2011 VTB Group Investor Day2011 VTB Group Investor Day

Moscow

© VTB 201© VTB 201111

MoscowOctober 04, 2011

Some of the information in this presentation may contain projections or other forward looking statements regarding future events or the futureSome of the information in this presentation may contain projections or other forward-looking statements regarding future events or the futurefinancial performance of JSC VTB Bank ("VTB") and its subsidiaries (together with VTB, the "Group"). Such forward-looking statements are basedon numerous assumptions regarding the Group's present and future business strategies and the environment in which the Group will operate in thefuture. We caution you that these statements are not guarantees of future performance and involve risks, uncertainties and other important factorsthat we cannot predict with certainty. Accordingly, our actual outcomes and results may differ materially from what we have expressed or forecastedin the forward-looking statements. These forward-looking statements speak only as at the date of this presentation and are subject to change

2

without notice. We do not intend to update these statements to make them conform with actual results.

Agenda

1. Update on Strategy Implementation

2. Integration of New Businesses

3. Retail Banking

4. Corporate and Investment Bankingp g

5. VTB Group Outlook

3

VTB Management Team

AndreyKostin

Mikhail Zadornov

EkaterinaPetelina

YuriSoloviev

HerbertMoos

President and Chairman of the Management Board

President –Chairman of VTB24 Management Board

Member of the Management Board

First Deputy President and Chairman of the Management Board

Deputy President and Chairman of the Management Board

Group Chairman and CEO

CEO / Retail Banking

Head of Group Strategy CEO / CIB Group CFO

4

CEO

Opening Speech

5

Andrey Kostin,President and Chairman of the Management Board

Update on Strategy ImplementationUpdate on Strategy Implementation and Integration of New Businesses

6

Ekaterina Petelina,Head of Strategy, Member of the Management Board

2013 Targets – Delivering Enhanced Profitability and Growth

Strategic goals 2013 Key strategic actions

Net profit of RUB 160-180 bn

Significantly increase share of high-margin businesses (IB, retail, and etc)

Implement large-scale transformations inRUB 160 180 bn

Drive ROE to 15-20%for the Group

Implement large scale transformations in corporate business:

- Build strong transaction bank and significantly increase the share in cash

d ttl t d t

Improve profit quality structure and increase

f f

and settlement products

- Gain fair market share in mid-cap client business

I l t l b l d l fstability of financial results

- Implement global coverage model for TOP-clients, increase share of wallet and profitability in this segment

- Increase operational efficiency and c ease ope at o a e c e cy a dstreamline business processes

Efficiently integrate new acquisitions

Modify Group Governance model in order to

7

y pcreate basis for future growth

Implementation of Strategic Goals is Well on Track

Profitability already transformed… …and reinforced by high-margin businesses growth

K fi i l

Profit before tax(in RUB bn)

2009 2010 2011e1H’11Key financial indicators

54 8 53 6

100

Retail Banking Investment Banking

Profit before tax(in RUB bn)

54.8 53.6Net profit,RUB bn

20.223.4

25.53x

1.8x 1.5x

2x

10.3%

18.1% >15%

(59.6)

ROE

11.27.2

15.1

7.216.4

1H’111H’102009

45 7%

n.m.

10.3%2010

Retail market shares (1)

1H’111H’102009 2010

IB market shares45.7% 44.0% low 40%43.0%

CIR International DCM: 14.9% Domestic DCM: 24.5% Russian ECM: 24.2%

Loans: 12.7% Deposits: 7.8%

8(1) As of 30 June 2011, including TransCreditBank, excluding Bank of Moscow

TransCreditBank – Key Operational and Financial Details

Top-11 by geographic coverage (1)Top-11 by geographic coverage (1) Key financial indicatorsKey financial indicators

290 offices in 194 cities across Russia (in RUB bn) 2009 2010 1H’11

2,419 ATMs and 4,213 POS terminals

> 38,000 corporate clients and >2 mln cards

TCB market share in 1H’2011:

Total assets 258.6 390.9

Net loans to customers

143.3 203.9

Equity 20.1 28.2

426.9

282.9

30.5

Russian Railways and its affiliated companies

– 1.6% in corporate loans, 1.6% in retail loans – 2.1% in corporate deposits, 0.7% in retail deposits

Net profit 4.1 7.5

ROA, % 1.7 2.3

3.1

1.5

LTD ratio, % 102 78 96

Rankings in Russia (2)Rankings in Russia (2)

represent a significant share of TCB’s business ROE, % 22.8 31.9 21.1

No. 11 No. 10

By assets By loan book

No. 5

By mortgage No. 5

By number of ATMs

9(1) Data presented as of 01-Jul-2011.(2) Rankings are based on RAS figures, as at 01-Jul-2011. Source: Interfax, RBC.

