2016 VTB Group Investor Day London / May 17, 2016 Some of the - PowerPoint PPT Presentation

2016 VTB Group Investor Day London / May 17, 2016

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 assumptions regarding the Group's present and future business strategies and the environment in which the Group will operate in the future. We caution 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.

VTB Group Overview Andrey Kostin President and Chairman of VTB Bank Management Board

IMPRESSIVE GROWTH STORY AND STRONG COMPETITIVE POSITIONS IN ALL KEY SEGMENTS Total assets RUB trln today  Leading player in Russia +29% y-o-y − 2nd largest banking group in Russia vs market +24% y-o-y 13.6 − 18 % market share in Russia 12.2 8.8  7.4 Successful growth story − 12-fold asset growth for the past 1.1 ten years 2005 2012 2013 2014 2015  Well-established universal banking model VTB market share in Russia − leading Russian banking group with strong positioning in all key Customer loans Customer deposits segments: CIB, Retail banking, Insurance, Leasing, Factoring, etc. 19% 17% 13%  Extensive branch network 7% Legal entities − over 1, 900 branches in Russia − presence in 22 countries 2005 2015 2005 2015 18%  11% Solid client base 5% Individuals 2% – over 20 mln active retail and corporate customers 2005 2015 2005 2015 4

VTB GROUP CORPORATE DEVELOPMENTS: MIX OF MERGERS AND ORGANIC GROWTH Completion of the BoM integration:  Optimisation of costs  Strengthening of internal control and risk management system  Revenue synergies: increased cross-sales and Organic growth strengthening of VTB Bank’s competitive positions 2004 2005 2008 2010 2011 2013 2016 Launch of Post Bank, a joint venture between VTB and Russian Post M&A deals  A wide network of outlets and an extensive client base  Access to pensioners base  VTB Group expertise and infrastructure 5

VTB GROUP FLEXIBLE OPERATING MODEL Corporate – Investment Banking Retail Business Mid-Corporate Banking global business line global business line global business line Assets (1) 22% 7.6 44% 3.8 0.8 5% RUB trln Large corporate clients Small corporate clients and individuals Mid-corporate clients (revenue RUB 0.3 – RUB 10 bn) (revenue > RUB 10 bn) (revenue <RUB 0.3 bn)  Broad corporate client base with  #2 Retail bank in Russia  Separate global business line and long term relationships with leading profit centre since 2014  Network: 1,648 outlets and Russian companies across all  Wide regional franchise 13 thousand ATMs economic sectors  Post bank  #2 Corporate bank in Russia  #1 Investment bank in Russia Corporate Centre Risk Audit and IT Finance HR Admin Legal Security PR Compliance management (1) Second number represents share of each global business line in VTB Group’s total assets, % 6

SUMMARY 2014 – 2016 Strategy of quality growth 2017 – 2019 New development strategy Maintaining position of С orporate-Investment Maintaining position of Сorporate -Investment 1 1 banking while further improving its efficiency banking while further diversifying CIB business mix Outperforming the market growth in Retail Outperforming the market growth in Retail banking, banking, and further increasing the share of Retail and further increasing the share of Retail in the 2 2 in the Group’s business mix Group’s business mix Prioritising Mid-Corporate banking as a Outperforming the market growth in Mid-Corporate 3 separate operating segment and profit centre while 3 banking in loans and transaction fee income while further increasing the market share in Russia further growing customer base Further consolidation of VTB Group governance Enhancement of Group level risk management structure and enhancement of Group level risk 4 4 and controls management and controls Focusing on operating efficiency and stringent cost Focusing on operating efficiency and stringent 5 5 control cost control Prioritising investments in technological platform Transitioning the Group to unified functional and 6 6 development and innovations technological platforms 7

VTB Group Corporate-Investment Banking Yuri Soloviev First Deputy President and Chairman of VTB Bank Management Board

