Transcript Slide 1

Presentation
July 2009
Overview
2
Overview
Bank of Moscow’s Key Strengths and Investment Highlights
Extensive distribution
network in Moscow and
key Russian regions
Well-diversified and solid client
base of large corporate, SME and
retail clients
5th largest bank in Russia in
terms of total assets*
3rd place by volume of
retail deposits* provides
reliable and stable
funding base
Strong risk profile
Moody’s: Baa1
Fitch: BBB-
Track record of strong support
from the City of Moscow – the
largest shareholder
*Source: magazine Kommersant Dengi (№11) figures as of 1 January, 2009
3
Shareholder Structure
4
Shareholder Structure
 The City of Moscow has been the largest
shareholder of the Bank since the Bank was
established in 1995
 Companies of the Capital Insurance Group
hold 15.28% of the Bank’s share capital.
Capital Insurance Group is controlled by the
City of Moscow and the Bank of Moscow
Group.
 Mr. Andrey Borodin, Chairman of the
Management Board, and Mr. Lev Alaluiev,
Deputy Chairman of the Board of Directors,
indirectly jointly control 21.18% of the Bank’s
share capital.
 Since 2004 Bank’s shares are traded on
MICEX.
 The recently completed 13th share issue is
under registration with the CBR to boost the
capital by RUB 20 bn
3,59%
8,15%
3,69%
48,11%
21,18%
Controlled by
the City of
Moscow
15,28%
Property Department of the City Moscow Government
OJSC Capital Insurance Group
Beneficial Ownership of Mr.Borodin and Mr.Alaluiev
LLC "GSM"
Controlled by GCM Russia Opportunities
Fund (Cayman Islands)
OJSC "GSM Investments"
Others
5
Business Overview
6
Business Overview
Business Lines
Retail Banking
Corporate and Investment Banking
 Current and deposit accounts
 Corporate lending
 Loan services
 Syndicated loans
 Mortgages
 Trade finance and guarantees
 Debit and credit cards
 Foreign trade and exchange operations
 Money transfers
 Debt Capital Markets (Local and International)
 Internet and telephone banking
 Payment and account services
 Internet trading (“Mos-broker”)
 Securities trading
 Precious metals
Asset Management & Private Banking
 Private asset management services
 Fund management services
 Depositary services
 Underwriting
 Research
 Mutual and pension funds
 Private Banking
7
Business Overview
Business Strategy
Prudent Risk Management
Policy
Business Efficiency and
Market Positions
 Emphasis on the further increase of risk management efficiency
 Rigorous control over the asset quality
 Credit risk diversification and strengthening of underwriting standards
 Increase business efficiency
 Maintain leading positions in the national banking industry
 Tighten control over the quality of all business processes, costs and expenses
 Increase and diversify the customer base
Retail Banking
 Maintain high quality of the loan portfolio
 Provide flexible services and solutions to customers to address the current market
environment
 Increase and diversify the customer base
Corporate Business
 Maintain high quality of the loan portfolio coupled with a rise in cross selling
 Provide flexible services and solutions to customers to address the current market
environment
Private Banking
 Offer services to wealthy individuals in line with international standards
 Retain positions in the regions
Branch Network
 Use the regional network to diversify client and risk concentration
PRESERVE ASSET QUALITY AND EFFICIENCY AND MAINTAIN CURRENT MARKET POSITION
8
Business Overview
Bank of Moscow’s Market Position*
Top Russian Banks by Retail Deposits (US$, bn*)
Top Russian Banks by Net Assets (US$, bn*)
203,35 104,76
91,29
10,81
57,57
Top Russian Banks by Capital (US$, bn*)
1,70
1,54
Vozrozhdenie
2,12
Promsvyazbank
