€¦ · Web viewUnofficial translation. 26. THE PRELIMINARY VERSION IS FOR DISCUSSION ONLY. TO BE RETURNED TO DELOITTE. IT IS PROHIBITED TO COPY OR DISTRIBUTE IN ANY FORM WITHOUT

UNOFFICIAL TRANSLATION

JOINT STOCK COMPANYMC BANK RUS

Annual Financial Statements for the year 2019 and Independent Auditor’s Report

(Translated from the Original in Russian – Unofficial Translation)


CONTENTS

Page

INDEPENDENT AUDITOR’S REPORT BALANCE SHEET (PUBLISHED FORM) FOR THE YEAR 2019 STATEMENT OF FINANCIAL RESULTS (PUBLISHED FORM) FOR 2019 STATEMENT OF CAPITAL ADEQUACY FOR RISK COVERAGE, (PUBLISHED FORM) AS AT 1 JANUARY 2020 STATEMENT OF CHANGES IN EQUITY OF CREDIT INSTITUTION (PUBLISHED FORM) AS AT 1 JANUARY 2019 INFORMATION ABOUT STATUTORY RATIOS, GEARING RATIO AND SHORT-TERM LIQUIDITY RATIO (PUBLISHED FORM) AS AT 1 JANUARY 2020 STATEMENT OF CASH FLOWS (PUBLISHED FORM) FOR 2019 INTRODUCTION1. BRIEF DESCRIPTION OF THE BANK’S ACTIVITIES

1.1. Nature of operations and principal activities of the Bank1.2. Operating environment1.3. Factors affecting financial performance of the Bank in the reporting year

2. REPORTING PERIOD AND UNITS OF MEASUREMENT OF ANNUAL FINANCIAL STATEMENTS3. INFORMATION ABOUT THE BANKING GROUP4. SUMMARY BASIS OF PREPARATION OF ANNUAL STATEMENTS AND KEY ACCOUNTING POLICIES

4.1. Principles and methods of measuring and accounting for significant transactions and events

4.2. The nature and amount of adjustments related to changes in accounting policies and estimates

4.3. Information on the nature and magnitude of material errors on each item of the annual financial statements for each previous period and change in classification

4.4. Information about the nature of assumptions and the main sources of estimation uncertainty at the end of the reporting period

4.5. Information on changes in the accounting policy of the credit organization for the next financial year

5. EXPLANATORY NOTES TO BALANCE SHEET ITEMS5.1. Cash, balances and minimum reserve deposits with the Bank of Russia, and balances with credit institutions

5.2. Financial assets at fair value through profit or loss5.3. Net loans outstanding, measured at amortised cost5.4. Net investment in financial assets at fair value through other comprehensive income5.5. Net investments in securities and other financial assets measured at amortised cost (other than loans)

5.6. Investments in subsidiaries and associates5.7. Property and equipment, intangible assets and inventories5.8. Other assets5.9. Due to the Central Bank of the Russian Federation5.10. Due to credit institutions5.11. Due to customers, other than credit institutions5.12. Government aid and subsidies5.13. Financial liabilities at FVTPL5.14. Debt issued at fair value through profit or loss5.15. Other liabilities5.16. Estimated liabilities, contingent liabilities and contingent assets5.17. Share capital

6. ACCOMPANYING INFORMATION TO THE STATEMENT OF FINANCIAL RESULTS6.1. Interest Income and Expense6.2. Commission income and expense6.3. Other operating income6.4. Operating expenses6.5. Net gain/(loss) on transactions with financial assets and liabilities at fair value through profit or loss

6.6. Information about losses and amounts of recovery of impairment for each type of asset61

6.7. Foreign exchange gains and losses6.8. Tax benefit (expense)


6.9. Information about employee benefits6.10. Basic and diluted earnings per share information6.11. Information about research and development costs6.12. Information on financial results from discontinued operations and disposal of long -term assets

7. DISCONTINUED OPERATION8. TRANSFERRED FINANCIAL ASSETS9. ACCOMPANYING INFORMATION TO THE ARTICLES OF THE STATEMENT ON CHANGES IN EQUITY10. ACCOMPANYING INFORMATION TO THE STATEMENT OF CASH FLOW11. MANAGE OF THE CAPITAL

11.1. Information about own funds (capital)11.2. Information about capital requirements and capital adequacy level

12. INFORMATION ABOUT RISK MANAGEMENT GOALS AND POLICIES12.1. Risk management goals , policies and procedures12.2. Credit risk12.3. Market risk12.4. Country risk12.5. Liquidity risk12.6. Currency risk12.7. Legal risk.12.8. Tax risk.

14. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES15. OPERATING SEGMENT16. INFORMATION ABOUT TRANSACTIONS WITH RELATED PARTIES

Net loans outstanding, measured at amortised costNet loans outstanding, measured at amortised costNet loans outstanding, measured at amortised cost

17. REMUNERATION TO KEY MANAGEMENT PERSONNEL17.1. Payments based on equity instruments

18. EVENTS AFTER THE REPORTING DATE

INDEPENDENT AUDITOR’SREPORT

To the Shareholders and Board of Directors of Joint-stock company MC Bank Rus.

Opinion

We have audited the accompanying annual statutory financial statements of Joint-stock company MC Bank Rus (hereinafter, the “Bank”) for the year 2019 (hereinafter, the “annual financial statements”), which comprise:

Balance sheet (published form) for the year 2019; Statement of financial results (published form) for the year 2019; Appendices to the balance sheet and statement of financial results, including:

Report on capital adequacy for risks (published form) as at 1 January 2020; Statement of changes in equity of a credit institution (published form) as at

1 January 2020; Information on statutory requirements, gearing ratio and short-term liquidity

ratio (published form) as at 1 January 2020; Statement of cash flows (published form) as at 1 January 2020; Explanatory information to the annual statutory financial statements for

the year 2019.

In our opinion, these annual financial statements present fairly, in all material respects, the financial position of the Bank as at 1 January 2019, and its financial performance and cash flows for the year 2018 in accordance with Russian accounting and financial reporting standards for credit institutions.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (“ISAs”). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Annual Financial Statements section of our report. We are independent of the Bank in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (the “IESBA Code”) together with the ethical requirements that are relevant to our audit of the annual financial statements in the Russian Federation, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of management and those charged with governance for the annual financial statements

Management is responsible for the preparation and fair presentation of the annual financial statements in accordance with Russian accounting and financial reporting standards for credit institutions, and for such internal control as management determines is necessary to enable the preparation of the annual financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the annual financial statements, management is responsible for assessing the Bank’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Bank or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Bank’s annual financial reporting process.

Auditor’s responsibilities for the audit of the annual financial statements

Our objectives are to obtain reasonable assurance about whether the annual financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs


will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these annual financial statements.

As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the annual financial statements, whether due to fraud or error; design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Obtain an understanding of internal control relevant to the audit 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 Bank’s internal control.

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Bank’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the annual financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Bank to cease to continue as a going concern.

Evaluate the overall presentation, structure and content of the annual financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

2


Report on procedures performed in accordance with Federal Law No. 395-1 “On Banks and Banking Activities” dated 2 December 1990

Management of the Bank is responsible for compliance with the obligatory ratios established by the Bank of Russia (the “obligatory ratios”), as well as for compliance of the Bank’s internal control and risk management systems with the Bank of Russia (the “CBR”) requirements.

According to Article 42 of the Federal Law No. 395-1 “On Banks and Banking Activities” dated 2 December 1990 (the “Federal Law”) in the course of our audit of the Bank’s annual financial statements for 2018 we performed procedures with respect to the Bank’s compliance with the obligatory ratios as at 1 January 2019 and compliance of its internal control and risk management systems with the CBR requirements.

We have selected and performed procedures based on our judgment, including inquiries, analysis and review of documentation, comparison of the Bank’s policies, procedures and methodologies with the CBR requirements, as well as recalculations, comparisons and reconciliations of numeric values and other information.

We report our findings below:

1. With respect to the Bank’s compliance with the obligatory ratios: the obligatory ratios as at 1 January 2019 were within the limits established by the CBR.We have not performed any procedures with respect to the Bank’s financial information other than those we considered necessary to express our opinion on whether the annual financial statements of the Bank present fairly, in all material respects, the financial position of the Bank as at 1 January 2019, its financial performance and its cash flows for 2018 in accordance with the Russian accounting and financial reporting standards for credit institutions;

2. With respect to compliance of the Bank’s internal control and risk management systems with the Central Bank of Russia requirements, we note the following:

(а) In accordance with the CBR requirements and recommendations, as at 1 January 2019 the Bank’s internal audit department was subordinated and accountable to the Bank’s Board of Directors and the Bank’s risk management departments were not subordinated or accountable to the departments undertaking the respective risks; heads of the Bank’s internal audit department and risk management departments meet the qualification requirements set by the CBR;

(б) As at 1 January 2019, the Bank had duly approved in accordance with the CBR requirements and recommendations the internal policies regarding identification and management of significant risks, including credit, operating, market, interest rate, legal, liquidity, and reputational risks;

(в) As at 1 January 2019, the Bank had a reporting system with regard to the Bank’s significant credit, operating, market, interest rate, legal, liquidity and reputational risks, and with regard to the Bank’s capital;

(г) Frequency and consistency of reporting made by the Bank’s risk management functions and internal audit function during 2018 on the Bank’s credit, operational, market, interest rate, legal risk, liquidity risk and reputational risk management, is in compliance with the Bank’s internal documents; the related reports include the findings of the Bank’s risk management functions and internal audit function in terms of evaluating the effectiveness of the Bank’s related methods and recommendations on their improvement;

(д) As at 1 January 2019, the authority of the Bank’s Board of Directors and the Bank’s executive bodies included control over compliance with the risk limits and capital adequacy ratios established by the Bank. For the purpose of control over the effectiveness of the risk management procedures applied by the Bank and consistency of their application during 2018 the Bank’s Board of Directors and its executive bodies regularly discussed reports submitted by the Bank’s risk management functions and internal audit function and analyzed the proposed remedial actions.

3


We have carried out the procedures with respect to the Bank’s internal control and risk management systems solely to report on the findings related to compliance of the Bank’s internal control and risk management systems with the CBR requirements.

[The original in Russian signed by]

Ekaterina Ponomarenko,

Engagement Partner25 March 2020

The following financial statements were prepared for use in the Russian Federation in accordance with accounting principles and financial reporting practices generally accepted in the Russian Federation and are not intended to present the financial position and results of operations of the audited entity in accordance with accounting principles and practices generally accepted in any other jurisdiction.

The Entity: Joint-stock company MC Bank Rus

Certificate of state registration No. 018.482, issued by Moscow Registration Chamber on 30.10.1992.

Primary state registration number: 1027739094250

Certificate of registration in the Unified State Register No. 77 007772881 of 21.08.2002, issued by Moscow Interdistrict Inspectorate of the Russian Ministry of Taxation No. 39.

Address: 117485 Moscow 30/1 Obrucheva St., Bld. 2

Audit Firm: AO “Deloitte & Touche CIS”

Certificate of state registration № 018.482, issued by the Moscow Registration Chamber on 30.10.1992.

Primary state registration number: 1027700425444

Certificate of registration in the Unified State Register No. 77 004840299 of 13.11.2002, issued by Moscow Interdistrict Inspectorate of the Russian Ministry of Taxation No. 39.

Member of Self-regulated organization of auditors “Russian Union of auditors” (Association), ORNZ 11603080484.

4

THE PRELIMINARY VERSION IS FOR DISCUSSION ONLY. TO BE RETURNED TO DELOITTE. IT IS PROHIBITED TO COPY OR DISTRIBUTE IN ANY FORM WITHOUT THE COMPANY'S PERMISSION.


Bank statements

OKATOterritory code

Code of the credit institution

As per OKPO Registration No. (/sequential No.)

45293566000 29418720 2789

BALANCE SHEET(published form)for the year 2019

Credit institution Joint-stock company MC Bank Rus(full name and short name)

Legal address 30/1 Obrucheva St., Bldg. 2, Moscow 117485

OKUD code 0409806Quarterly (annual)

Line number Description Note

For the reporting periodRUB thousand

For the previous reporting periodRUB thousand

1 2 3 4 5I. ASSETS

1 Cash 5.1 271 372 566 2072 Balances with the CBR 5.1 729 546 766 2642.1 Minimum reserve deposits 5.1 164 225 131 6253 Amounts due from credit institutions 5.1 15 974 11 7764 Financial assets at fair value through profit or loss 5.25 Net loans receivable carried at amortised cost 5.3 26 895 785 -5а Net loans outstanding 5.3 - 19 047 5556 Net investment in financial assets at fair value through other

comprehensive income 5.4- -

6а Net investments in securities and other financial assets available for sale

- -

7 Net investments in securities and other financial assets measured at amortised cost (other than loans) 5.5

- -

7а Net investments in securities held to maturity - -8 Investments in subsidiaries and associates 5.6 - -9 Current income tax assets 64 227 59 41810 Deferred tax asset 108 746 210 90411 Property, plant and equipment, intangible assets and inventories 5.7 405 741 411 91912 Non-current assets held for sale - -13 Other assets 5.8 261 970 177 16914 Total assets 28 753 361 21 251 212

II. LIABILITIES15 Loans, deposits and other dues to the CBR 5.9 - -16 Customer accounts measured at amortised cost 23 898 461 18 965 59316.1 Due to credit institutions 5.10 - -16.2 Deposits by customers, other than credit institutions 5.11 23 898 461 18 965 59316.2.1 548 856 357 00817 Financial liabilities at fair value through profit or loss 5.13 - -17.1 Deposits by individuals, including individual entrepreneurs - -18 Debt securities issued 5.14 - -18.1 at fair value through profit or loss - -18.2 measured at amortised cost - -19 Current income tax liability 61 255 1 62420 Deferred tax liabilities - -21 Other liabilities 5.15 317 208 246 35622 Allowance for possible losses on credit-related contingent liabilities,

other 5.161 710 20

23 Total liabilities 24 278 634 19 213 593III. EQUITY

24 Shareholders’ equity 5.17 2 030 450 1 395 00025 Treasury shares26 Share premium 5.17 1 501 261 1 097 75027 Reserve fund 5.17 115 768 115 76828 Fair value revaluation of securities available for sale decreased by

deferred tax liability (increased by deferred tax asset)- -

29 Revaluation of property, equipment and intangible assets decreased by deferred tax liability

- -

30 Revaluation of liabilities (assets) on payment of long-term benefits - -31 Revaluation of hedging instruments - -32 Grant financing (property investments)

5.17500 000 -

33 Change in the fair value of a financial liability due to changes in credit risk

- -

34 Estimated allowances for expected credit losses - -35 Retained earnings (accumulated deficit) 327 248 (570 899)36 Total equity 4 474 727 2 037 619

5




For the reporting periodRUB thousand

For the previous reporting periodRUB thousand

1 2 3 4 5IV. OFF-BALANCE SHEET COMMITMENTS

37 Irrevocable commitments 5.16 334 301 61 32638 Guarantees issued - -39 Non-credit contingent liabilities - -


Chairman of the Management Board Norihiro Sawaii

Chief Accountant I. Ponomareva

25 March 2020

6



Bank statements

OKATOterritory code



45293566000 29418720 2789

STATEMENT OF FINANCIAL RESULTS(published form)

for 2019

Credit institution Joint-stock company MC Bank Rus(full name and short name)



Section 1. Profit and loss


For the reporting period,

RUB thousand

For the corresponding

period of the previous

year, RUB thousand

1 2 3 4 51 Interest income – total, including: 6.1 3 685 069 2 445 1951.1 due from credit institutions 17 397 10 3711.2 loans to clients other than credit institutions 3 667 672 2 434 8241.3 from finance lease - -1.4 investments in securities - -2 Interest expense – total, including: 6.1 1 536 348 1 026 6722.1 deposits by credit institutions 570 92272.2 customer accounts (other than credit institutions) 1 535 778 1 017 4452.3 debt securities issued - -3 Net interest income (negative interest margin) 2 148 721 1 418 5234 Change in the allowance for possible losses and the estimated

allowance for expected credit losses on loans, loans and related debt, funds placed on correspondent accounts, and accrued interest income, total, including:

6.6 (270 409) (329 266)

4.1 change in the allowance for possible losses and the estimated allowance for expected credit losses on accrued interest income

(12 820) (3 963)

5 Net interest income (negative interest margin) after allowance for possible losses

1 878 312 1 089 257

6 Net gain on financial assets at fair value through profit or loss 6.5 - -7 Net income from operations with financial liabilities at fair value

through profit or loss6.5 - -

8 Net gain on securities at fair value through profit or loss - -8а Net gain on securities available for sale - -9 Net income from operations with securities measured at amortised

cost- -

9а Net gain on securities held-to-maturity - -10 Net gain on foreign exchange operations 6.7 2 750 2 83111 Net foreign exchange gains 6.7 (1 471) 1 99012 Net gain from operations with precious metals - -13 Income from investments in other entities - -14 Fee and commission income 6.2 183 871 139 86215 Fee and commission expense 6.2 198 436 154 95416 Changes in the allowance for possible losses and the allowance for

expected credit losses on securities at fair value through other comprehensive income

- -

16а Change in the allowance for possible losses on available-for-sale securities

- -

17 Change in the allowance for possible losses and the estimated allowance for expected credit losses on securities measured at amortised cost

- -

17а Change in allowance for possible losses on securities held to maturity - -18 Change in allowance for other losses 6.6 (19 468) (2 599)19 Other operating income 6.3 49 825 19 40920 Net income (expense) 1 895 383 1 095 79621 Operating expenses 6.4 972 310 789 03422 Profit/(loss) before income tax 6.8 923 073 306 76223 Tax benefit (expense) 6.8 352 111 182 11224 Profit (loss) from continuing operations 570 075 120 64325 Profit (loss) from discontinued operations 887 400726 Profit (loss) for the reporting period 570 962 124 650

7



Section 2. Other comprehensive income

Line numbe

rDescription Note

For the reporting period,

RUB thousand

For the corresponding

period of the previous

year, RUB thousand

1 2 3 4 51 Profit (loss) for the reporting period 570 962 124 6502 Other comprehensive income (loss) Х Х3 Items that are not reclassified to profit or loss, total, including: - -3.1 change in property and equipment revaluation reserve - -3.2 change in revaluation reserve for liabilities (assets) on defined post-

employment benefit plans - -4 Income tax related to items that cannot be reclassified to profit or loss - -5 Other comprehensive income (loss) that cannot be reclassified to profit

or loss, net of income tax - -6 Items that can be reclassified to profit or loss, total,

including: - -6.1 change in the revaluation Fund for financial assets at fair value through

other comprehensive income - -6.1а change in revaluation reserve for financial assets available for sale - -6.2 change in the revaluation Fund for financial liabilities at fair value

through profit or loss - -6.3 change in cash flow hedge reserve - -7 Income tax related to items that can be reclassified to profit or loss - -8 Other comprehensive income (loss) that can be reclassified to profit or

loss, net of income tax - -9 Other comprehensive income (loss), net of income tax - -10 Financial result for the reporting period 570 962 124 650




Stamp here

25 March 2020

8



Bank statements

OKATOterritory code



45293566000 29418720 2789

STATEMENT OF CAPITAL ADEQUACY FOR RISK COVERAGE(published form)

as at 1 January 2020

Credit institution Joint-stock company MC Bank Rus

(full name and short name)



Section 1. Capital adequacy ratio

Line number Financial instruments description Note

Instrument (indicator) value

as at the reporting date

Instrument (indicator) value at the beginning of the reporting

year

Reference to the Balance Sheet (published form) items, comprising

equity components

1 2 3 4 5 6Sources of common equity

1 Share capital and share premium – total, including: 11.1 3 531 711 2 492 750 24,26

1.1 ordinary shares (stakes) 11.1 3 531 711 2 492 750 24,261.2 preference shares - -2. Retained earnings (accumulated deficit): (570 899) (695 549) 352.1 of prior years 11.1 (570 899) (695 549) 352.2 of the reporting year 11.13 Reserve fund 115 768 115 768 274 Share capital subject to gradual exclusion

from the calculation of equity (capital) not applicable not applicable not applicable5 Common equity instruments of

subsidiaries held by third parties not applicable not applicable not applicable6 Sources of common equity, total

(line 1 +/- line 2 + line 3 – line 4 + line 5)3 076 580 1 912 969

Items decreasing common equity sources7 Adjusting the cost of a financial instrument - -8 Goodwill less deferred tax liabilities - -9 Intangible assets (excluding goodwill and

mortgage servicing rights) less deferred tax liabilities

284 640 266 406 11

10 Deferred tax assets dependent on future profit - -

11 Cash flow hedge reserve - -12 Insufficient allowance for possible losses - -13 Income from securitization transactions not applicable not applicable not applicable14 Income and expenses attributable to

changes in the credit risk of liabilities at fair value not applicable not applicable not applicable

15 Assets of defined post-employment benefit plan not applicable not applicable not applicable

16 Investments in treasury shares 198 378 81 388 3517 Mutual investments of the credit institution

and financial organization to the common equity instruments - -

18 Insignificant investments in common equity instruments of financial organizations - -

19 Significant investments in common equity instruments of financial organizations - -

20 Mortgage servicing rights not applicable not applicable not applicable21 Deferred tax assets not dependent on

future profit -54 386

22 Aggregate amount of significant investments and deferred tax assets in part exceeding 15% of common equity – total, including: - -

23 significant investments in common equity instruments of financial organizations - -

24 mortgage servicing rights not applicable not applicable not applicable25 deferred tax assets not dependent on

future profit - -26 Other indicators decreasing the sources of

common equity established by the Bank of Russia, total, - -

9







year


equity components

1 2 3 4 5 627 Negative value of additional capital - -28 Indicators decreasing the sources of

common equity – total (sum of lines 7 to 22 and lines 26 to 27) 483 018 402 180

29 Common equity – total (line 6 to line 28) 2 593 562 1 510 789Sources of additional capital

30 Additional capital instruments and share premium – total, including: 500 000 500 000 16.2

31 classified as capital32 classified as liabilities 500 000 500 000 16.233 Additional capital instruments subject to

gradual exclusion from the calculation of equity (capital) - -

34 Additional capital instruments of subsidiaries held by third parties – total, including: not applicable not applicable not applicable

35 additional capital instruments of subsidiaries subject to gradual exclusion from the calculation of equity (capital) not applicable not applicable not applicable

36 Sources of additional capital – total (line 30+ line 33 + line 34)

500 000 500 000

Items decreasing sources of additional capital37 Investments in own additional capital

instruments - -38 Mutual cross holding of additional capital

instruments - -39 Insignificant investments in additional

capital instruments of financial organizations - -

40 Significant investments in additional capital instruments of financial organizations - -

41 Other indicators decreasing the sources of additional capital established by the Bank of Russia – total, including: - -

42 Negative value of additional capital - -43 Indicators decreasing the sources of

additional capital – total (sum of lines 37 to 42) - -

44 Additional capital – total (line 36 to line 43) 500 000 500 000

45 Tier 1 capital – total (line 29 + line 44) 3 093 562 2 010 789

Sources of additional capital46 Additional capital instruments and share

premium980 467 1 227 004 32,35

47 Additional capital instruments subject to gradual exclusion from the calculation of equity (capital) - -

48 additional capital instruments of subsidiaries held by third parties, total, including: not applicable not applicable not applicable

49 additional capital instruments of subsidiaries subject to gradual exclusion from the calculation of equity (capital) not applicable not applicable not applicable

50 Allowance for possible losses51 Sources of additional capital, total (line

46+ line 47 + line 48 + line 50)980 467 1 227 004

Items decreasing sources of additional capital52 Investments in own additional capital

instruments18 511 259 328 35

53 Mutual investments of a credit institution and financial organization into additional capital instruments - -

54 Insignificant investments in additional capital instruments of financial organizations - -

54а Significant investments in additional capital instruments of financial organizations - -

55 Other indicators decreasing the sources of additional capital established by the Bank of Russia – total, including: - -

56 receivables past due for over 30 calendar days - -

10







year


equity components

1 2 3 4 5 656.1 excess of the aggregate amount of loans,

bank guarantees and sureties provided to the shareholders (participants) and insiders over its maximum value - -

56.2 investments in construction and purchase of property, plant and equipment and inventories - -

56.3 Investments in own additional capital instruments - -

56.4 The difference between the actual value of ownership interest due to the participants who left the company, and the value at which the share was sold to another participant - -

57 Indicators decreasing the sources of additional capital – total (sum of lines 52 to 56) 18 511 259 328

58 Additional capital – total (line 51 to line 57) 961 956 967 67659 Equity (capital) – total (line 45 + line 58) 4 055 518 2 978 46560 Risk weighted assets: Х Х Х60.1 necessary for determining the capital

adequacy ratio for common equity 30 393 530 22 119 27660.2 necessary for determining the capital

adequacy ratio for Tier 1 capital 30 393 530 22 119 27660.3 necessary for determining the capital

adequacy ratio 30 375 019 21 859 948Capital adequacy ratios and buffers to capital adequacy ratios, %

61 Common equity adequacy (line 29: line 60.1) 8.533 6.83

62 Tier 1 capital adequacy (line 45: line 60.2) 10.178 9.09163 Capital adequacy (line 59: line 60.3) 13.351 13.62564 Buffers to capital adequacy ratios – total,

including: 6.75 6.37565 capital conservation buffer 2.25 1.87566 countercyclical buffer 0 067 systemic importance buffer not applicable not applicable not applicable68 Common equity available for capital

conservation buffers to capital adequacy ratios 4.0333 2.3302

Capital adequacy ratios, %69 Common equity adequacy ratio 4.5 4.570 Tier 1 capital adequacy ratio 6 671 Capital adequacy ratio 8 8

Indicators not exceeding the established materiality level and not accepted for decreasing the sources of capital72 Insignificant investments in equty

instruments of financial organizations - -73 Significant investments in equty

instruments of financial organizations - -74 Mortgage servicing rights not applicable not applicable not applicable75 Deferred tax assets not dependent on

future profit281 103 156 518 10

Limitations related to inclusion of allowance for possible losses in calculation of the additional paid-in capital76 Allowance for possible losses included in

calculation of additional capital which relates to items the credit risk of which is assessed using the standardized approach not applicable not applicable not applicable

77 Limitations on inclusion of allowance for possible losses in calculation of additional capital when using the standardized approach not applicable not applicable not applicable

78 Allowance for possible losses included in calculation of additional capital which relates to items the credit risk of which is assessed using an internal model-based approach not applicable not applicable not applicable

79 Limitations on inclusion of allowance for possible losses in calculation of additional capital when using an internal model-based approach not applicable not applicable not applicable

instruments subject to gradual exclusion from the calculation of equity (capital)(applicable from 1 January 2018 through 1 January 2022)

80 Current limitation on inclusion of instruments subject to gradual exclusion from the calculation of equity (capital) in sources of common equity - -

81 Part of instruments not included in sources of common equity due to limitations - -

11







year


equity components

1 2 3 4 5 682 Current limitation on inclusion of

instruments subject to gradual exclusion from the calculation of equity (capital) in sources of additional capital - -

83 Part of instruments not included in sources of additional capital due to limitations - -

84 Current limitation on inclusion of instruments subject to gradual exclusion from the calculation of equity (capital) in sources of additional capital - -

85 Part of instruments not included in sources of additional capital due to limitations - -

Note. Information on the balance sheet data that are the sources for the preparation of section 1 of the Report is provided in table 1.1 of section I " information on the structure of own funds (capital)" of the information on the applied risk and capital management procedures disclosed www.mcbankrus.ru/about/rgi.php

12



Section 4. General characteristics of capital instruments

Line number Characteristics Description Description ...

