World Without Barriers. VTB Group 2010 Social Report Social
2010
Mission and Values
Who we are
VTB Group is the leading Russian financial institution with a strong local presence in key international markets.
Our mission
To provide world-class financial products and services that help to create a prosperous and sustainable future for our customers, stakeholders and society.
Our values
Trust. Gaining and retaining the trust of our customers is VTB Group’s most important value.
Reliability. VTB Group’s long-term strength is reinforced by leading positions in the financial markets where we operate and our ability to provide local expertise on a global scale.
Transparency. Our business is open and transparent, and all of our key stakeholders cooperate closely in order to deliver maximum value and visibility.
Versatility. Our wealth of expertise across a broad range of financial products and services ensures that we offer all of our customers the most comprehensive, flexible and sophisticated solutions that suit their individual needs.
Solidarity. Knowledge sharing and open communication are fundamental to our team ethos and strengthen our team spirit. While our lines of business are diverse, we are all pulling in the same direction, harnessing the creative insight and potential of each individual member of our team.
Our vision
VTB Group aims to replicate our successes in the domestic market on a global scale, becoming a premier player in all of our priority markets. 4 Table of Contents
A Letter from the President and Chairman of the Management Board 7
1. We 1.1. Profile 11 1.2. Strategy 13 1.3. VTB Group Management 15 1.4. VTB’s Approach to Corporate Social Responsibility 17 1.4.1. CSR Management 17 1.4.2. Stakeholder Engagement 19 1.5. Corporate Governance 20 1.6. Shareholder and Investor Relations 21 1.6.1. Government Relations 21 1.6.2. Relations with Individual Shareholders 22 1.6.3. Relations with Institutional Shareholders 25
2. Business 2.1. Management Approach 27 2.2. Supporting Key Economic Sectors 28 2.2.1. Innovative Technologies 29 2.2.2. Energy 29 2.2.3. Transport Infrastructure 31 2.2.4. Automotive Industry 32 2.2.5. Food Industry and Agriculture 32 2.2.6. Public Utility Sector 33 2.3. Financial Services for the Government 34 2.4. Supporting Medium Businesses 35 2.5. Supporting Small Businesses 36 2.6. Socially Significant Retail Products 38 2.7. Accessibility of Banking Services 39 2.8. Improving Service Quality 40 2.9. Reliability and Security of Banking Transactions 41 5
3. Team 3.1. Management Approach 43 3.2. Personnel Profile 44 3.3. Attracting Talent 44 3.3.1. Personnel Selection Practices 44 3.3.2. Attracting Young Specialists 46 3.4. Opportunities for Development 48 3.5. Remuneration and Social Benefits 51 3.6. Favourable Corporate Culture 52 3.7. Occupational Health and Safety 54 3.8. Protecting Employee Rights 55
4. Society 4.1. Management Approach 57 4.2. Supporting Culture and the Arts 57 4.2.1. Supporting Theatrical and Musical Art 57 4.2.2. Supporting Visual Arts 58 4.2.3. Supporting Cinematography and Television 59 4.3. Supporting Sport 60 4.3.1. Supporting Sports Associations and Events 60 4.3.2. Developing Sports Infrastructure 60 4.4. Supporting Health Care 61 4.5. Strengthening the International Reputation of Russian Business 61 4.6. Combatting Money Laundering and the Financing of Terrorism 63
5. Environment 5.1. Management Approach 65 5.2. Environmentally Sound Approach to the Construction and Reconstruction of Buildings 65 5.3. Resource Efficiency and Waste Management 66
Objectives for 2011 68 Selected Awards Won by VTB Group Companies in 2010 71 About this Report 73 GRI Content Index (G3.0) 75 6 A Letter from the President 7 and Chairman of the Management Board
Welcome to VTB’s third Social Report. For the first finance industry. Our international network, which time, we are disclosing information not only about includes over 20 banks and financial companies the corporate social responsibility performance in 19 countries in the CIS, Europe, Asia and Africa, of VTB Bank but also of the entire VTB Group. is unique to the Russian finance industry. This expansion of the reporting boundary is yet another step towards increasing the transparency However, we will not rest on our laurels. of our operations and furthering open dialogue We continuously strive to develop our business and with a broad range of stakeholders. improve the quality and efficiency of our operations. To this end, we adopted the VTB Group 2010–2013 In 2010, VTB celebrated its 20th anniversary. Development Strategy, which is our response to Despite being a relatively young financial group, dynamic changes in the economic and social we have achieved a great deal over our two-decade environment. VTB’s new strategy is, first and history. Today we occupy leading positions in the foremost, a strategy for efficient growth. Today our corporate, retail and investment sectors of the efforts are focused on “growth points”. These growth VTB Bank. Social Report 2010
8 points are our most promising products and a favourable business climate. These include the segments with the greatest potential for revenue high-tech sector, power generation, transport growth. Our key priorities include improving the infrastructure, car manufacturing, public utilities, efficiency of our business, achieving our target return the food industry and agriculture. Over the last year, on equity level and increasing the Bank’s market we participated in a number of socially significant capitalisation. We pay particular attention to projects, including the reconstruction of the Pulkovo strengthening our international standing, seeing airport and the construction of a waste processing ourselves as a prospective key player on the global plant in Yanino. financial markets. VTB24 continued its policy of actively lending At the same time, it is important for us that to small businesses, recognizing their role as an we not only achieve the objectives laid out important provider of jobs, as well as expanding in our new strategy but also create added its line of retail products and improving the security value for our stakeholders. So while for the Group of banking transactions. the strategy means improved financial performance, for our customers it means new products and Our people are what makes VTB unique. It is thanks services that meet their needs and help them to them that VTB was able to celebrate its 20th make investments. At the same time, for our anniversary last year, maintain stability in the employees it means better rewards and better face of a changing macroeconomic environment opportunities for professional growth. and enter a new stage of its development. And for the countries and regions in which we It is our priority to maintain and develop this operate, it means greater financial infrastructure unique asset. Through on-going collaboration and a contribution to socio-economic development. with educational institutions, we are able attract Corporate social responsibility is at the heart of VTB’s energetic and talented young people that business and is the foundation of the Group’s demonstrate significant potential, while at long-term success. the same time making our contribution to improving education in the field of economics in Russia. In 2010, we maintained our traditional focus on We place equal importance on developing strengthening investor and shareholder relations. the skills and abilities our managers and specialists The central theme of our engagement was the need to implement VTB’s new strategy. In 2010, discussion of VTB’s new strategy. For individual the Group ran a number of programs to develop shareholders we held VTB Open Days and corporate culture and unite employees around workshops, while we met with institutional investors common values. The most significant program at meetings and conferences, often with the was most likely We Remember, a voluntary campaign involvement of top VTB Group executives. These dedicated to the 65th anniversary of victory events helped create favourable conditions for the in the Second World War, which united over privatization of further shares in VTB Bank in 2011. 4,000 employees from different cities in Russia The Russia Calling Investment Forum, which was and the CIS. organised by the VTB Group for the second consecutive year to attract investment in Russia, For many years we have supported culture, sport has helped improve the overall investment climate and the arts in Russia. In 2010, VTB Bank and its in the country. subsidiaries organised major cultural events in partnership with leading museums and theatres, We also continued to support key economic sectors, supported television and literary projects and to ensure the social wellbeing of the population and supported athletes who went on to record A Letter from the President and Chairman of the Management Board
9 outstanding achievements. We are particularly We face a number of important tasks in 2011 proud of our charity programme World Without including the partial privatisation of the Tears, which for eight years already has been government’s stake in VTB and the integration helping provide Russian health care institutions of newly acquired assets into the Group’s with expensive medical equipment needed to save management system. I am certain that the children’s lives. professionalism of our staff and the support of our partners will help VTB successfully pass these One significant event in 2010 at Group important milestones and achieve its strategic goals level was our office move. The head office within the next three years, becoming a truly global of VTB Bank and the Russian division financial group that meets the highest international of VTB Capital have now moved to a new building standards. specially designed and equipped with energy and resource efficiency in mind. Across the Group we are gradually deploying electronic document management systems at an increasing number of divisions of VTB Bank and its subsidiaries, which also helps reduce the Group’s environmental footprint.
President and Chairman of the Management Board of VTB Bank Andrey Kostin 10 Challenge and Endeavour 1. We 11
We are VTB’s management, shareholders and investors. We are united around the common goal of increasing the business’ profitability and capitalisation. In the mid-term, this will be achieved through the VTB Group 2010–2013 Development Strategy approved by the Supervisory Council of VTB Bank last year. The foundation for implementation of this strategy is mutual trust, which is achieved through developing corporate governance and improving channels for communication between the management and shareholders, investors and other stakeholders.
1.1. Profile1 by developing integrated offerings tailored to their needs. The VTB Group is an international financial group operating on the Russian and international markets. The VTB Group is number two on the Russian It is composed of VTB Bank and its subsidiaries. corporate banking market. In 2010, the Group’s The VTB Group offers a full range of financial corporate lending market share was 12.2 %, services, including corporate and retail banking while its corporate deposit market share was 15 %. services, investment banking and other financial VTB is also the second largest player on the Russian services, including leasing, factoring, insurance and retail banking market. In the reporting period, pension services. The Group’s well-developed system the Group’s market shares in the retail lending of cross-selling products and services from different and deposit segments were 12.1 % and VTB companies helps meet customer demands 7.2 % respectively.
VTB Group key indicators as of December 31, 2010
Financial indicators • Assets — RUB 4,290.9 billion • Loan portfolio — RUB 3,059.6 billion • Net profit — RUB 54.8 billion
Shareholders • Over 165,000 individual shareholders • Approximately 1,500 institutional shareholders
Customers • Approximately 7.8 million retail customers • Approximately 94,000 corporate customers
Regions • 19 countries (CIS, Europe, Asia and Africa) • 73 Russian regions • Over 1,000 sales outlets
Headcount • 51,781
1. In this section the terms “VTB Group” or “Group” apply to the VTB Group as defined in the consolidated financial statements of VTB Bank for the years ended December 31, 2010 and 2009. VTB Bank. Social Report 2010
12
Russia
Belarus United Kingdom
Germany Ukraine France Kazakhstan Austria Georgia Italy Azerbaijan Armenia China Cyprus
India UAE
Vietnam
Singapore
Angola
Corporate business Retail business Investment business
One of the Group’s key competitive advantages The Group’s head organisation and corporate centre is the unique geography of its operations, which is VTB Bank, which is headquartered in Moscow. encompass 19 countries. In addition to Russia, The Bank is a major financial institution that provides where VTB has the country’s second largest branch banking services to corporate customers. The Group network, the Group operates in the CIS, Europe, includes lending and other financial institutions Asia and Africa. in which VTB Bank holds an equity interest of more than 50 % or whose activities are influenced by the Bank to a significant extent.
Analysts from the world’s leading rating agencies — Moody’s, Fitch Ratings and Standard & Poor’s — have traditionally assigned high credit ratings to VTB Bank. 1. We
13 1.2. Strategy2 growth, providing for an increase in revenue while improving business efficiency. Today VTB’s strategic Despite the economic challenges of the global priorities include achieving our return on equity (ROE) financial crisis, the VTB Group was able to maintain target and growing market capitalisation, as well stability and make significant headway in its as securing a qualitative improvement in our revenue development. The Group successfully achieved the structure and increasing the stability of the Group’s majority of the objectives set out in its 2007–2010 financial performance. development strategy, securing leading positions in all key segments of its business. Having achieved VTB continues to diversify its business, focusing on its strategic objectives, the VTB Group recognized the development of several priority areas. The Group the need to continue adapting to changes in the pays particular attention to the development of economic environment and opted to adopt a new high-margin business segments, including retail and mid-term development strategy. investment banking. Over the next three years, we expect the share of fee and commission income in In May 2010, the Supervisory Council of VTB Bank the Group’s total income to increase, as the Group’s approved the VTB Group 2010–2013 Development business becomes more diversified. Strategy. Unlike the previous strategy of aggressive growth, VTB’s new strategy is focused on efficient The new strategy defines objectives for each major business segment, including corporate, investment and retail banking. “By achieving the objectives set out in the Group’s strategy, VTB will build an efficient business that The Group’s 2010–2013 development strategy for can be measured on a different scale of quality, non-banking financial companies aims to improve which, in turn, will have a positive impact on market efficiency and profitability, expand product lines and capitalisation.” diversify industry and customer segments, as well as develop the regional network and other sales Ekaterina Petelina, member of the Management channels. Board of VTB Bank Our international development strategy focuses on strengthening VTB’s position in the regions in which
VTB Group objectives by business segment Corporate Investment Retail
• Create a corporate and investment bank • Build a sales platform for investment banking • Increase market share and retail business • Develop strong transactional banking and services targeting key customer segments share in the Group’s portfolio transform VTB into the primary settlement • Increase revenue from investment banking, • Further develop the retail network and bank for its corporate customers while improving revenue structure and alternative sales and service channels • Increase market share in the large corporate business efficiency • Transition to a segment-oriented approach client segment through cross-selling • Maintain VTB’s position as one of the top to customer service settlement and investment banking services three investment banks in Russia in terms • Improve IT framework and banking • Increase customer base coverage in the lower of key products technologies customer segments across all products • Become Russia’s number one bank in terms • Build best-in-class teams in priority business of customer service quality segments • Develop retail banking in the CIS using VTB24’s experience and technological base
2. In this and subsequent sections of the We chapter, the terms “VTB Group” or “Group” apply to VTB Group as defined by the VTB Group 2010–2013 Development Strategy. VTB Bank. Social Report 2010
14 Priority initiatives for 2010–2013
• Build a strong transaction banking practice • Reform the Group’s management system • Transform the corporate and investment practice • Transform the finance management system • Reform lending procedures • Improve IT efficiency • Develop the retail business
the Group already operates. In the CIS — a key region We plan to pay particular attention to improving the for the Group’s business — the main objective is to Group’s management system to maximise synergies strengthen VTB’s position on the market, particularly between companies, promote the sharing of best by actively developing the retail business and practices and better capitalise on VTB’s competitive improving the efficiency of the regional network and advantages. business processes. VTB’s priority in Europe, Asia and Africa lies in providing banking services to In order to ensure that our strategic objectives are corporate customers, particularly to companies achieved, we compiled a list of the Group’s strategic based in Russia and the CIS. initiatives for 2010–2013 and established the Project Office, a dedicated body responsible for their In order for us to achieve our objectives, we must implementation across the Group. The Project Office have well-developed supporting infrastructure in was created in 2010 and is based on VTB Bank’s place. The automation of business processes and Strategy and Corporate Development Department. the introduction of high-tech modern solutions and innovative products form an integral component of the Group’s strategy and are designed to improve operating efficiency. 1. We
15 1.3. VTB Group Management The Management Council has coordination committees for key aspects of the Group’s business, The VTB Group is managed as a strategic holding, which provide a platform for expert discussion of which implies a common development strategy for business development issues. In 2010, in addition all of the Group’s companies, common corporate to the 12 committees already in existence, further standards, a common brand, unified control systems, committees were created for IT, the retail business centralised management of financial performance and for monitoring subsidiary loan portfolios. and risks, coordination of planning and reporting The committees are comprised of Group specialists processes and sharing best practices within the in the relevant fields and are chaired by heads Group. of the respective divisions of VTB Bank.
