Transcript Subtitle

Confidential - Not For Distribution - Working Draft, 15 March 2007
Syndicate Research
Analyst Presentation
[Moscow, 23 March 2007]
Confidential - Not For Distribution - Working Draft, 15 March 2007
Disclaimer
The materials contained herein (the “Materials”) are for use at this analyst presentation only and not for further distribution by you or any other person. Furthermore, the Materials are not directed to, or
intended for distribution to or use by, any person or entity that is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would
be contrary to law or regulation or which would require any registration or licensing within such jurisdiction.
The Materials do not constitute or form part of, and should not be construed as, any offer or invitation to sell or issue, any solicitation of any offer to purchase or subscribe for, any shares in JSC VTB Bank
(“VTB”) or any of its subsidiaries (together with VTB, the “Group”). Neither the Materials, nor anything contained herein, shall form the basis of, or be relied on in connection with, any contract to purchase or
subscribe for any securities of the Group, nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever.
The Materials have been prepared solely for use in connection with the possible offering of ordinary shares and global depositary receipts representing shares in the Group (the “Offering”). The information
contained in the Materials has not been independently verified. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy,
completeness or correctness of the information or the opinions in the Materials. None of VTB or the Group or any of their respective affiliates, advisors or representatives shall have any liability whatsoever
(in negligence or otherwise) for any loss howsoever arising from any use of the Materials or their contents or otherwise arising in connection with the Materials.
The Materials are only for persons having professional experience in matters relating to investments and must not be acted or relied on by persons who are not Relevant Persons (as defined below).
Solicitations resulting from the Materials will only be responded to if the person concerned is a Relevant Person.
The Materials are not for distribution, directly or indirectly, in or into the United States (including territories and dependencies, any State of the United States and the District of Columbia) or to U.S. Persons
(as defined in Regulation S under Securities Act of 1933, “Regulation S” and the “Securities Act”, respectively), or in Australia, Canada, Japan or Russia. The Materials are not an offer for the sale of
securities in the United States or to U.S. Persons. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. The Group has
not registered and does not intend to register any portion of the Offering in the United States or to conduct a public offering of any securities in the United States.
The Materials are made to and directed only at (i) persons outside the United Kingdom, (ii) qualified investors or investment professionals falling within Article 19(5) and Article 49(2) (a) to (d) of the
Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”), and (iii) high net worth individuals, and other persons to whom it may lawfully be communicated, falling within
Article 49(2)(a) to (d) of the Order (such persons collectively being referred to as "Relevant Persons").
The Materials are confidential and must not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other person, whether or not such person is a Relevant Person.
Failure to comply with this restriction may constitute a violation of applicable securities laws. If you have received the Materials and you are not a Relevant Person you must return them immediately to VTB.
The Materials do not constitute a recommendation regarding the securities of VTB or the Group.
The Materials are not a public offer or advertisement of securities in the Russian Federation and are not an invitation to make offers to purchase any securities in the Russian Federation.
The Materials may include forward-looking statements. These forward-looking statements are statements regarding the Group’s intentions, estimates, forecasts, projections, beliefs or current expectations
concerning, among other things, the Group’s results of operations, financial condition, liquidity, prospects, growth, strategies and the banking industry. By their nature, forward-looking statements involve
risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. The Group cautions you that forward-looking statements are not guarantees of
future performance and that its actual results of operations, financial condition and liquidity and the development of the industry in which it operates may differ materially from those expressed, implied or
suggested by the forward-looking statements contained in the Materials. In addition, even if the Group’s results of operations, financial condition and liquidity and the development of the industry in which it
operates are consistent with the forward-looking statements contained in the Materials, those results or developments may not be indicative of results or developments in future periods. Neither VTB nor the
Group undertake to release publicly any revisions to any forward-looking statements to reflect events that occur or circumstances that arise after the date of the Materials.
The information and opinions contained in the Materials are provided as at the date of this presentation and are subject to change without notice.
All information not separately sourced are from Group data.
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Confidential - Not For Distribution - Working Draft, 15 March 2007
Overview of Presenters [VTB to confirm presenters]
Photo
Photo
Photo
Photo

Andrey L. Kostin

CEO and Chairman

Member of Supervisory Council, Management Board (Chairman) and Banking Group Management
Committee (Chairman)

Mikhail Zadornov

President and Management Chairman of VTB 24

[Member of Banking Group Management Committee]

Yulia G. Chupina

Head of Corporate Development

Member of Management Board and Banking Group Management Committee

Nikolai Tsekhomsky

Chief Financial Officer

Member of Banking Group Management Committee
INFO REQUIRED: VTB TO PROVIDE PICTURES;
VTB TO PROVIDE NAMES OF PRESENTERS IN
PRESENTING ORDER
3
Confidential - Not For Distribution - Working Draft, 15 March 2007
Agenda [To Be Discussed with VTB]
Topic
I.
Transaction Overview
II.
Key Investment Highlights
III. Russia and CIS Market Growth Opportunities
IV. Overview of VTB Franchise
V. VTB Strategy
VI. Corporate Banking
VII. Investment Banking
VIII. Retail Banking
IX. CIS Operations
X. European and Other Banking Operations
XI. Group Management Structure
XII. Risk Management
XIII. Information Technology
XIV. Financial Review
XV. Wrap-Up and Conclusion
Q&A
Presenter
[JGC Banker]
[Andrey L. Kostin]
[Andrey L. Kostin]
[Andrey L. Kostin]
[Yulia G. Chupina]
[Vadim O. Levin]
[Vadim O. Levin]
[Mikhail Zadornov]
[Yulia G. Chupina]
[Yulia G. Chupina]
[Yulia G. Chupina]
[Nikolai Tsekhomsky]
[Nikolai Tsekhomsky]
[Nikolai Tsekhomsky]
[Andrey L. Kostin]
Time
[9.00am]
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Confidential - Not For Distribution - Working Draft, 15 March 2007
I. Transaction Overview
[JGC Banker - TBD]
Confidential - Not For Distribution - Working Draft, 15 March 2007
Transactions Highlights

JSC Vneshtorgbank (VTB(a)), an open joint stock company incorporated under the
laws of the Russian Federation
Offering Size

[Up to 22.5% of enlarged share capital of VTB]
Use of Proceeds

Strengthen capital base to support the ongoing expansion of the business



100% primary
International tranche via GDRs listed on the London Stock Exchange
– GDRs offered under Rule 144A and Reg S
Domestic tranche via ordinary shares linked on RTS and MICEX
– Ordinary shares offered in the Russian Federation and outside the US under Reg
S and in the US under Rule 144A
The domestic tranche will include a Russian retail offering
Lock-up

[Company and pre-IPO shareholders: [180 days]]
Expected Pricing

Week of [10] May 2007
Listing

London Stock Exchange, RTS, MICEX
Joint Global Coordinators

Citigroup, Deutsche Bank, Goldman Sachs International

Citigroup, Deutsche Bank, Goldman Sachs International,
Renaissance Capital
Issuer
Structure
Joint Bookrunners

(a) VTB refers to the VTB Group throughout this presentation unless otherwise stated.
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Confidential - Not For Distribution - Working Draft, 15 March 2007
Offer Timetable
Date
Action/Item
23 March
 Syndicate Analyst Presentation
28 March
 Questions to be submitted by analysts
2 April
 Publication of final FY2006 audited financials
– [Conference call with analysts]
4 April
 First draft of research submitted
11 April
 Research publications, research blackout commences
 Announcement of intention to float
 Pre deal investor education commences
26 April
 Price range announcement
 Publication of pathfinder prospectus
 Management roadshow commences
10 May
 Pricing
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Confidential - Not For Distribution - Working Draft, 15 March 2007
Research Contacts and Guidelines
Linklaters
Submission of
Drafts
[email protected]
[email protected]
[email protected]
Draft research in full and redacted form should be sent to the Linklaters’
contacts above, who will forward redacted versions to VTB, Latham &
Watkins and the JGCs
Distribution or use of research reports by syndicate members must strictly comply with
the guidelines set forth in the final version of the memorandum on Preparation and
Distribution of Pre-deal Research Reports by Syndicate Members from the
underwriters’ legal counsel
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Confidential - Not For Distribution - Working Draft, 15 March 2007
II. Key Investment
Highlights
[Andrey Kostin]
Confidential - Not For Distribution - Working Draft, 15 March 2007
Key Investment Highlights

Market
Opportunity
Strong
Competitive
Advantages
Unique
Investment
Opportunity

Favourable Russian macroeconomic environment
– Average real GDP growth of 6.2% p.a. since 2001
Attractive Russian banking sector
– Growing by [38]% per year…
– … but still under penetrated…
– … with particular high growth opportunities in retail segment and Russian regions

Second largest bank in Russia

Superior growth and profit potential


Leading franchise and established customer base
Experienced management team with extensive experience

Recognised and trusted brand


One of only two liquid Russian banking stocks
First Russian bank with a GDR listing
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Confidential - Not For Distribution - Working Draft, 15 March 2007
Overview of VTB

Profile

Market
Position
Business
lines



Leading Russian universal banking group
with full range of banking products and
services
Second largest bank in Russia by assets,
loans and deposits
Corporate Banking
Retail Banking
Investment Banking

Distribution
Network
Regions
Clients


[525] branches/outlets in 62 out of 88
Russian regions
[296] branches / outlets in CIS
Nationwide branch network that is
significantly larger than those of most
competitors


Very strong position in Russia’s regions
Complementary operations in Europe, CIS,
Africa and Asia

Russia-related businesses locally and
internationally
Russian individuals

Net Income Growth ($m)
Total Asset Growth ($m)
[52,486]
[1,218]
+[42.9]%
36,723
+[144.1]%
+106.2%
17,810
499
205
2004
2005
2006
2004
+143.4%
2005
2006
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Confidential - Not For Distribution - Working Draft, 15 March 2007
Development of VTB into the Second Largest
Russian Banking Group
1990
Phase 1: 1990 – 2002
Formation
 1990: Incorporated as Bank
for Foreign Trade
 1998: VTB continued full
payments and settlements
during Russian financial
crisis
 1998-2003: CBR provided
VTB with additional liquidity
(a) Later rebranded as VTB24
2002
2005
Three Distinct Phases in VTB History
Phase 2: 2002 – 2005
Accelerated Expansion
 2002: New management team
appointed, including current CEO,
Mr. Kostin
 2002: Decision to pursue new
strategy and develop VTB as
universal banking group
 2004: Acquisition of Guta Bank(a)
(following Guta liquidity crisis) – and
formation of retail expansion
strategy
 2005: Acquisition of 75% stake in
ICB – and expansion into NorthWest Russia
 2005: Acquisition of CBR’s Western
European banking businesses – and
thus creation of European franchise
2006
2007
Phase 3: 2006 Onwards
Growth and Profitability
 2006: Re-branding of entities
to VTB “From a Group of
Banks to a Bank Group”
 2006: Re-organisation of
European subsidiaries
 2006: Focus on building out
VTB24 as the Group retail
business
 2007: IPO
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Confidential - Not For Distribution - Working Draft, 15 March 2007
VTB Investment Opportunity [TBU]
Ranking
By Total Assets (2006)
Market Share
Development
Growth (p.a)
Key Financials
Franchise
Rating
Ownership
[Source: ]
— Annualised
— As of 31-Dec-2005
— As of 31-Dec-2006
#1
Shrinking
#2
Rapidly Increasing
Total Assets (2004 – 6M 2006)
31.9%
86.4%
Net Income (2004 – 6M 2006(a))
145.2%
208.0%
Total Assets (6M 2006)
$108.3bn
$45.3bn
Net Income (6M 2006)
$1,339m
$554m
Cost Income Ratio (6M 2006)
54.6%
41.2%
Branches (Russia)
20,151
[525]
None
CIS, Europe, Africa, Asia
Employees
235,116(b)
28,466(c)
S&P
Not Rated
BBB+/Stable
Moody’s
Baa2/Stable
Baa2/Stable
Fitch
BBB+/Stable
BBB+/Stable
International Operations
 State: [55]%
 Free Float - Moscow Stock Exchange:
[45%]
 State: [77.5]%
 Free Float - London and Moscow
Stock Exchanges: [22.5%]
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Confidential - Not For Distribution - Working Draft, 15 March 2007
III. Russia and CIS Market
Growth Opportunity
[Presenter: Andrey Kostin]
Confidential - Not For Distribution - Working Draft, 15 March 2007
Favourable Macroeconomic Environment in
Russia
Nominal GDP (US$bn)
Real GDP Growth (%)
979
7.3%
7.2%
764
5.1%
592
307
345
2001
2002
6.4%
6.7%
2005
2006
4.7%
432
2003
2004
2005
2006
Inflation (%)
2001
2002
2003
2004
Annual Consumer Income per Capita (US$)
3,404
18.6%
15.1%
2,670
12.0%
11.7%
2,022
10.9%
9.0%
1,260
1,511
N/A
2001
2002
Source: State Statistics Service
2003
2004
2005
2006
2001
2002
2003
2004
2005
2006
15
Confidential - Not For Distribution - Working Draft, 15 March 2007
Strong Momentum in Russian Banking Sector
Comments
Total Banking Assets (US$bn)
 The Russian banking sector has been
demonstrating tremendous growth over the
last years (CAGR 2001-2006 - 38%)
57%
32%
35%
46%
24%
104.7
 Corporate banking drove growth of the
Russian banking sector in the past
533.4
2001
`
338.8
257.2
190.1
130.4
2002
2003
2004
2005
2006
Loans: Split Between Corporate & Retail
7%
8%
10%
14%
19%
24%
90%
86%
81%
76%
2003
2004
2005
2006
 Retail banking is its growth engine in the
present and is expected to be in the future
93%
2001
92%
2002
`
Corporate
Source: CBR (based on unconsolidated Russian statutory financial statements)
Retail
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Confidential - Not For Distribution - Working Draft, 15 March 2007
Retail Segment Driving Growth of Russian
Banking Sector
Retail Loans (US$bn)
Retail Deposits (US$bn)
78.4
144.1
95.7
41.0
71.3
51.5
22.3
10.2
3.1
4.5
2001
2002
2003
2004
2005
2006
22.9
32.9
2001
2002
Housing loans (US$bn)
2003
2004
2005
2006
Retail Bank Cards (m)
74.6
13.3
54.5
35.0
23.9
4.4
10.5
2.0
n/a
n/a
n/a
2001
2002
2003
2004
2005
2006
2001
15.4
2002
2003
2004
2005
(a)
2006
Note: CAGR for the period of 2004 – 2006
Source: CBR (based on unconsolidated Russian statutory financial statements)
17
Confidential - Not For Distribution - Working Draft, 15 March 2007
Significant Growth Potential: Underpenetrated
and Fragmented Banking Sector
Data on BRIC and US to be Added
Total Banking Assets / GDP (%)
Developed Economies
[•]
484%
US
UK
311%
Germany
Total Banking Assets per Capita (US$)
Developing Economies
13.2%
Russia
12.1%
CIS
average
28.4%
CEE
average
Developing Economies
[•]
49.9%
52.5%
89.2%
[•]
188,414
108,885
[•]
3,428
1,459
8,679
BRIC
Russia
CIS
average
CEE
average
US
UK
Germany
BRIC
Russia
CIS
average
CEE
average
Russian, CIS and CEE Banking Penetration Rates
Retail Deposits/GDP (%)
Developed Economies
Total Banking Assets (Unconsolidated) (%)(a)
Retail Loans/GDP (%)
7.4%
Russia
10.1%
CIS
average
19.2%
CEE
average
37%
37%
40%
38%
38%
37%
20%
18%
18%
`
17%
19%
20%
43%
44%
43%
45%
44%
43%
2001
2002
2003
2004
2005
2006
TOP5
TOP20
Others
Source: IMF, statistics prepared by Central Banks of respective countries (YE 2006 except for Poland (Aug 2006), Serbia (Sept 2006) and Ukraine (1H2006))
Note: CIS averages include data on Armenia, Belarus, Georgia, Kazakhstan, Moldova and Ukraine. CEE averages include data on Poland, Czech Republic, Slovakia, Serbia,
Croatia, Hungary
(a) Based on unconsolidated statutory data
18
Confidential - Not For Distribution - Working Draft, 15 March 2007
Regulatory Environment
Banking Sector Reforms Increase Confidence
Background
Recent Reforms:
Significant Steps
Forward
Reform Strategy:
Future Direction

Currently the CBR closely oversees and regulates the Russian banking system

Significant progress has been made by the CBR over the last years to strengthen its regulative
function and ensure smooth development of the Russian banking system

Deposit Insurance. Since 2004, deposits up to $7,000 are guaranteed by the Government. In
2007 the limit may rise to US$15,200

IFRS reporting. Starting from 2005, banks in Russia have to produce IFRS financial statements
and have them audited

Credit Bureaus. Starting from 2005, banks have to select a credit bureau and provide information
about their borrowers to this bureau. Currently, 22 credit bureaus are in operation nationwide

