ГОДОВОЙ ОТЧЕТ 2020 ANNUAL REPORT 2020

YEARS Strategic Financial Business From risk Creating wealth report performance divisions to opportunity responsibly

BANK SAINT PETERSBURG CONTENTS AT A GLANCE

STRATEGIC The Bank is con- RECORD-HIGH ASSETS REPORT 5 stantly developing NET INCOME 50 000 2 077 000 LETTER FROM THE MANAGEMENT 6 and improving. corporate customers retail customers We are grateful incl. 49 500 Internet Bank users incl. 1 300 000 Internet Bank users 30 YEARS PROUDLY to our customers, RUB 10.8 BN RUB 730 BN WITH THE CITY 8 partners and 16th in Russia MACROECONOMIC investors for our 36.9% ENVIRONMENT 12 mutually beneficial OUR STRATEGY 16 cooperation in the last year and are FINANCIAL hopeful for the PERFORMANCE 21 same in the next FINANCIAL HIGHLIGHTS 22 year as well! RETAIL CORPORATE DIVIDEND POLICY 31 DEPOSITS DEPOSITS INVESTOR RELATIONS 32

BUSINESS Saint-Petersburg RUB 276 BN RUB 203 BN DIVISIONS 35 58 offices CORPORATE BANKING 36 75% of loans 10.9% 20.4% RETAIL BANKING 48 Kaliningrad 90% of deposits PRIVATE BANKING 56 Saint-Petersburg DIGITAL BANKING 57 Kaliningrad FROM RISK Moscow 1 branch and 5 offices TO OPPORTUNITY 65 3% of loans LOAN PORTFOLIO RISK MANAGEMENT 66 4% of deposits COST OF RISK Rostov-on-Don Moscow RUB 459 BN. DYNAMIC ANALYSIS 74 1 branch and 1 office Krasnodar Novosibirsk CREATING WEALTH 22% of loans  14.4% RESPONSIBLY 77 6% of deposits CUSTOMERS 78 COLLEAGUES 81 Novosibirsk COMMUNITY 85 1 branch CORPORATE GOVERNANCE 92 Rostov-on-Don 1 representative office

Krasnodar 1 representative office

2 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 3 666 LetterRisk managementfrom the Management Strategic Financial Business From riskrisk Creating wealth 748 30Cost Years of riskProudly dynamic with analysisthe City report performance divisions to opportunity responsibly 12 Macroeconomic Environment 16 Our Strategy

Strategic Report

To be among the leaders in online sales and operations, while remaining the most efficient digital classic Russian bank.

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LETTER FROM THE MANAGEMENT

DEAR CUSTOMERS, INVESTORS In the end of 2020 we’ve summed the results Be the time the limitations were implemented, We are actively involved in our city’s activities. AND PARTNERS, of three-year Strategy 2018-2020. All the initial the Bank was quite well-prepared for what In 2020 we’ve reached an agreement with volumes growth goals were exceeded. was to come and achieved advanced level of the Administration of Saint Petersburg, Year 2020 became a dividing line for On the strategic horizon we were able to digitalization. Within the shortest terms we’ve implying taking part in social projects and the world “before” and the world “after”. Global outperform the market, or at least be on made the most of services and products helping towards dissemination of the cutting- coronavirus pandemic affected more or less any par with it, on all key business directions. available online, eliminating the need for edge banking technologies, as well as active state, company or person, changing the lifestyle The loan portfolio grew by 28% over 2018- the branch visit, thereby establishing ourselves development of local SME business. we’re used to. Our main focus became 2020, customer accounts by 33%. It indicates as a contemporary digital bank. the safety of our customers and employees. that over the last three years we’ve remained The Bank is constantly developing and A series of measures aimed at both safety and a competitive and reliable partner for our The Bank is also making strides in regional improving. We are grateful to our customers, uninterrupted operations was implemented. customers development – we’ve put on our maps two partners and investors for our mutually new representative offices in Krasnodar and beneficial cooperation in the last year and are Customer support was also a big priority for Last three years have also confirmed high levels Rostov-on-Don. hopeful for the same in the next year as well! us. Imposed limitations in order to mitigate of customer confidence – we’ve achieved 34% coronavirus infection spread led to decrease retail customer accounts growth significantly of revenues in SME business, as well as their ahead of the market, with our funding costs employees’ income. Drop in raw materials remaining among the lowest on the market. prices and in economic activity resulted in large Thus, we were able to maintain cheap funding corporates revenues decrease. In these difficult source, remaining independent of the capital times we’ve successfully relied upon our markets borrowing. measured approach, which, coupled with vast Elena Ivannikova Alexander Savelyev management experience, allowed us to provide 99% of corporate customers and around 60% Chairperson of the Supervisory Board Chairman of the Management Board much-needed support to our customers and of retail customers already are active digital minimize negative influence triggered platforms users. The share of digital sales by the pandemic. The Bank posted RUB 10.8 bn amounted to 64% of total mass sales, while of net income for the last year – an outstanding customer operations online share amounted to result. 82% of total operations volume.

Last year’s robust financials allowed us to fully keep our promises given to the Bank’s shareholders. In November 2020 the Bank’s shareholders took a decision to pay out 2019 dividends in full.

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30 YEARS PROUDLY YEARS WITHProudly THEwith the CITY City

Bank Saint Petersburg is one of the largest In the June of 1998 Bank Saint Petersburg 1990 On October 3, 1990, "Lenbank" 19971997 Doubly significant year: we banks in the Northwestern Federal District of became the first city bank to be allowed by was registered under No. 436 — opened a department for the first JSC bank in the country. mortgage lending; the Bank's Russia. Its history spans over 30+ years and the Central Bank to cash out card accounts. ATMs are operating 24/7. stems from a system of specialized government The Bank expanded lending through settlement banks. Based on “Zhilsozbank” of that system, and forex importers’ accounts, plastic card 1991 The shareholders took on October 3, 1990 “Lenbank” JSC emerged, lending as well as other lending products. a decision to change the name The year was economically to Bank Saint Petersburg. 1998 harsh for many, but the Bank which was renamed to Bank Saint Petersburg managed to fulfill its obligations a year later. Retail business development was commenced to the depositors and entered in the Bank’s business strategy. By the beginning The Bank became one 1992 top-50 banks, oriented towards 1992 of the founders of Saint- Since the first days of operation the Bank set its of 2000, the Bank provided over 600 types the settlement and budget Petersburg Exchange. course towards intensive development, then- of services, successfully implementing accounts.

new directions emerged on the market: e.g. the individual approach in customer service

forex operations, securities operations, cash as well as flexible tariff policy. The "Payroll Project" was collections. Dealing operations on international 1999 launched. currency and financial markets became by far The Bank is founding its operations on the basis the most successful direction. Correspondence of openness and transparency principles even We have not yet come up with 1993 a motto "High Culture Banking", We offered the first car loan and net expanded up to 130 banks, including foreign still to this day, which is regularly confirmed by but have already launched 2000 issued the first credit card. ones. financial results. The active business position of a program "Classics and the Bank allows it to develop collaborations with the Future" to support classical After the analysis of the high- In the mid-1990s the Bank launched banking international financial institutions and opens music art and musically gifted 2001 2001 tempo growth of bank cards, card emission. The Bank’s own processing up new prospects for interbank operations children. we created a department for center was developed, operating on combined development, trade finance, and lending. plastic card management. Bank chip and magnet technologies. Thanks to In 2007, the Bank hit a new developmental The Bank issued its first plastic cards will become the driver for milestone by a successful IPO, raising the rapid introduction of new services Bank 1994 cards. the Bank's growth over the next Saint Petersburg became one of the leaders USD 274 mln. The book was oversubscribed years. in the forming local market. seven times, which became a record for The Bank commenced a Russia-based company IPO. 1995 collaboration with We launched children's cards — During the economic crises of 1996−1998, the Allied Irish Banks. We 2002 cards for parents' allowance for the Bank did not back down from its positions, The best European market practice was actively developed projects children. uninterruptedly providing quality financial a benchmark to a new cutting-edge business on credit risk management. services to its customers. The Bank provided strategy of the Bank. Customer policy was The Bank's reports were made We were the first in the city to support to significant industries of the city, oriented towards building long-term positive in accordance with IFRS. 2003 issue chip cards — the safest particularly, long-term lending programs. For relations with the customer. At its base were and the most reliable. this purpose, a new credit risk management the Bank’s reliability, individual approach to The Bank reached an agreement system was developed and implemented the customer, service mobility, and ad-hoc 1996 with the Ministry of Finance of The Bank was one of the first in collaboration with Allied Irish Banks in 1997. reaction to the customer’s needs. Active the Russian Federation in order 2004 members of a deposit insurance customer base growth of the Bank was coupled to actively finance construction program — since 2004 retail At that time the Bank acquired the status of with a “middle” segment share increase. projects and production. deposits are protected by Principal Member in Visa International, which the government. allowed the Bank to launch the first large payroll projects.

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Retail position strengthening was in focus: stronghold: uninterrupted operations 20052005 We were one of the first banks 2013 The Bank entered top- the Bank targeted developing Internet banking, maintenance and customer service are still our to provide for communal 10 mortgage banks in Russia. services and mobile increasing physical presence, improving priorities. communication payments plastic cards service, acquiring, and expanding In the current circumstances we strive not only We launched the Internet Bank through ATMs and the Internet 2014 i2B for corporates, whereas a lending product line, particularly in mortgage to provide customer support but also to offer Bank. lending. development and take a step forward with retail customers enjoyed us and our new efficient solutions, cutting- the launch of our new YARKO Our first Eurobonds issue. loyalty program. Celebrating our 30th anniversary, we are edge innovative technologies and as always 2006 rightfully proud of our market share, long- a quality service. We optimistically look towards term customer relations, a strong team of the future and set out our plans accordingly, 2007 The key year for the Bank - 2015 We modernized St. Petersburg professionals, our impeccable reputation and and are secure in their successful fulfillment. the first privately-owned bank to Metro turnstiles with perform a successful IPO the possibility for NFC payments goodwill earned over the years passed. We are being entrusted by over 2 mln retail and purchased the best bank of customers and 50 000 companies. We are Kaliningrad, making it into our At this time Bank Saint Petersburg plays grateful to our customers for sticking with us Two significant projects were 2008 Evropeisky Branch. a significant and constructive role in the national throughout the years, and we are always ready finished: mobile bank launch for banking system development, with which to suit their financial requests. retail customers and Internet Bank revamp for corporates. We were one of the first banks it shares its history since its establishment. 2016 2016 to offer card payment via In the environment of both global and local mobile: Android Pay, Samsung challenges, dealing with new arising issues, The Bank became a partner for 2009 Pay and Apple Pay. the Bank should strive to remain a stability three federal programs: SME support, maternity capital, and pensions payment. We were one of the first banks 2017 to introduce a loan refinancing program. The number of retail customers 2010 exceeded 1 mln. We launched a perfect tool for 2018 purchase of the real estate — Two significant events of escrow accounts. 2011 the year: we moved to a new HQ in Malaya Okhta and became the first in the city to issue The Bank reached an a card allowing for in-transport 2019 agreement with the city and payment. launched Resident ID cards.

Over just six months The Bank opened 2012 the new Internet Bank for retail 2020 representative offices in Rostov- customers was developed and on-Don and Krasnodar. launched — a record term in Russia for a project of such magnitude.

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MACROECONOMIC ENVIRONMENT

GLOBAL AND RUSSIAN In the second half of the year production Inflation continued its acceleration and short- the funds received from the Ministry of Finance ECONOMY IN 2020 slowly recovered, the 4Q industrial production term inflationary risks grew their influence with of the Russian Federation from Sberbank 4.9% index was down by 2.5% y-o-y after long-term disinflationary ones remaining intact. acquisition. The operations of the CBR and inflation growth Russian economy saw a positive beginning a decrease of 6.7% in 2Q; the annual decrease the Ministry of Finance helped to stabilize of the year, ruble exchange rate remaining in FY 2020 amounted to 2.9%. With that said, Financial markets remained under pressure forex market position and continue supporting stable, with high oil prices and demand for the process manufacturing sector retained throughout most of the year of the corona- ruble exchange rate, until oil prices growth risky assets supporting the Russian market. moderate growth, with the chemical complex related news background and growing risks compensates for dropping federal budget Internal demand in the economy increased on (+8.8% y-o-y) and the food industry (+3.1% y-o- for the global economy. With that said, Oil&Gas gains, with the budgetary rule having the back of positive real salaries dynamics and y) being among the leaders in terms of growth. the Russian market remained relatively stable been corrected for not only oil prices drop active budgetary spending. However, COVID- GDP as a whole reduced by 3.5%. With that, until the oil prices collapse in March. Ruble compensation but also a drop in production 19 spread and first countermeasures enacted retail trade turnover shrank by 4.5% y-o-y, with has naturally reacted with steep weakening, volumes due to the OPEC deal. In 4Q 2020, starting with China, followed by the European the consumer demand recovery being held back with the RUB/USD exchange rate reaching the CBR completed its own forex operations, zone, bolstered global economic slowdown by weak disposable income dynamics: -4.3% 80.9 in March; in June it partially restored since 2021 forex sales will be only performed sentiment — the external demand began during 9M 2020. to RUB 69. 3Q saw a moderately negative in accordance with the budgetary rule dwindling, particularly in terms of energy sentiment, so did the beginning of 4Q. Firstly, benefitting the Ministry of Finance. With that carriers after a partial, and soon after complete Inflation in Russia continued its downward investors exercised caution due to uncertainty said, the CBR’s own operation on forex sales led shutdown of the air traffic in the number trend at the beginning of the year, reaching related to the outcome and aftermath of to a decrease in ruble liquidity in the banking of countries. Moreover, the OPEC+ deal its local minimum of 2.3% y-o-y in February. the US elections. Moreover, the sickness system, which resulted as one of the causes deterioration in March and increased However, rising uncertainty, weakening ruble, rate increase in the US/EU and limiting of structural liquidity surplus. Liquidity was production plans aggravated the oil market and growing demand for the essentials and countermeasures followed strengthened also significantly affected by increased money position. On that backdrop Brent oil price export prices growth for certain products led negative attitude towards the long-awaited demand. Some time prior to the additional plummeted to USD 22.7/bbl, local sorts lost to the price growth acceleration. Inflationary recovery of the global economy, with the USA non-working days in March, some individuals even more, Russian brand Urals repriced to flashes in April and November hiked the y-o-y budgetary stimulus package hitting one and legal entities showed high money demand. USD 15.1/bbl. inflation up to 4.9%. The Central Bank of Russia slump after the other. However, in the end, This trend held true throughout the whole year. (CBR) in 2020 pressed on with its monetary Joseph Biden’s victory was taken positively by The third ruble liquidity-affecting factor became Introduction of non-working days in Russia easing policy cycle, bringing the key rate down the markets, and epidemiological data influence the operations of the Ministry of Finance on in March to slow down the virus spread had no to 4.25%. One of the main drivers for easing is was partially canceled out by the notifications federal bonds placement ahead of budgetary material impact on the 1Q results. However, the prevalence of disinflationary pressure due about impending mass vaccination. So by spending. As a result, the structural liquidity the prolongation of limiting countermeasures to the drop in demand. Among other factors are the end of the year, the markets reached quite surplus of RUB 2.6 tn turned into RUB 0.19 tn until mid-May dramatically influenced other Central Banks’ actions: e.g. the Federal a positive outlook. On that backdrop and rising deficit by the end of the year. the economic growth and production activity Reserve System (FRS) plummeted its key rate interest to the risky assets the Russian ruble and largely hit the services sector. The industrial from 1.5–1.75% to 0–0.25% in March and recovered after its utmost weak point of RUB/ MOEX index after the March drop and weak production index in January–November shrank employed a new quantitative easing policy, and USD 80.5 among other emerging markets 3Q bounced back in November–December by 3% compared with the last year, after a 2.9% the European Central Bank (ECB) expanded its currencies to the RUB/USD 74.4 level at the end and refreshed January maximum by the end growth in 1Q. In the pre-pandemic environment asset purchase program. The largest regulatory of the year. of the month, by the year-end growing by 8%. among the developing industries were oil bodies’ actions supported the financial markets The bond market followed the key rate, however refining, chemical, and food industries. During throughout the year, whilst most of the Central The Central Bank already commenced dwindling non-residential demand by the end of the pandemic, the process manufacturing Banks lowered their key rates. However, after preemptive foreign currency sales in March the monetary easing cycle in Russia held back sector received a major hit under the influence the drop to 4.25% in July the CBR put everything following the budgetary rule (formally, they the prices in the end of the year. Nevertheless, of diminishing demand, while oil production was on hold, basing off of growing uncertainty and should have proceeded with it only in April); federal bonds yields dropped by 30–90 bp y-o-y impacted by the following OPEC deal. volatility of the external markets, coupled with after Urals dropping to USD 25/bbl the CBR depending on the maturity. ruble depreciation. increased the volume of the operation with

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BANKING SECTOR IN 2020 After that retail demand was restored on ECONOMY OF ST. PETERSBURG Fossil fuels extraction lost 15.5% by the end 113 the back of lower rates, including those on of the year. The most affected industry in St. 1.5 RUB TN Banking system assets grew by RUB 15.9 tn mortgages, and of the federal mortgage subsidy In 2020, the St. Petersburg economy was no Petersburg (as well in other regions) became RUB TN banking sector (+16.5% YTD) up to RUB 112.5 tn (3.7 tn due program initiation. The stabilization of 3Q exception to the pressure from the lower the food service industry (30.5% y-o-y turnover retail sector assets to forex revaluation). Ruble assets increased lowered the legal entities’ demand for funds, demand and limiting measures due to drop), with the retail sector contracting by 2% turnover by RUB 11.3 tn (+14.5% YTD), a net increase corporate lending slowed down a bit. With that, the coronavirus pandemic. The industrial to 1.5. Inflation came in slightly lower than in forex assets amounted to 4.6%. Gross loan the subsidy program was firstly expanded to production index went down by 1.8%, with the state average at 4.7%. portfolio as at January 1, 2021 amounted to RUB 900 bn, and to RUB 1 850 bn after that, the construction volumes decreasing by 9.3%. RUB 77.7 tn (+14% YTD). coupled with lower first payment threshold With that, the process manufacturing sector fueled the demand for these loans, with retail (taking up 84.6% of the city’s production), At the end of 1Q, the lending growth driver lending growing on the back of unsecured lost only 0.8%, supported by the chemical was a hike in demand from non-financial lending recovery. Nevertheless, mortgages sector (+18% y-o-y), food (+4.6%), and paper organizations when companies had to remained the main growth driver. By the end production (8.7%). compensate the lack of income. This trend held of the year lending mostly grew due to large up until the middle of 2Q. On the other hand, corporate lending from the various sectors, retail lending fell behind at the beginning of one of which being construction projects 2Q due to lower demand from the populace financing — also connected with the subsidy and stricter requirements set by the banks. program and lowered rates.

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OUR STRATEGY

At the beginning of 2018, the Bank published KEY STRATEGIC PRIORITIES Tripling the revenues in SME business GROWTH OF HIGH INCOME-GENERATING its Strategy for 2018–2020, followed by in the Moscow segment will drive a 25% CUSTOMER BASE 2019 amendments extending the planning MARKET LEADERSHIP IN EXIM OPERATIONS increase in total SME segment revenues. horizon up until 2022 and outlining new The Bank also sets a 5% annual ARPU (Average The Bank realizes that nowadays acquisition strategic priorities. However, the original This priority was initially set in 2019 when Revenue Per User) increase target. costs of new customers grow ever higher. strategy’s period of action drew to a close, the Bank stated EXIM as a strategic direction Customer retention and efficient cross-sales prompting the Bank to look quite ahead once of development. The Bank boasts advanced LARGE CORPORATE BUSINESS POSITION are a much cheaper option. In these terms, again in 2020. EXIM operations infrastructure with limited STRENGTHENING the Bank has been developing AI & ML-based impact from geopolitics on its operations big data analytics systems, allowing for better On December 24, 2020 the Supervisory Board due to the status of a privately-owned bank. Large corporate business is a key BS & churn rate management and individual offering. of Bank Saint Petersburg approved the Bank’s Coupled with existing vast expertise in EXIM, PL growth driver for the Bank, therefore Lending is still the main driver for ARPU growth, Strategy for 2021–2023. as well as a significant customer base amassed its expansion is essential for the overall while loan products’ penetration potential in the regions of operation, the Bank sets development of the Bank. During the last few in the existing base remains high. The Bank has The Bank has decided to adopt a new concise out goals to increase the active customer years, we managed to find a golden mean adopted the following metrics: ARPU growth form for its new Strategy, namely, a one-page base by 25%, with the volume of transactions between growth, moderate risk appetite, by 15% and increasing payroll customers loan strategy. It allows for capturing a better focus on growing by 20%. The Bank targets doubling and profitability in this segment. The Bank penetration from the current 22% to 35%. the essence of optimal long-term development. EXIM operations revenues in three years by is benefiting from strong brand recognition The Strategy 2021–2023 is available at actively utilizing its customer base and offering and a successful story of relations with large REMOTE MODEL OF CUSTOMER the Bank’s website. the best products and services. Having said that, business — coupled with great Moscow market ACQUISITION AND SERVICE the quality of services provided and customer potential it allows for ambitious growth targets The new Strategy provides for five key strategic satisfaction importance is also recognized, with in Moscow. We are looking to realize Moscow This priority is based on the Bank’s desire to priorities, outlining the rationale of their the fourth metric having to do with maintaining potential by increasing its loan portfolio by 45%, create a possibility of mass customer acquisition adoption as well as formulating key appropriate the already high level of Net Promoter resulting in an overall increase of 30% across and service exclusively in remote channels. metrics: Score (NPS) among EXIM customers. the Bank, in addition to which the Bank also The current combined offline-online model — market leadership in EXIM operations; targets doubling its customer base in Moscow, is effective in the regions of presence but — significant growth in SME business; SIGNIFICANT GROWTH IN SME BUSINESS with a 30% overall increase in the large limits the expansion. And physical expansion — large corporate business position corporates. seems to be expensive and out-of-date. Since strengthening; Focus on SME business is a reflection of this approach is new and challenging for us, — growth of high income-generating customer the goals to expand in Moscow and to increase in 2021 we are going to define the methodology base; the volumes of transaction business. One for accurate measurements of success. — remote model of customer acquisition and of the pillars for this priority is still a “blue However, we aim to guarantee the availability service. ocean” of the Moscow market, where taking of all mass services completely in online format, even a percent of the market would translate which will facilitate new customers’ acquisition into significant transaction revenues growth through remote channels enabling digital for the Bank as a whole. Also, the Bank has revenues growth. already been operating on the Moscow market for several years, and has garnered a strong reputation, building a solid name for itself. So one of the metrics used here is active SME customers fivefold growth in Moscow, driving the growth of a total SME customer base by 85% over three years.

