Investor Presentation Vozrozhdenie Bank 01.06.2018
Contents Track Record Key Information and Standing in the Russian Banking System Current Credit Ratings Corporate Management Vision and Positioning 1Q 2018 IFRS Results 2
Vozrozhdenie Bank Track Record A millionth card is issued; Establishment of cash collection service Foundation and licensing of Vozrozhdenie Bank. Bank s ADRs are traded in international markets; S&P ranking; Partnership with CIBC. Obtaining a status of a designated bank of the Russian Federation Government. Vozrozhdenie Bank is categorized as a stable credit institution. Vozrozhdenie Bank hits Top 20 Banks in corporate loan portfolio. The Bank is among three leaders of the Government Housing Financing Program; The Bank hits Top 7 largest mortgage banks of Russia; According to S&P the Bank is rated as the most transparent bank in Russia. Bank is among Top 3 credit institutions with the largest branch network in Russia. The Bank is among Top 10 largest banks in terms of issued cards; The Bank was named among Top 500 largest global financial companies in terms of brand value by the BrandFinance. Vozrozhdenie Bank is named the most transparent bank for shareholders by S&P following the results of Russian banks transparency survey. Deal of the Year Award from the EBRD; Mortgage portfolio securitization for RUB 4.07 billion. Mortgage portfolio securitization for RUB 4 billion; The Bank features among Top 100 public companies by RAEX Rating Agency. Promsvyaz Capital BV becomes a major shareholder. Deposit remote service system of the Bank is among top three in terms of functionality according to Markswebb Rank & Report. Integration with PSB 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 1991 1993 Foreign exchange license from the Bank of Russia; Moscow Interbank Currency Exchange membership; Bank s shares listed on Russian exchanges. 1995 1997 The Bank is categorized as a socially significant credit institution; Commencement of partnership with the World Bank. Establishment of ATM infrastructure; Launch of own processing center. 1999 2001 Largest ATM network in Moscow Region; 100,000 th VISA card issued 2003 2005 Rebranding; CRM system implementation 2007 2009 Vozrozhdenie Bank is included in TOP 1000 world banks by the Banker Magazine. Launch of operations model optimization program. 2011 2013 2015 The Bank receives the National Banking Award from ARB for the contribution to the region s economic development, wins Banking Business Award and Russia s Financial Elite Award as the Best Regional Bank and Bank of the Year in Mortgage Lending The Bank commences to service cards of the National Payment System Mir. 2017 The Bank s story goes on Implementation of S.W.I.F.T. system; Establishment of correspondent banking network with Western banks. The 14 th equity issue triples the Bank s capital. The Bank joins deposit insurance system; The Bank enters Top 10 largest banks in retail deposits. Vozrozhdenie Bank is named the Bank of the Year in Russia by the Banker Magazine. Dmitry Orlov, the Founder of Vozrozhdenie Bank, passes away; The Bank is renamed to Vozrozhdenie Bank Public Joint- Stock Company; Mortgage portfolio securitization for RUB 3.45 billion. 3
Bank Built on Relationships Strengths Among TOP 40 Russian banks Bank Number 2 in Moscow Region Community Банк in Moscow Region, Volgograd, Stavropol, Volgodonsk Highly loyal staff and customers Bank Strategy Full-fledged services to SME and Corporate businesses Retail services at all stages of lifecycle Strong focus on traditional banking products Well-balanced credit and resource policies Conservative risk management strategy Enhancement of financial services efficiency Services in 1,216,515 retail customers 53,047 corporate customers 16 regions 116 offices more than 1,100 ATMs 4
