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UBRD News Update

Y-2015 results (RAS)
15.03.2016

In 2015 the Ural Bank for Reconstruction and Development has implemented its plans, showed an increase in key financial indicators, maintained its leading position in the banking market and demonstrated the effectiveness of the existing business model.

Equity increased from RUB 24.8 bln to RUB 27.1 bln (+ 9%), including as a result of operating profit. Net assets grew by RUB 109.9 bln (+46%), reaching RUB 346.6 bln by January 1, 2016. Stock market trading, business lending, and revaluation of the foreign currency component of assets were key growth drivers. Total loan portfolio amounted to RUB 187.55 bln (+6%) as of January 1, 2016.

One of the main tasks of the year was work on the quality of the loan portfolio, particularly, reduction of arrears in corporate segment, maintenance of the required profitability of retail business given a gap of rates in assets and liabilities, decrease of anticipated losses on new retail loans by the end of the year. These goals were realized through improved approaches to credit risk assessment, implementation of new data and algorithms in the scoring models, switching focus in retail to loyal customers.

As a result, the Bank’s funding base increased by RUB 108.2 bln (+48%) and amounted to RUB 331.9 bln as of January 1, 2016. Most of the increase was ensured by the inflow of retail deposits (+ 43%); generally, the volume of retail deposits increased from RUB 93.17 bln to RUB 133.66 bln in 2015. In addition, the Bank has increased the fund raising in the repo market and interbank lending.

As of January 1, 2016, profit after tax amounted to RUB 2.2 bln, which is 14% more than in 2014.

In November 2015 UBRD assumed obligations under reorganization of VUZ-bank buying out 99.99% of shares.

DIA announcement
15.10.2015

The State Corporation Deposit Insurance Agency (DIA, the Agency) has selected the investor to participate in the prevention of bankruptcy of VUZ Bank JSC (the Bank) after consideration of proposals received from applicants interested in participating in the its rehabilitation.

A key criterion for the selection of investors is the smallest aggregate amount of financial assistance provided by the Agency to the financial rehabilitation of VUZ Bank.

UBRD (the Investor) was selected as a candidate that offered the most favorable conditions of financing measures to prevent bank’s failures. In accordance with the plan of DIA‘s participation in preventing the bankruptcy of the Bank the reduction of the authorized capital up to RUB 1 is envisioned and its subsequent increase by issue of new shares in favor of the Investor, allowing the latter to become the main shareholder of the Bank.

Also in accordance with the amendments to the plan of DIA‘s participation in preventing the bankruptcy of the Bank a financial assistance to cover the imbalance between the fair value of assets and the carrying value of liabilities in the amount of RUB 5.7 bln for 10 years is to be provided by DIA.

In future a reorganization of the Bank in the form of its accession to the Investor prior to October 1, 2025 is planned.

Given these activities the Bank will carry out its regular activities, fulfilling the full range of banking services and provide an uninterrupted service to customers.

UBRD will have a capital increase
10.08.2015

UBRD is listed among regional banks in respect of which measures to improve their capitalization will be implemented by Deposit Insurance Agency (DIA).

The additional capitalization will be carried out by transfer of federal loan bonds.

The list approved by Dmitry Medvedev, PM, includes 10 credit institutions: The Ural Bank for Reconstruction and Development, Tatfondbank, Asian-Pacific Bank, Zapsibkombank, International Bank of Saint-Petersburg, Surgutneftegasbank, Commercial bank Kuban Credit, Investment Bank of Chelyabinsk Chelyabinvestbank, Pervobank, Sarovbusinessbank.

UBRD acts as lead arranger of a syndicated loan Savings Bank Belarusbank
17.07.2015

Ural Bank for Reconstruction and Development acted as lead arranger with Alfa-Bank acting as mandated lead arranger and agent of a syndicated loan to Savings Bank Belarusbank (Belarus). The agreement for a facility in the amount of EUR 203 mln for the term of 6 months was signed on July 10, 2015.

17 financial institutions took part in the transaction: among them, in addition to UBRD and Alfa-Bank, are Novikombank, Promsvyazbank, Transcapitalbank, Bank Finservice, GLOBEX bank, Uralsib, Gazprombank, Svuaz-Bank (lead arrangers), Asian-Pacific Bank, Banca Intesa, Bank ZENIT, Kazkommertsbank, Absolut Bank, Oil Investment Bank, and Nefteprombank (organizers).

