vtb investor presentation 9m2019 eng 21112019 .pptx) · 2019-11-25 · this presentation has been...

INVESTOR PRESENTATION

November 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

Appendix

Transformation

9

12

4

15

19

27

4

VTB AT A GLANCE

5VTB AT A GLANCE BUSINESS OVERVIEWSTRATEGY & GUIDANCE APPENDIXMACRO TRANSFORMATION

OVERVIEW OF VTB GROUP

VTB Group

17

EMPLOYEES

84

BRANCH NETWORK

1.7

GLOBAL PRESENCE

countries

19.3%

21.1%

LOANS TO

INDIVIDUALS

16.6%CREDIT RATINGS

BBB-

Moody’s

DATA AS OF 30-SEP-19

CLIENT BASE

14

ATMsASSETS

15.6

▲60 bp ytd▲ 20 bp ytd

▲ 80 bp ytd

▲100 bp ytd

▲40 bp ytd

MARKET SHARE AS OF 30-SEP-19

MORTGAGE DEPOSITS OF

INDIVIDUALS

MARKET CAPITALISATION

ASSETS CORPORATE

LOANS

CORPORATE

DEPOSITS

in Russia

23.5%

18.0%

15.0%

15

thsd

in Russia

RUB trln thsd

in Russia

ruAAA

Baa3

9.3USD bn

thsd

VTB Group

mln banking

clients

in Russia

▲40 bp ytd

AS OF 20-NOV-19


3.3% 3.1% 4.2%

7.8% 9.1%

VTB OWNERSHIP STRUCTURE AND CAPITAL COMPOSITION

STRUCTURE OF EQUITY CAPITAL

FREE FLOAT

39.1%

FEDERAL AGENCY FOR STATE

PROPERTY MANAGEMENT

60.9%

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

35.5%

INDIVIDUAL INVESTORS

3.6%

DATA AS OF 08-OCT-19

STRUCTURE OF VOTING RIGHTS

+50 bp ytd

VTB INDIVIDUAL SHAREHOLDER BASE

IS RAPIDLY INCREASING

LISTING OF VTB ORDINARY SHARES AND GDRs

% OF FREE FLOAT

+6 pp

DIVIDEND HISTORY

PAYOUT RATIO

IFRS

2014 2015 2016 2017 2018

DIVIDEND YIELD

91%

2,250%

67% 90% 73% 12%

1,947% 121% 61% 15%

2.1% 1.6% 1.7% 5.5% 2.4%ORD. SHARES

TYPE 1 PREFS

TYPE 2 PREFS

RAS

1.3% 0.04% 5.2% 5.5% 2.4%

N/A 5.8% 11.7% 5.5% 2.4%

≈ 90thsd

≈ 89thsd

≈94 thsd

≈121thsd

≈154thsd

2 0 1 5 2 0 1 6 2 0 1 7 2 0 1 8 2 0 1 9Oct’2019


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

14 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 7,914 BN RUB 1,809 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 1.7 thsd branch network and 13 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 5,546 BN

all economic sectors

c. 500 thsd mid-corporate banking clients

9M’19

ASSETS

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

#1 retail franchise in Russia (c. 18 thsd retail

outlets and c. 5 thsd ATMs

and small business clients

of Post Bank)

