#1VOZROZHDENIE BANK THE BANK THAT IS ALWAYS WITH YOU Bank Vozrozhdenie 17 years of successful development Investor presentation December, 2008#2Investor presentation . Bank Vozrozhdenie in brief . . . Strategy & business overview Funding, Risk, Corporate Governance Financial Highlights Q3 2008 Investment summary VOZROZHDENIE BANK 2#3Vozrozhdenie Bank - a Community Bank built on SME and Individual relationships Assets: Loans: Retail funds: Net income for 9M: Shareholders' equity: ROE : Significant market presence RUB 137,131 mln RUB 103,200 mln RUB 104,166 mln RUB 2,525 mln RUB 14,396 mln 25.8% #8 Deposits from individuals # 3 Volume of loans to SMEs Note: data as of September 30, 2008 Retail clients: Corporate clients: Headcount (avg.): Offices: ATMs: Market capitalization: 1,270,000 #17 59,000 6,500 Branches 176 * RBC most recent ratings 633 Credit ratings RUB 7,729 mln Moody's Aaa Aa3.ru Aa Moody's Interfax Note: data as of October 30, 2008 Ratings Moody's Ratings Standard & Poor's Included in indexes: Ba3/D-/NP, stable BB-/ruAA-, negative MICEX Financial Index RTS-2 Listing VOZROZHDENIE BANK A Baa #28 Assets S&P AAA ruAA AA S&P national scale A BBB Ba3 BB- BB Ba Moody's S&P B international B A2 MICEX, A2 RTS Caa 01.01.06 01.09.06 01.05.07 01.01.08 01.09.08 CCC 3#4. • Share capital Shareholding structure (on May 12, 2008) Other Management Russian Professional investors Chairman anagement 31% 7% 6% 8,000 individual shareholders 800 Russian companies 3% 11% Free float 42% Foreign Professional investors Share price on MICEX shares 100 000 10 000 1 000 100 10 1.11.07 1.2.08 1.5.08 1.8.08 Volumes of trading (shares) 2007 1.11.08 0 rubles 1800 1440 1080 Volume 720 Last Price 360 2005 2006 10M 2008 MICEX (from 1/8/2005) 186 347 349 130 2 050 384 2 358 269 RTS 174 238 167 152 380 851 119 067 OTC (from 23/1/2007) 14 790 607 15 103 214 23,748,694 ordinary shares 1,294,505 preferred shares* * non-voting perpetual VOZROZHDENIE BANK German stock exchanges (ADR) 481 939 227 539 234 059 52 402 Total 842 524 743 821 17 455 901 17 632 952 4#5Market Strategy Corporate clients Servicing clients at each stage of business development Balanced lending and funding policy A community bank based on relationships Acquiring new customers Retail clients Servicing clients throughout their whole life- cycle Focus on core banking products Focused regional expansion, branches and ATMs Growing base of depositors and retail borrowers Payroll Services bridges commercial to retail sectors VOZROZHDENIE BANK 5#6Distribution network Focus on 20 regions with most diversified economies Moscow Region - home territory Murmansk Magadan St. Petersburg Petrozavodsk Kaliningrad Tula Ryazan Yaroslavl Moscow Region Nizhny Novgorod Saransk Volgograd Bostov Volgodonsk Krasnodar Stavropol Novorossiysk Makhachkala Barnaul Komsomolsk-na-Amure ° Khabarovsk Taldom Klin Dmitrov Lotoshino Sergiev Posad Solnetchnogorsk Pushkino Volokolamsk Shahovskaya Istra Khimki Shohyolkova Mitischi No ginsk Krasnogorsk Ruza Zvenigorod Barashiha . ⚫Elektrostal Lyubertsy Kurovskoye • Shatura Odyntsovo Ramenskoye Mozhaisk • Podolsk Bronnitsy Egoryevsk Naro-Fominsk Domodedovo Chekhov Mikhnewo Voskresensk Kolomna Lukhovitsy Serpukhor Stupino Pusohino Kashira Zaraisk Serebrianie Prudi Additional offices opened in '07-'08 Replication of Moscow region model in other regions: Total offices opened in last 2 years Moscow region 106 15 Stavropol' Krai 13 3 Rostov-on-Don region 8 0 Volgograd 7 3 Saint Petersburg 8 50 with high recognition of brand IPSOS survey 85% of respondents in our regions know us TNS loyalty survey