World Without Barriers VTB Group
Social Report
2011 Mission and Values 1
Who we are
VTB Group is a leading Russian financial institution with a strong presence in key international markets.
Mission
To provide world-class financial services that help to create a prosperous future for our customers, shareholders and the society.
Values
Trust. Gaining and retaining the trust of our customers is VTB Group’s most important value.
Reliability. VTB Group’s long-term strength is reinforced by leading positions in the financial markets where we operate and our international expertise and scale.
Transparency. Our business is open and transparent, and all of our key stakeholders cooperate closely in order to deliver maximum value and visibility.
Versatility. We offer sophisticated solutions of any complexity through presence in various financial segments.
Our Team. United team of professionals is our strength - knowledge, potential, energy and creative insight of each individual member of our team make us unique.
Vision
VTB seeks to be number one in all of its target markets. Table of Contents
Statement of Andrey Kostin, President-Chairman of the Management Board 5 3. Team 45 3.1. Management Approach 45 46 93.2. Personnel Attraction We .1 46 9 3.2.1. Personnel Selection Practices Profile .1.1 1.2. Strategy 11 3.2.2. Attracting Young Specialists 46 1.3. VTB Group Management System 12 3.3. Employee Development Opportunities 48 1.4. Approach to Corporate Social Responsibility 13 3.4. Remuneration and Social Benefits 51 1.5. Stakeholder Engagement 14 3.5. Favourable Corporate Culture 53 1.6. Corporate Governance System 18 3.6. Occupational Health and Safety 54 1.7. Shareholder and Investor Relations 20 1.7.1. Government Relations 20 4. Society 57 1.7.2. Relations with Individual Shareholders 21 4.1. Management Approach 57 57 26 4.2. Supporting Culture and the Arts Relations with Institutional Investors .1.7.3 58 Supporting Theatrical and Musical Art .4.2.1 59 29 4.2.2. Supporting Visual Arts Business .2 60 29 4.2.3. Supporting Cinematography and Television Management Approach .2.1 61 30 4.3. Supporting Sport Supporting Key Economic Sectors .2.2 63 31 4.4. Social Projects Technology Innovation .2.2.1 65 31 4.5. Strengthening the International Reputation of Russian Business Power Sector .2.2.2 67 32 4.6. Combatting Money Laundering and the Financing of Terrorism Transport Infrastructure .2.2.3 32 Automotive Industry .2.2.4 71 32 5. Environment Agriculture and Food Industry .2.2.5 2.2.6. Housing Construction and Public Utility Sector 33 5.1. Management Approach 71 2.3. Financial Services for Public Authorities 33 5.2. Environmentally Sound Approach to the Construction and Modernisation of Buildings 71 2.4. Supporting Small and Medium Business Development 34 5.3. Resource Efficiency and Waste Management 72 2.5. Socially Significant Retail Banking Product and Services 37 2.6. Accessibility of Banking Services 40 Selected Awards Won by VTB Group Companies in 2011 76 2.7. Improving Service Quality 41 About This Report 78 GRI Content Index (G3.0) 80 Annex. VTB Group organisational structure as of December 31, 2011 83 Contact Details 84 4 Statement of Andrey Kostin, 5 President-Chairman of the Management Board
Over the last decade, VTB has been consistently taking a socially responsible position, viewing it as an integral part of its corporate culture. Following international standards, we identify three key areas of our corporate social responsibility. The first one is running our business in an efficient and responsible manner, which includes, among other approaches, offering banking products and implementing projects aimed at accelerating the socio-economic development of the country. The second area is care for the development of employees and the interests of stakeholders, including our customers, partners, and shareholders. The third area is supporting the national culture and the arts, sports, healthcare services, and education.
Despite the difficult situation on the international financial markets, in 2011, VTB Group demonstrated high financial performance, generating a record net income. We have successfully consolidated our corporate and investment banking business, which now includes a leading investment bank, and the dynamically growing transaction banking business. The key performance indicators of the corporate and investment banking and the retail banking business Dear readers! lines, including their market shares, improved substantially as a result of both effective Welcome to VTB’s Social Report, the fourth one management and the acquisition of the Bank of produced by VTB Group. This year, for the first time in Moscow and TransCreditBank. Already in the the history of our social reporting, we are releasing reporting year, we were able to achieve the main the Social Report simultaneously with the Annual target of VTB Group Development Strategy for Report for the General Shareholders Meeting. By 2010–2013 – the return on equity level of 15%. doing so, we demonstrate our commitment to the highest standards of social responsibility and to the The active implementation of the existing three-year development of a dialogue with a broad range of development strategy not only brings stakeholders. unprecedented results for VTB Group and its Statement of Andrey Kostin, President-Chairman of the Management Board
6 7 shareholders. The steady improvement of the In the past year, the Group companies continued contemporary Russian art, as well as musical and areas and principles of the Group’s activities in financial performance helps expand and diversify their efforts aimed at reducing interest rates, theatrical festivals and tours. VTB Bank contributed that area. By the time of publishing this Report, the corporate programmes implemented for the benefit expanding its product and service lines, and to the financing of innovative education programmes Policy has been approved by the Management of our stakeholders – minority shareholders, improving the quality of customer service in the small at the St. Petersburg State University and the Board of VTB Bank. In the next year, we will inform employees, retail customers, small and medium business segment. VTB24 signed a number of new European University at St. Petersburg. The Bank all stakeholders about our progress in the businesses, innovative and systemically important cooperation agreements with regional governments continued implementing World without Tears, a introduction of common social responsibility sectors of the Russian economy, and, of course, in Russia aimed at supporting the development of corporate charity programme: over the reporting approaches across VTB Group. centres of culture and the arts, veterans, and the small businesses. period, donations were made to children’s hospitals young generation. in Vladimir, Volgograd, Voronezh, Kirov, Kursk, A substantial portion of the loans and guarantees Orenburg, Petropavlovsk-Kamchatsky, Rostov-on- In 2011, we expanded our engagement with provided by the Group’s banks was aimed at Don, St. Petersburg, Ulan-Ude, Ufa, Yuzhno- individuals holding shares of VTB Bank. Much supporting projects in priority economic sectors, Sakhalinsk, and Moscow. The participating hospitals ,interest was generated by financial awareness significant in social and infrastructural terms. Those received necessary medical equipment and supplies workshops for individual shareholders held in included innovative projects in the agriculture, as well as equipment for Montessori classrooms and .eight cities, where participants had an microelectronics, and power generation, as well as playgrounds opportunity to get their questions answered power grid modernisation projects aimed at directly by top executives of the Group. VTB also improving energy efficiency. In 2012, we will continue progressive movement ,continued developing products and services towards the building of a global financial group offered to minority shareholders of the Bank on Our subsidiary VTB Capital, a leader of the venture while paying particular attention to further preferential terms. industry in Russia and the CIS, actively supported expanding our socially responsible business innovation in various economic sectors. In 2011, VTB practices. In the past year, the Bank completed the President and Chairman The Group achieved major successes in the Capital signed a number of investment agreements to drafting of the Corporate Social Responsibility of the Management Board of VTB Bank development of its retail business. The integration of finance the development of nanotechnology, an Policy of VTB Bank, a document defining priorities, Andrey Kostin TransCreditBank and the Bank of Moscow not only important area for innovation. The investments will helped expand the Group’s customer base, but also be channelled into the development of alternative gave a new impetus for the improvement of the energy sources, oil and gas industry, customer service quality and the introduction of new telecommunications, biotechnology, electronic popular banking products, including socially oriented industry, and environmental technology. A ones. VTB Group continues to develop its retail sales cooperation agreement between VTB Capital and network in Russia, comprised primarily of offices of Skolkovo Foundation aimed at supporting innovation VTB24, TransCreditBank, and the Bank of Moscow. By was also signed. the year’s end, the total number of the Group’s retail outlets exceeded 1,200, while its ATM network In 2011, as a result of the integration of the Bank of included over 10 thousand units. The Group’s banks Moscow and TransCreditBank, the number of the in the CIS countries also were able to expand their Group’s employees increased by more than 30%, business. reaching almost 68 thousand by the end of the year. To facilitate the changes envisioned by VTB Group A socially significant area of our activities in the retail Development Strategy, we paid particular attention to segment was the development of mortgage lending the development and training of our staff, sharing services and the improvement of their attractiveness experience between employees, building an effective and affordability. In 2011, VTB24 introduced motivation system, and improving employee “Mortgage + Maternity Capital”, a unique mortgage satisfaction with their job. programme offered to young families on special terms, and embarked on a mortgage programme for VTB continued actively supporting culture, the arts, military service members participating in the and sports in Russia. In 2011, Group companies government-funded mortgage scheme. sponsored unique exhibitions of classical and Clear Goals 1. We 9
1.1. Profile The Group’s operations outside Russia include (as of December 31, 2011): VTB Group and its subsidiary companies comprise an international financial group operating on the l 15 banks based in the CIS counties (Armenia, Russian and foreign markets. The core business Ukraine – two banks, Belarus – two banks, activities of VTB Group are represented by two major Kazakhstan, and Azerbaijan) and Georgia, in Europe business lines: corporate and investment banking, (Austria, Cyprus, Germany, France, the United and retail banking. Kingdom), and Africa (Angola);
Within these two business lines, VTB provides its l two representative offices based in Italy and China; customers with the entire range of banking services, including corporate, investment, and retail banking l two VTB branches based in China and India; services. Furthermore, VTB actively develops its non-banking financial services, including leasing, l subsidiary organisations based in Singapore, United factoring, insurance, and pension management Arab Emirates, and China (Hong Kong). services. The well-developed system of cross-selling products and services from different VTB companies VTB Group also operates in Vietnam through an allows the Group to meet the needs of the most associated company – Vietnam-Russia Joint Venture demanding partners and is a source of significant Bank (hereinafter, VRB). potential for business development. VTB Group also operates in Vietnam through an In Russia, the Group provides banking products and associated company – Vietnam-Russia Joint Venture services through its head bank – JSC VTB Bank – Bank (VRB). as well as CJSC Bank VTB 24 (VTB24), OJSC Bank of Moscow (the Bank of Moscow), and JSC VTB Bank acts as the corporate centre of the Group, TransCreditBank (TransCreditBank). at the same time being a financial institution that
VTB Group key indicators as of December 31, 2011
Financial indicators • Assets: RUB 6,789.6 billion • Loan portfolio: RUB 4,590.1 billion • Net profit: RUB 90.5 billion
The structure of share capital of JSC VTB Bank • The Russian Federation represented by the Federal Agency for State Property Management – 75.5% of the share capital • The Bank of New York International Nominees (a depositary bank of the GDR programme) – 16.4% of the share capital • Other legal and physical persons (free float) – 8.1% of the share capital
Customers • Retail customers: over 15 million • Corporate customers: over 50% of major Russian companies
Geography of operations • 20 countries (CIS, Europe, Asia and Africa) • 73 Russian regions • Over 1,700 sales outlets
Headcount • 67,912 1. We
10 11 growth, providing for a significant increase in revenue combined with a qualitative improvement Strategy Implementation in the revenue structure and enhanced efficiency of the Group’s business. Unlike the previous stage of To ensure the implementation of its VTB business development, focused on the development strategy, in 2011 VTB undertook aggressive growth of business volume and market a number of large-scale transformations with share, the current priorities include improving the regard to management of the Group’s business efficiency of operations, achieving the target return and improvement of operational efficiency. They on equity level and increasing the Group’s market include capitalisation. • creation of the integrated corporate and According to the Strategy, the following changes to investment banking business line; the Group management system were made in order to create a platform for growth within Russia and • clear delineation of responsibilities between abroad: customer-oriented and product-focused specialists; l creation of two global business lines (retail banking and corporate and investment banking). Their • establishment of a system of product managers performance is disclosed in financial and responsible for financial results; management reports; • active development of transaction banking l centralisation of responsibilities for and – launch of a number of state-of-the-art consolidation of the management of the key transaction and cash management products supporting and controlling functions, including for companies, development of bundled finance, risk management, IT, and operational offerings, improvement of remote banking support of business; services;
l implementation of a new business model for • reform of the lending procedure – reduction servicing global customers. of the target decision time; itself provides corporate banking services. The Group respectively, compared to 12.1 and 7.2% as of comprises the companies, in which VTB Bank holds December 31, 2010. The Group management system helps subsidiary • beginning of the regional network reform – an equity interest of more than 50% or whose companies make better use of the Group’s global transformation of branches into operational activities are influenced by the Bank to a significant Analysts from the world’s leading rating agencies — expertise and resources and offer their customers offices, and centralisation of back-office extent. Moody’s, Fitch Ratings and Standard & Poor’s — have integrated solutions designed with the immediate functions traditionally assigned high credit ratings to VTB Bank. involvement of the head bank. The new model allows VTB Group is the second largest corporate lender in In 2011, Standard & Poor’s raised the Bank’s to reduce risks, build a truly global service model for • creation of a new team focused on the Russian market; in 2011, it became the market stand-alone credit profile to “BB”. Russian rating the largest customers, and ensure effective regional business– the Regional Network leader in terms of corporate deposits. Over 2011, the agencies have traditionally classified VTB Bank into coordination of each business line across all regions Department; Group’s corporate lending market share grew to the highest reliability group. where the Group operates. More details about the 18.7% compared to 12.0% as of December 31, 2010; Group management system are available in VTB • continued dynamic development of retail its corporate deposit market share increased to Group Management System of this Report. business – achieving record profits. 21.1% compared to 15% at the beginning of the year. 1.2. Strategy VTB is also the second largest player in the Russian In 2011, the merger of VTB Bank North-West into retail banking market. Over the reporting period, the In 2010, VTB Bank Supervisory Board adopted VTB VTB Bank was completed. While the legal Group’s market shares in the retail lending and Group Development Strategy for 2010–2013. The procedures were finalised, the new VTB North- deposit segments grew to 13.7 and 9.0% current VTB Strategy is a strategy for efficient West Regional Centre was established within VTB 1. We
12 13 Bank. The Centre is responsible for the legal persons comprising the Group as the main VTB Bank, VTB Capital, and VTB24 act as functional development of the Group’s corporate business in priority of the reform. expertise centres with regard to the respective major Corporate Social Responsibility Policy the Russian North-West and has broad discretion business lines. They provide systematic management of VTB Bank in defining its approaches towards lending and The reform of the Group management system of supporting and controlling functions at the Group the pricing policy. addresses several key objectives. In particular, VTB level. VTB Subsidiary Banks Department, in its turn, The Policy defines key principles and seeks to increase its income as a result of the synergy helps subsidiaries in tailoring group-wide priorities of the Bank’s CSR activities. Furthermore, a process of the integration of within business lines and reduce costs through the programmes to the context of their business, also It is aimed at continuing improvement TransCreditBank and the Bank of Moscow into the efficient use of common resources and infrastructure being the centre of communications between of the transparency of the Bank’s business structure of VTB Group started in 2011. A number by Group companies. The new management system functional coordinators and subsidiary companies. processes and the effectiveness of its of strategic and operational initiatives were will provide for better management and oversight of engagement with the key stakeholders, launched to ensure their effective integration. For assets and ensure effective integration of newly strengthening of the reputation of the each entity, a medium-term development strategy acquired businesses through better integration of 1.4. Approach to Corporate Social Bank, enhancement of the investment was developed to achieve an optimal structure of supporting and controlling functions. Responsibility attractiveness and the quality of business business and relations with other Group management. The Policy defines priorities companies. The strategies provide for maximising At present, it is VTB Group Management Committee with regard to the management of corporate benefits from the synergy between all Group (VTB GMC) that is responsible for the coordination of VTB operates with the interests of its stakeholders in behaviour and the Bank’s impacts on companies, while avoiding non-productive the management system at the Group level. The mind, continuously integrating the principles of the internal, market, social, and natural competition with other Group members. For Committee reviews and approves development corporate social responsibility (CSR) into its strategy environment, and to the development of example, according to the approved development strategies for various business areas and business and communications policy. VTB pays particular corporate non-financial reporting. The Policy strategy, the Bank of Moscow will develop its plans of the Group and its companies, analyses attention to the development of its corporate applies to all units of the Bank. According to offerings for small and medium businesses on its reports on their implementation, evaluates the status governance practices, including transparency of its the Policy, the Bank considers the possibility own, competing with VTB in the free market; of liquidity and risks, oversees the implementation of activities to shareholders and investors. The Group’s of adopting certain environmental and social however, in doing so it will follow common priority corporate projects, and approves common key priorities include supporting the national responsibility principles with the Equator principles of customer service and certain regional standards, approaches and operational principles economy, considering all material risks of the Principles taken into account. priorities. TransCreditBank will focus its efforts on across the Group. The Committee meetings are held financed projects, caring for employees and taking a the Russian regions where it has traditionally regularly on the basis of quarterly action plans. responsible attitude towards the environment. The operated and where other Group banks are not Group’s strategy of efficient growth also incorporates The Bank has been actively improving its CSR present; it will also continue doing business with VTB GMC has 13 coordination commissions providing social responsibility principles and seeks to ensure reporting system. In 2012, in line with the the railway sector, making use of its extensive a platform for expert discussion of common the business development that improves financial instructions from the Russian government, VTB sectoral expertise. standards, principles, and approaches, and for the performance, while facilitating positive social and Bank Supervisory Council of asked Andrey Kostin, approval of the subsidiaries’ development plans economic changes. The effectiveness of this VTB Bank President-Chairman of the Management within the respective business areas in line with the approach is demonstrated by the results of the Board, to develop corporate regulations on the use 1.3. VTB Group Management System overall business strategy of the Group. The Group’s activities, including those presented in this of voluntary environmental responsibility commissions are chaired by heads of VTB Bank Report. mechanisms, based on the respective To accomplish ambitious objectives defined by VTB respective divisions of and comprise relevant international standards. Taking into account those Group Development Strategy for 2010–2013, VTB specialists from all banks and companies of the To build a common platform for responsible business, regulations, the Bank plans to cover a number of continued to diversify its business focusing on Group. They are responsible for the introduction of in 2010–2011 the Bank was developing an additional environmental performance indicators several key business lines making significant best practices and development of group-wide integrated Corporate Social Responsibility Policy in its 2012 Social Report. It is planned to disclose contribution to the Group’s profits. Such “growth principles and standards in the respective areas, and intended to define the priorities, areas, and indicators of resource consumption and waste points” include corporate and investment banking, for streamlining and standardisation of internal principles of VTB’s activities in the field of corporate generation, as well as information on retail banking, and the Group’s international network. processes and procedures in those areas across the social responsibility. Due to large-scale environmental expenditures. At the same time, the Efficiency strategies for each business line should be Group. organisational changes the drafting of the policy took Bank will continue to provide information about supported by respective changes in the overall VTB more time than it was originally expected. Over 2011, the results of its environmental protection management system. Therefore VTB Group has In addition to coordination commissions, VTB GMC the draft policy was reviewed by relevant units of the activities and measures to improve resource identified transition to the management of major oversees the Group Credit Committee responsible for Bank. The policy was adopted by VTB Bank efficiency. Furthermore, the Bank plans to seek business lines across the boundaries of individual credit risk management and control. Management Board of in 2012. independent assurance of its 2012 Report. 1. We
14 Key VTB stakeholders and stakeholder communication channels 15 1.5. Stakeholder Engagement using the Bank’s website or the official page of VTB on Facebook. On December 8, Andrey Kostin The scale and the geography of the Group operations answered the most popular questions of Internet General Shareholders Meeting require systematic engagement with a broad range of users in real time. The event helped the Bank to Website and mailing lists Annual Report, Social Report stakeholders on a regular basis. VTB views effective receive stakeholders’ evaluation of its approaches Shareholders Meetings, conferences Controlling Interest newspaper stakeholder engagement on economic and social and determine priorities of subsequent stakeholder and investors Business Business associations Meetings, workshops, roadshows, partners Energy of Success magazine issues as an essential prerequisite for the success engagement activities. VTB plans to continue conferences and sustainability of its business. providing opportunities for stakeholder access to Shareholders Consultative Council unbiased first-hand information about the Group’s Shareholder Relations Centres The Group’s key stakeholders include shareholders activities. Call centre Supervisory Council Email Participation in commissions and investors, employees, the government, business and working groups Government partners, local communities, non-governmental In 2011, steps to improve the usability of the Meetings organisations, and mass media. Various Group’s corporate website vtb.ru were taken. Based on the Annual Report, Social Report functions are responsible for identifying stakeholder user feedback, new page templates were developed, Key VTB needs, keeping them informed, responding to their which will provide the foundation for a new, more stakeholders
