MAINTAINING A BALANCE OF INTERESTS
SUSTAINABILITY REPORT | 2019
2 Contents
Statement of Andrey Kostin, VTB for the environment 82 President and Chairman Financing environmental projects 83 of the Management Board 4 Environmental impact management 88 Charitable environmental projects 93 VTB Group in 2019 8 VTB for society 96 Values 9 VTB Group in 2019: key highliths 10 Managing sponsorship and charity projects 97 Credit ratings of VTB Bank 11 A Sporting Country 100 Patriotism and a Country of Traditions 104 A Cultured Country 105 About VTB Group 14 An Educated Country 108 A Country for Business 111 VTB Group – mission and vision 16 A Healthy Country 114 Reliability as a core value 18 Internal control and business ethics 21 CSR management 23 About the Report 116 Contributing to the UN Sustainable Development Goals 27 Scope of the Report 116 Stakeholder engagement 30 Approach to determining material topics 118
VTB for clients 36 Appendices 122
Support for socially important businesses Membership in business associations 122 and cooperation with governmental agencies 40 Abbreviations 124 Promoting small and medium GRI Standards reference table 125 enterprise development 48 Providing socially important retail services 52 Availability and quality of banking services 58 Contact information 130
VTB for employees 64
Personnel management 65 Talent training and development 68 Employee motivation and remuneration 74 Corporate culture and internal communications 76 Occupational health and safety 79
3 Sustainability Report / 2019
Statement of Andrey Kostin, President and Chairman of the Management Board
Dear Reader, This integration dramatically improved our manageability During the year, we worked towards strengthening while benefiting clients. Today we offer a full range our position in the SME segment, a field whose I am pleased to share with you the VTB Group’s of standardised services available in any VTB office success is of great importance for the economy, Sustainability Report for 2019. This is an important A major milestone across our network, covering almost the entire especially at the municipal and regional levels. In 2019, document that embraces one of our essential in 2019 was country. In 2019, SMEs accounted for about 34% of corporate every fourth principles, that of responding to national and adopting a new loans. The Bank continued to rank among Russia’s mortgage loan global challenges in keeping with the Sustainable Development The merger saw the Bank continue to operate keeping top three leaders for the volume of loans extended in Russia Development Goals and the interests Strategy in mind the social and economic factors important to this segment. was granted of all stakeholders – clients, partners, employees, for the VTB Group to a wide variety of stakeholders in the regions by VTB shareholders, the public, and the country and countries served by the Bank. VTB seeks In 2019, VTB launched a digital factory and as a whole. to expand its portfolio of projects that create jobs a product factory to promote working with SMEs. and improve lives. Traditionally, the Bank placed This helped us accelerate targeted product The past year was a successful one for VTB. We met great emphasis on developing the real economy: development and expand our remote services, all the objectives we sought to achieve, making a net agriculture, community and transport infrastructures, including non-banking ones such as educational profit of over RUB 200 billion, a record high for VTB. and housing construction. A significant event programmes geared towards entrepreneurs. During the year, we served a total of over 14 million in this context was the construction of the M-11 Neva clients across Russia. (Moscow – Saint Petersburg) motorway completed The innovation-based development of remote banking in 2019, an initiative that saw the active involvement channels is a key driver in meeting the interests A major milestone in 2019 was adopting a new of VTB. The opening of the motorway provided of our clients: 60% of them use VTB Online Development Strategy for the VTB Group, building a powerful stimulus to the economic activity in several and the Bank’s app a lot. on our in-depth analysis of global and industry Russian regions. changes and envisioning a profound transformation Every year we allocate substantial resources to make of our business model. We pursued our key objective The amount of housing-construction funding our information systems efficient, stable, and reliable. of creating by 2022 a highly effective organisation by the VTB Group reached RUB 150 billion in 2019, that has high employee engagement and is attractive accounting for about 20% of Russia’s total. In 2019, VTB’s most popular digital services include My Smart Andrey Kostin to clients and open to change. We estimate that every fourth mortgage loan in Russia was granted City, an app launched in 2019 to bring Moscow’s city President and Chairman in three years’ time, the large-scale efforts we started by VTB, while VTB’s residential loan portfolio grew services and VTB Bank’s services together under one of the Management Board in 2019 will lead us to a profitof over RUB 300 billion by 20%, totalling RUB 1.7 trillion. roof in an easy-to-use format. The Banker named with a ROE of 15%. the app the best technology product of the year. The Bank takes an active part in programmes Another milestone in 2019 was the merger improving housing affordability, including mortgage One of the pillars of the Bank’s sustainable of VTB Bank’s retail and corporate networks effective programmes for families receiving maternity capital, development, one that encompasses January 1, resulting from the largest structural large and military families, and residents of the Far the broad context of social and economic relations, transformation seen in Russia’s banking system to date. Eastern Federal District. is our employees’ professionalism coupled
