VTB GROUP 3M2007 FINANCIAL RESULTS
STRONG START TO THE YEAR
NET INTEREST INCOME UP BY 40.9%
RETAIL LOAN PORTFOLIO UP 19.5%
Moscow, June 26, 2007 - VTB, Russia’s leading universal banking group, today announces its consolidated
IFRS financial results for 3M2007 ended March 31, 2007.
The VTB Group’s net interest income grew by 40.9% (or US$141 million), and net fee and commission income
grew by 13.6% as compared to 3M2006. Net of gains from disposal of investments, pre-tax profit increased by
13.9% from US$259 million to US$295 million. Assets increased to US$56,153 million, up 7.2% or US$3,750
million, with retail loans up 19.5% outperforming market averages.
Financial Highlights
Profit and Loss Account (as compared to 3M2006):
 Interest income increased to US$1,066 million, up 46.2%, and fee and commission income increased to
US$111 million, up 22.0%;
 Net interest income increased to US$486 million, up 40.9% or US$141 million;
 Net fee and commission income increased to US$92 million, up 13.6% or US$11 million, reaching 13.6% of
operating income;
 The Group’s effective taxation rate (consolidated) increased from 10.9% to 25.9%, reflecting gradual
substitution of FX and securities gains by interest and commission income;
 Consolidated net profit for 3M2007 amounted to US$232 million, down 30.5% due to a decrease in
securities gains, which in 3M2006 included income from sale of KamAZ shares.
 Earnings per share decreased from US$6.3 to US$4.2 per 100,000 shares.
Assets and Funding (as compared to December 31, 2006):
 Loans and advances to customers increased to US$31,697 million, up US$2,435 million or 8.3%, with retail
loans to individuals up US$494 million to US$3,027 or 19.5%;
 Securities portfolio grew by 19.8% to US$10,729 million, including 5% of shares of European Aeronautic
Defense and Space Company (EADS);
 Customer deposits increased to US$23,381 million, up 17.0%, with retail deposits up 8.1% to US$7,918;
 March 2007: VTB EUR 1,000 million Eurobond with a floating rate of LIBOR + 0.6% p.a. maturing in March
2009, and VTB GBP 300 million Eurobond with an interest rate of 6.332% p.a. maturing in March 2010.
3M2007 Important Events:
 Increase of VTB’s share capital by 1,734,333,866,664 shares (24.97% of number of VTB shares after the
increase) approved by extraordinary general meeting of shareholders of VTB, followed by an IPO in May
2007;
 Vneshtorgbank officially renamed to JSC VTB Bank;
 Angola Banco VTB Africa SA started operations.
3M2007 Acquisitions:
 VTB initiated the process of acquiring 50% + one share of Slavneftebank in Belarus for US$25 million (deal
completed in May 2007);
 VTB purchased 25% plus one share in OJSC Terminal for US$40 million.
Comments:
Andrei Kostin, Chairman of the Management Board and CEO:
“Early 2007 delivered encouraging results underpinning our competitive position for strong growth in a
rapidly developing Russian economy. We continue to implement our strategy for further business expansion in
Russia and abroad, focusing on increasing our market share in the fast-growing retail banking in Russia. Our
successful Global Offer completed in May this year provided us with the capital to achieve this and reflected
strong interest of the investment community in rapidly expanding banking market in Russia.”
Nikolai Tsekhomsky, CFO:
“The results for the beginning of 2007 indicate the further growth of VTB Group and the anticipated positive
changes of the structure of the Group’s earnings. Early 2007 results demonstrate a clear trend toward gradual
replacement of gains from proprietary activities by interest and commission income, reflecting the ongoing shift
from proprietary activities to corporate and retail business. We hope that the improved quality of earnings will
enable us to meet expectations of our investors.”
Operating Performance
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Net of gains arising from disposal of investments, profit before tax was up 13.9% driven primarily by growth
in net interest income and net fee and commission income, reflecting the expansion of the Group’s
customer base and increase in volumes of lending, deposit taking and other customer transactions.
Net interest income reached US$486 million, which was attributable to growth in all of the components of
interest income: (i) Interest income on loans and advances to customers increased by 50.9% to US$854
million; (ii) interest income on securities increased by 21.1% to US$115 million; and (iii) interest on amounts
due from other banks increased by 42.6%, to US$97 million. The increase in net interest income reflected
the ongoing expansion of the Group’s lending business, particularly in the retail segment, and growth of the
Group’s securities portfolio.
Net interest spread increased to 4.3% in 3M2007 from 4.0% in 3M2006, mainly due to fast growth of the
Group’s retail loan portfolio reaching 9% of the Group’s gross customer loans, which yields higher average
interest rates than the Group’s corporate loan portfolio.
Operating income increased by 2.7% to US$674 million, compared to US$656 million in 3M2006, primarily
due to an increase of net interest income to US$486 million and net fee and commission income to US$92
million. Decrease in net gains from securities by US$162 million was attributable to income from sale of
KamAZ shares in 3M2006 and the performance of the Russian securities market in 3M2007, with RTS
index up only 0.7% compared to 27.4% in 3M2006.
