vtb investor presentation 7m2019 eng v4...2019/09/16 · vtb at a glance macro strategy &...

INVESTOR PRESENTATION

September 2019

This presentation has been prepared by VTB Bank (PJSC) (“VTB”) and has not been independently verified. This presentation does not constitute or form part or all of, and should not be construed

as, any offer of, or any invitation to sell or issue, or any solicitation of any offer to purchase, subscribe for, underwrite or otherwise acquire, or a recommendation regarding, any shares or other

securities representing shares in, or any other securities of VTB, or any of its subsidiaries, nor shall it or any part of it nor the fact of its presentation or distribution form the basis of, or be relied on in

connection with, any contract or any commitment whatsoever or any investment decision. Some of the information in this presentation may contain projections or other forward-looking statements

regarding future events or the future financial performance of VTB and its subsidiaries (together with VTB, the "Group"). Forward-looking statements are statements that are not historical facts. They

include statements about our beliefs and expectations and the assumptions underlying them. These statements are based on plans, estimates and projections as they are currently available to the

management of VTB. Such forward-looking statements are based on numerous assumptions, beliefs and expectations regarding the Group's present and future business strategies, financial

conditions, targets and the operating environment. We caution you that these statements are not guarantees of future performance and involve risks, uncertainties and other important factors that we

cannot predict with certainty. Accordingly, our actual outcomes and results may materially differ from what we have expressed or forecasted in the forward-looking statements. These forward-looking

statements speak only as at the date of this presentation and are subject to change without notice. We assume no obligation to update or revise these statements whether as a result of new

information or for any other reason or to make them conform to actual results. Certain numbers and ratios contained herein, related to past dates and periods, might have been restated in

accordance with the latest financial statements issued, and hence differ from the ones presented in the previous communications. Figures shown in this presentation are based on figures disclosed

in the annual and interim financial statements of the Group. However, figures used in this presentation might have been rounded, which could result in slight differences in percentage changes

compared to those provided in such financial statements.

VTB at a Glance

Macro Environment in Russia

Strategy and Guidance

Business Overview

Financials

Appendix

Transformation

9

12

4

15

19

24

33

4

VTB AT A GLANCE

5FINANCIALSVTB AT A GLANCE BUSINESS OVERVIEWSTRATEGY & GUIDANCE APPENDIXMACRO TRANSFORMATION

OVERVIEW OF VTB GROUP

VTB Group

17

EMPLOYEES

82

BRANCH NETWORK

1.7

GLOBAL PRESENCE

countries

19.3%

20.7%

LOANS TO

INDIVIDUALS

16.6%CREDIT RATINGS

BBB-

Moody’s

DATA AS OF 31-JUL-19

CLIENT BASE

13

ATMsASSETS

15.2

▲70 bp ytd▲20 bp ytd

▲80 bp ytd flat ytd▲90 bp ytd

▲40 bp ytd

MARKET SHARE AS OF 31-JUL-19

MORTGAGE DEPOSITS OF

INDIVIDUALS

MARKET CAPITALISATION

ASSETS CORPORATE

LOANS

CORPORATE

DEPOSITS

in Russia

23.5%

18.0%

14.9%

15

thsd

in Russia

RUB trln thsd

in Russia

ruAAA

Baa3

8.7USD bn

thsd

VTB Group

mln clients

in Russia

DATA AS OF 30-JUN-19




-58

1,260

142

198

1,536

30-Jun-19

998 1,319 1,276 1,345 1,276 1,383 1,405 1,400

219

200 166 169

182 161 153 136

1,217

1,519 1,442 1,514 1,458 1,544 1,558 1,536

31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 01-Jan-18 31-Dec-18 31-Mar-19 30-Jun-19

9.8%

12.4% 12.9% 13.1% 12.5% 12.0% 12.3% 12.0%

12.0%

14.3% 14.6% 14.8% 14.3%13.5% 13.7% 13.2%

VTB OWNERSHIP STRUCTURE AND CAPITAL COMPOSITION

STRUCTURE OF EQUITY CAPITAL

FREE FLOAT

39.1%

FEDERAL AGENCY FOR STATE

PROPERTY MANAGEMENT

60.9%

BASEL CAPITAL RUB BN

BASEL CAPITAL COMPOSITION

ORDINARY SHARES (HELD BY FEDERAL AGENCY

FOR STATE PROPERTY MANAGEMENT)

12.1%

ORDINARY SHARES IN FREE FLOAT

7.8%

PREFERENCE TYPE 1 SHARES

(HELD BY MINISTRY OF FINANCE OF

THE RUSSIAN FEDERATION)

32.9%

PREFERENCE TYPE 2 SHARES

(HELD BY STATE CORPORATION

DEPOSIT INSURANCE AGENCY)