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KEY STRATEGIC ISSUES DATA-DRIVEN ORGANIZATION KEY STRATEGIC TARGETS

GEOGRAPHY Continuing from the results of digital 1. ROE — 15%. The Bank has been gradually transformation and going one step deeper, increasing its ROE in recent years, with a 15% We remain a bank of two capitals, while creating we, feeling comfortable in a transformed level still remaining our target. the basis for the use of remote channels to digital environment, have formulated our new unlock the new regions. strategic direction for digital development 2. TSR — ABOVE THE MARKET. The Bank is as a “data-driven organization”. Having striving to bring value to our shareholders. OUR TARGET CUSTOMERS acquired experience in big data analytics, we We aim to increase shareholders’ return both are expanding our use of machine learning in share price growth and dividend payout. Talking about mass corporates, we aim and artificial intelligence-based macro and The benchmark is TSR (Total Shareholder to attract all segments of SME business, risk modeling, also allowing for customer base Return) of MOEX index. supporting our transactional model. Lending management, as well as smart pricing and will be used as leverage for the growth of offering, making the tailored individual offers this model and is not a focus in and of itself. available even to mass customers. Payroll account customers also remain a focus for our acquisition. On the retail side, we CREATIVE AND OPEN-MINDED TEAM aim for product-based acquisition primarily of middle-aged and older individuals with We also recognize that all of the above is not some substantial income. We also aim to possible without having highly qualified and expand our business partner collaborations motivated employees engaged in collaboration (construction companies, insurance agencies, on every level and efficient cross-functional car dealerships), which would allow us another teams. channel for new customer acquisition.

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Financial Performance

FY 2020 Net profit amounted to record-high RUB 10.8 billion (+36.9% compared with FY 2019).

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FINANCIAL HIGHLIGHTS

The principal factors that influenced the Bank’s 2020 financial results included: NET INTEREST INCOME NET FEE AND COMMISSION INCOME 25.5 — FY 2020 Net profit amounted to — FY 2020 ROAE up to 12.9% (10.2% The Bank’s interest income decreased by RUB BN record-high RUB 10.8 billion (+36.9% in FY 2019), 4Q 2020 ROAE up to 20.3% 10.4% in 2020 to RUB 43.4 bn, compared The Bank’s fee and commission income net interest compared with FY 2019), including (12.1% in 4Q 2019); to RUB 48.5 bn in 2019. Customer lending increased by 10.8% in 2020, reaching income RUB 4.5 bn in 4Q 2020 (+86.3% compared — Loan portfolio grew by 14.4% YTD, including contributed to 82.1% of the total interest RUB 9.9 bn, compared to RUB 8.9 bn in 2019. +9.6% with 4Q 2019); +15.2% in corporate and +12.0% in retail income: interest income from loans and Plastic cards settlements (35.8% of total fee and portfolios. advances to customers amounted to commission income) increased by 3.1% and RUB 35.6 bn. Interest income from other amounted to RUB 3.6 bn. Cash and settlement operations, principally from securities, operation fees (40.6% of the total fee and Revenues structure*, RUB mln decreased by 36.7%, amounting to RUB 7.8 bn commission income) increased by 11.0% to in 2020, compared to RUB 12.3 bn in 2019. RUB 3.6 bn compared to 2019. Fees for issuing 30 300 32 094 32 797 31 857 37 879 Overall, this interest income component still guarantees and letters of credit (15.3% of 25 523 23 281 comprises an insignificant amount of 17.9%. the total fee and commission income) increased 21 358 21 895 by 49.0% and stood at RUB 1.5 bn. 19 658 Interest expense decreased by 28.9%, amounting to RUB 16.7 bn in 2020, compared Fee and commission expense increased by to RUB 23.4 bn in 2019. Interest expense on 11.4% in 2020 to RUB 2.4 bn, compared retail term deposits decreased by 22.0% and to RUB 2.2 bn in 2019. The aggregate of 7.5 7 539 amounted to RUB 7.5 bn (45.3% of total interest commissions on plastic cards settlements RUB BN 6 245 6 819 4 700 5 211 5 243 net fee 4 169 3 973 expenses). Interest expenses on corporate term (including loyalty programs), securities 2 518 deposits increased by 29.1% and amounted to and settlement transactions amounted to and commission 234 RUB 3.5 bn (21.2% of total interest expenses). RUB 2.2 bn, or 91.3% of the total fee and income 2016 2017 2018 2019 2020 Interest expenses on due to banks decreased commission expenses. +10.6% by 36.4% and amounted to RUB 4.7 bn (28.4% Net Interest Income of total interest expenses). In 2020, the net fee and commission income Net Fee and Commission Income increased by 10.6% to RUB 7.5 bn (RUB 6.8 bn Net Trading Income Net interest income increased by 9.6% to for 2019). RUB 25.5 bn, compared to RUB 23.3 bn in 2019. Financial Result The main factor behind the NII increase is the lending expansion in the FY 2020 with 2 299 37 879 2 518 interest rates on liabilities decreasing. 7 539

25 523 (8 993)

10 827 * One-off incomes are excluded (15 205) from Revenues and Net (2 854) Trading Income; the loyalty program in the structure of net fee and commission income has been taken NII Net F&C Net Trading Other Income Revenues Provisions OpEx Taxes & other Net Profit into account in the Bank’s statements since 2018

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TRADING INCOME RESULT From 2007 onwards, Bank Saint Petersburg COST EFFICIENCY The Bank’s expenses related to premises and 2.5 has been among the leaders in the most equipment amounted to RUB 2.3 bn in 2020, RUB BN In 2020, net trading income amounted to important segments of the Russian financial The Bank’s operating expenses grew by 7.9% a 7.5% increase compared to 2019. net traiding RUB 2.5 bn. Gains from operations with foreign market and an active trader on foreign stock to RUB 15.2 bn compared to 2019. Significant income currencies and derivatives amounted to exchanges. The Bank is systematically included revenues increase mostly due to core business The Bank’s other operating expenses include RUB 2.8 bn, while losses from operations with in the activity ratings of the MOEX currency growth resulted in the cost/income ratio of rental payments, administrative costs, securities amounted to RUB 0.3 bn. Results derivatives market and the MOEX futures and 40.1% in FY 2020 (44.2% in 2019). professional services, security, transportation, from operations in financial markets were options market. The Bank’s currency futures delivery and other expenses. In 2020, these driven by the active increase of the low-risk flow trading volume currently represents a sizeable Staff costs is a major component of the Bank’s expenses decreased by 3.7% to RUB 5.3 bn. trading income share. share of the total trading volume of the Chicago operating expenses, comprising 49.8% Mercantile Exchange. The Bank is also a major of all costs. Staff costs increased by 17.4% participant in the REPO market and a partner and amounted to RUB 7.6 bn. of leading domestic and international financial institutions. The Bank contributes to the interest rate indicators calculated by the National Securities Market Association and is a market maker for interest-bearing instruments of the Moscow Exchange.

Operating Expenses*, RUB mln

44.2%

40.1% 39.4% 39.8% 38.5%

15 205 14 086 13 047 2 445 12 365 11 951 2 624 2 087 1 896 1 803 5 184 5 008 5 019 4 520 4 498

5 629 5 971 5 942 6 454 7 576 * Property tax is excluded from 2016 2017 2018 2019 2020 other administrative and operating expenses and Staff costs included in expenses related to premises and equipment. Other administrative & operating expenses Costs reclassified according to IFRS 16 — from other Expenses related to premises & equipment OpEx to OpEx related to Cost-to-Income premises and equipment.

24 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 25 22 Financial Highlights Strategic Financial Business From risk Creating wealth 31 Dividend Policy report performance divisions to opportunity responsibly 32 Investor Relations

KEY FINANCIAL INDICATORS Core banking margin dynamics BALANCE STRUCTURE Assets and liabilities structure,

7% January 1, 2020 & January 1, 2021, RUB bn 5.7% The core banking margin remains at 6% The Bank’s assets increased by 8.4% 674 ASSETS 730 a historically high level. 5% 148 bp in 2020, reaching RUB 730.2 bn, compared to 42 6%

4% RUB 673.7 bn as at January 1, 2020. 41 6% 60 8% 4.2% Core banking revenues increased by 9.0% 3% 43 6% and amounted to RUB 33.3 bn in FY 2020. 2% Gross loans increased by 14.4% Liquid assets 0.9% 186 26% RUB 268 bn Net income amounted to RUB 10.8 bn for 1% in 2020 and stood at RUB 459.3 bn, compared 194 29% FY 2020. The Bank’s return on equity (ROAE) 0 to RUB 401.4 bn as at January 1, 2020.

amounted to 12.9% for FY 2020 (10.2% for –1% 2Q16 4Q16 2Q17 4Q17 2Q18 4Q18 2Q19 4Q19 2Q20 4Q20 The share of loans and advances to customers 22 3%

FY 2019). –2% comprised 57.4% of total assets. 28 4%

–3% NIM Securities portfolio decreased by 16.9% Core Banking Margin in 2020 and amounted to RUB 82.1 bn, 419 Trading Margin compared to RUB 98.7 bn as at January 1, 2020. 368 55% 57% The share of the securities portfolio comprised 11.2% of total assets. Net income dynamics*, RUB mln

33 329 Amounts under reverse repo increased 30 579 in 2020 by 9.3% to RUB 104.3 bn, compared to 01.01.2020 01.01.2021 26 133 26 974 26 871 Fixed and other assets Due from banks 9 045 8 185 RUB 95.4 bn as at January 1, 2020. The share Cash & cash equivalents Loans and advances to customers 6 030 6 368 6 513 of the amounts under reverse repo comprised Securities portfolio and repo 14.3% of total assets. 674 LIABILITIES 730 19 2% The volume of customer deposits (customer 13 2% 89 12% accounts and promissory notes and deposit 20 103 20 606 20 358 22 394 24 284 3 0% 79 12% * Starting from FY 2019, certificates issued) increased in 2020 by 14.7% 5 1% loyalty program expenses 2016 2017 2018 2019 2020 to RUB 479.1 bn, compared to RUB 417.6 bn 141 RUB 141 bn are added to F&C income 19% Core banking NII as at January 1, 2020. The share of customer Source: Bank’s management 159 24% accounts. Core banking F&C deposits comprised 65.6% of the liabilities and equity total. ROAE & ROA Net Income dynamics 203 28% 169 25% The volume of due to banks increased 12.9% 10 827 12.3% 11.4% 9 047 in 2020 by 11.0% to RUB 141.1 bn, compared 10.2% 7 491 7 906 to RUB 158.6 bn as at January 1, 2020. 7.3% The share of due to banks comprised 19.3% 4 278 276 38% of the liabilities and equity total. 249 37% 1.4% 1.5% 0.7% 1.3% 1.2% As at January 1, 2020, the share of funds 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 attracted from capital markets was 0.4% of 01.01.2020 01.01.2021

ROAE Net Income the liabilities and equity total, compared to 0.7% Other Due to banks ROAA Shareholders‘ equity Corporate deposits as of January 1, 2020. Capital markets Retail deposits

26 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 27 22 Financial Highlights Strategic Financial Business From risk Creating wealth 31 Dividend Policy report performance divisions to opportunity responsibly 32 Investor Relations

Loan portfolio quality LOAN PORTFOLIO QUALITY In 2020, the retail loan portfolio (mortgage, Loan portfolio by sector, January 1, 2021

88.0% 88.3% 88.1% 87.6% car and consumer loans) increased by 81.7% 2.8% 25.1% Individuals Since lending constitutes the majority of 11.9% and amounted to RUB 110.9 bn. As of 2.6% 12.1% Leasing and financial services the Bank’s assets, the Bank focuses on January 1, 2021, loans to individuals amounted 1.5% 459.3 5.3% 11.8% Real estate maintaining the high quality of its loan portfolio. to RUB 115.3 bn (up 12.0% compared to 25.1% 10.3% Trade 401.4 5.7% 375.3 January 1, 2020). The share of loans to 9.5% Oil and gas 354.3 357.7 In 2020, the volume of loans to customers individuals in the loan portfolio amounted to 6.3% 7.0% Production and food industry (gross loans) increased by 14.4% and stood 25.1% as at January 1, 2021 (compared to 25.6% 6.3% Construction at RUB 459.3 bn. The provision charge for in the previous year). 7.0% 5.7% Heavy machinery FY 2020 decreased by 14.0% and amounted 12.1% and ship-building 5.3% Government financed to RUB 9.0 bn (RUB 6.3 bn without macro 9.5% 2.6% Transport factors recalculation). As at January 1, 2021, 11.8% 10.3% 1.5% Sports and health the allowance for loan impairment amounted 2.8% Other to 8.7% of the loan portfolio (compared to 8.3% as of January 1, 2020). Retail loan portfolio dynamics, RUB bn 01.01.2017 01.01.2018 01.01.2019 01.01.2020 01.01.2021 54.4 71.2 84.4 99.1 110.9 Loan portfolio, RUB bn As at January 1, 2021, the share of problem 78.3 L/D ratio loans in the Bank’s portfolio (Stage 3 loans and 67.0 60.0 POCI) amounted to 10.4% (compared to 9.2% 54.1

90.2% 90.1% as at January 1, 2020). The share of corporate 42.4 83.1% 77.4% problem loans amounted to 12.4% of the total 73.5% 26.8 27.2 corporate loans; the share of retail problem 20.8 15.0 Mortgages 10.3 15.2% loans amounted to 4.4% of the total retail loans. 3.5 5.3 5.4 14.3% 1.7 2.1 Car loans Consumer loans Provisions for the coverage of problem loans 01.01.2017 01.01.2018 01.01.2019 01.01.2020 01.01.2021 11.2% 11.0% 10.8% 10.4% were 83%. In 2020, the volume of loans written 9.7% 9.2% off amounted to RUB 6.2 bn. 8.3% 8.7% Cost-of-Risk dynamics

4.0% As at January 1, 2020, corporate loans 3.7% comprised 74.9% of the loan portfolio, its volume increased by 15.2% in 2020 to 3.4% 2.9% RUB 344.0 bn. The breakdown of the Bank’s 2.7% 2.5% 2.5% 2.3% corporate portfolio by sector reflects 2.7% 2.2% 2.2% 2.3% 1.9% St. Petersburg’s economic structure, which 1.9% 01.01.2017 01.01.2018 01.01.2019 01.01.2020 01.01.2021 2.0% 1.7% 1.9% 1.5% has a high proportion of construction, allowing 1.8% 1.7% Allowance for impairment / Gross loans the Bank to benefit from all the advantages of 1.3% 1.4% 1.5% 1.0% Problem loans / Gross loans the region’s economic structure, as well as to 0.6% 0.4% Coverage contribute to its development. 0.2%

* Starting from Apr. 1, 2018, problem loans FY 16 FY 17 FY 18 FY 19 1Q 20 2Q 20 3Q 20 4Q 20 include all lifetime ECL credit-impaired Retail CoR, % Total CoR, % loans (stage 3) and loans impaired at initial recognition (POCI) Corporate CoR, % Net of revised macro factors

28 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 29 22 Financial Highlights Strategic Financial Business From risk Creating wealth 31 Dividend Policy report performance divisions to opportunity responsibly 32 Investor Relations

DIVIDEND POLICY

CUSTOMER DEPOSITS SHAREHOLDERS EQUITY The Dividend Policy establishes the Bank’s In accordance with its promises and taking into AND CAPITAL intention to maintain a dividend payout ratio of account the stable financial position of the Bank, The volume of customer deposits (customer 20%+ of the Bank’s IFRS net profit (RUB 10.8 bn as well as the limited impact of the pandemic on accounts and promissory notes and deposit As of January 1, 2021, the Bank’s shareholders’ for FY 2020). The dividend amount is approved its activities compared to the initial expectations certificates issued) increased in 2020 by 14.7%, equity (EFRS) stood at RUB 88.7 bn (up11.7% by the General Shareholders Meeting, in spring 2020, on October 22, 2020, reaching RUB 479.1 bn (RUB 417.6 bn as of compared to January 1, 2020). The Bank’s as recommended by the Supervisory Board. the Supervisory Board decided to recommend January 1, 2020). As of January 1, 2021, 57.6% of total capital (RAS, Basel III) amounted to the Extraordinary General Shareholders customer accounts belonged to individuals and to RUB 85.7 bn (up 4.8% compared to However, the 2020 coronavirus pandemic’s Meeting of PJSC “Bank “Saint-Petersburg” to pay 40.4% belonged to corporate customers. January 1, 2020). In compliance with Basel impact on the economic environment dividends. Committee requirements (RAS, Basel III), is significant. It creates a necessity to Retail customer deposits increased by 10.9%, as of January 1, 2021, the Bank’s total capital maintain extra capital. In these conditions, BSPB summed up the results to amounting RUB 276.0 bn. In 2020 corporate adequacy stood at 13.3% and Tier 1 capital following global market tendencies and the Extraordinary General Shareholders customer deposits increased by 20.4% to adequacy stood at 10.6%. in line with the regulator’s measures aimed at Meeting of Bank Saint Petersburg held on RUB 203.0 bn. strengthening Russian banks’ capital, the Bank’s November 30, 2020 in a form of remote voting, The Bank increases capital per share for its Supervisory Board decided to recommend AGM following the regulator’s recommendations. Retail term deposits decreased by 2.0% shareholders. As of January 1, 2021, the Bank’s not to pay out dividends on ordinary shares and stood at RUB 171.3 bn. During 2020, book value per share has reached RUB 187. for 2019. Bank’s shareholders took a decision regarding corporate term deposits went up by 10.2% to the order of dividend payout. Dividends will be RUB 97.9 bn. Conditional on the economy stabilization paid out in the amounts as follows (the dividend the Bank communicated an intention to payout amount calculated based on 20% consider the issue of dividends in the second of IFRS FY 2019 net income): half of 2020. — RUB 3.33 per ordinary share; — RUB 0.11 per preferred share.

The source of payout is retained earnings. Customer deposits, RUB bn Capital Adequacy Ratio (RAS, BASEL III) Total dividend payout amounts to RUB 1.6 bn.

479.1 14.8% 85.7 81.8 13.3% 417.6 The Bank increases capital per share for its shareholders 11.5% 67.8 203.0 10.6% 63.3 20 7 40% 168.6 42% 6 56 60 3 42 2 7 0 0 0 0 2 73 67 60% 58% 53 60 249.0 276.0 22

01.01.2020 01.01.2021 01.01.2020 01.01.2021 01.01.2020 01.01.2021 0 002007 00200 0020 00203 00205 00207 0020 00202 Corporate deposits Total Capital adequacy ratio (N1.0) Total Capital 00200 00200 00202 00204 00206 0020 002020 Retail deposits Tier 1 Capital adequacy ratio (N1.2) Tier 1 Capital Capital per share, RUB

30 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 31 22 Financial Highlights Strategic Financial Business From risk Creating wealth 31 Dividend Policy report performance divisions to opportunity responsibly 32 Investor Relations

INVESTOR RELATIONS

The Bank makes every effort to increase Keeping in mind the challenges posed Proactive communications were carried BANK’S SHARES TRADING transparency, in addition to improving by the current situation and high level of out as new materials emerged (in the form the quality and quantity of information uncertainty, in 2020 the Bank actualized of presentations, press releases, updating The Bank’s ordinary registered shares (state available to its investors and shareholders. the structure of its presentational materials materials on the Bank’s website, etc.). In total, registration number 10300436В, ISIN: The Bank is focused on providing equal in order to provide an answer to the most in 2020, IR distributed 37 newsletters (press RU0009100945) are listed on the stock market of access to public information to all of its pressing queries from the market, namely releases/messages/reports) on the most the Moscow Exchange. Since October 28, 2016, stakeholders. business recovery after quarantine and significant events for the investment community. ordinary registered shares of the Bank have been evaluation of pandemic and customer support traded with listing Level 1 (stock ticker BSPB). Bank Saint Petersburg built all the processes measures on loan portfolio quality. Press releases/messages/reports are sent out in Investor Relations based on the best practice based on an investor base of about 500 analysts The Bank’s shares are included into the following that existed in the world and is striving to Thanks to the successful experience of online and portfolio managers. In addition, the Investor Moscow Exchange indices: Moscow Exchange maintain them at a high level, extending investor conference participation via the Zoom Relation team weekly provides existing and Indices (Broad Market Index (MOEXBMI/RUBMI); the circle of communications and the range of platform, which turned into the golden potential investors and investment bank Sectoral Financials Index (MOEXFN/ RTSfn). products prepared for the market. standard in the field of meetings/conferences analysts covering the Bank with five to ten arrangement in the reality of remote comments necessary to analyze the financial Following the Bank’s application, the Moscow Making every effort to maintain a close workspaces, the decision was taken to conduct condition of the Bank and make informed Exchange decided to add the preferred shares of connection with the investment community, quarterly IFRS earnings calls in a Zoom online investment decisions. Bank Saint Petersburg from December 30, 2020 to the Bank’s representatives pay significant video conference. the Level 3 list of securities admitted to trading. attention to interacting with its current and Foreign investors hold about 30% of the Bank’s The Bank’s preferred shares (ISIN: RU000A0JP0U9) potential investors. During 2020, the Investor voting shares. are traded on the stock market of the Moscow Relations team held 65 meetings and 10 events, Exchange with ticker symbol BSPBP. including two roadshows and one business- lunch in Moscow. Also, the Bank took part in six online investor conferences.