2,67
Uralsib
3,41
Alfa-Bank
3,53
Rosbank
GZB
VTB
Sberbank
3,56
Raiffaisen
4,28
12,95
Promsvyazbank
15,11
Rosbank
17,11
Raiffaisen
17,39
Unicredit
19,95
Alfa-bank
24,2
RSHB
GPB
VTB
Sberbank
24,98
Top Russian Banks by Loan Portfolio (US, $bn*)
160,25
33,76
61,16
13,97
11,88
10,32
9,73
8,61
Raiffaisen
Rosbank
Promsvyazbank
Rosbank
*
Source: magazine Kommersant Dengi (№20) figures as of April 1, 2009
Exchange Rate RUB/USD 33,9032 (Source: Central Bank of Russia) as of April 1, 2009
Alfa-bank
Raiffaisen
14,42
1,43
GZB
1,45
VTB
1,82
Sberbank
2,13
Uralsib
2,3
Unicredit
GZB
RSHB
VTB
Sberbank
2,48
14,56
Unicredit
14,83
4,67
Alfa-Bank
4,74
RSHB
27,32
9
Business Overview
Ratings Reflect the Credibility of the Bank*
A2
A
A3
A-
Baa1
BBB+
Baa2
BBB
Baa3
BBB-
Ba1
BB+
Ba2
BB
BBBa3
B+
*
Senior Unsecured Eurobond Ratings
10
Business Overview
Retail Banking
 No. 3 retail deposit taker in Russian Federation*
 US $5.1 bn of term deposits and current accounts as of 31 December 2008**
 Approved by CBR to participate in the Deposit Insurance System
 Authorised bank of the Deposit Insurance Agency to manage retail accounts of the banks with
withdrawn licences
 Over 9.6 mn retail customers as of 31 December, 2008 compared to 8.2 mn as of 31 December, 2007***
 As of 1 January, 2009, 11 mn plastic cards issued compared to 8.6 mn as of 1 January, 2008*
 Total retail loan portfolio – US $ 3.85 bn as of 31 December, 2008**
 Variety of deposit accounts designed for different categories of retail customers
 Wide range of services targeted at the inhabitants of the City of Moscow, including Muscovite Social Cards
issued in partnership with VISA International. The Muscovite Social Card is a Visa Electron integrated
plastic card that is a combination of a bank debit card, an identification card, an insurance identification
card and Moscow public transportation travel card
 Self-service zones inside retail locations and offices throughout the country to allow customers to get
services from ATMs such as credit payments, transfers, deposits, utility and mobile communication
payments, etc.
 Advanced Internet and Telephone banking
 All underwriting operations and credit procedures are centralized to be processed at the Head office
*
**
***
Source: Kommersant Dengi (№20) figures as of April 1, 2009
* USD\RUB exchange rates of CBR – 2008 USD1 = RUB 29,3804; 3Q 2008 USD1 = RUB 25,2464;
Source: Bank of Moscow, IFRS Consolidated Financial Statements (December 31, 2008)
2007 USD1 = RUB 24.5462; 2006 USD1 = RUB 26.3311;
Source: Bank of Moscow as of December 31, 2007
2005 USD1 = RUB 28.7825
11
Business Overview
Corporate and Investment Banking
 Over 105 000 corporate and public sector customers
as of 31 December, 2008*
 Focus on stable sectors of Russian economy
 Corporate banking dominates the asset side of the
balance sheet*:
 gross corporate loan portfolio of US $11.9 bn (RUB
 The Bank offers a variety of investment
banking services, including:
 underwriting
 debt issuance
 research
 asset management
349.3 bn) as of 31 December, 2008**
 involved in financing key City of Moscow projects
 Developing banking products and services targeted at
SME clients
 Starting from 2004 the bank has issued
bonds for 145 issuers reaching a total of
RUB 434 bn (USD $18.5bn)*
 Increasingly active in trade financing
 Provides payment services to commercial and public
sector clients through branch network
*
**
* USD\RUB exchange rates of CBR – 2008 USD1 = RUB 29,3804; 3Q 2008 USD1 = RUB 25,2464;
Source: Bank of Moscow as of December 31, 2008
2007 USD1 = RUB 24.5462; 2006 USD1 = RUB 26.3311;
Source: Source: Bank of Moscow, IFRS Consolidated Financial Statements (December 31, 2008)
