Bank Saint Petersburg 9M2011 IFRS Results

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1

BANK SAINT PETERSBURG

9M 2011 IFRS Results

December 2, 2011







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3

Summary –

Bank Saint Petersburg at a glance

2

Regional leader

Focused on

North-West

Selected financial

and operational

results

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

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

• Assets: 12.3%

• Loans: 14.4% - corporate, 4.9% - retail

• Deposits: 10.7% - corporate, 8.3% - retail

As at November 1, 2011

Client base: over 1.1 million retail and 35.7 thousand corporate customers

37 branches and outlets (primarily in St. Petersburg), 500 ATMs

As at October 1, 2011:

16th largest bank by assets and 14th by retail deposits among the Russian banks**

Ratings: Moody’s Ba3 (Stable outlook)

Total assets: RUB 305.8 bn (USD 9.5 bn)

Total capital: RUB 43.6 bn (USD 1.4 bn)

Net income: RUB 5.6 bn (USD 175.6 mln)

Cost/Income ratio: 32.6%

ROAE: 23.3%

Total capital adequacy: 13.5%

2,734 employees

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

** Interfax







4

Overview of Key Financials

In RUB bn Jan. 1, 2011 Oct. 1, 2011 YTD Oct. 1, 2010 Jul. 1, 2011 Oct. 1, 2011 y-o-y q-o-q

Total assets 272.61 305.82 +12.2% 247.43 292.06 305.82 +23.6% +4.7%

Gross Loans 202.25 223.70 +10.6% 196.49 217.96 223.70 +13.8% +2.6%

Customer Deposits* 202.17 221.95 +9.8% 179.04 212.23 221.95 +24.0% +4.6%

Total Capital 35.87 43.60 +21.6% 34.50 39.14 43.60 +26.4% +11.4%

9M 2010 9M 2011 y-o-y 3Q 2010 2Q 2011 3Q 2011 y-o-y q-o-q

Net Interest Income 9.05 10.34 +14.2% 2.77 3.52 3.55 +19.5% +0.8%

Net Fee and Commission

Income 1.18 1.46 +24.0% 0.42 0.50 0.53 +25.9% +5.1%

Revenues** 11.18 12.25 +9.6% 3.5 4.2 3.8 +8.3% -8.9%

Net Income 1.13 5.64 +145.1% 1.17 2.41 1.14 -2.6% -52.5%

9M 2010 9M 2011 y-o-y 3Q 2010 2Q 2011 3Q 2011 y-o-y q-o-q

Net Interest Margin 5.21% 5.00% -21 BP 5.09% 5.21% 4.98% -23 BP -11 BP

Cost/Income Ratio 28.15% 32.60% +4.45 PP 34.21% 30.15% 41.97% +11.82 PP +7.76 PP

ROAE 11.82% 23.30% +11.48 PP 17.78% 30.66% 13.25% -17.41 PP -4.53 PP

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

** Revenues calculation: gains from investment securities available for sale are excluded from revenues as one-off







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Table of contents

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I. Bank’s market position

II. Financial highlights and business overview

III. Recent developments and prospects







6

Sberbank; 19,5%

VTB Group; 14,6%

CIT Finance; 4,6%

International Bank

of Saint Petersburg;

3,6%

Baltinvestbank;

3,4%

Others (ca. 140

banks); 31,8%

Bank "Russia";

9,8%

Bank Saint

Petersburg;

12,7%

Strong Franchise

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

Market share in St. Petersburg as at October 1, 2011: Corporate banking*

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

5

Loans, market share as at July 1, 2011*

581774

9001 000

1 100

35,735,0

3535

31

2007 2008 2009 2010 October 1, 2011

Retail Corporate

12,9%

16,1%

14,4%13,9%

15,7%

11,8% 11,9%11,5% 10,7%

10,7%

YE 2007 YE 2008 YE 2009 YE 2010 9M 2011

Corporate loans Corporate deposits

6,3%7,1%

6,1%5,2% 4,9%

7,8%

9,5% 9,7%

8,7% 8,3%

YE 2007 YE 2008 YE 2009 YE 2010 9M 2011

Retail loans Retail deposits







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Table of contents

6


II. Financial highlights and business overview








8

34,5 35,9 37,439,1

43,6

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

247,4272,6 282,4 292,1

305,8

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

3 513 3 569

4 267 4 1793 805

1 202 1 304 1 1191 565 1 597

998

48

673293

712

3Q 10 4Q 10 1Q 11 2Q 11 3Q 2011

Revenues Operating expenses Provisions

Financial Highlights, 3Q 2011

Assets, RUB, bn

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

Capital, RUB, bn

7 * Net trading income includes gains from derivatives in the amount of USD 341 mln for 9M 2011 (in 9M 2011 P&L statement included in Other Income).

