Bank Saint Petersburg 1Q2011 IFRS Results

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1

BANK SAINT PETERSBURG

1Q 2011 IFRS Results

June 9, 2011







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Summary –

Bank Saint Petersburg at a glance

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Regional leader

Focused on

North-West

Selected financial

and operational

results

A leading privately-owned universal bank in St. Petersburg and the Leningrad region

St. Petersburg market share as at April 1, 2011*:

• Assets: 12.8%

• Loans: 16.0% - corporate, 4.8% - retail

• Deposits: 11.1% - corporate, 8.1% - retail

As at April 1, 2011

Client base: over 1 million retail and 35 thousand corporate customers

36 branches and outlets (primarily in St. Petersburg), 472 ATMs

As at April 1, 2011:

16th largest bank by assets and 15th by retail deposits among the Russian banks**

Ratings: Moody’s Ba3 (Stable outlook)

Total assets: RUB 282.4 bn (USD 9.9 bn)

Total capital: RUB 37.4 bn (USD 1.3 bn)

Net income: RUB 2.1 bn (USD 73.3 mln)

Cost/Income ratio: 26.2%

ROAE: 28.6%

Total capital adequacy: 12.7%

2,488 employees

* Association of North-West banks, Bank Saint Petersburg own estimates

** Interfax







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RUB 2.1 bn (USD 73.3 mln) for 1Q 2011

+ 497.5% compared with 1Q 2010

+ 15.2% compared with 4Q 2010

Q-o-Q / Apr 1, 2011 – Jan 1, 2011 Apr 1, 2011 – Apr 1, 2010

Net Income

Assets

Total capital

Loan portfolio

Customer deposits*

Cost/Income Ratio for 1Q 11 – 26.2%

ROAE for 1Q 11 – 28.6%

Capital Adequacy as at April 1, 2011 – 12.7%

Key ratios

RUB 212.8 bn (USD 7.5 bn) + 5.2% compared with Jan 1, 2011 + 19.5% compared with Apr 1, 2010

RUB 200.0 bn (USD 7.0 bn)

- 1.1% compared with Jan 1, 2011 + 15.6% compared with Apr 1, 2010

* Customer accounts are calculated as a sum of customer deposits and promissory notes and bills of exchange (other debt securities in issue)


+ 3.6% compared with Jan 1, 2011 + 21.7% compared with Apr 1, 2010


+ 4.4% compared with Jan 1, 2011 + 12.9% compared with Apr 1, 2010

Key indicators

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Table of contents

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I. Bank’s market position

II. Financial highlights and business overview

III. Recent developments and prospects







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Strong Franchise

Client base, thou Market share in St. Petersburg as at April 1, 2011: Retail banking*

Market share in St. Petersburg: Corporate banking*

* Central Bank of Russia, Association of North-West banks, Bank Saint Petersburg own estimates

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Loans, market share as at April 1, 2011*

6,3%7,1%

6,1%5,2% 4,8%

7,8%

9,5% 9,7%

8,7%8,1%

YE 2007 YE 2008 YE 2009 YE 2010 1Q 2011

Retail loans Retail deposits

581

774900

1 000

31

35

35

35

1 050

35

2007 2008 2009 2010 1Q 2011

Retail Corporate

12,9%

16,1% 16,0%

13,9%

15,7%

11,8% 11,9%

10,7%10,7% 11,1%

YE 2007 YE 2008 YE 2009 YE 2010 1Q 2011

Corporate loans Corporate deposits

Sberbank

20%

VTB Group

13%

Bank Saint

Petersburg

13%

Others

35%

CIT Finance

5%

Baltinvestbank

3%

Bank "Russia"

11%







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Table of contents

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II. Financial highlights and business overview








