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management report Λ 36 SBERBANK 170 YEARS. BY YOUR SIDE ANNUAL REPORT OPERATIONS ONFINANCIAL MARKETS 2011 Money market operations, foreign currency and precious metals trading 37 Securities transactions 38 FINANCIAL MARKETS OPERATIONS ON uring the first six months of 2011, foreign currency liquidity remained stable. With the goal of increasing the share of long-term liabilities in our overall foreign currency liability portfolio, Sber- bank issued Eurobonds for the total value of USD 1 billion and raised a syndicated loan in the amount of USD 1.2 billion in the second half of the year. These efforts, along with foreign currency deposits from customers, allowed us to reduce the volume of foreign currency repo transactions by almost USD 1.4 billion. The surplus liquidity in foreign currency was deposited with leading Western banks and then used in swap transactions to maintain Ruble liquidity. Surplus Ruble liquidity with a downward trend prevailed for the better part of the year. Sberbank invested surplus Ruble liquidity by participating actively in interdealer reverse repo transactions and interbank lending activities. In the fourth quarter, Ruble liquidity shrank sizably, mostly due to lending transactions. To restore liquid- ity, Sberbank raised capital on the interbank money market, entered into swap deals and raised funds from the Bank of Russia through repo transactions. MONEY MARKET OPERATIONS, FOREIGN CURRENCY AND PRECIOUS METALS TRADING Throughout 2011, Sberbank maintained its position as a key player on the interbank lending market and domestic foreign currency mar- ket. The total volume of foreign exchange transactions on the inter- bank and stock exchange markets reached RUB 33.3 trillion, while deposit transactions (interbank lending and redistribution of funds among banks) totalled RUB 72.7 trillion. The value of foreign exchange and deposit transactions with the currencies of CIS states and other former Soviet Republics was more than RUB 20 billion. On the derivatives front, much attention was given to developing our customer base and trading infrastructure and to promoting deriva- tive products for corporate customers. For transactions with corpo- rate customers, the Bank drafted a template agreement governed by English law and a framework agreement governed by Russian law, and developed guarantee mechanisms (a share pledge and collateral agreements) for derivative transactions. The Bank also actively pro- moted a new product range incorporating interest rate derivatives and structured deposits. Derivative transactions with customers totalled USD 7 billion in 2011. According to expert estimates, Sberbank's share in the derivatives market increased from 1-2% to 10%. Sberbank maintained its position as a key player on the interbank lending market and domestic foreign currency market There was a lot of activity on the foreign currency trading market in 2011 due to highly volatile exchange rates. As a result, Sberbank increased the volume of bank note transactions to USD 18 billion or 1.5 times the figure for 2010, while its share of import and export trading of foreign currency grew from 22.4% to 36.7%. The total volume of precious metals trading transactions outside Russia, excluding swap deals, rose by a factor of 1.2 to USD 7.6 billion, while swap deals dropped from USD 4.9 billion to USD 2.6 billion, mainly because there was no need to use the swap mechanism as a source of US Dollar funding throughout most of the year. ^ 37 170 YEARS. IT'S JUST THE BEGINNING WWW.SBERBANK.RU management report

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