DREAMS THAT CHANGE LIVES 1 Annual Report 2011 Annual Report 2011

Annual Report 2011

ANNUAL REPORT 2011 DREAMS THAT CHANGE LIVES 1 Annual Report 2011 Annual Report 2011

Dreams that change Annual Report 2011 lives

Address of the Chairman of Supervisory Board and the Chairman of Management Board ...... 5

General information ...... 7 At the heart of every one big, small, blue dreams live or, at first glance, castles in the air. Are all of us dream, everybody familiar Shareholders ...... 9 with these feeling, but a few realize how powerful the dreams Management bodies ...... 10 are. That is why this year we decided to dedicate an annual report to the dreams that changed our lives. Licenses, list of operations ...... 14

Organizations membership ...... 16 At all times and now there are dreamers, people who were more daring than others and freer in their thoughts. These qualities Main stages of development ...... 18 helped them to move progress and change the course of his- Key events in 2011 ...... 24 tory. The only thing they needed is to be believed and support- ed. Due to that help new inventions and discoveries that were Key financial indicators ...... 26 ahead of their time for years, have made inestimable contribu- Credit policy ...... 28 tion to the development of cultural and scientific world. Operations with securities ...... 32 We believe that the example of these famous people proves that Resource position ...... 36 everything we aspire to may come true, because they were able to realize their dreams thanks to the support. Card products ...... 40

Integral Clearing Center (ICC) ...... 44 Dare to have the bold dreams and “MEGABANK” will help your cherished wishes come true. Treasury operations ...... 47

Regional network ...... 49

International cooperation ...... 52

Risk management ...... 56

Corporate governance ...... 60

Personnel ...... 61

Strategic goals for 2012 ...... 62

Events after the reporting date ...... 63

Auditor’s report according to international standarts ...... 64

Financial statements according to international standards ...... 67

Details of the Bank and its branches ...... 73

2 2 3 Annual Report 2011 Annual Report 2011 Address of the Chairman of Supervisory Board and the Chairman of Management Board

Address of the LADIES AND GENTLEMEN! We have the honour to offer you the annual report and financial Chairman of Supervisory performance of PJSC “MEGABANK.”

Board and the Chairman For Ukraine 2011 year was marked by extension of post-crisis economic recovery and stabilization of political situation in the of Management Board country. Economic development positively influenced activity of PJSC “MEGABANK”. We can state with pleasure that during year passed the bank successfully performed assigned tasks. Management and staff of our financial institution succeeded to lay the foundation both for current execution of business plans and for sustainable development in the future, for an ambitious strategy of joining the leaders of banking services in Ukraine.

During the reporting year the bank worked on attraction of high- quality client base, on diversification of funding sources, quickly implemented new products and technologies according to market requirements and needs of clients, engaged in optimizing its organizational structure and improved business processes. Regarding our credit activity we followed the principles of balance and conservatism.

Positive dynamics in almost all directions is reflected in financial indicators of performance of PJSC “MEGABANK”. Most of them are significantly better than similar indicators within the banking system as a whole. Thus, the bank’s net assets at the beginning of 2012 amounted to UAH 4,540 million, loan and investment portfolio – UAH 3,568 million. The growth of these indicators for the reporting year reached 29% and 30% respectively. The financial results of PJSC “MEGABANK” in 2011 was a profit of UAH 3,493 thousand that is more than by 70% better than the result of the last year.

Bank continued to develop relations also with other international financial institutions. It should be noted appearance in 2011 of a new partner of “MEGABANK” – an international company “WorldBusiness Capital, Inc”. There has been also expanded cooperation with European Bank for Reconstruction and Devel- opment (EBRD) within the project aimed on energy efficiency of enterprises in Ukraine. Implementation of various projects with other and already traditional for “MEGABANK” partners has continued. Attracted from international financial organizations during the reporting period funds totalling 38.5 million U.S. dollars were used to finance the real sector of national economy. Talking about future plans in this direction, we want to assure that its international business the Bank will seek to attract into

4 5 Annual Report 2011 Address of the Chairman of Supervisory Board and the Annual Report 2011 General information Chairman of Management Board

the economy of the country foreign credit resources, thus con- “MEGABANK” is a universal financial institute with the European tributing creation of a positive investment climate in Ukraine. General vector of development, oriented to a long lasting and mutually beneficial partnership. The bank’s network covers all the terri- The challenge of the bank for the domestic market is to keep information tory of Ukraine ensuring the comfort and accessibility of service. and improve position of PJSC “MEGABANK”, to provide a full range of quality services to businesses and people on competi- “MEGABANK” offers dynamic hi-tech solutions, based on tradi- tive conditions. We believe that this is quite possible given the tions of reliability to its private and corporate clients. High-qual- respect to the bank in business circles, public confidence and ity, clear, indeed unique services of “MEGABANK” allow con- support of shareholders, capital adequacy level, professional siderably to facilitate life of its clients, help them attain financial management and staff. goals easily and quickly.

Let me thank the Supervisory Board, Management Board and all the team of “MEGABANK” for professionalism and high dedica- THERE ARE FOLLOWING SEVEN PRINCIPLES OF tion to work. Also we wish prosperity to all clients and partners MEGABANK’S PERFORMANCE: who have been working with the bank for many years. We assure you that PJSC “MEGABANK” further on will continue to 1. Professionalism promptly and properly perform its obligations. 2. Reliability

We hope for further fruitful and mutually beneficial cooperation! 3. Transparency 4. Responsibility 5. Productivity 6. High technology Sincerely yours, Chairman of the Supervisory Board Viktor Subotin 7. Growth

Chairman of the Management Board Olena Zhukova MISSION AND PHILOSOPHY

We sincerely believe in possibility of daily progress, in gradual permanent growth and perfection. In fact even the smallest details in the modern global world are extremely important, and each of them can grow into motive force. It is a new understand- ing, the first displays of which only appear at the developing market.

We realize the value of every instant for people who surround us. That is why we aim to be as closer to them as possible, to support, showing things as they are, to give hope for the future.

We help people to feel foundation of nowadays and see proof of the future.

6 7 Annual Report 2011 Annual Report 2011 Shareholders

TODAY “MEGABANK” IS:* Shareholders THE BANK’S SHAREHOLDERS ARE: • V.G. Subotin – 60.15% of authorized capital, direct • representatives, affiliates and branches in 24 regions of Ukraine; and indirect participation • 200 branches; • European Bank for Reconstruction and Development (EBRD) – 15.00% of authorized capital • 1 600 employees; • Credit Institution for Reconstruction (KfW) – 15.00% of • 19 000 customers – legal entities; authorized capital

• 122 000 customers – recipients of social benefits; • International Finance Corporation (IFC) – 6.02% of authorized capital • 323 000 customers – plastic cards holders; • 426 000 customers – individuals; • Another 3.83% of authorized capital is owned by more than 250 legal entities and individuals – residents and • UAH 653 mln. of own capital; nonresidents • 2 012 000 customers – utility bills payers;

• UAH 3 322 mln. of loan portfolio; 60,15% 3,83% • UAH 4 542 mln. of net wealth. 6,02%

15,00%

* As of 1.01.2012

8 9 Annual Report 2011 Management bodies Annual Report 2011 Management bodies

Management SUPERVISORY BOARD MEMBERS OF THE SUPERVISORY BOARD: The Supervisory Board of the Bank acts under the Regulation bodies on Supervisory Board.

In the Supervisory Board is established a standing Audit Subotin Viktor Alexander Saveliev Committee. Chairman of Supervisory Member of Supervisory Board Board

The Supervisory Board ensures effectiveness of the system of risk management.

BESIDES, THE SUPERVISORY BOARD PERFORMS:

• monitoring the implementation of main activities of the Bank, approval of strategy of the Bank, approval of annual budget, business plans and monitoring their implementation; Sakhtinova Svitlana Cherkasskiy Oleksiy Member of Supervisory Board, Member of Supervisory • appointment and dismissal of the Chairman and members Corporate Secretary Board, Head of Auditing of the Management Board, approval and termination of Committee their authorities;

• proper functioning of the internal and external control over financial and economic activities of the Bank;

• selection (definition) of external auditor and determination of the contract with it;

• approval for the appointment and dismissal of internal audi- Lars Oermann Nosenko Lidiya tors of the Bank; Member of Supervisory Board Member of Supervisory Board

• decision on the establishment, reorganization and liquida- tion of subsidiaries, affiliates, branches and representative offices, approval of their statutes and regulations.

The Supervisory Board based on the principles of corporate governance, approves organizational structure of the Bank to ensure the most effective management. To ensure stable operation of the Bank for a long-term perspective, following the principles of corporate governance, the Supervisory Board approved Corporate Governance Code.

10 11 Annual Report 2011 Management bodies Annual Report 2011 Management bodies

MANAGEMENT BOARD Porubay Olga Member of Management The authorities of office of the Chairman of Management Board Board, Chief Accountant and Board members are determined by the Regulation on the Bank’s Management Board, approved by General Meeting of Bank institutions’ work experi- Shareholders. ence makes 19 years, in PJSC “MEGABANK” she has been working for 18 years. In addition, the Board carries out its activities through committees in various areas of the Bank’s activity.

MEMBERS OF THE MANAGEMENT BOARD

Pereshybkin Maksim Member of Management Board, Head of Risk Zhukova Olena Sergeyev Yuriy Management Division Chairman of Management Deputy Chairman of Man- Board agement Board, Head of the Bank institutions’ work experi- Integral Clearing Centre ence makes 18 years, in PJSC Bank institutions’ work experi- “MEGABANK” he has been ence makes 18 years, in PJSC Bank institutions’ work experi- working for 5 years. “MEGABANK” she has been ence makes 13 years, in PJSC working for 12 years. “MEGABANK” he has been working for 13 years.

Arhipova Olena Member of Management Board, Head of Financial Laschenko Oleksandr Shypilov Oleksandr Monitoring Division First Deputy Chairman of Deputy Chairman of Management Board Management Board Bank institutions’ work experience makes 21 years, Bank institutions’ work experi- Bank institutions’ work experi- in PJSC “MEGABANK” she ence makes 16 years, in PJSC ence makes 14 years, in PJSC has been working for 21 years. “MEGABANK” he has been “MEGABANK” he has been working for 16 years. working for 14 years.

Yatsenko Oleksiy Pidgorna Viktoriya Deputy Chairman of Deputy Chairman of Management Board Management Board

Bank institutions’ work experi- Bank institutions’ work experience makes 9 years, in PJSC ence makes 18 years, in PJSC “MEGABANK” he has been “MEGABANK” she has been working for 9 years. working for 10 years.

12 13 Annual Report 2011 Licenses, list of operations Annual Report 2011 Licenses, list of operations

PUBLIC JOINT STOCK COMPANY “MEGABANK” is registered • attraction and placement of foreign currency in the foreign The Bank has the licenses of the State Commission on Licenses, list by the National Bank of Ukraine on 28.10.1991 and has the exchange market of Ukraine; Securities and Stock Market for the performing of the follow- registered number 58. ing activities: of operations • attraction and placement of foreign currency in the international markets; 1. Professional activity in the stock market - activity in securities PJSC “MEGABANK” OPERATES UNDER THE trading: brokering, series АВ № 493221 dated 23.10.2009. FOLLOWING LICENSES: • trading in foreign currency in the foreign exchange market of Ukraine (except for foreign exchange transactions and 2. Professional activity in the stock market – activity in securi- The License of the National Bank of Ukraine number 163 dat- checks (purchase, sell, exchange), which is carried out in ties trading: dealer activities, series АВ № 493222 dated ed 14.10.2011 on the right to provide banking services which cash offices and points of foreign currency exchange); 23.10.2009. are envisaged in part three of Article 47 of the Law of Ukraine • trading in foreign currency in the international markets; 3. Professional activity in the stock market – activities in se- “On banks and banking activity”. curities trading: underwriting, series АВ № 493223 dated • attraction and placement of precious metals in the cur- 23.10.2009. General license for currency operations of the National Bank rency market of Ukraine; of Ukraine number 163 dated 14.10.2011 on performing the 4. Professional activity in the stock market – activities in secu- following operations: • attraction and placement of precious metals in the interna- rities trading: activity relating to management of securities, tional markets; series АВ № 493224 dated 23.10.2009.