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33,1 33,5 34,535,9

37,4

April 1, 2010 July 1, 2010 October 1, 2010 January 1, 2011 April 1, 2011

232,1 239,5 247,4

272,6282,4

April 1, 2010 July 1, 2010 October 1, 2010 January 1, 2011 April 1, 2011

Financial Highlights, QoQ 2010 – 1Q 2011

Assets, RUB, bn

Income dynamics, RUB, mln Income and expenses data*, RUB, mln

Capital, RUB, bn

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+ 3.6% + 4.4%

* FY 2010 results calculation: the loss on loans granted at below market rates in the amount of RUB 525 mln is included in provisions;

1Q 2011 results calculation: the gain on loans granted at below market rates in the amount of RUB 69 mln is included in provisions

3 268

426 417 535 439

2 9782 9692 9933 085

337

49118-150

886515

1Q 10 2Q 10 3Q 10 4Q 10 1Q 11

Net Interest Income Net Fee and Commision Income Net Trading Income

4 325

3 343 3 513 3 569

4 267

859

2 780

1 085 1 202 1 304 1 1191 185

998

48 673

1Q 10 2Q 10 3Q 10 4Q 10 1Q 11

Revenues Operating expenses Provisions







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460 502638 554 633

280441

420 588318119

142143

162

168

1Q 10 2Q 10 3Q 10 4Q 10 1Q 11

Staff costs Other administrative and operating expenses

Expenses related to premises and equipment

Results for 1Q 2011

Cost/income and NIM Operating expenses, RUB, mln

Comments Net income dynamics, RUB, mln

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● Record quarterly Net Income

● ROAE well above the target

● NIM rebound

859

1 085 1 201

1 305

1 119

19,9%

32,5%34,2% 35,8%

26,2%

5,0%

4,7%

5,1%

5,6%

5,4%

0,0

10,0

20,0

30,0

40,0

1Q 10 2Q 10 3Q 10 4Q 10 1Q 11

4,0%

4,5%

5,0%

5,5%

6,0%

Cost/Income NIM

1 173

2 0901 815

350

777

17,9%

26,0%28,6%

12,2%

5,6%

0,00

1000,00

2000,00

3000,00

1Q 10 2Q 10 3Q 10 4Q 10 1Q 11

0,00%

10,00%

20,00%

30,00%

40,00%

Net Income ROAE







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161,7

178,7

201,8

231,2

253,0265,2

197,4

216,4

246,7

189,0

141,9

173,7

216,3 223,4224,5

135,3

209,5207,6203,7

179,7

155,8

197,9 196,5

231,3

96.3%98,4%

92,3%92,3%

87,4%

99,7%99,2%99,0%100,5%102,8%

94,9%

90,4%

0,0

50,0

100,0

150,0

200,0

250,0

2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11

80,0%

Average IEA Average IBL Loans/Deposits Ratio

Average interest rates on the assets side**

Interest Rates and Assets/Liabilities Ratios

Average interest rates on the liabilities side*

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Comments Average Interest Earning Assets (IEA) and Interest Bearing Liabilities (IBL), RUB, bn

* Average liabilities: due to banks, customer accounts including current accounts, debt securities in issue

** Average assets: loans, due from banks, securities portfolio, correspondent accounts

Interest rates stable on the asset side

Loans to deposits ratio is 96.3% - room for

leverage is still in place

6,0%

11,3%

10,3%

8,7%9,1%

8,4% 9,8%

9,0%

7,9% 8,1%5,6%

6,5%

6,5%8,1%

9,6%

9,8%

9,3%9,3%

9,7%9,9% 9,8%

9,0%

7,9%

7,2%

4,7%

8,1% 7,9%

6,9%6,9%

6,1%

7,2%7,4%

6,7%

6,0%

5,1% 5,0%

2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11

Average interest on term corporate deposits Average interest on term retail deposits

Average interest on liabilities

10,3%10,3%

14,2% 14,1%

15,0%

15,9%

14,8%

12,0%

13,1%

14,5%14,8%

10,8%

9,4%9,3%

13,2%

14,4%13,7%

13,0%12,7% 12,7%12,4%

11,7%

11,0%

9,9%

2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11

Average interest rate on loans Average interest rate on IEA







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Main Factors affected NIM in 1Q 2011