47.2%

STATE-OWNED

92.2%

19.9%

INSTITUTIONAL INVESTORS

35.9%

INDIVIDUAL INVESTORS

3.3%

DATA AS OF 1-JUN-19

STRUCTURE OF VOTING RIGHTS

TOTAL CAR

TIER I RATIO

TIER I PERPETUAL EUROBOND

TIER I W/O PERPETUAL

TIER II CAPITAL

LESS INVESTMENTS

TIER I

+20 bp ytd

PRE-IFRS 9 POST-IFRS 9

YTD

Total CAR 13.4% -10bp

Tier I ratio 12.2% +20bp

7M’19 update


REPORTS

VTB CORPORATE GOVERNANCE SYSTEM

APPROVES

ELECTS

REPORTS

REPORTSELECTS

ELECTSELECTS

ELECTS

ELECTS REPORTS

REPORTS AND PREPARES

RECOMMENDATION


RECOMMENDATION

REPORTS


RECOMMENDATION

ELECTS

APPROVES

Andrey Kostin

President and Chairman

of VTB Management Board

Anton Siluanov

Chairman

of VTB Supervisory Council

First Deputy Prime Minister -

Finance Minister of Russia

SUPERVISORY COUNCIL

11 MEMBERS

INCLUDING 4 REPRESENTATIVES OF MINORITY SHAREHOLDERS

MANAGEMENT BOARD

13 MEMBERS INTERNAL AUDIT

DEPARTMENT

AUDIT

COMMITTEE

STRATEGY AND

CORPORATE

GOVERNANCE

COMMITTEE

STATUTORY AUDIT

COMMISSION

GENERAL MEETINGOF SHAREHOLDERS

INDEPENDENT AUDITOR

STAFF AND

REMUNERATION

COMMITTEE

CORPORATE

SECRETARY

REPORTS


VTB GROUP OPERATING MODEL IN LINE WITH BEST GLOBAL PRACTICES

CORPORATE-INVESTMENT

BANKINGRETAIL BUSINESS MEDIUM AND SMALL

BUSINESS

#1 Investment bank and #2 Corporate bank in Russia

RUB 7,629 BN RUB 1,669 BN

BUSINESS WITH LARGE CORPORATE

CLIENTS

Broad corporate client base (coverage

BUSINESS WITH INDIVIDUALS BUSINESS WITH SMALL CORPORATE

AND MID-CORPORATE CLIENTS

wide regional franchise

Over 1,700 branch network and 12.6 mln clients in Russia

with leading Russian companies across

CORPORATE CENTER

ADMIN HRSTRATEGY

OPERATIONS PR

AUDIT AND COMPLIANCE

MARKETINGRISK

MANAGEMENT

CONTROL SUPPORT

c

LEGALSECURITY

ITFINANCE

RUB 5,413 BN

all economic sectors

c. 500,000 mid-corporate banking clients

7M’19

ASSETS

and c. 17,000 ATMs, JV with the Russian Post:

#1 retail franchise in Russia (c. 17,000 retail

outlets and c. 5,000 ATMs

and small business clients

of Post Bank)

in Russia >80%) with long-term relationships

9

MACRO ENVIRONMENT IN RUSSIA


0.7

-2.3

0.31.6

2.3

0.5

-1.5

-10.1

-0.2

4.8 4.3

0.6

2.5

-0.8

2.2 2.12.9 2.62.7

-10.0

-4.6

1.32.6

1.7

2014 2015 2016 2017 2018 6M'19

MACRO ENVIRONMENT IN RUSSIA

CPI DEC / DEC

USD/RUB (CBR, AVG)

OIL PRICE (URALS, AVG)

CBR KEY RATE (AVG)

GDP

INVESTMENTS IN FIXED CAPITAL

INDUSTRIAL PRODUCTION

RETAIL TURNOVER

FOR 7M’19 JUL / JUL

OIL PRICE USD AND EXCHANGE RATE RUB INFLATION AND CBR KEY RATE

RUSSIAN MACROECONOMIC INDICATORS %

7.9%

12.6% 10.6%9.1%

7.4% 7.7%

38.0

60.7 66.958.3 62.5 65.0

11.4%12.9%

5.4%

2.5%

4.3% 4.6%

2014 2015 2016 2017 2018 7M'19

97.6

51.041.6

53.1

69.7 65.5

2014 2015 2016 2017 2018 7M'19


29,054

28,460

25,987

24,200

23,219

18,553

7M'2019

2018

2017

2016

2015

2014

16,527

14,901

12,174

10,804

10,684

11,330

7M'2019

2018

2017

2016

2015

2014

38,639

38,947

34,786

34,036

36,172

31,939

7M'2019

2018

2017

2016

2015

2014

32,204

31,424

27,004

25,149

27,924

24,443

7M'2019

2018

2017

2016

2015

2014

CORPORATE LOANS

RUSSIAN BANKING SECTOR DYNAMICS

RUSSIAN BANKING

SECTOR

▼1% ytd

RUB BN RETAIL LOANS

▲11% ytd

CORPORATE FUNDING RETAIL FUNDING

▲ 2% ytd ▲ 2% ytd

12

STRATEGY AND GUIDANCE


KEY VTB GROUP STRATEGIC PRIORITIES FOR 2022

STRATEGIC PRIORITIES:FINANCIAL

COMMITMENTS:

LEADERSHIP IN CUSTOMER

SATISFACTION AMONG PEER BANKS

BETTER PERSONNEL ENGAGEMENT

● 100% PAPERLESS WORKFLOW

EXEMPLARY TIME-TO-MARKET

MOTIVATED AND EFFICIENT TEAM

● >50% SALES VIA DIGITAL CHANNELS

(RETAIL AND SME)

● 100% PRODUCTS AVAILABILITY DIGITAL

24/7 ACCESSIBILITY

ROE 15%

CIR 32%A LEADER IN SELECTED ECOSYSTEMS

FOCUS ON CLIENT-

CENTRICITY

BREAKTHROUGH IN

DIGITALIZATION

SET UP AND ROLL-OUT IN

DIGITAL ECONOMY

BUILDING A ROBUST AND

AGILE OPERATIONAL AND

TECH PLATFORM

CREATING HIGHLY

EFFECTIVE ORGANIZATION

& CULTURE

Dividend payout 50%

Net income RUB 300 bn


2019 GUIDANCE

Legal entities

In line with industry

≈ 1.2 %

MARKET GROWTH ≈ 5%

LOAN GROWTH

Individuals

Above industryLOAN GROWTHMARKET GROWTH ≈ 20%

COR

≈ 40 %CIR

≈ 3.5 %NIM

≈ 200 RUB BNNet profit

15

FROM BUILDING TRADITIONAL BANKING

PLATFORM TO BECOMING A VITAL

ELEMENT OF CLIENT LIFESTYLE


20162004 2005 2008 2010 2011 2013

LEGAL MERGER WITH

VTB BANK (MAY’16)

ORGANIC GROWTH

M&A DEALS

2018

LEGAL MERGER WITH VTB

BANK (JAN’19)

LAUNCH OF POST BANK

GUTA BANK PROMSTROIBANK

LETO BANK

BUILD-UP OF TRADITIONAL BANKING PLATFORM: MIX OF MERGERS AND

ORGANIC GROWTH

STARTING FROM 30 SEPTEMBER

2018, POST BANK IS ACCOUNTED

AS JV

VTB ACQUIRED

CONTROLLING

STAKE IN

VOZROZHDENIE

BANK (OCT’18)

VTB ACQUIRED CONTROLLING

STAKES IN WEST SIBERIAN

COMMERCIAL BANK AND

SAROVBUSINESSBANK (JAN’19)

2019


VTB GROUP TRANSFORMATION

1. DIGITALIZATION 2. TECHNOLOGIES

SETTLEMENTS

AUTHENTICATION

& BIOMETRICSTRANSACTIONS

AGILE

AI &

ROBOTISATION

COMMUNICATION

OPEN API

OTHER

DevSecOpsVTB CLOUD

DATA

MONETIZATION

3. ECOSYSTEM

Client

BECOMING NEW ELEMENT OF CLIENT

LIFESTYLE

RESTRUCTURING TRADITIONAL BANKING FUNCTIONS

TO CREATE AND ADOPT PRODUCTS AND SERVICES

TO VTB ECOSYSTEM

MAXIMIZING SALES THROUGH DIGITAL

CHANNELS

LIFESTYLE

BANKING

MOBILE

HOUSING

ECOSYSTEM

B2B

KEY ELEMENTS

KEY

TECHNOLOGICAL

CHANGES

2019 2022


MY SMART CITY APP

►FIRST APP COMBINES CITY

SERVICES OF MOSCOW

GOVERNMENT AND VTB

►INTEGRATION WITH PORTAL OF

PROVIDERS (PUBLIC PROCUREMENT) SINGLE

SIGN ON

►VTB SMALL FORM PROCUREMENT

(<1 MLN RUB)

FIRST STEPS IN ROLLING OVER VTB ECOSYSTEM

B2B PLATFORM FOR

SME

B2B BUSINESS

CONNECT

“EXPORT MANAGER”

SERVICE

VTB MOBILE

IN PARTNERSHIP

WITH TELE-2

LAUNCH: AUTUMN

2019

PROCUREMENT

LIFESTYLE

BANKING

HOUSING

ECOSYSTEM

LAUNCH: WINTER

2019

NEW DIGITAL PLATFORM FOR FULL

CYCLE OF REAL ESTATE SERVISES

MOBILE VIRTUAL NETWORK OPERATOR

BICYCLE RENTAL ►4.25 MLN RENTS IN 2018

►ACCELERATION WITH

RUSSIAN EXPORT CENTER

POTENTIAL

PARTNERSHIP

VTB COLLECTION►LOYALTY PROGRAMME

MARKET PLACE FOR

SEIZED PROPETY SALE

LAUNCH: AUG 2019

INSURANCE

Client

FULL VERSION : 2020

MARKET PLACES

- PLAN - LAUNCHED

“DIGITAL MORTGAGE”

