the annual report of oao sberbank of russia for 2012 written in

Auditor's Report on the Annual Statement of Sberbank of Russia

For 2012

March 2013

2

Auditor's Report - Sberbank of Russia

Contents

Independent Auditor's Report 3

Annexes

Annual report of Sberbank of Russia for 2012 including:

Balance sheet as of January 1, 2013 5

Income statement for 2012 6

Cash flow statement for 2012 7

Report on capital adequacy, amount of reserves for doubtful loans and other assets as of January 1, 2013 8

Report on statutory ratios as of January 1, 2013 9

Explanatory note 10

3

Ernst & Young Vneshaudit CJSC 77 Sadovnicheskaya Emb., b. 1 Moscow, 115035 Russia Phone: +7 (495) 705 9700 +7 (495) 755 9700 Fax: +7 (495) 755 9701 www.ey.com

Ernst & Young Vneshaudit CJSC 77 Sadovnicheskaya Emb., b. 1 Moscow, 115035 Russia 1 Phone: +7 (495) 705 9700 +7 (495) 755 9700 Fax: +7 (495) 755 9701 OKPO: 00139790

Independent auditor's report

To shareholders of Sberbank of Russia

We have audited the accompanying annual report of Sberbank of Russia (hereinafter, the "Bank"), which consists of the balance sheet as at January 1, 2013, income statement for 2012, cash flow statement for 2012, report on capital adequacy, ,amount of provisions for doubtful loans and other assets as of January 1, 2013, report on statutory ratios as of January 1, 2013 and an explanatory note.

Audited entity’s responsibility for the annual report

The Bank's management is responsible for the preparation and fair presentation of the annual report in accordance with the rules for preparing the annual reports, applied in Russian Federation, and for the internal control system, which is necessary for preparing the annual report, which is free from material misstatements due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on the fairness of this annual report based on our audit.

We conducted our audit in accordance with the federal standards on auditing effective in the Russian Federation and International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance that the annual report is free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual report. Audit procedures selection depends on the auditor’s judgment based on the assessment of risk of material misstatements in the annual report, whether due to fraud or error. In making those risk assessment, the auditor considers internal control system relevant to the entity’s preparation and fair presentation of the annual report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control system An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of accounting estimates made by the management, as well as evaluating the overall presentation of the annual report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

http://www.ey.com/

4

Opinion

In our opinion, the annual report present fairly, in all material respects, the financial position of the Bank as of January 1, 2013, its financial performance and its cash flow funds for 2012, in accordance with the rules for preparing the annual reports, applied in Russian Federation.

Other matters

As indicated in the clause 1 of the explanatory note, in accordance with the Directive of the Central Bank of the Russian Federation On Publishing and Submitting Information on the Activities of Credit Institutions, No. 2172-U, dated January 20, 2009, (hereinafter, the "Directive No. 2172-U"), the management of the Bank decided to publish an explanatory note as part of the annual report on the Bank's website (www.sbrf.ru; www.sberbank.ru). In accordance with Directive No. 2172-U, the forms of annual report (balance sheet, income statement, cash flow statement, report on capital adequacy, amount of provisions for Impairment of doubtful loans and other assets and report on statutory ratios) are published in the public media and posted on the web site of the Bank in the Internet as part of the annual report. The auditor's report on the accompanying annual report should be considered together with all forms of reporting and the explanatory note, which are an integral part of the annual report.

The accompanying annual report is not intended to represent the financial position and results of operations in accordance with accounting principles and practices generally accepted in countries and jurisdictions other than the Russian Federation. Accordingly, the accompanying annual report is not designed to those who are not informed about accounting principles, procedures and practices in the Russian Federation.

Sergey M. Taskaev, Partner, Ernst & Young Vneshaudit CJSC March 18, 2013 Details of the audited entity

Name: Sberbank of Russia Open Joint Stock Company. Information on the state registration of the credit institution by the Central Bank of the Russian Federation: No. 1481, dated June 20, 1991. Information on registration of the legal entity in the Unified State Register of Legal Entities: State registration certificate No. 1027700132195, dated August 16, 2002. Address: Russia, 117997, Moscow, Vavilova st. 19. Details of the auditor

Name: CJSC Ernst & Young Vneshaudit Main State Registration Number 1027739199333. Address: Russia 115035, Moscow, Sadovnicheskaya naberezhnaya, 77, building 1. CJSC Ernst & Young Vneshaudit is a member of Non Profit partnership “Russian Audit Chamber” (“NP APR”). CJSC Ernst & Young Vneshaudit is registered in the register of auditors and audit organizations of NP APR, number 3027, and also included in the control copy of the register of auditors and audit organizations, main registration number 10301017410.

http://www.sbrf.ru/

http://www.sberbank.ru/

Banking financial statements

Territory code under OKATO Code of the credit institution (branch)

under OKPO primary state

registration number

registration number

(reference number)

BIC

45293554000 00032537 1027700132195 1481 044525225

5

BALANCE SHEET

(disclosure form)

as of January 1, 2013

of the credit institution: Sberbank of Russia

Sberbank of Russia

Mailing address: Russia, 117997, Moscow, Vavilova st. 19.

Form code under OKUD 0409806

Quarterly (Annual)

thousand rubles

Line

number Description of the item As of reporting date

As of the relevant

reporting date of the

previous year

1 2 3 4

I ASSETS

1 Cash on hand 725 051 773 492 880 738

2 Due from the Central Bank of Russian Federation 381 207 927 151 196 647

2.1 Mandatory cash balances with the Central Bank of Russian Federation 122 373 578 99 392 457

3 Cash in credit institutions 81 464 392 38 443 527

4 Financial assets designated at fair value through profit or loss 101 883 985 23 528 226

5 Net loans to banks and customers 9 772 750 284 7 658 870 942

6 Net investments in securities and other financial assets available for sale 1 541 630 850 1 140 033 047

6.1 Investments in subsidiaries and affiliates 281 233 360 94 030 603

7 Net investments in securities held to maturity 361 861 978 417 065 553

8 Fixed assets, intangible assets and inventories 438 028 479 370 948 267

9 Other assets 177 874 551 126 452 216

10 Total assets 13 581 754 219 10 419 419 163

II LIABILITIES

11 Loans, deposits and other funds of the Central Bank of the Russian Federation 1 367 973 939 565 388 335

12 Due to banks 605 450 003 477 466 955

13 Due to corporate customers and individuals 9 462 176 277 7 877 197 651

13.1 Due to individuals 6 288 049 613 5 522 845 516

14 Financial liabilities designated at fair value through a profit or loss 25 965 548 0

15 Debt securities in issue 331 891 304 87 222 883

16 Other liabilities 115 477 162 85 195 233

17 Provisions for possible losses from credit contingencies, other possible losses and transactions with offshore

residents 21 323 838 26 305 667

18 Total liabilities 11 930 258 071 9 118 776 724

III SOURCES OF EQUITY

19 Share capital 67 760 844 67 760 844

20 Treasury shares 0 0

21 Paid-in capital 228 054 226 228 054 226

22 Reserve fund 3 527 429 3 527 429

23 Revaluation reserve for securities available for sale at fair value 26 396 638 -26 013 504

24 Revaluation reserve for fixed assets 84 217 444 84 710 995

25 Retained earnings 895 365 048 632 107 538

26 Profit for the reporting period 346 174 519 310 494 911

27 Total equity 1 651 496 148 1 300 642 439

IV OFF-BALANCE-SHEET LIABILITIES

28 Irrevocable liabilities 2 573 818 494 2 057 720 135

29 Guarantees and sureties granted 882 103 667 643 334 969

30 Non-credit contingencies 2 557 660 747 324

No data regarding derivatives are provided in Line 4 "Financial assets designated at fair value through a profit or loss" and Line 14 "Financial liabilities designated at fair value

through a profit or loss" as of January 1, 2012 since no accounting records of these instruments were kept prior to January 1, 2012 in accordance with Russian legislation.

CEO and Chairman of the Management Board,

Sberbank of Russia Herman O. Gref (Signature)

Chief accountant - Director of the Accounting and

Reporting Department, Sberbank of Russia Andrei V. Kruzhalov (Signature)

March 18, 2013




registration number

registration number

(reference number)

BIC

45293554000 00032537 1027700132195 1481 044525225

6

INCOME STATEMENT

(disclosure form)

for 2012


Sberbank of Russia



Quarterly (Annual)

thousand rubles

Line

number Description of the item As of reporting period

As of the relevant

reporting period of the

previous year

1 2 3 4

1 Interest income,

Including amounts from: 1 094 015 347 837 887 816

1.1 Amounts due from banks 9 643 007 7 885 809

1.2 Loans granted to customers and individuals 982 415 257 729 556 638

1.3 Granting financial leasing services 0 0

1.4 Investments in securities 101 957 083 100 445 369

2 Interest expenses, including amounts from: 399 092 075 262 061 888

2.1 Amounts due to banks 70 213 998 28280 326

2.2 Amounts due to corporate customers and individuals 319 035 780 230 620 472

2.3 Debt securities in issue 9 842 297 3 161 090

3 Net interest income (negative interest margin) 694 923 272 575 825 928

4 Changes in the provisions for possible losses on loans and similar accounts receivable, amounts on current

accounts and accrued interest income, including: -2 935 873 16 393 889

4.1 Changes in the provisions for possible losses on accrued interest income -538 989 235 208

5 Net interest income (negative interest margin) after provisions for possible losses 691 987 399 592 219 817

6 Net income from operations with securities designated at fair value through a profit or loss 8 405 211 -2 004 064

7 Net income from operations with securities available for sale 3 032 642 8 245 132

8 Net income from operations with securities held to maturity -979 -13 693

9 Net income from foreign currency operations 8 758 745 2 800 191

10 Net income from revaluation of foreign currency -3 109 858 6 344 991

11 Income from participation in other legal entities 3 959 989 3 529 344

12 Fee and commission income 159 874 974 134 285 740

13 Fee and commission expense 15 128 955 8 709 750

14 Changes in the provisions for possible losses on securities available for sale 61 800 -28 271

15 Changes in the provisions for possible losses on securities held to maturity 414 071 41 098

16 Changes in the provisions for other losses 632 408 -5 166 633

17 Other operating income 13 173 217 12182 822

18 Net income (expense) 872 060 664 743 726 724

19 Operating expense 397 351 665 334 825 179

20 Profit (loss) before tax 474 708 999 408 901 545

21 Income tax expense 128 534 480 98 406 634

22 Profit (loss) after tax 346 174 519 310 494 911

23 Disbursements from profit after tax, including: 0 0

23.1 Amounts, distributed among shareholders (members) as dividends 0 0

23.2 Amounts, allocated to reserve fund 0 0

24 Retained profit (loss) for the reporting period 346 174 519 310 494 911

Column 4 of Item 6 "Net income from operations with securities designated at fair value through a profit or loss" does not include the information on financial assets and liabilities

recognized as derivative financial instruments in 2012 since no accounting records of these operations were kept prior to January 1, 2012 in accordance with Russian legislation.





March 18, 2013




registration number

registration number

(reference number)

BIC

45293554000 00032537 1027700132195 1481 044525225

7

CASH FLOW STATEMENT

(disclosure form)

for 2012


Sberbank of Russia


Form code 0409814

Annual

thousand rubles

No. Description of items Cash flow for the

reporting period

Cash flow for the

previous reporting period

1 2 3 4

1 Net cash, obtained from (used in) operating activity

1.1 Cash received from (used in) operations prior to changes of operating assets and liabilities, including: 372 812 592 308 499 437

1.1.1 Interest received 1 077 670 297 820 253 346

1.1.2 Interest paid -382 510 239 -260 291 556

1.1.3 Commission received 158 787 555 134 379 929

1.1.4 Commission paid -15 038 891 -8 648 814

1.1.5 Net income from operations with financial assets designated at fair value through profit or loss, available for sale 1 420 412 296 396

1.1.6 Net income from operations with securities held to maturity 0 0

1.1.7 Net income for operations with foreign currency 8 758 758 2 686 708

1.1.8 Other operating income 11 887 988 13 1 64 026

1.1.9 Operating expenses -362 260 909 -303 303 254

1.1.10 Tax expense (reimbursements) -125 902 379 -90 037 344

1.2 Increase (decrease) of net cash from operating assets and liabilities, including: 574 448 290 -325 122 503

1.2.1 Net increase (decrease) of mandatory cash balances in Bank of Russia -22 981 121 -48 860 767

1.2.2 Net increase (decrease) of securities investments designated at fair value through profit or loss -51 115 813 7 525 040

1.2.3 Net increase (decrease) of loans -2 180 231 415 -1 843 943 066

1.2.4 Net increase (decrease) of other assets -37 413 475 9 347 443

1.2.5 Net increase (decrease) of loans, deposits and other amounts due to Bank of Russia 802 585 604 265 388 334

1.2.6 Net increase (decrease) in amounts due to banks 146 863 284 174 482 724

1.2.7 Net increase (decrease) in amounts due to corporate customers and individuals 1 660 564 341 1,141,839,491

1.2.8 Net increase (decrease) of financial liabilities designated at fair value through profit or loss 0 0

1.2.9 Net increase (decrease) of debt securities in issue 244 118 261 -20 800 487

1.2.10 Net increase (decrease) of other liabilities 12 058 624 -10 101 215

1.3 Totals of section 1 (item 1.1 + item 1.2) 947 260 882 -16 623 066

2 Net cash obtained from (used in) investment activity

2.1 Purchase of securities and other financial assets available for sale -606 558 735 -741 968 529

2.2 Proceeds from sale and redemption of securities and other financial assets available for sale 229 381 275 1 042 724 061

