financials fund quarterly report q4 2011 capital... · date of investment november 7, 2006 *exit...

Financials Fund Quarterly Report Q4 2011

Platinum Bank Branch in Kyiv, Grinchenko St., 1 (Maydan)

Looking at 4Q, the Russian banking sector continued to deliver strong growth on both sides of the balance sheet. Loan growth was unexpectedly high in December, with state banks leading the trend. Privately-owned banks were more conservative with loan supply pre-serving some extra liquidity in case of deterioration in the operating environment. Loan demand, however, remained very strong in 4Q.

With regard to trends for 2012, most of our Russian portfolio banks expect some slowdown in loan growth due to increased interest rates and general negative sentiment imported from other markets. Deposit rates in Russia started to increase at the end of 2011, continue to rise in the beginning of 2012 and are expected to increase further on the back of the external factors indirectly affecting liquidity in the system. Hear-ing and reading negative news from abroad, some banks are chasing deposits by raising their rates to build even higher liquidity cushions and prepare for the worst. Banks that have very strong or excess liquid-ity (all of our Russian portfolio holdings are in this category) do not want to lose market share in deposits and have to follow suit, adjusting their rates upwards. Higher deposit rates translate into higher loan rates and could in turn cool down the loan demand. The impact on net interest margins remains somewhat unclear in 2012: on one hand, the funding cost is increasing and is negative for NIM, on the other hand, banks are transferring the cost to borrowers by increasing lending rates. And should borrowers’ expectations for lending rates remain high, NIM could increase further. Adding aggressive lending policies from the biggest market players in the regions into the picture, we expect NIM to remain flat for most of our holdings in 2012. Provision-ing for bad loans that appeared on the balance as a consequence of the previous financial crisis was brought to a comfortable level during 2010-2011, and we do not expect any big changes in the near future when it comes to asset quality.

Deleveraging is continuing in the Ukrainian banking system, with the retail loan book decreasing and only the corporate loan book sup-porting overall growth. With the system still showing a high LTD ratio (about 170%) and capital markets being more or less closed, we do not expect loan growth to rebound in 2012 in Ukraine. The ban on FX retail lending has not been lifted and will continue to restrain retail lending in 2012 as the public continues to keep deposits in hard currencies, being nervous about the Hryvnia’s stability and making it challenging for banks to manage their currency positions if lending in Hryvnia.

The Georgian banking sector showed strong growth in 2011. We believe the growth will cool down somewhat in 2012 on the back of the slowdown in Turkey (one of the main trading partners and sources of FDI for Georgia), troubles in the Euro zone and potential instability before the parliamentary elections in October 2012.

All of our portfolio companies are currently working on closing their books for 2011 and none of them have reported official full-year results yet. We have decided to update you briefly on 3Q results, gen-eral trends that the banks saw in 4Q and what they expect in the com-ing year.

2011 has been a rollercoaster on the global financial markets, driven mainly by the Euro zone debt problems in the second half of the year, which resulted in depressed bank valuations in our region, despite their stronger (relative to 2008) position and higher-than-expected lending growth in 2011. The valuation of the portfolio holdings in the fund resulted in 0.94 weighted average P/BV multiple based on the lat-est available book as of the end of December.

Notwithstanding the recent turbulence, we are glad to report that the fund signed an exit deal at year-end, agreeing to sell the fund’s 18.8% stake in Bank Kedr to Russian leasing company Ekstroleasing, which is part of a local financial group. With an attractive footprint and a solid client base in the Krasnoyarsk region, the bank remains an interesting asset for a strategic investor, despite its moderate growth and profitability since the end of 2008. The transaction is a good exam-ple of the type of deals we are seeking for the rest of our holdings. It supports the consolidation story in Russia, with the buyer intending to merge the bank into its existing bank holdings. The bank’s shares remain in the fund’s portfolio and will not be transferred until the last payment is on our account, which is expected by the end of June. The first payment was received on 12 January 2012. We have held Kedr for the last 12 months at the RUB transaction price in our books, which implied a higher valuation multiple than the rest of our holdings. This value was adjusted for exchange rate differences at the end of Decem-ber, which only had a negligible effect on NAV, confirming the valua-tion.