• non-commercial operations with currency values; • trading precious metals in the currency market of Ukraine; 5. Professional activity in the stock market – depository activities: depositary activity of securities custodian, series АВ • operations with cash foreign currency and checks (pur- • trading precious metals in the international markets; № 493225 dated 23.10.2009. chase, selling, exchange, held for in the collection) that take place in offices and exchange offices of banks; • currency operations in the currency market of Ukraine, 6. Professional activity in the stock market – depository ac- which belong to financial services according to the article tivities: activities to register owners of registered securities, • operations with cash foreign currency (buying, selling, 4 of the Law of Ukraine “On financial services and state series АВ № 493226 dated 23.10.2009. exchange) which are carried out in the exchange offices, regulation of financial services market” and are not shown working on the basis of agency contracts concluded by in paragraphs 2-17 of the 2d part of Provision about the banks with legal entities - resident; order of providing banks and affiliates of foreign banks with General licenses on performing currency operations • running clients’ accounts (residents and non-residents) in approved by the Decision № 281 from 15.08.2011 of the foreign currency and non-resident clients’ accounts in the Management Board of the National Bank of Ukraine; national currency of Ukraine;

• currency operations in international markets, which belong • running correspondent accounts of banks (residents and to financial services according to the article 4 of the Law non-residents) in foreign currency; of Ukraine “On financial services and state regulation of financial services market” and are not shown in paragraphs • running correspondent accounts of banks (non-residents) 2-17 of the 2d part of Provision about the order of pro- in the monetary unit of Ukraine; viding banks and affiliates of foreign banks with General licenses on performing currency operations approved by • opening of correspondent accounts in the authorized the Decision № 281 from 15.08.2011 of the Management banks of Ukraine in foreign currency and respective bank- Board of the National Bank of Ukraine. ing operations on them;

• opening correspondent accounts in banks (non-residents) in foreign currency and respective banking operations on them;

14 15 Annual Report 2011 Organizations membership Annual Report 2011

“MEGABANK” is an active participant of the market and takes Organizations part in work of specially designed groups and professional organizations, activity of which is directed at perfection of per- membership formance of banking and financial sectors of Ukraine, creation of infrastructure and relations on the market, improvement of investment climate, protection of lenders’ rights and expand- ing the access to financial service markets for enterprises and population of Ukraine.

BESIDES, THE BANK PARTICIPATES IN A WORK OF THE FOLLOWING INSTITUTIONS:

• Association of Ukrainian banks (AUB);

• Association “Ukrainian credit and banking union” (UCBU);

• Kharkiv banking union;

• Association “Stock Partnership”;

• PrJSC “All Ukrainian Depository of Securities”;

• PJSC “Ukrainian Exchange”;

• PrJSC “Stock Exchange “PFTS”;

• Association of Ukrainian Stock Traders;

• Professional association of registrars and depositaries;

• The Fund of securing of individuals’ deposits;

• Ukrainian inetrbanking currency exchange;

• Association “Ukrainian union of participants of NSMEP”;

• Systems “MasterСard International” and “VISA “Dreams are not retreat from reality, International”; but the means to get closer to it”

• International systems of money transfer “PrivatMoney”, “MoneyGram”, “Anelik” and “Alur”. William Somerset Maugham

16 17 Annual Report 2011 Main stages of development Annual Report 2011 Main stages of development

1990 - 1997 • On a basis of ICC the bank has created a unified database Cherkassy oblast and in Chernigov, out of which 91 offices Main stages of individuals entitled to benefits and subsidies and has are automated billing offices. • In June 1990 the State Bank of the USSR registered automated working stations in subsidy offices. of development Kharkov commercial bank “Dobrodiy”. • The bank obtained a license for operations with banking • “Megabank” has become the member of National system metals – gold bars of the highest quality. • In February 1995 Subotin Victor Georgiyovych was elected of mass electronic payments (NSMEP) and has issued a the Chairman of the bank’s board of directors. first payment plastic card. • “Megabank” became member of international payment system “MasterCard”. • In 1995 Kharkov commercial bank “Dobrodiy” changed its • “Megabank” has installed the first ATM machine of the Na- name to “Joint stock commercial bank “Megabank”. tional system of mass electronic payments (NSMEP) at its • The bank opened an account to the 100,000th client. head office. • “Megabank” obtained a license of the State Security and • “Megabank” emitted 50th thousand payment plastic Exchange Commission for issue and circulation of securi- • The bank takes part in financing the building of the third card of the National system of mass electronic payments ties, for depositary activity and the right to run the register line of the Kharkiv underground. (NSMEP). of owners of registered securities. • In 2001 “Megabank” opened its first balance affiliate in • The bank has initiated and participated in creation and Poltava. 2005 - 2008 functioning of Kharkov regional bill centre, founded for re- solving the problems of non payments in budget and fuel • The bank obtained a license for currency valuables trans- • “Megabank” together with International Finance Corpora- and energy spheres. portation and created the first encashment service on a tion (IFC) implemented a project of improvement the bank’s basis of its head office in Kharkov. corporate management. • “Megabank” together with the National Bank of Ukraine has started the work as for creation of National system of • In April 2001 “Megabank” together with Kharkov oblast • By the general meeting of the bank’s shareholders Sub- mass electronic payments. administration, Ministry of Economic of Ukraine and State botin Victor Georgievich (formerly - Chairman of the Board Construction Office of Ukraine held a seminar “Progressive of Directors of the bankу) was elected the Chairman of the • The bank has become member of “S.W.I.F.T.” systems of charge accounting and payment by the users Supervisory Board of “Megabank”. By the recommenda- the energy carriers and housing and communal services in tion of International Finance Corporation David Kleeve, • “Megabank” became connected to information and deal- Ukraine” in Kharkov. international banking expert was elected to the member- ing system “Reuters”. ship of Supervisory Board for the position of independent • “Megabank” opened balance affiliates in Vinnitsa, Donetsk, director. Besides, Zhukova Olena Mykhailivna (formerly • The bank became the member of Ukrainian interbanking Zhitomir, Kiev, Kirovograd, Lvov, Nikolaev, Kherson, - Deputy of the Chairman of the Board) was elected as currency exchange (UMVB). Cherkassy and Chernigov. Chairwoman of the Board of Directors of “Megabank”.

• “Megabank” implemented ICC technology on a basis of • “Megabank” has increased the authorized capital by 150 1998 - 2004 its subdivisions in Kirovograd, Znamyanka in Kirovograd mln. UAH up to 200 mln. UAH by means of 2 additional oblast, Lvov, Pervomaisk in Nikolaev oblast, all district share emission. In line with the decree of management of • In 1998 “Megabank” opened its first branch office “Shebe- centers of Kharkov oblast, Novaya Kahovka in Kherson the National Bank of Ukraine PLC “Megabank” received a linske” in a village Krasniy Donets in Kharkov oblast. oblast, Cherkassy and Chernigov. status of a bank with foreign capital.

• 1.01.1999 “Megabank” opened in Kharkov oblast an In- • “Megabank” opened 141 its own offices in Vinnitsa, Ki- • “Megabank” entered the rating “ТОP-100”. Best compa- tegral Clearing Centre for people’s payments for housing rovograd and Znamyansti of Kirovograd oblast, Lvovі and nies of financial sector”. and communal services and energy carriers (ICC), created Stroy of Lvov oblast, Nikolaev and Pervomaisk of Nikolaev a unified database of payers, elaborated and launched a oblast, Kharkov and Khakrov oblast, Kherson and No- • Integral Clearing Centre of “Megabank” became the win- unified settlement receipt. vaya Kahovka of Kherson oblast, Cherkassy and Smili of ner of Ukrainian exhibition-competition “The best domestic

18 19 Annual Report 2011 Main stages of development Annual Report 2011 Main stages of development

product” in the nomination “Banking, insurance, financial term financing of small and medium enterprises with tech- and servicing of mortgage loans with the State Mortgage signed: on behalf of IFC – Jyrki Koskelo, vice-president of services”. nical assistance. “Megabank” initiated the Program of mi- Institution. corporation, on behalf of “Megabank” - Olena Zhukova, crocrediting. chairman of the bank’s Management Board. • “Megabank” created a unified database of payers for ener- • “Megabank” has opened in Lviv its own collection service. gy carriers and housing and communal services in Donetsk. • In February 2008 the German-Ukrainian fund opened to • EBRD and KfW and “Megabank” signed agreements about “Megabank” the credit line for 5 years in the amount of • “Megabanks’” information service at the number joint acquisition by EBRD and KfW 30% of “Megabank’s” • “Megabank” implemented the Integratal Clearing Center in EURO 5 mln. for financing small and medium enterprises. 0-800-50-44-00 became available. shares. The agreements were signed: on behalf of EBRD Poltava to pay for housing and communal services. – Andre Kuusvek, director in Ukraine, on behalf of KfW – • In May 2008 Kreditanstalt fur Wiederaufbau (KfW) (Recon- • “Megabank” emitted 100 thousandth card of National sys- Doirs Kohn, senior vice-president, on behalf of “Megabank” • “Megabank” put in operation the system of internet pay- struction Credit Institute) opened to “Megabank” a credit tem of mass electronic payments (NSMEP). - Viktor Subotin, chairman of the Supervisory Board, and ment for housing and communal services with the help of line for 5 years in the amount of 10 mln. USD for financing Olena Zhukova, chairman of the bank’s Management Board. plastic cards NSMEP, holders of which have the possibility small and medium enterprises. • “Megabank” installed its 100th ATM machine. to get info about debts and current housing and communal • “Megabank” changed its name from Public Limited Com- charges, pay these services thru the Internet at the site of • “Megabank” received from Kreditanstalt fur Wiederauf- • “Megabank” in the framework of “electronic student ID pany Megabank to PUBLIC JOINT STOCK COMPANY the bank’s Integrated billing centre www.erc.megabank.net bau (KfW) a technical assistance of German independent card” program issued 4,000 NSMEP cards to students of “MEGABANK”. The name was changed in line with the Law consultants and experts of Frankfort school of finance and Nikolaev State University in the name after V. O. Sukhom- of Ukraine “About joint stock companies”. • “Megabank” implemented a program to pay for utility ser- management in the area of improvement of risk and region- linskiy and Kharkov Ukrainian State Academy of Railway vices through its own network of ATMs. al network management and development of a business Transport. • EBRD and “MEGABANK” signed a loan agreement about plan for the next period. providing the bank with 5 year financing for the amount of • The bank opened 12 central regional offices in Dnepro- USD 15 million, aimed at support of small and mid-sized petrovsk, Zhaporozhye, Ivano- Frankovsk, Lugansk, Odes- • “Megabank” was granted a license of the National Bank 2009 businesses. The agreement was signed: on behalf of EBRD sa, Rovno, Simferopol, Sumy, Ternopol, Uzhgorod, and of Ukraine for operations with currency valuables and with – Jean-Marc Peterschmitt, director EBRD relations with Khmelnitskiy. bank metals on international markets. • During March “Megabank” increased its authorized capital banks, on behalf of “MEGABANK” - Olena Zhukova, chair- by UAH 150 million up to UAH 350 million thru share issue. man of the bank’s Management Board. • “Megabank” reorganized its eight branches opened in Vin- • The Bank has become the winner of contest of the Minis- nytsya, Donetsk, Zhitomir, Nikolaev, Kherson, Cherkassy try of Finance of Ukraine in definition of authorized banks • The bank issued the 200-th thousand card of National sys- • During October “MEGABANK”, PJSC increased the au- and Chernigov in the central regional offices. through which salary to employees of budgetary organiza- tem of mass electronic payments (NSMEP). thorized capital by UAH 150 million up to UAH 500 million tions and state social assistance shall be paid with plastic. thru share issue. The bank’s shareholders have become • “Megabank” opened 35 branches and automated payment • “Megabank” installed the first electronic kiosk (M-Box) with EBRD and KfW, each shareholding of which in the bank’s acceptance points in Vinnitsa, Kiev, Lviv, Poltava, Sevas- • “Megabank” became the winner of the State Treasury of the function of acceptance of utility payments in Kharkov. charter capital is 15%. topol, Feodosia (Crimea), Kharkiv, and Chertkov (Ternopil Ukraine competition for determining the banks which will region). be attracted for cash servicing with the aim of cash pay- • “Megabank” started issueing”MasterCard Platinum” pay- • European Fund for Southeast Europe (EFSE) and “MEGA- ment of checks of State Treasury of Ukraine. ment cards. BANK” signed an agreement about providing the bank with • In July 2007 “Megabank” signed a loan agreement with the subordinated loan for the amount of USD 10 million JSC “State export import bank” (Kiev) for 5 years within • “Megabank” became the winner of contest of the Pension • “Megabank” has expanded the list of services accepted for 7 years, aimed at improvement of bank’s capitalization the framework of realized together with International bank Fund of Ukraine for the selection of banks in which the con- by the technology of the Integral Clearing Center, to wit: and financing micro- small- and mid-sized businesses. The of reconstruction and development the Second project sent of pensioners and recipients accounts for payment of acceptance of payments for cable TV, intercoms and ven- agreement was signed: on behalf of EFSE – Dr. Klaus Glau- of export development in Ukraine. Agreement amount is pensions and monetary support can be opened. tilation channels. bitt, chairman of the Directors’ Board of EFSE, on behalf 10 mln USD with the possibility of further increase up to of “Megabank” - Olena Zhukova, chairman of the bank’s 20 mln. USD. • The bank has become partner-participant of international • International Finance Corporation (IFC) and “Megabank” Management Board. sustem of money transfer “PrivatMoney”, “MoneyGram”, signed a loan agreement about providing the bank with 4 • In September 2007 the European bank of reconstruc- “Аnelik” and “Alur”. year financing for the amount of USD 10 million with con- • KfW and “MEGABANK” signed the agreement about the tion and development (EBRD) opened to “Megabank” for version possibility into the bank’s shares, aimed at financ- subordinated loan in USD equivalent to EURO 4,4 million, 5 years a credit line in the amount of 20 mln. USD for long • “Megabank” signed the General Agreement on refinancing ing all lending operations of the bank. The agreement was for seven years, aimed at improvement of bank’s capitali-

