New opportunities of communications
in retail banking promotion
Deputy CEO, VTB24
Mikhail Kozhokin
1
Overview of VTB24

Profile
Market
Position
Business
Lines
Leading Russian retail bank with full
range of banking products and
services for individuals and SME




Second largest retail bank in Russia
Fifth largest bank in Russia by assets
Retail loans market share – 10,6%
Retail deposits market share – 6,4%





Loan and deposits for individuals
SME lending and services
Private Banking
Cards
Investment products for individuals
Distribution
Network
Regions



531 branches/outlets
Approx. 5000 ATMs
Nationwide branch network that is
significantly larger than those of most
competitors

Very strong position in all Russia’s
regions: 69 regions – 86% coverage
Focus on major cities


Clients

Over 7.8M individuals clients with
6.9M active clients
Approx. 200 000 SME clients with
49 500 active
Net Income Growth (in RUB mln)*
Total Asset Growth (in RUB mln)*
CAGR = 42%
CAGR = 100%
17 514
904 011
712 973
596 481
319 387
159 045
2006
2007
2008
2009
*IAS, standalone VTB24. 2010 data preliminary, non-audited
2010
545
937
2006
2007
4 237
4 898
2008
2009
2010
2
Retail Banking – History of VTB24
2004 – 2006
2007 – 2008
 SET UP
 ACCELERATED EXPANSION
 Acquisition of Guta Bank in
Russia
 Based on Guta Bank, a
specialized retail bank, VTB24,
was created, focusing on
serving and providing loans
for retail customers and small
businesses as a part of VTB.
 Product lines and sales
process were set and
launched
 Significant growth of VTB24’s
business volumes and market
share evidenced by branch
network expansion across the
country and creating new office
forms and bank products sales
modules.
 Retail customers’ migration from
VTB and VTB North-West
2009 – 2011
 ACNOWLEDGED LEADER
 The second largest retail bank in
Russia
 Wide branch network throughout
Russia
 Developed retail infrastructure,
including front office, processing
center and internet banking
 Significant retail client base
 Leader in customer service*
 VTB24 actively develops its retail
business and product line, leading
banking service technologies and
cross-selling, and steadily grows
its share on the retail market.
The strategic focus is further leading growth with client-oriented and segment-based
approach to ensure profitability and high efficiency
* Awards granted in 2010 presented on next slides
3
Business Growth Supported and Customer Loyalty
by Efficiency Improvement
Number of clients
Average time of operation
Branches and ATMs
Structure of client-flow by time in queue
4
Rising Customer Satisfaction Contribute to Stable Growth
-
-
EPSI (Quality assessment to meet
European standards) – Annual research
«Customer saticfaction’2010» – VTB24 is
recognized as absolute leader for customer
satisfaction and loyalty
VTB24
Sberbank
Alfa-Bank
Other
banks
VTB24
«The Retail Finance» magazine –
place
by results of 2010: «The best retail bank»,
«The best service quality»
1st place
1st
Alfa-Bank
Raiffeisen Bank
-
Industry
average
SPEAR’S Russia Wealth Management
Awards - in 2010 VTB24 Private Banking is
recognized as the best Russian bank,
providing private banking services and
wealth management
2nd
3rd
#1 Private Banking
5
Segment-oriented approach and the Internet
 VTB24 implemented a segment-oriented approach in client attraction. Key target segments are High/Ultra High
Net-Worth’s, mass affluent and the upper mass segment.
The upper mass segment is characterized by high level of activity in the Internet, especially in social networks:
52% of the respondents access the Internet every day, 81% - no less than once a week. In comparison national
average is 40% and 61% respectively.
 The marketing policy of VTB24 rests on following features:
 Internet Advertising (high share in the advertising budget, emphasis on contextual advertising)
 General creative concept (celebrities)
 Presence in social networks
The share of the Internet users in different income groups
85%
92%
The share of Internet in the sources of information about the bank
32%
search for information on the Internet
users' advice on the Internet
72%
22%
60%
19% 19%
16%
39%
10% 10%
300-500
501-800
801-1600
Family Income, per person, per month, $
1601-2500
>2500
300-500
11%
501-800
801-1600
Family Income, per person, per month, $
1601-2500
6
