Vtb · RUS:VTBR
Vtb — Investor Presentation (September 2011)
32 slides from Vtb's investor presentation, Sep 2, 2011
Slide 1: Investor Presentation
Investor Presentation 1 © VTB 2011 2011
Slide 2: Forward-looking statements disclaimer
Some of the information in this presentation may contain projections or other forward-looking forward looking statements regarding future events or the future financial performance of JSC VTB Bank ("VTB") and its subsidiaries (together with VTB, the "Group"). Such forward-looking statements are base
Slide 3: Agenda
1. Key Investment Highlights 3 2. Macro-Economic Environment 5 3 Att 3. Attractive ti U Universal i lBBanking ki F Franchise hi 8 8 4. M&A Update p 10 5. 1H’2011 Results 15 6. Outlook 21 7. Appendix 24 3 © VTB 2011 2011
Slide 4: Key Investment Highlights
Key Investment Highlights Russia is a resource-rich BRIC economy likely to outperform through the next Gateway to global cycle, driven by consumer and commodity demand Russian Lower inflation / interest rates likely to propel consumer financing and lending Rebound VTB set to benefit from econo
Slide 5: Macro-Economic Environment
1. Key Investment Highlights 3 2. Macro-Economic Environment 5 3 Att 3. Attractive ti U Universal i lBBanking ki F Franchise hi 88 4. M&A Update p 10 5. 1H’2011 Results 15 6. Outlook 21 7. Appendix 24 5 © VTB 2011
Slide 6: Macro-economic Environment
Macro-economic Environment The Largest Emerging EMEA R Russia i remains i very sensitive i i to global l b l Economy, by GDP in 2010 commodity prices No decline in economic activity (Oil&gas revenues share in total budget revenues around 50% ) 5,878 Urals up 50.5%, yoy to $ GDP up 3.9% yoy in 1H’11
Slide 7: Good Growth Perspectives for Russian Banking Sector
Good Growth Perspectives for Russian Banking Sector Banking Assets to GDP, 2010 Top 10 Russian Banks By Assets, 1H’11 180% 167% 150% 137% 120% 120% 105% 104% 100% Avr. 96% 86% 90% 82% 80% 76% 51% 60% 30% 0% South Africa Kazakhstan Slovakia Hungary Ukraine Poland Russia Czech China Brazil India Sourc
Slide 8: Attractive Universal Banking Franchise
1. Key Investment Highlights 3 2. Macro-Economic Environment 5 3 Att 3. Attractive ti U Universal i lBBanking ki F Franchise hi 88 4. M&A Update p 10 5. 1H’2011 Results 15 6. Outlook 21 7. Appendix 24 8 © VTB 2011
Slide 9: VTB Group - Attractive Universal Banking Franchise
VTB Group - Attractive Universal Banking Franchise Leading Player in Russia Strong Distribution Footprint Second Largest Universal Bank with RUB 4,720 bn / USD Over 1,300 branches across 163.2 (1) bn in assets and presence across Russia, CIS and Russia, CIS and Europe p Europe Over 1,000 1 000
Slide 10: M&A Update
1. Key Investment Highlights 3 2. Macro-Economic Environment 5 3 Att 3. Attractive ti U Universal i lBBanking ki F Franchise hi 8 8 4. M&A Update p 10 5. 1H’2011 Results 15 6. Outlook 21 7. Appendix 24 10 © VTB 2011
Slide 11: TransCreditBank – Acquisition with Strategic Fit
TransCreditBank – Acquisition with Strategic Fit Timeline ■ Fits strategic model; brings strong client base and is ROE accretive accreti e 43.18% stake acquired from minority Dec 2010 shareholders at RUB 21 per share VTB Group consolidated TCB in its FY’10 IFRS ■ Corporate Banking opportunities stat
Slide 12: TransCreditBank – Integration Plan and Expected Synergies
