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Vozrozhdeniye Bank

April 16, 2002

At 10 April 2002, the Press Conference on the results of the Bank's performance in 2002 was held in the bank Vozrozhdeniye

In his address to the audience Dmitriy Orlov, President of "Vozrozhdeniye" pointed out: "Commitment of each respectable Russian bank is to serve rightly national economic interests and economic course of the country, to promote economic development of the whole country and each region, to support actively national business, to contribute to the prosperity of each Russian citizen, as well as to upgrading living standards of the Russian people".

Alexandre Dolgopolov, Deputy Chairman of the Bank highlighted the Bank's activities in 2001 and in the first quarter of the current year. Deputy Chairmen of the Board Ludmila Goncharova, Mark Nakhmanovich and Nikolai Orlov answered the questions of the reporters and made their comments on the key presentation of the Press Conference.

Alexandre Dolgopolov informed about the growth of the Bank's net assets in the past year almost by one third, as well as about the increase of the balance currency. As at 1 April 2002, currency of balance totaled RUR 22.3 billion, net assets - RUR 13.8 billion, loan portfolio - RUR 9.7 billion, book profit - RUR 125 ml. Profit in the first quarter of year 2002 has already overlapped negative results of the past year (despite improvement in the other key ratios of the Bank's performance losses in the previous year amounted to RUR 84 ml.).

Alexandre Dolgopolov commented on the losses of the past year and explained that they were caused by the assets restructuring process and building up of additional reserves in compliance with international requirements. In the long run, these actions have strengthened and reinforced starting positions aimed at steady growth. In the first quarter of the current year, positive dynamics of the Bank's development made it possible to enter a positive stage of forming a profit side of the balance sheet, which is substantiated by RUR 125 million income received at the end of the first quarter. The Bank expects to gain profit in the amount of RUR 300 million in 2002.

Positive trends in the Bank's development, new fields of activities with prospects of receiving income (interest - at loan portfolio growth, and non-interest income), capitalization of the growing profits as a result of the above trends will enable the Bank to approach a new level of capital growth. In the prior year, the Bank's capital, calculated in compliance with International Standards of Financial Reporting, according to the preliminary data (the audit has not yet been completed) for the first time in the post-crisis period has reached a positive value and totaled $6 ml. By the end of year 2002, the Bank expects to increase its equity capital up to $30 ml under International Standards of Financial Reporting.

As to the last year's performance, the Bank has made great achievements and has taken new strategic positions in various fields. First of all, it relates to sales of high-technology banking products.

"Vozrozhdeniye" continues to widen the range of banking products and services. Particularly, the progress in the field of high-technology products should be noted, for it reflects a level of economic, technological and professional development of the Bank.

This particular area of business manifests readiness of Vozrozhdeniye to respond immediately to the customer's needs and anticipate them. Continuing to develop traditional fields of its activities, Vozrozhdeniye re-equips their technology basis. A lot of innovations have been introduced in the lending area, which has always been a core business of the Bank.

With respect to lending, the Bank has established close links with the productive sector of the economy and focused on supporting national enterprises. Loans to the sector of economy which produce goods and services accounted for over 60% of the overall loan portfolio of the Bank. The Vozrozhdeniye's loan portfolio shows steady growth trends : in the first quarter it increased from RUR 8.8 billion to RUR 9.7 billion.

The Bank continues to support regional and municipal authorities in solving their social and economic development problems. Vozrozhdeniye has always been involved in this activity. Quite recently, the Moscow Region Government and bank Vozrozhdeniye entered into a cooperation agreement aimed at priority tasks of building up financial and loan resources for comprehensive social and economic development of the region. Under the above agreement, the Bank shall engage in operations with the Moscow Region's financial resources and regional lending projects. In addition, Vozrozhdeniye is going to render assistance in creation and development of the Moscow Region's stock market. The Bank will also take part in implementing the regional investment projects, as well as in the regional social and economic development programmes. Particular significance in the above agreement is attached to extensive introduction of clearing settlements.

Vozrozhdeniye is also implementing its own projects with great social and economic significance. An example is a deposit programme Solidarnost (Solidarity) promoting business development and savings accumulation by their employees. The similar kind of project is a programme Perspective (Prospects), that contributes to the business enterprises development and at the same time assists in reducing the level of their staff turnover.

Offering financial services to individuals is a priority field of Vozrozhdeniye's activities. It is noteworthy, that over the previous year the volume of retail deposits has doubled. This figures manifest growing confidence in the Bank and reflect considerable success in approaches of promoting services to the market. But first and foremost, the significant inflow of financial resources creates new opportunities for crediting business enterprises.

With respect to retail business, the Bank widens the range of banking products and services for individuals. It can be clearly seen in active introduction in circulation of "plastic cards" both in Moscow Region and across the country. On the basis of its extensive branch network the Bank is developing the card servicing infrastructure covering about 120 ATMs, over two hundred cash advance outlets and over 500 points of sale and service linked to the Bank's acquiring system (the Bank has its own certified processing centre). The card payment and service system set up by the Bank has been steadily developing.

Vozrozhdeniye is a Principal Member of International Payment Systems - VISA International and EUROPAY International. The Bank is among leaders of the Russian bankcards issuers. At the moment, the volume of issued bankcards exceeds 225 thousand. Over the first quarter alone of year 2002, the Bank issued 25 thousand cards. By the end of this year, Vozrozhdeniye expects to pass the level of 350 thousand in card issuing.

The Bank is among financial institutions which hold leading positions in implementing different forms and methods in clearing operations. First and foremost, this refers to account remote control systems and electronic payments. These products and services are designed both for corporate customers and individuals. Being active in introduction of clearing payments, the Bank assists in solving the Government tasks as well. Advanced technology needs an appropriate telecommunication infrastructure, so the Bank is building new communication channels and is improving the old ones. And, at last, but not at least, a wide introduction of clearing settlements enables to make reporting and financial flows more transparent, and so improving tax collection and functioning of the whole financial system.




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