31JAN201117340772(organised as an open joint-stock company under the laws of the Russian Federation)

Offering of 1,046,054,133,732 Shares in the form ofShares and Global Depositary Receipts

1,046,054,133,732 ordinary shares, each with a nominal value of 0.01 rubles (the ‘‘Shares’’), of JSC VTB Bank (‘‘VTB’’), an open joint-stock company organisedunder the laws of the Russian Federation, are being offered within the framework set forth by the Decree of the Government of the Russian FederationNo. 1928-r dated November 2, 2010 (the ‘‘First Decree’’), as supplemented by a further Decree of the Government of the Russian Federation, which is expectedto be issued on or before the Closing Date (as defined below) (the ‘‘Second Decree’’ and, together with the First Decree, the ‘‘Decrees’’). Pursuant to theDecrees, the Shares are expected to be sold by the Russian Federation to Deutsche Bank AG, London Branch and VTB Capital plc, as purchasers (together, the‘‘Purchasers’’), under sale and purchase agreements to be entered into on or before the Closing Date between the Russian Federation (represented byOOO Merrill Lynch Securities (‘‘MLS’’) acting as agent (poverenny) in the name and on behalf of the Russian Federation pursuant to the Decrees and an agencyagreement between the Russian Federation and MLS dated November 10, 2010, as amended) and the Purchasers (the ‘‘Share Purchase Agreements’’) for thepurpose of onward sale in an offering (the ‘‘Offering’’) to institutional investors in the form of Shares (the ‘‘Offer Shares’’) and global depositary receiptsrepresenting Shares (the ‘‘GDRs’’ and, together with the Offer Shares, the ‘‘Securities’’). Each GDR represents an interest in 2,000 Shares.

The Offering comprises an institutional offering of (i) Offer Shares and GDRs outside the United States and Russia to certain persons in offshore transactions inreliance on Regulation S (‘‘Regulation S’’) under the US Securities Act of 1933, as amended (the ‘‘Securities Act’’), and in the United States to qualifiedinstitutional buyers (‘‘QIBs’’), as defined in, and in reliance on, Rule 144A (‘‘Rule 144A’’) under the Securities Act and (ii) Offer Shares in the RussianFederation. Generali Group has received an allocation of U.S.$300 million of Offer Shares and/or GDRs at the Offer Price in the Offering and affiliated fundsof TPG Capital L.P. have received an allocation of U.S.$100 million of Offer Shares and/or GDRs at the Offer Price in the Offering. See ‘‘Plan of Distribution’’.

VTB has applied to the UK Financial Services Authority (the ‘‘FSA’’), in its capacity as competent authority under the Financial Services and Markets Act 2000(the ‘‘FSMA’’), to admit any and all additional GDRs that may be issued from time to time by the Depositary representing up to the number of GDRs that wouldrepresent the total issued share capital of VTB, subject to the limitations and requirements of Russian law (the ‘‘Additional GDRs’’ (which term shall include theGDRs)), to the official list of the FSA (the ‘‘Official List’’), of which up to 523,027,066 GDRs will be issued on or about February 17, 2011, or such later date asmay be agreed between Deutsche Bank AG, London Branch, Merrill Lynch International and VTB Capital plc (together, the ‘‘Joint Bookrunners’’) and theRussian Federation (the ‘‘Closing Date’’). VTB has also applied to the London Stock Exchange plc (the ‘‘LSE’’) to admit the Additional GDRs to trading on theLSE’s regulated market for listed securities (the ‘‘Regulated Market’’) through its International Order Book (regulated market segment) (the ‘‘IOB’’), a marketthat is regulated for the purpose of Directive 2004/39/EC, under the symbol ‘‘VTBR’’. Admission to listing on the Official List, together with admission to tradingon the Regulated Market (the ‘‘Admission’’), constitutes listing on a stock exchange. VTB expects that unconditional trading in the GDRs on the LSE throughthe IOB will commence on or about February 18, 2011. All dealings in the GDRs prior to the commencement of the unconditional trading will be of no effect ifthe Admission does not take place and will be at the sole risk of the parties involved.

The Shares have been admitted to trading on the ‘‘B’’ quotation list of the Russian Trading System (the ‘‘RTS’’) and the Moscow Interbank Currency Exchange(‘‘MICEX’’). VTB’s existing GDRs were admitted to the Official List and to trading on the Regulated Market on May 17, 2007 and trade under the symbol‘‘VTBR’’. Prior to the Closing Date, there has not been any public market for the Additional GDRs, although the Additional GDRs will be immediately fungiblewith VTB’s existing GDRs.

This document (the ‘‘Prospectus’’), upon approval by the FSA, constitutes a prospectus relating to VTB prepared in accordance with Directive 2003/71/EC (the‘‘Prospectus Directive’’) as implemented in the United Kingdom through the prospectus rules (the ‘‘Prospectus Rules’’) of the FSA made under Section 73A of theFSMA. This document will be made available to the public in accordance with the Prospectus Rules.

AN INVESTMENT IN THE SECURITIES INVOLVES A HIGH DEGREE OF RISK. See ‘‘Risk Factors’’ beginning on page 8 for a discussion of certain risks thatshould be considered in connection with an investment in the Shares and the GDRs. The GDRs are of a specialist nature and should normally only be purchasedand traded by investors who are particularly knowledgeable in investment matters.

Offer Price of 9.1468 kopeks or $0.003125 per Offer Share and $6.25 per GDR

Neither the Offer Shares nor the GDRs have been or will be registered under the Securities Act, and neither the Offer Shares nor the Additional GDRs may beoffered or sold in the United States absent registration or an exemption from registration under the Securities Act. The Securities have not been, and will not be,registered under the Securities Act and may not be offered or sold within the United States except to QIBs in reliance the exemption from the registrationrequirements of the Securities Act provided by Rule 144A or outside the United States in offshore transactions in reliance on Regulation S. Prospectivepurchasers of the Shares or the GDRs in the United States are hereby notified that sellers of the Shares or GDRs may be relying on the exemption from theprovisions of Section 5 of the Securities Act provided by Rule 144A. The Shares and the GDRs are subject to transfer restrictions in certain jurisdictions.Prospective purchasers should read the restrictions described under ‘‘Transfer Restrictions’’.

The Joint Bookrunners reserve the right to reject any offer to purchase the Securities, in whole or in part, and to sell to any prospective investor less than theamount of the Securities sought by such investor. Fewer Shares (including in the form of GDRs) may be sold than the maximum number of Shares authorised forsale under the Decrees. The closing of the Offering is subject in all respects to the Second Decree being issued and the Share Purchase Agreements being dulyexecuted and performed by the parties thereto on or before the Closing Date. If the Second Decree is not issued or the Share Purchase Agreements are not dulyexecuted and performed by the parties thereto on or before the Closing Date, the Offering will be cancelled and any conditional dealings in the Securities will be ofno effect and will fail to settle. See ‘‘Risk Factors – Risks Relating to the Offering – The Offering is conditional in all respects on the issuance by the Government ofthe Second Decree and on due execution and performance of the Share Purchase Agreements’’.

The GDRs will be denominated in US dollars and issued in master form. The GDRs sold outside the United States (the ‘‘Regulation S GDRs’’) will beevidenced by a Master Regulation S Global Depositary Receipt (the ‘‘Master Regulation S GDR’’) issued by the Depositary and registered in the name of TheBank of New York Depository (Nominees) Limited, as nominee for The Bank of New York Mellon, London Branch, the common depositary for EuroclearBank SA/NV (‘‘Euroclear’’) and Clearstream Banking, société anonyme (‘‘Clearstream, Luxembourg’’). The GDRs sold to QIBs in reliance on Rule 144A (the‘‘Rule 144A GDRs’’) will be evidenced by a Master Rule 144A Global Depositary Receipt (the ‘‘Master Rule 144A GDR’’ and, together with the MasterRegulation S GDR, the ‘‘Master GDRs’’) issued by the Depositary and registered in the name of Cede & Co., as nominee for the Depositary Trust Company(‘‘DTC’’) in New York. The Shares represented by the GDRs will be held by VTB, as custodian (the ‘‘Custodian’’), for and on behalf of the Depositary. Except asdescribed herein, beneficial interests in the Master GDRs will be shown on, and transfers thereof will be effected only through, records maintained by DTC,Euroclear and Clearstream, Luxembourg and their direct or indirect participants. Transfers within Euroclear and Clearstream, Luxembourg will be inaccordance with the usual rules and operating procedures of the relevant system. Delivery of the Additional GDRs will be made through DTC with respect tothe Rule 144A GDRs and through Euroclear and Clearstream, Luxembourg with respect to the Regulation S GDRs, in each case on or about the Closing Date.

Joint Global Coordinators

BofA Merrill Lynch VTB CapitalJoint Bookrunners

BofA Merrill Lynch Deutsche Bank VTB Capital

The date of this Prospectus is February 14, 2011.