4 5 Sustainability Report / 2019
with our highly developed corporate culture. A Group-wide process was started in 2019 to develop The Bank continued to donate to major non-profit an Ilya Repin exhibition (over 600,000 attendees Our comfortable work environment, employee a comprehensive approach to green financing organisations that work to preserve Russia’s in Moscow and 300,000 in Saint Petersburg), support programmes, and equal opportunities and to assessing the environmental impact of loan- nature and biodiversity, including the Worldwide and the seventh season of Moscow’s Velobike for professional and personal growth all help supported projects. The main objective was to increase A Group-wide Fund for Nature and the Amur Tiger Centre. bikesharing service (five million bicycle rentals). In 2019, us remain highly attractive as an employer. the effectiveness of VTB’s participation in promoting process was started Donations to environmental projects totalled the Bank spent VTB continued to run World without Tears, the global and national climate agenda. The year’s in 2019 to develop about RUB 143 million. a total of a corporate charitable programme to purchase In 2019, VTB put a large project in place to work major projects included VTB Capital taking part a comprehensive equipment for children’s hospitals. Since with our integrated network’s leadership pool, as a co-organiser in the first placementof Russian approach The VTB Group’s charity and sponsorship activities 16.3 the programme’s launch, more than 100 hospitals involving more than 1,700 participants. The year Railways’ green bonds for a total of EUR 500 million to green financing in 2019 focused on six programmes in place since RUB billion in 52 regions across Russia have received financial also saw the Bank’s principal training programmes as well as VTB Bank financing the construction and to assessing the previous year: on 562 sponsorship support to purchase high-tech equipment. The total updated with components that help shape of solar and wind power facilities in several Russian the environmental and charity projects • A Sporting Country; amount granted stands at RUB 400 million (with more a culture of leadership and efficiency in keeping regions. impact than RUB 75 million provided in 2019). with the highest service standards in interactions of loan-supported • Patriotism and a Country of Traditions; with external and internal clients. The employee The Bank also continued to work on reducing projects VTB is turning 30 in 2020. I am confident that • A Cultural Country; engagement survey we conducted in 2019 showed its environmental impact. This included starting the success we have achieved thus far and our team’s that 83% of our employees fully share the VTB a big project to switch from physical to electronic • An Educated Country; concerted efforts will let the Group maintain Group’s mission, vision, values, and strategic goals. documents, with a view to processing 80% of client and strengthen its position as a leading Russian • A Country for Business; transactions electronically in all 1,500 of our offices financial institution during this anniversary year while As a large employer interested in developing a quality by 2022. • A Healthy Country. living up to the expectations of clients, shareholders, educational system, VTB makes sustained efforts partners, and all other stakeholders and making a new to support Russia’s higher-education system. An important objective VTB pursues in sustainable This approach proved efficient and contributed contribution to solving national and global sustainability In 2019 we entered into eight new educational development is preserving the ecosystem of the Arctic. to implementing the UN Sustainable Development problems. cooperation agreements, bringing the number Since 2014, VTB Bank has acted as the Russian Goals. As part of the comprehensive improvement of our partner schools to 180. One of our educational Executive Agency for the Arctic Council Project of our sponsorship and charity management system partners is St. Petersburg University’s Graduate School Support Instrument, a fund that aims to finance in 2019, we updated the Bank’s key regulations of Management, Russia’s leading business school. projects reducing pollution in the Arctic. In 2019, governing these activities. It holds a unique set of international accreditations, VTB Bank joined the working group for Ecology, In 2019, the Bank spent a total of RUB 16.3 billion enjoying steadily high international rankings. a national project of Russia’s Ministry of Natural on 562 projects. These included the VTB Kremlin Cup Sincerely, In 2019, Olga Dergunova, VTB’s Deputy President Resources and Environmental Protection to preserve Tennis Tournament (with an audience of over 60,000), Andrey Kostin and Chairman of the Management Board, was biodiversity across designated natural areas of federal appointed the school’s director. importance.