1 2 3 4 51 Short name of the instrument issuer JSC MC Bank RUS Limited Liability Company MC

Factoring Rus2 Instrument identification No. 10102789В Not applicable3 Applicable law Russian Federation Russian Federation3а other instruments of General loss absorption capacity

Regulatory conditions4 Tier of capital, in which the instrument is included

during the Basel III transition periodNot applicable Not applicable

5 Tier of capital, in which the instrument is included after the Basel III transition period

Common equity Additional paid-in capital

6 Consolidation stage, at which the instrument is included in the calculation of capital

Not applicable Not applicable

7 Type of instrument Ordinary shares subordinated debt (deposit, loan)8 Instrument value included in the calculation of capital 2 030 450 (RUB) 500 000 (RUB)9 Par value of the instrument 2 030 450 (RUB) 500 000 (RUB)10 Classification of the instrument for accounting

purposesShare capital liability carried at accounting value

11 Date of issue (borrowing, placement) of the instrument 12.10.2001, 24.04.2003, 21.11.2013

02.08.2018

12 Term of the instrument lifetime lifetime13 Maturity of the instrument for an indefinite term for an indefinite term14 Early redemption (repayment) options for the

instrument, approved with the Bank of RussiaNot applicable no

15 Initial date(-s) of possible exercise of an early redemption (repayment) option for the instrument, triggers and amount of buy back (repayment)

Not applicable no

16 Subsequent date(-s) of exercise of an early redemption(repayment) option for the instrument

Not applicable no

Interest/dividends/coupon income17 Type of interest rate on the instrument Not applicable fixed rate18 Rate Not applicable 719 Suspension of dividend distributions on ordinary

sharesyes not applicable

20 Obligatory payment of dividends Partially at the discretion of

the credit institution (parent credit institution

and (or) banking group participant)

Partially at the discretion of the credit institution (parent credit institution and (or) banking group

participant)

21 Conditions providing for an increase in payments on the instrument or other incentives for early redemption (repayment) of the instrument

not applicable no

22 Type of payment noncumulative noncumulative23 Convertibility of the instrument not applicable convertible

13




1 2 3 4 524 Conversion conditions not applicable In accordance with the legislation

the instrument can be converted upon occurrence of the following

events: – the value of the ratio R1.1, calculated by the Borrower in accordance with the Instructions of

the Central Bank of the Russian Federation No. 180-I, falls below

5.125 per cent in aggregate for 6 (six) and more operation days

(as defined by the regulations of the CBR) within 30 (thirty)

consequential operation days;- the CBR Board of Directors

approves the plan for participation of the CBR in activities to prevent

the Borrower’s bankruptcy;- the CBR Committee on Banking

Supervision (and the CBR Board of Directors, in the cases specified in

paragraph two of item 3 Article 189:49 of the Federal Law

“On Insolvency (Bankruptcy)”) approves a plan for participation of

the State Corporation Deposit Insurance Agency the Board to

perform the activities to prevent the Borrower from bankruptcy.

Such activities provide for financial assistance from the Central Bank of

the Russian Federation or the Deposit Insurance Agency as

stipulated by item 8 of Article 189:49 of the Federal Law

“On Insolvency (Bankruptcy)”. The Borrower may initiate the

conversion to increase the share capital (the conversion is provided for by an agreement). In this case the decision shall be taken by the General Shareholders Meeting of

the Borrower.25 Full or partial conversion not applicable full or partial26 Conversion rate not applicable not applicable27 Obligatory conversion not applicable obligatory28 Tier of capital, to which the instrument is converted not applicable common equity29 Short name of the issuer of an instrument,

to which the instrument is convertednot applicable JSC MC Bank Rus

30 Transfer of the instrument to accumulated deficit yes no

14




1 2 3 4 531 Write-off conditions In accordance with item

5 of Article 189.20 of the Federal Law “On Insolvency (Bankruptcy)”)

the Central Bank of the Russian Federation has

the right to demand decreasing the amount of the share capital if

the amount of the Bank’s equity (capital)

becomes lower than the amount of its share capital and the Bank cannot increase its

equity (capital). In this case, in accordance with the Direction of

the Central Bank of the Russian Federation No.

1260-U “On the Procedure for Matching Authorised Capital of a Credit Institution with

its Equity Capital” dated 24 March 2003, the

Bank shall decrease its share capital to the

amount of its equity and amend its articles of

association appropriately in

accordance with the regulations of the Bank of Russia which specify

the procedure for amending credit

institutions’ articles of association considering

the characteristics provided for by the

Direction.

not applicable

32 Full or partial write-off partial always not applicable33 Permanent or temporary write-off permanent not applicable34 Recovery not applicable not applicable35 Subordinated instrument not applicable The Borrower’s claims shall be

satisfied after all claims of other borrowers’ are satisfied.

36 Compliance with the requirements of Regulations Regulation of the Central Bank of the Russian Federation No. 646-P Regulations and Regulation of the Central Bank of the Russian Federation No.509-P

yes yes

37 Description of inconsistencies not applicable not applicable

Note: See the Section Regulatory Information Disclosure in www.mcbankrus.ru for detailed information on the terms for issuing (borrowing) capital instruments, and current information of section 5 of the Report.




Stamp here

25 March 2020

15


Bank statements

OKATOterritory code



45293566000 29418720 2789

STATEMENT OF CHANGES IN EQUITY OF CREDIT INSTITUTION(published form)

As at 1 January 2019


(full name and short name)


OKUD 0409810Quarterly (annual)

RUB thousand

Line number Description Note Share

CapitalTreasury shares

Share premium

Fair value revaluation of securities available for

sale decreased by deferred tax liability (increased by deferred tax asset)

Revaluation of property, equipment

and intangible

assets decreased by deferred tax liability

Increase (decrease) of

liabilities (claims) to be paid on long-term

post-employment

benefits upon

revaluation

Revaluation of hedging instruments

Reserve fundGrant

financing (property

investments)

Change in the fair value of a financial liability due to changes

in credit risk

Estimated allowances

for expected credit losses

Retained earnings

(accumulated deficit)

Total sources of capital

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 161 As at the beginning of the previous

reporting year 9 1 395 000 - 1 097 750 - - - - 115 768 - - - (695 549) 1 912 9692 Effect of changes in the

accounting policies - - - - - - - - - - - - -3 Effect of error correction - - - - - - - - - - - - -4 As at the beginning of the previous

reporting year (corrected) 1 39 5000 - 1 097 750 - - - - 115 768 - - - (695 549) 1 912 9695 Comprehensive income for the

previous reporting period - - - - - - - - - - - 124 650 124 6505.1 profit (loss) - - - - - - - - - - - 124 650 124 6505.2 other comprehensive income - - - - - - - - - - - - -6 Issue of shares: - - - - - - - - - - - - -6.1 nominal value - - - - - - - - - - - - -6.2 share premium - - - - - - - - - - - - -7 Treasury shares: - - - - - - - - - - - - -7.1 acquisition - - - - - - - - - - - - -7.2 disposal - - - - - - - - - - - - -8 Change in the cost of property,

plant and equipment and intangible assets - - - - - - - - - - - - -

9 Dividends declared and other payments to shareholders (participants): - - - - - - - - - - - - -

9.1 on ordinary shares - - - - - - - - - - - - -

16


Line number Description Note Share

CapitalTreasury shares

Share premium

Fair value revaluation of securities available for

sale decreased by deferred tax liability (increased by deferred tax asset)

Revaluation of property, equipment

and intangible

assets decreased by deferred tax liability

Increase (decrease) of

liabilities (claims) to be paid on long-term

post-employment

benefits upon

revaluation

Revaluation of hedging instruments

Reserve fundGrant

financing (property

investments)

Change in the fair value of a financial liability due to changes

in credit risk

Estimated allowances


Retained earnings

(accumulated deficit)

Total sources of capital

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 169.2 on preference shares - - - - - - - - - - - - -10 Other contributions made by

shareholders (participants) and profit distributions to shareholders (participants) - - - - - - - - - - - - -

11 Other movements - - - - - - - - - - - - -12 For the corresponding reporting

period of the previous year 1 395 000 - 1 09 7750 - - - - 115 768 - - - (570 899) 2 037 61913 As at the beginning of the

reporting year 1 395 000 - 1 097 750 - - - - 115 768 - - - (570 899) 2 037 61914 Effect of changes in the

accounting policies - - - - - - - - - - - 327 185 327 18515 Effect of error correction - - - - - - - - - - - - -16 As at the beginning of the

reporting year (corrected) 1 395 000 - 1 097 750 - - - - 115 768 - - - (243 714) 2 36 480417 Comprehensive income for the

reporting period: - - - - - - - - - - - 570 962 570 96217.1 profit (loss) - - - - - - - - - - - 570 962 570 96217.2 other comprehensive income - - - - - - - - - - - - -18 Issue of shares: 635 450 - 403 511 - - - - - - - - - 1 038 96118.1 nominal value 635 450 - - - - - - - - - - - 635 45018.2 share premium - - 403 511 - - - - - - - - - 40 351119 Treasury shares: - - - - - - - - - - - - -19.1 acquisition - - - - - - - - - - - - -19.2 disposal - - - - - - - - - - - - -20 Change in the cost of property,

plant and equipment and intangible assets - - - - - - - - - - - - -

21 Dividends declared and other payments to shareholders (participants): - - - - - - - - - - - - -

21.1 on ordinary shares - - - - - - - - - - - - -21.2 on preference shares - - - - - - - - - - - - -22 Other contributions made by

shareholders (participants) and profit distributions to shareholders (participants) - - - - - - - - 500 000 - - - 500 000

23 Other movements - - - - - - - - - - - - -24 For the reporting period 2 030 450 - 1 501 261 - - - - 115 768 500 000 - - 327 248 4 474 727



Chief Accountant I. PonomarevaStamp here25 March 2020

17


Bank statements

OKATOterritory code



45293566000 29418720 2789

INFORMATION ABOUT STATUTORY RATIOS, GEARING RATIOAND SHORT-TERM LIQUIDITY RATIO

(published form)as at 1 January 2020


(full name and short name)Legal adress

30/1 Obrucheva St., Bldg. 2, Moscow 117485

OKUD Form 0409813Quarterly (annual)

Section 1. Information about the main performance indicators of a credit institution (banking group)

Line numb

erIndicator Note

Actual ratio, %

As at the reporting date

on a date one quarter away

from the reporting date

on a date two quarters away


on a date three quarters away


At the beginning of the reporting

period1 2 3 4 5 6 7 8

CAPITAL, thousand rubles.1 Base capital 11.1 2 593 562 2 554 781 2 519 560 2 613 175 1 510 7891а Basic capital with full

application of the expected credit loss model without taking into account the impact of transitional measures 2 752 382 2 743 520 2 761 238 2 581 782

2 Fixed capital 11.1 3 093 562 3 054 781 3 019 560 3 113 175 2 010 7892а Fixed assets with full

application of the expected credit loss model 3 252 382 3 243 520 3 261 238 3 081 782

3 Own funds (capital) 11.1 4 055 518 3 912 649 4 148 768 4 349 967 2 978 4653а Equity (capital) with

full application of the expected credit loss model 4 112 485 3 996 644 3 915 532 3 599 495

RISK-WEIGHTED ASSETS , thousand rubles4 Risk-weighted assets 11.2 30 375 019 28 200 050 26 556 449 23 200 933 21 859 948

CAPITAL ADEQUACY RATIOS, %5 Common equity

adequacy ratio for bank (N1.1), for banking group (N20.1)

11.2

8.533 9.058 9.486 11.144 6.8325а Basic capital adequacy

ratio with full application of the expected credit loss model 9.591 10.09 10.823 11.657

6 Tier 1 adequacy ratio for bank (N1.2), for banking group (N20.2)

11.2

10.178 10.831 11.369 13.276 9.0976а Capital adequacy ratio

when fully applying the expected credit loss model 11.334 11.929 12.783 13.915

7 Capital adequacy ratio for bank (N1.0), for banking group (N20.0)

11.2

13.351 13.875 15.622 18.749 13.6257а Equity (capital)

adequacy ratio when fully applying the expected credit loss model 14.34 14.701 15.349 16.253

ALLOWANCES FOR BASE CAPITAL (as a percentage of total assets weighted by risk level), %8 Premium maintain

capital adequacy 2.25 2.125 2 1.875 1.875

19


Line numb

erIndicator Note

Actual ratio, %









period1 2 3 4 5 6 7 8

9 Counter-cyclical premium - - - - -

10 Surcharge for systemic importance - - - - -

11 Allowances to own funds (capital) adequacy ratios , total (page 8 + page 9 + page 10) 2.25 2.125 2 1.875 1.875

12 The base capital available for the maintenance allowances to the adequacy of own funds (capital) 4.0333 4.5579 4.986 6.644 2.33

THE RATIO OF FINANCIAL LEVERAGE13 The amount of balance

sheet assets and off- balance sheet claims at risk for calculating the standard of financial leverage, thousand rubles. 29 216 893 27 243 876 26 146 404 23 037 532 21 882 805

14 Gearing ratio of the Bank (N 1.4), Bank group (20.4) 10.588 11.213 11.549 13.513 9.189

14а Standard of financial leverage with full application of the expected credit loss model, %

10.845 12.323 12.037 13.3 -SHORT-TERM LIQUIDITY RATIO

15 Highly liquid assets, thousand rubles - - - - -

16 Net expected cash outflow, thousand rubles - - - - -

17 Short-term liquidity ratio N26 (N27), % - - - - -

STRUCTURAL LIQUIDITY RATIO ( NET STABLE FUNDING RATIO)18 Available stable

funding( ASF), thousand rubles. - - - - -

19 Required stable funding (RSF), thousand rubles. - - - - -

20 Structural l iquidity ratio (net stable funding ratio) N28 (N29), % - - - - -

STANDARDS THAT LIMIT CERTAIN TYPES OF RISKS, %21 Instant liquidity ratio

(N2)

68.391 69.125 107.781 82.593 101.18822 Current liquidity ratio

(N3)

84.505 78.797 94.721 92.887 91.74823 Long-term liquidity

ratio (R4)

110.53 109.746 105.289 107.304 105.0124 Maximum exposure

per a borrower or a group of related borrowers (N6)

maxi-

mum

num-ber

of brea-ches

dura-tion

maxi-

mum

num-ber

of brea-ches

dura-tion

maxi-

mum

num-ber

of brea-ches

dura-tion

maxi-

mum

num-ber

of brea-ches

dura-tion

maxi-

mum

num-ber

of brea-ches

dura-tion

15.47 15.34 15.3 6.4 8.725 Maximum exposure to

major credit risks for bank (N7), for banking group (N22) 21.41 21.592 21.694 5.424 6.299

26 Aggregate exposure per insiders (N10.1) 0.056 0.063 0.014 0.014 0.022

27 Bank’s capital used for acquisition of shares (stakes) of other legal entities (N12), banking group’s capital used for acquisition by the parent credit institution and the banking group

- - - - -

20


Line numb

erIndicator Note

Actual ratio, %









period1 2 3 4 5 6 7 8

members of shares (stakes) of other legal entities (N23)

28 Maximum risk per a bank-related entity (group of bank-related entities) (N25)

maxi-

mum

num-ber

of brea-ches

dura-tion

maxi-

mum

num-ber

of brea-ches

dura-tion

maxi-

mum

num-ber

of brea-ches

dura-tion

maxi-

mum

num-ber

of brea-ches

dura-tion

maxi-

mum

num-ber

of brea-ches

dura-tion

0.03 0.0329 Standard of sufficiency

of total resources of the Central counterparty N2cc - - - - -

30 Standard of sufficiency of individual clearing collateral of the Central counterparty N3cc - - - - -

31 Liquidity ratio of the Central counterparty N4cc - - - - -

32 Standard for the maximum risk of concentration of N5cc - - - - -

33 Liquidity ratio for non-banking credit institutions with the right to perform money transfers without the need to open bank accounts and perform other related banking transactions (N15.1) - - - - -

34 Maximum aggregate loans to client participating in settlements for settlements (N16) - - - - -

35 Loans to borrowers other than customers who are settlement participants issued by non-banking settlement and credit institutions in their own name and at their own expense (N16.1) - - - - -

36 Standard of the maximum amount of promissory note obligations of settlement non Bank credit organizations N16.2 - - - - -

37 Minimum ratio of mortgage pool and issue volume of mortgage backed bonds (N18) - - - - -

21


Section 2. Gearing ratio

Subsection 2.1. Calculation of balance sheet assets and off-balance sheet exposure for calculation of gearing ratio

Line number Indicator Note Amount,

RUB thousand1 2 3 4

1 Assets according to the balance sheet (published form), total 28 753 3612 Adjustment to investments in the capital of credit, financial, insurance or other

organizations, for which reporting data is included in the consolidated financial statements but not included in the calculation of equity (capital), obligatory ratios and amounts (limits) of open currency positions of the banking group

not applicable to a credit institution as a legal entity

3 Adjustment to fiduciary assets recognized according to the accounting rules but not included into calculation procedure of the gearing ratio -

4 Adjustment to derivative financial instruments (DFI) -5 Adjustment to stock lending transactions -6 Adjustment to the procedure of exposure on credit commitments to credit equivalent 33 3767 Other adjustments 647 2438 Balance sheet assets and off-balance exposure after adjustments for calculation of the

gearing ratio, total 28 139 494

Subsection 2.2. Gearing ratio calculation table (N1.4)

Line number Indicator Note Amount,

RUB thousand1

2 3 4Balance sheet asset risk

1 Amount of balance sheet assets, total: 29 666 5352 Negative adjustment in the amount of ratios used to reduce the sources of Tier 1 capital 483 0183 Balance sheet risk assets after adjustment (difference between line 1 and line 2), total 29 183 517

DFI transactions risk4 Current credit risk on DFI (less variation margin received), total -5 Potential credit risk for the counterparty on DFI transactions, total -6 Adjustment for the nominal amount of the collateral provided for DFI transactions which

is subject to derecognition according to the accounting rules неприменимо7 Negative adjustment in the amount of variation margin transferred in certain cases -8 Adjustment to claims of the bank being a clearing member to a central counterparty for

settlement of customers’ transactions -9 Adjustment for accounting for credit risk related to an underlying asset for issued credit

DFI -10 Negative adjustment to issued credit DFI -11 DFI risk after adjustments (sum of lines 4, 5, 9 less lines 7, 8, 10), total -

Stock lending transactions risk12 Claims on stock lending transactions, total: -13 Adjustment in the amount of cash netting (claims and liabilities) for stock lending

transactions -14 Credit risk for a counterparty on stock lending transactions -15 Risk on guarantee stock lending transactions -16 Claims on stock lending transactions after adjustments (sum of lines 12, 14, 15 less line

13), total: -Exposure on credit commitments

17 Nominal exposure on credit commitments, total: 332 59118 Adjustment to the application of credit equivalent ratios 299 21519 Exposure on credit commitments after adjustments (difference between lines 17 and 18),

total: 33 376Equity and risks

20 Tier 1 capital 3 093 56221 Amount of balance sheet assets and off-balance sheet exposure for calculation of

gearing ratio (total of lines 3, 11, 16, 19), total: 29 216 893Gearing ratio

22 Gearing ratio of the Bank (N1.4) (line 20 : line 21), Bank group (N20.4), per cent 10.59

22


Раздел 3. Information about calculating the short -term liquidity ratio

Line number Indicator Note

Dataon ___________

amount of claims

(obligations), thousand rubles

weighted amount of

claims (obligations),

thousand rubles1 2 3 4 5

High-quality liquid assets1 Highly liquid assets (HLA) subject to additional requirements (assets)

included in the numerator H26 (H27) XExpected cash flows

2 Cash of individuals, total, including:3 stable funds4 unstable funds5 Customer funds raised without collateral, total, including:6 operating deposits7 deposits that are not related to operating (other deposits)8 unsecured debt obligations9 Customer funds attracted under the allowance of X10 Additionally expected cash flows, total, including:11 for derivative financial instruments and in connection with the

potential need for additional collateral12 related to the loss of funding for secured debt instruments13 for the Bank's obligations under unused irrevocable and conditionally

revocable credit lines and liquidity lines14 Additionally expected cash outflows from other contractual

obligations15 Additionally expected cash outflows from other contingent liabilities16 Total cash outflow, total

(line 2 + line 5 + line 9 + line 10 + line 14 + line 15) XExpected cash inflows

17 For operations providing funds secured by securities, including reverse REPO operations

18 Under contracts without violation of contractual terms of performance of obligations

19 Other tributaries20 Total cash i nflow, t otal(line 17 + line 18 + line 19)

Total adjusted cost21 HLA, net of adjustments calculated taking into account the

restrictions on the maximum value of HLA-2B and HLA-2 X22 Net expected cash outflow X23 Short-term liquidity ratio of a banking group (N 26), a credit

institution (N 27), percentage X




Stamp here

25 March 2020

23


Bank statements

OKATOterritory code



45293566000 29418720 2789

STATEMENT OF CASH FLOWS(published form)

for 2019Credit institution Joint-stock company MC Bank Rus


OKUD Form 0409814Quarterly (annual)

Line number

Indicator Note Cash flows for the reporting

period, RUB thousand

Cash flows for the

corresponding reporting periodof the previous

year, RUB thousand

1 2 3 4 51 Net cash from/(used in) operating activities1.1 Cash from (used in) operating activities before changes in

operating assets and liabilities, total, including:

1 072 861

443 615 1.1.1 interest received

3 638 060

2 402 770 1.1.2 interest paid

(1 465 131)

(916 219) 1.1.3 fee and commission income

180 004

125 574 1.1.4 fee and commission expense

(197 560)

(154 954) 1.1.5 net gain on financial assets at fair value through profit or loss

available for sale -

-

1.1.6 net gain on operations with securities held to maturity -

-

1.1.7 net gain on foreign currency transactions 2 750

2 831

1.1.8 other operating income 48 717

15 376

1.1.9 Operating expenses (885 547)

(689 001)

1.1.10 income tax expense (benefit) (248 432)

(342 762)

1.2 Increase (decrease) in net cash flows from operating assets and liabilities, total, including:

(2 905 261)

174 050

1.2.1 net increase (decrease) in minimum reserve deposits with the Bank of Russia

(32 600)

(75 154)

1.2.2 net increase (decrease) in investments in securities at fair value through profit and loss

-

-

1.2.3 net increase (decrease) in loan receivables (7 740 326)

(10 271 123)

1.2.4 net increase (decrease) in other assets (5 562)

(100 017)

1.2.5 net increase (decrease) in loans, deposits and other amounts due to the Bank of Russia

-

-

1.2.6 net increase (decrease) in amounts due to other credit institutions -

-

1.2.7 net increase (decrease) in customer accounts (non-credit institutions)

4 868 818

9 821 344

1.2.8 net increase (decrease) in financial liabilities at fair value through profit or loss

-

-

1.2.9 net increase (decrease) in debt securities issued -

-

1.2.10 net increase (decrease) in other liabilities 4 409

799 000

1.3 Total section 1 (line 1.1 + line 1.2) (1 832 400)

617 665

2 Net cash from/(used in) investing activities2.1 Acquisition of securities and other financial assets classified as

available for sale -

-

2.2 Proceeds from sale and redemption of securities and other financial assets classified as available for sale

-

-

2.3 Acquisition of securities classified as held to maturity -

-

24


Line number

Indicator Note Cash flows for the reporting

period, RUB thousand

Cash flows for the

corresponding reporting periodof the previous

year, RUB thousand

1 2 3 4 52.4 Proceeds from redemption of securities classified as held to

maturity -

-

2.5 Acquisition of property, plant and equipment, intangible assets and inventories

(75 161)

(176 911)

2.6 Proceeds from sale of property and equipment, intangible assets and inventories

4 555

6 220

2.7 Dividends received -

-

2.8 Total Section 2 (total of lines 2.1 to 2.7) (70 606)

(170 691)

3 Net cash generated by (used in) financing activities3.1 Contributions of shareholders (participants) to share capital

1 538 961 -

3.2 Acquisition of treasury shares -

-

3.3 Sale of treasury shares -

-

3.4 Dividends paid -

-

3.5 Total Section 3 (total of lines 3.1 to 3.4) 1 538 961

-

4 Effect of changes in foreign exchange rate on cash and cash equivalents established by the Bank of Russia

(1 471)

1 990

5 Increase (decrease) in cash and cash equivalents (365 516)

448 964

5.1 Cash and cash equivalents at beginning of the reporting year 5.1

1 202 209

753 245 5.2 Cash and cash equivalents at the end of the reporting period 5.1

836 693

1 202 209




Stamp here

25 March 2020

25



EXPLANATORY INFORMATION TO THE ANNUAL FINANCIAL STATEMENTS OF JSC MC BANK RUS FOR THE YEAR 2019

INTRODUCTION

Annual financial statements (hereinafter – “annual financial statements”) are prepared in accordance with the CBRF Directive No. 3054-U of 4 September 2013 “On the Preparation of Annual Financial Statements by Credit Institutions” (hereinafter – “Directive No. 3054-U”) and formed by Joint-stock company MC Bank Rus (hereinafter – “Bank”) on the basis of Russian accounting and financial reporting standards.