y g gportfolio

By number of ATMs

TCB Strategic Focus Post Acquisition

TCB focus Principles of VTB and TCB interaction

Overall integration Integrate TCB by YE’2014

Migrating corporate business to VTB and merging the bank to VTB24

Russian Servicing Russian Railways Product specialisation:– TCB specialised in settlement and cash services cash -

integration strategy

Integrate TCB by YE 2014 Keeping high profitability and growth of the bank; ROE > 20%

Russian Railways coverage

group of companies and its employees is the 1st priority for TCB

TCB specialised in settlement and cash services, cashmanagement, payroll projects

– VTB specialised in lending and investment banking Maximasation of business related to Russian Railways

Coordination of work with TOP clients with VTB CIB team

Other corporate clients coverage

Continue to cover large and mid-cap clients

Coordination of work with TOP clients with VTB CIB team Independent work in other segments for the period before corporate

business migration in VTB Cross-sales of other VTB Group financial products Alignment of TCB risk policy and other key procedures according to

VTB Group standardsp

Retail Business

Focus: Russian Railways payroll clients

Split of business between TCB and VTB24 Payroll projects and corporate selling:

– VTB24 and TCB serves their current clients without changes– Independent work on attraction of new payroll program clients

TCB – no acquiring of new clients

Branch network management

Optimisation of branch network, increasing efficiency

Branch network audit Defining branches which will be transferred to VTB / VTB24 in the

future, implementation of VTB / VTB24 client service standards

10

efficiency future, implementation of VTB / VTB24 client service standards

TCB Integration Timeline

TCB li t t f t VTB TCB clients transfer to VTB Core TCB team transfer to VTB keeping motivation on

retention and growth of business transferred to VTB Keeping existing system of Russian Railways

coordinators in regional branches

Optimising branches of unified bank Transition to VTB24 processes and

procedures

Corporate business migration setup

Corporate business migration (6-9 months)

Legal integration to VTB24 (3 months)

Business integration (12 months)

4Q’2012100% ownership

over TCB

2Q-3Q’2013 3Q-4Q’20133Q-4Q’2014Integration to VTB24

setup

Aligning products, processes Harmonising product rangeI l ti VTB24 t d d

Buy-out of the remaining minority interests, lid ti f 100% h f TCB band infrastructure for corporate

clients migration

Analysing branch network, defining branches, required for Russian Railways, and

Implementing VTB24 standards Developing client communication plan Customising TCB and VTB24 IT systems Developing motivation and retention

systems for TCB personnel during integration process

consolidation of 100% shares of TCB by VTB Group

Execution of required corporate measures Notifying regulatory bodies, clients and

creditors of TCB and VTB24 Integration «branch by branch»

11

y ,opening new lacking branches

g p Training TCB personnel

g y

Bank of Moscow – Key Operational and Financial Details

BoM branch network in RussiaBoM branch network in Russia Structure of assets and liabilities (1)Structure of assets and liabilities (1)

Wide branch network – 380 offices in Russia, of T t l t Total liabilities and eq itwhich 140 in Moscow and Moscow region, and

over 1,900 ATMs Over 100,000 corporate clients and over 6.5 mln

active retail customers19%

Total assets Total liabilities and equity

21%8%7%

OtherRetail

Other

Equity

– 3.6% in corporate loans, 1.4% in retail loans

– 3.8% in corporate deposits, 1.4% in retail deposits

BoM market share (1):24% 57% 64%

Corporate

Retail

Corporate

Rankings in Russia (1)Rankings in Russia (1)

No. 7 No. 5

By assets By corporate loans

No. 5 Strong brand recognition – 41% in

Moscow and By corporate

12

Moscow region

(1) RAS, as of 01-Sep-2011.(2) Data presented as of 01-Jul-2011.

deposits

Bank of Moscow Strategic Focus Post Acquisition

Cooperation with Moscow City

– Continue expansion of the number of municipal enterprises serviced (2,000 entities and 1,500 payroll contracts) and strengthening cross-sales

– Participation in the extensive privatisation program -110 companies for sale

■ Further development of partnership with Moscow Government

City Government

– BoM – is a key transaction bank for Moscow City Purchasing Electronic Auctions with over 2,000 clients served

– Increase participation in infrastructure project financing– Among 3 banks to attract Moscow city deposits – up to RUB 150 bn

■ Integration of investment business with VTB CapitalInvestmentbusiness

Dealing with large-sized clients ■ Coordination of large-cap clients coverage with VTB in order to avoid internal competition within VTB Group

Mid-sized corporate b i i

■ Focus on business development in the mid-cap segment (<RUB10 bn), especially in Moscow and Moscow region, where current market share is low

– Presence in Moscow, Moscow region will allow BoM to cover over 50% of the total Russian mid-sized market

– Focus on developing unique loan and deposit products

42%58% 51% 49%

business in Russia Loan

portfolioDeposits

Moscow and Moscow Region

O

p g q p p

13

Other regions

Bank of Moscow Strategic Focus Post Acquisition

■ Implementation of VTB24 standards■ Further development of successful products and technologies of BoM