Deal detailsDate of investment November 7, 2006

*Exit date December 19, 2011

Cost of investment 10.8 EURm

Exit price 15.6 EURm

Cash on cash return 46.34

Gross IRR 7.75

Sberbank share cash on cash return during the same holding period 14.27

RTS Financials Index during the same holding period (value-weighted index) -16.90

Note: all the returns are in EUR termsRUB depreciated by 19.0% against EUR during the holding period USD depreciated by 2.6% against EUR during the holding period

*The payment will be received in tranches with the final closing by the end of June, return estimates are as if we received cash on the exit date for relative comparison with Sberbank and RTS Financials.

Ending the year on a positive noteFinancials Fund

Quarterly Report Q4 2011

Probusinessbank

In 3Q, Probusinessbank focused on generating liquidity and deposits grew 19% q-o-q in local currency. This demonstrates the bank’s ability to raise relatively cheap deposit funding through its nationwide distri-bution network. The loan book was up only 2.3% q-o-q in RUB terms, but still above the market y-t-d. The retail segment has been the main contributor to the growth and the bank has been successful in growing the high-margin express loan book, which is visible in its significantly higher than the market NIM.

The 3Q results suffered from significant losses on the trading portfolio (RUB 1.4bn or EUR 34.3m), which consumed the entire profit from the core banking business. The pre-tax profit was still marginally up, but net income was down 7.1% y-o-y. NII was up 41.4% y-o-y, sup-ported by a further expansion of NIM to 14.7%. Net Fees & Commission income was up over 60% q-o-q, contributing nicely to the 10% growth in NNI Income even after heavy trading losses. In late December, we held a board meeting where the bank’s trading strategies and policies and market risk policies were reviewed and some amendments were agreed upon. According to the management, Q4 was significantly better for the bank, with the core banking business producing strong figures.

The bank will continue to focus on its regional expansion and loan book growth in 2012. Special focus will be put into operational expenses, which should not grow faster than operational income.

Asian-Pacific Bank

Asian-Pacific BankIFRS, Unaudited

9M2011 EURm

9M2010 EURm

y-o-y % change

Net interest income 84.1 n.a. -Net interest income after provisions 69.0 n.a. -Net income 27.8 n.a. -Total deposits 917.2 n.a. -Net customer loans 779.8 n.a. -Total assets 1 170.9 n.a. -Net interest margin % 11.4 n.a. -ROaE, annualised % 19.4 n.a. -

The bank did not report 9M results on IFRS basis last year.

The bank delivered strong results in 3Q, posting an annualised 19% ROaE in EUR terms, and with profitability remaining high in 4Q according to the preliminary figures. Apart from an increased net interest margin, strong growth in core business and a provision write-back on the back of improved overdue loans dynamics in 4Q, the full year result will also be positively impacted by the property revaluation the bank performed close to year-end. According to the management, the bank has sufficient liquidity, loan demand remains strong and there are no signs of asset quality deterioration so far, despite negative global sentiment.

The bank slowed down its lending at the start of the year to get prepared for the worsening operating environment and is currently fine-tuning its optimistic growth plans in the budget for 2012.

Russia

Probusinessbank is among the top 40 Russian banks, is headquartered in Moscow and has a nationwide presence through its six regional subsidiary banks, all working under the "Life" brand. The group has an excellent distribution network, with 550 offices in 60 regions in Russia. Probusinessbank is a consolidator with a good track record in acquiring and integrating regional banks.

Value drivers: profitability increase through lower C/I and improved asset quality, strong distribution network with highly motivated sales forces, non-organic growth.

