Bank Saint Petersburg 1H2011 IFRS Results

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1

BANK SAINT PETERSBURG

1H 2011 IFRS Results

September 13, 2011







2







3

Summary –

Bank Saint Petersburg at a glance

2

Regional leader

Focused on

North-West

Selected financial

and operational

results

A leading privately-owned universal bank in St. Petersburg and the Leningrad region

St. Petersburg market share as at July 1, 2011*:

• Assets: 12.3%

• Loans: 15.6% - corporate, 4.5% - retail

• Deposits: 11.4% - corporate, 8.0% - retail

As at September 1, 2011

Client base: over 1.1 million retail and 35 thousand corporate customers

36 branches and outlets (primarily in St. Petersburg), 485 ATMs

As at July 1, 2011:

16th largest bank by assets and 16th by retail deposits among the Russian banks**

Ratings: Moody’s Ba3 (Stable outlook)

Total assets: RUB 292.1 bn (USD 10.5 bn)

Total capital: RUB 39.1 bn (USD 1.4 bn)

Net income: RUB 4.5 bn (USD 161.3 mln)

Cost/Income ratio: 28.8%

ROAE: 29.8%

Total capital adequacy: 12.5%

2,584 employees

* Association of North-West banks, Bank Saint Petersburg own estimates

** Interfax







4

Overview of Key Financials

In RUB bn Jan. 1, 2011 July 1, 2011 YTD Jul. 1, 2010 Apr. 1, 2011 July 1, 2011 q-o-q y-o-y

Total assets 272.61 292.06 +7.1% 239.46 282.43 292.06 +3.4% +22.0%

Gross Loans 202.25 217.96 +7.8% 177.21 212.75 217.96 +2.4% +23.0%

Customer Deposits* 202.17 212.23 +5.0% 175.23 200.01 212.23 +6.1% +21.1%

Total Capital 35.87 39.14 +9.1% 33.53 37.43 39.14 +4.5% +16.7%

1H 2010 1H 2011 y-o-y 2Q 2010 1Q 2011 2Q 2011 q-o-q y-o-y

Net Interest Income 6.01 6.79 +11.7% 2.99 3.27 3.52 +7.7% +17.6%

Net Fee and Commission

Income 0.76 0.94 +23.0% 0.43 0.44 0.50 +13.8% +17.2%

Revenues** 7.67 8.58 +11.9% 3.34 4.27 4.31 +1.1% +29.0%

Net Income 1.13 4.50 +298.9% 0.78 2.09 2.41 +15.1% +209.4%

1H 2010 1H 2011 y-o-y 2Q 2010 1Q 2011 2Q 2011 q-o-q y-o-y

Net Interest Margin 5.54% 5.07% -47 BP 5.38% 5.00% 5.21% +21 BP -17 BP

Cost/Income Ratio 25.38% 28.78% +3.40 PP 35.52% 26.21% 30.15% +3.94 PP -5.37 PP

ROAE 8.94% 29.80% +20.86 PP 12.17% 28.63% 30.66% +2.03 PP +18.49 PP

3 * Customer accounts are calculated as a sum of customer deposits and promissory notes and bills of exchange (other debt securities in issue)

** 1H 2011 and 2Q 2011 revenues calculation: gains from investment securities available for sale in the amount of RUB 879.3 mln are excluded from revenues as one-off







5

Table of contents

4

I. Bank’s market position

II. Financial highlights and business overview

III. Recent developments and prospects







6

12,9%

16,1% 15,6%13,9%

15,7%

11,8% 11,9%11,5% 10,7% 11,4%

YE 2007 YE 2008 YE 2009 YE 2010 1H 2011

Corporate loans Corporate deposits

Sberbank; 19,5%

VTB Group; 14,6%

CIT Finance; 4,6%

International Bank

of Saint Petersburg;

3,6%

Baltinvestbank;

3,4%

Others (ca. 140

banks); 31,8%

Bank "Russia";

9,8%

Bank Saint

Petersburg;

12,7%

Strong Franchise

Client base, thou Market share in St. Petersburg as at April 1, 2011: Retail banking*

Market share in St. Petersburg as at April 1, 2011: Corporate banking*

* Central Bank of Russia, Association of North-West banks, Bank Saint Petersburg own estimates

