30th Efma Convention: L d hi i t il fiLeadership in retail finance

13 p.m. & 14 March 2008 - Paris

Andrei KazminDirector GeneralRussian PostRussian Post

Reforming the Russian Banking Sector g gand Sberbank’s Role in the Development

of Economyof Economy

Andrey I KazminAndrey I KazminAndrey I. KazminAndrey I. Kazmin, , Chairman of the Board and CEO, Chairman of the Board and CEO,

Sberbank Sberbank

2002008 EFMA’s 30th Annual Convention8 EFMA’s 30th Annual ConventionParis, March Paris, March

2

Rapid Growth of Russian Economy p d G ow o uss co o y

34%GDP growth:

22%

2006Growth over 3 years

GDP growth: Russia and industrially

10%7%

4% 3% 2% 2% 2%

11%8% 7% 6% 6%

ydeveloped countries

2% 2% 2%

62%Growth, %

41%44%

37%35%

62%52%

45%42%42%38%

35%

Assets/GDP

B ki t i 27%31%

34%Banking assets in Russia

32001

20022003

20042005

20062007 (E)

Russian Banks: Good Potential for Growthuss s: Good o e o G ow325%

Banking assets /205%

148%

Banking assets / GDP *)

106% 92% 91% 74%52%

Germany

ItalyJapan

Czech Repub

Turkey

Kazakhstan

PolandRussia

8.9%8.3%7.9%public

an6.4%

5.9%

4.4%Bank loans / fi d it lfixed capital investments

42001 2002 2003 2004 2005 2006

*) 2006

Shortage of Capital as Hindrance to D l tDevelopment

16,8%14 9%15 0%16,0%

17,0%19,1%14,9%15,0%16,0%

Capital adequacy (Central Bank’s 10%

Standard No. 1)

2003 2004 2005 2006 2007 01.07.07

Public

54%

44% Public offerings by

Sberbank and VTB

36%

37%44%

41%27%

28%

Banking capital and

16%31%

28%

CapitalAssets

capital and assets growth

52004 2005 2006 2007** Estimate

Long Funds Shortageo g u ds S o ge

65%10Deposits

Trillion RUB

65%

54%

42%8

10LoansLoans in deposits, %

Changes in the31%

14%20%4

6 Changes in the saving behaviour

0

2

2002 2003 2004 2005 2006 200720%

Loans covered by deposits

Share of long loans in assets

17%15%

12%9%

15%Share of long deposits in liabilities

Sh t f l

16%17%27% 23%

12%9%

5%

10%Shortage of long funds

6

3%3%3%2%0%

2004 2005 2006 01.07.2007

Impacts on the Domestic Banking Sector

US sub-prime mortgage crunch is limiting access to global capital markets. Banks re-orient towards domestic funding.

Russia’s current account balance isSpeculative capital

Russian banking

account balance is impaired flows out of Russia

gsector Interbank loan

rates go up

Demand for Central Bank refinancing

instruments goes up

Funding base and retail deposits

g p

Balances of correspondent and

instruments goes up

7

g pgrowth goes through a stage of

seasonal slowdown

pdeposit accounts with the Central

Bank shrink

Sberbank Today

Major Performance Results for 9 Months 2007 *)

Sbe b od y

Major Performance Results for 9 Months 2007 )

Parameter 01 Jan.2007, billion RUB

01 October 2007, billion RUB

Growth over 9mo 2007RUB billion RUB 2007

Net assets 3 574 4 592 28,5%

Book profit 112,8 102,9 22.9%*

Net profit 87,9 81,2 22.4%*

Capital 347 633 82,4%

ROAE 28,6% 20,0%

ROAA 2,9% 2,6%

8

, ,

*) All figures here and hereafter are by RAR.