JSC Savings Bank Belarusbank is the largest universal financial institution in Belarus that offers its customers more than 100 types of banking products and services, including cash and settlement services, lending, deposit banking, leasing, factoring, cash collection, international and interbank settlements, currency exchange and conversion operations, operations with bank cards, consulting and depository services.

In June 2015 the Bank acted as co-arranger of the syndicated loan for Alfa-Bank (Belarus) in the amount of USD 30,000,000 and EUR 4,000,000.

UBRD co-arranges a syndicated loan to Alfa-Bank (Belarus)
08.07.2015

Ural Bank for Reconstruction and Development acted as co-arranger of the syndicated loan to CJSC Alfa-Bank (Belarus); and Alfa-Bank (Russia) acted as lead arranger. The Agreement was signed on June 29, 2015; the first tranche of USD 2,500,000 was disbursed on July 6. The second tranche of the same amount is to be disbursed in three weeks.

The syndicated loan to Alfa-Bank (Belarus) in the amount of USD 30,000,000 and EUR 4,000,000 involved eight credit organizations. Along with UBRD and Alfa-Bank, Novinkombank, Bank Zenit, Svyaz-Bank, Bank Finservice a cted as co-organizers, and Baltikums Bank and Asian-Pacific Bank as general managers. The term of the facility is 6 months with the possibility of extension for the same period.

After signing the agreement the combined ATM network of the Ural Bank for Reconstruction and Development has exceeded 22 th. units.

Now customers of both financial institutions will be able to withdraw money using a card of any payment system without commission.

As of June 1, 2015 UBRD’s AMT network accounted 1194 machines, and Ak Bars’ network accounted 1201 machine.

The consolidated network also includes ATMs of Alfa-Bank, United Settlement System and partner banks of VTB Group.

UBRD and Ak Bars consolidate ATM networks
22.06.2015

After signing the agreement the combined ATM network of the Ural Bank for Reconstruction and Development has exceeded 22 th. units.

Now customers of both financial institutions will be able to withdraw money using a card of any payment system without commission.

As of June 1, 2015 UBRD’s AMT network accounted 1194 machines, and Ak Bars’ network accounted 1201 machine.

The consolidated network also includes ATMs of Alfa-Bank, United Settlement System and partner banks of VTB Group.

UBRD to indemnify depositors of Plato-Bank
21.05.2015

Ural Bank for Reconstruction and Development won the tender to indemnify depositors, including individual entrepreneurs, of the credit institution Plato-Bank, LLC. This was reported on the website of the State Corporation Deposit Insurance Agency (DIA).

On May 13, 2015 the Central Bank of Russia has revoked banking license held by Ekaterinburg-based Plato-Bank (Registration No. 2071). Plato-Bank’s retail deposit portfolio amounted to RUB 740 mln as of April 1, 2015.

UBRD awarded by Visa for 1 mln cards issued
21.05.2015

UBRD was awarded by the international payment system Visa at the conference New Horizons that explores leaders of the banking industry in the Russian regions and was held in Yekaterinburg.

UBRD received the award for the emission of one million Visa cards and for the successful cooperation with Visa for 15 years. The first card from Visa was issued by UBRD in 2000, the millionth – at the end of 2014.

3-2-3 Strategy summary
28.01.2015

2014 was rich in foreign economic and geopolitical events. Difficult economic situation and sanctions against Russia were the key aspects of the year and required adjustments to many processes. UBRD responded quickly to market events and developments working over any opportunities.

An important event of the end of the year was the increase of the Central Bank key rate to 17% resulting in increase of interest rates on deposits by banks. Under these conditions, the banking system received a big cash inflow from depositors and new opportunities for development in 2015. Moreover, the risk of depositors’ distrust that was formed in the course of the year was removed from the banking system.

Clients
After completing the 3-2-3 strategy UBRD fulfilled the plan by the number of active clients of the Bank: as of January 01, 2015 UBRD had 1,007,259 customers. In 2014 the number of customers increased by 15%.