IMPORTANT INFORMATION ABOUT THIS PROSPECTUS

Each prospective investor, by accepting delivery of this Prospectus, agrees that this Prospectus is beingfurnished by VTB solely for the purpose of enabling a prospective investor to consider the purchase of theSecurities. Any reproduction or distribution of this Prospectus, in whole or in part, any disclosure of itscontents or any use of any information contained herein for any purpose other than considering aninvestment in the Securities is prohibited, except to the extent that such information is otherwise publiclyavailable.

This Prospectus is issued in compliance with the Prospectus Rules, which are compliant with the provisionsof the Prospectus Directive. VTB accepts responsibility for the information contained in this Prospectus.VTB declares that, having taken all reasonable care to ensure that such is the case, the informationcontained in this Prospectus is, to the best of its knowledge, in accordance with the facts and contains noomission likely to affect its import.

VTB has included its own estimates, assessments, adjustments and judgments in preparing some marketinformation, which has not been verified by an independent third party. Market information includedherein is, therefore, unless otherwise attributed exclusively to a third party source, to a certain degreesubjective. While VTB believes that its own estimates, assessments, adjustments and judgments arereasonable and that the market information prepared by VTB appropriately reflects the industry and themarkets in which it operates, there is no assurance that VTB’s own estimates, assessments, adjustmentsand judgments are the most appropriate for making determinations relating to market information or thatmarket information prepared by other sources will not differ materially from the market informationincluded herein.

Each of Moody’s, S&P and Fitch is established in the European Union and has applied for registrationunder Regulation (EU) No 1060/2009 (the ‘‘CRA Regulation’’), although notification of the correspondingregistration decision has not yet been provided by the relevant competent authority.

In general, European regulated investors are restricted from using a rating for regulatory purposes if suchrating is not issued by a credit rating agency established in the European Union and registered under theCRA Regulation unless the rating is provided by a credit rating agency operating in the European Unionbefore June 7, 2010 that has submitted an application for registration in accordance with the CRARegulation and such registration is not refused.

The contents of the websites of any of VTB and its subsidiaries (collectively, the ‘‘Group’’) do not form anypart of this Prospectus.

None of the Russian Federation, the Purchasers or the Joint Bookrunners makes any representation orwarranty, express or implied, as to the accuracy, completeness or verification of information set forth inthis Prospectus. None of the Russian Federation, the Purchasers or the Joint Bookrunners assumes anyresponsibility for the accuracy, completeness or verification of the information set forth in this Prospectus.Each person contemplating making an investment in the Securities must make its own investigation andanalysis of the Group and its own determination of the suitability of any such investment, with particularreference to its own investment objectives and experience, and any other factors that may be relevant tosuch person in connection with such investment.

The information contained in this Prospectus is only accurate as of the date on the front cover of thisProspectus. The Group’s business, financial and legal condition may have changed since that date, andneither the delivery of this Prospectus nor any sale made hereunder shall under any circumstances implyotherwise. In making an investment decision, prospective investors must rely on their own examination ofthe Group and the terms of this Prospectus, including the risks involved.

No person is authorised to give any information or to make any representation in connection with theOffering other than as contained in this Prospectus, and, if given or made, such information orrepresentation must not be relied upon as having been authorised by VTB, the Russian Federation or anyof the Purchasers or the Joint Bookrunners.

No prospective investor should consider any information in this Prospectus to be investment, legal, tax orother advice. Each prospective investor should consult its own counsel, accountant and other advisers forsuch advice. None of VTB, the Russian Federation or any of the Purchasers or the Joint Bookrunners, orany of their respective representatives, makes any representation to any offeree or purchaser of theSecurities regarding the legality of an investment in such Securities by such offeree or purchaser.

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The Joint Bookrunners are not acting on behalf of any person in connection with the Offering and are not,and will not be, responsible to any person for providing advice in respect of the Offering or for providingthe protections afforded to their respective clients. The Joint Bookrunners and certain related entities mayacquire a portion of the Securities for their own accounts.

In connection with the Offering, each of the Joint Bookrunners and any affiliate acting as an investor forits own account may take up the Securities and in that capacity may retain, purchase or sell for its ownaccount the Securities and any of VTB’s other securities or related investments and may offer or sell theSecurities or other investments otherwise than in connection with the Offering. Accordingly, references inthis Prospectus to the Securities being offered or placed should be read as including any offering orplacement of securities to any of the Joint Bookrunners and any affiliate acting in such capacity. None ofthe Joint Bookrunners intends to disclose the extent of any such investment or transaction otherwise thanin accordance with any legal or regulatory obligation to do so.

Apart from the responsibilities and liabilities, if any, which may be imposed on any of the Purchasers or theJoint Bookrunners by the FSMA or the regulatory regime established thereunder, none of the Purchasersor the Joint Bookrunners accepts any responsibility whatsoever for the contents of this Prospectus or forany other statement made or purported to be made by it or any of them or on its or their behalf inconnection with VTB, the Group or the Securities. Each of the Purchasers and the Joint Bookrunnersaccordingly disclaims, to the fullest extent permitted by applicable law, all and any liability whether arisingin tort or contract or otherwise (save as referred to above) which it might otherwise have in respect of thisProspectus or any such statement.

The distribution of this Prospectus and the offer and sale of the Securities may be restricted by law incertain jurisdictions. None of VTB or any of the Purchasers or the Joint Bookrunners is making an offer tosell any Securities to or is soliciting an offer to buy Securities from any person in any jurisdiction exceptwhere such an offer or solicitation is permitted. This Prospectus may not be used for, or in connection with,any offer to, or solicitation by, anyone in any jurisdiction or under any circumstances in which such offer orsolicitation is unauthorised or unlawful. VTB and each of the Purchasers and the Joint Bookrunnersrequire persons into whose possession this Prospectus comes to inform themselves about and observe suchrestrictions. None of VTB or any of the Purchasers or the Joint Bookrunners has taken any action, otherthan as part of the Offering, that would permit an offering of or relating to the Securities in any jurisdictionthat requires action for that purpose. Further information with regard to restrictions on offers and sales ofthe Securities is set forth under ‘‘Plan of Distribution’’ and ‘‘Transfer Restrictions’’.

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NOTICE TO CERTAIN INVESTORS

Notice to United States Investors

Neither the GDRs nor the Offer Shares have been or will be registered under the Securities Act, and theGDRs and the Offer Shares may be sold in the United States only to QIBs in reliance on Rule 144A.Prospective purchasers are hereby notified that a seller of the GDRs or the Offer Shares may be relying onthe exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. The GDRs andthe Offer Shares are not transferable except in accordance with the restrictions described under ‘‘TransferRestrictions’’.

In addition, until 40 days after the commencement of the Offering, an offer or sale of Securities within theUnited States by a dealer (whether or not participating in the Offering) may violate the registrationrequirements of the Securities Act if such offer or sale is made otherwise than in accordance with Rule 144A.

NEITHER THE GDRS NOR THE OFFER SHARES HAVE BEEN REGISTERED WITH, OR APPROVEDOR DISAPPROVED BY, THE US SECURITIES AND EXCHANGE COMMISSION (THE ‘‘SEC’’) ORANY STATE SECURITIES COMMISSION IN THE UNITED STATES OR ANY OTHERUS REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOTPASSED ON OR ENDORSED THE MERITS OF THE OFFERING OR THE ADEQUACY ORACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINALOFFENSE IN THE UNITED STATES.

Notice to New Hampshire Residents

NEITHER THE FACT THAT A REGISTRATION STATEMENT OR AN APPLICATION FOR ALICENSE HAS BEEN FILED UNDER CHAPTER 421-B OF THE NEW HAMPSHIRE REVISEDSTATUTES (‘‘RSA 421-B’’) WITH THE STATE OF NEW HAMPSHIRE, NOR THE FACT THAT ASECURITY IS EFFECTIVELY REGISTERED OR A PERSON IS LICENSED IN THE STATE OFNEW HAMPSHIRE, CONSTITUTES A FINDING BY THE SECRETARY OF STATE OF NEWHAMPSHIRE THAT ANY DOCUMENT FILED UNDER RSA 421-B IS TRUE, COMPLETE ANDNOT MISLEADING. NEITHER ANY SUCH FACT, NOR THE FACT THAT AN EXEMPTION OREXCEPTION IS AVAILABLE FOR A SECURITY OR A TRANSACTION, MEANS THAT THESECRETARY OF STATE OF NEW HAMPSHIRE HAS PASSED IN ANY WAY UPON THE MERITSOR QUALIFICATIONS OF, OR RECOMMENDED OR GIVEN APPROVAL TO, ANY PERSON,SECURITY, OR TRANSACTION. IT IS UNLAWFUL TO MAKE, OR CAUSE TO BE MADE, TOANY PROSPECTIVE PURCHASER, CUSTOMER, OR CLIENT ANY REPRESENTATIONINCONSISTENT WITH THE PROVISIONS OF THIS PARAGRAPH.