Stability. Multiple reforms designed to increase transparency and confidence

Reorganization. Simplification of the procedures to reorganize credit institutions

Basel II. Development of prudential regulation system based on Basel II principles

AML. Continuation of active work aimed at prevention of money-laundering
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Confidential - Not For Distribution - Working Draft, 15 March 2007
IV. Overview of VTB
Franchise
[Andrey Kostin]
Confidential - Not For Distribution - Working Draft, 15 March 2007
Overview of VTB Group – Key Operations
VTB Group
Banking Group Management Committee
Russia
Assets: $[*]bn
Revenue: $[*]bn
Net Income: $[*]m
Europe
Assets: $[*]bn
Revenue: $[*]bn
Net Income: $[*]m
CIS
Assets: $[*]bn
Revenue: $[*]bn
Net Income: $[*]m
Asia / Africa
Assets: NM
Revenue: NM
Net Income: NM
VTB
VTB Europe, London
(Headquarters)
JSCB Mriya, Ukraine(c)
VTB Representative
Office in India
VTB24,
Moscow
VTB France, Paris(b)
VTB-Ukriane,
Ukraine(c)
VTB Representative
Office in China
ICB,
St. Petersburg(d)
VTB Austria,
Vienna(e)
VTB Armenia,
Armenia
Vietnam-Russia Joint Venture
Bank, Vietnam
VTB
Broker, Chita(a)
VTB Germany, Frankfurt(b)
VTB
Georgia, Georgia
VTB Africa SA
Banco, Angola
Novosibirskvneshtorgbank,
Novosibirsk(a)
Russian Commercial Bank Ltd,
Zurich
VTB Representative
Office in Belarus
VTB Europe branch in
Singapore
Russian Commercial Bank
(Cyprus) Ltd, Cyprus
VTB Capital,
(Namibia)
VTB Representative Office in
Italy
Note:
(a)
(b)
(c)
(d)
(e)
All figures date to 31 December 2006
Currently under consideration to be converted into VTB branches.
Being transferred to VTB Europe and will ultimately be converted into VTB Europe branches in 2007.
In process of being merged (completion expected in 2007).
Following the merger with VTB which is expected to be completed in late 2007 or early 2008, ICB will cease to exist as a separate entity.
Will be transferred to VTB Europe in 2009.
21
Confidential - Not For Distribution - Working Draft, 15 March 2007
VTB Competitive Strengths
1
Significant Scale and Leading Market
Position
2
Extensive Distribution Network with
Broad Coverage
3 Broad Corporate Client Base
4
Leading Provider of Retail Banking
Services
5 Experienced Management Team
6 Recognised and Trusted Brand
7 Superior Growth with Strong Returns
22
Confidential - Not For Distribution - Working Draft, 15 March 2007
VTB/JGCs to discuss market shares
1
Significant Scale and Leading Market Position
Assets ($bn)
Loans ($bn)
Market
Share (%)
Sberbank
116.5
VTB
47.3
Gazprombank
24.3
30.8%
Deposits ($bn)
Market
Share (%)
Sberbank
12.5%
VTB
6.4%
Gazprombank
85.9
31.8
14.2
Market
Share (%)
31.5%
Sberbank
11.7%
VTB
5.2%
Gazprombank
4.4%
Bank of
Moscow
9.5
4.0%
3.3%
Alfa-Bank
9.1
3.8%
91.8
38.4%
21.4
11.4
9.0%
4.8%
Alfa-Bank
13.3
3.5%
Alfa-Bank
Bank of
Moscow
12.2
3.2%
Bank of
Moscow
10.0
2.6%
Rosbank
6.7
2.4%
Uralsib
6.3
2.6%
8.8
2.3%
Uralsib
5.9
2.2%
Rosbank
6.3
2.6%
Uralsib
Rosbank
11.9
8.9
MMB
7.4
2.0%
Raiffeisenbank
5.8
2.1%
Raiffeisenbank
3.9
1.6%
MDM Bank
7.4
1.9%
MDM Bank
5.3
2.0%
MDM Bank
3.8
1.6%
Raiffeisenbank
7.1
1.9%
MMB
5.0
1.8%
MMB
3.7
1.5%
Second largest banking group in Russia by total assets, total loans and total deposits
Note: Market shares are calculated on the basis of Russian Accounting Standards’ consolidated financial statements of top-100 Russia-based banks (Interfax, as of 1 October
2006). Russian accounting data differs from IFRS financials.
23
Confidential - Not For Distribution - Working Draft, 15 March 2007
1
Significant Scale and Leading Market Position
Ratings and Funding Cost Advantages
Funding Costs




Foreign Currency
Bank Deposit:
Baa2/Stable

Bank Financial
Strength: D-(a)

Issuer Default
Rating:
BBB+/Stable

Foreign Currency
Debt:
Baa2/Stable
Foreign Currency
Bank Deposits:
Baa2/Stable
Issuer Default
Rating:
BBB+/Stable
Individual: C/D
Foreign Currency
Ratings:
BBB+/Stable

Foreign Currency
Ratings:
BBB+/Stable
360
Russia Federation
320
Mid Spread to Midswaps (bp)

Other Large Russian Banks
280
240
200
160
120
VTB $ 7.5% due 2011
80
VTB $ 6.25% due 2035
VTB $ 6.875%
due 2008
VTB $ LTII
6.315% due 2015
40
VTB € 4.25% due 2016
0
0
2
4
6
8
10
Modified Duration (Options Adjusted) (Yrs)
12
VTB has maximum ratings possible for a Russian company and resulting very low funding costs
[Source: Credit agencies and Bloomberg]
(a)
Moody’s Bank Financial Strength is currently under review as the rating agency is implementing a new methodology.
24
Confidential - Not For Distribution - Working Draft, 15 March 2007
Significant Scale and Leading Market Position
1
M&A Strategy – Accomplished Acquisitions
Overview of Acquisitions
Stake
Acquired
Ownership Post
Acquisition(a)
Ukraine
98.0%
98.0%
66
[ ]
Russia
50.0% plus two shares
75.0% plus three shares
480
336
UK
88.9%
89.1%
249
-
December-2005 BCEN-Eurobank (now VTB France)
France
87.0%
87.0%
151
-
December-2005 Donau-Bank (now VTB Austria)
Austria
15.0%
100.0%
12
-
Luxembourg
15.0%
50.7%
5
-
December-2005 OWH (now VTB Germany)
Germany
51.6%
83.5%
42
-
January-2005
UGB (now VTB Georgia)(d)
Georgia
50.0% plus one share
50.0% plus one share
7
[ ]
July-2004
Guta Bank (now VTB24)
Russia
85.8%
85.5%
0
71
April-2004
Armsberbank (now VTB Armenia)
Armenia
70.0%
70.0%
9
[ ]
March-2006
Target
Mriya (now VTB Ukraine)
December-2005 ICB(b)
December-2005 MNB (now VTB Europe)
December-2005 EWUB(c)
Purchase
Price
Goodwill
Total Consideration
$[459]m
Target
Country
Date
Info required: VTB to confirm purchase prices +
aggregate consideration for European banks + confirm goodwill numbers
(a)
(b)
(c)
(d)
Amounts represent ownership of voting securities.
In March 2005 the Group acquired a 25% plus one share stake in ICB for c. $97m recognizing negative goodwill of $(30)m for the acquisition.
The Group sold a 19.0% interest in EWUB in 2004 and 2% interest in 2006 to an unrelated party. VTB now owns 48.7% of EWUB.
In March 2006 the Group acquired a further 8.3% stake in VTB Georgia for $5m and in April 2006 a 0.6% stake for $1m. The Group now owns 58.9% of VTB Georgia.
25
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2

Extensive Distribution Network with Broad
Coverage
525 branches across Russia
– [] branches located in Moscow and the
Moscow region
– c.[2,679] ATMs



Presence in 62 of 88 Russian regions
[163] VTB24 branches
[ ] other retail branches of ICB in Russia
VTB
VTB24
ICB
Note: As of 31 December 2006.
Info required: VTB to provide # of branches per region
26
Confidential - Not For Distribution - Working Draft, 15 March 2007
2
Extensive Distribution Network with Broad
Coverage
VTB Distribution Network - Russian Business
Current
 Full range of corporate, retail and
investment banking operations
 Full range of corporate, retail and
certain investment banking services
 [205] branches located in more than []
regions in Russia
 157 branches as of 31-Dec-2006,
primarily located in the North-West
regions
 In August 2005 began transferring the
retail and small business operations
along with selected assets and liabilities
to VTB24
 [Other Russian operations: VTB Broker
(Chita) and Novosibirskvneshtorgbank]
 Intention to combine the corporate and
investment banking operations into
VTB while transferring the retail
operations to VTB24
 Retail operations
 163 branches located in more than []
regions in Russia
 VTB24’s corporate client relationships
(except small businesses) are being
transferred to VTB
Future
Model
(End 2007)
 All Russian businesses excluding
retail and small business banking
 All retail banking and small
business banking operations
 146 ICB branches to be
transferred by 2008
Info required: confirm # branches and regions
27
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2
Extensive Distribution Network with Broad
Coverage
VTB Distribution Network – International Business



INDIA
CHINA
VIETNAM

SINGAPORE
Subsidiaries
Representative offices
Associates
Western Europe:
–
Currently controls six banks in Western Europe
–
Subsidiary banks in the UK, France, Germany, Austria, Switzerland
and Cyprus. Representative office in Italy
–
VTB Europe (based in London) is the holding company of VTB
France and VTB Germany. Process of converting both into
branches has started in 2007
–
VTB Austria is expected to be transferred to VTB Europe and
converted into a branch in 2009-2010
CIS:
–
Banking subsidiaries in Armenia, Georgia and Ukraine
–
[296] branches and [121] ATMs
–
Representative office in Belarus
–
Further CIS expansion is planned
Asia:
–
Branch of VTB Europe in Singapore
–
Representative offices in India and China, which will be transferred
into branches in 2007
–
Presence in Vietnam with 49% ownership in Vietnam-Russia Joint
Venture Bank
Africa:
–
Banco VTB Africa SA in Angola
–
VTB Capital (Namibia) PTY Ltd. in Namibia
VTB is the only franchise able to serve Russian businesses on an international scale
28
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3
Broad Corporate Client Base
Key Highlights
 Strong working relationships with leading Russian
companies across all sectors of the Russian
economy
Corporate Loans
29.6%
#2
8.8%
 #2 in Russian corporate banking with [8.8]% and
[9.0]% market shares in corporate lending and
corporate deposit respectively
Sberbank
VTB
Group
4.6%
4.0%
3.5%
Gazprombank
Alfa
Bank
Bank of
Moscow
Corporate Deposits
 Currently provides banking services to more than
60% of large sized Russian corporate entities
–
Approximately [27,700] large and medium
size companies in Russia
#2
17.3%
9.0%
Sberbank
Source: Bank of Russia
VTB
Group
7.4%
Gazprombank
4.2%
3.2%
Alfa
Bank
Bank of
Moscow
Info required: VTB to provide market shares
29
Confidential - Not For Distribution - Working Draft, 15 March 2007
4
Leading Provider of Retail Banking Services
Retail Deposits
Key Highlights
 Top 5 retail player in Russia with more than [ ]
retail customers as at 31-Dec-2006
57.1%
#2
4.5%
 Leading Russian market position in retail deposits
(#2), mortgage loans (#2) and total retail loans (#5)
 Particular focus on the upper mass and affluent
market segment
Sberbank
VTB
Group
2.2%
1.9%
1.8%
Bank of
Moscow
Raiffeisenbank
Rosbank
Uralsib
Retail Loans
Mortgage Ranking
 [To come]
2.4%
37.7%
8.7%
#5
4.1%
2.6%
Sberbank
Source: Bank of Russia
Russian
Standard
Bank
Rosbank
Raiffeisenbank
2.0%
1.9%
VTB
Group
Uralsib
Info required: VTB to provide market shares
30
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5
Experienced Management Team
 Senior management team has extensive experience in the financial services sector
 On average more than 12 years of relevant experience
Banking Group
Management
Committee
Management Board
Name
Age Years at VTB Years in Industry Responsibility
Andrei L. Kostin*
50
5
[
]
Chairman and CEO
Vadim O. Levin
43
5
[
]
[ ]
Alexei I. Akinshin*
47
4
[
]
[ ]
Gennadi V. Soldatenkov
54
6
[
]
[ ]
Igor N. Zavyalov
47
5
[
]
Head of Corporate Business
Yulia G. Chupina*
36
2
[
]
Head of Corporate Development
Vasiliy V. Kirpichev*
35
2
[
]
[ ]
Konstantin G. Kozhevnikov
39
2
[
]
Head of Non-Financial Assets Dept.
Erkin N. Norov*
53
5
[
]
Head of Loan Transactions and Risk Control
Vasily N. Titov
46
3
[
]
Head of PR and Marketing
E. M. Grevtsev
58
[
]
[
]
[ ]
Nikolay Kuznetsov
42
[
]
[
]
[ ]
Andrey Puchkov
29
[
]
[
]
[ ]
Nikolay Tsekhomsky
32
[
]
[
]
CFO
* Also member of Banking Group Management Committee
Info required: VTB to complete
31
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5
Experienced Management Team
Awards and Achievements
2005
[VTB
to review]
2006
Euromoney Awards of Excellence
2005: Best Bank in Russia
EBRD award for participation in the
Trade Facilitation Program as 'The
Most Active Bank-Issuer in developing
economies of Europe, Asia, Africa and
Middle East'
Certificates of distinction in Trade
Financing (American Express
Bank)
Best clearing bank of Russia in the
correspondent network of JP Morgan
Chase Bank (fifth consecutive time)
Best Russian clearing bank amongst
the clearing operators included in Bank
of New York correspondent bank
network
[Permission to use logos?]
Recognized as the best
commercial bank in Russia, best
Russian underwriting bank (Global
Finance Magazine)
Recognized as a ‘Superbrand' of
Russian banking sector
(Superbrands International)
Andrey Kostin (CEO) named "The
Banker of the Year" (Itogi
Magazine, Fitch Ratings)
Bond Deal of the Year 2006 in
EEMA (International Financing
Review Journal)
Finance New Europe
Journal
Best bank of Russia in 2006
Eastern European Financial
Institution Bond Deal of the Year
2006 (EuroWeek Magazine)
32
Confidential - Not For Distribution - Working Draft, 15 March 2007
6
Recognised and Trusted Brand
Key Highlights
Brands
 More than 16 years of operations in
the Russian banking market
 Recent rebranding exercise and
launch of VTB24 accelerated already
strong reputation
 Brand recognition
Info required: VTB to provide quotes on brand recognition
33
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6
Recognised and Trusted Brand
Description
Benefits
from Shareholder Support
Relationship
with the Russian
Federation
 Controlling shareholder through
the Federal Property Agency
 Supervisory Council
representatives
Outcome
 Stable management team
 Recognised and trusted brand
 [Independent decision making]
Relationship
with CBR
 One of the founding shareholders
which transferred its interests in
VTB in October 2002
 History of funding support,
including for strategic decisions
 Supervisory Council
representatives
 Acquisition of CBR’s interests in
European Banks
 Innovative investments
Russian Government as majority shareholder enhances reputation
for financial strength and customer trust in the brand
34
Confidential - Not For Distribution - Working Draft, 15 March 2007
77
Superior Growth with Strong Returns
VTB is one of the fastest growing Russian banks…
Russian Banking
Sector(a)
VTB
2004
2005
2006
[52,489]
Total
Assets
Total
Equity
CAGR 2004–2006
72%
36,723
44%
17,810
4,920
[6,314]
55%
37%
2,628
…while increasing profitability and efficiency over the same period
2004
2005
2006
[1,218]
Net
Income
499
205
(a) CBR (based on unconsolidated Russian Statutory Financial Statements)

Continuous growth in net
income

2006 RoAE of [ • ]% vs
2004 RoAE of 8.2%
35
Confidential - Not For Distribution - Working Draft, 15 March 2007
V.
VTB Strategy
[Yulia Chupina]
Confidential - Not For Distribution - Working Draft, 15 March 2007
Our Overall Goal
Strengthen our market position as a leading
provider of banking services to Russian customers
and leverage our unique international position
among Russian banks
37
Confidential - Not For Distribution - Working Draft, 15 March 2007
VTB Strategy
1
Consolidate Existing Leading Position in
Russian Corporate Banking
2
Aggressively Grow Market Share in
Attractive Russian Retail Banking Sector
3
Increase Cross-selling of Investment
Banking Products to Corporate Clients
4
Expand International Presence
5
Continue Integration and Improve
Operating Efficiencies
6
Centralise and Upgrade IT Systems and
Infrastructure
38
Confidential - Not For Distribution - Working Draft, 15 March 2007
1