(online trading system, public utility service charge payment system, etc)Retail

– credit cards– consumer loans– mortgage and cars loans to be sold by VTB24

(online trading system, public utility service charge payment system, etc)business■ Key loan products:

– mortgage and cars loans to be sold by VTB24

■ Branch network optimisation in those regions where business is inefficientp g■ Increase branch network effectiveness to reach VTB24 standards (2012-2014)

Gaps:Branch network

– in terms of loans per sales point – 5x

Fi i l l

– in terms of current accounts per sales point – 9х – in terms of term deposits per sales point – 3х

■ ROE of 20%Financial goal (2013)

14

New Governance Model in Place – Basis for Future Growth

■ Creating global b siness nit CIB

Key elements of new governance model

Target Group governance model

■ Creating global business-unit CIB responsible for corporate clients (including leasing and factoring) across all geographies of Group’s presence

d i l ti GAM LAM d l f

CEO

Administrative reportingFunctional reporting

and implementing GAM-LAM model for global clients coverage

■ Creating global business unit Retail business responsible for business with

Control and support

functionsRetailCIB International

divisionp

individuals and SME clients across all geographies of Group’s presence

■ Strengthening centralisation and integration of key support and control

Local CEOintegration of key support and control functions (priority – risk and finance)

■ Cost optimisation and efficiency improvement through integrated Control and

support RetailCIBmanagement of IT and operations

ppfunctions

RetailCIB

15

Retail Banking – Key Growth Driver

Mikhail Zadornov

16

Mikhail Zadornov,President – Chairman of VTB24 Management Board

Retail Banking Franchise

#3 largest branch network in Russia (incl. TCB) 857 points of sale (incl. TCB) 7,790 ATMs (incl. TCB)

Profile Distribution network

Leading Russian retail business Track record of continued growth Focus on profitability and returns Excellently placed to capitalise on attractive

opportunities

Market position Regions

Presence in 69 regions in Russia – 86% coverage (1)

Focus on major cities with leading positions in each of the regions

Strong #2 brand in Russia Retail loans market share – 12.7% Retail deposits market share – 7.8%

Business lines Clients

8.6 mln active individuals clients (1)

Over 222,000 SME clients (1) Full range of products and services for

SME and individuals

SME (thsd)Retail deposit market share in Russia

Market share Market share VTB24 client base VTB24 client base

8.8%10.2%

12.2% 12.7%

SME (thsd)

Individuals (mln)

Retail deposit market share in RussiaRetail loan market share in Russia 8.67.8

6.5

4.6

5.7% 6.0%7.2% 7.8%

4.8%

5.9%

72.4 127.5 166.3 197.1 222.22.3

17

2007 2008 2009 2010 1H’2011

(1) Based on VTB24 data

2007 2008 2009 2010 1H’2011

Fast growing and highly profitable business

(in RUB bn) 1H’11 1H’10 y-o-y

N t i t t i 34 2 25 5 34 1%541.5608.6

3.7

Loans to individuals (Gross) (1)Loans to individuals (Gross) (1) Financial highlights (1)Financial highlights (1)

+12%

Net interest income 34.2 25.5 34.1%

Net fee and commission income 8.1 4.8 68.8%

Operating income before provisions 43.7 31.5 38.7%

P i i f l i i t ( 2 8) ( 7 0) 60 0%188 6

387.1435.3

268.4

52.83.1

155.3

40.6

182.9

45.525.2

325.4

60.0

0.6

Provisions for loan impairment ( 2.8) ( 7.0) -60.0%

Staff costs and administrative expenses ( 20.7) ( 13.3) 55.6%

Profit before taxation 20.2 11.2 80.4%

188.6

217.2

89.9

75.9 190.6

155.3

181.7 219.5

2007 2008 2009 2010 1H’2011

(RU

B b

n) 19.03.8

Mortgage loans Consumer loans Car loans Other

Retail deposits (1)Retail deposits (1)

+15%

Retail Banking contribution to VTB Results (2)Retail Banking contribution to VTB Results (2)

142.6160.4

354 1476.5

747.9862.3

+15%

28% 20%

(RU

B b

n)

189.2 285.3392.0

605.3701.9

73.068.8

84.5262.2

354.1

2007 2008 2009 2010 1H’2011Operating income before

provisions (1H’11)Total assets

(1H’11)

18

(1) Data presented as reported in VTB financial statements and includes all retail business..(2) Calculated before intersegment eliminations.

