CBR`s list of systemically important banks Strategic focus on Moscow Area 2 Over 15,000 active corporate banking customers 3 Over 1,200,000 retail banking customers 3 99 offices and 32 cash offices, over 6,350 payment terminals and over 1,100 ATMs in Moscow Area 3 Over 8,320 employees 3,4 CBM s credit ratings: BB-/BB-/Ba3/A- from Fitch/S&P/ Moody s/acra MOEX included shares of CBM in the constituent lists of the MICEX Index and the RTS Index Free-float is 23% Overview Awards Balance sheet (RUB bln) 3Q Total Assets 1, , ,208.2 Gross Loans Customer Deposits Shareholder s Equity Key Ratios NPL 90+ / Gross Loans 1.7% 2.3% 5.1% Total Basel Capital (Basel III) 23.2% 14.7% 16.5% Income Statement (RUB bln) 9m2017 9m2016 9m2015 Net interest income Net Income Key Ratios RoAA 1.3% 0.9% 0.3% RoAE 19.3% 11.5% 3.0% NII/ARWA 5 4.3% 4.6% 3.9% Net Interest Margin 2.8% 3.6% 3.5% Cost / Income 28.4% 23.0% 28.1% Source: IFRS financial statements Key Financials Business segment contribution (3Q2017) Bank of the year in Russia Bank of the year awards in 2014 and in 2015 by The Banker Gross Customer Loans 11% Retail Revenue 24% Retail Best Bank in Russia The World s Best EM Banks in CEE 2016, by Global Finance Best Bank in Russia Awards for Excellence 2014, by Euromoney Corporate 89% Corporate 6 76% 1) Banki.ru ranking as of 1 December 2017 RUB 827 bln 2) Moscow Area represents Moscow and the Moscow Region Source: IFRS financial statements 3) Company data as of 1 January ) The number of employees of the entire banking Group is shown 5) ARWA is a sum of opening and closing average risk-weighted assets classified into the banking book and trading book, ARWA are averaged quarterly 6) Corporate revenues include corporate banking, treasury and cash operations RUB 107 bln 4

5 Transparent ownership structure and business development Roman Avdeev controlling shareholder Reputable minority shareholders Born in 1967 in Odintsovo, Moscow Region Education: Lipetsk State Technical University (1996) and Moscow International University of Business and Information Technologies (1994) Other Minority Shareholders of which 44% Rossium Pursued entrepreneurship in late 1980s, the key investment in Mr. Avdeev s portfolio is CREDIT BANK OF MOSCOW (CBM) Free-float 23% 1 56% Business Development Mr. Avdeev acquired CBM in 1994 Participated in day-to-day operational management until Mr. Avdeev is a member of the Supervisory Board with oversight over key strategic decisions Continuously provided support to CBM s growth through capital injections 2012 Additional share issues were placed on MOEX during the IPO and the SPO in Mr. Avdeev is Chairman of the Supervisory Board Source: Company data 1) The ratio is indicated before SPO on the Moscow Stock Exchange in October 2017 Since International financial institutions, incl. EBRD acquired a 15% stake Debut issue of perpetual subordinated Eurobonds amounting USD 700 mln, which were included in the Bank s Tier I capital SPO on MOEX: 3.2 bln new shares were placed at a price of RUB 4.5 per share 5

6 High standards of corporate governance Best international corporate governance practices Supervisory Board Audit Panel Supervisory Board Committees Audit Panel reports directly to shareholders 5 INEDs out of 10 Board members 2 representatives of minority shareholders INEDs have been present on the Board since 2008 Audit and Risk Committee Compensation, Corporate Governance and Nominations Committee Roman Avdeev Thomas Grasse Controlling shareholder of CBM EBRD representative Board member on Board of Directors in other banks in Russia, Central Asia and the EU William Owens Ilkka Seppo Salonen Chairman of the Supervisory Board Served as INED for multiple companies, including FESCO Chairman of the Compensation, Corporate Governance and Nominations Committee In was Chairman of the Management Board of Bank Uralsib Chairman of the Audit and Risk Committee Ownership disclosure Corporate and Financial information disclosure Strategy and Capital Markets Committee Beneficiaries are fully disclosed on CBM s corporate website IFRS statements are reviewed quarterly since 2011 and audited on annual basis Best Annual report in financial sector in Russia 1 Lord Peter Daresbury Vladimir Chubar >20 years of experience in executive positions Member of the Compensation, Corporate Governance and Nominations Committee Chairman of the Management Board of CBM Andrew Gazitua Andreas Klingen >20 years of investment banking experience in Europe Board member of Web Financial Group Chairman of the Strategy and Capital Markets Committee Non-executive member of Boards of Komercijalna Banka a.d. and Nova Ljubljanska banka d.d. Best corporate governance system in Russia 2 Best Corporate Annual Report 3 Best Annual Report in Financial Sector 3 Sergey Menzhinsky Chairman of the Board of Directors of REGION Investment Company Alexey Stepanenko First Vice President of LLC MCB Capital 1) 2017, according to XX Annual Contest of Annual Reports organized by Moscow Stock Exchange and RCB media group 2) 2015, according to Rus Rating 3) 2015, according to marketing and communication contest, MarCom Representatives of Minority Shareholders Independent Non-Executive Directors (INED) 6

