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Trust investment bank national bank trust

TRUST Investment Bank & National Bank TRUST

1st Half 2007 Results and Business Strategy

20 September 2007


Trust investment bank national bank trust

Disclaimer

This presentation has been prepared and issued by National Bank TRUST and TRUST Investment Bank (collectively and jointly known as “TRUST”). This publication is intended for professional and institutional customers. Any information in this presentation is based on data obtained from sources considered to be reliable, but no representations or guarantees are made by TRUST with regard to the accuracy of the data. The opinions and estimates contained herein constitute our best judgment at this date and time, and are subject to change without notice. This presentation is for information purposes, it is not intended to be and should not be construed as an offer or solicitation to acquire, or dispose of any of the securities or issues mentioned in this presentation. TRUST and/or its subsidiaries may use the information in this presentation prior to its publication to its customers. TRUST or its employees may also own or build positions or trade in any such securities, issues, and derivatives thereon and may also sell them whenever considered appropriate. TRUST may also provide banking or other advisory services to interested parties. TRUST accepts no responsibility or liability whatsoever for any expense, loss or damages arising out of, or in any way connected with, the use of all or any part of this presentation.


1 executive summary
1 Executive Summary

2 Rationale for Merger

3 Group History & Structure

4 Group Strategy

5 Group Business Overview

6 Group Risk Management

7 Group Financial Forecasts

8 Group Merger Implementation Plan


Executive summary
Executive Summary

  • The shareholders of Investment Bank TRUST (“IBT”) and National Bank TRUST (“NBT”) announced the merger of the two banks on July 17th, 2007

  • The merger will optimise both the capital and asset structure of the merged bank

  • Although the merged bank will be a universal bank, the focus of growth will be on the retail and SME portfolios

  • The branch expansion plan will be largely completed by the end of 2008 allowing management to greater focus on achieving higher ROAE targets

  • Including the announced and funded RUB3.4bn capital increase of NBT, the merged bank will have sufficient capital for at least 24 months and will be in the top 20 financial institutions in Russia by capital and assets


Executive summary nbt s stand alone profile
Executive Summary: NBT’s Stand Alone Profile

NBT in Figures:

1H 2007 IFRS (RUB mln.)

  • Total Assets:54,977

  • Net profit (6 month): 145

  • Shareholders’ equity: 5,497

  • Loan portfolio:32,676

    Branch Network as of 20 September, 2007:

    171 offices in 118 cities of Russia and in process of opening 42 offices by the end 2007

  • Employees: 6,357

  • Ratings:

  • “B1”, outlook “Positive” by Moody’s

  • “B-” , outlook “Positive” by Fitch

  • What We Are:

    NBT provides full range of commercial banking services to corporate and private clients. Bank primarily focuses on Retail and SME loans to corporate and individual customers and federal / municipal governmental entities. NBT is a member of Deposit Insurance System.

    Key Clients:

    Mass Retail segment, Trade and Service Industries, SME

    Current Geographical Coverage:

    Strong presence in cities with population of over 100,000 and satellite towns of large cities

    Strategic Goal:

    In the next two years to become a TOP 5 Russian retail and SME bank in Russian regions with high growth potential based on

    • Size of assets

    • Number of clients

    • Coverage of branch network


    Executive summary tib s stand alone profile
    Executive Summary: TIB’s Stand-Alone Profile

    TIB in Figures:

    H1 2007 IFRS (RUB mln.)

    • Total Assets:43,647

    • Net loss (6 month): (36)

    • Shareholders’ equity: 6,633

    • 2007 YTD League Tables:

      1st Qtr 2007, #2 CLNs (37.5%)

      1st Qtr 2007, #2 Domestic Owned Bank, Eurobonds (1.3%), #17 overall

      1H 2007: #1 Domestic owned Bank, Eurobonds and CLN

      1H 2007: #3 Domestic Owned Bank, IPOs

      Employees: 409

  • Ratings:

  • “B1”, outlook “Positive” by Moody’s

  • What We Are:

    TIB provides a full range of investment banking services to corporate and institutional clients. The Bank’s primary focus is to act as an intermediary between second and lower tier corporate Russia and domestic and international investors. Key products include DCM, ECM, Hybrids, Securitizations, Real Estate, Corporate Finance, Investment Banking and Principal Investments.

    Key Clients:

    Primary: Second and lower tier Russian & Ukrainian corporates with an appropriate size within the next 18 months to be seen as a qualified issuer of debt or equity to investors.

    Investors: Global Hedge Funds, International and Domestic Banks, Insurance Companies, Pension Funds, Private Clients and Asset Managers

    Location:

    Moscow based with FSA registered office in London with plans of expansion to Asia (licensed office in Hong Kong) within next 12 months.

    Strategic Goal:

    In the next two years:

    • Remain in top 3 domestically owned banks in fixed income credit product (CLNs, Eurobonds, Hybrids)

    • Move into top 3 domestically owned banks participating in IPOs, by number of deals

    • Retain research leadership in Fixed Income and Second Tier Equity


    1 executive summary1
    1 Executive Summary

    2 Rationale for Merger

    3 Group Structure

    4 Group Strategy

    5 Group Business Overview

    6 Group Risk Management

    7 Group Financial Forecasts

    8 Group Merger Implementation Plan


    Rationale for merger
    Rationale for Merger

    • Focus remains to grow branch network to cover all cities with population greater than 100,000 people. However the management recognises that the expansion plan will discontinue by the end of 2008

      • Further asset growth and diversification, namely across retail and SME

    • ROAE is forecasted to start to pick up in 2007 and normalize during 2008

    • Release app. $150mln of capital from Investment Bank TRUST by optimising asset structure through spin-off of the proprietary position to an asset management structure – needed in 12 months time (including current capital increase)(1)

    • Yukos deposits no longer represent a material component of the group balance sheet(2)

    • Become one of the top 20 Russian banks and reduce cost of funding

      • For every 50bp improvement to overall effective funding rate the earnings of the merged bank will increase by approximately $13mln leading to an improved ROE of additional app. 2.1%