Ipsos tns TEN the sixth sense of business •Loyalty index equals top 10% of major international banks ⚫94% of our clients are ready to recommend us VOZROZHDENIE BANK 6#7Business model Business based on relationships... ... gives strong non-interest income RUB bln • Customer oriented organic growth Non-interest income 3.5 3.2 • Conservative balance sheet Net interest income 2.8 2.6 35% 2.4 • Prinarily deposit funded 38% 2.1 41% 36% 1.8 39% • Focused network expansion 37% 38% 65% 62% 64% 62% 63% 61% 59% Increasing efficiency in service delivery Values: Responsive, Personal, Dependable Loan portfolio growth... Note: all loans are gross loans RUB bln Retail lending Corporate lending 20 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2009 funded by customer accounts 62 101 88 82 40% 41 36 36 32 RUB bln 107 Interest-free Current accounts 97 20 19% 84 Interest-bearing Deposits 80 81 76 18 73 63 15 17 17 69 61 63 13 10 81% 26 27 27 30 32 30 87 53 61 65 53 99 78 64 67 34 36 40 40 60% 60 51 60 554 45 44 45 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q12008 Q2 2008 Q3 2008 Note: all loans are gross loans VOZROZHDENIE Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q12008 Q2 2008 Q3 2008 BANK 7#8RUB mln Corporate business Corporate lending Large corporations ■SMES 87 40 ■ Other 78 Corporate funding RUB mln Current Accounts ■Term Deposits 65 67 64 29 31% 61 53 15 16 18 14 10 45 49 47 48 41 1 2 1 2 24 42 24 31 67% 27 24 56 52 19 21 21 17 2% 1 2 2 6 8 10 45 42 37 32 32 56% 25 26 24 23 23 19 44% 13 15 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Diversified loan book Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q12008 Q2 2008 Q3 2008 SME focus Data as of September 30, 2008 Other Transport 9% Industry State 8% 25% organizations 2% Up to RUB 30 mln ■RUB 30 mln - 100 mln RUB 100 mln - 750 mln More than 750 mln 79% RUB 46% 12% 86,956 Finance mln. 12% 23% 5% Construction 17% Wholesale & 27% 13% 13% 8% retail trade 1% Agriculture By volume By number Data as of September 30, 2008 VOZROZHDENIE BANK 8#9Retail business Retail loan book growth RUB bln consumer loans car loans credit cards mortgages Retail deposits distribution by size RUB3-30 thosand RUB30 100 thosand RUB100-400 thousand Data as of September 30, 2008 RUB400 thousand - 1 mln 20 20 17 18 over RUB1 mln 44% 17 15 10 31% 35% 13 9 29% 10 9 25% 8 6 3 17% 52 2 2 3 3 3 8% 2 3 4 4 5 1% By volume By number 7% 2% Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Retail funding Retail deposits by original term Placed and rolled-over in Q3 2008 56 Current Accounts 54 ■ 3 months 50 50 50 Term Deposits 6 months 60% 45 13 42 14 39 12 13 11 1 year Over 1 year 10 6 29% 30 30 32 32 34 36 39 41 11 43 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q12008 Q2 2008 Q3 2008 VOZROZHDENIE BANK 9% 2% By volume 66% 15% 11% 9% By number 9#10Card business Number, turnover and balances RUB, bln. Competitive ATM infrastructure Moscow region cities & towns, number 167 100 177 79 80 67 000'acc 16 1120 15 1050 14 credit turnovers, RUB bln. 162 980 13 Sberbank number of accounts, '000 acc. 910 12 840 11 accounts balances, RUB bln. 770 10 700 9 630 896543210 560 7 490 420 350 comparison, % 280 210 140 70 0 Bank Vozrozhdenie 2002 2003 2004 2005 2006 2007 2008 109 April Card business expansion Q3 2007 Q2 2008 Q3 2008 · Payrolls 4,000 7000 7,300 133 139 July November Target 2009-10 Credit Card development strategy • Offering cards only to existing clients. • - top and mid-level managers and specialists Pushing cross-sales between retail and corporate More active credit cards Exceptionally low loan