** Results calculation: the expenses /gains from recognition of loans granted at below market rates are included in provisions

3 548

535 500 525

2 969 2 9783 268 3 520

417 439118 49 517 54

-6623Q 10 4Q 10 1Q 11 2Q 11 3Q 11

Net Interest Income Net Fee and Commision Income Net Trading Income







9

6 040

11 112

15 192 14 750

12 252

2 429

3 8523 773 4 450 4 281

1 007

3 396

10 512

5 010

1 678

FY 07 FY 08 FY 09 FY 10 9M 11

Revenues Expenses Provisions

Financial Highlights, 9M 2011

Assets, RUB, bn

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

Capital, RUB, bn

8

126,7

215,7235,6

272,6

305,8

January 1, 2008 January 1, 2009 January 1, 2010 January 1, 2011 October 1, 2011

18,5

24,2

33,2

43,6

35,9

January 1, 2008 January 1, 2009 January 1, 2010 January 1, 2011 October 1, 2011

+ 12.2% + 21.6%

4 668

9 50310 421

12 024

10 336

889 1386 1489 17152810 1464

393 103903

-91

FY 07 FY 08 FY 09 FY 10 9M 11

Net Interest Income Net Fee and Commision Income Net Trading Income

* Net trading income includes gains from derivatives in the amount of USD 341 mln for 9M 2011 (in 9M 2011 P&L statement included in Other Income).

** Results calculation: the expenses /gains from recognition of loans granted at below market rates are included in provisions







10

Results for 3Q 2011

Cost/income and NIM, % Operating expenses, RUB, mln

Net income dynamics, RUB, mln

9

Comments

● Steady growth of net interest income and fee&commission

income;

● Q-o-Q operating costs are flat;

● 3Q 2011 Cost/Income Ratio is up at the back of negative result

from trading operations;

● 3Q 2011 ROAE is down due to the negative result from trading

operations and increased provisions

1 173

1 815 2 090

2 405

1 143

17,9%

26,0%28,6%

30,7%

13,3%

0

1000

2000

3000

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

0,0%

10,0%

20,0%

30,0%

40,0%

Net Income ROAE

34,2%

42,0%

30,2%26,2%

35,8%

5,1%4,7%

5,0% 5,2% 5,0%

0,0

10,0

20,0

30,0

40,0

50,0

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

3,00%

Cost/Income NIM

638 554 633768 770

420 588 318

611 598143162

168

186 229

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

Staff costs Other administrative and operating expenses

Expenses related to premises and equipment







11

2 009

2 774

640

4 115

5 638 20,6%

16,4%

2,9%

15,3%

23.3%

0,0%

10,0%

20,0%

30,0%

0

1000

2000

3000

4000

5000

6000

FY 07 FY 08 FY 09 FY 10 9M 11

Net Income ROAE

1600 2171

1 141

1 527 404

583

9M 10 9M 11

Staff costs Other administrative and operating expenses

Expenses related to premises and equipment

Results for 9M 2011

Cost/income and NIM Operating expenses, RUB, mln

Comments Net income dynamics, RUB, mln

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● Strong core income generation

● All 9M 2011 key ratios are in line with the Bank’s target:

- ROAE > 20%

- NIM ar. 5%

- Cost/Income Ratio within the range of 30-35%

4 281

3 146

40,2%

34,7%

24,6%

30,0%32,6%

5,5%

6,5%

5,0%4,9%5,2%

FY 07 FY 08 FY 09 FY 10 9M 2011

3,0%

8,0%

Cost/Income NIM







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Interest Rates and Assets/Liabilities Ratios

Average interest rates on the liabilities side* Average interest rates on the assets side**

11

Comments Average IEA and IBL (RUB bn)