    • Recognised cost synergies of at least $7.5mln per year; headcount reduction of 80 people

    • Merger advisors: Merrill Lynch as exclusive financial advisor, Allen & Overy as legal counsel and KPMG as auditors and financial advisors

    (1) See page 47 for further information

    (2) See page 55 for further information


    Executive summary1
    Executive Summary

    Rationale for Merger

    Group History & Structure

    Group Strategy

    Group Business Overview

    Group Risk Management

    Group Financial Forecasts

    Group Merger Implementation Plan


    Nbt s history

    • 2003 IBT management takes over management of NBT

    • May 2004 - Management Buyout (IBT management)

    • Re-branding of TRUST: The Two Banks

    • Hired professional retail banking team

    NBT’s History

    1995–2002

    2003–2004

    2005

    2006

    • May 2005 – MBO fully paid

    • Branch Network & Product Expansion

    • Hired team from one of the top SME banks’ in Russia

    • Continue Branch Network & Product Expansion

    • Leading Retail and SME Bank

    “New Era”

    2005-present

    • March 2005 – First Auto Loan

    • April 2005 – First Cash Loan

    • July 2005 – Retail loan program available at all branches

    • March 2006 – First SME Loan

    • April 2006 – Credit Cards program launched

    • October 2006 – First Mortgage Loan


    Tib s history

    • May 2004 - Management Buyout (IBT management)

    • Re-branding of TRUST: The Two Banks

    TIB’s History

    1998–2003

    2003–2004

    2006 – 1H2007

    Beyond

    • September 2006, hired new CEO

    • Restructured institution to meet the demands of clients and investors

    • Built equity platform (trading, research, sales)

    • Opened regulated sales office in London

    • Execution of broader product range

    • Derivatives platform (JV)

    • Expanded distribution with non-exclusive relationships with international banks and funds

    • Alternative Investments (Private Equity, Hedge Fund and Asset Management)

    • Open regulated sales office in Asia

    “New Era”

    2H2006 to Present

    • Summer 2006 – Institutional Investor Ranked Research Team

    • Sept. 2006 – TIB $150m, Reg S Eurobond placed. First Capital Markets Transaction post the MBO

    • Dec 2006 – First Subordinated CLN placed (BSP)

    • Jan 2007 – Announced Bank restructuring and staff upgrade program

    • April 2007 – First non-group Eurobond lead manger role

    • May 2007 – First Official IPO role (Nutritec & Dixy)


    Trust investment bank national bank trust

    Current Shareholding Structure between Yukos (Menatep) and Gazprom

    Other

    shareholders

    Terzyan Artashes

    Beliaev Sergei

    Fetisov Nikolai

    Yurov

    Ilia

    8,12%

    16,44%

    21,55%

    21,55%

    32,33%

    Beliaev Sergei

    Fetisov Nikolai

    Yurov Ilia

    100%

    100%

    100%

    TIB Holdings Limited (Cyprus)

    Neaspal InvestmentsLimited (Cyprus)

    Winsala InvestmentsLimited (Cyprus)

    Zaploma InvestmentsLimited (Cyprus)

    68,10%

    9,12%

    9,12%

    13,66%

    Yurov Ilia– 18,1699%

    Beliaev Sergei – 3,8225%

    Fetisov Nikolai – 1,1589%

    Terzyan Artashes– 1,031%

    Other

    shareholders

    Management company TRUST (Russia)

    Other shareholders

    Yurov

    Ilia

    24,18%

    0,55%

    0,1%

    99,35%

    68,38%

    7,44%

    National bank TRUST (Russia)

    TRUST Investment Bank (Russia)


    Trust investment bank national bank trust

    Pro-forma Post Merger Shareholder Structure between Yukos (Menatep) and Gazprom

    Other

    shareholders

    Terzyan Artashes

    Beliaev Sergei

    Fetisov Nikolai

    Yurov

    Ilia

    8,12%

    16,44%

    21,55%

    21,55%

    32,33%

    Beliaev Sergei

    Fetisov Nikolai

    Yurov Ilia

    100%

    100%

    100%

    TIB Holdings Limited (Cyprus)

    Neaspal InvestmentsLimited (Cyprus)

    Winsala InvestmentsLimited (Cyprus)

    Zaploma InvestmentsLimited (Cyprus)

    68,10%

    9,12%

    9,12%

    13,66%

    Yurov Ilia– 5,99%

    Beliaev Sergei – 1,25%

    Fetisov Nikolai – 0,38%

    Terzyan Artashes– 0,34%

    Other

    shareholders

    Management company TRUST (Russia)

    89,24%

    7,96%

    2,8%

    • Calculation based on the following numbers

    • NBT BV multiple = 2.5 X IBT multiple

    • Total equity NBT, thousand RUR 5492425

    • Total equity IBT, thousand RUR 6651134

    National bank TRUST (Russia)


    Merged bank organisational structure

    Retail between Yukos (Menatep) and Gazprom

    Origination

    SME

    Markets

    Network

    Research

    Sales & Syndicate

    Asset Management

    Merged Bank Organisational Structure

    Board of DirectorsChairman: Yurov

    CEO & Chairman of

    Management Board

    Eggleton

    Management CommitteeChairman: Fetisov

    President

    Fetisov

    CFO

    CRO

    CIO

    COO

    Treasury

    HR

    Retail Bank

    Investment & Corporate Bank Committee Chairman: Eggleton


    Group management structure post merger
    Group Management Structure (Post Merger) between Yukos (Menatep) and Gazprom

    Board of Directors

    Chairman: Yurov

    Credit CommitteeChairman: Yurov

    Investment &Corporate Banking CommitteeChairman: Eggleton

    Management CommitteeChairman: Fetisov

    ALCO CommitteeChairman: Eggleton

    Retail

    Risk

    Commitments Committee

    Technology Committee

    Products

    Committee

    SME Risk

    Corporate Risk


    Biographies shareholders and ceo
    Biographies – Shareholders and CEO between Yukos (Menatep) and Gazprom