2005 USD1 = RUB 28.7825
12
Business Overview
Moscow-based with Wide Geographical Reach
 133 outlets and 471 desks at postal offices in Moscow and Moscow Region
*
 64 regional branches and 184 sub-branches*
 With total 394 outlets throughout the country - presence in 52 regions of Russian Federation*
 Foreign subsidiaries in Belarus, Latvia, Estonia, Ukraine, Serbia and Representative office in Frankfurt
United States
of America
Norway
“Eesti Krediidipank”
(Tallin)
Finland
“Latvian Businessbank”
Petrozavodsk
(Riga)
Estonia
Vyborg
Latvia
Poland
Kaliningrad
St. Petersburg
Byelorussia
“Moscow-Minsk” (Minsk)
Vologda
Arkhangelsk
Velikiy Novgorod
Yaroslavl
Kovrov
Moscow
Ukraine
Orel
“BM Bank” (Kiev)
Rostov-on-Don
Nizhny Novgorod
Cheboksary
Kursk Lipetsk
Berezniaki
“Zarechye”
Kazan
Belgorod
Perm
(Kazan)
Voronezh
Sochi
Maykop
Syktyvkar
Kirov
Tula
Krasnodar
Volgograd
Stavropol
Turkey
Russian Federation
Izhevsk
Saratov
Yekaterinburg
Samara
Orenburg
Vladikavkaz
Petropavlovsk—
Kamchatsky
Ufa
Yakutsk
Tyumen
Chelyabinsk
Astrakhan
Orsk
Tomsk
Omsk
Yuzhno—Sakhalinsk
Novosobirsk
Kazahkstan
Kemerovo
Barnaul
Regional Branches
Iran
Kransnoyarsk
Khabarovsk
Novokuznetsk
Japan
Irkutsk
Ulan-Ude
China
Vladisvostok
Subsidiary and Affiliate Banks
*
Source: Bank of Moscow as of 1 June, 2009
13
Business Overview
Conservative Credit and Market Risk Policies in Place
 Based on recommendations and requirements of CBR, Basel Committee and auditors
 Single borrower/economic group limits
Credit Risk
 Product type/geographic/industry concentration limits
 Ongoing monitoring of borrower’s condition and collateral
 Strengthening of underwriting standards to address the crisis
Interest Rate Risk
 Measured via gap and interest rate sensitivity models
 Also employ stress testing and scenario analysis techniques
 Limited open foreign currency position, stop-loss, borrower limits
 Centralised control over exchange rates in currency operations
Currency Risk
 In accordance with CBR regulations, currency risk exposure cannot exceed 20% of the Bank’s aggregate capital
in all currencies
 Currency position is controlled by the CBR on a daily basis
 Managed with the aid of scenario analysis, simulative, optimising and predictive modelling
Liquidity Risk
 Strict CBR controls on instant (N2) and current (N3) liquidity standards
 Monitored on a daily basis
14
Business Overview
Bank of Moscow in International and Local Capital Markets
 5 senior Eurobonds issued over the last three
years and 2 LT2 Eurobond issue
 2 placements on the local debt market
 4 syndicated Term Loans outstanding
Eurobonds:
 US$250,000,000 Eurobonds due 2009
 RUR 5,000,000,000 Eurobonds due 2009
 US$300,000,000 Eurobonds due 2010
 CHF 250,000,000 Eurobonds due 2011
 In 2008 the Bank of Moscow raised approximately
US$1.45 bn from international and local markets
 US$500,000,000 Eurobonds due 2013
LT2 Debt:
Syndicated Loans:
 US$220,000,000 Syndicated Term Loan due 2009
 US$300,000,000 Subordinated Eurobonds due 2015
 US$400,000,000 Subordinated Eurobonds due 2017
 US$105,000,000 Syndicated Term Loan due 2010
 US$600,000,000 Syndicated Term Loan due 2010
 US$30,000,000 & EUR105,000,000 Syndicated
Term Loan due 2011
Local Bonds:
 RUR 10,000,000,000 Bond due 2011
 RUR 10,000,000,000 Bond due 2013
15
Financial Overview
*
* USD\RUB exchange rates of CBR – 2008 USD1 = RUB 29,3804; 3Q 2008 USD1 = RUB 25,2464;
2007 USD1 = RUB 24.5462; 2006 USD1 = RUB 26.3311;
2005 USD1 = RUB 28.7825
16
Financial Overview
Overview of Assets*
Assets in 2005 – 2008 (US$ million)
Asset Composition (2008)
0,1%
4,5%
2,4%
Financial Assets at
Fair Value
Premises and
equipment
Loans to customers
16 000
