August 2019 INVESTOR PRESENTATION
This presentation has been prepared by VTB Bank (PJSC) (“VTB”) and has not been independently verified. This presentation does not constitute or form part or all of, and should not be construed as, any offer of, or any invitation to sell or issue, or any solicitation of any offer to purchase, subscribe for, underwrite or otherwise acquire, or a recommendation regarding, any shares or other securities representing shares in, or any other securities of VTB, or any of its subsidiaries, nor shall it or any part of it nor the fact of its presentation or distribution form the basis of, or be relied on in connection with, any contract or any commitment whatsoever or any investment decision. Some of the information in this presentation may contain projections or other forward-looking statements regarding future events or the future financial performance of VTB and its subsidiaries (together with VTB, the "Group"). Forward-looking statements are statements that are not historical facts. They include statements about our beliefs and expectations and the assumptions underlying them. These statements are based on plans, estimates and projections as they are currently available to the management of VTB. Such forward-looking statements are based on numerous assumptions, beliefs and expectations regarding the Group's present and future business strategies, financial conditions, targets and the operating environment. 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 materially differ 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 assume no obligation to update or revise these statements whether as a result of new information or for any other reason or to make them conform to actual results. Certain numbers and ratios contained herein, related to past dates and periods, might have been restated in accordance with the latest financial statements issued, and hence differ from the ones presented in the previous communications. Figures shown in this presentation are based on figures disclosed in the annual and interim financial statements of the Group. However, figures used in this presentation might have been rounded, which could result in slight differences in percentage changes compared to those provided in such financial statements.
VTB at a Glance 4 Macro Environment in Russia 9 Strategy and Guidance 12 Transformation 15 Business Overview 19 Financials 24 Appendix 33
VTB AT A GLANCE 4
OVERVIEW OF VTB GROUP DATA AS OF 30-JUN-19 VTB Group in Russia CLIENT BASE BRANCH NETWORK 13 1.7 mln clients thsd in Russia in Russia ASSETS ATMs 15.1 17 MARKET SHARE AS OF 30-JUN-19 thsd RUB trln in Russia CREDIT RATINGS EMPLOYEES 16.6% 18.4% 19.3% 82 LOANS TO CORPORATE ASSETS BBB- INDIVIDUALS LOANS ▲ 40 bp ytd ▲ 60 bp ytd ▲ 70 bp ytd Baa3 Moody’s thsd ruAAA VTB Group MARKET CAPITALISATION GLOBAL PRESENCE 23.3% 14.9% 20.9% 8.2 DEPOSITS OF CORPORATE 15 MORTGAGE INDIVIDUALS DEPOSITS ▲ 20 bp ytd ▲ 60 bp ytd ▲ 90 bp ytd countries USD bn VTB AT A GLANCE MACRO STRATEGY & GUIDANCE TRANSFORMATION BUSINESS OVERVIEW FINANCIALS APPENDIX 5