    1 executive summary2
    1 Executive Summary between Yukos (Menatep) and Gazprom

    2 Rationale for Merger

    3 Group History & Structure

    4 Group Strategy

    5 Group Business Overview

    6 Group Risk Management

    7 Group Financial Forecasts

    8 Group Merger Implementation Plan


    Group strategy
    Group Strategy between Yukos (Menatep) and Gazprom

    • Upon the completion of the merger, become and remain one of top 20 Russian banks based on capital, assets, number of clients and branch network in Russian regions with long term recurring ROAE of >20%

      • In top 5 banks by full city coverage by end of 2008

      • In top 5 banks by portfolio and number of retail clients within 3 years

      • In top 5 SME banks by loan portfolio by the end of 2007

      • In top 2 Russian-owned banks league table for CLNs and Eurobond

      • In top 3 Russian-owned banks league table for IPO by 2009

      • At least 2 Institutional Investor ranked team members

    • Continue to provide a full range of banking and investment services to its existing corporate clients, but primarily focus on the retail and SME clients in order to grow the balance sheet while remaining a leader of financial intermediation of Russian corporate sector to international and domestic investors

    • Reduce leverage and absolute MTM securities portfolio across both banks by spinning off IBT proprietary position into asset management JV with internationally recognised partner

    • Focus on ROAE growth through deceleration of branch expansion by the end of 2008 and increased product penetration through the network

    • Utilise the experience of the management and sales department, the large regional network and cross-selling opportunities to increase the scope and depth of its banking business

    • Continue to introduce new risk management systems to make operations within the retail and SME sectors of the business more efficient


    1 executive summary3
    1 Executive Summary between Yukos (Menatep) and Gazprom

    2 Rationale for Merger

    3 Group History & Structure

    4 Group Strategy

    5 Group Business Overview

    6 Group Risk Management

    7 Group Financial Forecasts

    8 Group Merger Implementation Plan


    Integrated multi product platform
    Integrated Multi-Product Platform between Yukos (Menatep) and Gazprom

    RETAIL

    SME

    CORPORATE

    CAPITALMARKETS

    • Auto loans

    • Cash loans

    • Consumer loans

    • Credit cards

    • Savings products

    • Current accounts

    • Funds transfer

    • Safe custody

    • Debit cards

    • Micro loans

    • Medium loans

    • Small loans

    • Overdrafts

    • Factoring

    • Payments and cash management

    • Savings products

    • Working capital facilities

    • Collateralised loans

    • Overdrafts

    • Trade finance

    • Export-import finance

    • Payments and cash Management

    • Treasury products

    • Savings products

    • Asset management

    • Commercial banking

    • Debt products

    • Equity products

    • Hybrid and structured products

    • Fixed income

    • Equities

    • Derivatives

    • Corporate finance

    • Focus on car loans, cash loans and mortgage lending

    • Diversify and standardise product lines

    • Reclassify loans less than RUB 30mln to SME, and focus corporate business on loyal client base

    • Further reclassify loans less than RUB 75mln to SME in 2008

    • Broaden the product and services base

    • Focus on mid-cap companies

    Investment and Corporate Banking


    Retail banking

    281.0 between Yukos (Menatep) and Gazprom

    21.8

    68.0

    30.0

    15.8

    17.5

    12.7

    183.0

    4.3

    3.1

    07B

    08E

    1Q 2007

    Retail Banking

    Retail Strategy

    Net Retail Portfolio Size (RUB bn)

    • Enter TOP 5 by portfolio and number of clients within 3 years

    • Offer the widest and most flexible product lines

    • Focus on mass market segment of clients living in the Russian regions

    • Serve clients in all cities with the population of over 100,000

    40.6

    5.7

    2.8

    7.7

    23.6

    1.1

    16.9

    0.1

    1.6

    0.8

    6.7

    13.9

    12.2

    0.05

    5.7

    10.0

    0.6

    24.4

    8.1

    0.5

    5.3

    5.3

    0.3

    5.2

    0.2

    10.3

    5.1

    14.2

    3.2

    1.9

    7.9

    6.5

    4.7

    4.6

    3.4

    2Q 07

    1Q 06

    2Q 06

    3Q 06

    4Q 06

    1Q 07

    07B

    08E

    Cash

    Auto

    Cards

    Mortgage

    Number of Clients in Portfolio (‘000)

    Retail Deposits (RUB bn)

    341.0

    CAGR: 48%

    97.0

    234.0

    33.0

    48.0

    158.0

    29.0

    13.5

    19.0

    12.3

    128.0

    11.7

    11.0

    27.0

    211.0

    85.0

    7.3

    23.0

    10.0

    8.9

    8.3

    157.0

    4.5

    19.0

    4.1

    112.0

    94.0

    2.2

    66.0

    3.5

    3.4

    3.4

    3.2

    2.3

    2Q 07

    2004

    2005

    2006

    1Q07

    1Q 06

    2Q 06

    3Q 06

    4Q 06

    2Q 2007

    Call Deposits

    Term Deposits

    Cash

    Auto

    Cards


    Sme banking

    3,285 between Yukos (Menatep) and Gazprom

    858

    51

    2,376

    1Q2007

    SME Banking

    Overview

    SME Loans Classification as of 2Q07

    • Hired professional team from one of the top Russian SME banks in 2005

    • At 30.06.2007 SME loans accounted for 13.5% of NBT’s total loan portfolio

    • Even though SME lending was launched in March 2006, in 2006 NBT was ranked 9th among Russian banks by loan portfolio

    • Number of clients at the end of June 2007 reached 8,207 comparing to 3,842 at the end of 2006. It is expected to reach 15,000 by the end of 2007.