Key Information and Standing in the Russian Banking System Infrastructure and customer base* Rankings** Retail customers 1,265,515 Net assets 40 Corporate accounts 40,873 Net profit 53 Employees headcount 5,126 Retail deposits 23 Number of offices 116 Retail loans 28 Number of ATMs and payment terminals 1,114 Corporate loans 26 * Active customers (data as of 01.06.2018) ** Source: banki.ru (www.banki.ru) as of 01.05.2018 5
Current ratings Credit ratings as of 19.06.2018: ACRA Credit rating: BВ+(RU) Outlook: under revision-developing Moody s Investors Service Deposits rating: B3/NP Outlook: on watch for downgrade Counterparty risk assessment: B2/NP Moody's Aaa 25 Aa 22 A 19 Baa 16 Ba 13 B 10 Caa 7 S&P Global Ratings RAEX (Expert РА) S&P national scale ruaa- * Moody's Interfax national sscale A1.ru ** Issuer s credit rating: B/B Outlook: CreditWatch Developing ACRA RAEX S&PAAA 42 АКРА national scale BB+(RU) AA 35 A RAEX (Expert RA) national scale rub+ 28 BBB 21 S&P s global scale B 14 BB B Moody's global scale B3 7 0 CCC 01.02.14 01.06.14 01.10.14 01.02.15 01.06.15 01.10.15 01.02.16 01.06.16 01.10.16 01.02.17 01.06.17 01.10.17 01.02.18 01.06.18 * In May 2017 S&P Global Ratings recalled national scale ratings ** In March 2016 Moody s recalled national scale ratings Credit rating: ruв+ Outlook: under revision- developing 6
Recognition by Market Participants Listing Participation in financial indices Listing MICEX Broad Market Index MICEX Second-Tier Index MICEX Financial Index Second quotation level of MOEX Brand World Finance The Bank received the Best Corporate Governance in Russia Award from the World Finance portal The Banker Vozrozhdenie Bank was named the Bank of the Year on Russia by the Banker Magazine Brand value rating by BrandFinance The Bank is among Top 10 Russian banks with the highest band value the brand was evaluated at USD 190 mn 7
High Standards of Corporate Governance MANAGEMENT STRUCTURE GENERAL SHAREHOLDERS MEETING Human Resources and Compensations Committee - Prompt provision of information to investors - Full disclosure on the website - Quarterly IFRS statements - IFRS audited financial statements since 1991 - Reliable and professional management team BOARD OF DIRECTORS 12 members CHAIRMAN OF THE MANAGEMENT BOARD Mark Nakhmanovich MANAGEMENT BOARD 3 members AUDITOR PricewaterhouseCoopers Internal Audit Service Audit Committee Audit Commission Compliance Service Risks Block Arrows indicate electivity of the bank s bodies and external auditor Recognition of blameless reputation: V.Bank has the Best Corporate Governance in Russia, 2013 Andrey Shalimov was awarded for the Best IR in 2012 V.Bank was awarded as the Bank of the Year in Russia in 2010 8
Bank: Vision and Positioning Vision: A Stable Community Bank for SME and retail customers with a well-established network of the state-of-the-art offices (Moscow Region, South, North-West, Center) and full spectrum of banking services based on: long-term partnership with customers founded on professional attitude and observation of law offering of highly demanded banking products implementation of cutting-edge process solutions high quality standards conservative risk policy Strong corporate culture and substantial involvement of staff Positioning: Bank built on relationships (Community Bank): A Bank that works in all three segments; All key enterprises of a community/ territory are oriented for the bank s services; Among Top 5 banks in the community/ territory; Aimed at long-term relations, not just single transaction; Involved in/ oriented at solving social issues in the territory (establishment of social programs, participation in the life of community, introduction of loyalty programs with municipality); SME and Corporate customers services at all stages of business development using cutting-edge process solutions; Retail customers services to satisfy their needs to the maximum extent 9
1Q 2018 IFRS Results 10