SERVICEPILOT PROJECT

LAUNCHED: SEP 2019

19

BUSINESS OVERVIEW


259 252

7M'18 7M'19

97.3112.7

7M'197M'18

251.6

52.515.8

319.9

-51.1

-144.8

-26.797.3

NII NF CM Other Net operatingincome

Provisioncharge

Staff andadministrative

costs

Tax Net profit

1.5%1.6% 1.6%

45.8% 44.0%40.5%

234 261 260

2016 2017 2018

211172 167

2016 2017 2018

3.7%

4.1%3.9%

415 460 469

2016 2017 2018

3.8%

8.5%

12.5%

54.4

122.6

181.5

2016 2017 2018

ON TRACK TO DELIVER 2019 GUIDANCE

NET PROFIT RUB BN

PROVISIONS CHARGE (2) RUB BN

COR

ROE

(2) Including provision charge for impairment of debt financial assets and provision charge for impairment of other assets, credit related commitments and legal claims

NET INTEREST INCOME RUB BN

NIM

STAFF & ADMIN COSTS RUB BN

CIR

▲125%

▲48%

▲12% ▼0.4%

COSTS GROWTH DRIVEN BY ROLLOUT OF

TRANSFORMATION & RECENT ACQUISITIONS

▼19%▼3%

COR SUPPORTED BY SEVERAL LARGE

PROVISIONS RELIESED IN CORPORATE

BUSINESS 3M’19

▲11% ▲2%

NIM UNDER PRESSURE DUE TO

CHALLENGING ENVIRONMENT,

BOTTOMED OUT IN MARCH-APRIL

KEY COMPONENTS OF NET PROFIT

▼3% ▲8% ▼30% ▼3% ▼28% ▲20% ▲ 6% ▼14%

79%

16%

5%

(1) 7M’18 financial results were adjusted to reflect the changes in the groups structure (deconsolidation of: Post bank, Multicarta and VTB Bank Ukraine, disposal of VTB Insurance Group and VTB Bank Belgrade). Financial results were not adjusted to reflect the acquisitions

of “Vozrozhdenie Bank“, PJSC, “Sarovbusinessbank”, PJSC and “Zapsibcombank”, PJSC, which occurred in the second half of 2018 and the beginning of 2019. The Group management believes that the impact of these acquisitions on the Group’s financial performance for

the first 7M of 2018 individually or in aggregate would have been immaterial had it been applied as if the acquisitions happened prior to 1 January 2018.

YOY CHANGE

10.9%

TO DATA FOR

COMPARABLE

CONSOLIDATION

PERIMETER (1)

▼14%

5171

7M'197M'18

145121

7M'197M'18

▼3%

▼28%▲20%

3.3%0.8%

45.3%


2,925 3,320

31-Dec-18 31-Jul-19

3,875 3,748

31-Dec-18 31-Jul-19

1,405 1,496

31-Dec-18 31-Jul-19

1,289 1,473

31-Dec-18 31-Jul-19

6,667 6,477

31-Dec-18 31-Jul-19

4,202 4,630

31-Dec-18 31-Jul-19

DEPOSITS(1)LOANS(1)

ROBUST BUSINESS GROWTH WITH FOCUS ON RETAIL & SME

▲14%

> MARKET GROWTH

(▲2%) ▲10%

▼3%

DEPOSITSLOANS

> MARKET GROWTH

(▲11%)

RETAILRUB BN

CIB RUB BN

SME RUB BN

DEPOSITSLOANS

▼3%

▲6%▲14%

(1) Data from Segment analysis FY’18 and IFRS Unaudited Financial Highlights as of 31 July 2019.


Bank Fees USD / mln % share

VTB Capital 30.9 22.2

2 Credit Suisse 26.7 19.2

3 Citi 12.4 9.0

4 JP Morgan 9.0 6.5

5 Gazprombank 8.6 6.2

Source: Refinitiv Russia Investment Banking Review 1H 2019

Bookrunner Deal value / USD mln % share # of deals

VTB Capital 6,860 26.7 46

2 Gazprombank 5,968 23.2 52

3 Sberbank CIB 2,620 10.2 57

4 JP Morgan 1,318 5.1 10

5 Societe Generale 1,203 4.7 14

Source: Dealogic Russia Total DCM league tables 1H 2019

#1 IN INVESTMENT BANKING IN RUSSIA

#1 DCM BOOKRUNNER IN RUSSIA AND CIS

VTB CAPITAL: BEST INVESTMENT BANK IN RUSSIA

Best Investment Bank

in Emerging Markets

(2018,2019)


in Russia

(2010-2017, 2019)


in CEE (2013-2019)

Best Financial

Services in Russia

(2016-2019)

Best investment bank

in Russia

(2010-2019)

Bookrunner Deal value / USD mln % share # of deals

VTB Capital 5,792 11.5 42

2 Gazprombank 5,275 10.5 41

3 JP Morgan 4,381 8.7 22

4 Citi 3,722 7.4 20

5 Societe Generale 2,921 5.8 28

Source: Bloomberg Eastern European DCM league tables 1H 2019

#1 DCM BOOKRUNNER IN EASTERN EUROPE

#1 DCM bookrunner

in Russia

(1H 2019)

#1 bank in trade and

export finance in

Eastern Europe

(1H 2019)