requests in a timely manner, and building productive convenient website design. Furthermore, over the Intranet (hotline, forum) long-term relations with each stakeholder group. reporting year search engine optimisation of the Employee/management meetings corporate website was carried out, which helped Employees Corporate events VTB’s integrated external and internal increase the number of visitors two-fold, to 20 Labour union communications system includes both instruments thousand per day. In spring 2011, a new English- Energy of Team magazine Social report for informing stakeholders about the Group’s language version of the website mirroring the Russian Mailing lists Website activities and feedback mechanisms, which help website vtb.ru was launched. The Society section of Social Report Facebook Website identify and manage the most significant issues. A the corporate website vtb.ru was reorganised into a Call centre Communities Twitter Customers scheme of the Group’s stakeholder communications standalone site and moved to a dedicated domain – and mass media Volunteer actions Satisfaction surveys is presented in the chart. vtbrussia.ru. Controlling Interest newspaper Energy of Success magazine Energy of Success magazine Annual Report, Social Report Key VTB Stakeholders and Channels of Corporate Media Meetings, workshops, conferences Social media Communications with Them As part of efforts to improve the Group’s corporate In 2011, the Group continued to develop and improve media, a more dynamic, vibrant, and recognisable the Group’s activities, the number of copies delivered experts of VTB Capital. The newspaper has adopted its stakeholder communications channels. design for Energy of Success, a magazine for VTB to VTB’s foreign subsidiaries has been substantially a more conversational style. Now the publication is customers, has been developed. A new section on the increased within the existing distribution budget. As focused on explaining the complexities of modern Against the backdrop of the increasing media Group’s achievements in the CIS and other foreign a response to requests by the Bank’s branches, the financial system to a broad audience of retail attention towards the Bank’s activities, serious countries was added to the publication. Another new number of magazine recipients in the business circles shareholders. The newspaper circulation has efforts to improve the transparency of VTB Bank were section, Expertise, features VTB’s world renowned of Russian regions has also been increased. The increased from two to fifteen thousand. Today made. Among other measures, the number of such experts, who provide coverage and commentary of the magazine for the first time became available for Controlling Interest is available not only at media events, as press conferences and interviews current state of domestic and international financial business audience at VIP lounges of Moscow’s Shareholder Relation Centres in Moscow, St. with the Bank senior executives, was increased; markets, analysis of the activities of major securities largest airport and in business taxis. In the coming Petersburg, and Yekaterinburg, but also at customer completely new methods of stakeholder issuers, and forecasts of market and macroeconomic year, the magazine will also become available in service outlets of VTB24, including those based in communications were introduced. trends. The magazine provides continuous journalistic trains traveling between Moscow and St. Petersburg the regions where registered Group shareholders coverage of the Group’s sponsorship and charity – the business and the cultural capitals of Russia. reside. The newspaper is also distributed at In 2011, a hotline with Andrey Kostin, VTB Bank projects aimed at supporting culture, the arts, sports meetings with shareholders and other corporate President-Chairman of the Management Board, who and healthcare services. The content of Controlling Interest, a quarterly events. Soon the newspaper will undergo a re- answered questions from Internet users, was newspaper for VTB shareholders, has also been design, which will help communicate textual and organised for the first time. For one and a half week The concept of the distribution of Energy of Success updated. It has started publishing educational visual information to minority shareholders in a every user was able to submit his or her question, has also changed. To improve customer awareness of materials for shareholders and analytical articles by more effective manner. 1. We
16 17 VTB Promotion in the Social Media cultural events supported by VTB’s sponsorship or JSC VTB Bank Corporate Governance Structure VTB’s successes in improving the transparency charity initiatives. as of December 31, 2011 of its operations in 2011 have been appreciated In the reporting year, the main achievement in the by independent experts. In Q4’ 2011, the development of the Bank’s external communication VTB to Russia’s approach to the coverage of corporate VTB Bank has put in place an effective system of Bank’s media relations service was recognised system was active promotion of VTB Bank in the social activities is unique among systemically corporate governance and internal control over its the leader of the ranking of PR services of the social media – social networks and blogs. important Russian companies. The main objective of financial and economic affairs as a means of largest Russian companies by the Agency the project is to reach the broadest possible audience safeguarding the rights and legitimate interests of its of Economic News. Over the year 2011, VTB Since 2011, VTB Group has maintained an official of Internet users, informing them about sponsorship shareholders. The Supervisory Council is formed so Capital was the leader of the monthly ranking page on Facebook at the address: http://www. and charity activities of VTB Bank, engaging them in a as to ensure representation of different shareholder of information transparency by Medialogia facebook.com/vtbgroup, viewing it as a permanent dialogue, and consolidating socially-oriented Internet groups. The Supervisory Council, comprises 11 company; as a result, it was recognised the channel of communication with customers and audience around VTB’s projects. persons, including three non-executive members, year’s transparency leader among investment other stakeholders of the Group. The page features and is led by a non-executive Chair. The latter are not companies. the latest Group news, information on charity and At present, the monthly audience of vtbrussia.ru is members of the Management Board and do not have sponsorship projects of the Group in the form of over 37 thousand unique visitors; in November 2011, any relationships with VTB, which may affect the interesting and exclusive articles and interviews, the project won the prestigious Runet Award in the independence of their judgement. Since 2011, the Team Energy magazine for Group the Group’s official comments on the global State and Society category. Furthermore, over the employees has been published on a quarterly basis. financial and economic trends, interesting facts year a number of joint projects with the leading The Supervisory Council oversees the Audit The magazine has traditionally published materials related to finance, online conferences with the Russian bloggers were carried out to provide coverage Committee, which, in conjunction with the Internal explaining employees the Group’s development Group senior executives, campaigns and contests, of the results of the Bank’s main sponsorship and Control Department, supports the management strategy and the essence of the on-going changes. The and a traditional Q&A section. At the end of 2011, charity projects. Active efforts on expanding the function in ensuring the effectiveness of the Bank publication also covers the life of the VTB team, the number of page subscribers exceeded 6 Bank’ web presence helped substantially increase operations. The Staff and Remuneration Committee of including sport and charity initiatives by various thousand. The Group also maintains an English the percentage of positive mentions of VTB on the the Supervisory Council provides recommendations entities of the Group based both in Russia and abroad. version of its Facebook page: http://www. Internet. on key appointments and incentives for members of In the reporting year, the audience of the magazine facebook.com/vtbbank. the Supervisory Council and the Bank’s executive and expanded as a result of the acquisition of new banks control bodies. by the Group. In line with these changes, in 2011 the The Bank has bolstered its presence in the Twitter 1.6. Corporate Governance System magazine published articles aimed at facilitating the microblogging service, using its account @vtb_ru to In 2011, in order to optimise the decision-making integration of the new assets’ staff into the VTB team. cover the most important developments at the Group, VTB Bank continuously improves its corporate process with regard to the strategic development of key deals and achievements, charity and sponsorship governance system in line with international best VTВ and improvement of its corporate governance In 2011, new publications were added to the Group’s projects, and to publish interesting facts related to practices and recognised standards in this area. VTB system, the Strategy and Corporate Governance line of corporate media. Those include, among finance on a regular basis. Furthermore, the Bank’s is committed to strictly observing the rights of its Committee of the Supervisory Council was created. others, We, a corporate electronic magazine of specialists answer any questions asked by users, shareholders, including the right to receive dividends The key objectives of the Committee include defining TransCreditBank, and Banking Rate, a newspaper of including Bank customers, in real time, publish links and information about VTB operations, and ensuring strategic objectives and development priorities of the the Bank of Moscow. Therefore active efforts on the to relevant analytical materials, provide consultations the effectiveness and transparency of its managerial Bank, supporting and improving the corporate integration of the new subsidiaries’ corporate media on choosing Group products, and explain terms and decisions. governance system of VTB, and formulating proposals into the Group’s overall communications system have conditions associated with them. for the strategic management of the Bank’s equity started, with particular focus on ensuring their The supreme governing body of VTB Bank is the capital. conformance to VTB’s standards. Since July 2011, the VTB to Russia General Shareholders Meeting. The Bank’s We magazine has covered various aspects of the Supervisory Council, elected by and accountable to Another development in the field of corporate integration of TransCreditBank into the Group, with In 2011, VTB to Russia, a large-scale project aimed at the shareholders, provides strategic guidance and governance that took place in 2011 was the the December issue being entirely dedicated to the increasing public awareness of the Bank’s oversight of the activities of executive bodies. The introduction of the new position – Corporate integration. The Banking Rate newspaper targeting sponsorship and charity activities, has started. The latter, namely President-Chairman of the Secretary. The Corporate Secretary is elected by and customers of the Bank of Moscow in the second half main online platform of the project is the website Management Board and the Management Board, accountable to the Supervisory Council; in of 2011 featured a series of materials about the vtbrussia.ru. VTB to Russia is an online media outlet, manage the day-to-day activities of the Bank and administrative terms, the Corporate Secretary reports Group’s senior executives and joint projects of the a kind of a “social information agency”, providing accomplish objectives set by the shareholders and to President-Chairman of the Management Board. The Bank of Moscow and VTB24. exclusive coverage of social projects, sports and the Supervisory Council. Corporate Secretary of VTB Bank ensures compliance 1. We
18 VTB Bank corporate governance system as of December 31, 2011 19 of the Bank’s entities and employees with corporate Furthermore, in 2011, a training workshop on the governance policies and procedures guaranteeing the development of corporate governance was carried out legitimate rights and interests of the Bank for representatives of the Group subsidiary banks shareholders and facilitates interaction between the based in Ukraine, Kazakhstan, Azerbaijan, Armenia, Supervisory Board and shareholders. The Belarus, France, Germany, Austria, Africa, and Cyprus. General responsibilities of the Corporate Secretary also The workshop was delivered by Russian and External Approves Shareholders Elects Statutory Audit include supporting the effective work of the Bank’s international corporate governance experts. The auditor Meeting Commission Supervisory Council, ensuring the preparation and workshop programme covered a broad range of topics conducting of General Shareholder Meetings in related to the role and activities of boards of accordance with the relevant legal requirements, and directors, including the specifics of corporate Elects supervising the disclosure of information about the governance at public companies and companies with Bank. a state-owned stake. The workshop participants acquired deep knowledge of international best The Bank carries out an assessment of its corporate practices in the field of corporate governance. Reports governance system in terms of compliance with legal Appoints requirements and international best practice on an Strategy annual basis. Based on the results of an independent Appoints 1.7. Shareholder and Investor and Corporate assessment conducted by the Russian Institute of Prepares Relations Governance recommendations Directors, the Bank for the second consecutive year Committee and reports Staff received the score of “7” on the RID-Expert RA and Remuneration Supervisory Prepares National Corporate Governance Scale, which implies 1.7.1. Government Relations Committee Council recommendations the “Well-Developed Corporate Governance Practice” and reports Appoints level. Furthermore, in 2011, an assessment of the The Russian Federation represented by the Federal Audit Appoints corporate governance system was carried out by Agency for State Property Management is the majority Prepares members of the Supervisory Council in accordance shareholder of VTB Bank, which imposes certain Committee recommendations with recommendations of the Bank of Russia and responsibilities on the Bank and has major influence and reports international expert organisations and on the basis of on its strategy. In its operations, VTB takes into Reports a methodology approved by the Strategy and account the objectives set by the government and Appoints Corporate Governance Committee. The assessment seeks to contribute to the successful accomplishment scope included the development strategy, approach of strategic national goals. VTB Bank Supervisory to banking risk management, internal control system, Council comprises, among other members, Corporate Secretary working procedures of the governance and representatives of government authorities, management bodies, the quality of information professionals in managing state finances. Therefore Reports Reports disclosure, approach to preventing conflict of the key strategic decisions take into account priorities interest, relationships with affiliated persons, and of the government policy and consider the effects of compliance with the principles of professional ethics. the Bank’s actions on the national scale. Reports In April 2012, the Supervisory Board reviewed results President of the self-assessment and proposals for further To maintain an effective process of engagement with Internal and Chairman improvement of the corporate governance system, the government, Andrey Kostin, VTB Bank President Control of the Management based on those results. -Chairman of the Management Board, regularly Department Board participates in the meetings with Russia’s top VTB strives to maintain high corporate governance officials. In the reporting period, several meetings of Management Board standards also in its subsidiary banks. The Bank has VTB’s chief executive with President and Prime developed a concept of corporate governance, which Minister of the Russian Federation took place. The provides for the introduction of common corporate topics of the meetings included the current state of governance standards across the entire Group. financial markets, approaches towards the 1. We
20 21 improvement of the investment climate in Russia, as volume of credit limits in that area was RUB 131,569 The Bank engages with its shareholders not only information most important and relevant to the Bank well as the performance and trends of VTB’s million, while the amount of funds disbursed was through meetings, but also through a broad range of shareholders, including financial performance data, business. One meeting was dedicated to the results RUB 108,331 million. At present, the Group finances remote communication channels. information about the General Shareholder Meeting of the privatisation of a stake in VTB. During the projects aimed at the construction of affordable and and dividend payment, invitation to shareholder meeting, it was noted that the successful completion comfortable housing, development of the Remote Shareholder Communication Channels meetings and reports about shareholder events, of the deal will contribute to the creation of an agroindustrial complex, and support of education relevant news about VTB Group Companies, and international financial centre in Moscow. and healthcare services. Handling shareholder enquiries information about activities of the Shareholders Consultative Council (SCC). Furthermore, Andrey Kostin had a number of For more details on financial services provided to The handling of written and oral enquiries from meetings with the leaders of several CIS countries. state and municipal authorities, see Business section shareholders of VTB Bank is one of the key objectives The topics discussed during the meetings included, of this Report of the Shareholder Relations Service. Activities in this Breakdown of individual among others, plans for the development of VTB’s area are intended to support the realisation of shareholders of VTB Bank business in the CIS countries, and the Group’s role in 1.7.2. Relations with Individual Shareholders shareholder rights and legitimate interests, provide improving relations between post-Soviet states. shareholders with necessary information about the as of December 31, 2011 Alongside increasing shareholder value, the Bank equity and activities, and facilitate the VTB Group executives and specialists serve on a enhancement of VTB’s information transparency and identification and analysis of general and specific number of government and non-governmental effective engagement with individual shareholders problems faced by minority shareholders with a view Breakdown of individual shareholders by age commissions, sector-specific working groups, and are among the essential components of the Group to establishing effective mechanisms for resolving governing bodies of industry associations. For Strategy. them. On average, some 2,500 enquiries per month 60 000 53 611 54 227 example, Andrey Kostin, VTB Bank President- are filed with the Shareholder Relation Service 50 000 Chairman of the Management Board, and Vasily As a result of the sale of a 10% stake in VTB in through various communication channels. 39 343 Titov, his First Deputy, are members the February 2011, the authorised capital structure 40 000 Interregional Banking Council under the Federation underwent some changes compared to 2010. The Controlling Interest newspaper 30 000 Council of the Federal Assembly of Russia, a body number of shares held by individuals increased from 18 289 charged with facilitating improvement of the Russian 296.4 billion to 316.4 billion. The proportion of This quarterly publication covers key developments 20 000 banking system and development of the respective individual shareholders as of the record date (April at VTB, contains useful information for shareholders 10 000 legislation. Furthermore, Andrey Kostin and Vasily 21, 2011) was 3.03%. The total number of individual and provides detailed coverage of the activities of the 560 1 050 Titov serve on governing bodies of the Russian shareholders amounted to 167,126, including Shareholders Consultative Council. Since 2011, the 0
Union of Industrialists and Entrepreneurs (RUIE), an 114,062 participants of the IPO. newspaper has been distributed through VTB24 Under 20 20–35 35–50 50–65 65–80 Over 80 association supporting the development of relations service outlets across the country. Now it is available between business, the government, and the public VTB uses a systemic and balanced approach to to shareholders in 37 Russian regions. In Moscow in Russia. The activities of the RUIE cover a broad ensure effective engagement with this large and St. Petersburg, the newspaper and other printed Breakdown of individual shareholders by region of residence range of topics, including the improvement of shareholder group. The Bank has in place an effective materials for shareholders are available in over 60% environmental performance of Russian businesses, system for shareholder communications, which helps of VTB24 offices. Therefore the newspaper circulation 45 000 development of construction and financial provide relevant information to individual has increased from 2 thousand to 15 thousand 40 000 40 219 industries, as well as support of the defence shareholders on a timely basis and receive their copies. The content has also undergone some 35 000 industry and high-tech economic sectors. Andrey feedback. changes – a number of new features have been 30 000 Kostin also chairs the RUIE Joint Commission for added, including an analytical and an educational 25 000 20 000 16 500 Corporate Ethics, whose objective is the Since 2010, the Bank’s relations with minority section. 15 000 13 398 improvement of the climate in the Russian business shareholders have been managed by a dedicated 10 000 4 780 4 007 5 000 3 793 3 465 3 407 3 087 3 050 3 045 2 779 activities, and serves on the Presidium of the Shareholder Relations Service. In 2009, the VTB Shareholder Newsletter 2 718 2 668 2 649 2 519 2 157 2 156 2 044 2 007 0 Association of Russian Banks. Shareholders Consultative Council was created at VTB
Bank. The Council is an independent expert, Since 2010, the Shareholder Relations Service has Moscow Perm Region Tula Region An important aspect of the Bank’s engagement with consultative and advisory body intended to safeguard been preparing a monthly information newsletter, St. Petersburg Rostov Region Irkutsk Region Moscow RegionSamara Region Voronezh Region Belgorod Region Stavropol Region Sverdlovsk RegionKrasnodarLeningrad Region Region Volgograd Region Chuvash Republic the government is its contribution to implementation the rights and interests of VTB’s individual sending it electronically to some 35,000 Krasnoyarsk Region Republic of Tatarstan Nizhny Novgorod Region of top priority national projects. In 2011, the total shareholders. shareholders. The newsletter contains the Republic of Bashkortostan 1. We
22 23 The effectiveness of this outreach method is section Shareholder Information, created for the Relations Centres, meetings with VTB Shareholders This method of shareholder engagement allows each demonstrated by both continuously increasing number convenience of minority shareholders, contains the Consultative Council, and awareness raising visitor to receive personal consultations on a broad of subscribers and positive feedback from shareholders. information most interesting to them: corporate workshops. range of issues. Consultations are provided by news, products and services available on preferential representatives of VTB Shareholder Relations Service, Information materials at VTB24 offices terms, information about the General Shareholders Shareholder Relations Centres members of the Shareholders Consultative Council, Meeting and shareholder workshops. experts of VTB24, VTB Insurance, and VTB Registrar. In 2011, VTB24 implemented a project to install VTB Shareholder Relations Centres function in the In 2012, the Bank plans to start holding Open Days information stands for VTB shareholders at its The user interface of the Personal Account page has three cities where most of individual shareholders also in Yekaterinburg. customer service outlets in 37 regions. Each outlet also become more convenient, making it easier for an live: Moscow, St. Petersburg and Yekaterinburg. At has been equipped with a stand containing copies of individual shareholder to register an account, or these centres shareholders can receive professional VTB Shareholders Consultative Council the Controlling Interest newspaper and information change password. Information about the dividend advice on issues ranging from dividend payments brochures for VTB shareholders. This helps improve history, a dividend calculator, and a form for and changes in banking details to preferential The Shareholders Consultative Council (SCC) jointly the accessibility of relevant information to requesting an income certificate are available in the products and services and the Bank’s strategy. with the Supervisory Council and the Management shareholders in Russian regions. Dividends subsection of the Shareholders and Materials prepared for annual shareholders meetings Board of JSC VTB Bank participates in the preparation Investors section. The Bank intends to continue are made available at the centres in advance. and implementation of decisions affecting Shareholders and Investors website section improving the website in 2012; in particular, it is Throughout the year, shareholders can also obtain shareholders’ interest. To that end, SCC members planned to add new services to the Personal Account. the most recent issue of the Controlling Interest develop and submit to the Supervisory Council and At the end of the year, a new structure of the newspaper and other information materials, request the Management Board their opinions, proposals, Shareholder and Investors section of the corporate Direct Communication Channels an income certificate, update their personal details recommendations, and other materials relevant to website was introduced. A more intuitive main menu kept by the registrar, etc. Each of the centres on the respective decisions. Being advisory in their makes it easier for shareholders to locate necessary The Bank maintains face-to-face contact with average receives some 100 visitors and handles nature, SCC’s opinions and proposals do not interfere information and quickly navigate the site. The new individual shareholders through Shareholder about 250 telephone calls per month. with the authority of the Supervisory Council and the Management Board. In order to keep VTB minority shareholders as fully informed as possible, in 2011 specially designed In 2011, SCC members participated in regional Remote Shareholder Communication Channels information stands have been installed at all shareholder workshops as experts and answered Shareholder Relation Centres. All VTB’s printed shareholders’ enquiries related to the SCC’s Controlling Interest newspaper materials for shareholders are available on the stands. activities. The Council members also participated in 15,000 copies quarterly Furthermore, since 2011, the visitors are invited to Open Day events at Shareholder Relations Centres in Information newsletter provide their feedback by filling a questionnaire. Moscow and St. Petersburg. 35,000 email addresses monthly Targeted mailing (newsletters, notifications In 2012, VTB plans to take a number of steps to A new method of engagement with minority of dividend, invitations to meetings) – some 200 000 letters in 2011 improve the effectiveness of the Centres. The planned shareholders was exemplified by a meeting of SCC Information materials measures include streamlining the Centres’ members with a shareholder interest group, which VTB24 offices in 37 Russian regions organisational structure, standardising their was held in September 2011 in Moscow. Some 40 approaches, and introducing mechanisms for VTB shareholders taking an active stand on various Shareholder Website WWW.VTB.RU coordinating their activities. aspects of the Bank’s activities took part in the event. Relations Shareholders and Investors section Shareholders Over 60,000 page views per month As a result of the meeting, proposals for improving Service Shareholder Open Days the effectiveness of the Group’s operations were Unified reference desk prepared and communicated to VTB management. Over 2,000 communications per month Open Day events for shareholders are conducted on Email address [email protected] the basis of VTB Shareholder Relations Centres. The In 2011, five scheduled meetings of the Council were Some 250 enquiries per month events have been held in Moscow (on a monthly held. Senior executives of the Bank and its Phones of the Service and the Centres Some 40 calls per day basis) since 2009 and in St. Petersburg (on a subsidiaries – VTB Insurance, VTB Capital, and VTB Written enquiries quarterly basis) since April 2011. Each event is Registrar – participated in the meetings alongside Some 40 letters per month attended by 20–30 shareholders of the Bank. SCC members. 1. We