6 7 Sustainability Report / 2019
VTB Group in 2019
VALUES MISSION WE HELP PEOPLE MAKE THEIR PLANS A REALITY BY CREATING THE BEST FINANCIAL SOLUTIONS. WE ARE A TEAM OF PROFESSIONALS, WORKING FOR THE BENEFIT OF OUR CUSTOMERS AND THE COUNTRY AS A WHOLE.
WE VALUE WE WORK WE ARE OUR CUSTOMERS AS A TEAM RESPONSIBLE FOR OUR RESULTS
We put our customer We respect and trust We are result-, needs first. We trust each other. We support not process-oriented. our customers and strive each other and help Each of us is responsible IDENTITY to earn their trust. our colleagues grow. for our contribution We listen to our We achieve common to the common goals. THE VTB GROUP IS A LEADING RUSSIAN-BASED customers and act upon goals. We openly discuss INTERNATIONAL FINANCIAL GROUP. their feedback. our successes and failures.
VISION WE ARE WE CONTINUOUSLY A UNIVERSAL FINANCIAL GROUP THAT IS DEVELOPING BOTH DYNAMICALLY AND SUSTAINABLY, ONE THAT IS FOCUSED ON BEING THE FIRST-CHOICE PROACTIVE IMPROVE OUR FINANCIAL PARTNER FOR ITS CUSTOMERS AND WHICH PROVIDES THE PERFORMANCE MOST CONVENIENT AND CUTTING-EDGE SOLUTIONS TO THEIR NEEDS. We are not indifferent We are open to change. to what we are doing. We start change with We contribute proactively ourselves. We have no fear when dealing with shared to experiment. tasks. We go beyond our formal duties.
8 9 Sustainability Report / 2019
VTB GROUP IN 2019: KEY HIGHLIGHTS
VTB BANK CREDIT RATINGS
countries 159K 18 1.6K private VTB Group worldwide branches in Russia shareholders
61 % 14 million 68.6K BBB– of ordinary shares clients in Russia average headcount state-owned
18K 45 RUB 9.6 billion ATMs in Russia academic hours spent on charity Вaa3 of training per Group employee
32 % RUB 712 billion 923 decrease in fuel consumption in mortgage loans issued sponsorship and charity across the Group projects ruAAA
10 11 EXPANDING OUR HORIZONS TO KEEP GROWING
159К PRIVATE SHAREHOLDERS
VTB GROUP’S NEW DEVELOPMENT STRATEGY:
A NET PROFIT OF OVER RUB 300 BILLION WITH AN ROE OF 15% BY 2022 Sustainability Report / 2019 1 2 3 4 5 6 7 8 About VTB Group
The VTB Group is Russia’s second largest financial “The Group’s leadership did a great job in 2019, having About group and a leader in the global financial services thoroughly analysed the development path of the Russian market. The Group comprises over 20 financial banking market and opportunities for the VTB Group and credit organisations operating across all major to strengthen its position. This enabled us to set new ambitious VTB Group segments of the financial market. 18 countries of operation goals to significantly enhance our business model. Our new The Group operates outside Russia through worldwide development strategy must be implemented based on significant subsidiaries and associated banks that are located internal transformation. That is why Group executives found it necessary to update our mission, vision, and values while 18 Reliability as a core value in a number of countries in the CIS, Europe, and Asia, which supports the development of international maintaining our focus on the transparency of the Bank’s cooperation and the promotion of Russian companies corporate governance system and the Group’s high business 21 Internal control and business ethics in global markets. At the end of 2019, the Group’s ethics standards”. banking and investment banking business was active in 18 countries around the world. 