VTB OWNERSHIP STRUCTURE AND CAPITAL COMPOSITION STRUCTURE OF EQUITY CAPITAL STRUCTURE OF VOTING RIGHTS DATA AS OF 1-JUN-19 FEDERAL AGENCY FOR STATE ORDINARY SHARES (HELD BY FEDERAL AGENCY PROPERTY MANAGEMENT FOR STATE PROPERTY MANAGEMENT) 60.9% 12.1% 19.9% ORDINARY SHARES IN FREE FLOAT 7.8% INSTITUTIONAL INVESTORS 35.9% PREFERENCE TYPE 1 SHARES FREE FLOAT STATE-OWNED (HELD BY MINISTRY OF FINANCE OF 39.1% 92.2% THE RUSSIAN FEDERATION) 32.9% PREFERENCE TYPE 2 SHARES (HELD BY STATE CORPORATION INDIVIDUAL INVESTORS DEPOSIT INSURANCE AGENCY) 3.3% 47.2% +20 bp ytd BASEL CAPITAL RUB BN PRE-IFRS 9 POST-IFRS 9 BASEL CAPITAL COMPOSITION 14.8% 14.6% 14.3% 14.3% 13.7% 13.5% 13.2% 12.0% TOTAL CAR 1,536 TIER I RATIO 13.1% 12.9% 12.5% 198 12.4% 12.3% TIER II CAPITAL 12.0% 12.0% 142 1,544 1,558 1,536 9.8% 1,514 1,458 TIER I PERPETUAL EUROBOND 1,519 1,442 153 136 161 200 169 1,217 182 166 219 1,260 TIER I W/O PERPETUAL 1,383 1,405 1,400 1,345 1,319 1,276 1,276 998 TIER I LESS INVESTMENTS -58 30-Jun-19 31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 01-Jan-18 31-Dec-18 31-Mar-19 30-Jun-19 VTB AT A GLANCE MACRO STRATEGY & GUIDANCE TRANSFORMATION BUSINESS OVERVIEW FINANCIALS APPENDIX 6
VTB CORPORATE GOVERNANCE SYSTEM ELECTS INDEPENDENT GENERAL MEETING APPROVES AUDITOR STATUTORY AUDIT OF SHAREHOLDERS REPORTS COMMISSION ELECTS REPORTS APPOINTS ELECTS STRATEGY AND SUPERVISORY COUNCIL CORPORATE 11 MEMBERS GOVERNANCE COMMITTEE INCLUDING 4 REPRESENTATIVES OF MINORITY PREPARES PREPARES SHAREHOLDERS RECOMMENDATION RECOMMENDATION STAFF AND REMUNERATION COMMITTEE APPOINTS Anton Siluanov APPOINTS Chairman AUDIT of VTB Supervisory Council PREPARES COMMITTEE RECOMMENDATION First Deputy Prime Minister - Finance Minister of Russia APPOINTS REPORTS MANAGEMENT BOARD APPOINTS REPORTS 13 MEMBERS INTERNAL AUDIT CORPORATE DEPARTMENT SECRETARY PREPARES RECOMMENDATION Andrey Kostin President and Chairman of VTB Management Board REPORTS VTB AT A GLANCE MACRO STRATEGY & GUIDANCE TRANSFORMATION BUSINESS OVERVIEW FINANCIALS APPENDIX 7
VTB GROUP OPERATING MODEL IN LINE WITH BEST GLOBAL PRACTICES 6M’19 ASSETS CORPORATE-INVESTMENT RETAIL BUSINESS MEDIUM AND SMALL BANKING BUSINESS 1,679 RUB BN 5,387 RUB BN 7,673 RUB BN BUSINESS WITH SMALL CORPORATE BUSINESS WITH INDIVIDUALS BUSINESS WITH LARGE CORPORATE AND MID-CORPORATE CLIENTS CLIENTS #1 Investment bank and #2 Corporate bank in Russia Over 1,700 branch network and 12.5 mln clients in Russia 500,000 mid-corporate banking clients Broad corporate client base (coverage and c. 17,000 ATMs, JV with the Russian Post: and small business clients in Russia >80%) with long-term relationships #1 retail franchise in Russia (c. 17,000 retail wide regional franchise with leading Russian companies across outlets and c. 5,000 ATMs all economic sectors of Post Bank) CORPORATE CENTER SUPPORT CONTROL AUDIT AND c FINANCE IT ADMIN STRATEGY HR COMPLIANCE RISK SECURITY LEGAL OPERATIONS MARKETING PR MANAGEMENT VTB AT A GLANCE MACRO STRATEGY & GUIDANCE TRANSFORMATION BUSINESS OVERVIEW FINANCIALS APPENDIX 8