20 21 Annual Report 2011 Main stages of development Annual Report 2011 Main stages of development

zation and crediting SME. The agreement was signed: on • German Credit Institution for Recovery (KfW) organized exhibited innovative banking product - an electronic self- behalf of KfW – head of Eastern Europe financial markets technical assistance program “Agrocredit Portfolio Man- service terminal (m-box). department Eva Witt, and on behalf of “MEGABANK” - agement” for “MEGABANK” with the involvement of the chairman of the Management Board Olena Zhukova. International Project Consulting Company (IPC). • “MEGABANK” became one of the winners of the contest “National system of mass electronic payments - 10 Steps • In December Alexander Saveliev became the new mem- • In cooperation with the International Project Consulting to Success” in the nomination for “The significant contribu- bers of the bank’s Supervisory Board, the representative of Company (IPC) “MEGABANK” has worked on segmentation in the development of Internet acquiring of NSMEP”. EBRD and Lars Oermann, the representative of KfW. tion of client base of the bank in terms of corporate, small, medium and retail business. • European Fund for Southeast Europe (EFSE) opened five- • International Finance Corporation (IFC), a member of the year credit lines to PJSC “MEGABANK” for support of mi- World Bank group and “MEGABANK” signed the subor- • The rating agency “Credit-Rating Agency” confirmed cro and small businesses, as well as agricultural project dinated loan agreement for the amount of USD 10 million long-term credit rating of PJSC “MEGABANK” in accord- financing totaling USD 10 million. for 7 years. The agreement was signed on behalf of IFC – ance with the national scale at the level uaA- with fore- the manager of IFC activity in Ukraine Olena Voloshina, on cast “stable” and long-term credit rating of the bond issue • During the year “MEGABANK” opened six new offices; behalf of “MEGABANK” – Chairman of the Management “MEGABANK” Series E and F on the national scale at a three offices were opened in Kharkiv, and three in Lviv. Five Board Olena Zhukova. level uaA- with a forecast “stable”. branches were opened as automatic payment points and one branch office with an expanded list of operations. • In the course of the year the bank opened 5 automated bill- • “MEGABANK” took fourth place in the ranking of the best ing points in Lvov, two - in Poltava and three – in Kharkov. merchants on the First Stock Trading System , and entered • “MEGABANK” installed three electronic self-service termi- Besides the bank opened two full fleshed departments in into the top five securities custodians in accordance with nal on reception of utility payments (M-Box) in Kharkov and Poltava, and one in Mykolaiv oblast. the terms of record-keeping operations. put into operation two new ATMs in Konotop, Sumy oblast and in Kharkov. • A representative of “MEGABANK” became a member of the 2010 Committee of Legislation / Legal Committee of the Profes- sional Association of Registrars and Depositories (PARD). • “MEGABANK” celebrated its 20th anniversary. • “MEGABANK” was entitled to pay pensions in Sudak, • International Finance Corporation (IFC), a member of Crimea, Tysmenytsya district of Ivano-Frankivsk oblast, the World Bank Group, became a shareholder of PJSC Poltava district of Poltava oblast, Rivne district of Rivne “MEGABANK”. oblast, Ternopil, Terebovlya, Zbarazhskom, Zborovsky and Chertkovskom districs of Ternopil oblast. • “MEGABANK” has increased the regulatory capital by 132 million UAH: subordinated loans from the Credit In- • Ministry of Finance of Ukraine included PJSC “MEGABANK” stitutions for Recovery (KfW) amounted of USD 6.5 mil- in the list of banks that will act as agent on registration of lion and from the International Finance Corporation (IFC) compensation on the VAT- bonds. amounted of USD 10 million were attracted. • “MEGABANK” introduced an escort service for demateriali- • “MEGABANK” has begun a staged replacement of corpo- zation for the issuer of the securities. rate style (rebranding). • “MEGABANK” opened its training center. • European Bank for Reconstruction and Development (EBRD) with the help of a British consulting firm PKF has • “MEGABANK” was awarded the diploma of the Interna- provided technical support to PJSC “MEGABANK” to im- tional exhibition of innovative projects and export-oriented prove the system of risks in the bank. products “Energy of Growth” held in Kharkov favour of the

22 23 Annual Report 2011 Key events in 2011 Annual Report 2011

“Dreams become reality when thoughts turn into action”

MEGABANK, PJSC paid timely and in full the coupon and re- Dmitry Antonov Key events in 2011 deemed bonds of its own issue of series F which has been registered in 2008 with maturity of three years.

MEGABANK, PJSC issued bonds series G and H for maturity of 5 years for a total amount of UAH 100 million.

MEGABANK, PJSC together with consulting company «IPC GmbH» from Germany implemented the project “Agrocredit Portfolio Management” thanks to technical support of the State Development (KfW).

The Supervisory Board of MEGABANK, PJSC decided to or- ganize a new unit in the bank – Marketing Department which will generate new and innovative product offerings of the bank based on a study of needs of its clientele and constant analysis of banking market.

Balances with corporate customers of “MEGABANK” for the first time reached UAH 1 billion.

“MEGABANK” entered the top ten best Ukrainian companies on the quality of corporate governance. These are the results of the rating carried out by investment company “Concorde Capi- tal” together with the U.S. Agency for International Development (USAID).

The European Bank for Reconstruction and Development allocated a credit in the amount of U.S. $13.5 million to PJSC “MEGABANK” for Energy Efficiency Program in Ukraine (UKEEP). The signing of the agreement was held on November 14 in Kiev on the second awards ceremony for the best results in imple- menting UKEEP energy efficiency projects.

“MEGABANK” took the second place in nomination “The Best Report of a Foreign Company” of the XIV Annual Federal Con- test of Annual Reports (Russia). The coordinators of the contest are “RТS” Stock Exchange and Moscow Interbank Currency Exchange.

During the year “MEGABANK” has opened 19 branches in the form of automatic payment acceptance outlets. Fifteen outlets have been opened in Kharkov and by one in Vinnitsa, Dnepro- petrovsk, Zaporozhie and Lvov.

“MEGABANK” has signed an agreement with “WorldBusiness Capital, Inc.” for the credit line in the amount of USD 10 million for further lending to SME clients.

24 25 Annual Report 2011 Key financial indicators Annual Report 2011 Key financial indicators

For 2011 the bank’s equity capital grew by 2.5% and made UAH DYNAMICS OF BANK’S CAPITALIZATION IN 2008-2011 NBU LIQUIDITY NORMATIVE Key financial indicators 653 mln., and regulatory capital grew by 5% and made UAH 766 mln. Adequacy of regulatory capital is at a level of 20%, Liquidity of “MEGABANK” is stable. On 1.01.2012 in highly liq- whilst NBU standard is 10%. uid assets (on correspondent accounts and on hand) over the 31% 30% normative value of liquidity of NBU are funds in the amount of Thus, the amount of capital “MEGABANK” sufficient to increase UAH 220 million. their assets almost doubled while maintaining the adequacy of 20% the indicator within the required value.

Normative Actual Net wealth of the bank in 2011 grew by 29% and made UAH 4542 As of 1.01.2011 4 542 mln. As such the net wealth of banking system of Ukraine value value grew in the reporting year for 12%. 3 509 Н4* >=20% 46% 3 172 “MEGABANK” DURING 2011 IMPROVED ITS POSITIONS IN UKRAINIAN BANKS’ RATING (NBU DATA) ACCORDING TO Н5** >=40% 69% THE FOLLOWING INDICES:

Н6*** >=60% 107% • by assets size moved from the 42-nd to 40-th place; 766 729 714 • by liabilities size moved from the 42-nd to 40-th place;

• by the loan portfolio size and clients’ indebtedness moved Normative Actual As of 1.01.2012 from the 41-st to 36-th place. value value

Rating agency “Expert Rating” in 2011 confirmed the credit rat- 1.01.2010 1.01.2011 1.01.2012 Н4* >=20% 47% ing of PJSC “MEGABANK” credit rating and bond issue of Bank Series G, H and I on a national scale at uaA-and improved the outlook for credit rating from “stable” to “positive”. Н5** >=40% 95% assets, UAH mln. capital, UAH mln. capital adequacy, % STRUCTURE OF OPERATIONAL INCOME FOR 2011 Н6*** >=60% 107%

48% Net interest income Net income for 2011 made UAH 3 493 thousand. Total 2% Trading incomes Н4* – normative of instant (upon demand) liquidity UAH 251mln. 6% Other incomes Net commission income for 2011 made UAH 111 mln, or 44% Н5** – normative of current (up to 31 days) liquidity of operational income. Н6*** – normative of short term (up to 1 year) liquidity 44% Net commission income

Big part of commission income enables the bank to decrease dependency from interest rates change.

26 27 Annual Report 2011 Credit policy Annual Report 2011 Credit policy

In 2011, the loan portfolio grew by UAH 718 million or 28%, and BY ECONOMIC SECTORS AS OF 1.01.2012 (LEGAL ENTITIES) During 2011 the Bank has executed 358 loan agreements with Credit policy the balance sheet to date amounted to UAH 3 322 million. This entities that exceed the value in 2010 for 100 contracts. increase in loan portfolio in the banking system of Ukraine in the reporting year amounted to 9%. Within these contracts issued credit totaling UAH 1 853 million. 7% 43% of this amount (793 million UAH) were given to industrial 2% enterprises, 25% (471 million UAH.) – agricultural enterprises, 27% 4% AS OF 1.01.2012 THE STRUCTURE OF 17% (318 million UAH.) – trade enterprises, 7% (124 million LOAN PORTFOLIO IS AS FOLLOWS: 7% UAH. ) - utilities, 5% (90 million UAH.) - construction companies and 3% (57 million UAH.) - other borrowers. • corporate clients’ loans – 48%, 10% or UAH 1 605 mln. (+ UAH 346 mln.); PORTFOLIO BY PURPOSES AS OF 1.01.2012 (INDIVIDUALS) • small and medium business loans – 36%, or UAH 1 187 mln. (+UAH 381 mln.); 22% 21% 3% 3% • micro credits – 1%, or UAH 40 mln (+UAH 14 mln.); 4% 4% • loans to individuals – 15%, or UAH 490 mln • loans to industrial enterprises > by 4% (-UAH 23 mln.). • farms < 3% 12% • to trade < 2% • construction companies > by 2% • utilities < by 2% 13% • financial companies = (for the year unchanged) • transportation companies < by 1% 61% 48% • other

15% • other loans BY PURPOSES OF USE OF FUNDS AS OF • loans for consumer purposes secured by real estate 1.01.2012 (LEGAL ENTITIES) 1% • loans to purchase housing on the secondary market • loans to purchase vehicles in the primary market • consumer loans secured by property rights to the cash deposit 36% 35% investment loans • consumer loans secured by personal property • overdrafts

In 2011 the structure of loan portfolio the share of loans to customers of small and medium businesses grew by 5%. Following in 2011 the share of consumer loans secured by real estate increased by 5%. The share of loans for the purchase of motor vehicles decreased by 4%, on the purchase of housing 65% replenishment on the secondary market - by 1%. of working capital

In 2011, the share of loans to replenish working capital was reduced by 10% compared with 2010.

28 29 Annual Report 2011 Credit policy Annual Report 2011 Credit policy

LOANS ISSUED FOR 2011 (INDIVIDUALS) 200 MICROCREDITS BY PURPOSE AS OF 1.01.2012 LOAN LOSS PROVISION

180 (LEGAL ENTITIES AND INDIVIDUALS) In 2011 for individuals was entered into 121 loan agreements 174 160 (the same indicator in 2010 - 195) and granted loans totaling Overdue debt on loans and customers’ interest is UAH 162 UAH 67 million. 140 8% million, corresponding to 4.8% of total loan portfolio.

120 By 2011 overdue debt increased by UAH 28 million, or 21%. 1.5% 1.5% 100 Over the same period reserves for lending operations grew by 93 UAH 52 million and reached UAH 184 million. Thus, the amount 1.5% 4.5% 80 55% 37% of provisions covering amount of outstanding debt by 113%. In 60 the reporting year the value of this ratio increased by 15%.