23 CSR management Yuri Soloviev The year 2019 became momentous for the VTB Group: First Deputy President and Chairman of the Management Board, VTB Bank target performance indicators for the prior strategy 27 Contributing to the UN Sustainable were achieved ahead of schedule, and in late April Development Goals the VTB Group’s Supervisory Council approved the Group’s new Development Strategy for 2019– 2022. The strategy is built around three main Another achievement in 2019 was the completion Among the most significant developments 30 Stakeholder engagement priorities: of a merger of VTB Bank’s corporate and retail in the reporting period was an update to the Group’s regional networks, which resulted in sales growth mission, vision, and values. • Intense growth of the banking business, across both corporate and retail segments, cost complemented by initiatives related to the digital optimisation, and an increase in ROE. economy; • A focus on the interests of our clients and service quality; • New trends: increased efficiency, digitalisation, and advanced technology1.
1 Detailed information on the Development Strategy for 2019–2022 is available in the VTB Group’s Annual Report for 2019.
14 15 Sustainability Report / 2019 1 2 3 4 5 6 7 8 About VTB Group
VTB GROUP – MISSION AND VISION We help people make their plans a reality by creating the best financial solutions. We are a team of professionals, working for the benefit of our clients and the country as a whole.
The VTB Group follows a variety of operating models so that every client UNIVERSAL FINANCIAL GROUP finds the perfect solution. IMPROVING CUSTOMER FOCUS
A universal financial group that is developing Our clients see us as the go-to bank offering timely and relevant banking both dynamically FINANCIAL PARTNER OF FIRST CHOICE products based on our deep insights into DIGITALISING THE BUSINESS and sustainably, one our clients’ needs. that is focused on being the first-choice financial partner for its customers and which provides We are a high-tech, multi-channel bank the most convenient running both remote banking tools and cutting-edge solutions and an efficient branch network. We offer CONVENIENT, CUTTING-EDGE SOLUTIONS personal customer service in the digital world. DEVELOPING IN THE DIGITAL ECONOMY to their needs.
We support our clients in the digital world and integrate our services into their everyday lives. We have an extensive MORE THAN A BANK CREATING A CUTTING-EDGE OPERATING PLATFORM partner network complementing our sales channels.
We quickly respond to change thanks to our flexible operating platform and our adherence to the principles AGILE BANK of accountability, delegation, CREATING A HIGHLY EFFECTIVE ORGANISATION AND CULTURE and partnership within the Group.