2.3 Purchase of securities held to maturity -2 640 636 -77 705 943

2.4 Proceeds from redemption of securities held to maturity 57 643 886 18587919

2.5 Purchase of fixed assets, intangible assets and inventories -102 178 098 -81 289 404

2.6 Proceeds from sale of fixed assets, intangible assets and inventories 2 542 333 761 592

2.7 Dividends received 3 937 071 3 536 398

2.8 Totals of section 2 (sum of lines 2.1 to 3.7) -417 872 904 164 646 094

3 Net cash, obtained from (used in) financial operations

3.1 Shareholders’ (members’) contributions to share capital 0 0

3.2 Acquisition of equity shares (stocks) redeemed from the shareholders (members) 0 0

3.3 Sale of equity shares (interests) redeemed from the shareholders (members) 0 0

3.4 Paid dividends -47 330 379 -20 950 570

3.5 Totals of section 3 (sum of lines 3.1 to 3.7) -47 330 379 -20 950 570

4 Impact of changes in the official currency exchange rates against the ruble, set by Bank of Russia, on cash and

cash equivalents 141 193 -7 128 818

5 Increase (use) of cash and cash equivalents 482 198 792 119 943 640

5.1 Cash and cash equivalents at the beginning of the reporting year 582 513 944 462 570 304

5.2 Cash and cash equivalents at the end of the reporting year 1 064 712 736 582 513 944





March 18, 2013




registration number

registration number

(reference number)

BIC

45293554000 00032537 1027700132195 1481 044525225

8

REPORT ON CAPITAL ADEQUACY,AMOUNT OF PROVISIONS FOR IMPAIRMENT OF DOUBTFUL LOANS AND OTHER

ASSETS

(disclosure form)



Sberbank of Russia



Quarterly (Annual)

Line

number Indicator name

As of the beginning

of the reporting year

Increase (+)/

reduction (-) over

the reporting period

As of the

reporting date

1 2 3 4 5

1 Equity (capital) (thousands of Russian rubles),

including: 1 515 779 758 163 311 331 1 679 091 089

1.1 Share capital of the credit institution,

including: 67 760 844 0 67 760 844

1.1.1 Nominal value of registered ordinary shares (interests) 64 760 844 0 64 760 844

1.1.2 Nominal value of registered preferred shares 3 000 000 0 3 000 000

1.2 Treasury shares redeemed from shareholders (members) 0 0 0

1.3 Paid-in capital 228 054 226 0 228 054 226

1.4 Reserve fund of the credit institution 3 527 429 0 3 527 429

1.5 Financial result of operations underlying the calculation of equity (capital): 931 394 889 289 549 020 1 220 943 909

1.5.1 previous periods 633 468 145 263 106 380 896 574 525

1.5.2 reporting period 297 926 744 26 442 640 324 369 384

1.6 Intangible assets 2 555 334 2 369 192 4 924 526

1.7 Subordinated debt (loan, deposit, bonds issued) 300 000 000 60 745 400 360 745 400

1.8 Sources (part of sources) of additional capital formed by investors with inappropriate assets 0 0 0

2 Regulatory amount of equity (capital) adequacy ratio, (percent) 10.0 X 10.0

3 Actual amount of equity (capital) adequacy ratio, (percent) 15.0 X 12.6

4 Actual provisions established for possible losses (thousands of Russian rubles),

Including amounts from: 677 852 802 -31 036 459 646 816 343

4.1 loans and receivables 634 257 009 -28 018 655 606 238 354

4.2 other assets exposed to risk of possible losses, and other losses 17 290 126 1 964 025 19 254 151

4.3 credit contingencies disclosed in off-balance-sheet accounts, and term deals 26 242 586 -4 973 928 21 268 658

4.4 Operations with offshore residentso 63 081 -7 901 55 180

Reference section:

1 Charge (recovery) of provisions for possible losses on loans and similar receivables in the reporting

period (thousands of Russian rubles), ................................................................................................... 268 165 933

including as a result of:

1.1 granting of new loans ........................................................................................................................... 112 307 691

1.2 changes in loan quality ......................................................................................................................... 133 221 037

1.3 changes in the official currency exchange rate against the ruble, as set by Bank of Russia .................. 0

1.4 other reasons ........................................................................................................................................ 22 637 205

2 Recovery (decrease) of provisions for possible losses on loans and similar receivables in the

reporting period (thousands of Russian rubles), .................................................................................. 296 184 588

including as a result of:

2.1 non-perfoming loans write-offs ............................................................................................................ 30 608 981

2.2 repayment of loans ............................................................................................................................... 212 308 015

2.3 changes in loan quality ......................................................................................................................... 36 972 603

2.4 change in the official currency exchange rate against the ruble, as set by Bank of Russia ..................... 898 084

2.5 other reasons ......................................................................................................................................... 15 396 905




Reporting Department Andrei V. Kruzhalov (Signature)

March 18, 2013




registration number

registration number

(reference number)

BIC

45293554000 00032537 1027700132195 1481 044525225

9

REPORT ON STATUTORY RATIOS

(disclosure form)



Sberbank of Russia



Annual

Percent

Line

number Indicator name

Regulatory

amount

Actual amount

as of the reporting date as of the previous reporting date

1 2 3 4 5

1 Equity (capital) adequacy ratio of the bank (H1) 10.0 12.6 15.0

2 Equity (capital) adequacy ratio of non-banking credit institution with the right

to transfer funds without opening bank accounts and other related banking

operations (H1.1)

3 Instant liquidity ratio of the bank (H2) 15.0 61.4 50.8

4 Current liquidity ratio of the bank (H3) 50.0 74.3 72.9

5 Long-term liquidity ratio of the bank (H4) 120.0 99.8 87.3

Maximum risk ratio for a single maximum 16.7 maximum 17.3

borrower or a group of related borrowers (Н6) minimum 0.2 minimum 0.1

7 Maximum limit of large credit risks (H7) 800.0 141.1 125.3

8 Maximum amount of credits, bank guarantees and sureties issued by the bank

to its members (shareholders) (H9.1) 50.0 0.0 0.0

9 Aggregate risk ratio of the bank’s insiders (H10.1) 3.0 1.0 0.9

10 Ratio of the bank’s equity (capital) used for purchasing shares (stocks) with

other legal entities (H12) 25.0 0.8 0.7

11 Ratio of the amount of liquid assets with maturity within the next 30 calendar

days against the amount of liabilities of non-bank settlement credit institutions

(H15)

12 Liquidity ratio of non-banking credit institution with the right to transfer funds

without opening bank accounts and other related banking operations (Н15.1)

13 Ratio of maximum aggregate loans to customers involved in settlements for

completion of settlement (H16)

14 Ratio of loans to borrowers, other than those involved in settlements, from

non-bank settlement credit institutions on their own behalf or for their own

account (H16.1)

15 Minimum ratio of loans secured with mortgage to equity (capital) (H17)

16 Minimum ratio of mortgage cover and bonds secured with mortgage in the

issue (H18)

17 Maximum ratio of aggregate liabilities of the issuing credit institution to

creditors, who in accordance with federal laws have priority over the holders

of bonds secured with mortgage, to the its equity (capital) (H19)





March 18, 2013

10

Explanatory note to the annual report

for 2012 of Sberbank of Russia

Prepared in accordance with the requirements of the

Directive of Bank of Russia No. 2089-U from October

8, 2008, On procedures for preparing the annual

report of credit institutions (as amended)

11

Contents

1. Introduction to the Explanatory note .................................................................................................. 12 2. Sberbank business areas. Banking Products. Licenses ...................................................................... 13 3. Economic environment of Sberbank. Summary of significant changes in the activities, events that

affected/may affect financial stability, policies (strategy) of the Bank in the reporting year ...... 15 Loans to individuals ................................................................................................................................... 15 4. Summary 2012 results ........................................................................................................................ 16

4.1. Main operating results ................................................................................................................ 16 4.2. Sberbank ratings assigned by international rating agencies ....................................................... 16

Operations of the Bank with the most significant impact on the changes of financial results.

Operations of the Bank in various geographic regions ................................................................... 17 6. Development prospects of the Bank .................................................................................................. 21

7. Summary of the risks related to various operations of the Bank ................................................... 22 7.1. Country concentration of assets and liabilities of the Bank ........................................................ 22 7.2. Credit risk .................................................................................................................................... 23 7.3. Liquidity risk ............................................................................................................................... 31 7.4. Market risk .................................................................................................................................. 32

7.5. Legal risk ..................................................................................................................................... 33 7.6. Strategic risk ................................................................................................................................ 34 7.7. Operational risk ........................................................................................................................... 35 7.8. Risk of business reputation loss ..................................................................................................... 35

7.9. Information on operations/transactions with related parties of the Bank ................................... 35 7.10. Off-balance liabilities, term deals and related provision. ........................................................... 36

8. Information on payments/remuneration to the main management personnel ............................. 38

9. Expected dividend payments on shares and distribution of net profits of the Bank in 2012.

History of dividend payments and distribution of net profit ......................................................... 40 10. Earnings per share.............................................................................................................................. 41

11. Structure of the branch network of Sberbank ................................................................................. 42 12. Sberbank of Russia banking (consolidated) Group......................................................................... 43 13. Members of the Bank’s Supervisory Board and its changes in 2012. Information on the

shares/interests in the Bank held by the members of the Supervisory Board in 2012 ................. 44 14. Members of the Bank’s Management Board. Information on the shares/interests in the Bank

held by the members of the Management Board in 2012 ............................................................... 47 15. Significant information on valuation methods and major accounts ............................................. 48

15.1. Data comparability in disclosure reporting forms ....................................................................... 48

15.2. Principles and methods of valuation and accounting of certain balance-sheet items ................. 48

15.3. List of significant changes implemented in Accounting policy, which affect the comparability

of certain accounting items of the Bank ...................................................................................... 49

15.4. Brief information on results of balance-sheet items stock-taking ............................................... 49 15.5. Information on receivables and payables .................................................................................... 49 15.6. Information on adjusting events after the reporting date ............................................................ 50

15.7. Non-adjusting events after the reporting date .............................................................................. 51 15.8. Information on incompliance with accounting rules ................................................................... 51 15.9. Changes in the Bank’s Accounting policy for 2013 ................................................................... 51

12

1. Introduction to the Explanatory note

This Explanatory note:

is prepared in accordance with the requirements of the Directive of Bank of Russia No.

20891U, dated 10/8/2008

is part of the annual report of Sberbank of Russia2 for 2012 prepared in accordance with the

Russian accounting standards (hereinafter, the "RAS") and does not include information from

consolidated statements of the Bank Group;

use the information from disclosure report forms prepared in accordance with the Directive of

Bank of Russia No. 2089-U and Directive of Bank of Russia No. 2332-U3, and also internal

statistical report forms taking into account the events after the reporting date.

The figures used in the Explanatory note are provided as of 2012 and 2011 while the values of these

figures are consistent and comparable to each other.

The management of the Bank decided to publish this explanatory note as part of the annual report

on the web site of the Bank at (www.sbrf.ru; www.sberbank.ru). In accordance with the Directive No.

2172-U4, the forms of the annual report (balance sheet, income statement, cash flow statement, report on

capital adequacy, amount of provisions for impairment of doubtful loans and other assets and report on

statutory ratios) are published in the public media and posted on the web site of the Bank as part of the

annual report.

1 Directive of Bank of Russia On procedures for the annual reporting of credit institutions No. 2089-U, dated October 8, 2008

(as revised on November 13, 2010) (hereinafter, the "Directive of Bank of Russia No. 2089-U") 2Hereinafter, "Sberbank of Russia", "Sberbank", "Bank"

3 Directive of Bank of Russia On the list, forms and procedures for preparing and submitting reporting forms by credit

institutions to the Central Bank of the Russian Federation, No. 2332-U, dated November 12, 2009 (as revised on December 3,

2012) (hereinafter, the "Directive of Bank of Russia No. 2332-U") 4 In accordance with the Directive of Bank of Russia On Publishing and Submitting Information on the Activities of Credit

Institutions, No 2172-U, dated January 20, 2009, the credit institution independently adopts the decision to publish and method

of publishing the explanatory note to its annual report.

http://www.sbrf.ru/


13

2. Sberbank business areas. Banking Products. Licenses

Principal areas of banking activities:

Corporate business: providing services for settlement and current accounts, opening deposits,

providing all types of financing, issuing guarantees, providing services for exports and imports

operations of customers, cash collection services, cash services, conversion services, money

transfers from public to legal entities, transactions with promissory notes, etc.

Retail business: providing banking services to individuals by accepting deposits, lending,

servicing bank cards, making transactions with precious metals, savings certificates and

promissory notes, buying and selling foreign currency, payments, money transfers including

those without opening of bank accounts, safekeeping etc.

Operations on the financial markets: with securities, derivative financial instruments, foreign

currency; placing and borrowing funds on interbank market and capital markets, etc.

Within the mentioned business areas, Sberbank offers the customers a wide range of banking

products and services.

Apart from the banking operations, the Bank perform the following:

issuance sureties for third parties;

purchase claims from third parties;

trust management of monetary funds;

activities as a professional participant on the securities market, including brokerage, dealer and

depositary activities;

other operations and services.

Sberbank conducts its business in accordance with the licenses listed below: all licenses are issued

without term limitation.

License type License number Date received

Licenses issued by the Central Bank of the Russian Federation

General license for banking operations with funds in rubles and foreign

currency № 1481 08.08. 2012

License for banking operations on attracting and placing precious

metals, other operations with precious metals № 1481 30.08.2010

Licenses issued by the Federal Financial Markets Service

License for brokerage activities of professional participant on the

securities market. № 077-02894-100000 27.11.2000

License for dealing activities of professional participant on the

securities market. №077-03004-010000 27.11.2000

License for securities management activities of professional participant

on the securities market. № 077-03099-001000 27.11.2000

License for depositary activities of professional participant on the

securities market. №077-02768-000100 08.11.2000

License for the activities of specialized depositary of investment funds,

share investment funds and non-governmental pension funds* №22-000-1-00012 04.10.2000

License for acting as an stock exchange intermediary on conclusion and

trading of agreements, which are derivative financial instruments,

whose basic asset is stock exchange commodity

№ 1496 24.12.2009

* License was canceled on the initiative of Sberbank on October 18, 2012

14

Information on Bank's participation in the system of mandatory insurance of individuals

deposits in the banks of Russian Federation

Sberbank is a member of the deposit insurance system since January 11, 2005. In accordance with

the Russian laws, the Bank pays the insurance premiums to the fund of mandatory deposit insurance on a

quarterly basis. In 2012, the expenses of Sberbank on contributions to the mandatory deposit insurance

fund amounted to 23.0 billion rubles, which exceeds the figure for 2011 by 16.6%. The growth took place

due to the growth of amounts attracted from individuals.