24 25 In 2012, it is planned to take a number of steps in answering any questions regarding brokerage and 1.7.3. Relations with Institutional Investors order to enhance the effectiveness of the custody services, as well as retail products and In 2011, viewing the improvement of the Shareholders Consultative Council. The Bank will services of the Group. Building a system for engagement with investors and financial literacy of its shareholders as continue to improve the Regulation on the SCC and improving the transparency of investor an important objective, VTB Bank jointly develop other internal policies regulating its At the same time, the Bank continued to improve the communications are among the key principles of with the Russian Union of Borrowers and activities. agenda of the workshops; presentations were VTB’s progressive development. In 2011, the Bank Depositors implemented an awareness tailored to specific interests and needs of individual continued active engagement with institutional raising project in this area. Regional Awareness raising workshops shareholders. In 2012, regional workshop for investors. The main achievement of the reporting workshops for shareholders were held in minority shareholders will be continued; according to period was successful arrangement of the sale of a eight cities (Ufa, Voronezh, Novosibirsk, In 2011, viewing the improvement of the financial the preliminary schedule, the events will be held in 10% stake in VTB Bank to Russian and foreign Volgograd, Krasnodar, Samara, Stavropol, literacy of its shareholders as an important nine cities. investors by the majority shareholder – the Russian St. Petersburg), with the total number of objective, VTB Bank jointly with the Russian Union state represented by the Federal Agency for State participants exceeding one thousand. At of Borrowers and Depositors continued to Development of new products and services for Property Management. The reporting period also saw the workshops, experts made presentations implement an awareness raising project in this area. shareholders an increase in the coverage of VTB activities by on a range of topics, including corporate Regional workshops for shareholders were held in analysts of the leading investment banks and governance at VTB Group, financial eight cities (Ufa, Voronezh, Novosibirsk, Volgograd, In 2011, in order to improve the loyalty of minority brokerage houses. The result of such an increase in performance of the Bank, personal finance Krasnodar, Samara, Stavropol, St. Petersburg), with shareholders of VTB Bank, the Group companies the transparency of external communications was management, ownership and management the total number of participants exceeding one continued to develop preferential products and better understanding of the Bank’s activities by of VTB shares, brokerage and custody thousand. At the workshops, experts made services targeted at them. analysts, eventually leading to a more positive services, as well as preferential products and presentations on a range of topics, including perception of VTB. services available to shareholders. corporate governance at VTB Group, financial In order to reduce costs to VTB shareholders wishing performance of the Bank, personal finance to transfer their shares between a custody account VTB’s system of communications with the investment management, ownership and management of VTB and the shareholder register, in 2011 VTB Registrar community remained generally unchanged compared One of the most important events in the field of shares, brokerage and custody services, as well as introduced preferential rates on share transfers to 2010. The main areas of activities in this field engagement with the investment community was the preferential products and services available to (without changing ownership) for VTB Bank include the organisation of and participation in Investor Day in Moscow. The event was attended by shareholders. The final part of regional workshop shareholders. They are charged RUB 200, while the investment conferences, personal and group 95 foreign investors and analysts. VTB was featured a videoconference with a member of VTB rate for shareholders of other companies is RUB meetings with investors, preparation of presentation represented by top executives of the Group: Andrey Bank Management Board. Over the year the 2,360. materials and annual reports, investor targeting, as Kostin, VTB Bank President -Chairman of the participants’ questions were answered by Vasily well as participation in the disclosure of information Management Board; Herbert Moos, VTB Bank CFO; Titov and Ekaterina Petelina. The shareholders Furthermore, VTB Insurance offers all VTB about the Group’s financial performance and Yuri Soloviev, First Deputy President- Chairman of the highly appreciated participation of senior executives shareholders and their family members a 15–20% development of a communications programme. Management Board; Ekaterina Petelina, member of in the events, as well as the opportunity to ask them discount on a range of voluntary insurance products, the Management Board; and Mikhail Zadornov, the most pressing questions and receive an including comprehensive and collision car insurance, In 2011, the number of meetings of top executives of VTB24 President-Chairman of the Management immediate answer. Representatives of VTB24 and extension of obligatory car liability insurance, VTB Group with investors increased substantially. Board. VTB Insurance also participated in the workshop property insurance, third-party liability insurance and Representatives of the Group’s management international travel medical insurance, as well as participated in 18 conferences for investors from Institutional investors are increasingly paying accident and illness insurance. Europe, North and South America, Asia and Pacific attention to corporate social responsibility of VTB. VTB Shareholder Relations Centres function Region, and in three roadshows, which involved a Over the year, VTB received a number of enquiries in the three cities where most of individual VTB24 provides preferential custody services to VTB series of meetings with investors and analysts in the from investment funds and analytical agencies shareholders live: Moscow, St. Petersburg and shareholders on a permanent basis. Those holding world’s largest financial capitals. Furthermore, VTB regarding its CSR performance and activities, Yekaterinburg. At these centres shareholders VTB shares in a custody account at VTB24 are not management actively participated in conference calls compliance with the Equator Principles, transparency can receive professional advice on issues charged for the service, unlike shareholders of other and personal meetings with investors. Overall, in in corporate governance, etc. In this context, social ranging from dividend payments and changes companies. 2011, the number of meetings with institutional reporting has become an effective instrument of in banking details to preferential products and investors reached 364 compared to 286 meetings in communicating material information to the services and the Bank’s strategy. In 2012, VTB will offer its shareholders new 2010. investment community. preferential products and services. Confident Progress 2. Business 27
2.1. Management Approach corporate banking, retail banking, business with financial institutions, credit risk management, brand The Group is characterised by a large scale of its and marketing communications, monitoring of loan operations, affecting the interests of a significant portfolios of subsidiary companies, security, and portion of citizens and businesses. When providing internal controls aimed at anti-money laundering and its banking and other financial services, VTB counter-terrorism financing. The responsibilities of recognises its impact on the socio-economic these commissions also include considering various development of Russia and other countries of issues related to the Group’s socially responsible operations. The economic and social well-being of its behaviour in the financial services market. customers directly affects the Group’s own financial well-being. Therefore the Group has identified a In order to ensure a common approach towards the number of priorities in the field of corporate social development of corporate and investment banking responsibility, which include the following: business and retail business of its subsidiary companies, the Group maintains a formal system of l supporting key economic sectors; internal management communications between subsidiary banks and functional expertise centres of l providing financial services to public authorities; the respective business lines. In particular, those communications involve: approval and oversight of l supporting the development of small business the functional and organisational structure and sector; appointments at subsidiary companies with regards to global business lines; monitoring of the l developing a line of socially significant retail implementation of plans approved by the respective products and services; commissions of the Group Management Committee; and support for the implementation of agreed l improving the accessibility of financial services; objectives in the form of providing necessary functional expertise. l improving the quality of customer service; In order to improve the effectiveness of the l ensuring the security of banking operations. management of the key areas of its business, VTB also has carried out meetings and training workshops To ensure the effective implementation of its 2010– for its subsidiaries. One such event was the working 2013 Development Strategy, the Group introduces meeting “Organisation of Credit Processes at VTB unified approaches, standards, and procedures in the Group: Development of Cross-Sales to Customers of key segments of its corporate and investment Subsidiary Banks”, attended by 80 managers of banking business and retail business across all subsidiary banks based in the CIS, Georgia, Asia, regions where the Group operates. Europe, as well as the Bank’s branches in India and China. Specialists of a number of functions, including Strategic management of the key business areas is the customer service, the credit, and the product carried out by the Group Management Committee. ones, and of the risk management division also took The Committee has a number of specialised part in the event. The meeting’s agenda included a commissions coordinating such business areas as broad range of issues dealing with the organisation of 2. Business
28 29 credit processes at subsidiary banks, and the the entire range of associated risks taken into bank conducts environmental screening of the of projects being implemented in the “Innovation promotion of cross-sales of VTB products and account. Relying on international best practice and project and assigns a risk category, which then City” and an opportunity to become an investor in the services. The event helped improve coordination considering the lessons of the crisis, the Bank has informs the decision on financing the project respective companies. The company will also between the Group companies and contributed to the been continually improving its credit risk assessment proposed and providing preferential loan terms. contribute its practical expertise in doing venture implementation of an effective model of key business methodology, expanding the scope of quantitative Depending on the risk category assigned, a borrower business in Russia to the partnership: it will processes across all VTB’s entities and regions where risk assessment methods, and developing stress may be required to provide necessary documents participate in expert committees, as well as in they operate. testing procedures. demonstrating its efforts on the minimisation of preparing and reviewing draft laws and the environmental risks, including the results of the State Foundation’s other initiatives for the improvement In making its lending decisions, the Bank is guided Environmental Expert Review, a report on of the regulatory framework. The Group’s companies 2.2. Supporting Key Economic by the considerations of economic feasibility and environmental protection activities, etc. also directly invest into innovation and high-tech Sectors also by the principles of social responsibility, taking companies. For example, VTB Capital has financed into account the importance of certain borrowers to Other banks of the Group also have similar a number of projects in the agricultural sector; VTB the national and regional economies, among other procedures in place. Furthermore, the Bank of North-West Regional Centre in 2011 supported an Being an effective agent of the government policy for factors. Moscow requires potential borrowers not to have alternative energy project. supporting the national economy, VTB actively overdue social payments as a necessary condition for contributes to the implementation of projects for the The Group’s subsidiary banks also pay particular getting a loan. 2.2.2. Power Sector modernisation of the economy and social sphere of attention to customer assessment in terms of the the country, mainly through providing loan financing economic, social, and environmental impacts of their 2.2.1. Technology Innovation Electric power infrastructure is an important factor of to the real sector and various investment activities. activities. For example, CJSC VTB Bank (Armenia) (VTB economic development and meeting everyday needs Armenia) carries out an environmental risk Supporting the development of innovative of millions of people. VTB Group companies have The financial crisis has highlighted the need to assessment when providing loans refinanced within technologies is a key condition of Russia’s socio- traditionally provided financial services to companies further improve the Bank’s risk assessment system the framework of programmes of the International economic development. Investment in innovation of the power sector. and the approach towards analysing profitability of Bank for Reconstruction and Development and the helps make the national economy more competitive various customer segments and business areas with World Bank. As part of the loan appraisal process, the and sustainable, reduce its dependence on extractive In particular, in 2011, VTB Bank supported projects of industries, and find new opportunities for improving the sector’s leading companies aimed at improving VTB Group loan portfolio by sector as of December 31, 2011, RUB billion the quality of life in the country. energy efficiency of the Russian economy and reliability of power supply. Furthermore, in the reporting period 700 619,6 16% VTB Capital is a leader of the venture capital industry the Group’s entities provided financing to regional in Russia and the CIS, keenly investing in technology generating, grid, and distribution companies. 600 530,7 14% companies. The company actively participates in 464,3 developing international cooperation in the field of The Bank also contributes to supporting power 500 12% 386,9 supporting technology innovation. In 2011, VTB engineering companies through providing guarantees 363,2 357 10% Capital signed a number of investment agreements to for construction projects of public district power 400 10% 9% finance the development of nanotechnology, an plants. 248,8 important area for innovation. The investments will 300 214,9 7% 6% be channelled into the development of alternative 2.2.3. Transport Infrastructure 145,7 200 119,2 energy sources, oil and gas industry, 4% 94,1 3% 69,5 76,1 telecommunications, biotechnology, electronic One of the most important conditions of developing 3% 58,0 2% 2% 100 2% industry, and environmental technology. Russia’s economy is availability of state-of-the-art and reliable transport infrastructure connecting 0 Furthermore, a cooperation agreement between VTB regional centres spaced far apart. Group companies Capital and Skolkovo Foundation aimed at supporting have traditionally financed projects for the Other innovation was signed in 2011. According to the development of transport infrastructure. Finance Metals Energy Chemical Transport Oil and gas Coal mining agreement, VTB Capital (CJSC VTB Capital Asset Construction and media Manufacturing Management) becomes a venture partner of the In 2011, the Bank signed a number of cooperation Government bodies Trade and commerce Food and agriculture Telecommunications Foundation, thus getting access to the database agreements with state corporations for joint 2. Business
30 31 implementation of infrastructure projects aimed at 2.2.5. Agriculture and Food Industry 2.3. Financial Services for Public actively participated in a number of projects and developing a network of high-speed motorways Authorities programmes. For example, as a financial operator of supporting the integration of Russia’s transport The development of agriculture and food industry the city’s System of Unified Information and network into the global transport system. is fundamental to Russia’s sustainable socio- Accounting Centres (an integrated utility billing economic development. The strengthening of the State and municipal authorities often face the need system), in 2011 the Bank of Moscow continued to Jointly with a number of state corporations and agroindustrial complex will help ensure food to mobilise extra-budgetary funds for financing their effectively manage financial flows in the public utility investment banks, VTB Capital participates in security of the country and facilitate job creation in investment projects and recurrent expenses. VTB has sector of Moscow. In 2011, the system on a monthly financing of the Western High-Speed Diameter rural areas. traditionally been a strategic financial partner of basis handled utility payments of over 3.4 million Project, a project for the construction of a toll public authorities, supporting the implementation of households and over 40 thousand corporate highway at St. Petersburg. The project will be Providing loan financing to agroindustrial socially significant municipal and regional projects. customers. The system participants include about a implemented through a public-private partnership businesses has long been an important area of thousand providers of public utility and related with the involvement of the city government, and the Group’s business. In particular, VTB Capital The Bank often wins open tenders for providing loan services, some 2.6 thousand managing companies, will become the largest project of such kind in sees high potential for developing agricultural financing to regional and municipal authorities. In and dozens of banks and payment systems collecting Russia. The company will provide loan financing for sector in Russia and the CIS. The company’s 2011, the Bank provided loans to regional or utility payments of household customers. Using its the construction of the central section of the objective is to become the leading professional municipal governments of the following entities: own funds, the Bank of Moscow financed the creation motorway. The project implementation will help institutional investor in Russia’s agroindustrial of an integrated billing system providing a platform substantially relieve traffic on arterial roads in the sector, which, according to estimates of VTB l the cities of Smolensk, Petropavlovsk-Kamchatsky, for cooperation between payment collection agents, city’s centre, provide high-speed access to major Capital’s senior executives, has sufficient Magadan, Kaliningrad, Yuzhno-Sakhalinsk, service providers, engineering services, and the city highways, and further develop the city’s transport competitive advantage to become the world’s Krasnoyarsk, Orel, Tambov, and Krasnodar; Department of Public Utility Services and Public infrastructure, integrating the Big Port of St. leading wheat exporter. Amenities. Petersburg and the Sea Passenger Terminal on the l the Kursk, Amur, Smolensk, Archangelsk, Volodga, Vasilyevsky Island into it. 2.2.6. Housing Construction Novgorod, Orel, Kostroma, Rostov, Voronezh Regions and Public Utility Sector and the Republic of Khakassia. 2.4. Supporting Small and Medium 2.2.4. Automotive Industry Business Development Affordable housing, well-developed social In 2011, VTB continued providing financial resources The development of Russia’s automotive industry and infrastructure, and quality housing and utilities to executive authorities of Russian regions and improvement of its competitiveness is directly related services are among urgent expectations of most municipalities. The Bank’s loans are typically used to Small Business Customers to strategic objectives of developing the national Russians and important factors of the improvement finance priority budget expenditures essential to economy. Russian car manufacturers faced serious of overall quality of life in the country. Group regional social stability — salaries, social payments, The development of small business sector in Russia difficulties during the recent recession, which led to a companies have financed projects aimed at the payments for utility services, financing budget deficit, is an essential pre-requisite for addressing a range of serious risk of massive employee layoffs. In 2011, the development of affordable housing market, and repayment of regional or municipal debt. complex social and economic issues, involving a Group’s companies financed numerous projects aimed construction of social infrastructure facilities, and significant portion of the currently unemployed at supporting the Russian automotive industry. the reform and modernisation of the Russian public In 2011, the Bank signed cooperation agreements with workforce into entrepreneurship, refocusing credit utility sector. the governments of the Krasnoyarsk and Kirov regions, and tax policies toward supporting the development the Republic of Tatarstan, and the city of Veliky of productive sectors, transition to an innovation- Development of Khabarovsk regional aviation hub In 2011, the Bank signed a number of agreements Novgorod. The agreements provide a framework for based economic development model, diversifying the aimed at supporting housing construction and effective collaboration on addressing regional and economy and maintaining its stability. In May 2011, the Bank increased letter of credit limit for the developing affordable housing market through local socio-economic objectives, and implementing project of the largest aviation hub in the Russian Far East financing the construction of housing, priority federal and regional projects and programmes. Servicing small business customers is a strategic in terms of domestic and international passenger services. components of engineering and social The agreements also provide for a range of actions priority to retail subsidiaries of the Group, including The company implementing the project was provided loan infrastructure, transport infrastructure, industrial aimed at introducing state-of-the-art banking services, VTB24, the Bank of Moscow, TransCreditBank, as well financing and guarantees within the established limit. It parks, technology parks and business incubators, developing the securities market, creating a positive as the Group’s banks in the CIS and Georgia. is planned to convert the existing Khabarovsk airport into and, ultimately, at creating a favourable living image of regions, and attracting investors. the leading regional aviation hub in terms of the quality of environment for citizens and the society, as well VTB24 is one of Russia’s top three lenders to small passenger and cargo services. as safe and comfortable living conditions for all Within the framework of its cooperation with the enterprises. In 2011, the bank’s portfolio of loans to social groups. Moscow City Government, the Bank of Moscow has small businesses amounted to RUB 113 billion; the 2. Business