16 17 Sustainability Report / 2019 1 2 3 4 5 6 7 8 About VTB Group
RELIABILITY AS A CORE VALUE VTB BANK’S CORPORATE GOVERNANCE SYSTEM
The VTB Group created a highly efficient Corporate governance principles and procedures corporate governance system aimed are stipulated in the Corporate Governance Code 1 at achieving long-term goals that have been of VTB Bank , which is aimed at ensuring the Bank’s performance and protecting the interests of all established for the Group’s companies while t shareholders regardless of the number of shares Appro ensuring transparent decision making by its p t t tutor they own. Au tor Au t o o governing bodies. port
“Our absolute priorities are to guarantee equal treatment of all shareholders and ensure observance of their rights to govern
the Bank, receive dividends, and obtain complete information t on the Bank’s operations. For this purpose, the Bank created port a highly efficient system for corporate governance and internal control. The Supervisory Council oversees the Audit Committee, which, together with the Internal Audit Department, supports tr t the management function in ensuring the smooth running t t of the Bank’s operations. The Statutory Audit Commission orpor t Go r b r monitors the Bank’s financial and economic affairs. o tt port port pr p r u r pr t t pr p r The efforts put in by the Shareholders’ Consultative Council r o t o r o t o o or t r o r t in the reporting period are well worth mentioning. The members u r t o actively engaged with shareholders and spoke at all of the year’s t o tt principal shareholder events, including Investor Days in Moscow port and Saint Petersburg. Every year the Banks sets new goals Au t pr p r r o to improve the corporate governance system and works steadily o tt r o t o VTB up r or ou to achieve them”. t r o o t u r t o
Igor Repin Member of the Supervisory Council and Chairman of the Shareholders’ Consultative Council t t port port port port Appro
At the Annual General Meeting of Shareholders held Shareholders also elected a new Statutory in June 2019, a new Supervisory Council was elected, Audit Commission, which retained a seat which includes five directors who are not affiliated for a representative of minority shareholders. with the principal shareholder, including four representatives of minority shareholders. According to the Bank, this makes the Supervisory Council as independent as possible while also allowing t r b r the interests of a wide range of shareholders to be orpor t Au t r t r represented. p rt t r t r o VTB t Bo r
1 The Corporate Governance Code is available on the Bank’s official website port at https://www.vtb.ru/akcionery-i-investory/raskrytie-informacii/ustav-i-vnutrennie-dokumenty.
18 19 Sustainability Report / 2019 1 2 3 4 5 6 7 8 About VTB Group
In 2019, the Bank continued implementing the action in the National Corporate Governance ranking, plan to enact the Corporate Governance Code an achievement showcasing a well-developed INTERNAL CONTROL AND BUSINESS ETHICS adopted by the Bank’s Supervisory Council. The code corporate-governance system. As part remains the main source of guidance for improving of the monitoring, various components of the Bank’s Ensuring the highest business ethics standards ANTI-CORRUPTION AND the Bank’s corporate governance system1. corporate governance system were analysed, 7++ and transparency of the VTB Group’s BUSINESS ETHICS rating such as shareholder rights, the performance operations is an integral part of the Group’s A key challenge for the internal control system in the National The corporate-governance initiatives in place of management and oversight bodies, information corporate culture. Strict adherence to legal is the mitigation of corruption risk. In 2019, the Bank Corporate helped the Bank continue to appear high (7++) disclosure, and corporate social responsibility. requirements and financial transaction updated its anti-corruption policy3, which stipulates Governance ranking security are achieved by operating an efficient the basic rules and steps to prevent corruption. internal (compliance) control system2. Mandatory basic training was developed for new employees in order to provide them with information EXTERNAL EVALUATION OF THE WORK OF VTB BANK’S about key provisions of this document. Current Bank employees also receive anti-corruption training. SUPERVISORY COUNCIL As part of the joint effort to prevent involvement in questionable transactions related to money A total of 11,300 of the Bank’s employees received this training in 2019. In 2019, an external evaluation of the Supervisory Council’s work was conducted for the laundering, terrorist financing, and WMD first time. The evaluation also covered the work of the Supervisory Council