TransCreditBank – Integration Plan and Expected Synergies TCB Integration Milestones Expected Cost Synergies TCB integration plan was approved in August 2011 (in RUB bn) 3 years TCB will ill be b integrated i t t d into i t VTB Group G by b 2013: 2013 – Functional integration of both corporate a
Slide 13: Bank of Moscow – Acquisition with Compelling Rationale
Bank of Moscow – Acquisition with Compelling Rationale ■ Solid franchise despite recent turmoil Timeline – Over 100,000 corporate clients and over 6.5 mln active retail customers Due diligence based on information provided by the – Strong branch network totaling 381 across Russia and Feb 2011 major
Slide 14: Bank of Moscow – Key Financial Details and Expected Synergies
Bank of Moscow – Key Financial Details and Expected Synergies (1) Acquisition Price BoM FY’11 Outlook Total price paid RUB 258 bn Loan book growth 18% BV after recapitalisation RUB 170 bn Net profit RUB 3 bn P/BV ≈ 1.5x 15 ROE 4% Expected Cost Synergies (in RUB bn) 3 years Regional network 2.5 BoM s
Slide 15: 1H'2011 Results
1. Key Investment Highlights 3 2. Macro-Economic Environment 5 3 Att 3. Attractive ti U Universal i lBBanking ki F Franchise hi 88 4. M&A Update p 10 5. 1H’2011 Results 15 6. Outlook 21 7. Appendix 24 15 © VTB 2011 2011
Slide 16: 1H'2011 Highlights
1H’2011 Highlights 1H’11 Net Profit of RUB 53.6 bn Improves Group ROE Cost of Risk Declining Stable NIM (Annualised ROE) (Provision charge for loan impairment/ Average gross loan portfolio (annualised) 20% 8% 8% 18.1% 15% 6% 5.7% 6% 5.1% 4.8% 10.3% 4.6% 10% 4% 4% 5% 2% 1.9% 1.1% 2% n.m. 0% 0% 0% FY'
Slide 17: Solid Operating Income Growth
Solid Operating Income Growth Operating Income before Provisions, q-o-q y-o-y +69% +45% +10% 153.0 72.9 80.1 17.9 47.3 8.0 9.9 105.4 20.9 5.3 15.6 5.5 9.2 6.7 0.7 3.7 11.8 5.3 1.8 (RUB bn) n) 44.5 45.6 59.4 (RUB bn) 86.5 105.0 (4.6) 2Q’10 1Q’11 2Q’11 Net interest income before provisions (1) Net fee
Slide 18: Costs Remain under Control but Impacted by TCB Consolidation
Costs Remain under Control but Impacted by TCB Consolidation Staff and Administrative Expenses, q-o-q y-o-y +58% +53% +4% 41 7% 41.7% 44 0% 44.0% 45.9% 45.3% 42.8% 67.3 43.9 28.0 33.0 34.3 21.7 13.1 14.9 20.1 (RUB bn) 10.9 39.3 (RUB 19.9 19.4 23.8 bn) 10.8 2Q’10 2Q 10 1Q’11 1Q 11 2Q’11 2Q 11 1H’10 1
Slide 19: Asset Quality Improving
Asset Quality Improving Quarterly P&L Provision Charge (1) (y-o-y) y-o-y -18% -36% 2.1% 1.7% 1.1% 1.1% 1.2% 27.2 UB bn) UB bn) 11.7 17.3 7.7 9.6 (RU (RU 2Q’10 1Q’11 2Q’11 1H'10 1H'11 Provision charge for loan impairment/ Average gross loan portfolio Provision charge for impairment of debt (in %, ann
Slide 20: Healthy Balance Sheet Structure and Strong Capital Base
Healthy Balance Sheet Structure and Strong Capital Base Assets Structure Net Interest Spread, y-o-y 4,720 Average cost of interest bearing liabilities 4,291 4,448 Net interest spread 6% Average yield on interest earning assets 6% Cash and 3,753 7% 13% 3,628 10% mandatoryy 10.4% 9.8% 11% 9 3% 9.3% 8
Slide 21: Outlook
1. Key Investment Highlights 3 2. Macro-Economic Environment 5 3 Att 3. Attractive ti U Universal i lBBanking ki F Franchise hi 8 8 4. M&A Update p 10 5. 1H’2011 Results 15 6. Outlook 21 7. Appendix 24 21 © VTB 2011 2011
Slide 22: VTB's 'Road to 15' Strategy: Delivered as Promised so far, Targets Upgraded