40 31 31 91% 20 13,3 1,4 183 0 2009 2010 2011 162 151 loans issued • investments in fixed assets 132 134 • to replenish working capital issued amount, mln. UAH • purchase of fixed assets and working capital (mixed purpose) 96 • other • consumer loans secured by property rights to the cash It noted a significant increase in the amount of loans for working deposit and secured by personal property MICROCREDITING BY TYPES OF ACTIVITIES AS OF 1.01.2012 capital funds: in 2011 their share increased by 17%. • loans for consumer purposes secured by real estate • housing loans on the secondary market • loans to purchase vehicles in the primary market 30% 30% 1.01.2010 1.01.2011 1.01.2012

DYNAMICS OF ISSUE OF MICROCREDITS • volume of LLP, mln. UAH • LLP, mln. UAH In 2011, 174 microcredit contracts were concluded (in 2010 - 93) totaling UAH 31 million, that is 18 million more than a year ago.

32% 8%

• loans to businesses engaged in services • trade • production • loans to farmers

Following in 2011 recorded a significant increase - 16% - the share of loans to farmers.

30 31 Annual Report 2011 Operations with securities Annual Report 2011 Operations with securities

Operations with SECURITIES PORTFOLIO OF PJSC “MEGABANK”, THS. UAH AMOUNT OF TRADING CONTRACTS, MLN. UAH NUMBER OF OPEN ACCOUNTS IN SECURITIES securities 31 232 1 279 1 178 152 164 21 607 137 565 819 12 303 108 606

2009 2010 2011 1.01.2010 1.01.2011 1.01.2012

NUMBER OF TRADING CONTRACTS, PCS. NUMBER OF REGISTERED OPERATIONS, PCS.

1.01.2010 1.01.2011 1.01.2012 2 801 2 555 14 369 As of 1.01.2012 securities portfolio makes UAH 109 mln. during 2011 it dwindled by 21%, or UAH 29 mln.

1 240 6 166 During 2011 the bank concluded 2 801 contracts of sale and 3 527 purchase of securities for the total amount of UAH 1 178 mln. Compared with previous year their number grew by 10%, but the amount dwindled by 8%. 2009 2010 2011 2009 2010 2011

Custodian assets make UAH 2 481 mln. For 2011 their level grew by 18%. During the year the number of securities accounts has increased by 45 % and hit 31 232 accounts, but the number VOLUME OF ASSETS OF CUSTODIAN, MLN. UAH VOLUME OF REGISTERED OPERATIONS, MLN. UAH of custodian registered operations dwindled as twice and made 6 166 pcs. The aggregate volume of custodian operations grew by 24% and made UAH 6 940 mln. During 2011 the bank kept on providing the service of follow-up of the issuer with demate- 2 481 6 940 rialization of securities. 2 161 2 102 5 584 4 816 As of 1.01.2012 the number of issuers which availed the service is 48. In total at servicing of securities accounts there are 402 issuers of securities.

1.01.2010 1.01.2011 1.01.2012 2009 2010 2011

32 33 Annual Report 2011 Annual Report 2011

“The future belongs to those who believe in the beauty of their dreams”

Eleonora Roosevelt

34 35 Annual Report 2011 Resource position Annual Report 2011 Resource position

By liabilities in 2011 in the rating of Ukrainian banks (according CLIENTS’ FUNDS Resource position to official accounts of banks to the NBU) “MEGABANK” is up • term funds of entrepreneurs 4%, or UAH 196 mln. two positions and took 40th place. (-UAH 38 mln.); The situation in the market of financial resources during 2011 has repeatedly forced “MEGABANK” to increase rates to attract The source of growth in net assets in 2011 was the growth of • funds upon demand 4%, or UAH 175 mln. deposits. At the beginning of 2011 deposits of legal entities in- bank liabilities in the following areas: of individuals (- UAH 42 mln.); volved in the Bank at a rate of 12% per annum in local currency and 6% - in dollars, by the end of the year interest rates rose to • term funds of non-banking 3%, or UAH 136 mln. 16% and 7% respectively. But while the average rate on depos- individuals’ funds growth by UAH 275 mln., financial institutions (+UAH 1 mln.); its rate fell by 2.15% and for deposits in U.S. dollars - to 0.27% or by 27%; per annum, due to costly outflow of resources from the deposit • other liabilities 2%, or UAH 71 mln. portfolio of corporate clients. entrepreneurs’ funds growth by UAH 195 mln., (+UAH 1 mln.); or by 33%; In early 2011, deposits of individuals for a period of 12 months, • funds upon demand of non- 1%, or UAH 41 mln. involved the following rates: 13% annual rate in UAH, 6% - in funds of non-banking growth by UAH 1 mln., banking financial institutions (+UAH 179 ths). dollars and 3.5% - in Euros financial institutions or by 1%; Early in 2012, deposit at the same time engaged immediately loans from international growth by UAH 290 mln., at the following rates: 17% per annum in UAH, 7.75% - in U.S. financial institutions or by 64%. dollars and 6% - in Euros. The structure of the Bank’s liabilities for 2011 is as follows: share of interbank deposits (by 2%) grew. On the other hand, the share of term funds of clients (by 1%), subordinated debt (by LEGAL ENTITIES’ FUNDS UPON DEMAND 3%), loans from the NBU (by 1%) reduced. As of 1.01.2012 the structure of liabilities “MEGABANK” looked as follows: As of 1.01.2012 the number of open settlement accounts of legal persons was 10 881. In 2011 the bank opened to custom- • term funds of individuals 25%, or UAH 1 113 mln. 1% 2% ers – legal entities 2,459 new accounts, for 731 accounts or 3% (+ UAH 316 mln.); 42% more than last year. This turnover only accounts in national 4% 25% currency for the year increased by UAH 7 billion, or 32%, and 4% reached a level of UAH 29 billion. Balances upon demand of le- • loans from international 16%, or UAH 742 mln. 4% gal persons on 1.01.2012 versus 1.01.2011 increased by UAH financial institutions (+UAH 290 mln.); 7% 232 million, or 58%, the level of UAH 629 million.

• bank’s capital 14%, or UAH 653 mln. 7% (+UAH 16 mln.); All these factors allowed for the reporting period to obtain 16% revenue from services of legal entities in the amount of UAH • funds upon demand 13%, or UAH 588 mln. 13% 40 mln., UAH 6 million, or 17% more than in 2011. of legal entities (+UAH 233 mln.); 14%

• interbank deposits 7%, or UAH 313 mln. (+UAH 165 mln.);

• securities of own debt 7%, or UAH 313 mln. (+UAH 244 mln.);

• subordinated debt 4%, or UAH 200 mln. (- UAH 108 mln.);

36 37 Annual Report 2011 Resource position Annual Report 2011 Resource position

VOLUME OF ATTRACTED TERM DEPOSITS OF INDIVIDUALS INDIVIDUALS’ FUNDS UPON DEMAND FUNDS, MLN. UAH (LEGAL ENTITIES) In 2011 the Bank attracted new retail deposits totaling UAH At the beginning of 2012 portfolio of funds upon demand was 1 763 million, returned to depositors UAH 1 446 million. Thus, UAH 175 million in equivalent of national currency. By 2011 the 2009 458 the growth of funds of individuals amounted to UAH 316.6 mil- volume of funds of individuals declined by UAH 41.6 million. lion, or 40%. This figure in the banking system of Ukraine is 15%. 2010 476 In 2011, the Bank continued to work closely with the Pension On 1.01.2012 a deposit portfolio of individuals amounted to Fund, the Department of Labor and social protection, social in- 2011 775 UAH 1 113 million in equivalent of national currency. surance against industrial accidents and occupational diseases in Ukraine within the contracts on which the Bank is entrusted Growth during 2011 of deposit portfolio of the Bank was due with the payment of pensions, unemployment benefits, assis- to the introduction of product range adapted to the needs of tance for business activities of insurance to the victims of indus- VOLUME OF TERM FUNDS RETERNED, customers and market conditions and demonstrates the confi- trial accidents, state lump sum at birth, help disabled children, MLN. UAH (LEGAL ENTITIES) dence of depositors in the Bank. public assistance for single mothers, state care for children up to 3 years, assistance with adoption of a child, child support, assistance to needy families, help with pregnancy and childbirth, etc. 2009 538 VOLUME OF ATTRACTED TERM FUNDS, MLN. UAH (INDIVIDUALS) 2010 434 RECIPIENTS OF WELFARE PAYMENTS

2011 813 2009 1 372 83 059 76 758 2010 1 219 65 739 NUMBER OF OPENED DEPOSIT ACCOUNTS 2011 1 763 (LEGAL ENITIES)

38 799 2009 167 VOLUME OF TERM FUNDS RETERNED, 35 488 30 936 MLN. UAH (INDIVIDUALS) 2010 223

2011 294 2009 1 973 1.01.2010 1.01.2011 1.01.2012

2010 1 074 • pensioners • other social welfare payments DEPOSITS OF LEGAL ENTITIES 2011 1 446 The total number of recipients of welfare payments as of In 2011 the Bank opened 294 deposits worth 775 million USD. 1.01.2012 is 121 858 persons (pension – 38 799 persons, Compared to the year 2010 in the reporting year by 32% grew other social welfare payments – 83 059 persons). the number of public entities deposits, a 63% increase in the amount of funds. Thus, the volume of deposit portfolio late 2011 For 2011 the number of recipients of pension and social wel- made UAH 333 mln. fare has grown almost by 10 thousand persons, or 9%.

38 39 Annual Report 2011 Card products Annual Report 2011 Card products

As of 1.01.2012 the total issue of bank’s plastic cards made MAESTRO MASTERCARD PLATINUM Card products 323 thousand cards. During the reporting year their number grew by 40 436 pcs, or 14%.

In 2011 the bank realized 119 salary projects. The volume of funds which in the reporting year hit the plastic cards made UAH 817 mln. Compared with 2010 the volume of incomings grew by 20% and the income from servicing the plastic cards – by 29 % and made UAH 3 741 thousand. In the regions of Ukraine operate bank’s ATMs 95, for the last year the ATMs pool grew by two new terminals.

NUMBER OF PAYMENT CARDS ISSUE (IN THE REPORTING YEAR) AND CARDS IN CIRCULATION

VISA CLASSIC MASTERCARD GOLD

323 345 282 909 247 026

39 638 35 883 40 436 1.01.2010 1.01.2011 1.01.2012

• number of payment cards issue • number of cards in circulation

NUMBER OF ATMS AND TERMINALS VISA ELECTRON NSMEP

159 162

95 96

1.01.2010 1.01.2012

• ATMs • terminals

40 41 Annual Report 2011 Annual Report 2011

“Everything that exists in the world once was a dream” Carl Sandberg

42 43 Annual Report 2011 Integral clearing center (ICC) Annual Report 2011 Integral clearing center (ICC)

Integral Clearing Center of payments for energy and utilities (ICC) NUMBER OF SERVICES PAID VIA ICC PAYMENTS ACCEPTANCE FOR 2009, 2010, 2011 Integral clearing has been operating in the structure of PJSC “MEGABANK” for more than 12 years. A system of the ICC collects payment for 1.01.2010 center (ICC) electricity, heating, water heating, cold water, gas, sewer, com- 63 munications, radio, cable television, Internet, rent, etc.

1.01.2011 DUE TO THE ICC: 63

43% • people can comfortably pay energy and utility services 57% (payment service without required receipts, using plastic 1.01.2012 cards at ATMs or via the Internet) to get instant refunds 65 (no need to obtain information in the user’s utility services); friendly information on the status of their payments for energy and utilities (monthly bank sends to every home with a single account details of debts and charges for each service provided; In addition, a person can independently PAYMENTS ACCEPTED, MLN. UAH obtain this information in each section “MEGABANK”, or accepted throught the points of reception of ATMs, or through the Internet); payments of “MEGABANK“ 2009 accepted by other banks • Utilities procedure of processing payment of the popula- 2 055 tion: all the work of processing of primary documents (receipts) and maintain a database of taxpayers took the On 1.01.2012 ICC database was 2 012 thousand taxpayers on 2010 Bank and enterprises daily receive from “MEGABANK” utility bills. In 2011 it increased to 40 000 personal accounts, or 2 273 means the addition of an electronic registry of taxpayers; 2%. Number of service calculations made by technology ICC, simplified procedure for obtaining loans: bank, with infor- for the year also increased and is now 65. mation on actual cash flows of utilities, more quickly and 2011 carefully makes a decision about granting loans. 2 470 By 2011 the volume taken by ICC payments increased by UAH 197 million, or 9%, to UAH 2 471 million. And the average amount of one payment for municipal services has increased by 13% to UAH 299.

The share of fees adopted by units “MEGABANK” for the year AVERAGE AMOUNT OF A PAYMENT, UAH was 57%.

2009 All these factors have allowed the Bank to get in the reporting 243 year, revenue in the amount of UAH 32 million, 10% more than in 2010.