Term deposits Current accounts

Strategic Initiatives

■ Shift from product sales to servicing clients with customized approach to each segment B i b k f ll t il li t

Segment-oriented approach in

■ Become primary bank for all retail clients■ No.1 leadership for service quality

servicing customers

■ Enhance front-office efficiency by 50%■ Promote internet banking penetration for all retail clients■ Transfer of 80% routine customer transactions to automated

channels

Quality changes to drive efficiency

channels

■ Grow VTB24 branch network to 630 – 715 branches■ Development of extensive remote channel network

( 7 000 ATM d t t i l )

Infrastructure targets

(over 7,000 ATMs and payment terminals) ■ Enhance IT platform and technologies

■ Develop integrated approach to the management of VTB GroupVTB Group Retail

■ ROE at above 20%Financial goal (2013)

■ Develop integrated approach to the management of VTB Group retail businesses

VTB Group Retail businesses

19

■ ROE at above 20%(2013)

Retail Business Management on a Group Level

VTB24 experience sharing with VTB24 business model roll out in Integrated business model in Russia,

2008: Process & Technology Transfer 2010: Foreign Retail Platform 2013: International Retail Bank

p gVTB banks in CIS and Georgia VTB banks in CIS and Georgia.

Launch of retail project in Europe (France and Germany)

gCIS, Georgia and Europe under VTB24 management and coordination

VTB Bank VTB Bank

Current organisationCurrent organisation Target organisationTarget organisation

S bsidiar banks inVTB24 –

R ibilit fSubsidiary banks in CIS & EuropeVTB24

Functional coordination & businessmodel transfer

Responsibility for Retail Segment

Management of Retail business

Subsidiary banks in CIS & Europe

line and financial result responsibility

Customised Services and Products Launched

735857 1,008

800

900

1000

Customers segments

Segment-oriented approach in servicing retail customers Current results

PRIME package (launched at the end of 2008):

ges)

203 290426 430

586

422518

735

400

500

600

700

1H’09 2H’09 1H’10 2H’10 1H’11

VIP Individual banking products and services Asset management Non-financial services (advisory, life-style) Premium branches, special internet site and call-centre (n

umbe

r of p

acka

g

1H’09 2H’09 1H’10 2H’10 1H’11

PRIME package sales

PRIVILEGE package (launched at the end of 2008): es)

6 441 8,505 10,287

Total # of packages

Affluent and

Mass-affluent

PRIVILEGE package (launched at the end of 2008):

2,229 2,484 2,163 2,411 1,985

Dedicated service in all mass branches Special pricing on banking products Personal relationship managers (num

ber o

f pac

kag

2,373 4,513 6,441

1H’09 2H’09 1H’10 2H’10 1H’11

Privilege package sales

PRIORITY package (launched in 2011): ges)

Total # of packages

1 990 3,8439,9425,971

81 5811,328

1,853 2,128

3,971

Upper-mass Special pricing on banking products Personal relationship managers Discount programs and non-financial services

p g ( )

(num

ber o

f pac

kag

81 6621,990

21

Jan’11 Feb’11 Mar’11 Apr’11 May’11 Jun’11

Priority packages sales

VTB24 data

Total # of packages

Operational efficiency improved markedly along with increased client flow

100 3117.4 115.7 119.5

127.1

Daily client flow (thsd clients per day)Daily client flow (thsd clients per day) Key trendsKey trends

Over 10 minute waiting for clients decreased by 33% in the last 12 months while daily client flow rose by

84.9 83.9 86.9100.3

34.1 34.6 31.7 31.9 37.1 33.9 33.4 39.9

in the last 12 months while daily client flow rose by 29% over the same timeline

Number of complaints regarding queues in branches reduced by 2 times during the first half of 2011

4Q’09 1Q’10 2Q’10 3Q’10 4Q’ 10 1Q’11 2Q’11 3Q’11

Regional branches Moscow and Moscow region

Average term of complaint processing reduced by 3 times in the last 12 months – from 12 to 4 days

Regional branches Moscow and Moscow region branches

11:00 16%15%100%

Average time of operation (min per client)Average time of operation (min per client) Structure of client-flow by time in queueStructure of client-flow by time in queue

11:009:21 8:52 8:53

8:047:18 7:01 7:14 7:01 07:00 07:058:00

5:19 4:35 4:30 4:09 3:47 57% 57% 63% 67% 72% 78% 80%

43% 43% 37% 33% 28%20%

80%84%

85%

54%48% 22% 20% 16%15%

40%

60%

80%

T ll F t ffi

4:09 3:47 3:35 3:30 3:22 03:26 03:23

4Q’08 1Q’09 2Q’09 3Q’09 4Q’09 1Q’10 2Q’10 3Q’10 4Q’10 1Q’11 2Q’11

57% 57% 63%46% 52%

0%

20%

3Q’08 4Q’08 1Q’09 2Q’09 3Q’09 4Q’09 1Q’10 2Q’10 3Q’10 4Q’10 1Q’11 2Q’11

22VTB24 data

Teller Front-office manager 10 mins and less over 10 mins

Significantly increased penetration of remote channels

10% 10%14%

Internet banking clients

Percentage of all clients

Internet banking clients (thsd)Internet banking clients (thsd) Internet banking retail depositsInternet banking retail deposits

