Vtb · RUS:VTBR
Vtb — VTB Bank — Investor Presentation (September 2012)
33 slides from Vtb's investor presentation, September 2012
Slide 1: Investor Presentation
Investor Presentation September 2012 1 © VTB 2011
Slide 2: Forward-looking statements 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 JSC VTB Bank ("VTB") and its subsidiaries (together with VTB, the "Group"). Such forward-looking statements are based on numerous as
Slide 3: Why VTB?
Why VTB? • Prominent opportunity – fundamentally strong and high growth economy Russia • Why now? – stable political leadership and stable macroeconomic situation vs. global uncertainties • Proxy for the economy – diversified exposure to Russia investment Banking sector case • Long term potential –
Slide 4: Why Russia? Why a Russian bank? Why VTB?
Why Russia? 5 Why a Russian bank? 7 Why VTB? 9 4 © VTB 2012
Slide 5: Why Russia?
Why Russia? 5 © VTB 2012
Slide 6: Russia: prominent opportunity – fundamentally strong and high growth economy
Russia: prominent opportunity – fundamentally strong and high growth economy Prudentapproach Prudent approach to to government governmentspending spending Commentary Real economy gathers momentum Budget surplus / (deficit) as % of GDP (2011) 9.9% 8.3% 5.2% 6.0% 5.2% 4.3% 0.8% 1.5% 4.2% 4.3% (1.4%) (
Slide 7: Why a Russian bank?
Why a Russian bank? 7 © VTB 2012
Slide 8: Long Term Potential – Solid Opportunities for Banking Business Development
Long Term Potential – Solid Opportunities for Banking Business Development Commentary Growth potential driven by low penetration Retail is an important source of growth and margin Growth potential driven by low penetration Loans as % of GDP (FY’2011) Retail loans as % of GDP (FY’2011) 147% 62% 77% 3
Slide 9: Why VTB?
Why VTB? 9 ©OVTB 2012
Slide 10: VTB: Successful Growth Story – through Organic Growth and M&A
VTB: Successful Growth Story – through Organic Growth and M&A VTB corporate history Establishment & Breakthrough Focus on operating development strategy efficiency and ROE 1990-2001 2002-2009 2010-YTD The Bank for Foreign Trade (Vneshtorgbank) In 2002, the Russian Government became VTB’s VTB e
Slide 11: VTB in a Snapshot
VTB in a Snapshot Leading player in Russia Strong distribution footprint Second largest universal banking group in Russia Russia with RUB 6.5 trl / USD 220 bn in assets and competitive UK product range Germany Belarus Kazakhstan Austria Ukraine France Serbia Georgia Largest banking group by corp
Slide 12: Unique business model – universal banking platform
Unique business model – universal banking platform incorporating corporate and retail banking, IB and other financial services Corporate-investment banking Retail banking Retail banking Corporate banking Investment banking Transaction banking ■ The Group’s retail banking business focuses on deposits
Slide 13: Potential to unlock value – Corporate banking
Potential to unlock value – significant value can be extracted from the existing franchise. Corporate banking Corporate loan portfolio Corporate liabilities Term deposits Current accounts +47% +35% -2% -12% 3,666 3,766 3,690 2,472 2,435 2,143 2,508 2,668 1,772 597 649 1,592 740 540 508 (RUB bn) (RUB
Slide 14: Potential to unlock value – Investment banking and GTB
Potential to unlock value – significant value can be extracted from the existing franchise. Investment banking and GTB Investment Banking – key developments in 1Q’12 GTB – key developments in 1Q’12 Global banking GTB net fee and commission income ■ DCM: 23 transactions closed. Key deals – 3 tranche
Slide 15: Potential to unlock value – Retail banking
Potential to unlock value – significant value can be extracted from the existing franchise. Retail banking Retail loan portfolio Retail deposits Mortgage loans Car loans Consumer loans Term deposits Current accounts & other +55% +52% +5% +2% 824 861 1,161 1,190 763 1,079 255 242 609 862 198 555 439
Slide 16: Value creation through new initiatives. Insurance
Value creation through new initiatives. Insurance Successful start up – Top 8 market position in 3 years Product strategy is focused on profitable segments VTB Insurance1 GWP VTB Insurance1 2011 GWP structure 11.5x MTPL 6% 4% 1.0 25% MOD 19% Property and liability Personal accident (USD bn) 19% Volu
Slide 17: Value creation through new initiatives. Pension Fund
Value creation through new initiatives. Pension Fund Pension assets to GDP (%) (1) Average pension account in Russia Market experience more Market experience more Non-state State pension 2011 – 2020 than 25 years than 12 years pension fund fund CAGR 20.7% 86.6 72.6 67.0 188 average 75% 2005 – 2011 C
Slide 18: Value creation through new initiatives. Light Bank