32 33 number of current accounts of small enterprises and virtually any business purpose: from replenishment of The Group companies actively participate in individual entrepreneurs exceeded 200 thousand. Supporting participation of small and medium working capital, acquisition of equipment and real specialised conferences and forums dedicated to VTB24 was placed the second in the national ranking businesses in government procurement estate, their modernisation or repairs, to the small business development. In 2011, VTB24 was a of lenders to small business by Expert RA, based on refinancing of loans provided by other banks. Any strategic partner of the 10th National Microfinance the results of a survey of banks and a series of The most significant achievement of the Bank assets, including up to 100% of merchandise Conference titled New Decade, New Objectives: in-depth interviews with representatives of small and of Moscow in the small and medium business inventory were accepted as collateral. Over 960 small Regulation as a Development Driver and of the Small medium business lending market. customer segment is a joint project with the businesses and individual entrepreneurs took and Medium Business Days in Russia, business United Electronic Trading Venue (UETV), the advantage of the special offer, obtaining loans worth a venues for meetings and discussions between According to the strategy of the Bank of Moscow, largest national electronic trading operator. total of RUB 3,362 million. Responding to the growing entrepreneurs, representatives of executive and adopted in 2011 and aligned with the overall strategy Within the framework of the project, the bank demand of small businesses for financial services, in legislative authorities, small business support of VTB Group, one of the bank’s objectives is to has created a unique system for government 2011, CJSC Bank VTB (Belarus) (VTB Belarus) created a entities, and customers. develop its customer base among small enterprises procurement tenders and auctions. dedicated Small Business Development Department, with an annual revenue not exceeding RUB 300 which started developing new banking programmes Medium Business Customers million. To the bank, the objective of the UETV project and products in order to meet the demands of small was to create conditions ensuring equal access businesses, operating in the production, trade, and VTB Bank and its subsidiaries provide banking At present, there are over 300 thousand small and of both large companies and small businesses services sectors, to the maximum extent possible. As a services to medium business customers within the medium businesses in Moscow, which collectively to government procurement. To that end, the result, in 2011, the overall value of loans to small and framework of corporate and investment banking account for one quarter of the city’s economy and bank has implemented a unique online lending medium businesses (as denominated in the national global business line. VTB Bank’s branches actively provide over 2 million jobs. The Bank of Moscow programme. Collateral-free loans, which are currency) increased more than 7 times, while the provide loans to agricultural enterprises and food plays an important role of the key financial partner of provided within the shortest possible timeframe volume of non-performing loans decreased by more industries, healthcare and educational institutions, such companies, offering them the most attractive on the basis of an online form available at than 55%. and offer public utilities companies banking services terms of financing their business development. In the UETV website, help medium and small tailored to their needs. VTB has traditionally 2011, the Bank of Moscow received a special award businesses secure government contracts Group companies have implemented projects to supported medium businesses, which account for a “For a High Role of Customer Interests in the Bank’s and create new jobs. Over the year 2011, the improve the quality of small business customer significant share of regional economies in Russia. System of Priorities” from the Foundation for number of small and medium businesses service. For example, in 2011 VTB24 has introduced a Seeking to further develop its relations with this Supporting Lending to Moscow’s Small Business. At participating in electronic trading on the UETV modern model of servicing small business customers. customer group, the Bank continuously works to the end of 2011, the Bank of Moscow’s portfolio of increased four times, while the number of their Each customer has been assigned a personal optimise the pricing of its services, expand and loans to small businesses amounted to RUB 11.5 auction bids increased six times. manager, who offers a customised package of improve its product line, and enhance the quality of billion. In 2012, the bank plans to double the volume banking products and services tailored to the nature corporate customer service. of loans to small business customers . and needs of the customer’s business. Further developing its product line, in 2011, VTB24 Following their strategy of developing customer started to systematically offer a complete range of In addition to directly providing financial services to relations in the small business customer segment, in banking guarantees, including tender guarantee, small enterprises, Group companies support Cooperation to support small businesses 2011, the Group companies continued its efforts on guarantee for state and municipal contracts, advance initiatives of the business community and the reducing interest rates, expanding the range of payment guarantee, contract completion guarantee, government in this field. In particular, Nadezhda In 2011, VTB24 signed a number of cooperation agreements in the products and services, and improving the quality of payment guarantee, customs guarantee etc. The Karisalova, VTB24 Vice President, became a new field of small business support with regional authorities, including customer service in that segment. guarantees are provided against property or money chair of the Private Entrepreneurship and Small and the government of the Voronezh Region (to finance over a thousand as collateral, or without collateral. Medium Business Development Committee of the small businesses in the region), the Foundation for Small Business For example, in 2011, VTB24 has reduced interest Russian Chamber of Commerce and Industry. The Development and Support of the Republic of Bashkortostan, and the rates on all loan products targeting small businesses Another important area of VTB24’s activities in 2011 Committee plans to collaborate with federal and State Foundation for Small Business Support of the Voronezh Region. on average by 2–3 percentage points. The annual was developing offerings specifically targeting small regional executive authorities on expanding According to the agreements, VTB24 will offer small businesses of interest rate depends on the loan amount and period, entrepreneurs and supporting development of their government support of small and medium those regions its loan products, while the foundations will provide and starts from 10% for Rouble loans and from 9% businesses. One such offering was “As Simple as businesses, and to effectively use significant guarantees of up to 70% of the loan amount. This will help small for foreign currency loans. VTB24 has also 2х2”, which allowed small business and individual potential of regional Chambers of Commerce and enterprises obtain loans from the bank, while providing collateral for substantially decreased its up-front fee for providing entrepreneurs to get a loan worth up to RUB 60 million Industry and entrepreneur associations for facilitating only a part of the amount. a loan, with the lower boundary currently being 0.3%. at a minimum fixed rate. The loans were provided for small business development. 2. Business
34 35 Over 2011, the branch network of VTB Bank establishment and management of corporate pension proving identity. Thus potential borrowers are partial mortgage repayment. Only a few months after provided loans worth a total of RUB 129.5 billion to programmes. The fund has also started to provide relieved of the need to produce an income certificate, launching the programme, the bank has expanded it medium business customers; the number of consultations on the optimisation of tax accounting a copy of employment records, a proof of assets or to include not only finished housing, but also borrowers in this customer segment increased from in the implementation of corporate pension education, and other documents required under apartments at the construction stage. 1.5 to 1.8 thousand, while VTB Bank’s share of the programmes. These measures help companies in traditional mortgage programmes. Any customer able regional lending market in this segment grew from different economic sectors introduce state-of-the-art to provide a down payment of at least 50% of the At the end of 2011, VTB24 also started the 5.6 to 5.8%. employee motivation programmes. respective property price is eligible for the implementation of a mortgage programme for military programme regardless of whether he or she is an service members — participants of the government- Changes to the pricing approaches, made in 2011, employee or an entrepreneur. It is critically important funded mortgage system. This programme is helped the Bank offer competitive interest rates on 2.5. Socially Significant Retail that the programme does not imply any additional intended to contribute to the addressing of an corporate deposits. By offering attractive terms to Banking Products and Services fees or costs: the rates and service fees are not important social issue — providing military service medium business customers, VTB Bank was able to different from those under VTB24’s other mortgage members with comfortable housing. The programme increase its deposit portfolio in this segment by 11% programmes. The programme is available to will allow military service members to acquire — to RUB 38 billion. The year 2011 saw an increase in the number of customers of all categories buying housing in the housing virtually without using their own funds. The Group subsidiaries providing retail banking services. existing home market. The maximum loan period is down payment and further payments on the loan will The Group companies also contribute to the At present, they include VTB24, the Bank of Moscow, 20 years, while the maximum loan amount for be subsidised by the government transferring funds implementation of the overall medium business TransCreditBank, as well as the Group’s subsidiary Moscow, the Moscow Region, and St. Petersburg is to the personal account of a service member. support policy. For example, in 2011 PJSC VTB Bank banks in Armenia, Georgia, Kazakhstan, Ukraine, RUB 15 million, for other regions — RUB 8 million. Borrowers wishing to buy more expensive housing (Ukraine) (hereinafter, VTB Ukraine) has introduced a Azerbaijan, Belarus, France, and Germany. are able to add their own funds on top of the state- new procedure for approving risk-free transactions of Furthermore, since 2011, VTB24 has abolished early funded down payment. The programme provides medium business customers. According to the new Being a market leader in retail lending, VTB seeks to repayment penalties and restrictions for its mortgage loans for buying apartments in the existing home procedure, transactions are approved by regional meet the needs of its customers for loan products to products. Now its borrowers are able to fully or market. The annual interest rate starts at 9% (in directorates; at the head office level, only consent the maximum extent possible, focusing on such areas partially repay the loan ahead of schedule without Roubles), the down payment — at 20%. No from the credit risks management department is as mortgage lending, educational loans, and lending any penalty, beginning from the first month of the commission fee is charged for the loan application required. This measure helped substantially reduce on preferential terms to vulnerable social groups. loan period. This change has affected all mortgage review. An important feature of the programme is that the approval time for medium business customers. products of the bank. it allows participants to buy a home in any region Development of Mortgage Programmes where the bank operates, regardless of where they VTB Armenia has developed and introduced a whole In the reporting year, VTB24 continued the are stationed and the length of their service. range of new loan and deposit products, revised In 2011, VTB24 continuously implemented a development of special mortgage products offered on terms and conditions of lending to medium business programme for developing its mortgage services, preferential terms. For example, since March 16, Other Socially Significant Banking Products customers, and optimised the procedure for making them more affordable and attractive for the 2011 the bank has been implementing the unique determining interest rates on deposits. bank’s customers. By the end of the reporting year, programme “Mortgage + Maternity Capital” targeting VTB24 also took steps to improve the affordability of the bank’s mortgage portfolio (including KIT Finance’s young families. A distinct feature of the programme is MBA and EMBA programmes at the Moscow School of Between April 12 and May 12, 2011, VTB Georgia mortgage portfolio acquired by VTB24) amounted to the ability to obtain a mortgage loan without a down Management Skolkovo. In 2011, the bank launched a carried out a campaign of providing medium business over RUB 246 billion, or 40% more than at the end of payment, with all the other loan parameters targeted programme aimed at Skolkovo MBA loans in the national and foreign currency at the 2010. The overall sales of the bank’s mortgage remaining unchanged. The customer group eligible students, which offers them special lending terms: best-in-market fixed rate of 12%. The bank products over 2011 reached RUB 80 billion. The for the programme are young families with children the annual interest rate — between 10 and 14%, the guaranteed the fixed rate over the entire loan period. bank’s success in this area was acknowledged by holding a Maternity (Family) Capital Certificate issued minimum loan amount — RUB 750 thousand, the Within the framework of the campaign, companies independent experts: VTB24 won RREF AWARDS 2011 by the government. The bank accepts maternity maximum amount — RUB 3.6 million. The loan period with annual sales from USD 1 million to 3.5 million in the category Mortgage of the Year. capital funds as a down payment. Thus, depending is between 3 and 5 years. This is one of the most were offered loans worth USD 150 – 500 thousand on the housing price, borrowers are able to obtain a attractive offerings in the Russian market of with a period up to 7 years. An important achievement of VTB24 was launching of mortgage loan without paying from their own funds. educational loans. VTB24’s product is characterised a new mortgage programme, Beat the Formalities, in After completing a mortgage transaction and by a lower interest rate compared to a general VTB Pension Fund, the Group’s non-state pension 2011. Only two documents are required of a obtaining a loan, the borrower notifies the respective purpose loan; in addition, a borrower paying the fund, offers all companies, regardless of their customer applying for a loan under the programme: branch of the Pension Fund of the Russian Federation, entire tuition fee in one instalment receives a headcount and ownership, services for the the Russian passport and any other document which transfers the maternity funds to the bank as discount of 10% off the fee. 2. Business
36 37 Other subsidiaries of the Group also offer their VTB Group’s international network, which includes VTB24 makes it possible for any user to find the customers socially significant banking products. For over 30 banks and financial companies in 19 nearest ATM and obtain information on its operating Muscovite’s Social Card example, in order to support public servants, in countries of Europe, Asia, and Africa, is unique to a hours, get access to current exchange rates and 2011, VTB Insurance introduced a programme of Russian banking group. Within Russia, VTB is precious metal prices. By the end of 2011, the The Bank of Moscow, within the framework of its insurance on preferential terms aimed at the servants represented in 73 regions of the country. VTB24 has number of customers who chose Mobile Bank VTB24 joint project with the Moscow City Government, of bodies under the Ministry of Internal Affairs. The expanded its branch network to 676 offices in 69 as an instrument for managing their finance exceeded the Moscow Subway, the Moscow Social Security Bank of Moscow, VTB Armenia, and VTB Ukraine offer Russian regions, making its services accessible to 35 thousand. Department, the Moscow Mandatory Health preferential deposit conditions for pensioners. The 72% of Russia’s urban population. The regional Insurance Fund, and the Moscow Regional interest rate on such deposits is equal to the network of TransCreditBank includes over 280 outlets In 2011, VTB continued to improve its remote Railway, issues the Muscovite’s Social Card for maximum available rate across all the bank’s retail based in 190 cities and communities of the Russian services for corporate customers – Internet-Client pensioners and other citizens eligible for social deposit products. VTB Ukraine also offers pensioners Federation. The Bank of Moscow develops its branch and Bank-Client. In particular, now a customer is benefits. The social card is a plastic card with a below 65 years of age collateral-free cash loans of up network mainly in the capital region, and 141 of its able to use both services, which improves the magnetic stripe and a contactless chip, which to UAH 50 thousand. All a pensioner needs to do in 309 outlets are based in Moscow and the Moscow accessibility of remote banking in situations when combines the functions of a debit card and an order to obtain such a loan is to provide his or her Region. Furthermore, banking services to retail customer’s information security policy restricts the ID card. The card can be used as a regular bank passport, a pension code, and a certificate of pension customers are provided at 474 combined post and use of the Internet-Client service for banking card to withdraw cash from ATMs or at service for the last six months. banking offices. operations. In 2011, VTB has introduced a new outlets and to pay for goods and services. At service, Remote Acceptance of Payment Documents the same time the card provides its holder with Jointly with the Moscow City Portal of Government The Group works to make its products and services by a Third Party, which allows customers with a large access to various social benefits, including Services, the Bank of Moscow has implemented the available at the time most convenient to its branch network, holding companies and third services of the Moscow Subway, other means of functionality allowing users to pay utility bills from customers. One step in that direction was a pilot parties to authorise payments of their regional public transit, and the Moscow Regional Railway their personal account at the portal. Retail customers project to extend working hours of VTB24’s customer branches and/or subsidiaries, thus ensuring at subsidised rates. of the Bank of Moscow are able to pay for utility service outlets to 7 days a week, launched in centralised control over financial flows in real time. services using remote banking services (through an Moscow, St. Petersburg, Yekaterinburg, and Using new remote services, the central bodies of ATM or a web-based client) without commission fees, Novosibirsk in 2011. The lessons learned during the such organisations are able to obtain timely professional skills and knowledge, business style which is important to vulnerable social groups. Over pilot project will be used for introducing the new information about the status of accounts of their and workplace conduct, as well as personnel 2011, the number of the bank’s customers using web working schedule in other Russian cities. It is also subsidiaries, affiliated entities, and branches, and motivation and training programmes and banking services to pay their utility bills increased worth mentioning that VTB24 has developed online automatically oversee their payments. This service monitoring of customer satisfaction with the three times. Furthermore, the bank provides services that allow customers to submit an helps corporate customers optimise their financial services provided. In order to ensure additional centralised access to utility billing information for all application for a cash loan, a car loan, or a mortgage flows, use funds more efficiently, and reduce oversight of the quality of customer service at the Moscow residents. The Bank of Moscow also has loan via the bank’s website. Customers may provide management costs. Group’s large subsidiaries, positions of quality made it possible for its customers to make donations all the necessary documents during the signing of a supervisors were introduced at the Bank’s to the “Supporting Children and Families in Difficult loan contract after the approval of their online The Bank has continuously developed remote branches and additional offices. Life Situations” Charitable Foundation of the Central application by the bank. banking services for corporate customers of foreign Federal District without commission fees. branches and banks of VTB Group. In particular, in VTB strives to ensure a high level of customer service In addition to the extension of its branch and ATM 2011 the Bank’s Shanghai branch launched a remote at all Group subsidiaries. In order to maintain VTB’s networks, VTB continues to improve its remote banking system tailored to the needs of the local common standards of corporate customer service, in 2.6. Accessibility of Banking banking services, adding new functionality. In 2011, market and Chinese legislation. 2011 two customer service units focused on major Services VTB24 released Mobile Bank VTB24, a banking customers were created within the framework of application available on major mobile platforms – corporate and investment banking business line. One iOS (iPhone) and Android. The application allows 2.7. Improving Service Quality unit is focused on customers in the public and Active development of VTB’s branch network in users of the Telebank and Teleinfo systems to track defence sectors, while the other one works with Russia and abroad, improvement of remote banking the state of their accounts, cards, loans, and Improving the quality of customer service is an customers in market-based sectors. The new service services, and creation of the Group’s integrated ATM deposits. Using the application, they can pay to important strategic objective of the Group. The model, differentiating customers on the basis of their network are among the key factors supporting the mobile and Internet service providers, pay utility bills, integrated service quality management system, sector, helped improve the quality of sectoral accessibility of banking services to the broad public transfer funds to another VTB24 customer or another implemented across the entire Group, includes a expertise and better tailor product offerings to the and small business customers even in remote areas. bank, and manage their deposits. Mobile Bank set of rules and requirements regarding employee needs of specific customers. 2. Business