in Russia >80%) with long-term relationships

9

MACRO ENVIRONMENT IN RUSSIA

10VTB AT A GLANCE BUSINESS OVERVIEWSTRATEGY & GUIDANCEMACRO TRANSFORMATION APPENDIX

38.0

60.7 66.958.3 62.5 65.1

0.7

-2.3

0.31.6 2.3

0.7

-1.5

-10.1

-0.2

4.8 4.3

0.62,5

-0.8

2.2 2.12.9 2.6 2.72.7

-10.0

-4.6

1.32.8

1.8 1.4

2014 2015 2016 2017 2018 6M'19 9M'19

7.9%

12.6%10.6%

9.1%7.4% 7.6%

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 9M’19 SEP / SEP

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

RUSSIAN MACROECONOMIC INDICATORS %

97.6

51.041.6

53.1

69.7 64.3

2014 2015 2016 2017 2018 9M'19

11.4%

12.9%

5.4%

2.5%4.3% 4.0%

2014 2015 2016 2017 2018 9M'19

1H’19


29,351

28,460

26,992

24,200

23,219

18,553

9M'2019

2018

2017

2016

2015

2014

17,104

14,901

12,174

10,804

10,684

11,331

9M'2019

2018

2017

2016

2015

2014

32,908

31,424

27,004

25,149

27,924

24,443

9M'2019

2018

2017

2016

2015

2014

39,210

38,947

34,786

34,036

36,172

31,939

9M'2019

2018

2017

2016

2015

2014

CORPORATE LOANS

RUSSIAN BANKING SECTOR DYNAMICS

RUSSIAN BANKING

SECTOR

▲1% ytd

RUB BN RETAIL LOANS

▲15% ytd

CORPORATE FUNDING RETAIL FUNDING

▲ 5% ytd ▲ 3% 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


NET

PROFIT

≈ 200 RUB bn

LOANS

TO LEGAL ENTITIES

LOANS

TO INDIVIDUALS

CoR

NIM

CIR

GROW IN LINE

WITH INDUSTRY

GROW ABOVE

INDUSTRY

≈ 1%

≈ 3.4%

≈ 40%

MARKET GROWTH < 5%

MARKET GROWTH

UP TO 20%

2019 GUIDANCE

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

BANKINGMOBILE

HOUSING

ECOSYSTEM

B2B

KEY ELEMENTS

KEY

TECHNOLOGICAL

CHANGES

2019 2022

FISCAL

DATA


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

IN PARTNERSHIP

WITH TELE-2

LAUNCH: SEP 2019

PROCUREMENT

LIFESTYLE

BANKING

HOUSING

ECOSYSTEM

LAUNCH: WINTER

2019

NEW DIGITAL PLATFORM FOR FULL

CYCLE OF REAL ESTATE SERVISES

BICYCLE RENTAL ►4.25 MLN RENTS IN 2018

►ACCELERATION WITH

RUSSIAN EXPORT CENTER

POTENTIAL

PARTNERSHIP

MULTI-BONUS►LOYALTY PROGRAMME

MARKET PLACE FOR

SEIZED PROPETY SALE

LAUNCH: AUG 2019

INSURANCE

Client

FULL LAUNCH : 2020

MARKET PLACES

- PLAN - LAUNCHED

“DIGITAL MORTGAGE”

SERVICE

MOBILE

OCT: CONNECTED TO THE NEW-

BUILT APPARTMENTS DATABASE

OF VTB HOUSING ECOSYSTEM

FISCAL DATA OPERATOR

AUG 2019

LAUNCH: SEP 2019

19

BUSINESS OVERVIEW9M’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 9M’18

INDIVIDUALLY OR IN AGGREGATE WOULD HAVE BEEN IMMATERIAL HAD IT BEEN APPLIED AS IF THE ACQUISITIONS HAPPENED PRIOR

TO 1 JANUARY 2018.


4.5% 5.2%

1.6% 1.5% 2.0% 2.4%

45.3% 46.2%

33.3% 34.2%

13.3% 10.5%

13,238 14,030

31-Dec-18 30-Sep-19

11.4% 12.1%

53.7% 51.2%

18.7% 20.4%

4.7% 4.0%

4.4% 5.0%

7.1% 7.3%

14,761 15,625

31-Dec-18 30-Sep-19

1,281 1,483

1,442 1,650

2,989 3,421

31-Dec-18 30-Sep-19

1,347 1,507

8,435 8,491

31-Dec-18 30-Sep-19

▲12%

3,323 3,637

1,085 1,165

4,408 4,803

31-Dec-18 30-Sep-19

4,420 4,863

1,576 1,623

5,996 6,486

31-Dec-18 30-Sep-19

CORPORATE ▲0.7%vs market ▲0.7%

MEASURED BUSINESS GROWTH WITH FOCUS ON PRIORITISED

SEGMENTS AND STRENGTHENING BALANCE SHEET

ASSETS RUB BN

OTHER ASSETS

SECURITIES PORTFOLIO

LOANS TO CUSTOMERS

DUE FROM OTHER BANKS

CASH, SHORT-TERM FUNDS AND

MANDATORY RESERVES

GROSS LOANS

RETAIL ▲14.5%

Mortgage

Consumer

SME

DEPOSITS

LDR(1)