4Q 2010 NIM – 4.67%

10 4Q 2010 NIM – 5.00%

Average interest rate

Contribution to NIM change:

Retail term deposits + 15 bp

Corporate term deposits + 13 bp

+ 28 bp

Average balance

Contribution to NIM change:

Loans and advances to customers + 17 bp

Trading securities portfolio + 7 bp

Corporate term deposits -11 bp

Retail term deposits - 5 bp

Bonds in issue - 5 bp

+ 3 bp

Other factors + 2 bp







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Financial Summary (RUB), q-o-q, 1Q 2010 – 1Q 2011

RUB bn 1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011

Loans and Advances to Customers 159.61 157.62 176.25 182.82 192.58

Total Assets 232.08 239.46 247.43 272.61 282.43

Customer Deposits* 172.95 175.23 179.04 202.17 200.01

Total Liabilities 206.44 213.88 220.68 244.04 251.78

Total Shareholders’ Equity 25.63 25.58 26.75 28.56 30.66

Total Capital 33.15 33.53 34.50 35.87 37.43

Net profit 0.35 0.77 1.17 1.82 2.09

Net Interest margin 5.57% 5.38% 5.09% 4.67% 5.00%

Capital Adequacy 14.35% 14.35% 13.73% 12.96% 12.65%

Cost-to-Income ratio 19.86% 32.52% 34.21% 35.80% 26.21%

Allowance for loan imp. / Gross loans 10.37% 11.05% 10.30% 9.61% 9.48%

Loans / Deposits 92.29% 92.29% 98.44% 90.43% 96.29%

ROAA 0.61% 1.32% 1.91% 2.77% 3.05%

ROAE 5.57% 12.08% 17.78% 26.03% 28.63%

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Loan portfolio and quality

Loan portfolio and allowance for loan impairment Loan portfolio by sector, April 1, 2011

Comments

Provision charge (RUB mln)** and problem loans, %

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Loan portfolio growth in 1Q 2011:

Before provisions: +5.2% compared with January 1, 2011

After provisions: +5.3% compared with January 1, 2011

As at April 1, 2011:

- Corporate overdue loans – 4.97% (4.80% as at January 1, 2011)

- Retail overdue loans – 8.28% (8.77% as at January 1, 2011)

RUB 0.9 mln of the loan portfolio written off in 1Q 2011

* Ratios for April 1, July 1, and October 1, 2009 are ratios for restructured loans

** 4Q 2010 results calculation: the loss on loans granted at below market rates in the amount of RUB 525 mln is included in allowance; 1Q 2011 results calculation: the gain on loans granted at below

market rates in the amount of RUB 69 mln is included in allowance

212,8

178,1174,1159,4

155,2150,0

177,2

196,5 202,3

7,3%

6,0%

8,5%9,1%

10,4%11,1%

10,3%9,6% 9,5%

0

30

60

90

120

150

180

210

Apr 1, 09 Jul 1, 09 Oct. 1, 09 Jan 1, 09 Apr 1, 10 Jul 1, 10 Oct 1, 10 Jan 1, 11 Apr 1, 11

RU

B b

n

0

2

4

6

8

10

12

14

(%)

Loan portfolio Allowance for impairment / Gross loans

Trade

12,6%

Construction

12,2%

Real estate

10,5%

Gov ernment

f inanced

5,3%

Transport

3,9%

Production and f ood

industry

5,1%

Indiv iduals

6,8%

Heav y machinery

and ship-building

14,4%

Financial serv ices

9,3%

Oil and gas

8,9%

Other

8,2%

Health and

entertainment

2,8%

3 086

2 384 2 305

2 737 2 780

67348998

1 1855,2%5,1%

5,8%

8,6%7,4%

6,9%

7,5%

4,5%

7,1%6,3%

5,9%5,9%

6,3%7,1%

7,9%

6,6%

6,7%

6,9%

0

1000

2000

3000

Apr 1, 09 Jul 1, 09 Oct. 1, 09 Jan 1, 09 Apr 1, 10 Jul 1, 10 Oct 1, 10 Jan 1, 11 Apr 1, 11