2010 280

2011 299

44 45 Annual Report 2011 Integral clearing center (ICC) Annual Report 2011 Treasury operations

INFORMATION COVERAGE OF THE REGIONS With operations in the interbank market in 2011 “MEGABANK” OF UKRAINE BY THE ICC SYSTEM Treasury operations followed weighted credit policy aimed at minimizing risks.

Total sales of foreign currency in the interbank market in the reporting year amounted to UAH 7.5 billion (hereinafter the data given in equivalent local currency). This figure in 2010 amounted to UAH 3.1 billion. Foreign currency worth UAH 4.4 billion was purchased and sales of UAH 3.1 billion.

The volume of transactions on the interbank lending market in Chernigiv 2011 reached UAH 24 billion which exceeds the same indicator in 2010 of UAH 16.2 billion. During the year the Bank raised UAH 5.4 billion (in 2010 - UAH 2.3 billion.), and the amount of Kiev allocated funds amounted to UAH 18.6 billion (in 2010 - UAH Lviv 5.5 billion).

Poltava Kharkiv “MEGABANK” maintains correspondent relations with 81 bank- Cherkasy counterparty within the existing general agreements. Vinnytsia

Kirovograd Through an extensive network of correspondent accounts and Donetsk close partnerships with correspondent banks “MEGABANK” Mykolaiv has the ability to quickly and accurately conduct operations with all kinds of world currencies.

Kherson

• coverage as of 1.01.2012 VOLUME OF INTERBANK LOANS OPERATIONS IN CURRENCY NOMINAL, MLN.

UAH

4 151 5 626

USD

149 1 138

EUR

7,5 295

RUB

51 2 154

attraction placement

46 47 Annual Report 2011 Treasury operations Annual Report 2011 Regional network

VOLUME OF INTERBANK LOANS OPERATIONS, CORRESPONDENT BANKS OF PJSC “MEGABANK” As of 1.01.2012 regional network of “MEGABANK” contained IN UAH EQUIVALENT, BLN. (BY AVERAGE NBU RATE Regional network 200 branches, including: Head office in Kharkiv, representative FOR 2010 AND 2011 YEARS RESPECTIVELY) Deutsche Bank Trust Company Americas office in Kiev, Kiev affiliate and 197 branches, situated in 24 130 Liberty Street, New York, NY 10006, U.S.A. regions of Ukraine.

Commerzbank AG Branches in the regions of Ukraine are the central regional 32-36 Mainzer Street, Frankfurt am Main, 60261, Germany 7,8 branches in the number of 21 units, 62 branches with expanded

Deutsche Bank AG list of operations, as well as 114 automated points of payments acceptance. 24 12 D – 60325 Taunusanlage, Frankfurt, Germany

Unicredit Bank Austria AG In Kharkov region operate 128 branches, including 88 points of total for 2010 total for 2011 6-8 A-1010 Schottengasse, Vienna, Austria payment acceptance.

KREDIETBANK In 2011 21 branches were opened – points of payment accept- 7 В-1000 8355-Arenbergstaat, Brusel, Belgium ance, which are situated in Kharkov (17), Vinnitsia (1), Dnipro-

VOLUME OF PURCHASE AND SALE OF petrovsk (1), Zaporozhia (1) and Lviv (1). Joint Stock Commercial Saving Bank of the Russian CURRENCY TRANSACTIONS, IN UAH EQUIVALENT, MLN. Federation (Open Joint Stock Company) On the other hand, within the measures of network optimization 19 Vavilova Street, Moscow, 117997, Russia 19 branches ceased to exist, to name Zakarpattia central region- Joint Stock Bank “Promotion to Social Initiatives” al branch, 1 branch with a full list of operations in Kiev and 17 (OJSC “Sobinbank”) points of payment acceptance, situated in Kirovograd and oblast 4 401 3 069 bld. 56, 15 Rochdelskaya Street, Moscow, 123022, Russia (2), Lviv (4), Poltava (6), Kherson oblast (1) and Chernigiv (4).

Open Joint stock company “Alfa-Bank” 27 Kalanchevskaya Street, Moscow, 107078, Russia LOCATION OF BRANCHES

VTB Bank (OJSC) h.29, Bolshaya morskay Street, Saint-Petersburg 190000, Russia 64.5% Kharkiv 35.5% Other regions

Open joint Stock company “Promsvyazbank” bld. 22, h.10, Smirnovskaya street, Moscow, 109052, Russia

Commerzbank International S.A. 25 rue Edward Steichen, L-2540, Luxembourg purchase 7 470 PJSC “Commercial Bank “Privatbank” sale } 50 Naberezhna peremogy, Dnipropetrovsk, 49094, Ukraine

In 2011, total cash turnover of bank system amounted to UAH PJSC “State Export-Import Bank” 21 billion. Average daily balances of cash in the offices of the 127 Gorkogo Street, Kyiv, 03150, Ukraine structural units of the Bank during the reporting period amounted to UAH 110 million. Change funds through ATMs increased AS “PrivatBank” compared with 2010 by UAH 0.8 billion. and amounted to UAH Muitas Street 1, Riga, LV-1134, Latvia 1.9 billion PJSC “REAL BANK“ 60 Lenina Avenue, Kharkiv, 61072, Ukraine

48 49 Annual Report 2011 Annual Report 2011

1 1 Volyn 1 oblast Chernigiv Rivne oblast oblast 1 1 1 128

23 1 Kiev oblast Sumy oblast

Zhytomyr oblast 8 2 1 2 Lviv oblast 1 Ternopil Kharkiv oblast oblast Khmelnytskyi Cherkasy Poltava 1 oblast oblast oblast 4 1 Ivano-Frankivsk oblast 4 Luhansk Dnipropetrovsk 2 oblast Vinnytsia oblast 1 oblast Kirovohrad oblast Donetsk oblast

3 Mykolaiv Zaporizhia 2 BANK’S REGIONAL PRESENCE oblast oblast 1 6 Kherson oblast - a branch Odessa oblast

- the Head Bank

- an affiliate AR Crimea 2

- a representative office 1 Sevastopol

50 51 Annual Report 2011 International cooperation Annual Report 2011 International cooperation

“MEGABANK” implements 13 international long-term programs • from November 2011 - Program on Energy Efficiency in • August - November 2009 - KfW project «Manage loan International within the signed loan agreements with international financial in- Ukraine: a five-year contract with the European Bank for portfolio during the crisis” involving German international stitutions amounting in equivalent to 142.2 million U.S. dollars: Reconstruction and Development in the amount of 13.5 consultancy company (IPC); cooperation million U.S. dollars; • from July 2007 - second draft of the World Bank Export • 2010 – EBRD project to improve the Bank’s risk manage- Development in Ukraine: a five-year contract with PJSC • from December 2011 - a program to support small and ment involving a British consulting firm PKF; “Ukreximbank” worth 24.5 million U.S. dollars; medium enterprises: seven-year contract with «WorldBusi- ness Capital, Inc.» (WBC) guaranteed by OPIC for 10 mil- • 2010 –KfW project «Portfolio Management of agro credits” • from September 2007 - the program of support micro, lion U.S. dollars. involving German international consultancy company IPC; small and medium enterprises: a five-year contract with the European Bank for Reconstruction and Development • 2010 – draft project of the International Consulting Com- for 20 million U.S. dollars; As of 1.01.2012 the total amount of borrowing from international pany (IPC) «Segmentation of customer base the bank in financial institutions amounted to 106 million U.S. dollars. terms of corporate, small, medium and retail business”; • of February 2008 - the program of support micro, small and medium enterprises: a five-year contract with the Ger- In 2011, the Bank has received funding in the amount of 38.5 • 2011 – together with consultancy company «IPC GmbH» man-Ukrainian Fund (GUF) worth 5 million euros; million, namely from EFSE - 10 million U.S. dollars, tranches from Germany the bank realized the program «Portfolio within the open lines of credit from the World Bank - 10 million management of agro credits» by providing technical as- • from May 2008 - a program supporting small and medium U.S. dollars from the European Bank for Reconstruction and sistance from KfW. enterprises: a five-year contract with a German credit insti- Development – 10.5 million U.S. dollars and the WBC – 8 million tution for Reconstruction (KfW) for 10 million U.S. dollars; U.S. dollars. LOAN PORTFOLIO STRUCTURE • from July 2009 - a expansion program of credit operations The Bank repaid loans totaling 18.2 million dollars, including: of “MEGABANK”: four-year contract with the International EBRD repaid 7 million U.S. dollars, World Bank - 3 million U.S. Finance Corporation (IFC) worth 9.2 million U.S. dollars; dollars, KfW - 2,9 million U.S. dollars, International Finance Cor- poration (IFC) - 5,3 million U.S. dollars (including early repay- • from September 2009 - a program supporting small and ment of the subordinated debt of 3 million U.S. dollars). EBRD 27.6% WBC 8% medium enterprises: a five-year contract with the - Euro World bank pean Bank for Reconstruction and Development in the In November-December 2011, the EBRD and WBC opened to 16.7% amount of $ 15 million U.S. dollars; the Bank new credit lines for 13.5 and 10 million U.S. dollars respectively. • from December 2009 - to increase capitalization and support small and medium enterprises: seven-year subordi- Within the cooperation with international financial institutions GUF 6% nated loan agreement with the German Credit Institution for Bank receives technical and consulting support: KfW 10% Reconstruction (KfW) amounting to 6.5 million U.S. dollars; • 2005-2007 – IFC project «Improving corporate governance EFSE 18.7% • from December 2009 - to increase capitalization and ex- in banks of Ukraine»; IFC 13% pansion of lending operations of the Bank: seven-year subordinated loan agreement with International Finance • 2008 – KfW project on assessment of risk in the Bank with Corporation (IFC) to 7 million U.S. dollars; the involvement of the Frankfurt School of Finance and Management; • from December 2010 - the program of support of micro and small business: a five-year contract with the European Fund • 2008 – KfW project to improve the management system for Southeast Europe (EFSE) worth 5 million U.S. dollars; and develop a regional network of business plans with the involvement of an independent consultant, Dr. Dagmar • from December 2010 - a program of agricultural loans of Vassmut; micro and small business: a five-year contract with the Eu- ropean Fund for Southeast Europe (EFSE) worth $ 5 million • 2008 – 2009 – EBRD Trade Facilitation Project; U.S. dollars; • June-September 2009 –EBRD project «Managing social • from January 2011 - the program support of micro, small risks and environmental risks” with the involvement of the and medium enterprises: a five-year contract with the Eu- international consulting company «FI Consult»; ropean Fund for Southeast Europe (EFSE) worth 10 million U.S. dollars;

52 53 Annual Report 2011 Annual Report 2011

“Nothing contributes a future as bold dreams”