Internet audience in Russia
Dynamics of Internet Usage in Russia
70
45%
42,8%
40%
60
35%
32,3%
50
30%
mln.
27,0%
40
25%
20,8%
30
38,0
45,3
20%
59,7
15%
20
29,4
10%
10
2,1%
5%
3,1
0
2000
0%
2007
Users (left scale)
2008
2009
2010
% of Population (right scale)
 The number of the Internet users in the Russian Federation increased by 31,8% in 2010 and amounted to 59,7
million people. It’s about 42,8% of the total population of the country.
Source: Internet World Stats
7
Internet Advertising in Russia
Internet Advertising in Russia
25
120%
21,9
100%
97%
20
87%
80%
15,6
14,7
mln
15
60%
55%
9,5
10
40%
40%
The Internet is the only
segment of the
advertising market that
has been continuously
increasing even during
the crisis in 2008-09
years.
5,1
5
20%
6%
0
0%
2006
2007
2008
advertising expenses (left scale)
2009
2001
growth, % (right scale)
 Except for the post-crisis 2009, the growth rate of internet advertising in Russia in 2006-2010
didn’t descend below 40%. In 2010 the internet advertising market capacity in Russia according to
MindShare Interaction amounted to 21,9 billion rubles.
8
Website Attendance Dynamics – www.vtb24.ru
Website visitors
18 000 000
16 000 000
 The amount of website visitors is continuously rising
with a 25% increase in 2010. For 4 years in a row (20072010) the VTB24 site attendance has grown by 7.5
times.
14 000 000
12 000 000
10 000 000
 About 50% of visitors are interested in cash loans and
credit cards.
8 000 000
6 000 000
4 000 000
2 000 000
0
2006
2007
2008
2009
2010
The product structure of site attendance in 2010
VTB24 site reach is less than the amount of
Internet users in Moscow or St. Petersburg, but
exceeds that of Ekaterinburg and the other
Russian cities.
Monthly site reach, mln. visitors
Mortgages
19%
Microcredit
Auto Lending
1%
12%
7
6
5
4
Savings
19%
3
2
1
0
Cash loans
38%
Credit cards
11%
Moscow
St. Peterburg
VTB24
Ekaterinburg
9
VTB24 Expands Its Communications Via the Internet
Internet Advertising Costs, $mln
4,3
 Internet Advertising costs increased by 80% in 2010.
3,4
 The share of Internet Advertising coats in the
advertising budget is rising from year to year. In 2010 it
reached 26,1%.
2,4
Website is a Generator of Sales
 The amount of cash loans applications via
2008
2009
www.vtb24.ru increased by 28% in 2010, which is
three times more than in 2009 (9%).
2010
The Structure of Advertising Costs
100%
80%
60%
40%
20%
0%
2008
Internet
TV
Radio
2009
Press
Outdoor
2010
Metro
Collateral materials
10
The Effectiveness of Internet Advertising Increases:
The Example of Cash Loans
Internet Advertising Costs and Conversion Ratio (Number of Visitors-Number of Applications)
Internet advertising costs
conversion ratio
7,9
7,4
-21%
6,3
4,3
3,4
2,4
2008
2009
2010
 With the increase of Internet advertising costs by 80% in 2010 the conversion ratio of the number of
VTB24 site visitors into the number of internet applications for cash loans decreased by 21%. So the
effectiveness of Internet advertising has risen.
11
VTB24 in Social Networks
VTB24 is represented in Facebook, Twitter, on Banki.ru (leading Russian site
on banking), LiveJournal and Blogspot.
12
VTB24 Internet Banking
In 2009-2010 the number of internet banking clients of VTB24
has grown by 4,6 times. At present every eighth client of VTB24
uses internet banking.
Number of clients VTB24 internet banking
1200
14%
12.5%
974
1000
12%
thousands of people
10%
800
7.8%
8%
600
505
400
6%
4.6%
5.2%
4.5%
4%
211
200
2%
103
52.2
0
0%
01.01.2007
01.01.2008
01.01.2009
number of VTB24 internet banking users
01.01.2010
01.01.2011
share of VTB24 cliens, % (right scale)
13
Specifics of Russian financial internet development
 Banking technologies development can’t catch up with the Internet technologies
 Russians don’t have enough trust in the Internet for financial transactions.
 In general in Russia the Internet is yet a communication environment and information search
engine, rather than a tool for business matters and for solving personal financial questions.
 The core of financial internet audience are young successful professionals, a new and attractive
generation of clients
 This is yet narrow but fast growing segment with a high potential for both financial internet and
client base of retail banks development
They would open new opportunities for the banking sector
14