committees, proliferation, VTB Group companies are following The Bank also implemented the Code of Ethics4, the Chairman of the Supervisory Council, and the Corporate Secretary of the Bank. a single approach to creating and enhancing which stipulates business conduct and ethics The Russian Institute of Directors (RID) was hired to conduct the evaluation. The RID an associated internal control system. principles and regulations that are mandatory is recognised for its expertise in the field of corporate governance and for its performance for all employees and members of the Supervisory assessments of boards of directors in Russian companies. To standardise its approaches to maintaining an internal control system that prevents money Council, including principles to prevent corruption The experts evaluated the Supervisory Council’s performance highly. The evaluation laundering, terrorist financing, and WMD in the course of duty performance. Adhering concluded that the Supervisory Council was highly engaged in decision-making on key issues proliferation, the Group’s principal bank, VTB, to the Bank’s Code of Ethics is mandatory concerning the Bank’s operations while maintaining its focus on strategic management. took a series of steps and recommended expanding and unconditional for all employees. If standards At the same time, the evaluation highlighted areas in which the activities of the Supervisory them across Group companies: of ethics stipulated by the Code of Ethics Council and its committees can be improved. are higher than those defined by business practice • As part of improving identification procedures and applicable legislation, the Bank shall adhere Findings from the evaluation will be reviewed at a meeting of the Supervisory Council (including those increasing the Bank’s to the standards set in the Code of Ethics. and are included in the 2019 Annual Report. Any recommendations will be examined attractiveness and client loyalty), the Bank put and considered when further improving the work of the Supervisory Council a simplified procedure in place to accept new The Bank signed the Russian Anti-Corruption and the corporate-governance system as a whole. clients. It includes using remote channels to provide Charter for Business in 2013. According to the services and obtain client data from publicly National Anti-Corruption Plan for 2018–20205, accessible governmental sources; the Bank implemented an Anti-Corruption Plan for 2018–2020. The Bank’s Shareholders’ Consultative Council SCC members take an active part in engaging • To upgrade qualifications and learn about new (SCC), which has been active since 2009, represents with other shareholders, including at shareholders’ legal regulations on internal control procedures the interests of VTB Bank’s minority shareholders. general meetings and other events, both on-site related to preventing money laundering, terrorist There are very few such councils in Russia. The Bank and online. Requests and other information financing, and WMD proliferation, employees of Russia considers this practice efficient and useful communicated to the SCC result in proposals received remote training at intra-Group in increasing shareholders’ engagement and activity. addressed to VTB’s management. In 2019, seminars and at dedicated events that involved For over 10 years now, the SCC has protected SCC members spoke at all key shareholder events, representatives of banking supervisory agencies. the interests of minority shareholders, contributing including the Annual General Meeting of Shareholders to developing the VTB Group. All SCC members and Investor Days in Moscow, Saint Petersburg, are shareholders of the Bank. One SCC member and Yekaterinburg. sits on the Bank’s Statutory Audit Commission, and Igor Repin, Chairman of the SCC, is a member of VTB’s Supervisory Council.
2 Implementing measures to ensure compliance with the laws, regulations, and standards of self-regulated organisations adopted in the country of registration (if these rules or standards are mandatory for the Bank), as well as mitigating the risk of damages associated with sanctions and/or any other enforcement actions by supervisory agencies. 3 The Anti-Corruption Policy is available on the Bank’s official website at https://www.vtb.ru/akcionery-i-investory/raskrytie-informacii/ustav-i-vnutrennie-dokumenty. 4 The Code of Ethics is available on the Bank’s official website at https://www.vtb.ru/akcionery-i-investory/raskrytie-informacii/ustav-i-vnutrennie-dokumenty. 1 Detailed information on the VTB Group’s Corporate Governance System is available in the Annual Report of the VTB Group for 2019. 5 Approved by Presidential Decree No. 378 on the national anti-corruption plan for 2018–2020, dated 29 June 2018.
