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INVESTING IN RUSSIA IN 2011/2012: IT IS NEVER TOO LATE

INVESTING IN RUSSIA IN 2011/2012: IT IS NEVER TOO LATE. In this presentation:. WHAT RUSSIAN MARKET ACTUALLY IS SBERBANK: RUSSIA’S OLDEST & LARGEST. WHAT RUSSIAN MARKET ACTUALLY IS. WHAT RUSSIAN MARKET ACTUALLY IS: by size. WHAT RUSSIAN MARKET ACTUALLY IS: just facts.

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INVESTING IN RUSSIA IN 2011/2012: IT IS NEVER TOO LATE

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  1. INVESTING IN RUSSIA IN 2011/2012: IT IS NEVER TOO LATE

  2. In this presentation: • WHAT RUSSIAN MARKET ACTUALLY IS • SBERBANK: RUSSIA’S OLDEST & LARGEST

  3. WHAT RUSSIAN MARKET ACTUALLY IS

  4. WHAT RUSSIAN MARKET ACTUALLY IS: by size

  5. WHAT RUSSIAN MARKET ACTUALLY IS: just facts • local average daily total turnover USD 2.5 bn • ADRs traded at LSE, NYSE & NASDAQ, daily turnover at USD 1.1 bn • MCap at USD 986 bn (beginning of May) • the largest in Eastern Europe by cap • 73% of total turnover performed at MICEX • main benchmarks: MICEX (RUB-denom.), RTS (USD-denom.), RTS Standard (RUB-denom.) indices • MICEX index breakdown: 50% oil & gas (9 issuers), 22% metallurgy and mining (7 issuers), 16% financials (3 issuers) • 10 top stocks make up to 80% of turnover and 53% of total MCap

  6. WHAT RUSSIAN MARKET ACTUALLY IS: still undervalued vs. peers and its pre-crisis self

  7. WHAT RUSSIAN MARKET ACTUALLY IS: correlations MICEX Index vs. Brent Crude Px MICEX Index vs. S&P500

  8. WHAT RUSSIAN MARKET ACTUALLY IS: top 10 equities (80% of daily volume, >50% of MCap)

  9. WHAT RUSSIAN MARKET ACTUALLY IS: fixed income • governmental debt market par volume outstanding at USD 84 bn • local corporate debt at USD 117 bn at par (as of late April, 2011) • average issue par amount USD 150 mn, 380 issuers so far • corp.total return index up 12% over 2010, up 3.5% this year (end of May) • more facts: 3 m USD/RUB NDF yield 3.5-4% • annual CPI within 7-9% range • Russia’s public external debt/GDP at 2.3%, total ext.debt/GDP at 33%

  10. WHAT RUSSIAN MARKET ACTUALLY IS: fixed income Basic curves:

  11. WHAT RUSSIAN MARKET ACTUALLY IS: summary

  12. SBERBANK: RUSSIA’S OLDEST & LARGEST

  13. SBERBANK: Russia’s Oldest & Largest Commercial Bank • about 50% of national retail deposits, 30% of corporate credit • 3 times larger by assets than VTB, Russia’s second largest, and 4.5 times larger than GazpromBank, Russia’s third by size • a top 100 world bank by assets and capital • a top 100 world bank by brand value (MBO), ahead of GS, MS and JPM • MCap at USD 80 bn, comparable to Credit Suisse and SocGen • 57.6% of equity owned by Central Bank of Russia, 7.58% set to be privatized this year • SBRF is Russian top equity by liquidity at exchanges

  14. SBERBANK Global Comparison: 20 World ‘Strongest’ Banks

  15. SBERBANK: performance

  16. SBERBANK: performance

  17. SBERBANK: financial market client operations • a top 10 MICEX exchange operator (fx) • fx operations: >20 currencies (RUB, USD, EUR, AUD, BYR, CAD, CHF, CNY, CZK, DKK, EEK, GBP, JPY, KZT, LTL, LVL, NOK, PLN, SEK, UAH): TOD, TOM, SPOT • hedging: delivery forwards, NDFs, futures, options • DCM, ECM • asset management • retail brokerage, mutual funds, private pension funds • expanding corporate investment banking in 2011/2012 via Troika Dialog acquisition (Russia’s oldest investment company and brokerage): services for institutional investors and corporates, more sophisticated products