01-Jul-18 01-Oct-18 01-Jan-19 01-Apr-19 01-Jul-19

CAPITAL LEVELS SUFFICIENT TO FUND FURTHER GROWTH

01-Jul-18 01-Oct-18 01-Jan-19 01-Apr-19 01-Jul-19

Tier I ratio

IFRS

▼ 30 BP YTD

FLAT YTD

12.1% 11.9% 12.0%12.3%

12.0%Total CAR

13.7%

N20.0 ▼ 20 BP YTD 10.8% 11.0%

11.4%11.6%

11.2%

13.2%13.5%13.4%13.8%

N20.2 9.2%9.9%

9.0%9.4%

9.1%▲ 20 BP YTD

Dividend payout in the amount of RUB 26.8 bn

12% of FY2018 RAS net profit

15% of FY2018 IFRS net profit

N20.1 ▲ 40 BP YTD8.4%9.0%

8.0%8.4%8.1%

►BASEL

RAS►CBR

YTD

13.4% -10bp

12.2% +20bp

7M’19 update

24

FINANCIALS


11% 11% 13% 13% 12% 11% 11% 12%

67%69% 70% 70% 70%

72% 71% 72%

9%10%

8% 6% 6%

5% 7% 4%5%

5%5% 4% 5%

5%5% 5%8%

5%

4% 7% 7%

7% 6% 7%12,19113,645

12,588 13,009 12,940

14,761 14,842 15,055


6% 6% 6% 6% 6%4% 6% 6%

2% 2% 2% 2% 2%2% 2% 2%

5% 5% 4% 3% 3%2% 2% 2%

65% 60%66% 79% 79%

79% 76% 79%

16%14%

9%1% 1%

<1% <1% <1% 6%

13%13%

9% 9%

13% 14% 11% 11,35212,188

11,175 11,530 11,529

13,238 13,295 13,515


ASSETS RUB BN

(1) Includes investment in associates, premises and equipment, investment property, intangible assets and goodwill, deferred tax assets and others

OTHER ASSETS (1)

SECURITIES PORTFOLIO

LOANS TO CUSTOMERS

DUE FROM OTHER BANKS

CASH AND MANDATORY RESERVES

ASSETS AND LIABILITIES STRUCTURE

LIABILITIES RUB BN

OTHER LIABILITIES

SUBORDINATED DEBT

DEBT SECURITIES ISSUED

CUSTOMER DEPOSITS

DUE TO BANKS AND OTHER

BORROWED FUNDS

COLLATERALISED FUNDING FROM

THE CBR



▲2%

▲2%

YTD

15,192.5 +2.9%

7M’19 update

YTD

13,630.6 +3.0%

7M’19 update

BY CURRENCY

FX

RUB

FX

RUB

73%

57%

27%

43%

30-Jun-19

31-Dec-14

66%

53%

34%

47%

30-Jun-19

31-Dec-14


99.5%102.8% 104.0% 101.5%

62% 60% 59%60% 60% 58% 55% 56%

38%40% 41%

40% 40%42% 45% 44%

5,669

7,267 7,347

9,145 9,145 10,404 10,149 10,738

31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 01-Jan-18 31.дек.18 31-Mar-19 30-Jun-19

79% 81% 77% 75% 74% 74% 72% 72%

21%19%

23% 25% 26%26% 28% 28%

9,150 10,110 9,487 9,773 9,841

11,424 11,288 11,623


NET CUSTOMER

LOANS /

CUSTOMER

DEPOSITS (LDR)

LOANS AND ADVANCES TO

CUSTOMERS RUB BN

BY INDUSTRY

LOAN PORTFOLIO AND CUSTOMER DEPOSITS

INDIVIDUALS

LEGAL ENTITIES

CUSTOMER DEPOSITS RUB BN

OIL AND GAS

METALS

MANUFACTURING

GOVERNMENT BODIES

TRANSPORT

TRADE AND COMMERCE

ENERGY

FINANCE

BUILDING CONSTRUCTION

TELECOMMUNICATIONS

AND MEDIA

CHEMICALS

BY CURRENCY

NET LOANS CUSTOMER DEPOSITS

OTHER

INDIVIDUALS


31-Dec-14

30-Jun-19

FX

RUB65%

53%

35%

47%

30-Jun-19

31-Dec-14

NET LOANS

INDIVIDUALS

LEGAL ENTITIES

▲2%

150.6% 129.9% 120.5% 100.3%

▲3%


75%

68%

25%

32%

30-Jun-19

31-Dec-14

YTD

11,626.9 +1.8%

100.3% -250 bp

7M’19 update

YTD

10,862.2 +4.4%

7M’19 update

31-Dec-18

28%

10%

9%

7%

7%

6%

6%

6%

5%

4%

4%

3%

5%

21%

11%

9%

7%

9%

10%

7%

5%

2%

5%

6%

5%

3%


1731 37

72

9

45

1Q'18 2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

103.5% 103.7%

112.0% 112.0%110.8%

30-Jun-18 30-Sep-18 31-Dec-18 31-Mar-19 30-Jun-19

743 752 654 658 657

773


760 779 732 737 728

800


7.8% 7.1% 6.4% 6.5% 6.3%

LOAN BOOK QUALITY

COVERAGE RATIO LOAN WRITE-OFFS RUB BN

NPLS (90+) RUB BN

NPL RATIO (1)

