Alfa-Bank Ukraine First half 2009 results 23 November, 2009 Kiev
Market Share Market Share and Ranking 9M 2009 2008 2007 Share Place Share Place Share Place Assets 3.8% 7 3.5% 8 2.5% 10 Corporate Loans 4.1% 7 4.2% 8 2.9% 8 Retail Loans 2.3% 8 3.1% 7 2.3% 9 Loan Portfolio 3.5% 9 3.8% 8 2.7% 9 Legal Entities Accounts 6.2% 5 7.8% 3 3.1% 7 Market share in assets Ranking 3.5% 3.8% 8 7 10 1.8% 2.5% 23 16 1.0% 2005 2006 2007 2008 9М2009 2005 2006 2007 2008 9М2009 Source: National Bank of Ukraine 2
1H2009 highlights Corporate Business SME Business Retail Business CAGR +58% 870 10 1 603 86 2 170 2 424 2006 2007 2008 1H2009 Net loan portfolio (incl. repo), USD M -23% YtD 229 +12% YtD 175 1H'07 2007 2008 1H2009 Net loan portfolio, USD M CAGR +200% 82 572 735-28% YtD 531 2006 2007 2008 1H2009 Net loan portfolio, USD M Traditionally strong corporate segment Loan portfolio growth rate: +12% YtD in 1H2009 # 5 in corporate accounts and # 7 in corporate loans (NBU ranking) Reduction of the loan portfolio: -23% YtD The number of SME customers is above 5K (as at 31.10.2009) Launch of SME deposits program Reduction of the loan portfolio: -28% YtD Retail accounts growth rate: +5% YtD The number of clients is more than 252K (as at 31.10.2009) # 8 in terms of retail loans (NBU ranking) Treasury and Capital Markets Loan participati on notes 53% Treasury liabilities structure Due to other banks 36% Due to NBU 11% Debt securities in issue 0,2% Forex Market Maker Completion of eurobonds exchange in August 2009 Strategy goal in diversification of liabilities Total NBU refinancing raised: $277 M $2.7 M of local bonds were bought back before maturity during 1H2009 Source: IFRS financials, CAGR compound annual growth rate, YtD (year to date) growth from the beginning of the year 3
Structure of assets and liabilities Assets Structure, USD K Breakdown of assets, as % of total +2% YtD 3,764,643 133,876 135,747 103,742 65,383 +1% 123,640 116,751 328,250 315,040 +79% 3,821,790 Other Assets Investment Securities AFS 3.6% 3.6% 1.7% 3.1% +19% 3,133,392 3,130,612-4% Due from Other Banks 2.8% 3.2% -0.1% 2008 1H2009 Cash and Cash Equivalents 8.7% 8.2% Loans and advances to customers Due from other Banks Cash and Cash Equivalents Investment Securities available-for-sale Loans and advances to customers 83.2% 81.9% PPE, IA,Other Financial and non-financial Assets 2008 1H2009 Source: IFRS financials, YtD (year to date) growth from the beginning of the year 4
Structure of assets and liabilities Liabilities Structure, USD K Breakdown of liabilities, as % of total +4% YtD 3,317,829 50,467 74,390 50,751 494,162 3,464,551 1.5% Other Liabilities 30,229 0.9% -40% 250,506 +237% 225,606 2.2% Subordinate Debt 7.2% 724,270 1,218,721 +345% +47% 1,072,848 Due to NBU 1.5% 6.5% 1,429,338-12% -19% 1,161,092 Due to Other Banks Debt Securities and LPNs 14.9% 20.9% 36.7% 31.0% 2008 1H2009 Customer accounts Debt Securities and LPNs Due to other banks Due to NBU Subordinate debt Other Liabilities Customer accounts 2008 1H2009 43.1% 33.5% Source: IFRS financials, YtD (year to date) growth from the beginning of the year 5
Net loan portfolio Portfolio dynamics Portfolio structure, 1H2009 CAGR 81% 2,261-0.1% YtD 3,133 3,131 531 735 175 229 Other retail loans 1% Consumer loans 3% Mortgage loans 4% Car loans 8% 572 86 SME loans 6% 952 82 870 1 603 2 170 2 424 Corporate loans 75% Municipal loans 3% 2006 2007 2008 1H2009 Total loans Retail loans SME loans Corporate loans Source: IFRS financials, CAGR compound annual growth rate, YtD (year to date) growth from the beginning of the year 6
Liquidity profile, USD M Liquidity management Cash and cash equivalents as of 1H2009 315 (8.2% of Total Assets) Additional funding sources available Contingency funding Loans from OJSC Alfa-Bank 40 Corporate term deposits 30 Short term interbank market 50 Repo operations 30 Customer accounts -19% YtD 1,429 272 +5% 1,161 286 1,158-24% 876 Refinancing from NBU 150 2008 1H2009 Total 300 Corporate Retail Total Current foreign borrowings maturity profile Documents Coupon Amount Amortising payment Maturity date Amortising LPNs 2012 13.00% USD 840,633,000 USD 105,079,125 (Quarterly, starting from October 2010) Jul 2012 105 105 105 105 105 105 105 105 Oct 2010 Jan 2011 Apr 2011 Jul 2011 Oct 2011 Jan 2012 Apr 2012 Jul 2012 Source: IFRS financials, company data, YtD (year to date) growth from the beginning of the year 7
Capital Adequacy Ratio* 14.7% 13.5% 15.7% 16.1% 16.5%** 11.3% 12.2% 13.2%** 17.4% 10.8% 2005 2006 2007 2008 1H2009 CAR Tier 1 * Calculated in accordance with the Basel Accord ** Tier 1 Capital as at 31.12.2008 presented above is different from data stated in audited consolidated financial statements prepared as at 31.12.2008 due to reclassification of reserve related to Effect of translation to presentation currency from Tier 2 Capital to Tier 1 Capital. Such reclassification was made in order to provide comparable information to Tier 1 Capital and Tier 2 Capital calculated as at 30.06.2009. Source: IFRS financials 8
