Druvis Murmanis Managing Director Russia, Hansabank 2 Economy and - PowerPoint PPT Presentation

Capital Markets Day Tallinn, September 8, 2005 Druvis Murmanis Managing Director Russia, Hansabank

2 • Economy and Russian Banking market Q2 2005 • Business development • Financial highlights for Russian Unit

3 • GDP growth – 5.9% in H1 2005, Inflation 8.5% in 7 month • Political and social developments – Increase of presidential powers – Parliament election reforms • Government finance and debt – Budget surplus target for 2005 was 1.5% from GDP (OIL 28 USD barrel), currently realized surplus is 10% from GDP – CB currency reserves up 24 billion in H1 2005 to 148 billion USD – More liberal tax regime – Lower social tax, stable individual income tax – Federal borrowing down from 6.3% to 5.1% from GDP. – Government external debt decreases ahead of schedule from 160 bil (1998) to 100 bil USD (H1 2005) – Current account surplus 6.4% from GDP • Public sector debt and private capital flow – Private sector external debt raised from 28 bil to 121 bil USD(1998-2005) – Capital flight from Russia dropped to 5-6 bil USD in H1 2005 compared with 10-12 bil USD in H1 2004 – FDI inflow 9.4 bil USD in H1 2005

4 • Assets of banking system rose by 18% in H1 2005 (~217 bil EUR) • Loan portfolio of banking system has grown by 17% (~119 bil EUR). Loan to Assets Ratio is stable at 55% level. • Central Bank of Russia is considering to introduce more strict rules for lending to related companies • Deposit base has grown by 14% (total portfolio ~131 billion EUR) • Record number of banks has been closed by central bank starting from 2005. • Mergers and acquisitions processes are continuing. Uralsib, Vneshtorgbank, KMB, Impexbank. • Market shares: – TOP 30 banks market share has grown by 1% to 67% – Sberbank has 64% share on deposits market (~62 bil USD) and 33% on loans market (~ 52.7 bil USD)

5 Equity, Change EUR in mil Bank 30.06.05 % 1 Sberbank 6 500 29.2 2 Vneshtorgbank 2 170 32.3 3 Gazprombank 1 128 1.2 4 International Industrial Bank 749 -3.3 5 Alfabank 708 0.1 6 Bank Moskwi 525 8.9 7 MDM bank 502 30.8 8 Raiffeisenbank 444 74.2 9 Rosbank 438 13.4 10 International Moscow Bank 434 44.2 50 Rossija 87 145 51 National Bank Trast 87 -17.6 52 OAO Hansabank 84 5 943

6 HB Russia Lending ООО Hansa AS Hansa OOO Hansa business OAO Leasing Trade finance Leasing Russia Leasing (Booked in Hansabank Kaliningrad (Estonia) (Estonia) (Russia) Baltic (Russia) countries)

7 • To complete restructuring of KVEST bank – Acquisition completed end of February – Equity has been increased by EUR 84 M – end of June – New IT system implementation – Entering deposit insurance system • Implementing new policies and procedures • Audited by Central bank – Hansabank group Risk management systems and principles implementation • Credit risks • Market risks • Operational risks

8 • Expanding leasing business • Establishing corporate banking division – Corporate financing – Nordic-Baltic corporate desk – Trade finance – Factoring • Establishment of Kaliningrad and St Petersburg offices – Leasing operations are running – Premises have been found – Key people have been hired – Bank branches will be opened December 2005

9 • HR development – Intensive recruiting – 90 people are working in Russia, 50+ more expected this year – Salary system – Performance management system – HR administration • Marketing – Marketing strategy – PR – Sales support

10 • Net profit, €7.2m for 1H05 (+55% yoy) • Revenues €11.6m for 1H05 (+68% yoy) • Expenses €2.7m for 1H05 (+239% yoy) • Loan portfolio €283m, +€80m ytd • 1H05 ROE 54% (68% in 1H04), NIM 6.2% (6.6%), C/I 23% (11%) Highlights: • Increasing loan book, margins still high • Change in provisioning principles • Increase in operating expenses

11 Change 1H 04 1H 05 EUR in thousands YOY 8,991 5,455 +65% Net interest income Net fees 1,546 1,099 +41% Trading income 359 342 +5% Other income 691 7 n.m. Total revenue 11,587 6,903 +68% Operating expenses 2,659 783 +239% Provisions 473 560 -20% Net income 7,187 4,625 +55% EVA 4,854 3,656 +33%

12 Change Mar 05 Dec 04 EUR in millions June 05 YTD 77 46 14% Trade finance 52 18 6 245% Bank loans 21 169 151 39% Leasing 210 118 122 -6% HLR 115 77 28 233% HL 94 0.4 0 n.a. HLK 0.4 264 223 40% Total loans 283

13 AS Hansa Leasing Russia 3 500 3,119 3 000 OOO Hansa Trade Leasing Finance 2 500 EUR in thousands 2,176 2,098 2 000 1 500 1 000 HL Kaliningrad 500 Banking -52 -154 0 -500

Building a leading Nordic-Baltic bank