5

Loans, market share as at July 1, 2011*

581

774900

1 000

31

35

35

35

1 100

35

2007 2008 2009 2010 1H 2011

Retail Corporate

6,3%7,1%

6,1%5,2%

4,5%

7,8%

9,5% 9,7%

8,7%8,0%

YE 2007 YE 2008 YE 2009 YE 2010 1H 2011

Retail loans Retail deposits







7

Table of contents

6


II. Financial highlights and business overview








8

18,5

24,2

33,2

39,135,9

January 1, 2008 January 1, 2009 January 1, 2010 January 1, 2011 July 1, 2011

126,7

215,7235,6

272,6

292,1

January 1, 2008 January 1, 2009 January 1, 2010 January 1, 2011 July 1, 2011

Financial Highlights, 2010 – 1H 2011

Assets, RUB, bn

Income dynamics, RUB, mln Income and expenses data*, RUB, mln

Capital, RUB, bn

7

+ 7.1% + 9.1%

* Results calculation: the expenses from recognition of loans granted at below market rates are included in provisions

951 939

6 078 5 947

6 788

763736

167541

1H 2010 2H 2010 1H 2011

Net Interest Income Net Fee and Commision Income Net Trading Income

7 6687 082

8 580

1 944

3 9652 6842 506

9661 046

1H 2010 2H 2010 1H 2011

Revenues Operating expenses Provisions







9

Financial Highlights, 2Q 2010 – 2Q 2011

Assets, RUB, bn

Income dynamics, RUB, mln Income and expenses data*, RUB, mln

Capital, RUB, bn

8 * Results calculation: the gains / losses from recognition of loans granted on below market rates are included in provisions

239,5 247,4272,6 282,4

292,1

July 1, 2010 October 1, 2010 January 1, 2011 April 1, 2011 July 1, 2011

33,5 34,535,9

37,439,1

July 1, 2010 October 1, 2010 January 1, 2011 April 1, 2011 July 1, 2011

3 520

417 535 439 500

3 2682 9782 9692 993

426 515

49118-150 26

2Q 10 3Q 10 4Q 10 1Q 11 2Q 11

Net Interest Income Net Fee and Commision Income Net Trading Income

3 343 3 513 3 569

4 267 4 312

1 0851 185

1 202 1 304

1 119

1 565

998

48

673293

2Q 10 3Q 10 4Q 10 1Q 11 2Q 11

Revenues Operating expenses Provisions







10

Results for 1H 2011

Cost/income and NIM Operating expenses, RUB, mln

Comments Net income dynamics, RUB, mln

9

● Net Income well above the FY 2010 result

● NIM stable

● ROAE well above the target

9621 192

1 401

721

1 009929261

305354

1H 10 2H 10 1H 11

Staff costs Other administrative and operating expenses

Expenses related to premises and equipment

1 944 2 506

2 684

640

4 495

4 115

2 009

2 774

29,8%

15,3%

2,9%16,4%

20,6%

0

1000

2000

3000

4000

5000

FY 07 FY 08 FY 09 FY 10 1H 11

0,0%

10,0%

20,0%

30,0%

40,0%

Net Income ROAE

40,2%

34,7%

24,6%

30,0% 28,8%

5,1%4,9%

5,2%

6,5%

5,5%

FY 07 FY 08 FY 09 FY 10 1H 11

3,0%

8,0%

Cost/Income NIM







11

Results for 2Q 2011

Cost/income and NIM Operating expenses, RUB, mln

Comments Net income dynamics, RUB, mln

10

502638 554 633

768

441420 588 318

611142143

162

168

186

2Q 10 3Q 10 4Q 10 1Q 11 2Q 11

Staff costs Other administrative and operating expenses

Expenses related to premises and equipment

1 085 1 201

1 304 1 119

1 565

1 815

2 405

2 090

777

1 173

26,0%28,6% 30,7%

17,9%

12,2%

0,00

1000,00

2000,00

3000,00

2Q 10 3Q 10 4Q 10 1Q 11 2Q 11

0,0%

10,0%

20,0%

30,0%

40,0%

Net Income ROAE

● Key financials are stable for a number of quarters in a row

● Cost/Income Ratio is in line with the Bank’s target

● Deferred payment of RUB 70 mln for the deposit insurance

system is a major growth factor of the other OPEX

32,5%34,2% 35,8%

26,2%30,2%

5,2%5,0%4,7%

5,4%

5,1%

0,0

10,0

20,0

30,0

40,0

2Q 10 3Q 10 4Q 10 1Q 11 2Q 11

3,0%

Cost/Income NIM







12

Average interest rates on the assets side**

Interest Rates and Assets/Liabilities Ratios

Average interest rates on the liabilities side*

11

Comments Average Interest Earning Assets (IEA) and Interest Bearing Liabilities (IBL), RUB, bn

* Average liabilities: due to banks, customer accounts including current accounts, debt securities in issue

