Investor presentation H1 2014

1. H1 2014 IFRS Results Time-proved client loyalty
Conference Call
August 27, 2014

2. 2
7,7
7,4
2,7
1,4
5,5
1,6
15,9
10,4
8,5%
5,6%
Q1 2014
Q2 2014
Loans from CBR under
repo agreements
Interbank funding with
maturity less than 1 year
Interbank funding with
maturity over than 1 year
13
13
13
12
13
150
155
156
158
152
12
14
12
7
12
6,4
1,9
1
1
1
1
1
40
33
29
26
31
216
217
211
211
210
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Cash and
equivalents
Due from banks
Invest. securities
pledged under repos
Securities
Net loans
Other assets
8,5%
5,6%
Assets and liabilities
Assets stable across the year
Diversified funding structure
Market funding replaced by customer resources
L/D ratio down to targeted range
RUB bln
RUB bln
RUB bln
167
173
168
172
166
169
171
162
153
158
99%
102%
104%
112%
105%
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Gross loans
Customer funds
L/D
21
22
22
23
23
7
5
4
4
3
1
1
4
1
1
9
9
10
14
14
169
171
162
153
158
5,5
1,6
8
9
9
10
9
216
217
211
211
210
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Due to other banks
CBR funds under
repos
Client funds
Securities issued
Other liabilities
Subordinated loans
Equity

3. 3
20
18
19
16
18
87
91
87
89
93
107
109
106
104
110
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Retail deposits
Retail accounts
26,0
24,9
24,3
19,8
20,1
35,8
36,8
31,2
28,8
27,7
62
62
55
49
48
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Corporate accounts
Corporate deposits
Customer funds
Retail funds saw a strong inflow
Rebound of corporate deposits
RUB bln
-1.7%
+5.6%
RUB bln
53
50
47
46
42
42
45
4
5
6
5
5
7
5
57
54
54
51
47
49
50
Dec
Jan
Feb
Mar
Apr
May
Jun
RUB Corporate
FX Corporate
Corporate funds monthly dynamics (RAS)
79
77
76
75
79
80
83
25
27
29
28
28
27
26
105
104
105
103
108
107
109
Dec
Jan
Feb
Mar
Apr
May
Jun
RUB Retail
FX Retail
Retail funds monthly dynamics (RAS)
24%
10%

4. 4
Loan portfolio
Loan portfolio developments
Industry diversification – whom we limit?
RUB bln
51
52
51
52
50
79
81
74
76
72
25
28
30
31
31
12
13
13
13
13
166,9
173,2
168,2
171,6
166,1
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Large corporates
SMEs
Mortgages
Consumer, car loans, and cards
As of June 30, 2014
Rub 122,1
billion
SMEs dynamics decomposition
*Loan portfolio before provisions for impairment
-3.2%
51,6
49,9
Q1 2014
Q2 2014
Large corporates dynamics decomposition
76,2
72,2
Q1 2014
Q2 2014
RUB bln
RUB bln
Loans to new clients
Loans to existing clients
Recoveries
Migration between SMEs and large corps
+1,1
+4,3
-9,9
+0,5
Loans to new clients
Loans to existing clients
Recoveries
Migration between SMEs and large corps
0,0
+0,5
-1,7
-0,5
36%
0%
26%
1%
11%
5%
4%
8%
9%
Construction
(+0,1%)
Manufacturing
(-0,7%)
Agriculture
(-0,3%)
Wholesale & retail trade
(+1,0%)
Administrations
(-0,2%)
Other
(+0,3%)
Transport
(+0,1%)
Real estate
(-0,1%)

5. 5
1 102
1 810
1 350
1 730
1 863
3,7%
3,2%
1,9%
2,0%
2,2%
3,00%
4,47%
3,17%
3,94%
4,23%*
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Retail
Credit quality management
15
2,30%
2,10%
0,57%
3,11%
3,12%
2,20%
2,10%
2,30%
2,90%
2,79%
Q2 2014
Q1 2014
Q4 2013
Q3 2013
Q2 2013
Charges to provisions to avg gross loans, QoQ
Charges to provisions to avg gross loans, YtD
+Rub 744 mln new NPLs
-Rub 234 mln recoveries
-Rub 73 write-offs
+Rub 1 123 mln new NPLs
-Rub 990 mln recoveries
no write-offs
17 270
18 616
12 385
13 129
13 699
10,13%
10,46%
7,36%
7,70%
8,53%
10,35%
10,75%
7,36%
7,65%
8,25%
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
NPLs, Rub mln
Provisions, % of total portfolio
NPLs, % of total portfolio
*
no new NPLs
no recoveries
no write-offs
NPLs categorization
Annualized cost of risk
NPLs dynamics*
* NPL includes the whole principal of loans at least one day overdue either on principal or interest as well as not overdue loans with signs of impairment
*2,2% of which is overdue less than 30 days
7 939
8 671
3 518
3 882
4 319
10,6%
11,1%
5,3%
5,3%
6,0%
10,0%
10,8%
4,7%
5,1%
6,0%
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
SMEs
8 229
8 135
7 517
7 517
7 517
14,1%
15,2%
14,8%
16,1%
17,8%
16,2%
15,6%
14,6%
14,6%
15,1%
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Large corporates
NPLs, Rub mln
Provisions, % of total portfolio
NPLs, % of total portfolio