Rating: B- from Fitch RatingsOwnership stake: 19.93%Acquisition date: November 2006www.prbb.ru/en/information/news/

ProbusinessbankIFRS, Unaudited

9M2011 EURm

9M2010 EURm

y-o-y % change

Net interest income 237.1 167.6 41.4Net interest income after provisions 194.6 92.6 110.1Net income 16.8 18.1 -7.1Total deposits 2 036.2 1 466.0 38.9Net customer loans 1 436.6 1 110.3 29.4Total assets 2 973.9 2 240.3 32.7Net interest margin % 14.7 12.9ROaE, annualised % 8.8 11.3

Asian-Pacific Bank has now merged with our other two banks in the Russian Far East, has headquarters in Blagoveschensk and ranks among the top 100 Russian banks. The bank operates in 14 regions, with 158 offices focusing on retail and SME clients. Asian-Pacific Bank is a consolidator with strong shareholders and with experience in merging regional banks.

Value drivers: profitability increase from merger synergies and non-organic and organic growth in Russian Far East and Siberia.

Rating: B2 from Moody’s

Ownership stake: 17.91%Acquisition date: December 2006www.atb.su/

Financials FundQuarterly Report Q4 2011

Locko Bank

Locko Bank IFRS, Unaudited

9M2011 EURm

9M2010 EURm

y-o-y % change

Net interest income 41.5 27.4 51.4Net interest income after provisions 30.8 20.0 54.2Net income 13.1 18.8 -30.3Total deposits 577.3 514.8 12.1Net customer loans 867.3 662.3 30.9Total assets 1 289.5 1 090.5 18.2Net interest margin % 4.7 3.9ROaE, annualised % 11.6 19.1

In 4Q Locko Bank continued to focus on profitability and retaining interest margins. The retail loan book continued to grow nicely and it looks like this business line will already reach its break-even during 1Q 2012, which is earlier than budgeted. The bank plans to add new loan products to its retail offering, such as consumer loans and cards that have higher margins than the car loans that the bank is mainly offering today.

In order to further support its image as one of the leading SME banks, Locko Bank hired a new head of its SME division from Intesa Sao Paolo Russia. Irina Loskutova has been working with Intesa Sao Paolo for the past ten years and has extensive experience in SME bank-ing from this time.

Locko Bank is a Moscow-based bank with an established SME franchise. During the last two years, the bank has also started to develop retail banking. The bank has a network of 47 branches in the European part of Russia. It has a proven track record of profitable growth, operational efficiency and good asset quality. Locko Bank is working closely with the EBRD, the IFC and KfW in various SME and trade finance programs, and IFC is also a shareholder of the bank, with a 15% stake.

Value drivers: strong SME franchise, good platform to build retail banking, strong shareholders to support non-organic growth.

Rating: B+ from Fitch RatingsOwnership stake: 11.06%Acquisition date: September 2006www.lockobank.ru/eng/

Akibank

AkibankIFRS, Unaudited

9M2011 EURm

9M2010 EURm

y-o-y % change

Net interest income 17.1 18.1 -5.3Net interest income after provisions 13.5 16.3 -16.9Net income 1.4 3.2 -56.1Total deposits 467.9 591.0 -20.8Net customer loans 363.4 232.6 56.2Total assets 548.8 677.2 -19.0Net interest margin % 5.7 8.0ROaE, annualised % 2.4 5.7

In 3Q, the bank showed good loan book and deposit growth, with asset quality remaining stable. The loan book continued to grow in 4Q, with loan demand remaining sound from most of the industries the bank usually funds.

The bank remains very conservative when it comes to its liquid-ity position, increasing its deposit rates and keeping its market share despite its excess liquidity. This is negatively affecting its net interest margins, and one of the main focuses for the next year is to keep the margins stable, which is quite demanding as the bank is operating in a tough competitive environment.

Akibank is a regional bank in the Russian Republic of Tatarstan, headquartered in Naberezhnye Chelny. The bank has a strong market position, servicing big industrial groups and SME clients in the region through 44 offices. The bank is look-ing into opportunities to expand its operations through acquisitions in neighbouring regions.

Value drivers: non-organic growth, organic growth in Moscow with reinforced management team, profitability increase.