** Average assets: loans, due from banks, securities portfolio, correspondent accounts

Interest rates stable on both sides

Loans to deposits ratio is 93.5% - room for

leverage is still in place

6,0%6,0%

11,3%

10,3%

8,7%9,1%

8,4% 9,8%

9,0%

7,9% 8,1%5,6%

6,5%

6,1%6,5%

8,1%

9,6%

9,8%

9,3%9,3%

9,7%9,9% 9,8%

9,0%

7,9%

7,2%

4,7%4,7%

8,1% 7,9%

6,9%6,9%

6,1%

7,2%7,4%

6,7%

6,0%

5,1% 5,0%

2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11

Average interest on term corporate deposits Average interest on term retail deposits

Average interest on IBL

161,7

178,7

201,8

231,2

253,0265,2

271,2

197,4

216,4

189,0

141,9

173,7

216,3 223,4224,5

246,7254,4

135,3

209,5207,6203,7

179,7

155,8

197,9 196,5

231,3

93,5%

96.3%98,4%

92,3%92,3%

87,4%

99,7%99,2%99,0%100,5%102,8%

94,9%

90,4%

0,0

50,0

100,0

150,0

200,0

250,0

2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11

80,0%

Average IEA Average IBL Loans/Deposits Ratio

10,3%10,3%10,3%

14,2% 14,1%

15,0%

15,9%

14,8%

12,0%

13,1%

14,5%14,8%

10,8%

9,6%9,4%9,3%

13,2%

14,4%13,7%

13,0%12,7% 12,7%12,4%

11,7%

11,0%

9,9%

2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11

Average interest rate on loans Average interest rate on IEA







13

Main Factors affected NIM in 2Q 2011

1Q 2011 NIM – 5.00%

12 2Q 2011 NIM – 5.21%

Average interest rate

Contribution to NIM change:

Retail term deposits + 9 bp

+ 9 bp

Average balance

Contribution to NIM change:

Loans and advances to customers + 16 bp

Trading securities portfolio + 5 bp

Corporate term deposits - 7 bp

+ 14 bp

Other factors - 2 bp







14

Financial Summary (RUB), 2Q 2010 – 2Q 2011

RUB bn 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011

Loans and Advances to Customers 157.62 176.25 182.82 192.58 198.35

Total Assets 239.46 247.43 272.61 282.43 292.06

Customer Deposits 175.23 179.04 202.17 200.01 212.23

Total Liabilities 213.88 220.68 244.04 251.78 259.79

Total Shareholders’ Equity 25.58 26.75 28.56 30.66 32.27

Total Capital 33.53 34.50 35.87 37.43 39.14

Net profit 0.77 1.17 1.82 2.09 2.41

Net Interest margin 5.38% 5.09% 4.67% 5.00% 5.21%

Capital Adequacy 14.35% 13.73% 12.96% 12.65% 12.54%

Cost-to-Income ratio 32.52% 34.21% 35.80% 26.21% 30.15%

Allowance for loan imp. / Gross loans 11.05% 10.30% 9.61% 9.48% 9.00%

Loans / Deposits 92.29% 98.44% 90.43% 96.29% 93.46%

ROAA 1.32% 1.91% 2.77% 3.05% 3.36%

ROAE 12.08% 17.78% 26.03% 28.63% 30.66%

13







15

RUB bn 2007 2008 2009 2010 1H 2011

Loans and Advances to Customers 91.73 144.88 158.20 182.82 198.35

Total Assets 126.66 215.72 235.61 272.61 292.06

Customer Deposits 96.15 144.16 181.14 202.17 212.23

Total Liabilities 111.65 196.91 210.32 244.04 259.79

Total Shareholders’ Equity 15.00 18.81 25.28 28.56 32.27

Total Capital 18.51 24.23 33.22 35.87 39.14

Net profit 2.00 2.77 0.64 4.11 4.50

Net Interest margin 5.46% 6.47% 5.22% 4.94% 5.07%

Capital Adequacy 16.41% 14.15% 15.19% 12.96% 12.54%

Cost-to-Income ratio 40.21% 34.66% 24.62% 30.03% 28.37%

Allowance for loan imp. / Gross loans 2.75% 3.88% 9.14% 9.61% 9.00%

Loans / Deposits 95.40% 100.51% 87.36% 90.43% 93.46%

ROAA 2.15% 1.62% 0.28% 1.62% 3.21%

ROAE 20.60% 16.41% 2.90% 15.28% 29.80%

14

Financial Summary (RUB), 2007 – 2H 2011







16

Loan portfolio and quality

Loan portfolio and allowance for loan impairment Loan portfolio by sector, July 1, 2011

Comments

Provision charge (RUB mln)* and problem loans**, %

15

Loan portfolio growth in 1H 2011:

Before provisions: +7.8% compared with January 1, 2011

After provisions: +8.5% compared with January 1, 2011

As at July 1, 2011:

- Corporate overdue loans – 4.37% (4.80% as at January 1, 2011)

- Retail overdue loans – 8.12% (8.77% as at January 1, 2011)

