uralsib financial corporation: the partner of choice in russia · swot analysis strength stability...

1 October 2006 www.uralsib.com

23rd ABA General Meeting and Seminar

Taiwan

October 2006 www.uralsib.com

URALSIB Financial Corporation:The Partner of Choice in Russia


COUNTRY AND BANKING SECTOR PROFILE


Solid economic growth in Russia

2005 2006F 2007F 2008F 2009F

GDP 6,4 6,1 6,1 6,0 5,8

Industrial Production 4,0 4,2 5,2 6,3 6,5

Fixed Investment 10,7 9,8 9,8 10,1 12,2

CPI 10,9 9,7 8,3 7,7 8,5

Real Wages 12,6 12,3 10,1 9,0 7,5

Retail Sales 12,8 12,9 10,5 10,2 10,0

Exports, USD bln. 244 308 300 278 281

Imports, USD bln. 125 153 179 206 240

Current Account, USD bln. 84,0 98,0 80,1 48,9 29,5

Urals Crude, USD bbl. 51,3 61,5 57,7 50,2 45,5

Real Eff. RUR Rate 8,1 10,0 7,0 5,0 6,0

RUR/USD Rate (eop) 28,8 26,6 26,0 26,2 26,0

Source: Rossstat, URALSIB Research, Aug 2006

URALSIB Macro Research for Russia, YoY%

Russia’s sustainable economic growth is the outcome of prudent macroeconomic management, rising investment in the public and private sectors, ample natural resources, vibrant regional economies and a stable political environment.

Russia: 10th world largest economy and 3rd fastest growing of top 30 economies.


940871,9

265,6 260,40

200400600800

1000

China Japan Russia Taiwan

The outlook of Russian economy is favourable

Source: SberBank Department of External Relations, 07 Aug 2006

Gold and foreign currency reserves, USD bln.

USD 64,53USD 61,43

USD 50,6

50

60

70

2005 January - June2006

June 2006

Average Urals oil price, USD per barrel

Source: Russian Ministry of Finance

Stabilisation fund, USD bln.

1 August 2006

82,14

USD 21,3 bln. loan was repaid to Paris Club on August 2006

Russian Oil surplus revenues are allocated to Stabilisation fund

50,0

100,0

150,0

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

F

Foreign sovereign debt, USD bln.

Sources: Finance Ministry,URALSIB Research, 01 Jan 2006

In light of June’s deal to repay USD 21,3 bln. to the Paris Club of sovereign creditors by the end of August, and a number of other, lesser paybacks in the pipeline, we see government external debt plunging to just 1,5% of GDP.

On September 4th 2006, currency long-term rating of Russia was upgraded to BBB+, stable outlook.


Impressive RTS growth rates

0200400600800

1 0001 2001 4001 6001 800

01.0

9.19

95

01.0

9.19

96

01.0

9.19

97

01.0

9.19

98

01.0

9.19

99

01.0

9.20

00

01.0

9.20

01

01.0

9.20

02

01.0

9.20

03

01.0

9.20

04

01.0

9.20

05

01.0

9.20

06

RTS Index performance

0

50

100

150

200

250

05.0

1.98

05.0

1.99

05.0

1.00

05.0

1.01

05.0

1.02

05.0

1.03

05.0

1.04

05.0

1.05

05.0

1.06

RTS Index capitalisation, USD bln.OIL & GAS Utilities

Telecoms Machinery

Metals & Mining Fertilizers

Food & Beverages Transport

Trade Banks

RTS Index breakdown by sector

Sector Weight in IndexOIL & GAS 52,0%

Utilities 6,5%

Telecoms 9,7%

Machinery 0,8%

Metals & Mining 12,5%

Fertilizers 0,7%

Food & Beverages 1,2%

Transport 0,4%

Trade 0,6%

Banks 15,5%

Note: Before 01.07.04 calculation was based on total capitalisation, starting from 01.07.04 only free float capitalisation is taken into account.


SWOT Analysis

Strength

Stability has increased dramatically since 1990s financial and economic crisis as the economy has rebounded on the back of high commodity prices and the rouble’s 1998-99 devaluation. The greatly improves situation was rewarded September 2006, when Standard & Poor’s credit rating agency award Russia with BBB+, stable outlook rating.The use of surplus oil revenues to pay down external debt and build up a stabilisation fund will help safeguard public finances in event of a sharp drop in the price of oil.

Weaknesses

The economy’s dependence on the oil sector has been increased by the price of crude in recent years. Given still-limited progress on structural reform, this makes Russia vulnerable to a downturn in commodity prices.Real rouble appreciation, due to nominal currency strength and high domestic inflation, is eroding the competitiveness of the economy.