34.8

60.6

74.8

68 4

6.4

5.36%

8%

40 0n)974

1,210

5%8%

13%

19.8

17.131.6

55.368.4

2.7

3.2

-

30.040.0

2008 2009 2010 1H’2011

(in R

UB

bn

211505

974

2008 2009 2010 1H’2011

Term deposits Current accountsShare in deposits

Loan payments through cash-insLoan payments through cash-ins Number of client transactions (payments) by channelNumber of client transactions (payments) by channel

80%paym

ents

)

+21%

1 51.80.80.7

9 111.3

14.0 15.580%

88% 91% 94% 96%

60%

80%

100%

120%

15,0

20,0

25,0

59%

31-Dec-10 30-Jun-11

(% o

f tot

al lo

an

5.1 7.29.3 11.6

13.10.5

0.81.1

1.5

1.41.1

1.07.1 9.1

20%

40%

0,0

5,0

10,0

1H’2009 2H’2009 1H’2010 2H’2010 1H’2011

(in m

ln)

23VTB24 data (RAS)

31 Dec 10 30 Jun 11 1H 2009 2H 2009 1H 2010 2H 2010 1H 2011

ATMsInternet banking

BranchesShare of remote channels

Development of alternative sales channels and CRM

X-sell campaigns and targeted clients X-sell campaigns and targeted clients Share of repeat salesShare of repeat sales

80%

1,784

2,46280

90

100

40%

60%

19 16

423467 229

567938

1,784

30

40

50

60

70

0%

20%

1Q’09 2Q’09 3Q’09 4Q’09 1Q’10 2Q’10 3Q’10 4Q’10 1Q’11Number of campaigns

5 1016

0

10

20

2H’2008 1H’2009 2H’2009 1H’2010 2H’2010 1H’2011

Sales volume through pre-approved offers Sales volume through pre-approved offers Key trends Key trends

Car loansConsumer loans Credit cardsNumber of clients with preapproved offer (thsd)-

■ X-sells campaigns – effective mechanism to increase LTV by client and raise client loyalty

■ Approx 10% of car and consumer loans already)

6.4 7.0

9.2

■ Approx. 10% of car and consumer loans already being sold using direct mails campaigns

(in R

UB

bn)

1.22.1

3.2

2H’2008 1H’2009 2H’2009 1H’2010 2H’2010 1H’2011

24

2H 2008 1H 2009 2H 2009 1H 2010 2H 2010 1H 2011

Corporate and Investment Business

Yuri Soloviev

25

Yuri Soloviev ,First Deputy President and Chairman of the Management Board

CIB Franchise

ProfileInternational presence

Fully fledged player with competitive and innovative product range

Leading management team with global experience

Corporate business: CIS, Asia ,Europe and Africa Investment Banking Business: Moscow, London,

Singapore, Dubai and Hong Kong

ClientsMarket Position

#2 in terms of corporate loans and deposits in Russia

#1 Eurobond bookrunner in Russia and CIS by (Dealogic &Thomson Reuters)

#1 Ruble bond bookrunner in Russia (Bloomberg)

Client Base (3) Corporate Clients

VTB Bank 195,000

Transcreditbank 38,000

Bank of Moscow 100,000 #1 Ruble bond bookrunner in Russia (Bloomberg) #1 Equity Bookrunner in Russia and the CIS by

(Dealogic & Bloomberg)• #1 VTB Capital research team (Thomson Reuters)

,

Corporate customers market shares in RussiaCorporate customers market shares in RussiaVTB Capital league tables (June 2011) VTB Capital league tables (June 2011)

Russia-related international DCM# Lead Manager Amount, USD mln # of deals Share, %1 VTB Capital 4 087 17 14 9%1 VTB Capital 4,087 17 14.9%2 JP Morgan 3,598 12 13.1%3 Deutsche Bank 2,457 11 9.0 %

Domestic DCM

# Lead Manager Amount, RUB mln # of deals Share, %1 VTB C it l 138 338 31 24 5%

12.2%

12.8%

11.8%

15.0%

12.8%

16.4%

1 VTB Capital 138,338 31 24.5%2 Troika Dialog 125,280 40 22.2%3 Raiffeisenbank 48,000 22 8.5%

Russian ECM# Lead Manager Amount, USD mln # of deals Share, %

31-Dec-10* 30-Jun-11*30-Jun-10

Corporate loan market share in Russia

% Corporate deposit market share in Russia

%

26

g , ,1 VTB Capital 2,466 7 24.2%2 Deutsche Bank 1,910 4 18.7%3 BoA Merrill Lynch 1,090 1 10.7%

share in Russia market share in Russia

CIB Model

PRODUCT CLIENT SUPPORT■ Corporate and Investment banking units are now under one leadership umbrella