Management of the Group is carried out using The VTB Group’s governance and management a combination of two approaches: system fully complies with corporate and antitrust legislation in the countries in which VTB companies l Administrative management — management operate. According to VTB Group Management of subsidiary companies within the Group’s Council policies, decisions taken by the Council can organisational structure, mainly through corporate neither limit competition in the markets in which governance; the Group operates nor contradict existing legislation and company corporate charters. All of the Group’s l Functional management — a supplementary companies retain their independence in accordance management mechanism through which activities with civil law. in key business segments and functions across the Group can be coordinated. For more details about VTB’s governance and management system, please see the VTB Bank The highest management body at Group level is 2010 Annual Report. the VTB Group Management Council, which oversees strategic business development, planning and performance reviews, as well as coordinating the financial aspects of the Group’s business. It is also responsible for the implementation of priority projects and shared corporate standards. Council meetings are held regularly in accordance with quarterly work plans. In 2010, the Council held 22 meetings that addressed strategic business development and management improvements and approved the respective regulations and policies. VTB Bank. Social Report 2010
16 VTB Group organisational structure as of December 31, 2010 OJSC VTB Bank
Financial institutions Lending institutions Overseas branches
Russia OJSC VTB Leasing CJSC ODK VTB Pension Administrator CJSC VTB24 Bank Russia (100%) (100%) Ltd. (100%) (98.41%)
OJSC VTB Debt Centre CJSC VTB Capital OJSC VTB North-West NPF VTB Pension Fund (100%) (100%) Bank (100%)
MultiCarta Ltd. VTB Insurance Ltd. VTB Factoring Ltd. (100%) (100%) (100%)
CIS JSC VTB Bank (Georgia) PJSC VTB Bank (Ukraine) CIS (86.7%) (99.98%)
Subsidiary JSC VTB Bank JSC VTB Bank (Kazakhstan) (100%) (Azerbaijan) (51%)
CJSC VTB Bank (Armenia) CJSC VTB Bank (Belarus) (100%) (69.95%)
Europe ITC Consultants (Cyprus) VTB Bank (France) SA VTB Bank (Austria) AG Europe ltd. (100%) (87.04%) (100%)
VTB Bank (Deutschland) RCB (Cyprus) ltd. VTB Capital plc. AG (100%) (100%) (95.52%)
Asia VTB Capital (Namibia) Banco VTB-Africa S.A. Vietnam-Russia Joint New Delhi Branch Asia and Africa (Pty) Ltd. (50.33%) (66%) Venture Bank (VRB) (49%) (India) and Africa
Shanghai Branch Singapore Office (China)
Middle East Dubai Office Middle East 1. We
17 1.4. VTB’s Approach to Corporate 1.4.1. CSR Management Social Responsibility In order to adhere to the principles of corporate social responsibility, they must be integrated into For many years VTB has operated with the interests all business areas and segments at different of its stakeholders in mind and has continued management levels. Responsibility for CSR to integrate the principles of corporate social management is distributed across different divisions responsibility (CSR) into its strategy and and departments of VTB Bank and its subsidiaries. communications policy. VTB has paid particular attention to building trust-based relationships with shareholders and investors. The Group’s priorities “As businessmen, we believe that one of the greatest have also traditionally included supporting the benefits of business is its power to change the world Russian economy, caring for employees and taking for the better. And not only in the areas it directly a responsible attitude towards the environment. affects but also in the spheres in which key human Our new efficient growth strategy also incorporates values are fostered and created.” the principles of CSR. It aims to ensure Group-wide development that will improve financial performance Vasily Titov, First Deputy President and Chairman while also facilitating positive social and economic of the Management Board of VTB Bank changes.
VTB Bank, which has been guided by the principles Some CSR principles covering stakeholder relations of CSR for many years now, actively promotes best are set out in the VTB Code of Ethics adopted CSR practices within the Group. In the long-term, in 2008. In order to build a common platform for effective CSR management helps reduce strategic responsible business, in 2010 the Bank began risks and identify new business development developing an integrated CSR Policy to define areas opportunities. covered, priorities and principles for VTB’s CSR activities. It is planned that the Supervisory Council of VTB Bank will review the draft policy in 2011. VTB Bank. Social Report 2010
18 External and internal benefits of VTB’s responsible approach
Business Team
Supporting key economic sectors Attracting and selecting personnel
Financial services for the government Remuneration and social benefits
Supporting medium and small businesses Favourable corporate culture
Socially significant retail products Occupational health and safety
Accessibility of banking services Ensuring employee rights
Improving the quality of services
Reliability and security of banking transactions
Loyal customers, Motivated, new products and services loyal and competent employees VTB Increasing profitability and capitalisation Shareholder and investor trust
Favourable social Resource conservation, environment favourable natural environment
Society Environment
Supporting culture, sport and the arts Environmentally sound approach to the construction and reconstruction of buildings Supporting health care Resource efficiency and waste management Strengthening the international reputation of Russian business
Combatting money laundering and the financing of terrorism 1. We
19 1.4.2. Stakeholder Engagement In 2010, the Group continued to develop and improve its communication channels and updated In the course of its activities, the Group engages the design of VTB’s corporate website (www.vtb.ru). with a broad range of stakeholders, building relations The structure of the website was streamlined to with them based on open dialogue and mutual make it easier to understand for users. All available responsibility. information was divided into three key sections — We, Business and Society — which reflect the The Group’s key stakeholders include shareholders Group’s social responsibilities. and investors, employees, the government, business partners, local communities and non-governmental The Group also made serious efforts to further its organisations. Day-to-day stakeholder engagement relations with individual shareholders. In 2010, activities are managed by the respective functions we held the first workshops for individual of VTB’s companies. shareholders in various Russian regions as well as Shareholders Consultative Council Open Days. VTB’s integrated external and internal The Group created a monthly mailing list for communications system includes a broad range individual shareholders and analysed their enquiries of instruments for informing stakeholders about the on a regular basis (for more details, see the Relations Group’s activities, as well as feedback mechanisms, with Individual Shareholders section later in this which help identify and manage the most significant chapter). issues.
Key VTB stakeholders and stakeholder communication channels Shareholders Business partners Government Employees Customers Communities and investors Meetings and Supervisory Council Intranet (hotline and Website Social Report General Shareholders conferences forum) Meeting Participation in Call centre Website Business associations commissions and Employee/management Website and mailing working groups meetings Satisfaction surveys Voluntary campaigns lists Energy of Success magazine Meetings Corporate events Energy of Success Energy of Success Annual Report and magazine magazine Social Report Annual Report Labour union and Social Report Annual Report and Meetings, workshops Controlling Interest Team Energy magazine Social Report and conferences newspaper
Mailing lists Social media Meetings, workshops, roadshows and conferences Social Report
Shareholders Consultative Council
Shareholder Relations Centres
Call centre
Email VTB Bank. Social Report 2010
20 1.5. Corporate Governance of its financial position, economic performance and ownership structure, thereby giving shareholders VTB Bank, the Group’s corporate centre, develops its and investors the opportunity to make informed corporate governance system in accordance with the decisions. On an annual basis the Bank engages requirements of Russian legislation, Bank statutes an independent auditor to provide verification and international best practice. VTB guarantees and assurance of its financial statements. equal treatment for all of its shareholders, strictly observing their rights, including the right to receive In 2010, VTB continued to develop its corporate dividends and information about Bank operations. governance system in line with international best practice. A development strategy for the Bank’s The General Shareholders Meeting is the supreme corporate governance system for 2010–2013 was governing body of VTB Bank. The Bank’s Supervisory defined and a detailed action plan to support Council, elected by and accountable to the implementation of the strategy was approved. shareholders, provides strategic guidance and oversight of the activities of executive bodies. Over the year, both the Bank’s own specialists The latter, namely the President and Chairman of the and independent experts carried out evaluations Management Board and the Management Board, and assessments of VTB’s corporate governance manage the day-to-day activities of the Bank. system. VTB carried out a self-assessment of The Supervisory Council includes, among other its corporate governance system, which confirmed members, five independent directors. that the Group’s corporate governance practices were comparable to those of recognised leaders The Supervisory Council has two committees — in the field and the Bank’s main competitors. the Audit Committee and the Staff and Remuneration As a result of an independent evaluation of VTB’s Committee. corporate governance system carried out by the Russian Institute of Directors, the Bank scored seven The Audit Committee works together with the Internal out of ten on the National Corporate Governance Control Department to ensure internal financial and Rating scale by RID-Expert RA, which corresponds to operational control and assists the management the Well-Developed Corporate Governance Practice bodies in ensuring the effectiveness of the Bank’s level. operations. The Statutory Audit Commission oversees the legal compliance of the Bank’s activities. In 2010, the Bank actively engaged with expert and business communities to promote a national The Staff and Remuneration Committee is corporate governance model. VTB sponsored and responsible for drafting recommendations on key participated in a number of Russian corporate appointments and incentives for members of the governance forums and congresses. Andrey Kostin, Supervisory Council and the Bank’s executive and President and Chairman of the Management Board, control bodies. joined the Editorial Council of the 3rd National Corporate Governance Report published by the In accordance with the corporate Regulation on National Council on Corporate Governance in 2010. Information Policy, VTB ensures timely and full Ekaterina Petelina won the Aristos 2010 award in the disclosure of reliable information, including details Best Corporate Governance Director category. 1. We
21 Structure of VTB’s corporate governance system as of December 31, 2010
approves elects External Statutory Auditor General Shareholders Meeting Audit Commission
elect reports
appoints appoints prepares Audit Staff & Remuneration Committee recommendation Supervisory Council prepares Committee and reports recommendation and reports
reports appoints reports
reports reports President and Chairman Internal Control Department Management Board
1.6. Shareholder and Investor As a part of the Bank’s interaction with the Relations government, meetings between Andrey Kostin, President and Chairman of the Management Board of VTB Bank, and Russia’s top officials are held 1.6.1. Government Relations on a regular basis. Throughout 2010, VTB’s chief executive had several meetings with the President The majority shareholder of VTB Bank is the Russian and Prime Minister of the Russian Federation. Issues Federation represented by the Federal Agency discussed at the meetings included the state of the for State Property. As of the end of 2010, financial services markets, VTB’s performance and the government held 85.5 % of the Bank’s authorised the development of its business. Particular attention capital3. was paid to the development of consumer lending and VTB’s preferential mortgage lending programme. Due to the structure of its shareholder capital, VTB’s plans for financing large-scale investment in making strategic decisions, VTB Bank considers projects were also discussed. These projects include priorities and objectives set out in government policy the modernisation of St. Petersburg’s main airport and seeks to contribute to their implementation. Pulkovo and the Dynamo Stadium and the flagship In 2010, most members of the Supervisory Council, store of the Detsky Mir chain in Moscow. the body responsible for VTB’s strategic guidance, were government representatives. Alexey Kudrin, VTB Group executives and specialists serve as Deputy Prime Minister and Minister of Finance experts and members of a number of government of the Russian Federation, chaired the Council. commissions and sector-specific working groups.
3. In February 2011, the government’s interest decreased to 75.5 %. VTB Bank. Social Report 2010
22 Andrey Kostin, President and Chairman of the 1.6.2. Relations with Individual Shareholders Management Board of VTB Bank, and Vasily Titov, his First Deputy, are members of the Interregional In 2007, VTB became the first Russian bank to carry Banking Council under the Federation Council of the out an initial public offering (IPO), raising some USD Federal Assembly of Russia, a body that formulates 8 billion. As a result, the Bank more than doubled proposals on improvements to national banking its authorised capital, and over 120,000 Russians legislation and supports the development of the became its shareholders. The IPO was recognised as Russian banking system. Furthermore, Andrey Kostin the “most popular” in Russia and the world’s largest and Vasily Titov, as members of the governing bodies IPO in the banking sector at the time. of the Russian Union of Industrialists and Entrepreneurs (RUIE), actively contribute to building VTB stock is considered “blue chip”, which means relations between business and both government that it is among the most liquid stock on the Russian and society in Russia. Andrey Kostin has been market. In 2010, the number of Bank shareholders elected a member of the Council of the Association of exceeded 160,000, with only 1,500 of them being Russian Banks and is a member of several legal persons. organisations in the field of international economic cooperation. These include the Economic The large number of individual shareholders implies Cooperation Committee of the Russia-Ukraine a significant responsibility for VTB Bank and dictates Interstate Commission, the Shanghai Cooperation the need for a structured and balanced approach Organisation Business Council and the Russia-EU towards engagement with this shareholder group. Business Cooperation Council. In order to maintain effective relations with individual shareholders, in 2010 the Bank created a dedicated VTB Bank is an agent for the government stimulus Shareholder Relations Service; the Shareholders policy targeting the real sector of the economy, Consultative Council has been active at VTB Bank the post-crisis recovery of which requires significant since 2009. The Council is an independent expert, funds. An effective stimulus mechanism is the consultative and advisory body intended to protect provision of loans backed by state guarantees the rights and interests of VTB’s individual to systemically important and strategic Russian shareholders. enterprises. This mechanism makes loans accessible to companies that do not have sufficient assets to be At present, VTB has an effective system for used as collateral. In 2010, VTB provided state- shareholder communications, which helps provide guaranteed loans worth a total of RUB 109.8 billion. relevant information to individual shareholders These loans were provided to companies in sectors on a timely basis and receive their feedback. including the defence industry, the steel industry, VTB shareholders may reach the Bank both in person car manufacturing, agriculture, energy and aviation. and through remote communication channels, choosing the method most convenient for them. For more details on financial services provided to the government, as well as to the regional and municipal Remote shareholder communication channels authorities, see the Business chapter of this Report. include:
l Written enquiries. On average, the Shareholder Relations Service handles some 30–40 letters delivered by post per month. Typically, these are requests for different pieces of information, including extracts from the share register and information about the size of dividends, among others. 1. We
23 l Phone consultations. Representatives of the Shareholder Relations Service provide over 200 Shareholders Consultative Council telephone consultations per month on all aspects of selling and owning VTB shares. The Service’s phone The Shareholders Consultative Council (SCC) participates in the numbers — (495) 258–49–47 and 775–70–75 — are preparation of decisions affecting shareholders’ interests, providing mentioned in all printed materials for shareholders. its proposals and recommendations to the Supervisory Council and the Management Board of VTB Bank. The SCC comprises ten members l Enquiries via the website and email. The number of elected from individual shareholders of the Bank by an open ballot for shareholder enquiries submitted through electronic a period of four years. channels — the website www.vtb.ru and the email address [email protected] — has been growing The activities of the Council include handling shareholder enquiries continuously. The Shareholder Relations Service is and complaints, developing specialised banking products and services required to provide a response within three workings for shareholders, improving shareholders’ financial literacy and days of receiving an enquiry, which ensures that developing the Bank’s corporate governance system, among others. requests are replied to promptly. Regular SCC meetings are held once every two months. In addition l Call centre. Operators handle some 300 calls a to Council members, they are attended by relevant representatives month about VTB shares. In addition, some 800 calls from VTB Bank, including members of the Management Board and per month are handled by an IVR (interactive voice the Supervisory Council, heads of different corporate divisions response) system. Most enquiries deal with stock and representatives of the Shareholder Relations Service. In 2010, price, broker services, receiving dividends and the SCC meeting agenda covered a broad range of issues including, selling shares. among others, optimisation of the Bank’s processes, the VTB Group 2010–2013 Development Strategy and day-to-day Bank operations, l The VTB Shareholder Newsletter. The newsletter has as well as analysis of shareholder enquiries and the results of been prepared on a regular basis since December shareholder meetings. 2010 and is sent to VTB shareholders electronically. l Controlling Interest newspaper. This quarterly publication covers key Bank events, contains useful individual shareholders live: Moscow, St. Petersburg information for shareholders and provides detailed and Yekaterinburg. At these centres shareholders can coverage of the activities of the Shareholders receive professional advice on issues ranging from Consultative Council. The newspaper is distributed at dividends and changes in banking details to the all corporate events, as well as through Shareholder operations of the SCC and the Bank’s strategy. Relations Centres, VTB Registrar offices, and, since Materials prepared for annual shareholders meetings December 2010, through the offices of VTB24 in 37 are made available to shareholders at the centres Russian regions. Circulation is to be increased from before the meeting. Throughout the year, 2,000 to 10,000 copies from March 2011. shareholders can also visit the centres to obtain the most recent issue of the Controlling Interest The Bank maintains face-to-face contact with newspaper or update their personal details kept by individual shareholders at Shareholder Relations the registrar. Centres, shareholder meetings with the Shareholders Consultative Council and financial literacy l Shareholders Consultative Council Open Days. workshops. Since December 2009, the Shareholders Consultative Council has held monthly Open Days for individual l Shareholder Relations Centres have been shareholders. Since the events provide for face-to- established in the three cities where the most face communication, Council members are able to VTB Bank. Social Report 2010
24 Breakdown of individual shareholders of VTB Bank4 Breakdown of individual Breakdown of individual shareholders by age shareholders by region of residence
Under 20 Central Federal District 20–30 Far Eastern Federal District 30–40 North Caucasus Federal District 40–50 Volga Federal District 50–60 Urals Federal District 60–70 Siberian Federal District 70–80 Northwestern Federal District Over 80 Southern Federal District Other regions (outside the RF)
consider each shareholder’s situation in detail and workshops, VTB Group managers and specialists shareholders in turn can get detailed answers to their make presentations on the fundamentals of the questions. Most questions deal with dividends, national finance and banking systems, relevant potential for stock growth and the Group’s legislation, risks associated with investing in shares development strategy, as well as procedures for and basic approaches towards building a private inheriting, re-registering, selling or buying VTB stock. stock portfolio. Participants are able to meet SCC In addition to Council members, representatives members and Bank managers in person and get of the Shareholder Relations Service and VTB answers to questions of interest. In 2010, financial Depositary also participate in the events and offer literacy workshops were held in Moscow and shareholder consultations. St. Petersburg and were attended by a total of 280 shareholders. In 2011, we plan to conduct similar l Financial literacy workshops for shareholders. workshops in eight more Russian cities. In 2010, VTB Bank’s Shareholders Consultative Council joined forces with the Russian Union of One of the most important events of 2010 was Borrowers and Depositors, a national NGO, to launch the launch of a range of preferential products and a project to improve the financial literacy of VTB’s services from VTB Group companies designed individual shareholders. Over the course of the specially for Bank shareholders. The first such
4. Based on information as of the record date (April 16, 2010). 1. We
25 product was VTB24 — Victory Day, a high interest rate is to develop and implement a structured approach deposit for the elderly, an important VTB shareholder towards investment relations. The department’s category. Overall, more than 800 deposits were new priorities include a comprehensive analysis opened by VTB shareholders aged 70 or over as of investor feedback and the engagement of senior part of this offer. Another preferential product executives in dialogue with investors. for shareholders was launched by VTB Insurance: starting from June 2010, all VTB shareholders receive The main channels for communication with a 15–20 % discount on a range of insurance institutional investors include regular meetings products, including comprehensive and collision and conference calls. Over the reporting period, five car insurance, extension of obligatory car liability conference calls for financial analysts and investors insurance, property insurance, third-party liability were held to discuss quarterly financial results and insurance and international travel medical insurance, the VTB Group’s new strategy. Bank executives as well as accident and illness insurance. participated in nine conferences organised by leading Russian and foreign investment banks. 1.6.3. Relations with Institutional Shareholders In addition, VTB Bank held several major roadshows. As a result, more than 350 investors from all over the On-going engagement and openness with the world took part in meetings with the Bank’s senior investor community are among the most important executives throughout the course of the year. factors for the development of VTB’s business. Top VTB24 executives also actively maintained In 2010, VTB Bank made active efforts to reach dialogue with investors: in 2010, over 90 investors institutional investors, focusing particularly on took part in meetings about the Group’s retail communicating the Group’s new strategy and business. broadening dialogue between the Bank’s top management and the investor community. We have noted that institutional investors are increasingly paying attention to corporate social VTB’s relations with the investor community are responsibility, which is reflected in the enquiries managed by the Investor Relations Department. and requests we receive from investors. Given In 2010, Jyrki Talvitie, a world class professional the increased importance of CSR in the investor with twenty years’ experience working at major community, corporate social reporting has become international banks, was appointed head of the another important channel in our communication department. One of his objectives in the new position with investors. 26 Expanding Borders 2. Business 27
Business for us encompasses the millions of people and thousands of companies that use VTB’s products and services, be they investing or going about their regular activities. Our lending and investment operations not only affect our customers but also have indirect impacts on the economy, society and the environment. Therefore we make every effort to identify and understand pressing social and economic issues and objectives so that we can make our contribution and support sustainable development in the countries and regions in which we operate.