Consolidate Existing Leading Position in
Russian Corporate Banking
Strategy
Aim to grow faster than the overall Russian banking market through 2010
Focus on cross-selling of products, expanding customer base, enhancing client services,
diversifying loan portfolio and promoting new products
Current Initiatives
Impact
 Segmentation of client base into large,
medium-size and small clients in order to
provide more focused, tailored services
 Increase in the Group’s market share both in
terms of the number of customers and the
volume of operations
 Dedicated client manager for each large client
 Increase in number of large corporate clients
from [*] to [*] from 31-Dec-2005 to 31-Dec2006
 Creation of a division fully focused on mediumsized clients
 Enhance cross-selling of additional products
and services to existing customers (including
investment banking products)
 Increase in number of medium-sized
corporate clients from [*] to [*] from 31-Dec2005 to 31-Dec-2006
 Diversification of loan portfolio
39
Confidential - Not For Distribution - Working Draft, 15 March 2007
2
Aggressively Grow Market Share in Attractive
Russian Retail Banking Sector
Strategy






Aim to become second largest Russian retail bank
Become the provider of choice for banking services to small businesses and individuals in particular in the
affluent and upper mass retail segments
Expansion of VTB24 network in Russia to more than 500 branches by end of 2008
Ultimate goal is to operate branches in all Russian cities with populations of more than 150,000 people
Development of other distributions channels (ATM, telephone and internet banking), diversification of product
range and improvement of operational efficiency
Develop retail business in Ukraine and other CIS countries
Current Initiatives
 Expansion plan through VTB24 brand
 Expand branch network by opening new
branches and migrating branches from ICB
 Enhance and develop product line
 Small business corporate clients served
through VTB24 network
Impact
 Creation of [ ] new branches in 2006
(excluding migrated branches) and [ ] new
branches to date in 2007
 Diversified offering of deposits services and
lending products such as consumer loans,
mortgages, auto loans, credit cards and
services to small businesses
40
Confidential - Not For Distribution - Working Draft, 15 March 2007
3



Increase Cross-Selling of Investment Banking
Products to Corporate Clients
Strategy
Increase market share in selected products and services by leveraging strong corporate
customer relationships, expanding the range, improving the quality and intensifying the sale of
products
Increase fee income by emphasising role as arranger and adviser alongside the role of principal
creditor
Use VTB Europe as platform to consolidate investment banking operations
Current Initiatives
 Shift focus from proprietary activities to clientorientated services
 Assemble an experienced investment banking
team
 Expand range of products
 Focus on growing retail investment products
such as asset management and brokerage
services
Impact
 Current investment banking services include
arrangement and underwriting of securities
offering, project financing, M&A financing
and advisory services as well as proprietary
trading activities
 Established leading positions in selected
products, e.g. #2 underwriter of Russian
domestic corporate and regional bonds
 Launch of VTB Asset Management in
September 2006
41
Confidential - Not For Distribution - Working Draft, 15 March 2007
4




Expand International Presence
Strategy
Expand international presence to support the needs of corporate clients, principally Russian and
CIS
CIS banking market is priority for expansion due to attractive growth profile
– Organic growth and selected acquisition opportunities
Become retail and corporate leader in targeted CIS countries
– Current focus on Ukraine, Georgia and Armenia
– Possible acquisitions in Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, and Uzbekistan
Continue to build a broad platform in Europe and expand into selected countries in Asia and
Africa
Current Initiatives
CIS
Western
Europe
Africa/Asia
 Expand in strategic countries which are
involved in active trade and economic
cooperation with Russia
 Become a leader in corporate and retail
segments in each country VTB has or plans to
have a presence
 Build an integrated platform to service
Russian clients in Europe and European
corporate clients with business interests in
Russia and CIS
 Expand into selected countries in which
investments by Russian corporate clients are
expected e.g Vietnam, Namibia, Angola
Impact
 Present in 3 CIS countries
–
Ukraine, Georgia and Armenia
–
[296] branches in CIS region and [430,000] CIS
clients
 Present in 7 Western European countries
–
Ability to offer Russian clients easier access to
international financial services and international
capital markets
–
Ability to serve European corporate clients with
business interests in Russia and CIS
42
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5



Continue Integration and Improve Operating
Efficiencies
Strategy
Continue to integrate and streamline organisational structure to maximise operational efficiency
across business lines and geographies
Includes merger of ICB, continued migration of corporate and retail banking business between
VTB and VTB24 and consolidation of European subsidiaries
Gradually implement uniform management practices, internal control systems, liquidity
management systems and risk management policies in line with international best practices
Impact
Current Initiatives
 Further development and integration of financial, internal
controls and IT systems
 Simplified structure with greater focus across
business lines
 Launched a process of integrating risk management
across the Group following recent acquisitions
 Clear strategy
 Implementation of a matrix management model to
manage subsidiaries
 Creation of the Banking Group Managing Committee in
2006, an interbank coordination and management body
which includes VTB’s and subsidiary banks’
representatives
 In the process of integrating within VTB24 the Russian
retail and small business banking operations of VTB, ICB
and VTB24
 Unified group procedures and systems by [ ]
 Restructuring of Russian operations to be
substantially completed by August 2007
 Creation of a broad platform throughout Western
Europe
 VTB24’s corporate relationships are being
transferred to VTB
43
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5
Continue Integration and Improve Operating
Efficiencies
Rebranding - “From a Group of Banks to a Bank Group”
 Launched global rebranding in October 2006 to unite separate brands of the Group under a unified brand globally
 Most of the Group’s CIS and European operations have been rebranded under the VTB brand
 In Russia, the Group still operates under three different brands (VTB, ICB and VTB24). Ultimate goal is to operate two brands
once the integration of ICB into VTB is completed
–
VTB for Corporate Banking and Investment Banking
–
VTB24 for Retail Banking
44
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6


Centralise and Upgrade IT Systems and
Infrastructure
Strategy
Rationalise and strengthen IT systems to meet the needs of growing business
Upgrade several of the existing multiple IT systems, installations and support teams across the
Group into a new Group-wide integrated IT system
Current IT systems
 Each banking subsidiary has a separate IT
system managed on an independent basis, with
little or no functional integration between banks
other than VTB and VTB24
 Legacy systems across CIS and European banks
are sufficient to support banking operations in
those jurisdictions
 For financial reporting purposes, local GAAP data
is collected and consolidated regularly by the
Group, and transformed to IFRS financials
Objective
 Coordinate activities and establish a single
corporate reporting framework
– Gradual process to simplify, rationalise and
synchronise the different IT systems to
support access to and comparability of the
information that comes from the subsidiaries
 Unified application packages with “best-in-class”
functionality for key business areas
– Automatisation of core customer information
management, accounting, oversight,
reporting, etc.
45
Confidential - Not For Distribution - Working Draft, 15 March 2007
Use of IPO Proceeds
Development Plans
Overall
Russia


Capital base for ongoing organic growth
Investments in systems including risk
management and IT
 Organic led growth and business
improvements

Development of retail operations, including
– Expansion of branch network
– IT and operational improvements
Consolidate #2 position in corporate banking
Diversify product offering and gain market share
in selected investment banking niches
 Organic led growth building on the VTB and
VTB24 franchises, brands and networks
 Potential for selected acquisitions
Priority focus due to attractive growth profile
Key CIS markets are Ukraine, Georgia and
Armenia
Additional CIS markets such as Azerbaijan,
Belarus, Kazakhstan, Kyrgyzstan and Uzbekistan
Selected acquisitions in countries where presence
is deemed economically viable
 Organic led growth in Ukraine, Georgia and
Armenia where VTB has significant presence
 Possible selected acquisitions in
Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan
and Uzbekistan
Continue to build a broad platform across key
countries in Europe
Expand international presence to support the
needs of Russian clients
 Europe: Organic led growth building upon
rationalised and unified VTB Europe platform
 Other: Organic led growth via VTB
representative offices or branches or external
growth setting up JV’s with local players




CIS



Europe/Other
Countries
Preferred Route

46
Confidential - Not For Distribution - Working Draft, 15 March 2007
VI. Corporate Banking
[Vadim Levin]
Confidential - Not For Distribution - Working Draft, 15 March 2007
Corporate Banking - Overview
Highlights
As % of Total Loans to Customers, 2006
 Broad range of commercial banking services
and products to corporations, financial
institutions and government agencies
 Services include lending, deposits and
settlement services, trade and export finance
and custody services
 Majority of clients operate in largest sectors of
the Russian economy, such as manufacturing,
retail and wholesale trade, construction,
transport, oil and gas, production, energy, etc.
Corporate
93%
As % of Total Revenues, 2006
 More than [2,000](a) large clients and more
than [25,660](a) medium size clients in Russia
as at 31-Dec-2006
Corporate
DUMMY NUMBERS
[Source: ]
(a)
Net of overlapping clients between ICB and VTB.
48
Confidential - Not For Distribution - Working Draft, 15 March 2007
Corporate Banking – Solid Growth [TBU]
Corporate Loans ($bn)
Corporate Deposits ($bn)
$[ ]bn
$18.7bn
$[ ]bn
$7.8bn
$10.6bn
$3.9bn
2004
2005
2006
2004
2005
2006
Corporate banking remains the main source of revenue for VTB Group
[Source: ]
49
Confidential - Not For Distribution - Working Draft, 15 March 2007
Corporate Banking – Client Base
From 2003 to 2005, VTB implemented a number of measures aimed at strengthening position, including
tailoring products and services according to client profile
Large Clients
Medium-Size Clients
 Defined as companies that have annual revenues exceeding
$100m or revenues that are at least 1% of the aggregate industry
revenue
 Client relationships with large Russian companies in all industries
important to the Russian economy
 More than [2,000](a) large customers as of 31-Dec-2006
 Defined as companies that have annual revenues of between
$3m and $100m
 More than 25,660(a) medium size clients as of 31-Dec-2006
 Created industry divisions at the head office and launched industrybased business development programs to provide industry-specific
and customised services
 179 large customer client managers at the head office supported by
190 regional client managers as of 31-Dec-2006
 Strategic partnership frameworks with 130 major clients as of 31Dec-2006
 A dedicated service model for medium size clients that focuses
on providing standard product packages at VTB’s Moscow subbranches and branches located in economically significant
Russian regions
 Developed simplified credit approval procedures for medium
size clients
 Special unit to coordinate branch efforts aimed at expanding
medium size client business by implementing such measures
as standardised products and the creation of a database of
existing and potential clients
(a) Net of overlapping clients between ICB and VTB.
Info Required: confirm # clients
50
Confidential - Not For Distribution - Working Draft, 15 March 2007
Corporate Banking – Products & Services


Lending


Deposit and
Settlement
Services




Trade and Export
Finance
Custody Services





Syndicated
Loans

Loans in Rubles, US Dollars, Euros and certain other foreign currencies
Portfolio of medium term (1-3 years) and long-tem (over 3 years) corporate loans which generally have
some form of collateral
Other credit products include loan guarantees, performance guarantees, advance guarantees, payment
guarantees, custom guarantees and bid bonds
Started to offer more complex credit products, such as financial leasing and refinancing of investment
portfolios for specialised financial entities
Current or settlement deposit accounts and term deposit accounts in Rubles and in certain other foreign
currencies (predominantly US Dollars and Euros)
Special purpose accounts such as payment accounts used to settle obligations with Russian
counterparties and accounts used for transactions involving foreign currency payments
Payment and settlement services
Letter of credit and import and export settlement services (clients include Technopromexport, Rosneft,
Power Machines, Alrosa, Suel, Gazprom and TNK-BP)
Pre-export financing and acts as a currency control agent
Import financing using funds from foreign banks and export credit agencies that are currently unwilling to
assume direct credit risk of Russian companies
One of the largest custodian banks in Russia with AuM of $[ ]bn
Licensed to provide full range of custody services with respect to both Russian and foreign corporate and
governmental securities
Primary depository and paying agent for MinFin bonds
Leading arranger and lender on syndicated loans to corporations and financial institutions in Russia and
other CIS countries
51
Confidential - Not For Distribution - Working Draft, 15 March 2007
Corporate Banking – Outlook and Strategy

Consolidate #2 position by growing faster than overall Russian market through
2010 and accordingly achieve substantial market share increase in lending and
deposits

Increase cross-selling of additional products and services to existing customers

Focus on the growing needs of medium-size corporate customers to increase
customer base

Continue to improve customer service and streamline decision-making processes
and procedures

Continue to diversify loan portfolio

Promote new products
52
Confidential - Not For Distribution - Working Draft, 15 March 2007
VII. Investment Banking
[Vadim Levin]
Confidential - Not For Distribution - Working Draft, 15 March 2007
Investment Banking – Overview
Highlights







Investment banking products currently
offered to large corporate clients in Russia
(via VTB and ICB) and Western Europe
VTB is leveraging off the existing corporate
customer relationships to cross sell
customized investment banking product
and services
The leading position on the Russian bond
underwriting market
Securities portfolio represents [ ]% of total
assets as of December 31, 2006
Securities portfolio dominated by debt
instruments [ ]% as of December 31, 2006
Streamlined investment decision
procedures
Strong balance sheet of the Group supports
opportunity to further develop M&A
financing
Securities as Percentage of Total Assets, 2006
DUMMY NUMBERS
Securities
Breakdown of The Securities Portfolio, 2006
Government
Bonds
Government
Eurobonds
DUMMY NUMBERS
Corporate
Eurobonds
Equities
Corporate
Bonds
54
Confidential - Not For Distribution - Working Draft, 15 March 2007
Investment Banking – Overview

Products and
Services



Platform
Outlook and
Strategy
Current investment banking services include, proprietary securities trading, arrangement and
underwriting of securities offerings, project financing and advisory services, merger and acquisition
financing and advisory services
Intention to enter the asset management, brokerage, asset securitization and derivatives market



Currently Investment Banking services being rendered to large Russian corporate clients
Client relationship and business origination from Russia, with certain products developed by the
European subsidiaries
Leading Russian bond underwriter
Significant potential for development in SME segment and outside of the Group’s client base
Proprietary trading – the key revenue stream for the business





Become a leader in select investment banking products and services
Use VTB Europe as a platform for Investment Banking development
Enhance the Investment Banking product range
Strengthen current positions in retail products: asset management, brokerage services
Increase of level of commission income
55
Confidential - Not For Distribution - Working Draft, 15 March 2007
Investment Banking – Products and Services

Proprietary
Activities
Debt Capital
Markets




Precious Metals 
Operations

Historical focus on proprietary trading in Russian government securities, federal loan bonds and
Russian Federation Eurobonds, and derivatives transactions
Market maker in the Russian fixed income market. Significant player in repo and reverse repo securities
The Group’s income from proprietary activities was $[●] million in 2006
Arrangement and underwriting of debt securities offerings of Russian companies on the domestic market
In 2006, VTB arranged 32 domestic corporate and municipal bond offerings totaling approximately [$1.8bn]
in 2006
VTB trades precious metals (primarily gold), exports and sells gold, provides short- and medium-term
financing and hedging products to gold producers
Clients include 75 gold producers, the CBR, domestic and international banks


Debt and equity financing for development projects, on a recourse or a non-recourse basis
In 2006, VTB provided approximately $650m in funds for projects, including construction of a new longdistance oil-products pipeline, acquisition financing for aircrafts and construction of a business center
M&A and
Advisory
Services

In 2006, VTB participated in M&A financing with a total transaction amount of approximately $800m
– Arrangement of leveraged buyout financing for the acquisition of Corbina Telecom and as buy-side
advisor to Baring Vostok Capital Partners in the acquisition of Bank Caspian
Asset
Management


Platform in place to develop asset management business through CJSC “Prospect – Montes Auri”
Business currently in start-up phase
Other



Brokerage services on MICEX and RTS and the over-the-counter markets
Investment advisory and market making services on securities (primarily Russian debt securities)
Research on the Russian fixed income and equity markets
Project Finance
56
Confidential - Not For Distribution - Working Draft, 15 March 2007
Investment Banking – Established Franchise
Selected Transactions – [VTB to update]
Russian Bond Issues Underwritten
Ranking
1
1
2
[ ]
Total number
of issues
19
25
32
[ ]
April 2004/ May 2005
May 2005
City of Moscow
MGTS
Underwriter
and Market-maker
Arranger
2nd Issue of Rouble bonds
RUR 3 billion
Issuance of bonds
4th and 5th
of Rouble Bonds
RUR 3.5 billion
May 2005
April 2004/ April 2005
July 2005
Government of
Moscow Region
Perm Motors Group
EAST LINE Group
Arranger
1,820
1,544
1,104
US$m
Home Credit
and Finance Bank
Arranger and Underwriter
Arranger
2nd Issue of Rouble Bonds
RUR 3 billion
4th and 5th
Issues of Rouble Bonds
RUR 21.6 billion
August 2004
February 2003 – June 2005
Bank Russian Standard
Arranger and Underwriter
Paying Agent
Avtovaz
[ ]
Co-Arranger
2004
Note: Combined for VTB and ICB
Source: Cbonds Rating Agency
2005
2006
April [ ], 2007
3rd Issue of Rouble Bonds
RUR 2 billion
Arranger
1st
Issue of Rouble Bonds
RUR 1.2 billion
February 2004
Gazprom
Underwriter
1st- - 3rd
Issues of Rouble Bonds
RUR 9 billion
3d Issue of Rouble Bonds
RUR 10 billion
57
Confidential - Not For Distribution - Working Draft, 15 March 2007
Investment Banking – Platform [VTB to confirm the
breakdown of products offered in Russia and Europe]
Europe
Russia