Total overhaul of the coverage model

Sales

Total overhaul of the coverage model

– Product neutral one-window approach– Organised by sectors globally– Client grouping into IB-intensive, commercial and regional to

ensure proper attention at all levels

Trading

Product sales realignment

p p– CRM-backed

– Divided into flow and structured Trading

Middle ffi

Client coverage

Support

■ Reinvigorated transaction bank

– Structured divided into Russia/CIS and international– Run jointly between Equities and FI– Flow sales run globally through product/geography matrix

office– New organisational structure – TOP-3 position achieved in major products– Product-focused

■ Branch network optimisation under wayStructuring

■ Branch network optimisation under way

Enhanced origination capability incore market

Enhanced origination capability incore market

27

Key Strategic Priorities

Loan distribution is• Proper distribution is a

E h d

Loan distribution is key

Major pricing advantage

1

2

major competitive advantage

• Initial focus on Russia with first attempts onEnhanced

origination implies ability to distribute

j p g g

Improve risk profile and, hence, cost of

2

3

with first attempts on the international market

• International to distribute, boosting balance sheet velocity and

funding

Balance sheet turnover and higher ROE

4

distribution platform build-up

• In parallel, selective and well thought outvelocity and

ROEROE

Greater market share and broader client5

and well thought out origination to complement Russian distribution

M t l i f tand broader client franchise • Mutual reinforcement

• Access to global talent

28

Large-scale CIB Transformations in Place

New liquidity management products and tariff packages have been introduced Functionality of the Remote banking system is permanently improvingProducts

ff i

Building strong transaction bank

Solutions for top clients are being customisedoffering

Head of Cash Sales hired from JPM; New Trade Sales head appointed 45 complex Cash Management solutions for clients, special solutions for priority clients

Salesp g , p p y

600+ entities in pipelines Sales team is now focused on Sales only – other functions removed

Focused Business Unit for Transaction banking responsible for all products (CC, acquiring,Processes

Focused Business Unit for Transaction banking responsible for all products (CC, acquiring, cash services, etc.) is in place

New concept of the Tariffs Policy with full responsibility for pricing is being approved by the Client Committee

Processes

New unified lending framework implemented New mid-cap clients ranking methodology in place Deadlines are included in motivation system of staff involved in credit process

Improving lending process

Processes Deadlines are included in motivation system of staff involved in credit process New pricing policy is implemented Time to decision cut by 50-70% for large-clients, by 30-40% for mid-cap clients

New center of competence – CIB Credit Department – was created

29

Organisation Credit Committees structure improved Delegation of authority system for Branch and HQ Credit Committees revised

Market Challenges: VTB Response

Herbert Moos

30

Herbert Moos,CFO, Deputy President and Chairman of the Management Board

Russia 2011 versus Russia 2008

2008 – 2009 2011Economy Stretched after nearly a decade of growth at 7%

CAGRCooled off, credit cycle resumed only this year

Banks, corporate and Share of RUB in liabilities has spiked in late 2008 Now less dependent on FX as RUB is more flexiblepopulation due to sharp RUB devaluation

Banks Highly dependent on cross-border wholesale funding

Banks are 40% less dependent on external funding, a significant portion of foreign liabilities are long-term as it was raised after the crisis. Imminent conversion of deposits into FX in September will reduce demand fordeposits into FX in September will reduce demand for FX funding from abroad.

Regulator Regulator measures were effective and timely, but some were untested

Regulator has much richer toolbox for providing refinancing to banks. Liquidity injection system is in place.

Oil revenues share is still about 50% Oil revenues share is still about 50% Fiscal discipline slipped during the crisisFiscal discipline slipped during the crisis

1.7%

4.3%

7.5% 7.4%5.4%

4.1% 2.7%5%

10%

30%34%

42%

47%

37%

47%

41%

46% 48%

40%

50%

60%

Avegare 2003-2010

-5.9%-4.0%-4.1%

-2.6% -2.5%-3.5% -3.3%

-6.5% -7.9%-10%

-5%

0%30%

10%

20%

30%

31

-13.6%-12.6%

-15%2003 2004 2005 2006 2007 2008 2009 2010 1H11

Budget balance Non-oil budget balance

0%2003 2004 2005 2006 2007 2008 2009 2010 1H11

Oil&gas share ravenues in total, %

Source: Bloomberg, Source: MinFin, VTB Capital Research

Volatility in RUB, not in interest rates – big picture

140

1602022

USDRUB (LHS, inverted)RUBBASK(LHS i t d)

80

100

120

14024262830

RUBBASK (LHS, inverted)Crude oil, Brent (RHS)