These Notes form an integral part of the annual financial statements of the Bank for 2018 in accordance with Russian accounting standards (hereinafter – “RAS”) and the CBRF Directive No. 4983-U of 27 November 2018 “On the Forms, Procedure and Timing of Disclosure of Information by Credit Institutions on Their Activities” (hereinafter – “Directive No. 4983-U”).

Explanatory information is based on the forms of statutory financial statements prepared in accordance with the requirements of the Bank of Russia Directive No. 4927-U dated 8 October 2018 “On the List, Format and Procedure for Compilation and Submission of the Financial Statements of Credit Institutions to the Central Bank of the Russian Federation (hereinafter – “Directive No. 4927-U”).

These annual statements were signed by the Chairman of the Management Board of the Bank on 25 March 2020 and will be approved by the shareholders of the Bank by 5 June 2020.

The Bank’s full annual financial statements (including explanatory information) are available on the Bank’s website (www.mcbankrus.ru).

1. BRIEF DESCRIPTION OF THE BANK’S ACTIVITIES

1.1. Nature of operations and principal activities of the Bank

The Bank is a joint-stock Bank and operates in the Russian Federation (the "Russian Federation") in accordance with the Federal law "on banks and banking activities" and other legislative acts of the Russian Federation on the basis of the following licenses and permits:

The banking license to perform operations with Russian Rubles and foreign currency (without the right to raise funds from individuals) No. 2789 dated 14 November 2014;

License to raise funds from individuals in rubles and foreign currency No. 2789 of 14 November 2014.

The registered office of the Bank is located at Moscow, 30/1 Obrucheva St., Bld. 2. The Bank does not have any branches.

As at January 01, 2020, the Bank has 29 operating cash desks outside the cash unit in Moscow, Moscow region and Saint Petersburg, as well as the office for transactions with valuables. From the beginning of 2019, 6 operating cash desks outside the cash unit were opened.

The Bank is a member of the mandatory deposit insurance system for banks in the Russian Federation with No. 991 since 8 June 2011.

The list number of employees as of January 1, 2020 was 246 people, as of January 1, 2019 – 217 people.

The Bank’s primary business activities are:

1. Retail banking – banking services to individuals, maintenance of current accounts, allowance of car and other consumer loans, money transfers without the need to open bank accounts and foreign currency operations.

2. Corporate banking – opening and maintenance of current and settlement accounts, bank deposits, loans and other credit facilities, foreign currency operations, money transfers without the need to open bank accounts by order of individuals.

Retail banking (car loans) is considered as a strategic area of the Bank development. The Bank’s principal activity in retail banking is retail auto lending to individuals purchasing cars from

26

http://www.mcbankrus.ru/



authorized dealers. The size, structure and stability of the customer base are the factors contributing to the success of the Bank and have a significant impact on prospects for its future development. In particular, interaction with the distributor and dealer network of Mitsubishi ensures the presence of a permanent and growing customer base.

Mitsubishi offers cars in the segment of compact, medium и large off-road vehicles the demand for which is steadily growing among consumers in the Russian Federation and which have a predominant share in the Bank's loan portfolio (data according to the internal analysis of the retail loan portfolio of JSC MS Bank Rus for the 2019 calendar year). Based on the analysis conducted by the official distributor of Mitsubishi cars – MMC Rus LLC, every third retail buyer of a Mitsubishi car is a customer of the Bank according to the results of 2017-2019. Cooperation with the specified counterparties provides a constant demand for financial products and services offered by the Bank as well as potential for the renewal and development of corporate lending, and settlement and cash services for legal entities.

The Bank will also continue to increase the volume of car loans due to the entry to the market of used cars through official dealer centers.

Development of the corporate business of the Bank involves maintaining the loyalty of the existing customers, attracting new target groups of customers, building trust with them and maintaining long-term mutually beneficial cooperation. For corporate customers the Bank seeks to offer a full range of services including settlement and cash services, lending and placing temporary available funds on settlement accounts, term deposits.

The Bank has a credit rating from the Expert RA Rating Agency-ruA -, the forecast is "positive" as of October 14, 2019.

27



1.2. Operating environment

The economy of the Russian Federation displays some of the characteristics of emerging markets. Markets in developing countries, including Russia, are exposed to economic, political, social, judicial and legislative risks that differ from those in more developed markets. Laws and regulations governing doing business in Russia can change quickly, and there is a possibility of their arbitrary interpretation. The future direction of Russia's development depends to a large extent on the tax and monetary policy of the state, the laws and regulations adopted, as well as changes in the political situation in the country.

Due to the fact that Russia produces and exports large volumes of oil and gas, the Russian economy is particularly sensitive to changes in world oil and gas prices. In March 2020, world oil prices plummeted by more than 40%, which led to an immediate weakening of the Russian ruble against major currencies.

Since 2014, the United States and the European Union have imposed several packages of sanctions against a number of Russian officials, businessmen and organizations. These events have made it difficult for Russian businesses to access international capital markets.

The impact of changes in the economic situation on the Group's future results of operations and financial position may be significant.

In addition, at the beginning of 2020, a new coronavirus (COVID-19) began to spread very rapidly around the world, which led to the world Health Organization (who) declaring the beginning of a pandemic in March 2020. The measures taken by many countries to curb the spread of COVID-19 are causing significant operational difficulties for many companies and have a significant impact on global financial markets. As the situation is rapidly developing, COVID-19 can significantly affect the operations of many companies in various sectors of the economy, including, but not limited to, disruptions in operations resulting from production suspensions or closures, supply chain disruptions, staff quarantines, reduced demand, and difficulties in obtaining financing. In addition, the Group may face an even greater impact of COVID-19 as a result of its negative impact on the global economy and major financial markets. The significant impact of COVID-19 on the Group's operations largely depends on the duration and extent of the virus's impact on the global and Russian economy.

The impact of changes in the economic situation on the Bank's future performance and financial position is currently difficult to determine.

Russian consumers and corporations continue to face increasing economic difficulties, which increases the risk of default in the retail and commercial banking sectors. This operating environment has a significant impact on the Bank's operations and financial position. Management is taking the necessary measures to ensure the sustainability of the Bank's operations . However, the future impact of the current economic situation is difficult to predict, and management's current expectations and estimates may differ significantly from actual results.

1.3. Factors affecting financial performance of the Bank in the reporting year

Following banking transactions such as:

providing loans to legal entities and individuals; operations on the interbank market; making money transfers on behalf of individual clients

have had the greatest impact on the Bank’s financial results for the year 2019.

As well as the formation of the financial result for 2019 had an impact: effect of adjustment of allowances for possible losses determined in accordance with the Bank of

Russia Regulation no. 590-P1 to estimated reserves for expected credit losses determined in accordance with the Bank of Russia Regulation no. 604-P2, No. 605-P3 ;1 Regulation of the Bank of Russia dated June 27, 2017 No. 590-P "on the procedure for the formation of

reserves by credit organizations for possible losses on loans, loans and debt equated to it" (hereinafter - " Regulation No. 590-P»)

2 Regulation of the Bank of Russia of October 2, 2017 No. 604-P" on the procedure for recording in the accounting accounts of credit organizations operations for raising funds under Bank Deposit agreements, credit agreements, operations for the issue and repayment (payment) of bonds, promissory notes, Deposit and savings certificates" (hereinafter - " Regulation No. 604-P»)

3 The Bank of Russia regulation dated 2 October 2017№ 605-P "On the procedure for reflection in the accounts of the credit organisations of operations on placement of funds under the loan agreements, operations-related

28



the effect of introducing the concept of applying IFRS 9 in accordance with the Bank of Russia Regulations no.604-P, No. 605-P and no. 606-P by adjusting the relevant items of the annual statements as at 1 January 2019 by the Bank's decision in correspondence with the financial results of previous years.

The financial results for the main types of transactions for 2019 are reflected in the statement of financial results.

Based on the decision of the shareholder on the distribution of net profit for 2018, the Bank repaid the losses of previous years.

2. REPORTING PERIOD AND UNITS OF MEASUREMENT OF ANNUAL FINANCIAL STATEMENTS

The annual financial statements were compiled for the period starting January 01, 2019, and ending 31 December 2019 (inclusive), as at January 01, 2020.

The Balance sheet and the Statement of capital adequacy for risks coverage as of January 1, 2020 are prepared in the currency of the Russian Federation and presented in thousands of rubles. The Statement of financial results, the Statement of cash flows and Statement of changes in equity of the credit institution are presented for 2019, prepared in the currency of the Russian Federation and presented in thousands of rubles.

The comparable period for the balance sheet, Report on capital adequacy for risks, Information on statutory ratios, gearing ratio and short-term liquidity ratio is 1 January 2019 (beginning of the reporting year). The comparable data for the Statement of financial results, Statement of changes in the capital of the credit institution and the Statement of Cash Flows are the data for 2019.

These financial statements are presented in thousands of Russian rubles (hereinafter – “RUB thousand”), unless otherwise indicated.

The official exchange rates of foreign currency against the ruble at the end of the year used by the Bank in the preparation of the annual financial statements are shown below:

1 Janyary2020

1 Janyary 2019

RUB/USD 61.9057 69.4706RUB/EUR 69.3406 79.4605

transactions regarding the acquisition of rights of claim from third parties of execution of obligations in monetary form, operations, liabilities on issued Bank guarantees and allowance of funds" ( hereinafter – the "Regulation№ 605-P»)

29



3. INFORMATION ABOUT THE BANKING GROUP

The Bank does not head a banking (consolidated) group nor is it part of one, but it is part of a banking holding, which also includes:

Private Limited Liability Company Es-Invest. B.V.; Limited Liability Company MC Factoring Rus.As at January 01, 2020 the shareholders owned issued shares of the Bank:

1 Janyary2020, %

First level shareholders/holders of the issued share capital:Es-Invest B.V. (Es-Invest B.V.) (Netherlands) 68,7%Limited Liability Company MC Factoring Rus 31,3%

Total 100%

As at January 01, 2019 the only shareholder owned 100% issued shares of the Bank: 1 Janyary2019, %

First level shareholders/holders of the issued share capital:Es-Invest B.V. (Es-Invest B.V.) (Netherlands) 100%

Total 100%

As at January 01, 2020 and 2019, ultimate owners of the Bank are A.S. Petrov (15%) and Mitsubishi Corporation (85%).

4. SUMMARY BASIS OF PREPARATION OF ANNUAL STATEMENTS AND KEY ACCOUNTING POLICIES

4.1. Principles and methods of measuring and accounting for significant transactions and events

Accounting records were maintained in accordance with the Bank’s accounting policy that complies with the effective Russian accounting legislation. All of the Bank’s divisions irrespective of their location apply the existing accounting procedures.

The system of accounting and preparation of annual accounting (financial) statements is based on the principles of business continuity , consistency of accounting rules, comparability of accounting approaches, caution, timely reflection of transactions and priority of content over form.

As of January 1, 2019, the Bank of Russia's new regulatory documents regulation №604-P, Regulation №605-P, and Regulation №606-P, aimed at implementing the requirements of IFRS 9 "Financial instruments" (hereinafter referred to as "IFRS 9"), entered into force. The most significant changes are related to the way financial assets and liabilities are measured and accounted for, as well as to the accounting information on estimated reserves for expected credit losses, determined on the basis of the principles of IFRS 9 by adjusting the allowances for possible losses, which are calculated in accordance with the prudential requirements of the Bank of Russia.

The Bank's accounting policy for 2019 was approved by Order No. 555-PR of the Chairman of the Bank's Management Board dated 29.12.2018 . The main changes in the Accounting policy for 2019 compared to the Accounting policy for 2018 are due to the entry into force of the above-mentioned regulatory documents of the Bank of Russia and related changes in accounting and reporting, regulated by the Bank of Russia's Instruction No. 4983-U dated November 27, 2018 "on the forms, procedure and timing of disclosure by credit organizations of information about their activities" and Regulation No. 579-P dated February 27, 2017 "on the accounting plan for credit organizations and the procedure for its application".

The effect of implementing the requirements of IFRS 9 in accounting from 1 January 2019 was reflected by the Bank's decision by adjusting the corresponding items of the annual statements in correspondence with the financial results of previous years (see Note 4.2 "Nature and amount of

30



adjustments related to changes in accounting policies and estimates" of this Explanatory information).

The Bank's accounting policy for 2019 contains the following main changes and allowances related to the implementation of the requirements of IFRS 9:

1. methods of classification and evaluation of financial instruments depending on the applied business models and characteristics of cash flows of financial instruments (Solely Payments of Principle and Interests, hereinafter referred to as " SPPI»);

2. materiality levels for applying the effective interest rate method (hereinafter referred to as "EPS") in determining the amortised cost of financial assets and liabilities, as well as for recognizing expenses related to the allowance (placement) of cash, acquisition of rights of claim or securities;

3. criteria for changes made to the terms of transactions (modifications) accepted as significant for the recalculation of EPS for financial assets;

4. frequency of reflection in accounting: - recognition of income on commissions included and not included in the calculation of EPS when determining the amortised cost of financial assets and liabilities – on a daily basis, taking into account the specifics of car loans to individuals; - adjustments to the cost of financial assets and liabilities to amortised cost – on a daily basis, taking into account the specifics of car loans to individuals; - adjustments of allowances for possible losses to estimated reserves for expected credit losses-on a monthly basis;

5. changes related to the exclusion of individual accounts from the accounting plan for credit institutions (for example, income and expenses for future periods), as well as the exclusion of individual accounts from the Statement of financial results (for example, income/expenses from the use of embedded derivatives that are inseparable from the main agreement, and income/expenses from previous years identified in the reporting year);

6. the working plan of accounting accounts was supplemented with new accounting accounts, due to the transition to IFRS 9 and the corresponding changes in the Bank of Russia regulations governing accounting rules in credit organizations.

Detailed disclosure of certain allowances of the Bank's Accounting policy for 2019, including those related to the implementation of the principles of IFRS 9, is provided below.

Income and expense recognition

Income and expenses are recognized in the accounting records in 2018 according to the accrual method. This involves recognizing financial results of operations (income and expenses) as they are performed, rather than as respective cash (or cash equivalents) is received or paid. Income and expenses are recognized in the period in which they arise.

Interest income and expenses. The Bank charges interest income and expenses in accordance with the terms of the agreement (hereinafter referred to as the contractual interest rate), regardless of the credit quality of the financial asset.In cases where the effective interest rate differs significantly from the contractual interest rate, the difference in accounting accounts for adjustments that increase (decrease) the cost of funds placed (attracted) in correspondence with the income accounts (symbols part 1 SFR — interest income) or expenses (symbols part 3 SFR — interest expenses) is reflected in accounting .

The choice between the linear method of calculation or the EPS method is based on the application of the materiality criteria set out in the Accounting policy.

The effective interest rate ("EIR") is the rate at which the estimated future cash flows of a financial instrument are discounted to their net carrying amount over the expected life of the financial asset or liability, or (if applicable ) over a shorter period. Future cash flows are estimated based on all contractual terms of the instrument.

Interest income and expenses are calculated by applying EIR to the gross carrying amount of financial assets that are not credit-impaired (i.e., the amortised cost of a financial asset before adjusting for the amount of the estimated allowance for expected credit losses) or to the amortised cost of financial liabilities, as determined by Accounting policy. Interest income on credit-impaired financial assets is calculated by applying the effective interest rate to the amortised cost of such assets (i.e. their gross book value less the estimated allowance for expected credit losses). The effective interest rate for credit-impaired financial assets created or acquired reflects the amount of expected credit losses when determining the expected future cash flows from the financial asset.

31



Commission income and expenses. Commission income/expenses received/paid by the parties to the agreement are recognized as interest or operating income/expenses, depending on whether they relate to transactions that generate interest income/expenses.

Revenue from services and commissions includes revenue that is not an integral part of the EIR. R evenue i ncluded i n the r elevant s ection o f the s tatement o f f inancial results includes, among other things, loan servicing fees, fees for non-selection of credit (in the event that specific loan agreements are unlikely to be concluded), as well as fees for syndicated loans, and so on.

Interest income includes Commission income in the form of Commission fees (fees) on transactions that generate interest income.Interest expense includes Commission expense in the form of Commission fees (fees) for transactions on which interest expense occurs .

List of commissions .

The calculation of the cost of a financial instrument may include, for example, the following fees:- for issuing a loan; - directly related to the acquisition of financial assets; - for opening a credit line; - for the maintenance of open lines of credit; - for prolongation of the loan (other agreement for placement of funds); - directly related to raising financial liabilities; - other fees and commissions directly related to lending; - subsidies – the amount of compensatory monetary funds to compensate the Bank for the loss of

income on loans issued by the Bank ( with the exception of state subsidies).

If transaction costs are recognized as insignificant , they are deducted as expenses at a time.

If other income from the transaction is considered insignificant , it is debited to income at the same time.

Features of reflecting transaction costs and other income related to car loans to individuals:

- the amount of the subsidy from the Ministry of industry and trade for falling interest income on car loans of individuals for the reporting month is subject to reflection on the accounting accounts on the last working day of the month as operating income (symbol SFR 21115);

- the distributor's subsidy for individual car loans is calculated on a monthly basis and is subject to a one-time refund by the Distributor in full for the entire term of the loan agreement. The subsidy is a significant income of the Bank and is subject to inclusion in the EIR for loans issued during the reporting month on the last business day of each month for depreciation using the EIR method during the term of the contract. Thus, on the last business day for a loan with a subsidy from a distributor issued in the reporting month, the amortised cost is recalculated using EIR, while adjustments are made to bring the original amortised cost to the amortised cost using EIR;

- Agency fees from insurance companies (in terms of significant other income), as well as Agency fees to dealers (in terms of significant transaction costs) for individual car loans issued in the reporting month, are initially recorded in the following month no later than the last business day due to the inability to determine/calculate the amounts in the period of credit recognition, without including in the EIR, in contrast to the distributor's subsidy. Depreciation is carried out on a straight line basis over the term of the loan;

- remuneration to the Bank from insurance companies for concluding CASCO and similar agreements on car loans of individuals is recorded at the same time as Commission income (symbol SFR 12115) due to the uncertainty of their receipt at the date of recognition of the loan and the specifics of calculation.

Interest income and expenses are accrued on the recognition dates in accordance with the requirements of regulations No. 446–P, no. 579–P, No. 604–P, No. 605–P, No. 606–P.If the accrual date coincides with the date stipulated in the contract for payment, the balance sheet records first reflect the fact of accrual of receivables or payables in correspondence with the income or expense account, respectively. Then the fact of receipt or transfer of funds, respectively, on the debit or credit of accounts for accounting of funds in correspondence with the account of receivables or payables is reflected.

When calculating income and expenses under continuing contracts, the Bank is guided by clause 3.2 of Regulation No. 446-P and IFRS 15 "Revenue from contracts with customers".

32



Income and expenses from the performance of work, from services rendered (consumed) over time, recorded as part of income and expenses from banking operations and other transactions and operations related to ensuring the activities of credit organizations are recorded in the accounting records on the last business day of month by method results (i.e. volume of executed works, provided (consumed) services), as well as on the date of acceptance of work (allowance (consumption) of services) specified in the contract.Income and expenses from the allowance (consumption) of services rendered at a given time are recorded in accounting on the date of allowance (consumption) of the service defined by the terms of the agreement (including as the payment date).

The procedure for reimbursement of costs and expenses should be determined on the basis of contractual terms. If the service agreement explicitly States that all costs incurred by the Bank, or their specific amount, are subject to reimbursement by customers (contractors), then the amounts of these costs are not recognized as expenses, but are recorded in accounting as receivables.Accounting for amounts received (paid) at a time and subject to attribution to income (expenses) in subsequent reporting periods is maintained on accounts for accounts payable (receivables) with attribution to income (expenses) on the last business day of the month using the results method.

Financial assets

Financial assets are recognized and derecognized on the transaction date, provided that the asset is purchased or sold under a contract whose terms require delivery of the asset within the time period accepted in the relevant market. Financial assets are initially measured at fair value, including transaction costs. The exception is financial assets classified as at fair value through profit or loss (FVTPL). Transaction costs that are directly attributable to the acquisition of financial assets classified as at FVTPL are charged directly to profit or loss.

All recognized financial assets within the scope of IFRS 9 after initial recognition must be measured at amortised or fair value in accordance with the entity's business model for managing financial assets and the characteristics of contractual cash flows.In particular:

Debt instruments held under a business model that aims to generate contractual cash flows that include solely principal and interest payments are measured at amortised cost after initial recognition.

Debt instruments held under a business model that aims both to generate contractual cash flows that include solely payments of principal and interest, and to sell the related debt instruments, are measured at fair value through other comprehensive income after initial recognition.

All other debt instruments (for example, debt instruments that are measured at fair value or held for sale) and investments in equity instruments are measured at fair value through profit or loss after initial recognition.

At the same time, upon initial recognition of a financial asset, the Bank is entitled in each individual case to make a non-cancellable choice-classification:

The Bank may irrevocably decide to present subsequent changes in the fair value of equity investments in other comprehensive income if such investments are not intended for trading and are not contingent consideration recognized by the acquirer in the business combination, and

The Bank may irrevocably decide to classify a debt instrument as an FVTPL if the debt instrument meets the criteria for recognition at amortised cost or fair value through other comprehensive income, provided that this eliminates or significantly reduces the accounting mismatch (the"fair value option").