    • Factoring business is expected to reach RUB6bn by the end of 2007 and RUB10bn by the end of 2008

    SME Portfolio Size (RUB mln)

    34,700

    SME Strategy

    5,187

    • Diversify SME loan portfolio

    • Increase the range of banking services to SME clients

    • Standardise the products

    • Increase service efficiency

    • Be in top 5 SME bank by loan portfolio by the end of 2007

    18,144

    20,127

    2,638

    (2)

    (2)

    4,399

    11,372

    2,274

    1,353

    718

    (1)

    9,386

    48

    296

    22

    540

    156

    4,134

    669

    2,890

    1,734

    2Q2007

    1Q2006

    2Q2006

    3Q2006

    4Q2006

    2007B

    2008E

    Micro

    Small & factoring

    Medium

    (1) Doesn’t include factoring

    (2) Off balance sheet factoring of RUB 3.3bn as of 2Q 2007 , currently RUB3.5bn


    Pro forma corporate banking

    31.3 between Yukos (Menatep) and Gazprom

    32.7

    (1)

    12.1

    9.7

    21.9

    10.1

    21.6

    20.6

    11.8

    1Q 07

    07B

    08E

    Pro- forma Corporate Banking

    Net Corporate Loans (RUB bn)

    Overview

    • Number of corporate clients as of 31 July 2007 was c.13,400 (compared to 13,800 corporate customers as of 31 December 2006)

    • Reorganization: focus on relationship with medium-sized clients (up to RUB 5bn annual turnover), interested in multiple value-added banking services, while small clients are redirected to SME banking

    • Cross-sell opportunities for capital market products to regional customer base

    • Approximately $300mln higher yielding structured deals (collateralised) to be retained on Balance Sheet as support to distribution, however this business is not active through the end of the 2nd quarter.

    • Widening of existing product range

    CAGR: 8%

    23.8

    18.7

    17.7

    14.4

    14.0

    13.1

    7.9

    1Q 07

    2Q 07

    2004

    2005

    2006

    07B

    08E

    Corporate Deposits (RUB bn)

    30.7

    30.4

    29.3

    (1)

    9.6

    10.5

    13.1

    17.8

    1.0

    16.2

    21.1

    19.9

    16.8

    2Q 07

    2004

    2005

    2006

    Call Deposits

    Term Deposits

    (1) Expected budget due to withdrawal of Yukos-related deposits during 2007


    Capital markets
    Capital Markets between Yukos (Menatep) and Gazprom

    Overview

    Strategy

    • The Bank provides various services including:

      • Lending and structured lending

      • Private placements

      • Corporate finance

      • Capital markets (ECM and DCM)

      • Client flow trading

      • Research

      • Sales

      • Asset management

    • National and international presence through:

      • 450 international clients

      • 400 domestic clients

    • Institutional Investor ranked research team members

    • Diversify revenue stream and investor base by expanding products and services

    • Focus on mid-cap companies providing bridge to global capital markets

    • Focus on origination to distribution model

    • $13.5m of risk free origination income, including $11.2mln of fee income for 1H 2007 vs. less than $7mln for all 2006. Adjusted Target $25mln for full year 2007


    Trust investment bank national bank trust

    Head of Domestic between Yukos (Menatep) and Gazprom

    Sales

    Coordination

    CAPITAL MARKETS OVERLAY

    TRUST INTERNATIONAL Global Syndication & IBT Alternative Investment Products

    Investment & Corporate Banking Committee

    Origination

    Markets

    Sales

    Investment Banking and

    Structured Solution

    Fixed Income & Equity

    Sales & Distribution

    • Proprietary (Asset Management JV)

    • Client Flow

    • Repo

    • Derivatives (negotiating JV)

    • Corporate Book (Lending & Structured Credit)

    Products

    Research

    DCM & Private Placements

    Macro & Quantitative Analysis

    DCM & Private Placements

    Head of

    International Sales

    Coordination

    ECM, Hybrids & Private Placements

    Corporate

    Fixed Income

    Transaction Management Group

    Fixed Income

    • Primary/Secondary

    • Flow

      Equity

    • Primary/ Secondary

    • Flow

      Treasury

    • Funding

    • Treasury Products

    • Alternative Investments

    Capital Markets

    Securitization

    Equity

    Real Estate

    Real Estate

    IBSS Legal Counsel

    Corporate Finance and

    Investment Banking

    Domestic Syndication

    Financial

    Institutions

    Prinicpal Investments

    Structured

    Solutions

    Origination

    Distribution

    DEAL FLOW


    Nationwide branch network domestic distribution

    Top 10 Banks in RF Cities as of September 20, 2007 between Yukos (Menatep) and Gazprom

    No

    Bank

    # of Cities

    1

    Sberbank

    938

    Target area of regional expansion

    2

    Russian Agricultural Bank

    268

    3

    Rosbank

    220

    4

    Russky Standard

    175

    5

    VTB

    118

    6

    National bank Trust

    118

    7

    Uralsib

    104

    8

    Vozrozhdenie Bank

    74

    9

    VTB Retail

    73

    10

    Investsberbank

    73

    Nationwide Branch Network (Domestic Distribution)

    Critical Regional Indicators (as of September 20, 2007)

    Network Expansion Targets

    As of

    As of

    As of

    As of

    2007

    As of 2008

    2005

    2006

    20/09

    /

    07

    (planned)

    (planned)

    Regions

    47

    50

    55

    59

    70

    Cities

    74

    77

    118

    150

    -

    160

    220

    Sales offices

    125

    128

    171

    190

    -

    200

    300

    The bank owns app. 80% of the branches

    The average branch reaches break-even at app. 2 years

    *

    Source: NBT estimates

    * - at the end of December 2006 with the exception of NBT


    Established and recognised global platform international distribution

    Latvia between Yukos (Menatep) and Gazprom

    Estonia

    Sweden

    Germany

    Denmark

    USA

    UK

    Luxembourg

    Switzerland

    Kazakhstan

    France

    Italy

    USA

    Turkey

    Spain

    Portugal

    Greece

    Thailand

    Israel

    Hong Kong

    Philippines

    Singapore

    Chile

    South Africa

    Established and Recognised Global Platform (International Distribution)