Victor Hugo

54 55 Annual Report 2011 Risk management Annual Report 2011 Risk management

In 2011 the Bank paid special attention to the maintenance of Basic methods to manage the credit risk is the diversifica- rates, estimates the effect of the currency rates change on Risk management risk management to date that provided adequate answers of tion, creation of reserves to cover possible losses, limitation, the major parameters of the Bank’s activity. Also we make a the Bank to the growth of certain types of risk due to changes use of the market mark-up to the interest rate, increase of the continuous analysis of the Bank’s observance to the open cur- in the global economy and the economy of Ukraine. The basis pledged property amount and/or involvement of the additional rency position standards as set by the National Bank of Ukraine. of this process was the constant modernization of risk manage- guarantor(s) to the operation, risks insurance. Based on the analysis made the ALCO Committee approves the ment depending on changes in external factors and using best decision on reduction or change of the currency position. practices and recommendations that were provided to the Bank Credit risk management is carried out on the levels of separate by international consulting company in the previous year. In ad- credit product and loan portfolio of the bank as a whole. dition, testing of recommendations received in the daily activities Interest risk is the obvious or potential risk for inflowing cash and of the Bank has confirmed their effectiveness and efficiency in The credit risk monitoring’s aim is the permanent control over capital, which arise in the result of unfavourable interest rates ensuring risk management at all levels, minimizing the loss of the the units’ compliance with the risk minimization methods as ac- changes. This risk effects both on the Bank’s profitability and the Bank, keeping capital and assets to ensure maximum perfor- ceptable by the Bank. economic value of its assets, liabilities and off-balance instru- mance and sound financial condition, protecting the interests of ments. customers, investors and shareholders of the Bank. Major role in the management of credit risk plays a Credit Com- mittee of the Bank which provides credit risk management as a In the process of management over the interest risk, the Bank portfolio level and for individual projects. To ensure the effective- uses the following methods of analysis and estimation: FINANCIAL RISKS, WHICH ARISE WHILE MAKING BANK ness of the committee in Bank offers loan fees for business lines ACTIVITIES, INCLUDE: - credit committee of microcredit and credit committee of the • primary identification (risk-audit of borrowers, collateral, retail lending, providing credit risk management for these types credit products); Credit risk is the risk when the bank has losses in the result of of loan products. failure to comply with the contractual obligations by clients or • regular identification (actualization of obvious data on risks, counteragents of the bank. When making interbank transactions, the Bank makes, on a including the loan portfolio as a whole). monthly basis, the analysis of financial standing of the counter- Credit risks management consists of: agent banks, basing on which the proposals as for setting of Aimed at minimization of the interest risk, the Bank’s ALCO sets limits for interbank transactions with each counter-agent bank and on a monthly basis revises the internal limits of maximal • credit risks identification; are developed. interest risk upon the proposal of the Main Risk Management Department. The limits restrict the scope of risk, connected with • qualitative estimation of acceptable risks; change of interest rates, which the Bank is ready to bear. The Market risk is the one of losses’ incurrence in the result of un- limits are specified separately for instruments of the fixed- rev • specification of major ways to manage the credit risk; favourable change of the market value of financial instruments, enues of the capital market (bonds), for gap of loans/deposits foreign currency rates and/or precious metals and other assets and the level of the bank’s general interest risk. Depending on • monitoring of the acceptable credit risk and methods to of the Bank, which have the market value. Market risks man- the market situation, the Bank chooses the respective strategy minimize the risk, which are used by the Bank. agement is carried out by ALCO through: monitoring and man- of the interest risk management. agement of the Bank’s assets and liabilities according to short-, The major objective of the risk identification is the creation of middle- and long-term plans of the Bank, and for provision of conditions to ensure their further measurement and minimization. the gaps’ minimization between the Bank’s assets and liabilities Liquidity risk is the risk threatening the revenues and capital in as broken by the term of funds, currencies; specification and the result of the Bank’s failure to satisfy (in due time in full and The Bank uses the following identification methods: control of limits, which restrict the market value, in particular the with minimal losses) the demands in cash for execution of its liquidity, interest, currency risks. monetary obligations. • primary identification (risk-audit of borrowers, collateral, credit products); Aiming to manage and control the liquidity the authorized subdi- Currency risk is the obvious or potential risk for inflowing cash visions of the Bank act as follows: • regular identification (actualization of obvious data on risks, and capital, which arise through unfavourable fluctuations of for- including the loan portfolio as a whole). eign currency rates and prices for bank metals. • estimate the Bank’s liquidity on the base of the daily and forecast analysis of liquidity; The credit risk estimation provides for the evaluation of the proba- In order to manage the currency risk “MEGABANK” carries out bility that the events and circumstances, which lead to credit loss- the daily analysis of Bank’s open currency position amount for • analyze the assets of the balance sheet according to the li- es, may occur and specification of the potential losses’ amount. measurement of sensibility towards the changes of currency quidity level in respect to the structure of liabilities, amount,

56 57 Annual Report 2011 Risk management Annual Report 2011

structure and level of liabilities’ diversification; Activities conducted by the Bank in risk management, including managing credit and operational risk, allowing the Bank to • calculate concentrations (by instruments, counteragents, minimize their impact on income and capital and increase fi- terms, etc.); nancial stability of the Bank in a difficult macroeconomic situation, which creates new challenges as to the banking system of • forecast the change of liquidity parameters both as of the Ukraine and to the global financial system. current date and for the future; “MEGABANK” during 2011 performed economic standards set • analyze the sufficiency of sources to attract cash and the by the National Bank of Ukraine. The value of capital adequacy, cost of operations; liquidity and solvency substantially exceed regulatory requirements, emphasizing the high degree of bank’s stability to fluc- • analyze the Bank’s position at the market, activity of finan- tuations in the economy and the world. cial markets, specify and account for the changes of market conditions, and provide recommendations to equalize the liquidity through attraction of money in the essential amounts and at the appropriate rates, and to sell the assets quickly and with minimal losses of value;

• control and conduct monitoring of compliance with all the internal limits of the assets and liabilities structure, liquidity, economic regulations of the NBU;

• model and forecast the state of the Bank’s liquidity upon various scenarios, etc.

Operational risk is the potential risk of the bank’s existence, which arises through drawbacks of corporate management, internal control system or inadequacy of information technologies and processes of information processing from the point of view of manageability, universality, reliability, controllability and continuity of such technologies’ operation. In this connection the Bank pays special attention to management of operational, legal, judicial risks and the risk of reputation.

The Bank pays great attention to operational risk management. In particular, in 2011 the Bank had established a Committee on operational risk, whose main function is centralized operational risk management. It certainly has allowed operational risk management to a new level. In order to minimize the impact of operational risk events in the capital and revenues the Bank uses a “If you can dream about it you comprehensive banking insurance. can do it”

In recent years the Bank has continually integrated banking in- Walt Disney surance policies (BBB), liability of directors and officers, liability to third parties.

58 59 Annual Report 2011 Corporate Governance Annual Report 2011 Personnel

Corporate governance in the Bank is to create a system that Total number of employees of PJSC “MEGABANK” as of Corporate contributes to reconciliation/co-ordination of the interests of the Personnel 1.01.2012 was 1600. The average age of employees remained Bank’s management, shareholders, depositors and employees unchanged and is 37 years. Governance of the Bank. In 2011 the average salary of employees has grown to 704 UAH, Governing bodies of the Bank act under the Charter, Regula- or 24%, and amounted to 3 660 UAH. tions on the Supervisory Board and Management Board of PJSC “MEGABANK”. These documents define formation, - or The Bank continues to devote considerable attention to raising ganization and also rights, duties and responsibilities of the Su- the level of professional training. As part of the training center in pervisory Board and the Management Board of the Bank. 2011 the training of own 20 trainers and 24 training sessions for business areas and improve administrative efficiency were conducted. 142 employees attended the training. General Meeting is a supreme body of the Bank. In the compe- tence of General Meeting, in particular, there are the following: In 2011, introduced a system of distance learning and testing, allowing specialists to teach in the workplace, to broaden the par- • approval of annual performance results of the Bank (an- ticipation in training and quickly assess the level of knowledge in nual financial statements); distribution of profits and cover the implementation of new banking products or changes in the of loss of the Bank; regulatory framework.

• identifying key activities of the Bank and approval of re- 15 distance learning modules for 706 employees and 20 remote ports on their implementation. testing were conducted, in which knowledge of 436 employees was assessed.

Constantly acting committees have been set up to ensure the 24 Bank staff participated in training activities conducted by the effectiveness of the Bank: National Center for bank employees and other organizations.

• Credit Committee; Various forms of education in 2011 covered 730 employees of • Committee on Asset and Liability Management; the Bank. • Tariff Board; • Budget Committee AVERAGE AGE OF EMPLOYEES NUMBER EMPLOYEES

Corporate governance in the Bank is a process used to ensure 1.01.2010 37 years 1 616 efficient operation and reliability of the Bank and increase its 1 611 1600 value. 1.01. 2011 37 years

1.01. 2012 37 years Corporate governance is based on the following principles:

• corporate; AVERAGE SALARIES • accountability; • fairness; 1.01. 2010 2 576 UAH • transparency; • responsibility; 1.01. 2011 2 956 UAH • integrity; • professionalism. 1.01. 2012 3 660 UAH 1.01.2010 1.01.2011 1.01.2012

60 61 Annual Report 2011 Strategic goals for 2012 Annual Report 2011 Events after the reporting date

The Bank’s strategy in 2012 is aimed to increase the efficiency • “MEGABANK” timely and in full paid interest income on Strategic goals by augmenting high-yield assets, optimize administrative costs Events after the bonds Series H for the third coupon period. Size of pay- with providing liquidity and capital adequacy of the Bank and the ments per bond was UAH 34.90 at a rate of 14% per for 2012 procedures of risk management. reporting date annum.

• Experience of Intergral Clearing Center for housing and STRATEGIC GOALS FOR 2012: communal services of “MEGABANK” (ICC) will be used throughout Ukraine. This January 27 in Kharkov said • Increase bank’s assets by UAH 1 bln. (or 22 %); the Minister of Regional Development, Construction and Housing Anatoly Bliznyuk, seeing the work of ICC. • Increase loan portfolio by UAH 839 mln. (or 25 %); • The Chairman of the Management Board of “MEGABANK” • Increase the volume of loans, issued to small and medium Olena Zhukova was elected a member of the Kharkiv businesses by UAH 518 mln., corporate clients – by UAH branch of the European Business Association in 2012. Eu- 310 mln., retail lending portfolio – by UAH 11 mln.; ropean Business Association is the leading organization for foreign business in Ukraine and brings together about 900 • Increase the volume of clients’ term funds by UAH 592 mln. European, Ukrainian and international companies. and increase the volume of borrowing at international market by UAH 155 mln.; • “MEGABANK” received an award from the German firm «Wincor Nixdorf» for “original use of ATMs in reception of • ensure the growth of loan portfolio by attracting of clients in payment for utility services”. the domestic market as well as continued active work with funding from international financial institutions. • Rating agency “Expert Rating” confirmed credit rating of PJSC “MEGABANK” credit rating and bond Series G, H and I on a national scale at uaA- and improved outlook on credit rating from “stable” to “positive”.

• In reliability rating of Ukrainian banks, which made “Standard Rating” by the results in 2011,” MEGABANK “entered the twenty most reliable Ukrainian banks. The “MEGABANK” got into the first category of reliability, get- ting rated -ua.1, which is the highest possible. It means that a bank with a high probability will fulfill its obligations on time.

• Shareholders of PJSC “MEGABANK” at the Annual Gen- eral Meeting held on April 10, accepted the development strategy of the Bank for the years 2012-2015, which aims to move away from the universal scheme of the banking business and the introduction of expert model. In addition, the shareholders elected the Supervisory Board of “MEGABANK” consisting of: Chairman of the Supervi- sory Board - Viktor Subotin, members of the Supervisory Board - Alexander Saveliev (representative of the European Bank for Reconstruction and Development), Lars Oer- mann (representative of the German state bank), Oleksiy Cherkasskyi, Oleksander Plyekhov, Svitlana Sakhtinova and Lidiya Nosenko.

62 63 Annual Report 2011 Auditor’s report according to international standards Annual Report 2011 Auditor’s report according to international standards

control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

Auditor’s report according to 5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide а basis for our audit opinion.

international standards Opinion

6. In our opinion, the financial statements present fairly, in all material respects, the financial position of the Bank as of 31 December 2011, and its financial performance and its cash flows for the уеаr then ended in accordance with International Financial Reporting Standards.

27 april 2012 Kyiv, Ukraine

LLCAudit Firm “PricewaterhouseCoopers (Audit)”, 75 Zhylyanska Street, Kyiv 01032, Ukraine Т: +з80444906777, F: +з804449067з8, шшш.ршс.соm/иа INDEPENDENT AUDITOR’S REPORT

To the Shareholders and Board of Directors of Public Joint Stock Company “Megabank“:

1. We have audited the accompanying financial statements of Public Joint Stock Соmраnу “Megabank” (the “Bank”) which comprise the statement of financial position as of 31 December 2011 and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the уеаr then ended and а summary of significant accounting policies and other explana- tory notes.

Management’s Responsibllity for the Financial Statements

2. Management is responsible for the preparation and fair presentation of these financial statements in ассоrdance with Intemational Financial Reporting Standards, and for such internal соntrol as management determines is necessary to enable the preparation of financial statements that аrе free from material misstatement, whether due to fraud оr еrrоr.