LIABILITIES RUB BN

LE

RETAIL

OTHER LIABILITIES

SUBORDINATED DEBT

DEBT SECURITIES ISSUED

CUSTOMER DEPOSITS

DUE TO BANKS AND OBF

▲6%

RETAIL

LE

99.1%

CORPORATE ▲8.2%

RETAIL ▲9.0%▲6%

vs market ▲14.8% vs market ▲3.1%

vs market ▲4.7%

Term

Current

Term

Current

▲14%

▲16%

▲7%

▲9%

▲3%

▲10%

(2)

(2) INCLUDING VOZROZHDENIE BANK

(1) NET LOANS/DEPOSITS

DEPOSITS IN

TOTAL

LIABILITIES

78.6% 80.4%LOANS IN

TOTAL

ASSETS

72.4% 71.6%


▼15%

▲14%

▲10%

▲42%

-12.9

51.2

-32.4

-58.7

155.2

22.6

22.4

110.23.3%

▼40 bp

13.0%▲340 bp

1.0%▼30 bp

37.8%

0.9%▼50 bp

11.1%▼90 bp

NET INTEREST

INCOME

NET FEE &

COMISSION

INCOME

OTHER

INCOME

NET OPERATING

INCOME

PROVISION

CHARGE

STAFF &

ADMINISTRATIVE

COSTS

TAX

NET

PROFIT

▼2%

▲6%

▼21%

▲19%

▼4%

NIM

CoR

CIR

ROE

CHANGE

YoY

43.4%▲690 bp

3.3%▼60 bp323.8

67.3

33.9

425.0

-77.8

-184.3

128.0

▲16%

▲0.4%

NET INTEREST

INCOME

NET

FEE & COMISSION

INCOME

NET

OPERATING

INCOME

PROVISION

CHARGE

STAFF &

ADMINISTRATIVE

COSTS

TAX

NET

PROFIT

NIM

CoR

CIR

ROE

0%

▲1%

▲140%

CHANGE

YoY3Q’2019 RUB BN

-34.9

9M’2019 RUB BN

▲140 bp

POSITIVE TREND IN PROFITABILITY IN 3Q 2019

OTHER INCOME


315.9(79%)

395.1 (78%)

82.3 (21%)

108.3 (22%)

398.2503.4

9M'18 9M'19

3.2%3.3% 3.3%

3.9%

3.3%

STRUCTURE AND DYNAMICS OF INTEREST INCOME & EXPENSE

NET INTEREST INCOME RUB BNGROSS INTEREST INCOME RUB BN

GROSS INTEREST EXPENSE RUB BN

▼2%

▲26%

▲13%

INTEREST EXPENSE ON CUSTOMER DEPOSITS

INTEREST EXPENSE ON OTHER INTEREST BEARING LIABILITIES

INTEREST INCOME ON LOANS AND ADVANCES TO CUSTOMERS

INTEREST INCOME ON OTHER INTEREST BEARING ASSETS

YIELD ON TOTAL

INTEREST

BEARING

ASSETS

9M’19

8.4%

8.5%flat YoY

3Q’19 / 3Q’18

NIM

9M’18

9M’19

5.3%

4.8%9M’18

▼33%

▲21%

▲32%

▲25%

COST OF TOTAL

INTEREST BEARING

LIABILITIES

104.2 109.4 110.2

1Q'19 2Q'19 3Q'19

330.7323.8

9M'18 9M'19

629.7 (86%)

760.8 (92%)

99.2 (14%)

66.4 (8%)

728.9827.2

9M'18 9M'19


56.1 (61%)

66.5 (61%)

8.8 (10%)8.0 (7%)

6.5 (7%)7.5 (7%)

17.1(18%)

20.7 (19%)

4.0 (4%)

5.7 (6%)92.5

108.4

9M'18 9M'19

26.5 (90%)

37.9(92%)

1.0 (3%)

0.7 (2%)1.1 (4%)

1.5 (4%)0.7 (3%)

