February,February, 2008 2008Zurich, SwitzerlandZurich, Switzerland

Russia’s Regional Markets: Refinancing Russia’s Regional Markets: Refinancing through a Specialised Bankthrough a Specialised Bank

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Information

Joint-Stock Bank «GPB-Mortgage» was founded in 1988 as a state owned banking entity Commercial Bank «SOVFINTRADE»

In 2005 Commercial Bank «SOVFINTRADE» was repositioned as a specialized entity concentrating exclusively on originating mortgages in the residential mortgage market

In 2007  Commercial Bank «SOVFINTRADE» was renamed in Joint-stock Bank GPB-Mortgage

GPB-Mortgage

Joint Stock Bank GPB-Mortgage

Shareholders

GPB-Mortgage is majority owned by Gazprombank (Open Joint-stock Company). It’s share is more than 70 %

Over 27 % of GPB-Mortgage’s shares is controlled by Gazprom group

And less then 1 % of shareholding held by third party corporate entities

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To become the largest specialized mortgage lending bank in Russia

To create a structure which will allow the purchase, refinancing and servicing of mortgage loans across all over of the Russian Federation

To increase capitalization of the Bank

Strategic Objectives

Peculiarities of the Project

As for the number of securitised mortgage loans (app.16 billion RUR) GPB-Mortgage is a leader among Russian banks

GPB-Mortgage’s business model is based on a developed regional servicing network which procures for origination, refinancing and servicing of mortgage loans

The regional network covers almost 50 Russia’s regions with the highest mortgage lending perspectives

InformationGPB-Mortgage

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The Main Stages of Development

May 2005 – mortgage loans refinancing business started

December 2005 – establishment of own corporate regional network for origination, refunding and servicing of mortgage loans

November 2006 – inaugural domestic RMBS transaction – first ever on the Russian market (app.3 billion RUR)

December 2006 – successful cross-boarder RMBS transaction (app. 6 billion RUR)

June 2007 – first repeat cross-boarder RMBS transaction of a Russian Originator (app. 7 billion RUR)

InformationGPB-Mortgage

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Standing of the GPB-Mortgage

Net Profit Equity

Return of the Share Capital

The Results

GPB-Mortgage

Equity dynamics, mln. RUR

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

2005 2006 2007 2008

Pe riod

mln

. RU

R

Return of Share Capital dynamics, %

0,00%

2,00%

4,00%

6,00%

8,00%

10,00%

12,00%

14,00%

16,00%

18,00%

20,00%

2006 2007 2008

Pe riod

Ne t Profit Dynamics , mln. RUR

0

50

100

150

200

250

300

2005 2006 2007 2008

Pe riod

mln

. RU

R

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BORROWERS

Capital Markets/ Long-term Funds

Servicing

Mortgage Sale

Mortgage Sale

Regional Servicing

Companies

Initial Lender

Regional Operator

GPB-Mortgage

Tiered Originating and Servicing

The Structure of Regional Mortgage Lending

Small Regional Banks

the structure allows to originate mortgage in the geographically diverse regions of the country

it establishes the standard approach to origination and underwriting

it allows GPB-Mortgage to maintain the high-quality origination standards

Two-tier model used in

origination and servicing

process:

GPB-Mortgage

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Participants of the Regional Mortgage Market

Initial LenderSale of loan

Loan par amount

Regional Operator

Mortgage Borrowers

Servicing of mortgage loans

Sale of loan

GPB-Mortgage

Loan par amount

Servicing fee

Initial Lenders:Participants: small or medium regional banks with little or no access to long term funds

Functions: act as initial lenders / underwrite mortgages originated in accordance with the

underwriting standards developed by GPB-Mortgage

Regional Operators:Participants: non-banking organisations which are controlled either by GPB-Mortgage or by local

government

Function: acquire mortgage certificates from the Initial Lenders and on-sell them to GPB-Mortgage

Opportunities: high professional underwriting of the mortgage loans

GPB-Mortgage:Function: - creation of unified standards of mortgage lending and refinancing

- providing access to long term funds

- development of the IT-network for mortgage lending and servicing processes

Cooperation

Participantsand Functions

GPB-Mortgage

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Russia’s Mortgage Market: Ranking Russian Banks

The disproportion between volume and quantity of mortgage loans show the right balance of GPB-Mortgage’s portfolio :

The Leaders of the Mortgage Market

the average size of given out loans is less than at the other participants of the market

diversification of the mortgage portfolio on regions

GPB-Mortgage

33 758

21 60019 775

14 000

11 478 10 99110151

0

5000

10000

15000

20000

25000

30000

35000

GPB-Mortgage

Uralsib VTB Group Delta -Credit

KIT-Finance Trans Kredit Bank

Vozrozhdenie

Leaders of the mortgage lending/ refinancing by quantity of the mortgage loans, qn.