Foreign Institutional Investor Base

37%

30%

21%

7% 4% 2%

Scandinavia and UK USA Continental Russia Asia Baltic states Europe

Source: the Bank’s own research, December, 2020.

32 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 33 6636 CorporateRisk management Banking Strategic Financial Business From riskrisk Creating wealth 4874 RetailCost ofBanking risk dynamic analysis report performance divisions to opportunity responsibly 56 Private Banking 57 Digital Banking

Business Divisions

Expert knowledge of the customer base and years old proximity to customers ensure the Bank’s flexibility and responsiveness in addressing the needs and interests of each of the 2 077 000 customers.

34 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 35 36 Corporate Banking Strategic Financial Business From risk Creating wealth 48 Retail Banking report performance divisions to opportunity responsibly 56 Private Banking 57 Digital Banking

CORPORATE BANKING

The Bank continues to improve its services and support for international business SETTLEMENT BUSINESS In 3Q 2020, the Bank launched the Mass performance by offering a wide range of transactions, and many other services, along Payment service to maintain the loyalty of cutting-edge banking services to small, with customized solutions geared to particular Bank Saint Petersburg strives to become customers with payroll projects distributed medium and large-sized enterprises, business needs of companies in different the leading settlement bank for residents between several credit institutions, for example, taking into account each customer group’s sectors. and enterprises in St. Petersburg engaged where some of their employees are not based particular requirements and interests. in payments and settlements with customers in the regions of the Bank’s presence. In the Rostov Region, we are already and suppliers. To date, Bank Saint Petersburg has cooperating successfully with large enterprises Mass Payment is an innovative service offering 74.9% 50 000 corporate customers. The Bank’s in different industries, with a special focus on The Bank issues Visa Business and MasterCard a number of advantages: a single register loan portfolio corporate banking business remains primarily mechanical engineering, road construction, Business corporate cards to be used by for several banks; no need for generating an formed by loans focused on the regional market of agricultural industry, including support to company employees to cover their travel additional transfer order; an ability to remotely to legal entities St. Petersburg. In addition, the Bank agricultural exporters. The Bank’s representative expenses and current expenses related to track the payment status in the register; fees strengthened its positions in Kaliningrad office in Krasnodar has ambitious goals, too. the company’s operations. Payments for charged as a lump sum for completed transfers in 2015 through the creation of its The main focus of Bank Saint Petersburg’s products and services can also be made online. only. Evropeisky Branch, which currently has over activities in the South of Russia is to support A corporate card is a universal and safe tool 9 000 corporate customers (Bank Saint large and medium-sized businesses for accessing company funds round-the-clock The service has helped to significantly reduce Petersburg completed the integration of in the following sectors: mechanical engineering, without the need to visit the Bank’s office: labor inputs for the generation and signing of Bank Evropeisky in Kaliningrad, reorganizing it road construction, agriculture, food industry, payments for goods and services are carried individual transfer orders and received positive together with the Bank’s Kaliningrad Branch into chemicals, etc. out by one touch thanks to modern payment customer feedback. the new Evropeisky Branch). In 2016, Bank Saint services; cash deposits can be made and Petersburg strengthened its presence outside In St. Petersburg, six sectoral departments withdrawn 24/7/365 through the wide network Given the current economic and geopolitical the domestic Northwestern region: The Bank provide services to large and medium of ATMs. All corporate cards issued by Bank situation, one of the priorities is to make sure opened a representative office targeted at businesses. Specialization of employees Saint Petersburg support the cutting-edge that customers can enjoy smooth payments corporate customers in Novosibirsk. Since in companies of particular sectors allows to mobile payment technology offered by Apple in the main foreign currencies, such as US December 2019 Nevsky Branch started carrying develop and maintain a high level of sectoral Pay, Samsung Pay and Android Pay. Moreover, dollar, euro, pound sterling, Chinese yuan, out banking operations and providing a full expertise, understand business specifics customers may open a corporate card account Swiss franc, and some others. The Bank has range of banking services to its individual and of customer service, and tailor products to and order their first card via Internet Bank i2B. reserve correspondent accounts in US dollars corporate customers instead of a representative customer needs. and euros with several foreign banks. The Bank office. In 2020, Bank Saint Petersburg offered has correspondent relationships with high- Loans to legal entities represent 74.9% of its clients new online cash registers with profile financial institutions and large clearing In 2020, the Bank continued its expansion the total loan portfolio. The breakdown of a built-in acquiring function. The device centers, such as JP Morgan Bank N.A., New York across Russia by opening two new the Bank’s corporate portfolio by sector reflects integrates an online cash register, a bank (including their London and Tokyo branches); representative offices in Rostov-on-Don and St. Petersburg’s economic structure, which has card terminal, and easy-to-use cash register The Bank of New York Mellon; Raiffeisen Bank Krasnodar. Bank Saint Petersburg is ready to a high proportion of construction, real estate, software. Thus, clients do not have to buy International AG, Austria; Commerzbank AG, offer its unique know-hows in the field of small trade and production, allowing the Bank to both a cash register and a card terminal. Germany; the Bank of China; Credit Suisse, and medium-sized business support in its new benefit from all the advantages of the region’s Bank Saint Petersburg offers, in cooperation Switzerland; Société Générale, France; etc. regions of presence. Bank Saint Petersburg economic structure, as well as to contribute to with its partner Payment Technologies LLC, currently offers companies in the South of its development. the registration of A930 online cash registers In 2020, the Bank’s correspondent network was Russia a wide range of traditional banking tools on a turnkey basis, including registration with expanded to include an account with a major for lending, bank guarantees, a fiscal data operator and a tax inspectorate European clearing and depositary center and buying a fiscal memory device. EUROCLEAR BANK SA/NV, indicating a high level of trust from our foreign partners.

36 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 37 36 Corporate Banking Strategic Financial Business From risk Creating wealth 48 Retail Banking report performance divisions to opportunity responsibly 56 Private Banking 57 Digital Banking

The Bank was included in the list of banks CORPORATE LENDING Also, in 2020, the Bank issued a EUR 56.9 mln It is not the first product provided by the Bank to that are entitled to open procurement loan to Adamant JSC to finance their current the country’s largest air company. For example, participant accounts according to 44-FZ. Since To reach its strategic goals, Bank Saint operations. Adamant is one of Russia’s major the master agreements on general terms of loan September 2018, the Bank’s customers can Petersburg is striving to create a product range diversified holding companies, the leader transactions for a total of EUR 70 mln to finance open such accounts in Internet Bank i2B as well that matches the interests of its corporate of the street retail real estate market working capital and general corporate needs as at the Bank’s office. Nowadays, the Bank customers as much as possible. Despite in St. Petersburg, and the actual creator of were made in the summer of 2020. services over 2 500 customers participating the challenging macroeconomic situation, the modern shopping and entertainment in government procurement. the Bank continues to provide corporate complex industry in the region. The holding The Bank’s Moscow Branch and State Transport lending to companies from various industry combines dozens of production and Leasing Company (GTLK) entered into The Bank values the time of its corporate sectors and is strengthening its positions in this construction companies, trade, medical, a cooperation agreement according to which clients and expands its business hours. From market segment. In addition to granting new advertising businesses, hotels, restaurants, and the Bank will open a RUB 10 bn line of credit for February 1, 2020 onwards, our clients can make loans, the Bank is also improving the terms of other enterprises in different areas of business. 35 months. The loan funds will be, in particular, the Russian ruble payments within the Bank via already existing loans, which indicates general available to finance the company’s current the i2B online banking portal from 7 a.m. until financial sector recovery. In 2020, the Bank’s Moscow Branch continued operations in the Russian Federation, as well 11 p.m. daily, including weekends. to work vigorously and was able to considerably as its international business. In 2020, the Bank and Megalit – Okhta Group increase its loan portfolio, from RUB 89 bn to The Bank provides a wide range of banking LLC entered into a credit facility agreement RUB 137 bn. The Bank’s Moscow Branch and pharmaceutical services connected with cash transactions to raise project finance for the construction distributor “FC Grand Capital” entered into in the regional markets of both St. Petersburg of phases 2 and 3 of the Primorsky Kvartal In 2020, the Bank’s Moscow Branch and Avtomir a cooperation agreement. Under this agreement, and the Leningrad Region, including receipt residential facility in St. Petersburg. The credit Group of Companies entered into a cooperation Bank Saint Petersburg shall provide financing of collection, payments, foreign exchange, cash limit under the facility is up to RUB 2 bn. agreement which provides for the Bank to open RUB 1 bn. The purpose of the loan is to finance re-counting, the delivery of cash wages to a RUB 2 bn credit facility to finance the borrower’s the company’s current operations aimed at customers, and loading ATMs and payment The Bank and Construction Trust Group of working capital to provide financing for a dealer developing the Russian pharmaceuticals market. kiosks. Companies (with ST-Novoselye Specialized network in cities across Russia. In addition, Developer LLC acting as the developer) have the Bank and Avtomir Group of Companies In 2020, the Bank partnered with Russia’s The year 2020 was dominated by the need to entered into credit facility agreements with agreed to cooperate in developing retail lease major sports construction company when preserve and support businesses in the context respect to project finance for the construction and car lending businesses. In particular, in 1Q its Moscow Branch and Magnum Group of of the pandemic and optimize performance of two apartment buildings as part of 2020, the Bank plans to expand its car lending Companies engaged in construction and in the new environment while maintaining the NEWPITER project. The term of the facilities program at Avtomir’s car dealerships. outfitting of sports facilities in Russia entered a high level of customer service. The Bank worth RUB 1.2 bn and RUB 700 mln, into a cooperation agreement. According to performed 125 500 cash collection visits, of respectively, is two years. Also, in 2020, the Bank’s Moscow Branch the agreement, Bank Saint Petersburg will which 91 500 were directly to our customers, supported one of the largest general contractor open lines of credit and issue bank guarantees. 23 200 were to maintain and replenish cash businesses in the Moscow Region by granting Since 1995, Magnum has been professionally in the Bank’s ATMs, and 10 800 visits were In-Situ Concrete Construction Directorate-1 JSC engaged in the comprehensive implementation made to support the Bank’s own divisions. a guarantee limit of RUB 1 bn for participation of sports construction projects, from front- In 2020, the Bank transported and processed in tenders and contractual performance. end engineering design to commissioning of RUB 470.7 bn in cash. completed sports facilities outfitted with all During 2020, the Bank significantly extended necessary equipment. Over this period, they its partnership with Aeroflot PJSC by entering have implemented more than 1 000 sports into an agreement on general terms and construction projects across Russia, from standby letters of credit procedures with a total outdoor sports grounds to sports complexes financing limit of up to EUR 70 mln. and stadiums hosting world-level competitions.

38 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 39 36 Corporate Banking Strategic Financial Business From risk Creating wealth 48 Retail Banking report performance divisions to opportunity responsibly 56 Private Banking 57 Digital Banking

In 2020, the Bank entered into cooperation The Bank supported AP Trade, an official In 2020, the Bank provided project financing to RISK HEDGING with PIR Group of Companies, a leader distributor of Procter & Gamble, by Terminal Resource Specialized Developer LLC in manufacturing of packaged cheese and extending a RUB 950 mln loan via its Branch for a low-rise residential construction project One of the priorities in Bank Saint Petersburg’s distribution logistics of cheese and dairy in Novosibirsk. The lending purpose is to finance in Pushkinsky District of St. Petersburg. operations is the creation of effective solutions products in Russia. A RUB 750 mln facility working capital. The Bank is willing to provide Payments between the developer and buyers allowing customers to competently manage was provided to finance working capital of the company with all necessary banking tools of dwelling units will use escrow accounts. currency, commodity, and interest risks while the Group’s companies. and services for successful development of its The financing limit granted by the Bank for maintaining and increasing the profitability of operations involving distribution of high-quality the project totals RUB 1.1 bn. their business. The Bank’s Moscow Branch financed a major consumer goods in the Siberian Federal District. distributor of frozen fish products Agama Group In 2020, the Bank carried out its first online The Bank is actively establishing a relevant under a RUB 500 mln facility agreement to 2020 saw the first loan issued to a client at registration of a mortgage loan contract for product line for corporate customers, including finance the company’s working capital. the Bank’s representative office in Rostov-on- a legal entity. The Bank and Geoline LLC tools for hedging market risks, creating Don. The first borrower is Megapolis Group who entered into an agreement for a working additional opportunities for increasing profits, Our regional branches and representative has been successfully operating in the South capital loan secured by real estate. A loan of and managing liquidity. offices were also successful in completing of Russia since 1993. The agreement sets RUB 12 mln was made available for 12 months. a number of large transactions in 2020, which the overall credit limit of RUB 220 mln for A package of documents was certified with an In the interests of customers, strategies based demonstrated a high level of customer focus the Group’s fuel companies Etalon MK LLC and electronic digital signature issued to the client on an individual approach and thorough and deep expertise across a wide range of Brizan LLC. by the Bank’s certification authority. Upon analysis of business specifics are constantly sectors. the submission of the complete package via being developed for various market segments. The Bank continues to actively participate the online service of the Federal Service for They allow the Bank’s customers to choose The Kaliningrad-based European Branch, who in project financing of construction by State Registration, Cadastre and Cartography a solution that meets their expectations. has been a long-term partner with Russia’s implementing escrow projects. of the Russian Federation (Rosreestr), leading ship repair company PREGOL Shiprepair the registration process took three business The level of service and awareness of products Yard, granted them a EUR 2.5 mln line of In 2020 the Bank continued its long-term days. increases regularly. In terms of the quality credit within a short time frame. The loan will efficient collaboration with LSR Group PJSC. of services and price parameters, the Bank be used to buy a floating ship repair dock, an As a part of “General agreement on common In 2020, Bank Saint Petersburg also contributed competes with the world’s largest investment industrial vessel intended for ship repair (or lending terms” in the total amount of RUB 16 bn to the development of car sharing in Russia and brokerage companies. transportation). for three following years, loans are given for by supporting X-Leasing in its finance lease operational, financial and investment operations transaction to transfer 1 000 Nissan Qashqai The Bank’s Novosibirsk Branch financed the Altai of the construction holding. cars to Russia’s leading car sharing service Railcar Building Plant (“Altaivagon” JSC), Russia’s YouDrivе. Since the end of 2019, a total of major railway car manufacturer, by providing The Bank provided project financing for 1 500 Nissan Qashqai cars have been leased a RUB 2 bn facility. The purpose is to support Setl Group’s first escrow project Solnechny out to YouDrivе to develop car sharing in Russia. production at one of the largest enterprises Gorod. Rezidentsii residential facility by in the Altai Region as part of the government entering into credit facility agreements to support program for backbone enterprises fund the construction of the project’s two in the period of the pandemic. first phases, with the credit limits totaling RUB 2.3 bn.

40 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 41 36 Corporate Banking Strategic Financial Business From risk Creating wealth 48 Retail Banking report performance divisions to opportunity responsibly 56 Private Banking 57 Digital Banking

Highlights of 2020: DEPOSIT PRODUCTS To grant financing to small and medium-sized The Bank’s preapproved loans for small and 99% — following the interest rate swaps on businesses on preferential terms, the Bank medium-sized businesses were recognized standard line RUB MosPrime and USD LIBOR, the Bank One of the strategic priorities of the Bank’s actively interacts with specialized organizations as the best in the Quick Solutions for Business deposits has for the first time entered into an deposit business is to gradually transfer within the framework of state support category of the Russian Chamber of Commerce are made through interest rate swap transaction on the key the conclusion of deposit agreements to programs. The Bank’s Program for Stimulating and Industry’s competition. Internet Bank rate of the Central Bank of Russia to hedge digital channels. This substantially reduces Lending to Small and Medium-Sized Businesses the interest rate risk of its corporate client; the workload of branch network employees (Program 6.5) includes loans for small and The Bank’s loan portfolio under lending — the Bank has executed its first ever interest who will be able to focus instead on individually medium-sized businesses at good rates of programs targeted at SMEs (including those rate cap transaction on the MosPrime Rate. tailored deposits and devote more time to other up to 8.5% per annum. Another program supported by government measures for Interest rate cap (or interest rate option) is products for corporate customers. Around 99% implemented by the Ministry of Economic the period of the pandemic) increased 2.4 times an effective tool for managing interest rate of deposits in the standard range are already Development of the Russian Federation in 2020. risks for clients raising debt funding for one placed through Internet Bank i2B. in accordance with Decree of the Government year or longer. The tool is used to hedge No. 1764 dated December 30, 2018 is Program As for supporting its SME customers, it was not loans against interest rate going up. It is In 2020, the Bank launched a new deposit 8.5 which enables SMEs engaged in the priority just a set of measures but entire ecosystem simple and quick to execute; product for legal entities and individual sectors of the Russian economy to borrow at #ICAN_BUSINESS_ONLINE that the Bank — the Bank has entered into its first-ever entrepreneurs. The Universal deposit allows a rate not exceeding the key rate of the Bank of launched during the coronavirus pandemic. interest rate corridor transaction with our customers to earn by depositing their Russia plus 2.75% per annum. It accommodates financial services that are a corporate client. The interest rate corridor temporarily idle funds and secure themselves particularly relevant when the Bank’s dealings is a modern hedging instrument for against an unpredictable decrease in the flow of In 2020, the Bank’s customers were able to with clients are remote. companies that run their business using payments. enjoy the benefits of the Leasing Premium borrowings. The product allows clients Program run in cooperation with our partner The #ICAN_BUSINESS_ONLINE ecosystem to manage their interest rate risks with PROGRAMS TARGETED AT SMALL X-Leasing. In this program, the Bank determines enables our corporate customers to do minimum expenses on hedging while raising AND MEDIUM ENTERPRISES and preapproves for a client a credit limit the following without visiting the Bank: the attractiveness of loan transactions that can be used to purchase vehicles and — make payments quickly and securely; for the Bank by increasing ROE and profit Loans to small and medium enterprises special equipment without further documents, — receive bank statements by email; margins in the client’s budget. are strategically important for Bank Saint collateral and guarantors at a better rate. — check their business partners using our Petersburg and allow SMEs to finance their The leasing transaction can involve purchasing Svetofor service; In addition, the Bank continues to develop working capital, purchase equipment, vehicles, either new or used (for up to three years) — monitor the account activity and balance a product line of interest rate derivatives real estate, and other property required to movable property, such as cars, trucks, trailers, changes; for corporate clients who, once embedded develop their business, as well as to start new semi-trailers, special vehicles, buses, and light — convert foreign currencies using a quotation in the credit process, allow to reduce lines of business. commercial vehicles. The customer’s leasing board; the interest rate to the Borrower without application is processed within two hours. — place a deposit; lowering the interest margin or to increase — submit a loan application; the profitability of the loan transaction, as well In the beginning of 2020, the Bank issued its — use our international business services; as to neutralize currency and trade risks for first preapproved loans to legal entities and — issue a qualified electronic signature the company. individual entrepreneurs. In total, in 2020, in a matter of minutes; preapproved lending programs involved — connect to acquiring services; 492 agreements worth more than RUB 1.5 bn. — and many more.