6. 6
Credit quality
As of June 30, 2014
Large corporates
SMEs
Mortgages
Other retail
Total
Gross loans, including
49,898
72,192
30,722
13,336
166,148
Current loans
84.9%
94.0%
97.1%
92.7%
91.8%
Past-due but not impaired, including
-
0.5%
2.4%
2.5%
0.8%
Less than 90 days
-
0.3%
2.2%
2.5%
0.7%
Over 90 days
-
0.2%
0.2%
0.0%
0.1%
Impaired, including
15.1%
5.5%
0.5%
4.8%
7.4%
Less than 90 days
-
0.5%
-
0.6%
0.3%
Over 90 days
15.1%
5.0%
0.5%
4.2%
7.1%
Total NPLs
15.1%
6.0%
2.9%
7.3%
8.2%
Provisions
-17.7%
-6.0%
-1.0%
-4.9%
-8.5%
Net Loans
41,057
67,835
30,403
12,687
151,982
Provisions to NPLs Ratio
103.4%
Provisions to 90 days+ NPLs
117.4%
Rescheduled Loans
6.4%
NPL -
the whole amount of loans with principal overdue for more than 1 day as well as loans with any delay in interest payments.
RUB mln

7. 7
Financial highlights
As of June 30, 2014
2Q14
1Q14
QoQ
1H14
1H13
YoY
Interest income
4,949
5,063
-2.3%
10,012
9,097
+10.1%
Interest expense
(2,554)
(2,472)
+3.3%
(5,026)
(4,680)
+7.4%
Fee and commission income
1,149
1,101
+4.4%
2,250
2,587
-13.0%
Fee and commission expense
(172)
(185)
-7.0%
(357)
(265)
+34.7%
Other operating income
270
138
+95.7%
408
418
-2.4%
Total operating income b.p.
3,642
3,645
-0.1%
7,287
7,157
+1.8%
Operating expense
(2,178)
(2,187)
-0.4%
(4,365)
(4,226)
+3.3%
Provisions for loan impairment
(973)
(893)
+9.0%
(1,866)
(2,275)
-18.0%
Provisions for impairment of other assets
46
(9)
-
37
2
x18.5
Taxation
(106)
(128)
-17.2%
(234)
(137)
+70.8%
Net profit
431
428
+0.7%
859
521
+64.9%
RUB mln

8. 8
4,2%
4,5%
4,9%
4,9%
4,6%
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
NIM in line with target despite funding costs growth
Interest income & expense breakdowns
NIM decomposition
Spread
Interest rates
3,3
3,1
1,6
1,7
0,2
0,2
-1,5
-1,6
-0,4
-0,4
-0,5
-0,6
2,6
2,4
Q1'14
Q2'14
Int. income from corp. loans
Int. income from retail loans
Other int. income
Int. expense from retail deposits
Int. expense from corp.deposits
Other int. expense
RUB bln
6,4%
6,7%
6,9%
6,6%
6,2%
11,5%
11,8%
11,8%
11,9%
11,7%
5,0%
5,1%
4,9%
5,3%
5,5%
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Spread (net)
Yields on earning assets (net)
Cost of funds
-0,31%
-0,13%
+0,07%
+0,02%
Loans
Deposits
Other
Base effect
7,7%
7,6%
6,7%
7,3%
8,1%
6,5%
6,8%
6,7%
7,0%
7,0%
10,9%
11,2%
11,4%
11,4%
11,3%
15,0%
15,3%
15,3%
15,4%
15,4%
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Corporate term deposits
Retail term deposits
Yields on corporate loans
Yields on retail loans

9. 9
8
11
14
17
20
23
1 215
1 247
940
916
977
1 137
1 145
1 169
2Q 2013
3Q 2013
4Q 2013
1Q 2014
2Q 2014
Net fee income
Net fee income with corrected gradual accruals of one-off reclass
2,2
2,4
2,6
2,6
2,4
1,2
1,2
0,9
0,9
1,0
0,22
0,14
0,10
0,14
0,27
3,7
3,8
3,7
3,6
3,6
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Net interest income
Net fees
Other income
Operating results
…supported operating income on a stable level
…amid seasonally high business activity…
Fee income dynamics…
…with all components growing in Q2..
RUB bln
RUB mln
-0.1%
+6.7%
-0.7%
-14.1%
238
241
274
295
219
225
185
216
916
977
1Q 2014
2Q 2014
Settlements
Cards
Cash transactions
Other
RUB mln
2012
2013
2014
H1 2012
86.8
H1 2013
90.0
H1 2014
91.6
Balances on debit card accounts, RUB bln
Credit turnover of card accounts, RUB bln