48 201

30 915

24 02821 580

18 70016 315

13500

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

VTB Group Moskom-mercbank

GPB-Mortgage

Delta-Credit

Uralsib KITFinance

GorodskoiIpotechniy

Bank

Leaders of the mortgage lending/ refinancing by volume of mortgage portfolio, ths. RUR

9

ArchangelskVologda

Cherepovets

Nizhniy Novgorod

Kostroma

Tula

Voronezh

Kazan

BlagoveshchenskNovosibirsk

KhabarovskIrkutskBarnaulOrenburg Magnitogorsk

ChelyabinskStavropolUfa

Saratov

Tolyatti

Dimitrovgrad Izhevsk

St.-Petersburg

Vladimir

Syktyvkar

Vladivostok

Gorno-Altaisk

Perm

Rostov

Krasnodar

Petrozavodsk

Krasnoyarsk

Kirov KemerovoBryansk

Omsk

Ulan-Ude

Yakutsk

Program of Refinancing: Corporate Regional NetworkGPB-Mortgage

10

5

25

38

50

0

5

10

15

20

25

30

35

40

45

50

2005 2006 2007 2008

• 2005 – 5 Regional corporate operators• 2006 – 25 Regional corporate operators• 2007 – 38 Regional corporate operators• 2008 – non less than 50 Regional corporate operators

Corporative regional network

establishment dynamics

Program of Refinancing: Corporate Regional Network

Efficiency and Professionalism of

the Corporate Regional Network

GPB-Mortgage

As of 1 January, 2008 the mortgage portfolio being served by GPB-Mortgage and it’s Corporate regional network amounted to 27.24 billion RUR

The quality of the mortgage portfolio is confirmed by high credit rating of it’s mortgage backed securities, given by rating agencies

The total stuff number of the Corporate regional network is about 500 employees Corporate regional operators provided more than 70% of the overall volume of

mortgages originated by the Bank By the end of 2006 the Corporate regional network reached self-repayment One of the participants of the Corporate regional network was rated by Moody’s

successfully which benefits the Bank’s high-rating obtaining strategy for the whole Corporate network

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Automation of the business stages

Information system

GPB-Mortgage

Portal for the Settlement Banks

Originators and Settlement Banks’ Level

Mortgage Operator’s Level

United management and account system

TISIO

Information system of the mortgage operator

Mortgage portal

Interaction with the partners at refinancing and servicing

GPB-Mortgage’s LevelDebt Collection

System

Workflow system (EMS Documentum)

AISPIC

Automated information system of the Originator

Internal systems of GPB-Mortgage

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Common Underwriting Standards

Initial Lender Regional Operator GPB-MortgagePotential Borrowers

Specially developed underwriting and servicing standards were worked out by GPB-Mortgage for Initial Lenders and Regional Operators participating in GPB-Mortgage’s mortgage programme

In order to participate in GPB-Mortgage’s mortgage programme, both the Regional Operator and the Initial Lender are to underwrite mortgages strictly in accordance with parameters set by GPB-Mortgage

If such parameters are not adhered to, the loan is rejected during the repeat underwriting process

In addition to the underwriting standards, GPB-Mortgage provides the participants of the mortgage programme with an integrated software system which allows to carry out repeated checks of refinancing loans’ quality.

In the middle of 2007 GPB-Mortgage and Agency for Home Mortgage Lending (“AHML”) have entered into the agreement on joint activity on creation uniform procedures of servicing and information exchange

Underwriting Process

Standards

Repeat Underwrite

Initial Underwrite Final Underwrite

GPB-Mortgage

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Regional Statistics: Quality of the UnderwritingGPB-Mortgage

GPB-Mortgage's Analysis of the Regional Underwriting

0,0

20,0

40,0

60,0

80,0

100,0

120,0

Re gions

Shar

e of

the

Rep

aym

ent,

%

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Mortgage Loan Servicing: Arrears Management

Standing Order of Arrears

Management

In case of occurrence of the delayed debts Regional operators undertake the

certain actions set by the Standing order of the GPB-Mortgage

38 40 55 12060 75306

Regional operator informs the

borrower over the telephone and in

writing of the fact that his mortgage

is in arrears

RO informs the borrower that the

mortgage is more than 30 days in arrears. Commences the

information gathering process as to the

reasons behind the arrears

Second postal notice of the

arrears

Notice of loan acceleration with a demand to settle the

mortgage backed debt, interest and penalties immediately and in

full

A day for sending the

claim to court

The Servicer has the right to sell the mortgage certificate to a

third party

RO presents to GPB-Mortgage a detailed report with relation to borrowers that in arrears and the reasons for

arrears

Number of Days Following

Commencement of Arrears

GPB-Mortgage in a current mode traces statistics of the delayed debts on servicing portfolios and supervises spent work on its clearing

GPB-Mortgage

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0,00%

20,00%

40,00%

60,00%

80,00%

100,00%

120,00%

the 1-st day occurrenceof arrears

30-th day 60-th day 90-th day 120-th day 150-th day 180-th day

M ortgages beenin arrears

The Average Period of Extinguishing the Arrears in 2007

Efficiency of the Arrears ManagementGPB-Mortgage

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Perspectives of development of

business

GPB-Mortgage

Corporate regional network covering most of Russian’s regions can provide considerable underwriting and servicing facilities for the securitisation transactions planned

Alexander Egorov (GPB-Mortgage)Deputy Chairman of the Board

+7 495 223 40 40AEgorov@gpb-ipoteka.ru

Contacts