2.1. Management Approach The VTB Group 2010–2013 Development Strategy provides a system of measures to improve the quality The development of key areas of the Group’s of customer service, including the introduction business is coordinated by a number of specialised of a segment-oriented sales model. We expect that commissions under the control of the Group the implementation of such a model, when coupled Management Council, including committees for with our broad line of products and services, will the corporate and retail businesses, business with allow us to fully meet the needs of different customer financial institutions, risk management, marketing segments by using a differentiated approach to communications and security. As part of the overall customer service. Furthermore, the VTB Group will strategic development of the Group, the committees continue to expand its regional network and develop coordinate different aspects to ensure that Group alternative sales and services channels, improving companies conduct their business responsibly the accessibility of financial services to retail and on the financial services market. corporate customers. The Group is working to modernise its infrastructure and automate key In its lending operations, the VTB Group considers products, processes and procedures. not only financial factors but also the indirect impact of its lending decisions on the economy, society and the environment. For example, in accordance with its credit policy, the Bank not only evaluates the financial status of potential corporate borrowers but also considers their industrial and technological potential, the significance of their businesses to respective regional economies and their contribution to budgets at different levels, as well as risks associated with their operations. VTB Bank. Social Report 2010
28 2.2. Supporting Key Economic Sector RUB % billion Sectors Finance 382.3 12 Metals industry 334.5 11 In its operations, the VTB Group always considers Construction 303.2 10 the priorities and objectives for the economic Industrial manufacturing 267.7 9 development of the countries in which it operates. Commerce 230.6 8 In Russia, among other priorities, VTB’s lending Chemicals industry 226.6 7 and investment activities are aimed at supporting Transport 186.2 6 the diversification of the national economy and Oil & gas industry 139.7 5 the transition to an innovation-based development Government bodies 115.4 4 model, as well as improving social conditions and Energy 97.8 3 minimising adverse environmental impacts. Food industry and agriculture 81.6 3 Coal industry 55.6 2 Telecommunications and media 23.6 1 Aviation 20.5 1 Other sectors 52.8 2 Individuals 541.5 18 Total: 3059.6
Group loan portfolio by sector
Finance Metals industry Construction Industrial manufacturing Commerce Chemicals industry Transport Oil & gas industry Government bodies Energy Food industry and agriculture Coal industry Telecommunications and media Aviation Other sectors Individuals 2. Business
29 2.2.1. Innovative Technologies 2.2.2. Energy
A key factor determining the competitiveness of A stable and reliable energy supply is a prerequisite Russia on the global stage is innovation. Innovation not only for industry but also to meet the needs has been set out as a priority in government policy of millions of people. VTB Group companies have aimed at modernising the national economy and traditionally lent to the energy sector and this improving the quality of life in the country. continued throughout 2010, with loans worth a total of RUB 97.8 billion provided to companies in the Of all of the Group’s companies, VTB Capital is the sector by the Group. leader in terms of supporting innovation. VTB Capital invests funds in innovative projects in key economic sectors and areas, including aerospace technology, information technology, energy efficiency, medicine, Construction of a plant in Vyborg producing agriculture, new construction materials and environmentally clean fuel nanotechnology, to name a few. VTB Bank (France) SA structured a EUR As of the end of 2010, VTB Capital managed venture 30 million pre-export finance facility for funds worth a total of over RUB 5.5 billion. Over half Vyborgskaya Cellulose to finance the of this amount has already been invested in real construction of the world's largest wood projects being implemented by a total of 24 pellet plant. Wood pellets are a new kind of companies, which led to the creation of over 630 fuel product experiencing strong demand in new jobs. These projects include, among others: the region. The pellets are produced mainly from agricultural and forestry waste and are l CJSC Russian Navigation Technologies (RNT): a clean fuel with a low ash content (no more development of a unique vehicle tracking and control than 3 %). When the pellets are combusted, system based on the GLONASS satellite navigation only the carbon previously absorbed by the system; growing trees is released into the atmosphere. The finance facility will enable the borrower l CJSC Returnil Soft: development of unique anti-virus to purchase wood pellet production lines software using artificial intelligence; from Andritz (Austria). The loan will be repaid through the export of wood pellets to a Swedish l Bentus Laboratory Ltd.: manufacturing of modern sales agent, Ekman & Co, over a period of 36 fifth-generation personal hygiene products, including months, including a grace period of 6 month. those marketed under the Sanitelle brand; l CJSC MOBI.Money: development of a broad range of mobile payment services and mobile money transfers. VTB Bank. Social Report 2010
30 Although most of the loans were provided to traditional energy companies, in 2010 the VTB Group Supporting alternative energy in Georgia financed a number of projects to develop alternative energy. By supporting environmentally-sound VTB Bank (Georgia) won a joint tender held by and efficient energy technologies, VTB made its Germany’s KfW Bank and the UN Development contribution to protecting the environment. Programme, as well as the Ministry of Finance and the Ministry of Energy, Environmental Protection and Natural Resources of Georgia as part of a Georgian project to promote the Reconstruction of a hydropower plant in Karelia use of renewable energy resources for local energy supplies. According to the terms of the In 2010, VTB North-West Bank provided a five- project, the bank will provide special-purpose year loan worth RUB 335 million to Nord Hydro loans at a preferential rate to Georgian energy for the reconstruction of Lyaskelya, a small companies, including local micro hydropower hydropower plant based in the Republic of plants. Karelia. It is expected that the generation capacity of the plant will increase eight-fold as a result of the project, helping overcome the energy deficit in the region and increase power generation. 2. Business
31 2.2.3. Transport Infrastructure Reconstruction of Pulkovo airport in St. Petersburg A well-developed transport infrastructure is an integral component of the life and rhythm of any In 2010, VTB Capital was appointed as modern economy. Russia’s enormous size and financial advisor to and co-investor in the the vast distances that must be covered mean Pulkovo airport reconstruction project, which that the development of the nation’s transport is one of the largest infrastructure projects in network is imperative not only to ensure the integrity Russia. The project involves the construction of its national economy but also to create favourable of a new international passenger terminal, conditions for the population for work, rest and modernisation of the existing Pulkovo-1 study. terminal, reconstruction and construction of engineering facilities and the development In 2010, VTB Factoring started providing factoring of the airport’s commercial infrastructure. services to Domodedovo Airport and OJSC Transaero The project will help the airport achieve Airlines, which helped optimise Transaero’s fuel a service quality that meets high international costs and provide cheaper airline services to standards and establish Pulkovo as the largest passengers. airport in the Baltic region.
Construction of new underground stations “We are proud that VTB Capital has played a role in in Yekaterinburg the Pulkovo reconstruction project. Acting as both a financial advisor and a co-investor, we were able to In March 2010, VTB Bank and OJSC Metrostroy attract over EUR 1 billion of investment for the project. Underground Construction Technologies signed We hope that the effective financing mechanism used a two-year loan agreement worth a total of for the Pulkovo project will also be used for other RUB 100 million. The borrower will use the infrastructure projects. The project’s success and its funds to execute government contracts for recognition by leading industry publications prove the construction of new stations for the first that infrastructure development projects in Russia stage of the Yekaterinburg underground. are of interest to international investors”. Overall, VTB Bank plans to provide some RUB 480 million for the construction of the Oleg Pankratov, Co-Head of Global Banking, Head of Yekaterinburg underground. Infrastructure Capital & Project Finance at VTB Capital
“You just need to drive through the city to understand the need to continue constructing the underground. In Yekaterinburg there is no rush hour. The city is congested throughout the whole day.”
Yuri Dozorets, Director of OJSC Metrostroy UCT VTB Bank. Social Report 2010
32 2.2.4. Automotive Industry 2.2.5. Food Industry and Agriculture
The Russian government has set out the objective Agriculture and the food industry play a critical role of developing the Russian automotive industry in providing jobs for the rural population and are and making it more competitive on the domestic vital to the country and its food security. Throughout and international markets. Throughout the crisis, Russia’s transition to a market economy, these VTB Bank supported Russian car manufacturers sectors have been the most vulnerable and have in overcoming financial difficulties, helping prevent suffered a lengthy decline. To make matters worse, huge staff layoffs. the wildfires and drought of the summer of 2010 had a very significant impact on the sector. The VTB Group supported both food and agricultural companies through the provision of loans. In 2010, Supporting a major Russian car manufacturer we provided loans worth a total of RUB 81.6 billion to the sector. In 2010, VTB Bank continued to provide financial support to OJSC AvtoVAZ. According to a memorandum of intent signed between the Bank and the company, the main areas of Supporting livestock farming in the Republic cooperation included the restructuring of the of Udmurtia and the Kaliningrad region company’s debt and providing loans to finance its operating expenditures and investment In 2010, VTB Bank provided a one-year loan projects. We provided a RUB 5 billion facility worth RUB 300 million to OJSC Vostochny, for a period of 18 months to the company a pig farming enterprise that is part of the to refinance a bond issue placed earlier Komos Group Holding Company, to finance by AvtoVAZ. its core operations. OJSC Vostochny operates the largest pig farming complex in Udmurtia and the second largest in Russia with a total capacity of 280,000 pigs. Other Komos Group subsidiaries have used VTB Factoring services since 2009 to attract working capital for their operations. Throughout 2010, the holding’s companies received more than RUB 380 million through factoring.
VTB North-West Bank provided a credit line worth RUB 1.3 billion to the Pravdinskoye Pig Farming Company to finance the construction of a major pig farming complex in Novo-Biyskoye in the Pravdinsky district of the Kaliningrad region. 2. Business
33 2.2.6. Public Utility Sector Reconstruction of sewage and water supply The public utility sector is one of the most socially systems in Moscow and Krasnoyarsk significant areas of the economy and impacts the wellbeing of all citizens. Group companies finance In 2010, VTB Bank provided a non-revolving projects aimed at modernising infrastructure and credit line worth RUB 2 billion to the municipal reforming the sector, and, ultimately, improving the company Mosvodokanal to finance the quality of life for the public. reconstruction, repair and acquisition of capital assets, as well as to refinance earlier loans taken for these purposes.
Construction of a waste processing plant The Bank also signed a loan agreement with in Yanino Krasnoyarsk Municipal Utility Complex LLC worth a total of RUB 290 million to finance the VTB Capital serves as a financial advisor to the construction of a public sewer in Krasnoyarsk. St. Petersburg City Government with regards Furthermore, in 2010 the Bank provided five to the construction of a waste processing guarantees worth a total of RUB 140 million to plant in Yanino. The construction project is secure the company’s obligations regarding the first Russian public-private partnership in the performance of government and municipal waste management. Modernisation of waste contracts. management infrastructure is expected to help secure environmental improvements in the city.
“All parties involved in the project will benefit. The city will be helped to undertake a major modernisation program for its waste management infrastructure and secure environmental improvements, while investors will receive stable cash flows regardless of the market situation.”
Oleg Pankratov, Co-Head of Global Banking, Head of Infrastructure Capital & Project Finance at VTB Capital VTB Bank. Social Report 2010
34 2.3. Financial Services for the availability of the Bank’s loan services, while Government expanding cooperation in investment and driving regional socio-economic development.
As a systemically important financial institution, VTB’s subsidiaries are also active at regional level. VTB has been a strategic partner for the government In 2010 VTB North-West Bank signed cooperation for many years. The Group’s companies actively agreements with the Leningrad, Arkhangelsk and cooperate in Russia with regional and municipal Pskov regions, as well as the Republic of Karelia. governments, providing loans to finance investment Throughout the year the bank provided lending projects and recurrent expenses. services to the governments of the Novgorod, Arkhangelsk and Vologda regions, the Republic In 2010, the Group continued to provide financing of Karelia and the cities of Kaliningrad and to the government, providing loans worth a total of Severodvinsk. RUB 115.4 billion. The average size of loans provided to the executive authorities in 2010 was some VTB Capital has a number of public-private RUB 31 million. The borrowers were the governments partnerships. Of the five venture funds the company of a number of Russian regions, including the manages, four were created in partnership with Moscow, Saratov, Astrakhan, Ryazan, Tula and the governments of the cities of Moscow and Sverdlovsk regions, as well as the Republics of St. Petersburg and the Nizhny Novgorod and Saratov Karelia, Mari El and North Ossetia. Loans provided regions. Furthermore, in 2010 VTB Capital supported by the Group are used to fund priority regional the issue of Russian sovereign Eurobonds worth budgetary spending on items significant to social USD 5.5 billion together with three leading global stability, such as state salaries, social spending and investment banks. utility subsidies.