CIB: 2015 KEY ACHIEVEMENTS In 2015 CIB managed to achieve CIB net income and costs dynamics RUB bn  Four-fold year-on-year increase in NOI driven 101.6 by strong revenue growth, tight cost control and a reduction in provisions vs high 2014 29.9 24.2 base -34.2  CIB increased / maintained its leading market position in loans (~23%), deposits (~14%), 2014 2015 current accounts (~15%) and across all investment banking products Net operating income Net profit  Improved portfolio mix: increase share of Oil CIB structure of net operating income before and Gas, Metals and Mining, Retail, Telecom, provisions Chemicals and lower exposure to Construction, Utilities, Public Sector  Year-on-year 30% increase of fees and 15% commissions driven by cross-sell and new product development 9% 45% 45% 76% 2014 NII NCI 2015 10% Other Income Other income 9

CIB: 2013-2019 MARKET IN RUSSIA CIB loans RUB trln CIB deposits and current accounts RUB trln ~7% ~8% ~23% ~22% CAGR CAGR CAGR CAGR 30-31 29-30 23-24 23.8 23-24 22.8 19.7 19.6 13.6 13.2 2013 2014 2015 2016 (F) 2019 (F) 2019F 2016F 2013 2014 2015 2016 (F) 2019 (F) 2019F 2016F  Significant banking market growth in 2013-2016 driven by currency impact, closed international capital market and low risk appetite of foreign banks to Russia;  We expect slower market growth in 2016-2019 both in lending and deposit / current accounts markets in Russia due to low investment demand and high interest rates. 10

CIB CREDIT BUSINESS (1) : 2014-2015 HIGHLIGHTS Key 2015 achievements Loan portfolio RUB bn +14%  Managed to increase CIB segment loan portfolio by 18% and ensure strong revenue growth +18%  Maintained strong positions in corporate lending; worked with more than 400 active client groups 7,671 6,748  Kept leading position: VTB market share of CIB Russian 6,139 5,186 credit portfolio rose from 19.3% in 2013 to 23% in 2015  International franchise development: VTB Group established itself as one of the leading lenders and arrangers of private financings in Sub-Saharan Africa and arranged some 2014 2015 strategic financing transactions in CEEMEA and Asia Loans and advances to legal entities (net) (including debt restructurings, holding company financings CIB loans and advances (net) and event driven transactions)  VTB has extended its presence in infrastructure finance by moving forward with the financing of a landmark toll road construction project and several new deals in mining, airport and shipping finance  VTB has taken the leading position in terms of volume of deals approved under the Government investment projects support program (P-1044)  Development of Trade Finance franchise and further build-up relations with counterparties from 55 countries  Since 2013 Trade Finance business volume has been increased by 7.0x  Became one of the key partner banks for Russian Export Credit Agency (EXIAR) (1) Key products in L&D segment are Credit, Leveraged Finance and Investments, Infrastructure credits and project finance, Trade finance, Leasing 11

CIB TRANSACTIONAL BUSINESS: 2014-2015 HIGHLIGHTS 2015 Key achievements Deposits and current accounts RUB bn  Overall GTB revenue increase: net operating income grew by 117%, fees and commissions – by 44%, net interest income – by 121% 3,940  Current account volumes grew by 51% significantly higher than 3,520 3,212 market growth 2,152  Significant market share: current accounts – 15%, deposits – 15%; factoring – 33%  Leading Custodian in Russia with 6% increase in assets under custody 2014 2015  VTB provided new cash management solutions for 80+ large groups Deposits of legal entities of companies which included more than 600 legal entities CIB deposits  VTB is recognised to be the top solution and product provider in Cash Management in the Russian Market. Launched multiple CIB GTB segment financial results RUB bn products around Liquidity Management, Channels and Cash & Settlements 29.1  Implemented centralised treasury solutions for 18 government controlled companies, including Rostelecom, Transneft, Rostech and Alrosa 16.2 13.4 12.7  Capital consuming transactions were priced with intense focus on 8.8 ROE hurdle rates 4.3  VTB Factoring completed the largest ever global factoring transaction between InterRao and Gazprom EnergoHolding for RUB 13 bn 2014 2015  Net operating income Fees and comissions Servicing 24 Depositary Receipts Programs of The Bank of New Net profit York Mellon and Deutsche Bank Trust Company Americas 12