Predominantly by Russian
based client managers
Origination
Product Offering







Proprietary activities
Russian debt capital markets
Precious Metals Operations
Project Finance
Asset management
M&A and Advisory Services
Tailored products for SME
clients











European subsidiaries for certain
foreign clients moving to Russia
Servicing Russian corporate clients
moving into European capital markets
Structured and trade finance
Syndicated lending
Loan securitization
Clearing and settlement
Money markets
Trade finance
International debt capital markets
Fixed income research
Brokerage
Proprietary activities
Commitment to significantly expand the investment banking with focus on selected products
58
Confidential - Not For Distribution - Working Draft, 15 March 2007
Investment Banking – Outlook and Strategy
 Become a leader in selected investment banking products and services
 Improving coordination between the corporate and investment banking businesses
– Leverage off its existing corporate customer relationships to cross-sell investment banking
products
– Design customized and new investment banking products and services
 Use VTB Europe as the platform for consolidating the Group’s investment banking operations
 Strengthen current positions in retail products: asset management, brokerage services
 Reduce earnings volatility coming from significant income from proprietary trading
 Increase fee income by shifting its focus from the role of a principal creditor to a role of
arranger and adviser
 Introduce a system of proprietary securities portfolio management at the Group level
59
Confidential - Not For Distribution - Working Draft, 15 March 2007
VIII. Retail Banking
[Mikhail Zadornov]
Confidential - Not For Distribution - Working Draft, 15 March 2007
Retail Banking – Overview
Highlights






VTB retail business services include among
others, deposits and lending to individuals and
small businesses(a)
Leading Russian market position in retail deposits
(#2), mortgage loans (#2) and total retail loans
(#5) as of 31 December, 2006 - TBD
In process of combining Russian retail and small
business banking operations in VTB24, the
specialized retail banking subsidiary in Russia
VTB24’s predecessor, Guta Bank, was acquired in
2004
Aim at becoming a leading retail bank in Russia
Successful retail banking operations in Ukraine,
Georgia, Armenia to be further enhanced with
VTB24 product expertise is used
As % of Total Loans to Customers, 2006
Retail
7%
Breakdown of Retail Banking Loan
Portfolio, 2006
Auto Loans
DUMMY NUMBERS
Consumer
Loans
(a)
For the purpose of this presentation, statistics presented hereafter is based on products to individuals only
Small
Business
Loans
Mortgages
61
Confidential - Not For Distribution - Working Draft, 15 March 2007
Retail Banking – Impressive Recent Growth
Retail Loans (US$bn)
2,500
Retail Deposits (US$bn)
[2,249]
8,000
[7,327]
7,000
2,000
6,000
5,180
5,000
1,500
4,000
1,000
851
3,000
2,111
2,000
500
988
1,000
130
34
0
0
2003
2004
2005
2006
2003
2004
2005
2006
Expansion of the retail division is a key strategic priority for the VTB Group
62
Confidential - Not For Distribution - Working Draft, 15 March 2007
Retail Banking – History
2004
2005
 Acquisition of Guta Bank in Russia
– Wide branch network
throughout Russia
– Developed retail infrastructure,
including front office,
processing center and internet
banking
– Significant retail client base
 Acquisition of Armsberbank in
Armenia
– Armenian subsidiary of
Sberbank until 1993
– [The leading branch network]
– [Largest retail client base]
 In order to capture the market growth,
VTB decides to concentrate all retail
banking operations in Russia in a
separate banking subsidiary - Guta
Bank
 Acquisition of ICB to develop corporate
and retail banking presence in the
North-West region
– [Leading position in the North-West
region]
– [more than xx individual clients as
of 31 December, 2006]
 Acquisition of United Georgian Bank
– Third largest bank in Georgia
– Full rang of retail products in major
cities as well as more remote areas
through [28] branches
2006-2007
 Rebranding of Guta Bank to VTB24
 Further transfer of retail assets and
liabilities to VTB24. Restructuring to be
completed by the end of 2007
 Assimilation of ICB’s retail operations
into VTB24, interfacing the banks’
ATMs and standartizing the terms of
the offered products. Full integration to
be completed after merger with ICB is
finalized
 Acquisition of Mriya Bank in Ukraine
– Full rang of retail products
throughout Ukraine via 171
branches of which 63 specialize in
serving retail customers
– [xx retail customers as of 31
December, 2006]
Focus on retail banking in Russia and CIS is critical for growth
VTB24’s goal is to become a leading retail bank in Russia
63
Confidential - Not For Distribution - Working Draft, 15 March 2007
Retail Banking – Summary
Client Base
Distribution
Products and
Services


4.6 million individual and 154 thousand small business clients in Russia
Additional 421 thousand individual and 16 thousand small business clients in the other growing
CIS markets




Direct distribution model no products are sold through partnerships or third-parties
[525] branches throughout Russia
2,679 ATMs in Russia
Platform for retail roll-out in other CIS countries: 296 branches and 121 ATMs

Services include deposit accounts, lending, small business loans, consumer loans, mortgages,
auto loans and credit cards
Strategic focus on small business loans segment with currently low competition
Leading mortgage player, with total mortgage portfolio outstanding of USD [ ] mn, representing a
10% market share in Russia
Catch-up position on the auto loan market
[ ] credit cards issued




Outlook and
Strategy




Become a leading retail bank in Russia
Increase the market share in products offered to upper mass and affluent market segments and
small businesses
Expand VTB24 branch network to more than 500 branches by 2008
Ultimately operate branches in all Russian cities with populations of more than 150,000 people
64
Confidential - Not For Distribution - Working Draft, 15 March 2007
Russian Retail Banking – Client Base [TBD]
Comments
Number of Individual Customers
 More than 4.6 million retail customers in
Russia in VTB, VTB24 and ICB
DUMMY NUMBERS
4.6
 Migration of client to VTB24 to provide
additional momentum for further growth,
given VTB24 specialised focused on retail
services rendered to individuals and small
businesses
2004
2005
2006
Number of Cards Issued
 Standardized and well tailored product
offering to become available to existing
client
DUMMY NUMBERS
 Focused on affluent client base
 [ ] card issued
2004
2005
2006
65
Confidential - Not For Distribution - Working Draft, 15 March 2007
Russian Retail Banking – Distribution
(Branch Based Model)
Russian Banks’ Network, 2006
Distribution Network: Branches
20,151
232
222
216
211
185
Impexbank
Uniastrum
Gazprombank
450
Ak Bars
494
Bank of
Moscow
Hybrid (Corporate & Retail)
[525]
Uralsib
Retail
2006
Rosselhozbank
2005
Sberbank
2004
582
Rosbank
DUMMY NUMBERS
VTB
730
Source: RBC Ratings
Number of ATMs
Distribution Highlights
2,679
DUMMY NUMBERS



2004
2005
2006




Key distribution channels include branches, sub-branches, outlets and ATMs,
telephone and internet banking
Total of [525] branches as of 31 December, 2006 of which [272] were purely
retail oriented
VTB24 retail network consisted of 163 branches as of December 31, 2006.
Further [557] branches to be migrated to VTB24 in the near future
[ ] branches in Moscow and Moscow region
Presence in 62 of [ ] Russian macro regions
The first Russian bank to offer internet banking
Plans to maintain branches in all Russian cities with populations greater than
150,000 inhabitants
66
Confidential - Not For Distribution - Working Draft, 15 March 2007
Branch-Based Banking Model
Russian Retail Banking – Products and
Services
Deposit
Accounts




Competitive array of products
US$[ ]m in retail deposits as of 31-Dec-2006
Offers fixed term, open-add term, flexible term and current settlement deposits
Salary accounts for corporate clients employees
Small Business
Loans



Simplified credit approval procedures for companies with annual turnover of less than US$3m
Approximately 154 thousand small business customers mostly located in the regions
Total portfolio of [ ] as of December 31, 2006
Mortgages



VTB24 has approximately [3,200] mortgage loan customers. Majority located in Moscow
Fixed interest rate products. Plans to offer floating rates and home equity credit lines in the future
Total portfolio of [ ] as of December 31, 2006

84% of total portfolio is unsecured lending. The term of the total portfolio is from six month to 5
years
Approximately 50% of total loans originated in the Moscow region
Total consumer loan portfolio of [ ], as of December 31, 2006 with average size of [ ]
Standard auto loans of up to US$50,000 for a term of 1-5 years
Express auto loans of up to US$25,000 offered for 1-4 years. Approved faster than standard but
tighter credit procedures and higher interest rates
Approximately 78% of total loans originated in Moscow
Total auto loan portfolio of [ ] as of December 31, 2006
VTB24 issues VISA, Mastercard and Diners’ Club debit and credit cards
As of 1-Apr-2007, VTB24 had issued [ ]mn VISA and Mastercard cards and ICB had issued [ ]mn
Consumer
Loans




Auto Loans
Credit Cards




Product range in place to leverage the expanding branch network
67
Confidential - Not For Distribution - Working Draft, 15 March 2007
Retail Banking – Outlook and Strategy

Substantially increase retail lending and retail deposit market shares in Russia, in particular in products
offered to high-growth and significantly profitable market segments

Become the provider of choice of banking services to high-growth and significantly profitable market
segments, in particular the upper mass and affluent market segments and small businesses

Successfully complete the migration of the Group’s Russian retail business to VTB24 to leverage best
practices

Expand the retail network of VTB24 to more than 500 branches in Russia by the end of 2008
– Operate branches in all Russian cities with populations of more than 150,000 people

Develop sales through other distribution channels, including ATM network, telephone and internet banking

Introduce new products

Streamline business processes and credit procedures and focus on customer service improvements

Improve credit scoring system and collections to protect credit portfolio quality
68
Confidential - Not For Distribution - Working Draft, 15 March 2007
IX. CIS Operations
[Yulia Chupina]
Confidential - Not For Distribution - Working Draft, 15 March 2007
Overview of the CIS Operations
Highlights






CIS is a priority task to continue VTB rapid
development
The Group aims to become a significant player on
the CIS markets servicing local and Russian
clients as well as trades between the regions
Under-banked CIS markets to become an
important factor of further growth
First Russian bank to meaningfully enter the CIS
market
– Approximately 430,000 local clients as of 2006
Intend to roll-out corporate and retail banking
services in the region to local client base
Additional restructuring and integration
opportunities, including proposed merger of
subsidiary banks in Ukraine by the end of 2007
As % of Total Group’s Assets, 2006
DUMMY NUMBERS
CIS
As % of Total Group’s Revenues, 2006
DUMMY NUMBERS
CIS
70
Confidential - Not For Distribution - Working Draft, 15 March 2007
CIS Footprint
Ukraine
Georgia
2005: GDP - $83bn
2005: GDP - $[ ]bn
GDP per capita – 1,497
CPI – 6.2%
GDP per capita
CPI – 14%
Subsidiary
% controlled
Acquired in
Subsidiary
JSCB Mriya
98%
2006
VTB Georgia 58.9%
% controlled
Total 2006 assets [ ]
Total 2006 assets [ ]
Total 2006 net profit [ ]
Total 2006 net profit [ ]
VTB Ukraine 100%
Total 2006 assets [ ]
Total 2006 net profit [ ]
Acquired in
2005
2005(a)
Russia
(a) Received a banking license in 2005
Belarus
Ukraine
Moldova
Kazakhstan
Georgia
Uzbekistan Kyrgyzstan
Armenia Azerbaijan
Turkmenistan
2005: GDP – []
GDP per capita – [ ]
CPI – []
2005: GDP - $4.9bn
GDP per capita – [ ]
CPI – 0.6%
Subsidiary
% controlled
VTB Armenia 70% + 1 share
Belarus
Tajikistan
Armenia
Acquired in
Type
Opened in
2004
Representative Office
[]
Total 2006 assets [ ]
Total 2006 net profit [ ]
Note:
Total assets and net profit for the CIS subsidiaries indicated Prior to intercompany eliminations
71
Confidential - Not For Distribution - Working Draft, 15 March 2007
Market Positions vs. Market Characteristics
Market Characteristics TBU

Ukraine



Georgia
Armenia
Corporate / retail loans,
2005: $18bn / $6.4bn
2003 – 2005 CAGR [] / []
Corporate / retail deposits,
2005: $13bn / $13.2bn
[160] banks in the market




Total loans: $0.92bn
Total deposits:$1.15bn
2003 – 2005 CAGR [] / []
18 banks in the market




Total loans: $[ ] bn
Total deposits:$[ ] bn
2003 – 2005 CAGR [] / []
[ ] banks in the market
VTB Market Position











172 branches of which 63
specialize in serving retail
customers and 75 ATMs
64 thousand retail clients
One thousand corporate
clients
# [ ] market position
Comments

Retail banking products developed
on the basis of extensive Mriya’s
regional network which covers
virtually all regions of Ukraine
Corporate banking developed on
the basis of well-capitalized VTB
Ukraine
Merger of two subsidiary banks in
2007


# [ ] market position
28 branches and 32 ATMs
across the country
119 thousand retail clients


Full range of retail products
Additional corporate products
for selected Russian and
Georgian customers
# [ ] market position
96 branches and 14 ATMs
throughout Armenia
254 thousand retail clients
15 thousand corporate clients

Full range of banking
services to commercial and
retail customers
Restructuring of branch
network

72
Confidential - Not For Distribution - Working Draft, 15 March 2007
Outlook and Strategy


Existing
Markets



New
Markets
Become a leader in corporate and retail segments in each country of presence
Continue restructuring efforts and further improve efficiency
– Complete the merger of Ukrainian subsidiaries by the end of 2007
– Implement Group-wide risk management and control systems
– Integrate IT solutions into Group-wide IT architecture
Review and optimise existing distribution network
Maximise local client retention and volume of business via new processes and
products
Optimise product offering, leveraging VTB Corporate and VTB24 expertise

Further expand to the fast growing CIS countries of strategic interest which are
actively involved in trade and economic cooperation with Russia

Review organic growth or acquisitions alternatives on the markets of
Kazakhstan, Belarus, Azerbaijan, Uzbekistan and Kyrgyzstan
73
Confidential - Not For Distribution - Working Draft, 15 March 2007
X.
European and Other
Banking Operations
[Yulia Chupina]
Confidential - Not For Distribution - Working Draft, 15 March 2007
Overview of the European and Other Banking
Operations
Highlights


Build an integrated platform to service European
corporate clients with business interests in Russia
and CIS and vice versa
As % of Total Group’s Assets, 2006
DUMMY NUMBERS
Europe
Existing platform of six European subsidiaries as
a result of several acquisitions
– includes most recently the acquisition of the
CBR’s participation interest in the number of
banks in the end of 2005


VTB is in process of restructuring the European
operations under one umbrella to increase
profitability, decrease operating expenses,
optimize the capital structure within the Group and
improve corporate governance
Established business in Asia and Africa to service
Russian corporate client’s needs
As % of Total Group’s Revenues, 2006
DUMMY NUMBERS
Europe
DUMMY NUMBERS
75
Confidential - Not For Distribution - Working Draft, 15 March 2007
Overview of European Banking Operations
Austria
United Kingdom
Subsidiary % controlled
Acquired in
Subsidiary % controlled
Acquired in
VTB Europe 89.1%
Total 2006 assets [ ]
Total 2006 net profit [
Dec-2005
VTB Austria 100%
Total 2006 asset s [ ]
Total 2006 net profit [
[]
]
]
France
Germany
Subsidiary % controlled
Acquired in
VTB Germany 83.5%
Total 2006 assets [ ]
Total 2006 net profit [ ]
Dec-2005
Luxembourg
United
Kingdom
Germany
Austria
Switzerland
France
Italy
Subsidiary % controlled
Acquired in
VTB France 87.0%
Total 2006 assets [ ]
Total 2006 net profit [
Dec-2005
]
Switzerland
Cyprus
Subsidiary % controlled
Acquired in
RCB Cyprus 100%
Total 2006 assets [ ]
Total 2006 net profit [
[2003 ]
Cyprus
]
Subsidiary % controlled
Acquired in
RKB Zurich 99.9%
Total 2006 assets [ ]
Total 2006 net profit [
1992
]
Italy
Type
Representative Office
Opened in
[]
76
Confidential - Not For Distribution - Working Draft, 15 March 2007
Restructuring and Integration of European
Banking Operations
2006
2007