1.0 (2%)29.341.1

9M'18 9M'19

63.267.3

9M'18 9M'19▲40%

STRUCTURE AND DYNAMICS OF FEE AND COMMISSION INCOME

AND EXPENSE

NET FEE AND COMMISSION INCOME RUB BNFEE AND COMMISSION INCOME RUB BN

FEE AND COMMISSION EXPENSE RUB BN

▲ 6%

▲17%

▲1% YoY

3Q’19 / 3Q’18

▲43%

▲21%

▲15%

▼9%

▲19%

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



OTHER

OPERATIONS WITH

SECURITIES AND ON CAPITAL

MARKETS

▲43%

▲36%

▼30%

▲43%

GUARANTEES AND OTHER

CREDIT RELATED FACILITIES

RECEIVED

A ONE-OFF INCREASE IN EXPENSES FOR LOYALTY

PROGRAMMES – THE RESULT OF SIGNIFICANT

CHANGES TO THOSE PROGRAMMES – HAD A NEGATIVE

IMPACT ON FEE AND COMMISSION INCOME IN 3Q

18.9

26.022.4

1Q'19 2Q'19 3Q'19


732 731

31-Dec-18 30-Sep-19

23.5

38.1

13.9

75,5

9M'19

9.4% 8.4%

9.7% 11.8%

80.9%79.8%

11,24211,727

31-Dec-18 30-Sep-19

95%

4%1%

33%

4%

63%

2%

31%

2%65%

72.3

34.4

29.2

41.1

101.5

75.5

9M'18 9M'19

1.4%

0.9%

1.6% 1.7%

1.3% 0.6%

9M'18 9M'19

5.7%5.5%

6.4%6.1%

NPL RATIO

PROVISION CHARGE FOR LOAN IMPAIRMENT RUB BN

INDIVIDUALS

LE

TOTAL

PASS

STAGE 1

WATCH

SUB-STANDARD

DOUBTFUL

NPL

STAGE 3

+ POCI

LOANS AT AMORTISED COST RUB BN

BY ECL STAGES

NPL RUB BNPROVISION FOR LOAN

IMPAIRMENT RUB BN

ALLOWANCE FOR LOAN IMPAIRMENT /

TOTAL GROSS LOANS

COR

INDIVIDUALS

LE

COVERAGE 30-Sep-19

112.4%▲40bp

0.8%

10.1%

52.3%

ALLOWANCE

RATIO

STAGE 2

flat ▼1%

▼26%

COR REFLECTS STABLE ASSET QUALITY IN ALL BUSINESS SEGMENTS

654 650

31-Dec-18 30-Sep-19

STAGE 2

STAGE 1

STAGE 3

+ POCI


36.5%43.4%

9M'18 9M'19

36.4% 37.8%

1.6% 1.6%1.5% 1.5%

58 59

14 23

72 82

9M’18 9M’19

CIR

COSTS/ AVG.

ASSETS

STAFF COSTS

INCLUDING

PENSIONS

ADMINISTRATIVE

EXPENSES

COSTS GROWTH SLOWING DOWN IN 3Q 2019

STAFF AND ADMINISTRATIVE COSTS RUB BN

AVERAGE NUMBER OF EMPLOYEES THSD

VTB BANK

+9 THSD RECENTLY CONSOLIDATED BANKSSUBSIDIARIES

INCLUDING 6.4 PP - RECENTLY CONSOLIDATED BANKS

EARLIER RECOGNITION OF PERFORMANCE-BASED

COMPENSATION IN 2019 VS 2018 (DIFFERING

CALENDARISATION)

+19%

95.1 117.6

59.3

66.7

154.4

184.3

9M'18 9M'19

▲19%

▲690 bp

flat

▲12%

▲24%

32.1 37.6

19.5

21.1

51.6

58.7

▲8%

▲17%

▲14%

▲140 bp

flat

3Q’18 3Q’19

3Q’18 3Q’19


Bookrunner Deal value / USD mln % share # of deals

VTB Capital 8,740 26.7 68

2 Gazprombank 6,821 20.8 68

3 Sberbank CIB 3,493 10.7 70

4 JP Morgan 2,100 6.4 17

5 Societe Generale 1,550 4.7 14

Source: Dealogic Russia Total DCM league tables 3Q’19

Bookrunner Deal value / USD mln % share # of deals

VTB Capital 7,480 11.1 59

2 Gazprombank 6,009 8.9 51

3 JP Morgan 5,738 8.5 31

4 Citi 5,267 7.8 28

5 Societe Generale 3,953 5.3 33

Source: Bloomberg Eastern European DCM league tables 3Q’19

Bank Fees USD / mln % share

VTB Capital 44.1 18.4

2 Gazprombank 35.0 14.6

3 Credit Suisse 30.5 12.7

4 Sberbank CIB 26.2 10.9

5 Goldman Sachs 15.1 6.3

Source: Refinitiv Russia Investment Banking Review 3Q’19

INVESTMENT BANKING IN RUSSIA 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)