* Year on year

Profit Growth o G ow

31,7 33,937,2

27 6 27,740

25,927,6 ,

20

30

n R

UB

10Bill

io

0Q1 2007 Q2 2007 Q3 2007

Book profit Net profit

1 EUR 36 62 RUB

9

1 EUR = 36, 62 RUB

FundraisingFundraising Deposits Breakdown of raised funds

2 029 2 1482 311

2 435

2 500

Breakdown of raised funds

Retail deposits 63 2%

2 000

llion

RU

B 63.2%

1 50001.01.07 01.04.07 01.07.07 01.10.07

Bi 26.3%

Corporate accounts *

Corporate funds Other7.4%822 870

1 016 1 062

1 100

Corporate accounts

%

Global borrowings 3.1%

822

700

900

llion

RU

B

10

3.1%500

Q4 2006 Q1 2007 Q2 2007 Q3 2007

Bil

* - average daily balance for the quarter

Corporate LendingCorporate Lending Sector-wise breakdown 2 578Loan book

Industry and other sectors: 55 6%

1 929 1 9992 115

2 000

2 500

UB

sectors: 55.6%

Trade:23.9%

1 500

Bill

ion

RU

23.9%1 000

01.01.07 01.04.07 01.07.07 01.10.07

1 500 Lending quarter-wise

Transport Construc

1 332

1 111

9171 000

1 500

RU

B

Lending quarter wise

and communications: 8.1%

Agriculture:6,5%

tion: 5,9%

9171 000

Bill

ion

R

11

500Q1 2007 Q2 2007 Q3 2007

Corporate Lending Customer-wiseCorporate Lending Customer-wise

S ll b i l thSmall business loans growth

288388

ion

RU

B

Corporate loan book

Medium37 7%

Large customers 46 6%

89146

205Bill

i

37.7%46.6%

Small business loans as percentage

01.01.04 01.01.05 01.01.06 01.01.07 01.10.07

15.0%

13 2%

15.0%14.9%14.5%15.5%

Small business loans as percentage of corporate loan book

Government authorities: 0.7%

12.1%13.2%

11.5%

13.5%

Small business

12

01.01.04 01.01.05 01.01.06 01.01.07 01.10.07

Retail LendingRetail Lending

867L b kRetail loan book breakdown 867

794

695 719800

900

UB

Loan book Retail loan book breakdown

695 719

600

700

Bill

ion

RU

Consumer loans: 62.8%

60001.01.07 01.04.07 01.07.07 01.10.07

Mortgage loans as percentage of27.3%27.3%

22.1%30%

Mortgage loans as percentage of retail loan book

Mortgage loans Car loans4.2%Other

5 7%

7.6%13.0% 15.2%

10%

20%

13

5.7%0%

01.01.04 01.01.05 01.01.06 01.01.07 01.10.07

Credit Risk ManagementCredit Risk Management

35002%

6%

Loan book and percentage of loans overdue

Risk level

1.1% 1.1%1.1% 1.0%

3000

3500

RU

B

1% 5.2%4%

6%

2 7122 901

3 077

3 550

2500Bill

ion

1%3.7% 3.9%

3.5% 3.2% 3.1%2%

200001.01.07 01.04.07 01.07.07 01.10.07

0%

Loans outstanding

0%

01.01.04 01.01.05 01.01.06 01.01.07 01.07.07 01.10.07Loans outstanding Loans overdue / loans outstanding

14

Revenues for 9 Months 2007Revenues for 9 Months 2007 Revenues

134160

2006 2007

Revenues for 9mos 2007, RAR

89 91103

122134

113120

2006 2007 Interest income on

lending: 67.6%89 91

80

llion

RU

B

40

Bil

Fees:0

Q1 Q2 Q3Securities: 11.4% 18.1%Other:

2.9%

15

Fee IncomeFee Income

F i th F i b kdFee income growth Fee income breakdown

32.8%

21.3%

19 723.0

24.9

19 0

30 2006 2007

15.4%

2.2%14.8

17.619.719.0

20

llion

RU

B

15.0%13.3%

Retail cashier/payment services0

10Bil

Retail cashier/payment services Corporate cashier/payment services Retail lending Corporate lending

0Q1 Q2 Q3

16

Bank cardsOther

Expenses for 9 Months 2007Expenses for 9 Months 2007

Expenses Expenses breakdown for

50.3%120 55%

p

R t il d it

Deposit insurance:

p9mos 2007

47.1%45.2%

60

90

RU

B

45%

50% Retail deposits interest: 36.7% 3.6%

30

60

Bill

ion

40%

45%

0Q1 II квартал Q3

35%Other:

Q1 II квартал Q3

Expenses Cost / Income Provisions:8,6%

Administrative, operational, staff: 31.9%

19,2%

17

Capital, Capital Adequacy RatioCapital, Capital Adequacy Ratio

Capital Capital adequacy

600

UB

19.1% 17.7%

11 7%15.9%

16%

20%

347

602 606 633

200

400

Bill

ion

RU 11.7%

8%

12%

10%

001.01.2007 01.04.2007 01.07.2007 01.10.2007

0%

4%

01.01.2007 01.04.2007 01.07.2007 01.10.2007

18

Sberbank Market Cap Sbe b e C p

RTS indexOrdinaries price (RTS)

4.3110 4 501.01.07 01.04.07 01.07.07 01.10.07 01.11.07 4.3

4.23.9100

110

SD)

4 0

4.5

3.63.480

90

Cap

billi

on U

S

3.5

4.0

ies p

rice

SD)

60

70

(b

3.0 Ord

inar

i(U

19

01.01.07 01.04.07 01.07.07 01.10.07 01.11.07Capitalization Ordinaries price (RTS)

Historical prices recalculated per new par value

Development of the Banking Sector: Wh t H t b DWhat Has to be Done

A i i i li iActions to raise capitalisation

Revise approaches to long funds accumulation andRevise approaches to long funds accumulation and use

I h i f l dImprove mechanisms for money supply and refinancing from the Bank of Russia

Develop stock market and long-term investment marketmarket

20