Q1 2018 IFRS performance results Balance Sheet 01.04.2018 01.01.2018 01.04.2018 vs 01.01.2018 01.04.2017 01.04.2018 vs 01.04.2017 Assets, RUB mln 231 257 252 743-8,5% 233 716-1,05% Liquid assets ratio, % 22,3% 27,2% -4,9 п.п. 15,7% +6,6 п.п. Loan portfolio, RUB mln 177 962 176 805 +0,7% 196 319-9,4% Retail loan portfolio, RUB mln 64 854 65 459-0,9% 65 294-0,7% Corporate loan portfolio, RUB mln 113 108 111 346 +1,6% 131 025-13,7% NPL ratio (90+), % 5,8% 5,9% -0,1 п.п. 6,3% -0,5 п.п. Customer funds, RUB mln 189 436 206 582-8,3% 195 284-3% Retail funds, RUB mln 153 401 162 455-5,6% 136 622 +12,3% Corporate funds, RUB mln 36 035 44 127-18,3% 58 622-38,5% Total capital ratio 1.0 (under CBR), % 13,6% 13,5% +0,1 п.п. 12,2% +1,4 п.п. Common equity Tier 1 Н1.2 (under CBR), % 9,6% 9,4% +0,2п.п. 7,7% +1,9 п.п. P&L 1КВ18 4КВ17 Q1 2018 vs Q4 2017 1КВ17 Q1 2018 vs Q1 2017 Net interest income, RUB mln 2 980 2 914 +2,3% 2 686 +10,9% Net fees and commissions, RUB mln 952 1 262-24,6% 1 003-5,1% Operating income before provisions, RUB mln 4 251 4 347-2,2% 3 716 +14,4% Operating expenses, RUB mln (1 967) (2 753) -28,6% (1 824) +7,8% Net profit/loss, RUB mln 640 572 +11,9% 537 +19,2% Cost of risk ratio, % 2,3% 1,8% +0,5 п.п. 2,3% 0 п.п. NIM, % 4,9% 4,7% +0,2 п.п. 4,6% +0,3 п.п. ROE, % 9,9% 8,6% +1,3 п.п. 8,9% +1 п.п CTI, % 46,3% 63,3% -17 п.п. 49,1% -2,8 п.п. 11
61 51 41 31 21 11 1 25% 20% 15% 10% 5% 0% Balance sheet RUB bln Assets structure Liabilities structure -1,3% 234 245 245 253-8,7% 231 17 25 32 35 1 4 4 6 20 19 16 4 17 34 32 Cash and equivalents Due from banks 234 4 245 245 253 5 9 5 231 4 Due to other banks Clients funds Securities issued Securities 195 202 197 207 189 Other liabilities 181 185 178 161 159 Net loans Subordinated loans 15 15 15 17 16 Other assets 4 1 5 4 1 9 3 2 8 3 4 7 34 6 24 25 26 27 24 Equity Liquid assets Customer funds structure -3% 195 202 197 207 189 Retail deposits 20% 16% 17% 17 25 32 19 15 16 27% 22% 35 20 33 31 122 125 127 146 140 Cash and cash equivalents 14 18 15 Securities 16 35 41 39 14 28 Share of liquid assets 23 27 20 17 17 9 Retail accounts Legal entities' accounts Legal entities' deposits 12
Loan portfolio RUB bln Loan portfolio Retail lending Loans to corporate & SME customers Retail loans Loans to administrations -9% Mortgages Consumer and car loans Bank cards 196 201 194 10 8 8 65 68 68 177 +1% 178 6 4 65 65 65 68 68 65 65 2 2 2 2 2 16 17 17 16 16 121 125 119 106 109 47 49 49 48 47 Loans-to-Deposits ratio NPLs dynamics 101% 100% 98% 86% 94% Gross loans Customer funds 7,6% 6,3% NPLs, Rub bln. Provisions, % of total portfolio NPLs, % of total portfolio 7,7% 8,1% 6,4% 6,6% 8,8% 10,4% 5,9% 5,8% Total provisions to NPL 90+ 180% (+30 pps. to 4Q 2017) 196 195 201 202 194 197 177 207 178 189 L/D 12,3 12,9 12,8 10,3 10,3 13
Capital position RUB bln IFRS capital - 3,2 RUB bln. (IFRS 9 ) Regulatory capital under the Bank of Russia requirements Common equity Tier I DIA recapitalisation Tier 2 Capital 24,3 24,7 26,2 27,1 24,4 30,3 30,5 31,2 31,5 31,3 4,9 3,6 4,5 3,2 2,8 6,6 6,6 6,6 6,6 6,6 9,4 18,9 20,3 20,1 21,7 21,9 Capital adequacy under the Bank of Russia requirements Basel III capital Common equity Tier I ratio (N1.2) Total Capital ratio (N1.0) Minimum requirements set by the Bank of Russia increased for CAR support buffer Tier I Capital (Basel III) Total Capital Adequacy Ratio Tier II Capital (Basel III) Tier I Capital Adequacy Ratio 13,5% 13,6% 12,2% 12,1% 12,5% 9,4% 9,6% 7,7% 8,1% 8,1% 9,875% 7,875% 17,1% 16,2% 16,3% 15,7% 15,3% 13,3% 12,5% 12,3% 11,6% 11,4% 31,5 31,4 32,9 33,6 30,0 8,3 8,0 7,5 7,5 7,4 23,2 23,4 25,4 26,1 22,6 18,0% 16,0% 14,0% 12,0% 10,0% 8,0% 6,0% 4,0% 2,0% 0,0% 14