Establish VTB Europe as the hub

Transfer VTB’s interest in VTB France
and VTB Germany to VTB Europe

Rebranding of several European
subsidiaries under VTB name in
November 2006
2009
 VTB France and VTB Germany transferred to
branches under VTB Europe subject to relative
regulatory approvals
 Integration of VTB Austria under VTB Europe only
in 2009-2010
 Allows better control and cost reduction
 RCB-Cyprus and RKB-Zurich will remain 100%
owned subsidiaries of VTB [to be confirmed]
 Remaining interest in EWUB (49%) is
expected to be sold to MBRD during 2007
[TBC]
 Will allow VTB to adequately capitalize VTB
Europe and to allow VTB Austria to fully utilize its
deferred tax assets prior to the restructuring
Results
VTB
VTB
Austria
VTB
Europe
VTB
France
RCB –
Cyprus
VTB
Germany
RKB –
Zurich

Increase the profitability

Decrease operating expenses by centralizing the middle-and back-office functions

Optimize the capital structure within the Group and improve corporate governance

Easier access to international financial services and international capital markets for
the Russian clients

Offer additional products, including trade finance, trade-related payment and
settlement services and lending services to Russian and foreign clients
77
Confidential - Not For Distribution - Working Draft, 15 March 2007
Description of the International Banking
Activities
VTB
Europe





Europe
VTB
Austria




VTB
Germany
VTB
France





Established in October 1919 in London, United Kingdom, as “Moscow Narodny Bank.”, rebranded in 2006
Provides corporate and investment banking services, including structured trade finance operations,
syndicated lending arrangements, credit lien note programmes, Eurobonds and securitization
transactions
Has a branch in Singapore and representative offices in Beijing
Established in 1974 in Vienna, Austria as Donau-Bank, rebranded in 2006
Specializes in syndicated lending operations, credit and settlement services. Other services and activities
include structured trade finance, trade-related documentary transactions, international account
management, transactions in promissory notes and fiduciary operations.
Additionally conducts securities trading and investment operations, money and foreign exchange
markets, and engages in repo transactions with Russian government and corporate debt securities.
Mostly wholesale funded
Established as Ost-West Handelsbank in November 1971, rebranded in 2006
Principal activities include clearing and settlements, syndicated lending, money market and foreign
exchange trading. Additionally provides pre-export and post-export financing and accounts receivable
factoring
Extensive correspondent bank network throughout Western Europe, Russia and the CIS
Primarily client deposits funded
Established in 1921 in Paris, France as BCEN-Eurobank, rebranded in 2006
Provide trade finance and trade related banking services (including export credit agency loans and
documentary products)
Mostly wholesale funded
78
Confidential - Not For Distribution - Working Draft, 15 March 2007
Description of the International Banking
Activities (continued)

Formerly a branch of Vneshekonambank, became a separate bank in 1995

Mostly fee-based products, including back-to-back lending, secured lending, securities and currency trading, accounts
receivable factoring, deposit taking and trade finance

Funded by interbank loans from VTB and third parties as well as client deposits and market borrowings

Established in 1992

Primary activities include trade and project finance, payment and settlement services, arranging syndicated loans, brokerage
services, trust and fiduciary services and consulting services

RKB-Zurich also engages in transactions in securities, foreign exchange and precious metals

Primarily client deposits funded, but also obtains funding via interbank and syndicated loans markets

Vietnam-Russia Joint Venture Bank (or VBR) was established November, 2006

Parties participating in VRB include Bank for Investment and Development of Vietnam (51% of legal capital) and VTB (49% of
legal capital). Initial share capital of $10 million

Services include primarily transaction processing and financing services for commercial operations between Vietnam and
Russia

Opened its first branch in the city of Vungtau in March 2007
Europe
RCB Cyprus
RKB Zurich
Asia
VBR
Africa
Branches and 
representative 
offices
Banco VTB
Africa, Angola
VTB Capital,
Namibia
Representative office in India and China
VTB Europe branch in Singapore




Banco VTB Africa SA (Angola) was incorporated with the Banco National de Angola in February, 2007.
VTB owns 66% of Banco VTB Africa SA
Initial share capital of $10 million
Banco VTB Africa SA’s current focus is on providing international settlement services and loans and trade financing to Russian
and African clients

[To come]
79
Confidential - Not For Distribution - Working Draft, 15 March 2007
Outlook and Strategy
European Operations

Integrate subsidiaries under VTB Europe, followed by transformation of other banks to its branches

Make additional products available to Russian corporate client and facilitate trade finance of European clients with Russian
counterparties

Increase efficiency of European operations through cost-cutting and prudent capital management

Implement unified corporate governance standards, improve management and control
Operations in Asia and Africa

Launch operations in India and China

Develop business in Vietnam, Angola and Namibia

Service foreign trade operations of Russian companies in Asia and Africa and provide international settlements operations

Participate in project and trade finance (joint investment projects with participation of Russian capital)
VTB will follow its corporate clients’ international expansion
80
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XI. Group Management
Structure
[Yulia Chupina]
Confidential - Not For Distribution - Working Draft, 15 March 2007
Corporate Governance Structure

VTB is the Group’s holding company

Each banking subsidiary has its own
corporate bodies and is subject to banking
regulation and supervision in its respective
jurisdiction

Shareholders Meeting
Supervisory Council
• 9 members (a) [including] 2 independent non-executives
•Chaired by Alexei L. Kudrin
• Oversees general management
• Establishes VTB’s strategy
Audit Committee
• [ ] members (a)
• Chaired by [Yves-Thibault de
Silguy]
VTB maintains:
– Control over banking subsidiaries
through majority representation on
subsidiaries’ boards
– Administrative and organisational
supervision through a matrix
management model
(a) Please see appendices A,B,C for full biographies.
Management Board
• 10 members (a)
•Chaired by Andrei L. Kostin
• VTB’s collective executive body
Banking Group Management Committee
• 11 members (a)
•Chaired by Andrei L. Kostin
• Interbank coordination body
• Responsible at Group level for strategy, approval of
business plan, alignment policies, overseeing corporate
governance and forming unified culture
(matrix management model)
82
Confidential - Not For Distribution - Working Draft, 15 March 2007
Employees Statistics
Region
Entity/Country
Russia
VTB
VTB24
ICB
Other
Total Russia
Mriya
VTB Ukraine
VTB Georgia
VTB Armenia
Other
Total CIS
Total Group
9,983
7,163
5,195
1,822
1,818
83
845
923
4
84.8%
12.9%
3,673
Europe
Rest of the World
% of Total
24,163
CIS
Total Europe
Number of Employees
as of 31 December 2006
Great Britain
France
Germany
Cyprus
Austria
Other
219
141
84
75
63
31
613
2.2%
0.1%
17
28,466
 As of 31 December 2006, VTB had [28,466] employees, [24,163] of which were based in Russia, [3,673] in the CIS, [613] in Europe and [17] in the rest
of the world
 Growth mainly driven by retail branch network expansion
83
Confidential - Not For Distribution - Working Draft, 15 March 2007
Overview of Employee Policy
Policy


Aim to develop a skilled, highly productive staff that is successful in conducting business
Recognition that the Russian market of qualified financial institutions personnel, especially for
junior and middle management, is highly competitive

Commitment to a [performance based] corporate culture and belief in its importance for
business development
To foster such a culture we organise:
– Regular seminars during which senior managers share their experiences with other
employees
– Seminars and roundtable discussions for mid-level managers
– Working groups aimed at developing separate business segments

Culture

Training Program


Compensation
Trade Unions




Comprehensive training program which provides both internal and external professional
training for employees at all levels
[Corporate university offering professional development training to junior and mid-level
managers]
Staff costs and defined contribution pension expense accounted for [X]% of the Group’s
operating expenses for 2006
We believe that the current defined contribution pension expense compensation package is
generally comparable to that offered by other major Russian banks
A number of VTB’s Russian employees belong to a trade union
Most employees of foreign banks also belong to trade unions
To date we have not experienced any strikes, work stoppages, labour disputes or actions that
have had a material effect on our operations
84
Confidential - Not For Distribution - Working Draft, 15 March 2007
XII. Risk Management
[Nikolai Tsekhomsky]
Confidential - Not For Distribution - Working Draft, 15 March 2007
Risk Management Overview

Main risks in the Group’s business are credit risk, market risks (interest rate, currency and securities portfolio), liquidity risk
and operational risk

Risk is managed at each entity that forms the VTB Group on a independent basis

Furthermore, the VTB Group has established a number of Group-wide bodies, to manage risk on a Group-wide basis, as
illustrated in the following diagram:
Credit
Market (a)
Risk Management Commission

Oversees credit and market risk management
Group wide

Includes chief risk officers of all Group banks,
VTB risk managers, Treasury managers and an
audit officer from VTB’s Internal Control
Department

Liquidity
(a)
Operational
Internal Control
Commission
Asset and Liability Committee

Implementing policies and supervising Group
banks with respect to currency, liquidity and
interest rate risks

Group funding

Financial risk transfers within the Group

Internal control of all
subsidiaries through individual
audit committees in each
subsidiary
Anti-Money Laundering
Commission

Prevention of money
laundering and terrorist
financing

Sharing of blacklists

Supervision of implementation
of unified policies and
procedures
Membership of the committees outlined above is formed with senior representatives from most of the Group banks which,
together with the matrix management model, ensures that policies and procedures are adopted and adhered across the Group
(a) Treasury performs centralised liquidity and market risk management functions.
86
Confidential - Not For Distribution - Working Draft, 15 March 2007
Risk Management and Controls
Credit
 Limits for single borrowers, groups of borrowers, industries, regions and countries established
– Limits are reviewed regularly and comply with the exposure limits established by the CBR for Russian
banks
 VTB Group conducts thorough investigation of each prospective borrower
– Procedures for corporate loans include analyzing the borrower’s business prospects, purpose of the
loan and valuation of any collateral
– Letters of credit, guarantees and other commitments are subject to same rigorous credit review
– Procedures for retail loans are based on an internally-developed scoring system
Market
 Securities risk monitored on a daily basis by using a VaR methodology
– As at December 31, 2006, VTB’s VaR for its securities portfolio (a) was $122 million (including $62
million attributable to EADS shares) [VaR calculation at a Group level?]
 Currency risk managed by matching currency of assets and liabilities on a currency by currency basis
within certain limits
– Position is hedged with options, swaps and forwards
– Currency position limits are [ ]
 Interest rate risk: monitored on a 10-day basis through monthly interest rate sensitivity analysis
Liquidity
Operational




Liquidity risk is managed by assessing maturity profile of assets and liabilities at least every 10 days
Majority of funding comes from deposits and debt funding in capital markets
Debt securities protfolio provides additional liquidity if required
Group’s total cumulative liquidity gap as of December 31, 2006 was $[ ] million
 Internal Control Department and Legal Department monitor compliance with internal policies and
procedures through audit of all bank operations and transactions
 Anti-money laundering prevention includes “know-your-customer” procedures including detailed
verification of customers
(a) Calculated using the historic simulation method on a 1-day basis and 99% confidence level.
87
Confidential - Not For Distribution - Working Draft, 15 March 2007
VTB Credit Policies and Procedures – Corporate
Origination
Analysis
Interest Rate
Determination
Assurance /
Collateral
Exposure
Limits
Credit
Approval
 Loan application
with information on
the customer and
purpose of the loan
 Initial investigation
by client manager
 Further review by
other departments
industry, legal,
security, CRCD
 CRCD sets the
appropriate interest
rate based on:
– Minimum
interest rates
established by
the ALCO
– Risk premium
attributed to
the customer
 In general, all loans
are fully collateralized
 Collateral is valued by
third party appraisers
 Collateral value is
discounted depending
on liquidity of asset
 Assessment of
borrower’s financial
condition and likely
credit needs based on
internal rating system
 Exposure per
borrower established
for on- and offbalance sheet
exposures
 Additional limits by
sector, region, country
 Approval required at
appropriate committee
based on loan size:
– Small credit
committee for <
RUR 300 million
– Credit committee
for > RUR 300
million and < RUR
1.5 billion
– Management
board > 1.5 billion
Monitoring
 Monitoring of the borrower’s (and the guarantor’s) financial condition
throughout the life of the loan
 Ongoing monitoring of value of collateral (including on-site
inspections of property, if applicable)
Note: “CRCD” = Credit and Risks Control Department.
“ALCO” = Asset and Liabilities Committee.
“CC” = Credit Committee
“LRD” = Loan Recovery Division.
Problem Loan Recovery
 Problem loans initially handled at branch level
 When payments are at least due for 30 days, loan transferred to the
LRD
 LRD contacts the borrower and attempts restructuring of the loan
–
If the loan is restructured, LRD monitors compliance with
terms of restructured loan
–
If loan cannot be restructured, VTB commences legal action
88
Confidential - Not For Distribution - Working Draft, 15 March 2007
VTB Credit Policies and Procedures – Retail

Credit origination and analysis:
– Standard loan application form filled at the branch by customer
– VTB24 conducts further investigations on prospective borrowers:
– Personal interviews with the customer
– Review of supporting documentation provided by the customer
– Review of public information sources for evidence of criminal activities
– Information from national credit bureaus (when available)
– Lending limits for consumer and car finance products established by an internally-developed scoring system
– Fully automated for consumer loans
– Case-by-case within given parameters for car finance products
– Credit scoring system assigns a grade of “yes”, “no” or “requires further analysis” to the loan application

Interest rate is set by the scoring system based on the minimums established by the asset and liability commission, the credit
standing of the borrower and the purpose and currency of the loan

Collateral (which might be in the form of real estate, personal property, securities, automobiles and other liquid assets) is
valued by third party appraisers

Approval:
– Mortgage loans for individuals require authorization by loan officer and a risk manager
– Non-mortgage loans for individuals receiving a “yes” from the credit scoring system may be authorised by a loan officer
acting alone
– All other non-mortgage loans for individuals require authorisation by a risk manager and a loan officer
– Small business loan applications are authorised by the credit committee (level of authorisation required depends on size of
the loan, type of loan and type collateral)
89
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VTB Group Currency Exposure
USD
RUR
EURO
Other
currencies
Total
[]
[]
[]
[]
[]
Securities portfolio
[]
[]
[]
[]
[]
Cash and short term funds
[]
[]
[]
[]
[]
Due from other banks, net
[]
[]
[]
[]
[]
Premises and equipment
[]
[]
[]
[]
[]
Intangible assets
[]
[]
[]
[]
[]
Assets of disposal group held for sale
[]
[]
[]
[]
[]
Investment property
[]
[]
[]
[]
[]
Investments in associated banks
[]
[]
[]
[]
[]
Other assets
[]
[]
[]
[]
[]
Total Assets
[]
[]
[]
[]
[]
Liabilities
Customer deposits
[]
[]
[]
[]
[]
Debt securities issued
[]
[]
[]
[]
[]
Due to other banks
[]
[]
[]
[]
[]
Other borrowed funds
[]
[]
[]
[]
[]
Subordinated debt
[]
[]
[]
[]
[]
Other liabilities
[]
[]
[]
[]
[]
Liabilities of disposal group held for sale
Total Liabilities
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
Net balance sheet position
[]
[]
[]
[]
[]
Off-balance sheet credit related commitments
[]
[]
[]
[]
[]
Net derivative position
[]
[]
[]
[]
[]
(As of December 31, 2006; in $ million)
Comments
A
Assets
Customer loans and advances, net
 [Comments to come]
 [Comments to come]
 [Comments to come]
 [Comments to come]
 [Comments to come]
 [Comments to come]
90
Confidential - Not For Distribution - Working Draft, 15 March 2007
VTB Group Liquidity Position
On
demand &
< 1 month
From 1
to 6
months
From 6
months to
1 year
> 1 year
Overdue
maturity
undefined
Total
[]
[]
[]
[]
[]
[]
Securities portfolio
[]
[]
[]
[]
[]
[]
Cash and short term funds
[]
[]
[]
[]
[]
[]
Due from other banks, net
[]
[]
[]
[]
[]
[]
Premises and equipment
[]
[]
[]
[]
[]
[]
Intangible assets
[]
[]
[]
[]
[]
[]
Assets of disposal group held for sale
[]
[]
[]
[]
[]
[]
Investment property
[]
[]
[]
[]
[]
[]
Investments in associated banks
[]
[]
[]
[]
[]
[]
Other assets
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
(As of December 31, 2006; in $ million)
Comments
A
Assets
Customer loans and advances, net
Total Assets
Liabilities
Customer deposits
[]
[]
[]
[]
[]
[]
Debt securities issued
[]
[]
[]
[]
[]
[]
Due to other banks
[]
[]
[]
[]
[]
[]
Other borrowed funds
[]
[]
[]
[]
[]
[]
Subordinated debt
[]
[]
[]
[]
[]
[]
Other liabilities
[]
[]
[]
[]
[]
[]
Liabilities of disposal group held for sale
Total Liabilities
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
[]
Net liquidity gap
[]
[]
[]
[]
[]
[]
Cumulative liquidity gap
[]
[]
[]
[]
[]
[]
 [Comments to come]
 [Comments to come]
 [Comments to come]
 [Comments to come]
 [Comments to come]
 [Comments to come]
91
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XIII. Information
Technology
[Nikolai Tsekhomsky]
Confidential - Not For Distribution - Working Draft, 15 March 2007
Information Technology Overview

The development and implementation of the VTB’s IT strategy is carried on a group-wide basis by the Banking
and Information Technologies Committee (“BITC”)
– The BITC includes representatives of VTB, VTB24 and ICB and coordinates IT strategy at the Group level
– Monitors implementation of approved IT projects
– Proposes new IT-related initiatives in response to feedback from Group subsidiary banks
Current IT systems
 Each banking subsidiary has a separate IT system
managed on an independent basis, with little no functional
integration between banks other than VTB and VTB24
Objective
 Coordinate activities and establish a single corporate
reporting framework
–
 Legacy systems across CIS and European banks are
sufficient to support banking operations in those
jurisdictions
 For financial reporting purposes, local GAAP data is
collected and consolidated regularly by the Group, and
transformed to IFRS financials
Gradual process to simplify, rationalize and
synchronize the different IT systems to support
access to and comparability of the information
that comes from the subsidiaries
 Unified application packages with “best-in-class”
functionality for key business areas
–
Automatization of core customer information
management, accounting, oversight, reporting,
etc.