7 Moscow and Moscow Area Finland Portugal New Zealand Israel Egypt Czech Rep. Hungary Colombia Chile Thailand Malaysia Hong Kong Philippines Moscow region dominates by economic indicators in Russia Moscow and Moscow Region constitute more than 25% of Russian GDP Consumer oriented economy in Moscow (FY2015) (FY2015) 29% 16% Moscow 29% 21% 5% Moscow Region European part of Russia (excluding Moscow) Volga Region and Ural Siberia and Russian Far East 6% 5% 1% Retail and Wholesale Trading 7% Real Estate 9% Manufacturing Transportation and Communications 51% State-financed institutions 21% Construction Other GDP comparison Unemployment Average monthly income (US$ bln, 2015) (3Q2017) 5.0% (FY 2016, US$) % Moscow City Russia Moscow City Russia Developed Markets xx GDP per Capita (US$ 000) EMEA Emerging Markets South America South-East Asia Low delinquency rates vs. Russia s Top 30 regions Source: Federal State Statistics Service, EIU, National Bureau of Credit Histories Data for Moscow and Moscow region is presented for

8 CBM tripling its market share since 2012 Top 20 banks Dec-2012, ranked by total assets (RUBbn) Top 20 banks December-2017, ranked by total assets (RUBbn) #1 #2 #3 #4 #5 4,450 2,852 1,701 1,541 14, % 9.1% 5.8% 3.5% 3.1% #1 #2 #3 #4 #5 5, ,213 9,354 23, % 11.4% 6.8% 4.5% 3.9% #6 1, % #6 3, % #7 1, % #7 2, % # % #8 2, % # % #9 1, % # % #10 1, % # % #11 1, % # % #12 1, % # % # % # % # % # % # % # % # % # % # % # % # % # % # % # % # % Source: 8

9 Sustainable performance comparison with Russian peers Growth Margin Efficiency Return on Equity Loan portfolio quality Asset CAGR (2014-3Q2017) NII/RWA 1 (3Q2017) Cost/Income Ratio (3Q2017) RoAE 2 Range (2014-3Q2017) NPL (3Q2017) 49.9% 4.3% 28.4% 2.1% 19.3% 1.7% Privatelyowned Russian Universal Banks 4.8% 0.3% 5.0% 3.9% 51.5% 39.9% 0.7% 6.7% 14.9% 11.8% 5.0% 6.5% -3,4% 8.1% 33,5% 7.1% 26.0% 3,4% Foreign- Owned Universal Banks -5.8% 0.0% 39.8% 7.1% 10.8% 6.9% -7.2% N/A 39.4% 3.7% 7.4% 0.0% Russian Listed Large Caps 2,1% 5,9% 33,1% 10,1% 25,2% 9 4,6% 1.5% 4.7% 47.7% 10.1% 11.7% 6.5% Source: Company data, publicly available IFRS financial statements Financial data for BSPB, PSB and Alfa-Bank is calculated based on 1H2017 IFRS financial statements 1) Calculation of risk-weighted assets includes operational risk for Raiffeisenbank. Average risk-weighted assets for the period, are calculated on quarterly basis for CBM and on 2 dates for other banks. 2) Calculated as Net Income for a period divided by opening and closing average of Total Equity (averaging on 2 dates)