Loan loss provisions share in gross loan portfolio LLP dynamics Share of total LLP in gross portfolio by segments +74% YtD USD M 242 421 Total loans 7.2% 11.9% 2008 1H2009 LLP and write offs Corporate loans 5.8% 10.7% 700 600 500 400 300 7,2% 11,9% 14,0% 12,0% 10,0% 8,0% 6,0% SME 4.0% 19.0% 200 100 0 1,9% 1,5% 2006 2007 2008 1H2009 4,0% 2,0% Retail loans 0,0% 11.9% 14.3% Provision before write-offs Provision after write-offs Write offs* Provision after write-offs, as % of total loans 2008 1H2009 Source: IFRS financials * Cumulative stock of write offs 9
Income performance (in thousands USD) Operating income Net interest income +15% 1H2009 183,305 154,734 2008 488,452 +28% 134,048 1H2008 1H2009 1H2008 2007 143,609 142,295 Net fee and commission income +8% 11,515 12,427 Net interest margin 11.3% 8.7%* 1H2008 1H2009 Operating income structure, 1H2009 Other operating income 9% 5.8% 6.4% Net fee and commission income 7% 2006 2007 2008 1H2009 Source: IFRS financials * Annualized Net interest income 84% 10
Income before provisions performance, USD M Net profit before provisions performance +164% +14-45 +59 +156-250 -93 (Loss)/profit for the Provision for Adj. profit before Adj. profit before Provision for (Loss)/profit for the period impairement provision provision impairement period 1H2008 1H2009 Net profit breakdown, 1H2009 +12 +49-60 +155-250 -93 Net interest income Net fee and commission income Other income Administrative and other operating expense Provision for impairment (Loss)/profit for the period Source: IFRS financials 11
Careful management of expenses Cost to income ratio* 56.5% 64.8% 54.8% 34.6% 32.5% 2006 2007 1H2008 2008 1H2009 Staff costs and administrative expenses dynamics -24% 79 32 47 +3% -42% 60 32 28 1H2008 Administrative and other operating expenses 1H2009 Salaries and employee benefits Total Source: IFRS financials * Cost to income ratio is calculated as Staff costs and administrative expenses divided by operating income calculated including provisions for loan impairment 12
Strategy 2010 Market expectations Business view Foreign currency exchange rate volatility Œ lower than in 2008/09 ŒUniversal bank model Stabilization of political environment after elections Decrease in the cost of liabilities, liquidity improvement ŽImprovement in liquidity on the market Ž Restructuring of corporate loan portfolio Stabilization and increase of retail deposits Growth of the market share of state banks Retail loan portfolio recovery New priorities in customer segmentation Higher market concentration of top-30 banks Further cost optimization 13
Contact Details Public Joint-Stock Company "Alfa-Bank 4/6 Desyatynnaya str., 01025 Kiev Tel.: +38 044 490-46-00 Fax: +38 044 490-46-01 E-mail: IR@alfabank.kiev.ua http: //www.alfabank.com.ua/en Mr. Oleg Kostyuchok Chief Financial Officer Tel.: +38 044 490-46-74 E-mail: OKostyuchok@alfabank.kiev.ua Mr. Valeriy Naumov Head of Risk Management Tel.: +38 044 284-03-60 E-mail: Valeriy.Naumov@alfabank.kiev.ua Mrs. Iryna Kovalchuk Investor Relations Tel.: +38 044 499-10-41 E-mail: IKovalchuk@alfabank.kiev.ua Mr. Andrey Bobyshev Head of Capital Markets Tel.: +38 044 499-16-71 E-mail: ABobyshev@alfabank.kiev.ua Mr. Viacheslav Molodkin Head of Treasury Tel.: +38 044 499-16-71 E-mail: Vyacheslav.Molodkin@alfabank.kiev.ua 14
Disclosure This presentation has been prepared and issued by Alfa-Bank. This publication is intended for professional and institutional customers. Any information in this presentation is based on data obtained from sources considered to be reliable, but no representations or guarantees are made by Alfa-Bank with regard to the accuracy of the data. The opinions and estimates contained herein constitute our best judgment at this date and time, and are subject to change without notice. This presentation is for information purposes, it is not intended to be and should not be construed as an offer or solicitation to acquire, or dispose of any of the securities or issues mentioned in this presentation. Alfa-Bank may use the information in this presentation prior to its publication to its customers. Alfa-Bank or its employees may also own or build positions or trade in any such securities, issues, and derivatives thereon and may also sell them whenever considered appropriate. Alfa-Bank may also provide banking or other advisory services to interested parties. Alfa-Bank accepts no responsibility or liability whatsoever for any expense, loss or damages arising out of, or in any way connected with, the use of all or any part of this presentation. 15