15

3. Economic environment of Sberbank. Summary of significant changes in the

activities, events that affected/might affect financial stability, policies (strategy)

of the Bank in the reporting year

During 2012, the ratio of growth of the Russian GDP was decelerating from quarter to quarter. As a

result, the GDP growth ratio decreased from 4.3% in 2011 to 3.4% in 2012, according to MED5.

The growth of industrial production also decelerated, following the weak results in the extraction

sector and a serious slowdown of the manufacturing industry. The domestic demand could not sufficiently

support the economic growth. Therefore, despite the higher growth of population income and substantial

increase of consumer lending, the major indicators of economic development were lower than in 2011.

The deficiency of the economy affected the growth features of the banking sector:

In 2012, the growth of the corporate lending was lower than a year ago: 14% vs. 27%.

During 2012, the Russian banking sector experienced a steady deficit of resources, generated

by the influence of the following key factors:

– continued capital outflow from Russia in recent years;

– fiscal factors (net surplus of the federal budget during the main part of the year and

sterilization of ruble liquidity, as well as increased borrowing by the Ministry of Finance in

the domestic market);

– decrease of surplus of the current account.

Despite the mentioned constraints, during the year, Sberbank was actively raising its resource base

and increased the balance of retail and corporate deposits by the amount exceeding 1.5 trillion rubles. The

growth rate of the loan portfolio exceeded the growth rate of the customer funds. Sberbank was actively

using its accumulated liquidity reserves by conducting direct REPO secured by bonds. In addition, during

the year, Sberbank raised funds from Bank of Russia under the Regulations No. 312-P6 and the Federal

Treasury in the form of deposits. Over the year, the funds of Bank of Russia (including subordinated loan)

and Federal Treasury placed in Sberbank increased by 2.5 times to 1.4 trillion rubles.

Share of Sberbank in various segments of financial market7:

Jan. 1, '13 Jan. 1, '12

Assets 28.9% 26.8%

Capital 27.4% 29.1%

Loans to corporate customers 33.6% 32.9%

Loans to individuals 32.7% 32.0%

Due to corporate customers 17.2% 14.5%

Due to individuals 45.7% 46.6%

5Ministry of Economic Development of the Russian Federation

6On the procedure of Bank of Russia for granting loans secured by assets or sureties to credit institutions, No. 312-P, dated

November 12, 2007 (as revised on July 03, 2012) 7 According to the internal Methodology for calculating the share of Sberbank of Russia in the principal segments of financial

market in the Russian Federation and regional markets, No. 887-4-r, dated April 22, 2011

16

4. Summary 2012 results

4.1. Main operating results

Sberbank has finished the year of 2012 with the following economic indicators8:

Indicators, million rubles. 2012 2011 Change, %

Assets 13 581 754 10 419 419 30.4%

Profit before tax 474 709 408 902 16.1%

Profits after tax 346 175 310 495 11.5%

Capital9 1 679 091 1 515 780 10.8%

The major source of capital growth, calculated in accordance with the Regulations of Bank of

Russia No. 215-P, is the earned net profit. In addition, in October, the Bank issued subordinated bonds

included to the calculation of capital. At the same time, during the year, the capital decreased by the

amount of dividends paid in accordance with the decision of the General Shareholders' Meeting for 2011

and the amount of investments in subsidiaries, in particular, the acquired DenizBank and Volksbank

International. The overall result for 2012 is an increase of capital by 10.8% to a 1,679 billion rubles.

The capital adequacy (H1 ratio) for 2012 decreased from 15.0% to 12.6%, mainly due to growth in

the loan portfolio, which forms the most part of assets, weighted by risk to calculate the H1 ratio.

4.2. Sberbank ratings assigned by international rating agencies

Credit ratings of Sberbank for 2012 did not change:

Fitch Ratings Moody’s

Long-term foreign currency rating:

Sberbank ВВВ Baa1

Russian Federation ВВВ Baa1

Rating of international debts

Loan participation notes issued as part of

Sberbank's MTN program

ВВВ А3

Eurobonds of the Russian Federation ВВВ Baa1

8 Hereinafter, the figures provided in the tables may differ from the calculated figures due to rounding

9Regulations on the methods to determine the equity (capital) of credit institutions, No. 215-P, as approved by the Central

Bank of the Russian Federation on February 10, 2013 (as revised on December 03, 2012)

17

Operations of the Bank with the most significant impact on the changes of financial

results. Operations of the Bank in various geographic regions

Aggregated Profit and Loss Statement

million rubles 2012 2011 % Change

Net interest income 694 923 575 826 20.7%

Interest income, including those from: 1 094 015 837 888 30.6%

Due from banks 9 643 7 886 22.3%

Corporate loans and loans to individuals 982 415 729 557 34.7%

Investments in securities 101 957 100 445 1.5%

Interest expense, including those on: (399 092) (262 062) 52.3%

Due to banks (70 214) (28 280) 148.3%

Due to corporate customers (92 463) (43 141) 114.3%

Due to individuals (226 573) (187 479) 20.9%

Debt securities in issue (9 842) (3 161) 211.4%

Changes in provision for loans (2 936) 16 394 (117.9%)

Changes in provision for securities and other losses 1 108 (5 154) (121.5%)

Net income from operations with financial assets and securities 11 437 6 227 83.7%

Net income from foreign currency operations 5 649 9 145 (38.2%)

Net fee and commission income 144 746 125 576 15.3%

Other operating income 17 133 15 712 9.0%

Operating expenses, including: (397 352) (334 825) 18.7%

Staff costs 209 565 190 647 9.9%

Administrative expenses, depreciation 134 294 97 413 37.9%

Expenses on realization of proprietary claims 28 170 17 565 60.4%

Profit before tax 474 709 408 902 16.1%

Accrued (paid) tax (128 534) (98 407) 30.6%

Profit after tax 346 175 310 495 11.5%

Operating income before provision10

earned by the Bank in 2012 amounted to 873.9 billion rubles

versus 732.5 billion rubles in 2011. Net interest income and net commission income also exceeded those

of the previous year.

Net interest income grew by 20.7% to 694.9 billion rubles. This growth was provided by the

increased amount of interest income.

The interest income11

grew by 30.6% mainly due to income from corporate loans and loans to

individuals and amounted to 1,094.00 billion rubles:

1) 1) The Bank receives more than half of its interest income from corporate loans. Over the

year, the amount of income received from these loans grew by 29.9% and amounted to 634.6

billion rubles. The amount of corporate loan portfolio12

increased by 16.2% and exceeded 7.4

trillion rubles. The total amount of corporate loans issued by the Bank exceeded 5.9 trillion

rubles. - nearly by 350 billion rubles more than in 2011.

2) Interest income from loans to individuals increased by 51.3% to 326.0 billion rubles. The

growth of income is primarily driven by the increased amount of lending. Over the year, the

loan to individuals portfolio of Sberbank grew by 42.3% and exceeded 2.5 trillion rubles. More

than 66% of the portfolio growth was provided by consumer loans and credit card

indebtedness.

10

The operating income before provisions was estimated in accordance with the form 0409807 as follows: item 18 minus item

4 minus item 14 minus item 15 minus item 16 11

In accordance with the Directive of Bank of Russia No. 2332-U, the interest income includes interest on loans and

commission income from lending operations, interest income of previous years, penalties and fines. 12

Provides the balance of corporate loan portfolio before deducting provisions

18

3) The income of previous years, penalties and fines were received by the Bank from customers

as part of its work with problem assets. 6.7 billion rubles were received in 2012 (in 2011,

11.6 billion rubles)

4) The income from the sale of insurance products13

amounted to 15.0 billion rubles. (in 2011,

13.4 billion rubles)

The interest income from investments in securities was 102.0 billion rubles. This income increased

slightly (by 1.5%) while the securities portfolio of the Bank grew by 15.4%. This is due to the fact that in

order to improve the reliability of investments and increase the share of securities accepted by Bank of

Russia as the collateral for refinancing, during the year Sberbank was purchasing the state bonds and the

bonds of first-rate corporate issuers. The yield of these assets on the market has declined in 2012.

The interest income from amounts due from banks increased by 22.3% to 9.6 billion rubles due to

the increased amount of interbank loans, including loans to subsidiaries.

The interest expenses increased by 52.3%, or 137.0 billion rubles, and amounted to 399.1 billion

rubles. The expenses increased for all items:

1) The interest expenses on amounts due to banks amounted to 70.2 billion rubles. Their amount

increased by 41.9 billion rubles. mainly due to deposits of Bank of Russia. In 2012, the

significant amounts were raised from the regulator, because Sberbank continued to increase

lending operations in the circumstances when the growth of amounts due to customers was

lower than the demand on loans. Over the year, the amounts on deposits in Bank of Russia14

increased from 565 billion rubles to 1,368 billion rubles.

2) The interest expenses on amounts due to corporate customers increased by 49.3 billion

rubles to 92.5 billion rubles mainly due to term deposits. Moreover, 2012 saw the increase both

of the interest rates and the amount of attracted deposits.

3) The interest expenses on amounts due to individuals increased by 39.1 billion rubles to 226.6

billion rubles. The expenses increased both following the growth of the amount of deposits (by

13.9% to 6,288 billion rubles.) and the increase in interest rates on deposits during the year.

4) The interest expenses on debt securities in issue increased by 6.7 billion rubles to 9.8 billion

rubles. The growth refer to significant increase of funds attracted to savings certificates of

Sberbank, after the customers were offered higher interest rates than for deposits. Over the

year, the amounts raised with savings certificates increased from 9 billion rubles to 222 billion

rubles.

Over the year, the net income from operations with financial assets and securities15

increased by

5.2 billion rubles to 11.4 billion rubles. The most significant amount of income refer to derivative

financial instruments, shares and corporate bonds.

The net income from operations with foreign currencies16

decreased by 3.5 billion rubles to 5.6

billion rubles due to the impact of negative foreign currency revaluation.

The net commission income increased by 15.3%, or by 19.2 billion rubles and amounted to 144.7

billion rubles. The growth was mostly caused by the following:

1) The commission income increased by 25.6 billion rubles, of which 65% were provided by the

increased income from operations with bank cards. The most notable increase in commission

13

The indicated income is reflected on the symbol 12406 "Income from the provision of consulting and information services"

for individuals, which reflects the main income from the sale of insurance products. Other income from similar activities,

including income from the sale of mandatory pension insurance contracts are reflected on the symbol 16202 "Commission fees

from intermediary services under brokerage and similar agreements" and, in accordance with the rules for preparing the form

0409807, relate to the item "Commission income". When selling the insurance products, Sberbank is not the insurer. Total

income from the sale of insurance products for 2012 amounted to 16.8 billion rubles. 14

Including the amount of subordinated loan (300 billion rubles) received from Bank of Russia at the end of 2008 15

The indicator includes net income from operations with financial assets designated at fair value through profit or loss, from

operations with securities available for sale and securities held to maturity (lines 6, 7 and 8 of the Form 0409807) 16

This indicator includes the net income from operations with foreign currencies and net income from foreign currency

revaluation (item 9 and item 10 of the Form 0409807) 10 формы 0409807)

19

income was noticed in acquiring, bank guarantees and settlement operations, the most

significant decline – in operations with foreign currencies.

2) The commission income increased by 6.4 billion rubles, mostly refer to the higher volumes of

operations with bank cards. In particular, there was an increase in the amount of payments to

payment systems.

In 2012, the changes in the provision for possible losses from loans were driven by the following

factors:

The Bank created/further increased amounts of provision following

– granting of new loans (42% of the total provision created during the year)

– changes in the quality of loans (50%)

– other reasons (8%)

The Bank recovered/decreased amounts of provision following

– repayment of loans (72% of the total reserves recovered during the year)

– changes in the quality of loans (12%)

– other reasons, including the change in the official foreign currency rates established by

Bank of Russia (6%)

– write-offs of non-performing loans (10%)

The above changes in provision (excluding write-offs of non-performing loans) were recognized in

the Income statement. As a result, in 2012, the Bank’s provision charge on loans17

amounted to 2.9 billion

rubles. A year earlier, the net income was obtained from recovery of provision for loans in the amount of

16.4 billion rubles.

The operating expenses of the Bank increased by 18.7%, or 62.5 billion rubles and amounted to

397.4 billion rubles. The following items had the most significant impact on the increase of operating

expenses:

1) Projected growth of staff costs (+18.9 billion rubles);

2) Administrative expenses that follow the development of the business (+28.7 billion rubles) and

depreciation (+8.2 billion rubles);

3) Increase of expenses from the realization of proprietary claims (+10.6 billion rubles).

The profit earned by Sberbank in 2012 exceeds the results in 2011. Profit before tax amounted to

474.7 billion rubles. (2011: 408.9 billion rubles). Profit after tax amounted to 346.2 billion rubles. (2011:

310.5 billion rubles).

Information on various operations conducted by credit institution in different geographic regions

The Bank offers a full range of services throughout the Russian Federation. Sberbank of Russia also

operates on the markets of other countries:

via the network of its subsidiaries18

operating in the Republic of Kazakhstan, Ukraine, Belarus,

Switzerland, Austria, Czech Republic, Slovakia, Hungary, Croatia, Serbia, Slovenia, Bosnia

and Herzegovina, Banja Luka in Bosnia and Herzegovina, Turkey, Germany and Bahrain.

via its branch in India (see "Structure of the branch network of Sberbank").

In their regions, the subsidiaries and the branch provide a wide range of banking services to retail

and corporate customers and carry out operations in the financial markets. All operations are conducted in

accordance with the licenses obtained from national regulators.

In addition, the Bank is present abroad via its financial companies, members of the Sberbank

Group, which provide services in accordance with their specialization in the following countries: the

Republic of Kazakhstan, Ukraine, Ireland, United States of America, Great Britain, Cyprus.

17

Line 4 of the form 0409807 18

This Explanatory Note does not include financial data on subsidiary banks.

20

Two foreign representative offices located in Germany and China are not directly involved in

banking operations. These representative offices assist in promoting the business of the Bank and its

customers in the regions and build the image of Sberbank in these countries.

21

6. Development prospects of the Bank

For the successful implementation of “Sberbank of Russia development strategy till 2014”, the

Bank has to provide effective work in 2013, which will able to bear the expenses on implementing the

wide range of strategic projects. This requires that the following important tasks are solved and that key

effectiveness indicators are achieved.

In the area of finance, the Bank plans to provide strong financial performance through stable

business development, improved cost control and effective risk management.

