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Credit Europe Bank Ltd.
Presentation
October 2007
2
Shareholder’s Structure
____________________
FIBA Holding A.S.
Credit Europe Group N.V.
Credit Europe Bank (Suisse)
S.A.
100%
Credit Europe Bank (Romania)
S.A.
FIBA International Financial Services
Company PLC
99.99%
Finans International
Invest LLC
Credit Europe Leasing S.A.
100%99.99% 100%
Credit Europe Leasing
Ltd. (Russia)
89.8%100% 100%
Credit Europe Bank Ltd.
Credit Europe Bank N.V.
Credit Europe Bank (Ukraine)
Ltd.
1,6%
99,99%95%
Finansbank A.S.
9.68%
3
• Operating in Russia since 1997• Ultimately owned and fully backed by the FIBA Group
(one of Turkey’s largest financial conglomerates) • Offers full range of corporate, retail and SME banking services• 45 branches in Moscow and 40 branches and offices in major economic centres of the Russian Federation, plus 35 in
the pipeline • Has over 1.5 mm retail, corporate and SME customers as of September 2007• In March 2007, Finansbank (Russia) Ltd. became Credit Europe Bank Ltd.• Strong management team with 10 years of experience of operating in Russia and other international banking markets• Rated Ba1 by Moody’s (Stable outlook)
Highlights
Credit Europe Bank Overview
Started mortgage lending in June 2007Leasing company in Russia reached a loan portfolio of US$ 50 million as of September 2007Credit Europe Life, the insurance arm of the Group in Russia, is being incorporated
Recent developments
4
History
Key Milestones in Credit Europe Bank’s HistoryFinansbank representative office established in Moscow
Incorporated as a commercial bank and commenced operations focusing on corporate clients
Met all commitments to creditors in aftermath of Russian economic crisis
Strategic decision of FIBA Group to expand Russian operations
Commenced consumer finance operations
Admitted to National Deposit Insurance Scheme by CBR
Entered retail banking sector
Commencement of SME banking operations
Finansbank (Moscow) Ltd. became Finansbank (Russia) Ltd.
First regional office opened
1st Rouble bond is issued
1998 2000 2002 2004 20051997 20011999 20031994 2006 2007
1st Eurobond is issued
1st Syndicated Loan is closed
FIBA Group sells 46% of Finansbank A.S. (Turkey) to National Bank of Greece
Finansbank (Russia) Ltd. becomes Credit Europe Bank Ltd.
First Rating by Moody’s (Ba2)
Rating upgrade by Moody’s (Ba1)
Ranking in Sector (asset size) #42#291 #282 #262 #204 #61#95
5
10%
45%45%
40%
20%
40%
Credit Europe Bank’s target is to continue to increase its share in Russian financial services market
Key Objectives and Strategies
Strategy
Expand through balanced & continuous growthof its corporate, retail and SME banking activities in Moscow and the regions
Introduce innovative financial products that meet customers needs
Leverage international expertise and best practice standards of wider FIBA Group
Maintain sound risk management discipline
Greater market share in each of the regions in which it currently operates
Enter into new regions where Credit Europe Bank can operate profitably
Increased business volumes, asset size and profitability
Maximise shareholder value
Invest in human resources and IT systems to generate quality growth, support new products and streamline processesRetail
BankingCorporateBanking
SMEBanking
Objectives
Business Focus
Strategies
Medium Term Target Long Term Target
RetailBanking
CorporateBanking
SMEBanking
6
Geographical Presence
Present in Key Economic Centres
Moscow
St Petersburg
Samara
Nizhniy Novgorod
Rostov-on-Don Ufa
PermChelyabinsk
OmskNovosibirsk
YekateringburgSaratovVoronezh
Kazan
KrasnodarStavropol
Orenburg
Kemerovo
Krasnoyarsk
Surgut
Nizhnevartovsk
Tyumen
Togliatta
Tambov
Network Across Russia85 branches
95 ATMs
4,825 employees
45 branches located in Moscow and 40 branches in Russian key economic regions with strong potential
7
Branch Overview
# of branches
23
54
85
0
20
40
60
80
100
2005 2006 Sep - 2007
• Number of branches to reach 120 by YE 2007
city current pipelineMoscow 45 10St.Petersburg 13 3Kazan 2 2Rostov-na-Donu 2 2Ufa 4 2Samara 1 2Chelyabinsk 1 1Krasnodar 1 2Tumen 1 0Orenburg 1 0Voronej 1 1Perm 1 0Ekaterinburg 3 2Novosibirsk 1 2Omsk 2 0Saratov 1 0Volgograd 1 0Nizhniy Novgorod 1 2Nizhnekamsk 1Izhevsk 1Tolyatti 1Almet’evsk 1 0Surgut 1Barnaul 1 0Cheboksary 1 0Total 85 35