In 2010, VTB Bank signed a cooperation agreement with the Stavropol region. The bank also has a cooperation programme with the Moscow city government and cooperation agreements with the Republics of Kabardino-Balkaria and Tatarstan, the cities of Kazan and Ulan-Ude, the Khanty-Mansi Autonomous Region, as well as the Samara, Tambov, Kaliningrad, Astrakhan, Tula and Orenburg regions. The agreements support the development of effective financial support programmes for small businesses and mortgage schemes and aim to increase the 2. Business
35 2.4. Supporting Medium The total value of loans provided to medium-sized Businesses businesses through VTB Bank branches in the reporting period was RUB 121 billion. Regional market share in this segment increased from VTB Group companies have traditionally provided 4.7 % to 5.6 %. Deposit market share grew from support for medium-sized businesses, which 6.4 % to 7.5 %, while the overall resource portfolio account for a significant share of Russia’s regional of the Bank’s branches reached RUB 88.5 billion economies. Expanding the services provided to this by the end of 2010. The total number of medium- customer segment is an important priority of the sized business customers served by the Bank Group’s business development strategy, since this reached some 29,000, which includes 23,000 would help achieve the objective of diversifying VTB’s regional customers served through our branches. business. While most small business customers are served by VTB24, services to medium-sized businesses are provided by VTB Bank.
According to the Bank’s classification, the medium business customer segment includes companies with annual revenue between RUB 90 million and RUB 3 billion.
The medium business segment is generally characterised by a high demand for loan financing. Last year saw growing demand for long-term loans to finance capital expenditure and investment projects. At the same time, this customer segment requires a special approach to lending services involving prompt decision-making and competitive costs. The Bank’s approach in the medium business segment has evolved towards longer loan periods, easier requirements for borrowers and collateral, broader use of unsecured loans and lower interest rates. In 2010, VTB continued to expand and enhance its line of products, making them more competitive. The Bank optimised deposits terms for the lower sub-division of the medium-sized business segment to make them more attractive for potential customers. VTB Bank. Social Report 2010
36 2.5. Supporting Small Businesses techniques have been developed to streamline and shorten the loan approval procedure. Small businesses help reduce unemployment by creating new jobs and driving general In order to improve the attractiveness of its improvements and creating new sectors in the loan products, in 2010 VTB24 reduced interest economy. The provision of banking services to small rates on loans offered to small businesses. businesses is a strategic area in VTB’s operations. Among other offerings, VTB24 introduced These services are provided by VTB24 and the Triple 9, a special loan product for small trade Group’s banks in Armenia, Georgia, Kazakhstan, businesses. Customers can receive a loan worth Azerbaijan, Ukraine and Belarus. up to RUB 9 million for a 9‑month period at an annual rate starting from 9.9 %. The short approval The Group’s leader in terms of the volume of loans period on this loan –between 5 and 7 working provided to small businesses is VTB24, the Group’s days — means trade enterprises can quickly take retail bank, which runs a lending programme a loan to pay suppliers, buy new goods or top up targeting small enterprises and individual working capital. entrepreneurs in Moscow and other regions of Russia. In the reporting period, VTB24 provided In 2010, VTB Bank (Belarus) actively developed 19,000 loans worth a total of RUB 29.3 billion. its integrated approach to small business customer As of the end of 2010, VTB24’s loan portfolio in this service. Throughout the year the bank increased the customer segment amounted to RUB 64.2 billion, number of customers in this segment by 40 % and while the number of legal persons and individual expanded the range of services it offers. The bank entrepreneurs using the retail bank’s cash and introduced a line of deposit products specifically settlement services reached a total of 177,000. targeting small businesses, which helped increase its deposit portfolio 3.5 times. The bank also introduced In 2010, in order to attract and retain small business a special preferential service programme allowing customers, Group companies worked to reduce customers using other services of VTB Bank (Belarus) interest rates, expand product lines and improve to receive loans at a reduced rate. The bank’s spirited customer service. efforts in the small business lending market helped it increase its loan portfolio 2.3 times over the year. The VTB24 Management Board approved The bank’s contribution to the development of a new service model for small business customers entrepreneurship in Belarus was recognised at the aimed at increasing sales, expanding the customer Best Entrepreneur National Awards, at which the base and promoting an integrated approach bank received an award in the Best Bank Supporting to customer service. The new model involves targeted Entrepreneurship category for the second customer communications, assigning customer consecutive year. portfolios to dedicated client managers and using a “one stop shop” approach for the entire range of VTB Bank (Ukraine) offered its small business customer services. This is achieved through building customers an updated line of core loan products, teams of client managers — specially trained including overdrafts, loans for purchasing real estate salespeople that can work with small business and equipment and loans for replenishing working customers throughout the entire service cycle. capital. In partnership with the National Association Support functions will also be automated and of Haulage Companies and the insurance company centralised as much as possible. The model provides Ingo Ukraine, the bank launched a vehicle purchase for tailor-made product and service offerings loan programme. Combined cash and settlement for small businesses. Business processes have services for small business customers are available been optimised and special borrower evaluation at all bank outlets. 2. Business
37 In the reporting year, VTB Insurance designed and “Having received a microloan, businesses grow launched a property insurance product specifically and then return to their bank for subsequent, more targeted at small and medium businesses. substantial loans. This is why the development of microfinance in Russia is so important for the banking In addition to implementing their own programmes community. We already have experience of creating targeting small business customers, the Group’s a specialised microloan entity, OJSC Microfinance, companies support government initiatives in the which was established in 2008 together with the sphere. By the end of 2010, VTB24 had signed Moscow city government. VTB24 also provides loans 40 agreements with regional state institutions directly to microfinance institutions in the Kemerovo supporting small businesses. In December 2010, region and the Republic of Tatarstan.” the Russian Development Bank and VTB24 signed an agreement to provide a RUB 5 billion loan to Nadezhda Karisalova, Vice President of VTB24 finance small businesses.
The Group’s companies actively participate in specialised conferences dedicated to supporting small businesses. In 2010, VTB24 was the strategic partner for the fourth regional conference titled Practical Instruments for Improving the Competitiveness of Small and Medium Businesses, which was held in Orenburg, and the national conference titled Microfinance in Russia on the Verge of Change: Lessons from the Crisis and New Opportunities, which was held in Moscow. VTB Bank. Social Report 2010
38 2.6. Socially Significant Retail VTB24’s product line includes mortgage loans Products subsidised by the government. In 2010, the bank launched State-Subsidised Mortgage Loans, a new programme under which it provided loans at a The Group’s retail business, which is one of its reduced rate, independent of loan period and down strategic development areas, is run by VTB24 payment. In October 2010, the programme was and the Group’s subsidiary banks in Armenia, expanded to include housing under construction Georgia, Kazakhstan, Ukraine, Azerbaijan and at the time of loan approval. Belarus. VTB24 also helps improve the affordability of new The VTB Group is one of the leading Russian cars by participating in the government subsidised lenders to individuals. In 2010, its share of this car loan programme. Loans are provided for the market amounted to 12.1 %, which made it the purchase of all Russian-made car models under second largest retail lender in Russia. RUB 600,000 that are included in a special list issued by the Russian Ministry of Industry and Trade. By offering a broad range of banking services in line with customer demands, VTB’s retail business helps address pressing social problems, such as the purchase of housing, which remains a serious challenge for many families. VTB24, as a leading player on the mortgage lending market, makes a significant contribution towards tackling this issue. In 2010, in order to improve the affordability of mortgage loans, VTB24 cut interest rates on all mortgage products across all areas of its operations. Furthermore, employees of VTB’s corporate clients were offered preferential mortgage conditions.
As of December 31, 2010, the VTB Group’s mortgage loan portfolio amounted to RUB 217.2 billion. This was an increase of 19.5 % over the year as a result of, among other factors, consolidation of TransCreditBank. VTB24’s mortgage loan portfolio increased by 13.5 % over the year, and currently includes some 103,000 active loans with an average loan size of RUB 1.5 million. 2. Business
39 2.7. Accessibility of Banking VTB corporate customers can also benefit from the Services ease of remote banking services. Without leaving their desks, customer employees can prepare the necessary documents and send them to the Bank, The broad geography of the VTB Group’s operations track transaction statuses, search for documents for helps ensure the accessibility of banking services a given period and access bank statements, among to the broad population and small businesses. other services. Corporate customers can choose The Group has an international network that is between our two services: unique for a Russian bank spanning 19 countries in Europe, Asia and Africa. As the second largest l Internet-Client: this service allows customers to financial group in Russia, VTB has 744 sales outlets manage accounts and perform transactions through in 73 of Russia’s 83 regions, while the VTB24’s retail the VTB Bank website. All documents and directories network includes over 530 offices in 69 Russian are stored on the Bank’s servers, so users can regions. manage their accounts from any computer connected to the Internet; In addition to expanding its branch network, VTB develops both corporate and retail remote l Bank-Client: this service provides access to the same banking services to improve accessibility. set of actions and transactions but all information is stored on the customer’s computer and data VTB24’s retail customers have access to the is exchanged with the Bank during short connection Telebank system. This allows them to make a wide sessions. This service may be suitable for customers variety of payments and transactions — ranging from without reliable Internet access. paying utility bills and transferring money through to buying foreign currency and financial instruments Currently remote banking services for corporate on the securities market. All of this can be done customers are being actively rolled out at the VTB 24 hours a day online or by mobile or landline phone. Group’s international branches and banks. In 2010, The Teleinfo information system allows customers to we launched the VTB Direct project at VTB’s banks access up-to-date information about the status of in France and Germany. their cards, accounts, loans and deposits with VTB24 from anywhere in the world 24 hours a day, 7 days a week and 365 days a year free of charge. VTB Bank. Social Report 2010
40 2.8. Improving Service Quality employees immediately involved in the service chain. As part of the Effective Customer Service programme, One of the VTB Group’s strategic objectives is to employees from the Bank’s customer service and improve the quality of customer service in both transaction processing divisions receive both the corporate and retail segments of our business. in-person and distance training. The latter was made possible thanks to development of the Effective VTB strives to provide its customers with full and Service e-learning course, which is based on Service reliable information about the terms and costs of its Manual materials. Furthermore, VTB Bank has services, as well as payment procedures. Customers introduced corporate trainers and quality supervisors can obtain detailed information about the cost of at each sales office. VTB24 carries out regular services at sales outlets, though the call centre or training in several areas, including products and on the websites of the Group’s companies. Using the services, as well as sales and customer service skills. same channels they can also receive consultations Particular attention is paid to building the customer from VTB specialists to help them make an informed service skills of new employees. decision of whether to use the Group’s services. VTB Group companies collect customer feedback, As well as focusing on improving customer service which is analysed and taken into account in the in the retail business, VTB also pays significant decision-making process. We have introduced attention to improving the quality of service for our systems to handle customer enquiries and corporate customers. To this end, in 2009 VTB complaints across multiple communications launched a project to introduce across-the-board channels, including through the call centre, corporate corporate customer service standards, which website, email, remote banking systems and by post. included Sales Office Standards and our Service Information on how to submit a complaint or enquiry Manual. These documents lay out our rules and is available at the sales offices and on the websites requirements for employee professional skills of each respective company. and knowledge, business style, workplace conduct and customer care. Furthermore, we institutionalised As part of our efforts to improve the quality of quality supervisors at the Bank’s sales outlets and customer service, in 2010 most of the Group’s ran a series of training events for front office companies introduced integrated service quality employees. monitoring systems. These systems include elements such as test purchases, customer surveys by phone, In an effort to reduce service time in the corporate audits for compliance with Sales Office Standards segment, VTB is working to streamline customer and IVR systems. service procedures. Improvements so far include the introduction of automated procedures to receive and VTB conducts customer satisfaction surveys on review loan applications and the institutionalisation a regular basis in order to learn about customers’ of client managers to support the “one stop shop” views regarding product lines, the quality of service approach to customer service. We also run an IVR and the skills of service staff, among other factors. (interactive voice response) system, allowing For example, in 2010 VTB Bank carried out an online customers to obtain information about the Bank’s customer survey, which revealed a high level of products, services and special offers around the customer loyalty to the Bank. Among the key factors clock. making VTB an attractive provider of banking services, customers mentioned prompt service, The quality of customer services directly depends on the ability of staff to effectively address customer the skills and motivation of our employees. With this needs, attractive terms of service and a personalised in mind, VTB pays significant attention to training all approach to customers. 2. Business
41 2.9. Reliability and Security In March 2010, VTB North-West Bank introduced of Banking Transactions an additional service as part of its Client-Telebank remote banking system. The service provides a digital signature USB token with strong data By nature, the provision of banking services protection. The token is resistant to external attacks unavoidably involves access to personal data and tampering, cannot be duplicated and sensitive and sensitive information about customer’s information cannot be extracted from it. Furthermore, financial resources. As such, VTB is obliged to secure the bank introduced an SMS-OTP service as another customer information and ensure it remains authentication layer, meaning customers access the confidential. Group companies pay significant Client-Telebank system using single-use passwords attention to preventing and counteracting any sent to their mobile phones via text message. attempts to harm our customers. Security inevitably involves a human aspect, which The largest risk of unauthorised access to customer VTB has not overlooked. The Bank educates its data is associated with Internet banking. The security customers on safe payment practices and provides of Internet payments can only be ensured through detailed guidance on online payment rules. VTB24 a combination of the Group’s measures and recommends that its customers use a dedicated card customer compliance with secure operating for online payments. Customers should transfer only practices. the amount necessary for the planned purchase to the respective account and also only use trusted In 2010, VTB Group companies implemented a shops online. number of projects to improve transaction security. VTB24 implemented 3‑D Secure technology, which adds an additional layer of security to online payments made with Visa and MasterCard cards issued by the Bank. The technology, made available to customers free of charge, helps protect against credit card fraud. 42 United Towards Success 3. Team 43
The VTB team numbers over 50,000 employees and is the Group’s key asset. The team is what makes it possible for us to achieve the Group’s goals. VTB attracts the best talent and creates opportunities for professional and personal growth. As a responsible employer, VTB strives to ensure fair remuneration and the social security of its employees, as well as fostering a favourable corporate culture, guaranteeing the protection of employee rights and complying with occupational health and safety requirements.
3.1. Management Approach “There is no doubt that VTB’s energetic team that constantly strives to lead the market is capable of With the goal of improving the effectiveness of achieving any goal, no matter how complex. One such human resource (HR) management, the VTB Group objective is the transition to a new business model developed and approved an HR Management based on improving operational efficiency and Concept in 2010. The Concept defines the main increasing shareholder value. I am convinced that principles, areas, methods and forms of HR VTB has the significant potential required to achieve management, which are all ultimately aimed all of its strategic goals.” at achieving the Group’s strategic objectives. Alexey Kudrin, Chairman of the Supervisory Council The VTB Group Management Council reviews and of VTB Bank in the reporting period, Deputy Prime approves group-wide standards and approaches, Minister and Minister of Finance of the Russian as well as policies and concepts with regard to Federation the key aspects of HR management across the VTB Group. The Council’s decisions and recommendations provide a foundation for the VTB Bank continuously monitors and oversees respective decisions and policies of individual the state and performance of the Group’s HR Group companies. The Council has a dedicated HR management system by collecting regular reports, coordination committee, whose objectives include requesting additional information in the process of ensuring the effective development of the Group’s day-to-day interaction between the Group’s entities HR management system and defining procedures for and evaluating the performance of the Group’s practical interaction between different Group entities HR management departments and units. on HR management issues. VTB Bank. Social Report 2010
44 3.2. Personnel Profile5 Headcount by VTB Group company category, as of December 31, 2010 Over the reporting period, the number of VTB Group employees increased (mainly as a result of the consolidation of TransCreditBank), reaching 51,781 as of December 31, 2010. A year earlier the number of employees was 40,447.
In 2010, median staff turnover for VTB Group companies was 11.6%.
In 2010, the median employee age at VTB Group companies was 37.