DCM BOOKRUNNER IN EASTERN EUROPE

#1 DCM bookrunner

in Eastern Europe

(3Q 2019)

Best investment Bank

in Russia

(2019)

LEADING POSITION:

Bookrunner Deal value/USD mln % share # of deals

1 Goldman Sachs 775.7 40 4

VTB Capital 348.8 18 4

3 Credit Suisse 226.4 11.7 2

ECM BOOKRUNNER IN RUSSIA

Source: Refinitiv Russia Investment Banking Review 3Q’19

#1 Research Team “Transport”

category, EMEA

(2016-2019)

#1 Research Team

“Electric utilities” category, EMEA

(2019)

27

APPENDIX: FINANCIALSCOMPARISON OF FINANCIAL DATA AND RATIOS IS BASED ON PRIOR PERIODS FINANCIAL STATEMENTS NOT ADJUSTED

FOR DECONSOLIDATION OF POST BANK, MULTICARTA AND VTB BANK UKRAINE, DISPOSAL OF VTB INSURANCE GROUP

AND VTB BANK BELGRADE.

28

6% 6% 6% 6% 6% 4% 5%

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

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

65% 60%66% 79% 79% 79%

80%

16% 14% 9%1% 1%

<1% <1%

6% 13%13%

9% 9%

13%10% 11,352

12,18811,175 11,530 11,529

13,23814,030

31-Dec-14 31-Dec-15 31-Dec-16 31-Dec-17 1-Jan-18 31-Dec-18 30-Sep-19

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

70%69% 70% 70% 70%

72% 72%

9%

10%8% 6% 6%

5%4%

5%

5%5% 5% 5%

4%5%

8%

5%4% 7% 7%

7%7%

12,19113,645

12,588 13,009 12,940

14,76115,625


73%

53%

27%

47%

30-Sep-19

31-Dec-14

73%

57%

27%

43%

30-Sep-19

31-Dec-14

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

PRE-IFRS 9 IFRS 9

▲6%

BY CURRENCY

FX

RUB

FX

RUB

PRE-IFRS 9 IFRS 9

▲6%


29%

10%

9%

6%

7%

6%

6%

6%

4%

4%

4%

3%

6%

21%

11%

9%

7%

9%

10%

7%

5%

2%

5%

6%

5%

3%

PRE-IFRS 9 IFRS 9

150.6% 129.9% 120.5% 100.3% 99.5% 102.8% 99.1%

79% 81% 77% 75% 74% 74% 71%

21%19%

23% 25% 26%26% 29% 9,150 10,110 9,487 9,773 9,841

11,424 11,913


68%

53%

32%

47%

30-Sep-19

31-Dec-14

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-Sep-19

FX

RUB

GROSS LOANS

INDIVIDUALS

LEGAL ENTITIES

▲4%

▲9%

LDR RUB

195%

77%

101%

68%

75%

32%

25%

30-Sep-19

31-Dec-14

LDR FX

110%

62% 60% 59% 60% 60% 58% 57%

38%40% 41%

40% 40%42%

43% 5,669

7,267 7,347 9,145 9,145

10,404 11,288


PRE-IFRS 9 IFRS 9


82%

84% 79% 75% 75%

75% 76%

18%

16% 21%

25% 25%

25%

24%

2,149

2,8833,004

3,622 3,622