  18. SBERBANK: portfolio for Petrogrand • open in July, 2010, expires July, 2011; base currency: Russian ruble • conservative portfolio: • max. 15% equity + bonds and cash • municipal and sub-federal bonds only, one year to maturity or less; rated by at least one of the three world agencies; with rating no more than four notches below Russian sovereign; • active inter-market arbitrage operations (going cash and hard currency and back to papers again) • as of late May, yields 11% annual return in RUB terms, 22% USD and 8.2% EUR (because of EUR appreciation vs. USD)

  19. SBERBANK: contacts Sberbank Of Russia Treasury & Financial Market Department Asset Management 19 Vavilova Str., 117997 Moscow, Russia http://www.sberbank.ru Sales: +7 (495) 957-5964 Vladimir Zelenov, Irina Finokhina, Svetlana Yashina

  20. Disclaimer This report is not an offer or solicitation to buy or sell any securities or related financial instruments or to participate in any trading strategy. Although the information and opinions expressed in this report are believed to be accurate as of this date, no express or implied warranties or representation are being made as to accuracy or completeness. The information and opinions presented have not been tailored to any specific transaction of any third party and are not a detailed analysis of a specific situation of any third party. Our opinions may change without further notice. The information and opinions expressed in this report are not a substitute for an independent assessment of an individual’s investment needs and goals. Opinions expressed in this report may differ or be contrary to the opinions of other units of Sberbank (hereinafter referred to as the Bank) as a result of using different assumptions or criteria or analysis of information for different purposes.  This document is for information purposes only. Descriptions of any company or companies or their securities or the markets or developments mentioned herein are not intended to be complete. Any statements regarding past performance are not necessarily indicative of future performance. The Bank, its affiliates, officers and/or employees and/or related parties may hold interests in or may have performed services for one or more of the companies mentioned in this report and/or may hold such interests and perform or seek to perform such services in the future subject to the Bank’s internal procedures aimed at avoidance of conflict of interest.  The Bank or any of its affiliates may act or have acted as market-makers in securities or other financial instruments mentioned herein or securities underlying such financial instruments or related to those securities. Furthermore, the Bank may have or have had a relationship with or provide or have provided investment banking, capital markets and/or other financial services to the relevant companies. Employees of the Bank or its affiliates may serve or have served as officers or directors of the relevant companies subject to the Bank’s internal procedures aimed at avoidance of conflict of interest. Neither the Bank nor any of its affiliates accept any liability arising from the use of any of the information or opinions expressed in this report.  This report may not be reproduced, distributed or published, in whole or in part, for any purpose without the express written permission of the Bank.  This report may be used by investors within the Russian Federation subject to Russian laws. Foreign investors (including but not limited to those from Switzerland, the Netherlands, Germany, Italy, France, Sweden, Denmark, and Austria) may use this report provided they are deemed to be institutional investors under the laws of the country of registration. This report was prepared by the Bank, which is not registered as a broker-dealer by the SEC and is distributed to persons who by their acceptance thereof confirm that they are a major institutional investor in the US as defined in Regulation 15a–16 of the US Securities Act of 1934 and understand the risks involved in executing transactions in securities. This report was prepared by the Bank, which is not registered by the FSA and is not available to private customers in the United Kingdom. Analyst certification  Each research analyst primarily responsible for the content, in whole or in part, of this research report, certifies that with respect to each security or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about those securities or issuers; and (2) no part of his or her compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by that research analyst in the research report and (3) such research analyst does not perform transactions in securities issued by companies that he or she covers. The Bank accepts no responsibility for any use of information based on the views of any research analyst in relation to any relevant securities.

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