Debt instruments measured at amortised cost or fair value through other comprehensive income.

The Bank assesses the classification and measurement of a financial asset based on the characteristics of the contractual cash flows and the Bank's business model used to manage the asset.

To classify and measure an asset at amortised cost or at fair value through other comprehensive income, the terms of the relevant agreement must provide for cash flows that include solely payments of principal and interest on the outstanding portion of the principal amount.

When checking the contractual cash flows for compliance with these requirements, the principal amount of the debt is considered as the fair value of the financial asset at its initial recognition. The

33



principal amount of the debt may change over the life of the financial asset (for example, in the case of payments against the principal amount). Interest includes compensation for the time value of money, for credit risk on the principal amount outstanding over a period of time, and for other normal risks and costs associated with lending, as well as profit margins. Principal and interest payments are estimated in the currency in which the financial asset is denominated.

The cash flows stipulated in the agreement, which include only payments to the principal amount of the debt and interest, correspond to the terms of the basic loan agreement. Contractual terms that result in risks or volatility of the contractual cash flows that are not related to the underlying credit agreement, such as the risk of changes in stock or commodity prices, do not cause the contractual cash flows to arise, which include solely payments of principal and interest on the outstanding portion of the principal amount. A financial asset that is created or acquired can be a basic credit agreement, regardless of whether it is a loan in its legal form.

The business models used to manage financial assets were evaluated at the date of first application of IFRS 9 for classification of a financial asset. The business model was applied retrospectively to all financial assets recognized on the Bank's balance sheet at the date of first application of IFRS 9. The business model used by an organization is defined at a level that reflects the mechanism for managing financial assets grouped together to achieve a particular business goal. Since the Bank's business model does not depend on management's intentions for an individual instrument, the assessment is performed at a higher level of aggregation rather than at the level of individual instruments.

The Bank applies a Business model for all financial assets, the purpose of which is to hold assets to receive the contractual cash flows.

The amortised cost of a financial asset is determined by:

- monthly on the last calendar day of the month,- on the dates of full, partial and early repayment (refund).

At initial recognition of a financial asset, the Bank determines whether the newly recognized financial assets are part of an existing business model or indicate the emergence of a new business model. The Bank reviews its business models in each reporting period to identify changes compared to the previous period. In the current reporting period, the Bank did not identify any changes in its business model.

Debt instruments that are measured at amortised cost or fair value through other comprehensive income after initial recognition are subject to impairment.

Reclassification. In the event of a change in business model, whereby the Bank holds certain financial assets with respect to such assets being reclassified. Classification and valuation requirements related to the new category are applied prospectively from the first day of the first reporting period after changes in the business model that led to the reclassification of the Bank's financial assets . Changes in the contractual cash flows are analyzed in accordance with the accounting policies set out below ("Modification and derecognition of financial assets").

Depreciation. In accordance with the documents of the Bank of Russia that define the procedure for implementing IFRS 9, it is necessary to apply a forward– looking approach to the assessment of possible impairment of assets and calculate estimated reserves for expected credit losses (hereinafter referred to as the "allowance for ECL"). The requirements of IFRS 9 for assessing possible impairment do not apply to equity instruments.

However, in order to fulfil prudential requirements of the Bank of Russia the Bank simultaneously creates an allowance for possible losses on loans, loan and similar debt and the reserve for possible losses on other assets, contingent liabilities, credit and non-credit character, other possible losses in accordance with the requirements of regulations of Bank of Russia from June 28, 2017 № 590-P "On procedure of formation by credit organizations of reserves for possible losses on loans, loan and similar debts" (hereinafter – "Regulation No. 590-P") and dated October 23, 2017 "on the procedure for forming reserves for possible losses by credit organizations" (hereinafter – "Regulation No. 611-P"). At the same time, the balance sheet should reflect adjustments to the reserves for possible losses up to the amount of the estimated reserve for ECL at least once a month.

From 1 January 2019, the Bank reflects adjustments to allowances for possible losses before estimated allowances for expected credit losses in respect of the following financial instruments measured at amortised cost:

cash;

34



funds in the Central Bank of the Russian Federation and credit institutions; net loan debt; other financial assets (accounts receivable); other financial liabilities ( credit -related contingent liabilities).

The Bank uses various models and assumptions when calculating expected credit losses (hereinafter referred to as ECL). Management uses professional judgment in determining the most appropriate model for each type of instrument , as well as the assumptions used in these models (including assumptions related to key credit risk factors ).

ECLs are recognized through a loss allowance in the amount equal to:

12-month ECL (expected credit losses arising from defaults on a financial instrument that may occur within 12 months after the reporting date;);

ECL for the entire term (expected credit losses arising in case of all possible cases of default over the life of the financial instrument).

A full-term ECL allowance should be recognized if the credit risk of a financial instrument has increased significantly since initial recognition. The criteria for assessing a significant increase in credit risk are described below. For all other financial instruments, ECL is estimated at 12-month ECL.

Key inputs used to measure expected credit losses:

probability of default (hereinafter-PD); losses in case of default (hereinafter-LGD); the amount of claims at risk in the event of default (EAD).

These indicators are usually calculated based on internal and external statistical models and other historical data, and adjusted for forecast information weighted with the probability of default.

PD is an estimate of the probability of default over a certain period of time and is estimated as of a certain point in time. The calculation is based on statistical rating models and is evaluated using rating tools, taking into account various categories of counterparties and risks. These statistical models are based on market data (if available), as well as internal data containing both quantitative and qualitative factors.

LGD is an estimate of the level of losses in the event of default. LGD is calculated based on the difference between the cash flows due under the contract and those that the lender expects to receive, taking into account the cash flows from existing collateral. The calculation is based on discounted cash flows, with discounting based on the effective interest rate for the instrument.

EAD is the estimated amount of claims at risk at the time of default, taking into account the expected changes in the amount of claims after the reporting date, including principal and interest payments, and expected withdrawals from open loan commitments. The Bank uses EAD models that reflect the characteristics of its loan portfolios.

Ecls are a probability-weighted estimate of the current cost of credit losses. They are calculated as the present value of the difference between the contractual and expected cash flows discounted at the effective interest rate, taking into account the probability-weighted impact of several future economic scenarios.

The Bank evaluates ECL on an individual or collective basis for loan portfolios that have similar economic risk characteristics. The measurement of the loss allowance will be based on the present value of the expected cash flows of the asset using the original effective interest rate, regardless of whether it is measured individually or collectively.

When evaluating ECL on a collective basis, financial instruments are grouped based on common risk characteristics. The Bank will evaluate the credit risk characteristics of the groups of instruments on an ongoing basis to ensure that there are signs of uniformity.

Significant increase in credit risk

The Bank monitors all financial assets, issued credit obligations and financial guarantees that are subject to impairment requirements to assess whether there has been a significant increase in credit risk since initial recognition. In the event of a significant increase in credit risk, the Bank will assess the amount of the loss allowance based on the ECL for the entire period.

35



In assessing whether the credit risk of a particular financial instrument has increased significantly since initial recognition, the Bank compares the risk of default on that financial instrument at the reporting date (taking into account the remaining maturity of the instrument) with the expected risk of default (taking into account the remaining maturity) at the date of initial recognition of the instrument.

When assessing the Bank uses reasonable and verifiable information (quantitative and qualitative), taking into account historical and forecast data, which can be obtained without unnecessary expenditure of funds and time, based on the Bank's past experience and expert assessment of loans.

Given that a significant increase in credit risk since initial recognition is a relative amount, this change in PD, in absolute terms, will be more significant for financial instruments with a lower initial PD than for financial instruments with a higher PD.

If payments under the agreement are overdue by more than 30 days, the Bank recognizes a significant increase in credit risk and assigns the asset to Stage 2 of the impairment model, i.e. the allowance for losses is measured using ECL for the entire period.

Credit-impaired financial assets

A financial asset is credit-impaired when one or more events occur that have a negative impact on the estimated future cash flows of such financial asset. Credit-impaired assets belong to Stage 3 of the impairment model.

Determination of default

The definition of default is crucial for determining ECL. The definition of default is used when calculating the ECL amount and when determining the basis for calculating the loss allowance (12-month ECL or full- term ECL ), since the default value is a component of the probability of default (PD) indicator and affects both the ECL assessment and the identification of a significant increase in credit risk.

The Bank considers the following events as default:

The borrower is more than 90 days overdue on any material credit obligation to the Bank; or The borrower is unlikely to fully meet its credit obligations to the Bank.

The definition of default is adapted accordingly to reflect the characteristics of different types of assets.

The estimated reserve formed in accordance with IFRS 9 is accounted for as the difference between the estimated reserve and the allowance for possible losses, which is reflected in the accounts for adjusting reserves for possible losses. The difference is distributed among the various balance sheet accounts for adjustments to allowances for possible losses in proportion to the amounts owed.

Modification and derecognition of financial assets. A financial asset is modified if the contractual terms governing the cash flows of the asset are revised or otherwise modified between the date of initial recognition and the date of maturity of the financial asset. The modification affects the amount and / or timing of the contractual cash flows either at the same time or at a future time. In addition, the introduction or adjustment of existing covenants for an existing loan will constitute a modification even if such new or adjusted covenants do not have an immediate effect on cash flows, but may affect cash flows if they are not met (for example, if the loan interest rate is violated, the loan interest rate may increase).

The Bank reviews loans issued to customers for financial difficulties of the borrower in order to ensure maximum repayment and minimize the risk of default. Sanctions are waived when the borrower has taken all reasonable steps to comply with the original contractual terms, there is a high risk of default or default has already occurred, and it is expected that the borrower will be able to meet the revised contractual terms. Renegotiation in most cases involves extending the loan repayment period, changing the timing of the loan's cash flows (payments of principal and interest), reducing the amount of cash flows owed to the lender (forgiveness of principal or interest), and adjusting covenants.

When a financial asset is modified, the Bank assesses whether the modification results in the asset being derecognized. In accordance with the Bank's policy, a modification results in derecognition if it results in significant differences in the contractual terms. In order to determine whether the amended terms differ significantly from the original contractual terms, the Bank analyzes:

36



Qualitative factor. For example, after changing the terms, the contractual cash flows include not only payments of principal and interest; the currency of the agreement or the counterparty has changed. It also analyzes the degree of changes in interest rates, maturities, and covenants.

If these factors do not explicitly indicate a significant modification, then: A quantitative assessment is made to compare the present value of the remaining contractual

cash flows in accordance with the original terms of the agreement and the cash flows in accordance with the revised terms, both amounts being discounted using the original effective interest rate.

If the difference between the present value values is greater than 10%, the Bank considers that the revised terms differ significantly from the original terms and result in derecognition.

If a financial asset is derecognized, the estimated allowance for expected credit losses is revalued at the date of derecognition to determine the net carrying amount of the asset at that date. The difference between the revised carrying amount and the fair value of the new financial asset under the new terms will result in a gain or loss on derecognition. The amount of the allowance for expected credit losses for a new financial asset will be calculated based on the amount of credit losses expected in the following 12 months, except in rare cases when a new loan is considered credit-impaired at the time of origination. This applies only when the fair value of a new loan is recognized at a significant discount to its revised face value, since there is a high risk of default that has not been reduced by the modification.

The Bank controls credit risk for modified financial assets by evaluating qualitative and quantitative information (for example, if the borrower has overdue debt under the new terms).

If the contractual terms of a financial asset change that does not result in derecognition of the asset, the Bank determines whether the credit risk of the asset has increased significantly since initial recognition by comparing:• the probability of default over the remaining life of the asset , estimated based on the data available at initial recognition and the original contractual terms; and• the probability of default over the remaining life of the asset at the reporting date based on the revised terms.For financial assets that have been modified in accordance with the Bank's policy on temporary waiver of debt collection and for which the modification did not result in derecognition, the probability of default assessment reflects the Bank's ability to receive cash flows in accordance with the revised agreement, taking into account the Bank's previous similar experience, as well as various indicators of customer behavior, including repayment of debt in accordance with the revised contractual terms. If credit risk persists at a level significantly higher than expected at initial recognition, the estimated allowance for expected credit losses is still calculated at an amount equal to the amount of credit losses expected over the life of the asset.

The amount of the estimated allowance for loans that are waived is usually calculated solely on the basis of the amount of credit losses expected within 12 months, provided that there is evidence of a positive trend in the repayment of debt by the borrower after the modification, which leads to the reversal of a previously significant increase in credit risk.

If the modification does not result in derecognition of the asset, the profit/ loss from the modification is calculated by comparing the gross carrying amount before and after the modification (less the allowance for expected credit losses). The Bank then estimates the amount of expected credit losses for the modified asset, and the expected cash flows from the modified financial asset are included in the calculation of the expected cash deficit from the original asset.

A financial asset is derecognized only when the rights to the cash flows under the relevant contract expire (including the rights to expire as a result of a modification that substantially changes the contractual terms), or when the financial asset and all the principal risks and rewards of ownership of the asset are transferred to another entity. If the Bank does not transfer or retain all the principal risks and rewards of ownership of the asset and continues to control the transferred asset, it reflects its interest in the asset and its associated liability to the extent that it can pay the corresponding amounts. If the Bank retains all the main risks and rewards of ownership of the transferred financial asset, it continues to account for the asset and reflects the cash received in the transfer as a secured loan.

When a financial asset is derecognized in full, the difference between the asset's carrying amount and the consideration received, as well as accounts receivable and comprehensive income/ loss previously recognized in profit or loss and accumulated in equity, is recognized in profit or loss. The

37



exception is investments in equity that are classified as at fair value through other comprehensive income (FVTPL), for which the cumulative gain / loss previously recognized in other comprehensive income is not subsequently reclassified to profit or loss.

If a financial asset is not derecognized in full (for example, when the Bank retains the option to buy back part of the transferred asset), the Bank allocates the previous carrying amount of the financial asset between the part that it continues to recognize in its continuing involvement and the part that it no longer recognizes based on the relative fair values of the specified parts at the date of transfer of the asset. The difference between the carrying amount charged to the part that is written off and the amount of compensation received for the part that is written off, as well as any accumulated related gains or losses recognized in other comprehensive income, is recognized in profit or loss. The resulting gain or loss, which has been attributed to equity, is allocated between the part that continues to be recognized and the part that is derecognized, based on the relative fair values of these parts.

Write-off of assets. Loans are written off if the Bank cannot reasonably expect full or partial recovery of the financial asset. In this case, the Bank concludes that the borrower does not have assets or sources of income that can provide sufficient cash flows to repay the amounts to be written off. A write-off is an event that leads to derecognition. The Bank has the right to resort to compulsory collection of debt on written- off financial assets. Refunds received by the Bank by force lead to an increase in profit.

Presentation of the estimated allowance for expected credit losses in the balance sheet. The estimated allowance for expected credit losses is presented in the balance sheet as follows:

• For financial assets measured at amortised cost: as a deduction from the gross carrying amount of assets; • For loan commitments: as an estimated liability;

Financial liabilities

Financial liabilities are classified either as financial liabilities at fair value through profit or loss (FVTPL) or as other financial liabilities.

Financial liabilities are initially recognized at fair value.

The Bank classifies all financial liabilities as subsequently measured at amortised cost, except when other estimates are applied.

The amortised cost of a financial liability is determined by:

- at least once a month on the last calendar day of the month;- on the date of full or partial refund, including early refund of funds raised.

Derecognition of financial liabilities. The Bank derecognises financial liabilities only when they are settled, cancelled or the claim for them expires. The difference between the carrying amount of a financial liability that is derecognized and the consideration paid or payable is recognized in profit or loss.

An exchange of debt instruments between a Bank and a lender with substantially different terms is accounted for as the settlement of the original financial liability and the recognition of a new financial liability. The Bank accounts for a material change in the terms of an existing financial liability or part of it as the settlement of the original financial liability and the recognition of a new financial liability. The Bank assumes that the terms of the liability differ materially if the discounted present value of the cash flows under the new terms, including Commission payments less Commission received, discounted at the original effective interest rate, differs by at least 10% from the discounted present value of the remaining cash flows under the original financial liability. If the modification is not material, the difference between: (1) the carrying amount of the liability before the modification; and (2) the present value of cash flows after the modification should be recognized in profit or loss as income or expense from the modification in other income and expenses.

Obligations to provide loans at a below-market rate. Loan commitments at a below-market rate are initially measured at fair value and then (if not classified as FVTPL) are measured at the higher of the following:

• the amount of the estimated allowance for expected credit losses determined in accordance with IFRS 9; and

38



• the amount initially recognized less (if necessary) accumulated income recognized in accordance with the Bank's revenue recognition policy.

Loan commitments at a below-market rate that are not classified as FVTPL are presented in the statement of financial position as estimated liabilities, and the results of the revaluation are included in other income. The Bank did not classify any commitments to provide loans at below market rates as at FVTPL.

Significant assumptions:

Transaction costs.For transaction costs for a financial liability, a materiality criterion of more than 5% of the nominal value of the financial liability is established.For the costs of a transaction for the allowance (placement) of funds, a materiality criterion of 10% of the amount of funds provided is established.

Other income from the transaction.For other income from a transaction for the allowance (placement) of funds, the materiality criterion is set at 10% of the amount of funds provided.The subsidy from the distributor for car loans to individuals is always a significant income of the Bank and is subject to inclusion in the EPS for loans issued during the reporting month on the last business day of each month for depreciation using the EPS method during the term of the contract.

Initial recognition.At initial recognition of a financial instrument in the cases provided for in paragraph B4 of IFRS 9, the transaction price and fair value are verified.For funds provided, including loans, and for funds raised, including deposits and deposits, a 25% increase or decrease in the fair value of the transaction price is considered insignificant.To measure the fair value of financial assets and financial liabilities in the form of interbank loans and deposits the credit institution uses the interest rate based on the following sources:- For interbank loans and deposits — the average rate in rubles for interbank loans, which is published on the official website of the Bank of Russia on the date of issuance of the loan (Deposit).- Interest rate (yield to maturity) on bonds and other debt obligations that are traded on the market, issued (attracted) by credit institutions with similar ratings. If ratings do not match, credit risk correction factors are applied.

For attracted subordinated instruments (loans, loans, deposits, other than bonds), the credit institution uses the yield to maturity of bonds issued in the same currency and for a comparable period by an Issuer with a comparable rating. If the Issuer's rating differs from the credit institution's rating (in the absence of any rating), additional credit risk adjustments are applied.In this case, the market range of interest rates is determined within the range of plus or minus 10 % of the received rate.

For loans granted to legal entities and individuals in rubles, the average rate is accepted, which is published on the official website of the Bank of Russia on the nearest date, adjusted for changes in market conditions from the date of publication on the website of the Bank of Russia to the date of loan issuance. In this case, the market range of interest rates is determined within the range of plus or minus 25 % of the average rate.The method of EIR.When calculating amortised cost, the EIR method is not applied if:- the difference in accrued interest income between interest income calculated using the EIR method and interest income calculated using the linear method does not exceed 10 %. In this case, the linear method is used;- financial commitments (deposits), the return period of which is less than one year at initial recognition, including a return date which falls on another fiscal year or, if the difference between amortised cost financial liabilities, as defined by EIR, and the amortized cost of financial liabilities defined by the linear method is not significant (+/- 10%) for financial liabilities, the repayment period of which more than one year;- to financial obligations (deposits) with a term of repayment on demand (term of demand).

Significant change in fair value (revaluation).A change in fair value (revaluation) is considered significant if it exceeds 5% of the previous estimate.

Significant change in the terms of a financial instrument.To determine the materiality of changes to the contract of a financial instrument, a credit institution applies paragraph B3. 3. 6 of IFRS 9.The terms are considered significantly different if the present value of the cash flows under the new terms, including Commission payments less Commission received, discounted at the original

39



effective interest rate, differs by at least 10% from the discounted present value of the remaining cash flows of the original financial instrument.

Cash and cash equivalents

Cash and cash equivalents consist of cash on hand, unrestricted balances on corresponded and term deposits with the Central Bank of the Russian Federation with original maturity of less or equal to 90 days and amounts due from credit institutions with original maturity of less or equal to 90 days and are free from contractual encumbrances.Amounts that are subject to any restrictions on their use are excluded from cash and cash equivalents.

Mandatory cash reserves with the Central Bank of the Russian Federation

Mandatory cash balances with the Central Bank of the Russian Federation represent mandatory reserve Deposit with the CBRF, which are not intended to Finance current operations of the Bank. Consequently, they are excluded from cash and cash equivalents for the purposes of the statement of cash flows.

Assets seized as a result of foreclosure

In certain circumstances, the assets of loans that were declared in default are foreclosed on. Assets recovered as a result of foreclosure are measured at the lower of their carrying amount and fair value less costs to sell.

Fixed assets

Equipment and other property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.

Depreciation is calculated to write off the actual or estimated cost of property, plant and equipment (except for land plots and construction in progress) less the residual value on a straight-line basis over the expected useful life. The expected useful lives, carrying amounts and depreciation method are reviewed at the end of each reporting period.

40



Assets received under Finance leases are amortised over their expected useful lives in the same manner as assets owned by the Bank. However, if there is no reasonable assurance that the lessee will acquire ownership by the end of the lease term, the asset must be fully amortised over the shortest of the two terms: the lease term or the useful life.

Group of fixed assets Useful life, years

Office and computer equipment 4-15Server equipment 5Transport and other equipment 3-5Capital investment ( improvements to leased property) Useful life of the leased asset

An item of property, plant and equipment is written off when it is sold or when no future economic benefits are expected from the continued use of the asset. The gain or loss on the sale or other disposal of items of property, plant and equipment is determined as the difference between the sale price and the carrying amount of these items and is recognized in profit or loss.

Materiality criteria:

On useful lives – more than 1 year; Component cost related to a project cost in general – more than 10%; Costs of capital repairs in relation to a project cost in general – 10% of a project cost; Costs of technical inspection and maintenance of property and equipment, except for

property, in relation to a project cost in general are not established since expenses are not material;

Cost limit – RUB 100 000; Cost of uniform and insignificant items to record at aggregated cost; Qualitative criteria: if an item does not undergo wear and tear and obsolescence, its cost is

not subject to impairment, and the assessment related to receipt of economic benefits is difficult, it is not recognized as an item of property and equipment, but recognized in inventory regardless of the cost.

When the original cost of the acquired item of property and equipment is determined for accounting, the Bank does not include in it the amount of VAT paid by the Bank and not subject to reimbursement in accordance with paragraph 5 Article 170 of the Tax Code of the Russian Federation and the legislation of the Russian Federation on taxes and fees.

If one item has several parts (components) that have substantially different useful lives, each part is to be recorded as an independent inventory item if its value is also material with regard to the total value of an item of property and equipment.

Impairment of assets. Checking for impairment of assets is carried out in accordance with the Bank of Russia Regulation No. 579–P of February 27, 2017 "Regulations on the accounting plan for credit organizations and the procedure for its application" ( hereinafter — Regulation No. 579–P), International financial reporting standards and the Bank of Russia Letter No. 265-T of December 30, 2013 "on Methodological recommendations "on testing by credit organizations of assets subject to impairment testing"".An asset that is subject to an impairment test is considered impaired if its cost, net of accumulated depreciation, exceeds its recoverable amount.If the recoverable amount of an asset to be tested for impairment is less than its cost recorded in the accounting records less accumulated depreciation, an impairment loss is recognized.An impairment loss is the amount by which the value of an asset subject to impairment testing, net of accumulated depreciation, exceeds its recoverable amount.An impairment loss is recognized as an expense during the reporting period if the asset to be tested for impairment is not carried at a revalued amount.The credit institution must assess at the end of each reporting period whether there is any indication that the assets are impaired.According To Regulation No. 448-P:— In accordance with paragraph 2.32 of fixed assets, regardless of the selected models are reviewed for impairment at each financial year end and when events occur that significantly affect their valuation. Impairment losses on items of property, plant and equipment are recognized when they are identified.

41



— At the end of each reporting year, the credit institution determines whether there are indications that the impairment loss on an item of property, plant and equipment recognized in previous reporting periods no longer exists or has decreased (paragraph 2.33).— In accordance with paragraph 4.10, property that is temporarily unused in its main business and is accounted for at cost less accumulated depreciation and accumulated impairment losses is subject to an impairment test at the end of each reporting year.— At the end of each reporting year, the credit institution determines whether there is any indication that the impairment loss on an item recognized in previous reporting periods no longer exists or has decreased.

Intangible asset

Intangible assets purchased separately. End-of-use intangible assets acquired in separate transactions are carried at cost less accumulated depreciation and accumulated impairment losses. Depreciation is calculated on a straight-line basis over the useful life of the intangible assets. The expected useful lives and depreciation method are reviewed at the end of each reporting year, and all changes in estimates are reported on a forward-looking basis. Intangible assets with indefinite useful lives that are acquired in separate transactions are accounted for at cost less accumulated impairment losses.