42 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 43 36 Corporate Banking Strategic Financial Business From risk Creating wealth 48 Retail Banking report performance divisions to opportunity responsibly 56 Private Banking 57 Digital Banking

The Bank’s digital platform for SMEs involving TARGETED PROGRAM FOR FOR EXIM COMPANIES — an increased period of time and a higher Internet Bank i2B and the BSPB Business mobile AGRICULTURERS amount of FX transactions, with making FX app draws on the market’s best practices In 2020, the development of services for EXIM transactions available to customers via our and know-hows. It is an open digital platform Boasting extensive experience of companies was one of the Bank’s strategic online banking portal between 9 a.m. and convenient for daily financial transactions in real providing loans to agricultural enterprises, priorities. 11 p.m., and increasing the upper limit on time without visiting the bank office. in 2017 the Bank was granted the status of an the transaction amount to USD 15 mln; authorized bank of the Ministry of Agriculture The principal area of focus in this direction — consistently responsive, personalized The high quality of our digital solutions for small of the Russian Federation for the agribusiness is the positioning of the Bank as a reliable customer support for registering and medium-sized businesses was highly rated concessional lending program: The Bank’s partner, a leader in servicing the EXIM activities international business contracts, where our by independent experts. In 2020, the Bank customers can now apply for loans with up to of Russian companies. Throughout the year employees provide clients with necessary ranked among the top 20 leading banks a 5% interest rate. the Bank’s experts demonstrated the market support and our currency control officers are in the CIS and the Caucasus region offering a high level of competence in this field, while always ready to be contacted; the best digital ecosystems for SMEs according In 2020, the Bank continued to actively the operational service provided the first-class — a series of webinars to support business to the SME Banking Club’s Banking Ecosystems lend to the agriculture sector. In particular, experience. partners covering relevant issues in the field for SMEs 2020 study. The rating research the Bank financed Pravdinskoye Pig Framing of foreign economic activities. encompassed services for legal entities and Company, one of the major breeding We always place a special focus on improving individual entrepreneurs offered by 212 banks companies in the Kaliningrad Region. the convenience and quality of the integrated When structuring transactions with in 11 countries of the study region (Azerbaijan, As part of the credit facility agreement with international business services for our clients, the Bank put a particular focus on Armenia, Belarus, Georgia, Kazakhstan, the company, the Bank opened two lines of corporate customers where not just individual the use of letters of credit for payments Kyrgyzstan, Moldova, Russia, Tajikistan, credit worth a total of RUB 500 mln under aspects are worked on but an ecosystem under international business contracts. For Uzbekistan, and Ukraine). the Concessional Loan Program of the Ministry as a whole. The change represents an evolution exporters, this method secures that foreign of Agriculture of the Russian Federation. from the simple to the complex: the work is currency revenue is credited to their account on SME Banking Club’s experts rated The loans were disbursed to Pravdinskoye Pig not merely and not only aimed at improving the dates stated in their international business the banks in terms of convenience and Framing Company to buy young stock, fodder, cash payment services or currency control contracts, while for importers, it is a good way to comprehensiveness of functionality of their web and veterinary drugs, prepare for planting procedures but also at handling these aspects secure the receipt of the very product that is to and mobile applications taking into account operations and repair agricultural equipment in combination with other products and be supplied under the contract. customers’ needs, the extent of innovation, and for a new season. services, for example, as a consulting service or contribution to the improvement of remote a niche pricing plan offering, etc. In addition, the Bank has made available to banking services during the pandemic. Services In the reporting year, the Bank executed exporters and importers three comprehensive of the same type were grouped to get 34 unique concessional facility agreements with In 2020, in the context of the COVID- offers combining a letter of credit and hedging services offered by banks to their customers a total value of RUB 1.5 bn with agricultural 19 pandemic, the Bank provided a range of facilities, which provide protection against on an ecosystem basis. The research identified enterprises. banking support measures to its corporate business and currency risks. These include the top 20 best ecosystems in the region. customers engaged in international business. the following: This included financial services that are — a letter of credit with post-financing + particularly relevant when the Bank’s dealings a hedging instrument; with clients are fully remote, such as: — a letter of credit with reservation of funds + — seamless cross-border payments both a hedging instrument; in Russian rubles and in foreign currency — an export letter of credit + a hedging without changing the receipt and transfer instrument. routines;

44 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 45 36 Corporate Banking Strategic Financial Business From risk Creating wealth 48 Retail Banking report performance divisions to opportunity responsibly 56 Private Banking 57 Digital Banking

A suitable hedging instrument (such In 2020, the SWIFT GPI service was launched The Bank has launched its business channel TRADE FINANCE OPERATIONS as a forward contract, an option, or an option into commercial operation. SWIFT GPI allows VEDsovet on Telegram to expand its range of strategy) is selected on a case-by-case basis. you to track payments as they go through online services for both existing and prospective Bank Saint Petersburg offers its customers a chain of correspondent banks in real time. clients. The VEDsovet provides a forum for real a wide range of high-quality services related to As for special pricing plan offers, in 2020, The system generates notifications every time professionals in different areas of international documentary operations and international trade the Bank offered its Light VED — a new pricing when a credit institution changes the status of business to publish cases, opinions and reviews, finance. The Bank continues to maintain and plan adapted for small and medium-sized your transfer. as well as latest news from the world of export strengthen its positions in this market segment businesses engaged in international business and import on a daily basis. The channel’s by supporting and expanding the list of its operations. The Light VED includes a range of From November 2020 onwards, all the banks content will be of interest not only to our foreign counterparty banks. services that are most required by exporters using SWIFT will need to send information customers already engaged in international and importers. The following services are about transfer execution, delay or denial to business, but also to those who are just In 2020, the Bank’s trade finance business available on a no-fee basis: preliminary review of the SWIFT GPI service, which will significantly considering to start it. The channel has already saw a significant increase in the number of an international business contract; maintaining improve the transparency of transfers for attracted about 3 800 followers. transactions involving import letters of credit the first foreign currency account; subscription the participating banks. and an uptick in handling standby letters fee for the i2B service; payments within The VEDsovet customer support service, of credit intended to secure obligations of the Bank both in Russian rubles and in foreign As part of developing the Bank’s international which is currently available to both existing the Bank’s customers. currency; 15 payments in Russian rubles (to business consulting service, we work to and prospective customers of the Bank via corporate accounts) to other banks; issuing continuously enhance the existing and build a dedicated phone line, email, Telegram, and a bank control record on request; adjustment new contacts with counterparties and business WhatsApp, has won a prize at the Innovation of details of supporting documents and urgent partners specialized in the development of Time 2020 awards in the Service Solution of registration of the contract. international business operations and services. the Year — Financial Services category, which The second half of 2020 was busy in terms reflects the high level of customer service As for the development of technological of achieving final agreements and approving provided by the Bank. equipment and provision of benefits long-term plans for fruitful cooperation to participants of EXIM activities with between the Bank and a number of support online services, corporate customers can organizations and institutions. In particular, automatically send SWIFT МТ 940, МТ 941 and September 2020 saw the conclusion of an МТ 942 statement messages through Internet agreement with the Saint Petersburg Export Bank i2B. Russian representative offices of Support Center, and in December 2020, foreign companies and other organizations the Bank partnered with the Leningrad Region’s founded by non-resident entities must Economic Development Agency and Industry regularly provide them financial reports Development Center, and one of the largest according to the established international transport and forwarding operators MODUL. reporting standards. Internet Bank i2B has an By strengthening its partner network, the Bank in-built functionality which, once enabled, will will be able to expand its service offering for automatically send out reports with the required corporate customers engaged in international (daily/monthly) frequency. Financial information business operations, develop better product is transmitted via protected SWIFT channels offers and improve customer service. directly to the parent entity’s bank. Foreign bank’s consent to receive such statements must be obtained to enable the service.

46 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 47 36 Corporate Banking Strategic Financial Business From risk Creating wealth 48 Retail Banking report performance divisions to opportunity responsibly 56 Private Banking 57 Digital Banking

RETAIL BANKING

As one of the key players in St. Petersburg’s RETAIL DEPOSIT SERVICES BANK CARDS In 2020, the Bank updated its Service Terms for retail banking services, Bank Saint payroll card holders. Now, free withdrawals from 1.5 Petersburg aims to become the first bank An extensive sales network, an opportunity to One of the priority areas for the Bank’s retail any ATMs of any bank across Russia are available MLN of choice for the city’s residents. The Bank make deposits online, a high quality of services, business is the issuance of bank cards and to the Bank’s payroll clients twice every month. plastic cards currently has 2 077 000 retail customers, reliability, a wide range of deposit options and the provision of related services. As of January forming a solid base for the future competitive interest rates provide the Bank 1, 2021, a total number of all types of plastic Besides, all payroll cards participate successful growth of its retail business. with a continuously increasing number of loyal bank cards issued reached 1 459 000. The Bank in the YARKO awards scheme which is designed customers and a steadily broadening deposit has also seen an annual increase in the number for the ICOUNT card, our new attractive product. Throughout 2020, the retail loan portfolio base. of its payroll customers: over 8 000 payroll increased by 12.0% to RUB 115.3 bn, mortgage programs with over 650 000 active payroll cards In autumn 2020, the Bank launched a new card loans grew by 16.8%, consumer loans grew by According to the Interfax agency, the Bank as of January 1, 2021. product ICOUNT in all regions of operations, 115.3 1.5%, and car loans grew by 2.0%. The share of ranks 15th among Russian banks by total retail which previously tailored for Moscow and RUB BN loans to individuals reached 25.1% of the total deposits as of January 1, 2021. To ensure compliance with the Federal Law on Novosibirsk customers. Free issuance and retail loan loan portfolio. the National Payment System, the Bank issued service, unlimited withdrawals from ATMs of any portfolio In order to increase its customer base and more than 140 000 MIR cards in 2020. credit institution, and premium status are just +12.0% In 2020, the total amount of retail deposits attract additional deposit inflow, the Bank a few benefits of this payroll card. In addition, increased by 10.9%, totaling RUB 276.0 bn. offered its customers a choice of several In addition, all holders of the 100 Days cards ICOUNT card includes unique YARKO rewards The share of retail deposits amounted to 57.6% seasonal deposits with historically high interest issued by Bank Saint Petersburg are enrolled on accrual system providing up to 1.5% payback of of total customer deposits. rates in 2020. Customers receiving their the Mastercard’s Privilege Program where they the amounts spent and up to 20% when buying pensions through the Bank enjoyed increased can have access to special offers, enjoy up to from the Bank’s partners. The card is available >140k deposit rates on several deposits. 40% discounts, and earn up to 20% cashback online, it takes three minutes to place an MIR cards from Mastercard’s partners. order. The card then can be acquired through The Bank’s customers also have an opportunity the branch network or courier service. to make deposits online. Online deposits In response to the coronavirus challenge, accounted for 79% of retail deposits placed in 2020, the Bank issued a virtual card for In 2020, the Bank launched Mastercard® Dynamics of Retail in 2020. online shopping. Visa Virtual is a new debit card 100 Days, a new credit card featuring a longer Customer Deposits, RUB bn specifically designed for purchasing goods and grace period. Bank Saint Petersburg’s new

276.0 In 2020, the mobile application was expanded services online. Holders can shop in any web- product breaks the traditional perception

249.0 to include a capability to open any deposit based stores, buy air and rail tickets online, pay of credit cards by allowing its cardholders offered by the Bank, resulting in an 88% for purchases without limits, including online to make any purchases on credit for three 104.7 74.2 increase in the number of deposits opened via games, music and movie downloads, and many months without paying any interest to the Bank. the mobile platform. more, without leaving their homes. In addition, the 100 Days credit card can substitute for your other credit cards: thanks to The Visa Virtual card is part of the Bank’s its higher credit limit of up to RUB 750 thousand #ICAN_ONLINE ecosystem launched to and a grace period of 100 days, it will combine support its clients in the context of loans and credit cards from other banks into the COVID-19 expansion. It accommodates a single card. Besides, no annual fee will be

174.8 171.3 financial services that are particularly relevant charged for your Mastercard® 100 Days for when the Bank’s dealings with clients are fully the first year of service. 01.01.2020 01.01.2021 remote. Term deposits In 2020, the total number of pension cards Current accounts exceeded 78 000.

48 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 49 36 Corporate Banking Strategic Financial Business From risk Creating wealth 48 Retail Banking report performance divisions to opportunity responsibly 56 Private Banking 57 Digital Banking

PAYMENTS AND TRANSFERS LOYALTY PROGRAMS Financial Institutes for its YARKO Bonus MORTGAGE LENDING Program, and the Person of the Year awarded to 852k In 2020, the Bank significantly expanded In 2020, the Bank offered its customers to join Yekaterina Zvonova, Director of the Department The Bank is represented by six Mortgage loyalty the possibilities for convenient and fast transfer three loyalty programs: of Mass Segments, Marketing and Big Data Lending Centers (four in St. Petersburg, one programs to legal entities and individuals. At the beginning — YARKO — emotional and engaging; Analytics who heads the YARKO development in Moscow and one in Kaliningrad). Also participants of the year, fast payment in digital channels — Cashback — for rational customers; team. mortgage lending is available in the Novosibirsk +14% became available to more than 4.8 thousand — Travel — for travelers. branсh. In the Mortgage Lending Centers organizations in the housing and utilities sector PROGRAMS customers can get detailed advice on all and telecommunications services. In 2020, the YARKO bonus loyalty program FOR THE SELF-EMPLOYED mortgage lending programs available and celebrated its 6th anniversary and surprised its obtain an estimated calculation of the amount The audience of customers active in digital customers with great gifts from the program’s In 2020, the Bank launched a bunch of products and maturity, as well as apply for a mortgage channels increased by 15% and amounted to partners. and services for the self-employed — a new loan. A dedicated loan officer supports each 539 000 users in December, while the number customer segment comprised of individuals customer throughout the entire process. As an of transfers made increased by 21% and The YARKO program is actively contributing who earn professional income from activities additional convenience for the customers and in December for the first time exceeded 1.2 mln to the development of the partner pipeline. that have neither an employer nor workers a way to ensure confidentiality, each center has transactions per month. 2020 saw the launch of more than 200 new hired under employment contracts, or income a separate meeting room; the Bank’s outlets partners, with particular focus being placed on from the use of property. also have depository areas for transactions In 2020, the number of tax payments made online services and those partners who can using safe deposit boxes. through the Bank’s digital channels amounted offer new opportunities to our cardholders. With our services for the self-employed, a client to 68 000 payments and increased by 84% The program’s catalogue was expanded to can: The Bank ranks 3rd among all local banks and compared to 2019. include partners such as Yandex.Zapravki, — get registered online on the Government 1st among private banks in St. Petersburg’s Perekryostok Vprok online hypermarket, Services Portal for user-friendly registration mortgage lending market. Throughout 2020, The number of users of the mobile application and IVI online movie theater. We have also in the Moi Nalog (My Tax) application of the Bank provided a total of RUB 36.1 bn 921.5k grew throughout 2020 at a fast pace and engaged partners sought after by clients, the Federal Tax Service; in the form of 11 978 loans, compared to operations amounted to 460 500 people in December, such as the pharmacy chains Ozerki, Pervaya — order a card that will best suit them, RUB 25.1 bn and 10 146 loans in the previous per month which is 24% more than the figure as of the year Pomoshch, and Doktor Stoletov. choosing from our wide range of bank cards; year. 73% of the total mortgage loan portfolio via mobile app beginning. An increase in the number of — use our free courier delivery of cards; consisted of mortgage loans for newly transfers made by these customers amounted Strong confidence of YARKO customers — enjoy up to 20% bonus awards on the YARKO constructed buildings. to more than 27%, reaching 921 500 operations is unchanged with their number reaching loyalty program for their purchases; per month. 852 000 as of January 1, 2021. At the same time, — receive a professional income tax refund During the reporting period, the Bank of Russia the number of active users of the program has through the YARKO loyalty program; was gradually lowering its key rate, enabling In 2020, the Bank invited its clients to extend increased by 14% compared to the previous — get an individual consultation to find answers the Bank to reduce its mortgage interest their vacation season by paying for travel year. to any question they have or obtain any rates both as limited special offers for certain 1st services via its online banking portal and mobile other relevant information. partners and permanently. PLACE app without fees. Clients can use the Bank’s The Bank’s loyalty programs have been among private digital channels to make no-fee payments for highly appreciated by independent experts. The Bank is continuing its productive banks orders, tickets and trips to most of the key travel The Bank has won three awards in the 7th cooperation with construction companies in St. Petersburg agencies. Annual Loyalty Awards Russia Competition. and real estate agencies. By the end of in mortgage In 2020, the Competition included 173 projects 2020, more than 620 developers and over lending from 94 companies. The Bank has become 1 100 construction projects received the Bank’s the winner in three categories: The Team accreditation. of the Year, The Best Loyalty Program from

50 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 51 36 Corporate Banking Strategic Financial Business From risk Creating wealth 48 Retail Banking report performance divisions to opportunity responsibly 56 Private Banking 57 Digital Banking

Customers can receive mortgage-related advice By the end of December 2020, the Bank In addition, the Bank began issuing mortgage Besides, the website provides you with > 7k and apply for a mortgage loan at the Bank’s opened over 7 000 escrow accounts within real loans to buyers of real estate properties the point-and-click access to the Bank’s escrow accounts representative desks located in the offices of its estate transactions under sale and purchase on the primary market, with co-investment operators and mortgage advisors who can help within real partner companies. contracts and concession agreements between contracts being registered electronically. you navigate through the real estate showcase estate transactions individuals. Bank Saint Petersburg was one The Bank’s borrowers buying real properties to make the right choice or advise you on what In 2020, the Bank launched a mortgage lending of the first banks in the country to introduce from PIK Group were the first to engage in new to do further, how to make an application, what program under the national interest rate an escrow account system for both mortgage format transactions. Also, the Bank abandoned documents you need for making a transaction subsidy scheme. The interest rate on mortgage lending and real estate transactions without the practice of mandatory mortgage bonds and getting a loan, and so on. loans subsidized by the government was 6% per the Bank’s mortgage. This form of settlement on the secondary real estate market. Now, its annum for the Bank’s payroll clients and 6.25% implies placement of the buyer’s cash funds clients may get their transactions registered CAR LOANS per annum for other customers. on a special-purpose escrow account opened online via a notary public or the Bank’s own under a trilateral agreement, and transfer of services. The Bank is represented by three Car Lending As at the year end, the Bank ranked among the transaction amount is made available only Centers in St. Petersburg and one Car Lending the top 10 banks in terms of the amount of after all terms and conditions of the agreement The Bank has launched a smart mortgage Center in Kaliningrad where customers can get government-subsidized mortgage loans. are met. program for acquisitions on the secondary detailed advice on all car lending programs, housing market. Now, the Bank processes apply for and receive a loan. Since May 2019 the Bank provides mortgage Also, in 2020, the Bank opened more than mortgage applications without an appraisal lending under the national subsidy program 1 000 escrow accounts for the purposes of report and other additional documents for In 2020, the Bank successfully launched introduced by Decree of the Government payments between a participant of share-equity the subject project. What is required is only a project to develop its car loan business of the Russian Federation No. 1711 dated construction, of the one part, and a developer, the documents of title. Applications are in regions, thus expanding its geography and January 30, 2017. Families where a second of the other, under co-investment contracts processed within up to two days. ramping up its customer base and partner or subsequent child citizen of the Russian under Federal Law No. 214-FZ. network. Federation has been born since January 1, 2018, In 2020, the Bank launched a real estate are entitled to a mortgage for the acquisition To develop its remote services, in 2020, showcase on its website, where developers In 2020, the Bank efficiently managed of housing from a legal entity on a new build the Bank simplified its mortgage documentation offer more than 4 000 residential facilities. competitive product lines and interest rates, mortgage lending market at a rate of 6% p.a. package and made it available online. Almost all of the projects under construction continued to maintain its high-quality car loan in St. Petersburg, Leningrad Region and portfolio, and built long-term and reliable Kaliningrad, have been accredited for mortgage partnerships with major auto sales centers Mortgage portfolio high quality loans by the Bank. In addition to residential in St. Petersburg. The main advantages of 2.3% construction projects, the real estate showcase the Bank’s car loan product line include large will help the Bank’s clients to select an loan amounts, the possibility to add insurance 1.8% 1.8% 1.7% 1.7% apartment on the secondary market from premiums and additional services to the loan

1.4% among more than 1.2 mln available options. amount and a down payment starting from 1.3% 1.1% 0% (even if additional products are added to 1.0% 0.9% The service hosted on dom.bspb.ru is provided the loan amount). Constant efforts to speed by the Bank in cooperation with CIAN, a major up loan application consideration and drafting online real estate marketplace. The real estate of loan transactions, to develop remote sales showcase will help you find an apartment for channels, and to keep up with main market your approved mortgage loan. You can also trends have also enabled the Bank to gain 01.01.2017 01.01.2018 01.01.2019 01.01.2020 01.01.2021 * Overdue loans include go the other way round: choose a real estate strong footing in the car loan business. the entire principle of Overdue loans* property and immediately submit a mortgage the loan at least 90 days overdue. Provisions application.