Notice to European Economic Area Investors

This Prospectus has been prepared on the basis that all offers of Securities other than the Offeringcontemplated in this Prospectus in the United Kingdom once this Prospectus has been approved by thecompetent authority in the United Kingdom and published in accordance with the Prospectus Directive asimplemented in the United Kingdom will be made pursuant to an exemption under the ProspectusDirective, as implemented in Member States of the European Economic Area (the ‘‘EEA’’), from therequirement to produce a prospectus for offers of the Securities. Accordingly, any person making orintending to make any offer within the EEA of the Securities should only do so in circumstances in whichno obligation arises for VTB or any of the Purchasers or the Joint Bookrunners to produce a prospectusfor such offer. None of VTB, the Russian Federation or any of the Purchasers or the Joint Bookrunnershas authorised, nor do they authorise, the making of any offer of the Securities through any financialintermediary, other than offers made by the Joint Bookrunners, which constitute the final placement of theSecurities contemplated in this Prospectus.

Each person in a Member State of the EEA which has implemented the Prospectus Directive (each, a‘‘Relevant Member State’’) who receives any communication in respect of the Securities or who acquires anySecurities will be deemed to have represented, acknowledged and agreed that it is a ‘‘qualified investor’’within the meaning of Article 2(1)(e) of the Prospectus Directive; and in the case of any Securitiesacquired by it as a financial intermediary as that term is used in Article 3(2) of the Prospectus Directive,such financial intermediary will also be deemed to have represented, acknowledged and agreed that theSecurities acquired by it have not been acquired on behalf of, nor have they been acquired with a view totheir offer or resale to, persons in any Relevant Member State other than qualified investors, as that term

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is defined in the Prospectus Directive, or in circumstances in which the prior consent of the JointBookrunners has been given to the offer or resale; or where the Securities have been acquired by it onbehalf of persons in any Relevant Member State other than qualified investors, the offer of those Securitiesto it is not treated under the Prospective Directive as having been made to such persons. VTB, the RussianFederation, the Purchasers, the Joint Bookrunners and their affiliates, and others will rely upon the truthand accuracy of the foregoing representations, acknowledgements and agreements. Notwithstanding theabove, a person who is not a qualified investor and who has notified the Joint Bookrunners of such fact inwriting may, with the consent of the Joint Bookrunners, be permitted to subscribe for or purchase theSecurities.

For the purposes of this representation, the expression an ‘‘offer of Securities to the public’’ in relation toany Securities in any Relevant Member State means the communication in any form and by any means ofsufficient information on the terms of the offer and any Securities to be offered so as to enable an investorto decide to purchase or subscribe for the Securities, as the same may be varied in that Relevant MemberState by any measure implementing the Prospectus Directive in that Relevant Member State, and theexpression ‘‘Prospectus Directive’’ means Directive 2003/71/EC and includes any relevant implementingmeasure in each Relevant Member State.

Notice to United Kingdom Investors

This Prospectus is only being distributed to and is only directed at (i) persons who are outside the UnitedKingdom, (ii) investment professionals falling within Article 19(5) of the Financial Services and MarketsAct 2000 (Financial Promotion) Order 2005 (the ‘‘Order’’) or (iii) high net worth entities falling withinArticle 49(2)(a) to (d) of the Order and other persons to whom it may lawfully be communicated (suchpersons collectively being referred to as ‘‘relevant persons’’). The Securities are only available to, and anyinvitation, offer or agreement to subscribe, purchase or otherwise acquire such Securities will be engagedin only with, relevant persons. Any person who is not a relevant person should not act or rely on thisProspectus or any of its contents.

Notice to Russian Investors

The GDRs may not be offered, transferred or sold in Russia, or to or for the benefit of any persons(including legal entities) resident, incorporated, established or having their usual residence in Russia or toany person located within the territory of Russia unless and to the extent otherwise permitted underRussian law.

This Prospectus should not be considered as a public offer or advertisement of GDRs in the RussianFederation, and is not an offer, or an invitation to make offers, to purchase GDRs in the RussianFederation. Neither the GDRs nor any prospectus or other document relating to them has been registeredwith the Russian Federal Service for Financial Markets (the ‘‘FSFM’’).

Notice to Investors in the Dubai International Financial Centre

This Prospectus relates to an exempt offer (an ‘‘Exempt Offer’’) in accordance with the Offered SecuritiesRules of the Dubai Financial Services Authority (the ‘‘DFSA’’). This Prospectus is intended for distributiononly to Persons of a type specified in those rules. It must not be delivered to, or relied on by, any otherperson. The DFSA has no responsibility for reviewing or verifying any documents in connection withExempt Offers. The DFSA has not approved this Prospectus nor taken steps to verify the information setout in it, and has no responsibility for it. The Securities to which this Prospectus relates may be illiquidand/or subject to restrictions on their resale. Prospective purchasers of the Securities offered shouldconduct their own due diligence on the Securities. If you do not understand the contents of this Prospectus,you should consult an authorised financial adviser. For the avoidance of doubt, neither the Shares nor theGDRs are interests in a ‘‘fund’’ or a ‘‘collective investment scheme’’ within the meaning of either theCollective Investment Law (DIFC Law No. 1 of 2006) or the Collective Investment Rules Module of theDubai Financial Services Authority Rulebook.

Notice to Investors in the United Arab Emirates (Excluding the Dubai International Financial Centre)

The Securities have not been, and are not being, publicly offered, sold, promoted or advertised in theUnited Arab Emirates (‘‘U.A.E.’’) other than in compliance with the laws of the U.A.E. Prospectiveinvestors in the Dubai International Financial Centre should have regard to the specific notice toprospective investors in the Dubai International Financial Centre set out above. The information

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contained in this Prospectus does not constitute a public offer of securities in the U.A.E. in accordancewith the Commercial Companies Law (Federal Law No. 8 of 1984 of the U.A.E., as amended) or otherwiseand is not intended to be a public offer. This Prospectus has not been approved by or filed with the CentralBank of the United Arab Emirates, the Emirates Securities and Commodities Authority or the DubaiFinancial Services Authority. If you do not understand the contents of this Prospectus, you should consultan authorised financial adviser. This Prospectus is provided for the benefit of the recipient only, and shouldnot be delivered to, or relied on by, any other person.

Notice to Investors in Certain Other Countries

For information to investors in certain other countries, see ‘‘Plan of Distribution – Selling Restrictions’’.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this Prospectus are not historical facts and constitute ‘‘forward-looking statements’’.Forward-looking statements are identified by words such as ‘‘believes’’, ‘‘anticipates’’, ‘‘expects’’,‘‘estimates’’, ‘‘intends’’, ‘‘plans’’, ‘‘will’’, ‘‘may’’ and similar expressions, but these expressions are not theexclusive means of identifying such statements. Forward-looking statements appear, without limitation,under the headings ‘‘Summary’’, ‘‘Risk Factors’’, ‘‘Management’s Discussion and Analysis of FinancialCondition and Results of Operations’’ and ‘‘Business’’. VTB or the Group may from time to time makewritten or oral forward-looking statements in reports to shareholders and in other communications.Examples of such forward-looking statements include, but are not limited to:

• statements of VTB’s or the Group’s plans, objectives or goals, including those related to its strategy,products or services;

• statements of future economic performance;

• statements of general economic developments in Russia or the other countries in which the Groupoperates; and

• statements of assumptions underlying the types of statements referred to above.

Forward-looking statements that may be made by VTB or the Group from time to time (but that are notincluded in this Prospectus) may also include projections or expectations of revenues, income (or loss),earnings (or loss) per share, dividends, capital structure or other financial items or ratios.

By their very nature, forward-looking statements involve inherent risks and uncertainties, both general andspecific, and risks exist that the predictions, forecasts, projections and other forward-looking statementswill not be achieved. Prospective investors should be aware that a number of important factors could causeactual results to differ materially from the plans, objectives, expectations, estimates and intentionsexpressed in such forward-looking statements. These factors include:

• the global financial crisis and its impact on the global and Russian economies and financial markets;

• the challenging conditions in the Russian economy, including the Russian banking sector;

• declines and increased volatility in global and Russian securities markets;

• fluctuations in prices of securities issued by Russian entities and for oil, gas, precious metals and othercommodities;

• the impact, or lack thereof, of the measures that the Russian Federation has enacted or may enact inthe future to support the Russian banking sector;

• inflation, interest rate and exchange rate fluctuations in Russia;

• the effects of, and changes in, the policies of the Government and regulations promulgated by theCBR;

• the effects of competition in the geographic and business areas in which the Group conducts itsoperations;

• the effects of changes in laws, regulations, taxation or accounting standards or practices in thejurisdictions where the Group conducts its operations;

• the ability of VTB or the Group to increase market share for its products and services and controlexpenses;

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• acquisitions or divestitures;

• the effect of the Group’s restructuring and re-branding of its Russian and European bankingoperations;

• the Group’s expansion in various geographic and business areas;

• technological changes; and

• the success of VTB or the Group at managing the risks associated with the aforementioned factors.

This list of important factors is not exhaustive. When relying on forward-looking statements, prospectiveinvestors should carefully consider the foregoing factors and other uncertainties and events, especially inlight of the political, economic, social and legal environment in which VTB and the Group operate. Suchforward-looking statements speak only as of the date on which they are made. Accordingly, VTB and theGroup do not undertake any obligation to update or revise any of them, whether as a result of newinformation, future events or otherwise. VTB and the Group do not make any representation, warranty orprediction that the results anticipated by such forward-looking statements will be achieved, and suchforward-looking statements represent, in each case, only one of many possible scenarios and should not beviewed as the most likely or standard scenario.