Useful life. The useful life of intangible assets is determined by the Bank on the date of recognition of the intangible asset (transfer of the intangible asset for use in accordance with the intentions of the management of the credit institution).:- from the term of validity of the credit institution's rights to the result of intellectual activity or means of individualization and the period of control over the intangible asset;- the expected life of the intangible asset, during which the credit institution expects to receive economic benefits.

The useful life of an intangible asset may not exceed the life of a credit institution. Intangible assets with finite useful lives are generally amortised by the Bank over a useful life of 1 to 25 years, determined on the basis of Professional judgment.

Intangible assets created by our own efforts – research and development ("R & d"). Research and development costs are charged to expenses in the period in which they arise.

The cost of self-employed development work (as an independent project or as part of other work) is capitalized as an intangible asset only if the following conditions are met:

technological feasibility of completing the work on creating an intangible asset that is suitable for use or sale;

intent to complete the creation, use or sale of an intangible asset; ability to use or sell an intangible asset; high probability of future economic benefits from an intangible asset; availability of technical, financial and other resources to complete the development, use or sale

of an intangible asset; the ability to reliably estimate the value of an intangible asset arising from research and

development.

Internally generated intangible assets are accounted for in the amount of expenditures incurred after the date when the intangible asset first begins to meet the above criteria. If it is not possible to reflect an intangible asset created in-house, development costs are charged to expenses in the period of occurrence.

Once recognized, internally generated intangible assets are accounted for at cost less accumulated depreciation and accumulated impairment losses, similar to intangible assets acquired in separate transactions.

Derecognition of intangible assets. An intangible asset is written off when it is sold or when no future economic benefits are expected to flow from its use or disposal. A gain or loss on derecognition of an intangible asset, which is the difference between the net disposal proceeds and the carrying amount of the asset, is included in profit or loss at the time of derecognition.

Impairment of intangible assets. Intangible assets, regardless of the accounting model selected, are subject to impairment testing at the end of each reporting year. Impairment losses on intangible assets are recognized at the time they are identified.After an impairment is recognized, depreciation on intangible assets that are ready for use should be calculated by reducing their cost recorded in the accounting records by the amount of the impairment from the date following the recognition date, over the remaining useful life.

42



The Bank determines at the end of each reporting year whether there is any indication that the impairment loss on an intangible asset recognized in previous reporting periods no longer exists or has decreased.If there is evidence that an impairment loss on an intangible asset recognized in previous reporting periods no longer exists or has decreased, it is reversed (in full or in part) to the extent of the cost of the intangible asset (less depreciation) that would have been recorded in the accounting records if there were no evidence of impairment.After a previously recognized impairment loss has been reversed, amortisation of intangible assets that are ready for use should be calculated taking into account an increase in their cost recorded in the accounting records by the amount of the recovered impairment loss from the day following the recovery date, over the remaining useful life.

Indefinite useful life. Intangible assets whose useful life cannot be determined reliably are considered to be intangible assets with an indefinite useful life.For an intangible asset with an indefinite useful life, the credit institution should annually consider whether there are factors that indicate that it is not possible to reliably determine the useful life of the asset.If these factors cease to exist, the credit institution determines the useful life of this intangible asset and the method of its depreciation. The specified useful life of the intangible asset and the method of depreciation begin to apply from 1 January of the year following the year in which the decision was made to establish the useful life of the intangible asset and the method of depreciation.

Taxation

Income tax expense represents the amount of current and deferred tax.

Current income tax. The amount of current tax is determined based on the amount of taxable profit for the year. Profit before tax differs from the profit recorded in the statement of financial results due to items of income or expense that are taxable or deductible for tax purposes in other reporting periods, and does not include items that are not taxable or deductible for tax purposes. Liabilities for current income tax is calculated using tax rates that have been imposed by the legislation in force until the end of the reporting period.

Deferred income tax. Deferred income tax is recognized for temporary differences between the carrying amounts of assets and liabilities recorded in the consolidated financial statements and the corresponding tax accounting data used in calculating taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible temporary differences, provided that it is probable that future taxable carrying profit will be available to use these temporary differences. Tax assets and liabilities are not recognized in the financial statements if temporary differences arise from the initial recognition of assets and liabilities in transactions that do not affect either taxable or accounting profit.

Deferred tax liabilities are recognized for taxable temporary differences, except when the Bank is able to control the timing of the reversal of the temporary difference and it is probable that the difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced if it is no longer probable that there will be sufficient taxable profit to fully or partially utilize these assets. Deferred tax assets and income tax liabilities are calculated using tax rates (as well as tax legislation) that were approved or practically approved by the legislation at the reporting date and are expected to be effective during the period when the tax asset is realized or the liability is settled.

The measurement of deferred tax liabilities and assets reflects the tax consequences of the Bank's intentions (as at the end of the reporting period) to recover or settle the carrying amount of assets and liabilities.

Operating taxes. In the Russian Federation , there are requirements for accrual and payment of various taxes that are applied to the Bank's activities , in addition to income tax . These taxes are recorded in the statement of financial results under the line " tax Refund (expense)".Allowances for liabilities and charges

Allowances for future expenses are recognized when the Bank has a present obligation (legal or constructive) as a result of past events and it is probable that the Bank will have to settle the obligation, and the amount of the obligation can be estimated.The amount of the allowance for future expenses recorded is the best estimate of the amount required to settle the obligations, determined at the end of the reporting period, taking into account the risks and uncertainties inherent in these obligations. If the amount of the allowance for future

43



expenses is calculated based on the estimated cash flows for the repayment of obligations, the allowance for future expenses is determined as the discounted value of such cash flows (if the effect of the cost of money over time is significant).

If it is expected that the payments required to settle the obligations will be partially or fully reimbursed by a third party, the related receivable is recognized as an asset, provided that it is absolutely certain that the reimbursement will be received and it is possible to reliably estimate the amount of this receivable.

Unprofitable contracts

Existing liabilities under unprofitable contracts are recorded in the allowance for future expenses and are measured using the same principles. A contract is considered unprofitable if the Bank has assumed contractual obligations that are subject to unavoidable losses, i.e. the amount of expenses incurred to fulfill the obligations exceeds the economic benefits that are expected to be received under the contract.

Conditional liability

Contingent liabilities are disclosed in the financial statements unless it is unlikely that an outflow of funds will result from their settlement. A contingent asset is disclosed in the financial statements when an inflow of economic benefits is probable.

Collateral

The Bank receives collateral for the obligations of its clients in cases when it considers it necessary. Collateral is usually a type of collateral for the client's assets, which gives the Bank the right to claim such assets in respect of both existing and future obligations of the client.

4.2. The nature and amount of adjustments related to changes in accounting policies and estimates

As a result of applying the new Accounting policy requirements in connection with the entry into force of the Bank of Russia's regulations aimed at implementing the principles of IFRS 9, the Bank switched to the relevant classification categories and changed the valuation of financial assets and liabilities in accordance with the Bank of Russia's Information letter no.IN-18-18/21 dated 23 April 2018 "on certain issues related to the entry into force of the Bank of Russia's accounting regulations from 1 January 2019".

According to the Bank's decision, the transition effect was reflected in accounting by adjusting the corresponding items of the annual statements in correspondence with the financial results of previous years.

44



The table below shows the impact of applying the principles of IFRS 9 on the balance sheet items as at 1 January 2019:

Name articles on

January 1, 2019 before the application

of IFRS (IFRS) 9

Name articles on

January 1, 2019 after application

IFRS (IFRS) 9

Initially reported on January 1,

2019 Reclassification Revaluation

Revised on January 1

Two thousand nineteen

Financial asset

Funds of a credit institution in the Central Bank of the Russian Federation

Funds of a credit institution in the Central Bank of the Russian Federation 766 264 - - 766 264

Funds in credit organization

Funds in credit organization 11 776 - 91 11 867

Net loan debt Net loans receivable

carried at amortised cost 20 077 020 (1 029 465) 390 053 19 437 608

Net investments in securities and other financial assets available for sale

Net investment in financial assets at fair value through other comprehensive income

Deferred tax asset Deferred tax asset 210 904 - (66 638) 144 266 Other financial assets Other financial assets 217 604 (82 504) 3 688 138 788 Total financial assets 21 283 568 (1 111 969) 327 194 20 498 793 Financial liability

Customer accounts Customer accounts measured at amortised cost 18 791 864 173 729 - 18 965 593

Debt obligations issued Debt securities issued Other liabilities Other liabilities 1 532 054 (1 285 698) - 246 356 Allowances for possible losses on credit-related contingent liabilities, other possible losses and transactions with residents of offshore zones

Allowances for possible losses on credit-related contingent liabilities, other possible losses and transactions with residents of offshore zones 20 - 9 29

- Estimated allowances


Deferred tax liability Deferred tax liability Other financial liabilities Other financial

liabilities Total financial liabilities 20 323 938 (1 111 969) 9 19 211 978 Sources of own funds 2 608 518 2 608 518

Revaluation at fair value of available-for-sale securities

Revaluation at fair value of financial assets at fair value through other comprehensive income, reduced by deferred tax liability (increased by deferred tax asset)

- Estimated allowances for expected credit losses

Retained earnings Retained earnings (570 899) - 327 185 (243 714)

Total sources of own funds 2 037 619 - 327 185 2 364 804

Total effect of applying IFRS 9 327 185

45



4.3. Information on the nature and magnitude of material errors on each item of the annual financial statements for each previous period and change in classification

4.3.1. Reclassification

The classification changes were made in the annual reports for 2019 to provide a clearer picture of the Bank's financial results.

Name of the article report on financial results

Originally reflected

The amount reclassification

sAmount after

reclassification Interest income from loans to customers that are not credit institutions 3 641 799 25 873 3 667 672

Other operating income 75 698 (25 873) 49 825

In the annual reports as of January 1, 2019, classification changes were made to bring it into line with the reporting form as of January 1, 2020. The current year's reporting format provides a clearer picture of the Bank's financial position .

Name of the article balance sheetOriginally reflected


sAmount after

reclassification Net loan debt 20 077 020 (1 029 465) 19 047 555Other assets 259 673 (82 504) 177 169Customer accounts (17 791 864) (173 729) (18 965 893)Other liabilities (1 532 054) 1 285 698 (246 356)

Name of the article report on financial results

Originally reflected


sAmount after

reclassification Interest income from loans to customers that are not credit institutions 2 426 225 8 599 2 434 824

Interest expense, total, including: (973 073) (53 599) (1 026 672)on borrowed funds of credit organizations (8 630) (597) (9 227)

on borrowed funds of clients who are not credit organizations (944 443) (53 002) (1 017 445)

Commission income 845 382 (705 520) 139 862Commission expenses (953 263) 798 309 (154 954)Other operating income 67 198 (47 789) 19 409

Name of the article cash flow statementOriginally reflected


sAmount after

reclassification Interest received 2 394 171 8 599 2 402 770 Interest paid (862 620) (53 599) (916 219) Fee and Commission income 831 094 (705 520) 125 574 Commissions paid (953 263) 798 309 (154 954)Other operating income 63 165 (47 789) (47 789)

4.3.2 Correction of errors

In accordance with The Bank's Accounting policy, an error is recognized as material if it, individually or in combination with other errors for the same reporting period, may affect the economic decisions of users made on the basis of reports compiled on the basis of accounting data for this reporting period.

Is considered to be any significant error, correction of which will result in a violation of the mandatory regulations. Materiality by quality criteria is determined on a case-by-case basis based on professional judgment.

In the reporting and previous reporting periods, no significant errors were found in the Bank's annual reports.

4.4. Information about the nature of assumptions and the main sources of estimation uncertainty at the end of the reporting period

46



In the process of applying the accounting policies management must make estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Estimates and underlying assumptions are based on past experience and other factors that are considered appropriate in the circumstances. Actual results may differ from these estimates.

Estimates and related assumptions are regularly reviewed. Changes in estimates are reflected in the period in which the estimate was revised, if the change affects only that period, or in the period to which the change relates, and in future periods, if the change affects both current and future periods.

The following are key assumptions about the future and other key sources of estimation uncertainty at the end of the reporting period that are likely to result in significant adjustments to the carrying amounts of assets and liabilities over the next financial year.

Evaluating the business model. The classification and valuation of financial assets depends on the results of principal and interest payments and the results of testing the business model. The business model used by the Bank is defined at the level that reflects the mechanism for managing financial assets grouped together to achieve a particular business goal. This assessment includes the use of judgment that reflects all relevant evidence, including regarding the process of evaluating and measuring the performance of assets; the Bank monitors financial assets carried at amortised cost or at fair value through other comprehensive income that are derecognized before maturity in order to understand the reason for their disposal and its relevance to the business objectives for which the asset was held. Monitoring is part of the Bank's ongoing assessment of the current relevance of the business model in which the remaining financial assets are held. If the model is not relevant, an analysis is performed for changes in the business model and possible changes in the classification of the relevant assets.

Significant increase in credit risk. The amount of expected credit losses is estimated at the amount of the estimated allowance equal to the credit losses expected within 12 months (for first-stage assets) or over the entire loan term (for second-and third-stage assets). An asset enters the second stage if its credit risk has increased significantly since initial recognition. IFRS 9 does not define a significant increase in credit risk. When assessing the significance of an increase in credit risk for an individual asset, the Bank takes into account both qualitative and quantitative forecast information that is reasonable and can be confirmed.

Determine the number and relative weight of forecast scenarios for each product/market type and determine the forecast information relevant to each scenario. When measuring the level of credit losses, the Bank uses reasonable forward-looking information that is based on assumptions about the future movement of various economic factors and how these factors will affect each other. See notes 4 and 12.2 for more information, including an analysis of the sensitivity of the estimated level of credit losses to changes in the applied forward-looking information.

Probability of default. The probability of default is a key input signal in measuring the level of credit losses. The probability of default is an estimate over a given time horizon that includes historical data, assumptions, and expectations of future conditions. See Explanations 4 and 12.2 for more information, including an analysis of the sensitivity of the estimated level of credit losses to changes in the probability of default as a result of changes in economic factors.

Losses in case of default. Losses in the event of default are an estimate of the losses that will arise in the event of default. It is based on the difference between the cash flows due under the contract and those that the lender would expect to receive, taking into account the cash flows from collateral. See Explanations 4 and 12.2 for more information, including an analysis of the sensitivity of the level of credit losses to changes in the default loss rate as a result of changes in economic factors.

Fair value measurement. In assessing the fair value of a financial asset or liability, the Bank uses observable market data to the extent that they are available. If such level 1 inputs are not available, the Bank uses valuation models to determine the fair value of its financial instruments.

Useful lives of fixed assets and intangible assets. The expected useful lives of property, plant and equipment and intangible assets are reviewed at the end of each reporting year.

Deferred tax assets and liabilities . In 2019, the Bank recognized the result for deferred tax assets and liabilities in accordance with the Bank of Russia Regulation No. 409-P of 25 November 2013 "Regulations on the accounting procedure for deferred tax liabilities and deferred tax assets".

47



The carrying amount of deferred tax assets is reviewed at the end of each reporting period (quarter) based on the statement of calculation and Professional judgment and reduced if it is no longer probable that future taxable profit will be sufficient to fully or partially utilize these assets.

As of 01.01.2020, according to the statement, there was a set-off of existing IT and IT, which arose as a result of taxable and deductible temporary differences. As a result of competition, taking into account not recognised a deferred tax asset is reflected in accounting for deferred tax asset amounting to 108 745 903 of the ruble.

Taking into account the allowances of the Accounting policy and in accordance with the approved Business plan for the period 2017-2021, the Bank believes that it is probable that taxable profit will be generated in the future. The above conclusion is confirmed by the Business Plan data and the forecast calculation of taxable profit made on its basis. By the end of 2019, the Bank received taxable income in the amount of 589 105 287 rubles.

4.5. Information on changes in the accounting policy of the credit organization for the next financial year

In connection with the entry into force on 1 January 2020, a new order of reflection in the accounts lease agreements-credit institutions by the Bank of Russia in accordance with IAS 16:

— The allowances of Bank of Russia from November 12, 2018 No. 659–P "On the procedure for reflection in the accounts lease agreements-credit institutions";

— Instructions of Bank of Russia from November 12, 2018 No. 4965-U "On amendments to Bank of Russia Regulation dated 27 February 2017 № 579–P "On the Plan of accounts for credit institutions and the procedure for its implementation"";

— The instructions of the Bank of Russia of July 9, 2018 No. 4858-U "On amendments to Bank of Russia Regulation dated 22 December 2014 No. 446–P "About the order of determination of incomes, expenses and other comprehensive income of credit organizations";

— Instructions of Bank of Russia from may 22, 2019 No. 5147-U "On amendments to Bank of Russia Regulation dated 22 December 2014 No. 448–P "On the procedure of accounting of fixed assets, intangible assets, real estate temporarily unused in core activities, non-current assets held for sale, inventories, means of labor and objects of labor, received on contracts of indemnity, collateral, the purpose of which is not defined in the credit organizations",

and other normative documents of the Bank of Russia, by Order from 31.12.2019, No. 616-PR was made corresponding changes in Accounting policies for the year 2020.

The expected effect of the transition to IFRS 16 is:

- loss - 381 thousand;

- lease liabilities - 132 004 thousand;

- asset in the form of use rights – 132 738 thousand;

- depreciation of assets in the form of use rights – 3 979 thousand.

48



5. EXPLANATORY NOTES TO BALANCE SHEET ITEMS

5.1. Cash, balances and minimum reserve deposits with the Bank of Russia, and balances with credit institutions

Cash and balances with the Central Bank of the Russian Federation are as follows:

1 Janyary 2020

1 Janyary 2019

Cash 271 372 566 207Balances of credit institutions with the CBR 729 546 766 264Funds in credit institutions without risk of loss - 1 363Net of mandatory reserves in the CBR (164 225) (131 625)Total cash and cash equivavents 836 693 1 202 209Funds in credit institutions with risk of loss 15 990 10 518Less allowance for possible losses - (105)Less estimated allowances for expected credit losses (16) -Total cash and balances with the Central Bank of the Russian

Federation 852 667 1 212 622

As at 1 January 2020 and 2019 all the funds available to the Bank are available for use in commercial activities, there are no restrictions on their use and the use of the loan funds provided.

5.2. Financial assets at fair value through profit or loss

As at 1 January 2020 and 1 January 2019, the Bank had no financial assets at fair value through profit or loss.

5.3. Net loans outstanding, measured at amortised cost

Loans to customers comprise:

1 Janyary 2020

1 Janyary 2019

Loans to legal entities other than credit institutions 1 131 700 308 141 Total loans to legal entities 1 131 700 308 141 Loans to individuals 26 412 101 19 389 051 Total loans to customers 27 543 801 19 697 192

Less allowance for impairment, including: - (649 637) loans to legal entities other than credit institutions - (59 495) loans to individuals - (590 142) Excluding the allowance for expected credit losses,

including: (648 016) -Loans to legal entities other than credit institutions (66 220) -Loans to individuals (581 796) - Total net loans receivable, including: 26 895 785 19 047 555 net receivables on loans to legal entities other than credit institutions 1 065 480 248 646 net receivables on loans to individuals 25 830 305 18 798 909

49



Analysis of loans to legal entities not being credit organizations by economic activities are presented in the table below:

1 Janyary 2020 1 Janyary 2019Carrying

amount of loans Share, %

Carrying amount of

loans Share, % Economic sectors analysis:Trade 435 325 38.5 305 666 99.2Finance lease activities 696 375 61.5 - -Real estate transactions, rentals and services - - 2 475 0.8Total loans by economic sector 1 131 700 308 141 Less allowance for possible losses - - (59 495) -Less estimated allowances for expected credit losses (66 220) - - - Total loans to legal entities other than

credit institutions 1 065 480 100 248 646 100

The table below shows the analysis of loans granted to legal entities that are not credit institutions by credit purpose:

1 Janyary 2020 1 Janyary 2019Carrying

amount of loans Share, %

Carrying amount of

loans Share, %Analysis for the purpose of lending:Acquisition of fixed assets 600 000 53.0 308 141 100Financing of current activities (replenishment of working capital) 419 068 37.0 - - The financing of the leasing operations 96 375 8.5 - -Reconstruction of non- residential buildings 16 257 1.5 - -Total loans for lending purposes 1 131 700 308 141Less allowance for possible losses - - (59 495) -Less estimated allowances for expected credit losses (66 220) - - -Total loans to legal entities other than credit institutions 1 065 480 100 248 646 100

Loans to individuals are represented by the following credit products:

1 Janyary 2020 Total amountAllowance for

possible losses Net amountLoans to individuals (car loans) 26 412 101 (581 796) 25 830 305

1 Janyary 2019 Total amountAllowance for

possible losses Net amountLoans to individuals (car loans) 19 389 051 (590 142) 18 798 909

50



Information on the movement in allowance for possible losses and valuation allowance on loans for 2019 and 2018 is represented as follows:

Loans to credit institutions

Loans to legal entities –

non-credit institutions

Loans to individuals Total

As at 1 January 2019, prior to the application of IFRS 9 - 59 495 590 142 649 637

Impact of applying IFRS 9 (see note 4.2) - 2 441

(270 641)

(268 200)

As of 1 January 2019, after applying IFRS 9 - 61 936 319 501 381 437

Allowance for expected credit

losses - 4 284 264 157 268 441Loans sold or repaid by taking

security during the reporting period - - (1 862) (1 862)

Loans written off in the reporting period - - - -

As at 1 January 2020 - 66 220 581 796 648 016

Loans to credit institutions




As at 1 January 2018 - 59 003 261 941 320 944 Allowance for impairment - 492 328 201 328 693Loans written off in

the reporting period - - - -

As at 1 January 2019 - 59 495 590 142 649 637

51



The tables below include an analysis of net loan debt by types of collateral:





Vehicles 263 289 25 812 517 26 075 806Realty 84 945 - 84 945Without collateral and other means of reducing credit risk 717 246 17 788 735 034 Total net loans receivable, measured

at amortised cost 1 065 480 25 830 305 26 895 785





Vehicles 211 501 18 790 478 19 001 979Without collateral and other means of reducing credit risk 37 145 8 431 45 576

Total net loans receivable 248 646 18 798 909 19 047 555

Information about loans in terms of time, remaining until full maturity, is represented in Note 12.5 “Liquidity Risk” to the annual financial statements.

As at 1 January 2020 and 2019, all loans (100% of loans to customers) were granted to companies operating in the Russian Federation, which represents a significant geographical concentration in one region. Information on loan receivables by geographic zones is represented in Note 12.4 “Country risk” of the financial statements.

5.4. Net investment in financial assets at fair value through other comprehensive income

As at 1 January 2020 and 1 January 2019, the Bank has no investments in financial assets measured at fair value through other comprehensive income.

5.5. Net investments in securities and other financial assets measured at amortised cost (other than loans)

As at 1 January 2020 and 1 January 2019, the Bank has no investments in securities and other financial assets measured at amortised cost (other than loans).

5.6. Investments in subsidiaries and associates

As at 1 January 2020 and 2019, the Bank had no investments in subsidiaries, affiliated companies and other participation.

52



5.7. Property and equipment, intangible assets and inventories

Property and equipment, intangible assets and inventories are in the table below.

1 January 2020

1 January 2019

Property and equipment 211 473 129 073Intangible assets 361 903 319 224Property and equipment and intangible assets 573 376 448 297 Depreciation charge on property and equipment (95 040) (74 149)Amortization charges on intangible assets (78 616) (56 913)Total depreciation and amortization charges (173 656) (131 062) Total net book value of property, plant and equipment and

intangible assets 399 720 317 235 Capital investments into property and equipment - 89 142Capital investments into intangible assets 1 353 4 095Inventories 4 668 1 447Less allowance for possible losses - - Total net book value of property and equipment, intangible

assets and inventories 405 741 411 919

53



5.7.1. Property, plant and equipment and inventories

Reconciliation of book value for each class of PPE is presented in table below:Equipment and

furniture, hardware, alarm

system, leasehold improvements Vehicles Inventories

Capital investments Total

At initial/indexed/revalued cost

1 January 2018 64 829 25 290 2 779 12 906 105 804

Additions 15 150 35 431 13 272 89 142 152 995Disposal (362) (11 265) (14 604) (12 906) (39 137)

As at 1 January 2019 79 617 49 456 1 447 89 142 219 662 Additions - - 18 766 18 475 37 241Commissioning 87 376 3 788 - (107 617) (16 453)Disposal (1 360) (7 404) (15 545) - (24 309) As at 1 January 2020 165 633 45 840 4 668 - 216 141 Accumulated depreciation and

impairment As at 1 January 2018 57 515 12 180 - - 69 695 Depreciation expense 4 723 9 168 - - 13 891Eliminated on disposals (362) (9 075) (9 437) As at 1 January 2019 61 876 12 273 - - 74 149 Depreciation expense 16 297 9 692 - - 25 989 Eliminated on disposals (1 360) (3 738) - - (5 098) As at 1 January 2020 76 813 18 227 - - 95 040 Net book value As at 1 January 2020 88 820 27 613 4 668 - 121 101

As at 1 January 2019 17 741 37 183 1 447 89 142 145 513

As at 1 January 2020 and 2019, PPE included fully depreciated equipment with initial cost of RUB 57 239 thousand and RUB 52 076 thousand, respectively.