NPLS

PROVISION FOR LOAN IMPAIRMENT RUB BN

ALLOWANCE FOR LOAN IMPAIRMENT / TOTAL GROSS LOANS

ALLOWANCE FOR

LOAN IMPAIRMENT

(1) The Group defines non-performing loans (NPL) as lifetime expected credit losses (ECL) credit-impaired loans with contractual principal and or interest payments overdue more than 90 days and purchased or originated credit impaired (POCI) loans with principal

and or interest payments becoming overdue more than 90 days after the date of initial recognition.

POST BANK

CONTRIBUTION

7.5%7.6%

PROFORMA OF HISTORICAL DATA ADJUSTED FOR CHANGES IN POST

BANK ACCOUNTING TREATMENT

▼6% ▼1%▲3% ▲1% ▲1% ▼13% ▲1%

DATA AS REPORTED

POST BANK

CONTRIBUTION



DATA AS REPORTED

▲730bp

102.3%



▲850bp

1H’19: 54 RUB BN

1H’18: 49 RUB BN

▼0.5%POST BANK

ACCOUNTED AS JV

POST BANK

ACCOUNTED AS JV

DATA AS REPORTED

flat

7.6% 6.9%5.7% 5.8% 5.7%

▲0,5%

734.1 +0.3%

7M’19 update

YTD

5.7% flat

7M’19 updateYTD

110.7% -130 bp

7M’19 update

YTD


5.7% 5.7%

6M'19

98.4% 98.7%

0.7% 0.6%

0.9% 0.7%

11,424 11,623

31-Dec-18 30-Jun-19

31-Dec-18 30-Jun-19

WATCH

NPLs RUB bn

LOANS AT AMORTISED COST RUB BN BY ECL STAGESBY MEASUREMENT

APPROACH RUB BN

Stage 1

Stage 2

PASS SUB-STANDARD

NPL RATIO

DOUBTFUL NPLS

LOANS AT AMORTISED COST

LOANS AT FAIR VALUE THROUGH P&L

LOANS AT FAIR VALUE THROUGH OCI

11,465

82.4%

8.8%

GROSS LOAN PORTFOLIO BREAKDOWN UNDER IFRS 9

▲2%

8.8%

95%

4% 1%

11,242

80.9%

9.7%

9.4%

45.6

PROVISION CHARGE

Stage 3 + POCI

Allowance ratio: 0.9%



STAGE 2:

LECL

STAGE 1:

12 MONTH ECL

STAGE 3+POCI:

LECL CREDIT-IMPAIRED

AND PURCHASED

OR ORIGINATED

CREDIT IMPAIRED

14.9

18.1

12.6

11%

2%

87%

2%

32%

2%64%

654 657

31-Dec-18 30-Jun-19


7M’19 update

2.0%1.7%

1.4% 0.5%

6M'18 6M'19

PROVISION CHARGE AND COST OF RISK

48.2

18.5

26.5

27.1

74.7

45.6

6M'18 6M'19

2.2% 2.0%

1.6%

1.8%

1.7%2.2%

1.3%

1.7%

0.0%0.9%

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

PROVISION CHARGE FOR IMPAIRMENT OF LOANS RUB BN

PROVISION CHARGE FOR CREDIT

LOSSES ON LOANS TO

INDIVIDUALS

PROVISION CHARGE FOR CREDIT

LOSSES ON LOANS TO LEGAL ENTITIES

COST OF RISK BREAKDOWN

COST OF RISK (1)

LOANS TO INDIVIDUALS

LOANS TO LEGAL ENTITIES

(1) Provision charge for credit losses divided by average gross loans and advances to customers

(2) Comparative information for key performance indicators for 2018 was not restated as the cost to develop the necessary information would be excessive.

IND:▼50bp

2.2%

1.5% 1.7%

0.5%1.1%

1.6%

0.8%

LE:▼130bpIND:▼30bp

LE:▼90bp

39.4 24.3

35.1

0.5

18.0

14.5

14.6

11.4

13.7

13.4

53.9

38.946.5

14.2

31.4

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

▼42% ▼39%

0.5

y-o-y (2)

0.8% -


238 214

6M'18 6M'19

4.1%3.3%

9.4%8.8%

8.7% 8.4%

4.9% 5.3%

4.7% 5.0%

6M'18 6M'19

9.3% 9.0% 8.8% 8.8% 8.9%

8.7% 8.4% 8.4% 8.3% 8.5%

4.8% 4.8% 5.1% 5.3% 5.3%

4.6% 4.5% 4.6%5.0% 5.1%

2Q'18 3Q'18 4Q'18 1Q'19 4Q'19

▼80bp

4.2% 3.9%3.4% 3.2%

3.3%

NET INTEREST INCOME RUB BN AND INTEREST MARGIN %

NET INTEREST INCOME AND NIM

▼10%

▼90bp

▼10%

122 121 110 104 109

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

YIELD ON TOTAL INTEREST BEARING

ASSETS

YIELD ON CUSTOMER LOANS

COST OF TOTAL INTEREST BEARING

LIABILITIES

COST OF CUSTOMER DEPOSITS

AVERAGE YIELDS AND COST OF FUNDS %

y-o-y (1)