VTB’s ‘Road to 15’ Strategy: Delivered as Promised so far, Targets Upgraded VTB Group Net Profit and ROE Targets 2013 ≈20% 160-180 >15% 120-140 ROE 10.3% % 100 88 new neg. 54.8 new old target 50 old target target RUB bn) target neg. target 1Q: 26 26.1 1 (R 2009 2010 2011 2013 Large-scale Transformat
Slide 23: Appendices
Appendices 23 1. Segment Update 24 2 Financial Update 2. 29 3. VTB Group Public Debt Instruments 31 23 © VTB 2011
Slide 24: Segment Analysis
Segment Analysis Corporate and Investment Banking Investment Loans and Transaction (1) Retail Banking Other (2) (in RUB bn) Total CIB Banking Deposits Banking 1H'11 1H'10 1H'11 1H'10 1H'11 1H'10 1H'11 1H'10 y-o-y 1H'11 1H'10 y-o-y 1H'11 1H'10 y-o-y (3) Net interest income 6.2 4.1 53.8 48.7 5.8 4.2 6
Slide 25: CIB Subsegment – Loans and Deposits
CIB Subsegment – Loans and Deposits Customer Loans Market Shares in Russia 15.0% 16.4% +6.4% 6 4% 12 8% 12.8% 12.2% 11.8% 2,073.8 12.8% 1,948.6 n) 30 J 10 30-Jun-10 31 D 10 31-Dec-10 30 J 11 30-Jun-11 (RUB bn % Corporate loan market % Corporate deposit 31-Dec-10 30-Jun-11 share in Russia market shar
Slide 26: CIB Subsegment – Investment Banking
CIB Subsegment – Investment Banking VTB Capital League Tables June 2011 Key Developments in 1H’11 Russia-related international DCM Four simultaneous IPO/SPO deals were successfully # Lead Manager Amount, USD mln # of deals Share, % completed in early 2Q’11 2Q 11 (Bank Nomos, Nomos Armada Armada, E
Slide 27: CIB Subsegment – Transaction Banking
CIB Subsegment – Transaction Banking To be a market leader in Transaction Services businesses in terms of Target g market share of clients, clients volumes volumes, deposits deposits, commissions and fees Product Market share(1) Market position(1) Product offer Current accounts 8.8% 3 Documentary op
Slide 28: Retail Banking in Russia
Retail Banking in Russia Segment Data - Loans to Individuals (Gross) Market Shares in Russia 10 7% 10.7% 12.2% 12.7% +14% 621.6 7.2% 7.8% 545.4 6.1% (RUB bn) 30-Jun-10 31-Dec-10 30-Jun-11 % Retail loan market % Retail deposit market 31-Dec-10 30-Jun-11 share in Russia share in Russia + Key y develop
Slide 29: VTB Group 1H'2011 Highlights
VTB Group 1H’2011 Highlights ■ Record net profit in 1H’2011 − RUB 53.6 bn with ROE at 18.1% ■ Corporate Investment Banking and Retail Banking post a solid 1H’2011 pre-tax profit of RUB 51.2 bn and RUB 20.2 bn, respectively ■ Operating income before provisions up 45% y-o-y to RUB 153.0 bn ■ Strong St
Slide 30: VTB Group 1H'2011 Financial Highlights
VTB Group 1H’2011 Financial Highlights (in RUB bn) 1H'11 1H'10 y-o-y 2Q'11 2Q'10 y-o-y 1Q'11 q-o-q Net interest income before provisions (1) 105.0 86.5 21.4% 59.4 44.5 33.5% 45.6 30.3% Net fee and commission income 17.9 11.8 51.7% 9.9 6.7 47.8% 8.0 23.8% N t resultlt from Net f financial fi t (2) i
Slide 31: VTB Group Public Debt Instruments
VTB Group Public Debt Instruments VTB Group Public Debt Instruments Outstanding Public Debt Repaid in 2011 (1) Equivalent Maturity Amount Borrower amount Instrument Date/Put or Coupon Borrower Instrument Repayment Date Coupon (mln)(1) (USD, mln)(1) Call Option 2011 Members of Loans repayment / Janua
Slide 32: VTB Group International Public Debt Instruments Issued in 2010-2011
VTB Group International Public Debt Instruments Issued in 2010-2011 Borrower Date of issue Amount (mln) Instrument Maturity date Coupon/rate VTB March 2010 USD 1,250 Series 7 EMTN 2 March 2015 6.465% VTB August 2010 SGD 400 Series 8 EMTN 2 August 2012 4.2% VTB August 2010 CHF 400 Series 9 EMTN 2 Aug