As at 1 January 2019 and 2020, the Bank did not have any contractual obligations to acquire PPE.

5.7.2. Leases

In the reporting period, only operating sublease contracts were concluded and acted upon, most of which are non-residential premises for the placement of cash offices outside the cash hub. In terms of the cost of lease payments, the sublease contract for non-residential (office) premises to locate the Bank’s Head Office is material. The premises occupied by the Bank are located at: 117485, Moscow, 30/1 Obrucheva St., Bld. 2.

The sublease contract period is 11 months with automatic prolongation for the same period in the absence of a written notice to the parties to terminate the contract no later than 10 calendar days before the end of the sublease term.

The cost of a lease payment is determined by the contract and is subject to revision by entering into additional agreements to the contract, at the initiative of the lessor.

The contract provides for the use of the premises by the tenant only within the permitted use specified in the contract, all improvements and changes must be agreed with the owner of the building occupied.

Information on lease payment costs is provided in Note 6.4.5.7.3. Intangible assets

54



A reconciliation of the carrying amount for each class of intangible assets at the current and previous reporting dates is presented in the table below:

Software created by the Bank

Purchased software

Purchased licenses

Investing in the creation Total

At carrying amount 1 January 2018 400 1 255 284 842 - 286 497 Additions 218 - 32 509 4 095 36 822Disposals - - -1 January 2019 618 1 255 317 351 4 095 323 319 Additions - - - 37 920 37 920Commissioning - 4 843 38 729 (40 662) 2 910

Disposal - - (893) (893)

1 January 2020 618 6 098 355 187 1 353 363 256 Accumulated

amortization

1 January 2018 27 510 37 696 - 38 233

Depreciation expense 94 - 18 586 - 18 680Eliminated on disposals - - - - -

1 January 2019 121 510 56 282 - 56 913

Depreciation expense 124 463 21 132 - 21 719Eliminated on disposals - - (16) - (16)

1 January 2020 245 973 77 398 - 78 616 Net book valueAs at 1 January 2020 373 5 125 277 789 1 353 284 640

As at 1 January 2019 497 745 261 069 4 095 266 406

There were no assets classified during 2019 and 2018 as intangible assets with indefinite useful life.

55



5.8. Other assets

Other assets are as follows:1 January

20201 January

2019 Other financial assets:Interest receivable, commissions, penalties 328 366 226 922Short-term receivables on other transactions 5 665 5 674

334 031 229 215Estimated allowances for expected credit losses (112 520) -Allowance for possible losses - (94 115) Total other financial assets 221 511 135 100 Other non-financial assets:Advances paid 40 661 35 697Taxes other than income tax 66 -Prepaid expenses - 9 615

40 727 45 312 Estimated allowances for expected credit losses (268)Allowance for possible losses (3 243) Total other non-financial assets 40 459 42 069

Total other assets 261 970 177 169

There are no long-term receivables, included in other assets, in relation to which other transactions, redemption or payment are expected to be made in a period exceeding 12 months from the reporting date.

Information on the change of the allowance for possible losses on other assets for 2019 and 2018 is presented in Note 6.6. of the financial statements.

Information on other assets by currency and maturity is represented in Notes 12.6 “Currency risk” and 12.5. “Liquidity risk”.

5.9. Due to the Central Bank of the Russian Federation

As at 1 January 2020 and 2019 the Bank had no amounts due to the Central Bank of the Russian Federation

5.10. Due to credit institutions

As at 1 January 2020 and 2019, the Bank had no amounts due to credit institutions.

5.11. Due to customers, other than credit institutions

Amounts due to customers, other than credit institutions, are as follows:

1 January 2020

1 January 2019

Term deposits 22 895 000 17 982 000Current and settlement accounts 765 682 809 864Obligations for the payment of interest 237 779 173 729

Total due to customers, other than credit institutions 23 898 461 18 965 593

Term deposits as of January 1, 2020 and January 1, 2019 include an indefinite subordinated loan in the amount of RUB 500,000 thousand raised from a shareholder, LLC " MCFR ". The following amounts are due to customers who are not credit institutions, by type of economic activity:

1 January 2020

1 January 2019

56



Financial sector 23 158 751 18 185 905Individuals 548 856 357 008Trade 188 788 405 841Other 2 066 16 839 Total due to customers, other than credit institutions 23 898 461 18 965 593

Amounts due to customers who are not credit institutions include amounts that individually exceed 10% of the Bank's equity: - attracted from 2 (20,775,000 thousand rubles, 1,200,000 thousand rubles-29.59%) as of January 1, 2020; - raised from 4 clients (102 15 000 thousand rubles – 507.04%, 1 210 170 thousand rbl. – 40.63%, 1 003 200 thousand rbl. – 40.29%, 308 of 348 thousand rubles 10.35%) on January 1, 2019.

5.12. Government aid and subsidies

During the reporting period, the Bank was a member of the Government program to support lending to individuals for the purchase of cars. At the same time, the income from state subsidies (indicated as part of other income) amounted to RUB 25 873 thousand and RUB 47 789 thousand for 2019 and 2018 respectively.

5.13. Financial liabilities at FVTPL

As at 1 January 2020 and 2019, the Bank had no financial liabilities at fair value through profit or loss.

5.14. Debt issued at fair value through profit or loss

As at 1 January 2020 and 2019 the Bank did not have any debt securities issued.

5.15. Other liabilities

Other liabilities consist of the following:

1 January 2020

1 January 2019

Other financial liabilitiesCash in settlements 159 589 92 777Accounts payable to employees, including 92 060 77 184liabilities on payment of long-term benefits 29 420 19 726Other, including 10 569 29 164allowances – estimated non-credit liabilities - 29 262 218 199 125Other non-financial liabilities:Deferred income 54 990 47 231 Total other liabilities 317 208 246 356

The increase in funds in settlements includes the Bank's obligations to pay Commission fees to dealers in the framework of providing services for attracting clients under Agency agreements.

Information on other liabilities by currency and maturity is provided in the notes Currency risk and liquidity Risk of this explanatory information.

5.16. Estimated liabilities, contingent liabilities and contingent assets

Allowances-non-credit estimated liabilities arise for the Bank as a result of past financial and economic activities and are characterized by uncertainty as to the amount and timing of performance.

57



As of January 1, 2020 and 2019, contingent financial liabilities were presented as follows:

1 January 2020

1 January 2019

Contingent liabilities and commitments to provide loansDeferred loan commitments and unused credit lines 334 301 61 326 Total contingent liabilities and commitments to provide

loans 334 301 61 326

Estimated allowances for expected credit losses (1 710)Amount of the allowance for possible losses (20)

From time to time, clients and counterparties file claims against the Bank in the form of lawsuits. Allowances – estimated liabilities of a non-credit nature include the amounts payable for disputes, disagreements and court proceedings that are not settled at the reporting date, decisions on which can be made only in subsequent reporting periods.

As at 1 January 2019 allowances for estimated liabilities include allowances for possible payments for lawsuits of RUB 29 thousand.

Information on changes in allowances for estimated liabilities under lawsuits for 2019 and 2018 is presented below.

1 January 2019

Allowance recovery

Additional allowancein

g Write offs1 January

2020 Allowance for legal claims 29 (29) - - -Total allowances –

estimated non-credit related liabilities 29 (29) - - -

1 January 2018

Allowance recovery

Additional allowancein

g Write offs1 January

2019 Allowance for legal claims 156 (4) 55 (178) 29Total allowances –

estimated non-credit related liabilities 156 (4) 55 (178) 29

58



5.17. Share capital

As at 1 January 2020 and 2019, authorized share capital consisted of 1 030 450 and 1 395 000 ordinary shares with par value of RUB 1 000 per share.

The share capital consists of the following number of shares:

Authorized share capital,

items

Authorized capital

authorized for issue but not issued, items

Own shares purchased

from shareholders,

items

Share capital issued4,items

Ordinary shares (par value RUB 1000)

1 January 2018 1 395 000 - - 1 395 000

1 January 2019 1 395 000 - - 1 395 000 Share issue (by category, type): - - - -Purchase of own shares 635 450 - - 635 450Sale of own shares - - - - 1 January 2020 2 030 450 - - 2 030 450

No dividends were paid to the Bank's shareholders during 2019 and 2018.

Based on the decision of the shareholder on the distribution of net profit for 2018, the Bank repaid losses of previous years in the amount of 124,650 thousand rubles.

6. ACCOMPANYING INFORMATION TO THE STATEMENT OF FINANCIAL RESULTS

6.1. Interest Income and Expense

Interest income by type of asset is presented as follows:

2019 2018 Loans to individuals 3 548 183 2 396 073 Loans to legal entities 87 002 21 195 Loans to banks 17 397 10 371 Total interest income calculated using the effective interest

method 3 652 582 2 427 639 Fines and penalties 29 053 16 873 Other interest income 3 434 683 Total interest income 3 685 069 2 445 195

Interest expense by type of asset is presented as follows:2019 2018

Deposits and other borrowed funds from legal entities, including: 1 500 778 998 531

non-resident legal entities 1 409 275 873 259 Subordinated debt 35 000 18 914Loans from credit institutions 570 9 227 Total interest expense calculated using the effective

interest method 1 536 348 1 026 672 Other interest expenses - - Total interest expense 1 536 348 1 026 672

6.2. Commission income and expense

4 Number of shares

59



2019 2018 Remuneration for making money transfers 177 367 134 032Remuneration for settlement and cash services, from making money transfers 4 749 4 422Remuneration for opening and maintaining Bank accounts 1 069 893Other expenses 686 515 Commission income total 183 871 139 862 For services to attract potential customers and information and

analytical services 133 114 107 116Expenses for money transfer services 50 958 37 269For cash and settlement services and maintaining Bank accounts

6 057 5 716For conducting operations with currency values - 116Other 8 307 4 737 Commission expenses, total 198 436 154 954 Net Commission income / (expense) (14 565) (15 092)

The specifics of the Bank's business consists in the main types of activities reflected in interest income and expenses, Commission income and expenses are related to the main type of activity.

6.3. Other operating income

2019 2018 Government subsidy income 29 966 -Other income (including income from the allowance of rights to

software) 11 554 9 349Income from consulting activities 2 930 1 730Income from adjustment of remuneration obligations 4 195 969Income from sale of loans and property 1 180 4 488Income from previous years for households.operations (cor.rents) - 2 873 Total other operating income 49 825 19 409

6.4. Operating expenses

2019 2018 Staff costs 496 424 410 767

Administrative costs, incl.: 425 064 365 669Software support, update and configuration 85 427 73 221Other administrative expenses 74 122 61 794Rent 56 943 58 105Depreciation/amortization charges 47 708 32 570Recruitment costs 44 632 42 797Payment for the right to use software 38 443 28 728Telecommunication and information systems services 32 329 25 786Consulting, notary and legal services 21 367 28 345Maintenance of the property 15 153 8 823Audit costs 8 940 5 500Other expenses 50 822 12 598 Total operating expense 972 310 789 034

Operating expenses under the "other" line include expenses on car loans granted to individuals in the form of an initial payment in the amount of 29,966 thousand rubles, which is subsequently reimbursed by the Ministry of industry and trade of the Russian Federation as part of the State program to support lending to individuals for the purchase of cars for 2019 (see note 6.3 " Income from state subsidies").

6.5. Net gain/(loss) on transactions with financial assets and liabilities at fair value through profit or loss

There were no transactions with financial assets and liabilities at fair value through profit or loss in 2019 and 2018.

60



6.6. Information about losses and amounts of recovery of impairment for each type of asset

Information on changes in the estimated allowances for expected credit losses and allowances for possible losses for 2019 is provided below. Changes in allowances for loan and related debt also include changes in the allowance for funds placed on the Bank's correspondent accounts and accrued interest income.

Change in the estimated

allowance for loan and related debt

including: change in the allowance

for possible losses

Change in the estimated reserve

for securities valued under the

SSCSD

including: change in the allowance

for possible lossesBalance at 1 January 2019 before the application of

IFRS (IFRS) 9Balance at 1 January 2019 before the application of

IFRS (IFRS) 9 650 610 650 610 - Including allowances for possible losses on: - loan debt 641 849 641 849 -- funds placed on correspondent accounts 105 105 -- accrued interest income 7 788 7 788 -- penalties and fines

868 868-

Impact of the transition to IFRS 9 (268 291) 8 073 Balance at 1 January 2019 after the application of IFRS

(IFRS) 9 382 319 658 683 Changes in reserves, including: 270 409 506 611 -recovery of reserves (2 652 722) (1 743 146) -creation of reserves 2 923 131 2 249 757 - Write- off from the reserve - - - Write- off of allowance for realized loans (1 900) (3 713) - Adjustment of interest income on impaired loans 17 642 - - Balance at 1 January 2020 650 828 1 161 581 -Including allowances for: - loan debt 624 122 1 120 667 -- funds placed on correspondent accounts 16 107 -- accrued interest income 23 894 38 011 -- penalties and fines 2 796 2 796

61



Information on changes in allowances for impairment for 2018 is provided below:

Loan debt

Correspon-ding

accountsPenalties,

% AllowancesOther Assets

Credit related commit-ments Total

At 1 January 2018 316 595 107 4 693 156 93 928 - 415 479 Allowances/(recovery of allowances) 325 254 (2) 3 963 51 2 579 20 331 865Write-off of assets - - - (178) (17) - (195) At 1 January 2019 641 849 105 8 656 29 96 490 20 747 149

6.7. Foreign exchange gains and losses

Net income and expenses from foreign exchange operations comprise:

2019 2018 Income from foreign exchange operations 2 893 3 764Expenses from foreign exchange operations (143) (933)Net income/(expenses) from foreign exchange operations 2 750 2 831 Income from revaluation of foreign currency 6 684 23 376Expenses from foreign exchange revaluation (8 155) (21 386)Net income/(expenses) from foreign currency revaluation (1 471) 1 990 Total net profit/(loss) on operations with foreign currency 1 279 4 821

6.8. Tax benefit (expense)

The major components of tax expenses are presented below:

2019 2018 Income tax (decrease of income tax on deferred tax) 153 341 51 977Other taxes 198 770 130 135 Total tax benefit 352 111 182 112

6.8.1. Income Taxes

Bank calculates income tax for the current period based on tax accounting data prepared in compliance with tax law of the Russian Federation.

The tax rate used in the analysis of the relation between tax expense and accounting profit, disclosed below, is 20% payable by corporate entities in the Russian Federation on taxable profits under tax law in that jurisdiction.

62



The tax effects of temporary differences as at 1 January 2019 and 2018 are as follows:1 January

20201 January

2019Deferred tax assets/liabilities related to:Amounts due from credit institutions - -Loan debt 206 887 1 719Allowances for possible losses on credit related commitments and other possible losses and loans 30 895 21 014Estimated allowances for expected credit losses on credit- related contingent liabilities, other possible losses and transactions with residents of offshore zones (5 342) -Other assets 55 364 52 398Non- current assets held for sale - -Exchange rate differences on foreign activities - -Estimated allowances for expected credit losses on amounts due from credit institutions (18) -Estimated allowances for expected credit losses on loans (104 409) -Property, plant and equipment, intangible assets and inventories (57 692) (53 138)Other financial liabilities - 205 849Tax losses carried forward - -Net deferred tax assets/( liabilities) 125 685 227 842Unrecognized deferred tax asset (16 939) (16 939)Net deferred tax claims /( liabilities ) 108 746 210 904

The analysis of the effective income tax rate for 2019 and 2018 is presented as follows:

2019 2018

Profit/(loss) before income tax 724 303 176 627

Tax at the statutory tax rate (20%) (144 861) (35 325)Change in unrecognized deferred tax asset - -Effect of tax rate different from the rate of 20% - -Tax effect of permanent differences (8 480) (16 652)

Income tax expenses (153 341) (51 977)

Current income tax expense /(refund) 117 821 153 333Deferred income tax expense / (refund): 35 520 (101 356)Deferred income tax expense recognized 35 520 -Deferred taxes reclassified from equityin profit or loss - -

Income tax expense/(refund) 153 341 51 977

63



Deferred tax assets/( liabilities) 2019 2018 As at 1 January – deferred tax assets (before applying IFRS 9) 210 904 109 548 As at 1 January – deferred tax assets (subject to the application of IFRS 9) 144 266 - As of January 1 – deferred tax liabilities - - Change in deferred income tax recorded in other comprehensive income 5 - -Change in deferred income tax recorded in profit or loss, including: 35 520 101 356

- Income tax recognized directly in equity: - - As of January 1 – deferred tax assets 108 746 210 904 As of January 1 – deferred tax liabilities - -

6.9. Information about employee benefits

2019 2018 Salary and bonuses 404 970 335 987Contributions to state extra -budgetary funds 91 508 74 780

Total employee benefits 496 478 410 767

Information on the total amount of payments (remuneration) to members of the Executive bodies and other employees of the Bank performing risk-taking functions , their share in the total amount of remuneration, as well as on the remuneration system is provided in the Explanation "information on the remuneration system" to the annual reports.

6.10. Basic and diluted earnings per share information

The Bank does not calculate diluted earnings per share due to the absence of free float of the Bank's shares.

6.11. Information about research and development costs

Research and development expenses for 2019 amounted to 14,726 thousand rubles, and for 2018 - 13,661 thousand rubles.

6.12. Information on financial results from discontinued operations and disposal of long -term assets

In the reporting and previous periods , fixed assets were sold. Profit from disposal of assets is disclosed in the Statement of financial results.

7. DISCONTINUED OPERATION

There were no discontinued operations in the reporting and previous reporting periods.

8. TRANSFERRED FINANCIAL ASSETS

The Bank did not have any transferred assets in the reporting and preceding year.

5 Note to the user : this consolidation is only possible if the tax effect for each line is presented elsewhere in the notes or in the statement of comprehensive income and profit and loss itself.

64



9. ACCOMPANYING INFORMATION TO THE ARTICLES OF THE STATEMENT ON CHANGES IN EQUITY

The table below presents the results of the reconciliation of the book value of equity instruments at the beginning and end of the reporting period:

ItemShare capital

Share premium

Reserve fund

Grant funding

Retained earnings

(accumulated

deficit)Total capital

sources Data at 1 January 2018 1 395 000 1 097 750 115 768 - (695 549) 1 912 969profit (loss) - - - - 124 650 124 650 Data at 1 January 2019 1 395 000 1 097 750 115 768 - (570 899) 2 037 619

ItemShare capital

Share premium

Reserve fund

Grant funding

Retained earnings

(accumulated

deficit)Total capital

sources Data at 1 January 2019 1 395 000 1 097 750 115 768 - (570 899) 2 037 619

Impact of changes in accounting policies - - - - 327 185 327 185Data at 1 January 2019 (corrected) 1 395 000 1 097 750 115 768 - (243 714) 2 364 804profit (loss) - - - - 570 962 570 962 Issue of shares 635 450 403 511 - - - 1 038 961The contributions of

shareholders - - -500 000

- 500 000 Data at 1 January 2020 2 030 450 1 501 261 115 768 500 000 327 248 4 474 727

10. ACCOMPANYING INFORMATION TO THE STATEMENT OF CASH FLOW

Cash and cash equivalents include cash in operating cash offices and on correspondent accounts of the Bank.

Cash flows from operating activities is presented using the indirect method, whereby profit or loss is adjusted on the effects of non-monetary transactions and income and expenses notelines related to cash inflow or outflows from financing activities.

11. MANAGE OF THE CAPITAL

In accordance with the instructions of the Central Bank of the Russian Federation from 27.11.2018 No. 4983-In "On the forms, procedure and terms for disclosure by credit institutions information about their activities" on the website of JSC MC Bank Rus https://www.mcbankrus.ru/about/rgi.php the Bank has information about the risks taken, the procedures for their assessment, risk management and capital in accordance with the instructions of the Central Bank of the Russian Federation from 07.08.2017 No. 4482-U "On the form and procedure for disclosure of a credit institution (parent credit institution of a banking group), information about accepted risks, the procedures for their assessment, risk management and capital".

The Bank manages its capital to ensure that the Bank continues operating in the foreseeable future and simultaneously maximizes profit for shareholders by optimizing the ratio of debt to equity. The Bank actively manages its capital in order to cover the risks associated with the Bank's activities. The Bank's capital adequacy is controlled using the standard values set by the Central Bank of the Russian Federation, signal values approaching the standard values.

The capital structure is reviewed by the Bank's management Board at least once a year. During this review, the Board, in particular, analyzes the cost of capital and the risks associated with each class of capital. Based on the recommendations of the Management Board, the Bank may adjust its

65



capital structure by paying dividends, issuing additional shares, raising additional borrowed funds, or repaying existing loans. The main objective of capital management is to monitor compliance with external requirements for the Bank's capital in order to ensure the Bank's continued operations in the foreseeable future and simultaneously maximize profits for shareholders by optimizing the ratio of debt to equity.

No dividends were paid to the Bank's shareholders during 2019 and 2018.

11.1. Information about own funds (capital)

When calculating mandatory ratios and determining the amount of its own funds (capital), the Bank takes into account the allowances for possible losses on financial assets formed in accordance with The Bank of Russia Regulation N 590-P, the Bank of Russia Regulation N 611-P and the Bank of Russia's Instruction N 2732-u.

The structure of the Bank's own funds (capital) in accordance with the requirements of the Bank of Russia Regulation No. 646-P of July 4, 2018 "on the methodology for determining the amount of equity (capital) of credit institutions ("Basel III")" (hereinafter – "Regulation No. 646-P") is presented below.

2019 2018 Fixed capital 3 093 562 2 010 789in particular, the core capital 2 593 562 1 510 789 Additional capital 961 956 967 676 Own funds (capital) 4 055 518 2 978 465

The Bank's own funds (equity) as at 1 January 2020 and 1 January 2019 include the following instruments:

Name of the capital instrument 2019 2018 2019 2018Fixed capital, including: 3 093 562 2 010 789 Basic capital, including: 2 593 562 1 510 789Authorized capital 2 030 450 1 395 000Share premium 1 501 261 1 097 750Reserve fund 115 768 115 768 Current year profit confirmed by the auditor - -Profit of previous years, confirmed by the auditor (570 899) (695 549)Intangible asset (284 640) (266 406)Deferred tax asset - (54 386)Investments in sources of own funds 198 378 (81 388) Additional capital 500 000 500 000

Subordinated loans (bond loans) 500 000 500 000 Additional capital, including: 961 956 967 676 Current year profit (not confirmed by the auditor), 980 467 1 227 004including gratuitous financing 500 000 -Attachments to your own tools. (18 511) (259 328) Own funds (capital) 4 055 518 2 978 465

66



The additional capital as of January 1, 2020 and January 1, 2019 includes a subordinated loan that meets the requirements of Regulation No. 646-P.:

Credit currency

Interest rate

Maturity date

1 January2020

1 January2019

LLC “MCFR” RUB 7% unlimited 500 000 500 000 Total subordinated loans 500 000 500 000

Investments in sources of own funds

Investments in the Bank's capital sources (indirect investments of the Bank in the sources of its own funds) – the Bank's income generated from payments returned by insurance companies to the Bank as Agency remuneration in accordance with agreements concluded by the credit institution with insurance companies in the framework of the Bank's borrower insurance programs, if the sources of the insurance premium transferred by The Bank's borrowers to insurance companies are funds provided to the borrower by the Bank.

Investments in sources of own funds as of January 1, 2019 amounted to 340,716 thousand rubles.

As of January 1, 2020, investments in sources of own funds decreased by 123,827 thousand rubles and amounted to 216,889 thousand rubles.