52 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 53 36 Corporate Banking Strategic Financial Business From risk Creating wealth 48 Retail Banking report performance divisions to opportunity responsibly 56 Private Banking 57 Digital Banking

From 2020 onwards, the Bank offers its clients CONSUMER LOANS Bank Saint Petersburg has expanded The Bank is in the top 3 of St. Petersburg market 5th to carry out a car purchase transaction with capabilities of its Time is Money lending product leaders in terms of consumer lending, and 3rd PLACE a secure payment arrangement using an escrow Bank Saint Petersburg takes a conservative involving deposit secured loans for retail in the top 10 in terms of credit cards. PLACE in the ranking account. approach to risk and offers consumer loans clients. Now, a loan can be issued to any client in the ranking of the Best banks only to the existing customer base. The target of the Bank who is willing to put up their valid 2020 was a good year in terms of refinancing of the Best banks of St. Petersburg Where the escrow method is chosen, the car segment for the unsecured lending program deposit or promissory note as collateral. So, if loans at Bank Saint Petersburg. The loans of St. Petersburg in terms of purchase transaction is closed at the Bank. is still represented by the customers holding a client urgently needs money for any purpose, refinanced by the Bank allow customers in terms of car loans consumer lending The Bank undertakes drafting a sale and the Bank’s payroll cards, whose financial there is no need to close their term deposit to optimize the debt burden by reducing purchase contract, counting and verifying position is well known to the Bank. 85% of prematurely and thus lose interest on it, but the amount of monthly payments and reducing the cash. The money is deposited to an the unsecured loan portfolio is attributed to instead they can obtain a loan for the required the overpayment on loans of other banks. escrow account. The seller and the buyer sign payroll cardholders. The Bank also offers loans amount secured by their deposit. What is the car purchase contract and the seller hands to customers who have a good profile with particularly important about the Time is Money Improvement efforts in 2020 were focused on over the keys and documents to the buyer. the Bank or are employed by reliable partner loans is that decisions are made quickly (you scaling unsecured lending which allowed to The buyer gets the vehicle registered with entities. can borrow within a day) and the terms are increase the loan portfolio in low-risk customer the Road Police, and only thereafter the Bank quite simple — all you need is just a couple of segments. The Bank will continue to enlarge transfers the funds to the seller. Thus, such This approach has proved to be the most documents, including an application, passport, the customer base and maximize its potential a transaction poses no risk of buying a car that efficient one. First of all, targeted work with and promissory note to be put up as collateral, by improving the quality of customer service. is pledged, stolen or seized by the court. There customers and forecasting their individual if any. is no need for the seller to carry cash around, needs warrant a more sizeable response. as after the registration of the car, the money is The second advantage is that the Bank can credited to their own account from which it can take a cautious approach to new borrowers be withdrawn or transferred to an account with and accept only measured risks of the external another bank without bank fees. unsecured lending market, having customers whose financial position it can assess most Starting from 2020, the Bank offers a service for efficiently. selling vehicles used as collateral for loans. This type of transactions involves assisting individual Bank Saint Petersburg continues to maintain clients with the sale of a car held as collateral by and improve the technology of issuing the Bank, namely the following: consumer loans, which significantly saves — dealings with the seller (the current borrower the customers time, as it implies the full remote of the Bank) and the buyer of the vehicle; receipt of loans. Internet Bank users can not — supporting the release of pledge and transfer only sign an agreement and receive money of money by the vehicle buyer to repay into an account through a personal account the existing loan of the vehicle seller using an on a proposal approved by the Bank, but also escrow account; make an application on their own, and track — making a sale and purchase contract for the course of its consideration. the vehicle used as collateral in accordance with the applicable laws.

In 2020, the Bank ranked 5th out of 20 among the Best St. Petersburg Banks for Car Lending.

54 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 55 36 Corporate Banking Strategic Financial Business From risk Creating wealth 48 Retail Banking report performance divisions to opportunity responsibly 56 Private Banking 57 Digital Banking

PRIVATE BANKING DIGITAL BANKING

For more than 13 years, our Private Banking Our own concierge service is successfully DIGITAL CUSTOMER SERVICES In 2020, the mobile application was expanded 65.7 business has been a reliable partner to high fulfilling customer requests of various levels to include a capability to open any deposit 99% RUB BN net worth clients in managing their wealth. of complexity: from day-to-day requests The difficult circumstances due to offered by the Bank, resulting in an 88% share of electronic assets under to individual traveling, from the creation of the coronavirus pandemic in 2020 has given increase in the number of deposits opened via payments management Our Private Banking team is successful wine collections to real estate purchase and a great impetus to the digital transformation the mobile platform. in St. Petersburg in creating individual wealth management art-banking. in all dimensions, bringing the understanding schemes, both for business and family, using that the world has no choice but to digitalize. The mobile app was further enhanced by conventional banking products along with The purpose of Private Banking is to By the date the quarantine was imposed, adding the Exchange Bridge service. Now, our state-of-the-art and advanced tools on financial be the center of financial expertise for the Bank has already achieved a high level of customers can make transactions to buy or markets, asset structuring, and real estate the customer, offer the best products and digitalization and thus was very well prepared sell foreign currency with deferred conversion 13.6 the best services based on the customer-centric backed with a security deposit in any place of RUB BN transactions, and by engaging the most reliable for the situation. assets under partners, including for taxes and legal issues. model, build relationships with the customer on the globe. Nowadays the new service has no management the basis of mutually beneficial cooperation. The e-banking system for retail customers, analogues among existing offers for individual in Moscow In 2020, the amount of assets managed by Internet Bank, accessible at i.bspb.ru, is customers. Within the Exchange Bridge service, the Private Banking business increased by Private Banking team is constantly researching the principal online channel for the customers the client gets the opportunity to buy and 35% compared to 2019 to reach RUB 65.7 bn new market practices to solve any extraordinary of Bank Saint Petersburg, offering increasingly sell currency with a deferred settlement date (RUB 52.1 bn in St. Petersburg and RUB 13.6 bn requests of our customers. better services and solutions at more favorable upon paying 10–12% of the future transaction in Moscow. prices. The number of individuals who have amount. At the same time, the Bank will accrue signed up for i.bspb.ru showed a growth of 14% and pay monthly interest on the amount of in 2020: from 1 300 000 to 1 482 000. One-third the security deposit, and the planning horizon of the city’s economically active population has for a convenient settlement date in the future access to i.bspb.ru, and every third customer of will be 365 days. the Bank uses the mobile banking application: The number of active users exceeded The Cash Back section was introduced to 460 000 per month with the number of app the mobile app. Now, holders of the Visa uses exceeding 10 mln per month. The share Cashback card who receive standard сashback of users of the mobile banking application grew rate of 1% and higher cashback earnings for by 25% and reached 85% of the total number of the categories, such as “Filling station” (5%) Internet Bank users. and “Cafes and restaurants” (10%), can control the amount of payable cashback rewards and In 2020, Bank Saint Petersburg updated its the program performance terms. mobile application to improve the quality of the customer interface. This primarily involved Payroll clients of the Bank can now pick the most anticipated improvements requested the initial credit limit via the mobile application. by proactive users of the Bank. The limit has been approved and can be picked in just one click. You do not need any document In 2020, clients ordered 63% more credit or statement. The initial amount is RUB 5 000, cards via the mobile and Internet banking but it can be increased in 3 months. solutions than in 2019. For debit cards, this figure increased by 20%. 50% more SMS online services were ordered and digital orders for corporate cards grew by 9.2%.

56 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 57 36 Corporate Banking Strategic Financial Business From risk Creating wealth 48 Retail Banking report performance divisions to opportunity responsibly 56 Private Banking 57 Digital Banking

The Bank cares about its customers’ security In 2020, the Bank added new functionality to As for the support for its SME customers, it A high quality of our digital solutions for small and does its utmost to offer the best possible its BSPB Business mobile app for corporate was not just a set of measures but an entire and medium-sized businesses was highly rated service on remote channels. Therefore, customers. Now, our clients can choose ecosystem #ICAN_BUSINESS_ONLINE that by independent experts. In 2020, the Bank in our mobile app you can now restore your a mobile phone number for receiving a payment the Bank launched during the coronavirus ranked among the top 20 leading banks username and password without visiting or confirmation SMS. pandemic. It accommodates financial services in the CIS and the Caucasus region offering calling the Bank (sometimes a call may still be that are particularly relevant when the Bank’s the best digital ecosystems for SMEs according necessary, as the security of our clients’ funds In addition, the Counterparty Check service dealings with clients are remote. to the SME Banking Club’s Banking Ecosystems and data is the Bank’s number one priority), is now available in the mobile app. It enables for SMEs 2020 study. order statements for public and municipal clients to get information about reliability of The #ICAN_BUSINESS_ONLINE ecosystem employees, download any file from your their business partners by simply entering their enables our corporate customers to do In 2020, the highest standard of the Bank’s correspondence with the Bank, download taxpayer identification code. The system can the following without visiting the Bank: online products was confirmed by a number of account statements, delete any authorized generate a brief report on the business partner — make payments quickly and securely; independent experts. device that is not used, apply for a loan and send it if required. — receive bank statements by email; repayment holiday, and ask to update your — check their business partners using our The Bank received a prize for digitalization passport details. The BSPB Business mobile app now allows for Svetofor service; at the annual Digital Leaders awards sending a printable copy of transfer orders — monitor the account activity and balance in the Digitalization Program 2020 — Banking Further, in 2020, the Bank launched a number marked as executed by the Bank. In the History changes; Services category. The Digital Leaders awards of important digital projects for its customers. section of the mobile application, the user can — convert foreign currencies using a quotation is an annual event that showcases the best Via our mobile app, you can now order a virtual generate a PDF printable copy of an executed board; achievements in the field of digitalization and card that can be tokenized (added to your ruble transfer order chosen from the list and — place a deposit; online services and inspires for greater digital phone’s wallet). The Bank has introduced send it to their counterparty using the standard — submit a loan application; transformation in all spheres of life. It has a simpler application form and submission application tools. — use our international business services; evolved from the Innovation Time project that procedures for consumer loans. The Bank has — issue a qualified electronic signature has been running for more than a decade. speeded up the display of card operations It is now possible to edit payments awaiting in a matter of minutes; in its mobile banking application — now, signature and control your payment drafts, — connect to acquiring services; The Bank has won a prize for its achievements the information appears instantly. Users have which considerably simplifies the creation of — and many more. in organizational digital transformation an opportunity to pick a credit limit in just new payments and speeds up the completion of in the CDO/CDTO AWARD 2020. a couple of clicks. The Bank has provided an transactions. The Bank’s digital platform for SMEs involving opportunity to recommend the Yarkaya and the i2B online banking service and the BSPB Solutions of digitalization leaders in their ICOUNT cards to your friends and get rewards. In 2020, the Bank’s BSPB Business mobile Business mobile app draws on the market’s industries and famous CIOs, CDOs/CDTOs In addition, the Bank has made considerable application for corporate customers ranked best practices and know-hows. It is an open of leading companies were nominated for investments in ensuring the security of its second in the rating maintained by brobank. digital platform convenient for daily financial the prize in 2020. PRIZE customers’ money in the digital banking space. ru, a service for choosing financial services transactions in real time without visiting for from banks and loan companies. The rating the bank office. Bank Saint Petersburg has won the prize the digitalization At the end of 2019, 99% of corporate customers was based on user reviews published in Google in two categories, the DIGITAL Transformation leader use the Internet Bank i2B, 99% of payments and Play and App Store, making it as unbiased of the Year 2020 and the CDO/CDTO Award in CDO/CDTO FX transactions are made online. as possible. Other leaders include applications 2020 (the prize for the digitalization leader). Award 2020 of Alfa Bank, Sberbank, and Tinkoff Bank. The latter was given to Alexander Rybakov, Vice- In terms of platforms, the BSPB Business President, Director of the Digital Department of topped the rating among Android apps. Bank Saint Petersburg.

58 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 59 36 Corporate Banking Strategic Financial Business From risk Creating wealth 48 Retail Banking report performance divisions to opportunity responsibly 56 Private Banking 57 Digital Banking

In the Retail Finance Awards 2020, our project IT SUPPORT FOR BUSINESS The Bank has improved credit risk management Moreover, in 2020, the Bank and Neoflex, “The WF Core Platform. Digital Transformation OPERATIONS processes by moving all calculations into a new a developer of IT platforms for business of the CRM System of Bank Saint Petersburg” decision-making system based on the SAS digitalization, launched pilot services for received a special award in the IT In 2020, the Bank was able to ensure that platform and the WF Core low-code platform. receipt and processing of client requests from Implementation category. measures to allow for a continuous remote external sources on the basis of the Neoflex work in the context of the pandemic were put The deployment of the solution virtually MSA Platform. The platform will enable the Bank BusinessDrom analytical agency updated in place within a short time frame. instantly began to produce positive effects on to create and launch new services in common the Bank’s rating “Quality Seal.Online” at the Bank’s performance. A new loan pipeline architecture within shorter time frames. the A1.online level. This is the highest quality Other measures taken by the Bank to increase powered by the SAS RTDM and the WF Core level that may be assigned to online banking the efficiency of technological support of low-code platform is able to quickly adapt The aim of the implementation of the Bank’s systems and online accessibility of services. business in 2020: to the business needs and maintains a high digitalization strategy and upgrading of its The Quality Seal.Online is a unified system — the first part of a project for rapid standard of customer service. technology landscape is to achieve faster time for rating online accessibility of services and deployment of combat/testing zones (CI/CD) to market for new product launches. Based quality of remote customer services. The rating was implemented. The project’s goal was to So, the use of the SAS RTDM product brings on analysis of the customer’s business tasks, methodology involves analysis of external provide automated deployment of presales logics of decision-making on loans to a brand Neoflex experts have, in cooperation with communications, functionality of the online CRM zones (fully automated deployment new level. A prospective customer instantly the Bank, developed a targeted architecture system, and features available in the client and configuration of Windows servers, SQL receives a response to their loan request and deployed and configured the Neoflex area. The agency reviews the level of disclosure, servers, web-services for IIS). In some cases, in accordance with the latest relevant offers of MSA Platform as the first step. This produced an quality and convenience of the client service deployment acceleration ranges from several the Bank, including a possible loan amount, an environment that brings together developers, infrastructure, standard contract terms, days to several minutes; interest rate, a monthly repayment amount, engineers, and operations staff. The platform the level of financial sustainability, and other — a solution for the centralized application and the cost of insurance. The system makes includes services, such as automated CI/CD parameters. software update service was found and put a decision based on the borrower’s risk processes, monitoring, logging, and enables into commercial operation (PatchMyPC); portfolio and where the terms sought after the Bank to easily scale it as business functions Preapproved loans offered by Bank Saint — employees were enabled to create virtual by the borrower do not match, generates an are transferred. Petersburg were recognized as the best machines via a self-service portal and alternative offering. in the Quick Solutions for Business category related work to develop the virtual cloud Neoflex’s pilot project has developed of the Russian Chamber of Commerce and infrastructure tool MS Azure Pack was The offering is calculated by the system within microservices that implement processing Industry’s competition. performed; no longer than one minute. Now, additional and verification of loan applications against — the Bank’s main ABS (CFT) and Processing IS information sources configured in both the clients’ requests received from partner (TWO) switched to new equipment (Exadata synchronous and asynchronous modes are websites and digital channels of the Bank hardware and software). used in the decision-making process for even followed by channeling the requests to the CRM more precise calculation of the credit risk and system for further processing. The Bank continues to develop its consumer assessment of prospective borrowers’ solvency. lending business, including by using process In 2020, the Bank deployed the AppDynamics digitalization tools. The Bank uses deep Deep analysis of risk profiles of prospective solution to improve customer service levels. analytics techniques to increase sales and borrowers helps reduce the number of It will enable the Bank to effectively manage offer customers what they really need. In order “bad” loans and quick generation of offerings the performance of both internal and clients’ to support these techniques, we have found contributes to improved service levels and, applications. a solution that is capable of determining hence the number of clients. Optimization and individual offerings in a precise and quick digitalization of the process made it possible manner: SAS RTDM (SAS Real-Time Decision to reduce manual verifications, possible errors, Manager). and operating expenses.

60 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 61 36 Corporate Banking Strategic Financial Business From risk Creating wealth 48 Retail Banking report performance divisions to opportunity responsibly 56 Private Banking 57 Digital Banking

CISCO’s AppDynamics, a world leader on INFORMATION SECURITY Thanks to the fact that the Bank’s infrastructure The Bank continues to expand and develop the market of monitoring performance of was prepared for safe remote work, the staff cooperation with leading Russian and services and applications, and Bank Saint The Bank pays great attention to the security of was switched to remote routines within international companies in the field of Petersburg, one of Russia’s largest regional remote customer service systems. Protecting the shortest time frames. information security which ensures a high banks, announced the beginning of their customer data and operations is one of level of protection of the Bank’s infrastructure, cooperation aimed at the implementation of the Bank’s top priorities. In 2020, the Bank The Information Security Strategy involved banking information and services. a long-term program for digital transformation finished the implementation of the Information the deployment of a number of systems to of banking products. AppDynamics provides Security Strategy by having achieved the desired protect the IT infrastructure, such as a privileged The high level of compliance of the Bank’s the Bank with a single platform for monitoring goals. Also, in 2020, it prepared a new user monitoring system and a corporate information security system with the latest and analysis of software and hardware for Information Security Strategy for 2021–2023, network risk management system, as well requirements has been confirmed by successful improved customer service. which determines areas of improvement for as a protection system against targeted attacks audits in accordance with such standards the information security system and draws on during online operations. as GOST R 57580.1-2017 “Security of AppDynamics will monitor the Bank’s the Bank’s Development Strategy. financial (banking) operations. Protection of infrastructure elements, such as the online The Bank’s critical web-services, including information of financial organizations. Basic banking portal, the mobile app, the Bank’s The Bank continued to improve the information its online banking service, were protected set of organizational and technical measures”; internal applications, the client server security incident monitoring system. against application attacks using a web-attack Payment Card Industry Data Security Standard application Microsoft Dynamics CRM, CFT- The Information Security Monitoring and protection tool from one of the leading data (PCI DSS) and a number of others. Bank ABS, the Processing System, and the IBM Incident Response members took part in cyber protection providers in Russia. Integration Bus (IIB). The project is implemented drills both with the involvement of third party in cooperation with Winncom Technologies, vendors and with the participation of FinCERT of one of the leading vendors of integrated the Bank of Russia. In order to remain prepared telecommunications and network solutions. to counter external and internal attacks, penetration tests are conducted on a regular In July 2020, the Bank migrated to the fail- basis. safe cluster RDQM, a group of servers that provide high accessibility of the IBM Integration To minimize information security risks, Bus. The cluster uses a single IP-address and a security standard for third parties that sets a failure of one server does not lead to an out mandatory requirements for provision of outage, as the IT systems automatically switch to IT services was adopted for the purposes of another server in the cluster. contracting.

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From Risk to Opportunity

Thanks to efficient and proactive risk management, which strives to transform every risk into an opportunity, Bank Saint Petersburg is always profitable and resistant to external shocks.

64 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 65 66 Risk management Strategic Financial Business From risk Creating wealth 74 Cost of risk dynamic analysis report performance divisions to opportunity responsibly

RISK MANAGEMENT

Risk Description Key Mitigating Actions

By the end of 2020, the Bank partly removed limitations of credit policy commenced in 2Q 2020, but even so it remains more moderate as compared with the beginning of 2020. High level of coronavirus sickness rate indicates stronger credit risk both in retail and corporate segments, despite The strategic objective of risk management The Supervisory Board has a dedicated the expectations of 2021 economic recovery. is to ensure the Bank’s financial stability. Risk Management Committee that assists In large corporate lending the Bank strives to increase the share of high credit The existing risk management framework the Supervisory Board in overseeing the Bank’s quality loans. In SME lending the Bank develops internal statistic risk evaluation comprises a set of measures and solutions risk management system, and the efficient models and, despite the increase in credit risk, in 2020 a new outer customer designed to identify, monitor and assess identification, quantification, and control of risk. lending program was launched based not only on the official financials all material risk types, to determine their analysis, but also on the turnover on settlement accounts. This product was acceptable level, and to mitigate/limit each For each type of banking risk, a management previously available only for the customers already being serviced in the Bank. type of risk. system has been established that ensures In retail lending mortgage loans and unsecured loans to payroll customers are an adequate risk assessment and includes prevalent. During 2020 these segments were less affected as compared to car Pursuant to current legislation and the Bank’s measures to mitigate and limit it. The Bank lending and unsecured lending to the non-payroll customers. Charter, the Supervisory Board approves measures its assumed risks against its equity, In order to manage credit risks related to customers (credit organizations, the Risk and Capital Management Policy, which supporting the capital adequacy ratio required financial enterprises and corporates), the Bank employs the limit system, covers the coordination of actions taken to by the Bank of Russia, which allows the Bank curbing the maximal credit risk amount during:

enhance the risk management framework, to to meet its obligations (including contractor — lending / deposit placement operations; improve methodology consistently, as well as to covenants), and to maintain its efficient — financial assets sales/purchases, including currency, where standardize and automate risk management utilization of capital. the counterparty credit risk arises; processes. — repurchase agreements; — non-exchange derivative contracts; — placement of funds on corresponding or other accounts of the counterparty credit organization; Risk Description Key Mitigating Actions — other operations exposing the Bank to the credit risk. Corresponding counterparty limits are set according to the authorizes bodies’ Credit Risk The risk of losses The economic state of the most companies in 2020 was affected by global decisions as a result of a remote credit quality analysis (financials and other if a borrower or coronavirus pandemic. Limitations imposed since 2Q in order to curb available financial and non-financial information). During the limit’s course of counterparty fails to the spread of the virus lead to decreased revenues of some of SMEs and their action counterparty credit quality is being monitored. Data accrued as a result meet its contractual workers. Raw materials prices drop and decrease in economic activity also of the monitoring is used to evaluate the counterparty risk. obligations. affected large corporates. The Bank practices conservative approach for counterparty risk evaluation, As a response to increased credit risk, the Bank employed a stricter policy on credit risk minimization is mostly achieved through prevalent collaboration loan approval and support for customers in difficult financial state in terms of with customers of high credit ratings. When conducting collateralized deals federal as well as own support programs. liquid collaterals are favored. By the end of the 2020, the most of the credit holidays ran out, with the maximum of approvals falling on 2Q, and, from the preliminary data 93% of customers with credit holidays came back to normal loan service. This signifies the efficiency of the support measure.