Staff
In 2014 the Bank conducted two waves of optimizations in the front area and the head office. As of December 2014 the number of employees was 6,108.

Processes
Last quarter was very successful the corporate business in terms of deposits, which have increased by 166%.

In December 2014 UBRD managed a big inflow of customers: every second client visited our office during the month. Despite the intense pressure on the front area, in December the average waiting time in service offices was minimal during the year.

Lending
Retail Business: From January to September approaches to risk assessment were severely tightened resulting in decrease of the approval rate by one third. Starting from September the number of applications received decreased due to the general decline in demand for loans.

Corporate Business: In April and May there was a sharp decrease in the number of loan applications. Since June the number of applications has stabilized at 900-950, and the percentage of approved applications stood at the level of 45-50%. At the end of the year there was a significant decrease in the number of applications related to the difficult situation in the economy and the currency market.

Finances
Bank’s assets in 2014 increased by 17.5% and amounted RUB 236.7 bln.

Equity in 2014 increased from RUB 17.4 bln to RUB 24.8 bln (+42.4%). As of January 1, 2015 N1 ratio was 13.54% (with a minimum requirement of 10%).

Pre-tax profit of the Bank at the end of 2014 amounted to more than RUB 2 bln; net profit amounted to RUB 1.9 bln.

Net operating income in 2014 increased by 44.7%.

Results of the implementation strategy 3-2-3
3-2-3 Strategy was formulated in 2011 with four main objectives: creating value for customers, creating conditions for staff, ensuring efficiency and achieving financial results. An action-plan was launched for each of these blocks, and by the end of 2014 UBRD has achieved the intended result. Thus, the Bank achieved the targets of 1 mln customers and creation of necessary infrastructure, and the target income.

As of October 1, 2014 the Bank had 555 offices (as of 2011 – 200 offices, the planned number in the strategy – 550).

Income of the Bank for the past period has increased by more than triple RUB 45.8 bln (as of 2011 – RUB 13 bln).

The number of customers has doubled to 1,007,259 customers (as of 2011 – 570,000)

UBRD implemented several major projects in the HR field: introduction of the system of motivation and grades, development of integrated approaches for assessment and staff development, organization and arrangement of actions to support internal corporate values.

A significant change in the development of branch network and the perception of the Bank’s image was the rebranding conducted in 2012. New image, design and office space seriously affected the success of communication and interaction with customers, which contributed to a rapid increase in the customer base.

“During the implementation of the strategy we have practically rebuilt the bank in terms of internal processes, as well as in terms of management of key business processes. Today we have the necessary infrastructure, all possible channels of communication with customers, and most importantly, a serious competitive advances relative to the market”, says Anton Solovyov, President of UBRD

Challenges in 2015
To compensate and take into account all the negative fluctuations in the economy, we need a clear implementation of the budget approved for 2015 (reducing the overall size of the budget amounted to 17.6 - 20%). As far as this reduction is sufficient, the results of the Q1 2015 will show.

UBRD managed cost optimization and will continue to minimize costs, reviewing and improving the efficiency of business processes. These actions are carried out in order to respond adequately to the events taking place in the markets.

Preliminary Y-end 2014 results (RAS)
19.01.2015

Ural Bank for Reconstruction and Development (UBRD) summarized the first financial results for 2014. As of January 1, 2015 Bank’s equity increased from RUB 17.4 bln to RUB 24.8 bln, an increase of RUB 7.4 bln or 42.4%. Currently, UBRD is among fifty largest Russian banks in terms of equity.

UBRD assets for 2014 increased to RUB 236.7 bln or by 17.5%. As of January 1, 2015, N1 ratio, one of the main indicators of stability and reliability of the financial institution, was 13.31% (with a minimum requirement level of 10%).

Liabilities amount to almost RUB 224 bln, which is RUB 46 bln more compared to the beginning of last year (+ 17.8%). Balance profit amounts to more than RUB 2 bln. Net operating income increased by 44.7% to RUB 23.712 bln.

“The results of 2014 show that UBRD is able to work effectively in any situation: we were able not only to receive more profit than in the successful 2013, but also provide a significant capital cushion. This will allow the Bank consistently implement its business objectives even under adverse developments in the economy“, said Anton Solovyov, President UBRD.