AVAILABLE INFORMATION

For so long as any of the Securities are ‘‘restricted securities’’ within the meaning of Rule 144(a)(3) underthe Securities Act, VTB will, during any period in which it is neither subject to Section 13 or Section 15(d)of the US Securities Exchange Act of 1934, as amended (the ‘‘Exchange Act’’), nor exempt from reportingpursuant to Rule 12g3-2(b) thereunder, provide to any holder or beneficial owner of such restrictedsecurities or to any prospective purchaser of such restricted securities designated by such holder orbeneficial owner upon the request of such holder, beneficial owner or prospective purchaser, theinformation required to be delivered to such persons pursuant to Rule 144A(d)(4) under theSecurities Act.

LIMITATIONS ON SERVICE OF PROCESS ANDENFORCEABILITY OF CIVIL LIABILITIES

VTB is an open joint-stock company incorporated under the laws of the Russian Federation. None of themembers of VTB’s supervisory council (the ‘‘Supervisory Council’’) or VTB’s management board (the‘‘Management Board’’) are residents of the United Kingdom or the United States. Moreover, the majority ofthe assets of VTB and substantially all of the assets of its directors and officers are located in the RussianFederation. As a result, it may not be possible for investors to:

• effect service of process within the United Kingdom or the United States upon any such person; or

• enforce, in the English or US courts, judgments obtained outside English or US courts against anysuch person in any action.

In addition, it may be difficult for investors to enforce, in original actions brought in courts in jurisdictionslocated outside the United Kingdom and the United States, liabilities predicated upon English laws orUS federal securities laws.

Courts in the Russian Federation will generally recognise judgments rendered by a court in any jurisdictionoutside the Russian Federation if:

• an international treaty providing for the recognition and enforcement of judgments in civil cases existsbetween the Russian Federation and the country where the judgment is rendered; or

• a federal law is adopted in Russia providing for the recognition and enforcement of foreign courtjudgments.

No such treaty for the reciprocal recognition and enforcement of foreign court judgments in civil andcommercial matters exists between the Russian Federation and the United States or the United Kingdomand no relevant federal law on enforcement of foreign court judgments has been adopted in the RussianFederation.

The Deposit Agreement provides that actions brought by any party thereto be referred to arbitration inLondon, England, in accordance with the rules of the London Court of International Arbitration. Each of

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the United Kingdom, the United States and Russia is a party to the United Nations (New York)Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the ‘‘New YorkConvention’’). Consequently, Russian courts should generally recognise and enforce in Russia an arbitralaward from an arbitral tribunal in the United Kingdom, on the basis of the rules of the New YorkConvention, subject to qualifications provided for in the New York Convention and compliance withRussian procedural regulations and law. However, it may be difficult to enforce arbitral awards in Russiadue to:

• the inexperience of Russian courts in enforcing international commercial arbitral awards;

• official and unofficial political resistance to enforcement of awards against Russian companies infavour of foreign investors; and

• the Russian courts’ inability or unwillingness to enforce such orders.

VTB has appointed TMF Corporate Services Limited (which has succeeded to the business of CliffordChance Secretaries Limited) as its agent for service of process in the United Kingdom in any suit, action orproceeding with respect to the GDRs. However, a Russian court may not give effect to such appointment.

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TABLE OF CONTENTS

IMPORTANT INFORMATION ABOUT THIS PROSPECTUS . . . . . . . . . . . . . . . . . . . . . . . . i

NOTICE TO CERTAIN INVESTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS . . . . . . . . . . . . v

AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi

LIMITATIONS ON SERVICE OF PROCESS AND ENFORCEABILITY OF CIVILLIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vi

PRESENTATION OF FINANCIAL AND OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . ix

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

THE OFFERING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

CAPITALISATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

DIVIDENDS AND DIVIDEND POLICY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

SELECTED CONSOLIDATED FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . 43

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88

RISK MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114

MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136

PRINCIPAL SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149

RELATED PARTY TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150

THE BANKING SECTOR IN RUSSIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152

BANKING REGULATION IN RUSSIA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155

DESCRIPTION OF SHARE CAPITAL AND CERTAIN REQUIREMENTS OF RUSSIANLEGISLATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164

TERMS AND CONDITIONS OF THE GLOBAL DEPOSITARY RECEIPTS . . . . . . . . . . . . . . 183

CERTAIN PROVISIONS OF THE GDRS WHILE IN MASTER FORM . . . . . . . . . . . . . . . . . 200

TAXATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202

TRANSFER RESTRICTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213

PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217

SETTLEMENT AND DELIVERY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223

INFORMATION RELATING TO THE DEPOSITARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226

LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226

GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227

INDEX TO FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1

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PRESENTATION OF FINANCIAL AND OTHER INFORMATION

Presentation of Financial Information

The Group’s financial information set forth herein has, unless otherwise indicated, been extracted withoutmaterial adjustment from its unaudited interim condensed consolidated financial statements as of and forthe nine months ended September 30, 2010 and 2009 (the ‘‘Interim Condensed Consolidated FinancialStatements’’) and from its audited consolidated financial statements as of and for the years endedDecember 31, 2009, 2008 and 2007 (the ‘‘Annual IFRS Financial Statements’’ and, together with theInterim Condensed Consolidated Financial Statements, the ‘‘IFRS Financial Statements’’), as set forth onpages F-2 through F-255 of this Prospectus, prepared in accordance with International Financial ReportingStandards (‘‘IFRS’’) issued by the International Accounting Standards Board. The US dollar was thefunctional currency for VTB’s IFRS financial statements for the year ended December 31, 2007. In 2007,VTB performed a re-assessment of its functional currency for the purposes of IAS 21 ‘‘The Effects ofChanges in Foreign Exchange Rates’’. As a result, the Group changed its functional currency from theUS dollar to the ruble starting from January 1, 2008. Effective from January 1, 2009, the Group alsochanged its currency of presentation from the US dollar to the ruble. See Note 3 to the AnnualIFRS Financial Statements. The Group’s financial information that has been extracted from theIFRS Financial Statements (including for the years ended December 31, 2007 and 2008) is presented inthis Prospectus in rubles.

Auditors

The Annual IFRS Financial Statements have been audited in accordance with International Standards onAuditing by CJSC Ernst & Young Vneshaudit (‘‘Ernst & Young’’), who have expressed an unqualifiedopinion on each of those financial statements, as stated in their reports appearing herein. The Group’sInterim Condensed Consolidated Financial Statements have been reviewed but not audited by Ernst &Young, who have expressed an unqualified conclusion on those financial statements, as stated in theirreport appearing herein. The address of Ernst & Young is Sadovnicheskaya Naberezhnaya 77, Building 1,Moscow 115035, Russian Federation. Ernst & Young are independent auditors. Ernst & Young is amember of the Non-profit Partnership ‘‘Audit Chamber of Russia’’.

Reclassification

In 2008, the Group reclassified certain financial assets initially booked as ‘‘held for trading’’ and‘‘available-for-sale’’ to ‘‘loans and advances to customers’’, ‘‘due from other banks’’ and ‘‘investmentsecurities held to maturity’’, respectively. The reclassifications were made pursuant to IFRS 7 ‘‘Financialinstruments: Disclosures – Reclassification of Financial Assets’’ and IAS 39 ‘‘Financial Instruments:Recognition and Management’’. VTB effected the reclassifications upon the occurrence of ‘‘rarecircumstances’’ due to the crisis in international financial markets from September 2008, onwards. Thedeclines in market prices in the relevant financial assets that occurred in the third quarter of 2008 qualifiedfor characterisation as a ‘‘rare event’’ for the purposes of IFRS 7, as they significantly exceeded historicalvolatilities observed in financial markets. See Notes 3 and 6 to the IFRS Financial Statements for the yearended December 31, 2008 for further information, including carrying values and fair values of thereclassified financial assets and ‘‘Management’s Discussion and Analysis of Financial Condition andResults of Operations – Factors Affecting Results of Operations and Capital Structure – Fluctuations inthe Value of Securities and Reclassifications’’.

