RESULTS 2016 Macroeconomic and internal financial conditions In - PowerPoint PPT Presentation

RESULTS 2016

Macroeconomic and internal financial conditions In 2016 the process of slowdown in the decline in the In 2016 the continuing slowdown in the decline in GDP Russian economy continued against the background of (0.4% p.a. in 3Q vs 0,6% p.a. in 2Q) accompanied by the relatively stable internal financial conditions and a of signs of recovery in economic activity of certain number of external factors: increased volatility in sectors and regions of the Russian Federation. CBR recorded a slowdown in inflation according to the world commodity and financial markets and low growth in the world economy. baseline forecast of 5.4 % - 5.8 % at the end of 2016 as In 2016 the limits on oil production by the countries – well as reducing the risks of inflation. suppliers impacted positively on commodity markets In these circumstances, a moderately tight monetary and dynamics of prices on hydrocarbons as well as policy of CBR was aimed for maintaining of financial stability and creating incentives for savings by economic contributed to the strengthening of the Russian currency by more than 20% by year-end ( 60,1618 entities, contributing to the further slowing of inflation RUB / $ against 72,8827 RUB / $ at the end of 2015). and its output on the target level of 4% in 2017. Reduction of the key rate (in June 2016 from 11 % to Negative factor, restricting access to international 10.5% p.a. and from 10.5% to 10% p. a. in September capital markets and increasing the cost of raising funds 2016) was accompanied by a signal to the market on its in the domestic market, remained sectoral sanctions possible further reduction in 1-2Qs 2017. imposed against several Russian credit institutions. January 01 , 2016 January 01 , 2017 Rate RUB/ $ 72,8827 60,6569 Key rate of the Bank of Russia (% p.a.) 11 10 Inflation (% p.a.) 12,9 5,4 Brent ($/barrel) <40 >55

Development of the Russian banking sector in 2016, dynamics In 2016, in the framework of implemented moderately tight monetary policy, the Bank of Russia has proposed to the banking sector some changes and measures aimed for stabilization of the Russian economy and financial sector: expanding the Lombard list (added 45 issues of securities additionally), clarifications in a structure of obligations, subject to reservation, which included in the calculation of required provisions for the Russian credit institutions. In 2016 the Bank of Russia continued the process of active recovery in the Russian banking system: a number of operating banks (with the right to conduct banking operations) decreased over the year by 63 to 623 (178 credit institutions are unprofitable). According to the CBR information as at January 01, 2017 a number of credit institutions with revoked (cancelled) licenses for banking operations comprised 351 for the whole period of recovery. The concentration of banking assets in 2016 has not changed significantly, where traditionally the first 50 of credit institutions (by total assets) have accumulated up to 88.7% of the banking assets and only 11.3% are the assets of the remaining banks (87% and 13% in 2015, respectively). 2016 vs 2015 (in bns. of RUBs) Indicator Annual change, % Assets -3,5 (1,9*) 80 063 /83 000 Aggregate loans to economy -6,9 (-2,4*) 40 939 /43 985 Loans to non-financial organizations -9,5 (-3,6*) 30 135 / 33 301 Loans to individuals 1,1 (1,4*) 10 804 / 10 684 Loans to financial institutions-residents (excl. credit 67,4 2 777 /1 659 institutions) Profit 384,4 930 /192 Deposits of individuals 4,2 (9,2*) 24 200 /23 219 -10,1 (-2,8*) Customer accounts and deposits (excl. credit institutions) 24 322 / 27 064 Due to the Bank of Russia -49,2 2 726 /5 363 Provisions for possible losses +3,5 5 594 / 5 406 Source: http://www.cbr.ru/analytics/ (* - excl. amendments for currency revaluation )

Business Profile NK Bank (joint stock company), License № 2755 is a private commercial Bank, focused on services for corporate business and private customers, operates in the Russian banking market since 1993. The Bank's primary business includes the classic banking operations with securities, foreign currency, loans and guarantees, financial services and products for wealthy customers (Private banking). PRIORITIES RETAIL BUSINESS: traditional banking products and services for individuals CORPORATE BUSINESS: services and products for large business and medium-sized enterprises PRIVATE BANKING: unique products and financial services for wealthy customers PARTICIPATION Moscow Exchange OJSC (trader on currency, money and capital markets) Member of the Moscow International Currency Association Associate member of IPS Visa International Affiliate member of IPS MasterCard Worldwide Member of the Russian National SWIFT Association Member of the Association of Regional Banks of Russia (Association “Russia”) Member of SRO National Finance Association User of Reuters, Bloomberg, Info system RVS – Bills RATINGS MOODY’S INVESTORS SERVICE (November 2016) RANKINGS EXPERT RA (as at 01.01 . 2017) Bank Deposits B3/NP Assets 166 Baseline Credit Assessment b3 Dynamics of capital 134 Outlook negative Total loan portfolio 152 Counterparty Risk Assessment B2(cr)/NP(cr) Loans to legal entities 152 Loans to individuals 111 Customer accounts 153 Deposits of individuals 151 Total financial result 144