IT expenditure in 2006 was $[ ] million, of which $[ ] million was allocated to maintenance of IT systems and
$[ ]m was allocated to capital expenditure

[Can we quantify / discuss expected synergies]
93
Confidential - Not For Distribution - Working Draft, 15 March 2007
Information Technology Strategy
Initiative
Impact
Central Databank
 Storage and consolidation of analytical information at the
Group level
 Include customer data and financial reports on banking
subsidiaries
 Improve access to up-to-date information
 Reduce time and costs of preparation of consolidated
analytical and mandatory reports
IT Infrastructure
Co-location and
Consolidation in
Russia
 Start by co-locating VTB’s and VTB24’s IT systems to
two joint hubs in Moscow and St. Petersburg
 Followed by migration of regional IT systems to
centralized system
 Finally, set up joint organizational structures to optimize
management of IT application design and tracking across
the Group’s Russian Banks
 ICB integration to start as soon as merger is completed
 Increase efficiency
 Creation of integrated IT system for the Group’s Russian
banks
Integrated Group-  Centralization of VTB customer information
 In the future, might create centralized CRM system for
wide CRM
information relating to all customers of all Group’s banks
System
Centralized
Automated
Banking Systems
 Implementation of a single Automated Banking System in
VTB and another in VTB24
 For VTB, support core business functions and accounting
operations
 For VTB24, implementation in all its branches of a
centralized retail business management system
 Selection of external IT provider and implementation of
the systems will be coordinated between VTB and VTB24
 Increase cross sales
 Improve interaction between VTB business unites
 Maximize utilization of potential offered by the product
specialties of the Group’s European banks
 VTB: discontinue the use of multiple non-integrated
systems
–
Improve quality of products and services
–
Reduce operating risks
 VTB24: replace legacy system
–
Facilitate rapid growth of VTB24 retail
business
Implementation of core projects of IT strategy expected to be completed by 2010
94
Confidential - Not For Distribution - Working Draft, 15 March 2007
XIV. Financial Review
[Nikolai Tsekhomsky]
[All 2006 financials are currently estimates or
extrapolations of 9M06 financials. All 2006
numbers need to be updated when available]
Confidential - Not For Distribution - Working Draft, 15 March 2007
Comparability of Historical Financial Information

The Group has entered into a number of material acquisitions since the beginning of 2004, which impact the
comparability of financial information between historical periods
(US$ in millions)
Stake Acquired
Ownership Post
Acquisition (a)
Purchase Price
Total Intangibles
Russia
85.8%
85.8%
0
71
ICB
Russia
25.0% plus one share
25% plus one share
97
(30)
Dec-2005
ICB
Russia
50.0% plus two shares
75% plus three shares
480
336
Dec-2005
MNB (now VTB Europe)
UK
88.9%
89.1%
249
–
Dec-2005
BCEN-Eurobank (now VTB France)
France
87.0%
87.0%
151
–
Dec-2005
OWH (now VTB Germany)
Germany
51.6%
83.5%
42
–
Date
Target
Country
Jul-2004
Guta Bank (now VTB24)
Mar-2005

Difficulties in comparability of historical financial information includes:
Profit and Loss
2006 versus
2005
2005 versus
2004

Full-year contribution from VTB Europe, VTB France and VTB
Germany in 2006 versus immaterial contribution in 2005

Full year contribution of the additional 50% plus two share
stake in ICB in 2006 versus immaterial contribution in 2005

Full contribution from Guta Bank (now VTB24) in 2005 versus
part-year contribution in 2004
(a) Represents ownership of voting securities.
Balance Sheet

No material comparability issues

Includes impact of acquisitions of VTB Europe, VTB
France, VTB Germany and 75% plus 3 shares stake in
ICB in 2005 versus no impact in 2004
96
Confidential - Not For Distribution - Working Draft, 15 March 2007
[2006 Figures are estimates]
Summary Income Statement
For years ended Dec. 31,
(US$ in millions)
Interest Income
Interest Expense
Net Interest Income
Provision for Loan Impairment
Net Interest Income after provisions
Gains from securities
% Growth
2004
2005
2006
‘04–’05
‘05–’06
$1,049
$1,759
$3,743
67.7%
112.8%
(920)
(2,126)
93.7
131.1
1,617
(475)
574
839
46.2
92.7
(196)
(103)
(313)
(47.4)
203.9
378
736
1304
94.7
77.2
4
332
573
NM
72.6
Net Fee and Commission Income
106
168
372
58.5
121.4
FX Translation Gains
114
281
NM
NM
Other Non-Interest Income
327
325
218
(0.6)
(32.9)
Operating Income
929
1,553
2,748
67.2
76.9
Operating Expenses
(628)
(850)
(1,299)
35.4
52.8
Profit Before Tax
301
703
1,449
133.6
106.1
Income Tax Expense
(93)
(195)
Profit from Discontinued Operations
Minority Interest
Net Profit After Tax
(8)
109.2
18.2
0
3
(230)
NA
–
–
(3)
(12)
NA
–
–
$205
$499
$1,219
Gains on disposal of Kamaz shares
–
–
$117
Gains on disposal of IMB shares
–
–
301
143.6%
144.1%
[ Comments to come]
[ Comments to come]
[ Comments to come]
[ Comments to come]
[ Comments to come]
Notes (Pre Tax)
[ Comments to come]
97
Confidential - Not For Distribution - Working Draft, 15 March 2007
[2006 Figures are estimates]
Summary Balance Sheet
2004
(US$ in millions)
Gross Customer Loans
Allowance for Loan Impairment
Net Customer Loans
As of Dec. 31,
2005
2006
% Growth
‘04–’05
‘05–’06
$10,722
(553)
$20,533
(608)
$30,680
(1,220)
9.9
100.7
91.5%
49.4%
10,169
19,925
29,460
95.9
47.9
Securities Portfolio
3,103
7,291
9,371
135.0
28.5
Cash and Short-term Funds
1,752
3,096
3,973
76.7
28.3
Due from Other Banks
2,023
4,141
6,463
104.7
56.1
Premises and Equipment
321
832
1,024
159.2
23.1
Intangible Assets
102
451
291
206.8
4.8
Other Assets
340
987
1,908
229.9
63.4
$17,810
$36,723
$52,490
106.2%
42.9%
$6,024
$12,765
$20,136
111.9%
57.7%
Debt Securities Issued
3,948
7,241
11,240
83.4
Due to Other Banks
3,254
6,629
9,313
103.7
40.5
Other Borrowed Funds
1,729
2,937
2,577
69.9
(12.3)
–
1,161
1,351
NM
16.4
146
15,101
719
31,452
1,078
45,695
392.5
49.9
108.3
45.3
2,628
4,920
6,314
87.2
28.3
81
$17,810
349
$36,723
481
$52,490
330.9
37.8
106.2%
42.9%
$21,092
$41,839
TBD
12,329
19,202
TBD
10,992
18,128
TBD
Total Assets
Customer Deposits
Subordinated Debt
Other Liabilities
Total Liabilities
Shareholders’ Equity
Minority Interest
Total Liabilities and Equity
Risk Weighted Assets (a)
Average Interest Earning Assets
(b)
Average Interest Bearing Liabilities
(b)
[ Comments to come]
[ Comments to come]
[ Comments to come]
[ Comments to come]
55.2
[ Comments to come]
[ Comments to come]
(a) Represents the Group’s risk weighted assets calculated in accordance with the Basel Accord and assuming IFRS accounting. Currently each bank subsidiary is regulated by the banking
regulator in the respective jurisdiction and based on local accounting standards.
(b) Average represents quarterly average for 2005 and 2006 and semi-annual average for 2004. For 2005, average excludes impact of consolidation of acquired subsidiaries in December
2005, as the impact on the income statement was not material.
98
Confidential - Not For Distribution - Working Draft, 15 March 2007
[2006 Figures are estimates]
Key Financial Ratios
2004
2005
2006
Profitability Indicators
Net Interest Margin (a)
4.7%
4.4%
3.8%
Fee & Commission Income to Operating Income
11.5
11.1
13.5
Non-Interest Income to Operating Income
59.1
51.4
52.5
Cost-to-Income
67.9
56.1
47.3
Return on Average Shareholders’ Equity (a) (b)
[–]
[–]
[–]
Return on Average Assets (a) (b)
[–]
[–]
[–]
Tier 1 Ratio
[–]
[–]
11.8%
Total Capital Ratio
12.0
14.1
12.0
[ Comments to come]
[ Comments to come]
[ Comments to come]
Capital Adequacy Indicators – BIS
[ Comments to come]
Asset Quality
Overdue Loans as % of Gross Customer Loans
0.8%
0.3%
[–]
Overdue & Rescheduled Loans as % of Gross Customer Loans
3.4
1.4
[–]
Non-Performing Loans as % of Gross Customer Loans
[–]
[–]
[–]
151.5
211.8
[–]
Allowances as % of Overdue & Rescheduled Loans
[ Comments to come]
[ Comments to come]
(a) Average represents quarterly average for 2005 and 2006 and semi-annual average for 2004. For 2005, average excludes impact of consolidation of acquired subsidiaries in December
2005, as the impact on the income statement was not material.
(b) Net profit after minorities and shareholders’ equity excluding minorities.
99
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Net Interest Income
Net Interest Income pre Provisions
Net Interest Income
Net Interest Spread & Margin
Provisions
Net Interest Spread
Net Interest Margin
6%
2,000
93%
1,617
US$ in millions
1,500
4.7%
4.4%
313
4%
46%
1,000
[]
3.8%
4.2%
4.1%
3%
839
574
500
5%
103
1,304
[]
3.2%
2%
196
736
1%
378
0%
0
2004
2005
2004
2006

[Comments to come]

[Comments to come]

[Comments to come]

[Comments to come]

[Comments to come]

[Comments to come]
2005
2006
100
Confidential - Not For Distribution - Working Draft, 15 March 2007
[2006 Figures are estimates]
Analysis of Change in Net Interest Income
Increase in Interest Income due to Changes in Volume
Increase in Interest Expense due to Change in Volume
US$ in millions
2006 vs 2005
750
604
17
6
48
710
53
30
22
175
53
122
500
250
Increase in Interest Income due to Change in Rate
Increase in Interest Expense due to Changes in Rate
445
106
57
213
DUMMY
657 CHART
587
147
66
339
265
0
Customer
Loans
Securities
Due from Other
Banks
Total Interest
Income
Customer
Deposits
Increase in Interest Income due to Changes in Volume
Increase in Interest Expense due to Change in Volume
US$ in millions
2005 vs 2004
750
604
17
6
48
30
22
710
53
175
53
122
500
250
Debt Securities
Issued
Net Interest
Income
Increase in Interest Income due to Change in Rate
Increase in Interest Expense due to Changes in Rate
445
106
57
(a)
213
147
66
657
587
Due to Banks (2) Total Interest
and Other
Expense
Borrowed
Funds
339
265
0
Customer
Loans
Securities
Due from Other
Banks
Total Interest
Income
Customer
Deposits
Debt Securities
Issued
Due to Banks (b) Total Interest
and Other
Expense
Borrowed
Funds
Net Interest
Income
(a) For debt securities issued, the Increase due to volume was $142 and the decrease due to rate was $85 for 2005 vs 2004.
101
(b) Including subordinated debt.
Note: Changes in volume are calculated as the change in volume multiplied by the interest rate in the previous period, while changes in rate is calculated as the change in average rate multiplied
by the previous period’s volume. Changes caused by both volume and rate are allocated between volume change and rate change at the ratio each component bears to the relative total change.
Confidential - Not For Distribution - Working Draft, 15 March 2007
[2006 Figures are estimates]
Net Interest Income Components (2006)
Interest Income
4,000
336
US$ in millions
3,743
Net Interest Income
2,126
831
504
3,500
3,000
Interest Expense
2,902
637
2,500
658
2,000
1,617
1,500
1,000
500
0
Customer
Loans
Securities
Due from Other
Banks
Total Interest
Income
Customer
Deposits
Debt Securities Due to Banks
Issued
and Other
(a)
Borrowed
Funds
Total Interest
Expense
Net Interest
Income
Average
Rate
[ - ]%
[ - ]%
[ - ]%
[ - ]%
[ - ]%
[ - ]%
[ - ]%
[ - ]%
[ - ]%
Change from
2005
[ - ]%
[ - ]%
[ - ]%
[ - ]%
[ - ]%
[ - ]%
[ - ]%
[ - ]%
[ - ]%
(a) Including subordinated debt.
102
Confidential - Not For Distribution - Working Draft, 15 March 2007
[2006 Figures are estimates]
Provisioning & Asset Quality
Asset Quality and Coverage
Provisioning
Provisions (LHS)
Overdue Loans
Overdue + Rescheduled Loans
Allowance for Impairment
Provisions as % of Average Gross Loans (RHS)
4%
US$ in millions
300
3%
2.6%
196
200
2%
103
100
1%
0.8%
As % of Average Gross Loans(a)
313
8%
152%
Coverage
7%
As % of Gross Loans
400
6%
0%
2004
2005
[ ]%
Coverage
5.2%
5%
4%
3.4%
3.0%
3%
2%
1%
1.4%
0.8%
0.3%
[]
0.0%
0
212%
Coverage
0%
2006
2004

[Comments to come]

[Comments to come]

[Comments to come]

[Comments to come]

[Comments to come]

[Comments to come]
2005
2006
(a) Average represents quarterly average for 2005 and 2006 and semi-annual average for 2004. For 2005, average excludes impact of consolidation of acquired subsidiaries in December
2005, as the impact on the income statement was not material.
103
Confidential - Not For Distribution - Working Draft, 15 March 2007
[2006 Figures are estimates]
Non-Interest Income
Evolution of Non-Interest Income
Fee & Commission Income
FX Translation Gains
Contribution of Non-Interest Income
1,600
%
Breakdown
1,444
85%
1,400
US$ in millions
43%
70%
218
15.1%
60%
281
19.5%
50%
1,200
1,000
Non-Interest Income to Operating Income
Fee & Commission Income to Operating Income
(a)
Securities Gains
Other Non-Interest Income
779
59.0%
51.4%
51.4%
40%
800
546
600
573
325
39.7%
30%
(8)
327
200
114
106 4
168
2004
2005
0
12.8%
20%
400
332
372
25.8%
12.5%
12.5%
10%
0%
2006
2004

[Comments to come]

[Comments to come]

[Comments to come]

[Comments to come]

[Comments to come]

[Comments to come]
(a) Represents gains less losses arising from financial assets through profit and loss.
2005
2006
104
Confidential - Not For Distribution - Working Draft, 15 March 2007
[2006 Figures are estimates]
Operating Expenses
Breakdown of Operating Expenses (2006)
Evolution of Operating Expenses
Total: US$ 1,299m
1,500
US$ in millions
1,250
Other Expenses
Leasing & Rent Expeses
Administrative Expenses
Non-Banking Activities Expenses
53%
Staff Costs
35%
1,000
750
500
250
850
628
233
137
34
107
114
48
94
111
236
Other
Expenses
27%
1,299
Staff Cost
41%
93
Pension
Expenses
2%
541
DUMMY
CHART
Leasing &
Rent
Expenses
6%
Administrative
Expenses
11%
665
364
Non-Banking
Activities
Expenses
13%
0
Operating Expenses
to Operating Income
Operating Expenses
to Operating Income
(Excluding
Provisions)
2004
2005
2006
[x] %
[x] %
[x] %
[x] %
[x] %
[x] %