10 Introduction 3 Strategy and Business Overview 10 Financial Performance 15 Appendix 23 10

11 Strategic Pillars In The Medium Term Objective To Cement Position as Top 3 Private Russian Bank Providing Full Range of Quality Banking Services to Customers Core Market Growth Pillars Drivers Corporate Preferred choice for high quality large and medium-sized corporates, Russian blue-chip clients Further develop commission products, including bank guarantees, cross-sale Increase share of settlements & money transfers and on demand deposits Leveraging cash handling business as a good entry point and efficient risk management tool for corporate clients Above market growth Further decreasing funding costs Strategic Focus on Moscow Area Retail Focus on high quality client base and effective retail network coverage within Moscow area Maintain wide product offering with focus on high-margin consumer loans, deposits and commission products Leverage existing distribution platform as a customer acquisition tool with focus on alternative channels development Enhance service quality and promote brand value Focus on enhancing operating excellence and productivity IB/Capital markets Strong interbank franchise Experienced market professionals with proven track record Access to global markets through operations on various markets Providing full range of investment banking services - ECM, DCM, M&A deals, equity financing Low risk deals with high quality counterparties for efficient use of capital Maintaining strong balance sheet 11

12 CBM competitive advantages (FY2015) Focus on Moscow/Moscow region (25% of Russian GDP) 29% 16% 29% 21% 5% Moscow Moscow Region European part of Russia (excluding Moscow) Volga Region and Ural Siberia and Russian Far East Leading payment terminal network as a unique acquisition tool Cash Handling Market Share (% share by cash handled, Russia, 2016) Others FGUP GCSS 7% 8% Rosinkas 34% INKAKHRAN / CBM 17% 34% Sberbank Source: Association of organizations involved in cash turnover, handling and valuables transportation Cash handling strategic synergies with corporate banking business One of the market leaders in Moscow and Moscow region with over 6,190 devices in high traffic locations Value for Customers Serves as an entry point to start new customer relationships and enhance customer loyalty High demand service for retail trade customers Superior functionality (mini-branch basis) in comparison to competitors devices Unique advertising and acquisition channel off-loading branches and contributing to CBM s risk metrics improvement through comprehensive data collection on individuals Strategic benefits to CBM 3,275 customers, of which 201 are banks 773 armoured vehicles with various carrying capacity Powerful tool for monitoring customer cash flows Permanent customer balances allow for direct debiting in case of distress situation Servicing CBM s network of payment terminals and ATMs In November 2015 CREDIT BANK OF MOSCOW acquired INKAKHRAN, one of the biggest cash handling companies in Russia Source: Federal State Statistics Service, EIU, National Bureau of Credit Histories 12

13 Corporate banking: focus on increasing contribution of larger corporates Highlights Corporate loans breakdown by industry Strong and Quality Customer Base Over 15,000 active corporate customers Focus on large and medium-sized corporates Historically strong expertize in retail and wholesale trading sector (3Q2017) 3% 8% 3% 4% 5% 6% 7% 7% 8% 11% 38% Business Focused on Growth Strategy and organisational structure designed to deliver sustainable growth Focus on increasing contribution of large corporates Oil&chemicals Property rental Construction Financial Auto Food & farm Services Pharma Industrial construction Metallurgical Other Gross corporate loan portfolio evolution (RUB bln) 827 Risk Management as Key Priority Well-diversified loan portfolio Gradual extension of the loan book maturity profile under strict supervision of the risk management division Synergies with cash handling business, enabling effective credit monitoring Q2017 Source: Company data, IFRS financial statements 13

14 Retail banking careful customer selection Highlights Approx. 1,200,000 retail banking customers 1 (3Q2017) Focus on high-yield retail products 4% 1% Significant potential of the Moscow Area retail banking market Proper infrastructure for efficient customer acquisition and service Focus on high margin consumer loans 73% of the portfolio Careful risk selection focused on high-quality customers 22% General Purpose Loans Mortgages Credit Cards Differentiated risk appetite based on customer segmentation Tight underwriting policies 73% Auto Loans Focus on quality customer segments, that offer high growth potential Controlled slowdown in lending dynamics (% of new originations, volume) 2 (RUB bln) Target Customer Segments Active Customers of the Bank Penetration 3 : 3.1% Approval rate: 67.4% Other Customers of the Bank Penetration 3 : 1.8% Approval rate: 57.8% New Customers: Walk-in Customers Penetration 3 : 0.6% Approval rate: 11.6% 7% 32% 6% 16% 39% Corporate Channel New Customers: Corporate Employees Penetration 3 : 3.4% Approval rate: 52.0% New Customers: Adequate Level Credit History Penetration 3 : 1.0% Approval rate: 44.2% Source: Company data, IFRS financial statements 1) As of 1 January ) As of 1 November ) Active clients in each segment divided by potential client base in each segment % 15% Q % Gross Retail Loan Portfolio Gross Retail Loans as a % of Total Gross Loan Portfolio 14