3.3% -

RUB 251.6 bn -2.8%

7M’19 update



64%63%

9%

7%7%

7%16%

18%4%

5%60.8

71.3

6M'18 6M'19

65%64% 53%

61%

65%

9% 10%9% 8%

6%7% 7%9% 6%

7%17% 13%22% 20%

17%2% 6%7% 5%

5%32.1 32.1 31.1 30.9

40.4

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

42.9 44.9

6M'18 6M'19

FEE AND COMMISSION INCOME BREAKDOWN RUB BN

NET FEE AND COMMISSION

INCOME

NET FEE AND COMMISSION

INCOME / AVG ASSETS (NET)

NET FEE AND COMMISSION INCOME RUB BN

INSURANCE PRODUCTS

DISTRIBUTION AND OTHER AGENCY

SERVICES

SETTLEMENT, TRADE FINANCE

AND CASH TRANSACTIONS

OTHER

GUARANTEES AND OTHER CREDIT

RELATED COMMITMENTS

OPERATIONS WITH SECURITIES AND

ON CAPITAL MARKETS

FEE AND COMMISSION INCOME

▲26% ▲17%

▲17% ▲5%

0.7%0.6%

0.5% 0.5%

0.7%0.7%

0.6%

22.3 20.9 16.8 18.926.0

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

y-o-y (1)

0.6% -

RUB 52.5 bn +8.4%

7M’19 update



59% 74% 75% 72% 72%

41%26% 25% 28% 28%

96.6

78.1 77.2 81.2 81.9


5176 80

52

49 46

103

125 126

comparableconsolidation

perimeter

1H'18 1H'19

36 38 43 41 40

26 2429

20 25

62 6373

61 65

2Q'18 3Q'18 4Q'18 1Q'19 2Q'19

STAFF COSTS AND ADMINISTRATIVE EXPENSES RUB BN

COST / INCOME RATIO

COST / AVG. ASSETS

NUMBER OF EMPLOYEES THSD

STAFF AND ADMINISTRATIVE EXPENSES

1.8% 1.8% 2.0% 1.7% 1.7%

37.6% 38.5% 44.6% 44.3% 48.9%

STAFF COSTS INCLUDING

PENSIONS

ADMINISTRATIVE EXPENSES

▲5%

1.9% 1.7%

39.4% 46.6%

▲0.7%

14.9% - ORGANIC GROWTH

7.3% - EFFECT OF RECENT M&As

▲22.2%

VTB BANK

OTHER COMPANIES OF

VTB GROUP

(1) 7M’18 financial results were adjusted to reflect the changes in the groups structure (deconsolidation of: Post bank, Multicarta and VTB Bank Ukraine, disposal of VTB Insurance Group and VTB Bank Belgrade). Financial results were not adjusted to reflect the

acquisitions of “Vozrozhdenie Bank“, PJSC, “Sarovbusinessbank”, PJSC and “Zapsibcombank”, PJSC, which occurred in the second half of 2018 and the beginning of 2019. The Group management believes that the impact of these acquisitions on the Group’s financial

performance for the first 7M of 2018 individually or in aggregate would have been immaterial had it been applied as if the acquisitions happened prior to 1 January 2018.


(1)

Post Bank: 18.5

VTB Insurance: 5.7

57.3

INCLUDING:

VTB Bank

4.5

INCLUDING:

SarovBusinessBank: 1.0

ZapSibComBank: 3.0

Vozrozhdenie Bank:

58.6VTB Bank

y-o-y (2)

45.3% -

1.7% -

RUB 144.8 bn +20.2%

7M’18 update

APPENDIX


1H’19 1H’18 Change 2Q’19 2Q’18 Change

NIM 3.3% 4.1% -80bp 3.3% 4.2% -90bp

CoR 0.8% 1.6% -80bp 1.1% 2.2% -110bp

Cost / Assets 1.7% 1.9% -20bp 1.7% 1.8% -10bp

CIR 46.6% 39.4% -720bp 48.9% 37.6% 130bp

ROE 10.1% 14.0% -390bp 7.9% 12.3% -440bp

1H’19 1H’18 Change 2Q’19 2Q’18 Change

Net interest income 213.6 238.1 -10.3% 109.4 121.8 -10.2%

Net fee and commission income 44.9 42.9 4.7% 26.0 22.3 16.6%

Net other income 11.3 35.3 -68.0% -2.6 19.6 -113.3%

Operating income before provisions 269.8 316.3 -14.7% 132.8 163.7 -18.9%

Provision charge for credit losses and other provisions -45.4 -69.0 -34.2% -30.2 -48.3 -37.5%