In the work with customers, the Bank plans to focus on further development of customer

relationships, improving the return per customer, increasing the number of products per customer,

diversifying the resource base and creating conditions for entering new markets.

The priorities for processes and technologies will include improving the reliability, increasing

the productivity and enhancing the systems. The Bank plans to implement a number of critical projects

in order to create the foundation for the development of new technologies. This includes the

standardization of IT platforms and processes, consolidation of IT infrastructure, building a multi-channel

model, creating the technological framework for analyzing big data, and further development of digital

technology.

The guidelines for improving the management and personnel system are as follows:

developing human capital: creating a structured personnel management system that meets the

requirements of business;

developing information resources: forming foundations for the effective use of information,

building information and analysis systems to achieve the objectives of the Bank;

developing the management system: creating a management system that is adequate to the

increasing complexity of the business and volatility of external factors.

22

7. Summary of the risks related to various operations of the Bank

7.1. Country concentration of assets and liabilities of the Bank

million rubles Jan. 1, '13

Russia CIS

Countries

from the

"Group of

developed

countries"19

Other

countries Total

Assets

1 Cash 725 052 0 0 0 725 052

2 Due from the Central Bank of Russian Federation 381 208 0 0 0 381 208

2.1 Mandatory cash balances with the Central Bank of

Russian Federation 122 374 0 0 0 122 374

3 Cash in credit institutions 644 485 79 420 915 81 464

4 Financial assets designated at fair value through profit

or loss 80 638 7 9 678 11 561 101 884

5 Net loans to banks and customers 8 759 529 128 608 453 987 430 626 9 772 750

6 Net investments in securities and other financial assets

available for sale 1 321 698 34 376 63 452 122 105 1 541 631

6.1 Investments in subsidiaries and affiliates 80 928 31 074 52 553 116 678 281 233

7 Net investments in securities held to maturity 349 771 4 892 7 199 0 361 862

8 Fixed assets, intangible assets and inventories 438 006 0 0 22 438 028

9 Other assets 167 667 3 463 3 722 3 023 177 875

10 Total assets 12 224 213 171 831 617 458 568 252 13 581 754

Liabilities

11 Loans, deposits and other funds of the Central Bank

of the Russian Federation 1 367 974 0 0 0 1 367 974

12 Due to banks 191 110 25 497 368 891 19 952 605 450

13 Due to corporate customers and individuals 8 936 080 18 315 420 576 87 205 9 462 176

13.1 Due to individuals 6 256 688 17 160 4 859 9 343 6 288 050

14 Financial liabilities designated at fair value through a

profit or loss 5 229 0 13 353 7 384 25 966

15 Debt securities in issue 331 891 0 0 0 331 891

16 Other liabilities 103 309 1 845 6 013 4310 115 477

17 Provisions for possible losses from credit

contingencies, other possible losses and transactions

with offshore residents

20 037 248 151 888 21 324

18 Total liabilities 10 955 630 45 905 808 984 119 739 11 930 258

Net position 1 268 583 125 926 (191 526) 448 513 1 651496

19

The countries of the "Group of developed countries" include: Australia, Republic of Austria, Grand Duchy of Luxembourg,

Hellenic Republic, Ireland, Italian Republic, Canada, Kingdom of Belgium, Kingdom of Denmark, Kingdom of Spain,

Kingdom of Netherlands, Kingdom of Norway, Kingdom of Sweden, New Zealand, Republic of Portugal, United Kingdom of

Great Britain and Northern Ireland, United States of America, Federal Republic of Germany, Republic of Finland, French

Republic, Swiss Confederation, Japan

23


Russia CIS

Countries

from the

"Group of

developed

countries"20

Other

countries Total

Assets

1 Cash 492 881 - - - 492 881

2 Due from the Central Bank of Russian Federation 151 197 - - - 151 197

2.1 Mandatory cash balances with the Central Bank of

Russian Federation 99 392 - - - 99 392

3 Cash in credit institutions 1486 482 35 758 717 38 443

4 Financial assets designated at fair value through profit

or loss 20 031 3 093 - 404 23 528

5 Net loans to banks and customers 7 011 957 115 764 231 314 299 836 7 658 871

6 Net investments in securities and other financial assets

available for sale 1 077 134 36 275 26 624 - 1 140 033

6.1 Investments in subsidiaries and affiliates 65 220 28 028 783 - 94 031

7 Net investments in securities held to maturity 404 747 5 124 7 195 - 417 066

8 Fixed assets, intangible assets and inventories 370 933 - - 15 370 948

9 Other assets 116 591 1 448 6 247 2 166 126 452

10 Total assets 9 646 957 162 186 307 138 303 138 10 419 419

Liabilities

11 Loans, deposits and other funds of the Central Bank

of the Russian Federation 565 388 - - - 565 388

12 Due to banks 157 192 25 417 285 608 9 250 477 467

13 Due to corporate customers and individuals 7 621 882 13 038 208 451 33 827 7 877 198

13.1 Due to individuals 5 497 384 12 105 7 444 5 913 5 522 846

14 Financial liabilities designated at fair value through a

profit or loss - - - - -

15 Debt securities in issue 87 223 - - - 87 223

16 Other liabilities 77 764 1 116 2 572 3 743 85 195

17 Provisions for possible losses from credit

contingencies, other possible losses and transactions

with offshore residents

18 672 157 6 645 832 26 306

18 Total liabilities 8 528 121 39 728 503 276 47 652 9 118 777

Net position 1 118 836 122 458 (196 138) 255 486 1 300 642

Most of the assets and liabilities of the Bank are in the Russian Federation. The net loans to legal

entities forms the major part of assets placed with non-residents. The loans to non-resident legal entities

include mostly the deals with groups which are Russian by their major place of business activity.

7.2. Credit risk

Credit Risk Management

Credit risk is the risk of potential financial losses arising as a result of late or incomplete

performance or non-performance by the borrowers of their obligations to the Bank to deliver cash or other

20

The countries of the "Group of developed countries" include: Australia, Republic of Austria, Grand Duchy of Luxembourg,

Hellenic Republic, Ireland, Italian Republic, Canada, Kingdom of Belgium, Kingdom of Denmark, Kingdom of Spain,

Kingdom of Netherlands, Kingdom of Norway, Kingdom of Sweden, New Zealand, Republic of Portugal, United Kingdom of

Great Britain and Northern Ireland, United States of America, Federal Republic of Germany, Republic of Finland, French

Republic, Switzerland, Japan

24

financial assets. Credit risk is the most significant type of risk for the Bank, and the Banks pays special

attention to managing this risk and monitoring the quality of the loan portfolio.

Credit risk management in corporate lending

The Bank has a mandatory independent expertise of credit risks performed when making the

decision on granting the loans to borrowers with medium-sized and large businesses, as well as the largest

customers. The credit risk assessment system adopted in the Bank allows to evaluate the expected level of

credit risk by assessing the customer risk (probability of default) and transaction risk (loss in the event of

default).

In order to effectively manage the credit risk in operations with legal entities, Bank defines two

main types of operations: corporate lending operations and operations in the financial markets with

corporate clients and financial institutions. The Bank has regulated and implemented the key processes to

establish, review and control the limits of credit risk, monitor the financial condition and warning signals,

and regularly review the internal credit rating of the counterparty/borrower/ issuer, and manage the

collateral for operations on financial markets.

Credit risk management in lending to small businesses

In 2012, the Bank continued to develop the risk management system of lending to small businesses.

The customers are divided into two segments: "Micro-business" where the retail risk assessment tools are

applied, and "Small Business", for which the risk assessment tools which are fully integrated into the risk

management system for medium and large corporate customers are created.

The Bank is using two standardized, centralized technologies for lending to small businesses:

"Credit factory" - assessing the risk at the time of customer application for loan, the credit rating is

assigned to the deal, and "Credit conveyor" - the long-term rating is assigned to the customer by taking

into account the specific characteristics of the customer category.

The "Credit Factory" technology is used in credit products of "Doveriye", and products "Express

auto" and "Express asset" which are processed in pilot mode using the purchased vehicle or equipment as

collateral. Preparations are performed to introduce this technology in the subsidiary banks in the Republic

of Belarus and Kazakhstan.

Credit risk management in lending to individuals

The Bank continued to develop its retail customer risk management system by using its "Credit

Factory" technology to provide the major retail credit products, such as consumer loans, car loans,

housing loans and credit cards.

Changes introduced by the Bank in "Credit Factory" in 2012:

scoring assessment of retail customers credit history based on statistical approach was

introduced for housing loans;

Risk-Based-Pricing, applicable for consumer loans, was extended to new segments: employees

of companies-participators in salary projects, working pensioners who receive their income in

Sberbank and others;

rating models of the customers credibility assessment was implemented for all products;

integrated scoring model was implemented for car loans, housing loans and credit cards;

regional scorecards of risk level were implemented for consumer loans by taking into account

the regional specifics of the risk profile;

fraud monitoring system, which is planned to be further developed in 2013, was implemented

in the process of pre-credit processing.

25

Quality of the loan and similar debts

million rubles Jan. 1, '13 Jan. 1, '12

Claims on loans

Claims on

interest income Claims on loans

Claims on

interest income

Quality of the loan debt, categories:

I 5 171 925 14 588 3 485 093 7 976

II 3 919 897 28 221 3 497 106 19 752

III 709 280 5 052 731 235 5 860

IV 174 849 933 161 625 656

V 394 322 6 329 409 211 7 151

Total indebtedness on loans and interest 10 370 273 55 123 8 284 270 41 395

Indebtedness on loans granted to shareholders

(members) of the credit institution and the interest

on these loans21

852 - - -

Amount of overdue indebtedness 269 038 4 414 274 754 4 807

Amount of restructured indebtedness 1 022 959 10 012 1 036 401 8 630

Collateral, including: 9 575 210 X 8 276 763 X

Quality category I 233 885 X 135 648 X

Quality category II 3 533 496 X 3 485 185 X

Estimated provision for possible losses excluding

the provision for portfolios of homogeneous loans 655 972 8 291 681 567 8 787

Estimated provision taking into account the effect

of collateral and excluding the provision for

portfolios of homogeneous loans

517 637 7 737 555 908 8 249

Total actual provision for possible losses,

including by quality categories: 597 522 8 716 625 399 8 858

I 498 - 507 -

II 59 949 1 252 47 419 242

III 86 262 1 010 101 227 1 270

IV 82 409 441 80 379 346

V 368 405 6 013 395 866 7 001

As of January 1, 2013, and January 1, 2012, in the portfolio of the Bank there were loans with the

terms which are significantly different from the market terms, i.e. preferential loans as stated in the

Regulations of Bank of Russia On procedure of creating provisions for possible losses on loans, loan debt

and its equivalents by credit institutions, No. 254-P, dated March 26, 2004.

The amount of overdue indebtedness for the year decreased by 5.7 billion rubles as a result of

overdue corporate loans.

As of January 1, 2013, the amount of restructured corporate loans22

amounted to 1,009 billion

rubles, their share in the corporate loan portfolio was 13.6% (as of January 1, 2012, 1,017 billion rubles

and 15.9%, respectively). Restructuring means introducing changes to the initial substantial terms of the

loan agreement concluded with the borrower, which makes agreement’s terms more favorable for the

borrower and which was not provided by original terms of loan agreement.

As of January 1, 2013, the amount of restructured loans23

to individuals in the loan portfolio

amounted to 14 billion rubles, their share in the loan portfolio to individuals was 0.6% (as of January 1,

21

In accordance with the Accounting Policy of Sberbank of Russia, the Explanatory Note discloses information on the amount

of arrears on loans to shareholders (members) of the credit institution and interest on such loans, if the shareholder (member)

holds more than five percent of the voting shares of the Bank. 22

In accordance with the Regulations on working with distressed assets as part of the model "Implementing the individual

collection system», No. 278-6-r, approved by the Sberbank on April 18, 2012 23

In accordance with the "Methodology for determining the quality category of the loan , assessing the collateral security

accepted for the loan and calculating the reserve for possible losses on loans", No. 2047, approved by Sberbank on December

22, 2010.

26

2012, 20 billion rubles and 1.1%, respectively). The standard restructuring schemes include increase in

term of the loan, changes in the loan repayment schedule, full or partial waiver of penalties, change in the

currency of the loan.

In 2012, Sberbank of Russia continued to follow the conservative approach to the creation of

provision for possible losses based on the International Standards and requirements of Bank of Russia24

in

order to establish the adequate provision.

When creating provision for corporate loans and loans to small businesses, assessed other than on

a portfolio basis, the individual quality assessment is applied for each specific loan. We continue to pay

special attention to the analysis of the of the borrower's financial position, existing gearing, sources of

repayment of the loan and their credibility, quality and liquidity of collateral, other credit risk factors. The

classification of these loans (i.e. assignment of the relevant quality category of the loan) is based on a

case-by-case professional judgment about the level of credit risk on the loan.

The assessment of the borrowers' financial position takes into account the probability of default of

the corporate borrower. The expected losses of the Bank are determined as the level of the Bank's

potential losses in case of default the borrowers. These approaches to provision creation allow to

determine more precisely the individual percentage of provision for each corporate customer. The

principles built into the system for assessing the possible losses are based on western practices in the area

of risk management.

When forming the provision for loans to individuals and loans for small businesses Sberbank

focuses on the portfolio approach. The standard loans that do not exceed the limit set by Bank of Russia

are grouped into portfolios and sub-portfolios with similar credit risk levels. Sberbank is re-assessing its

credit risk on portfolios of similar loans on a quarterly basis by analyzing the information about losses on

retail loans and loans to small businesses in previous reporting periods.

A number of internal documents of the Bank which regulate the procedure for creating provision

were adjusted in 2012 in order to optimize the process: the functions of participants of the process and

signs of the individual impairment of portfolio loans were determined more precise and the procedure of

writing off the loans against provision was simplified.

24

Regulations of Bank of Russia On procedure of creating provisions for possible losses on loans, loan debt and its equivalents

by credit institutions, No. 254-P, dated March 26, 2004 and Regulations of Bank of Russia "On procedure of creating reserves

for possible losses, No. 283-P, dated March 20, 2006.