Shareholders Grigoryev Viktor Smirnov Sergey President of JSC NK Bank since 2011. Chairman of Executive Board of JSC NK Bank since 2005. More than 25 years of successful More than 20 years of successful business experience as a Head, Chairman and a Member of the Board business experience in the Russian of Directors of industrial enterprises banking system as a Chairman and holdings. (CEO) and a Member of the Board of Directors in commercial banks. Business interest : industrial, oil and gas, energy and other assets of key sectors. Professional corporate management skills and personal In a period of 2008 - 2015 the shareholder invested in leadership qualities have defined the Bank’s success in development of the Bank: overcoming economic crisis in 1990 th , 2004, 2008 – 2010. Additional share issue : 55.5 m rubles in 2009 Experience of the leader has allowed the Bank to find its Subordinated loans in amounts of 148.5 m rubles in 2009 and niche in the Russian banking system, the ability to look 324 m rubles in 2014 one step further - to determine accurately the main Free of charge financing: 150 m rubles in 2013 vectors of development for the Bank. and 15 m rubles in 2015. HIGH SHAREHOLDERS’ INTEREST IN DEVELOPMENT OF THE BANK HELPS TO:  attract financially stable partners and new customers S. Smirnov  organic business development and extension of the Bank's activities 10,0% V.Grigoryev  participate in financially stable and long term projects 90,0%

Corporate management BOARD OF DIRECTORS  Development and strategy Grigoryev Victor , Chairman of the BoDs  Compensations  Development and strategy Grigoryeva Ksenia , Member of the BoDs  Risk management Mekhryakov Vladimir , Independent Member of the BoDs  Compensations Kiyko Svetlana , Independent Member of the BoDs  Risk management Yakubenko Philipp , Member of the BoDs  Audit and internal control EXECUTIVE BOARD Smirnov Sergey , CEO Deputy CEOs, Members of the ExB: Batraev Vladislav Grigoryeva Ksenia Gusarova Natalya Demchenko Vladimir Dremova Olga Lyalyushko Julia Solganik Janna Merkulova Elena , Chief Accountant

Financial profile ASSETS DYNAMICS 01.01.2017 in thousands of RUBs (rf 806*) 01.01.2016 As at January 01, 2017 the Bank's assets 1 196 166 Cash and equivalents amounted to 15 937,0 m rubles , the share of 574 180 working assets - 78,68%, return on assets Cash and balances with CBR 310 764 613 939 (ROA) - 1.30% Required reserves 93 973 116 745 Due from banks 261 269 815 581 Assets 15 936 158 Financial assets at fair value thought profit / loss 527 227 432 639 01 01 2017 Net loan receivables 12 032 103 10 554 804 Net investments in securities and other financial 1 171 131 1 933 937 13 783 165 Liabilities assets Property, equipment and intangible assets 37 021 301 763 Assets 16 373 985 Long-term assets held- for- sale 481 428 539 293 01 01 2016 Other assets 356 876 170 022 rf .806 * , in *Published RAS financial statements, reporting forms 807, 806 incl. events after the reporting date 01.01.2017 14 334 098 Liabiliti es ths . of RUBs Structure of Assets as at January 01, 2017 ( %) STRUCTURE The structure of the Bank’s assets at the Loans reporting date is traditionally in a large part 6,35% comprised of the loan portfolio - 44%, securities portfolio - 15%, highly liquid assets 14,85% Interbank – 13%, interbank loans portfolio in Russian Loans 54% banks for up to 30 days - 22% and other 43,91% assets. Cash and equivalents 12,57% TERM CUSTOMER ACCOUNTS/LIABILITIES – 71,11% Securities LOANS/CUSTOMER ACCOUNTS – 63,27% 22,32% Other assets