Staff costs and administrative expenses -125.6 -124.7 0.7% -64.9 -61.6 5.4%

Profit before tax 98.8 122.6 -19.4% 37.7 53.8 -29.9%

Income tax expense -22.0 -22.8 -3.5% -7.4 -9.5 -22.1%

Net profit 76.8 99.8 -23.0% 30.3 44.3 -31.6%

KEY FINANCIAL RATIOS

INCOME STATEMENT KEY INDICATORS RUB BN

VTB GROUP FINANCIAL HIGHLIGHTS: P&L AND KEY RATIOS

7M’19 7M’18 YTD

251.6 258.7 -2.8%

52.5 48.4 8.4%

15.8 22.7 -30.3%

319.9 329.8 -3.0%

-51.1 -71.3 -28.3%

-144.8 -120.5 20.2%

124.0 138.0 -10.1%

-26.7 -25.3 5.7%

97.3 112.7 -13.7%

7M’19 7M’18 (1) YTD (1)

3.3% - -

0.8% - -

1.7% - -

45.3% - -

10.9% - -


6M’19

IFRS consolidated

financial

statements

7M’19

IFRS unaudited

financial

highlights


30-Jun-19 31-Mar-19 Change 31-Dec-18 YTD

Gross loan portfolio 11,623.2 11,287.9 3.0% 11,423.5 1.7%

Loans to legal entities 8,323.6 8,121.9 2.5% 8,435.0 -1.3%

Loans to individuals 3,299.6 3,166.0 4.2% 2,988.5 10.4%

Total assets 15,055.3 14,841.8 1.4% 14,760.6 2.0%

Customer deposits 10,738.0 10,149.0 5.8% 10,403.7 3.2%

Deposits of legal entities 6,029.5 5,582.2 8.0% 5,995.8 0.6%

Deposits of individuals 4,708.5 4,566.8 3.1% 4,407.9 6.8%

Total liabilities 13,514.7 13,295.2 1.7% 13,237.6 2.1%

Total shareholders' equity 1,540.6 1,546.6 -0.4% 1,523.0 1.2%

30-Jun-19 31-Mar-19 Change 31-Dec-18 YTD

NPL ratio (1) 5.7% 5.8% -10bp 5.7% flat

LLR ratio 6.3% 6.5% -20bp 6.4% -10bp

Tier I CAR 12.0% 12.3% -30bp 12.0% flat

Total CAR 13.2% 13.7% -50bp 13.5% -30bp

BALANCE SHEET KEY INDICATORS RUB BN

VTB GROUP FINANCIAL HIGHLIGHTS: BALANCE SHEET

KEY ASSET QUALITY & CAPITAL RATIOS

31-Jul-19 YTD

11,626.9 1.8%

8,305.6 -1.5%

3,321.3 11.1%

15,192.5 2.9%

10,862.2 4.4%

6,170.9 2.9%

4,691.3 6.4%

13,630.6 3.0%

1,561.9 2.6%

31-Jul-19 YTD

5.7% flat

6.3% -10bp

12.2% 20bp

13.4% -10bp

(1) The Group defines non-performing loans (NPL) as lifetime expected credit losses (ECL) credit-impaired loans with contractual principal and or interest payments overdue more than 90 days and purchased or originated credit impaired (POCI) loans with principal and or

interest payments becoming overdue more than 90 days after the date of initial recognition.

6M’19

IFRS consolidated

financial

statements

7M’19

IFRS unaudited

financial

highlights


INTERNATIONAL DEBT MATURITY PROFILE (2) USD MLN

Borrower CurrencyAmount outstanding

(mln) Instrument Maturity Date/Put or Call Option Coupon ISIN

2018

VTB USD 698 Series 12 EMTN 2 Matured and repaid in February 2018 6.32% XS0592794597

VTB CHF 300 Series 3 EMTN 3 Matured and repaid in May 2018 2.9% CH0226747746

VTB USD 1,514 Series 4 EMTN 2 Matured and repaid in May 2018 6.875% XS0365923977

2020

VTB USD 948 Series 10 EMTN 2 October 2020 6.551% XS0548633659

2022

VTB USD 1,500 Series 21 EMTN 2 Subordinated Debt October 2022 6.95% XS0842078536

2024

VTB CHF 350 Series 4 EMTN 3 Subordinated Debt October 2024 (call option) 5.0% CH0248531110

2035

VTB USD 31 Series 6 EMTN 1 June 2035 6.25% XS0223715920

Perpetual

VTB USD 2,250 Tier 1 Perpetual Eurobond (call option) Dec 2022 (call option)(1) 9.5% XS0810596832

(1) Fixed until the first call date, then reset on 6th Dec 2022 and every 10th year thereafter.

(2) Net of bought back public debt. exchange rates published by the CBR as of September 10, 2019. In addition to international debt, VTB Group currently has RUB 130.5 bn domestic bonds.

827

1,339

23125

2020 2022 2024 2035

USD

CHF

VTB GROUP PUBLIC DEBT AND HYBRID CAPITAL INSTRUMENTS

Investor Relations

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e-mail: [email protected]

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