[Comments to come]

[Comments to come]

[Comments to come]
105
Confidential - Not For Distribution - Working Draft, 15 March 2007
[2006 Figures are estimates]
Total Asset Growth
60,000
50,000
Other
Due From Other Banks
Securities
Loans and Advances to Customers
US$ in millions
40,000
106%
43%
52,490
’04-’05
’05-’06
5,972
113%
11%
6,463
105%
56%
9,371
135%
29%
10,000
[Comments to come]

[Comments to come]

[Comments to come]

[Comments to come]
4,141
7,291
20,000

36,723
5,366
30,000
% Growth
17,810
2,515
2,023
3,103
30,680
96%
54%
19,925
10,169
0
2004
2005
2006
106
Confidential - Not For Distribution - Working Draft, 15 March 2007
[2006 Figures are estimates]
Gross Loan Portfolio Concentration
Total: US$ 10,722m
Total: US$ 20,533m
2004
2005
(a)
2006
16%
Finance
Total: US$ 30,680m

[Comments to come]

[Comments to come]

[Comments to come]

[Comments to come]
23%
19%
(b)
Trade &
Commerce
15%
(c)
32%
Manufacturing
Building
Construction
8%
8%
1%
7%
4%
Oil, Gas &
Energy
11%
6%
7%
5%
Government
16%
20%
3%
Individuals
17%
15%
4%
5%
17%
Other
0%
Top 10 Customer
Loans as % of Gross
Customer Loans
10%
20%
19%
22%
30%
40%
0%
10%
20%
30%
40%
0%
10%
20%
2004
2005
2006
34.6 %
19.7 %
18.0 %
30%
40%
(a) Includes loans made for acquisition finance, to insurance and leasing companies, to non-bank investment companies, and financial arms of Russian industrial groups.
(b) Includes businesses in the retail, wholesale goods and services industries.
(c) Includes all manufacturing industries including without limitation machine building, automotive and ship building.
107
Confidential - Not For Distribution - Working Draft, 15 March 2007
[2006 Figures are estimates]
Gross Loan Portfolio Breakdown
Loan Portfolio By Currency (2006)
Loan Portfolio By Maturity (2006)
< 1 Month
12%
Other Euro
4%
3%
US$
48%
> 1 Year
44%
RUR
45%
Total Gross Customer Loans: US$ 30,680m (2006)

[Comments to come]

[Comments to come]

[Comments to come]

[Comments to come]

[Comments to come]

[Comments to come]
1-6 Months
26%
6-12
Months
18%
108
Confidential - Not For Distribution - Working Draft, 15 March 2007
[2006 Figures are estimates]
Securities Portfolio
[Discussion required on
breakdown of financial assets
categories]
Financial assets:
10,000
Held to maturity
Eurobonds of the Russian
Federation 5.2%
Available for sale
Other Equity
Investments 8.7%
Pledged under repurchase agreements and loaned financial assets
Russian Corporate
Eurobonds 9.5%
33%
At fair value through P&L
9,419
5
1,279
250%
92%
7
US$ in millions
665
128%
6,000
2,465
Bonds Issued by Foreign
Companies and Banks
Total: $1,279m
16.9%
Russian Corporate Eurobonds 3.6%
Other 3.9%
Equity Securities 4.0%
7,075
8,000
International Moscow
Bank Shares(a) 26.0%
10% stake in ALROSA (b)
- 24.4%
% Growth
’05-’06 ’06-’07
Other
9.3%
298%
82%
172%
(31%)
Promissory Notes 5.6%
Foreign Government
Bonds 13.1%
4.9% stake in
EADS – 47.7%
Bonds Issued by Foreign
Companies and Banks
Total: $2,465m
22.2%
1,352
[ Split to come]
4,000
3,103
7
190
340
5,267
5,670
2,000
Total: $5,670m
2,566
[ Comments to come]
0
2004
2005
2006
109
Confidential - Not For Distribution - Working Draft, 15 March 2007
[2006 Figures are estimates]
Total Liabilities Growth
50,000
45,694
45%
Other Liabilities
40,000
US$ in milllions
Debt Securities Issued
Customer Deposits
’04-’05
’05-’06
137%
(4%)
108%
3,928
31,452
9,313
104%
[Comments to come]

[Comments to come]

[Comments to come]

[Comments to come]
40%
719
4,098
11,240
83%
55%
6,629
20,000

1,078
Subordinated Debt & Other
Borrowed Funds
Due to Banks
30,000
% Growth
15,101
146
7,241
1,729
3,245
20,136
10,000
112%
58%
3,948
12,767
6,024
0
2004
2005
2006
110
Confidential - Not For Distribution - Working Draft, 15 March 2007
[2006 Figures are estimates]
Customer Deposits Concentration
Total: US$ 6,024m
Total: US$ 12,765m
2004
2005
Individuals
16%
Finance
Oil, Gas &
Energy
Other
Top 10 Customer
Deposits as % of
Total Customer
Deposits
10%
5%
5%
13%
2004
[x] %
30%
40%
50% 0%
[Comments to come]

[Comments to come]

[Comments to come]
3%
10%
20%

8%
5%
13%
[Comments to come]
16%
6%
8%
0%
18%
16%
3%

41%
17%
12%
Trade &
Commerce
Government
2006
41%
35%
Manufacturing
Total: US$ 20,136m
10%
10%
20%
30%
2005
[x] %
40%
50%
0%
10%
20%
30%
40%
50%
2006
[x] %
111
Confidential - Not For Distribution - Working Draft, 15 March 2007
[2006 Figures are estimates]
Customer Deposits
By Client (2006)
Current Account (38%)
By Maturity (2006)
Term Deposit (62%)
>1 Year
9.5%
Corporate
26%
Corporate
21%
Individuals
7%
6–12 Months
11.3%
<1 Month
52.0%
Individuals
21%
State
5%
State
20%
1–6 Months
27.2%
Total Customer Deposits: US$ 20,136m (FY2006)

[Comments to come]

[Comments to come]

[Comments to come]

[Comments to come]

[Comments to come]

[Comments to come]
112
Confidential - Not For Distribution - Working Draft, 15 March 2007
[2006 Figures are estimates]
Debt Securities & Subordinated Debt
Growth
Breakdown (2006)
Total: US$ 12,591m
Debt Securities Issued
Subordinated Debt
14,000
49.9%
12,000
1,351
10,000
US$ in millions
Subordinated
Debt
Debentures 13.8%
1.9%
12,591
112.8%
8,000
Deposit
Certificates
3.4%
8,402
1,161
6,000
Promissory
Notes
20.7%
DUMMY
CHART
11,240
3,948
4,000
7,241
2,000
3,948
Bonds
60.2%
0
2004
2005
2006

[Comments to come]

[Comments to come]

[Comments to come]

[Comments to come]

[Comments to come]

[Comments to come]
113
Confidential - Not For Distribution - Working Draft, 15 March 2007
[2006 Figures are estimates]
Segmental Analysis – By Geography
Total Assets (2006)
Shareholders’ Equity (a) (2006)
- US$ 52,482m -
- US$ 6,314m 19.0%
23.9%
1.7%
2.2%
73.9%
Russia
CIS
Europe
Total Revenue (2006)
- US$ [ ]m 1.4%
7.2%
79.3%
Russia
CIS
Europe
Net Profit (2006)
- US$ 1,219m 1.4%
7.2%
DUMMY
CHART
91.4%
Russia
(a) Excluding minorities.
CIS
Europe
91.4%
Russia
CIS
Europe
114
Confidential - Not For Distribution - Working Draft, 15 March 2007
[2006 Figures are estimates]
Overview of the Group’s Equity
7,000
6,000
Minorities
Retained Earnings
Revaluation Reserve
Unrealized Gains & FX Translation Difference
Share Capital & Share Premium

[Comments to come]

[Comments to come]

[Comments to come]
349
5,000
94%
US$ in millions
[Comments to come]
20%
5269
660
72
175
4,000
3,000

2709
2006
Shareholders
’ Equity:
US$6,314m
81
199
242
4013
2,000
1,000
2187
0
2004
2005
2006
115
Confidential - Not For Distribution - Working Draft, 15 March 2007
[2006 Figures are estimates]
Overview of Regulatory Capital Position
CBR Capital (VTB Standalone, RAS)
US$ in millions
2,958
2,839
3,000
CBR Capital Adequacy Ratio
16%
15.6%
15.1%

[Comments to come]

[Comments to come]

[Comments to come]

[Comments to come]
12.4%
2,500
2,022
12%
2,000
1,500
CBR
Requirement
(10%)
8%
1,000
4%
500
0
0%
2004
2005
2006
2004
BIS Capital (Tier I and Tier II)
8,000
Tier I
Tier II Less Deductions
16%
US$ in millions
971
14.1%
12.0%
5,898
1,597
2006
BIS Capital Adequacy Ratio
6,597
6,000
2005
12%
2.3%
12.0%
8%
4,000
2,540
2,000
4,927
5,000
2005
2006
12.0%
11.8%
12.0%
2004
2005
2006
BIS &
Covenants
(8%)
4%
0%
0
2004
116
Confidential - Not For Distribution - Working Draft, 15 March 2007
Financial Outlook

Russian banking market continues to exhibit strong conditions
– Strength of Russian macro-economic environment underpins positive outlook for banking sector as a whole

VTB Group’s significant scale and leading market position support the expectation that it will grow faster than
the market through 2010

2007 is expected to be a year of substantial investment for the Group due to:
– Aggressive expansion of distribution network in Russia
– Strategy to grow retail banking market share
– Ongoing efforts to integrate and enhance operating efficiencies

[Need to have detailed discussion on what we feel we should infer / indicate]
117
Confidential - Not For Distribution - Working Draft, 15 March 2007
XV. Wrap-Up and
Conclusion
[Andrey Kostin]
Confidential - Not For Distribution - Working Draft, 15 March 2007
Key Investment Highlights

Market
Opportunity
Strong
Competitive
Advantages
Unique
Investment
Opportunity

Favourable Russian macroeconomic environment
– Average real GDP growth of 6.2% p.a. since 2001
Attractive Russian banking sector
– Growing by [38]% per year…
– … but still under penetrated…
– … with particular high growth opportunities in retail segment and Russian regions

Second largest bank in Russia

Superior growth and profit potential


Leading franchise and established customer base
Experienced management team with extensive experience

Recognised and trusted brand


One of only two liquid Russian banking stocks
First Russian bank with a GDR listing
119
Confidential - Not For Distribution - Working Draft, 15 March 2007
Q&A
Confidential - Not For Distribution - Working Draft, 15 March 2007
[VTB to review biographies]
Appendix A – Supervisory
Council
Confidential - Not For Distribution - Working Draft, 15 March 2007
Supervisory Council (1/3)


Alexei L. Kudrin
Chairman



Dmitry B. Aratsky



Anton V. Drozdov

[To update with INEDs once
confirmed]
Alexei L. Kudrin (born 1960) has served as the Chairman of the Supervisory Council of VTB since July 2002.
Mr. Kudrin has been the Minister of Finance of Russia since 2004. From 1997 to January 1999 and from June 1999 to
May 2000, he served as First Deputy Minister of Finance of Russia. From January to June 1999, he was the First
Deputy Chairman of the Management Board of RAO UES of Russia. From 1996 to 1997, Mr. Kudrin was the Deputy
Head of the Russian Federation President Administration and Chief of the General Accounting Office of the Russian
Federation. Mr. Kudrin has served as Chairman of the Supervisory Council of CJSC АК ALROSA, Chairman of the
Board of Directors of SC Deposit Insurance Agency and a member of the Supervisory Council of JSC Sberbank.
Mr. Kudrin graduated from Leningrad State University (now St. Petersburg State University) in 1983 with a Ph.D. in
economics.
Dmitry B. Aratsky (born 1964) has served as a member of the Supervisory Council of VTB since December 2004.
Mr. Aratsky has been the Deputy Head of the Federal Property Agency since 2004. From 2000 to 2004, he was the
First Deputy Prime Minister of the Federal Property Agency. From 1997 to 2000, Mr. Aratsky was the Chairman of the
Committee of Resources and Land Use of the Nizhny Novgorod Region. Mr. Aratsky has served as a member of the
Supervisory Councils of OJSC Mortgage Housing Crediting Agency, OJSC Rosselkhozbank and JSC Russian Bank
Development.
Mr. Aratsky graduated from the Gorky State University (now the Nizhny Novgorod State University) in 1986 and the
Volgo-Viatsky State Service Academy in 1997 with a Ph.D. in technical sciences and a doctorate in economics.
Anton V. Drozdov (born 1964) has served as a member of the Supervisory Council of VTB since 2002.
Since 2004, Mr. Drozdov has been the Head of the Economic and Financial Department of the Government of the
Russian Federation. From 2003 to 2004, he was the Deputy Head of the Economic and Financial Department of the
Government of the Russian Federation. From 1999 to 2003, he was Head of Departments in the Administration of the
Government of Russia. From 1994 to 1999, he was Deputy Chief of the Main Department of Federal Treasury of the
Ministry of Finance of Russia.
Mr. Drozdov graduated from Moscow Finance Academy in 1986 with a specialisation in economics.
122
Confidential - Not For Distribution - Working Draft, 15 March 2007
Supervisory Council (2/3)


Arcady V.
Dvorkovich



Andrei L. Kostin

Alexey L.
Savatyugin



Arcady V. Dvorkovich (born 1972) has served as a member of the Supervisory Council of VTB since 2002.
Since 2004, Mr. Dvorkovich has been the Head of the Expert Office of the President of the Russian Federation. From
2000 to 2004, he was the Adviser to the Minister and Deputy Minister of the Ministry Economic Development and
Trade of the Russian Federation. From 1994 to 2000, he held the positions of Adviser, Senior Expert, General Director
and Senior Scientist of CJSC Economic Expert Group.
Mr. Dvorkovich has served as a member of the Supervisory Councils of OJSC Mortgage Housing Crediting Agency,
JSC Sberbank and SC Deposit Insurance Agency and a member of the Board of OJSC Joint Stock Company for Oil
Transporting Joint Stock Company Transneft.
Mr. Dvorkovich graduated from Moscow State University in 1994.
Andrei L. Kostin (born 1956) has served as a member of the Supervisory Council of VTB since 2002. Mr. Kostin has
been the Chairman of the Management Board and Chief Executive Officer of VTB since 2002.
From 1996 to 2002, Mr. Kostin was the President of Vnesheconombank (formerly Vnesheconombank of the USSR).
From 1995 to 1996, he served as First Deputy Chairman of the Board of Commercial Bank National Reserve Bank. Mr.
Kostin is the Chairman of the Supervisory Councils of ICB and VTB24, Chairman of the Board of Directors of RCBCyprus and a member of the Advisory Committee of VTB Europe. Mr. Kostin has served as Chairman of the Board of
OJSC Sovkomflot, a member of the Board of OJSC NK ROSNEFT, President of the All-Russia Public Organisation
Federation of Sports Gymnastics of Russia and a bureau member of the Panel of the Russian Engineering Union.
Mr. Kostin graduated from Moscow State University in 1979 with a Ph.D. in economics.
Alexey L. Savatyugin (born 1970) has served as a member of the Supervisory Council of VTB since 2006.
Mr. Savatyugin has been a Director of Finance Policy Department in the Ministry of Finance of the Russian Federation
since 2004. From 1992 to 2004, he held the positions of faculty assistant and senior teacher at St. Petersburg State
University. Mr. Savatyugin has served as Chairman of the Board of OJSC Rosgosstrakh and member of the
Supervisory Councils of OJSC Mortgage Housing Crediting Agency, OJSC Rosselkhozbank, JSC Sberbank and SC
Deposit Insurance Agency.
Mr. Savatyugin graduated from St. Petersburg State University in 1992.
123
Confidential - Not For Distribution - Working Draft, 15 March 2007
Supervisory Council (3/3)

Andrei V. Sharonov




Sergei A. Storchak



Alexei V. Ulyukaev

Andrei V. Sharonov (born 1964) has been the Deputy Minister of Economic Development and Trade of Russia since
1999.
From 1997 to 1999, Mr. Sharonov was the Deputy Minister of the Economy of Russia. From 1996 to 1997, Mr.
Sharonov was the Head of the Department for the Ministry of the Economy of Russia. From 1992 to 1996, Mr.
Sharonov was Chairman of the Russian Federation Youth Committee. Mr. Sharonov has served as a member of the
Boards of Directors of Oil Transporting Joint Stock Company Transneft, OJSC RZD and OJSC Aeroflot – Russian
Airlines.
Mr. Sharonov graduated from the Ufa Aviation Institute in 1986 and the Russian State Service Academy under the
Sergei A. Storchak
(born Federation
1954) has served
a member
Supervisory Council of VTB since December 2004.
President
of the Russian
in 1996as
with
a Ph.D. of
in the
sociology.
Mr. Storchak has been the Director of the Department for the Ministry of Finance of the Russian Federation since 2004.
From 1998 to 2004, he was a Deputy Chairman of Vnesheconombank. From August 1994 to April 1998, Mr. Storchak
held the positions of Deputy Head of the Department and Chief of the Branch for the Ministry of Finance of Russia.
From 1988 to 1994, Mr. Storchak was the Second Secretary in Ministry of Foreign of Affairs of the USSR and later, the
Russian Federation, for Permanent Representation of the USSR to the United Nations and other international
organisations.
Mr. Storchak graduated from the Moscow State Institute of International Relations, USSR Ministry of Foreign Relations
(now the Moscow State Institute of International Relations, Ministry of Foreign Affairs of Russia) in 1981 with a Ph.D. in
Alexei
V. Ulyukaev (born 1956) has served as a member of the Supervisory Council of VTB since 2002.
economics.
Since 2004, Mr. Ulyukaev has served as the First Deputy Chairman of the Bank of Russia. From 2000 to 2004, Mr.
Ulyukaev was the First Deputy Minister of Finance of Russia. From 1999 to 2000, he was the Deputy Director of the
Foundation Institute for Problems of an Economy in Transition. From 1998 to 1999 he was Deputy Director of the
Institute for Problems of an Economy in Transition. From 1996 to 1998, he was a Deputy in the Moscow City Duma.
Mr. Ulyukaev is a member of the Advisory Committee of VTB Europe and a member of the Supervisory Council of VTB
France. He has served as a member of the Supervisory Council of JSC Russian Bank for Development and Deputy
Chairman of the Supervisory Council of JSC Sberbank.
Mr. Ulyukaev graduated from Moscow State University with a doctorate in economics.
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Confidential - Not For Distribution - Working Draft, 15 March 2007
[VTB to review biographies]
Appendix B – VTB
Management Board
Confidential - Not For Distribution - Working Draft, 15 March 2007
Management Board (1/3)
Andrei L. Kostin
Chairman
Vadim O. Levin
First Deputy
Chairman

Chairman of the Management Board of VTB since June 2002. See “Supervisory Council”.