Value creation through new initiatives. Light Bank VTB plans to enhance its retail banking franchise by launching a new “light bank” business under the VTB Express brand Project highlights In the majority of Russia's regions mass & low-mass client segments account for 30-50% of total personal income
Slide 19: International presence – basis for capturing new business opportunities outside Russia
International presence – basis for capturing new business opportunities outside Russia VTB Capital is strengthening its international franchise International presence Sep 2011 New Head of Global Banking and Client 15 subsidiary banks across CIS, Europe, Georgia and Africa Coverage appointed from M
Slide 20: An attractive investment opportunity
: an attractive investment opportunity Unique business model in Russia – universal banking platform wide branch network throughout Russia commercial and investment banking services other financial services, inc. insurance, leasing, factoring, etc. International presence – basis for capturing P
Slide 21: Attachments
Attachments 1. VTB Group financials 20 2. Cost optimisation program 27 3. History of integration 29 21 © VTB 2012
Slide 22: Attachments 1. VTB Group financials
Attachments 1. VTB Group financials 22 © VTB 2012
Slide 23: Performance of Corporate and Investment Banking – financial result
Performance of Corporate and Investment Banking – financial result Operating income before provisions Profit before taxation 1Q’2011 1Q’2012 1Q’2011 1Q’2012 +9% +46% +13% +146% 59.6 59.6 52.7 52.7 47.1 45.8 (5.6) (13.8) 30.9 30.1 27.9 20.7 22.6 (RUB bn) (20.1) (RUB bn) 14.2 (23.2) 4.7 5.1 2.9 3.7 Ne
Slide 24: Retail Banking performance – financial result
Retail Banking performance – financial result Operating income before provisions Profit before taxation 1Q’2011 1Q’2012 1Q’2011 1Q’2012 +58% +66% +62% +214% 34.2 34.2 27.6 26.0 21.1 21.1 (6.6) 19.0 16.5 (2.1) 10.9 (RUB bn) (RUB bn) 6.3 (16.7) 7.4 3.8 (11.6) 0.8 1.9 Net interest Net fee and Other ope
Slide 25: Solid operating income; NIM under pressure
Solid operating income; NIM under pressure Operating income Net interest margin (1) and spread +31% 10.1% 95.4 8.9% 9.0% 9.0% 9.0% 80.1 76.7 72.9 56.9 9.0% (2) 4.6% 3.9% 12.1 10.3 5.1% 9.9 9.2 54.0 8.0 4.4% 4.4% 4.3% 4.2% 46.0 49.1 54.0 77.9 (RUB bn) 1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 22.9 Average yield
Slide 26: Staff and administrative expenses – costs remain under control
Staff and administrative expenses – costs remain under control Staff and administrative expenses Number of employees +30% 67,912 69,403 66.1% 65,685 10,085 10,171 54,606 10,215 980 44.5% 53,311 941 45.3% 42.8% 41.3% 900 8,017 8,338 727 809 54,570 56,800 58,338 50.7 42.5 33.0 34.3 BoM 24.3 44,567 45,
Slide 27: Asset quality – more conservative countercyclical provisioning policy adopted
Asset quality – more conservative countercyclical provisioning policy adopted Сost of risk up 60 bps y-o-y to 1.7% … … loan loss reserves up 30 bps YTD … 1.7% 1.1% 1.2% 0.9% 8.9% 8.6% 0.5% 20.4 6.6% 6.3% 6.6% (RUB bn) 9.6 7.7 8.0 6.3 1Q'11 2Q'11 3Q'11 4Q'11 1Q'12 31-Mar-11 30-Jun-11 30-Sep-11 31-Dec
Slide 28: Healthy balance sheet structure
Healthy balance sheet structure Assets structure Customer loans / customer deposits 6,790 6,337 6,451 Cash and mandatory 7% reserves 6% 6% 14% 12% 4,720 13% Securities 124.1% (3) 4,448 6% 6% 6% portfolio (1) 119.6% 117.6% 116.6% 6% 113.7% 6% 13% 10% Due from other 9% 6% banks 65% 63% 66% Loans to cu
Slide 29: Attachments 2. Cost optimisation program
Attachments 2. Cost optimisation program 29 © VTB 2012
Slide 30: VTB Group cost management strategy for 2012-2014
VTB Group cost management strategy for 2012-2014 Targeted ratios Sources of cost savings 45% 42% Supplier and procurement 41% process management 28% 28% 28% 10% Premises and equipment 20% management 17% 40% 14% 13% Outsourcing of selected services 30% FY'12 FY'13 FY'14 Labour automation and other ar
Slide 31: Attachments 3. History of integration
Attachments 3. History of integration 31 © VTB 2012
Slide 32: Track record of successful acquisitions
Track record of successful acquisitions (1) ■ VTB participated in bailout of Guta-bank ■ ROE accretive deal ■ On the basis of existing retail platform business has grown ■ Created critical market share in Saint Petersburg and North- 30 times in 2004-11 with VTB24 becoming clear #2 retail player West
Slide 33: BoM and TCB – proven value accretion
BoM and TCB – proven value accretion Profile One of the core subsidiaries servicing some of the Meets all KPIs in terms of growth and profitability Group's target client segments High asset quality (NPL ratio at 2.4%) Sufficiently capitalised – all capital adequacy indicators Actively inte