4,408

4,803


41% 45% 46% 44% 43% 48% 48%

7% 5%4% 4% 4%

4%4%

6% 6% 6%5% 5%

4%4%

46% 44%44%

47% 48%

44%

44%

1,945 1,9602,176

2,486 2,534

2,989

3,421


15.5% 14.9% 14.7% 14.3%12.8% 11.9%

2014 2015 2016 2017 2018 9M'19

5.3%

6.6%5.7%

4.9% 4.7% 4.9%

38%40% 41% 40%

CASH LOANS & OTHER

MORTGAGE LOANS

CAR LOANS

FUNDING FROM INDIVIDUALS RUB BNLOANS TO INDIVIDUALS RUB BN

CREDIT CARDS

SHARE OF RETAIL IN TOTAL LOANS

SHARE OF RETAIL IN TOTAL

CUSTOMER FUNDING

TERM DEPOSITS

CURRENT / SETTLEMENT DEPOSITS

Pre-IFRS 9 IFRS 9

MARKET SHARES (1)YIELD ON LOANS AND COST OF DEPOSITS

COST OF DEPOSITS OF INDIVIDUALS

YIELD ON LOANS TO INDIVIDUALS

Pre-IFRS 9 IFRS 9

(1) The market share is calculated using VTB’s methodology with data from the Bank of Russia based on RAS statements.

VTB BUSINESS WITH INDIVIDUALS

21% 19% 23% 25%26% 26%

29%

40%42% 43%

▲14% ▲9%


15.0% Deposits of

individuals

18.0% Loans to

individuals

▲100bp ytd▲20bp ytd


9.0%10.0% 9.7%

8.9%7.8% 7.6%

2014 2015 2016 2017 2018 9M'19

79% 81%77% 75%

74% 74%71%

FUNDING FROM LEGAL ENTITIES RUB BNLOANS TO LEGAL ENTITIES RUB BN

SHARE OF CORPORATE IN TOTAL LOANS

SHARE OF CORPORATE IN TOTAL CUSTOMER FUNDING

CURRENT / SETTLEMENT DEPOSITS

TERM DEPOSITS

COST OF DEPOSITS OF LE YIELD ON LOANS TO LE

Pre-IFRS 9 IFRS 9

Pre-IFRS 9 IFRS 9

VTB BUSINESS WITH LEGAL ENTITIES

75%77% 76%

75% 75% 74% 75%

25%

23% 24%

25% 25%26%

25%

3,520

4,384 4,342

5,523 5,5235,996

6,486


62% 60% 59% 60% 60%58% 57%

21.1% Deposits of

legal entities

19.3% Loans to

legal entities

▲40bp ytd▲60bp ytd


MARKET SHARES (1)YIELD ON LOANS AND COST OF DEPOSITS

5.2%

7.1% 6.6%5.5%

4.5% 5.0%

▲1% ▲8%

(1) The market share is calculated using VTB’s methodology with data from the Bank of Russia based on RAS statements.

7,205

8,150

7,311 7,287 7,307

8,435 8,491



5.7% 5.8% 5.7% 5.5%

654 658 657 650

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

732 737 728 731

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

17.3

31.2 36.6

71.7

8.5

46.5 37.2

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

LOAN BOOK QUALITY

LOAN WRITE-OFFS RUB BN

NPLS (90+) RUB BN

NPL RATIO (1)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.