Certain Definitions

In this Prospectus, all references to:

‘‘CBR’’ are to the Central Bank of Russia;

‘‘CEE’’ are to the following Central & Eastern European countries: Albania, Bosnia & Herzegovina,Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Montenegro,Poland, Romania, Slovakia, Slovenia and Serbia;

‘‘CIS’’ are to the Commonwealth of Independent States and its member states (excluding Russia) as of thedate of this Prospectus, being Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan,Turkmenistan, Ukraine and Uzbekistan;

‘‘EEA’’ are to the European Economic Area;

‘‘EU’’ are to the European Union;

ix

‘‘Eurozone Member States’’ are to the participating Member States in the third stage of the European andEconomic Monetary Union pursuant to the Treaty establishing the European Community, as amendedfrom time to time;

‘‘EWUB’’ are to East-West United Bank S.A.;

‘‘Government’’ are to the federal government of the Russian Federation;

‘‘Group’’ are to VTB and its subsidiaries collectively;

‘‘IPO’’ are to the initial public offering of VTB completed in May 2007;

‘‘RAS’’ are to Russian Accounting Standards;

‘‘RCB-Cyprus’’ are to Russian Commercial Bank (Cyprus) Ltd.;

‘‘Russia’’ are to the Russian Federation;

‘‘Vneshtorgbank (Ukraine)’’ are to JSC Vneshtorgbank (Ukraine);

‘‘VTB’’ are to JSC VTB Bank (formerly OJSC Vneshtorgbank) as a standalone entity;

‘‘VTB Armenia’’ are to CJSC ‘‘VTB Bank (Armenia)’’ (formerly Armsberbank);

‘‘VTB Austria’’ are to VTB Bank (Austria) AG (formerly Donau-Bank AG, or ‘‘Donau-Bank’’);

‘‘VTB Azerbaijan’’ are to OJSC VTB Bank (Azerbaijan);

‘‘VTB Belarus’’ are to CJSC VTB Bank (Belarus) (formerly CJSC ‘‘Slavneftebank’’, or ‘‘Slavneftebank’’);

‘‘VTB Capital’’ are to VTB Capital plc (formerly VTB Bank Europe Plc, or ‘‘VTB Europe’’ (formerlyMoscow Narodny Bank Ltd, or ‘‘MNB’’));

‘‘VTB Capital (Namibia)’’ are to VTB Capital Namibia (Pty) Ltd;

‘‘VTB France’’ are to VTB Bank (France) SA (formerly Banque Commerciale pour l’Europe duNord-Eurobank, or ‘‘BCEN-Eurobank’’);

‘‘VTB Georgia’’ are to JSC ‘‘VTB Bank (Georgia)’’ (formerly JSC ‘‘United Georgian Bank’’, or ‘‘UGB’’);

‘‘VTB Germany’’ are to VTB Bank (Deutschland) AG (formerly Ost-West Handelsbank AG, or ‘‘OWH’’);

‘‘VTB Kazakhstan’’ are to JSC VTB Bank (Kazakhstan);

‘‘VTB North-West’’ are to OJSC VTB Bank North-West (formerly OJSC Industry & Construction Bank, or‘‘ICB’’);

‘‘VTB Ukraine’’ are to JSC VTB Bank in Ukraine (formerly JSCB ‘‘Mriya’’); and

‘‘VTB24’’ are to JSC Bank VTB24 (formerly JSC Vneshtorgbank Retail Financial Services).

Certain Currencies

In this Prospectus, all references to:

‘‘US dollar’’, ‘‘USD’’ or ‘‘$’’ are to the lawful currency of the United States;

‘‘RUR’’, ‘‘ruble’’ and ‘‘kopecks’’ are to the lawful currency of Russia;

‘‘EUR’’, ‘‘Euro’’ or ‘‘E’’ are to the single currency of the Eurozone Member States;

‘‘CNY’’ or ‘‘yuan’’ are to the lawful currency of the People’s Republic of China;

‘‘GEL’’ are to the lawful currency of Georgia; and

‘‘UAH’’ or ‘‘hryvnia’’ are to the lawful currency of Ukraine.

Rounding

Certain figures included in this Prospectus have been subject to rounding adjustments. Accordingly, figuresshown for the same category presented in different tables may vary slightly and figures shown as totals incertain tables may not be an arithmetic aggregation of the figures that precede them.

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Exchange Rate Information

The table below sets forth, for the periods and dates indicated, the high, low, period end and periodaverage exchange rate between the ruble and the US dollar, based on the official exchange rate quoted bythe CBR for the relevant period. Fluctuations in the exchange rate between the ruble and the US dollar inthe past are not necessarily indicative of fluctuations that may occur in the future. These rates may alsodiffer from the actual rates used in the preparation of the IFRS Financial Statements and other financialinformation presented in this Prospectus.

RUR per $1.00

Period PeriodHigh Low end average(1)

Year2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.00 27.46 28.78 28.292006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28.78 26.18 26.33 27.182007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26.58 24.26 24.55 25.572008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.39 23.13 29.38 24.982009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36.43 28.67 30.24 31.722010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31.78 28.93 30.48 30.37MonthJanuary 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.63 29.67 29.67 30.09February 2011 (through February 14, 2011) . . . . . . . . . . . . . . . . . . . 29.80 29.26 29.32 29.41

(1) The average rates are calculated as the average of the daily exchange rates on each business day (which rate is announced by theCBR for each such business day) and on each non-business day (which rate is equal to the exchange rate on the previousbusiness day).

No representation is made that the ruble or US dollar amounts referred to herein could have been orcould be converted into rubles or US dollars, as the case may be, at these rates, at any particular rate or atall. The exchange rate between the ruble and the US dollar has fluctuated significantly during the periodscovered by the IFRS Financial Statements. The CBR rate on February 14, 2011 was RUR 29.32 = $1.00.

Industry and Market Data

In this Prospectus, VTB refers to information regarding the Group’s business, the business of itscompetitors and the market in which the Group operates and competes. VTB obtained this information inpart from various third party sources and in part from VTB’s own internal estimates. VTB has obtainedmarket and industry data relating to VTB’s business from providers of industry and market data, namelythe CBR, the Federal State Statistics Service (‘‘Rosstat’’), Cbonds, Interfax Information Services(‘‘Interfax’’) and the World Bank.

Industry publications, surveys and forecasts generally state that the information contained therein has beenobtained from sources believed to be reliable. VTB has relied on the accuracy of the information fromindustry publications, surveys and forecasts without carrying out an independent verification thereof andcannot guarantee their accuracy or completeness. VTB confirms that such third party information has beenaccurately reproduced, and as far as VTB is aware and is able to ascertain from information published bysuch third parties, no facts have been omitted from the information in this Prospectus that would render itinaccurate or misleading. See ‘‘Risk Factors – Risks Relating to VTB’s and the Group’s Business andIndustry – The Group has not independently verified information regarding its competitors and officialdata from Government agencies and the CBR’’.

In addition, in many cases, VTB has made statements in this Prospectus regarding the Russian bankingindustry and the Group’s position in this industry based on the Group’s own experience and investigationof market conditions. VTB cannot assure you that any of its assumptions are accurate or correctly reflectits position in the industry, and its statements have not been verified by any independent sources. See‘‘Risk Factors – Risks Relating to the Russian Federation – The lack of availability and reliability ofstatistical information in Russia makes business planning inherently uncertain and may impair the ability ofthe Group to plan effective strategies’’ and ‘‘Risk Factors – Risks Relating to VTB’s and the Group’sBusiness and Industry – The Group has not independently verified information regarding its competitorsand official data from Government agencies and the CBR’’.

This Prospectus includes statistical information on the Group’s branch network. For purposes of compilingand presenting the data in this Prospectus, the definition of a ‘‘branch’’ includes all branches, sub-branchesand outlets. As at September 30, 2010, the Group had 667 Russian branches.

The language of this Prospectus is English. Certain legislative references and technical terms have beencited in their original language in order that the correct technical meaning may be ascribed to them underapplicable law.

xi

SUMMARY

This summary must be read as an introduction to this Prospectus, and any decision to invest in the Securitiesshould be based on a consideration of the Prospectus as a whole. Following the implementation of the relevantprovisions of the Prospectus Directive in each Member State of the EEA, no civil liability will attach to theresponsible persons in any such Member State solely on the basis of this summary, including any translationthereof, unless it is misleading, inaccurate or inconsistent when read together with the other parts of thisProspectus. Where a claim relating to the information contained in this Prospectus is brought before a court in aMember State of the EEA, the plaintiff may, under the national laws of the Member State where the claim isbrought, be required to bear the costs of translating the Prospectus before the legal proceedings are initiated.

Overview

The Group is a leading Russian universal banking group offering a wide range of banking and otherfinancial services and products across Russia and certain CIS countries. The Group also has operations inselected countries in Europe and, to a limited degree, Asia and Africa. The Group focuses on providingbanking and other financial products and services to Russian, CIS and foreign clients through its Russian,CIS and foreign subsidiaries. According to VTB’s estimates based on data published by the CBR, theGroup ranked second in Russia in total corporate deposits, total corporate loans, total retail deposits, totalretail lending and total assets, each with a market share of 13.3%, 11.6%, 6.3%, 10.6% and 11.4%,respectively, as of September 30, 2010. Global Finance magazine recognised VTB as the best commercialbank in Russia in the category of ‘‘Best Emerging Market Banks in Central and Eastern Europe’’ in 2009.As of September 30, 2010, the Group had RUR 3,753 billion in total assets and RUR 545.4 billion in totalequity (including minorities) compared to RUR 3,611 billion in total assets and RUR 504.9 billion in totalequity (including minorities) as of December 31, 2009.