11.2. Information about capital requirements and capital adequacy level

The Bank's assets , weighted by the level of risk in accordance with the requirements of the Bank of Russia's Instruction No. 180- I dated June 28, 2017 "on mandatory Bank standards" (hereinafter referred to as "instruction No. 180-I"), are presented in the table below:

1 January2020

1 January2019

Risk-weighted assets for calculating the basic capital adequacy

ratio (N1.1) 30 393 530 22 119 276 Risk-weighted assets for calculating the capital adequacy ratio

(N1.2) 30 393 530 22 119 276 Risk-weighted assets for calculating the equity (capital) adequacy

ratio (N1.0) 30 375 019 21 859 948

Value of assets weighted by level of risk, including credit risk, market risk and operational risk. The table below provides information on the main components of the Bank's risk weighted assets as of 1 January 2020:

Value for standard N1.0



Total risk-weighted assets , including: 30 375 019 30 393 530 30 393 530 Credit risk 28 773 131 28 791 642 28 791 642 Operational risk 1 601 888 1 601 888 1 601 888 Market risk - - -

The main components of the Bank's risk weighted assets as at 1 January 2019 are disclosed below:




Total risk-weighted assets , including: 21 859 948 22 119 276 22 119 276 Credit risk 20 666 260 20 925 588 20 925 588 Operational risk 1 193 688 1 193 688 1 193 688Market risk - - -

67



During the reporting period, the Bank complied with the capital adequacy requirements of the Central Bank of the Russian Federation. Capital adequacy ratios are presented below.

The minimum acceptable

ratio1 January

20201 January

2019 Capital adequacy ratio (N1.0) 8.0 13.4 13.6 The Bank's basic capital adequacy ratio (N1.1) 4.5 8.5 6.8 The Bank's capital adequacy ratio (N1.2) 6.0 10.2 9.1

In order to comply with capital adequacy standards, the Bank uses the following valuation methods:

Forecasting capital adequacy ratios. Capital adequacy monitoring. Stress testing of capital adequacy. Implementing and monitoring internal thresholds for early warning of capital adequacy

declines.

12. INFORMATION ABOUT RISK MANAGEMENT GOALS AND POLICIES6

Risk management is of fundamental importance in banking and financial activities and is an integral part of the Bank's activities , ensuring that the balance between the level of accepted risk and profitability is maintained, as well as minimizing possible adverse effects on the Bank's financial position . The main risks associated with the Bank's operations are credit risk, liquidity risk, market risk, operational risk and reputational risk.

12.1. Risk management goals , policies and procedures7

Risk management plays an important role in the Bank's operations . The main risks inherent in the Bank's operations include credit risks , market risks, liquidity risks, as well as risks related to geographical concentration and changes in currency exchange rates. The Bank's goals, policies and procedures for managing these risks are described on the website of MC Bank Rus JSC https://www.mcbankrus.ru/about/rgi.php.

12.2. Credit risk

The Bank is exposed to credit risk , i.e. the risk arising from the probability of non-fulfillment of contractual obligations of the borrower or counterparty to the Bank.

The Bank is exposed to credit risk due to its operations: allowance(placement) of funds and their return (repayment) (lending operations), interbank credit and Deposit operations, settlements on correspondent accounts for own operations, term transactions, conversion operations.Limits on the level of credit risk in terms of the volume of operations (transactions) performed with a single counterparty ( counterparties of a particular type of economic activity), as well as restrictions established as part of banking products and activities are approved by the Bank's management bodies . The actual size of risks is monitored daily in comparison with the established limits.

The Bank issues loans secured by collateral , as well as sureties of legal entities and individuals. a Significant part of lending is made to loans to individuals secured by collateral of the purchased vehicle. Such risks are constantly monitored and analyzed at least once a year.

The Bank's credit Committee manages the Bank's credit risk and performs the following functions:- makes decisions on conducting operations that carry credit risk; - participates in setting limits for structural divisions to conduct operations that carry credit risk (including limits on credit risk for counterparties, financial organizations, brokerage organizations, securities issuers, etc. ) and monitoring compliance with limits (including limits on counterparties); - reviews reports on the level of credit risk accepted by the Bank and related concentration risk;

6 The credit institution independently determines the structure , content and procedure for disclosure of qualitative and quantitative information about risks , taking into account the principle of proportionality.

7 Disclosure of quantitative characteristics of significant types of risk for a credit institution should be based on internal information provided to the credit institution's management body.

68



- reviews draft documents and approves internal regulatory documents regulating credit risk management, including procedures for conducting operations related to the Bank's acceptance of credit risk, and methodology for assessing credit risk for approval by the Bank's management bodies; - making decisions on the settlement of overdue debts of the Bank's borrowers in accordance with the Bank's internal regulatory document;- considers and approves for consideration by the Bank's management bodies proposals to improve internal technologies for managing credit risk and related concentration risk, to organize procedures for conducting operations related to the Bank's acceptance of these risks, to improve the work of the Bank's divisions responsible for managing these risks and participating in operations related to the Bank's acceptance of relevant risks.

The internal audit service conducts regular audits to ensure that existing internal control tools and procedures are developed and implemented appropriately.

Significant increase in credit risk. As explained in Note 4, the Bank monitors all financial assets that are subject to impairment requirements for significant increases in credit risk since initial recognition . If a significant increase in credit risk is detected, the Bank calculates the amount of the estimated allowance based on the amount of credit losses expected over the entire loan term, and not just the next 12 months.

Internal credit risk ratings. In order to minimize credit risk, the Bank has developed and implemented a system in which the counterparty's default risk is determined on the basis of internal credit ratings for legal entities and the length of the delay, as well as other information that affects the borrower's risk assessment for individuals.the Bank has adopted clear criteria for attribution to the stage of impairment at the time of initial recognition and during the loan servicing process.

The Bank analyzes all data collected using statistical models and assesses the probability of default over the remaining life of the instruments at risk and its possible dynamics over time. The factors to be taken into account in the framework of this process may include macroeconomic data. The Bank generates scenarios for changes in the relevant economic indicators in the future, as well as a representative set of other possible forecast scenarios. The Bank then uses these probability-weighted forecasts to adjust its estimates of the probability of default.

The Bank applies various criteria to assess the significance of increased credit risk per asset portfolio. These criteria use both quantitative and qualitative data indicating changes in the probability of default.

The Bank believes that the credit risk of a financial asset has increased significantly since initial recognition if the contract payments are overdue for 30 days or if the Bank has reasonable information indicating an increase in credit risk ( for example, loss of collateral, restructuring process, etc.).

The Bank has monitoring procedures in place to confirm the effectiveness of the criteria used to identify significant increases in credit risk. This means that a significant increase in credit risk is detected before the default event occurs or before the payment delay reaches 30 days . The Bank periodically tests its credit ratings based on historical data to determine whether the credit risk factors that led to the default were taken into account in a timely manner.

The use of forward-looking information. When assessing for a significant increase in credit risk, as well as when measuring the amount of expected credit losses, the Bank uses forward-looking information that can be obtained without undue financial or labor costs. Used by the external information includes economic data and forecasts published by government agencies and bodies monetary-credit regulation.

The Bank analyzes the probability of these forecast scenarios. Scenarios of the "forecast of socio-economic development of the Russian Federation" according to the Ministry of economic development of the Russian Federation, published on the Internet8 site, represent information used by the Bank for strategic planning and budgeting. The Bank has identified and documented the main factors of credit risk and credit losses for each portfolio of financial instruments and, through statistical analysis of historical data, assessed the relationship between macroeconomic variables, credit risk and credit losses. As part of the calculation of reserves under IFRS 9, the Bank uses forecast information on macroeconomic factors to assess the impact on the probability of default of borrowers. Scenarios can be based on scenarios from the Ministry of economic development of the Russian Federation or

8 https://economy.gov.ru/

69



from other sources, such as the Bloomberg system . The observation period is 10 years . During the reporting period, the Bank updated statistical data.

The predicted relationships between key indicators and default and loss ratios for various portfolios of financial assets were developed based on historical data analysis. The Bank performs a sensitivity analysis, considering how the expected credit losses for the main portfolios will change if the key assumptions used to calculate changes in expected credit losses change.

As explained above, these indicators are usually derived from internal statistical models and other historical data and adjusted for probability-weighted forecast information.

The "probability of default" indicator is an estimate of the probability of default within a given time interval. It is estimated as of a certain point in time. The calculation is based on the use of statistical rating models, and the assessment is carried out using tools adapted to different categories of counterparties and risks. These statistical models are based on market data (if available), data from international rating agencies, and internal data that takes into account both quantitative and qualitative factors. The probability of default is estimated by taking into account the contractual maturities and the rate of early repayment. The assessment is based on current conditions, adjusted for future conditions that will affect the probability of default.

The "Loss in default" indicator is an estimate of the losses that will occur in the event of default. It is determined based on the flows that the Bank expects to receive, taking into account the cash flows from the sale of existing collateral. The default loss models for secured assets take into account forecasts for the future value of the collateral, including discounts on urgent payments, the term of implementation of the collateral, cross-collateral, the cost of implementation of the collateral, and indicators of successful resolution of problem debt (i.e., removal from the problem category). The default loss models for unsecured assets take into account the repayment period and the level of recovery of overdue debt in the event of default. The calculation is based on discounting cash flows using the original effective interest rate on the loan.

The "amount of credit claim at risk of default" indicator is an assessment of the risk at the date of default in the future, taking into account the expected changes in risk after the reporting date, including repayment of principal and interest, as well as expected samples of approved credit facilities. The Bank's approach to modeling this indicator takes into account expected changes in the outstanding amount over the maturity period that are permitted by current contractual terms (depreciation profiles, early repayment or overpayment, changes in the use of unselected amounts for credit obligations, and measures taken to mitigate risks before default). To assess credit claims at risk of default, the Bank uses models that reflect the characteristics of the respective portfolios.

The Bank measures expected credit losses by taking into account the risk of default over the maximum term of the agreement (including extension options) during which the entity is exposed to credit risk, but not for a longer period, even if it is normal business practice to extend or renew the agreement. However, for financial instruments such as revolving credit lines that include both the used and unused component of the credit obligation, the Bank's contractual ability to demand repayment of used credit funds and cancel unused credit lines does not limit the risk of credit losses for the Bank within the period of notification under the agreement.

The procedure for calculating expected credit losses for accounting purposes differs from the procedure for calculating expected credit losses for regulatory compliance purposes, although many of the inputs used are similar. The Bank has ensured that an appropriate methodology is used in calculating expected credit losses for both accounting and regulatory purposes. The main differences between the methodology used to assess expected credit losses in accordance with IFRS 9 and the methodology used to comply with regulatory requirements are as follows:

The estimation of expected credit losses is based on the average value of credit losses, weighted with probability. As a result, the amount of the estimated allowance for expected credit losses will be the same regardless of whether it is measured for individual instruments or groups of instruments (although for large portfolios it is more appropriate to use a collective assessment). When assessing for a significant increase in credit risk, a collective assessment may be required, as indicated below.

The purpose of credit risk management is to minimize the Bank's losses due to non fulfillment of its obligations by borrowers and maximize the Bank's profitability taking into account credit risk.

Objectives of credit risk management:

Analysis and assessment of credit risks. Determining the amount of risks.

70



Credit risk management. Monitoring the effectiveness of credit risk management. The main principle of the calculation of the allowances for the regulation of the Bank of Russia №590-P analysis of the financial position, quality of debt servicing by the borrower, the possibility of adjusting the reserve by providing to the transaction, the possibility of other significant factors affecting quality category loans.

Combining instruments into groups based on common risk characteristics.If the amount of expected credit losses is estimated on a collective basis, financial instruments are grouped based on common risk characteristics, such as:

• type of instrument; • credit rating; • type of collateral; • date of initial recognition; • remaining maturity; • economic sector; • geographical location of the borrower; • the borrower's income level; and• the cost of collateral for a financial asset (if it affects the probability of default (collateral ratios

(LTV)).

These asset groups are regularly reviewed to ensure their homogeneity.

For example, for the purposes of vintage analysis and homogeneity analysis, the portfolio of loans to individuals for the purchase of a car on credit can be divided into sub- portfolios according to the following options:

• depending on the payment schedule for the loan (classic annuity payment or repayment scheme with a residual payment); • depending on the number of documents provided by the borrower (loan with 2 documents, loan with 1 document, loan with a full set of documents); • depending on the age of the car being purchased on credit (new car, used car).

The analysis of the Bank's credit risk for each class of financial assets, taking into account the stage in accordance with IFRS 9, excluding the impact of collateral and other credit quality improvement mechanisms, is presented in the tables below. Unless otherwise indicated, the amounts shown in the tables for financial assets are their gross carrying amounts. For loan commitments, the amounts in the tables represent the amounts for which the obligation was assumed, respectively.Grouping is not performed for the portfolio of legal entities.

The gross carrying amount of financial assets by credit rating level and exposure to credit risk on loans and Bank guarantees, excluding the impact of collateral and other credit quality improvement mechanisms, is presented in the tables below. Unless otherwise indicated, the amounts shown in the tables for financial assets are their gross carrying amounts. For loan commitments and financial guarantee agreements, the amounts in the tables represent the amounts for which, respectively, a commitment has been made or a guarantee has been provided.

71



The table below shows the impact of changes in the gross carrying amount of financial instruments in the reporting period on changes in the estimated loss allowance , as well as a reconciliation of the balance of the estimated loss allowance at the beginning and end of the period by class of financial instruments for 2019, by asset class:

Stage 1 Stage 2 Stage 3Credit losses

expected within 12 months

Credit losses

expected over the life of the loan

Credit losses

expected over the life of the loan Total

Loans to individuals measured at

amortised cost Gross book value as of 1 January 2019

19 167 160 139 417 201 552 19 508 129 Changes in gross book value- Reclassification to the first stage 16 244 (16 244) - - - Reclassification to the second stage (388 867) 390 608 (1 741) - - Reclassification to the third stage (286 548) (63 760) 350 308 - Financial assets created or newly acquired 20 406 280 - - 20 406 280 Financial assets, whose recognition was terminated

(13 440 879) (43 441) (46 114) (13 530 434)

Write-downs - - - -Other changes 20 595 3 050 4 481 28 126

Gross book value as of 1 January 2020 25 493 985 409 630 508 486 26 412 101

Less estimated allowance for expected credit losses 202 463 80 809 298 524 581 796

72





Credit losses


Credit losses


Estimated allowance for expected

credit losses - loans to individuals measured at amortised cost


credit losses as at 1 January 2019

123 200 35 391 160 910 319 501 Changes in the amount of the allowance- Reclassification to the first stage 6 087 (6 087) - - - Reclassification to the second stage (4 664) 6 225 (1 561) - - Reclassification to the third stage (2 138) (16 134) 18 272 - - Increase due to changes in credit risk 75 492 73 527 204 504 353 523 - Decrease due to changes in credit risk (50 701) (2 775) (47 414) (100 890)- Offs - - - -

Financial assets created or newly acquired 125 809 - - 125 809 Financial assets, whose recognition was terminated

(70 622) (9 338) (36 187) (116 147)


credit losses as at 1 January 2020

202 463 80 809 298 524 581 796

73





Credit losses


Credit losses


Loans to legal entities that are not credit

institutions, measured at amortised cost Gross book value as of 1 January 2019 213 009 36 165 61 744 310 918 Changes in gross book value- Reclassification to the second stage (365 645) 365 645 - - Financial assets created or newly acquired 3 669 914 - - 3 669 914 Financial assets, whose recognition was terminated

(2 812 967) (36 165) - (2 849 132)

Write-downs - - - -Other changes Gross book value as at 1 January 2020

704 311 365 645 61 744 1 131 700 Less estimated allowance for expected

credit losses 3 311 1 165 61 744 66 220

74





Credit losses


Credit losses


Estimated allowance for expected credit

losses - loans granted to legal entities that are not credit institutions, measured at amortised cost

Estimated allowancefor expected credit

losses as at 1 January 2019

153 39 61 744 61 936 Changes in the amount of the allowance- Reclassification to the second stage (1 160) 1 160 - -- Increase due to changes in credit risk 1 890 52 - 1 942- Decrease due to changes in credit risk - (47) - (47)Financial assets created or newly acquired 2 581 - - - 2 581Financial assets, whose recognition was terminated (152) (39) - (191) Estimated allowancefor expected

operating losses as at 1 January 2020

3 311 1 165 61 744 66 220

75





Credit losses


Credit losses


Commitments to provide loans Total liabilities as of 1 January 2019

42 491 18 835 - 61 326 Changes in the amount of liabilities- Write-off (in connection with the repayment of a credit line)

(42 491) (18 835) - (61 326)Loan commitments assumed or newly acquired

303 689 30 612 - 334 301 Total liabilities as of January 1, 2020

303 689 30 612 - 334 301 Less allowance for expected credit losses as

at 1 January 2020

(1 590) (120) - (1 710)

76





Credit losses


Credit losses


Allowancefor expected credit losses

– loan commitments Allowancefor expected credit losses

as at 1 January 20 51 20 - 71 Changes in the amount of the allowance- Write-off (in connection with the repayment of a credit line)

(51) (20) - (71)Loan commitments assumed or newly acquired

1 590 120 - 1 710 Allowancefor expected credit losses

as at 1 January 2020

1 590 120 - 1 710

As mentioned in the section on significant increases in credit risk, the Bank's monitoring procedures provide for detecting a significant increase in credit risk before default occurs-no later than 30 days after the payment is overdue. This requirement mainly applies to loans and advances made to customers, in particular to individuals, since for loans and advances made to legal entities and other assets, more detailed information about the borrower is available, which is used for analysis for significant increases in credit risk. The table below provides an analysis of the gross carrying amount of loans and advances to customers, grouped by length of delay.

The table below provides an analysis of the credit quality of outstanding loans at the reporting date by category. As of January 1, 2020:

Loans granted to clients of legal entities

Loans before allowance for impairment

Allowancefor impairment

Loans after deduction of allowance for impairment

Allowance for impairment in relation to the

amount of loans before deducting

allowance for impairment

Individually impaired loansUndue 1 069 956 (4 456) 1 065 480 0.4Delinquency: more than 180 days 61 744 (61 744) - 100Total individually impaired

loans 1 131 700 (66 220) 1 065 480 5.9Total loans granted to

clients of legal entities 1 131 700 (66 220) 1 065 480 5.9

77



Loans to customers to individuals

Loans before allowance for impairment

Allowancefor impairment

Loans after deduction of allowance for impairment

Allowance for impairment in relation to the

amount of loans before deducting

allowance for impairment

Collectively assessedUndue 24 732 575 (198 163) 24 534 412 0.8 Delinquency: up to 30 days 413 921 (5 839) 408 082 1.4 from 31 to 60 days 86 655 (17 463) 69 192 20.2 from 61 to 90 days 22 656 (5 159) 17 497 22.8 from 91 to 180 days - - - - more than 180 days - - - -

Total collectively assessed 25 255 807 (226 624) 25 029 183 0.9 Individually impairedUndue 454 254 (22 167) 432 087 4.9 Delinquency: up to 30 days 90 832 (13 422) 77 410 14.8 from 31 to 60 days 43 087 (9 252) 33 835 21.5 from 61 to 90 days 59 634 (11 813) 47 821 19.8 from 91 to 180 days 101 151 (62 407) 38 744 61.7 more than 180 days 407 336 (236 111) 171 225 58.0

Total individually impaired 1 156 294 (355 172) 801 122 30.7

Total loans to customers to individuals 26 412 101 (581 796) 25 830 305 2.2

The table below provides information on the cost and quality categories of collateral received , taken as a reduction in the estimated allowance for possible losses, as of the reporting date, by type of borrower:

January 1, 2020 January 1, 2019

Types of borrowers1st quality category

2nd quality category

1st quality category


Legal entity - 179 446 - 224 991

Total cost of collateral taken as a decrease in the estimated reserve - 179 446 - 224 991

The table below provides information on loans to customers who are not credit institutions and have collateral accepted as a reduction in the estimated allowance for possible losses at the reporting date, by type of collateral:

January 1, 2020 January 1, 2019

Types of borrowers1st quality category


1st quality category


Means of transport - 264 324 - 211 534Realty - 85 000 - -Less allowance for possible losses - (7 176) - (33)

Total loans to customers who are not credit institutions and have collateral accepted as a decrease in the estimated allowance for possible losses - 342 148 - 211 501

The tables below provide information on the maximum exposure to credit risk of financial assets and off- balance sheet liabilities as at 1 January 2020 and 2019, excluding the impact of risk mitigation measures, such as the use of master netting agreements or allowanceof collateral.

78



The maximum exposure to Credit risk reduction tools

Maximum exposure to

credit risk without taking into account measures to

reduceNetting

agreements Allowance

credit risk including mitigation measures

As of January 1, 2020 Money 271 372 - - 271 372 Funds of credit institutions in the Central Bank of the Russian Federation 729 546 - - 729 546 Obligatory reserve 164 225 - - 164 225 Amounts due from credit institutions 15 974 - - 15 974 Net loans receivable carried at amortised cost

26 895 785 - (342 148) 26 553 637 Total maximum exposure to

credit risk of financial assets 27 912 677 - (342 148) 27 570 529

Irrevocable obligations of a

credit institution 334 301 - - 334 301

Total maximum exposure to credit risk of off -balance sheet liabilities

334 301 - - 334 301

Total maximum exposure to credit risk of financial assets and off-balance sheet liabilities

28 246 978 - (342 148) 27 904 830

79



The maximum exposure to Credit risk reduction tools

Maximum exposure to

credit risk without taking into account measures to

reduceNetting

agreements Allowance

credit risk including mitigation measures

As of January 1, 2019Money 566 207 - - 566 207Funds of credit institutions in the Central Bank of the Russian Federation 766 264 - - 766 264Obligatory reserve 131 625 - - 131 625Amounts due from credit institutions 11 776 - - 11 776Net loan debt 19 047 555 - (211 501) 18 836 054 Total maximum exposure to credit risk of financial assets 20 391 802 - (211 501) 20 180 301Irrevocable obligations of a credit institution 61 326 - - 61 326Total maximum exposure to credit risk of off -balance sheet liabilities 61 326 - - 61 326Total maximum exposure to credit risk of financial assets and off-balance sheet liabilities 20 453 128 - (211 501) 20 241 627

12.3. Market risk

Market risk is the risk of changes in the value of a financial instrument as a result of changes in market prices , regardless of whether these changes are caused by factors specific to a particular investment or Issuer, or factors affecting all securities traded on the market. The Bank is exposed to market risk due to the impact of General or specific changes in the market on its products. The Bank does not perform trading operations with financial instruments, and the Bank does not have a trading portfolio.

The Bank assesses both the overall level of market risk and the individual levels of its main components (if any) - currency, interest rate risk of the trading book and stock risk. To manage market risk, it analyzes currency risk factors for individual banking operations and transactions. for this purpose , it also monitors currency rates on open markets, price dynamics for fixed- term currency instruments, and collects key macro indicators that can affect changes in currency exchange rates.

The amount of currency risk is taken into account for the amount of market risk if, on the date of calculation of the amount of market risk, the percentage of the amount of open currency positions in certain foreign currencies and the amount of the credit institution 's own funds (capital) is equal to or exceeds 2 %. In the reporting period, the amount of currency risk was not taken into account the amount of market risk. In its activities, the Bank annually approves the limits of open positions within the limits set by the Bank of Russia.

12.4. Country risk

The risk management Department monitors the risk of default by foreign counterparties (legal entities and individuals) obligations, limitations of activities of credit organizations on the territory of foreign States for economic, political, social changes, and also due to the fact that the currency of a monetary obligation may be unavailable to the counterparty due to the peculiarities of national laws (regardless of the financial situation of the counterparty).The Bank's country risk management procedures include the assessment of risk factors and parameters when entering into and monitoring contracts with foreign counterparties, and based on professional judgment.This approach allows the Bank to minimize possible losses from changes in the investment climate in the country where the Bank's counterparties operate.