8
Human Resources
• Strong human resources is one of our competitive advantages
• MT programs organized in Russia and The Netherlands
• Focus on customer-centric corporate culture
• Continuous investment in trainings and education
• Relocation of personnel to match market needs
# of employees
485048253297
0500
100015002000250030003500400045005000
2006 Sep - 2007 Dec - 2007
9
18.4%12.8%
68.8%
Focus on Long-Term Corporate ClientsFirst business line of Credit Europe BankCore products are
– Corporate Loans
– Project Finance: primarily to industrial and construction companies that is collateralised
– Trade Finance
– Settlement Operations
– FX ServicesCorporate loan portfolio amounted to US$ 720.8 mm (37.2% of total assets and 46.1% of loan portfolio (1)) as of September 2007, up by 77.5% since end 2006 from US$ 406.1mm (2)
Competitive advantages are
– quick response to credit requests
– strong IT infrastructure
– trade finance expertise
Corporate Banking
168.1
406.1
720.8
75.30
100
200
300
400
500
600
700
2004 2005 2006 September 2007
Commercial Customer Loans
____________________(1) Calculated prior to provisions for loan impairment and excluding SME loans (2) Source: Consolidated Financial Statements and CBR
(As of September 2007)
Corporate Loans
Currency Composition of Corporate Loans
(US$mm)
Other RussianRoubles
US Dollars
10
SME Banking – Overview
cash loans - SME
8662.9
200
102030405060708090
100
2006 Sep-07 Dec-07
US
$ (m
ln)
• SME was set up in early 2005 following a thorough market analysis.
• CEB’s SME definition and target: Maximum 250 employeesAnnual sales up to $20,000,000Credit needs from $1,000 up to $2,000,000
• Leverage on our experience in fast growing markets through our group
• In September 2007 total SME portfolio (gross of provisions) reached to US$ 62.9 million
• Although the loan portfolio is relatively small, we believe the business line will become the growth engine of the bank in the medium term.
• Focus and full commitment to SME Banking at Management and shareholders levels
• In the long run, we are aiming for a loan portfolio breakdown of 40-40-20
# credit customers SME
378
4500
2820
0
500
1000
15002000
2500
30003500
4000
4500
5000
2006 Sep-2007 Dec-2007
11
25.142.6 48.7
18.8
22.8
25.837.3
27.3
47.9
8.5
8668.4
0
20
40
60
80
2004 2005 2006 Sep- 2007
Current Account and Demand Deposits Term Deposits
Retail BankingFocus on Lending, Product Range and Innovation
Comprehensive range of retail banking products including various types of consumer loans and retail depositsOver 1.5mm retail customersFocus on retail lending as it is profitable, given higher margins to individualsGrowth driven by developing branch network, quality of service and product innovation (acquire ~2000 new customers a day)Five main products offered to retail borrowers:
- Instant Loans- Multi-purpose Loans - Car Loans- Payroll Cards and International Bankcards- Holiday Loans- Payroll Services
Offers 3rd Party insurance products (life and car) in sponsorship with leading international insurers (e.g. Aviva)Offers Mortgage Loans since June 2007
Retail Deposits
Retail Loans
158.8
180.1330.9
158.210.4
122.7 153.789.5
232.9
38.57.8
64507.5
46.1
258.5
0
200
400
600
800
2004 2005 2006 Sep - 2007
Instant Loans Car Loans Multipurpose Loans Other
(US$mm)
(US$mm)781.4
12
Retail Banking
• Co-brand bank cards with 2 international merchants: Auchan and Metro
•Successful results:•Increased customer satisfaction•Higher purchase volume•Increased brand recognition
13
Credit Ratings
Moody’s ranks Credit Europe Bank above its competitors like Russian Standard Bank & HCFB
Credit Europe Bank Ltd. Peer Group in Russia
____________________As per May 5th 2007
Ba1
Ba2
Ba3
B1
14
Total Assets – in mln US$
34 45 65 148
493
1 079
1 937
2 200
0
500
1000
1500
2000
2500
2001 2002 2003 2004 2005 2006 Sep2007
(E)2007
Financial Performance
15
Capital base (shareholders equity + subordinated debt) – in mln US$
Financial Performance
10 12 14 21
58
137
320317
0
50
100
150
200
250
300
350
2001 2002 2003 2004 2005 2006 Sep2007
(E)2007
16
Net Profit – in mln US$
Financial Performance
0.3 0.91.7
3.1
5.97.4
11.5
15
0
2
4
6
8
10
12
14
16
2001 2002 2003 2004 2005 2006 Sep2007
(E)2007