Opportunities

An acceleration of the structural reform agenda, including support for small and medium-sized businesses, strengthening of the banking sector, administrative reform to tackle red tape and corruption, and revamp of the “natural monopolies”, would go a long way towards developing the non-oil economy and improving long-term growth prospects.

Threats

Although capital flight has slowed dramatically in recent years thanks to increased political and economic stability and the launch of economic reform in Putin’s first term, heightened concerns over the business environment since the Yukos affair risk reversing the trend and also slowing fixed capital expenditure.

Economic performance should continue to be supported over the forecast period by high oil prices.


East Timor

Russia

1 5362 177

1 197

2002 2005 2010F

Total Lending/GDP (%)

CAGR 02–05 = 8.6%

GDP ($Bn at PPP)

18,1%15,1%8,7%

2002 2005 2010F

CAGR 02–05 = 20.1%

1 6112 187

1 396

2002 2005 2010F


CAGR 02–05 = 4.9%

GDP ($Bn at PPP)

32,7%28,9%20,1%

2002 2005 2010F

CAGR 02–05 = 12.9%

3 6135 595

2 729

2002 2005 2010F


CAGR 02–05 = 9.8%

GDP ($Bn at PPP)

13,3%12,8%11,0%

2002 2005 2010F

CAGR 02–05 = 5.2%

8 429

13 501

6 066

2002 2005 2010F


CAGR 02–05 = 11.6%

GDP ($Bn at PPP)

37,7%37,9%26,2%

2002 2005 2010F

CAGR 02–05 = 13.2%

CAGR 05–10 = 7.2%

CAGR 05–10 = 4.6%

CAGR 05–10 = 6.3%

CAGR 05–10 = 3.2%CAGR 05–10 = 9.1%

CAGR 05–10 = 0.8%

CAGR 05–10 = 9.9%

CAGR 05–10 = -0.1%

Note: Total Lending/GDP (%)

Lending by commercial banks and non-bank financial institutions to the private sector, other financial institutions, central and local government and non-financial public enterprises

Russia’s lending potential

Russia’s capital markets exhibit strong growth potential. The financial sector is still underperforming compared to other BRIC countries.

ChinaIndia

Source: EIU, Monitor Analysis

Brazil


Income and consumer lending growth

-20 -10 0 10 20

1998

1999

2000

2001

2002

2003

2004

2005

2006F

Population real disposable income, YoY %

Average monthly income, USD

Sources: Rosstat, URALSIB Research

Sources: Rosstat, URALSIB Research

56%

28%

0

10

20

30

40

50

60

Russia Central and ЕasternEurope

2005-2008F Consumer lending growth rates

Source: UniCredit Research

050

100150200250300350400

1998

1999

2000

2001

2002

2003

2004

2005

2006

F


0

50

100

150

200

250

300

350

2003 2004 2005 2006

Assets Capital

Russian banking sector

Russian banks by Capital, USD bln.

Russian banks by Assets, USD bln.

Assets and capital of Russian banking system, USD bln.

Source: Central Bank of Russian Federation; URALSIB IR Team research

State owned banks

Bank URALSIB

Regional banks

+ -

-

+

+

+

Foreign banks

Capital + +

Product diversification - +

Network + -

Key indicators 2003 2006

Banking assets / GDP 38,3% 45,1%

Banking capital / GDP 5,4% 5,7%

Individual deposits / GDP 9,5% 12,8%

Total loans / GDP 16.6% 25,3%

Source: Central Bank of Russian Federation

Source: Kommersant Money,01 July 2006


URALSIB FINANCIAL CORPORATION


URALSIB Financial Corporation structure

Corporate and Retail banking

URALSIB Financial Corporation

Insurance

Investment banking

Leasing Private equity

Asset management

Brokerage

Private banking

Key businesses

URALSIB member companies are leaders in different financial sectors, united by common strategic goals and a shared mission.

Being one of Russia’s best capitalised and most diversified financial institutions, URASLIB Financial Corporation is excellently positioned to take advantage of Russia’s impressive economic growth.


Asset management

5 mutual funds – over USD 985 mln. invested into Russian equity and debt markets36% share of the open mutual funds marketClient funds under management USD 3.2 bln.Four closed-end funds (equity and real estate) – over USD 380 mln.Over 400 trust management clients – over USD 400 mln.EUROMONEY Awards: Best Mutual Funds Manager in Russia 2004 and Best Asset Manager in Russia 2005

Brokerage

Among top 7 Russian securities tradersAll securities and all marketsLow commission feeSingle investment accountMargin trades Large stake transactionsInvestment valuation upgradeInternet trading

Insurance

Over 1 mln. individual clientsMore than 450 client service centresInsurance Premia USD 280 mln. (41% growth YoY)10% share of the overall insurance market"A+" rating by the Expert RA national rating agency.