14 000
12 000
10 000
8 000
6 000
*
Source: Bank of Moscow, IFRS Consolidated Financial Statements (December 31, 2008)
2 090
1 411
1658
1 035
2005
40
0
256
100% = US$27 276 mn
239
65,3%
145
2 000
692
4 000
2604
Due from other banks
Other assets
17 582
18 000
1 205
Mandatory cash
balances w ith central
banks
C ash and equivalents
Mandatory cash balances with central banks
Trading securities
Loans to customers
4534
16,9%
20 000
14 325
1,4%
9 724
9,4%
5 596
Cash & cash
equivalents
2006
2007
2008
* USD\RUB exchange rates of CBR – 2008 USD1 = RUB 29,3804; 3Q 2008 USD1 = RUB 25,2464;
2007 USD1 = RUB 24.5462; 2006 USD1 = RUB 26.3311;
2005 USD1 = RUB 28.7825
17
Financial Overview
Bank of Moscow’s Loan Portfolio
Loan Portfolio Breakdown by Industry Sectors (2008)*
5,3%
4,0%
 Increasing geographic and sectoral
3,2%
2,3%
diversification
21,4%
 53% of the Bank’s gross loan book are
3,1%
concentrated in regions**
4,4%
 Focus is on fast growing sectors of the
10,2%
Russian economy
21,1%
 As of December 31, 2008, related party
13,1%
11,8%
Retail
Financial & other services
Manufacturing
Construction
Trade
Fuel & Energy
State Agencies
Food Industry
Metallurgy
Transport & Communications
lending accounted for 1.5 % of the gross loan
portfolio of the Bank compared to 2.6% as of
31 December 2007 **
Others
*
**
Source: Bank of Moscow, IFRS Consolidated Financial Statements (December 31, 2008)
Source: Bank of Moscow as of December 31, 2008
* USD\RUB exchange rates of CBR – 2008 USD1 = RUB 29,3804; 3Q 2008 USD1 = RUB 25,2464;
2007 USD1 = RUB 24.5462; 2006 USD1 = RUB 26.3311;
2005 USD1 = RUB 28.7825
18
Financial Overview
Bank of Moscow’s Loan Portfolio (Cont’d)
Retail Loan Portfolio Breakdown (2008)
5,1%
Retail Loan Portfolio 2005 – 2008 (US$ million)
3,0%
3 629
13,9%
3 040
27,4%
1 390
50,6%
Scoring Loans
Car Loans
Mortgages
Credit Cards
524
Consumer Loans
2005
2006
2007
2008
 Retail loan portfolio grew by 19.3% since the end of 2007 in USD terms
*
Source: Bank of Moscow, IFRS Consolidated Financial Statements (December 31, 2008)
* USD\RUB exchange rates of CBR – 2008 USD1 = RUB 29,3804; 3Q 2008 USD1 = RUB 25,2464;
2007 USD1 = RUB 24.5462; 2006 USD1 = RUB 26.3311;
2005 USD1 = RUB 28.7825
19
Financial Overview
Bank of Moscow’s Loan Portfolio (Cont’d)
Overdue Loans and Allowance for Loans Losses
500%
Client Concentration: Twenty Largest Borrowers
5,0%
4,7%
4,4%
4,1%
400%
3,5%
300%
30 000
3,2%
375%
33 699
35 000
3,8%
30%
28,0%
25308
2,9%
25 000
2,6%
2,3%
256%
200%
214%
215%
20 000
1,7%
0,61%
0,33%
0,50%
1,1%
1,13%
0,8%
10 000
0,5%
5 000
0,2%
0%
2006
2007
2008
BoM: Overdue / gross loans
 Overdue loans comprised 1.13 % of the Bank’s gross loan
portfolio as of December 31, 2008
 Overdue loans are covered 2.15 times by provisions as of
December 31, 2008
Source: Bank of Moscow, IFRS Consolidated Financial Statements (December 31, 2008)
14 412
9 778
5 666
25%
21,70%
20,3%
20%
2005
Allowance for loan losses / overdue
*
10289
0
-0,1%
2005
18021
15 000
1,4%
100%
16947
24,9%
2,0%
2006
2007
2008
Total Loans
Collateral
TOP 20 Client Concentration
 Diversified loan portfolio with a 21.7%
concentration of top 20 borrowers in the total loan
portfolio, which has increased due to slowdown of
the economy
 Loan portfolio is collateralized by 1.9 times
* USD\RUB exchange rates of CBR – 2008 USD1 = RUB 29,3804; 3Q 2008 USD1 = RUB 25,2464;
2007 USD1 = RUB 24.5462; 2006 USD1 = RUB 26.3311;
2005 USD1 = RUB 28.7825
20
Financial Overview
Overview of Liabilities
Liabilities in 2005 – 2008 (US$ million)
Liability Composition (2008)
1,3% 1,5%
12,5%
29,3%
700
25 000
3 121
127
20 000
2 280
15 000
13 837
81
1 923
10 000
14 285
115
55,4%
1 010
100% = US$24 973 mn
9 856
