Annual Report 2010


Independent Auditor’s Report

To the Shareholders and Board of Directors of Bank Vozrozhdenie:

The accompanying summarised financial statements have been derived from the financial statements of Bank Vozrozhdenie (hereinafter - “the Bank”) for the year ended 31 December 2010, prepared in accordance with international financial reporting standards.

Management’s Responsibility for the Summarised Financial Statements

These summarised financial statements are the responsibility of the Bank’s management.

Auditor’s Responsibility

Our responsibility is to express an opinion on whether these summarised financial statements are consistent, in all material respects, with the financial statements from which they were derived.

We have audited the financial statements of the Bank for the year ended 31 December 2010, from which these summarised financial statements were derived, in accordance with International Standards on Auditing. In our report dated 28 March 2011 we expressed an unqualified opinion on the financial statements from which the summarised financial statements were derived.

Opinion

In our opinion, the accompanying summarised financial statements are consistent, in all material respects, with the financial statements from which they were derived.

For a better understanding of the Bank’s financial position and the results of its operations for the period and of the scope of our audit, the summarised financial statements should be read in conjunction with the financial statements from which the summarised financial statements were derived and our audit report thereon.

28 March 2011
Moscow, Russian Federation

FINANCIAL STATEMENTS

Summarised International Financial Reporting Standards Financial Statements Derived from the Audited International Financial Reporting Standards Financial Statements

STATEMENT OF FINANCIAL POSITION

In millions of Russian Roubles

31 December 2010

31 December 2009

ASSETS
Cash and cash equivalents

32,151

34,101

Mandatory cash balances with the CBRF

1,072

868

Trading securities

12,182

9,756

Due from other banks

5,860

6,363

Loans and advances to customers

104,046

85,205

Investment securities available for sale

2,043

1,312

Premises, equipment and intangible assets

3,132

3,102

Other financial assets

1,644

1,236

Other assets

4,028

3,660

TOTAL ASSETS

166,158

145,603

LIABILITIES
Due to other banks

7,772

4,368

Customer accounts

130,334

113,129

Debt securities in issue

5,794

6,364

Subordinated loans

4,293

4,578

Other financial liabilities

611

576

Other liabilities

494

302

TOTAL LIABILITIES

149,298

129,317

EQUITY
Share capital

250

250

Share premium

7,306

7,306

Retained earnings

9,227

8,660

Other reserves

77

70

TOTAL EQUITY

16,860

16,286

TOTAL LIABILITIES AND EQUITY

166,158

145,603

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STATEMENT OF COMPREHENSIVE INCOME

In millions of Russian Roubles

2010

2009

Interest income

13,600

16,954

Interest expense

(8,109)

(8,628)

Net interest income

5,491

8,326

Provision for loan impairment

(1,872)

(4,752)

Net interest income after provision for loan impairment

3,619

3,574

Fee and commission income

4,295

4,027

Fee and commission expense

(360)

(298)

Losses less gains/Gains less losses from trading securities

(90)

204

Gains from trading in foreign currencies

3,139

3,513

Foreign exchange translation losses

(2,794)

(2,939)

Foreign exchange translation losses less gains

(24)

(3)

Gains less losses from disposals of investment securities available for sale

15

18

Dividend income

2

1

Other operating income

225

147

Administrative and other operating expenses

(7,180)

(6,325)

Provision for impairment of other assets

(121)

-

Profit before tax

726

1,919

Income tax expense

(145)

(702)

PROFIT FOR THE YEAR

581

1,217

Other comprehensive income:
Available-for-sale investments:
Gains less losses/(Losses less gains) arising during the year

(5)

26

Income tax credit/(expense) recorded directly in other comprehensive income

12

(8)

Other comprehensive income for the year

7

18

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

588

1,235

Earnings per share for profit attributable to the equity holders of the Bank, basic and diluted (expressed in RR per share)
Ordinary shares

23

49

Preference shares with determined dividend amount

25

50

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STATEMENT OF CHANGES IN EQUITY

In millions of Russian Roubles

Share capital

Share premium

Other reserves

Retained earnings

Total equity

Balance at 31 December 2008

250

7,306

52

7,457

15,065

Total comprehensive income for 2009

18

1,217

1,235

Dividends declared

(14)

(14)

Balance at 31 December 2009

250

7,306

70

8,660

16,286

Total comprehensive income for 2010

7

581

588

Dividends declared

(14)

(14)

Balance at 31 December 2010

250

7,306

77

9,227

16,860

STATEMENT OF CASH FLOWS

In millions of Russian Roubles

2010

2009

Cash flows from operating activities
Interest received

13,199

16,244

Interest paid

(8,448)

(7,978)

Fees and commissions received

4,267

4,014

Fees and commissions paid

(360)

(298)

Net income received from trading in trading securities

19

47

Net income received from trading in foreign currencies

345

613

Other operating income received

217

160

Administrative and other operating expenses paid

(6,575)

(5,840)

Income tax paid

(633)

(580)

Cash flows from operating activities before changes in operating assets and liabilities

2,031

6,382

Changes in operating assets and liabilities
Net increase in mandatory cash balances with the Central Bank of the Russian Federation

(204)

(713)

Net increase in trading securities

(2,541)

(484)

Net decrease/(increase) in due from other banks

506

(4,338)

Net (increase)/decrease in loans and advances to customers

(20,568)

2,114

Net increase in other financial assets

(425)

(340)

Net decrease in other assets

148

209

Net increase/(decrease) in due to other banks

3,126

(17,679)

Net increase in customer accounts

17,978

21,062

Net (decrease)/increase in debt securities in issue

(333)

416

Net increase in other financial liabilities

26

95

Net increase in other liabilities

41

10

Net cash (used in)/from operating activities

(215)

6,734

Cash flows from investing activities
Acquisition of investment securities available for sale

(1,589)

(786)

Proceeds from disposal of investment securities available for sale

876

1,916

Acquisition of premises, equipment and intangible assets

(511)

(382)

Proceeds from disposal of premises, equipment and intangible assets

8

4

Income from disposal of non-current assets available for sale

63

Proceeds from disposal of investment properties

7

Dividend income received

2

1

Net cash (used in)/from investing activities

(1,144)

753

Cash flows from financing activities
Receipt of funding from international financial institutions

407

766

Repayment of subordinated loans

(395)

Receipt of subordinated loans

91

Repayment of syndicated loans

(3,307)

Dividends paid

(14)

(14)

Net cash from/(used in) financing activities

89

(2,555)

Effect of exchange rate changes on cash and cash equivalents

(680)

679

Net (decrease)/increase in cash and cash equivalents

(1,950)

5,611

Cash and cash equivalents at the beginning of the year

34,101

28,490

Cash and cash equivalents at the end of the year

32,151

34,101

For a better understanding of the Bank’s financial position and the results of its operations for the year, and of the scope of our audit, these summarised financial statements should be read in conjunction with the financial statements, from which these summarised financial statements have been derived, and audit report thereon. Copies of audited financial statements can be obtained from Bank Vozrozhdenie.

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Fax: +7 (495) 620 1953
Web-site: http://www.vbank.ru
Email:  investor@voz.ru

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