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

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

Interest rates are stable

Loans to deposits ratio is close to the target

5,7%6,0%6,0%

6,6%6,7%

8,1%7,9%

9,0%

9,8%

11,3%

10,3%

8,4%

9,1%8,7%

7,2%

9,0%

9,7%

7,9%

6,0%6,1%6,5%

9,8%9,9%

9,8%9,6%

8,1%

9,3%9,3%

4,6%4,7%4,7%5,0%5,1%

6,0%

6,7%

7,2%7,4%

7,9%8,1%

6,9%6,9%

6,1%

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

Average interest on term corporate deposits Average interest on IBL

10,1%

14,2% 14,1%

15,0%

15,9%

14,8%14,8% 14,5%

13,1%

12,0%

10,8%

10,3% 10,3% 10,3%

9,3%

12,7%13,0%

13,7%14,4%

13,2%12,7% 12,4%

11,7%11,0%

9,9%9,3% 9,4%

9,6%

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

Average interest rate on loans Average interest rate on IEA

178,7

231,2

253,0265,2

271,2282,5

216,4

262,8

161,7

201,8

141,9

173,7 189,0

216,3 224,5 223,4

197,4

135,3

155,8179,7

197,9196,5

203,7207,6 209,5

231,3

246,7254,4

93,7%

94,9%

102,8%100,5%

99,0% 99,2% 99,7%

87,4%

92,3% 92,3%

98,4%

90,4%

96.3%

93,5%

0,0

50,0

100,0

150,0

200,0

250,0

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

80,0%

Average IEA Average IBL Loans/Deposits Ratio







13

Main Factors affected NIM in 3Q 2011

2Q 2011 NIM – 5.21%

12 3Q 2011 NIM – 4.98%

Average interest rate

Contribution to NIM change:

Loans and advances to customers -13 bp

Trading securities portfolio -11 bp

Corporate term deposits +7 bp

-17 bp

Average balance

Contribution to NIM change:

Correspondent accounts -7 bp

Loans and advances to customers +11 bp

Due to banks +5 bp

Retail term deposits -8 bp

+1 bp

Other factors - 7 bp







14

Financial Summary (RUB), 3Q 2010 – 3Q 2011

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

Loans and Advances to Customers 176.25 182.82 192.58 198.35 203.37

Total Assets 247.43 272.61 282.43 292.06 305.82

Customer Deposits 179.04 202.17 200.01 212.23 221.95

Total Liabilities 220.68 244.04 251.78 259.79 269.68

Total Shareholders’ Equity 26.75 28.56 30.66 32.27 36.14

Total Capital 34.50 35.87 37.43 39.14 43.60

Net profit 1.17 1.82 2.09 2.41 1.14

Net Interest margin 5.09% 4.67% 5.00% 5.21% 4.98%

Capital Adequacy 13.73% 12.96% 12.65% 12.54% 13.45%

Cost-to-Income ratio 34.21% 35.80% 26.21% 30.15% 41.97%

Allowance for loan imp. / Gross loans 10.30% 9.61% 9.48% 9.00% 9.09

Loans / Deposits 98.44% 90.43% 96.29% 93.46% 93.70%

ROAA 1.91% 2.77% 3.05% 3.36% 1.52%

ROAE 17.78% 26.03% 28.63% 30.66% 13.25%

13







15 14

RUB bn 2007 2008 2009 2010 9M 2011

Loans and Advances to Customers 91.73 144.88 158.20 182.82 203.37

Total Assets 126.66 215.72 235.61 272.61 305.82

Customer Deposits 96.15 144.16 181.14 202.17 221.95

Total Liabilities 111.65 196.91 210.32 244.04 269.68

Total Shareholders’ Equity 15.00 18.81 25.28 28.56 36.14

Total Capital 18.51 24.23 33.22 35.87 43.60

Net profit 2.00 2.77 0.64 4.11 5.64

Net Interest margin 5.46% 6.47% 5.22% 4.94% 5.00%

Capital Adequacy 16.41% 14.15% 15.19% 12.96% 13.45%

Cost-to-Income ratio 40.21% 34.66% 24.62% 30.03% 32.60%

Allowance for loan imp. / Gross loans 2.75% 3.88% 9.14% 9.61% 9.09%

Loans / Deposits 95.40% 100.51% 87.36% 90.43% 93.70%

ROAA 2.15% 1.62% 0.28% 1.62% 2.61%

ROAE 20.60% 16.41% 2.90% 15.28% 23.30%

Financial Summary (RUB), 2007 – 9M 2011







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Loan portfolio and quality

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

Comments

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

15

Loan portfolio growth in 9M 2011:

Before provisions: +10.6% compared with January 1, 2011

After provisions: +11.2% compared with January 1, 2011

As at October 1, 2011:

- Corporate overdue loans – 4.36% (4.80% as at January 1, 2011)

- Retail overdue loans – 7.23% (8.77% as at January 1, 2011)

RUB 776 mln of the loan portfolio written off in 9M 2011

* Provision charge calculation: the losses / gains on loans granted at below market rates are included in provision charge

** Ratios for April 1, July 1, and October 1, 2009 are ratios for restructured loans; overdue loans include and impaired not past due loans the whole principle of loan at least one day overdue or impaired

Heavy machinery and ship-building

13,6%

Construction 13,3%

Trade 12,6%

Financial services 10,1%

Real estate 9,7%

Oil and gas 7,4%

Individuals 7,0%

Production and food industry

5,1%

Government financed 4,9%

Transport 4,5%

Health and entertainment

3,1%

Other 8,7%

218,0 224,0

155,2 159,4174,1 178,1 177,2

196,5202,3 212,8

9,1%

7,3%

8,5%9,1%

10,4%11,1%

10,3%9,6% 9,5% 9,0%

0

30

60

90

120

150

180

210

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

RU

B b

n

0

2

4

6

8

10

12

14

(%)

Loan portfolio Allow ance for impairment / Gross loans

3 086

2 384 2 305

2 737 2 780

717

1 185

99848

673

293

4,6%

4,5%

7,5%

6,9%

7,4%

8,6%

7,1%

5,8%5,1% 5,2%

4,6%

6,8%6,7%

6,6%

7,9%

7,1%

6,3%6,9%

5,9% 5,9%6,3% 6,2%

0

1000

2000

3000

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

0

5

10

15

Provision charge Overdue loans / Gross loans Impaired not past due* / Gross loans







17

Assets and liabilities structure

Assets structure, October 1, 2011 Liabilities structure, October 1, 2011

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Customer

accounts

(corporates);

46,2%

Customer

accounts

(individuals);

25,6%

Shareholders'

equity; 11,8%

Capital markets;

9,8%

Due to other

banks; 5,1%Other; 0,8%

Loans and adv ances to

customers

66,5%Securities portf olio

16,3%

Fixed and other assets

7,5%

Cash & cash equiv alents

6,4%

Amounts receiv able under

rev erse repurchase

agreements

2,2%

Due f rom other banks

1,0%







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Trading securities portfolio

Securities portfolio*, October 1, 2011

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● Conservative approach to risk:

- 90%+ of the debt securities belong to the CBR Lombard list;

● Average duration is 1.5 years;

● No exposure to problem European assets

* Securities portfolio includes trading securities and trading securities pledged under sale and repurchase agreements

Comments

Corporate bonds

63,8%

Municipal bonds

13,8%

Corporate Eurobonds

10,9%

Federal local bonds

10,3%

Corporate shares

1,2%







19

97,9

162,0 177,0

232,3

26,9

37,7

206,99,7

5,2

32,1

43,0

54,2

5,1

4,0

9,5

YE 2007 YE 2008 YE 2009 YE 2010 9M 2011

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

16,4%

14,1%15,2%

13,0% 13,5%12,3%

9,7%10,7%

9,6%10,5%

YE 2007 YE 2008 YE 2009 YE 2010 9M 2011

Total Capital ratio Tier 1 Capital ratio

Capital and funding

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

Comments

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Risk-weighted assets (RWA), RUB, bn

112,7

171,2

218,6

276,8

Additional ordinary shares issue successfully completed in

November 2011

Further revaluation of c. 3% stake in the MICEX is a factor 324,2

30

386

147

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2011 2012 2013 2014







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Table of contents

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II. Financial highlights








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New share issue successfully completed:

- the EBRD is a new shareholder with 6.17% of the voting shares;

- USD 75 million subordinated debt to be repaid by the end of January 2012

Relocation to the new premises completed

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Recent developments and prospects







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Bank Saint Petersburg 9M2011 IFRS Results

Economy & Finance

Transcript of Bank Saint Petersburg 9M2011 IFRS Results