15 Introduction 3 Strategy and Business Overview 10 Financial Performance 15 Appendix 23 15

16 Outstanding efficiency (RUB bln) 23.9 Net interest income Net fee and commission income +87% Operating income % m m m 2017 Other net income (loss) 43.4 (RUB bln) Operating expenses Salaries and employment benefits Administrative expenses Other expenses % 23.0% 28.4% +36% +20% , m m m 2017 Cost-to-income ratio Net fee and commission income (RUB bln) 22.1% 17.7% +23% % 9.7 9m m m 2017 Net fee and commission income Share in operating income Net interest margin analysis 4.6% 4.3% 3.9% 3.5% 3.6% 2.8% 9m m m 2017 NIM NII / ARWA 2 1) Other expenses consist of depreciation of property and equipment and of provision for impairment of other assets and credit related commitments 2) ARWA is a sum of opening and closing average risk-weighted assets classified into the banking book and trading book, averaged quarterly 16

17 Emphasis on highly liquid assets Asset structure Deposits in credit and other financial institutions (RUB bln) - Liquid assets represent 54% of total assets 1, , % +6% 1, % 3% 97% Repo Term deposits The fair value of securities that serve as collateral under reverse REPO is 835 RUB bln or 119% of the underlying value of such deals The debt securities portfolio is used as a liquidity buffer with 76% of the bond portfolio qualified in the Lombard list of the Central Bank of the Russian Federation % % Additional unused liquidity sources amounted to RUB 438 bln as of 1 October 2017 Unused liquidity sources structure Other Securities Retail loans Q2017 Cash Deposits in credit and other financial institutions Corporate loans 1) Cash includes cash on hand, correspondent account with the CBR and nostro accounts with other banks 1 11% 6% Unpledged securities portfolio under reverse REPO Own portfolio of Lombard list securities 17% free of pledge (on-balance sheet) Loans eligible for pledge to the CBR 66% OFZ received under DIA capitalization program in

18 Loan portfolio quality is improving Gross loan portfolio coverage by impairment allowance (RUB bln) % 6.1% % 5.6% % Q Q2017 1H2017 3Q2017 Loans to customers, gross Cost of risk and NPL dynamics LLP/Gross loans (RUB bln) 117% 8 23 LLP/NPL 1 coverage 325% 303% 322% 263% Q Q2017 1H2017 3Q2017 NPL (Corporate loans) NPL (Retail loans) LLP (Loss Loan Provision) Related party lending concentration 5.1% 4.8% 4.6% 2.9% 2.1% 1.9% (% of Gross loans) 1.1% 2.8% 3.4% 3.4% 3.0% 2.3% 1.9% 1.9% 1.7% 3Q Q2017 1H2017 3Q2017 NPL 90+/gross loans 1 COR 2 3Q Q2017 1H2017 3Q2017 1) NPLs are loans with payments that are overdue >90 days 2) Cost of risk ratio is calculated as impairment allowance net charge (annualised) to average loan portfolio for the period 18

19 ,0% 8,0% 7,0% 6,0% 5,0% 4,0% 3,0% 2,0% 1,0% 0,0% NPL coverage by provisions maintained at a healthy level Corporate Loan Book Retail Loan Book % LLP / NPL 90+ % Cost of Risk % LLP / NPL % 533% 103% 99% 121% 96% % 5.8% 5.1% 4.5% 1.4% 1.0% % 6.5% % 7.9% % 7.0% 7.6% 7.3% 0,1 0,1 0,1 0,1 0,1 0,1 0,1 0, % 0, Q2017 Gross Loans (RUB bln) NPL 90+ Loan Loss Provisions Ratio Q2017 Gross Loans (RUB bln) NPL 90+ Loan Loss Provisions Ratio Corporate Cost of Risk Retail NPLs and LLPs, by product type (3Q2017, % of gross loans) 5.8% 4.3% 1.5% 99% 93% 48% 89% 7.6% 7.0% 6.9% 6.7% 8.7% 5.4% 5.1% 1.9% 1 3.2% 1.0% 4.8% 1 2.2% Q2017 Cost of Risk Source: IFRS financial statements 1) Exposure in the amount of RUB 0.4 bln, which is not considered as mortgage by nature Retail Total Auto Loans Mortgage Loans Cash Loans and Credit Card Loans NPL LLP % 1 LLP / NPL