Vadim O. Levin (born 1963) has been the First Deputy Chairman and member of the Management Board of VTB since
August 2002.
From 1997 to 2002, he was the Deputy Chairman of Vnesheconombank. From 1994 to 1997, he was Head of
Department, Deputy Manager and Manager of the St. Petersburg branch of the joint-stock bank Imperial. Mr. Levin is
currently the Chairman of the Supervisory Council of VTB Armenia, member of the Supervisory Councils of
Evrofinance, VTB24, ICB and VTB Georgia and a member of the Board of Directors of RCB-Cyprus.
Mr. Levin graduated from the Leningrad Financial Economic Institute in 1985 with a Ph.D. in economics.




Alexei I. Akinshin
Deputy Chairman


Gennadi V.
Soldatenkov
Deputy Chairman


Alexei I. Akinshin (born 1959) has been the Deputy Chairman of the VTB Management Board since December 2004
and a member of the Management Board of VTB since July 2003.
From 2002 to 2003, he was a Senior Vice-President of VTB. From 1996 to 2002, he held several positions at
Vnesheconombank, including Advisor of the Bank’s Administrative Department, Head of the Resources Department,
Head of the Foreign Currency and Financial Transactions Department and Head of the Directorate of the Foreign
Currency and Financial Transactions. From 1994 to 1996, he was Deputy Chairman of the Management Board and
Head of the Credit and Economic Department of Russian-German Trade Bank. Mr. Akinshin is a member of the
Supervisory Council of ICB and a member of the Boards of Directors of CJSC MICEX, CJSC FB MICEX and SelfRegulated Organisation National Securities Market Association.
Mr. Akinshin graduated from the Moscow Financial Institute in 1982.
Gennadi V. Soldatenkov (born 1952) has been a Deputy Chairman and member of the Management Board of VTB
since January 2001 and currently serves as President-Chairman with oversight of the Regional Business and the IT
Projects Coordination Department for the VTB Group.
From 1991 to 2001, he held several positions at the Moscow Regional Office of Sberbank of the Russian Federation,
including Chairman, Deputy Chairman of the Board and Vice-President. Mr. Soldatenkov is currently Deputy Chairman
of the Supervisory Council of VTB Germany. Mr. Soldatenkov has been a member of the Stock Exchange Board, NonCommercial Partnership Moscow Stock Exchange.
Mr. Soldatenkov graduated from the Moscow Financial Institute in 1975 and the Moscow Higher Party School in 1989.
126
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Management Board (2/3)


Igor N. Zavyalov
Deputy Chairman


Yulia G. Chupina




Vasiliy V. Kirpichev

Igor N. Zavyalov (born 1960) has been a Deputy Chairman and member of the Management Board of VTB since July
2002 and currently serves as Deputy Chairman and Head of the Corporate Business. From 1999 to 2002,
Mr. Zavyalov was the Deputy Chairman of Vneshekonombank. From 1998 to 1999, he was the Deputy Chairman of the
Management Board of the National Reserve Bank. In 1998, he was Head of the Department for the Development of
Business with the Engineering Sector for OJSC Joint-Stock Bank Inkombank. Mr. Zavyalov is a member of the
Supervisory Council of VTB24 and Chairman of the Supervisory Councils of VTB France, VTB Austria, VTB Ukraine,
Mriya, Euroleasing Gesellschaft mit Beschrenkter Haftung, OJSC VTB Broker Bank and Chairman of the Boards of
Directors of OJSC VTB-Leasing and OOO (LLC) Insurance Company VTB-ROSNO Insurance Company. Mr. Zavyalov
has served as a member of the Board of Directors of OJSC KAMAZ.
Mr. Zavyalov graduated from Ordzhonikidze Moscow Aviation Institute in 1986.
Yulia G. Chupina (born 1970) has been a member of the Management Board of VTB since September 2005. She
joined VTB in 2004 and currently serves as Vice-President, Head of Corporate Development and Financial Assets
Department.
From 1998 to 2003, she worked at McKinsey & Company Inc. FSU as a consultant and project manager. Ms. Chupina
is a member of the Supervisory Councils of VTB24, ICB, VTB Austria, VTB Ukraine, Mriya and OOO (LLC) Insurance
Company VTB-ROSNO, a member of the Advisory Committee of VTB Europe and a Deputy Chairperson of the
Supervisory Council of VTB France.
Ms. Chupina graduated from Moscow State Linguistic University in 1993 and from ESADE, Spain, and Leonard Stern
Business School, New York University, United States in 1997 with a joint MBA degree in finance and international
management.
Vasiliy V. Kirpichev (born 1970) has been a member of the Management Board of VTB since November 2005.
From 1998 to 2005, he worked in various positions at Vnesheconombank, including Deputy Chairman. Mr. Kirpichev is
a member of the Supervisory Council of OJSC Bank VTB Broker and a member of the Advisory Committee of VTB
Europe. He has served as a member of the Board of Self-Regulatory Organisation National Stock Association and a
member of the Board of Directors of ZАО ROSEXIMBANK.
Mr. Kirpichev graduated from St. Petersburg University of Economics and Finance in 1995.
127
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Management Board (3/3)


Konstantin G.
Kozhevnikov



Erkin R. Norov



Vasily N. Titov

Konstantin G. Kozhevnikov (born 1967) has been a member of the Management Board of VTB since July 2005. Mr.
Kozhevnikov has worked at VTB since 2004 and currently serves as Senior Vice-President, Head of Non-Financial
Assets Department.
From 2001 to 2004 he was a Vice-President and Deputy Chairman of the Board of JSB Public Initiatives Support
(SOBINBANK). From 1999 to 2001, he was President of the non-commercial partnership Upkeep of Energy
Resources. From 1998 to 1999, he was Vice-President of the Economic Policy Foundation. From 1997 to 1998, he was
an administration consultant and Head of the Office of the Deputy Head of the Administration of the President of the
Russian Federation. Mr. Kozhevnikov is a member of the Board of Directors of EWUB and ZAO Almaz-Press and
Chairman of the Boards of Directors of ZAO Almaz Press and ZAO VTB-Invest. Mr. Kozhevnikov has served as
President of the All-Russian Public Organisation Golf Association of Russia and a member of the Board of Directors of
OAO Aircraft Engine.
Mr. Kozhevnikov graduated from the State Central Institute of Physical Training in 1990 and the Russian Academy for
Erkin R. Norov Service
(born 1954)
a member
the Management
of VTB
since
July
2002 and currently
Governmental
underhas
thebeen
President
of theofRussian
FederationBoard
in 2000
with a
Ph.D.
in economics.
serves as Senior Vice-President, Head of Loan Transactions and Risks Control Department.
From 1999 to 2002, he was the Director for Development and Planning Board of Vnesheconombank. In 1999, Mr.
Norov was the Head of the Department for Calculation of Tax Basis and Tax Income Planning of the Ministry of the
Russian Federation on Taxes and Assessments. From 1992 to 1999, he held several positions at JSC AvtoVAZ,
including Chairman of the Management Board on the Development of Maintenance, Director on Marketing and Trade,
General Director of the Economics and Finance Department, Vice-President – General Director of Finance,
Economics, Marketing, Trade and Motor-Car Maintenance Department, and Vice-President – Director of the
representative office in Moscow.
Mr. Norov graduated from Moscow State University in 1976 and from the Academy of People’s Economy under the
Government of the Russian Federation in 2001 with a Ph.D. in economics.
Vasily N. Titov (born 1960) has been a member of the Management Board of VTB since October 2004 and currently
serves as Senior Vice-President, Head of PR and Marketing Department.
From 1998 to 2002, Mr. Titov was the Deputy Head of Administrative Department and PR Director – Head of
Information and External Affairs Department of Vnesheconombank. From 1996 to 1998, he was Deputy General
Director of АООТ Russian Automobile Alliance. Mr. Titov is a member of the Supervisory Councils of VTB France and
Mriya and a member of the Board of Directors of CJSC Almaz-Press. Mr. Titov is a member of the Boards of Directors
of OOO Interfax-AKI, ZAO Interfax-China, OAO Avtovaz and OAO Russian Automobile Alliance.
Mr. Titov graduated from Leningrad State University in 1983 and from the Finance Academy under the Government of
the Russian Federation in 2002.
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Confidential - Not For Distribution - Working Draft, 15 March 2007
[VTB to review biographies]
Appendix C – Banking
Group Management
Committee
Confidential - Not For Distribution - Working Draft, 15 March 2007
Banking Group Management Committee (1/3)
Andrei L. Kostin
Chairman

See “Supervisory Council”.

See “Management Board”.

See “Management Board”.


E.M. Grevtsev (born 1949) has been executive director of VTB Europe’s Singapore branch since 2001 and is currently
Director of VTB Bank Europe Nominees pte Limited (Singapore).
From 1994 to 1997, Mr. Grevtsev worked as Vice-President and General Representative in London for Commercial
Bank Most-Bank. From 1990 to 1994, he was the Deputy Chairman and Joint General Manager of Moscow Narodny
Bank. From 1983 to 1990, he held several positions at the Bank of Foreign Trade of the USSR, including Head of the
Crediting of Foreign Economic Relations, Head of the Socialist Countries Crediting and Accounting Department,
assistant to the Chairman of the Board, Vice-Director of the Economy-Planning Department, member of the Board and
Head of the Personnel Department. From 1980 to 1983, he was the Commissioner of the Bank of Foreign Trade for the
USSR at the USSR Trade Mission in Indonesia and representative of Moscow Narodny Bank’s Singapore branch.
From 1970 to 1979, he was an economist and then a manager of the Planning and Economics Department of the Bank
of Foreign Trade of the USSR. Mr. Grevtsev is currently a member of the Board of Directors of VTB Europe.
Mr. Grevtsev graduated from Moscow Financial Institute in 1970 with a Ph.D. in economics.

See “Management Board”.
Alexei I. Akinshin
Yulia G. Chupina

E.M. Grevtsev
Vasiliy V. Kirpichev
130
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Banking Group Management Committee (2/3)


Nikolay Kuznetsov


Nikolay Kuznetsov (born 1964) has been a Senior Vice-President and Head of Subsidiary Bank Liaison of the
Corporate Development and Financial Asset Department of VTB since June 2006.
From 2005 to 2006, Mr. Kuznetsov acted as Executive Director of JSC Ilyushin Finance Co. From 2003 to 2005, he
worked at JSC Power Machines – Turbine Bucket Plant, Leningrad Metallic Plant, Elektrosila, Energomashexport as
Deputy General Director on Economics and Finance. From 1999 to 2003, he served as a Deputy General Director for
Finance and Planning of ОАО Aeroflot – Russian Airlines. From 1996 to 1999, he was Head of Treasury, Executive
Vice-President, member of the Management Board and acting Chairman of ОАО BANK MENATEP. He is currently a
member of the Supervisory Councils of VTB Armenia, VTB Georgia, VTB Germany, RKB-Zurich and CJSC VTBCapital.
Mr. Kuznetsov graduated from Moscow Management Institute in 1986 and Pierre Mandes University (France)
Grenoble Academy in 1994 with a Ph.D. in economics.
See “Management Board”.
Erkin R. Norov

Andrei Puchkov

Andrei Puchkov (born 1977) joined VTB in 2002 and currently serves as Senior Vice-President, Head of the Legal
Department.
From 1999 to 2002, Mr. Puchkov was a member of the Moscow BAR. He currently serves as a member of the Board of
Directors of RCP-Cyprus, Chairman of the Supervisory Council of CJSC VTB-Capital, a member of the Supervisory
Councils of VTB Ukraine, Mriya, VTB France, VTB24 and ICB and member of the Advisory Committee of VTB Europe.
Mr. Puchkov graduated from Moscow State University in 1998.

See “Management Board”.

Igor N. Zavyalov
131
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Banking Group Management Committee (3/3)


I.G. Suvorov


Nikolai
Tsekhomsky




Mikhail Zadornov

I.G. Suvorov (born 1948) has been Chairman and Chief Executive of VTB Europe’s Board of Directors since 1997 and
is currently Director of VTB Europe Strategic Investments Ltd. and Director of the VTB Europe Strategic Investments
(Russia) Ltd.
From 1991 to 1997, he served as Director and General Director of Moscow Narodny Bank’s Singapore branch. From
1987 to 1991, he was the Deputy Head of the Soviet Banking Institutions Abroad Department and the Deputy Head of
the Correspondents’ Relationships Department of the Bank of Foreign Trade of the USSR. From 1980 to 1987, he was
Deputy Head of the Soviet Banking Institutions Abroad Department of Moscow Narodny Bank’s Singapore branch.
From 1972 to 1980, he was an economist, senior economist, senior consultant, major expert, the Deputy Head of the
Department on Control of Soviet Foreign Banks for the State Bank of the USSR. Mr. Suvorov currently serves as
Chairman of the Board of Directors of VTB Europe.
Mr. Suvorov graduated from the Moscow Financial Institute in 1972.
Nikolai Tsekhomsky (born 1974) has been Senior Vice-President and Head of the Finance Department (CFO) of VTB
since October 2005.
From 2002 to 2005, Mr. Tsekhomsky worked as Vice-President and CFO for OAO Mobile Telesystems. From 1999 to
2002, Mr. Tsekhomsky served as the Head of the Finance Department at Renaissance Capital. Mr. Tsekhomsky is
currently a member of the Supervisory Councils of VTB24, ICB, Mriya, VTB Europe and VTB Austria.
Mr. Tsekhomsky graduated from Saint-Petersburg State Academy for Engineering and Economics in 1996 and
received a Ph.D. in 1999.
Mikhail Zadornov (born 1963) has been the President and Management Chairman of VTB24 since July 2005.
From 1999 to 2005, Mr. Zadornov served as a Member of the State Duma, serving on the commission on reviewing
federal budget spending on national defense and Russian state security and the committee for budget and taxes. From
1997 to 1999, he was Minister of Finance of the Russian Federation and served in several government roles, including
member of the Russian Security Council, Deputy Manager from Russia in the International Monetary Fund, First
Deputy Chairman of the Russian Government, Special Representative of the Russian President for relations with
international financial organisations and advisor to the President of Sberbank of the Russian Federation. From 1993 to
1997, he was a member of the State Duma and served as Chairman of the committee on budget, taxes, banks and
finances. From 1990 to 1993, he was a member of the State Economy Reform Committee of the RSFSR Council of
Ministers. From 1989 to 1990, he was a Junior Scientist and Scientist at the Institute of Economics and Expert of
Planning/Budget Commission of the USSR Supreme Soviet and Scientist of Economy Institute of the USSR Academy
of Science. From 1986 to 1988, he was a post-graduate student of the Economy Institute at the USSR Academy of
Science. Mr. Zadornov currently serves as a member of the Supervisory Council of VTB24.
Mr. Zadornov is a graduate of the Moscow Institute of National Economy and has a Ph.D. in economics.
132