Approximately starting with June 2020, new federal lending support programs were launched for the populace and business by subsidizing interest rates, which were the main factor for development of standard lending programs to the retail customers and SMEs in 2H 2020.

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Risk Description Key Mitigating Actions Risk Description Key Mitigating Actions

Liquidity Risk The risk of losses if The approach to managing liquidity is based on ensuring a level of liquidity Interest Rate Risk The risk of losses due to Analysis of the Bank’s exposure to interest rate risk is based on the forecast maturities of assets and provisions that will allow the Bank to sustain a certain period of sudden adverse fluctuations of of unfavorable changes in the current value of the Bank’s assets and liabilities do not match. outflow of customer deposits and a reduction in the Bank’s ability to attract market interest rates. liabilities. The key criterion for measuring this risk is the sensitivity of capital to resources from the financial market caused by macroeconomic events or any the general interest rate level. Another criterion is the sensitivity of annual net occurrences directly related to the Bank. interest income to changes in the general level of interest rates.

The Bank has established a multi-level liquidity management system that Given the available forecast, if interest rate movements appear unfavorable provides a comprehensive approach to monitoring, forecasting and decision- to the Bank’s interest rate risk exposure, the decision is made to regulate making in this sphere, as well as uses a scenario approach to determine the level of risk by undertaking any of the following actions: current and projected liquidity. — modification of transfer prices, basic interest rates and banking product Throughout 2020, the Bank’s total cash and liquidity reserves were adequate rates aimed at changing the structure of the incoming customer operations enough not only to support its day-to-day operations and cover unplanned flow to manage the asset/liability ratio; liability outflow, but also to support growth in active banking operations, where — operations on the financial market to change the Bank’s interest rate risk necessary. position, including the adjustment of the debt securities portfolio duration, medium- and long-term fixed-rate interbank borrowing and lending, Market risk The risk of assets In 2020 global markets were defined by coronavirus pandemic influence interest rate swaps, etc. devaluation due to on economies and markets. In order to support financial stability many In 2020 ruble-denominated operations rate decreased significantly. market factors. government regulators developed support measures, including monetary Particularly, the Central Bank of Russia notched the key rate down four times easing, fiscal stimulation, regulatory easing and targeted funding. Epidemic in the total amount of 2%. This trend manifested due to low inflation. Monetary coupled with no deal on oil production decrease in 1Q 2020 led to significant policy easing was necessary to push back against prevalent disinflationary risks drop in oil prices and increased global markets volatility. WTI oil as of April 20, on the back of global pandemic. 2020 was traded in the negative, reaching the minimum of USD -37. However it was only applied to some select contracts of American oil sorts. As compared In US dollar-denominated assets interest risk management was analyzed by with December 31, 2019 Brent and Urals prices dropped by 26% and 23% the Bank in terms of Russia’s implicit risk and basal international interest rates correspondingly. levels. Interest rates in terms of Russia’s risk margin went down in the course of 2020, revealing high volatility. The Bank kept the gap between assets and Pandemic, as well as long-term downward trend on oil prices below risk-sensitive liabilities at a minimum. the budgetary rule level, with geopolitical risks on the rise due to US presidential elections led to ruble devaluing by 20% by the end of the year.

68 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 69 66 Risk management Strategic Financial Business From risk Creating wealth 74 Cost of risk dynamic analysis report performance divisions to opportunity responsibly

Risk Description Key Mitigating Actions Risk Description Key Mitigating Actions

Stock Market Risk The risk of losses due To manage the stock market risk, the Bank uses: Commodity Risk The risk of losses due to The following measures are applied to limit this risk: to adverse changes adverse fluctuations of — open and total position limits for investments in securities of various — limits on sensitivity to risk commodities market; in the market quotations the commodity market issuers and on groups of securities; of trading securities and instruments prices. — open and aggregate position limits on investments in certain types of derivatives. — limits on sensitivity to stock market risk factors; underlying assets and on investments in underlying assets with certain — limits on maximum daily transaction valuations; specifications; — option position limits; — option position limits; — stop-loss limits for groups of securities; — stop-loss limits on commodity market instruments; — VaR limits; — VaR limits; — daily monitoring of the stock market risk and compliance with the fixed — daily commodity risk and limit compliance monitoring. limits. The majority of the limits were established for oil-related instruments. In building its securities portfolio, the Bank continues to maintain a conservative approach. The volume of limits on equity securities remains Operational Risk The risk of losses The Bank’s approach to operational risk management is aimed at reducing small relative to the total limits on securities. REPO transactions represent due to inadequate or the risk to an acceptable level by carrying out measures to prevent situations a significant proportion of securities transactions. As of January 1 2021, erroneous internal that could be a source of the risk, as well as by insuring against operational the share of bonds amounts to 96% of the Bank’s securities portfolio (total processes, actions of risks that are beyond its control. volume of trading and investment securities). In forming its bond portfolio, employees and systems The Bank employs two main approaches to operational risk (OR) management: the Bank gives preference to first-class credit quality securities. The share of or external events. bonds included in the Lombard List of the Bank of Russia amounts to 74%. — top-down approach — OR management in terms of consequences caused by OR. This approach implies statistical data gathering in terms of OR Currency Risk The risk of losses due to Currently, management of the currency risk is carried out on a daily basis. events in the set format, aggregation and analysis; adverse exchange rate The Bank monitors compliance with open currency position limits, as regulated — bottom-up approach — OR management in terms of divisions, banking fluctuations. by the Bank of Russia, and calculates the value of currency risk in accordance products and processes. New (and changing) products risk factors analysis with procedures established by the Bank of Russia. is essential in this approach.

To manage the currency risk, the Bank uses: The Bank’s OR management process implies:

— limits on sensitivity to risk factors of currency and money market; — OR identification; — open foreign exchange position limits; — data registration concerning internal OR events and OR events database — forward foreign exchange position limits; losses; — option position limits; — OR evaluation; — VaR limits; — choice and implementation of OR reaction approach as a result of the evaluation; — stop-loss limit. — OR monitoring. The principal volume of limits is set on hard currencies. Limits on other currencies are negligible. In order to minimize the operational risk, the Bank establishes limits of loss from operational risk incidents for its major activities.

A number of measures have been developed to ensure continuity of the Bank’s operations and/or recovery of the Bank’s operations in case of critical and emergency situations. The Bank established backup sites, where backup workstations are set up and equipped to ensure continuity of the critical business processes.

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Risk Description Key Mitigating Actions ANTI-MONEY LAUNDERING The Bank’s procedures for preventing money PROCEDURES laundering and financing of terrorism include Strategic Risk The risk of losses due In order to mitigate the strategic risk, the Bank has adopted a system of the Know Your Customer (KYC) procedures, to errors in strategic strategic planning and analysis which comprises drafting and approval The Bank’s policies and procedures for detection of suspicious transactions and decision-making. of the development strategy, ongoing implementation monitoring and, if applicable, adjustment/revision of the strategy. counteracting money laundering are based information storage. All the information on the applicable legislation of the Russian obtained in the process of counteracting money The Bank’s strategy is drafted in accordance with its strategic development Federation. The Bank has developed laundering is confidential, except for the cases priorities in general and by particular business area, defining specific efforts the necessary internal regulations and when it is supplied to the Federal Service required to successfully attain the strategic goals. In accordance with the Bank’s Charter, the strategy and business priorities must be approved procedures to prevent money laundering for Financial Monitoring, in accordance with by the Supervisory Board. To ensure greater efficiency and transparency and financing of terrorism. These procedures the applicable legislation. The Bank’s employees of strategic decisions, the Supervisory Board has established the Strategy are aimed at, among other things, minimizing receive training on counteracting money Committee. the risk of the Bank, being used as a money laundering at least once a year. Continuous monitoring of the strategy implementation progress includes laundering tool, protecting the Bank from various feedback tools designed to adjust and revise the strategic goals and financial and reputational risks and increasing The Bank’s Financial Monitoring Department priorities, as well as macroeconomic and competitive analysis. To successfully the confidence that its banking services are monitors customer transactions and implement the strategy, the Bank has introduced a key performance indicator available only to bona fide customers. the activities of all units with regard to (KPI) management system designed to support the link between the strategic and operative levels of planning, as well as a strategic projects system compliance with the applicable Russian channelling major qualitative changes. legislation on counteracting money laundering and financing terrorism.

WORKING WITH FOREIGN Bank Saint Petersburg is registered with the US TAXPAYING CUSTOMERS Internal Revenue Service as a Participating Foreign Financial Institution under the Global In full compliance with the current legislation, Intermediary Identification Number (GIIN) Bank Saint Petersburg makes all reasonable TQQXV5.99999.SL.643. efforts available under present circumstances among its customers to identify legal entities The Bank has internal regulations in place, and individuals that are subject to foreign laws including criteria for classifying customers on foreign account taxation (for foreign taxpayer as foreign taxpayers, and methods for obtaining accounts), including Chapter 4 of the US Internal relevant information from them. The Bank Revenue Code of March 18, 2010 (Foreign conducts its customer identification procedures Account Tax Compliance Act, or FATCA). within the time limits stipulated by the FATCA.

The Bank systematically briefs its employees on various issues related to identifying foreign taxpayers among its customers.

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COST OF RISK DYNAMIC ANALYSIS

The Bank’s risk management system has The crisis of 2008–2009 demonstrated existing After implementation of leading risk For five years, starting with 2016, the cost of undergone significant changes, addressing new problems and the necessity of changes to be management practices based on risk for pre-2013 loan vintages decreased from challenges of the last 10 years. introduced into the risk management approach. the accumulated expertise and loss record, a peak of 2.7% to 0.4%, while the cost of risk for Problem loans provisions started to contribute since 2013 a “new” quality of the loan portfolio new loans granted after 2013 remains stable at The period from the early 2000s until 2008 was a major part of created provisions. has been established with an integrated risk around 1.0-1.1%. marked by absence of any considerable defaults assessment system. “Old” problem loans in the market and the resulting lack of required Starting from 2009, a significant work has been granted before 2013 continued to contribute statistics for development of efficient risk carried out for building a new risk management a major share to the total cost of risk for the last management models, thus there was no regular culture, including implementation of five years and kept providing a significant risk management in Russia in those years. the corporate customers ratings model. Within negative impact on the Bank’s financial results. The Bank created major part of its provisions a few years, the best practice was implemented on the growth of the loan portfolio, which in the daily risk management procedure of Bank Due to consistent establishment of the new doubled every year until 2008. High net interest Saint Petersburg and started to be used for risk management culture, starting from margin excessively covered any risks, for this evaluation of each loan project. 2013 the Bank has obtained a “new” quality of reason the provisions did not put pressure on the loan portfolio, which accounted for 89% of the Bank’s financial results. the loan portfolio as of January 1, 2021. To sum up, due to both repayment and writing off of problem loans granted before 2013, their share in the total loan portfolio is decreasing every year (accounted for 7% as of January 1, 2021), and the remaining problem loans were covered by provisions to a great extent.

Loan portfolio dynamics Cost-of-Risk dynamics

459.3 13.6 401.4 34.3 370.3 375.3 11.9 343.7 354.3 357.7 13.5 25.1 3.4 9.1 3.4 3.2 12.4 15.3 37.0 26.9 31.0 41.4 35.7 276.8 0.4 2.7 35.2 2.3 2.0 2.1 190.3 232.9 395.7 1.9 95.0 332.5 1.7 246.6 268.5 303.7 0.6

0.8 1.4 2.3 2.7 1.7 1.0 1.1 0.4 Consistently low 146.3 119.2 91.3 post-2013 53.8 31.9 0.8 vintages CoR 38.1 31.1 15.7 0.9 1.0 1.1 1.0 0.9 1.0 1.1 2013 2014 2015 2016 2017 2018 2019 2020 2013 2014 2015 2016 2017 2018 2019 2020

Standard pre-2013, RUB bn Problem pre-2013, RUB bn Post-2013 loan in loan portfolio, % Macro factors influence, % Standard post-2013, RUB bn Problem post-2013, RUB bn Pre-2013 loan in loan portfolio, %

74 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 75 678 LetterCustomers from the Management Strategic Financial Business From risk Creating wealthwealth 881 30Colleagues Years Proudly with the City report performance divisions to opportunity responsibly 1285 MacroeconomicCommunity Environment 1692 OurCorporate Strategy Governance

Creating Wealth Responsibly

The entire business is built on ethical principles and a responsible approach to increasing wealth and maintaining the trust of employees, customers, shareholders, society as a whole.

76 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 77 78 Customers Strategic Financial Business From risk Creating wealth 81 Colleagues report performance divisions to opportunity responsibly 85 Community 92 Corporate Governance

CUSTOMERS

Bank Saint Petersburg is the largest private At the same time, individual customer services HIGH SPEED AND FLEXIBILITY OF HIGH QUALITY SERVICE bank in Northwest Russia. The financial are provided separately, in a designated area THE DECISION-MAKING PROCESS services provided by the Bank support away from the main office zones. This Premium In 2020, maintaining a high standard of the local development of the region and zone is for VIP customer services and there is Close proximity to customers, a high processing customer service both in its online and offline its sustainable economic growth, as well a special room for confidential meetings. speed and the flexibility of the decision-making channels regardless of the restrictions imposed as helping individual customers to reach process remain the traditional advantages of due to the COVID-19 pandemic became one of their financial targets. At the same time, the Bank is actively developing Bank Saint Petersburg in the Northwest Region. the key priorities for the Bank. its e-business model. In 2020, the Bank Services for customers still constitute launched a number of important digital projects The Bank introduced its continuously Customer experience has come to the fore — the core of the Bank’s business. The Bank for its customers. Via our mobile app, you can functioning Loan Factory project by fine-tuning it was important to help clients to pivot and has 2 077 000 individual customers and now order a virtual card that can be tokenized the lending process throughout the entire life adapt to the changed conditions, and master 50 000 corporate customers. Its proximity to (added to your phone’s wallet). The Bank has cycle of a loan, from application review and customary offline processes in remote service customers, high processing speed, and flexibility introduced a simpler application form and disbursement of funds to a loan follow-up channels. In this period, the number inquiries of decisions remain the traditional advantages submission procedures for consumer loans. for both individuals and legal entities. In view from clients considerably increased in all of Bank Saint Petersburg in the Northwest The online and mobile banking services provide of the fact that loan product automation is channels. Cross-functional task forces have Region. Combined with the introduction of new a more complete and visual information on a crucial element of the Loan Factory, the Bank been created to quickly address the issues quality standards for all operations, settlements debit cards, in particular with cards offering standardized the procedure for the automation and identify system problems faced by and services, these factors determine the Bank’s cash back. The Bank has speeded up the display of newly introduced loan products. the customer. This enabled us to sort out all contribution to the social and economic growth of card operations in its mobile banking the situations within short time frames and of the Russian Northwest. application — now it appears instantly. Users The technological leadership of the Bank quickly find optimal solutions. The solutions have an opportunity to pick a credit limit in just guarantees a high-speed of digital services. adopted by task forces were then scaled PROXIMITY TO CUSTOMERS a couple of clicks. The Bank has provided an All Internet Bank services — loans, deposits, across the Bank, thereby supporting our clients opportunity to recommend the Yarkaya and and cards — are easily available to customers in getting a handle on the new realities and 58% The Bank continues to develop its branch ICOUNT cards to your friends and get rewards. in a click. The service is based on the timely enabling us to anticipate possible questions and of private network in St. Petersburg, creating the most In addition, the Bank has made considerable creation of personalized offers and pre- considerably reduce the flow of queries. customers are up-to-date and convenient outlets, lending investments in ensuring the security of its completed forms in the channel most Internet Bank centers and round-the-clock service locations. customers’ money in the digital banking space. convenient for the customer. To continue the work to create a quality users As of January 1, 2021, the Bank’s customer management system that started in 2019, service network comprises 63 outlets, six The i2B Internet Bank is currently used by the Bank enhanced the role of the Quality Mortgage Lending Centers and three Car more than 99% corporate customers of Bank Committee in 2020. The Quality Committee is Lending Centers. The numbers of ATMs and Saint Petersburg, with 99% of payments and designed to advocate the interests of customers POS terminals amounted to 810 units. FX transactions being handled remotely. in the development of products and services, 99% In 2020, the Bank enhanced its BSPB Business give its recommendations on how to improve of corporate Open space provides proper attention to each mobile app for corporate customers with new customer experience when introducing customers are Internet Bank customer, while spatial zoning is fully aligned functions. This was highly rated by both users improvements that significantly affect users with the needs of various customer groups. At and experts and in 2020, the Bank’s mobile the customer experience, monitor the quality of the office entrance, there is an extended 24-hour app for corporate customers ranked second service at outlets and remote channels. self-service zone. The main part of the office is in the rating maintained by brobank.ru, a service divided into an operational service zone (for quick for choosing financial services from banks and operations), a zone for more time-consuming loan companies. In terms of platforms, the BSPB operations, and the cash-desk zone. There is Business topped the rating among Android a comfortable waiting area between these zones. apps.

78 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 79 78 Customers Strategic Financial Business From risk Creating wealth 81 Colleagues report performance divisions to opportunity responsibly 85 Community 92 Corporate Governance

COLLEAGUES

It uses customer feedback to identify and shows positive customer response to The successful implementation of the Bank’s Staff Composition by Business Line, January 1, 2021 help tackle systemic problems faced by the enhancements introduced to the mobile strategic initiatives is driven by its main asset — customers, assesses the effectiveness of app, as well as a rise in satisfaction among a professional, customer-oriented team. Bank measures implemented by the Bank’s divisions clients participating in the YARKO program. Saint Petersburg is one of the largest employers 2% 1% Top-management to improve customer experience, organizes in the North West Region of Russia, employing 1% 2% Finance quality measurements (such as by NPS or Net The experience gained throughout 4 220 people (as of January 1, 2021). 25% Business departments 25% Promoter Score (a consumer loyalty index), CSI the pandemic period has allowed for building 1 341 people are employed at branches, and 32% 2% Settlements and accounting or Customer Satisfaction Index, TxR or Temkin a work process with feedback from customers 2 879 employees work at the Head Office. 12% IT and optimization Experience Ratings). in such a way that the customer’s interests are 4% Risk management now the main driving force for all product and The relationships between the Bank and 1% Control over operations 2% Introduced in 2019, the TxR — a tool for process changes in the Bank. its employees are based on respectful and 4% Administrative functions 13% Operation support the assessment of quality of the Bank’s products mutually beneficial cooperation. The Bank builds 5% 12% 5% Legal support and security and services — has proved to be successful. In 2020, well-coordinated work of all divisions an open, creative team to meet the challenges 13% 4% 32% Branch network TxR measurement results were used as a basis has made our customers receptive to the Bank’s of the new time, improving its staff 4% for a number of enhancements to the mobile efforts. development, motivation and recognition tools 0% 1% app for retail clients, to implement a set of for years. Ambitious projects and challenges measures aimed at raising awareness of invite each team member to unlock their the rules for accumulation and use of rewards potential by enhancing their knowledge and among the YARKO loyalty program participants, expanding their competencies. and to connect new partners. The TxR behavior Staff Composition by Age, January 1, 2021 Respectful mutually beneficial relations between

the Bank and the staff are implemented through 38% development, motivation, and recognition tools for the results achieved. Digital transformation 31% and the continuous search for efficiency gains provide the Bank’s employees with new opportunities to realize their own potential. 17% The implemented practices of kanban and agile, aimed at accelerating the entry into the market

of banking products, are gradually becoming 7% 7% a characteristic feature of the Bank’s corporate culture, where an important role is given to team management. < 24 25–34 35–44 45–54 > 55

80 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 81 78 Customers Strategic Financial Business From risk Creating wealth 81 Colleagues report performance divisions to opportunity responsibly 85 Community 92 Corporate Governance