27

Overdue assets 25


Amount

including overdue terms

Provision for

possible losses

total including by the period of overdue

up to 30

days

from 31

to 90

days

from 91

to 180

days

More

than 180

days

Calculate

d Actual

1. Total loans receivable: 10 370 273 373 646 62 503 34 575 24 629 251 939 655 972 597 522

1.1 Claims to Bank of Russia for

repurchase of the securities 852 0 0 0 0 0 0 0

1.2 Granted loans, placed deposits 10 063 929 369 065 61 933 34 557 24 598 247 978 627 964 573 554

1.3 Claims for rights acquired in

the transaction (claims) (cession) 62 658 15 0 0 0 15 4 561 3 496

1.4 Claims for transactions related

to disposal (acquisition) of

financial assets with simultaneous

offering to the counterparty of the

right to defer the payment (delivery

of financial assets)

25 252 4510 571 19 31 3 889 18 097 18 829

1.5 Claims on the return of

amounts provided by reverse

REPO

196 445 0 0 0 0 0 4 546 840

1.6 Claims on receive (return) of

the debt securities, shares,

promissory notes, precious metals,

provided under the loan agreement

20 013 0 0 0 0 0 0 0

1.7 Amounts paid by the credit

institution to the beneficiary under

bank guarantees, not yet collected

from the principal

1 124 56 0 0 0 56 804 804

2. Securities26

377 495 79 0 0 0 79 2 071 2 071

3. Other claims 288 157 25 637 2 461 1225 6 240 15 711 22 527 25 005

25

According to the form 0409115, including the events after reporting date 26

The tables for 2012 and 2011 indicate a portion of the securities portfolio, for which the Bank creates provisions for possible

losses

28


Amount

including overdue terms

Provision for possible

losses

total including by the period of overdue

up to 30

days

from 31

to 90

days

from 91

to 180

days

More

than 180

days Calculated Actual

1. Total loans receivable: 8 284 270 356 552 45 429 24 942 13 465 272 715 681 567 625 399

1.1 Claims to Bank of Russia for

repurchase of the securities 0 0 0 0 0 0 0 0

1.2 Granted loans, placed deposits 8 045 397 350 200 45 286 24 683 13 164 267 066 657 193 592 186

1.3 Claims for rights acquired in

the transaction (claims) (cession) 8 127 1 997 0 0 0 1 997 2 959 2 959

1.4 Claims for transactions related

to disposal (acquisition) of

financial assets with simultaneous

offering to the counterparty of the

right to defer the payment (delivery

of financial assets)

51 271 4 296 143 259 299 3 595 16 240 25 936

1.5 Claims on the return of

amounts provided by reverse

REPO transactions

179 416 0 0 0 0 0 5 116 4 259

1.6 Claims on receive (return) of

the debt securities, shares,

promissory notes, precious metals,

provided under the loan agreement

0 0 0 0 0 0 0 0

1.7 Amounts paid by the credit

institution to the beneficiary under

bank guarantees, not yet collected

from the principal

58 58 0 0 1 57 58 58

2. Securities 429 743 79 - - - 79 2 547 2 547

3. Other claims 199 754 21 164 2 317 1322 1222 16302 22 242 23 601

In 2012, the amount of overdue loans increased from 356.6 billion rubles to 373.6 billion rubles.

Overall, in the loan portfolio, the share of loans overdue for more than 90 days decreased from

3.5% to 2.8%.

The largest increase was in loans to individuals with overdue term for up to 30 days (16.1

billion rubles).

The most significant decline in the overdue indebtedness was in corporate loans with the

overdue term for more than 180 days (by 21.4 billion rubles).

In 2012 the Bank launched a system of automatic telephone notification of the borrowers based on

COSC27

in Yekaterinburg in order to improve the effectiveness of collecting the overdue debt on retail

loans on the early stage . Bank was refining the "Tallyman", an automated system, which follows up the

non-performing debts of individuals, in order to optimize the collection strategies, communicate with

borrowers and integrate it on-line to the Bank's accounting systems. In addition, the systems were refined

to automate the late debts collection from the borrowers.

In 2012, the Bank separated a new process of organizing the work with the indebtedness on debit

cards of individuals without overdraft and debit cards of individuals with overdraft on the early stage. A

pilot project of collecting debts on debit cards with no overdraft was implemented.

The Bank plans to further develop new technologies for the work with non-performing assets of

individuals by using the scoring and intelligent collection process management system.

27

* COSC means Customer Operations Support Center

29

The results of working with non-performing corporate debts in 2012 are provided below:

recovery of non-performing assets in cash amounted to 105 billion rubles. (in 2011, 120.5

billion rubles);

reclassified, i.e. transferred from the category of non-performing debts to the category of non-

problem debts, the loans in the amount of 60 billion rubles. (in 2011, 79.8 billion rubles);

repaid the overdue interest, late fees, fines, penalties in the amount of 26 billion rubles. (in

2011, 25.7 billion rubles);

the provision for possible losses on loans and other assets recovered by 124 billion rubles (In

2011, by 148.5 billion rubles) primarily in result of repayment of the indebtedness in cash and

reclassification of the loans.

The total amount of debt write-offs against the provision is provided in the "Reference" section of

the form 0409808.

In 2012, the Bank separated the process of organizing the work with non-performing assets on the

stage of overdue term up to 30 days for the customers in "Small business" and "Micro business"

segments. In order to work out this technology, a pilot project has been conducted and "CRM Corporate"

system has been refined.

Concentration of loans

The Bank pays close attention to control of the concentration of credit risks and compliance with

regualtory requirements of Bank of Russia.

Structure of loans and similar debts (before excluding created provision for possible losses)

million rubles Jan. 1, '13 share, % Jan. 1, '12 share, %

Amounts placed in Bank of Russia 852 0.0% - -

Interbank loans 418 508 4.0% 118 338 1.4%

Corporate loans and similar debts, including: 7 422 317 71.6% 6 388 537 77.1%

Loans to resident legal entities 6 189 819 59.7% 5 453 287 65.8%

Loans to non-resident legal entities 683 923 6.6% 442 878 5.3%

Loans to government organizations 354 055 3.4% 267 391 3.2%

Claims on the debts recognized as a result of the

contracts concluded by the bank on the

assignment of rights(cession) with deferred

payment

22 146 0.2% 51 161 0.6%

Claims on the return of amounts provided by

reverse REPO transactions 145 594 1.4% 165 680 2.0%

Other claims 26 780 0.3% 8139 0.1%

Loans to individuals and similar debts, including: 2 528 596 24.4% 1 777 395 21.5%

Loans to individuals 2 528 561 24.4% 1 777 285 21.5%

Claims on the debts recognized as a result of the

contracts concluded by the bank on the

assignment of rights(cession) with deferred

payment

34 0.0% 110 0.0%

Total loan debts 10370273 100.0% 8 284 270 100.0%

72% of the loans and similar debts in Sberbank are attributed to corporate debts, more than 24% are

retail debts, and the rest are the loans to banks.

30

Structure of loans and similar debts in terms of currencies (before provision for possible losses)


Rubles 8 587 179 82.8% 6 783 415 81.9%

US Dollars 1 500 227 14.5% 1 320 174 15.9%

Euro 222 672 2.1% 150 875 1.8%

Other currencies 60 195 0.6% 29 805 0.4%

Total loan debts 10 370 273 100.0% 8 284 2 70 100.0%

Concentration level of large credit risks

The Bank closely monitors the concentration of large credit risks, which are now assessed as

acceptable.

In accordance with the internal regulatory documents, the Bank conducts the daily monitoring of

large credit risks and forecasting the compliance with the requirements established by Bank of Russia on

the statutory ratios28

N6 (maximum risk limit per borrower or group of related borrowers) and N7

(maximum limit of large credit risks).

The list of largest borrowers of the Bank include the representatives of various sectors of the

economy, therefore, the credit risk is adequately diversified.

Structure of retail loan portfolio*


Total retail loans 2 528 561 100.00% 1 777285 100.00%

housing loans: 1 000 186 39.6% 762 161 42.9%

including mortgage loans 740 510 29.3% 540 654 30.4%

car loans 102 001 4.0% 82 152 4.6%

other consumer loans 1 426 374 56.4% 932 971 52.5%

* According to the form 0409115 "Information on the quality of assets of credit institution"

The 66% of the increase in the retail loan portfolio of the Bank were ensured by consumer loans and

credit cards while 32% - by mortgage loans.

The Bank grants loans to the enterprises of all major sectors of the economy while the largest part

of the portfolio is attributed to manufacturing.

28

Directive of Bank of Russia No. 110-I of January 16, 2004, On statutory ratios of the banks (as revised on April 28, 2012).

31

Corporate loan portfolio of residents by industry*


Corporate loans** (including individual

entrepreneurs) 6 189 819 100.0% 5 453 287 100.0%

including by type of economic activities:

Manufacturing 1 426 242 23.0% 1 306 341 24.0%

Wholesale and retail trade, repair of motor

vehicles, motorcycles, household goods and

personal items

1 151 756 18.6% 1 093 827 20.1%

Real estate operations, lease and rendering of

services 860 986 13.9% 717 402 13.2%

Transport and communications 726 939 11.7% 549 409 10.1%

Agriculture, hunting and timber industry 458 452 7.4% 401 335 7.4%

Construction 337 272 5.4% 330 860 6.1%

Production and distribution of electricity, gas

and water 297 725 4.8% 254 859 4.7%

Mining 333 910 5.4% 248 340 4.6%

Other types of activities 568 175 9.2% 528 471 9.7%

Including loans to small and medium-size

businesses 1 113 377 18.0% 999 801 18.3%

including individual entrepreneurs 219 298 3.5% 158 849 2.9%

* The table is consistent with the approaches to preparation of the form 0409302 "Information on placed and raised funds"

(Proposal 1 to the Directive of Bank of Russia No. 2332-U)

** Loans do not include loans to non-residents, government agencies and state-financed organizations, repurchase

transaction, assignment agreements, etc.

7.3. Liquidity risk

The key document for assessing, controlling and managing liquidity is the Policy of Sberbank of

Russia on liquidity management and control29

. The main tool of this Policy is the analysis of liquidity

gaps based on classification of assets and liabilities of the Bank based on the expected maturity terms,

which for some instruments significantly differ from contractual maturities. For assets and liabilities with

no contractual maturity, the Bank is developing a model for assigning them to different time intervals. To

manage the liquidity risk, the Bank sets limits on the extent on which the potential outflows of funds must

be covered by expected inflows at all time intervals. Along with the analysis of liquidity gaps, the risk

metrics of liquidity are the main tools of analyzing the liquidity profile. These metrics include statutory

ratios and liquidity indicators of Bank of Russia, as well as the indicators used in the global practices to

manage the liquidity (loan-to-deposit ratio, share of external debt in liabilities, etc.).

In managing its liquidity risk, the Bank distinguishes the risk of statutory liquidity and risk of

physical liquidity.

The risk of statutory liquidity refer to the violation of the restrictions of statutory liquidity ratios of

Bank of Russia (H2, H3 and H4). Twice a week, the Bank forecasts its statutory liquidity ratios and

monitors its compliance with these ratios by taking into account not only regulatory restrictions but also

the stricter limits established by the Procedure of Sberbank of Russia for complying and calculating the

mandatory ratios of Bank of Russia. The regular forecasting of liquidity ratios and establishment of

internal limits allow the Bank to ensure the unconditional compliance with the requirements of Bank of

Russia.

The risk of physical liquidity refer to the inability of Bank to fulfill its obligations to the

counterparty in any currency as a result of physical unavailability of funds (impossibility to make a

payment, issue loan, etc.).

29

Policy of Sberbank of Russia on liquidity management and control, No. 826-r, dated January 18, 2001.

32

The tools for managing the physical liquidity risk in the short-term include the Cash Flow

forecasting model and control of available liquidity reserves. To cover any possible shortage of liquidity

that exceeds the available supply of funds, the Bank has liquidity reserves, which include the direct REPO

with banks collateralized with securities and raising funds from Bank of Russia.

Sberbank of Russia is managing its mid-term and long-term liquidity in accordance with the annual

and quarterly funding plans. These documents provide the analysis of current trends in the development

of different balance sheet items, and several development scenarios of the coming period. For each of the

expected scenarios, liquidity risk is assessed and the response measures are described. To change the

structure of liabilities and improve the liquidity profile, the Bank use both increase of amounts due to

customers and amounts of trade finance operations, bond issues, syndicated loans and other operations on

the financial markets. In this case, the flexible interest rate policy of the Bank plays a key role in the

relationships with customers.

Compliance with liquidity ratios:

Liquidity ratios

Limit established by Bank

of Russia Sberbank’s critical value

Ratio value as of the reporting

date, %

Jan. 1, '13 Jan. 1, '12

N2 more than 15% 15% 61.43 50.82

H3 more than 50% 55% 74.26 72.90

H4 less than 120% 110% 99.82 87.28

7.4. Market risk

The Bank identifies the following categories of market risk:

Interest rate risk for balance sheet assets and liabilities, which are sensitive to interest rates,

which is the risk of decrease/increase of interest income as a result of changes of the yield curve

following the maturity mismatches (interest rate reconsideration) of placed and raised funds.

Market risk on trading items, including:

Interest rate risk of the portfolio of debt securities, which is the risk arising from adverse changes in

the market rates.

Stock market risk is the risk arising from adverse changes in the quotations of equity securities;

Currency risk is the risk arising from adverse changes in foreign exchange rates and precious metals

prices.

The interest rate risk on non-trading items is assessed through the gap analysis by distributing the

assets and liabilities with fixed interest rates per their contractual maturities, and assets and liabilities with

floating rates - by their terms till reconsideration of rates. The gap is calculated separately for Russian

rubles and foreign currency. The Bank assess the impact which the increase or decline of the interest rate

by 100 basis points may have on the net profit.

Interest rate risk on non-trading items:

Market risk

million rubles

Market risk

% of the capital

Jan. 1, '13 Jan. 1, '12 Jan. 1, '13 Jan. 1, '12

Interest risk on non-trading items 18 214 10 272 1.1% 0.7%

The increase in the interest rate risk on non-trading items as of January 1, 2013, compared to

January 1, 2012, refer mostly to two factors:

33

growth of short-term loans from Bank of Russia and Federal Treasury deposits used for funding

of the growth of ruble loan portfolio: In 2012, the increase of ruble loan portfolio amounted to

1.8 trillion rubles;

increasing gap on each of the periods intervals of interest rates changes due to the increase of

the balance sheet currency by 30%.