20 21 Sustainability Report / 2019 1 2 3 4 5 6 7 8 About VTB Group
WHISTLEBLOWER HOTLINE INTERNAL CONTROL AND BUSINESS CSR MANAGEMENT The Bank’s employees may report violations ETHICS TRAINING OF PERSONNEL of the Russian legislation or the Bank’s regulatory/ To maintain the highest ethical standards of Bank Along with being focused on financial As part of implementing the new development executive documentation, including corruption and VTB Group operations, mandatory training has performance and business success, strategy in 2019, we paid considerable attention instances, to the whistleblower hotline. A new been arranged for all employees. All newly hired the VTB Group also takes responsibility to environmental protection, in particular to reducing edition of the Whistleblower Hotline Policy was employees are obligated to familiarise themselves for the economic, social, and environmental the Group’s environmental impact due to accelerated implemented in 2019 to update and provide structure digitalisation of the Group’s business and transition with the internal regulations that stipulate principles footprint of its operations. The VTB Group for the procedure for collaboration between dedicated and standards of ethical conduct and terms to paperless document flow. Bank units that take part in examining the reports of employment with the Bank or any other company strives to implement sustainability standards made to the whistleblower hotline. of the VTB Group. Employee adaptation includes uniformly and universally in all areas Another important aspect of the VTB Group’s new required introductory training courses that explain of its work. development strategy involves shaping the Bank’s A total of 50 reports were made by employees position with regard to green financing and the closure the Code of Ethics to all categories of new employees. Green financing to the whistleblower hotline in 2019; each report of major deals. These included placement of Russian Training programmes are available as remote learning is a top priority was investigated and resolved. Railways’ green bonds, with VTB Capital being sessions on the Bank’s employee education portal The VTB Group’s activities related to corporate in the VTB Group’s a co-organiser, and financing of major Russian projects and on VTB Group companies’ internal corporate social responsibility (CSR) support the top priorities CSR efforts platforms. of the Group’s Development Strategy for 2019–2022. in solar and wind power engineering.
The mandatory training system ensures corporate According to the new strategy, the VTB Group Among the new development strategy’s goals achieved policies are followed consistently across aims to become a bank of choice for all categories in 2019 was improved management of charity the Group. The system provides general information of consumers of financial services. To address and sponsorship activities. In particular, the procedure about internal (compliance) control and internal this challenge, special attention was paid in 2019 for the Committee for sponsorship and charity was control related to preventing money laundering, to the quality of products and services offered, updated in the reporting period. terrorist financing, and WMD proliferation. client satisfaction and loyalty indicators, and to ensuring high availability of financial services for underprivileged sections of the community and residents of distant regions.
22 23 Sustainability Report / 2019 1 2 3 4 5 6 7 8 About VTB Group
VTB Bank’s CSR Policy is a core document that sets of VTB Bank and covers issues related to managing out the bank’s principles and activities in sustainable the bank’s corporate behaviour and the bank’s development. With this policy in place, the Group can influence on the corporate, market, social, and natural structure its CSR activities and work more effectively environment. PRIMARY CSR DOCUMENTS OF VTB BANK with stakeholders. The policy applies to all divisions
KEY AREAS OF VTB BANK’S CSR ACTIVITIES • CSR Policy (2012) • Conflict-of-Interest Policy • Whistleblower Hotline (2020) Policy (2020) • Code of Ethics (2020) • Insider Information • Sponsorship and Charity • Anti-Corruption Policy and Market Manipulation Committee Policy (2019) (2019) Policy (2019) • Charity Policy (2019) • Corporate Governance • Insider Information Code (2015) • Sponsorship Policy (2019) Confidentiality Policy Market environment Internal environment Natural environment • Information Policy (2017) (2019) Responsible financing, Development of workforce Reduced resource enhanced access to services, capacity, creating a safe consumption, environment and upgrading the quality working environment protection projects, of service and green financing NON-FINANCIAL RISK MANAGEMENT The Group defines non-financial risks to include operational, reputational, strategic, legal, regulatory Non-financial risk management is another important (compliance), and model1 risks. component of managing VTB’s CSR activities. Approaches to managing non-financial risks are defined Environmental risks are also managed, with Group in the Group’s internal regulations, and focused banks verifying clients’ legal compliance and analysing work to control and mitigate risks ultimately helps the environmental footprint of pledged properties boost the Bank’s capitalisation and bolsters its status (real estate and asset groups). The VTB Group provides internationally. complete and reliable risk information in both external and internal reporting in accordance with the legislative Social environment Corporate governance The VTB Group has established procedures to identify, Implementation of charitable Creating a transparent requirements of the countries where the Group assess, aggregate, control, and monitor risks, operates. and sponsorship projects and efficient corporate including non-financial ones, in line with the Bank’s in the regions of operation governance system Risk and Capital Management Strategy approved by the Supervisory Council in November 2019.