VTB was established in 1990 as the Bank for Foreign Trade of the Russian Federation. Since that time,VTB has, through organic expansion and selected acquisitions, transformed itself into a universal bankinggroup with a strong presence in Russia and an expanding presence in the CIS. The Group operates outsideRussia through 12 bank subsidiaries, located in the CIS (Armenia, Azerbaijan, Belarus, Kazakhstan andUkraine), Europe (Austria, Cyprus, France, Germany and the United Kingdom), Georgia and Africa(Angola). VTB also has a financial services and consulting company in Namibia, which is in the process ofbeing liquidated, an associated bank in Vietnam, as well as representative offices in Italy, China andKyrgyzstan, branches in India and China and branches of VTB Capital in Singapore and Dubai. Towardsthe end of 2006, the Group began rebranding the majority of its subsidiaries so that ‘‘VTB’’ now forms partof their names. As of September 30, 2010, the Group operated its banking business in Russia through667 branches. Despite its continuing expansion, the Group’s Russian banking business continues torepresent a significant majority of its activities.

Prior to the Offering, the Russian Federation owned approximately 85.5% of VTB’s ordinary shares and is,and will continue after the Offering to be, the controlling shareholder of the Group. VTB’s ordinary sharesare traded on the RTS and MICEX in Russia, and its global depositary receipts are traded on the LSE.

The Group has three principal areas of business:

• Corporate banking, which provides a broad range of commercial banking services and products,including corporate lending, foreign trade transactions, syndicated loans, deposit and settlementservices to large- and medium-sized corporations and financial institutions. Corporate bankinggenerated 64.3% and 57.6% of the Group’s total revenues in 2009 and the nine months endedSeptember 30, 2010, respectively;

• Retail banking, which provides financial services, including deposit accounts, lending and certainancillary services, to individuals and small-sized corporations. Retail banking generated 19.7% and24.4% of the Group’s total revenues in 2009 and the nine months ended September 30, 2010,respectively; and

• Investment banking, which provides a full range of investment banking products and services, includingresearch, merger and acquisition financing and advisory services, debt and equity capital markets,infrastructure and project finance, foreign exchange, derivatives, structured products, custody servicesand portfolio management services and also manages the Group’s proprietary trading activities.Investment banking generated 10.3% and 12.7% of the Group’s total revenues in 2009 and thenine months ended September 30, 2010, respectively.

1

Competitive Strengths

The Group believes that its business is characterised by the following competitive strengths:

• Significant scale and strong market position;

• Demonstrated ability to implement strategy and achieve superior growth;

• Extensive distribution network, with broad coverage throughout Russia;

• Broad corporate client base and well established relationships with leading Russian companies acrossall economic sectors;

• Strong franchise in investment banking;

• One of the leading providers of retail banking services in Russia;

• Management team with extensive experience in the financial services sector; and

• Recognised and trusted brand.

Strategy

The Group’s strategy is to seek to:

• Convert its unique strategic position into a consistent return on capital;

• Consolidate its position as a leader in the Russian corporate banking sector, including throughestablishing a corporate-investment banking business, developing its transaction banking business,increasing penetration in lower corporate segments and expanding its share of wallet fromcorporate customers;

• Continue dynamic development of the retail business;

• Further develop a comprehensive range of investment banking products and services;

• Develop subsidiary financial companies’ businesses;

• Increase the efficiency of the Group’s international network;

• Continue to integrate and enhance operating efficiencies within the Group;

• Centralise and upgrade the Group’s IT systems and infrastructure to support its growing businessoperations; and

• Improve tax efficiency across the Group’s international network.

Risk Factors

An investment in the Securities involves a high degree of risk. Among the risks relating to the Group andthe Securities are risks associated with the following matters:

• The Offering is conditional in all respects on the issuance by the Government of the Second Decreeand on due execution and performance of the Share Purchase Agreements.

• The Offer Shares are being disposed of by the Russian Federation under a new and untestedexemption from the Privatisation Law and such disposal may be subject to legal or other challenges.

• The instability of the global and the Russian financial markets.

• Potential deterioration of economic conditions in Russia and the other markets in which the Groupoperates and in the growth of Russia’s banking sector.

• The possible impact or failure of the stabilisation measures of the Government and the CBR.

• Systemic liquidity problems, losses or defaults by other financial institutions and counterparties.

• Liquidity, credit, market and operational risks.

• The Group may be unable to achieve its strategic objectives in a timely manner or at all.

• Increased credit exposure as a result of the increased size of the Group’s loan portfolio.

2

• Increased loan losses and decreased demand for the Group’s services as a result of the globaleconomic crisis.

• VTB may not become aware of its borrowers’ events of default in a timely manner.

• VTB’s inability to monitor and control procedures relating to the loan and securities portfolios of theGroup on a daily basis.

• The Group may be unable to reduce the industry and borrower concentrations in its loan portfolio.

• Potential declines in the value or liquidity of the collateral securing the Group’s loans.

• The difficulty of enforcing security and/or guarantees under Russian law.

• Potential increases in the number of defaulting loans to the Group’s corporate and retail customers.

• The Group will require a significant amount of cash to meet its debt obligations.

• Potential devaluation of the ruble against the US dollar and other currencies.

• The accuracy of judgments, estimates and assumptions made by management during the preparationof the Group’s consolidated financial statements.

• The Group may fail to integrate acquired businesses.

• The restructuring of the Group’s European banking operations.

• The interests of the Russian Federation may conflict with those of other shareholders.

• The Group’s IT systems may be insufficient to support its operations.

• A successful implementation of the Group’s expansion and integration strategy requires an upgrade ofits IT systems.

• The Group’s significant off-balance sheet credit-related commitments.

• Competition in Russia and other markets where the Group operates.

• Competition, additional risks and high costs associated with the Group’s recently expandedinvestment banking business.

• Potential loss of senior management or inability to recruit or retain experienced and/orqualified personnel.

• The requirement for disinterested director or disinterested shareholder approval for some interestedparty transactions of Russian banks in the Group.

• Legislative and legal risks.

• The accuracy of information regarding the Group’s competitors and official data from Governmentagencies and the CBR.

• Risks relating to Russia and the CIS.

• Risks relating to the Securities and the trading market.

3

Summary of the Offering

The Company . . . . . . . . . . . . . . . . . . JSC VTB Bank.

The GDRs . . . . . . . . . . . . . . . . . . . . Each GDR represents an interest in 2,000 Shares on depositwith JSC VTB Bank, as Custodian. The Additional GDRs willbe immediately fungible with VTB’s existing GDRs.

The Offering . . . . . . . . . . . . . . . . . . The Offering comprises an institutional offering of (i) OfferShares and GDRs outside the United States and Russia tocertain persons in offshore transactions in reliance onRegulation S and in the United States to QIBs in reliance onRule 144A and (ii) Offer Shares in the Russian Federation.Generali Group has received an allocation of U.S.$300 millionof Offer Shares and/or GDRs at the Offer Price in the Offeringand affiliated funds of TPG Capital L.P. have received anallocation of U.S.$100 million of Offer Shares and/or GDRs atthe Offer Price in the Offering. See ‘‘Plan of Distribution’’.

Closing Date . . . . . . . . . . . . . . . . . . February 17, 2011.

Offer Price . . . . . . . . . . . . . . . . . . . . 9.1468 kopeks or $0.003125 per Offer Share and $6.25 per GDR.

Listing and Market for the Securities VTB’s ordinary shares have been admitted to the ‘‘B’’ quotationlist of the RTS and MICEX. Application has been made for theAdditional GDRs to be admitted to trading on the LSE’sRegulated Market, on which VTB’s existing GDRs are admittedto trading under the symbol ‘‘VTBR’’.

Voting Rights . . . . . . . . . . . . . . . . . . Shareholders are generally entitled to one vote per Share at ashareholders’ meeting. Each GDR carries the right to instructthe Depositary to vote 2,000 Shares.

Lock-up . . . . . . . . . . . . . . . . . . . . . . Representatives of the Government have publicly announcedthat the Government does not intend to undertake any furtherpublic sales of shares in VTB in 2011, although the Governmenthas not entered into any legally binding agreement preventingthe sale of any shares in VTB during that period.

Dividend Policy . . . . . . . . . . . . . . . . VTB’s Regulation on Dividend Policy envisages a dividendconstituting at least 10% of VTB’s statutory net profit. See‘‘Dividends and Dividend Policy’’.

Use of Proceeds . . . . . . . . . . . . . . . . VTB will not receive any of the proceeds of the Offering. Thetotal expenses of VTB, payable by VTB, in connection with theOffering are estimated to be no greater than $1.3 million.

Transfer Restrictions . . . . . . . . . . . . The Securities will be subject to certain transfer restrictions. See‘‘Transfer Restrictions’’.

Related Party Transactions . . . . . . . . The Group enters into transactions in the normal course ofbusiness with the Russian Federation, entities controlled,directly or indirectly, by the Russian Federation and its affiliates.Transactions are priced predominantly at market rates.

Management . . . . . . . . . . . . . . . . . . VTB currently has 11 members on its Supervisory Council, fiveof whom are independent representatives, and 12 members onits Management Board. Members of the Supervisory Council areelected at the General Shareholders’ Meeting and serve until thenext annual General Shareholders’ Meeting, and may bere-elected an unlimited number of times. Members of theManagement Board are elected by the Supervisory Council andserve for a period prescribed by the Supervisory Council, whichmay not exceed five years, and may be re-elected an unlimitednumber of times. Members of the Supervisory Council and the

4

Management Board own in the aggregate less than 0.01% ofVTB’s issued and outstanding shares.