The Bank assesses the market risk on trading items (interest risk on the portfolio of debt

securities, stock market and currency risks) in accordance with the VaR methods. These methods allow to

assess the maximum amount of expected financial losses over a certain period of time with a given level

of confidence probability. The Bank assesses VaR by using historical modeling with 99% confidence

probability at the 10 days horizon with allowances for specific risks associated with changes in the prices

of individual instruments that are not caused by the changes in the overall market situation.

As part of daily monitoring of risk levels accepted by the Bank on trading items, we also analyze

the items at risk, and assess their sensitivity to changes in market indicators. One of the methods is the

sensitivity of the item to change in the rates by 1 basis point (DV01).

Market risk value on trading items:

Market risk

million rubles

Market risk

% of the capital

Jan. 1, '13 Jan. 1, '12 Jan. 1, '13 Jan. 1, '12

Market risk on trading items30

19 613 13 915 1.17% 0.91%

on portfolio of debt securities 18 108 12 684 1.08% 0.83%

stock market risk 4 023 10 339 0.24% 0.68%

currency risk 5 311 1 976 0.32% 0.13%

effect from diversification of investments 7 830 11 084 0.47% 0.73%

The volatility on the market corresponds to the level of the previous year. However, the foreign

currency item significantly increased due to the acquisition of DenizBank. The decline in the stock

market risk is associated with the reduced share portfolio position. The increased risk of debt securities

portfolio compared to the previous year is associated with the increase of the portfolio, as well as the

increased share of long-term securities in its structure.

As part of new model, we have developed a more accurate approach to calculating VaR on the

portfolio of debt instruments. In such calculation, we consider the weighted average time to maturity

(duration), which leads to a significant reduction of market risk for the portfolio of debt instruments. The

new model better reflects the stock market risks on illiquid securities. The results of backtesting

demonstrate the adequacy of the model. In this context, the foreign currency VaR is declining

significantly.

Calculation as of Jan. 1, '12

Type of risk, million rubles New model Old model

on portfolio of debt securities 12 684 41 706

stock market risk 10 339 9 872

currency risk 1 976 5 379

7.5. Legal risk

The Bank has approved and applies an internal regulatory document that governs the cooperation

between the units of the Bank and its Legal Department in order to eliminate any risk of non-compliance

30

Market risk for the trading positions is recalculated for the new model ("Method calculation of value at risk (VAR)" from

02.07.2012)

34

of the internal documents of the Bank with the provisions of new federal laws, laws of constituent entities

of the Russian Federation, other regulatory legal acts and law enforcement practice.

In order to comply with the recommendations of Bank of Russia and the Basel Committee on the

assessment of banking risks, the Bank is working on building an integrated risk management system of

Sberbank of Russia Group.

As of January 1, 2013, the total amount of pending legal claims brought against the Bank by

individuals and legal entities was 9.9 billion rubles. (in 2011, 132.9 billion rubles). The Bank expects that

most of these legal claims will be resolved by the court in favor of the Bank.

7.6. Strategic risk

Strategic risk is the risk of incurring losses by the credit institution as a result of mistakes

(deficiencies) committed while making decisions which determine the strategy of activities and

development of the credit institution (strategic management) and appear to be not taking into

consideration or insufficient taking into consideration of possible dangers which may threaten the

activities of the credit institution, wrong or insufficiently reasoned determination of prospective activities

in which the credit institution may achieve advantage over competitors, absence or insufficient provision

of the necessary resources (financial, material and technical, human) and organizational measures

(management solutions) that must provide achievement of strategic goals of the credit institution

activities31

.

In October 2008, the Supervisory Board approved the Development strategy of the Bank for the

period until 2014. The Development strategy of Sberbank of Russia for the period until 2014 is available

on the official website of the Bank at:

http://www.sbrf.ru/moscow/ru/about/today/strategy/ and

http://www.sbrf.ru/cornmon/img/uploaded/ir/pics/strategy_rus.pdf

The strategy was prepared in the rapidly changing situation on the financial markets and the

economy in general. Therefore, an important task was to achieve a balance between the decisions dictated

by short-term market conditions and long-term objectives. The Strategy implied the changes in the

internal organization of the Bank's work, increasing labor productivity, changes in the approaches to

customer service, improving the professionalism of employees and their motivation based on the results

of their work. 2012 was the last but one year in the implementation period of this Strategy. Its results

moved the Bank closer to achieving some objectives set out in the Strategy:

Strategic objective 2011 2012

Increasing the net profit by 2.5-3 times compared

to 2007 - 116.7 billion rubles.

310.5 billion

rubles

346.2 billion

rubles

Ensuring the return on equity of at least 20% 26.2% 23.5%

Retaining the share in the assets of the Russian

banking system at the level of 25-30% 26.8% 28.9%

Currently, Sberbank began to develop the new Strategy, a document which will be guiding the Bank

in its work until 2018, inclusive. The Bank analyzes the major socio-economic and technology trends in

Russia and in the world, the attractiveness of certain business areas, development level of principal

systems and processes in Sberbank compared to best global practices.

In accordance with its development plan, the new strategy of Sberbank Group is expected to be

approved by the Supervisory Board of Sberbank of Russia in September 2013.

31

On Typical Banking Risks, Letter of Bank of Russia, No. 70-T, dated June 23, 2004.

http://www.sbrf.ru/moscow/ru/about/today/strategy/

http://www.sbrf.ru/cornmon/img/uploaded/ir/pics/strategy_rus.pdf

35

7.7. Operational risk

The Bank manages the operating risk in accordance with the recommendations of Bank of Russia

and Basel Committee on banking supervision in order to prevent and/or reduce the losses from deficient

of internal processes, failures and errors in functioning of information systems, in personnel activities and

as a result of impact of external factors.

The rapid development of Sberbank and the use of increasingly complex technologies require higher

awareness of operational risks and adequate response. In 2012, the Bank refined the processes for

collecting the data on incidents of operational risk and self-assessment, and began to work on the scenario

analysis. In this regard, the risk coordinators, who identify, assess the operational risks, and inform about

the incidents, were appointed in all structural units of the Bank. In order to prevent and/or reduce the

losses in the realization of operational risk, the Bank regulates the business processes, separates the

authority, controls the operation procedures and compliance with limits, works to ensure the information

security and going concern, improves the audit of automated systems and hardware, insures the property,

etc.

The Bank developed a model for calculating and allocating the capital for operational risk. The key

performance indicators for the units take into account the level of operational risk.

The Bank continues to systematize the information on realized risk events and incurred losses. In

three regional banks, the software for comprehensive analysis of the problem areas was implemented.

During the period of forming the database on realized operational risks, the level of operational risk is

assessed by using the basic indicator approach recommended by the Basel Committee on banking

supervision and based on the information in income statement and expert assessments.

In 2012, in Sberbank, the ratio of expenses associated with the realization of operational risk to

profit was 0.75% (in 2011, 1.2%).

7.8. Risk of business reputation loss

The Bank assesses the level of its reputation risk in accordance with its Procedure for assessing the

reputation risks32

. This Procedure is based on the recommendations of Bank of Russia and defines the

procedure of assessing the risk of business reputation loss for Sberbank of Russia in general.

When identifying and assessing the factors affecting the level of risk of business reputation loss, we

use several groups of indicators with regard to financial condition of the Bank. Among them are

comparison with the indicators in the Russian banking sector in general, the compliance by the Bank with

the legal requirements in the area of financial monitoring, the change in the business reputation of

affiliates, subsidiaries and dependent companies, the international rating of the Bank, etc.

7.9. Information on operations/transactions with related parties of the Bank

The Bank was conducting its operations with related parties on the terms similar to those for

operations (transactions) with other counterparties.

Related parties33

are the legal entities or individuals who can affect the activities of the Bank or

whose activities can be affected by the Bank.

In accordance with the Directive of Bank of Russia No. 2089-U, the explanatory notes discloses the

information on operations with related parties exceeding 5% of the relevant balance sheet items. Among

the four groups of related parties subject to disclosure (dominant economic entity, subsidiaries, dependent

32

Procedure for assessing the reputation risks of Sberbank of Russia, No 1485-r, dated March 12, 2007 33

Statutory accounting standard "Information on related parties" (PBU 11/2008), approved by the Ministry of Finance of the

Russian Federation on April 29, 2008

36

companies and key management personnel34

), as of the reporting dates, in Sberbank, this requirement

applied to the operations with Bank of Russia (dominant economic entity) and subsidiaries.

Information on such transactions is provided in the table below:


Bank of Russia Subsidiaries Bank of Russia Subsidiaries

Operations and transactions

Investments in shares and equity of subsidiaries 276 589

Attracted funds 1 367 974 565 388

including subordinated debts 300 000 300 000

Irrevocable liabilities of the credit institution 146 193

Income and expenses

Income from participation in other legal entities 1 709

Interest expense (58 166) (22 818)

The operations provided in the table above include the interested party transactions35

. All interested

party transactions have been approved by the Supervisory Board of the Bank.

7.10. Off-balance liabilities, term deals and related provision.

Off-balance liabilities


Amount of

liabilities

Provision for

possible losses

Amount of

liabilities

Provision for

possible losses

Unused credit lines 1 185 984 17 258 974 734 10 890

Letters of credit 143 676 123 157 088 1

Granted guarantees and sureties 728 331 3 328 489 850 8 130

Other instruments 166 912 66 115 665 382

Total credit commitments and contingencies 2 224 903 20 774 1 737 337 19 403

Term deals and derivative financial instruments


Amount

of claims

Amount

of

liabilities

Provision

for

possible

losses

Amount

of claims

Amount

of

liabilities

Provision

for

possible

losses

Term deals, including: 38 311 48 441 83 105 288 103 902 907

those for which provision is created 8 514 8 51] 83 105 288 103 902 907

Options, including: 198 919 199 864 0 18 146 17 860 143

those for which provision is created 0 0 0 18 146 17 860 143

Swaps, including: 617 163 623 841 411 409 410 413 884 5 790

those for which provision is created 122 536 119 780 411 409 410 413 884 5 790

34

In accordance with the Accounting Policy of Sberbank, the details on operations (transactions) with the key management

personnel in the Explanatory note include information on operations with persons, who are the members of the management

and controlling bodies of the Bank. Such persons are the members of the Supervisory Board of the Bank, CEO, Chairman of

the Management Board, members of the Management Board and members of the Audit commission. 35

In accordance with the Federal Law No. 208-FZ "On Joint Stock Companies", dated 12/26/1995 (as revised on 12/29/2012) 36

In the table, the information as of January 1, 2012, is recalculated to include the changes introduced in 2012 to the Russian

laws on accounting for derivative financial instruments.

37

The Bank conducts forward transactions primarily in order to maintain liquidity in various foreign

currencies required for business.

Legal proceedings

In the process of current activities of the Bank, the legal claims against the Bank are brought to the

courts. Based on its own assessment and recommendations of internal professional advisors, the Bank's

management believes that proceedings on such legal claims will not lead to significant losses for the

Bank, and accordingly, does not make any provision for possible losses following these proceedings.

38

8. Information on payments/remuneration to the main management personnel

In accordance with the Accounting Policy of Sberbank, the details of operations (transactions) with

the key management personnel include the information on operations with persons, who are the members

of the management and controlling bodies of the Bank. These persons are as follows:

Members of the Supervisory Board of the Bank (as of January 1, 2013, 17 people)

CEO, Chairman of the Management Board, Members of the Management Board (as of January

1, 2013, 13 people);

Members of the Audit commission (as of January 1, 2013, 7 people).

Remuneration to the members of the Management Board and CEO, Chairman of the

Management Board

Remunerations and compensations are paid under the contracts concluded with CEO, Chairman of

the Bank’s Management Board, and members of the Management Board. Sberbank has no practice of

paying commission or other property considerations to the members of its Management Board.

In 2012, as in 2011, the Bank did not issue options for the Bank’s shares, did not provide interest-

free or loss-making loans to its employees, and did not use any insurance, loan/deposit, or other indirect

material incentive schemes.

In order to limit labor costs for members of the Management Board, the Supervisory Board of the

Bank has set:

limits on official salaries of members of the Management Board;

limits on bonus payments during the year, which depend on the project implementation, and

compliance with key performance indicators by a member of the Management Board;

limits the amount of remuneration for the year as a percentage of the profits of the Sberbank of

Russia Group in accordance with the international financial reporting standards.

These limitations are set forth in contracts concluded with members of the Management Board.

The information about the amount of payments to members of the Management Board is regularly

published on the website as part of quarterly reports on securities.

In 2012, all payments accrued to the members of the Management Board excluding the payments

during the business trips amounted to 1.97 billion rubles (in 2011, 1.96 billion rubles).

Remuneration to the members of the Supervisory Board

The decisions on remuneration to the members of the Supervisory Board and Audit commission of

Sberbank of Russia, related to their participation in these management and controlling bodies of the Bank,

are made on the Annual General Shareholders' Meeting of Sberbank of Russia.

In November 2012, the Supervisory Board adopted the approaches to the payment of remuneration

and compensation to members of the Supervisory Board. These approaches are based on "Regulations on

remuneration and compensation paid to the members of the Supervisory Board of Sberbank of Russia",

which will be submitted for approval on the Annual General Shareholders' Meeting on May 31, 2013. The

proposed remuneration shall consist of a base part and addition for Committees work, for chairing the

Committees and for chairing the Supervisory Board.

It is recommended that the base part for 2012 amounts to 4.2 million rubles (an increase of 10.5%

compared to 2011). The maximum amount of the remuneration to all members of the Supervisory Board

elected on June 1, 2012, is estimated to be 81.06 million rubles.

The remuneration to the members of Supervisory Board related to their participation in this

management body of the Bank amounted to 55.8 million rubles.

The remuneration is paid only upon consent of the member of the Supervisory Board in accordance

with the laws of the Russian Federation.

39

Remuneration to the members of the Audit Commission

It is expected that the remuneration to the members of the Audit commission for 2012 related to

their participation in this controlling body of the Bank remains at the level of payments for 2011, that is:

to the Chairman of the Audit commission in the amount of 1 million rubles, and to each member of the

Audit commission in the amount of 750 thousand rubles subject to their consent in accordance with the

laws of the Russian Federation. The maximum amount of the remuneration to all members of the Audit

Commission elected on June 1, 2012, is estimated to be 5.5 million rubles.