The median gender ratio for VTB Group companies in 2010 was 47.5% men to 52.5% women. OJSC VTB Bank Subsidiary banks in Russia Subsidiary banks outside Russia and the CIS 3.3. Attracting Talent Subsidiary banks in the CIS Financial companies In 2010, against the backdrop of a post-crisis recovery of the finance industry, VTB Group made OJSC VTB Bank 10,154 20 % significant efforts to improve the efficiency of its Subsidiary banks in Russia 29,249 56 % operations and strengthen its team. Subsidiary banks in Western Europe, Asia and Africa 776 1 % 3.3.1. Personnel Selection Practices Subsidiary banks in the CIS and Georgia 7,632 15 % To a significant extent, the approaches employed Other subsidiaries 3,970 8 % by different companies within the Group to attract and select job candidates depend on the specifics of each individual company and the The Group is actively developing and expanding its nature of its business. For example, in the corporate retail business, which stipulates a demand for a large segment, which is characterised by a high level number of young and energetic professionals of competition and stable development, capable of building a highly efficient business the Group pays great attention to attracting on a new, greater scale. highly professional specialists that are capable of creating centres of expertise in priority areas for In addition to the specific approaches and policies development. The dynamic nature of the Group’s of individual subsidiaries, there are certain basic investment business means that we must identify principles for staff selection adopted at Group and attract leading investment banking talent to level that are mandatory for all Group companies. ensure rapid and efficient growth of this segment. One of the most important principles concerns
5. In this section, information about headcount is provided for the VTB Group as defined by the consolidated financial statements of VTB Bank for the years ended December 31, 2010 and 2009. Information about staff turnover, gender ratio and age is provided for VTB Group as defined by the VTB Group 2010–2013 Development Strategy, excluding OJSC TransCreditBank, OJSC VTB Debt Centre, CJSC VTB Capital, ITC Consultants (Cyprus) Ltd., VTB Capital (Namibia) (Pty) Ltd., Banco VTB Africa SA and Vietnam-Russia Joint Venture Bank. 3. Team
45 Average employee age breakdown Breakdown of VTB Group personnel by gender, across VTB Group companies as of December 31, 2010
Average age of 31–35 Men Average age of 35–40 Women Average age of 40–45
Composition of VTB Bank management bodies by gender and age, as of December 31, 2010 Age Women Men Total Age Women Men Total Management Board Supervisory Council 30 or under 0 0 0 30 or under 0 0 0 31–50 2 5 7 31–50 1 4 5 51 or over 0 4 4 51 or over 0 6 6 Total 2 9 11 Total 1 10 11
discrimination, which is completely prohibited the fairness and transparency of the entire selection in any form. This means that employees are selected process. on the basis of their professional skills, regardless of their gender, age, marital status and any other The established new employee selection and circumstances unrelated to their work responsibilities. evaluation process includes a job interview, a review of the candidate’s application, completion of a test When selecting candidates for open positions, assignment (if necessary), definition of a probation Group companies consider the professional period, testing throughout the probation period and skills of applicants, their previous work an evaluation of the candidate’s performance at the experience and relevant qualifications end of the probation period. and evaluate their professional and personal qualities against VTB’s requirements. The selection The VTB Group values its own people and makes process includes an assessment of candidates efforts to develop staff and identify talent internally. against the corporate competency model. Therefore, in making decisions between internal This approach helps avoid the influence of personal and external candidates, preference is usually given preferences for employee selection, while improving to the former. VTB Bank. Social Report 2010
46 All VTB Group companies seek to maintain a reasonable balance between recruiting young VTB Open Days specialists and experienced professionals. VTB Bank holds annual Open Days for university VTB identifies new candidates using a broad range of students, where young people can obtain different resources and venues, including the internal information about the Bank and its activities, human resource database and a database of external learn about work placements, meet VTB Bank candidates, relevant employment events, executives and employees, take part in a Work universities, specialised employment websites and Placement Fair and ask Bank experts their by announcing its vacancies in the media and online. questions.
VTB makes active use of its group-wide career The event has traditionally enjoyed website vtb-career.com to promote jobs and attract significant popularity among students. prospective employees. The website contains general In April 2010, the VTB Open Day was information about the Group, opportunities for attended by 110 students from 30 Moscow and advantages of working with VTB, the corporate universities. culture and the team and available vacancies in all countries in which the Group operates. Other materials available on the website include recommendations from VTB senior executives to experience by participating in the day-to-day candidates, employee success stories and themed operations of the organisation. Over 200 university sections such as Tip of the Day and Job Profile. students enrol on work placements at the Bank each The website helps ensure equal opportunities year, while the total number of work placements at for all candidates seeking jobs with the Group. the Group’s companies across Russia exceeds 2,000. VTB Bank offered work placements to students 3.3.2. Attracting Young Specialists throughout the economic downturn, when many companies stopped recruiting young specialists. To fill its entry-level positions, the Group typically attracts university students and recent graduates. Given VTB’s geography, the Group needs to attract One way to attract this category of candidate is promising young specialists not only for its Russian through VTB Open Days, which have been held operations but also for its international subsidiaries. each year since 2007. VTB Capital has developed two young talent development programmes — ELEVATE and Fixed Term The VTB Group is primarily interested in attracting Analyst (FTA) — which will be launched in 2011. proactive young specialists with excellent computer The ELEVATE programme is aimed at university skills trained in economics, finance, information graduates, while the FTA programme targets technology and marketing. To that end, Group students. Programme participants will receive skills companies provide work placements for students training and complete work placements at different from relevant universities, which helps attract young company divisions in Moscow and London. talent, while maintaining VTB’s image as an attractive employer. According to the 2010 TargeT rating of In addition to work placements and skills graduate employers, VTB was ranked 11th, ahead development programmes, the VTB Group provides of other Russian financial groups. financial support to talented university students. For example, VTB Bank awards corporate The largest number of work placements is provided scholarships to the most gifted students at Moscow’s by VTB Bank, where students obtain first-hand economic universities. The Bank has been running 3. Team
47 “We are given the opportunity to see the bank from VTB North-West Bank has been running university within, which helps us learn more about future job and student support programmes since 1994. opportunities and inspires us. We were pleased to Programmes include financial assistance to higher discover that they had prepared lots of interested educational institutions, grants to support training and unexpected events and presentations. What and research for the most gifted students and was particularly unexpected was that VTB executives building a candidate pool for the Bank by attracting openly debunked myths about the Bank — about how talent. In 2010, the total number of candidates for people got jobs there, how much they were paid and corporate scholarships from VTB North-West Bank how VTB treated its young specialists. We also were was 79. The scholarships were awarded to 45 impressed by the enthusiasm of young specialists students selected by the bank’s HR Department on who held a banking lottery and talked about their a competitive basis; they also received personal work — it was obvious that they enjoy their jobs.” certificates and souvenirs.
A VTB Open Day participant VTB Group contributes to improving the quality of education in Russia through participation by its managers in programmes run by external educational the VTB Bank Corporate Scholars programme since institutions and the organisation of its own 2002, which supports and attracts the most educational and training events for students. promising students. The Group closely collaborates with a number of leading Russian universities, including the VTB24 awards corporate scholarships to students of Financial University under the RF Government, the International College of Economics and Finance Moscow State University, the Higher School at the Higher School of Economics national research of Economics, the Moscow State Institute university and finances accommodation for select of International Relations of the Russian Ministry non-resident students. In 2009–2010, VTB24 of Foreign Affairs and St. Petersburg State University. provided scholarships for 19 students. In addition to financial support, they were able to receive work placements at VTB24 and meet the Bank’s best specialists. VTB Bank. Social Report 2010
48 3.4. Opportunities for Development training programmes are accessible for employees of VTB Bank, VTB24 and other Russian companies To keep our staff highly motivated and ready to in the Group. address any new objectives, we need to ensure that personnel are continuously developing RTCs are used as venues for professional professionally. This is done through our corporate development and training of VTB’s specialists and training system, which also builds a succession line managers and for sharing experience and skills. pool for executive positions. VTB also has a central corporate training facility for mid-level and senior managers — the VTB Group The employee training system at VTB is based on the Corporate University. The Rector of the Corporate principle of “cascading knowledge”, which means University is Andrey Kostin, President and Chairman that trained employees, in turn, become trainers of the Management Board of VTB Bank. Corporate sharing their knowledge with co-workers. Within the University courses are taught by senior VTB corporate training system, VTB employees receive managers, professors and teachers from Moscow technical training helping them to perform their universities, business trainers and consultants, job duties more effectively and improve their as well as highly-skilled practitioners representing understanding of VTB’s business processes, products various areas of the Group’s business. and technologies. In addition, training programmes in management and teamwork are also offered. The main forms of teaching include interactive workshops, training and business simulations. The main forms of corporate training at the VTB The training process is closely integrated with the Group include internal and external workshops, actual job responsibilities of trainees, as are work placements and internships, training courses, “homework” materials, case studies and graduation distance learning (including e-learning courses and projects. video workshops) and certification programmes. VTB strives to maintain uniform personnel training Since its creation in 2005, the Corporate University standards across all Group companies and divisions. has delivered five training programmes, each of which was aimed at building management skills Given the broad geographical spread of its branch relevant to the Group’s business objectives. network, VTB Bank pays special attention to the For example, in 2009–2010 the University delivered development of its distance learning system. a training programme titled Anti-Crisis Managers / For example, VTB Bank maintains a Corporate Agents of Change, which was targeted at the Learning Portal, where employees can take e-learning consolidation and sharing of experience of anti- courses and tests in skills for their respective jobs, crisis management and the support of anti-crisis business effectiveness, office software and banking measures at VTB’s divisions and branches. In 2010, applications. Information on upcoming corporate training was aimed at the implementation of priority training events is also available on the portal. strategic initiatives, including the development The Group’s retail companies also develop their of transactional banking and the transformation own distance learning systems. For example, in 2010 of VTB’s corporate and investment business. VTB24 developed 53 new e-learning courses and 46 Programme participants developed and implemented electronic tests, while VTB Bank (Ukraine) developed business projects aimed at achieving the Group’s and made available 101 new courses for its strategic objectives. employees. The Corporate University offers programmes on both The VTB Group maintains a network of Regional a competitive basis and programmes open to all Training Centres (RTCs), which ensure that corporate representatives of a certain employee category. 3. Team
49 For example, in order to participate in the Energy of the United Electronic Trading Venue. Yet another new Leadership programme aimed at developing the VTB programme was targeted to train IT staff in managing Group’s succession pool, young managers need CISCO equipment widely used at the Bank’s to demonstrate outstanding business achievements, networks. receive positive recommendations and pass a competitive admission process. At the same time, In the retail business, employee training has the Effective Management programme is open to all traditionally been focused on improving the managers at VTB Bank’s structural units and its efficiency of services and the quality of customer branches. This programme aims to develop HR service. In 2010 VTB24 developed an integrated and business process management skills. training programme to support the transition of its outlets to a single waiting line system; 573 The Corporate University Club, a body that brings employees took part in the programme. VTB Pension together University alumni, was created in March Fund, the Group’s non-state pension fund, also 2010. The Club’s objectives include sharing developed an intensive training programme to management experience and skills, supporting VTB’s support sales of its products through the Group’s business projects, corporate policies and social campaigns, mentoring current students on University programmes and promoting independent learning. In 2010, the Club won a prestigious professional VTB’s Regional Training Centres award in HR management from the Trainings Index 2010. Regional Training Centres are located at VTB branches. In addition to core operations at the In 2010, corporate training activities focused branches, they also prepare training events that on VTB managers. This reflected corporate priorities are delivered to VTB employees working in the including communicating the Group’s new given region. development strategy to all levels of management and building the skills necessary to improve At present, VTB has 9 active RTCs based in the efficiency of VTB’s business. For example, Vladimir, Voronezh, Yekaterinburg, Krasnodar, VTB Capital conducted training programmes for Krasnoyarsk, Nizhny Novgorod, St. Petersburg its global management team throughout the year, and Khabarovsk. A further 7 RTCs were created using the services of leading experts. In order to specifically for VTB’s retail business on the basis promote professional development of VTB Capital’s of regional branches of VTB24. Each centre executives, a number of personalised training provides between three and five training events programmes were designed and delivered in London per quarter. and Moscow. RTCs deliver in-person training events, video At the same time, Group companies continued workshops and distance learning courses, their traditional programmes for specialists and as well as conducting professional testing implemented new programmes aligned with the new of employees. All RTCs meet VTB’s uniform VTB strategy. For example, in order to boost cross- corporate training standards, using state-of- selling, over 1,000 client managers from VTB Bank the-art training technologies and equipment, received basic training in selling the products of as well as the services of professional trainers. the Group’s financial companies. The Bank also The centres attract VTB’s best specialists, who organised centralised training for its employees share their experience and skills with other involved in electronic trading. The training was employees. based on two trading venues — Sberbank-AST and VTB Bank. Social Report 2010
50 retail network. As part of the programme, Pension Fund specialists provide in-person training, VTB Corporate University Club mentoring and phone consultations to VTB24 employees that sell pension products. Overall, 385 At present, the Corporate University Club VTB24 outlets in 6 federal districts of the Russian comprises over 200 active members, including Federation were covered by the programme in 2010. alumni and current students of the Corporate University representing different Group In addition to corporate training, VTB also employs companies based in Russia and the CIS. staff rotation within the Group to develop its staff. Most often employees in key positions are The Club is organized into 12 regional branches transferred from VTB Bank to subsidiary companies and is guided by the Coordination Council, so that they can transfer the common values and which includes the chairmen of the branches. corporate culture of the Group. In some cases, General discussions are held through the Club’s staff from our subsidiaries come to work in the website and by videoconference. The Club is corporate centre from subsidiaries or move from the a self-regulating community, which operates regional branch of a subsidiary to its headquarters. without financial support from VTB. It is common practice at VTB Bank (Georgia) for experienced employees from sales outlets to be The Corporate University Club contributed to transferred to the head office. In 2010, 18 employees the implementation of a number of large-scale were transferred to the head office of our Georgian projects, including those aimed at consolidating subsidiary. VTB’s team during the crisis. In summer 2010, the Club’s first meeting was held and The Group rarely rotates internationally, as participants took stock of the first year of their employees need to be familiar with the local legal work together and discussed the Club’s role in and regulatory context, but it is practiced in some the implementation of the Group’s new strategy. cases. 3. Team
51 3.5. Remuneration and Social analysing candidate salary expectations and using Benefits other sources of information. VTB Group also pays special attention to the social VTB Group offers its employees competitive security of its employees. All Group companies remuneration and an integrated package of social determine employee compensation packages, benefits. In 2010, the Group approved the Concept including social components, on the basis of for Managing Motivation and Remuneration at the common principles defined at Group level. At the VTB Group and the Uniform Principles of Motivation same time, the specific extent and size of benefit and Remuneration at the VTB Group. These are basic packages offered by each Group company depends corporate documents defining uniform approaches on a range of factors, including national and regional towards remuneration across the Group and context and applicable legal requirements, among ultimately aimed at improving the performance others. of VTB employees and fostering a results-oriented culture. Typical social benefits available to VTB employees include subsidised voluntary medical insurance, The remuneration of Group employees consists of access to occupational pension schemes, fixed and variable components. The fixed component additional paid leave for special circumstances includes base salary and other payments guaranteed and monetary allowances. Some Group companies to employees regardless of their performance. offer additional benefits, including flexible work The variable component includes bonuses arrangements and the opportunity to purchase depending on meeting pre-established performance VTB products at a preferential corporate rate. targets. As such, performance evaluation is an VTB companies organise medical check-ups and important instrument used by the Group to manage vaccination programmes on a regular basis. staff motivation, as employee remuneration depends In addition, VTB uses a range of intangible motivation directly on performance. tools to reward the best-performing employees, including notes of appreciation and posting The Group evaluates the performance of its employee photos on corporate walls of honour, employees using key performance indicators amongst others. (KPIs) and a “management by objectives” system. The employee evaluation process involves analysis Occupational pension schemes are part of the of technical and professional knowledge and skills, social benefit packages offered by VTB Bank, operational and labour discipline, customer service VTB Specialised Depository, VTB Leasing and teamwork skills in achieving objectives. and the Group’s subsidiary banks in Austria, VTB Group uses its personnel evaluation system not Germany and the United Kingdom. In 2010, only to improve employee motivation and determine overall VTB Bank expenditures on occupational remuneration but also to identify employee training pensions for its employees exceeded RUB 69 million. needs, design personalised training and career In the near future, the Group plans to expand its development plans, identify the most promising occupational pension schemes to cover other employees and build a succession pool. subsidiaries.