    1 executive summary4
    1 Executive Summary between Yukos (Menatep) and Gazprom

    2 Rationale for Merger

    3 Group History & Structure

    4 Group Strategy

    5 Group Business Overview

    6 Group Risk Management

    7 Group Financial Forecasts

    8 Group Merger Implementation Plan


    Group risk management architecture
    Group Risk Management Architecture between Yukos (Menatep) and Gazprom


    Risk management strategy
    Risk Management Strategy between Yukos (Menatep) and Gazprom


    Pro forma credit portfolio diversification
    Pro-forma Credit Portfolio Diversification between Yukos (Menatep) and Gazprom

    Loan Portfolio Regional Breakdown as of 2006YE

    Corporate

    Retail

    SME

    Far East

    2.5%

    North-West

    Central

    8.6%

    22.0%

    Ural

    11.2%

    Siberia

    West

    12.2%

    16.2%

    Privolzhskyj

    South

    13.2%

    14.0%

    Loan Portfolio Regional Breakdown as of 2Q 2007


    Credit portfolio diversification cont d

    Individuals between Yukos (Menatep) and Gazprom

    Individuals

    Trading Enterprises

    Trading Enterprises

    Financial Intermediaries

    Financial Intermediaries

    Manufacturing

    Manufacturing

    Engineering and Metal Processing

    Engineering and Metal Processing

    Construction

    Construction

    Energy

    Energy

    Chemicals and Petrochemicals

    Chemicals and Petrochemicals

    Oil and Gas

    Oil and Gas

    Transport

    Transport

    State Administrations

    State Administrations

    Pharmaceuticals

    Pharmaceuticals

    Other

    Other

    Credit Portfolio Diversification (Cont’d)

    Industry Breakdown as of 2006YE

    Top 10 Credit Concentration - NBT

    Top 10 Credit Concentration - IBT

    Industry Breakdown as of 2Q 2007

    * Fully repaid as at 30.06.2007 (total amount is RUR 1 945 mln)


    Credit portfolio quality

    11. between Yukos (Menatep) and Gazprom68%

    11.33%

    3.00%

    2.22%

    2.50%

    10.60%

    1.80%

    10.00%

    2006

    2Q 2007

    2007B

    2008E

    2006

    2Q 2007

    2007B

    2008E

    Small

    21.0%

    19.7%

    -

    -

    Auto

    25.7%

    24.9%

    -

    -

    ive

    Interest Rate

    Micro

    23.4%

    22.8%

    -

    -

    Cash

    35.8%

    33.6%

    -

    -

    ffect

    E

    Blended

    -

    -

    18.38

    %

    16.38

    %

    Blended

    -

    -

    28.0

    %

    21.75

    %

    Credit Portfolio Quality

    Non-Performing Loans / Total Loans (%)

    Provisions / Non-Performing Loans (%)

    6.98%

    6.67%

    5.23%

    5.16%

    5.12%

    4.28%

    4.19%

    3.70%

    3.62%

    3.80%

    77.12%

    72.23%

    70.20%

    61.33%

    62.85%

    2005

    2006

    2Q 2007

    2007B

    2008E

    2005

    2006

    2Q 2007

    2007B

    2008E

    Provision / NPL

    Provision / Gross Loans

    Retail NPL / Total Loans (%)

    SME NPL / Total Loans (%)

    Corporate NPL / Total Loans (%)

    1.30%

    0.54%

    0.33%

    0.25%

    2006

    2Q 2007

    2007B

    2008E

    -

    -

    -

    -

    -

    -

    -

    -

    Blended

    13.6%

    11.5

    %

    16.

    5

    0

    %

    16.25

    %


    Managing retail credit risk

    25% between Yukos (Menatep) and Gazprom

    20%

    15%

    10%

    5%

    0%

    06.2005

    12.2005

    06.2006

    12.2006

    06.2007

    Managing Retail Credit Risk

    Auto

    Cash

    Level of defaulted loans

    16%

    14%

    14%

    12%

    12%

    10%

    10%

    8%

    8%

    6%

    6%

    4%

    4%

    2%

    2%

    0%

    0%

    06.2005

    12.2005

    06.2006

    12.2006

    06.2007

    06.2005

    12.2005

    06.2006

    12.2006

    06.2007

    SPD, second payment default rate

    FPD, first payment default rate

    AUTO

    CASH

    Credit cards

    TPD, third payment default rate

    • Measures applied in 2006/2007

    • The reorganisation of retail risk management department was completed.

    • “Welcome calls” were introduced in order to identify frauds at the earliest possible stage.

    • Anti-fraud training and equipment were provided to the retail banking employees to improve their capabilities of spotting fraudulent customers.

    • Credit products were modified or eliminated to avoid high risk combinations, for instance 0% equity auto loans. Credit documentation requirements were standardised and clarified.

    • Risk management targets:

    • Probability of default – 11%

    • Expected losses – 5%-7%

    • Risk based pricing

    • Further diversification of the portfolio


    1 executive summary5
    1 Executive Summary between Yukos (Menatep) and Gazprom

    2 Rationale for Merger

    3 Group History & Structure

    4 Group Strategy

    5 Group Business Overview

    6 Group Risk Management

    7 Group Financial Forecasts

    8 Group Merger Implementation Plan


    Nbt financial overview
    NBT - Financial Overview between Yukos (Menatep) and Gazprom

    Key indicators, RUR mln

    Key financial ratios, %

    Headcount 2,698 3,505 5,529 5,860 6,357


    Ibt financial overview
    IBT-Financial Overview between Yukos (Menatep) and Gazprom

    Key indicators, RUR mln

    Key financial ratios, %

    Headcount 537 436 475 387 409


    Timeline convergence of expense to revenue generation capacity
    Timeline: Convergence of Expense to Revenue between Yukos (Menatep) and GazpromGeneration Capacity

    This is one of the main profitability drivers of the bank.