Based on the decision of the Annual General Shareholders’ Meeting held on June 1, 2012, the

members of the Audit commission were paid the remuneration for 2011 in the amount of 3.3 million

rubles.

40

9. Expected dividend payments on shares and distribution of net profits of the

Bank in 2012. History of dividend payments and distribution of net profit

Year for

which the

dividends are

paid

Share of

dividend

payments in

the net profit

of the Bank in

accordance

with IFRS

Share of net

profit of the

Bank in

accordance

with RAS

directed for

dividend

payments

Dividends on

1 ordinary

share, rubles

Dividends on

1 preferred

share, rubles

Amount of

dividends on

all ordinary

and preferred

shares,

million rubles

Amount of

paid

dividends* on

all ordinary

and preferred

shares,

million rubles

Date of the

General

Shareholders'

Meeting that

adopted

decision on

dividend

payment

2009 10.0% 0.0800 0.4500 2 177 2 165 04.06.2010

2010 12.1% 0.9200 1.1500 21 010 20 922 03.06.2011

2011 15.0% 15.3% 2.08 2.59 47 491 47 277 01.06.2012

* Reason for non-payment of declared dividends was incorrect payment details, provided by shareholders.

In accordance with the Dividend policy adopted by the Supervisory Board in 2011, Sberbank

intends to consistently increase over 3 years (starting from the payment of dividends for 2011) the amount

of dividend payments to 20% of its net profit attributable to shareholders of the Bank and determined on

the basis of the annual consolidated financial statements of the Bank under IFRS37

. The Bank began to

determine the amount of its payment on this basis starting from the dividends for 2011.

Below is the amount of dividends on shares of Sberbank for 2012, that is expected to be

recommended for approval by General Shareholders' Meeting after the approval by the Management

Board and review by the Supervisory Board of the Bank:

Share of the dividend

payments in the net

profit of the Bank

based on IFRS

Share of the dividend

payments in the net

profit of the Bank

based on RAS

Amount of declared

(accrued) dividends per

1 ordinary share*,

rubles

Amount of declared

(accrued) dividends per

1 preferred share*,

rubles

Aggregate amount of

declared (accrued)

dividends for all

ordinary and preferred

shares,

million rubles

17% 17% 2.57 3.20 58 678

The decision on dividend payment and their amount for 2012 will be adopted by the Annual

General Shareholders’ Meeting on June 31, 2013. The information on this will be posted on Sberbank's

website (www.sbrf.ru; www.sberbank.ru).

37

IFRS: International Financial Reporting Standards

http://www.sbrf.ru/


41

10. Earnings per share

Diluted and base earnings per share are calculated in accordance with the methodology used by the

Bank in its audited international reporting (IFRS 33. Earnings per share).38

As of January 1, 2013, Sberbank of Russia has no shares that may dilute the earnings per ordinary

share of the Bank. Accordingly, the diluted earnings per share equal the base earnings per share. The base

earnings per share are calculated by dividing the net profit owned by the Bank's shareholders by the

average weighted number of ordinary shares outstanding during the year less own shares repurchased

from shareholders.

2012 2011

Net profit of Sberbank of Russia owned by shareholders, million

rubles. 346 175 310 495

Dividends on preferred shares of Sberbank of Russia declared in

reporting year, million rubles. (3 200) (1 150)

Net profit of Sberbank of Russia owned by shareholders holding

ordinary shares, million rubles. 342 975 309 345

Weighted average number of ordinary shares of Sberbank of Russia

outstanding during the year, million units. 21 587 21 587

Base and diluted earnings per share, rubles per share 15.89 14.33

38

Letter of Sberbank of Russia, methodological recommendations On procedure for calculating earnings per share during

preparation by credit institutions of their financial statements in accordance with International Financial Reporting Standards,

No. 129-T, dated October 26, 2009

42

11. Structure of the branch network of Sberbank

In the Russian Federation

As of January 1, 2013, the branch network of the Bank in the Russian Federation consisted of

18,588 units, including 17 regional banks, 194 branch offices and 18,377 internal structural units:

units Jan. 1, '13 Jan. 1, '12

Units in the Russian Federation, including 18 588 19 249

Regional banks 17 17

Branch offices 194 505

Total number of internal structural divisions, including 18 377 18 727

Total number of additional branch offices, of which: 11 210 10 494

— specialized on rendering services to individuals 8 626 7 997

— universal 2 424 2 373

— specialized on rendering services to legal entities 160 124

Operational offices 672 588

Operational cash desks outside the cash operating units 6381 7 547

Mobile cash offices 114 98

In 2012, the actual number of Sberbank of Russia personnel increased by 4279 people and as of

January 1, 2013, amounted to 245,316 people.

In foreign countries

The branch in the Republic of India (hereinafter, the "Branch") was established as strategic base

for developing the business of the Group. The Branch provides a range of services to corporate

customers, such as cash management services, raising funds for deposits, lending, trade finance,

conversion and forward operations, and specialized products for export and import operations, in

particular, clearing settlements in rupees, direct settlements between India and Russia in Russian rubles

avoiding cross-currencies based on the unique settlement platform "rupee-ruble".

The representative office in Germany was established to build and maintain the image of the Bank

in Germany and European Union, assist the business of units of the Bank in their dealings with German

partners.

The representative office in China is intended to develop partnerships with Chinese banking,

commercial and government organizations in order to promote the business of Sberbank of Russia Group

and its customers in the region.

43

12. Sberbank of Russia banking (consolidated) Group

In 2012, the number of members in the consolidated group of the Bank increased by 57 companies

and, as of January 1, 2013, amounted to 204 companies, in which the Bank has:

direct influence over 37 companies;

indirect influence over 163 companies;

together indirect and direct influence over 4 companies.

The Bank prepares its consolidated statements in accordance with the Accounting policy of

Sberbank of Russia Banking (Consolidated) Group. As of January 1, 2013, the consolidated statements of

Sberbank of Russia included the statements of 98 companies39

:

Company name

Share of the Group’s control

in the participant’s authorized

capital, %

Bank's direct interest

1 Sberbank Leasing Closed Joint-Stock Company 100.0000%

2 Sberbank Capital Limited Liability Company 100.0000%

3 Subsidiary Bank Sberbank of Russia Joint-Stock Company 99.9977%

4 SUBSIDIARY BANK SBERBANK OF RUSSIA PUBLIC JOINT-STOCK

COMPANY 100.0000%

5 Sberbank Investments Limited Liability Company 100.0000%

6 Sberbank – Automated Trading System Closed Joint-Stock Company 100.0000%

7 BPS-Sberbank Open Joint-Stock Company 97.9055%

8 Perspektivnye Investitsii Limited Liability Company (group of companies)* 100.0000%

9 Detsky Mir – Center Open Joint-Stock Company 25.0338%

10 SB International S.a.r.l. (group of companies)* 100.0000%

11 Sberbank Europe AG (group of companies)* 100.0000%

12 Sberbank Finance Limited Liability Company 100.0000%

13 BNP Paribas Vostok Limited Liability Company 70.0000%

14 DENIZBANK ANONIM SIRKETI (group of companies)* 99.8526%

Bank’s indirect interest

1 Krasnaya Polyana Open Joint-Stock Company 50.0290%

2 TransComStroy Limited Liability Company 24.9900%

3 Sherigo Resources Limited 41.2498%

4 Crystal Towers Limited Liability Company 50.0100%

5 Derways Automobile Company Limited Liability Company 51.0000%

* The companies that provide their statements by subgroups (in aggregate, subgroups include 83 companies, including the

parent companies).

The remaining 106 companies have no material impact on the consolidated financial indicators of

the Sberbank of Russia Group.

This explanatory note is part of Sberbank of Russia's annual report for 2012 prepared in accordance

with RAS and does not include the data of the consolidated statements of Sberbank of Russia Group.

39

the balance-sheet total of these companies exceeds 1% of the balance-sheet total of Sberbank of Russia.

44

13. Members of the Bank’s Supervisory Board and its changes in 2012. Information

on the shares/interests in the Bank held by the members of the Supervisory

Board in 2012

Members of the Supervisory Board elected on 6/3/2011 Members of the Supervisory Board elected on June 01, 2012

1 Sergei M. Ignatiev

2 Georgy I. Luntovskiy

3 Aleksei V. Ulyukaev

4 Nadezhda Yu. Ivanova

5 Anna V. Popova

6 Alexei L. Savatyugin

7 Valery V. Tkachenko

8 Sergei A. Shvetsov

1 Sergei M. Ignatiev

2 Georgy I. Luntovskiy

3 Aleksei V. Ulyukaev

4 Nadezhda Yu. Ivanova

5 Valery V. Tkachenko

6 Sergei A. Shvetsov

Managers of Sberbank of Russia

9 Herman O. Gref

10 Bella I. Zlatkis

7 Herman O. Gref

8 Bella I. Zlatkis

Independent/outside directors

11 Sergei M. Guriev

12 Mikhail E. Dmitriev

13 Mikhail Yu. Matovnikov

14 Vladimir A. Mau

15 Rayr R. Simonyan

16 Sergei G. Sinelnikov-Murylev

17 Alessandro Profumo

9 Sergei M. Guriev

10 Mikhail E. Dmitriev

11 Mikhail Yu. Matovnikov

12 Vladimir A. Mau

13 Rayr R. Simonyan

14 Sergei G. Sinelnikov-Murylev

15 Alessandro Profumo

16 Dmitry V. Tulin

17 Ronald Freeman

Members of the Bank’s Supervisory Board as of January 1, 201340

:

SERGEI M. IGNATIEV

Chairman of the Supervisory Board, Sberbank of Russia

Chairman, Central Bank of the Russian Federation

No interest in the Bank’s authorized capital/ordinary shares.

No transactions with shares of the Bank in 2012.

GEORGY I. LUNTOVSKY

Deputy Chairman of the Supervisory Board, Sberbank of Russia, Chairman of the HR and

Remuneration Committee

First Deputy Chairman, Central Bank of the Russian Federation



ALEKSEI V. ULYUKAEV

Deputy Chairman of the Supervisory Board, Sberbank of Russia, Chairman of the Strategic

Planning Committee

First Deputy Chairman, Central Bank of the Russian Federation



40

The members were elected by the Annual General Shareholders' Meeting of Sberbank of Russia on June 1, 2012.

45

HERMAN O. GREF

Member of the Supervisory Board, Sberbank of Russia, member of the Strategic Planning

Committee

CEO, Chairman of the Management Board, Sberbank of Russia

Interest in the Bank’s authorized capital: 0,0031%.

Percentage of the Bank’s ordinary shares held: 0,003%.


SERGEI M. GURIEV

Independent member of the Supervisory Board, Sberbank of Russia, member of the HR and

Remuneration Committee

Rector of the Private Educational Institution Russian Economic School.



MIKHAIL E. DMITRIEV

Independent member of the Supervisory Board, Sberbank of Russia, member of the Strategic

Planning Committee

President, Center for Strategic Research Foundation.



BELLA I. ZLATKIS

Member of the Supervisory Board, Sberbank of Russia

Deputy Chairman of the Management Board, Sberbank of Russia

Interest in the Bank’s authorized capital: 0,0004%.

Percentage of the Bank’s ordinary shares held: 0,0005%.

No transactions with shares in 2012.

NADEZHDA YU. IVANOVA

Member of the Supervisory Board, Sberbank of Russia, member of the Audit Committee

Director of the Consolidated Economic Department, Central Bank of the Russian Federation.


No transactions with shares in 2012.

MIKHAIL YU. MATOVNIKOV


Planning Committee

Chief Executive Officer, Interfax Economic Analysis Center LLC.



VLADIMIR A. MAU

Independent member of the Supervisory Board, Sberbank of Russia, Chairman of the Audit

Committee, member of the Human Resources and Remuneration Committee

Rector of the Russian Presidential Academy of National Economy and Public Administration



46

ALESSANDRO PROFUMO

Member of the Supervisory Board, Sberbank of Russia, member of the Strategic Planning

Committee

In 1997 – 2010, he served as CEO of UniCredit Bank.



RAYR R. SIMONYAN

Independent member of the Supervisory Board, Sberbank of Russia, member of the Audit Committee

Chairman of the Board of Directors / Regional Coordinator, Morgan Stanley Bank LLC.



SERGEI G. SINELNIKOV-MURYLEV

Independent member of the Supervisory Board, Sberbank of Russia, member of the HR and

Remuneration Committee, member of the Strategic Planning Committee

Rector of the Russian Foreign Trade Academy of the Ministry of Economic Development of the

Russian Federation



VALERY V. TKACHENKO

Member of the Supervisory Board, Sberbank of Russia, member of the Audit Committee

Chief Auditor, Central Bank of the Russian Federation.



DMITRY V. TULIN

Independent member of the Supervisory Board, Sberbank of Russia, member of the Audit Committee



RONALD FREEMAN


Planning Committee

Independent Member of the Board of Directors: Severstal JSC, Volga Gas, Atlantic Council

(Washington, DC, USA), The Piligrims Society (London, UK), Columbia University School of Law

(New York, USA), PILnet, Public Interest Law Network (New York, USA), Royal Institute of

International Affairs (Chatham House), London, UK.

Information on transactions with the Bank’s shares in 2012:

Date

Transaction

information

Interest in the

authorized

capital prior to

the change,

%

Percentage of

the voting

shares prior to

the change,

%

Interest in the

authorized

capital after the

change,

%

Percentage of the voting shares

after the change,

%

17.10.2012

18.10.2012

Acquisition of ordinary

shares 0 0 0.0001 0.0001

47

SERGEI A. SHVETSOV

Member of the Supervisory Board, Sberbank of Russia

Deputy Chairman, Central Bank of the Russian Federation.



14. Members of the Bank’s Management Board. Information on the

shares/interests in the Bank held by the members of the Management Board in

2012

The Management Board is a collective executive body managing the current activities of the Bank.