Information on the geographical concentration of the Bank's assets and liabilities as at 1 January 2020 and 2019 is provided in the following table:

80



Russia CIS country OECD country

Total as of January 1,

2020 AssetsMoney 271 372 - - 271 372Funds of credit institutions in the Central Bank of the Russian Federation 729 546 - - 729 546Amounts due from credit institutions 15 974 - - 15 974Net loans receivable carried at amortised cost 26 895 785 - - 26 895 785 Fixed assets, intangible assets 405 741 - - 405 741Other assets (p. 9, 10, 13 f. 0409806) 434 399 - 544 434 943 Total assets 28 752 817 - 544 28 753 361 LiabilitiesAmounts due to credit institutions - - - - Customer accounts, non-credit organizations 2 911 697 17 20 986 747 23 898 461Other liabilities (p. 19, 21 f. 0409806) 352 731 220 25 512 378 463Allowances for possible losses on credit-related contingent liabilities, other possible losses and transactions with residents of offshore zones 1 710 - - 1 710 Total liabilities 3 266 138 237 21 012 715 24 278 634 Net balance sheet position 25 486 679 (237) (21 011 715) 4 474 727 Off-balance sheet liabilities

Deferred loan commitments and unused credit lines 334 301 - - 334 301

Total off-balance sheet liabilities 334 301 - - 334 301

Russia CIS country OECD countryTotal as of

January 1, 2019

AssetsMoney 566 207 - - 566 207Funds of credit institutions in the Central Bank of the Russian Federation 766 264 - - 766 264Amounts due from credit institutions 11 776 - - 11 776Net loan debt 19 047 555 - - 19 047 555Fixed assets, intangible assets 411 919 - - 411 919Other assets (p. 8, 9, 12 f. 0409806) 447 332 - 159 447 491

Total assets 21 251 053 - 159 21 251 212 LiabilitiesCustomer accounts, 3 863 326 267 15 102 000 18 965 593non-credit organizations 1 624 - - 1 624Other liabilities(page 19, 21 f. 0409806) 69 891 - 176 465 246 356Allowances for possible losses on credit-related contingent liabilities, other possible losses and transactions with residents of offshore zones 20 - - 20

Total liabilities 3 934 861 267 15 278 465 19 213 593 Off-balance sheet liabilities

17 316 192 (267) (15 278 306) 2 037 619 Deferred loan commitments and unused credit lines 61 326 - - 61 326

81



Total off-balance sheet liabilities 61 326 - - 61 326

12.5. Liquidity risk

Liquidity risk – the risk of the Bank's inability to Finance its activities, i.e. to ensure the growth of assets and meet obligations as they become due without losses in an amount that threatens the financial stability of the Bank.Liquidity risk can be expressed in the following forms:• risk of mismatch between the amounts and dates of cash receipts and debits (incoming and

outgoing cash flows);• the risk of unforeseen liquidity requirements, i.e. the consequences that unforeseen events in

the future may require more resources than anticipated;• market liquidity risk, i.e. the probability of losses when selling assets or due to the inability to

close an existing position due to insufficient market liquidity or insufficient trading volumes.• funding risk, i.e. the risk associated with potential changes in the cost of funding (own and

market credit spread) that affect the size of the Bank's future income.

The asset and liability management Committee monitors these types of risks by analyzing assets and liabilities by maturity, determining the Bank's strategy for the next financial period.

Liquidity risk is managed in the Bank by:• forecasting payment flows by major currency types in order to determine the amount of

liquidity deficit (excess); • forecasting the structure of assets and liabilities in order to determine the required level of

liquid assets; • forecasting and monitoring the values of liquidity indicators, including daily monitoring of signal

values; • stress testing of the liquidity level.

Current liquidity is managed by the Treasury, which conducts operations in the money markets to maintain current liquidity and optimize cash flows.

The Bank's financing features consist in establishing a list of sources of financing by the main shareholder of the Bank.The concentration of funding sources by counterparty is analyzed by the risk management Department based on the list of funding sources and reporting f.0409157 "Information about major creditors (depositors)".The actual indicators of the ratio of assets and liabilities by maturity (demand) are calculated on a monthly basis by the accounting Department in accordance with the Bank of Russia's regulatory documents on reporting f.0409125 "Information on assets and liabilities by maturity and maturity".

Liquidity limits – maximum permissible values of excess (deficit) of liquidity are set by the decision of the asset and liability management Committee at the suggestion of the Treasury and the risk management Department. The tables for analyzing The Bank's liquidity status as of January 1, 2020 and January 1, 2019 are presented as follows based on reporting on form 0409125 " Information on assets and liabilities by demand and maturity", these tables show the amounts of assets and liabilities based on contractual undiscounted cash flows:

82



As of January 1, 2020:

Item description On demand and for 1 day

up to 30 days up to 90 days

up to 180 days

up to 1 year over 1 year

Assets

1. Cash, including balances on correspondent accounts

842 071 923 451 842 071 842 071 842 071 842 071

3. Loans and related receivables measured at amortised cost

- 946 692 2 925 009 5 399 930 11 374 411 31 930 522

3. Other assets 664 90 052 134 925 135 030 136 609 136 609 4. TOTAL LIQUID ASSETS (art .1+2+3) 842 735 1 960 195 3 902 005 6 377 031 12 353 091 32 909 202

Liabilities

5. Customer funds, including: 765 682 3 125 460 4 578 428 7 055 234 12 748 144 26 259 838 5.1 deposits of individuals 548 856 412 755 548 856 548 856 548 856 548 856 6. Other liabilities 77 329 138 279 188 367 195 437 195 437 217 858 7. TOTAL LIABILITIES (article 5+6) 843 011 3 463 777 4 766 795 7 250 671 12 943 581 26 477 696 8. Off-balance sheet obligations and guarantees issued by the Bank - 165 547 334 301 334 301 334 301 334 301

LIQUIDITY INDICATOR

9. Excess (deficit) of liquidity (article 4-(article 7+article 8)) (276) (1 669 129) (1 199 091) (1 207 941) (924 791) 6 097 205 10. Coef-t of excess (deficit) of liquidity (article 9/article 7)*100% 0.00 (48.20) (25.20) (16.70) (7.10) 23.00

If a critical level of liquidity deficit is reached, the Bank can attract additional funding through a credit line opened to the Bank «Mitsubishi Corporation Finance PLC». The remaining unused limit at the reporting date is 11,225,000 thousand rubles.

83



As of January 1, 2019:

Item description On demand and for 1 day

up to 30 days

up to 90 days

up to 180 days

up to 1 year

over 1 year

Assets

1. Cash, including balances on correspondent accounts

1 202 209 1 202 209 1 202 209 1 202 209 1 202 209 1 202 209

3. Loans and related receivables measured at amortised cost

- 710 399 2 137 388 4 038 420 7 674 267 24 053 532

3. Other assets 513 82 292 92 420 92 420 92 628 92 6284. TOTAL LIQUID ASSETS (art .1+2+3)

1 202 722 1 994 900 3 432 017 5 333 049 8 969 104 25 348 369

Liabilities

5. Customer funds, including: 809 864 2 810 746 3 936 149 5 963 066 9 290 212 20 712 380

5.1 deposits of individuals 357 008 357 008 357 008 357 008 357 008 357 0086. Other liabilities 62 260 98 874 143 846 143 846 143 846 159 5337. TOTAL LIABILITIES (article 5+6) 872 124 2 909 620 4 079 995 6 106 912 9 434 058 20 871 9138. Off-balance sheet obligations and guarantees issued by the Bank

61 326 61 326 61 326 61 326 61 326 61 326

LIQUIDITY INDICATOR

9. Excess (deficit) of liquidity (article 4-(article 7+article 8))

269 272 (976 046) (709 304) (835 189) (526 280) 4 415 130

10. Coef-t of excess (deficit) of liquidity (article 9/article 7)*100%

30.90 (33.50) (17.40) (13.70) (5.60) 21.20

Main methods of Bank liquidity management (recovery) applied by the Bank's assets and liabilities management Committee: a method of maintaining a certain level of highly liquid assets in the form of balances on

correspondent accounts and cash accounts; method of forming reserves of liquid assets (in the form of liquid securities) and selling them at

a low level of liquidity; method of limiting the terms of granting loans: liability management method-creating a liquidity reserve in the form of limits on the Bank

opened by other banks and ensuring the maximum possible attraction of term liabilities at rates that suit the Bank.

The Bank's management Board determines the main liquidity parameters required for compliance and procedures for restoring liquidity in the long term. In particular, the Bank's Management Board makes decisions on the implementation of the following measures to restore liquidity: definition of planned tasks for the Bank's divisions for the formation of an urgent resource base; making decisions on raising / lowering the interest rates of attraction and placement; making decisions to limit or freeze the growth of assets in certain areas (primarily loans); making decisions on asset restructuring, including the sale of part of the assets (within the

amount determined by the Charter).

The Board of Directors makes decisions on asset restructuring, including the sale of part of assets over the amount of the Bank's Management Board's competence ; decides on the need to attract subordinated loans (loans) and escalate, if necessary, to the General meeting of shareholders, approval of grant financing agreements.The relevance of the business financing plan in cases of an unpredictable decrease in liquidity is reviewed at least once a year by the risk management Department.

12.6. Currency risk

Currency risk is the risk of changes in the value of a financial instrument due to changes in exchange rates. Identification of currency risk involves an analysis of all operating conditions of the Bank: analysis of the impact of currency exchange rate changes on individual transactions; analysis of the impact of changes in exchange rates on certain areas of banking activity; analysis of the impact of currency positions on the Bank's ORP and the structure of the Bank's

balance sheet as a whole.The difference in the amounts of the Bank's claims and liabilities in certain foreign currencies creates the risk of losses (losses) in the event of adverse changes in exchange rates. Exposure to this risk is determined by the degree of mismatch between the amounts of assets and liabilities in a particular currency.

To assess currency risk, the structure of assets and liabilities is compared in terms of the currency of operations performed. Each currency is considered separately.

84



The main method for assessing currency risk is the calculation of open positions in foreign currencies in certain foreign currencies and certain precious metals calculated in accordance with the instructions of the Bank of Russia N 178-I.

The Treasury Department monitors the Bank's open currency position on a daily basis to ensure that it meets the requirements of the Central Bank of the Russian Federation.

Information on the Bank's assets and liabilities by currency as at 1 January 2020 is provided below:

Russian rouble USD Euro Total Assets Money 255 966 7 027 8 379 271 372Funds of credit institutions in the Central Bank of the Russian Federation 729 546

- - 729 546

Amounts due from credit institutions 10 661 5 192 121 15 974Net loans receivable carried at amortised cost 26 895 785

- - 26 895 785

Fixed assets, intangible assets and inventory 405 741 -

- 405 741

Other assets(p. 9, 10, 13 f. 0409806) 434 943 - - 434 943 Total assets 28 732 642 12 219 8 500 28 753 361 Liabilities Amounts due to credit institutions - - - -Funds of clients who are not credit institutions 23 892 857 5 590 14 23 898 461 Other liabilities(p. 19, 21 f. 0409806) 378 463 - - 378 463Allowances for possible losses on credit-related contingent liabilities, other possible losses and transactions with residents of offshore zones 1 710 - - 1 710 Total liabilities 24 273 030 5 590 14 24 278 634 OPEN BALANCE SHEET POSITION 4 459 612 6 629 8 486 4 474 727

85



Information on the Bank's assets and liabilities by currency as at 1 January 2019 is provided below:

Russian rouble USD Euro Total Assets Money 557 852 5 540 2 815 566 207Funds of credit institutions in the Central Bank of the Russian Federation 766 264 - - 766 264Amounts due from credit institutions 10 533 1 161 82 11 776Net loans receivable carried at amortised cost 19 047 555 - - 19 047 555 Fixed assets, intangible assets and inventory 411 919 - - 411 919Other assets(p. 9, 10, 13 f. 0409806) 447 491 - - 447 491 Total assets 21 241 614 6 701 2 897 21 251 212 Liabilities

Loans, deposits and other funds of the Central Bank of the Russian Federation - - - -Amounts due to credit institutions - - - -Funds of clients who are not credit institutions 18 963 359 2 232 2 18 965 593Current income tax liability 1 624 - - 1 624Other liabilities(p. 19, 21 f. 0409806) 246 356 - - 246 356Allowances for possible losses on credit-related contingent liabilities, other possible losses and transactions with residents of offshore zones 20 - - 20

Total liabilities 19 211 359 2 232 2 19 213 593 OPEN BALANCE SHEET POSITION 2 030 255 4 469 2 895 2 037 619

12.7. Legal risk.

Legal risk – risk of Bank losses due to non-compliance by Bank of requirements of legal acts and concluded contracts, legal errors permissible in the implementation of activities, imperfection of legal system (inconsistency of the Russian legislation, lack of legal norms regulating some matters arising in the course of the Bank's activities) , violation by counteragents of regulatory legal acts and conditions of concluded contracts.

From time to time and in the normal course of business, claims against the Group are received from customers and counterparties. Management is of the opinion that no material non-accrued losses will be incurred and accordingly no allowancehas been made in these consolidated financial statements.

12.8. Tax risk.

Laws and regulations affecting business in the Russian Federation continue to change rapidly. Management’s interpretation of such legislation as applied to the activity of the Bank may be challenged by the relevant regional and federal authorities. Recent events suggest that the tax authorities are taking a more assertive position in their interpretation of the legislation and assessments and as a result, it is possible that transactions and activities that have not been challenged in the past may be challenged. Fiscal periods generally remain open to tax audit by the authorities in respect of taxes for three calendar years proceeding the year of tax audit. Under certain circumstances reviews may cover longer periods. Management believes that it has provided adequately for tax liabilities based on its interpretations of tax legislation.. However, the relevant authorities may have differing interpretations, and the effects on the financial statements could be significant.

In 2019, changes were made to the Tax code of the Russian Federation and certain legislative acts, which, among other things, provide for an increase in the basic VAT rate to 20%. The 20% rate is applied for the sale of goods, works, services, and property rights starting from January 1, 2019. Since VAT is not charged on Bank transactions, management does not expect a significant impact on The Bank's reporting, except for a corresponding increase in costs for purchasing goods and paying for services .

14. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

86



Fair value is defined as the cost at which a financial instrument can be acquired in a transaction between knowledgeable, willing, and independent parties , except in cases of forced or liquidated sale.

The fair value of financial assets and liabilities is determined as follows:

The fair value of financial assets and liabilities with standard terms that are traded in active liquid markets is determined in accordance with market quotations (including fixed-term bonds, promissory notes and perpetual bonds quoted in an organized market).

For financial assets and liabilities with short maturities (less than 3 months), the carrying amount is assumed to be approximately equal to the fair value. T his a ssumption a lso a pplies t o demand d eposits a nd n on- maturing savings accounts.

Management believes that the carrying amount of loans and advances to banks and customers, as well as funds from banks and customers with floating interest rates, can be taken as their fair value.

The fair value of loans and advances to banks and customers, as well as amounts due from banks and customers with fixed interest rates , was determined based on market rates at the reporting date for similar instruments with maturities equal to the fixed term remaining to maturity.

The fair value of other financial assets and liabilities (excluding derivatives) is determined in accordance with generally accepted cost models based on discounted cash flow analysis using prices used in market transactions at the relevant date and dealer quotations for similar financial instruments.

There were no financial assets and liabilities measured at fair value after initial recognition as at 1 January 2020 and 2019.

15. OPERATING SEGMENT

Segment analysis is not performed by the Bank , since the Bank does not publicly place securities.

16. INFORMATION ABOUT TRANSACTIONS WITH RELATED PARTIES

For the purposes of this disclosure, parties related to a credit institution are defined by the Bank in accordance with IAS 24 "Related Party Disclosures", under which parties are considered related if one of them has the ability to control the other or exercise significant influence in making financial and operational decisions by the other party. When determining the possible relationship between the parties, special attention is paid to the economic content of the relationship, not just its legal form. Related parties can enter into transactions that unrelated parties cannot enter into. However, transactions between related parties may differ in terms, terms and amounts from transactions between unrelated parties.

The following information is provided on the balance sheet balances resulting from transactions and settlements with related parties.

All transactions and transactions with related parties in 2019 and 2018 were conducted within market price conditions.

87



Assets and liabilities arising from transactions with related parties as at 1 January 2020 are as follows:

(RUB thousand)

Line № Item descriptionGroup А (major share-holder)

Group B (entities

under joint control)

Group C (key

manage-ment

personnel)

Group D (other related parties)

Assets1. Net loans outstanding, measured at

amortised cost - - - 2 2212. Other assets

-

123 783 - -Liabilities

3. Subordinated debt received 500 000 - - -4. Customer accounts, incl.: 194 877 20 990 710 - -4.1. Deposits 170 000 20 986 747 - -5. Other liabilities 28 993 - 39 997 6 996

Off-balance sheet assets6. Unused credit lines provided to the Bank - 11 225 000 - -

The results of these transactions are included in the statement of financial results in the following amounts:

For the year 2019(RUB thousand)


Group B (entities


Group C (key

manage-ment

personnel)


1. Interest income on loans granted- 887 897 30 103

2. Interest expense on amounts due to customers – non-credit institutions

(135 498) (1 324 580) - -Net interest income (expense)

(line 1 – line2) (135 498) (436 683) 30 1033. Net gain from trading in foreign

currencies - 10 - -4. Commission income 86 3 403 - -5. Commission expense - - - -

Net fee and commission income (expense) (line 4 – line5) 86 3 403 - -

6. Reversal of loan loss allowance - - 15 47. Other operating income 2 930 - - -8. Operating expenses (42 863) (719) (47 335) (39 250)9. Reversal of allowancefor credit-related

commitments - - - -Net income (loss) from transactions

with related parties (line 1-line 2+line 3+line 4-line 5+line 6+line 7-line 8+line 9) (175 345) (433 989) (47 290) (39 143)

88



Assets and liabilities arising from transactions with related parties as at 1 January 2019 are as follows:

(RUB thousand)


Group B (entities


Group C (key

manage-ment

personnel)



amortised cost - - - 6481.1 Other assets - - - -2. Liabilities - 78 203 - 1

Subordinated debt received3. Customer accounts, incl.: - 500 000 - -4. Deposits - 16 623 332 - -4.1. Other liabilities - 16 282 000 - -5. Off-balance sheet assets 18 333 162 310 30 087 8 0636. Unused credit lines provided to the Bank - - - -


amortised cost - 6 898 000 - -

The results of these transactions are included in the statement of financial results in the following amounts:

For the year 2018 (RUB thousand)


Group B (entities


Group C (key

manage-ment

personnel)


1. Interest income on loans granted - 624 392 - 382. Interest expense on amounts due to

customers – non-credit institutions (2 229) (946 582) - -Net interest income (expense)

(line 1 – line2) (2 229) (322 190) - 383. Net gain from trading in foreign

currencies - 289 - -4. Commission income 1 730 112 256 - -5. Commission expense (53 606) (222 491) - -

Net fee and commission income (expense) (line 4 – line5) (51 876) (110 235) - -

6. Reversal of loan loss allowance - - - -7. Other operating income - - - -8. Operating expenses (233) (56 808) (73 738) (41 283)9. Reversal of allowancefor credit-related

commitments - - - -Net income (loss) from transactions

with related parties (line 1-line 2+line 3+line 4-line 5+line 6+line 7-line 8+line 9) (54 338) (488 944) (73 738) (41 245)

89



17. REMUNERATION TO KEY MANAGEMENT PERSONNEL

In 2018 and 2019, remuneration to members of the Executive bodies and other employees of the Bank performing risk-taking functions included short- term remuneration, which is expected to be paid in full before the end of 12 months after the end of the annual reporting period in which the employees rendered the relevant services, and long-term remuneration payable after 12 months after the reporting date:

Line № Types of rewards 2019 20181 Short- term remuneration total, including: 59 223 54 0121.1 Labor costs, including bonuses and compensation 59 223 54 0122 Long-term rewards 29 420 19 7263 Post-employment benefits - -

4Remuneration in the form of Issuer's options , shares, units, shares in the authorized capital and payments based on them - -

5 Other long- term remuneration - -

6List number of employees (number of people), total including:

246 217

6.1Number of main management personnel (number of people)

7 7

Information about key indicators and goals of the remuneration system

Goals of the remuneration system:

- maintaining the market level of wages for Bank employees; - creation and continuous improvement of the Bank's remuneration system; - ensuring a high level of qualification of Bank employees; - encouraging employees to work with high- quality, highly organized and efficient work, innovation, innovation, and respect for the Bank's property;

- creating a personnel reserve and ensuring career growth of the Bank's employees; - ensuring social protection of employees; - maintaining and strengthening the Bank's business reputation;- ensuring openness and transparency in relations with employees in the field of personnel management; - compliance with the requirements of Federal laws and other regulatory legal acts containing labor legislation.- increasing employees ' motivation to achieve their goals, introducing a differentiated approach to financial incentives for Bank employees depending on their performance of certain key performance indicators and the degree of influence on financial results, and encouraging restrictions on taking excessive risks for the Bank.

Key corporate indicators are set for the period from April 1 of the current year to March 31 of the year following the current one (financial year).

Corporate KPIs, individual KPIs, and competency KPIs are combined by the Bank into an annual KPIs for all employees and are evaluated at the end of the financial year. Strategic KPIs for employees classified as risk takers are assessed at the end of the financial year and at the end of the 3rd year following the financial year in which it is included in the non-fixed part of remuneration.

Description of the remuneration system for employees of divisions that perform internal control and risk management, and ways to ensure independence of the size of the remuneration Fund of such divisions from the financial results of divisions (bodies) that make decisions on banking operations and other transactions:

- the Bank ensures independence of the size of the remuneration Fund for these divisions from the financial results of structural divisions (bodies) that make decisions on banking operations and other transactions;

- the amount of the fixed part of remuneration (official salary) is not less than 50% of the total remuneration paid to employees of this category. In fact, in 2018, the amount of the fixed part of remuneration (official salary) was at least 78% of the total remuneration.

Taking into account the Bank's strategy , corporate KPIs are set in order to achieve the goals set for financial results and limit the most significant risks. Corporate KPIs:

90



№ KPI Weight Indicator characteristics

Procedure for determining and evaluating

1

General

Net profit, million ₽ 25%

Quantitative indicator of profitability

Financial result

2 Loans, billion ₽ 25%

Quantitative indicator for credit risk

The size of the loan portfolio ( loans to individuals and legal entities)

3

Captive lending Mitsubis

hi

The penetration rate in retail

sales Mitsubishi,

%

10%Qualitative indicator of profitability

The share of Bank loans in the number of retail sales of new mmsr cars. The calculation is based on the number of loans issued by the Bank for new Mitsubishi vehicles in the period (management reports) and mmsr information on the number of cars sold in the period, with the exception of sales to legal entities and sales to Belarus and Kazakhstan.

4 Write-off coefficient 10%

Quantitative indicator for credit risk

The ratio of the amount of written-off loans (bad debt), including fraud cases , for new Mitsubishi cars to the average annual volume of the portfolio of auto loans for new Mitsubishi cars . The average annual volume is calculated as an arithmetic mean based on monthly reporting data

5Yield on captive loans

Mitsubishi10%

Quantitative indicator of profitability

The difference between the weighted average interest rate ( the rate calculated as the rate specified in the loan agreements, taking into account the direct subsidy rate) for loans issued to individuals for the purchase of Mitsubishi cars in fiscal year 2018 and the funding rate determined by the AMC

6

Captive lending

Write-off coefficient 10% Qualitative risk

indicator

The ratio of the amount of written-off loans (bad debt) for the current financial year, including cases of fraud , for cars (excluding new Mitsubishi cars ) to the average annual volume of the portfolio of auto loans for cars (excluding new Mitsubishi cars ). The average annual volume is calculated as an arithmetic mean based on monthly reporting data

7Yield on

non- captive loans

10%Quantitative indicator of profitability

The difference between the weighted average interest rate on loans ( the rate calculated as the rate specified in the loan agreements, taking into account the rate of net income from commissions on life insurance and CASCO) issued to individuals for the purchase of cars (other than new Mitsubishi cars ) in fiscal year 2018 and the funding rate determined by the AMC

In case of incomplete achievement of the set goals, it is possible to reduce or cancel payments, while the non-fixed part of remuneration takes into account the specific weight of corporate KPIs, individual KPIs and KPI competencies. The degree of achievement of the annual KPIs affects the amount of the bonus limit set for all categories of employees.

The established corporate KPIs were not changed in the reporting period.

The results of each of the members of the Executive bodies and other employees performing risk-taking functions are evaluated taking into account the results of achieving each of the established KPIs, which are divided into annual KPIs and strategic KPIs (General). The amount of payments is directly proportional to the total result of achieving annual KPIs in % and their specific weight in the non- fixed part of remuneration. KRI strategic goals are set based on the achievement of goals in the long term and are evaluated at the end of the 3rd year following the financial year.

Internal regulations provide for the possibility of adjusting the amount of deferred bonus based on the results of strategic KPIs for planned interim indicators for the current financial year, but such adjustments were not made in the reporting period, except in cases of dismissal.

The non - fixed part of remuneration for members of Executive bodies and other employees who accept risks, deferred for subsequent periods, is:

91



2018 2019

Remuneration related to the reporting year 10 572 12 185Remuneration related to previous periods 9 154 17 235

Total non-fixed part of remuneration for members of Executive bodies and other employees who accept risks, deferred for subsequent periods 19 726 29 420

No payments were made during the reporting year when members of Executive bodies and other employees taking risks were dismissed.

17.1. Payments based on equity instruments

The Bank did not make payments based on equity instruments.

18. EVENTS AFTER THE REPORTING DATE

The Bank did not have any significant categories of non-corrective events requiring disclosure after the reporting date.


Chief Accountant I.V. Ponomareva

25 March 2020

92

Documents

€¦ · Web viewUnofficial translation. 26. THE PRELIMINARY VERSION IS FOR DISCUSSION ONLY. TO BE RETURNED TO DELOITTE. IT IS PROHIBITED TO COPY OR DISTRIBUTE IN ANY FORM WITHOUT