Rating: B3 from Moody’s

Ownership stake: 19.99%Acquisition date: June 2007www.akibank.ru


FIA-Bank

The CEO of the bank asked to be replaced at the end of 2011 due to his rapidly deteriorating health condition. The new CEO, with a back-ground at the bank and long experience within the management team, was appointed and is now undergoing CBR approval.

In 4Q, the bank experienced some deposit volatility as it resisted following increasing deposit rates in accordance with the market. Deposits, however, stabilised as soon as interest rates were adjusted upwards. The bank is actively working on increasing its retail share in its loan portfolio in order to increase profitability, and saw both good dynamics in its retail portfolio in 4Q and stronger-than-expected NIM due to the positive trend. However, there are some symptoms of fad-ing demand in the region, and the bank is budgeting moderate loan growth and flat NIM for 2012. Continuing the work on strengthening its retail portfolio, the bank is planning to set up a new department to follow up on different kind of products, making its marketing more effective in different regions.

FIA-Bank is based in the Samara region, with 19 offices servicing retail and SME clients. The bank has strong brand recognition in the region and a growing client base. FIA-Bank is an attractive partner for banks seeking expansion in the Samara region.

Value drivers: loan and deposit growth based on a strong retail platform and brand recognition, recovery of auto industry.

Rating: -

Ownership stake: 20.00%Acquisition date: April 2008www.fiabank.ru

FIA-BankRAS*

9M2011 EURm

9M2010 EURm

y-o-y % change

Net interest income 12.6 8.0 57.8Net interest income after provisions 7.4 5.2 41.8Net income 1.6 0.5 234.1Total deposits 370.7 297.2 24.7Net customer loans 307.2 257.6 19.2Total assets 442.0 366.7 20.5Net interest margin % 4.7 3.6ROaE, annualised % 4.8 1.6

* Note that RAS can have substantial discrepancies with IFRS accounting.

Russian banking sector in 2011

RUBbnDecember

2010September

2011November

2011December

2011m-o-m,

% changeq-o-q,

% changey-o-y,

% changeAssets 33 805 38 443 39 880 41 628 4.4 8.3 23.1Total loans 18 148 21 748 22 795 23 266 2.1 7.0 28.2 – retail loans 4 085 5 065 5 336 5 551 4.0 9.6 35.9 – corporate loans 14 063 16 683 17 459 17 715 1.5 6.2 26.0Deposits and current accounts 20 699 23 954 24 298 25 566 5.2 6.7 23.5Provisions 1 904 2 000 2 016 1 988 -1.4 -0.6 4.4 Source: CBR


Dennis Vinokourov and Julianna Sosnovska visiting FIA-Bank in Togliatti, Samara region, Russia

Morgan&Stout

Morgan & Stout had another strong quarter, both in terms of new port-folios received and revenues. For the full year, the volume of new port-folios increased nearly four times and the company has now clearly established itself as one of the top three collection agencies in Russia. December is traditionally a very good month for collection agencies in Russia and this year was no exception. Collections were roughly 30-40% higher than in November and this contributed to a year-end result that will show a significant increase from the previous year.

The company has now decided on the location for its new regional call centre. It will be in Yaroslav, 250km northeast of Moscow, and is planned to be in operation starting from April. This will allow the com-pany to further expand its business more cost efficiently than in Mos-cow, as both the rent and salaries are significantly lower.

Morgan & Stout is a Moscow-based debt collection agency that was established in April 2007. M&S offers the full spectrum of debt collection services, focusing on early phase soft collection and legal services. The company has two main business lines; credit management services and purchased debt. M&S has firmly established itself as one of the top 5 collection companies in Russia, with a diversified client base consisting of retail banks and telecom and utilities companies.

Value drivers: diverse CMS business, high collection efficiency, good technical platform for rapid expansion.