▲ 1% flat▼ 1% ▲1%

▲40bp

▼0.1%

flat

▼0.5%

PROVISION FOR LOAN IMPAIRMENT RUB BN

COVERAGE RATIO

▼1%

NPLs

`FY’2018: 156.8

`9M’2018: 85.1 `9M’2019: 92.2

6.4% 6.5% 6.3% 6.1%

112.0% 112.0% 110.8% 112.4%

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


33%

4%63%

98.4% 98.4%

0.7% 0.7%0.9% 0.9%

11,424 11,913

31-Dec-18 30-Sep-19

95%

4% 1%

9.4% 8.4%

9.7% 11.8%

80.9%79.8%

11,24211,727

31-Dec-18 30-Sep-19

5.7%5.5%

2%

31%

2%65%

GROSS LOAN PORTFOLIO BREAKDOWN UNDER IFRS 9

0.8%

LOANS AT AMORTISED COST RUB BN

BY ECL STAGES

PASS

DOUBTFUL

NPL

LOANS AT AMORTISED COST

LOANS AT FAIR VALUE THROUGH P&L

LOANS AT FAIR VALUE THROUGH OCI

▲4%

10.1%

52.3%

STAGE 1

STAGE 2

STAGE 3

+ POCI

WATCH

SUB-STANDARD

PROVISION

CHARGE RUB BN

NPL RUB BN

NPL RATIO

xx

xx

12.6

12 MONTH ECL

LECL

LECL CREDIT-

IMPAIRED

AND PURCHASED

OR ORIGINATED

CREDIT IMPAIRED

ALLOWANCE

RATIO

LOAN PORTFOLIO RUB BN

xx

654 650

31-Dec-18 30-Sep-19

23.5

38.1

13.9

75.5

9M'19


24.3 35.1

0.5 18.0 15.9

14,6 11.4

13.7

13.4 14.0

38.9

46.5

14.2

31.4 29.9

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

2.0%

1.7%1.3%

0.6%

9M'18 9M'19

2.0%

1.6%

1.8% 1.7% 1.7%

1.3%

1.7%

0.0%0.9% 0.8%

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

72.5 34.4

41.1

41.1

113.6

75.5

9M'18 9M'19

PROVISION CHARGE AND COST OF RISK

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.

IND:▼30bp

1.5%

0.9%

LE:▼50bpIND:▼30bp

LE:▼70bp

▼23% ▼34%

1.5%1.7%

0.5%

1.1% 1.0%


359 324

9M'18 9M'19

4.0%3.3%

3.9%3.4%

3.2% 3.3% 3.3%

▼70bp

NET INTEREST INCOME RUB BN AND INTEREST MARGIN %

NET INTEREST INCOME AND NIM

▼10%

▼60bp

▼9%

YIELD ON TOTAL INTEREST EARNING

ASSETS

YIELD ON CUSTOMER LOANS

COST OF TOTAL INTEREST BEARING

LIABILITIES

AVERAGE YIELDS AND COST OF FUNDS %

121 110 104 109 110

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

9.0% 8.8% 8.8% 8.9% 8.8%

8.4% 8.4% 8.3% 8.5% 8.5%

4.8% 5.1% 5.3% 5.3% 5.2%

4.5% 4.6% 5.0% 5.1% 4.9%

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

9.2%8.8%

8.6% 8.4%

4.8% 5.3%

4.6% 5.0%

9M'18 9M'19

COST OF CUSTOMER DEPOSITS


61%64%

7%9%

7%7%

19%15%

5%4%

108.492.9

9M'199M'18

0.6% 0.6%

67.363.8

9M'199M'18

64% 53% 61% 65% 58%

10%9% 8%

6%8%

7%9% 6%

7%7%

13%22% 20%

17%20%

6% 7% 5%

5%6%32.1 31.1 30.9

40.437.1

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



OTHER

GUARANTEES AND OTHER CREDIT

RELATED COMMITMENTS

OPERATIONS WITH SECURITIES AND

ON CAPITAL MARKETS

FEE AND COMMISSION INCOME

▲16% ▲17%

▲7% ▲5%

0.6%0.5% 0.5%

0.7%0.6%

20.9 16.8 18.926.0 22.4

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


38 43 41 40 38

2429

20 25 21

62.672.5

60.7 64.9 58.7

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

95 114 118

59

73 67

154.4

187.3 184.3

9M'18 9M'18 9M'19

(1) 9M’18 P&L 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).

STAFF AND ADMINISTRATIVE EXPENSES

STAFF COSTS AND ADMINISTRATIVE EXPENSES RUB BN

COST / INCOME RATIO

COST / AVG. ASSETS

NUMBER OF EMPLOYEES THSD

STAFF COSTS INCLUDING

PENSIONS

ADMINISTRATIVE EXPENSES

▼6% ▼2%

▲19%

VTB BANK

OTHER COMPANIES OF

VTB GROUP

(1)

VTB Insurance: 5.8

57.8

INCLUDING:

VTB Bank

4.5

INCLUDING:

SarovBusinessBank: 1.0

ZapSibComBank: 3.0

Vozrozhdenie Bank:

59.6VTB Bank

1.8% 2.0% 1.7% 1.7% 1.5%

38.5% 44.6% 44.3% 48.9%37.8%

1.9% 1.6%

39.1% 43.4%

74% 75% 72% 72% 71%

26% 25% 28% 28% 29%

78.1 77.2 81.2 81.9 83.6

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


9M’19 9M’18 Change 9M’18 Change 3Q’19 3Q’18 Change 3Q’18 Change

Net interest income 323.8 330.7 -2.1% 358.6 -9.7% 110.2 110.2 0.0% 120.5 -8.5%

Net fee and commission income 67.3 63.2 6.5% 63.8 5.5% 22.4 22.1 1.4% 20.9 7.2%

Net other income 33.9 29.3 15.7% 56.5 -40.0% 22.6 9.4 140.4% 21.2 6.6%

Operating income before provisions 425.0 423.2 0.4% 478.9 -11.3% 155.2 141.7 9.5% 162.6 -4.6%