RUB

BASK

D/bb

l

20

40

6032343638

USDR

UB,

US

040

25

30

25

30MIBOR, O/ NCBR refinancing rateCPI YoY

10

15

20

10

15

20CPI, YoY

% %

0

5

10

0

5

10

01 02 03 04 05 06 07 08 09 10 11

32Source: Bloomberg, Source: MinFin, VTB Capital Research

01 02 03 04 05 06 07 08 09 10 11

Russian Corporates and Banks – Different from 2008

Leverage of top-20 Russian companies is moderate (0.9 net debt / EBITDA in 2010)

Floating RUB is a natural hedge for exporters Progressive taxation is additional hedge for oil companies

“Stress scenario” for the Russian banking sector

2012-2013

No significant asset qualityProgressive taxation is additional hedge for oil companies FX exposure significantly replaced by local currency borrowings

No significant asset quality deterioration as underwriting rules remained strict and as of Aug’11 bad loans were 116% provisioned

Local debt market value has exceeded that of EurobondsLocal debt market value has exceeded that of Eurobonds

No interest rate shock due to exchange rate flexibility

Some NIM widening on 49% 44%

Eurobond issuance

Ruble bond issuance

216 345

higher funding costs and faster asset re-pricing

Lending growth to slow down to 5-10% on weakening

51% 56%

2008 Aug 2011

(US

D,b

n)

confidence, with retail being more resilient

Cost pressures for banks are to be addressed again given 60

70

80Eurobond issuanceRuble bond issuance

New bond issuance shifted to local marketNew bond issuance shifted to local market

g gweaker top-line growth

Banks’ funding much healthier, loans/deposits = 91 4% (2008: 122%)10

203040

50

33

91.4% (2008: 122%)0

2003 2004 2005 2006 2007 2008 2009 2010 2011YTD

Response to Market Turbulence

■ Direct REPO operations (RUB 1,000 bn turnover in September)

Government has all necessary tools to support liquidity Government has all necessary tools to support liquidity

■ Budget auctions of Ministry of Finance (RUB 1,000 bn as of 26 Sep)

■ FX swaps

■ Subordinated debt issuance mechanism

■ CBR more closely monitors FX banking activity having ‘commissar’ in every major institution

Unsecured lending

VTB’s estimated funding availabilityVTB’s estimated funding availability VTB Bank’s liquidity (on the daily basis in RUB bn) VTB Bank’s liquidity (on the daily basis in RUB bn)

■ Unsecured lending

500 Funding sources (in RUB bn)REPO 572.2Secured loans from CBR 60.0Loans from Ministry of Finance 30.0L f M t 19 0

0

1-Jul 15-Jul 29-Jul 12-Aug 26-Aug 9-Sep 23-Sep

Highly liquid assets Total liquid assets

Loans from Moscow government 19.0

Interbank and other 126.6Total 807.8

34(1) Utilisation of uncollateralised loan limit from MinFin automatically reduces uncollateralised loan limit from the CBR

VTB Strong Results in 1H’2011 Backed by Solid Capital Position

■ Record net profit in 1H’2011 − RUB

1H’11 highlights 1H’11 highlights Profitability already transformed…

2009 2010 2011e1H’11Key indicators ■ Record net profit in 1H 2011 RUB 53.6 bn with ROE at 18.1%

■ CIB and Retail Banking post a solid 1H’2011 pre-tax profit of RUB 51.2 bn

54.853.6

100

Net profit,RUB bn

and RUB 20.2 bn, respectively

■ Operating income before provisions up 45% y-o-y to RUB 153.0 bn

10.3%

n.m.

18.1% >15%(59.6)

ROE

16 8%19.0%19.5%

BIS Group capital BIS Group capital ■ Strong growth of net fee and

commission income – up 52% y-o-y to RUB 17.9 bn

505 522 547 566570

101100193193193667670740715698

14.1%15.5%16.8%

12.0%13.2%12.4%13.9%14.1%

RU

B b

n)

■ Net interest margin stable at 4.8%

■ Improving asset quality with NPL ratio down 90 bps YTD followed by declining

Tier I Tier II less deductions

Total capital adequacy ratioTier 1 ratio

505 522 547 566570

30-Jun-10 30-Sep-10 31-Dec-10 31-Mar-11 30-Jun-11

(R

down 90 bps YTD followed by declining provision charge: down from 2.1% in 1H’2010 to 1.1% in 1H’2011

35

BIS ratio remains solid at 14.1% with Tier I ratio at 12.0%

Bank of Moscow – Acquisition of 81% Stake Finalised

19 Sep 2011 VTB Debt Center acquired 46.48% of the Price paid for BoM is in line with initial total price guidance of RUB258 bn (inc RUB100 bn capital injection)

TimelineTimeline Key factsKey facts

19 Sep 2011

VTB Group acquired 80.57% shares

BoM ordinary sharesRUB258 bn (inc. RUB100 bn capital injection)

RUB 295 bn invested in a specially issued 10-year Russian Federal loan bond (OFZ) at 8.16% p.a.