0

5

10

15

Provision charge Overdue loans / Gross loans

Impaired not past due* / Gross loans







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Assets and liabilities structure

Assets structure, April 1, 2011 Liabilities structure, April 1, 2011

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Loans and advances

to customers

68,2%

Securities portfolio

16,0%

Cash & cash

equivalents

5,0%

Amounts receivable

under reverse

repurchase

agreements

1,9%

Due from other banks

1,9%

Fixed and other

assets

7,0%

Customer accounts

(corporates);

45,5%

Customer accounts

(individuals);

25,3%

Shareholders'

equity; 10,9%

Capital markets;

10,1%

Due to other banks;

7,8%Other; 0,5%







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97,9

162,0 177,0

216,3

26,9

29,0

206,99,7

5,2

50,543,0

32,1

9,5

4,0

5,1

YE 2007 YE 2008 YE 2009 YE 2010 1Q 2011

RWA - banking book RWA - trading book RWA - off-balance-sheet

Capital and funding

Capital adequacy, % Repayment schedule for 2011-2014, USD, mln

Comments

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Risk-weighted assets (RWA)*, RUB, bn

112,7

171,2

218,6

276,8

Additional ordinary shares issue in the pipeline

Revaluation of c. 3% stake in the MICEX expected

268

436

87 78

2011 2012 2013 2014

295,8

16,4%

14,1%15,2%

13,0% 12,7%12,3%

9,7%10,7%

9,6% 9,7%

YE 2007 YE 2008 YE 2009 YE 2010 1Q 2011

Total Capital ratio Tier 1 Capital ratio







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Table of contents

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II. Financial highlights








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The EBRD is a key investor

- the Bank’s management and a number of minorities have expressed their intent not to exercise their pre-emptive rights in favor of the EBRD;

- the EBRD intends to participate in the offering up to RUB 2.75 billion; its potential ownership will amount to 6% of the Bank’s ordinary shares

(5% after the type A preference shares conversion in 2013)

The EBRD consents to the repayment of the USD 75 million subordinated loan in case of the participation in

the Bank’s new share issue

- Potential savings on tax and interest expenses in the amount up to USD 30 million;

- Contractual maturity of the subordinated loan is 2019 with a call option in July 2014

Capital enhancement not a priority April 1, 2011 Expected capital adequacy after the placement

provided that subordinated loan is repaid

Tier 1 - 9.7% Tier 1 - 10.6% - 10.9%

Total capital adequacy - 12.7% Total capital adequacy – 12.8% - 13.1%

Details on the New Share Issue (1)

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On June 7, 2011, the Supervisory Board of Bank Saint Petersburg took the decision

on the New Issue of Ordinary Shares

Rationale for the Issue







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Indicative terms and conditions

Details on the New Share Issue (2)

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June 7, 2011 - Decision of the Supervisory Board of the Bank on the New Issue of Ordinary Shares. The issue will be placed under the following terms and conditions:

Number of shares to be issued – 24,000,000;

Type of offering – open subscription;

Form of payment for the shares - Russian roubles

Maximum gross proceeds from the offering: RUB 3.5 bn (USD 125.7 mln)

Preliminary schedule:

Cut-off date: June 7, 2011;

The offerings under the pre-emptive rights execution will be accepted from the end of July till mid September 2011:

- The offerings can be either submitted to the Bank along with the necessary documents or the underwriter can be contacted to purchase the shares;

The Issue is expected to be registered with the CBR in October 2011







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Bank Saint Petersburg 1Q2011 IFRS Results

Economy & Finance

Transcript of Bank Saint Petersburg 1Q2011 IFRS Results