38 39 Corporate and Investment Banking conduct exchange operations at the best available pre-approved loans, are specifically designed for the maintain statistics for all forms of customer rate without paying service fees for account opening particular customer, who may leave his or her contact interaction and promptly respond to potential issues. In 2011, the Bank has introduced new standardised and maintenance. The Bank also continued to details for faster preparation of necessary documents. credit procedures. The main objective of new expand the functionality of the Customer’s Processing In May 2011, specialists of the Bank’s Corporate procedures is to reduce time to decision on limits and System (a system for centralised management of Customer Satisfaction Monitoring and Development and Strategy Department carried out a transactions involving credit risk, while maintaining the treasury functions of large corporate customers). Complaint Handling survey of client managers and a number of large and high risk assessment standards characteristic to VTB. To Other new products made available to VTB’s medium business customers in order to evaluate the effectively address this objective, the Bank has created corporate customers include Corporate Minimum As part of its efforts to improve customer service quality of the Bank’s transaction banking services a centralised Credit Department responsible for the Balance and Corporate Monthly Average Balance. quality, VTB continues building an integrated system and identify opportunities for their improvement. analysis and structuring of credit transactions at the These products allow a group of companies serviced for monitoring of customer satisfaction with the Based on the comments and suggestions offered head office, and for the organisation and improvement by the Bank to receive higher interest rates on the quality of service. The main monitoring instruments during the interviews, a number of actions to improve of credit processes at the Bank’s branches. aggregate balance of all accounts of the group and traditionally used by the Bank include telephone transaction services were initiated. offset overdrafts on individual accounts using other surveys, auditing offices against customer service In order to improve the quality of corporate customer accounts, thus managing its funds more efficiently. standards, and evaluation of the service quality using The most effective channel of getting feedback from service, in 2011 the Bank implemented a range of interactive voice response (IVR) systems. corporate customers is their immediate contacts with measures aimed at expanding its product line and Retail Banking Furthermore, many subsidiaries of the Group contract client managers and specialists offering loan and streamlining existing processes and systems. In specialised agencies to evaluate the customer transaction banking products in the process of sales. particular, it simplified procedures for opening new In 2011, VTB24 made major efforts to improve the service quality using the “mystery shopper” Call centre specialists conduct telephone surveys of accounts and placing funds on deposit for all quality of retail customer service. Modernisation of 8 technique. Based on the monitoring results, action customers closing their accounts with the Bank in corporate customers. The line of corporate offices of the bank and renovation of 139 offices was plans to rectify the non-conformances identified are order to identify the causes of their dissatisfaction. commission-based products was expanded with new carried out; 14 offices moved to more spacious developed and respective cost estimates are Two such surveys were carried in 2011. VTB’s branches service plans introduced and targeting various premises better accessible to customers. Air produced; the implementation of the action plans is often organise seminars for their customers (in some customer groups. In 2011, the Bank also offered a conditioning and lighting systems were modernised subject to continuous oversight. cases – using videoconferencing technology), where new unique service – Currency Exchange without at all offices; waiting areas were provided with more they are able to voice suggestions on various aspects Opening an Account – to companies participating in comfortable chairs. Furthermore, 60 largest offices VTB receives customer complaints through a broad of their interaction with the Bank. The Group also international trade. The service allows a company to were equipped with freely available wireless Internet range of channels, using the call centre, written explores opportunities for conducting regular customer access points. messages sent to the Bank’s regular mail and e-mail surveys using the existing remote banking system. addresses, the Bank’s website, standardised VTB’s integrated ATM network In 2011, VTB24 was able to significantly reduce the customer feedback books, available at each service Customer Satisfaction Studies timing of a number of the most popular services at its outlet, and such social networks as Facebook and In 2011, VTB created an integrated international ATM offices. This allowed the bank to reduce queues Twitter. The Bank on a regular basis carries out an VTB24 took part in an independent survey of network, which includes VTB’s units in seven countries where two-fold: at the end of 2011, the share of customers analysis of customer communications, using its customer satisfaction in Russia’s banking sector in the Bank operates. Now holders of VTB’s plastic cards in waiting in line over 10 minutes was as low as 13%. results in developing proposals for streamlining 2011, carried out by EPSI Sweden. As a result, the Russia, Ukraine, Belarus, Georgia, Kazakhstan, Armenia, and Over the reporting year, the number of complaints business processes. bank came out the leader in terms of customer Azerbaijan are able to withdraw cash at the Bank’s standard related to queues decreased by 56%. satisfaction and became the only bank demonstrating rates and manage their own and borrowed funds regardless In 2011, the Bank has introduced an integrated an improvement in the customer satisfaction index of the country they are in. At the end of 2011, the network In order to offer its customers the broadest possible process for handling communications from corporate compared to the previous year. Over the same period, included over 6000 ATMs. This privilege is available to the range of relevant products, VTB24 has launched a customers based on the CRM system. The units the average customer satisfaction index in the holders of VISA and MasterCard debit and credit cards issued system of personalised offerings through its ATM immediately interacting with customers add to the Russian banking industry decreased by 1.1%. by VTB24, VTB Azerbaijan, VTB Armenia, VTB Belarus, VTB network. The new technology was developed by the system information about past and planned Georgia, VTB Kazakhstan, and VTB Ukraine. In order to make bank’s department responsible for maintaining the meetings, calls, other contacts and issues arising in Furthermore, in 2011 VTB24 once again became the it easier for customers to use VTB’s ATMs, Multicarta Ltd. has Customer Relationship Management (CRM) System the process of customer interaction. In order to track leader of the quality of service ranking of retail banks developed a special geolocation service allowing to promptly jointly with Multicarta Ltd. After entering the PIN code, the effectiveness of customer interaction and by the Retail Finance magazine. The ranking was locate the nearest ATMs of the integrated network on the a user of the bank’s ATM is offered a number of such continuously improve the quality of services, a based on a questionnaire survey of 12 thousand company’s website: http://www.multicarta.ru/vtb/map. products as cash loans, car loans, and credit cards on special management reporting form was created on respondents and over 500 “mystery shopper” favourable terms. The offerings, which may include the basis of the CRM system. This allows the Bank to evaluations of banks’ service outlets. Open Horizons 3. Team 41
3.1. Management Approach evaluating the performance of HR departments of the Group subsidiaries. Employees are the Group’s key asset enabling it to achieve the highest results. Therefore VTB views Personnel Profile investment in the personnel as investment in the future, efficiency, and sustainability of its business. In 2011, the number of the Group’s employees substantially increased, partially as a result of The Group’s main goal in the field of HR management acquiring new assets, reaching 67,912 persons at the is to build a team of highly motivated, loyal and end of the year, or over 16 thousand more compared competent employees. To that end, VTB actively works to the previous year. The Group’s largest subsidiaries on the attraction and development of employees, in terms of headcount are VTB24 (21,915 persons), provides for competitive remuneration and social the Bank of Moscow (10,788 persons), and security of its employees, strives to maintain a TransCreditBank (7,814 persons). common corporate culture, ensures occupational health and safety, and observes employee rights. The Group strives to ensure the maximum possible adaptation and integration of staff of the newly acquired The unit responsible for HR management at the Group companies into the VTB team. In 2011, VTB reduced level is the respective coordination commission of the staff turnover: the median value across the Group Group Management Committee. The commission’s companies was 10.8% as compared to 11.6% in 2010. objectives include ensuring effective development of HR management systems at subsidiary companies and To ensure the most effective and successful business defining procedures for practical interaction between development driven by both the transfer of expertise the Group’s entities on the issues related to HR between generations and the potential of young management. The main document defining principles, employees, the Group companies maintain an approaches, forms and methods of personnel optimal age balance among their workforce. In 2011, management is the VTB Group HR Management the median employee age was 36.6. Concept adopted in 2010. Guided by the Concept, in 2011, the Group’s entities took actions to standardise their HR management processes and improve the 3.2. Personnel Attraction respective management systems. The main objective of the measures was to ensure the most efficient use 3.2.1. Personnel Selection Practices of the outcomes of employees’ work for achieving strategic goals of VTB Group, while meeting personal To ensure the successful implementation of its needs, interests, and expectations of employees. 2010 – 2013 Strategy, the Group strives to fill vacancies with highly skilled professionals. The Group To have a complete and up-to-date picture of the has been developing and implementing instruments state and the development level of HR management aimed at improving the effectiveness of employee systems at the Group companies, the Bank carries selection. For example, in 2011, the Group started to out continuous monitoring and oversight of the build an external candidate pool – a database of respective activities by collecting regular reports, senior and middle managers and highly skilled requesting additional information as necessary, and specialists capable of applying best international and 3. Team
42 Headcount as of December 31, 2011 Average employee age breakdown across VTB Group Breakdown of VTB Group personnel by gender, 43 domestic practices in such areas as corporate, companies, as of December 31, 2011 as of December 31, 2011 investment, and retail banking, finance, information technology, risk management, etc. The external candidate pool comprises both Russian specialists 6% 9% and foreign Russian-speaking professionals working at 19% international banks and financial companies. Another 13% 31% method of attracting external talent used by VTB Group 35% is a dedicated career portal – www.vtb-career.com. 1%
The Group’s corporate and investment banking team in 2011 was strengthened with professionals having experience of working at Russian and international financial institutions, and in foreign countries.
56% 69% To support the energetic development of the Group’s retail business, a large number of senior and middle 61% managers, as well as line staff were recruited into this business line. In the reporting period, VTB24, the leader of the Group’s retail business, developed and JSC VTB Bank Average age of 31–35 Men introduced a number of new instruments to improve the Subsidiary banks in Russia Average age of 35–40 Women effectiveness of staff selection, including standardised Subsidiary banks in Europe, Asia, and Africa Average age of 40–45 requirements for candidates and assessment tools. The Subsidiary banks in the CIS and Georgia bank also designed and delivered a training event for Other subsidiary companies managers to help them conduct effective job interviews.
Despite active searching for external candidates, the Placement Fair and get their questions answered by Composition of VTB Bank management bodies by gender and age, Group gives priority to its own employees when filling Bank experts. This event has traditionally been as of December 31, 2011 vacancies. The Group effectively implements a job popular among university students. The programme rotation process with particular emphasis on the of the 2011 Open Days was designed so as to Composition of the VTB Bank Management Board Composition of the VTB Bank Supervisory Council rotation of senior and mid-level managers and highly facilitate two-way communication between the by gender and age, as of December 31, 2011 by gender and age, as of December 31, 2011 skilled specialists, both within Russia and between students and potential employers. assets based in different countries. 6 9 The Group companies have an annual work 5 8 5 8 3.2.2. Attracting Young Specialists placement programme, which allows students to get 7 involved into real business processes related to 4 6 The Group pays serious attention to selecting young customer service, product lines, handling source 335 3 specialists. Entry-level vacancies are typically filled documents at credit departments, as well as financial 4 3 with university students and recent graduates. One and banking reporting. Thus, during their placement 2 3 method of engaging with prospective young the students acquire relevant skills, learning about 2 1 candidates are Open Days conducted by the Bank various aspects of the Bank’s activities and state-of- 1 since 2007. the-art banking technologies. In 2011, over 2 0 0 0 0 0 thousand students received work placements at the 31–50 51 or over 31–50 51 or over These events allow young people to obtain Group companies, with VTB24 accommodating more information about the Bank and its activities, learn than a thousand of them. VTB24 was placed sixth in Men Men about work placements with the Group, meet VTB the Perfect Employer ranking based on the results of Women Women Bank executives and employees, take part in a Work a student survey by the company Universum. 3. Team
44 45 In 2011, VTB Capital successfully launched Elevate and which have been systematically built over the last few (UETV). In addition, VTB continued to develop skills of its which, in addition to their core activities, provide Fixed Term Analyst (FTA), two development programmes years. In addition to external trainers and consultants, IT staff in managing CISCO equipment – a critical training to VTB staff in the respective regions. aimed at attracting and selecting young specialists, corporate trainings are delivered by the Group’s own component of the Bank’s networks. interested in an investment banking career, for work and specialists having substantial expertise in various At present, VTB has nine RTCs based in Vladimir, work placements at Moscow and London offices of VTB in business functions. These include VTB’s best client In 2011, VTB Bank implemented a project to train its Voronezh, Yekaterinburg, Krasnodar, Krasnoyarsk, Nizhny 2012. The company received over 2,500 applications for managers having the status of corporate trainers, leading specialists at foreign financial institutions. Novgorod, Samara, St. Petersburg, and Khabarovsk. RTCs participation in the programmes from all over the world. graduates and students of VTB Corporate University, Between May and October 2011, the Bank’s key experts provide training on their own premises (between three As a result of a multi-level selection process designed to experienced specialists of various business units. visited such leading international banks as BNY Mellon, and five events per quarter), deliver training workshops, identify the most talented university students and Citibank, Deutsche Bank, Commerzbank, Societe and support distance learning courses and professional graduates, 14 persons were enrolled for the Elevate The main areas of corporate training at VTB Group Generale, BNP Paribas to study the best practices of the testing of employees. RTCs not only play an essential role programme, and 45 persons – for the FTA programme. include functional training intended to enable global banking sector and to be able to use them for in the corporate training system, but also provide a The programmes will open with an introductory course by employees to effectively perform their job duties, achieving VTB’s strategic objectives. The main topics platform for effective experience sharing. VTB Capital. Then skill development trainings will be held training in specific business processes, products, discussed during the visits included risk management, in London. The Elevate programme includes four and technologies, developing of general business credit procedures, transaction banking, and information Corporate University rotations (each 12 weeks long), during which participants productivity skills intended to ensure the quality of technology. The Bank employees also participated in will work at different business units of VTB Capital. The corporate business practices, and of management short-term professional seminars, trainings, and The central corporate training facility for senior and duration of the FTA programme is 2 months in London competencies to support the creation of the conferences organised by world-renowned financial mid-level managers of VTB Group is the Corporate and up to 12 months in Moscow. integrated corporate management system. institutions and training organisations. University. The Rector of the Corporate University is Andrey Kostin, VTB Bank President-Chairman of the In addition to work placements and skill development The Group identifies staff training and development In 2011, VTB24 delivered a training programme titled Management Board. The Corporate University courses programmes, VTB Group supports students during their needs on the basis of performance analysis and key Flawless Service to heads of the bank’s additional are taught by senior VTB executives, professors and university studies. The Group has traditionally supported performance indicators reflecting the implementation offices. Initially the participants were invited to identify teachers from Moscow universities, business trainers the most gifted students of economic universities of of business objectives. Training needs of individual specific features of flawless service; than they were and consultants, as well as highly-skilled practitioners Moscow and St. Petersburg, awarding corporate employees are determined on the basis of both formal trained to communicate the respective principles to representing various areas of the Group’s business. scholarship to them. VTB also provides support to foreign assessment procedures – questionnaires, professional their co-workers and involve them into creating a students, financing the education of students from testing – and expert judgement by employee flawless service culture at their offices. Furthermore, Since its creation in 2005, the Corporate University has Angola, Vietnam, India, China, and Namibia at the supervisors and HR specialists. This approach helps VTB24 has developed a two-year candidate pool delivered six training programmes, aimed at building Financial University under the Russian Government. timely identify employee training needs, thus training and development programme, which includes management capacity in the areas essential to the Group’s improving the effectiveness of corporate training. leadership development trainings, master classes and business objectives. For example, the Energy of For more details about VTB’s support to higher meetings with business leaders, four Corporate MBA Leadership programme delivered in 2010 – 2011 to educational institutions and the development of Corporate Training Programmes modules and the ProBank business simulation. The participants selected on a competitive basis was aimed at professional education in Russia, see section Social programme aimed at developing leadership and building additional management resources for the Projects of chapter Society. The amount, areas, and methods of training at the management competencies is linked to actual development of transaction banking and transformation of Bank and the Group subsidiaries depend on strategic management processes within the bank and tailored corporate and investment banking business. The business priorities of the respective company, the to the specifics of retail banking. Corporate University Club, a body bringing together 3.3. Employee Development number and profile of employees, and identified University alumni and students, continued its activities in Opportunities training needs. Nevertheless, all corporate training In 2011, TransCreditBank carried out large-scale 2011. The Club’s objectives include sharing management programmes are delivered in accordance with the training of front office employees across its branch experience and skills, supporting VTB’s business projects, common corporate standards of VTB Group. network in such areas as customer service standards, corporate policies and social campaigns, mentoring Viewing staff competence as one of the key factors of effective sales, and loan products. Managers of the current students on University programmes, and its success, VTB pays great attention to corporate To facilitate the growth of cross-sales in its corporate bank’s head office and branches received the promoting independent learning. At present, the Corporate training and employee development. VTB’s corporate business, VTB Bank trained over 3,600 client managers Effective Manager training programme. University Club has over 200 active participants – alumni training system helps the Group timely respond to in products of VTB Group financial companies. The Bank and current participants of the Corporate University challenges posed by the external environment. Today also implemented a centralised corporate programme to The accessibility of corporate training to VTB Bank programmes from the Group companies based in Russia the main focus of the Group’s corporate training train employees to work on two electronic trading venues employees is also supported by regional training and the CIS. The Club is a self-regulating community activities is the development of internal resources, – Sberbank-AST and the United Electronic Trading Venue centres (RTCs) based at selected Bank branches, functioning without financial support from VTB. 3. Team
46 47 3.4. Remuneration and Social Benefits affects the size of the variable component of objective and professional approach based on remuneration. common group-wide principles. The performance of Compliance with international guidelines on compensation The Group supports loyalty and motivation of its individual employees, organisational units and entire in the financial sector employees and facilitates the maximum possible The KPIs used by the Bank reflect both individual companies is evaluated using pre-established realisation of their professional potential through performance of employees and collective performance quantitative and qualitative targets and The Group uses international guidelines and standards regarding ensuring a competitive remuneration level and of the respective units, companies, and the Group as a management-by-objectives techniques. compensation in the financial sector, adopted by the Financial Stability providing an integrated system of social benefits. whole. Within the framework of the Bank’s Board after the recent financial crisis. Following those guidelines, in management-by-objectives programme, a series of Different employee evaluation criteria are used for designing KPIs for performance assessment, the Group uses a balanced The motivation and remuneration systems at workshops was conducted in 2011 to train managers business and service divisions, for various controlling approach, which takes into account both financial performance and the individual Group companies are based on common and key specialists in the principles of management by and supporting functions, as well as for managers risks taken. In order to support the fulfilment of Russia’s commitments principles and corporate standards of VTB Group, at objectives and approaches towards setting KPI targets. and specialists. The employee evaluation process taken within the framework of G20, in 2011 VTB Bank participated the same time taking into account specific features of involves an analysis of technical and professional in a review of the implementation of the FSB Principles for Sound the company and the region where it operates, such In order to ensure steady development of its business, knowledge skills, customer service skills, operational Compensation Practices and associated standards. as the nature and development stage of the the Group seeks to motivate long-term performance of its and labour discipline, and teamwork skills in company’s business, requirements of the respective employees. To that end, in 2011 VTB Capital has achieving objectives. national legislation, the state of the local labour introduced a long-term employee motivation programme. circumstances. The specific extent and size of benefit market, and the local standard of living. According to the programme, employees receive a part of The Group’s employee evaluation system makes use of packages offered by each Group company depends their remuneration in the form of VTB shares in equal part the entire range of assessment methodologies currently on the national and regional context, applicable legal The overall group-wide approach provides for over three years. In the future, it is planned to introduce available in the market, including the Assessment Centre requirements, and available funds. In the event of an building remuneration and motivation systems similar programmes in other companies of the Group, process, 360-degree evaluation, competency-based accident or other exceptional circumstances, of Group companies on the basis of key performance taking into account the requirements of local legislation interview, professional testing, and performance employees may be offered an additional allowance. indicators, aligned with the overall goals and and regulatory authorities. evaluation. For example, in 2011 the Assessment Centre strategy of VTB Group and linked to the objectives technique was used to evaluate regional client service VTB Group continues to develop corporate of the respective organisational unit and the nature In order to ensure a competitive remuneration level, teams and to assess the conformance of client managers’ programmes aimed at ensuring social security of its of its activities. The meeting of KPI targets directly VTB Group companies continuously monitor labour competencies to the respective job requirements. The employees after their retirement. VTB Pension Fund, markets in the regions where they operate. They do Group also used competency-based interviews as a rapid the Group’s non-state pension fund, offers its services so by participating in salary surveys (both general assessment method when selecting internal candidates for the management of pension savings within the Distance learning at VTB and specifically focusing on the finance industry), for filling new vacancies arising in the process of framework of mandatory pension insurance and analysing employee salary expectations and using transforming the organisational structure. personal plans under corporate pension schemes. The broad geography of VTB Group’s operations determines the other sources of information. important role of distance learning in the corporate training system. Social Policy It is worth mentioning that VTB employees are offered VTB Bank employees have access to a Corporate Training Portal, where As a part of integration processes within VTB Group, in discounts on a number of the Group’s products, e.g. they may take distance learning courses and tests in professional 2011, the Bank implemented a project to standardise The social policy of VTB Group is aimed at ensuring policies by VTB Insurance, and mortgage loans on skills, business productivity, and using office and banking software, as programmes and approaches in the field of employee social security of its employees in accordance with preferential terms. well as obtain information about planned training events. The Group motivation, remuneration, and social benefits across the principles of responsibility and partnership. All subsidiaries also promote distance learning. For example, in 2011, the newly created North-West Regional Centre. Group companies determine employee compensation The Group companies have intangible motivation TransCreditBank rolled out 15 distance learning courses aimed at Furthermore, a project to align remuneration and packages, including social components, on the basis programmes for the best-performing employees, improving the personal effectiveness of employees, such as Effective social benefit policies and procedures at the Bank of of common principles defined at the Group level. using notes of appreciation and other rewards. Negotiations, Time Management, and Teamwork. In the same year, Moscow and TransCreditBank with the Group’s Overall, the structure and size of the key social VTB24 and VTB Ukraine developed over 100 distance learning courses standards was launched in 2011. benefits at VTB Group remained unchanged and online tests. Furthermore, the functionality of the distance learning compared to the previous reporting period. 3.5. Favourable Corporate Culture portal has been expanded by adding new training methods (webinars Employee Evaluation and online conferences) and interactive “learning maps”, which track The main elements of the social benefit package The Group companies strive to foster a favourable courses and other forms of training taken by an employee, and support Employee performance evaluation is the foundation available to the Group employees include medical corporate culture aligned with the Group’s values and assessment of training results. of performance and motivation management at VTB insurance, pension schemes, and one-time facilitating the maximum possible realisation of Group. The Group companies strive to ensure an allowances associated with special family employee potential. One of the most important 3. Team