Members of the Management Board of Sberbank of Russia as of December 31, 2012:

Full Name Position

Interest in the

Bank's

authorized

capital

Percentage of the

Bank’s ordinary

shares held

1 Herman O. Gref CEO, Chairman of the Board 0.0031% 0.003%

2 Igor G. Artamonov Deputy Chairman of the Management

Board 0.00027% 0.00029%

3 Sergei N. Gorkov Deputy Chairman of the Management

Board None None

4 Andrey M. Donskih Deputy Chairman of the Management

Board 0.0012% 0.0013%

5 Bella I. Zlatkis Deputy Chairman of the Management

Board 0.0004% 0.0005%

6 Anton A. Karamzin Deputy Chairman of the Management

Board 0.003% 0.003%

7 Stanislav K. Kuznetsov Deputy Chairman of the Management

Board None None

8 Aleksander Yu. Torbakhov Deputy Chairman of the Management

Board None None

9 Denis A. Bugrov Senior Vice-President None None

10 Olga N. Kanovich Senior Vice-President None None

11 Victor M. Orlovskiy Senior Vice-President 0.0007% 0.0008%

12 Alexander V. Bazarov Vice President – Director of the Key

Account Management Department 0.0022% 0.0023%

13 Aleksander V. Morozov Vice-President – Director of Finance

Department, 0.0014% 0.0009%

None of the above members of the Management Board made any transactions with the shares of the

Bank in 2012.

48

15. Significant information on valuation methods and major accounts

15.1. Data comparability in disclosure reporting forms

The reporting forms as of January 1, 2013 (for 2012) have been prepared in accordance with the

Directive of Bank of Russia No. 2332-U as revised by the date of the reporting forms. As a result, the

information for 2011 was brought in line with that revision. The exceptions are the lines 441

and 1442

of

the form 0409806 shape and line 643

of the form 0409807 that do not include the information on

derivative financial instruments as of January 1, 2012 because credit institutions performed no

appropriate records prior to January 1, 2012.

15.2. Principles and methods of valuation and accounting of certain balance-sheet items

According to the Regulations of Bank of Russia No. 302-P, the assets and liabilities are accounted

at their initial value as of the date of their acquisition or occurrence. The initial value does not change

until their write-off, sale or repurchase, unless otherwise provided by the laws of the Russian Federation

and regulatory acts of Bank of Russia. In this case:

the assets and liabilities in foreign currency (excluding the amounts of received and issued

advances and advance payments for the goods, work and services delivered, which are

recognized on the balance-sheet accounts of settlements with nonresident organizations for

business transactions) and precious metals are revalued as the exchange rate and the metal price

change in accordance with the regulations of Bank of Russia;

Assets, claims and liabilities, the specific amount (value) of which is determined by using

embedded derivatives (ED) shall be revalued (recalculated) on a daily basis with recognition of

the resulting differences for respective income/expense items from the date of the transfer of

ownership of the asset delivered (date of work acceptance or service provision) to the actual

payment date;

the cost of fixed assets changes in the event of further construction, additional equipment,

modernization, reconstruction, revaluation or partial liquidation of the respective assets in

accordance with the regulatory documents of Bank of Russia. In particular, according to the

Regulations of Bank of Russia No. 302-P, the Bank revalues the group of homogeneous fixed

asset items at their current (replacement) cost. Accordingly, fixed assets are regularly revalued,

so that the value at which they are recognized in the accounting and reporting forms does not

differ significantly from their current (replacement) value.

the property temporarily unused in core activities, after its initial recognition, is accounted at its

current (fair) value. The items of the property temporarily unused in core activities are revalued

at their current (fair) value on a quarterly basis;

securities are accounted based on the actual costs of their acquisition. The actual acquisition

costs for the interest bearing (coupon) securities include, besides the cost of the security at the

acquisition price determined by the terms of contract (deal), the interest (coupon) income paid

upon its acquisition. If securities are acquired under derivative financial instrument (DFI)

contracts, the cost of securities shall be determined according to DFI cost.

After the initial recognition, the cost of debt obligations changes based on the amount of

interest income accrued and received from the date of the initial recognition of the debt

obligations. Interest (coupon) income will be accrued and reflected in the accounting records on

a daily basis. Securities are recognized on the respective balance sheet accounts of investments

in securities, depending on the purpose of their acquisition.

41

Financial assets assessed at their fair value through profit or loss 42

Financial liabilities assessed at their fair value through profit or loss 43

Net income from operations with securities assessed at their fair value through profit or loss

49

The securities "designated at fair value through profit or loss" and the securities "available for

sale" shall be subject to daily revaluation at the current (fair) value of securities;

derivative financial instruments are recognized at their fair value from the date of initial

recognition. The revaluation of derivative financial instruments is made on a daily basis,

including the day of ending the recognition of a derivative financial instrument.

15.3. List of significant changes implemented in Accounting policy, which affect the comparability

of certain accounting items of the Bank

The changes made to the Accounting policy for 2012 cover the following aspects:

specifics of DFI accounting. A derivative financial instrument is initially recognized in the

accounting records upon signature of the contract which appears to be derivative financial

instrument. From the date of their initial recognition, the derivative financial instruments are

accounted at their fair value. The derivative financial instruments are revalued daily at fair

value regardless of whether the market is active or not.

change of the property classification procedure due to the introduction of the new category - the

property temporarily unused in core activities which includes the property (part of the property)

(land or building, or part of the building or both) owned by the Bank (obtained in the course of

its charter activities) and intended for receiving rent payments (excluding the payments under

financial lease contracts), revenues from the increase of the value of such property or both, but

not for using as labor instruments for the rendering services, management of a credit institution,

as well in cases provided by sanitary and hygienic, technical and operating, and other special

technical standards and requirements, which is not planned to be sold within one year from the

date of its classification as the property temporarily unused in core activities;

accepting the items valued of 40,000 rubles to accounting as part of inventories.

These changes had no significant effect on the comparability of certain indicators of the Bank,

except on operations with DFI: DFIs accounted in the line 4, "Financial assets designated at fair value

through profit or loss" of the form 0409806 as of January 1, 2013, amounted to 28,994 million rubles;

DFIs reflected in the line 14 "Financial liabilities designated at fair value through profit or loss" of the

form 0409806 as of January 1, 2013, amounted to 25,966 million rubles.

15.4. Brief information on results of balance-sheet items stock-taking

In order to prepare the annual report, the Bank performed stock-taking as of November 1 or

December 1, 2012, of fixed assets, intangible assets, inventories, settlements for claims and liabilities

with respect to bank transactions and deals, for the claims and liabilities in respect of term transactions,

settlements with debtors and creditors.

As of January 1, 2013, cash revision of cash and valuables were performed in all cash departments

of the Bank.

Based on the stock-taking of the property and cash revision, the on correction measures of the

identified discrepancies between actual availability and accounting data were adopted.

15.5. Information on receivables and payables

In order to provide the full presentation of the results of the Bank’s activities on its balance sheet as

of the end of the reporting period, the Bank has taken measures to settle the obligations and claims for

forward transactions recorded on the accounts of Chapter "D"[Г] of the Working plan of accounts in the

50

Bank’s branches, as well as receivables and payables posted on the accounts No. 603 "Settlements with

debtors and creditors" and No. 474 "Settlements for individual transactions".

The Bank reconciled the accounts receivable and the accounts payable regarding to suppliers,

contractors, buyers and contracting parties to whom bilateral reconciliation statements were sent.

In order to exclude recognition of actually put into operation fixed asset items on account No. 607

“Investments in construction (building), creation (production) and acquisition of fixed assets and

intangible assets”, the Bank analyzed the capital investments and discovered no incorrect recognition of

costs.

The necessary measures were taken to settle and minimize the amounts on the accounts until

clarification.

The balance on account No. 47416 “Amounts transferred on correspondent accounts until

clarification” as of 1/1/2013 in the amount of 1.9 billion rubles, appeared as a result of recognizing

amounts, which were not allocated to the recipients’ accounts due to unavailability of settlement

documents, as well as misrepresentation or misstatement of details, on correspondent accounts and intra-

branch settlement accounts. The amount in rubles appeared in the period from December 24 to December

30, 2012, and that in foreign currency appeared in the period from December 21 to December 31, 2012.

15.6. Information on adjusting events after the reporting date

The Bank prepares its annual report taking into account events after the reporting date (hereinafter,

the "EARD") which occur between the reporting date and the date of signing the annual report and affect

or might affect the Bank's financial standing.

The accounting records reflect the adjusting EARD. Adjusting EARD are events which confirm, as

of the reporting date, the existence of the conditions in which the Bank has operated.

The total volume and composition of EARD for 2012 are presented in the consolidated turnover

statement in the form of Appendix 14 to Regulation of Bank of Russia No. 302-P.

According to Directive of Bank of Russia No. 2089-U and the Bank’s Accounting policy, the

accounting records contain, in particular, the following adjusting EARD:

carryover of the balances from the profit and loss accounts of the accounting year to the profit

and loss accounts of the previous year, namely:

– 9,070,075.7 million rubles on the income accounts;

– 8,725,659.8 million rubles on the expense accounts;

adjustments of taxes and duties payable by the Bank in the amount of 855.0 million rubles

(increase by 188.8 million rubles, decrease by 1,043.8 million rubles);

adjustment of provision for possible losses (excluding provision-estimated non-credit

liabilities) created as of the reporting date based on the information on the conditions existed as

of the reporting date and received in course of preparing the annual report, in the amount of

3,430.2 million rubles (increase by 293.0 million rubles, decrease by 3,723.2 million rubles);

receipt after the reporting date of primary source documents confirming the transactions

performed before the reporting date and/or determining (specifying) the cost of the work,

services and assets for these transactions and specifying the income and expenditure recognized

in the accounting records for the amount of 2,526.6 million rubles (increase in income by

1,080.7 million rubles, increase in expenses by 3,607.3 million rubles).

51

15.7. Non-adjusting events after the reporting date

In January 2013 the Bank attracted resources from the thirteenth series of loan participation notes

under the MTN issuance programme in the amount of 25 billion rubles. The notes mature in January 2016

and have contractual fixed interest rate of 7.0% p.a.

In February 2013 the Bank attracted resources from the fourteenth series of loan participation notes

under the MTN issuance programme in the amount of 0,25 billion Swiss franc equivalent to 8,2 billion

rubles as at the date of issue. The notes mature in February 2017 and have contractual fixed interest rate

of 2.065% p.a.

In March 2013 the Bank attracted resources from the fifteenth series of loan participation notes

under the MTN issuance programme in the amount of 0,55 Turkish liras billion equivalent to 9,4 billion

rubles as at the date of issue. The notes mature in March 2018 and have contractual fixed interest rate of

7.4% p.a.

15.8. Information on incompliance with accounting rules

The Bank's branches and central office confirm the compliance of the bank transactions recognized

on the accounts with the account characteristics provided in Regulation of Bank of Russia No. 302-P.

No cases of non-compliance with the accounting rules were identified.

15.9. Changes in the Bank’s Accounting policy for 2013

For accounting purposes, the following main changes were introduced to the Accounting policy for

2013:

The main changes are caused by entering into force from January 1, 2013, of the Federal Law "On

accounting", No. 402-FZ, dated 12/6/2011 (hereinafter, the "Law No. 402-FZ") and the Regulations of

Bank of Russia "On the rules of accounting by credit organizations located within the Russian

Federation", No. 385-P, dated 7/16/2012 (hereinafter, the "Regulations No. 385-P").

In particular, in accordance with the law No. 402-FZ, the wording of provisions related to changes

in the Accounting policy was amended. As indicated, any changes in the Accounting policy can be

introduced under the following conditions:

changes in the requirements established by the Russian laws on accounting, federal and/or

industry standards;

developing or selecting a new method of accounting, the application of which results in better

quality of information about the object of accounting;

significant change in the business environment of economic entity.

In accordance with the Regulations No. 385-P, as well as by taking into account the clarifications of

Bank of Russia, the Accounting policy defines the procedure of recording the intra-bank claims and

liabilities between the central office and branches or between the branches regarding the amounts of

transfers performed by customers and operations on intra-system redistribution of assets, liabilities,

capital and property. At the same time, it was established that the intra-bank transfers on the accounts of

mutual debt settlements are carried out by "head offices". For the purposes of the Accounting policy, the

head offices include the central office, regional banks, and head branch offices.

The Accounting policy defines that if the property, accounted on the balance sheet without the value

added tax, is later sold prior to its use for banking transactions, for the lease or prior to its putting into

operation, the amount of value added tax, allocated to the balance sheet account 60310, is included to the

cost of the sold property prior to recognizing the transaction on its disposal.

The property temporarily unused in core activities additionally includes such category as the

building (part of a building) with no defined purpose of use.

52

It is established that when transferring the properties of the housing stock, land improvement

facilities into the properties, temporarily unused in core activities and recognized at current (fair) value,

the amount of the accrued depreciation shall be written from the off-balance sheet account No. 91211.

The Accounting policy defines the materiality criterion for reflecting non-credit contingencies in the

accounting records: For the purposes of reflecting the non-credit contingencies amounts in the off-

balance-sheet account for contingencies, the amounts of non-credit contingencies exceeding 30 million

rubles or 1 million U.S. dollars, or 1 million Euros are recognized as significant. The accounting of non-

credit contingencies is performed in accordance with the Regulations of Bank of Russia No. 385-P.

The adjusting EARDs include VAT adjustments on operations with related parties in accordance

with the regulations of the Bank. In this case, after the completion of the period established for posting

EARD by the branches of the Bank, the VAT adjustments on operations with related parties are

recognized on the balance sheet of the central office in the period from January 28 of the new year to

February 5 of the new year.

The Bank changed the last date of recognizing EARD on the balance sheets of Bank's branches. The

EARDs may be posted on the balance sheets of the Bank's branches up to January 25, 2013, inclusive.

When preparing the annual report for 2011, the adjusting events after the reporting date were posted on

the balance sheets of the branches up to January 27, 2012.

Along with the regional banks and branch offices, the definition of the "branch" term includes the

head offices.

During 2012 and within the period of preparing the annual report of which this explanatory note is

an integral part, there were no other events required to be disclosed in the explanatory note under the laws

of the Russian Federation.

CEO, Chairman of the Management Board, Sberbank of Russia Herman O. Gref

Chief Accountant of Sberbank of Russia -

Director of the Accounting and Reporting Department

Sberbank of Russia Andrei V. Kruzhalov

Total numbered, bound and sealed 53 sheets

the annual report of oao sberbank of russia for 2012 written in

Documents