5 000
7 315
5 855
Due to other banks
Due to Customers
Debt securities issued
Other liabilities
Financial Liabilities at Fair Value
0
735
1 447
2005
2006
Due to other banks
Due to customers
2 836
2007
2008
Debt securities issued
Other
 Strong deposit base is one of the key advantages of the
Bank, especially in the recent global liquidity crisis
*
Source: Bank of Moscow, IFRS Consolidated Financial Statements (31 December, 2008)
* USD\RUB exchange rates of CBR – 2008 USD1 = RUB 29,3804; 3Q 2008 USD1 = RUB 25,2464;
2007 USD1 = RUB 24.5462; 2006 USD1 = RUB 26.3311;
2005 USD1 = RUB 28.7825
21
Financial Overview
Deposit Base
Composition of Client Deposit Portfolio (2008)
Growth in Deposits (US$ million)
By Deposit Type
16 000
14 285
14 000
13 837
12 000
38,4%
9 856
10 000
61,6%
Current / Demand
Accounts
Term Deposits
8 000
6 000
5 855
4 000
By Customer Type
2 000
0
2005
2006
2007
Individuals
2008
33%
37,2%
State Ow ned
Organisations
 Continued diversification of deposit base with the
following sources of funding available: funds of
state-owned corporations, City of Moscow and CBR
funding
*
Source: Bank of Moscow, IFRS Consolidated Financial Statements (December 31, 2008)
Federal Budgets +
Regional Funds
Other Commercial +
Legal Entities
6,6%
23,2%
* USD\RUB exchange rates of CBR – 2008 USD1 = RUB 29,3804; 3Q 2008 USD1 = RUB 25,2464;
2007 USD1 = RUB 24.5462; 2006 USD1 = RUB 26.3311;
2005 USD1 = RUB 28.7825
22
Financial Overview
Profit & Loss Highlights
Selected Profitability Ratios*
Profit and Loss Income (US$ million)*
2008
2007
2006
2005
Net interest income
966.0
777.2
534.8
328.3
Net fee and commission
income
196.7
175.2
119.0
69.0
6%
(127.3)
63.1
39.3
17.8
(305.2)
(99.7)
(51.1)
(22.4)
Profit before taxation and
minority interest
280.8
537.5
289.7
181.4
Net profit
230.2
361.9
213.6
139.3
1.73
2.82
1.78
1.19
15%
5,5%
4,7%
1%
2,0%
1,8%
10,9%
2,0%
2005
2006
Return on Assets
10%
4,3%
4,5%
5%
0,9%
0%
2007
0%
2008
Net Interest Margin
Return on Equity
Cost/Income Ratio*
Operating Income*
55%
1000
800
20%
2%
Basic earnings per share (EPS)
25%
18,7%
3%
exchange operations
(Provision for)/recovery of
loan impairment
22,2%
4%
Gains less losses arising from
Trading securities and
5%
20,4%
1016
1035
49,94%
16%
18%
17%
6%
5%
6%
78%
77%
77%
17%
50%
694
600
49,29%
49,24%
400
415
83%
45%
46,11%
200
0
40%
2005
Income
*
2006
2007
2008
C ost/Income
Source: Bank of Moscow, IFRS Consolidated Financial Statements (December 31, 2008)
2005
2006
2007
Net commission income
Net income from trading operations
Net interest income
2008
* USD\RUB exchange rates of CBR – 2008 USD1 = RUB 29,3804; 3Q 2008 USD1 = RUB 25,2464;
2007 USD1 = RUB 24.5462; 2006 USD1 = RUB 26.3311;
2005 USD1 = RUB 28.7825
23
Financial Overview
Capital Adequacy
Capital Adequacy
 As of the end 2008, the Bank’s total capital position
Capital Base (US$ million)
3 500
was sound with a total capital ratio of 13.9%.
 This is well above the 10% minimum limit set by the
20,0%
18,0%
3 000
15,7%
3 094
CBR
 Core capital (Tier 1) of RUB 62bn (US$2 516mn)
 High quality of capital: Tier 1 ratio of 9.5%
 In August 2008, the 12th share issue for RUB 8.3 bn
was finalized.
 A new share issue has been completed to increase the
15,0%
13,3%
2 500
2 719
14,80%
13,90%
2 000
10,0%
1 500
1 554
1 000
1 112
5,0%
Tier I capital by RUB 20 bn (approx. USD 650 mn)
748
500
0
0,0%
2004
2005
2006
2007
2008
Total capital
Total capital ratio
CBR requirement
*
Source: Bank of Moscow, IFRS Consolidated Financial Statements (December 31, 2008)
* USD\RUB exchange rates of CBR – 2008 USD1 = RUB 29,3804; 3Q 2008 USD1 = RUB 25,2464;
2007 USD1 = RUB 24.5462; 2006 USD1 = RUB 26.3311;
2005 USD1 = RUB 28.7825
24