    Trust investment bank national bank trust

    Increasing loan portfolio in assets structure 2006 vs.1Q07 between Yukos (Menatep) and Gazprom

    2Q 2007

    2007 Budget

    NBT – Total assets and Loan portfolio

    Total assets & loan portfolio. RUR mln.


    Nbt net interest margin less llp
    NBT Net Interest Margin less LLP between Yukos (Menatep) and Gazprom


    Nbt loan portfolio structure
    NBT - Loan portfolio structure between Yukos (Menatep) and Gazprom

    Changes in loan portfolio structure

    2005

    2Q07

    2007 Budget

    2006

    Retail

    50.0%

    Corporate

    41.3%

    SME

    8.7%

    93% of retail and SME business is conducted in the Regions


    Nbt deposit analysis corp and retail
    NBT – Deposit Analysis (Corp and Retail) between Yukos (Menatep) and Gazprom


    Trust investment bank national bank trust

    TRUST Investment Bank - Assets structure between Yukos (Menatep) and Gazprom

    2006

    1H07

    2007 Budget

    Cash and

    cash

    Cash and

    Other

    equivalents

    Cash and cash

    Other

    Other

    cash

    3.4%

    equivalents

    0.5%

    10.9%

    8.5%

    equivalents

    Loans to

    10.9%

    Loans to

    12.0%

    Loans to

    customers

    customers

    customers

    6.7%

    6.2%

    21.2%

    Financial

    Financial

    Financial

    assets

    assets

    assets through

    through profit

    through profit

    profit and loss

    and loss

    and loss

    72.0%

    74.8%

    72.9%

    1H2006 to 1H2007

    2006 to 2007

    Total assets

    Financial assets at fair value

    Total assets

    Financial assets at fair value

    50 000

    50 000

    45.4%

    -11.4%

    40 000

    40 000

    34.0%

    30 000

    30 000

    -21.0%

    47 396

    43 647

    41 973

    20 000

    20 000

    34 528

    32 581

    31 441

    27 285

    21 629

    10 000

    10 000

    2006

    2007B

    1H2006

    1H2007


    Nbt 1h07 effective interest rates
    NBT – 1H07 Effective Interest Rates between Yukos (Menatep) and Gazprom


    Trust investment bank financial assets at fair value structure
    TRUST Investment Bank - Financial assets at fair value structure

    Changes financial assets at fair value structure

    2005

    2006

    1H07

    Other

    Other

    Other

    14%

    15%

    21%

    Eurobons of RF

    Corporate debt

    Eurobons of RF

    11%

    securities

    0%

    43%

    Eurobons of RF

    20%

    Corporate debt

    Corporate debt

    securities

    securities

    58%

    OFZ

    60%

    17%

    OFZ

    OFZ

    5%

    36%


    Rating breakdown of securities portfolio ibt
    Rating breakdown of Securities Portfolio - IBT structure

    Ruble bond portfolio rating breakdown

    BBB+/Baa1 (incl.

    sovereign)

    BBB/Baa2

    21%

    BBB-/Baa3

    Currency bonds portfolio rating breakdown

    0%

    BB+/Ba1

    1%

    BBB+/Baa1 (incl.

    44%

    BB/Ba2

    sovereign)

    1%

    BBB/Baa2

    8%

    BB-/Ba3

    2%

    2%

    B+/B1

    BB+/Ba1

    19%

    9%

    B/B2

    BB/Ba2

    B-/B3

    1%

    3%

    BB-/Ba3

    6%

    4%

    52%

    No rating

    B+/B1

    16%

    Ruble bond without rating portfolio breakdown

    B/B2

    B-/B3

    Banks

    7%

    2%

    3%

    No rating

    Electric utilities

    18%

    18%

    1%

    Municipality

    2%

    OFZ Futures

    1%

    13%

    Private enterprises

    State enterprises

    9%

    Subfederal financial

    37%

    institutions

    Subfederal

    governments


    Trust investment bank liabilities structure
    TRUST Investment Bank - Liabilities structure structure

    Funding structure

    2006

    1H07

    2007

    Other

    Other

    Other

    Long term

    8%

    Long term

    7%

    10%

    financing

    Long term financing

    financing

    10%

    12%

    8%

    Short term

    Short term interbank

    Short term

    interbank

    Payables

    10%

    interbank

    Payables under

    6%

    under REPO

    12%

    49%

    REPO

    Customer

    53%

    accounts

    9%

    Payables

    Customer accounts

    under REPO

    Customer

    19%

    66%

    accounts

    21%


    Pro forma key ratios merged bank targets
    Pro-forma Key Ratios; Merged Bank Targets structure

    3 year plan has not been amended due to current market conditions


    Pro forma securities portfolio optimising for the future

    36,181 structure

    17,704

    10,575

    6,056

    7,650

    Treasury and Asset Management

    5%

    1,262

    2,396

    765

    5%

    574

    15,434

    5%

    526

    6,885

    5,100

    5,483

    4,422

    6,302

    17,089

    6,120

    2,228

    6,302

    2,227

    1Q 2007

    2007B

    2008E

    1Q 2007

    2007B

    2008E

    Pro-forma Securities Portfolio – Optimising for the Future

    • In order to optimise the asset structure of the bank and allow the expansion of the retail and SME business, the bank has decided to reduce its position in trading securities to 10% of total assets by the end of 2009

    Pro-forma Trading Securities (RUB mln) - Proprietary

    Pro-forma Trading Securities (RUB mln) – Client Flow Business

    27,897

    19,691

    35,688

    1,494

    4,974

    4,948

    6,181

    1,525

    1,690

    6%

    1,512

    2,420

    5%

    16,258

    370

    1,376

    941

    12,949

    6,181

    5,799

    4,604

    2%

    16,215

    11,575

    11,016

    137

    1,357

    2Q 2007

    2Q 2007

    2005

    2006

    2005

    2006

    Total

    Government and municipal bonds

    Corporate bonds

    Equities

    Equities

    Asset Management & Other

    Corporate bonds

    % of total assets


    Pro forma funding structure
    Pro-forma Funding Structure structure

    2006

    2Q 2007

    3Q-4Q 2007

    2008E

    2009E

    • $100mln CLN by NBT (Dec)