48 49 objectives in this area is creating a shared 7th VTB Spartakiad (a team-based multi-sports institutions and organise events for veterans of the aimed at preventing accidents, injuries, and communication space bringing together the Bank and tournament) was held after a two-year break. Great Patriotic War (the Second World War). They occupational diseases, training employees in safe the Group subsidiaries. In 2011, an integrated extranet Eighty teams representing VTB Bank branches and implement voluntary projects to collect charitable working practices and safety standards, workplace portal of VTB Group has been launched. The portal the Group companies and collectively comprising donations for acquiring necessities and gifts, certification in terms of working conditions, provides for effective document exchange, implements over a thousand athletes competed in the event. organise cultural, educational and entertainment investigating injuries and occupational diseases, information sharing mechanisms with regard to regular The Spartakiad programme included the sports, events, and conduct excursions and shows. and implementing medical and preventive conference calls between the Bank and its subsidiaries, most popular among VTB employees, such as measures. and ensures two-way communication supporting the futsal, volleyball, streetball, runner racing, relay An important area of volunteer activities is blood work of corporate boards (supervisory councils) and racing, kart racing, chess, and bowling. In 2011, donation. VTB has conducted Blood Donor Days in In 2011, the Group continued to improve its other collegial governing bodies. The portal has paintball and target shooting were included in the cooperation with the Federal Blood Service since occupational health and safety (OHS) management well-developed multi-language contextual search Spartakiad programme for the first time. The 2008. In 2011, 8 corporate blood donation events system. In particular, internal policies were functionality, including full-text document search. In athletes were supported by over 2,600 fans from were held at the VTB Head Office, in Bryansk, modified and amended in line with recent changes addition, this information resource provides convenient all over the country – VTB employees and their Samara, Irkutsk, Voronezh, Tula, and Belgorod. to government regulations aimed at strengthening tools for both online and offline collaboration: thematic family members. During the event held in the Federation Tower in employers’ responsibility for employee safety and forums, shared calendars, instruments for setting tasks Moscow, over 100 employees donated 50 litres of motivation for OHS compliance. These changes and tracking their implementation. The portal also In 2011, VTB also organised a traditional winter blood. were taken into account in drafting the key contains well-organised up-to-date reference family festival at Leonid Tyagachev Ski Club. Over elements of a group-wide OHS standard applicable information: the structure of the Group companies and 1,500 employees of the Bank and the Group In order to improve the quality of volunteer projects all VTB subsidiaries. It is expected that the final a complete phone directory. subsidiary companies took part in the event. The and attract broader attention to socially significant version of the standard will be presented at the festival participants enjoyed skiing, skating and projects initiated by their employees, the Group end of 2012. In addition to the group-wide portal, many Group tubing, rode snowmobiles and snowboards. companies organise competitions of volunteer companies maintain intranet resources of their own. Employees’ children were offered creative workshops. initiatives. For example, in 2011 VTB24 for the first Bank managers and specialists receive specialised For example, in September 2011, VTB24 launched 24 time held two such large-scale competitions. OHS training within one month after starting their Hours, a new intranet portal providing a platform for The Group companies conduct sports events, According to the conditions of the competitions, the work with the Bank; then they are trained as sharing knowledge and experience and effective corporate festivals, contests and competitions, best projects were supported with corporate grants necessary, but at least one time in three years. The employee communications. The portal, which hosts culturally and socially significant events, actively matching the resources and efforts of the volunteer trainings, which make use of guidance materials forums, blogs, and conferences, offers a range of support employee teams in various sports. All these teams proposing them. Twenty six volunteer teems prepared by OHS specialists of VTB, include personal opportunities for employee feedback and efforts are aimed at building a cohesive VTB team participated in the Hundred Friends competition, orientation and group sessions. The Bank has a communication between them, allows to create pages sharing a common corporate culture and values. proposing their projects for supporting orphaned system for testing OHS knowledge and skills of of individual units and projects, and to support children (associated with Children’s Day) and managers and specialists on a regular basis. In 2011, creative initiatives. The Bank of Moscow also Corporate Volunteering veterans of the Great Patriotic War (associated with over 550 managers and OHS specialists, as well as embarked on a project for creating a corporate intranet the Victory Day). The winning team was provided a fire and electrical safety coordinators received OHS portal, which will be launched in summer 2012. Volunteer projects are an important manifestation of matching grant worth RUB 100 thousand to finance training. One indication of the effectiveness of the VTB’s corporate values. They help employees the project implementation. Thirty four teams took Bank’s efforts is a low occupational injury rate. For In the reporting period, VTB Group retained all its main demonstrate their proactive attitude and contribute part in the competition A New Year Gift to the World, example, in 2011 only one occupational injury took instruments of internal communications including to socially significant activities. Corporate volunteer conducted jointly with the team of TransCreditBank. place, which was categorised as minor and resulted employee meetings with the Group senior executives, projects are coordinated by the VTB Volunteer Club, Each of the five winning teams received a grant of in 7 days lost. the Team Energy corporate magazine, information which comprises 9 regional associations based in RUB 40 thousand for organising a creative New Year digests and brochures, information boards, surveys, Russia and 5 associations in the CIS. VTB volunteer festival for orphaned children. The Bank and the Group companies pay serious polls and various internal corporate events. movement has steadily expanded over the years: in attention to activities aimed at improving working 2011, mass volunteer actions took place in more conditions of employees and ensuring OHS Corporate Events than 20 Russian cities. VTB employees implement 3.6. Occupational Health and Safety compliance. In particular, in 2011 over 4,200 volunteer projects primarily aimed at supporting workplaces across the Group were certified in terms Traditional sports festivals and tournaments are an children from children’s homes, residential schools, The Group attaches great importance to providing of working conditions, and the certification process important instrument of maintaining a common and care institutions for children with limited physical safe working condition for its employees. The continues. Over 13 thousand employees received corporate culture at VTB. For example, in 2011 the abilities. The volunteers also help medical and social actions of the Group companies in this field are preventive medical check-ups. Timely Support 4. Society 51
4.1. Management Approach group-wide principles of sponsorship and charity; however, the Bank does not influence specific VTB Group for many years has been demonstrating decisions of its subsidiaries directly. a strong connection between business performance and creating favourable conditions in the regions In 2011, the overall charity expenditures across VTB where it operates. The Group maintains a proactive Group amounted to RUB 1.9 billion. position with regard to social responsibility, viewing such aspects as implementing socially significant projects, supporting culture, the arts, sports, 4.2. Supporting Culture and the Arts healthcare, and education, contributing to the strengthening of the international reputation of Supporting the national culture and arts is an Russian business, and combatting money laundering essential element of the Bank’s social policy and as an integral component of its activities. The Group communication strategy. For many years VTB has selects priorities of its social activities based on implemented large-scale partner projects with where it can maximise its positive impact on the Russia’s leading museums and theatres, actively society. contributed to the cultural life of Moscow and St. Petersburg, promoted significant cultural projects in Traditional priorities of VTB sponsorship and charity the Russian regions, and helped develop cultural activities have been culture, the arts, education, connections with other countries. VTB’s sports, and healthcare services. VTB has a number achievements in this area were acknowledged by of internal policies, which regulate sponsorship independent experts: in March 2011, the Bank activities and charitable donations. At VTB Bank, became the leader of the Philanthropists of the decisions on sponsorship and providing charitable Decade ranking by Profile magazine in the category aid are made collectively; the implementation of Arts Patron of the Decade. charity programmes is coordinated by the Bank’s Charity Committee. When reviewing applications for charitable support, the Committee relies on such criteria as whether the application has a clear focus VTB Group for many years has been and targets specific needs, the social significance of demonstrating a strong connection between the proposed project, and potential for long-term business performance and creating favourable cooperation. Special attention is also paid to the conditions in the regions where the Group social contribution of the project to local community operates. The Group maintains a proactive development. In 2011, the Committee held 14 position with regard to social responsibility, meetings, reviewing some 500 applications of viewing such aspects as implementing socially organisations and individuals for charitable aid. significant projects, supporting culture, arts, A total of 116 applications were supported by sports, health care, and education, contributing the Bank. to the strengthening of the international reputation of Russian business, and combatting At the Group subsidiaries, decisions on the provision money laundering as an integral component of of financial assistance are made by their its activities. management. All the companies rely on the common
Фото Валентина Барановского © 4. Society
52 53 4.2.1. Supporting Theatrical and Musical Art supporting the Black Sea Fleet Theatre and attracting In 2011, VTB24 started partnership with the Yevgeny public attention to its problems. The Sevastopol tour Vakhtangov State Academic Theatre, which The Group companies actively support VTB has traditionally supported the Bolshoi Theatre. is an annual charitable action by the Pyotr Fomenko commemorated its 90th anniversary in that year. contemporary artists and sponsor the It has been a member of the theatre Board of Trustees Workshop Theatre and VTB Bank. The first such tour VTB24 sponsored the renovation of the auditorium promotion of contemporary visual arts in the since 2002, also participating in the activities of the took place in 2008. Since then, the theatre has and dressing rooms. Furthermore, VTB24 became the Russian regions and abroad. non-profit organisation the Bolshoi Theatre traditionally presented two performances each time. official partner of staging the special anniversary Foundation. In December 2010, Alexander Budberg, The first performance is staged for the crew of the performance Quay, and Medea, another new advisor to VTB Bank President-Chairman of the Black Sea Fleet and their families free of charge. production. Since 2004, VTB Bank has been a member of the Management Board, was elected Chairman of the Tickets for the second day’s performance are sold Board of Trustees of the State Russian Museum, Executive Committee of the Bolshoi Board of freely with the proceeds donated to the Lavrenev The Bank of Moscow also provides substantial traditionally supporting the most outstanding Trustees. As part of its partnership with the Bolshoi, Sevastopol Drama Theatre, a cultural institution of support to theatrical art – the Bolshoi Theatre, the Et projects. In 2011, the Bank sponsored the exhibition the Bank sponsors a premiere production each year. the Russian Black Sea Fleet. Cetera Theatre, and Moscow Youth Theatre. “Movement. Form. Dance” in the Marble Palace of the In 2011, VTB participated in the financing of the Furthermore, in 2011 the Bank of Moscow sponsored Russian Museum organised within the framework of Sleeping Beauty ballet production. This premiere VTB has also traditionally supported the most the Spasskaya Tower festival of military bands and the “Dyaghilev P.S.” International Festival of Arts. marked the beginning of a new chapter in the significant musical and theatre festivals in Russia. supported the Tchaikovsky Charitable Foundation. The exhibition presented some 90 works from the Bolshoi’s unique history: the Sleeping Beauty One event sponsored by the Bank in the reporting museum’s collection and private collections, which became the first ballet staged in the theatre’s year was the Stars of the White Nights Festival in St. VTB’s sponsorship helps residents of the countries demonstrated artists’ vision of dance expressed in historical building after a major renovation. Petersburg. A total of 115 theatrical performances and where the Group companies operate acquaint the most diverse forms and genres from classical concerts were presented over the nine weeks of the themselves with Russian theatrical and musical art. painting to non-figurative art. The Bank also For many years VTB has sponsored projects of the cultural forum. In the reporting year, the festival was In particular, VTB Armenia for the fourth consecutive sponsored an exhibition of the outstanding artist Mariinsky Theatre, being the general partner of the not limited to St. Petersburg – some events took place year has sponsored theatrical seasons of Yerevan’s Konstantin Korovin in the Benois Wing of the theatre since 2006. In 2011, VTB was the general in Moscow and Veliky Novgorod. In 2011, the Bank Stanislavsky State Russian Drama Theatre. The bank museum. For the first time some 250 works of the sponsor of an international dance forum – the 11th also sponsored the 10th Moscow Easter Festival. For also co-sponsors cultural and educational events artist from 15 Russian museums were presented in International Mariinsky Ballet Festival, held in St. the first time, the musical forum went beyond national carried out under the auspices of the Embassy of the one space. The exhibition covered all stages of the Petersburg between April 14 and 24. Being the only borders: the concerts were held in five national Russian Federation in the Republic of Armenia and artist’s creative life and all kinds of his art: easel, international-level classical ballet festival in Russia capitals – Moscow, Kiev, Minsk, Vilnius, and Astana aimed at developing cultural and historical traditions monumental, and scene painting, drawing, and and one of the most significant events of the world – and 38 Russian cities. Special projects within the and supporting compatriots in Armenia. OJSC VTB ornamental art. ballet season, the festival has traditionally attracted framework of the festival included a concert to Bank (Azerbaijan) (VTB Azerbaijan) in 2011 ballet fans from all over the world. commemorate the victims of the Chernobyl nuclear sponsored four performances by Russian theatrical The Group companies actively support contemporary disaster and a concert dedicated to those affected by troupes at the Baku Russian Drama Theatre. artists and sponsor the promotion of contemporary VTB Bank is a long-time partner of the Pyotr Fomenko the recent tsunami in Japan. A total of 122 concerts visual arts in the Russian regions and abroad. In Workshop Theatre. The Bank supported the were presented. The Bank also supported the Baltic 4.2.2. Supporting Visual Arts 2011, TransCreditBank sponsored the Palette of construction and completion of the new theatre House Theatre Festival in St. Petersburg. The central Reality art exhibition in a number of cities where building. A significant part of the theatre’s tours is idea of the 2011 festival was the synthesis of different VTB Bank and the Tretyakov Gallery are long-time the bank’s offices are based. The project was aimed sponsored by VTB. In 2011, the Bank sponsored the theatrical schools. The central figure of the festival partners. Since 2002, the Bank has been a member at supporting Russian modern artists and getting theatre’s charitable tour of Sevastopol aimed at was Rimas Tuminas, a renowned director whose of the Gallery’s Board of Trustees, sponsoring residents of the Russian regions acquainted with productions embodied the synthesis of the Russian numerous programmes and projects. In 2011, the their art. A painting auction for the benefit of the and the Lithuanian theatrical traditions. Tretyakov Gallery supported by the Bank presented “Spread Your Wings!” charitable foundation was Supporting the national culture and arts is an essential element of the an exhibition of the famous Russian painter Nikolai organised by the bank. Bank’s social policy and communication strategy. For many years VTB The Group subsidiaries also actively support Ge, commemorating the 180th anniversary of the has implemented large-scale partner projects with Russia’s leading theatrical and musical art. For example, VTB24 for artist. VTB helped return back to Russia a significant In the reporting year, VTB Capital has entered a museums and theatres, actively contributed to the cultural life of more than four years has partnered with the Theatre part of the artist’s heritage – 55 large drawings, strategic partnership with Calvert 22, a London-based Moscow and St. Petersburg, promoted significant cultural projects in of Moscow South-West, contributing to the which for over a century were kept in private arts foundation. The partnership will help present the the Russian regions, and helped develop cultural connections with modernisation of the theatre’s engineering systems. collections in Switzerland. The works acquired by VTB most recent achievements of the contemporary other countries. In the reporting year, VTB24 sponsored the Bank become a unique present for the 155th Russian art in the United Kingdom as part of a wider installation of a new sound system at the theatre. anniversary of the museum. programme of cultural exchange with Russia, Central 4. Society
54 55 and Eastern Europe. The partnership between Calvert population over 100 thousand and in all regions of of partnership between VTB and KAMAZ-Master – in 22 and VTB Capital, which will support, among other the Russian Federation. The channel broadcasts no other motorsport discipline a Russian team has Sport is essential to creating a favourable social environment and activities, exhibitions of young Russian artists in documentary and feature films, projects by cultural been able to achieve such an impressive success at strengthening the nation’s health. Supporting both amateur and London, will facilitate the development of cross- figures, popular science and educational the international level. professional sport and creating necessary pre-requisites for high cultural links between Russia and the United programmes, talk shows and game shows, live achievements of Russian athletes in a broad range of sports are among Kingdom. concerts and recorded theatrical performances. As part of its sport sponsorship, VTB supports the key priorities of VTB’s social activities. Russia’s national teams and contributes to the 4.2.3. Supporting Cinematography and Television VTB Bank was the official sponsor of the TEFI Region development of international connections. In 2011, 2011 national television awards. The TEFI the Bank sponsored the Russian Basketball and The geography of the tournament has been VTB Group supports significant projects and events in Competition conducted annually since 1994 is the Volleyball Federations, the Russian Federation of expanding from year to year, and its popularity the field of Russian cinema and television. most prestigious awards programme in the Russian Artistic Gymnastics, and the Russian Alpine Ski and among basketball fans has been increasing. television industry. Snowboard Federation. The Bank’s financial support For example, VTB sponsored the production of the helps Russian athletes better prepare for the In 2011, the Bank also supported the third film Burnt by the Sun 2: Citadel, premiered in 2011, a In 2011, the Bank of Moscow supported a popular upcoming Olympics, thus improving their winning international football tournament VTB Lev Yashin second part of a two-part project by Nikita Mikhalkov. television game show by the “What? Where? When?” chances. Cup, held in such stadiums, as the Dynamo Minor The Bank also sponsored the production of the first club, continuing a sponsorship programme initiated Sport Arena, Rodina, and Arena Khimki. In the part of the movie released in 2010 – Burnt by the Sun in 2010. The bank has also developed the Furthermore, the following Russian and international reporting year, the tournament format was changed: 2: Exodus. The two-part film dedicated to the Great edutainment website telezriteli.tv, providing web- sport organisations received financial support from its participants included the leading European youth Patriotic War was filmed on a scale unique to the based services for fans of the famous intellectual the Bank in 2011: teams, whose members will probably play for their Russian cinematography. A total of 330 thousand game. By answering questions, participating in trivia national teams in the 2018 FIFA World Cup, also in metres of film was shot for Burnt by the Sun 2. One quizzes and contests website, members can collect l Football Club Dynamo Moscow; Moscow. In 2011, four youth teams contested the hundred seventy-five actors appeared in Exodus, one prize points and then redeem them for valuable cup: Everton (England), Freiburg (Germany), OFK hundred ninety – in Citadel. An unprecedented rewards provided by the Bank of Moscow. l United Hockey Club Dynamo Moscow; Beograd (Serbia), and Dynamo Moscow. number of people – several tens of thousands – took part in the filming of crowd scenes. Several large- l Mini-football Futsal Club Dynamo; The Bank of Moscow was the general partner of the scale sets, including a bridge on the River Klyazma, a 4.3. Supporting Sport 22nd Kremlin Cup 2011 international tennis church, and a citadel, were built for the movie. Tens l International Judo Federation; tournament held in the Olympic Stadium in October of T-34 tanks, Katyusha rocket launchers, German Sport is essential to creating a favourable social 2011. The entire prize money of the tournament, motorcycles, and actual wartime trucks were used environment and strengthening the nation’s health. l International Association of Athletics Federations worth USD 1,526,500, was provided by the Bank of during the filming. Supporting both amateur and professional sport and (IAAF); Moscow. The financial institution has been creating necessary pre-requisites for high supporting the Kremlin Cup since 1998, being its Since 2011, VTB Bank has been a sponsor of news achievements of Russian athletes in a broad range of l International Gymnastics Federation (IGF). general partner since 2003. programmes on the Culture television channel. This sports are among the key priorities of VTB’s social has become a new model of partnership with a activities. As part of its support of sports tournaments, in 2008 Development of Sports Infrastructure business organisation for the channel, which never VTB bank jointly with the Russian Basketball signed sponsorship contracts before that. The VTB Bank has been the general sponsor of the Federation established an international professional VTB Bank and the Dynamo National Sports and channel created in 1997 is operated by the All-Russia KAMAZ-Master rally team for the last five years. The basketball league – the VTB United League. The Bank Physical Training Society signed an agreement on the State Television and Radio Broadcasting Company long-time partnership between the Bank and the has been a titular sponsor of the league for three establishment of VTB Arena, a joint company to (VGRTK), a national media holding. The Culture team is an example of a successful and mutually years. Only the best basketball clubs of the former invest in a major project for redeveloping the Dynamo channel is available in all Russian cities with the beneficial collaboration between business and sport, Soviet Union and Europe compete in the league. In Stadium in Moscow and Petrovsky Park surrounding which was demonstrated by the Kamaz-Master’s the season 2011/12, the Bank will increase the the stadium. The VTB Arena Park project provides for outstanding success in the 2011 Dakar Rally. In amount of its sponsor funding from RUB 65 million to the renovation and modernisation of the Grand VTB Group supports significant projects and 2011, for the first time in the history of the rally, 80 million to keep pace with the successful Sports Arena, construction of additional sports events in the field of Russian cinema and representatives of a single team took the top four in development. The Bank views the VTB United League facilities in Petrovsky Park, and construction of a television. the truck class. This was already the tenth win of the as a dynamic project and a model of a professional multi-purpose centre including a hotel, office team in the annual rally. This proves the effectiveness approach towards organising sports tournaments. premises and apartments. The Grand Sports Arena, 4. Society