Portfolios under management: EUR 350m as of end November 2010Total revenues: EUR 4m as of end of November 2010Ownership stake: 33.00%Acquisition date: July 2008www.morganstout.com/en/

EE-DF AG

The large portfolio purchased in September from Rosbank has been collecting above the planned levels, and looks like a good purchase. We also decided to make a revaluation of the earlier purchased portfolios as the collection curve has turned out to be flatter and the collection period longer than expected. The company will record a small profit for the full year after these revaluations.

EE-DF is a joint-venture with the leading European debt collection company Intrum Justitia that aims to become a significant market player in the Russian purchased debt market. The company purchases non-performing retail loan portfolios consisting of mainly non-secured consumer loans, credit cards and car loans. The total commitment amounts to EUR 20m. The purchased portfolios will be serviced by local collection companies, with Morgan & Stout as the preferred partner for the joint-venture.

Value drivers: best-in-class portfolio analysis tools, good portfolio sourcing capabilities, strong partners.

Portfolios under management: n/a

Total revenues: n/aOwnership stake: 25.00%Acquisition date: January 2010


Morgan & Stout call center in Moscow works in two shifts, seven days a week and has today over 400 employees.

Pivdennyi bank

Pivdennyi found the operating conditions in 4Q to be difficult, with a generally unstable retail deposit market and catastrophically low liquidity in the interbank market causing many banks to increase their UAH deposit rates to 25% and higher, while Pivdennyi worked to keep its rates at more reasonable levels, protecting its NIM, while not losing deposits. Overall, the bank was successful in this effort, and December brought better liquidity in the markets, even if banks are wary of fur-ther UAH drought spells to come. The NBU is using a tight monetary policy to relieve downward pressure on the currency, but this makes normal settlement business a tough slog for the banks.

Pivdennyi’s improved top line results in 2011 have been damp-ened by provisioning on a few bad loans, but overall core income has displayed positive trends. In addition, the bank launched several key internal projects, including a reorganisation of the IT department and an upgrade its systems, and is interviewing candidates for a new Head of Retail Credit. Both of these areas will be important for Pivdennyi’s development in 2012 and beyond.

Ukraine

Pivdennyi is the largest bank in the Odessa region, with a 30% market share in southern Ukraine. The bank has a strong regional brand with loyal corporate and retail clientele. The growing Black Sea trade routes offer good growth prospects for the bank to further expand its corporate bank-ing business.

Value drivers: developing SME business and retail lending, increasing profitability.

Rating: B- from Fitch, B3 from Moody’sOwnership stake: 9.98%

Acquisition date: January 2008http://en.bank.com.ua/

Pivdennyi bankIFRS, Unaudited

9M2011 EURm

9M2010 EURm

y-o-y % change

Net interest income 36.2 25.8 40.3Net interest income after provisions 18.9 16.9 11.7Net income 3.2 4.7 -31.9Total deposits 964.4 894.7 7.8Net customer loans 844.0 802.3 5.2Total assets 1 175.5 1 149.1 2.3Net interest margin % 5.5 3.8ROaE, annualised % 2.8 4.7


Nadra Bank

Nadra enjoyed good liquidity throughout the second half of 2011, as it benefitted from the cash flows of group companies owned by business-man Dmitry Firtash, the bank’s main shareholder. Overall, corporate deposits grew in the fourth quarter by 42% q-o-q in local currency, which more than offset continued outflows in retail deposits (-19% q-o-q). The management has made significant recoveries within the corporate loan book, allowing them to release provisions, and is mak-ing strides with business development on the corporate side as corpo-rate loans increased by 12% during the quarter. The retail business is still somewhat weak, as Nadra has not regained the confidence of the population after two years of temporary administration. Full-year net income on Ukrainian reporting standards was very weak, at USD 0.3m.

Nadra is the 11th largest bank in Ukraine and the largest independ-ent retail bank in the country. It is a universal commercial bank with a nationwide branch network focusing on the mass retail market. In 2006-2007, Nadra underwent a major rebranding and re-launch of its retail product line, which was very suc-cessful, but the bank experienced severe deposit outflows in late 2008 and the subsequent deterioration of assets led to a distressed situation. The bank was under temporary administration until August 2011, but has since regained its full operational status.