20 Customer deposits are the main source of funding Liabilities breakdown Deposits by credit institutions (incl. CBR) (RUB bln) + 11% 0.5% 1, , % 1, % 30% 8% 17% 12.4% 6.6% 80.5% Repo with Fis Repo with CBR Term deposits Current account Fair value of securities provided as collateral under repo transactions is 516 RUB bln or 113% of the underlying value of such deals. 249 Debt securities repayment schedule Q2017 Other Retail deposits Deposits by credit institutions Source: IFRS financial statements 1) Perpetual subordinated Tier I Eurobond issue is included in Total equity + 54% Corporate deposits Bonds issued Deposits by CBR 42% 1% (RUB bln) Local bonds Senior Eurobonds Sub Eurobonds 1 Perp sub Eurobonds 20

21 Sound capital position and active issuer of subordinated debt Capital instruments April 2017: USD 500m CBOM 2018 subordinated Tier 2 Eurobond was partially redeemed in the amount of USD 394m April 2017: USD 600m new 10-year subordinated Tier 2 Eurobond issuance May 2017: USD 700m perpetual subordinated Tier 1 Eurobond issuance October 2017: Second cash tender offer launched on the USD 500m CBOM 2018 subordinated Tier 2 (USD 25m redeemed) October 2017: RUB 14.4 bln - SPO on MOEX October 2017: RUB 22 bln - subordinated deposits from corporate customers RAS capital adequacy requirements 1 IFRS capital adequacy (Basel III, fully loaded) (RUB bn) (%) Dec Sep-17 CET1 Tier 2 Additional Tier 1 CET1 Tier % RAS capital adequacy ratios % 14.2% 9.4% 10.6% 31-Dec Sep-17 Core tier 1 capital ratio Tier 1 capital ratio Total capital ratio2 Total: 11.5% 2 CET1: 6.1% Total: 9.6% 2.0% 1.5% 0.35% 1.25% CET1: 7.025% 1.6% Total: % 2.0% 1.5% 0.65% 1.875% CET1: 8.0% 2.525% 2.0% 1.5% 1.0% 2.5% 4.5% 4.5% 4.5% 3.5% Minimum Tier 2 Minimum Additional Tier 1 Systemic Risk Buffer Capital Conservation Buffer Minimum CET1 (N1.1) 1 Total Capital 17.0% 12.6% 10.0% 7.3% 7.3% 6.7% 20.2% 11.8% 8.5% N1.0 N 1.2 N 1.1 From Jan-17 From Jan-18 From Jan-19 1) Calculated on the basis of the Russian non-consolidated reporting 2) N1.1 requirement + capital conservation buffer + systemic risk buffer. The buffers have effect on payment of dividends only 1-Jan-17 1-Jul-17 1-Dec-17 21

22 Overview of the Current Capital Adequacy Regulatory Framework in Russia Capital Adequacy Ratios 1 Reported Regulatory minimums Capital buffers Capital conservation buffer, countercyclical buffer and buffer for systemically important banks legislation came into force on 1 January 2016 Banks are required to report the buffers quarterly. The buffers have effect on payment of dividends only. If the minimum buffer requirement is not satisfied, payment of dividends to shareholders is prohibited If the minimum quarterly buffer requirement is reached, the CBR has established the percentage of profits that may be paid out to shareholders each quarter Source: IFRS financial statements and Credit Bank of Moscow company investor relations 1) Calculated on the basis of the Russian non-consolidated tax reporting 2) Expressed as cumulative addition to the applicable minimum capital adequacy ratios, not as incremental additions per period CBM as of 1-Dec-2017 Since 1-Jan Total capital (N1.0) 20.2% Min 8% Min 10% Min 10% - Tier 1 Capital (N1.2) Total 11.8% Min 6% Min 6% Min 5.5% - Common Equity Tier 1 (N1.1) 8.5% Min 4.5% Min 5% Min 5% - Additional Tier 1 3.3% No limitations on minimum/maximum amount Applicability Implementation schedule Buffer Calculation 2 to CBM From 1-Jan-2016 From 1-Jan-2017 From 1-Jan-2018 From 1-Jan-2019 Capital conservation % RWAs Yes % % % % Countercyclical For systemically important banks Weighted average of all national countercyclical buffers in the countries, with residents of which the bank has entered into transactions; set at 0% for Russia Yes 0% (25% of total buffer size) 0% (50% of total buffer size) - (75% of total buffer size) - (100% of total buffer size) % RWAs Yes % % % % Additional capital buffer for CBM % % % % 22