10. 10
1 321
1 279
1 360
1 300
1 307
328
336
404
436
329
176
181
203
170
194
310
338
450
281
348
2 135
2 134
2 417
2 187
2 178
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Rent and costs relating to premises, equipment and depreciation of intangible assets
Taxes other than income tax and contributions to the State Deposit Insurance Agency
Administrative and other expenses
Staff costs
Costs
Operating model optimization project development
Costs structure
C/I ratio
RUB mln
-0,4%
58,2%
56,0%
65,6%
60,0%
59,8%
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Cost to Income Ratio, %
Stage
Centralisation:
Internet-Bank client support service

Work with orders and requests of Federal Tax Service
Requests - done
Orders - Dec14
AML/FT control
 Moscow region
Controller for the service of regular payments for the mobile and internet-bank

FRAUD-analysis and payment controller function

Automation of Internet-client payment processing
 on Rub payments
Optimisation of individuals’ incoming payments processing

Uniting cashier and teller functions
Moscow region
Work with orders and requests of Federal Bailiff Service
Requests - done
Orders - Oct14
Stage
HR documentation handling
Moscow region – Dec14
Security Administrators function
Moscow region – Oct15
Accounts opening / online client profiles
Moscow region - Mar15/Dec15
Handling internal payrolls
Moscow region – Jan15
FX control
Moscow region – Mar15
Fixed cash collection routs planning
Part of Moscow region – Oct14
Credit middle and back office
Moscow region – Dec14
Credit operations with large clients
Moscow region – Dec14
Credit turnover/ reissue of bank cards on payrolls
2015
Establishing IT Help Desk/Service Desk
2015

11. 11
11,7%
11,4%
12,0%
8,8%
9,7%
9,9%
14,6%
13,2%
13,8%
11,2%
11,6%
12,3%
Q2 2013
Q3 2013
Q4 2013
Q4 2013
Q1 2014
Q2 2014
Tier 1
Tier 1 + Tier 2
Statutory Capital (Н1.0)
Statutory common equity Tier (Н1.1)
Net profit – the main source of capital support
…and net profit
Stable provisioning allowed for steady operating profit…
Capital adequacy
Basel I
Basel III
RUB bln
188
247
724
428
431
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Net profit
RUB mln
+0.7%
+129%
28,8%
31,2%
23,0%
25,8%
25,5%
3,5%
4,6%
13,2%
7,6%
7,5%
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Operating profit before provisions and taxation / Average equity
ROE
-1,3
-1,3
-0,4
-0,9
-0,9
1,5
1,7
1,3
1,5
1,5
Q2 2013
Q3 2013
Q4 2013
Q1 2014
Q2 2014
Provisions
Operating profit before provisions and taxes
+0.4%
-4.4%
ROE, %

12. 12
Questions and answers
investor@voz.ru http://www.vbank.ru/en/investors
Elena Mironova
Deputy Head of IR
+7 495 620 90 71
E.Mironova@voz.ru
Andrey Shalimov
Deputy Chairman of
the Management Board
A.Shalimov@voz.ru

13. 13
Disclaimer
Some of the information in this presentation may contain projections or other forward-looking statements regarding future events or the future financial performance of Bank Vozrozhdenie (the Bank). Such forward-looking statements are based on numerous assumptions regarding the Bank’s present and future business strategies and the environment in which the Bank will operate in the future. The Bank cautions you that these statements are not guarantees of future performance and involve risks, uncertainties and other important factors that we cannot predict with certainty. Accordingly, our actual outcomes and results may differ materially from what we have expressed or forecasted in the forward-looking statements. These forward-looking statements speak only as at the date of this presentation and are subject to change without notice. We do not intend to update these statements to make them conform with actual results. The Bank is not responsible for statements and forward-looking statements including the following information:
- assessment of the Bank’s future operating and financial results as well as forecasts of the present value of future cash flows and related factors;
- economic outlook and industry trends;
- the Bank’s anticipated capital expenditures and plans relating to expansion of the Bank’s network and development of the new services;
- the Bank’s expectations as to its position on the financial market and plans on development of the market segments within which the Bank operates;
- the Bank’s expectations as to regulatory changes and assessment of impact of regulatory initiatives on the Bank’s activity. Such forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from those expressed or implied by these forward-looking statements. These risks, uncertainties and other factors include:
- risks relating to changes in political, economic and social conditions in Russia as well as changes in global economic conditions;
- risks related to Russian legislation, regulation and taxation;
- risks relating to the Bank’s activity, including the achievement of the anticipated results, levels of profitability and growth, ability to create and meet demand for the Bank’s services including their promotion, and the ability of the Bank to remain competitive. Many of these factors are beyond the Bank’s ability to control and predict. Given these and other uncertainties the Bank cautions not to place undue reliance on any of the forward-looking statements contained herein or otherwise. The Bank does not undertake any obligations to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as may be required under applicable laws.