Income & expense RUB mln Interest income and expense 5,0% 4,7% 4,5% 4,7% Net interest margin 4,9% Interest expense 6 086 6 258 6 161 6 255 6 203 3 233 3 251 167 168 93 59 92 146 781 802 2 956 171 75 110 673 3 164 2 986 177 176 237 132 74 105 629 387-167 -168-171 -177-237 2 300 2 211 2 098 2 227 2 420-3 233-3 251-2 956-3 164-2 986 Contributions to the State Deposit Insurance Agency Interest income Interest expense Net fees & commissions Ряд6 Contributions to State Deposit Insurance Agency Due to banks Issued securities Corp. term deposits(incl.subordinated)¤t accounts Share of fees & commissions in the operating income 1600 1400 1200 1000 800 600 400 200 0 1 279 1 262 1 203 109 74 75 100 1 003 49 59 952 75 268 280 308 78 41 68 235 237 242 228 213 202 167 413 591 557 567 463 Settlements Cards Cash transactions Other Guarantees issued 27,0% 30,4% 27,1% 29,0% 22,4% 15
Operating expenses RUB bln Net profit Provisions COR +19,2% 1 606 +11,9% 2,3% 2,3% 0,9% 1,8% 2,3% 537 559 572 640-1 093-1 121-448 -827-1 019 Operating expenses structure 63,3% CTI Return on equity and assets ROE ROA 49,1% 48,7% 44,3% 46,3% 25,2% 1 824 2 050 1 962 581 791 783 1 243 1 259 1 179 2 753 996 1 757 1 967 629 1 338 8,9% 9,1% 0,9% 0,9% 2,6% 8,6% 9,9% 0,9% 1,1% Staff costs Administrative and other expenses 16
Investor relations contacts IR Division Contacts Tel.: +7 495 620 90 71 E-mail: investor@voz.ru Website: http://www.vbank.ru/en/investors www.twitter.com/vbank_ir Twitter: Sergey Varlamov Head of Investor Relations E-mail: S.Varlamov@voz.ru 17
Disclaimer Some of the information in this presentation may contain projections or other forward-looking statements regarding future events or the future financial performance of Bank Vozrozhdenie (the Bank). Such forward-looking statements are based on numerous assumptions regarding the Bank s present and future business strategies and the environment in which the Bank will operate in the future. The Bank cautions you that these statements are not guarantees of future performance and involve risks, uncertainties and other important factors that we cannot predict with certainty. Accordingly, our actual outcomes and results may differ materially from what we have expressed or forecasted in the forward-looking statements. These forward-looking statements speak only as at the date of this presentation and are subject to change without notice. We do not intend to update these statements to make them conform with actual results. The Bank is not responsible for statements and forward-looking statements including the following information: - assessment of the Bank s future operating and financial results as well as forecasts of the present value of future cash flows and related factors; - economic outlook and industry trends; - the Bank s anticipated capital expenditures and plans relating to expansion of the Bank s network and development of the new services; - the Bank s expectations as to its position on the financial market and plans on development of the market segments within which the Bank operates; - the Bank s expectations as to regulatory changes and assessment of impact of regulatory initiatives on the Bank s activity. Such forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from those expressed or implied by these forward-looking statements. These risks, uncertainties and other factors include: - risks relating to changes in political, economic and social conditions in Russia as well as changes in global economic conditions; - risks related to Russian legislation, regulation and taxation; - risks relating to the Bank s activity, including the achievement of the anticipated results, levels of profitability and growth, ability to create and meet demand for the Bank s services including their promotion, and the ability of the Bank to remain competitive. Many of these factors are beyond the Bank s ability to control and predict. Given these and other uncertainties the Bank cautions not to place undue reliance on any of the forward-looking statements contained herein or otherwise. The Bank does not undertake any obligations to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required under applicable laws. 18