Auditor’s Responsibility

3. Our responsibllity is to express аn opinion оn these financial statements based оn our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements аrе free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend оn the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud оr еrrоr. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financiaI statements in оrder to design audit procedures that аrе appropriate in the circumstances, but not for the purpose of expressing an opinion оn the effectiveness of the entity’s internaI

64 65 Annual Report 2011 Annual Report 2011 Financial statements according to international standards

Financial statements according to international standards

PJSC “MEGABANK” STATEMENT OF FINANCIAL POSITION ths. UAH

Note 31 December 31 December 2010 1 January 2010 2011 (restated, Note 3} (restated, Note 3)

ASSETS

Cash and cash equivalents and 7 422 377 328 912 390 854 mandatory reserve balances

Due from other banks 8 263 109 103 970 106 833

Loans and advances to customers 9 3 098 130 2 641 734 2 335 514

Investment securities аvаilаblе for sale 10 2 626 52 418 104 944

Current income tax prepayment 23 23 23

Deferred income tax asset 24 4 964 - -

IntangibIe assets 11 1 110 1 012 1 277

Premises and equipment 11 174 210 165 057 147 037

Other financial and non-financial assets 12 47 003 49 270 8 592

TOTAL ASSETS 4 013 552 3 342 396 3 095 074

LIABILIТIES

“The dream is always winged Due to other banks 13 427 445 368 476 390 133 - it overtakes the time” Loan from NBU - 46 000 315 131

Customer accounts 14 2 285 930 1 819 025 1 404 463 Sergiy Konenkov Debt securities in issue 15 115 630 70 964 78 837

Other borrowed funds 16 333 238 101 950 57 263

Current income tax liabllity 1 080 220 230

66 67 Annual Report 2011 Financial statements according to international standards Annual Report 2011 Financial statements according to international standards

Note 31 December 31 December 2010 1 January 2010 Note 2011 2010 2011 (restated, Note 3} (restated, Note 3) Gains less losses from trading 5 090 5 946 in foreign currencies Deferred income tax liability 24 - 3 726 4 915 Foreign exchange translation gains less losses/ - (1 107) Provisions for liabilities and charges 17 5 084 4 650 6 902 (Iosses less gains) and other liabilities Losses оn initial recognition of assets 9 (4 564) (12 865) Subordinated debt 18 211 618 314 185 229 521 at rates below market TOTAL LIABILITIES 3 380 025 2 729 196 2 487 395 Gains less losses from disposals 790 3 845 of investment securities аvаilаblе for sale

Impairment of investment securities (261) (73) EQUITY аvаilаblе for sale

Share capital 19 550 149 550 149 550 149 Provision for credit related commitments 17 (4) (473)

Share premium 138 138 138 Other operating income 22 5 047 3 546

Retained earnings 32 892 23 545 22 855 Staff costs 23 (89 596) (75 350)

Revaluation reserve for premises 50 400 38 867 34 537 Other administrative and other operating expenses 23 (107 267) (87 110)

Revaluation reserve for investment (52) 501 - Profit before tax 10 286 4 098 securities availabIe for sale Income tax 24 (939) (3 408)

TOTAL EQUITY 633 527 613 200 607 679 PROFIТ FOR ТНЕ YEAR 9 347 690

TOTAL LIABILITIES AND EQUITY 4 013 552 3 342 396 3 095 074 Other comprehensive income:

Аvаilаblе-fоr-sаlе investments:

• Gains less losses recycled to profit оr loss upon (790) (3 845) PJSC “MEGABANK” STATEMENT ОF COMPREHENSIVE INCОMЕ ths. UAH disposal оr impairment

• Fair values gains less losses 73 4 495 Note 2011 2010 arising during the уеаrу

Interest income 20 368 090 388 430 Revaluation of premises 4 587 -

Interest expense 20 (222 911) (267 739) Income tax recorded directly in other 24 7 110 4 181 comprehensive income Net interest income 145 179 120 691

Provision for loan impairment 9 (50 526) (43 102) Other comprehensive income for the уеаr 10 980 4 831 TOTAL COMPREHENSIVE INCOME FOR ТНЕ YEAR 20 327 5 521 Net interest income after provision 94 653 77 589 for loan impairment Earnings реr share for profit аttributаblе to the 25 0, 0187 0, 0014 owners of the Bank, basic and diluted Fee and commission income 21 111 388 103 084 (expressed in UAH реr share) Fee and commission expense 21 (6 985) (10 930)

Gains less losses/(Iosses less gains) 1 995 (2 004) from financial derivatives

68 69 Annual Report 2011 Financial statements according to international standards Annual Report 2011 Financial statements according to international standards

PJSC “MEGABANK” STATEMENT OF CHANGES IN EQUITY ths. UAH PJSC “MEGABANK” STATEMENT OF CASH FLOWS ths. UAH

Share Share Revaluation Revaluation Retained Total Note 2011 2010 capital premium reserve for reserve for earnings аvаilаblе for premises sale securities Cash flows from operating activities Interest received 393 773 346 688

AT 1 JANUARY 2010 550 149 138 - 34 537 22 855 607 679 Interest paid (217 251) (263 645)

Аvаilаblе-fоr-sаlе investments: Fees and commissions received 111 388 103 084

• Gains less losses recycled to - - (3 845) - - (3 845) Fees and commissions paid (6 985) (10 930) profit оr loss upon disposal оr Income received from financial derivatives 1 995 (2 004) impairment 5 090 4 839 • Fair values gains less losses - - 4 495 - - 4 495 Income received from trading in foreign currencies arising during the уеаr Other operating income received 4 752 5 849

Revaluation of premises ------Staff costs paid (89 239) (75 103) Income tax recorded directly in - - (149) 4 330 - 4 181 Administrative and other operating expenses paid (97 539) (84 913) other comprehensive income Income tax paid (8 755) (277) Other comprehensive income - - 501 4 330 - 4 831 Cash flows from/(used in) operating activities before 97 229 23 588 Profit for the уеаr - - - - 690 690 changes in operating assets and liabilities Total comprehensive income for 2010 - - 501 4 330 690 5 521 Net (increase)/decrease in: BALANCE AT 31 DECEMBER 2010 550 149 138 501 38 867 23 545 613 200 due from other banks (156 674) 5 571 Аvаilаblе-fоr-sаlе investments: loans and advances to customers (545 149) (344 588) • Gains less losses recycled to - - (790) - - (790) profit оr loss upon disposal оr NBU mandatory reserve balance (3 727) (24 871) impairment Net increase/(decrease) in: • Fair values gains less losses - - 73 - - 73 due to other banks 60 390 (20 910) arising during the уеаr due to NBU (46 000) (269 131) Revaluation of premises - - - 4 587 - 4 587 customer accounts 473 989 423 978 Income tax recorded directly in - - 164 6 946 - 7 110 other comprehensive income short-term debt securities in issue 1 000 -

Other comprehensive income - - (553) 11 533 - 10 980 provisions for liabilities and charges and other liabilities 434 (2 250)

Profit for the уеаr - - - - 9 347 9 347 Net cash used in operating activities (118 508) (208 613) Total comprehensive income for 2011 - - (553) 11 533 9 347 20 327 Cash flows from financing activities BALANCE AT 31 DECEMBER 2011 550 149 138 (52) 50 400 32 892 633 527 Proceeds from disposal of investment securities 49 239 53 027 available for sale

Acquisition of premises and equipment (6 792) (27 279)

Proceeds from disposal of premises and equipment 1 210 650

70 71 Annual Report 2011 Financial statements according to international standards Annual Report 2011 Details of the Bank and its branches

Note 2011 2010 Details of the Bank and its Dividend income received 496 500 branches (current date) Acquisition of intangible assets (98) -

Proceeds from disposal of intangible assets 11 - 265

Net cash from investing activities 44 055 27 163

Cash flows from financing activities

Proceeds from other borrowed funds 16 250 713 49 372 HEAD OFFICE OF PJSC “MEGABANK” Repayment of other borrowed funds 16 (18 364) -

Proceeds from subordinated debt 18 - 79 850 30 Artema street, Kharkiv tel.: +38 (057) 714 20 13 Repayment of subordinated debt 18 (109 386) -

Issue of own debt securities 102 058 14 980 www.megabank.net e-mail: [email protected] Repayment of own debt securities (59 246) (22 626)

Net cash from financing activities 165 775 121 576 № Unit name, Unit status Location Effect of exchange rate changes on cash (1 584) (26 938) registration data and cash equivalents

Net increase/(decrease) in cash and cash equivalents 89 738 (86 812) KYIV AFFILIATE on-balance affiliate Kyiv, 64 Bogdana Khmelnytskogo Street

Cash and cash equivalents at the beginning of the year 287 362 374 174 REPRESENTATIVE OF OFFICE PJSC representative office Kyiv, 64 Bogdana Khmelnytskogo Street “MEGABANK” IN THE CITY OF KYIV Cash and cash equivalents at the end of the year 7 377 100 287 362 1 Branch № 8 branch Kharkiv, Marshala Zhukova Avenue, 13, app. 82

2 Branch № 11 branch Kharkiv, Marshala Zhukova Avenue, 31

3 Branch № 12 branch Kharkiv, Slinko Street, 14-B

4 Branch № 13 branch Kharkiv, Newtona Street, 111

5 Branch № 14 branch Kharkiv, Kosticheva Street, 13

6 Branch № 16 branch Kharkiv, Moskovskiy Avenue, 199

7 Branch № 17 branch Kharkiv, Tankopiya Street, 3/2

8 Branch № 18 branch Kharkiv, Kom. Uborevicha Street, 44-В

9 Branch № 19 branch Kharkiv, Ak. Pavlova Street, 140

10 Branch № 20 branch Kharkiv, Ordzhonikidze Avenue, 27

11 Branch № 21 branch Kharkiv, Gritsevtsya Street, 29

12 Branch № 22 branch Kharkiv, Permska Street, 12/14

13 Branch № 23 branch Kharkiv, Poltavsky Shlyakh, 152

72 73 Annual Report 2011 Details of the Bank and its branches Annual Report 2011 Details of the Bank and its branches

№ Unit name, Unit status Location № Unit name, Unit status Location registration data registration data

14 Branch № 24 branch Kharkiv, Ak. Proskury Street, 13 43 Branch № 59 branch Kharkiv, underground station “Pushkinska”, room № 18-А

15 Branch № 25 branch Kharkiv, Staroshyshkivska Street, 12 44 Branch № 60 branch Kharkiv, underground station “Universitet”, underground passage № 2 16 Branch № 27 branch Kharkiv, Rodnikova Street, 9 45 Branch № 61 branch Kharkiv, underground station “Industrialna”, 17 Branch № 28 branch Kharkiv, Kharkivskykh Diviziy Street, 8/1 underground passage № 2 18 Branch № 29 branch Kharkiv, Rybalko Street, 49-D 46 Branch № 62 branch Kharkiv, underground station “Naukova” 19 Branch № 30 branch Kharkiv, Rybalko Street, 25 47 Branch № 63 branch Kharkiv, Marshala Bazhanova Street, 28 20 Branch № 31 branch Kharkiv, Olimpiyska Street, 29 48 Branch № 64 branch Kharkiv underground station “Studentska”, 21 Branch № 32 branch Kharkiv, Stadionnyi proyizd,12/1 underground passage № 2, hall № 1

22 Branch № 33 branch Kharkiv, Kharkivskykh Diviziy Street,19 49 Branch № 65 branch Kharkiv, underground station “Geroyiv Pratsi “, underground passage № 1, hall № 1 23 Branch № 34 branch Kharkiv, N. Uzhviy Street, 74 50 Branch № 66 branch Kharkiv, Yurievskaya Street, 6, letter “А-2” 24 Branch № 35 branch Kharkiv, Moscovsky Avenue, 210/1 51 Branch № 67 branch Kharkiv, Komsomolske Highway, 52 25 Branch № 36 branch Kharkiv, Korchagintsev Street, 13 52 Branch № 68 branch Kharkiv, Saltivske Highway, 43 26 Branch № 37 branch Kharkiv, Saltivske Highway, 242-G 53 Branch № 70 branch Kharkiv, Chernyshevskogo Street, 55 27 Branch № 38 branch Kharkiv, Turkestanska Street, 26 54 Branch № 71 branch Kharkiv, Peremogy Avenue, 64-А 28 Branch № 39 branch Kharkiv, Krasnodarska Street, 181-B 55 Branch № 72 branch Kharkiv, Zubareva Street, 63-А 29 Branch № 40 branch Kharkiv, Gv. Shironintsev Street, 73-B 56 Branch № 73 branch Kharkiv, 23rd August Street, 31, app. 103 30 Branch № 42 branch Kharkiv, Slavy Avenue, 5 57 Branch № 74 branch Kharkiv, Plekhanivska Street, h. 126/2 31 Branch № 43 branch Kharkiv, Gagarina Avenue, 176, bld. 10 58 Branch № 75 branch Kharkiv, underground station “Ploscha Povstannya “, 32 Branch № 45 branch Kharkiv, Artyoma Street, 46 underground passage № 2, premise № 8 33 Branch № 48 branch Kharkiv, Traktorobudivnykiv Street, 71-B 59 Branch № 76 branch Kharkiv, underground station “Marshala Zhukova”, 34 Branch № 49 branch Kharkiv, Traktorobudivnykiv Street, 92 underground passage № 2, premise № 14

35 Branch № 50 branch Kharkiv. Traktorobudivnykiv Street, 114-A 60 Branch № 77 branch Kharkiv, underground station “Proletarska”, underground passage № 1, premise № 43 36 Branch № 51 branch Kharkiv, Tymurivtsiv Street, 29-D 61 Branch № 78 branch Kharkiv, underground station “Radyanska”, 37 Branch № 52 branch Kharkiv, Svitla Street, 3-A underground passage № 1, premise № 30 38 Branch № 53 branch Kharkiv, Gv. Shyronintsev Street, 50 62 Branch № 79 branch Kharkiv, underground station “Tsentralny Rynok”, 39 Branch № 54 branch Kharkiv, Derevyanko Street, 7 underground passage № 2, premise № 5

40 Branch № 55 branch Kharkiv, Bakulina Street, 1 63 Branch № 80 branch Kharkiv, Korchagintsev Street, h. 17, app. 2

41 Branch № 56 branch Kharkiv, 2-nd Pyatyrichky Street, 18 64 Branch № 82 branch Kharkiv, Plekhnivska Street, h. 73, app. 3