Ownership stake: 0.66%

Acquisition date: August 2006

www.nadrabank.ua/eng/to-you

Ukranian banking sector in 2011

UAHbnDecember

2010September

2011November

2011December

2011m-o-m,

% changeq-o-q,

% changey-o-y,

% changeAssets 94 209 102 917 104 452 105 428 0.9 2.4 11.9Total loans 72 401 79 291 79 355 79 319 0.0 0.0 9.6 – retail loans 20 440 20 218 19 934 19 621 -1.6 -3.0 -4.0 – corporate loans 51 960 59 073 59 421 59 698 0.5 1.1 14.9Deposits and current accounts 41 385 46 893 46 614 48 678 4.4 3.8 17.6Provisions 11 297 12 411 12 185 11 894 -2.4 -4.2 5.3 Source: NBU


Platinum bank

Platinum continued to post great results on the back of strong growth through the first nine months of 2011. Having finished the integration of Home Credit’s Ukrainian business, and simultaneously imple-mented successful organic retail deposit growth strategies, the bank has been able to fund a doubling of the loan portfolio entirely with local deposits, making it one of the top 5 fastest-growing retail banks in Ukraine. Although management chose to be somewhat conservative with loan portfolio growth during the unstable months of October and November, the preliminary full year figures look good, as do trends for 2012. Portfolio quality continues to be exemplary, and the bank has finished several key internal projects, including the set up of a full-scale “operations factory” in Kyiv.

As a reflection of Platinum’s growing reputation as a quality pro-vider of retail banking services, the bank was named “Best Retail Bank in Ukraine”, based on a poll of local bankers taken by a local finance magazine.

Platinum Bank is the only independ-ent pure play consumer finance group in Ukraine. The bank was set up in 2007 with two business lines; mortgage and consumer finance/cash cards. As the market environ-ment has changed significantly since its establishment, the bank is now expanding its product range to become a full service retail and SME bank.

Value drivers: non-organic growth, organic growth through branch roll-out, profitability increase.

Rating: -Ownership stake: 23.69%Acquisition date: February 2007http://en.platinumbank.com.ua/

Platinum bankIFRS, Unaudited

9M2011 EURm

9M2010 EURm

y-o-y % change

*Core income 37.6 19.2 96.3*Core income after provisions 28.5 16.6 71.3Net income 5.6 5.7 -2.2Total deposits 147.7 24.7 498.2Net customer loans 190.4 93.4 104.0Total assets 308.0 156.0 97.4Net interest margin % n.a. n.a.ROaE, annualised % 11.4 9.8

* Net interest income and net fees and commission income.

Lyudmila V. – retail customer of Platinum Bank. Platinum Bank, Kyiv branch.

Bank of Georgia

Georgia

Bank of Georgia is a leading Georgian universal bank, providing a full range of commercial and investment bank-ing, asset and wealth management, insurance, leasing and card process-ing services to its corporate and retail clients. The largest retail bank in the country, with a 36% market share by total assets, Bank of Georgia serves approximately one million retail and corporate clients through its network of 143 branches and 408 ATMs, as well as through other delivery chan-nels including the Internet, mobile banking and a state-of-the-art call centre. Bank of Georgia is listed on the Georgian Stock Exchange and has its GDRs listed on the London Stock Exchange.

Value drivers: loan book growth, profitability improvement, attractiveness of the region.