NEW ONLINE CHALLENGES In total, the Bank hired 936 new employees The Corporate University is a successful tool on-the-job development of skills. With respect in 2020, which is in line with the 2019 figure, for involvement of management members to managerial skills, in 2020 the training focused 256 The year 2020 speeded up the deployment of regardless of the staff reduction trends in the development of the team, enhancement on distributed team management, feedback, managers 4 220 online tools. Our Recruiting and Onboarding observed during the pandemic in Russia and of the interaction and transformation of and staff motivation. were trained people team sharpen their skills in online recruiting globally. the corporate culture, knowledge and expertise employeed practices and use digital solutions for interviews, management, use of new tools and forms of The Bank uses mentoring and coaching candidate evaluation and onboarding in order Thanks to the well-coordinated work development, improvement of cross-functional practices to develop its capabilities to be able to stay in tune with current changes by the Bank’s HR team and divisions, at team practices, and further development of in the transfer of expertise. 536 employees and developments. the beginning of the COVID-19 pandemic, the distance learning system in order to support of the Bank, including four Board members, a significant portion of our team was seamlessly the implementation of the Bank’s Strategy and worked to develop their colleagues in 2019– In 2020, our HR team have offered an EVP moved to the remote work routines. The reliable key projects. 2020. Training of high-potential managers (Employee Value Proposition) concept and technical and multi-channel information support was contributed to by members of the Bank’s signature style. The Bank’s new, outstanding of the staff and responsive restructuring For the first time in its history, the Bank has Supervisory Board. and informative page on the largest recruiting of the forms of interactions have ensured introduced a cross-functional team named platform hh.ru represents its value proposition safety, health and good performance during the “Product Training System”, which was From 2020 onwards, new employees of as an employer to attract the best candidates. the pandemic. With respect to employees of initiated and is actively contributed to by the HR branches receive induction training remotely. 26k An individual EVP for IT professionals enables subsidiary offices, all recommended precautions team with a view to set up an algorithm for In 2020, employees of the Bank were assigned courses the Bank to compete for talents with technology are taken and the staff are regularly tested for managing product training and to introduce 173 distance learning courses and tests, which and training leaders. coronavirus infection. common online formats. Over the past year, is a 25% increase from 2019 and twice as many lectures 350 employees of our corporate business as in 2018. The BSPB Corporate University has employees The Bank’s brand in the IT environment is BSPB CORPORATE UNIVERSITY unit attended 196 online training activities; launched the Eduson, an additional distance completed in 2020 936 additionally strengthened by our #braincamp, 40 distance learning courses were developed. learning platform with hundreds of training new employees a proven internship project for IT graduates. The Bank pays great attention to programs encompassing a wide range of hired in 2020 2020 saw the launch of the second wave of the professional development of the team, Being one of the faculties, in 2020 the Digital competencies and skills. In 2020, employees of the program when 25 talented students from increasing its potential in different directions: Academy focused on competencies that help the Bank completed 26 thousand courses and industry-specific universities were given an managerial effectiveness, professional expertise, fuel digital breakthroughs, such as digital training lectures and passed 55 thousand tests. opportunity to work and directly contribute to interaction with the client, digitalization of marketing, project management, and system the Bank’s digital projects on Big Data, technical services and solutions. analysis. The training was attended by ORGANIZATIONAL CHANGE solution development, testing, and systemic 75 members of cross-functional teams. analysis. The Bank has established a Corporate University Compulsory training courses in systemic In 2020, the Bank underwent a few significant to create an environment for the fulfillment of analysis, business analysis, remote team organizational changes. In particular, industry- The Bank’s Future Banker program designed to the potential of every member of our team. All management, trends of the Information Era, specific departments that serve large business train graduates from St. Petersburg universities employees are distributed between the faculties and unit economics were determined for each accounts were combined into larger units last and young professionals for working with of business and management and the Digital employee. September. Employees of the departments customers has been successfully running for Academy. were consolidated into a new site at the Bank’s the tenth year in a row. In 2020, the program The Bank still pays special attention to Head Office where they hold meetings with their trained 86 people and 76 of them received an the development of its management team. clients, including online interactions. Dealings employment offer from the Bank. In 2020, 256 (44%) managers were trained. with large business accounts are led by Deputy All managerial programs were moved Chairman of the Management Board Vyacheslav online, with training formats including online Yermolin. training sessions, distance learning courses, interactive training chats, and self-guided

82 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 83 78 Customers Strategic Financial Business From risk Creating wealth 81 Colleagues report performance divisions to opportunity responsibly 85 Community 92 Corporate Governance

COMMUNITY

An emphasis in the structural changes was DIGITAL ERA Bank Saint Petersburg attaches great The Bank paid for the installation of sanitizers made on personalized services, high levels importance to the successful development of and disinfectants in schools and kindergartens of industry specialization, and the ability to The events of 2020 have driven the development the regions of its presence, strictly adhering to in several districts of the city. When schools adapt to the customer’s needs based on of online communications with the staff. social responsibility principles in its business were in distance learning, the Bank bought the knowledge of ins and outs of their business. The Bank has launched a Telegram channel operations. tablet PCs for students from low-income This approach enabled the Bank to achieve where employees can receive the latest families in Petrodvorets District of St. its target performance, as well as promoted updates and unique corporate content The Bank pays particular attention to the following Petersburg. The Bank paid for taxi services for the growth of its loan portfolio and foreign on their smartphones. We keep our staff three groups of social responsibility initiatives: health workers in Pushkin to visit their self- business portfolio. A survey among large informed and maintain their involvement supporting underprivileged children, developing isolated patients. The Bank’s funds were used business accounts has identified the Bank’s by carrying out regular thematic campaigns the urban environment, and encouraging financial to buy an ultramodern CT scanner for testing NPS equal to 63.8. The Bank became the leader which were implemented in a remote format awareness. patients at the Municipal Hospital of St. John of of the segment among all the banks included in 2020. During our Digitalization Week, Kronstadt. in this survey. more than 1 500 employees were able to In 2020, the global society was faced with watch presentations by outstanding speakers the COVID-19 pandemic and the resulting Ensuring that the Bank’s operations are running The Micro, Small and Medium-sized Business on the topics, such as the Economy 4.0, challenges significantly affected the social smoothly and both our clients and employees > 40 segment is headed by Chairman of the Board technologies of the future, phygital theater, sphere. Bank Saint Petersburg did its best to help are feeling comfortable and secure has become healthcare Kirill Kuznetsov. The transformation of and digital marketing, and also to take part overcome the situation. a priority for the Bank’s management. About facilities got com- the business model in dealings with in a charity online marathon, compete in an 2 500 employees (or 60% of the staff) were prehensive the segment and the restructuring of processes online quiz, and do “digital” morning exercises SUPPORT DURING THE COVID-19 moved to remote work in the quarantine period. support from the required the structure to be redesigned every day. The Information Security Week PANDEMIC A large part of sales activities and customer Bank as follows: the Directorate for Support of dedicated to the theme of Russian folk warrior relations went through online channels. Lending to Mass and Medium-Sized Corporate heroes provided the Bank’s team with another New challenges call for new solutions. In this The Bank provided all support measures Businesses and the Directorate for Analysis chance to consolidate their knowledge in an respect, in 2020, the Bank refocused its to its customers that were introduced by and Support of Sales on the Mass and Medium- easy-to-remember format. corporate social responsibility efforts in order the government (the loan repayment holidays Sized Corporate Business were set up. First to solve the urgent issues in the healthcare under Federal Law No. 106-FZ; the mortgage of all, the change is intended to help acquire In 2020, our team celebrated the Bank’s 30th and social care sectors which were most hit by subsidy scheme; the government’s new customers, ensure high quality dealings anniversary. Although the event was carried the pandemic. concessional car loan program, in particular, with the current customer base, and improve out online, the Bank was able to organize the implementation of the “Car for Health customer service in line with their business a memorable special day for its employees, During 2020, the Bank provided comprehensive Workers” sub-program which provides for segment. as the top management team marked support to more than 40 healthcare facilities a 10% discount off the cost of a car purchased the merits of more than 400 employees in St. Petersburg and the Leningrad Region. by health workers employed by state medical and awarded them for their commitment Its funds were used to equip individual isolation facilities deducted from the first installment to the Bank’s values of customer focus, wards for patients with coronavirus infection, payment; interest-free payroll loans, etc.), as well partnership, effectiveness, and proactivity as well as to procure medicines and personal as offered its own debt restructuring programs, in a live stream session. The staff also received protective equipment for doctors working in red and reduced or abolished fees for the most online congratulations from performing zones. During the rise of SARS-CoV-2 cases sought-after services. The Bank has quickly artists who are our clients, and also from our (in April – May 2020), the Bank paid for launched a number of new online products, colleagues from the Bank’s regions of presence. the 24-hour provision of hot meals for doctors such as online registration of transactions of the Mariinskaya Hospital in St. Petersburg. with developers, online mortgage approval for retail and corporate clients, online payroll card programs, a virtual bank card, etc.

84 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 85 78 Customers Strategic Financial Business From risk Creating wealth 81 Colleagues report performance divisions to opportunity responsibly 85 Community 92 Corporate Governance

Another important part of our support activities The Bank’s Moscow Branch has entered into The #ICAN_ONLINE ecosystem not only helps area, and rental holidays for one month for was financing key businesses and organizations partnership with KAMPO JSC, who are currently our clients to solve their financial issues, but connecting an online cash register. In addition, that work at the frontline of the battle against one of the leading manufacturers of respiratory also enable them to order food at cost, buy the client could enjoy special terms for using the pandemic. equipment for medical facilities. In April 2020, services and goods at discounts, visit virtual InSales, an online store platform, including KAMPO received a medical device market tours in the most exclusive museums, and be free use of the platform for 60 days and a 50% In the spring of 2020, the Bank and BIOTEK authorization from the Federal Service for trained by the Skillbox, one of the best digital discount off the base price for the first payment. holding supported the provision of Russian Supervision in Healthcare (Roszdravnadzor) for schools. hospitals with express tests to expedite its GS-16 pneumatic ventilator. The ventilator CHARITY AND SPONSORSHIP the diagnosis of COVID-19. The Bank’s is designed to provide first aid by artificial The Bank provided a special banking support Moscow Branch opened a line of credit worth pulmonary ventilation and oxygen-air mixture package for medical professionals during In 2020, we still had to solve those social RUB 400 mln for a major pharmaceutical inhalation. The device can be used by hospitals the COVID-19 pandemic, which includes special issues that existed prior to the pandemic. company BIOTEK to procure innovative and other (including temporary) medical offers under payroll programs for medical The Bank continued to implement its own COVID-19 rapid tests. The BIOZEK Medical treatment facilities where it is necessary to workers and their families, such as reduced long-term social programs. In 2020, the Bank COVID-19 IGG/IGM Rapid Test Cassette ramp up the intensive care capacities due to rates for the Bank’s loan products (mortgage, continued its long-term aid program for produced in the Netherlands detects the virus a lack of lung ventilators, and in emergency consumer and car loans, and credit cards). Kolpino Family Education Support Center in the human body within 10 minutes. care settings. In this partnership, the Bank No. 9 (formerly known as Foster Care Center provides end-to-end services to the business, In addition, the Bank’s special package offers No. 27). The project started in 2006 when The Bank extended a RUB 49 mln loan to including a RUB 100 mln financing facility, a zero fee for SMS messages and reduced fees the Bank joined the Board of Trustees of this 49 Alarm Motors to buy 13 ambulance vehicles. support of the company’s international business for payments and transfers. Besides, payroll institution. In addition to improving the Center’s RUB MLN The purpose of the facility was not only to operations and work under government cards that participate in the YARKO loyalty facilities and infrastructure, the Bank also lended for purchase vehicles, but also to provide them contracts, as well as cash payment services. program will receive higher bonus rewards for offers the children additional vocational 13 ambulance with special equipment for transporting and ordering from popular online delivery services. training, healthcare and leisure activities, vehicles resuscitating patients. The Bank’s loans will also As for the support for its SME customers, it vocational guidance. The Bank is sponsoring purchase be used to equip seven other medical vehicles was not just a set of measures but an entire In accordance with the decision of study and interest groups, the Graduates that have been earlier provided to medical ecosystem #ICAN_BUSINESS_ONLINE that the Central Bank of the Russian Federation on Club, a range of excursions and trips as well facilities in the Leningrad Region. the Bank launched during the coronavirus the implementation of measures to improve as educational materials and games, facilities pandemic. It accommodates financial services accessibility of online shopping, the Bank and resources. The Bank regularly provides The Bank financed a contract to procure that are particularly relevant when the Bank’s brought its fee under its Internet merchant incentives for talented teachers at the Center. personal protective equipment against COVID- dealings with clients are remote. acquiring contracts down to 1% until September In 2020, as part of the BlagoDaryu (Thank You) 19. The Bank issued an advance bank guarantee 30, 2020 for businesses engaged in retail program, the Bank used its funds intended for RUB 117 mln to IntelMed JSC and signed The Bank’s #ICAN_ONLINE is another sales of food, pharmaceuticals, medical for corporate New Year presents to finance a RUB 370 mln credit facility agreement to ecosystem launched to support its retail and goods, household appliances, electronics, the acquisition of modern gym equipment, an finance the procurement of personal protective corporate clients in the context of the COVID- telecommunication equipment, clothing, and interactive sandpit for a lounge area, and metal equipment against COVID-19 to be further 19 expansion. It accommodates financial convenience goods. detectors for the Kolpinsky Rubezh searching supplied to medical facilities. services that are particularly relevant when group at the Center for the Promotion of Family the Bank’s dealings with clients are fully remote. To give more support to its clients, the Bank Education No. 9. offered a package of Internet merchant acquiring services which is provided For 15 years, the Bank has been supporting in cooperation with its technical partner, the Helping Homeless Dogs Charity Foundation. Paykeeper. The package includes the following: Funds are allocated to shelter 500 stray dogs free connection to the service, six months of and 100 cats. free technical support, the company’s client

86 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 87 78 Customers Strategic Financial Business From risk Creating wealth 81 Colleagues report performance divisions to opportunity responsibly 85 Community 92 Corporate Governance

Regardless of the circumstances, Bank Saint the activities were carried out in the formats SOCIALLY-ORIENTED & The Bank plans to improve and develop Petersburg supports social and cultural allowed by the City Government, in particular ENVIRONMENTAL PROJECTS the corporate lending system, including for legal initiatives in its regions of presence. In 2020, on a remote basis and in smaller groups; entities engaged in the design and construction the Bank allocated funds to the Alexander — the Christmas Tree of Good Deeds campaign As a 30-year-old player on the financial market of social infrastructure in St. Petersburg, and Gorodnitsky Fund for the installation of initiated by the Bank as part of the city’s Kind of St. Petersburg, Bank Saint Petersburg is transfer such facilities into public ownership to a memorable sign To an Unknown Driver St. Petersburg charity festival was held online proactively involved in the implementation of the city. at the Kobona: The Road of Life Museum and expanded in 2020. In cooperation with essential economic and social projects, provides in the Leningrad Region. Moreover, in the year the Detki store, the Bank organized an online integrated services to systemically important On January 21, 2020, the First Deputy Chairman that was particularly difficult for the cultural gathering of presents for children in need municipal enterprises, and develops its of the Management Board Pavel Filimonenok industry, the Bank supported the St. Petersburg- and disadvantaged families. The campaign mortgage lending business. The Bank’s project and Chairman of the Committee for Economic based Masterskaya Theater by providing our was contributed to by the Bank’s pipeline includes initiatives aimed at taking care Policy and Strategic Planning of St. Petersburg clients with online access to the Balzaminov’s employees and clients, as well as buyers of both old-timers and younger generation, Valery Moskalenko signed a Cooperation and Marriage performance during the celebrations of the Detki store. The YARKO bonus preserving the historical heritage, and creating Liaison Agreement to Support Sustainable Social of the Bank’s anniversary. program participants had an opportunity to a comfortable urban environment. Bank Saint and Economic Development of St. Petersburg. compensate 100% of the cost of their charity Petersburg is always there ready to help when it The Agreement was part of the implementation EMPLOYEE VOLUNTEER purchases from the Bank. The campaign has comes to the crunch. of the Action Plan for the Development of Social INITIATIVES gathered New Year presents for children Infrastructure in Education and Healthcare supported by eight St. Petersburg-based In a ceremonial signing, Chairman of approved by Governor of St. Petersburg In addition to its traditional charity events, since charity organizations; the Management Board Alexander Savelyev Alexander Beglov on December 18, 2019. 2012, the Bank has supported its employees — in September 2020, the Bank held and Governor of St. Petersburg Alexander in their volunteer projects. During 2020, the BlagoDaryu Online Charity Festival Beglov made a Cooperation and Liaison The cooperation is designed to ensure mutually the Bank’s employees volunteered for a number for all of its four regions of presence: St. Agreement between the City of St. Petersburg productive interactions between the parties of important charity projects, including: Petersburg, Moscow, Kaliningrad and and PJSC “Bank “Saint-Petersburg” to lay in order to provide comprehensive support — the White Flower and Dreams Come True Novosibirsk. The Festival included three down the basis for cooperation and liaisons to building social infrastructure facilities, such projects supporting a children’s hospice in St. tracks: the Sports Challenge, the Helping between the parties in the field of economic as kindergartens, schools and out-patient Petersburg; Nature, and the Helping the Elders. development of St. Petersburg. clinics, in St. Petersburg. The Committee — supervision of lessons and workshops as well The campaign resulted in the procurement intends to submit potential projects for as socialization, adaptation and career of equipment for the employment of two Under this Agreement, the Bank intends to the implementation using project financing to guidance classes at Family Education Support physically impaired persons, recording develop and implement community-focused Bank Saint Petersburg for consideration after Center No. 9. This project has existed online tours for the elders in nursing projects in the city, including in the fields a relevant expert review. The Bank, in turn, in the Bank since 2015. Within this project, homes, and establishing new eco-habits. of family policies, motherhood, fatherhood will prepare and submit to the Committee the Bank’s employees visit the center, Our employees have found out many new and childhood support, and improvement its proposals regarding available tools, hold workshops, supervise excursions things about charity projects in the Bank’s of people’s lives. Other goals include mechanisms and terms of project financing, and visits to culture and sport events, and regions of presence, and also learned to act the development and deployment of state- and send requests for information about communicate with its children. Career as information volunteers and fund-raisers, of-the-art banking technology for the benefit commitments for the construction of social guidance is an important part of the project: and to involve their family members, friends for the community, broad deployment of infrastructure facilities or whether such facilities the Bank’s initiative to visit enterprises is and followers in various activities. electronic payment mechanisms, development are needed in St. Petersburg. actively supported by corporate customers. the banking infrastructure, and roll-out of The project aims to assist socialization and projects promoting the development of small prepare children for adult life. In 2020, and medium-sized businesses in the city.

88 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 89 78 Customers Strategic Financial Business From risk Creating wealth 81 Colleagues report performance divisions to opportunity responsibly 85 Community 92 Corporate Governance

The Bank has entered into a RUB 360 mln credit The subject matter of the contracts is The Bank offers a special-purpose loan Bank Saint Petersburg is fully aware of facility agreement with IntelMed JSC. The loan the purchase by the city of St. Petersburg of for education in Russian universities. Our the importance of building a healthy social proceeds will be used to pay to vendors in order 300 apartments with a total area of 13 thousand educational loan is available to individuals environment and will continue to be actively to meet commitments on supplying medical square meters in four buildings that are of 21 years of age and older for higher involved in the social life by implementing its equipment to a new building of Municipal currently being built as Phase II of the New education purposes. An eligible borrower traditional charity projects and encouraging Hospital No. 33. Kolpino residential facility for the purposes under the program is a student or his/her employees’ volunteer initiatives. of the implementation of the government- parent. The loan should not exceed the cost of A new treatment and diagnosis building of sponsored program “Provision of Affordable educational services as stated in the contract Municipal Hospital No. 33 in Kolpinsky District Dwelling Units and Housing and Public Utility and should be at least equal to the program of St. Petersburg is scheduled to be put into Services to Residents of St. Petersburg” minimum amount, being RUB 50 000. operation until the end of this year. It will have and the “Provision of Accommodation to The interest rate is 9.5% per annum. The loan 276 treatment beds and 30 intensive care Orphans, Children Without Parental Support, term ranges from 13 months to seven years. beds and will house a cardiovascular surgery and Individuals From Among Them Under department and a neurosurgery department. If Contracts of Rent of Special-Purpose Dwellings” The Bank’s online banking service has been necessary, the hospital can be quickly converted in accordance with the Targeted Investment recognized as the most accessible for people into a facility for treating coronavirus patients. Program. with impaired vision. The Arts, Science and Sports Charity Foundation in cooperation with IntelMed is one of the leading suppliers of Projects designed to develop the city’s the Everland inclusiveness project studied medical equipment in the Russian market. infrastructure will always be a priority for us. the accessibility of mobile and online services They have been supplying high-quality medical The Bank extended a loan to SV-Transport offered by different organizations as part of equipment, appliances and consumables for leasing company to buy 100 buses for the Special Look program intended to support medical facilities and health care centers for Passazhiravtotrans municipal transport people with visual impairments. Among other more than 20 years. company. An auction to supply extra-large things, the expert evaluation covered banking buses under financial lease was held by services. The online banking service offered The Bank issued bank guarantees worth Passazhiravtotrans in December 2019. by Bank Saint Petersburg was recognized a total of RUB 1.1 bn to SPb Renovatsiya LLC The auction winner SV-Transport has to date as the most accessible for people with visual to secure their obligations under contracts completed the delivery of 100 new articulated problems, scoring 5 out of 5 possible points. with the Committee of Property Relations buses for the transport services of St. of St. Petersburg. This is the first time that Petersburg, which are already running around the developer participates in this type of the city. All the vehicles were built in Minsk. auctions held by the city. The buses are outfitted with Euro 5 compliant engines and disabled access facilities.