Security Codes . . . . . . . . . . . . . . . . . Regulation S GDRs: CUSIP: 46630Q202ISIN: US46630Q2021Common Code: 029806675SEDOL: B1W7FX3

Rule 144A GDRs: CUSIP: 46630Q103ISIN: US46630Q1031Common Code: 029806730SEDOL: B1W7FP5

ISIN for Shares: RU000A0JP5V6

LSE GDR tradingsymbol: VTBR

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Selected Historical Financial and Operating Data

The financial information set forth below as of and for the years ended December 31, 2009, 2008 and 2007has been extracted without material adjustment from the Annual IFRS Financial Statements. The financialinformation set forth below as of and for the nine months ended September 30, 2010 and 2009 has beenextracted without material adjustment from the Interim Condensed Consolidated Financial Statements.The financial data set forth below should be read in conjunction with, and is qualified in its entirety byreference to, the IFRS Financial Statements and related notes included elsewhere in this Prospectus and‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’’.

For the periodended For the year ended

September 30, December 31,

2010 2009 2009 2008 2007

(unaudited) (audited)(RUR billions)

Selected Income Statement DataNet interest income (before provision for impairment) . . . . . . 129.5 107.4 152.2 113.6 65.4Provision charge for impairment . . . . . . . . . . . . . . . . . . . . . . (40.3) (126.4) (154.7) (63.2) (13.5)

Net interest income/(expense) after provision for impairment . 89.2 (19.0) (2.5) 50.4 51.9

Net fee and commission income . . . . . . . . . . . . . . . . . . . . . . . 17.8 14.7 21.0 16.3 14.3Gains less losses/(losses net of gains) arising from financial

assets at fair value through profit or loss . . . . . . . . . . . . . . . 7.6 (15.8) (21.3) 4.0 3.5Gains less losses/(losses net of gains) from available-for-sale

financial assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.3 1.9 1.1 (1.6) 3.0Gains less losses arising from extinguishment of liability . . . . . – 14.7 14.7 9.5 –Losses on initial recognition of financial instruments and on

loans restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.1) (19.0) (19.7) – –(Losses net of gains)/gains net of losses arising from dealing in

foreign currencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5.7) (9.9) (12.4) (64.7) 14.0Foreign exchange translation gains less losses . . . . . . . . . . . . . 7.4 24.5 26.6 67.0 2.8Income arising from non-banking activities . . . . . . . . . . . . . . . 3.9 1.9 2.8 3.2 2.4Expenses arising from non-banking activities . . . . . . . . . . . . . . (2.6) (0.8) (1.1) (1.4) (1.6)Other(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.6 0.9 1.6 3.1 3.6

Operating income/(loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118.4 (5.9) 10.8 85.8 93.9

Staff costs and administrative expenses . . . . . . . . . . . . . . . . . . (68.0) (52.5) (76.4) (67.5) (49.9)Other(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.0) 1.0 (2.7) (0.2) 2.5

Profit/(loss) before taxation . . . . . . . . . . . . . . . . . . . . . . . . . . 49.4 (57.4) (68.3) 18.1 46.5

Net profit/(loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38.8 (45.5) (59.6) 4.6 38.7

Including net profit attributable to non-controlling interests . . . (2.8) 3.3 3.8 (0.2) 0.8

(1) Comprises share in income/(loss) of associates, (provision charge for)/recovery of impairment of other assets and credit relatedcommitments and other operating income.

(2) Represents profit from disposal of subsidiaries and associates and loss from impairment of goodwill.

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As of September 30, As of December 31,

2010 2009 2009 2008 2007

(unaudited) (audited)(RUR billions)

Selected Balance Sheet DataLoans and advances to customers, net . . . . . . . . . . . . . 2,528.2 2,512.7 2,309.9 2,555.6 1,437.2Securities portfolio(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 404.6 366.7 400.7 259.9 331.7Cash and short-term funds, mandatory cash balances

with central banks . . . . . . . . . . . . . . . . . . . . . . . . . . 208.9 187.3 284.1 423.7 147.0Due from other banks, net . . . . . . . . . . . . . . . . . . . . . 255.5 333.1 345.6 308.0 238.9Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356.1 184.0 270.5 150.2 118.4

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,753.3 3,583.8 3,610.8 3,697.4 2,273.2

Customer deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,839.3 1,518.4 1,568.8 1,101.9 910.6Debt securities issued . . . . . . . . . . . . . . . . . . . . . . . . . 541.4 531.6 485.7 560.1 404.7Due to other banks . . . . . . . . . . . . . . . . . . . . . . . . . . . 380.9 262.1 287.0 388.7 363.1Other borrowed funds . . . . . . . . . . . . . . . . . . . . . . . . . 141.3 462.4 470.9 848.7 127.1Subordinated debt . . . . . . . . . . . . . . . . . . . . . . . . . . . 186.5 194.8 195.3 226.3 28.7Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118.5 79.2 98.2 179.6 34.0

Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,207.9 3,053.6 3,105.9 3,305.3 1,868.2

Equity attributable to shareholders of the parent . . . . . 539.7 519.9 502.3 389.4 397.8Non-controlling interest . . . . . . . . . . . . . . . . . . . . . . . 5.7 10.3 2.6 2.7 7.2

Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 545.4 530.2 504.9 392.1 405.0

Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . 3,753.3 3,583.3 3,610.8 3,697.4 2,273.2

(1) Comprises financial assets at fair value through profit or loss, financial assets available-for-sale, financial assets held-to-maturityand financial assets pledged under repurchase agreements and loaned financial assets.

As of September 30, For the year ended December 31,

2010 2009 2009 2008 2007

(unaudited) (audited)(RUR billions)

Selected Financial Ratios Profitability indicatorsNet interest margin(1)(2) . . . . . . . . . . . . . . . . . . . . . . 5.2% 4.3% 4.6% 4.8% 4.4%Net fee and commissions income to operating income 15.0% – 194.4% 19.0% 15.2%Cost to operating income before provision . . . . . . . . 42.3% 43.1% 45.7% 45.3% 46.5%Return on average equity(2)(3) . . . . . . . . . . . . . . . . . . 9.9% (14.6%) (13.7%) 1.1% 12.4%Return on average assets(2)(3) . . . . . . . . . . . . . . . . . . 1.4% (1.6%) (1.6%) 0.2% 2.2%

Asset qualityOverdue loans as % of gross customer loans . . . . . . . 9.1% 6.5% 7.7% 1.8% 1.2%Overdue and rescheduled loans as % of gross

customer loans . . . . . . . . . . . . . . . . . . . . . . . . . . . 20.1% 14.8% 19.5% 2.4% 1.4%Allowances as % of overdue loans . . . . . . . . . . . . . . 105.0% 122.2% 119.3% 197.8% 211.7%

Group capital adequacy indicators(4)

Tier 1 ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.9% 14.0% 14.8% 10.5% 15.0%Total capital ratio . . . . . . . . . . . . . . . . . . . . . . . . . . 18.8% 19.5% 20.7% 17.3% 16.3%

(1) Represents the ratio of net interest income before provision for loan impairment expressed as a percentage of average interest-earning assets.

(2) Average balances represent quarterly averages for each of 2007, 2008, 2009 and 2010 (as applicable).

(3) Represents ratio of net profit expressed as a percentage of average equity (including minorities) or assets, respectively.

(4) Calculated as of the year end in accordance with the Bank for International Settlements (‘‘BIS’’) methodology prior tointroduction of Basel II, as described in Note 41 of the IFRS Financial Statements.

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RISK FACTORS

An investment in the Securities involves a high degree of risk. Investors should carefully consider the followinginformation about these risks, together with the information contained in this Prospectus, before they decide tobuy the Securities. The actual occurrence of any of the following risks could adversely affect VTB’s and/or theGroup’s operating results and financial condition. In that case, the value of the Securities could also declineand investors could lose all or part of their investment.

The risks and uncertainties discussed below are those that VTB and the Group believe are material, but theserisks and uncertainties may not be the only ones that VTB and the Group face. Additional risks anduncertainties, including those of which VTB’s and the Group’s management are not currently aware or deemimmaterial, may also have an adverse effect on VTB’s and/or the Group’s operating results and financialcondition or result in other events that could lead to a decline in the value of the Securities.

Risks Relating to the Offering

The Offering is conditional in all respects on the issuance by the Government of the Second Decree and on dueexecution and performance of the Share Purchase Agreements.

The closing of the Offering will be conditional on the issuance by the Government of the Second Decreeauthorising the sale of the Offer Shares and the Shares to be represented by the GDRs by the RussianFederation to the Purchasers under the Share Purchase Agreements for onward sale to investors and onthe due execution and performance of the Share Purchase Agreements by the parties thereto on or beforethe Closing Date. If the Second Decree is not issued or the Share Purchase Agreements are not dulyexecuted and performed by the parties thereto on or before the Closing Date (as to which the Group cangive no guarantee or assurance), the Offering will be cancelled and any conditional dealings in theSecurities will be of no effect and will fail to settle.