in BoM29 Sep 2011

BoM will be fully consolidated in 9M’11 Financial Statements with 1day effect in P&L

BoM 6M’11 Financial statements to be issued until the end of Oct. 7th. Basel I requirements will be met

DIA issued RUB 295 bn 10-year loan to BoM at an annual rate of 0.51%

BoM FY’11 outlookBoM FY’11 outlook

Loan book growth 18%

by YE’2012VTB Group expects to provide BoMwith additional capital of RUB 100 bn. VTB h i B M h 100%

Net profit RUB 3 bn

ROE 4%

VTB share in BoM to reach 100%

36

Cost Optimisation Program

Cost optimisation program 46%44%

Strategic goalsStrategic goals

to be announced by YE’2011 CIR44%

Low 40s

2009 1H2011 2013

Key areas of focus Key areas of focus

Branch network reorganisation Back office Administrative

functions

Personnel structureoptimisation

Centralisation of the backoffice system and functions

Increasing effectivenessof administrative support

Property management IT infrastructuremodernisation Centralised procurement

37

VTB’s Targets

VTB Group net profit and ROE 2013 targetsVTB Group net profit and ROE 2013 targets

ROE

≈20%

>15%160-180

120-140

neg.

10.3%

neg

54.8 old target

new target

old target

new target

88100

1H 53 6t t

50

B b

n)

neg.

2009 20132010 2011

1H: 53.6target

(RU

B

Loan book

VTB Group 2011 targetsVTB Group 2011 targets

CIR:Не удается отобразить рисунок . Возможно, рисунок поврежден или недостаточно памяти для его открытия. Перезагрузите компьютер, а затем снова откройте файл. Если вместо рисунка все еще отображается красный крестик , попробуйте удалить рисунок и вставить его заново.

Low 40’s

NIM:Не удается отобразить рисунок . Возможно, рисунок поврежден или недостаточно памяти для его открытия. Перезагрузите компьютер, а затем снова откройте файл. Если вместо рисунка все еще отображается красный крестик , попробуйте удалить рисунок и вставить его заново.

> 4.5%

Cost of risk:Не удается отобразить рисунок . Возможно, рисунок поврежден или недостаточно памяти для его открытия. Перезагрузите компьютер, а затем снова откройте файл. Если вместо рисунка все еще отображается красный крестик , попробуйте удалить рисунок и вставить его заново.

1-1.5%

Loan book growth:

Не удается отобразить рисунок . Возможно, рисунок поврежден или недостаточно памяти для его открытия. Перезагрузите компьютер, а затем снова откройте файл. Если вместо рисунка все еще отображается красный крестик , попробуйте удалить рисунок и вставить его заново.

+15%

Tier 1:Не удается отобразить рисунок . Возможно, рисунок поврежден или недостаточно памяти для его открытия. Перезагрузите компьютер, а затем снова откройте файл. Если вместо рисунка все еще отображается красный крестик , попробуйте удалить рисунок и вставить его заново.

≈ 10%

38

Appendix

39

Operating Efficiency Improvements

504 476531

5678,000.0

9,000.0

600

ATMs

Branches19,208

Branches and ATMs of key peers Branches and ATMs of key peers Branches and ATMs of VTB24 (1)Branches and ATMs of VTB24 (1)

4,0004,996 5,371

163

328

504 476

3,000.0

4,000.0

5,000.0

6,000.0

7,000.0

200

300

400

500

Branches

1,3471,800

568

0.0

1,000.0

2,000.0

2006 2007 2008 2009 2010 1H’11

0

100

567446

269 192

Sberbank VTB24 Alfa-Bank Gazprombank Russian Standard

f (2)f (2) (2)(2)Retail loan portfolio per branch (2)Retail loan portfolio per branch (2) Retail deposit portfolio per branch (2)Retail deposit portfolio per branch (2)

SberbankAlfa-BankGazprombank

SberbankAlfa-BankGazprombank

825 864 906Russian StandardVTB24

583

793 839911

1,1891,288Russian Standard

VTB24

(in R

UB

mln

)

59 67 75

203 204 183181242 286

432 415 440

187 242 258139

334 399387465 452

583(in

RU

B m

ln)

40(1) VTB24 data. As of 30.06.2011 number of branches (incl. TKB) – 857, number of ATMs (incl. TKB) – 7,790(2) VTB24 calculations based on CBR data (RAS)

2009 2010 1H’2011 2009 2010 1H’2011

TCB and BoM Acquisition Price

BoM Acquisition Price (1)BoM Acquisition Price (1)TCB Acquisition Price (for 74.48% stake)TCB Acquisition Price (for 74.48% stake)

Total price paid RUB 258 bn

BV after recapitalisation RUB 170 bn

Total price paid RUB 38.3 bn

BV (as of Dec 31, 10) RUB 20.9 bn

P/BV ≈ 1.5x P/BV 1.8x

41

(1) Management forecast.