MACRO ENVIRONMENT IN RUSSIA 9
MACRO ENVIRONMENT IN RUSSIA OIL PRICE USD AND EXCHANGE RATE RUB INFLATION AND CBR KEY RATE CBR KEY RATE (AVG) USD/RUB (CBR) CPI DEC/DEC OIL PRICE (URALS, AVG) FOR 6M’19 JUN/JUN 66.9 65.3 62.5 60.7 58.3 12.6% 10.6% SINCE 29-JUL-19: 38.0 9.1% 7.9% 7.7% 7.4% 7.25% (ACTUAL) 12.9% 97.6 11.4% 65.8 70.8 51.0 53.1 5.4% 41.6 4.7% 4.3% 2.5% 2014 2015 2016 2017 2018 6M'2019 2014 2015 2016 2017 2018 6М'19 RUSSIAN MACROECONOMIC INDICATORS % 2014 2015 2016 2017 2018 6M’19 GDP 4.8 4.3 INVESTMENTS IN FIXED CAPITAL 2.9 2.7 2.6 2.6 2.5 2.2 2.3 2.1 1.6 1.7 INDUSTRIAL PRODUCTION 1.3 0.7 0.5 0.3 RETAIL TURNOVER -0.2 -0.8 -1.5 -2.3 -4.6 -10.1 -10.0 VTB AT A GLANCE MACRO STRATEGY & GUIDANCE TRANSFORMATION BUSINESS OVERVIEW FINANCIALS APPENDIX 10
RUSSIAN BANKING SECTOR DYNAMICS RUSSIAN BANKING SECTOR RUB BN CORPORATE LOANS RETAIL LOANS 38,602 6M'2019 16,329 6M'2019 ▼1% ytd ▲10% ytd 2018 38,947 2018 14,901 2017 34,786 2017 12,174 2016 2016 34,036 10,804 2015 2015 36,172 10,684 2014 2014 11,330 31,939 CORPORATE FUNDING RETAIL FUNDING 31,453 6M'2019 6M'2019 28,983 ▲ 0.1% ytd ▲ 2% ytd 2018 28,460 2018 31,424 2017 25,987 2017 27,004 2016 24,200 2016 25,149 2015 23,219 2015 27,924 2014 18,553 2014 24,443 VTB AT A GLANCE MACRO STRATEGY & GUIDANCE TRANSFORMATION BUSINESS OVERVIEW FINANCIALS APPENDIX 11
STRATEGY AND GUIDANCE 12
KEY VTB GROUP STRATEGIC PRIORITIES FOR 2022 FINANCIAL STRATEGIC PRIORITIES: COMMITMENTS: LEADERSHIP IN CUSTOMER FOCUS ON CLIENT- SATISFACTION AMONG PEER BANKS CENTRICITY ROE 15% ● 100% PRODUCTS AVAILABILITY DIGITAL BREAKTHROUGH IN ● >50% SALES VIA DIGITAL CHANNELS DIGITALIZATION (RETAIL AND SME) Net income RUB 300 bn ● 100% PAPERLESS WORKFLOW SET UP AND ROLL-OUT IN A LEADER IN SELECTED ECOSYSTEMS CIR 32% DIGITAL ECONOMY BUILDING A ROBUST AND EXEMPLARY TIME-TO-MARKET AGILE OPERATIONAL AND 24/7 ACCESSIBILITY TECH PLATFORM Dividend payout 50% BETTER PERSONNEL ENGAGEMENT CREATING HIGHLY EFFECTIVE ORGANIZATION MOTIVATED AND EFFICIENT TEAM & CULTURE VTB AT A GLANCE MACRO STRATEGY & GUIDANCE TRANSFORMATION BUSINESS OVERVIEW FINANCIALS APPENDIX 13
2019 GUIDANCE In line with industry LOAN GROWTH CIR ≈ 40 % Legal entities MARKET GROWTH ≈ 5% Above industry LOAN GROWTH NIM ≈ 3.5 % Individuals MARKET GROWTH ≈ 20% ≈ 1.2 % ≈ 200 RUB BN Net profit COR VTB AT A GLANCE MACRO STRATEGY & GUIDANCE TRANSFORMATION BUSINESS OVERVIEW FINANCIALS APPENDIX 14
FROM BUILDING TRADITIONAL BANKING PLATFORM TO BECOMING A NEW ELEMENT OF CLIENT LIFESTYLE 15
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