23 Introduction 3 Strategy and Business Overview 10 Financial Performance 15 Appendix 23 23

24 Milestones of capital growth Tier 2 Subordinated debt 258 RUB bln Additional capital Retained earnings Share capital Tier 2 capital Tier 1 capital Q2017 Tier 2 domestic bond issue totaling RUB 3 bln Tier 2 Eurobond issue totaling USD 500 mln Additional share issue in the total amount of RUB 7.5 bln was purchased by the Bank s beneficial owners proportionally to their stakes Additional share issue in the amount of RUB 5 bln acquired by the the majority shareholder Tier 2 Eurobond issue totaling RUB 5 bln IPO and SPO placed on Moscow Exchange enabled the Bank to attract about RUB 30 bln Tier 2 debt from Deposit Insurance Agency (DIA) in the total amount of RUB 20.2 bln Tier 2 deposit from one of the Bank`s corporate clients amounting USD 300 mln Issue of additional 3.2 bln ordinary shares with a nominal value of RUB1 each was registered with the CBR Tier 2 Eurobonds totalling USD 600 mln issued in April 2017 Perpetual T1 subordinated Eurobond totalling $700mln issued in May 2017 Source: IFRS financial statements Data for is calculated according to Basel III regulations and does not include adjustments due to immaterial effect: 1) Intangible assets 2) Revaluation 24

25 Delivering sustained profit Comments The main drivers for ROA and ROE growth are ROA ROE Fee and commission income COR stabilization 24.4% CTI remains at below 30% 17.2% 19.0% 18.2% 20.1% IPO and SPO on MOEX 19.3% 1 8.9% 10.1% 11.1% 2.0% 2.4% 2.0% 2.2% 2.4% 2.1% 1.1% 1.1% 0.8% 1.3% 0.2% H2017 Source: IFRS financial statements 1) ROE calculation does not include Perpetual Eurobonds as at 30 September

26 History of international capital markets transactions October 2006 Senior Unsecured US$100m Eurobond 10.25% coupon Due October 2009 August 2011 Senior Unsecured US$200m Eurobond 8.25% coupon Due August 2014 Eurobond issues February 2013 Senior Unsecured US$500m Eurobond 7.70% coupon Due February 2018 May 2013 Subordinated Tier II US$500m Eurobond 8.70% coupon Due November 2018 November 2014 Subordinated Tier II RUB 5 bln Eurobond 16.5% coupon Due May 2025 EMEA Finance Achievement Awards Best Financial Institution Bond in 2013 Euromoney magazine Highly commended CEE deal in 2013 Awards Global Banking & Finance Review Best Eurobond issuer in 2013 and best Russian borrower on syndicated loan market in 2014 CBONDS Financial sector issuer among Top 10 CIS international bond issuers, 1H 2017 October 2016 April 2017 May 2017 Senior Unsecured US$500m Eurobond 5.875% coupon Due Nov 2021 Subordinated Tier II US$600m Eurobond 7.500% coupon Due October 2027 Subordinated Tier I US$700m Eurobond % coupon Perpetual Syndicated loans January 2005 September 2005 August 2006 September 2006 May 2007 August 2007 September 2007 Loan facility in amount of US$10m, arranged by a syndicate of Asian, European and US banks Due July 2005 US$40m, arranged by a syndicate of European banks Due September 2006 Loan facility in amount of US$20m, arranged by a syndicate of Asian and European banks Due August 2007 Loan facility in amount of US$53m, arranged by a syndicate of Asian and European banks Due September 2007 Loan facility in amount of US$80m, arranged by a syndicate of Asian, European and US banks Due May 2008 Loan facility in amount of US$30m, arranged by a syndicate of European banks Due February 2009 Loan facility in amount of US$50m, arranged by a syndicate of Asian, European and US banks Due September 2008 August 2008 October 2010 October 2011 November 2012 March 2014 March 2017 Loan facility in amount of US$100m, arranged by a syndicate of 12 European and US banks Due August 2011 US$170m A/B loan: US$40m 5-year A loan from IFC, US$130m 1-year B loan from syndicate of 13 banks CBM fully refinanced the B loan and obtained a new US$131m 1-year B loan Due November 2012 Loan facility in amount of US$308m, arranged by a syndicate of 16 European and US banks Due November 2013 Loan facility in the amount of up to US$500m, arranged by a syndicate of 18 banks Due March and September 2015 Loan facility in amount of US$500m, arranged by a syndicate of Asian, European and US banks Due March 2018