Ownership stake: 10.94%

Rating: ‘BB-/BB-’ from S & P, ‘B1/NP’ (FC) & ‘Ba3/NP’ (LC) from Moody’s and ‘BB-/BB-’ from Fitch Ratings

Acquisition date: April 2006www.bog.ge/

Bank of GeorgiaIFRS, Unaudited

9M2011 EURm

9M2010 EURm

y-o-y % change

Net interest income 73.5 69.4 5.9Net interest income after provisions 67.8 56.4 20.3Net income 42.4 24.3 74.5Total deposits 1 044.6 675.2 54.7Net customer loans 1 123.0 839.2 33.8Total assets 1 960.3 1 472.0 33.2Net interest margin % 7.9 8.7ROaE, annualised % 18.4 12.9

Georgian banking sector in 2011

GELmDecember

2010September

2011November

2011December

2011m-o-m,

% changeq-o-q,

% changey-o-y,

% changeAssets 10 564 11 976 11 881 12 679 6.7 5.9 20.0Total loans 6 082 7 232 7 336 7 519 2.5 4.0 23.6 – retail loans 2 375 2 976 3 073 3 173 3.2 6.6 33.6 – corporate loans 3 708 4 256 4 262 4 346 2.0 2.1 17.2Deposits and current accounts 5 488 6 116 6 039 6 745 11.7 10.3 22.9Provisions 587 584 564 536 -4.9 -8.1 -8.7 Source: NBG


Bank of Georgia reported solid 3Q 2011 results, with close to 75% y-o-y increase in net income and ROE edging closer to the long-term target of 20%. The net result was boosted by strong NIM of 7.9% and lower cost of risk. Operating expenses declined 5.8% q-o-q in local currency, leaving the C/I ratio at a very satisfactory level of 51.9%.

The bank has continued to grow its loan book faster than the mar-ket, despite its already dominant market position. Net customer loans grew nearly 34% y-o-y, and this growth was fully funded from deposits. The deposits growth has exceeded the loan growth and the loans to deposit ratio has declined to 108% from 116% from the start of the year. With close to 18% core Tier 1 capital ratio, the bank is not only profit-able and liquid, but also well capitalised. This has been recognised by the rating agencies as well, and both Standard & Poor´s and Fitch raised their respective ratings by two notches, to BB-. Bank of Georgia is now rated at the sovereign level.

Bank of Georgia is progressing with its premium listing on the Lon-don Stock Exchange according to the previously-announced timetable. The tender offer for exchanging shares to the UK holding company will expire on 24 February, and with close to 75% pre-acceptance, the listing is expected to take place before the end of February. The recep-tion among the UK investor community has been very positive and the bank has got plenty of positive media coverage. The share price has been volatile on a very volatile market, but has seen a recovery in Janu-ary, when other emerging markets have rallied.

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Fund performance since inceptions

East Capital Financials Investors AB (publ) (31.01.2012)

NAV (EUR) % 1 mth % YTD % Since inception269.01 0.6 0.6 -46.2

NAVIndicative NAV is published on East Capital’s website on the 5thbanking day of every month.

East Capital Financials Fund

Jefferies International Pareto - Öhman Alternativa AktiemarknadenEquity Sales Equity Capital Markets Trading DeskJudah Plotner+44 207 898 [email protected]

Joakim Appeltofft+46 407 50 [email protected]

+46 8 673 17 [email protected]

Prices can be found on:Bloomberg: <JJFD > / Emerging Europe andCentral Asia

Prices can be found on:Bloomberg: <OHMF> / Swedish shares and BondsWeb: www.paretoohman.se / Swedish shares and Bonds

Prices can be found on:Web: www.alternativa.se

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For additional information regarding the East Capital FinancialsFund, please contact:

East Capital ABE-mail: [email protected]: +46 8 505 88 555

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Portfolio by country %

Portfolio by company %

Russia 61.0Georgia 16.1Ukraine 14.5 Cash and strategic

deposits8.4

Probusinessbank 22.2 Bank of Georgia 16.1Asian - Pacific Bank 11.3 Cash and deposits 8.4 Locko Bank 7.5 Bank Kedr 6.8 Platinum Bank 6.5 Pivdennyi Bank 6.3Morgan & Stout 5.4Akibank 4.9 FIA Bank 2.4Nadra Bank 1.7 ED-EF AG 0.5

Portfolio is net of fees, excluding undrawn commitments.

Portfolio is net of fees, excluding undrawn commitments.

financials fund quarterly report q4 2011 capital... · date of investment november 7, 2006 *exit...

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