The Offer Shares and the Shares to be represented by the GDRs are being disposed of by the Russian Federationunder a new and untested exemption from the Privatisation Law and such disposal may be subject to legal or otherchallenges.

The Offer Shares and the Shares to be represented by the GDRs are being disposed of by the RussianFederation under a new and untested exemption from Federal Law No 178-FZ ‘‘On privatisation of stateand municipal property’’ dated December 21, 2001 (as amended) (the ‘‘Privatisation Law’’) provided for inArticle 3.2 (15) of the Privatisation Law. As a result, the validity, interpretation and application of thisexemption and of the Decrees and other Government acts issued and contracts entered into pursuant tothis exemption (including in connection with the Offering) may be subject to legal, political or otherchallenges. Any such challenges, whether or not ultimately successful, could result in the cancellation ofthe Offering, lead to a decline in the value of the Securities and/or result in investors losing all or part oftheir investment.

Risks Relating to VTB’s and the Group’s Business and Industry

The instability of the global and the Russian financial markets and the ongoing European sovereign debt crisis mayhave an adverse effect on VTB’s and the Group’s business, liquidity and financial condition.

Dislocation of financial global credit markets

The financial markets, both globally and in Russia, experienced significant volatility, dislocation andliquidity constraints as a result of the global financial crisis that commenced with dramatic declines in theUS housing market in the autumn of 2007. Reflecting concern about the stability of the financial marketsgenerally and the strength of counterparties, many lenders and institutional investors reduced, and in somecases ceased to provide, funding to borrowers, including other financial institutions, which significantlyreduced the liquidity in the global financial system.

In response to the global financial crisis and the threats to the ability of investment banks and otherfinancial institutions to continue as going concerns, many of the largest countries in the world, includingRussia, the United States and several European countries, implemented significant rescue packages, whichincluded, among other things: the recapitalisation of banks through the state purchase of common andpreferred equity securities; the state guarantee of certain forms of bank debt; the purchase of distressedassets from banks and other financial institutions by the state; and the provision of guarantees of distressedassets held by banks and other financial institutions by the state.

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Despite these measures, the volatility and market disruption in the global banking sector continuedthroughout 2010, although some improvement of the situation in the financial markets has recently beenreported. No assurance can be given, however, that a further downturn will not occur, or that further statesupport measures will not be required, or that any state support measures will be sufficient to restorestability in the global banking sector and financial markets in the short term or beyond. Any suchuncertainty, disruption or volatility may have an adverse effect on VTB’s and/or the Group’s business,financial condition, results of operations and prospects.

A restructuring of sovereign debt issued by one or more Eurozone Member States or any impact oneconomic activity or global or Russian financial markets resulting from the ongoing sovereign debt crisisaffecting certain Eurozone Member States could have an adverse effect on VTB’s and/or the Group’sbusiness, financial condition, results of operations and prospects.

Impact on VTB’s and the Group’s business operations

The continuing uncertainty in the international financial markets and any tightening in credit conditionsand contraction of the economies in which the Group operates could adversely affect VTB’s and theGroup’s business and operating results as a result of: decreases in VTB’s and the Group’s net interestincome; decreases in the demand for VTB’s and the Group’s credit products as a result of higher interestrates; significantly increased loan provision charges, loan losses and write-offs; goodwill impairment;increases in borrowing costs and reduced, or no, access to capital markets due to unfavourable marketconditions; and decreases in fee and commission income due to a reduction in capital markets activity, aswell as significant declines in the market values of securities held in VTB’s and the Group’s tradingportfolios.

Impact on liquidity

The disruptions in the global financial markets had a severe impact on the liquidity of banks across theworld, as well as the availability of credit and the terms and cost of funding in the Russian Federation.Russian banks, including VTB, VTB24 and VTB North-West, experienced a reduction in availablefinancing both in the interbank and short-term funding market and in the longer-term capital markets andthrough bank finance instruments. A number of financial institutions suffered severe liquidity problemsand, in certain cases, the majority shareholders had to sell their shares to other Russian institutions. TheRussian securitisation market has also remained largely inaccessible since the onset of the financial crisis in2008. In Russia, the combination of uncertainty in the global markets and corresponding domestic factorsin 2008 and early 2009 gave rise to higher than normal interbank lending rates. For example, according tothe CBR, in January 2008, the average interbank ruble lending rate was 2.8%, while, in January 2009, itincreased to 16.3%. At the end of 2009 and in the nine months ended September 30, 2010, the averageinterbank lending rates were 5.1% and 2.6%, respectively.

The Group has historically depended on wholesale funding. Accordingly, although the interbank lendingmarket has stabilised since early 2009, any future volatility in interbank lending rates could have an adverseeffect on VTB’s and/or the Group’s business, financial condition, results of operations and prospects.

In 2009, the liquidity position in the Russian banking sector generally improved, with both retail andcorporate deposits demonstrating signs of recovery with growth rates of 26.7% and 10.5%, respectively.Accordingly, as of December 31, 2009, VTB registered a considerable deposit inflow driven by animproved level of liquidity throughout Russia. However, should the economic situation worsen again inRussia or in the global markets in which the Group operates, there can be no assurance that the lack ofliquidity experienced in the Russian banking system during the height of the financial crisis will not return.

Impact on the ratings of the Group and the Russian Federation

In 2008, as a result of the negative impact of the financial crisis on the Russian banking sector, S&P andFitch downgraded VTB’s ratings. As of the date of this Prospectus, VTB had a long-term issuer creditrating of ‘‘BBB’’ (downgraded from BBB+) and a short-term issuer credit rating of ‘‘A-3’’ (downgradedfrom A-2) from S&P, foreign currency deposit ratings of ‘‘Baa1/Prime-2’’ from Moody’s, and a short-termIDR of ‘‘F3’’ (downgraded from F2) and a long-term IDR of ‘‘BBB’’ (downgraded from BBB+) fromFitch. Additionally, some of the ratings of VTB’s subsidiaries have also been downgraded. In July 2009,Moody’s downgraded the financial strength ratings of VTB Capital, VTB France and VTB Austria from‘‘D’’ to ‘‘D�’’. However, in January 2010, following the change in the outlook on Russia’s IDR, Fitchrevised the outlook of VTB to ‘‘Stable’’ from ‘‘Negative’’. On August 20, 2010, Moody’s changed its

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outlook on the financial strength ratings of VTB, VTB24 and VTB North-West to ‘‘Stable’’ from‘‘Negative’’.

By way of comparison, Moody’s changed its outlook on the Russian banking sector from ‘‘positive’’ to‘‘stable’’ in the third quarter of 2008. In February 2009, Fitch downgraded its long-term IDR for theRussian Federation from ‘‘BBB+’’ to ‘‘BBB’’ and downgraded Russia’s country ceiling rating from ‘‘A�’’to ‘‘BBB+’’. Additionally, S&P downgraded its long-term/short-term sovereign credit ratings for theRussian Federation from ‘‘BBB+/A-2’’ to ‘‘BBB/A-3’’. Since the Russian Federation is, and will continueafter the Offering to be, the controlling shareholder of the Group, the credit ratings of VTB are supportedby those of the Russian Federation. Accordingly, any downgrades of the credit ratings of the RussianFederation could result in a downgrade of VTB’s credit ratings. There can be no assurance that VTB orthe Russian Federation will be able to maintain their current credit ratings, and any deterioration in thegeneral economic environment or the Group’s financial condition could cause further downgrades. Therecently experienced downgrades, as well as any future downgrades, could adversely affect the Group’sliquidity and competitive position and undermine confidence in the Group, which could lead to increasedborrowing costs and limited access to capital markets.

Deteriorating economic conditions in Russia and the other markets in which the Group operates, together with anydecline in the growth of Russia’s banking sector, may continue to have an adverse effect on VTB and the Group.

The majority of VTB’s and the Group’s profit is generated in Russia, and VTB and the Group areparticularly exposed to the deteriorating economic conditions in Russia. Between 2008 and 2010, theRussian economy was adversely affected by market downturns and economic slowdowns elsewhere in theworld, which also dampened foreign investment in Russia. Investment capital inflows into Russiadecreased significantly as a result of the global financial crisis, reducing bank liquidity. In 2008, the Russianeconomy experienced a net capital outflow in the private sector of $132.7 billion, compared to a net capitalinflow of $82.4 billion in 2007 and $41.4 billion in 2006. However, in 2009, net capital outflows reduced to$56.9 billion and in the nine months ended September 30, 2010 to $16 billion. According to Rosstat, thevolume of foreign investment into Russia in 2007 amounted to $120.9 billion, having increased by 119.5%compared to 2006. In 2008, however, according to the same source, the volume of foreign investment intoRussia totalled $103.8 billion, representing a decline of 14.2% compared to 2007. In 2009, the volume offoreign investment into Russia further decreased by 21% to $81.9 billion. This figure fell to $47.5 billion inthe nine months ended September 30, 2010, reflecting a further decrease of