Investment banking

Regional ReachDiverse Client Base - almost 100,000 corporate clientsComprehensive Investment banking servicesManagement consulting expertiseLeading brokerage & research Direct investment expertiseBridge financing

Leasing

Over 1000 clients3% share of the Russian leasing market25 leasing company’s branchesAuthorized capital stock - USD 15 mln.Innovative solutionsCooperation with major international banks

Private banking

Foreign financial marketsInheritance lawAlternative investing Luxury lifestyle consultingDiscretionary asset managementInvestments in precious metalsClassical banking productsInsurance servicesEUROMONEY Award: Best Private Banking in Russia 2006

Private equity

Investing in rapidly growing companies that are privately owned, regionally based and with an annual turnover in excess of USD 50 mln.Average investment is in the range of USD 20-30 mln., and aimed at acquiring a 10% to 25% stake together with representation on the board of directors.

Corporate and Retailbanking

Core business of URALSIB Financial Corporation240 000 individual deposits - over USD 1.2 bln.1.7 mln. current accountsFull range of banking servicesSecond after Sberbank largest in Russian networkDeposits USD 5.4 bln. (32%growth YoY)Loans USD 4.6 bln. (45% growth YoY)

Key businesses

URALSIB Financial Corporation is high diversified financial institution.


FinancialSupermarket

AutoAutoLoansLoans

AutoAutoLeasingLeasing

Mutual FundsProperty,CasualtyInsurance

Life Insurance

MortgagesMortgages

PersonalPersonalLoansLoans

Retail Retail CustomerCustomer

Commercial Commercial BankingBanking

Private Equity

AssetManagement,

Private Banking

Insurance

LeasingLeasing

InvestmentInvestmentBankingBanking

Corporate Corporate CustomerCustomer

FinancialBridge

A Financial Bridgefor Corporates

A FinancialSupermarket for Individuals

One Stop Shop business model

Composition of business set to provide complex financial services for institutional,corporate and retail clients.


Bank URALSIB at a snapshot

2004 2005 Growth, %

Total assets 5,906 8,337 29

Due to customers 3,196 4,817 34

Loans to customers 3,228 4,617 30

Total liabilities 4,787 6,887 30

Total equity 1,120 1,450 23

Profit before income tax expense 0,077 0,501 553

BANK URALSIB financial highlights, USD bln.

Employees 17 500

Clients 4,6 million

URALSIB Financial Corporation is a leader in the key segments of the Russian financial market. The core of the Corporation, URALSIB Bank, is among the five largest in Russia.

UpgradedDecember 2,

2005

Confirmed rating February 22,

2005

UpgradedNovember 7,

2005

“Ba3”, stable outlook

“B”, positive outlook

“B”, positive outlook URALSIB Bank

• UralSib Bank• IBG NIKoil Bank• Kuzbassugolbank• Avtobank-NIKoil• Bryanskiy Narodny

Source: URALSIB CFS 2005

http://www.fitchratings.com/corporate/index.cfm


INTERNATIONAL BUSINESS


International business composition

Trade Finance• L/Cs (inc. post-financing and deferred payment) and

Guarantees• Pre-Export & Pos-Import Financing• ECA-covered Financing• Gold Financing (Cash pre-export financing or

Unallocated Gold loans)

Wholesale Funding• Syndicated and bilateral loans

• Eurobonds

• Financing from EBRD and IFC

Product split, USD mln. Geographical split

480

705290

95115

150185

L/C & L/Gs

Syndicated & Bilateralwholesale loansEurobonds

EBRD&IFC

Gold financing

ECA Financing

Pre-export & post-importfinancing

69%

8%

23%

Europe America Asia & Middle East

Total volume of international financing amounts to USD 2,020 million.

Share of the Japanese banks dominates


Syndicated loans

URALSIB started raising syndicated loans back in 1997, and successfully repaid outstanding facilities following the 1998 crisis. Business was resumed in 2000, and up to now the Bank has successfully raised 14 loans.

MLAs Currency Amount Maturity

THE BANK OF TOKYO-MITSUBISHI, LTD.; DRESDNER KLEINWORT; ING BANK N.V.; NATEXIS BANQUES POPULAIRES; AND SUMITOMO MITSUI BANKING CORPORATION EUROPE LTD.