56 57 while preserving a historical outline of the stadium, establish clear communication with every healthcare In 2011, 13 thousand employees of 332 companies will be converted into a modern sports facility with a institution participating in the programme: took part in the London event. The funds raised in Within the framework of the World without capacity of up to 45 thousand people. The functional children’s hospitals themselves decide which that year – USD 600,000 – were donated to Tears corporate charity programme, the North- areas of the renovated stadium are arranged in equipment and pharmaceuticals they need the Barnardo’s, a charity supporting children. VTB Capital West Regional Centre of VTB Bank carried out accordance with the FIFA requirements for venues most. In 2011, within the framework of the financed one half of the entry fees of its employees, two children’s festivals featuring characters hosting world championship games. programme, VTB supported healthcare institutions while the remaining part was paid by the employees of Smeshariki, a popular animated cartoon based in Vladimir, Volgograd, Voronezh, Kirov, themselves. series. Over 150 children took part in the events In 2011, as part of the preliminary stage of the Kursk, Orenburg, Petropavlovsk-Kamchatsky, and were presented gifts. The festivals were project, works to disassemble the light poles were Rostov-on-Don, St. Petersburg, Ulan-Ude, Ufa, In 2011, VTB Ukraine donated substantial funds to held at N. Filatov St. Petersburg Children’s started in order to make it possible for experts to Yuzhno-Sakhalinsk, and Moscow. The children’s the Road of the Future foundation implementing Clinical Hospital No. 5 and Talitsky Children’s study in detail the condition of their structural hospitals participating in the World without Tears projects to provide targeted charitable aid to sick Tuberculosis Sanatorium. elements having historical value. Based on the study were donated lung ventilators, respiratory children and institutions for children without parental results, and with consent from the Moscow Culture anaesthetic units, ophthalmology equipment, care. Heritage Department, the next steps of the project state-of-the-art precision medication dispensers, Supporting Education will be taken. The dismantling of spectator seats and equipment and supplies for intensive care of the In 2011, VTB Insurance donated RUB 2 million, the lower tier of the concrete “comb”, on which the newborn, equipment for Montessori classrooms and originally intended for the New Year’s gift campaign VTB actively contributes to projects for supporting seats were based, has already been completed. playgrounds. Following a tradition, characters from to the Give Life charity foundation. education in Russia. The Bank strives to contribute to “Good Night, Kids”, a national children’s television the improvement of the quality of education and The overall investment in the renovation project will show, take part in the programme. In each city Supporting Veterans and Persons with supports educational institutions introducing amount to some USD 1.3–1.4 billion. participating in World without Tears, artists of the Disabilities innovative programmes and demonstrating high popular show and their puppets hold festivals for achievements. In 2011, the Bank made a donation to little patients, presenting gifts financed by VTB. VTB Bank for many years has financed associations of the Endowment Fund of the European University at 4.4. Social Projects veterans and persons with disabilities and made St. Petersburg. The European University, founded in VTB Capital also actively participates in socially targeted donations. VTB also donates funds for 1994 as a non-state graduate university in social Assistance in addressing social and humanitarian significant projects, aimed at the engagement of festivals to honour veterans, associated with such sciences and humanities (anthropology, history, problems is an important dimension of the Bank’s children with physical disabilities and children at risk dates as the Defender of the Fatherland Day and the history of arts, political science, sociology, charity programmes. into education and creative activities. In particular, in Victory Day. economics), combines education with cutting-edge 2011, VTB Capital became a partner of the School of research, raising a new generation of Russian World without Tears Kindness charity programme. Under the programme, In 2011, VTB provided charitable aid to the United scientific elite. a book of fairy tales was published jointly with the Country Foundation to finance activities aimed at To provide support to children’s healthcare publishing house EKSMO. The fairy tales were written people with limited abilities, the Victory Regional As part of its support to educational projects, the institutions, the Bank has implemented its own by both children with disabilities and renowned Non-Governmental Foundation of Veterans of the Bank made a donation to the Endowment Fund for charity programme, World without Tears. Since professional authors, collaborating with the Great Patriotic War, Regional Non-Governmental the Development of the St. Petersburg State 2003, when the programme was launched, VTB publishing house, including Lyudmila Ulitskaya, Dina Organisation of Disabled War Veterans of the Russian University to support the development of the Arts and helped dozens of children’s hospitals all over Russia Rubina, and Darya Dontsova. The proceeds from the Ministry of Foreign Affairs, the Moscow House of Humanities programme at the university. The obtain high tech medical equipment, book sales were donated to children’s healthcare Veterans (Pensioners) of Wars and the Armed Forces, innovative model of education, implemented by the pharmaceuticals, and supplies. The Bank seeks to programmes. The project was partially financed by the Foundation of the Veterans’ Council of the Federal respective department, is perfectly suited to the personal donations of VTB Capital employees. Migration Service, and the Union of Angola Veterans, current needs of the Russian labour market. a regional association of participants of the armed As part of its support of sports tournaments, in 2008 VTB Bank jointly In 2011, VTB Capital employees based in London, conflict in Angola. In 2011, the Bank donated funds to the Graduate with the Russian Basketball Federation established an international supported JP Morgan Corporate Challenge – an School of Management at the St. Petersburg State professional basketball league – the VTB United League. The Bank international series of annual 5.6 km charity races, in VTB Azerbaijan was a sponsor of the national University. The funds will be used for recruiting the has been a titular sponsor of the league for three years. Only the which teams of large companies of various economic Paralympic Games, organised by the Sport Ministry best teachers, establishing scholarships and grants best basketball clubs of the former Soviet Union and Europe compete sectors and government organisations participate. and the Paralympic Committee of Azerbaijan. for students, as well as financing research of interest in the league. VTB Capital has supported the event annually as part Supporting athletes with disabilities is an important to VTB and the development of innovative of its efforts to engage employees in charity activities. area of the Bank’s social activities. educational programmes and learning materials. 4. Society
58 59 The Bank of Moscow for the fifth time was a sponsor Given the specifics of the closed and heavily Significant International Events “brain drain” from Russia. Other topics discussed at of the “Mission Possible: Finance is Your Vocation” regulated Chinese market and difficulties faced by the conference included development prospects of contest, allowing gifted school students to enrol in non-residents wishing to enter local businesses, The Group companies participate in the most Russia – UK relations, opportunities for investing in the Financial University under the Russian VTB plays an important role, supporting access of significant international events bringing together Russia, and the development of the international Government without entrance exams. Russian manufacturers and suppliers to one of the business and political leaders to discuss the most financial centre in Moscow. world’s biggest markets. In the CIS countries and effective approaches to economic development. One Aid to Religious Organisations Georgia, the activities of VTB are aimed at such event in 2011 was the World Economic Forum in In 2011, VTB sponsored a number of international supporting the growth and qualitative Davos, attended by German Chancellor Angela Merkel, business meetings and conferences, including the VTB provides substantial charitable aid to religious development of trade between the countries. UK Prime Minister David Cameron, French President International Investment Forum “Yalta Business organisations. Since 2007, VTB Bank has been VTB’s strategic goal in those markets is Nicolas Sarkozy, US Treasury Secretary Timothy Meetings”, the International Conference “Common financing the construction of the seven-dome Church supporting mutual penetration of the national Geithner, as well as leaders of the World Bank, EBRD, Economic Space 2020: Technical Regulation as an of Venerable Sergiy Radonezhsky in Pechersky economies eventually leading to the formation of WTO, and IFC. The Russian Federation was represented Integration Instrument”, and the international District of Kiev. a common economic space. by the country’s top officials, including President exhibition DENKMAL Moscow 2011. Dmitry Medvedev and First Deputy Prime Minister Igor In 2011, VTB financed the restoration of the Participation in International Financial Shuvalov. Andrey Kostin, VTB Bank President- RUSSIA CALLING! iconostasis and marble elements of the altar of the Projects Chairman of the Management Board also took part in a Naval Cathedral in Kronstadt (St. Petersburg) and number of meetings with international investors, The largest and most significant project of the Group donated funds for the restoration of the Voskresensky The Group subsidiaries participate in major where upcoming privatisation of a 10% interest in VTB aimed at strengthening the international reputation of New Jerusalem Monastery. international financial projects, thus facilitating was discussed, among other issues. Russian business is the annual VTB Capital RUSSIA the development of partner relations between CALLING! Investment Forum. The Forum provides a The Bank also donated funds to the Dunilovskaya Russia and the countries where the Bank’s partners In 2011, VTB Capital, as has become tradition, took platform for open dialogue between investors, Orthodox Residential Girls’ School (the city of are based. For example, in 2011, VTB Capital was a part in the annual St. Petersburg International representatives of business circles, and the Russian Ivanovo) for orphaned children and children without co-arranger of the placement of the second Economic Forum, one of the most representative Government. It is a strategic project to VTB Capital, a parental care. seven-year Eurobond issue of Ukraine’s National platforms for dialogue between the Russian and key event in the market, and the first international- Agency for Preparing and Conducting of the 2012 international business communities. VTB Capital level investment conference in Russia. The objectives UEFA European Football Championship worth USD organised a number of significant events, including of the RUSSIA CALLING! Investment Forum include 4.5. Strengthening the International 690 million. The transaction, intended to raise the session “Creation of the International Financial promotion of investment opportunities and Reputation of Russian Business funds for financing the construction of Centre. Cooperation within the CIS, the EurAsEC, and development of Russia’s positive international image. infrastructure facilities for the 2012 European the EurAsEC Customs Union”, the roundtable meeting In 2011, the event drew over 2,000 participants, Football Championship, was guaranteed by the “Venture Business and Global Corporations”, and a including over 500 investors from Russia, Europe, US, Being a leading Russian financial group with a Ukrainian Ministry of Finance. In June 2011, VTB meeting of the company’s top executives with Asia, Middle East and Africa, and some 300 senior strong international presence, VTB recognises the Capital also closed a cross-currency swap deal for representatives of the leading international and managers of the leading Russian companies. Within importance of its role as a representative of OJSC Acron. The company placed a RUB 7.5 billion Russian media. the framework of the event, leaders of the largest Russia and Russian business in the global local bond three-year offer, and the swap Russian and international companies together with key business arena. The Group subsidiaries often act transaction allowed it to change the currency of Furthermore, VTB Capital participated in Russian investors discussed approaches towards the as Russia’s “economic ambassadors” in the liabilities from Russian Rouble to Chinese Yuan for Business Week 2011, a conference dedicated to development of infrastructure and increasing capital countries where they operate and support a significant part of the issue. This was the first recent events and trends in the Russian and global inflow to Russia. The entire first day of the Forum was international operations of Russian business, deal of a Russian company on such a scale with a economies, which was carried out under the auspices using a range of approaches. On the one hand, derivative financial instrument in the RUB/CNY of the London School of Economics and Political VTB, being a reliable financial partner of Russian currency pair. The success of the transaction opens Science. The event included lectures, discussions Being a leading Russian financial group with a strong international companies, helps them enter foreign markets. On up new opportunities for other Russian companies and meetings with influential Russian and European presence, VTB recognises the importance of its role as a representative the other hand, the Group itself is a worthy interested in attracting affordable funding in CNY. It experts. The objectives of the conference included of Russia and Russian business in the global business arena. The representative of Russian business providing the is also an important step towards expanding strengthening the international reputation of the Group subsidiaries often act as Russia’s “economic ambassadors” in highest-level services to businesses and economic cooperation between Russia and China Russian Federation, discussing opportunities for the countries where they operate and support international operations governmental bodies of the countries where its through building a system for direct payment in attracting talented young professionals to Russian of Russian business, using a range of approaches. entities operate. national currencies. companies, and identifying measures for preventing 4. Society
60 61 dedicated to individual meetings of Russian activities undermining economic and social example, in 2011 it completed the deployment of an companies’ executives with investors. The official foundations of the society require serious attention The largest and most significant project integrated transaction monitoring system based on opening day of the forum featured the plenary session from not only government agencies but also financial of the Group aimed at strengthening the solutions by IBM and Norkom Technologies. The “Russia and the World: Road to 2020”, and the panel institutions. The Group actively combats the international reputation of Russian business system integrated with the corporate data storage discussions “Rethinking Growth Models – Capital penetration of criminal capital into the national is the annual VTB Capital RUSSIA CALLING! allows implementing specific scenarios for the Modernisation” and “Removing Development economies and the financing of terrorism. In every Investment Forum. The Forum provides identification of suspicious or problematic Constrains – the Infrastructure of Tomorrow”. On the country where they operate, the Group companies a platform for open dialogue between transactions. final day of the Forum, two roundtable discussions – strictly comply with the requirements of the local investors, representatives of business circles, “Internationalisation of Russian Capital Markets” and legislation in the field of Anti-Money Laundering / and the Russian Government. It is a strategic Implementing its internal control procedures in the “Investment Management in Russia: Challenges and Counter-Terrorism Financing (AML/CTF) and project to VTB Capital, a key event in the field of AML/CTF, the Bank systematically engages Opportunities” – organised jointly with the Euromoney implement additional internal controls aimed to market, and the first international-level with all its partner financial institutions. In and Forbes magazines were held. The RUSSIA reduce the risk of using VTB products and services investment conference in Russia. particular, the Bank regularly shares information CALLING: London Session attracted over 500 for illegitimate purposes. about its AML/CTF practices with Russian and participants, including representatives of 147 foreign banks. In 2011, the Bank exchanged investment companies and 56 companies from various In 2004, VTB signed the declaration “Banks against and enhancement of internal AML/CTF controls and questionnaire data and information about ATM/CTF economic sectors. Over 800 personal meetings of Money Laundering”, thus officially stating its development of the national legal framework in the activities with more than 100 banks. Furthermore, investors with senior executives of the leading Russian position with regard to AML/CTF. The Bank field with international best practices taken into an analysis of over 400 financial institutions, with companies took place during the event. committed to comply with the internationally account. which the Bank or the Group subsidiaries planned recognised AML/CTF principles and cooperate with to establish or expand contractual relations, was The annual forums organised by VTB Capital help other signatory banks in the process of Furthermore, in 2011, the coordination of due carried out in 2011. establish a direct dialogue between Russian implementing the requirements of the Russian diligence procedures of subsidiary banks was companies and foreign investors, and present an legislation and expert bodies. substantially improved. In particular, the Group Employee training is an integral part of the Group’s unbiased picture of the economic development and Management Committee has approved the AML/CTF internal control system; it is carried out in investment climate in Russia to the international In order to join efforts of the Group companies and Coordination Procedure between Subsidiary Banks accordance with the respective legal requirements business community. The forums have a significant establish common AML/CTF standards, a and VTB Bank in Conducting Due Diligence on Credit of the Russian Federation and other countries positive impact on investment in Russia, facilitating consolidated policy of VTB Group defining common Organisations. According to the document, where the Group operates. In the reporting year, the inflow of foreign investment, the growth of the principles and rules in that area has been adopted. participation of VTB Bank is required in any due 9,723 Bank employees, including 1,620 recruited Russian stock market and the creation of a positive The policy complies with the recommendation of diligence procedures on Russian and foreign banks in 2011, received AML/CTF training. In 2011, 1,597 image of the country as a whole. the Financial Action Task Force on Money conducted with a view to developing cooperation of Bank employees received initial knowledge Laundering (FATF) and is applicable across all VTB Group banks with them. assessment prior to assuming new or extended regions where the Group operates, including the responsibilities; 8,036 persons underwent 4.6. Combatting Money Laundering countries whose legislation does not fully meet the Paying serious attention to the quality of their scheduled AML/CTF testing. Group subsidiaries and Terrorism Financing FATF requirements. customer base, VTB Group implement all necessary also have mandatory AML/CTF training procedures within the framework of their customer programmes. For example, JSC Bank VTB Among significant developments of the year 2011 identification and analysis programmes. All draft (Kazakhstan) (VTB Kazakhstan) prepared training The problems related to money laundering and were the inclusion of two new banks of VTB Group – internal regulations defining procedures and materials and delivered 47 employee training financing of terrorism remain relevant to both Russia TransCreditBank and the Bank of Moscow– in the conditions of providing banking products and courses, both on-site and distance ones. Over 530 and the international community. Such illegal Group’s system of AML/CTF coordination and services are subject to a mandatory review by the bank employees received training within the cooperation, and the expansion of cooperation with Transaction Monitoring Department. The Department framework of those courses. non-banking financial organisations. It is important analyses proposed products and services in terms of The Group companies participate in the most to note that the Bank of Moscow is a member of the their potential use for money laundering and Another instrument of AML/CTF skills development is significant international events bringing AML/CTF and Compliance Committee of the minimises that risk by incorporating necessary internal job placements with the Interbank together business and political leaders to Association of Russian Banks. The bank actively controls. Transaction Department. In 2011, employees of five discuss the most effective approaches to participates in the dialogue between the business Bank branches and VTB Kazakhstan received such economic development. community, regulators, and representatives of The Bank has also been improving its practices of placements. legislative authorities with regard to standardisation customer transaction monitoring and oversight. For Common Heritage 62 5. Environment 63
5.1. Management Approach themselves; at the same time, it is VTB Bank Administrative Department that is responsible for The expanding geography of the Group’s developing methodologies and guidelines, operations inevitably leads to increased monitoring expenditures, and general oversight of consumption of energy and other resources, administrative and housekeeping activities across necessary for creating favourable working the Group. conditions at VTB. The Group seeks to minimise its direct environmental footprint by managing In 2011, an integrated property management its activities in an environmentally sound manner. software system was launched in a pilot mode, with The Group’s main objectives in this area include the Bank being a test site. It is expected that the using environmentally sound principles in the system, among other benefits, will help better track construction and maintenance of its premises resource consumption and identify measures to and ensuring efficient resource use. reduce it. As of the end of 2011, the Property Registry module of the system was ready for Since 2010, the Bank has had the Administrative commercial deployment, while the Management of Department responsible for coordinating Property Lease Contracts and Allocation of administrative and housekeeping activities across Employees modules were being finalised. It is the Group. The department’s responsibilities include expected that the system deployment will be improving the energy efficiency of operations, completed in 2012. ensuring environmental compliance in the management of the property complex, and improving environmental performance in property and logistics 5.2. Environmentally Sound management. Approach to Construction and To ensure a collegial approach towards decision- Modernisation of Buildings making and the use of best practices in the field of property and logistics management, the The Bank seeks to ensure the most efficient use of its Coordination Commission for VTB Group’s Property property through adopting efficient layout solutions Complex Management was created under the and workstation standards, improving the logistics Group Management Committee in July 2011. The between different premises, and strengthening its commission’s plans for 2012 include capacity to track resource consumption. In 2011, standardisation of existing corporate regulations in the most significant developments in terms of the field of administrative and housekeeping optimisation of the Bank’s property use were the activities and development of group-wide completion of the move of the Bank’s head office guidelines in such areas as property leasing, to the Federation Tower, acquisition of additional renovation, and modernisation; cleaning; premises in the tower, and the beginning of the procurement of paper and other stationery; and construction of a new office building in arrangement of workplaces. Vorontsovskaya Street in Moscow.