42 Branch № 58 branch Kharkiv, Peremogy Avenue, 50-B 65 Branch № 83 branch Kharkiv, Kosiora Avenue, h. 140, app. 4

74 75 Annual Report 2011 Details of the Bank and its branches Annual Report 2011 Details of the Bank and its branches

№ Unit name, Unit status Location № Unit name, Unit status Location registration data registration data

66 Branch № 84 branch Kharkiv, underground station “Sportivna”, 91 Branch № 123 branch Kharkiv, underground station “Zavod imeni Malysheva”, kiosk № 5 in the passage № 1 passage № 1

67 Branch № 85 branch Kharkiv, Bakulina Street, 18 92 Branch № 124 branch Kharkiv, underground station “Traktornyi zavod”, passage № 1 68 Branch № 86 branch Kharkiv, Druzhby Narodov Street, 279-A 93 Branch № 125 branch Kharkiv, underground station “Akademika Barabashova”, 69 Branch № 87 branch Kharkiv, Shevchenko Street, 26 passage № 2 70 Branch № 88 branch Kharkiv, Feiebakha Square, 8 94 Branch № 126 branch Kharkiv, underground station “Akademika Pavlova”, 71 Branch № 89 branch Kharkiv, Gagarina Avenue, h. 244, app. 21 passage № 1

72 Branch № 91 branch Kharkiv, Saltivske Highway, h. 262 95 Branch № 127 branch Kharkiv, underground station “Geroiv pratsi”, passage № 1 73 Branch № 92 branch Kharkiv, Rybalko Street, 24/17 96 Branch № 128 branch Kharkiv, underground station “Naukova”, passage № 1 74 Branch № 93 branch Kharkiv, Gritsevtsya Street, 27 97 Branch № 130 branch Kharkiv, 300-А Moskovskyi Prospect 75 Branch № 97 branch Kharkiv, Blukhera Street, 66 98 Branchя № 133 branch Kharkiv, 39-А Prospect Gagarina 76 Branch № 102 branch Kharkiv, 23rd August Street, h. 51 99 Branch “Balakliyske” branch Kharkiv Region, Balakliya, Zhovtneva Street, 35, app. 17 77 Branch № 103 branch Kharkiv, Energetichna Street, 1 100 Branch “Barvinkivske” branch Kharkiv Region, Barvinkove, 50 rokiv Radyanskoyi 78 Branch № 106 branch Kharkiv, Rogatinsky proyizd, 3, letter С-2 Ukrainy Street, 3 79 Branch № 107 branch Kharkiv, Shevchenko Street, 142 - А, letter – G-4 101 Branch “Borivske” branch Kharkiv Region, Borivsky District, Village of Borova, 80 Branch № 108 branch Kharkiv, Gv. Shyronintsev Street, h. 29-А Miru Street, 14

81 Branch № 109 branch Kharkiv, Universitetska Street, h. 37/39 102 Branch “Valkivske” branch Kharkiv Region, Valki, 50 rokiv Zhovtnya Square, 3

82 Branch № 111 branch Kharkiv, Peremogy Avenue, 61 103 Branch “Vovchanske” branch Kharkiv Region, Vovchansk, Lenina Street, 87

83 Branch № 113 branch Kharkiv, Peremogy Avenue, 75-В 104 Branch “Dergachivske” branch Kharkiv Region, Dergachi District, Derchagi, Petrovskogo Street, 27 84 Branch № 115 branch Kharkiv, Tarasivska street 105 Branch “Zmyivske” branch Kharkiv Region, Gagarina Street, 15 85 Branch № 117 branch Kharkiv, underground station “Oleksiivska”, passage № 1 106 Branch “Zmyivske № 2” branch Kharkiv Region, Zmyiv, 50 rokiv Komsomolu Street, 115 86 Branch № 118 branch Kharkiv, underground station “23 Serpnia”, passage № 1 107 Branch “Zolochyvske” branch Kharkiv Region, Zolochiv, Pravdy Street, 8 87 Branch № 119 branch Kharkiv, underground station “Arkhitektora Beketova”, passage № 1 108 Branch “Izyumske” branch Kharkiv Region, Izyum, Khlibozavodska Street, 3

88 Branch № 120 branch Kharkiv, underground station “Kholodna gora”, 109 Branch “Komsomolske” branch Kharkiv Region, Zmyivsky District, Komsomolske, passage № 2 Druzhby Street, 6 (DSch-5)

89 Branch № 121 branch Kharkiv, underground station “Pivdennyi vokzal”, 110 Branch “Krasnogradske” branch Kharkiv Region, Krasnograd, K. Marxa Street, 5 passage № 1 111 Branch “Krasnokutske branch Kharkiv Region, Krasnokustk, Peremogy Street, 13 90 Branch № 122 branch Kharkiv, underground station “Prospect Gagarina”, 112 Branch “Kupyanske” branch Kharkiv Region, Kupyanks, R. Luxembourg Square, 1 passage № 1 113 Branch “Lozivske” branch Kharkiv Region, Lozova, Volodarskogo Street, 2

76 77 Annual Report 2011 Details of the Bank and its branches Annual Report 2011 Details of the Bank and its branches

№ Unit name, Unit status Location № Unit name, Unit status Location registration data registration data

114 Branch “Lozivske № 2” branch Kharkiv Region, Lozova, micro-district № 3, h. 37 141 Branch “Lvivske № 28” » branch Lviv, Krichevskogo Street, 61

115 Branch “Pervomayske” branch Kharkiv Region, Pervomayskiy, Micro-district 1/2, 142 Poltava CRB branch Poltava, 17 Komsomolska street bld. 28., app. 2,3 143 Branch “Poltavske № 2” branch Poltava, Biryuzova Street, h. 48/2 116 Branch “Chuguyivske” branch Kharkiv Region, Chuguev, Kharkivska Street, 122, 144 Branch “Poltavske № 3” branch Poltava, Frunze Street, h. 173 app. 2,3 145 Branch “Poltavske № 4” branch Poltava, Staryi Podil Street, h. 4 117 Branch “Chuguyivske № 2” branch Kharkiv Region, Chuguev, Zhadanovskogo Street, 3 146 Branch “Gadyatske” branch Poltava Region, Gadyach, 118 Branch “Shebelinske” branch Kharkiv Region, Balakliyivsky District, Chervony Donets, 50th Ricchya Zhovtnya Street, 44 Zhovtneva Street, h. 9 147 Branch “Seleschynske” branch Poltava Region, Mashivsky Region, 119 Branch “Shebelinske № 2” branch Kharkiv Region, Balakliyivsky District, Chervony Donets, village of Bazylivschina, Polyova Street, h. 6 Lenina Street, h. 40 148 Branch “Poltavske № 11” branch Poltava, Parizskoyi Komuny Street, h. 20/1 120 Lviv CRB branch Lviv, Mitskevicha Square, 8 149 Branch “Poltavske № 2” branch Poltava, Engelsa Street, h. 19-A 121 Branch “Lvivske № 1” branch Lviv, Prof. Buiko Street, 2 150 Chernygiv CRB branch Chernygiv, Miru Avenue, h. 12 122 Branch “Lvivske № 2” branch Lviv, I. Vygotovskogo Street, 34 151 Cherkasy CRB branch Cherkasy, Khreschatyk Street, h. 205 123 Branch “Lvivske № 3” branch Lviv, Varshavska Street, 64 152 Branch “Smilyanske№ 1” branch Cherkasy Region, Smila, Lenina Street, h. 18 124 Branch “Lvivske № 4” branch Lviv,Turyanskogo Street, h. 5 153 Khmelnytsk CRB branch Khmelnytskiy, Shevechnko Street, h. 11 125 Branch “Lvivske № 5” branch Lviv, Mykolaichuka Street, h. 22 154 Odesa CRB branch Odesa, Velyka Arnautska Street, h. 25 126 Branch “Lvivske № 6” branch Lviv, Grinchenko Street, h. 4 155 Kherson CRB branch Kherson, Girskogo Street, h. 19 127 Branch “Lvivske № 7” branch Lviv, Chukarina Street, h. 9 156 Branch “Novokakhovske” branch Kherson Region, Nova Kakhovka, 128 Branch “Lvivske № 8” branch Lviv, Linkolna Street, h. 57 Dzerzhinskogo Street, h. 33 129 Branch “Lvivske № 9” branch Lviv, Khutorivka Street, h. 24 157 Branch “ Novokakhovske № 2” branch Kherson Region, Nova Kakhovka, Peremogy Avenue, h. 3 130 Branch “Lvivske № 10” branch Lviv, Chornovola Avenue, h. 99 158 Branch “Novokakhovske № 3” branch Kherson Region, Nova Kakhovka, Gorkogo Street, h. 44 131 Branch “Lvivske № 11” branch Lviv, Chervonoyi Kalyny Avenue, h. 109 159 Branch “Novokakhovske № 4” branch Kherson Region, Nova Kakhovka, Bukina Street, h. 58 132 Branch “Lvivske № 12” branch Lviv, Sykhivska Street, h. 14 160 Branch “Novokakhovske № 7” branch Kherson Region, Nova Kakhovka, 133 Branch “Lvivske № 13” branch Lviv, Dnisterska Street,16 Elektromashinobudivnikiv Street, h. 3

134 Branch “Lvivske № 17” branch Lviv, Zamartivska Street, h. 45 161 Vinnytsya Central Regional Branch branch Vinnytsya, 50th Ricchya Peremogy Street, h. 33

135 Branch “Lvivske № 19” branch Lviv, I. Mazepy Street, h. 11 162 Branch “Vinnytske № 1” branch Vinnytsya, Botanichna Street, h. 23

136 Branch “Lvivske № 20” branch Lviv, Bortnyanskogo Street, 17 163 Branch “Universitet” branch Vinnytsya, Frunze Street, h. 4

137 Branch “Lvivske № 21” branch Lviv, Mikhnovsky Brativ Street, h. 21 164 Volyn Central Regional Branch branch Lutsk, B. Khmelnystkogo Street, h. 27

138 Branch “Lvivske № 23” branch Lviv, S. Petlyury Street, h. 36 165 Dnipropetrovsk Central Regional Branch branch Dnipropetrovsk, Lenina Square, h. 1

139 Branch “Lvivske № 24” branch Lviv, Dozvilna Street, h. 1 166 Branch “Dnipropetrovsk № 1” branch Dnipropetrovsk, Ryleeva Street, 2

140 Branch “Lvivske № 27” branch Lviv, S. Petlyury Street, h. 2-А 167 Donetsk Central Regional Branch branch Donetsk, Artyoma Street, h. 122

78 79 Annual Report 2011 Details of the Bank and its branches Annual Report 2011

№ Unit name, Unit status Location registration data

168 Zhytomyr Central Regional Branch branch Zhytomyr, Peremogy Street, h. 54

169 Zaporizhya Central Regional Branch branch Zaporizhya, Lenina Avenue, h. 144, premise 201

170 Branch “Zaporizhske № 2 branch Zaporizhia, 70-А Magistralna street

171 Ivano-Frankivsk Central branch Ivano-Frankivsk, Sichovykh Striltsiv Street Regional Branch (Chapaeva Street), h. 70

172 Kirovograd Central Regional Branch branch Kirovograd, Druzhby Narodiv Square, h. 3

173 Branch “Znamyanske” branch Kirovograd Region, Znamyanka, Matrosova Street, h. 27

174 Branch “Kirovogradske № 1” branch Kirovograd, Popova Street, h. 9, app. 1

175 Branch “Kirovogradske № 3” branch Kirovograd Region, Kirovograd District, village of Katerynivka, Pivdenna Street, h. 12

176 Crimean Central Regional Branch branch Simferopol, Sevastopolska Street/Sergeyeva-tsenskogo Street, h. № 8/1

177 Branch “Sevastopolske № 1” branch Sevastopol, Ochakovtsiv Street, house 4

178 Branch “Feodosiyske” branch Crimean AR, Feodosiya, Krymska Street, h. 84, premise 7

179 Lugansk Central Regional Branch branch Lugansk Region, Lugansk, Kotsyubinskogo Street, h. 6

180 Mykolayiv Central Regional Branch branch Mykolayiv, Spaska Street, h. 14

181 Branch “Mykolayivske № 1” branch Mykolayiv, Geroyiv Stalingradu Avenue, h. 113

182 Branch “Mykolayivske № 3” branch Mykolayiv Region, Novo-Odesky District, village of Konstyantynivka, Mykolayivska Street, h. 4

183 Rivne Central Regional Branch branch Rivne, Kyivska Street (Libknekhta Street), h. 21

184 Sumy Central Regional Branch branch Sumy, Kirova Street, h. 19

185 Ternopil Central Regional Branch branch Ternopil, Ruska Street, h. 17

186 Branch “Chortkivske № 1” branch Ternopil Region, Chortkiv, Knyazya Volodymyra Velykogo Street (Budivelna Street), h. 8

80 81