    • $150mln Eurobond by IBT (Sep)

    • $20mln NBT sub-debt (Mar)

    • $50mln NBT CLNs (Apr)

    • $200mln NBT Eurobond (May)

    • €150mln funding from securitisation (May)

    • €150-200mln securitisation bond

    • $100mln private placement

    • $100mln one year syndicated loan

    • $400-500mln funding from securitisation

    • $350mln new Eurobonds issued

    • $100mln raised in syndicated loans

    • $50-100mln of other securities issued

    • $400-500mln funding from securitisation

    • $150-300mln new Eurobonds issued

    • $100mln raised in syndicated loans (new)

    • $50-100mln of other securities issued (new)

    Increasingly Diversified Funding Structure

    2006

    2Q 2007

    2007 Budget

    2008E


    Pro forma capital structure

    Management estimates that after the merger, National Bank TRUST would reach TOP 20 Russian banks in terms of assets

    1.5bln of 3.4bln of announced capital increase has been provided. The remaining 1.9bln will be provided by the end of October

    Significant room to overperform asset growth targets in model

    RUB 7bln capacity for tier 2 subdebt issuance

    23,367

    19,057

    15,997

    12,130

    2Q 2007

    2007B

    2008E

    2009E

    16.89%

    13.16%

    2Q 2007

    Pro-forma Capital Structure

    Total Shareholders Equity (RUB mln)

    Comments

    CAGR: 29%

    Capital Adequacy Ratio

    20.6%

    18.2%

    17.6%

    16.0%

    16.1%

    15.3%

    14.73%

    12.24%

    1Q 2007

    2007B

    2008E

    2009E

    Tier 1 Ratio

    Total Capital Ratio

    BIS Requirements (8%)

    Central Bank (10%)



    Pro forma related party transactions
    Pro Forma Related Party Transactions Merged Bank

    Amounts Due to RPCustomers

    Loans to RP

    Transactions with related parties:

    • Carried out on an arm's-length basis

    • Subject to the same approval procedures and limits as transactions with unrelated parties

    6.03%

    728

    2.62%

    2.31%

    1.72%

    543

    647

    610

    2004

    2005

    2006

    1H2007


    Pro forma employee structure

    409 Merged Bank

    6,357

    6%

    18%

    94%

    82%

    IBT

    NBT

    Pro-forma Employee Structure

    Employee Structure

    2006

    2Q 2007

    Pro-Forma 2007

    Pro-Forma 2008

    Total: 5,631

    Total: 6,766

    Total: 8,200

    Total: 9,100

    • Post merger, the group expects a minimal impact to its headcount due to different business operations of the banks being merged; however due to spin-off of proprietary and alternative investments combined with synergies and back office redundancy will lead to savings of at least $7.5mln a year

    • Expected redundancies of appr. 80 people due to merger (23 front office, 57 back/middle office)

    • In light of the bank’s network expansion plans, management anticipates to have approximately 3,000 new employees to grow the business in 2007 and 2008. The new employees will receive introductory training to ensure that high standards are maintained

    • Headcount not due to increase significantly after 2009


    1 executive summary6
    1 Executive Summary Merged Bank

    2 Rationale for Merger

    3 Group History & Structure

    4 Group Strategy

    5 Group Business Overview

    6 Group Risk Management

    7 Group Financial Forecasts

    8 Group Merger Implementation Plan


    Indicative timetable expected completion in 2q 2008
    Indicative Timetable: Expected Completion in 2Q 2008 Merged Bank