90 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 91 78 Customers Strategic Financial Business From risk Creating wealth 81 Colleagues report performance divisions to opportunity responsibly 85 Community 92 Corporate Governance

CORPORATE GOVERNANCE

Upgrading corporate governance in line with — the Policy on the Appointments and THE GENERAL SHAREHOLDERS MEETING the best practice is one of the Bank’s key tasks. Remuneration Committee of the Supervisory Strictly observing the rights of shareholders, Board, as approved by a resolution of The General Shareholders Meeting is the Bank’s The Annual General Shareholders Meeting, internal control and auditing procedures, the Supervisory Board on August 12, 2016; supreme governing body that decides on held on May 27, 2020, passed the following a high level of transparency and information — the Policy on the Audit Committee of key issues related to the Bank’s activities, resolutions: disclosure, as well as the maintenance the Supervisory Board, as approved by as established by the Federal Law on Joint-Stock — allocation of profit of PJSC “Bank “Saint- of efficient management bodies, ensure a resolution of the Supervisory Board on Companies and the Bank’s Charter. Petersburg” for 2019; customer confidence and the maximum August 12, 2016; — payout (declaration) of dividends for 2019; efficiency of shareholders’ investments. — the Policy on the Risk Management The shareholders have the option of — approval of the auditor of PJSC “Bank “Saint- Committee of the Supervisory Board, remote participation in the Annual General Petersburg” for 2020; The following internal Bank documents regulate as approved by a resolution of Shareholders Meeting by filling out voting — remuneration payment to the members of corporate governance: the Supervisory Board on July 31, 2014; ballots in the electronic form and voting the Supervisory Board; — the Charter, as approved by a resolution of — the Policy on the Digitalization Committee via Shareholder’s Online Account available — compensation to the members of the General Shareholders Meeting held on of the Supervisory Board, as approved by at the web-site of JS Company «R.O.S.T the Supervisory Board; May 27, 2020; a resolution of the Supervisory Board on Registrar» — rrost.ru. The shareholder’s — determination of the number of members of — the Policy on the Supervisory Board, July 28, 2020; personal account also contains a message the Supervisory Board; as approved by a resolution of the General — the Policy on the Corporate Secretary, about the Meeting and documents necessary — election of the Supervisory Board members; Shareholders Meeting held on May 29, 2019; as approved by a resolution of for making a decision on voting, as well — election of the Revision Committee — the Policy on the Management Board, the Supervisory Board on August 28, 2020; as information about all corporate actions of members; as approved by a resolution of the General — the Policy on the Revision Committee, the Bank. — reduction of the authorized capital of PJSC Shareholders Meeting on May 27, 2020; as approved by a resolution of the General “Bank “Saint-Petersburg” though redeeming — the Policy on the Strategy Committee of Shareholders Meeting held on May 27, 2020; According to the results of 2019, about purchased shares; the Supervisory Board, as approved by — typical form of Non-Disclosure Agreement 300 shareholders of the Bank connected to — approval of the Charter of PJSC “Bank “Saint- a resolution of the Supervisory Board on (confidentiality agreement), as approved by the personal account of the shareholder. Petersburg” as amended and restated; July 23, 2015; the order of the First Deputy Chairman of — approval of the Regulations on the Board — CEO on November 19, 2020. The Bank is obligated to hold an Annual General the Management Board of PJSC “Bank “Saint- Shareholders Meeting not earlier than two Petersburg” as amended and restated; months and not later than six months following — approval of the revised version of the end of the fiscal year. the Regulations on the Revision Committee of PJSC “Bank “Saint-Petersburg”; According to the Russian legislation, — approval of the authorized signatory of Corporate Governance Structure, January 1, 2021 the Bank may also convene additional General the petition requesting state registration Shareholders Meetings. of the revised Charter of PJSC “Bank General Shareholders Meeting “Saint-Petersburg”.

Strategy Committee Revision Committee Auditors During the Extraordinary Shareholders meeting Appointments and Remuneration Committee on November 30, 2020, the following decision was taken: Internal Audit Service Supervisory Board Audit Committee — payout (declaration) of dividend for nine

Corporate Secretary Risk Management Committee months of the year 2020.

Digitalization Committee

Management Board

92 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 93 78 Customers Strategic Financial Business From risk Creating wealth 81 Colleagues report performance divisions to opportunity responsibly 85 Community 92 Corporate Governance

THE SUPERVISORY BOARD

The Supervisory Board is responsible for Andrey P. Bychkov Alexander V. Savelyev Yuri G. Levin the general management of the Bank’s activities, has been a member of the Supervisory Board is the Chairman of the Management Board (from has been a member of the Supervisory Board except for issues that fall under the competency since April 2010. At present, Mr. Bychkov is January 2001 to August 2014, and has held this since May 2020. He is the founder and director of the General Shareholders Meeting. the Managing Director of the Financial Block position again since July 2016). Mr. Savelyev has of the company “Kingston Analytica”. Docent, The Supervisory Board determines strategic at VEB. Mr. Bychkov was born in 1961. He is been a member of the Supervisory Board since professor, and thereafter esteemed analytics priorities for the Bank’s activity and controls a graduate of Moscow State University and January 2001; he also acted as the Chairman professor in Smith School of Business, Queen’s the functioning of executive management the Russian Academy of Economics. of the Bank’s Supervisory Board from August University. Stephen J. R. Smith Chair Professor bodies. According to the resolution from 2014 to July 2016. His previous experience in Analytics and “Analytics and Artificial the 2019 General Shareholders Meeting, Mr. Bychkov owns no shares in the Bank. includes Deputy Chairman of the Management Intelligence” Ecosystem Director. Director of the Supervisory Board is made up of nine Boards of Petrovsky Commercial Bank and center for customer analytics in Scotiabank. members. Alexey A. Germanovich Baltoneximbank. Mr. Savelyev was born in 1954. The Moscow School of Management SKOLKOVO has been a member of the Supervisory Board He is a graduate of Kazan Aviation Institute. president. Born in 1976. Graduated from Belarus Elena V. Ivannikova since June 2014. He currently acts as a member State University, majored in mathematical has been the Chairperson of the Supervisory of the Board of Directors of PJSC Unipro, and Mr. Savelyev owns 25.56% of the Bank’s ordinary shares. electronics, and from Rutgers University, New Board since July 2016 and has worked for PJSC Centrinvest Bank, Komercijalna Banka His holding in the Bank’s charter capital is 24.71%. Jersey, USA, 2001; Ph.D. in Operations Research. the Bank since 2001. Previously, she worked ad Beograd (the largest bank of Serbia). as the Chief Accountant at Petrovsky Commercial Mr. Germanovich was born in 1977. He is Andrey M. Zvyozdochkin Mr. Levin owns no shares in the Bank. Bank and Baltoneximbank. Ms. Ivannikova was a graduate of Moscow State University and has been a member of the Supervisory Board born in 1965. She is a graduate of Kiev Institute Cranfield University (UK). since May 2017. Mr. Zvyozdochkin is a partner, Sergey P. Nazarov of the People’s Economy. member of the Board of Directors and the CEO has been a member of the Supervisory Board Mr. Germanovich owns no shares in the Bank. of ATON LLC. His background spans 20 years since May 2020. He possesses over 20 years Ms. Ivannikova owns 0.59% of the Bank’s ordinary shares. in investment banking and general banking of experience in raising investments and Her holding in the Bank’s charter capital is 0.57%. Pavel A. Kiryukhantsev operations. He headed the Exchange Council banking. From 2013 to 2016 he held a position has been a member of the Supervisory Board of PJSC Moscow Stock Exchange in 2018. He of managing director, head of branch of Vladislav S. Guz since May 2018. From 2007 to 2017, he was currently acts as a member of the Board of a private entity “Standard & Poors Credit Market has been the Deputy Chairman of the Supervisory the Director of the Department of CJSC Ward Directors of NAUFOR. Mr. Zvyozdochkin was born Services Europe Limited” LLC. From 2016 to Board since July 2016. Previously, Mr. Guz has Howell International. He has been the CEO in 1973. He is a graduate of Moscow State Aviation 2017 — a Supervisory Board member of ACB acted as Chairman of the Management Board of CJSC Zest Leaders since 2010 and Zest Technology University, Financial University under “RosEvroBank” JSC. From 2018 to 2019 was since August 2014 until July 2016, the First Team Development LLC since 2012. From the Government of the Russian Federation and a Supervisory Board member of “Petersburg Deputy Chairman of the Management Board 2017 to June 2019, he acted as a member IMD Business School (Switzerland). Social Commercial Bank” JSC. Since 2019 has since 2009 and the Deputy Chairman of of the Board of Directors and the Chairman been a member of the Supervisory Board the Management Board since 2004. His previous of the Appointments and Remuneration Mr. Zvyozdochkin owns no shares in the Bank. of rating agency “Expert RA”, as well experience includes working at the St. Petersburg Committee of JSC StroyTransNefteGaz. Since as a Management Board member. Since 2013 has Branch of Alfa-Bank as the First Deputy Director 2018 he acts as a member of the Board In accordance with corporate governance best been a Supervisory Board member in “Safmar of the branch and its Executive Director (from of Directors of JSC First Freight Company. practices, the Supervisory Board includes four financial investments” PJSC. Born in 1973. 1996 until 2003). Mr. Guz was born in 1967. He is Mr. Kiryukhantsev was born in 1964. He is independent directors: Andrey P. Bychkov, Graduated from Khabarovsk State Academy a graduate of Leningrad State University. Mr. Guz a graduate of Leningrad State University, Michel Alexey A. Germanovich, Andrey M. Zvyozdochkin for economics and law, international economic holds a PhD in Economics. Institute (Germany) and INSEAD (France). and Pavel A. Kiryukhantsev. These directors relations department. CFA and ACCA certified. positively contribute to the Board’s functioning Mr. Guz owns no shares in the Bank. Mr. Kiryukhantsev owns no shares in the Bank. with their experience and professionalism. Mr. Nazarov owns no shares in the Bank.

94 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 95 78 Customers Strategic Financial Business From risk Creating wealth 81 Colleagues report performance divisions to opportunity responsibly 85 Community 92 Corporate Governance

THE SUPERVISORY BOARD’S SHARE THE STRATEGY COMMITTEE THE AUDIT COMMITTEE THE DIGITALIZATION COMMITTEE TRANSACTIONS The Strategy Committee is not a management The Audit Committee is not a management The Digitalization Committee is an advisory Pavel A. Kiryukhantsev sold shares of the Bank body of the Bank. Members of the Committee body of the Bank. Members of the Committee and consultative body ensuring efficient as a result of secondary market operations are appointed by the Supervisory Board. are appointed by the Supervisory Board. performance of the Supervisory Board’s in February and April of 2020. Other members The Committee’s current members The Committee’s current members are: Andrey functions related to the digitalization of the Supervisory Board did not make any are: Andrey M. Zvyozdochkin, Alexey A. P. Bychkov (Chairman of the Committee), Alexey of the Bank’s products, services and transactions with the Bank’s shares. Germanovich, Vladislav S. Guz (Chairman A. Germanovich and Pavel A. Kiryukhantsev. internal processes. Along with competitive of the Committee), Elena V. Ivannikova, strategy development in digital processes, DETERMINATION CRITERIA AND LEVEL Alexander V. Savelyev and Yury G. Levin. The main task of the Audit Committee is to the Committee will evaluate digitalization OF REMUNERATION FOR MEMBERS OF assist the Supervisory Board in controlling projects expenses structure, formulate THE SUPERVISORY BOARD The main task of the Strategy Committee is to the Bank’s operations. The Committee recommendations for key digital and assist the Supervisory Board in determining verifies the integrity and accuracy of financial innovational technologies and products, as well Based on a decision of the General the long- and mid-term strategy of the Bank reporting, and preparation and presentation as for prioritized projects aimed at digital and Shareholders Meeting, the members of and its business priorities, as well as to review of the financial statements, examines innovational technologies development. the Bank’s Supervisory Board may be entitled the Bank’s major innovation and investment the functioning of the internal control and to remuneration and compensation for projects. audit systems, and issues recommendations to Committee members are appointed by costs related to performing their functions the Supervisory Board. the Bank’s Supervisory Board. as members of the Supervisory Board. THE APPOINTMENTS AND REMUNERATION The amount of remuneration and compensation COMMITTEE THE RISK MANAGEMENT COMMITTEE Current members of the Committee are: Yury G. is set by the General Shareholders Meeting. Levin (Chairman), Vladislav S. Guz, Alexey A. A resolution of the General Shareholders The Appointments and Remuneration The Risk Management Committee is not Germanovich (senior independent director) Meeting in 2015 approved the Regulations Committee is not a management body of a management body of the Bank. Members on Remunerations and Compensations Paid the Bank. Members of the Committee are of the Committee are appointed by The Committee was set up to provide efficient to the Members of the Supervisory Board, Vladislav S. Guz, Andrey M. Zvyozdochkin the Supervisory Board. The Committee’s current performance of the Supervisory Board through establishing the terms and procedures for such and Pavel A. Kiryukhantsev (Chairman of members are: Sergey P. Nazarov (Chairman of preliminary review and recommendations on payments. the Committee), Yury G. Levin. the Committee), Andrey P. Bychkov, Andrey M. the following key matters: Zvyozdochkin and Elena V. Ivannikova. — local and global digital competitive landscape According to a resolution of the General The main task of the Appointments and monitoring in financial sector; Shareholders Meeting held on May 27, Remuneration Committee is to provide The principal task of the Risk Management — enhancing the Bank’s competitiveness 2020, remuneration paid to the members of recommendations to the Supervisory Board Committee is to assist the Bank’s Supervisory in the Russian digital financial services the Supervisory Board for the years 2019– with regard to candidates for key management Board in defining the Bank’s priorities related market; 2020 stood in the amount over RUB 60.0 mln. positions, as well as to establish the principles to its exposures and creating the conditions — achievement of unique competitive Participation in respective committee meetings and criteria for determining the amounts of required for proper risk management. advantages through implementation was also factored in when calculating remuneration for the Bank’s key management of benchmark practices and innovative remuneration amounts for the members of and staff. digitalization projects. the Supervisory Board.

96 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 97 78 Customers Strategic Financial Business From risk Creating wealth 81 Colleagues report performance divisions to opportunity responsibly 85 Community 92 Corporate Governance

THE MANAGEMENT BOARD

The Bank’s ongoing operations are managed by Vyacheslav Y. Ermolin Kirill S. Kuznetsov Alexey A. Teploukhov the Chairman of the Management Board as its has been a member of the Management Board has been a member of the Management Board holds the position of the Deputy Chairman of sole executive body, and by the Management since December 2017; at the same time, he since December 2019, the Deputy Chairman of the Management Board. A Management Board Board as its collegial executive body. As of is the Vice-President, supervising the Bank’s the Management Board since October 2020; at member since September 2020. Mr. Teploukhov January 1, 2021, the Bank’s Management Board corporate business. Mr. Ermolin joined the Bank the same time, he is the Vice President, Head of is employed at the Bank since 2007. Since is made up of eight members. in August 2017. From 1999 to 2017, he worked for Moscow Branch. Mr. Kuznetsov joined the Bank 2011 he has been a Board of Directors member Sberbank as the Head of the Largest Corporates, in December 2018. From 2011 to 2018, he in credit organization Petersburg Raschetnyi Alexander V. Savelyev Deputy Head of the Credit Department and Head worked in Alfa-Bank (Russia) as the Head of Center JSC. Since April 2020 Mr. Teploukhov has is the Chairman of the Management Board of Sales Department for the Large and Middle Medium Corporate Business. Mr. Kuznetsov been a Board of Directors member at the self- (from January 2001 to August 2014, and Corporates of the Head Office in St. Petersburg. was born in 1980. He is a graduate of Altai State regulating organization “National financial has again held this position since July Mr. Ermolin was born in 1981. He is a graduate of University. association”. Graduated from St. Petersburg 2016). Mr. Savelyev has been a member Arkhangelsk State Technical University. State University, majored in Law. of the Supervisory Board since 2001; from Mr. Kuznetsov owns no shares in the Bank. August 2014 to July 2016, he also acted Mr. Ermolin owns no shares in the Bank. Mr. Teploukhov owns no shares in the Bank. as the Chairman of the Bank’s Supervisory Kristina B. Mironova Board. His previous experience includes Pavel V. Filimonenok has been the Deputy Chairperson of Vladimir P. Skatin Deputy Chairman of the Management has been the Deputy Chairman of the Management the Management Board since September 2013; is the Deputy Chairman of the Management Boards of Petrovsky Commercial Bank and Board since 2003; the First Deputy Chairman of the First Deputy Chairman of the Management Board, has been a member of the Management Baltoneximbank. Mr. Savelyev was born in 1954. the Management Board — Chief Executive Officer Board since June 2020, having joined Bank Board since 2008. His career at JSC Industry He is a graduate of Kazan Aviation Institute. since June 2020. Mr. Filimonenok joined the Bank Saint Petersburg in 2002. Her previous and Construction Bank (which later in 2001 and worked as the Director of the Retail positions include: the Deputy Director of became VTB North-West) was launched Mr. Savelyev owns 25.56% of the Bank’s ordinary shares. Business Department from August 2003 until June the Moscow Branch, Director of Investor in 1995 as the Deputy Chairman of His holding in the Bank’s charter capital is 24.71%. 2007. In May 2009, he was appointed the Chairman Relations, and the Director of the Customer the Management Board. In 2001, he was of the Board of Directors of JSC Kompyuterniye Monitoring Department. Ms. Mironova was born appointed the First Deputy Chairman Konstantin Y. Balandin Sistemy Dlya Biznesa. His previous positions in 1980 and graduated from St. Petersburg of the Management Board, and during has been the Deputy Chairman of include the Deputy Director of the Plastic Cards University for Economics and Finance. 2006–2007 he served as the Chairman of the Management Board since January 2008. Department at Petrovsky Commercial Bank. the Management Board. Mr. Skatin was Mr. Balandin has worked for the Bank Mr. Filimonenok was born in 1971. He is a graduate Ms. Mironova owns 0.02% of the Bank’s ordinary shares. born in 1956. He is a graduate of Leningrad since 2000. From 1996 to 2000, he worked of St. Petersburg Institute of Precision Mechanics Her holding in the Bank’s charter capital is 0.02%. Polytechnic Institute and St. Petersburg State in the Treasury Department of the Industry and Optics. Ms. Mironova also holds a 100% interest in Zugradia University for Economics and Finance. Mr. Skatin and Construction Bank. Mr. Balandin was born Enterprises Limited, which in turn owns 100% of Noroyia holds a PhD in Economics. in 1976. He is a graduate of the Economics Mr. Filimonenok owns 0.02% of the Bank’s ordinary Assets Limited. Noroyia Assets Limited owns 26.578% Department of St. Petersburg State University. shares. His holding in the Bank’s charter capital is 0.02%. of the charter capital of Verniye Druzya Management Mr. Skatin owns no shares in the Bank. Mr. Balandin holds a PhD in Economics and Mr. Filimonenok also holds a 100% interest in Lazoria Company LLC. Verniye Druzya Management Company a Qualification Certificate issued by the Federal Limited, which in turn owns 100% of Zerilod Holdings LLC owns 25.53% of the Bank’s ordinary shares and holds The members of the Management Board did Commission for the Securities Market. Limited. Zerilod Holdings Limited owns 26.576% of a 24.72% interest in the Bank’s share capital. not make transactions with the Bank’s shares. the charter capital of Verniye Druzya Management Mr. Balandin owns 0.04% of the Bank’s ordinary shares. Company LLC. Verniye Druzya Management Company His holding in the Bank’s charter capital is 0.04%. LLC owns 25.53% of the Bank’s ordinary shares and holds a 24.72% interest in the Bank’s share capital.

98 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 99 78 Customers Strategic Financial Business From risk Creating wealth 81 Colleagues report performance divisions to opportunity responsibly 85 Community 92 Corporate Governance

SHAREHOLDERS EQUITY STRUCTURE REGISTRAR

As of January 1, 2021, the Bank’s charter Due to bought-back treasury shares were not The Bank’s registrar is Joint Stock Company License data: capital was RUB 507 654 167 and consisted realized during one year since the buyback «R.O.S.T. Registrar» (JS Company «R.O.S.T. — number: 045-13976-000001; of 487 554 167 ordinary shares with date, the Bank has to decrease its share Registrar»). — issue date: December 3, 2002; a nominal value of RUB 1 per share and capital by redemption of the shares. In May — issuing authority: FCSM Russia; 20 100 000 preferred shares with a nominal 2020 the AGM approved the resolution to Location and mailing address of JS Company — term: indefinite. value of RUB 1 per share. All issued shares have decrease its share capital in the amount of «R.O.S.T. Registrar»: been paid in full. 11 999 833 ordinary shares with a nominal 18 Stromynka Street, Building 5B, Moscow, value of RUB 1. The cancellation was performed Russia, 107076 In October 2018, the Bank completed all on June 8, 2020. buy-back procedures in accordance with Telephone: +7 /495/ 780 7363 72-FZ on Joint-Stock Companies and acquired 11 999 833 ordinary shares at a price of St. Petersburg Branch: RUB 55 per share. 6 Belovodsky Lane, St. Petersburg, Russia, 194044

Telephone: +7 /812/ 424 2122

AeroAvkar Branch: Shareholders Equity Structure (Ordinary Shares), January 1, 2021 212A Moskovsky Prospect, St. Petersburg,

4.47% Russia, 196066 51.82% Mr. A.V.Savelyev and Top-management 2.46% 36.30% Free float Telephone: +7 /812/ 371 9868 4.95% 4.95% European Bank for Reconstruction and Development 4.47% East Capital www.rrost.ru 2.46% Treasury shares

51.82%

36.30%

100 BANK SAINT PETERSBURG Annual report 2020 Annual report 2020 BANK SAINT PETERSBURG 101 THANK YOU FOR BEING WITH US!

“BANK “SAINT-PETERSBURG” PUBLIC JOINT-STOCK COMPANY

“Bank “Saint-Petersburg” PJSC 64A Malookhtinsky Prospect, St. Petersburg, 195112, Russian Federation www.bspb.ru