Day-to-day management of the property of individual To ensure an environmentally sound approach to Group subsidiaries is conducted by the companies the construction and modernisation of its 5. Природа
64 65 premises, the Bank requires its construction and 5.3. Resource Efficiency and Waste renovation contractors to comply with stringent Management The European Embankment requirements, which include the use of environmentally safe and certified materials only. VTB not only participates in the construction of its asked the Public Scientific Council for the The standard contract form for construction and VTB Group strives to ensure the most efficient use own buildings, but also manages one of the largest Environment and Natural Resources of the St. renovation works requires a contractor to provide of natural resources through reduction of paper, re-development projects in St. Petersburg – the Petersburg Scientific Centre of the Russian certificates of conformance with the existing health water, electricity, and heat consumption by the European Embankment – through its subsidiary, Academy of Sciences to carry out an additional and safety standards. Terms of reference for that Bank and the Group companies, among other CJSC VTB Development (VTB Development). The analysis of the completeness, sufficiency, and kind of works provide for the use of only chemically measures. project provides for re-development of a currently effectiveness of the proposed environmental inert and safe materials, such as gypsum plaster, unused industrial site in the historic centre of St. protection measures. At a Council meeting, held glass, stone, porcelain stoneware, and wood, while To reduce the consumption of energy resources, Petersburg. It is planned to build a world-class on December 6, 2011, experts approved the the use of plastics and materials containing the Bank installs the equipment designed for using multi-purpose complex comprising premium proposed actions. The Council concluded that asbestos is minimised. In this way, the Bank state-of-the-art approaches, including, for example, apartments, office and retail premises, a hotel, the implementation of the proposed clean- ensures comfortable working conditions for its computer modelling of air flows in HVAC systems. social infrastructure facilities, and a pedestrian up measures will result in the elimination of employees, while also preventing environmental The heating and cooling units having the best heat embankment. An important component of the a hazardous “pollution hotspot” within the pollution with hazardous chemicals as a result of exchange properties (plate radiators and fan coil project is the construction of the Boris Eifman city, which currently is a permanent source of construction or renovation works. units) and ensuring the most efficient air flow Dance Theatre, a cultural facility of international ground water, air and soil contamination with distribution are chosen for the Bank’s offices. significance. heavy metals and toxic organic chemicals built The Bank uses state-of-the-art energy saving Variable-frequency drives are used in ventilation up at the site, and a threat to public health. technologies and solutions to maximise energy systems, which helps reduce energy consumption. The project provides for the demolition of a It was found that the scope and scale of the efficiency of newly designed buildings. In particular, In 2011, performance adjustment tests of the HVAC complex of buildings of the Institute for Applied proposed activities, including demolition advanced building automation systems were system were carried out in the Tower West of the Chemistry (GIPKh), which occupied the site since works, land remediation, and subsequent installed in the Tower West of the Federation Tower Federation Tower complex. Based on the test results, 1919. An environmental audit, carried out at the development of the site, complies with complex in Moscow. The systems, which control the operating regimes of the equipment were GIPKh industrial site, identified over 50 sources of the existing environmental legislation and power consumption, lighting, and the building adjusted, and heat loads of fan coil units were chemical pollution. regulations. The planned measures will ensure climate depending on the time of day, outdoor balanced. environmental safety of the construction and temperature and other parameters, helps the Bank The site clean-up process will involve the areas adjoining the site. The experts noted optimise its consumption of energy resources. Only VTB Bank was one of the first Russian banks to decontamination of the pollution sources. Then the project implementation will definitely energy saving lamps are used in the building. The completely replace incandescent light bulbs with all GIPKh buildings will be demolished, with lead to the improvement of the state of the Bank plans to use similar solutions in the Group’s energy-saving fluorescent lamps. Currently the debris being processed by crushers. Over 700 local environment in the southern part of other major construction projects, including the Group companies are beginning to introduce even thousand cubic metres of crushed debris and Petrogradsky District of St. Petersburg. building in Vorontsovskaya Street. more efficient LED and halogen lighting systems. For contaminated soil will be removed from the example, in 2011, LED-based systems were installed site. All the waste will be properly disposed of The Bank sets high environmental and resource in the Bank’s office buildings in Vorontsovskaya at special landfills agreed by the authorities; efficiency standards also for construction and Street, Plyushchikha Street, and the 2nd in the process of remediation works, measures renovation projects of the Group subsidiaries. In Yuzhnoportovy Passage, which led to a reduction in to prevent contamination of air, water bodies, 2011, it started drafting the Indicative Guidelines for annual energy consumption from 170 to 80 soil and subsoil, and coastal areas will be the Construction and Renovation of Buildings Used thousand kWh. implemented. To complete the remediation, by VTB. The approaches defined by the document will the site will be filled with clean soil. help optimise construction, renovation and building In order to provide continuous monitoring of energy maintenance costs of the Group companies and bring resource consumption, additional power, water, and Given the complexity and scale of the project, newly acquired premises in compliance with VTB’s gas meters are installed each year in the buildings of VTB Development seeks to utilise the best standards. The document will also set targets for the the Bank and its subsidiaries. For example, in 2011, available environmental technologies and environmental performance of buildings used by the 70 meters were installed in the Tower West of the solutions, and involve the best experts into Group subsidiaries. It is planned to approve the Federation Complex. the project implementation. VTB Development finalised document in the second half of 2012. 5. Природа
66 Resource consumption by VTB Bank in 20111 67 Consumption in 2011 Resource Measurement unit Planned Actual Heat Gcal 18 000 17 259 Electricity thousand kWh 25 810 21 658 Water m3 74 000 73 132
Fuel consumption for business travel using VTB Bank corporate vehicles, 2009–1011 Indicator 2009 2010 2011 Fuel consumption, thousand l 869,6 920,7 892,1
The Group companies also implement their own VTB Bank also acts responsibly with regard to the programmes to improve resource efficiency. For disposal of used paper and waste management. example, in 2011, the Bank of Moscow installed cold About 70% of the Bank’s paper documents are sent and hot water meters, as well as energy saving to an archive and, at the end of the retention period, fluorescent and LED lamps; insulation of the hot are collected by third-party contractors for recycling. water supply system was improved. The Bank also In 2011, 17.92 tonnes of paper were sent for achieved energy savings through the improvement of recycling. Group companies also practice its heat-consuming systems and building insulation, responsible management of waste paper. VTB readjustment and replacement of equipment, and Capital for several years have sent used paper for installation of various systems and units for recycling. In 2011, the amount of recycled paper automated monitoring and controlling of resource waste was some 3 tonnes, which allowed to save consumption. over 50 trees.
Many VTB divisions and subsidiaries have already In 2011, a total of 537 tonnes of solid waste was introduced electronic document management generated at the Bank. Containers with non- systems, which help reduce paper consumption in hazardous waste were being sent to landfills. Used the preparation and approval of draft documents. mercury lamps, batteries, vehicle tires and spare Currently divisions responsible for reviewing parts were collected by licensed contractors for proposed contracts or giving necessary consent disposal. receive scanned copies or electronic texts. Changes to draft documents are also made electronically; they Responsible management of the Group’s motor are authorised by digital signature and do not require vehicle fleet also contributes to the reduction of its signing a paper copy. environmental footprint. When replacing obsolete vehicles and selecting new ones, strict environmental The Group continues to develop its videoconferencing performance criteria based on Euro 3, 4 and 5 system, which helps reduce the amount of business standards are considered alongside cost and general travel, saving resources, time, and money for the performance. In 2011, 30 obsolete vehicles were Group. The system encompasses all Group disposed of, while all 42 vehicles acquired in the subsidiaries and can be used for communications reporting year complied with Euro 3 standard or with business partners in virtually any part of the better. world. In 2011, total videoconferencing time exceeded 22,000 hours.
The total primary energy consumption in 2011, including fuel consumption for the production of electricity and heat, and for business travel, was .1 389 TJ. The data apply to the Tower West of the Federation Tower complex. Selected Awards Won by VTB Group Companies in 2011
68 Selected Awards Won by VTB Group 69 Companies in 2011
VTB Bank Elite Quality Recognition Award for US Dollar Clearing JP Morgan VTB Leasing Leader in the Rolling Stock Leasing Market 2011 Expert RA Agency
Best Sub-Custodian bank in Russia 2011 Global Finance Magazine VTB Pension Fund Financial Pearl of Russia 2011 annual non-governmental award Family Budget web portal, with the support from Budget in the category Impeccable Reputation, High Reliability Publishing House
Company of the Year 2011 in the Bank of the Year category RosBusinessConsulting Group VTB Bank UKRAINIAN BANKER AWARDS 2011 in the categories Most Ekonomika Publishing House (Ukraine) Dynamic Bank and Best Investment Bank Award In Recognition of Outstanding US Dollar Payment Bank of New York Mellon Formatting and Exceptional STP Rate in 2011 VTB Bank The Most Popular Bank in Armenia, according to an online Credit AM (Armenia) survey on the site www.credit.am Best Marketing 2011 Guild of Marketologists Bank of Moscow Euro STP Excellence Award Commerzbank AG Best Annual Report in the Financial Sector RTS and MICEX stock exchanges Expert RA Agency USD STP Excellence Award JP Morgan Chase
Arts Patron of the Decade (a category in the ranking Profile Magazine TransCreditBank STP Excellence Award 2011 Commerzbank AG Philanthropist of the Decade)
VTB24 Best retail bank in the category Result and Success of the RBC Mediagroup Financial Olympus National Awards
Grand Prix of Russia’s Financial Elite Awards Expert RA Agency
RREF AWARDS 2011 in the Mortgage of the Year category LLC Megapolis
VTB24 branch in St. Petersburg – Customer Trust Award 2011 Consumer Association of St. Petersburg and Leningrad in the category Mortgage Bank Region
Professional Recognition Award in the category Best Banking Far Eastern Guild of Realtors Organisations Working with Mortgage Programmes
VTB Capital #1 Bookrunner in Eastern Europe DCM and ECM Dialogic #1 Financial Advisor to M&A transactions in Russia and CIS by value
#1 Research Team in Russia Country Analysis, #1 Brokerage Firm Thomson Reuters in Russia, #1 Equity Sales Team in Russia, Extel Survey
#1 for Overall Client Service in Russia, FX Poll 2011 Euromoney
#1 Private Equity Firm in Russia, Private Equity International PEI Media Awards
Best Investment Bank in EMEA, Achievement Awards EMEA Finance
Best Investment Bank in Russia, World’s Best Investment Banks Global Finance
Best Private Equity Firm in CEE, Achievement Awards EMEA Finance
Best Debt Bank in CEE, World’s Best Investment Banks Global Finance
Best Investment Bank for Debt Capital Markets, Best Investment BNE Bank for Equity Capital Markets, Investment Banks Survey
Financial Advisor of the Year in Russia and CIS, European M&A Mergermarket Awards
Best FX Provider in Russia, World’s Best FX Providers Global Finance About This Report
70 71 functional units of VTB Bank. The information This report has been prepared in accordance with the About This Report management system used in preparing this Report requirements of GRI Application Level C (see GRI provides for an integrated use of different forms and Content Index below in this Report). methods of data collection and consolidation. All environmental performance indicators of JSC VTB Please send your comments and suggestions Bank used in this Report were provided by the regarding this Report to Elena Melikhova at JSC VTB This Social Report 2011 for VTB Group (the Report) is the fourth social Administrative Department. The unit responsible for Bank Advertising and Marketing Division report published by JSC VTB Bank (VTB Bank or the Bank). The previous the preparation and publication of this Report was ;JSC VTB Bank Advertising and Marketing Division (PR E-mail: [email protected] Social Report was published in autumn 2011. VTB has published its Social and Marketing Department). phone: (495) 775-54-54, ext. 1-46-48. Report 2011 for the General Shareholders Meeting on June 8, 2012.
The objectives of the preparation and publication of accordance with the International Financial Reporting this Report include an analysis of the corporate social Standards (IFRS). responsibility performance of VTB Group (hereinafter also referred to as the Group or VTB) in the reporting The content of this Report has been defined on the basis period by the Group’s management and of the principles of materiality, stakeholder communicating information about this performance inclusiveness, sustainability and completeness as to stakeholders. defined by the Global Reporting Initiative’s Sustainability Reporting Guidelines ( the GRI Guidelines). The reporting period of this Report is the calendar year beginning on 1 January 2011 and ending on 31 The following procedures were used to identify December 2011. In future, VTB plans to continue material topics to be covered by this Report: publishing annual social reports, which have become an integral part of the Group’s annual reporting l interviews with relevant managers; process. l an analysis of the content of non-financial reports The target audience of this Report includes issued by similar companies; government authorities, shareholders and investors, customers and employees, as well as the general l an analysis of media materials and VTB’s corporate public. publications;
The boundary of this Report, like in 2010, includes l an analysis of VTB’s internal policies and regulations. companies of VTB Group. Unless stated otherwise, the qualitative information presented in this report In order to ensure the quality of this Report, VTB applies to VTB Group as defined by VTB Group Group relied on the principles of balance, Development Strategy for 2010–2013. comparability, accuracy, timeliness, clarity, and reliability as defined by the GRI Guidelines. The financial information presented in this Report applies to VTB Group as defined by the consolidated The responsibility for collection and consolidation financial statements of VTB Bank prepared in of information for this Report was distributed among GRI Content Index (G3.0)
72 GRI Disclosure Disclosure definition Report section Pages. 73 GRI Content Index (G3.0) 3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced About This Report 78–79 operations, and other entities that can significantly affect comparability from period to period and/or between organisations
3.10 Explanation of the effect of any re-statements of information provided in earlier There were no re-statements reports, and the reasons for such re-statement
3.11 Significant changes from previous reporting periods in the scope, boundary, There were no significant or measurement methods applied in the report changes
3.12 Table identifying the location of the Standard Disclosures in the report This section 80–82 GRI Disclosure Disclosure definition Report section Pages. 1. Strategy and Analysis 4. Governance, Commitments, and Engagement
1.1 Statement from the most senior decision-maker of the organisation Statement of President- 5–7 4.1 Governance structure of the organisation, including committees under the highest Chapter 1. We 18–19 Chairman of the governance body responsible for specific tasks, such as setting strategy or Management Board organisational oversight
2. Organisational Profile 4.2 Indicate whether the Chair of the highest governance body is also an executive Chapter 1. We 18 officer 2.1 Name of the organisation Chapter 1. We 9 4.3 For organisations that have a unitary board structure, state the number of members Chapter 1. We 18 Primary brands, products, and/or services Chapter 1. We 9 of the highest governance body that are independent and/or non-executive 2.2 Chapter 2. Business 29 members
Operational structure of the organisation, including main divisions, operating Chapter 1. We 9 4.4 Mechanisms for shareholders and employees to provide recommendations or Chapter 1. We 18 2.3 companies, subsidiaries, and joint ventures Annex 83 direction to the highest governance body Chapter 3. Team 22–25
2.4 Location of organisation’s headquarters VTB Group headquarters is 4.6 Processes in place for the highest governance body to ensure conflicts of interest Chapter 1. We 18–20 based in Moscow, are avoided 12, Presnenskaya Nab. Mailing address: 4.8 Internally developed statements of mission or values, codes of conduct, and Mission and Values 1 29, Ul. Bolshaya Morskaya, principles relevant to economic, environmental, and social performance and the http://www.vtb.ru/we/ St. Petersburg, 190000, status of their implementation today/mission/ Russia
2.5 Number of countries where the organisation operates Chapter 1. We 9 4.14 List of stakeholder groups engaged by the organisation Chapter 1. We 15
2.6 Nature of ownership and legal form Chapter 1. We 9 4.15 Basis for identification and selection of stakeholders with whom to engage Chapter 1. We 14–15
2.7 Markets served by the organisation Chapter 1. We 9 4.16 Approaches to stakeholder engagement, including frequency of engagement by type Chapter 1. We 14–17 and by stakeholder group Scale of the reporting organisation Chapter 1. We 9–10 2.8 Chapter 2. Business 30 Performance Indicators Chapter 3. Team 45–46 Economic Performance
2.9 Significant changes during the reporting period regarding size, structure, or Chapter 1. We 12 EC3 Coverage of the organisation’s defined benefit plan obligations Chapter 3. Team 52 ownership EC8 Development and impact of infrastructure investments and services provided Chapter 4. Society 57–67 2.10 Awards received in the reporting period Chapter 1. We 17 primarily for public benefit through commercial, in-kind, or pro bono engagement Chapter 2. Business 35, 37 Chapter 4. Society 58,76 EC9 Understanding and describing significant indirect economic impacts, including the Chapter 2. Business 30–39 http://www.vtb.ru/we/ extent of impacts Chapter 4. Society 57–69 press-center/awards/ Environmental Performance 3. Report Parameters EN3 Direct energy consumption Chapter 5. Environment 74 3.1 Reporting period for information provided About This Report 78 EN22 Total weight of waste by type and disposal method Chapter 5. Environment 75 3.2 Date of the most recent previous report About This Report 78 Labour Practices and Decent Work 3.3 Reporting cycle About This Report 78 LA2 Total number and rate of employee turnover Chapter 3. Team 45–47 3.4 Contact point for questions regarding the report or its contents About This Report 79 LA3 Benefits provided to full-time employees that are not provided to temporary or part- Chapter 3. Team 52 3.5 Process for defining report content About This Report 78 time employees
3.6 Boundary of the report About This Report 78 LA13 Composition of governance bodies and breakdown of employees per category according Chapter 3. Team 47 to gender, age group, minority group membership, and other indicators of diversity 3.7 Any specific limitations on the scope or boundary of the report About This Report 78 Annex
74 GRI Disclosure Disclosure definition Report section Pages. 75
Product Responsibility Annex PR5 Practices related to customer satisfaction, including results of surveys measuring Chapter 2. Business 43 customer satisfaction
Society VTB Group organisational structure as of December 31, 2011
SO5 Public policy positions and participation in public policy development and lobbying Chapter 1. We 20–21 Chapter 2. Business 30–34
SO8 Monetary value of significant fines and total number of non-monetary sanctions for No significant fines or JSC VTB Bank non-compliance with laws and regulations non-financial sanctions were imposed on VTB Group companies
Indicators of the Financial Services Sectoral Supplement VTB Factoring Ltd. VTB Pensionny (100%) CJSC Holding VTB Capital FS1 Policies with specific environmental and social components applied to business Chapter 1. We 13–14 CJSC Bank VTB 24 Administrator Ltd. (100%) OJSC VTB Leasing lines Chapter 2. Business 29–31 (100%) (100%) (100%) Insurance Company VTB-Insurance Ltd. (100%) .FS6 Percentage of the portfolio for business lines by specific region, size and by sector Chapter 1. We 9 OJSC Bank of Moscow Holding VTB Capital IB Ltd (94.846%) VTB DC Ltd. (100%) a Chapter 2. Business 30 JSC TransCreditBank CJSC VTB (99.99%) (74.53%) Multicarta Ltd. Specialised Depository Russi (100%) (100%) CJSC VTB Registrar CJSC VTB Arena CJSC VTB Capital (100%) (77.3%) (100%)
CJSC VTB Development VTB Capital (100%) Finance Ltd. (81%)
JSC VTB Bank (Georgia) PJSC VTB Bank OJSC VTB Bank (96.31%) (99.97%) (Azerbaijan) (51%)
CJSC VTB Bank (Armenia) CJSC VTB Bank JSC Bank VTB CIS (100%) (Belarus) (71.4%) (Kazakhstan) (100%)
VTB Bank Austria VTB Capital Holding AG (100%) UK Limited (100%) RCB (Cyprus) Ltd. VTB Bank France SA (96,25%) (60%) VTB Capital plc Europe (95,5%) VTB Bank Deutschland AG (100%)
Vietnam-Russia Joint a Banco VTB-Africa S.A. VTB Capital (Namibia) VTB Capital New Delhi Shanghai Dubai Singapore Venture Bank (VRB) Hong Kong Branch Branch (66%) (Pty) ltd (50,33%) Office Office (50%)* Limited (100%) (India) (China) Afric Asia and a VTB Capital Inc. (100%) Americ
The organisational structure of the Group is presented according to the criteria that VTB Group comprises JSC VTB Bank, as well as credit, financial, and other organisations, in which VTB Bank holds an equity interest of more than 50% or whose activities are influenced by the Bank to a significant extent.
* VRB is not a part of VTB Group; however, VTB Bank holds a substantial equity interest in VRB and therefore is able to influence its activities to a significant extent. Contact Details
VTB Bank (open joint stock company)
Address: 29, Ul. Bolshaya Morskaya, St. Petersburg 190000, Russia
Phones: 8 (800) 200-77-99, (495) 739-77-99
Fax: (495) 258-47-81
Website: www.vtb.ru
E-mail: [email protected]
Please send your comments and suggestions regarding this Report to Elena Melikhova at JSC VTB Bank Advertising and Marketing Division
;E-mail: [email protected] phone: (495) 775-54-54, ext. 1-46-48.