In order to ensure a competitive remuneration level, Occupational pension plans for the Russian Group’s VTB Group companies continuously monitor labour employees are managed by VTB Pension Fund, markets in the regions in which they operate. They do the Group’s non-state pension fund. The fund also so by participating in salary surveys (both general offers its services to other companies on the open and specifically focusing on the finance industry), market. VTB Bank. Social Report 2010
52 3.6. Favourable Corporate Culture Institutions, which was held in Yakhroma in the Moscow region. VTB’s ski team took a respectable Having a favourable corporate culture means that fourth place in the tournament. VTB employees are joined together in a cohesive team. It improves loyalty and motivation and helps In addition to the downhill ski team, VTB employees employees develop leadership skills and realise their can join a variety of other corporate teams, including potential not only professionally, but also creatively football, ice hockey, volleyball, basketball, paintball and through sport and social activities. Creating and tennis. All these teams participate in internal a comfortable working environment within the and external sports events on a regular basis. VTB team is one of the key priorities for the Group’s For example, in 2010 VTB’s hockey team won the HR management. Non-Professional Hockey League and the Russian Amateur Hockey League, while VTB’s football team The Group’s effective internal communications won the Moscow Mayor’s Cup. system is a key instrument in supporting and promoting the VTB corporate culture. The main channels of internal communications include employee information events with the involvement The Team Energy magazine and VTB Corporate of Group senior managers, the Team Energy corporate Reporters magazine, the Group’s Intranet portal, information digests and brochures, information boards, surveys, The Team Energy corporate magazine is an polls and various internal corporate events. important and effective instrument for corporate communication. Team Energy provides In 2010, internal communications activities focused VTB employees with high quality regular on informing employees about the VTB Group’s new analytical information about the activities and strategy. We held a number of employee information achievements of various Group companies, and training events with the involvement of senior the development of the finance industry as a managers, with the VTB Corporate University Club whole, success stories of individual employees and the VTB Volunteer Club leading a number of and priority development areas for the Group’s initiatives to this end. Special sections dedicated business. to the new strategy and its implementation were created in the Team Energy corporate magazine, The magazine includes contributions from VTB on the Group’s Intranet portal, the corporate web Corporate Reporters, Group employees who, forum and information boards. in addition to their everyday work, write or photograph for our corporate media, covering Another way through which we foster our corporate various aspect of VTB. At present, the Group culture at VTB is our corporate events for employees. has 20 Corporate Reporters. Their news, Some of them are held regularly, while others are articles and photos appear on the Group’s held in celebration of significant milestones in the Intranet portal and information boards as well Group’s history. as in the magazine. To improve their skills, Corporate Reporters receive training in the In 2010, one of the largest corporate events was Virtual Journalism Department (a specialised the VTB Global Chess tournament. programme offered by the VTB Corporate University). One of our regular corporate events is the winter sports festival. In 2010, we teamed up with the 6th International Downhill Ski Cup for Financial 3. Team
53 Volunteer projects play a special role in fostering VTB’s corporate culture. They help employees VTB Global Chess demonstrate their initiative, connect with society and contribute to socially significant activities. In 2010 VTB Global Chess, an international chess some 25 % of VTB Bank staff took part in various tournament dedicated to the 20th anniversary charity and volunteer projects (including by giving of VTB Bank, was held in 2010. 153 employees blood and helping children’s homes and hospitals, representing 18 of the Group’s companies veterans and institutions providing important in Europe, Asia and Africa took part in the social services). Corporate volunteer projects tournament. Games were played over the are coordinated by the VTB Volunteer Club, Internet using virtual chessboards on the Chess which comprises 9 regional associations based Planet website. in Russia and 5 associations in the CIS. VTB Group also invited visitors to its corporate Throughout 2010 the Moscow VTB Volunteer Club website www.vtb.ru to take part in the supported a children’s hospice in Moscow and tournament. A number of visitors, including collected over RUB 500,000 in charitable donations. 9 grandmasters and 12 international masters, It held a charity auction to collect funds to organise faced the winners of the corporate competition. New Year festivities at the children’s homes under The winners of the team competition were VTB its patronage, supported those affected by the Bank (Georgia), VTB Bank and VTB24 (who took summer’s wildfires and organised a blood donation first, second and third place respectively). day and the Smiling Bus promotion.
No less attention is paid to VTB’s veterans. In 2010, several events were organised for them. These included, among others, celebrations of Defender of We Remember the Fatherland Day and International Women’s Day. To celebrate the 65th anniversary of victory in WWII, The largest project implemented by the VTB VTB organised a banquet, a trip to former battlefields Volunteer Club was We Remember, a voluntary in the Smolensk region and a screening of the campaign dedicated to the 65th anniversary of film Burnt by the Sun 2: Exodus for its veterans. victory in the Second World War. A total of 4,084 On International Day of Older Persons, veterans were VTB employees from 59 cities in Russia and offered a tour to Rybinsk. They were also invited the CIS took part in the campaign. They helped to a reception in celebration of the 20th anniversary veterans, improved the VTB Garden that was of VTB Bank. created in 2009, organised themed events for children’s homes and assembled a War Album containing memories and photographs from the war. All in all, We Remember lasted two months and included over 90 events run by VTB volunteers in various regions. VTB Bank. Social Report 2010
54 3.7. Occupational Health In 2010, in connection with the relocation of the and Safety6 head office of VTB Bank to the Federation Tower in the Moscow City International Business Centre, significant attention was paid to OHS and the The VTB Group cares about its employees and takes creation of a comfortable workspace. While taking measures to actively reduce the risk of disease or into account all applicable health and safety rules, illness and prevent workplace injuries. The Group the Bank made special efforts to ensure that the new thoroughly investigates all cases of injury in working space was laid out in a manner conducive accordance with legal requirements, trains its to efficiency and comfort. employees in the basics of workplace safety and implements medical and preventive measures as In accordance with the established requirements, required by legislation. each employee has a space of at least 4.5 square meters at the new premises. In order to make more All Group employees are required to comply with efficient use of natural light, the Bank chose to adopt occupational health and safety (OHS) requirements. an open-plan layout. Workspace lighting is in line In order to promote safe work practices and with requirements and a centralised climate control principles, the VTB Group trains its employees system ensures optimum air conditions. During the in the fundamentals of workplace safety. In 2010, move, the Bank took a number of measures to help VTB introduced a distance learning course that employees adapt to the new working environment. allowed employees to learn the theory of fire safety We held a number of orientation and briefing and other aspects of OHS from their desks. sessions and added a special section titled VTB employees also continue to receive practical The Tower to the Bank’s Intranet portal. The Tower training in the use of personal protective equipment section contains regularly updated information about and fire extinguishers. safety rules, engineering systems and services, the use of special equipment, the location of catering In 2010 the Group raised OHS quality at its regional outlets and transport options, amongst others. branches to a new level. This new approach included a discussion of new internal OHS regulations, joint work to draft a corporate OHS policy, a proactive attitude towards collaboration with the regulatory authorities and the implementation of a number of measures to improve workplace conditions.
6. In this section the terms «the VTB Group» or «the Group» apply to the VTB Group as defined by the VTB Group 2010–2013 Development Strategy. 3. Team
55 3.8. Protecting Employee Rights The VTB Bank labour union was created so that employees could exercise their right to freedom The main principles of VTB’s approach to employee of association and to facilitate the observance relations include respect for personal freedom, of employees’ labour and social rights and human rights and dignity, ensuring equal guarantees. In 2010, the average number of opportunities and preventing any form of members in the VTB Bank union was 405, or about discrimination. When acquiring new assets, 4 % of the Bank’s total headcount. The union has VTB integrates them into the overall HR management traditionally provided social assistance to its system on the basis of these universal principles, members and their families, including monetary applied across the entire Group. At the same time, allowances to those in difficulty. In 2010, the union specific HR management and employee relations paid great attention to organising treatment approaches may take into account the distinct at health resorts and recreation, as well as cultural features and traditional practices of the new assets. and health-boosting events for members and their VTB employees comprise a multi-national and at the families. same time a cohesive team of skilled professionals. This multi-national team, which facilitates cross- Any reorganisation of the Group’s newly acquired cultural communication and the sharing of assets is carried out in strict compliance with international best practices within the Group, is an respective national legislation and is driven solely important strategic advantage for VTB. The Group by the Group’s need for strategic development. operates and is managed on the principles of partnership and cooperation, which allows each employee to make his or her unique contribution to the development of VTB.
The VTB Group encourages the professional and personal development of its employees. There are a number of open employee associations at the Group, including, among others, the VTB Corporate University Club, various volunteer and sports groups and associations and the VTB Bank labour union. 56 Shared Values 4. Society 57
Society refers to the people living in the countries in which VTB operates, including our own employees. The long-term success of the VTB Group is inseparable from social well-being, including the state of culture and the arts, sports and health care. In addition to its core activities, VTB contributes to social development mainly through large-scale charity and sponsorship programmes. We also act as an “economic ambassador” for Russia in foreign countries and take active steps to prevent the use of our products and services for money laundering.
4.1. Management Approach 4.2. Supporting Culture and the Arts
The VTB Group supports socially significant initiatives Russian culture and the arts require long-term that are not directly related to its core activities and structured support. Over the last few years the Group HR management. This is done mainly through charity supported a number of large-scale projects aimed at and sponsorship. Overall, in 2010 the VTB Group developing theatrical and musical art, the visual arts, spent some RUB 1,366 billion on charitable activities cinematography and television in Russia. The Group and RUB 1,699 billion on sponsorship of various strives to support the promotion of Russian culture projects in Russia and abroad7. VTB Bank accounted abroad and the development of cultural relations for most of these expenditures. with other countries.
At VTB Bank, decisions on the financing of charity 4.2.1. Supporting Theatrical and Musical Art and sponsorship projects are made collectively by the Bank’s Charity Committee. At the Bank’s subsidiaries, VTB has long-term partnership relations with leading decisions on the provision of financial assistance Russian theatres, including the Mariinsky Theatre, are made by the management. When reviewing the Bolshoi Theatre and the Pyotr Fomenko applications for charitable support from legal Workshop Theatre. Other Group companies also persons, VTB relies on key criteria such as whether support leading theatres and musical institutions the application has a clear focus and targets specific in the regions in which they operate. VTB sponsors needs, the social significance of the proposed project both individual productions and events such as and opportunities for long-term cooperation. festivals, competitions and tours.
The Group has adopted general principles to prevent One of the most prominent cultural events of 2010 against the use of VTB products and services for sponsored by VTB Bank was a premiere of Die money laundering and the financing of terrorism. Fledermaus (The Bat), an operetta by Johann Strauss,
7. In this section the terms “the VTB Group” or “the Group” apply to the VTB Group as defined by the VTB Group 2010–2013 Development Strategy. VTB Bank. Social Report 2010
58 at the Bolshoi Theatre. The production was the result In the reporting year, VTB Bank (Armenia) sponsored of a long-term project and many years of attempts by Yerevan’s Stanislavsky State Russian Drama Theatre, the theatre to return the famous work by the Austrian VTB Bank (Azerbaijan) supported four productions composer to the Bolshoi’s stage. at the Baku Russian Drama Theatre and VTB Bank (Georgia) sponsored a concert by Dmitri In the reporting period, VTB Bank and its subsidiaries Hvorostovsky in Tbilisi. sponsored a number of outstanding theatre festivals. The Bank sponsored the 10th International Mariinsky In Western Europe, VTB Bank (France) was one of Ballet Festival held at the Mariinsky Theatre, the sponsors of a highly acclaimed Classical Music which was hailed as a triumph. This is the only Festival in Paris. Both world-famous musicians international-level classical ballet festival in Russia, and young talents took part in four concerts during which has traditionally attracted ballet fans from all the festival, performing works from the European over the world. VTB Bank also sponsored the Post and Russian classical repertoire. Efremov Space International Theatre Festival in memory of the famous actor and director Oleg 4.2.2. Supporting Visual Arts Efremov. The project meant Moscow theatregoers could see new productions by theatre companies VTB Bank is the leader among the Group’s from Russia, Latvia and Bulgaria. In 2010 for the companies not only in sponsoring theatres and sixth consecutive year, VTB North-West Bank was musical institutions, but also in supporting visual the general sponsor of the Baltic House International arts. For many years the Bank has maintained Theatre Festival, which is one of the most popular partnership relations with the State Russian theatre events in Russia. Museum in St. Petersburg, as well as the State Tretyakov Gallery and the Pushkin Museum of Fine In 2010, VTB supported a number of contests and Arts in Moscow. The Bank has sponsored significant awards aimed at finding new talent and rewarding exhibitions and other events organised by its partner outstanding artists. In October 2010, the 1st museums. International M. Magomaev Contest of Vocalists sponsored by VTB Bank was held in Moscow. In 2010, VTB Bank sponsored an exhibition of works Singers from Europe, the Middle East and the CIS by Isaac Levitan at the Mikhailovsky Palace all competed in the event. For the third consecutive in St. Petersburg. The exhibition, which was in year, VTB Bank sponsored the award ceremony of the celebration of the artist’s 150th anniversary, featured Dmitri Shostakovich Prize, one of the world’s most about 100 paintings and graphic works from the prestigious awards in music. The ceremony was held collections of the Russian Museum and the Tretyakov in the Great Hall of the Tchaikovsky Moscow State Gallery. The Bank also sponsored an exhibition titled Conservatory in April 2010. Pyotr Konchalovsky: the Evolution of the Russian Avant-Garde at the Tretyakov Gallery. The exhibition Thanks to VTB’s sponsorship, residents of the featured the artist’s best paintings from the countries in which the Group’s companies operate collections of the Tretyakov Gallery and the Russian can acquaint themselves with Russian theatrical Museum, and the most acclaimed works from several and musical art. For example, in 2010 VTB Bank private collections. Paintings from the collection sponsored a tour of the Pyotr Fomenko Workshop of the artist’s family, as well as documents and Theatre (Moscow) to Sevastopol. The tour was in aid personal items were displayed for the first time. of charity; the first performance was staged for the Another significant event noted by art historians crew of the Black Sea Fleet and their families, while and lovers of art was the exhibition of Alexander the proceeds from the second performance were Deineka’s works at the Tretyakov Gallery, donated to the Lavrenev Sevastopol Drama Theatre. also sponsored by the Bank. 4. Society
59 Outside Russia, VTB sponsored cultural events in VTB Bank also provided financial support to In the other countries, including an exhibition of Russian Family Circle, a nationwide campaign and film art from the collection of the Russian Embassy in festival, which was conducted in seven Russian Singapore. The exhibition was held in celebration regions between April and October 2010. of the second anniversary of VTB Capital’s successful The campaign was aimed at reviving moral and operations on the international investment market spiritual relationships and values in Russia, creating and the moving of the company’s Singapore branch a positive image of the family as a unit and to a new office. The exhibition featured socialist promoting family values among the young. realist paintings dating back to the late 1950s and It included a series of press conferences and talk- running through to the early 1980s, including shows, as well as a number of roundtable landscapes and still lifes by artists representing discussions under the banner Community Centres different generations. within Walking Distance. The campaign also included charity visits to schools for orphans and care homes VTB also contributes to the conservation and for the elderly, as well as the screening of films from restoration of sites of historical and cultural heritage. the In the Family Circle international family and Among a number of other heritage sites, VTB Bank children’s film festival and charity circus supports the restoration of the Valaam Monastery performances. and the Voskresensky New Jerusalem Monastery. In 2010, VTB Bank was the official sponsor of the TEFI 4.2.3. Supporting Cinematography and Television 2010 National Television Competition, the most prestigious awards in the Russian television industry. VTB Group supports significant projects and events Competition participants, which included television in the field of Russian cinema and television. companies, TV channels, studios, production centres and associations, submitted 623 works, In 2010, VTB Bank supported a number of cinema or approximately 25 % more than in 2009. projects aimed at preserving memories of the Second World War, also known in Russia as the Great Patriotic War. The Bank was the official sponsor of the film Burnt by the Sun 2: Exodus directed by Nikita Mikhalkov. The film’s premiere, which was held at the State Kremlin Palace, was dedicated to the 65th anniversary of victory. VTB Bank customers were offered the opportunity to be among the first to see the film and special exclusive screenings were organised for them in Donetsk, Odessa, Dnepropetrovsk and Kharkov. VTB North-West Bank sponsored the St. Petersburg International Cinema Forum, which was held in May 2010. The forum was attended by leading figures from Russian and international cultural and arts communities. In addition to the forum, a number of outdoor cinemas were set up that screened old war films free of charge for the general public. VTB Bank. Social Report 2010
60 4.3. Supporting Sport VTB Arena Park For many years VTB has supported sport in Russia. VTB Bank partners with the national federations of Dynamo Stadium was selected as one of the figure skating, volleyball, boxing, golf and chess to arenas to host the 2018 FIFA World Football Cup. name just a few. It also supports sports institutions, According to the agreement, VTB will invest sports-related NGOs, national teams, clubs and a total of some USD 1.3–1.4 billion in the unions. VTB supports both professional and amateur redevelopment of the stadium and surrounding sport. park.