Staff costs and administrative expenses increased by 38.3% to US$365 million, reflecting organic growth of
the Group's network in Russia which entailed increased staff, marketing and advertising expenditures.
Sustained increase in VTB’s interest and commission income was provided by growth throughout the
Group’s key strategic areas: corporate, retail and investment banking operations. Customer loans
comprised 56.4% of total assets as of March 31, 2007, compared to 55.8% as of December 31, 2006.
Accordingly, interest income on customer loans increased to 80.1% of interest income, from 77.6% in 2006.
Total customer deposits increased by 17.0% to US$23,381 million in 3M2007, of which deposits from
individuals represented US$7,918 million, corporate deposits represented US$11,368 million, and state and
public deposits represented US$4,095 million.
Loan Quality and Concentration
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Overdue and rescheduled loans and allowances for loan impairment as of March 31, 2007 amounted to
2.7% and 3.2%, respectively, of the Group’s gross loan portfolio.
Coverage of overdue and rescheduled loans by allowances for loan impairment stood at 118.7% as of
March 31, 2007.
The rate of provisioning decreased from 1.8% in 3M2006 to a comfortable 0.8% in 3M2007.
The Group’s exposure to ten largest borrowers as a percentage of gross customer loans remained at
17.7%. The Group continues to seek to diversify its customer base and lending capacity and increase its
lending volumes.
Capitalization and Capital Adequacy
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
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The Group’s consolidated shareholders’ equity increased to US$7,143 million as of March 31, 2007 from
US$6,992 million as of December 31, 2006 due to the contribution of net profit in the amount of US$232
million and foreign exchange gains of US$44 million, offset by a decrease in the unrealized gains on
financial assets available-for-sale by US$105 million, mainly attributable to revaluation of EADS shares.
As of March 31, 2007 the VTB Group’s consolidated BIS Tier 1 capital was US$6,509 million, compared to
US$6,357 million as of December 31, 2006, and total BIS capital was US$7,787 million, compared to
US$7,646 million as of December 31, 2006. The Group’s BIS Tier 1+2 capital adequacy ratio decreased
from 14.0% as of December 31, 2006 to 12.9% as of March 31, 2007, remaining well above the 8.0%
minimum set by the Basel Accord.
VTB and all of its subsidiary banks continue to observe the capital adequacy requirements set by their
respective local regulatory authorities.
Consolidated Balance Sheet (expressed in millions of US dollars)
31 March 2007
(unaudited)
Assets
Cash and short-term funds
Mandatory cash balances with central banks
Financial assets at fair value through profit or loss
Financial assets pledged under repurchase agreements
and loaned financial assets
Due from other banks
Loans and advances to customers
Financial assets available-for-sale
Investments in associates
Investment securities held-to-maturity
Premises and equipment
Investment property
Intangible assets
Deferred tax asset
Other assets
31 December
2006
3,523
641
7,291
3,581
648
5,120
2,463
2,938
6,193
31,697
970
173
5
1,427
180
452
106
1,032
6,813
29,262
888
200
11
1,422
178
455
93
794
Total assets
56,153
52,403
Liabilities
Due to other banks
Customer deposits
Other borrowed funds
Debt securities issued
Deferred tax liability
Other liabilities
6,643
23,381
4,279
12,915
114
512
7,587
19,988
4,468
11,565
125
509
47,844
44,242
1,166
1,169
49,010
45,411
Equity
Share capital
Share premium
Unrealized gain on financial assets available-for-sale
Premises revaluation reserve
Currency translation difference
Retained earnings
2,500
1,513
49
336
391
1,994
2,500
1,513
154
341
352
1,744
Equity attributable to shareholders of the parent
6,783
6,604
360
388
7,143
6,992
56,153
52,403
Total liabilities before subordinated debt
Subordinated debt
Total liabilities
Minority interest
Total equity
Total liabilities and equity
Consolidated Statements of Income (expressed in millions of US dollars)
For the three-month period ended
31 March (unaudited)
2007
2006
Interest income
Interest expense
1,066
(580)
729
(384)
Net interest income
Provision for loan impairment
486
(62)
345
(94)
Net interest income after provision for loan impairment
424
251
Gains less losses arising from financial assets
at fair value through profit or loss
Gains less losses from available-for-sale financial assets
Gains less losses arising from dealing in foreign currencies
Foreign exchange translation gains less losses
Fee and commission income
Fee and commission expense
Share in income of associates
Income arising from non-banking activities
Other operating income
20
–
78
28
111
(19)
(1)
22
11
71
111
(24)
123
91
(10)
4
22
17
Net non-interest income
250
405
Operating income
674
656
(365)
(14)
18
(264)
(17)
–
Profit before taxation
313
375
Income tax expense
(81)
(41)
Net profit
232
334
Net profit attributable to:
Shareholders of the parent
Minority interest
218
14
326
8
Staff costs and administrative expenses
Expenses arising from non-banking activities
Profit from disposal of associates
Consolidated Statements of Cash Flows (expressed in millions of US dollars)
For the three-month period
ended 31 March (unaudited)
2007
2006
Cash flows from operating activities
Interest received
Interest paid