RUB 776 mln of the loan portfolio written off in 1H 2011

* Provision charge calculation: the losses / gains on loans granted at below market rates are included in provision charge

** Ratios for April 1, July 1, and October 1, 2009 are ratios for restructured loans; overdue loans include the whole principle of loan at least one day overdue

Construction

13,6%

Trade

12,9%

Financial serv ices

10,8%

Production and f ood

industry

5,2%

Transport

4,2%

Gov ernment

f inanced

4,6%

Indiv iduals

6,5%

Heav y machinery

and ship-building

15,1%

Real estate

9,3%

Oil and gas

6,7%

Other

8,2%Health and

entertainment

2,9%

218,0212,8

202,3196,5

155,2 159,4

174,1 178,1 177,2

9,0%9,5%9,6%10,3%

11,1%10,4%

9,1%

7,3%

8,5%

0

30

60

90

120

150

180

210

Jul 1, 09 Oct. 1, 09 Jan 1, 09 Apr 1, 10 Jul 1, 10 Oct 1, 10 Jan 1, 11 Apr 1, 11 Jul 1, 11

RU

B b

n

0

2

4

6

8

10

12

14

(%)

Loan portfolio Allowance for impairment / Gross loans

3 086

2 384 2 305

2 737 2 780

293673

48998

1 185 4,6%5,2%5,1%

5,8%

8,6%7,4%

6,9%

7,5%

4,5%

7,1% 6,2%6,3%5,9%5,9%

6,3%7,1%

7,9%

6,6%

6,7%

6,9%

0

1000

2000

3000

Apr 1, 09 Jul 1, 09 Oct. 1, 09 Jan 1, 09 Apr 1, 10 Jul 1, 10 Oct 1, 10 Jan 1, 11 Apr 1, 11 Jul 1, 11

0

5

10

15

Provision charge Overdue loans / Gross loans

Impaired not past due* / Gross loans







17

Assets and liabilities structure

Assets structure, July 1, 2011 Liabilities structure, July 1, 2011

16

Loans and advances

to customers

67,9%

Securities portfolio

17,2%

Cash & cash

equivalents

4,8%

Amounts receivable

under reverse

repurchase

agreements

1,6%

Due from other banks

1,2%

Fixed and other

assets

7,3% Customer accounts

(corporates);

47,1%

Customer accounts

(individuals);

25,6%

Shareholders'

equity; 11,0%

Capital markets;

9,6%

Due to other banks;

6,2%Other; 0,5%







18

Corporate bonds

60,6%Municipal bonds

12,6%

Corporate Eurobonds

11,1%

Federal local bonds

10,0%

Corporate shares

5,6%

Trading securities portfolio

Securities portfolio*, July 1, 2011 Securities portfolio*, January 1, 2011

17

● Conservative approach to risk:

- 90%+ of the debt securities belong to the CBR Lombard list;

- 90% of the debt securities portfolio is rated on par or above the Bank’s rating:

- 70% of the debt securities are BBB- and above rated

- 20% of the debt securities are BB- and above rated

● Average duration is 1.5 years

● No exposure to securities of foreign issuers

* Securities portfolio includes trading securities and trading securities pledged under sale and repurchase agreements

Comments

Corporate bonds

61,6%Municipal bonds

13,8%

Federal local bonds

11,5%

Corporate Eurobonds

8,3%

Corporate shares

2,7%

Russian Federation

Eurobonds

2,2%







19

16,4%

14,1%15,2%

13,0% 12,5%12,3%

9,7%10,7%

9,6% 9,7%

YE 2007 YE 2008 YE 2009 YE 2010 1H 2011

Total Capital ratio Tier 1 Capital ratio

97,9

162,0 177,0

222,8

26,9

33,6

206,99,7

5,2

55,7

43,0

32,1

9,5

4,0

5,1

YE 2007 YE 2008 YE 2009 YE 2010 1H 2011

RWA - banking book RWA - trading book RWA - off-balance-sheet

Capital and funding

Capital adequacy*, % Repayment schedule for 2011-2014, USD, mln

Comments

18

Risk-weighted assets (RWA)*, RUB, bn

112,7

171,2

218,6

276,8

Additional ordinary shares issue in the pipeline; expected

capital adequacy after the placement:

Tier 1: 11.1-11.4%

Total capital adequacy: 13.1-13.4%

Further revaluation of c. 3% stake in the MICEX is a factor

312,1

263

436

147

78

2011 2012 2013 2014







20

Table of contents

19


II. Financial highlights








21

New HQ launched

New share issue – exactly as planned:

- September 10 – the last day of pre-emptive rights execution

- The issue is to be registered with the CBR in October 2011

20

Recent developments and prospects







22 21

Economy & Finance

Bank Saint Petersburg 1H2011 IFRS Results