4.3.1. Supporting Sports Associations and Events In late June 2010, the winning architect was named following an international design tender. VTB Bank sponsors sports federations promoting Experts selected a design proposed jointly by different sports in Russia. For example, in 2010 the Mikhail Posokhin, a distinguished Russian Bank signed a sponsorship agreement with the architect, and acclaimed Dutch architect Erick International Amateur Sambo Federation, committing van Egeraat. to sponsor a number of tournaments in 2010–2011. The Bank also cooperates with the Russian The redevelopment project is scheduled for Basketball Federation, the Russian Volleyball completion in 2016. The new complex, VTB Federation, the Russian Federation of Artistic Arena Park, will comprise a stadium, a multi- Gymnastics and the Russian Cycling Federation purpose indoor arena, a shopping and among others. entertainment centre, office premises and apartments. VTB Bank supports the development of sport not only in Russia but also internationally. For example, in 2010 it became an official partner of the International Federation of Gymnastics, sponsoring Major sports tournaments sponsored by VTB Bank four tournaments. The Bank also supports the in 2010 include the Russian National Motocross International Judo Federation and the International Championship and the 22nd Acrobatic Gymnastics Association of Athletics Federations (IAAF). World Championships, held in Wroclaw in July. In addition, in accordance with a sponsorship Support from VTB Bank helps Russian teams better agreement between VTB and the International Judo prepare for upcoming tournaments and maintain Federation, in 2010–2011 the Bank has and will more structured training programmes. For the third support a series of tournaments in major cities consecutive year, the Bank sponsored Russia’s including Moscow, Paris, Tokyo and Hamburg. national women’s basketball team. Over this period the team has improved its performance, winning 4.3.2. Developing Sports Infrastructure the European championship and an Olympic bronze medal. The Bank also sponsors the Dynamo and In 2010, VTB Bank and the Dynamo National Sports Krylia Sovetov football clubs, while VTB Bank and Physical Training Society signed an agreement (Georgia) is the general sponsor of Dynamo football on the establishment of VTB Arena, a joint company club in Georgia, and Lokomotiv, the national rugby to invest in a major project for the redevelopment of champion. the Dynamo Stadium and Petrovsky Park in Moscow. 4. Society
4.4. Supporting Health Care 61 World without Tears VTB Group pays special attention to supporting children’s health care in Russia. Since 2003 VTB Under the World without Tears programme, Bank has implemented World without Tears, VTB Bank finances the acquisition of expensive a corporate charity programme to provide support medical equipment, pharmaceuticals and to children’s health care institutions. supplies for children’s health care institutions. In addition, in an effort to create a positive VTB also continuously provides charitable support environment at the children’s health care to a number of associations for the disabled institutions, VTB organises festivals and to support their inclusion into society. presents gifts to the little patients on a regular basis.
4.5. Strengthening the International World without Tears is a long-term targeted Reputation of Russian Business programme aimed at meeting specific health care institution needs. Since the initiative began, VTB has provided support The Group’s activities in the CIS, Europe, Asia and to children’s hospitals and other health Africa help strengthen the reputation of Russian institutions in 17 cities of Russia. business and promote its interests abroad. All medical institutions participating in the programme are able to select The role of VTB as an “economic ambassador” the necessary equipment and materials of Russia is particularly important in the CIS and themselves. The Bank then pays directly for Georgia, where the Group develops its corporate and the selected goods, which eliminates any retail banking business. VTB provides financial middlemen. infrastructure for international trade between Russia, the CIS and Georgia. The presence of the Group’s In 2010, the Bank financed the purchase subsidiaries in Western Europe helps VTB customers of medical equipment for 16 children’s receive quality services on the international financial hospitals based in Moscow and another markets. 10 Russian cities, including Vladikavkaz, Yekaterinburg, Irkutsk, Kazan, Krasnodar, Our presence on the Chinese market is particularly Krasnoyarsk, Nizhny Novgorod, Novosibirsk, significant to the Group. VTB provides support to Perm and Samara. The Bank’s overall Russian companies working in China or planning expenditure on charitable aid to children’s to enter the Chinese market. In Vietnam and Angola, health care institutions in 2010 amounted VTB also provides financial infrastructure for Russian to RUB 16 million. businesses entering the local markets, at the same time supporting the development of trilateral relations by organising transactions between the Group’s subsidiaries in different countries business reception held in Dubai in celebration (e. g. Angola — Vietnam, China — Kazakhstan, of Russia Day. The event was hosted by Sergey Angola — China). Krasnogor, the Consul General of the Russian Federation in Dubai, and was attended by local The Group has been active on the investment market officials, diplomats, business representatives of the United Arab Emirates since 2009 through VTB and other honourable guests, as well as regional Capital. In 2010, VTB Capital was a partner for a managers from VTB Capital. VTB Bank. Social Report 2010
62 VTB strengthens the international reputation of Russian business not only through its core activities, Russia Calling! but also by organising its own business dialogue projects and participating in international economic The VTB Capital Russia Calling Investment forums and conferences, which bring together Forum, which was held in Moscow on October representatives from business and government from 5–7, 2010, was a significant success. different countries. The largest and most significant The event drew some 1,900 participants, project in this area organised by VTB in 2010 was the including almost 500 investors. Forty-six Russia Calling Investment Forum. speakers took part in plenary sessions and panel discussions, while over 1,000 In March 2010, VTB Capital took part in the Global meetings took place between the Russian Technology Symposium held annually at Stanford and international business elites and the University. The event brought together over 300 investment community. Vladimir Putin, the participants from different countries, including Prime Minister of the Russian Federation, entrepreneurs, financiers and technology developers. spoke during the opening day of the forum. Renowned Russian and foreign experts spoke In 2010, VTB Capital also took part in a CIS positively of the investment potential of the international economic forum titled Innovation as Russian economy, which boosted the country’s a Development Strategy for the CIS. The Forum was attractiveness to international investors. attended by senior government officials from Russia and the CIS, as well as representatives from industry VTB Capital’s annual forums help associations and NGOs and business executives. establish a direct dialogue between The event discussed prospects for the economic Russian companies and foreign investors, development of the CIS through to 2020 and ways and present an unbiased picture of the to advance economic integration within the CIS. economic development and investment climate in Russia to the international business Furthermore, as has now become tradition, community. The forums have a significant VTB Capital took part in the St. Petersburg positive impact on investment in Russia, International Economic Forum, becoming an official facilitating the inflow of foreign investment, partner for the event for the first time. The Forum the growth of the Russian stock market and the has become one of the most representative platforms creation of a positive image of the country as a for dialogue between the Russian and international whole. business communities. In 2010, senior executives from VTB Capital participated in plenary sessions One component of the Russia Calling project and panel discussions and held meetings with is VTB Capital’s Russia Calling London clients and press conferences. Over the course of Sessions. The sessions include individual the Forum, representatives from VTB Capital held meetings between senior executives from over 20 business meetings and 2 press events, Russian companies and leading investment with senior company executives giving a total of 12 funds, as well as discussions on topics interviews to different media outlets. of interest for the investment business. Participants in the discussions include The VTB Group also participates in major Russian and British government officials and international forums and events that discuss global representatives from business and academic economic issues. One event of note in 2010 was circles, investment companies and stock the G20 Toronto Summit, which discussed problems exchanges. faced by the global financial system and ways to 4. Society
63 “The Russia Calling Investment Forum is a unique In order to combine efforts and standardise platform for direct dialogue between Russian approaches in the field of AML/CFT, the VTB Group companies and investors. In our view, the key has adopted a unified policy defining common objectives of the forum include promoting Russian principles and rules with regard to this area. assets, building relations with foreign investors The policy conforms to the recommendations of the and improving the attractiveness of Russia as an Financial Action Task Force (FATF) and is applied by investment destination.” the Group even in countries in which legislation does not fully comply with FATF requirements. Yuri Soloviev, President of VTB Capital VTB Bank and all of its subsidiaries have put in place the necessary AML/CFT internal control tackle them. This was the first G20 summit where procedures, including customer due diligence business leaders presented their recommendations measures. In order to reduce the risk of involving to government delegates. Andrey Kostin, President the Group’s companies in money laundering and Chairman of the Management Board of VTB and the financing of terrorism, VTB uses special Bank, represented Russian business at the summit. risk assessment criteria, monitors the activities of its customers and has formal procedures for reporting transactions subject to mandatory 4.6. Combatting Money Laundering control. and the Financing of Terrorism The key factor governing the effectiveness of our AML/CFT procedures is the competence of our staff. In Russia, as in other countries around the world, The VTB Group runs regular training for its efforts to combat money laundering and the employees in this area on topics including relevant financing of terrorism are the responsibility of not legal requirements, internal control rules and only the government but also financial institutions. procedures and typical money laundering schemes In every country in which it operates, the VTB Group and ways to identify them, as well as customer complies with all relevant national legislation and identification methods. Employees are explained implements additional control procedures to reduce their responsibilities with regards to identifying the risk of the use of VTB products and services for money laundering and the financing of terrorism. illegal purposes. The Group uses various forms of training, including initial orientation, specialised training, VTB Bank officially stated its position with regard to skill development and workshops, among others. anti-money laundering and combatting the financing of terrorism (AML/CFF) in 2004 by signing the VTB Bank assesses AML/CFT compliance and Banks against Money Laundering declaration by employee knowledge on a regular basis. For example, Russian banks. The Bank committed to adhere to VTB Bank (Belarus) uses the following forms internationally recognised AML/CFT principles and of assessments: initial knowledge assessments cooperate with other signatories of the document (within a month of initial orientation), regular on the implementation of the requirements of knowledge assessments (at least once a year) and Russian legislation and expert organisations with extraordinary assessments (carried out according regard to AML/CFT. to the decision of a responsible bank official). 64 Caring about the Future 5. Environment 65
We, our team, and society at large all live and operate in the environment. Our goal is to preserve it for future generations. To achieve this, we strive to adopt effective management approaches that combine administrative and engineering measures to minimise our environmental footprint. The Group’s priorities in this area include using environmentally sound approaches in the construction and renovation of premises and ensuring the efficient use of the resources necessary for our operations.
5.1. Management Approach 5.2. Environmentally Sound Approach to the Construction In 2010, a new unit was created at VTB Bank, the Administrative Department, which is responsible for and Reconstruction of Buildings the management of administrative and housekeeping activities at the Bank and coordination of these In an effort to reduce its environmental footprint, activities across the Group. The Group Management the VTB Group uses environmentally sound Council has coordination commissions for property approaches in the construction and renovation management and logistical support, which include of its premises. The Group makes structured representatives from all of the Group’s companies. efforts to provide its organisational units with In April 2010, the coordination commission for optimum office premises that, along with other property management approved a property features, are extremely energy and resource management concept for the VTB Group, which efficient. VTB prefers to own its premises defined the Group’s approaches to the acquisition, rather than rent office space, since this allows sale, rent and construction of office premises. greater freedom to implement resource and energy efficient solutions and to monitor and control The VTB Group is working on automating its property resource consumption. management processes so as to improve the effectiveness of the management of administrative The Group also employs a responsible approach and housekeeping activities. In 2010, it was decided in its relations with construction and renovation to roll out a property management software system, contractors. VTB requires its contractors to use which, among other benefits, would help better track certified products and materials that meet current resource consumption and take measures to reduce health and safety standards, including fire safety it. A pilot project for the roll out of such a system will requirements. For example, in its construction be implemented at VTB Bank. It is expected that projects, VTB Bank strives to minimise the use of successful approaches identified during the project materials containing reactive chemicals, while trying will be replicated at other Group companies. to use natural materials, such as wood, stone, glass, metal and gypsum plaster, or modern inert chemical materials, as much as possible. In this way, the Bank VTB Bank. Social Report 2010
66 ensures that its employees work in comfortable and Furthermore, in 2010 VTB Bank developed an energy safe working environments of the highest standards. conservation and efficiency programme to ensure efficient energy use. VTB monitors and controls energy and resource consumption and uses state-of-the-art energy VTB Bank and its subsidiaries have traditionally paid efficient technologies and equipment in its significant attention to energy and resource construction and renovation projects. Furthermore, efficiency. VTB Bank was one of the first Russian it incorporates energy efficient solutions in the banks to completely replace incandescent light bulbs design of premises. VTB’s approach is exemplified with energy-saving fluorescent lamps. Currently the in the move of the head office of VTB Bank to a new Bank is beginning to introduce even more efficient building in the Federation Tower of the Moscow City LED and halogen lighting systems. International Business Centre. The new building and its engineering systems were designed and built VTB Bank also acts responsibly with regards with energy and resource efficiency in mind. to waste management. About 70 % of the Bank’s For example, the lighting and climate control system paper documents are sent to an archive and, efficiently adjusts indoor conditions depending at the end of the retention period, are collected on the time of day and weather. Automated control by third-party contractors for recycling. systems track and control power consumption 24 The percentage of sensitive documents that hours a day. A a result of the introduction of these are destroyed by shredding and pulping at the systems, electricity and heat consumption decreased request of the Bank’s structural units is 29 %. 15–20 %. About 1 % of documents are shredded with the resulting waste disposed of in regular waste The building’s design features, which include containers. Containers with municipal solid waste floor-to-ceiling glazing, provide for the maximum are sent to waste landfills. Mercury lamps, batteries, possible use of natural lighting. The use of operating supplies, vehicle tires and parts unfit for transparent office partitions also helps minimise further use are collected by licensed waste the need for artificial lighting and associated energy management contractors or vehicle maintenance consumption. companies for proper disposal.