Provision charge for credit losses and other

provisions-77.8 -98.9 -21.3% -111.4 -30.2% -32.4 -38.2 -15.2% -42.4 -23.6%

Staff costs and administrative expenses -184.3 -154.4 19.4% -187.3 -1.6% -58.7 -51.6 13.8% -62.6 -6.2%

Profit before tax 162.9 169.9 -4.1% 180.2 -9.6% 64.1 51.9 23.5% 57.6 11.3%

Income tax expense -34.9 -36.6 -4.6% -39.2 -11.0% -12.9 -15.9 -18.9% -16.4 -21.3%

Net profit 128.0 133.3 -4.0% 141.0 -9.2% 51.2 36.0 42.2% 41.2 24.3%

VTB GROUP FINANCIAL HIGHLIGHTS: P&L AND KEY RATIOS

9M’19 9M’18 Change 9M’18 Change 3Q’19 3Q’18 Change 3Q’18 Change

NIM 3.3% 3.9% -60 bp 4.0% -70 bp 3.3% 3.7% -40 bp 3.9% -60 bp

CoR 0.9% 1.4% -50 bp 1.5% -60 bp 1.0% 1.3% -30 bp 1.5% -50 bp

Cost / Assets 1.6% 1.6% - 1.9% -30 bp 1.5% 1.5% - 1.8% -30 bp

CIR 43.4% 36.5% 690 bp 39.1% 430 bp 37.8% 36.4% 140 bp 38.5% -70 bp

ROE 11.1% 12.0% -90 bp 13.1% -200 bp 13.0% 9.6% 340 bp 11.3% 170 bp

ROA 1.1% 1.4% -30 bp 1.4% -30 bp 1.3% 1.1% 20 bp 1.2% 10 bp

INCOME STATEMENT KEY INDICATORS RUB bn

KEY FINANCIAL RATIOS

(1) 9M’18 and 3Q’18 PL 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).

9M’19

IFRS consolidated

financial

statements

MODIFIED DATA (1) MODIFIED DATA (1)

MODIFIED DATA (1) MODIFIED DATA (1)


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

Gross loan portfolio 11,912.7 11,623.2 2.5% 11,423.5 4.3%

Loans to legal entities 8,491.3 8,323.6 2.0% 8,435.0 0.7%

Loans to individuals 3,421.4 3,299.6 3.7% 2,988.5 14.5%

Total assets 15,624.6 15,055.3 3.8% 14,760.6 5.9%

Customer deposits 11,288.4 10,738.0 5.1% 10,403.7 8.5%

Deposits of legal entities 6,485.7 6,029.5 7.6% 5,995.8 8.2%

Deposits of individuals 4,802.7 4,708.5 2.0% 4,407.9 9.0%

Total liabilities 14,030.1 13,514.7 3.8% 13,237.6 6.0%

Total shareholders' equity 1,594.5 1,540.6 3.5% 1,523.0 4.7%

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

NPL ratio (1) 5.5% 5.7% -20bp 5.7% -20bp

LLR ratio 6.1% 6.3% -20bp 6.4% -30bp

(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.

VTB GROUP FINANCIAL HIGHLIGHTS: BALANCE SHEET

BALANCE SHEET KEY INDICATORS RUB bn

KEY ASSET QUALITY & CAPITAL RATIOS

9M’19

IFRS consolidated

financial

statements


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 6-Dec -22 and every 10th year thereafter.

USD

CHF

VTB GROUP PUBLIC DEBT AND HYBRID CAPITAL INSTRUMENTS

827

1,339

232 25

2020 2022 2024 2035

(2) Net of bought back public debt. exchange rates published by the CBR as of November 1, 2019. In addition to international debt, VTB Group currently has RUB 149 bn domestic bonds.

Investor Relations

Tel: +7 (495) 775-71-39

e-mail: [email protected]

vtb investor presentation 9m2019 eng 21112019 .pptx) · 2019-11-25 · this presentation has been...

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