losses Debit cards 916,620 1,070,160 1,070,160 . Credit cards 53,580 88,785 88,785 . VOZROZHDENIE BANK 10#11Funding, Risk & Corporate Governance VOZROZHDENIE BANK 11#12Balance sheet changes quarterly Liquidity cushion used for business support RUB bln Cash & equivalent 137 132 18 117 16 111 8 S 10 18 100 15 8 20 93 3665 2 20 9 5 7 8 18 7 5 17 15 16 Due from other banks Clients funds still the major funding source RUB bln 82 137 132 117 111 43 41 43 100 93 33 Retail deposits Retail accounts 39 36 13 Corporate accounts 14 34 34 Corporate Securities 82 7 12 5 32 32 30 12 13 27 26 26 11 Retail loans 75 84 75 10 6 10 24 24 23 21 19 20 20 22 22 deposits ■ Securities issued ■Syndicated loans 59 51 62 62 62 72 65 Corporate loans 13 17 9 Subordinated 10 8 CO 6 7 7 8 7331 7335 ■Other assets 11 11 12 4 4 5 5 5 5 7 13 4 M 8335 5 loans Other Liabilities 13 13 14 ■ Equity 6 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 VOZROZHDENIE BANK Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 12#13Liquidity management Liquidity cushion RUB mln Maturity structure ■Cash & equivalents RUB 34 bln Due from other banks RUB RUB 31 bln ■Securities 28 bln RUB 27 bln 35% 16,1 RUB 17 bln RUB RUB 18 bln 17,7 14,5 18 bln 6,5 8,5 7,3 9,8 7,2 5,4 5,9 4,4 4,7 45% 21% 20% 19% 19% 17,6 0.6 7,6 8,1 8,3 6,7 5,2 5,2 5,2 Assets Liabilities 25% 16% Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Demand and less From 1 to 6 From 6 to 12 Over 12 Months than 1 month months months VOZROZHDENIE BANK 13#14Market funding Low dependence on market funding 1st syndication - due March 2009 . • Successfully rolled-over in 2008 Increased from $50.0 to $59.8 million • 6M LIBOR + 1.8% ~ 4.2% 2nd syndication - due October 2009 • $ 53 million • 6M Libor + 1.2% -6.0% Debut bond issue: - Market funding uncertainty – small impact on business • Uncertain access to new international market funds • Strategy to grow business on the basis of domestic sources . • Growth plans developed not relying on market funding Focus on improvements: Efficiency Risk Management Corporate Governance Bond trading Bonds 900 000 • - RUB 3 bln. due March 2010 • Coupon -8.95% 750 000 • MICEX A1 - CBR Lombard List 600 000 Market funding policy - less than 10% of liabilities 450 000 300 000 150 000 VOZROZHDENIE BANK Volume of Yield of the last deal % 48 40 40 32 24 ཧྨསཾ 29,62 16 8,95 Coupon rate 8 0 0 01.04.2007 01.07.2007 01.10.2007 01.01.2008 01.04.2008 01.07.2008 01.10.2008 14#15Credit Quality Management Credit Risk Over-due loans 5,0% 3,6% 3,5% 3,5% Provisions, % of Total Loans Impaired, % of Total Loans NPL, % of Total Loans Large corporate SMEs Mortg. RUB mln Other Total retail loans % of Total portfolio 3,3% 3,5% 1,8% Current loans 28,663 56,261 9,469 10,037 104,430 97.6% 1,4% 2,5% 2,5% 2,3% 2,3% 0,6% 0,6% 0,9% 0,7% Past-due, including 0 2,031 212 255 2,498 2.3% 2005 2006 2007 Q1 2008 Q2 2008 Q3 2008 Less than 0 169 147 89 405 0.4% Retail over-due loans 30 days 2,4% Overdue loans on credit cards Overdue car and consumer loans 2,0% Overdue mortgages/mortgage portfolio 1,6% 1,2% 0,8% 0,4% 0,0% 01.01.2006 01.09.2006 Over 30 0 1,063 19 47 1,129 1.0% days Impaired 799 46 119 964 0.9% Provisions 28,663 2,873 161 260 3,729 3.5% Net loans 28,228 55,419 9,520 10,292 103,460 01.05.2007 01.01.2008 01.09.2008 VOZROZHDENIE BANK 15#16High level of corporate governance Board of Directors consists of 12 members including 9 non-executive members Independent directors head Audit & HR Committees • Timely information provision to investors Full disclosure on web-site Quarterly IFRS financial reporting with web-cast presentations Financial reports under IFRS audited from 1991 Comprehensive system of internal audit • Solid and professional team • Continuing excellent reputation recognition TOP-5 Russia's best governed companies - 2007 STANDARD The most shareholder transparent bank in Russia - 2006, 2007 & POOR'S MA TROIKA DIALOG "... the Bank is well informed on the principles of corporate governance and proves to be very much interested in the future improvement of the practice of corporate governance... 