    • Announced Merger to market, staff and regulators on 17 July 2007

    • Engaged A&O as legal counsel

    • Finalizing Capital Increase of National Bank TRUST by late October 2007

    • Informal Discussions with regulator on Merger

    • Official request will be filed with CBR during October 2007


    Trust investment bank national bank trust

    APPENDIX Merged Bank


    Trust investment bank national bank trust

    Yukos Deposits Merged Bank


    Trust investment bank national bank trust

    Yukos Related Deposits Merged Bank

    Post Yukos related company auctions the

    Unfrozen Yukos-Related deposits have effectively

    been reduced to zero



    Balance sheet rub mln
    Balance Sheet (RUB mln) Merged Bank

    NBT

    IBT

    2005

    2

    2006

    2

    Q

    2007

    2005

    2

    2006

    2

    Q

    2007

    Cash and cash equivalents

    13,970

    11,147

    1

    6

    ,

    326

    5,350

    5,696

    4

    ,

    774

    Amounts due from credit institutions

    15

    15

    15

    1,891

    1,320

    519

    Trading securities

    7,302

    6,150

    2

    ,

    655

    13,887

    34,529

    3

    1

    ,

    441

    2,695

    Net loans to cust

    omers

    16,379

    24,847

    32

    ,

    676

    4,381

    3,166

    16,934

    Total retail loans

    4,691

    12,715

    -

    -

    -

    2,695

    11,343

    4,381

    3,166

    Corporate

    11,688

    9,891

    4,399

    SME

    -

    2,241

    -

    -

    -

    Property, equipment and intangibles

    1,203

    1,965

    2,633

    417

    604

    5

    82

    Tax and other assets

    484

    546

    672

    2,421

    2,081

    3,

    6

    35

    Total Assets

    39,360

    44,670

    54

    ,

    977

    28,347

    47,396

    4

    3

    ,

    646

    Amounts due to credit institutions

    2,875

    1,126

    1,423

    3,959

    3,983

    4

    ,

    395

    Payables under repurchase agreements

    -

    -

    -

    7,013

    21,842

    18

    ,

    333

    Amounts due to customers

    30,564

    34,868

    38,

    787

    7,235

    7,899

    7

    ,

    637

    Retail

    7,299

    11,886

    176

    -

    -

    13,482

    7,637

    7,899

    Corporate

    23,265

    22,867

    7,059

    25,305

    SME

    -

    -

    -

    -

    -

    -

    Funding from securitisation

    -

    -

    -

    -

    -

    -

    Obligations to return securities received as

    -

    -

    -

    846

    1,885

    2,092

    collateral

    Debt securities issued

    1,002

    3,713

    8

    ,

    6

    40

    2,714

    4,914

    4,

    312

    Tax and other liabilities

    726

    625

    6

    30

    348

    204

    2

    44

    Total Liabilities

    35,167

    40,333

    4

    9

    ,

    480

    22,114

    40,727

    37

    ,

    013

    Shareholders' Equity

    4,193

    4,337

    5

    ,4

    97

    6,233

    6,669

    6,6

    33


    Income statement rub mln
    Income Statement (RUB mln) Merged Bank

    NBT

    IB

    T

    2005

    2

    2006

    2

    Q

    2007

    2005

    2

    2006

    2

    Q

    2007

    Interest income

    2,726

    4,622

    3

    ,

    337

    1,354

    2,383

    1,55

    8

    Due from credit institutions

    208

    321

    243

    145

    290

    143

    Debt securities and other financial instruments

    615

    679

    179

    555

    1,581

    1,126

    -

    Reverse repurchase agreements

    -

    -

    117

    117

    62

    2,915

    Loans to customers

    1,904

    3,622

    440

    395

    226

    Interest expense

    (788)

    (1,373)

    (

    1,140

    )

    (659)

    (1,439)

    (

    1,077

    )

    Due to credit institutions

    (73)

    (27)

    (26)

    (125)

    (237)

    (153)

    Repurchase agreements

    -

    -

    -

    (301)

    (739)

    (617)

    Deposits by customers

    (634)

    (1,247)

    (870)

    (109)

    (225)

    (116)

    Debt securities issued

    (81)

    (99)

    (244)

    (123)

    (238)

    (153)

    Net interest income

    1,938

    3,249

    2,197

    695

    944

    481

    Provision for impairment

    (304

    )

    (665)

    (417)

    (238)

    (295)

    7

    Net interest income after provisions

    1,634

    2,584

    1,780

    457

    649

    488

    Fee

    and commission income

    876

    925

    461

    187

    318

    2

    90

    Fee and commission expense

    (163)

    (159)

    (

    96

    )

    (51)

    (45)

    (

    27

    )

    Net Fees and commissions

    713

    766

    365

    136

    274

    263

    Total operating income

    3,310

    3,619

    2,290

    2,262

    1,784

    707

    Operating expense

    (2,463

    )

    (3,317)

    (

    2,174

    )

    (1,324)

    (1,518)

    (

    748

    )

    Salaries and benefits

    (1,318)

    (1,855)

    (

    1,288

    )

    (828)

    (946)

    (

    442

    )

    Administrative expenses

    (815)

    (1,148)

    (

    687

    )

    (359)

    (426)

    (2

    56

    )

    Depreciation and amortization

    (153)

    (165)

    (

    115

    )

    (77)

    (95)

    (4

    0

    )

    Other expenses

    (178)

    (

    148)

    (

    84

    )

    (61)

    (51)

    (

    10

    )

    Profit before taxation

    847

    303

    116

    938

    265

    (41)

    Income tax expense

    (

    558

    )

    (

    111

    )

    29

    (

    213

    )

    (

    87

    )

    5

    Net income

    288

    192

    145

    726

    178

    (36)



    Russian banking sector summary
    Russian Banking Sector: Summary Merged Bank

    Banking Sector Summary

    Total Assets

    • Retail lending is increasingly the focus for banks and, despite explosive growth in consumer credit, Russia still lags behind emerging market peers. There is potential for several years of further strong growth in credit card, auto credit, as well as mortgage lending as personal income levels rise

    • Mortgages, although quickly becoming a mass product, still account for only 0.75% of GDP vs. 5.3% in Kazakhstan and 7.3% in Poland and amid enormous demand for new housing, still make up only c.10% of total retail loans

    • Mortgage lending is forecasted to grow by 80% in 2007

    • There is increasing emphasis on providing banking services in the under-banked regions as economic wealth spreads into the regions responsible for much of Russia's industrial output

    • The key constraints for all Russian banks are capital and funding. With some of the leading private banks growing at over 100% per annum, sourcing capital is challenging

    • VTB successfully listed in May 2007 and several other banks have IPO in the pipeline

    • In 2006, total NPLs of the banking system has increased by 2.5x from $765m as of January 2006 to $2.0bn whereas lending to individuals rose by 75% in 2006

    $bn

    %

    Total Deposits

    Key Banking Statistics

    $bn

    %

    With the fast growth of retail lending, an increasing number of banks face capital constraints as the capital ratio decreases to the minimal level acceptable by the CBR

    Source: RosStat, CBR


    Trust investment bank national bank trust

    Russian Banking Sector: Forecasts by Product Merged Bank

    Total Banking Assets

    Total Deposits

    Mortgages

    Credit Cards

    Car Loans

    Corporate Loans

    Source: Deutsche Bank Equity Research (20-Sep-06) and Merrill Lynch Research (23-May-06)


    Trust investment bank national bank trust

    Russian Banking Sector: Benchmarking Merged Bank

    Banking Assets in % of GDP

    Total Loans in % of GDP

    Total Deposits in % of GDP

    (1)

    (2)

    (1)

    (2)

    (1)

    (2)

    Note: Total banking assets, loans and deposits data as of 31 December 2005 unless otherwise stated

    Sources: European Banking Federation, Bank of Ukraine, Economist Intelligence Unit and broker research

    (1) Includes Bulgaria, Czech Republic, Hungary, Poland, Romania, Slovakia and Ukraine

    (2) Includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Norway, Netherlands, Portugal, Spain, Sweden, Switzerland and the United Kingdom


    Trust investment bank national bank trust

    Top Russian Banks Merged Bank

    Main Financial Indicators of Top 20 Banks, as at April 1, 2007

    Source: Interfax

    (1) Includes capital increase of RUB 3.4bn