Income received on operations with financial assets
at fair value through profit or loss
Income received on dealing in foreign currency
Fees and commissions received
Fees and commissions paid
Income arising from non-banking subsidiaries
and other operating income received
Staff costs, administrative expenses and
expenses arising from non-banking activities paid
Income tax paid
Cash flows from operating activities before
changes in operating assets and liabilities
Net decrease (increase) in operating assets
Net decrease (increase) in mandatory cash balances with local central
banks
Net decrease (increase) in restricted cash
Net increase in trading securities designated at fair value through profit
or loss
Net decrease (increase) in financial assets pledged under repurchase
agreement
Net decrease (increase) in due from banks
Net increase in loans and advances to customers
Net increase in other assets
Net (decrease) increase in operating liabilities
Net (decrease) increase in due to banks
Net increase in customer accounts
Net decrease in promissory notes and certificates of deposits issued
Net increase in other liabilities
Net cash used in operating activities
Cash flows from investing activities
Dividends received
Proceeds from sales or maturities of investment securities availablefor-sale
Purchase of investment securities available-for-sale
Purchase of subsidiaries, net of cash acquired
Proceeds from redemption of investment securities held-to-maturity
Purchase of premises and equipment
Proceeds from sale of premises and equipment
Purchase of intangible assets
Net cash used in investing activities
1,057
(575)
725
(376)
(13)
79
111
(20)
(12)
(21)
91
(10)
32
40
(357)
(99)
(258)
(60)
215
119
13
13
(38)
(12)
(1,960)
(369)
338
653
(2,309)
(276)
(762)
(1,814)
(467)
(194)
(972)
3,148
(415)
31
142
1,551
(473)
546
(1,521)
(1,771)
3
2
28
(110)
–
6
(30)
24
(2)
174
(18)
(14)
–
(39)
33
(2)
(81)
136
For the three-month period
ended 31 March (unaudited)
2007
2006
Cash flows from financing activities
Increase in Central Bank of the Russian Federation funding
184
–
Decrease in Central Bank of the Russian Federation funding
(153)
(75)
Proceeds from other credit lines
321
21
Repayment of other credit lines
(13)
–
–
(72)
Redemption of bonds denominated in RUR
Proceeds from issuance of Eurobonds
1,923
–
242
(241)
(157)
Proceeds from issuance of SSD debentures (Schuldscheindarlehen)
Redemption of SSD debentures (Schuldscheindarlehen)
600
Proceeds from syndicated loan
113
Repayment of syndicated loan
(603)
Net cash provided by financing activities
1,029
(591)
1,531
Effect of exchange rate changes on cash and cash equivalents
Net increase in cash and cash equivalents
997
26
51
(45)
(587)
Cash and cash equivalents at beginning of the year
3,479
2,541
Cash and cash equivalents at the end of the period
3,434
1,954
JSC VTB Bank and its subsidiaries (the VTB Group or the Group) are a leading Russian commercial banking group, offering a range of
banking services and products across Russia, certain CIS countries and in selected countries of Western Europe, Asia and Africa. As of
March 31, 2007 the Group had a network of 152 full-service branches located across Russia, comprised of 58 branches of VTB, 40
branches of VTB 24 and 54 branches of Industry and Construction Bank. Outside of Russia, the Group operates through four subsidiary
banks located in the CIS (Armenia, Georgia, and two banks in Ukraine), six subsidiary banks located in Europe (Great Britain, France,
Germany, Austria, Switzerland and Cyprus), two subsidiary banks in Africa (Angola, Namibia) and 4 representative offices in India, Italy,
China and Belarus. VTB has also established subsidiaries in Asia, and its UK subsidiary has a representative office in Singapore. VTB has
operated under a full banking license, № 1000, from the Central Bank of the Russian Federation since 1990.
The Group operates in the commercial banking sector and provides services including deposit taking and commercial lending, support of
clients’ export/import transactions, FX, securities trading, and trading in derivative financial instruments. The Group had 29,550 employees
as of March 31, 2007. The Government of the Russian Federation is VTB’s main shareholder and owns, through the Federal Property
Management Agency, 99.9% of its registered share capital. For more information please visit www.vtb.ru.
Some of the information in this presentation may contain projections or other forward-looking statements regarding future events or the
future financial performance of JSC VTB Bank ("VTB") and its subsidiaries (together with VTB, the “Group"). Such forward-looking
statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in
which the Group will operate in the future. We caution you that these statements are not guarantees of future performance and involve
risks, uncertainties and other important factors that we cannot predict with certainty. Accordingly, our actual outcomes and results may differ
materially from what we have expressed or forecasted in the forward-looking statements. These forward-looking statements speak only as
at the date of this presentation and are subject to change without notice. We do not intend to update these statements to make them
conform with actual results.
Contacts:
Nataly Loginova
Irina Mokeeva
Telephone:
+7 (495) 739-77-99
8-800-200-77-99
(toll free number for Russian regions)
E-mail:
InvestorRelations@vtb.ru