2004 " IFC VOZROZHDENIE BANK 16#17Q3 2008 IFRS Results Excellent profit in difficult environment VOZROZHDENIE BANK 17#18Q3 2008 key results Assets growth RUB bln 82 48 +37% 137 132 117 111 100 93 Net profit RUB mln +10% 966 878 688 681 542 399 275 Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Stable funding Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Operational expenses RUB bln ■Market funding RUB mln -6% 4% 1770 1762 1656 Customer funds ■Capital 1589 1378 1 390 1194 113 110 82% 92 96 82 75 69 8 14 14 15 15 16 19 14% Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 VOZROZHDENIE BANK Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 18#19Income & Margins Operating income Fee income RUB bln 3,5 RUB bln 3,2 0,1 0,2 2,8 other 2,6 1,1 2,4 0,2 income 2,1 0,1 1,0 0,1 10 1,8 0,1 0,9 0,8 0,1 0,8 0,7 0,6 1,3 1,5 1,7 1,7 20 1,1 Other 1,1 1,0 13% 17% 0,9 0,8 0,8 ■Retail 5% business 0,7 12% 10% 35% 0,6 10% 34% 35% Fee 11% 34% income 38% Bank 41% 40% 2,3 29% cards & 30% 26% 2,0 30% payroll 29% ■Net 29% 30% interest 32% 20% 19% 21% 25% 22% 21% ■■ Corporate payments income Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 Spread Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 NIM on average assets 8,6% 8,1% 7,1% 7,2% 7,6% 7,5% 6,4% 6,7% 6,8% 5,7% 6,2% 6,3% 6,0% 5,8% Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 VOZROZHDENIE BANK Q1 2007 Q2 2007 Q3 2007 Q4 2007 Q1 2008 Q2 2008 Q3 2008 19#20Key performance indicators ROE. % Mid-term target: 20-25% 21,0% 18,5% 19,1% 25,8% 2006 2007 9M 2008 2005 Capital adequacy Tier 1 Tier 1 + Tier 2 15,9% 15,0% 12,5% 12,9% 11,7% 10,6% 8,7% 7,7% ROA. % 1,39% 1,37% 2005 2006 2,07% 2,70% 2007 9M 2008 Cost to income ratio. % 76,1% Mid-term target: 50% 72,3% 62,7% 53,9% 2005 2006 2007 9M 2008 2005 2006* 2007 9M 2008 *2006 - less extraordinary items VOZROZHDENIE BANK 20 20#21Investment Summary: Bank Vozrozhdenie • • Sound long-term strategy • • • Adaptable in a changing environment High profitability on any size of the balance sheet Strong lead in expanding regional SME and retail markets Current Challenges • Funding: loan to deposit ratio ~ 110 - 115% • Credit quality . • • Efficiency Personal Bank for individuals and corporate clients . · · 60% of client base concentrated in Moscow region - Corporate focused on SME – little oil & gas, mining or heavy industry Business diversity and flexibility High risk management and corporate governance standards . • No 1 in Information Transparency to Shareholders by S&P (2007&2006) S&P rating BB- assigned in Aug'08, Moody's Ba3 confirmed in Oct'08 • Positive track-record of communication with investors • . Recent Board of Directors meeting held according to best practices Active HR& Compensation and Audit Committees VOZROZHDENIE BANK 21 21#22Investor Relations contacts Julia Vinogradova Advisor to the Chairman +7 495 705 91 74 [email protected] Svetlana Fedotova Economist of IR division +7 495 705 91 74 [email protected] [email protected] Vladimir Baklanov Economist of IR division +7 495 705 91 74 [email protected] http://www.vbank.ru/en/investors VOZROZHDENIE BANK 22 22