USD 320 million

10 August 2007; 364 days

COMMERZBANK AKTIENGESELLSCHAFT; RAIFFEISEN ZENTRALBANK ÖSTERREICH AKTIENGESELLSCHAFT; ZAO RAIFFEISENBANK AUSTRIA; STANDARD BANK PLC; SUMITOMO MITSUI BANKING CORPORATION EUROPE LTD

USD 212 million

10 April 2007; 364 days

THE BANK OF TOKYO-MITSUBISHI, LTD.; COMMERZBANK AKTIENGESELLSCHAFT; DRESDNER BANK AG; ING BANK N.V.; RAIFFEISEN ZENTRALBANK ÖSTERREICH AG;SUMITOMO MITSUI BANKING CORPORATION EUROPE LTD.

USD 263 million

24 November 2006; 364 days

Repaid syndicates

ABN AMRO BANK N.V.; THE BANK OF TOKYO-MITSUBISHI, LTD.; COMMERZBANK AKTIENGESELLSCHAFT; DRESDNER BANK AG; ING BANK N.V.

USD 135.5 million

11 July 2006; 364 days

URALSIB is a frequent borrower on the international syndicated loans market. The syndicated loans are trade-related and generally have a maturity of 364 days. The lender's base is diversified by countries and regions, and regional diversification has significantly increased over the past few years. The secondary market has also developed, and the loans are actively traded.


Banks from Asia and Middle East in Russia

Japan

China Iran

India

Bank of China (ELUOSI)

Industrial CommercialBank of China

Canara Bank

ICICI Bank

State Bank of India

Bank Melli Iran

The Bank ofTokyo-Mitsubishi UFJ, Ltd

Sumitomo Mitsui BankingCorporation

Mizuho

Michinoku

Several banks from this region confirmed their commitment to the Russian market by opening Representative offices and subsidiaries in different regions of the country.

Selected Participants of URALSIB Bank Syndicated loansBanks form Asia and Middle East in Russia

Bank Muscat International Indover Bank

BTMU (Europe) Mashreq Bank

Dubai Bank Melli Bank Plc

Emirates Bank InternationalNational Bank of Egypt

(UK ) Limited

Export-Import Bank of the Republic of China

Shanghai Commercial & Savings Bank Ltd.

Hua Nan Commercial Bank State Bank of India

ICICI Bank EurasiaSumitomo Mitsui Banking

Corporation


URALSIB Financial Corporation

8, Efremova St., Moscow,119048, Russia

Alexander DementievDeputy Chairman, International Business

Tel.: +7 [495] 723 78 [email protected]

Leonid VakeyevDirector, Financial Institutions

Tel.: +7 [495] 723 79 58 [email protected]

Anton ZurDirector, Trade Finance

Tel.: +7 [495] 723 70 [email protected]

Alexei KondratievDirector, Investor Relations

Tel.: + [495] 705 90 39 ext. [email protected]

International contacts


Some statements and/or other information included in this document may be deemed to be “forward looking” within the meaning of Section 27A of the Securities Act, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. Forward looking statements include statements concerning the Bank’s plans, objectives, goals, strategies, and future operations and performance, and the assumptions underlying these forward looking statements. The Bank uses the words “anticipates”, “estimates”, “expects”, “believes”, “intends”, “plans”, “may”, “will”, “should”, and any similar expressions to identify forward-looking statements. These forward looking statements are used widely in this presentation, especially in sections the include plans, outlook, projections, trends and forecasts. The Bank has based these forward looking statements on the current view of its management with respect to future events and financial performance. These views reflect the best judgment of the Bank’s management but involve uncertainties and are subject to certain risks the occurrence of which could cause the actual results to differ materially from those predicted in the Bank’s forward-looking statements and from past results, performance or achievements. Although the Bank believes that the estimates and projections reflected in its forward-looking statements are reasonable, if one or more of the risks or uncertainties materialize or occur, or if any of the Bank’s underlying assumptions prove to be incomplete or incorrect, the bank’s actual results of operations may vary from those expected, estimated or projected.

Disclaimer

The statements and financial information of BANK URALSIB (hereinafter called “the Bank”) as well as of its predecessor banks, including but not limited to Avtobank-NIKoilBank, NIKoil IBG Bank, Bryansky Narodny Bank, Kuzbassugolbank, Ural-Siberian Bank, have been derived from audited and/or un-audited consolidated and unconsolidated accounts for some of the previously mentioned banks, as these were available at the time of preparation of this document. Quarterly updates are based on management accounts.

uralsib financial corporation: the partner of choice in russia · swot analysis strength stability...

Documents