VTB also practices a responsible approach in 5.3. Resource Efficiency managing its motor vehicle fleet. When replacing and Waste Management obsolete vehicles and selecting new ones, we consider environmental performance as well as cost and general performance. In defining The VTB Group strives to ensure efficient use of the environmental requirements for our vehicles, the resources necessary for its operations. To this end, Group relies, on Euro 3, 4 and 5 standards. At the we continuously implement administrative and end of 2010, 84 % of the 217 vehicles owned by VTB engineering measures aimed at reducing electricity, Bank had emission levels better than those defined heat, water and paper consumption by Group by the Euro 3 standard. companies. Another effective instrument that helps minimise In 2010, VTB Bank for the second time undertook a adverse environmental effects is the use of modern comprehensive energy audit of its office premises in information technology. By introducing electronic Moscow. The results of the audit, which was carried document systems, VTB Bank is reducing its paper out by independent contractors, revealed a high level consumption. The Bank uses electronic systems for of energy efficiency of the Bank’s premises. internal correspondence and document exchange; 5. Environment
Resource consumption by VTB Bank in 2010 67 Resource Measurement unit Consumption in 2010 Heat Gcal 31,394.75 Electricity GJ 52,730 Water m3 163,238
Use of VTB Bank corporate vehicles for business travel, 2009–1010 2009 2010 Fuel consumption, thousand l 869.6 920.7 Fuel consumption, GJ 31,305.6 33,145.2
since 2010, the Bank has been using electronic In order to improve its energy efficiency, VTB Bank copies for centralised registration of contracts. VTB (Armenia) has been replacing incandescent light Bank deploys modern software systems to support bulbs and traditional fluorescent lamps with LED these processes. In the reporting period, electronic lamps. The bank has a contract with a specialised document management systems were introduced at organisation that collects waste paper from the VTB Bank (Kazakhstan) and VTB Factoring. Bank’s offices for recycling. At present VTB Bank (Armenia) is preparing to roll out an electronic Taking into account the geographic spread of its document management system. operations, VTB actively promotes the use of videoconferencing, thus reducing the need for VTB Bank (Georgia) converted the heating system at business travel. The Group has adopted uniform its head office from diesel fuel to natural gas, which requirements for videoconferencing equipment used helped significantly reduce heating costs. At the across all of its companies. VTB Bank has been head office and sales outlets of VTB Bank (Georgia), developing its videoconferencing system since 2004; new lighting systems and gas and electricity meters currently the system encompasses all offices in have been installed. The new building of the bank’s Moscow, regional branches and subsidiary banks. central branch is equipped with motion sensor In 2010, total videoconferencing time exceeded lighting control systems, as well as state-of-the-art 6,700 hours. heating and ventilation systems, which provide for efficient use of power and gas. Many of the Group’s foreign subsidiaries also make efforts to improve their energy and resource efficiency. VTB Bank (Ukraine) has been implementing a system of measures for energy conservation, including completely replacing incandescent light bulbs with fluorescent lamps, as well as issuing regular reminders for employees about the need to switch off unused electrical devices and introducing regular office inspections to check that lights have been turned off. Uninterruptible power supply systems have been installed and commissioned in all outlets of the regional directorates of VTB Bank (Ukraine). VTB Bank. Social Report 2010
68 Objectives for 2011
Group management system Corporate governance
l Improve the Group management system to build a l Improve compliance with international corporate platform for future growth and ensure the transition governance best practice: from “strategic holding” to “global bank” management models – Update VTB Bank corporate policies with regards to corporate governance: the Code of Conduct, l The key development priorities for the VTB Group’s the Code of Ethics, the Dividend Policy, the management system include: Information Policy and the Regulation on the Procedure for Corporate Conflict Resolution – Building a global Corporate and Investment Banking business line — a single centre l Improve the quality of governance, management responsible for working with the largest customers and control: across all regions and countries of operation
– Develop and implement common corporate
– Building a global Retail Banking business line with governance standards across the Group VTB24 responsible for retail services (individuals
and small businesses) in all countries of operation – Introduce the concept of corporate governance across the VTB Group
– Building a strong corporate centre for the Group and integrating key control areas (risk, finance) – Further optimise the responsibilities of corporate executive bodies – Reducing costs and improving efficiency by
integrating IT management and operational – Develop a change management system management l Improve the transparency of the corporate governance system for stakeholders:
– Maintain and improve VTB’s national corporate governance rating
– Promote the Bank’s image as a corporate governance leader in Russia
l Improve the availability of information on the quality of VTB’s corporate governance system Objectives for 2011
CSR Management Communications 69 l Approve and implement a CSR Policy for VTB Bank l Promote the VTB Group on major social networks, including the creation of pages/channels dedicated to the Group’s activities on Facebook, YouTube and Relations with individual Twitter; ensure that the Group’s activities are covered shareholders on cultural, sports and charity websites
l Implement an integrated approach towards informing l Organise workshops for individual shareholders the public at large about the Group’s social activities; in a number of cities, including Ufa, Voronezh, involve the blogosphere in stakeholder discussions; Novosibirsk, Volgograd, Samara, Krasnodar, collect stakeholder feedback through various Stavropol and St. Petersburg web-based resources l Introduce new products and services for individual shareholders Motivating employees
l Introduce a management by objectives system Relations with institutional for managers and develop the existing management shareholders by objectives system for key VTB Bank employees
l Amend the motivation and remuneration system l Develop recommendations to determining the size to bring it in line with changes in business planning of dividends to ensure better predictability for shareholders and investors with regards to the size of future dividends Attracting talent l Diversify the range of VTB institutional investors l Identify the most talented students at relevant in terms of geography and investment strategy universities and include them on significant Group projects involving senior managers l Expand analytical coverage of VTB stock by major investment banks and brokerage houses l Create a database of Russian specialists working at foreign banks and financial companies and use it to l Further enhance the transparency of external fill vacancies within the Group communications l Adopt a proactive approach to investor communications VTB Bank. Social Report 2010
70 Training and developing Environmental protection employees and resource efficiency
l Launch the VTB Academy, a training programme l Introduce an automated property management targeting the Group’s senior executives and using the system services of European and American business schools and the world’s leading business training providers l Consolidate management areas by merging the Group Management Council’s property management l Build a succession pool in accordance with the committee and the logistics support committee needs of the Group’s divisions; train and develop pool members l Optimise the use of office premises, including by selling unnecessary property and cancelling rental contracts
l Introduce electronic document management systems at the Group’s companies Selected Awards Won by VTB Group Companies in 2010
Selected Awards Won by VTB Group
Companies in 2010 71
VTB Bank Best Russian Bank in the Best Emerging Market Global Finance Magazine Banks category
The VTB Corporate University Club won Trainings INDEX 2010 Awards in the Effective Solution in the Field of Employee Training, Development and Performance Improvement category
Best Corporate Bank in the Results Financial Olympus 2010 National Awards and Success category
Best Russian Trade Bank 2010 Trade Finance Magazine
Best Investor Meetings IR Magazine Russia & CIS Awards 2010 in partnership with Thomson Reuters Extel
Best Annual Report in the Financial Sector RTS Stock Exchange
Best Annual Report in the Financial Sector Securities Market Magazine jointly with the Russian Ministry of Finance and with support from the MICEX Stock Exchange
Winner in the special Socially Responsible Attitude to Culture Socially Responsible Companies Award Ceremony 2010 category
Quality Recognition Award for USD Transactions JP Morgan Chase Bank N. A., New York
Leader in the Call Centre Industry Crystal Headset Awards
VTB24 Best Mortgage Bank Financial Olympus National Awards
Grand Prix in the Bank of the Five Years 2005–2010 category Russia’s Financial Elite 2005–2010 Awards
Best Russian Bank Business New Europe Magazine
Winner in the Best Forex Bank-Broker category Forex Expo Awards 2010
Russian Private Bank of the Year SPEAR’S Russia Wealth Management Awards
VTB Capital Best Russian Equity House Euromoney Awards for Excellence 2010 Best Russian Debt House
Most Innovative Investment Bank Investment Banking Award by The Banker Magazine from Central and Eastern Europe 2010
Best Investment Bank in Russia EMEA Finance Best M&A deal in CEE: Uralkali / Silvinit merger
Largest Investment Company Financial Olympus 2010 National Award in the Result and Success category
#1 Russia Domestic Bonds Underwriter Bloomberg
#1 Eurobond Bookrunner in Russia Dealogic #1 ECM Bookrunner in Russia and the CIS
#1 DCM Bookrunner in Russia and the CIS Thomson Reuters #1 ECM Bookrunner in Russia and the CIS VTB Bank. Social Report 2010
72 VTB Capital Best Investment Bank in Russia Global Finance Magazine
Global PPP Transaction of the Year: the Pulkovo Airport Project Infrastructure Investor
European Airport Deal of the Year: the Pulkovo Airport Project Project Finance, Euromoney
Best High Yield Bond Deal of the Year in Southeast Asia Alpha Southeast Asia Deal & Solution Awards
Best Russian DCM Team CBonds Best Eurobond Bookrunner in Russia
Reliability Rating for VTB Capital Asset Management: The National Rating Agency AAA (the highest reliability rating)
VTB Capital Asset Management: The Most Ambitious Company National League of Asset Managers
#1 Research Team in Russia Thomson Reuters Extel Survey 2011 #1 Brokerage Company in Russia
Deal of the year in Transport category: Infrastructure Journal the Pulkovo Airport Project
VTB Leasing Largest Leasing Company in Russia 2010 9th Professional Conference Leasing in Russia 2010 Leader in the Aircraft Leasing Market 2010 Leader in the Rolling Stock Leasing Market 2010
VTB Pension Fund Winner in the Stable Reliability category 3rd Annual Public Awards Financial Pearl of Russia 2010
VTB Bank Most Innovative Bank in Ukraine MoneyGram international money transfer system (Ukraine) Best Foreign Bank Migom international money transfer system
Most Professional Bank Financial Oscar Awards by the newspaper Business
VTB Bank Best Bank Supporting Entrepreneurship Best Entrepreneur National Awards (Belarus)
VTB Bank Progress Award in the Integration Best Participants of Azerbaijan-Russia Trade and (Azerbaijan) in the Economy of Azerbaijan category Economic Relations Awards
VTB Bank Quality Recognition Award JPMorgan, Citibank (Germany)
VTB Bank Best Bank Cooperating with the Office Armenian Financial Ombudsman’s Office (Armenia)
Winner in the Best Exchange Member NASDAQ OMX Armenia Exchange. on the Foreign Currency Market category Best Exchange Member 2010 Awards About this Report
About this Report 73
This Social Report for the VTB Group for 2010 (hereinafter, the Report) is the third social report published by OJSC VTB Bank (hereinafter, VTB Bank or the Bank).
The objectives of the preparation and publication The financial information presented in this Report of this Report include an analysis of the corporate applies to the VTB Group as defined by the social responsibility performance of the VTB Group consolidated financial statements of VTB Bank (hereinafter also referred to as the Group or VTB) prepared in accordance with International Financial in the reporting period by the Group’s management Reporting Standards (IFRS). and communicating information about this performance to stakeholders. The content of this Report has been defined on the basis of the principles of materiality, stakeholder The reporting period of this Report is the calendar inclusiveness, sustainability and completeness year beginning January 1, 2010 and ending as defined by the Global Reporting Initiative’s December 31, 2010. In future, VTB plans to continue Sustainability Reporting Guidelines (hereinafter — publishing annual social reports, which have become the GRI Guidelines). an integral part of the Group’s annual reporting process. The following procedures were used to identify topics to be covered by this Report: The target audience of this Report includes government authorities, shareholders and investors, l Interviews with relevant managers; customers and employees. l An analysis of the content of non-financial reports Unlike the Social Reports of VTB Bank in 2008 issued by similar companies; and 2009, the boundary of this Report has been expanded to include the VTB Group. The expansion l An analysis of media materials and VTB’s corporate of the Report boundary was necessary given the publications; increased geographical diversification of the Group’s operations and increasing demands for information l An analysis of VTB’s internal policies and regulations. from VTB stakeholders, particularly within the context of the partial privatisation of VTB Bank’s stock. In order to ensure the quality of this Report, the VTB Group relied on the principles of balance, Unless stated otherwise, the qualitative information comparability, accuracy, timeliness, clarity and presented in this report applies to the VTB Group as reliability as defined by the GRI Guidelines. defined by the VTB Group 2010–2013 Development Strategy. VTB Bank. Social Report 2010
74 Responsibility for the collection and consolidation This report has been prepared in accordance with the of information for this Report was distributed across requirements of GRI Application Level C (see the GRI the functional units of VTB Bank. The unit responsible Content Index on page 75–77). for the preparation and publication of this Report was the Advertising and Marketing Division of VTB Please send your comments and suggestions Bank. The information management system used in regarding this Report to Elena Melikhova in the preparing this Report provides for an integrated use Advertising and Marketing Division of OJSC VTB Bank of different forms and methods of data presentation (email: [email protected]; and consolidation. phone: +7 (495) 775–54–54, ext. 1–46-48). GRI Content Index (G3.0)
GRI Content Index (G3.0) 75
GRI disclosure Disclosure definition Report section Pages 1. Strategy and analysis
1.1 Statement of the most senior decisionmaker of the organization about the relevance Statement of the President and Chairman 7–9 of sustainability to the organization and its strategy 2. Organisational profile
2.1 Name of the organisation Chapter 1. We 11
2.2 Primary brands, products, and/or services Chapter 1. We 11–12 Chapter 2. Business
2.3 Operational structure of the organisation, including main divisions, operating companies, Chapter 1. We 16 subsidiaries, and joint ventures
2.4 Location of organisation’s headquarters Chapter 1. We 12
2.5 Number of countries where the organisation operates Chapter 1. We 11
2.6 Nature of ownership and legal form Chapter 1. We 21
2.7 Markets served by the organisation Chapter 1. We 11–12
2.8 Scale of the reporting organisation Chapter 1. We 11–12, 28, Chapter 2. Business 44 Chapter 3. Team
2.9 Significant changes during the reporting period regarding size, structure, or ownership This is the first Social Report covering the performance of VTB Group
2.10 Awards received in the reporting period Appendix 1. Awards 71–72 3. Report parameters
3.1 Reporting period for information provided About this Report 73
3.2 Date of the most recent previous report About this Report 73
3.3 Reporting cycle About this Report 73
3.4 Contact point for questions regarding the report or its contents About this Report 74
3.5 Process for defining report content About this Report 73
3.6 Boundary of the report About this Report 73
3.7 Any specific limitations on the scope or boundary of the report About this Report 73 VTB Bank. Social Report 2010
76 3. Report parameters
3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, About this Report 73 and other entities that can significantly affect comparability from period to period and/or between organisations
3.10 Explanation of the effect of any re- statements of information provided in earlier reports, There were no re-statements and the reasons for such re-statement
3.11 Significant changes from previous reporting periods in the scope, boundary, About this Report 73 or measurement methods applied in the report
3.12 Table identifying the location of the Standard Disclosures in the report About this Report 75–77 4. Governance, commitments, and engagement
4.1 Governance structure of the organisation, including committees under the highest Chapter 1. We 21 governance body responsible for specific tasks, such as setting strategy or organisational oversight
4.2 Indicate whether the Chair of the highest governance body is also an executive officer Chapter 1. We 21
4.3 For organisations that have a unitary board structure, state the number of members Chapter 1. We 20 of the highest governance body that are independent and/or non-executive members
4.4 Mechanisms for shareholders and employees to provide recommendations or direction Chapter 1. We 19, 22–25, to the highest governance body Chapter 3. Team 55
4.8 Internally developed statements of mission or values, codes of conduct, and principles Chapter 1. We 3 relevant to economic, environmental, and social performance and the status of their implementation
4.14 List of stakeholder groups engaged by the organisation Chapter 1. We 19
4.15 Basis for identification and selection of stakeholders with whom to engage Chapter 1. We 19
4.16 Approaches to stakeholder engagement, including frequency of engagement by type Chapter 1. We 19 and by stakeholder group GRI Content Index (G3.0)
Performance indicators 77 Economic performance
EC3 Coverage of the organisation’s defined benefit plan obligations Chapter 3. Team 51
EC8 Development and impact of infrastructure investments and services provided primarily for Chapter 2. Business 28–39, public benefit through commercial, in-kind, or pro bono engagement Chapter 4. Society 57–61
EC9 Understanding and describing significant indirect economic impacts, including the extent Chapter 2. Business 28–39 of impacts
Environmental performance
EN3 Direct energy consumption Chapter 5. Environment 67
Labour practices and decent work
LA2 Total number and rate of employee turnover Chapter 3. Team 44
LA3 Benefits provided to full-time employees that are not provided to temporary or part-time Chapter 3. Team 51 employees
Product responsibility
PR5 Practices related to customer satisfaction, including results of surveys measuring customer Chapter 2. Business 39–41 satisfaction
Society
SO1 Nature, scope, and effectiveness of any programs and practices that assess and manage Chapter 4. Society 57-63 the impacts of operations on communities, including entering, operating, and exiting
SO5 Public policy positions and participation in public policy development and lobbying Chapter 1. We 21–22 Chapter 2. Business
Indicators of the financial services sectoral supplement
FS1 Policies with specific environmental and social components applied to business lines Chapter 1. We 17, 66 Chapter 5. Environment
FS6 Percentage of the portfolio for business lines by specific region, size and by sector Chapter 1. We 11–12, 28 Chapter 2. Business
FS13 Access points in low-populated or economically disadvantaged areas by type Chapter 2. Business 39 Contact Details
VTB Bank (open joint stock company) OJSC VTB Bank
Address: 29, Bolshaya Morskaya str., St. Petersburg 190000, Russia
Phones: 8 (800) 200-77-99, +7 (495) 739-77-99
Fax: +7 (495) 258-47-81
Websites: www.vtb.ru, www.vtb.com
E-mail: [email protected]
Please forward your comments and suggestions regarding this Report to Elena Melikhova, Advertising and Marketing Department of OJSC VTB Bank
E-mail: [email protected], phone +7 (495) 775-54-54, ext. 1-46-48