1 VTB Bank and its branches assess corruption risks as part of enacting Regulations on the Procedures to Manage Regulatory (Compliance) Risk Adopted by VTB Bank, made effective by Executive Order No. 366 dated 2 June 2015; Regulations on the Procedure for Self-Assessment of Operational and Regulatory (Compliance) Risks, made effective by Executive Order No. 336 dated 10 May 2016; and Regulations on Collecting Information about Events Associated with Operational and Regulatory Risks and their Consequences, made effective by Executive Order No. 12 dated 18 January 2016.
24 25 Sustainability Report / 2019 1 2 3 4 5 6 7 8 About VTB Group
CONTRIBUTING TO THE UN SUSTAINABLE DEVELOPMENT GOALS
The VTB Group continues to disclose The VTB Group’s strategy, mission, and strategic focus information about how the Group’s activities are in line with SDG and contribute to achievement relate to the UN Sustainable Development of all 17 goals. The VTB Group focused on eight Goals (SDGs). priority goals with global best practices in mind. The Group intends to contribute to achieving them as it pursues its primary activities, including by taking part in and supporting various projects and initiatives On 25 September 2015, 193 countries adopted to improve the quality of life in the regions the 2030 Agenda for Sustainable Development, where the VTB Group operates and to develop which introduces 17 SDGs to address global social, the healthcare industry, science, education, culture, environmental, and economic challenges. and environmental protection.
VTB’s sustainable development goals
CLIMATE RISK MANAGEMENT
The VTB Group manages climate risk as part of managing credit, concentration, reputational, operational, and strategic risks.
VTB Bank assesses the transition and physical risks associated with global climate change as follows:
• Transition risk is assessed together with credit risk as part of assessing borrower creditworthiness and credit ratings. Transition risk is also assessed as part of industry analysis, factoring in political, legal, and technological changes taking place in the industry; • Physical risk assessment mainly takes place as part of operational risk analysis. The scenario-based analysis may also be performed, including assessment of the consequences of potential unfavourable conditions, and self-assessment of actually incurred loss due to operational risk, including in connection with emergency situations. Moreover, risks associated with emergency situations are also assessed as part of pledged property assessment.
The VTB Group intends to continue developing its climate risk management system in 2020 and take part in topical events arranged by the Bank of Russia.
26 27 Sustainability Report / 2019 1 2 3 4 5 6 7 8 About VTB Group
VTB GROUP’S INITIATIVES AIMED AT ACHIEVING PRIORITY SDGS IN 2019
• Development • Ensuring employment • Financing of socially • Implementing charitable • Financing projects • Reducing resource • Supporting the World Wild • Participating of professional and a suitable working important infrastructure projects and corporate aimed at providing cities consumption, Fund for Nature (WWF) in and organising business and personal competencies environment in the regions development projects volunteering initiatives of operation with new implementing energy- programme for protection forums, conferences, of employees of operation (19,900 new (transport, irrigation aimed at reducing opportunities, access saving technologies of rare big cat species and business events jobs created across systems, energy inequality and providing to various services, by VTB Bank • Working with higher VTB Group in 2019) supply, information help to people in need and sufficient power • Green financing • Entering into agreements education institutions and communication supply, housing, public • Supporting the Amur Tiger with federal, regional, in the regions of operation • Support for SMEs: joining technologies) • Equal employment transport, sports and social • Organising employee Centre by VTB Bank and municipal authorities (VTB Bank provided a renewed programme in the regions of operation opportunities and equal infrastructure trainings in responsible for cooperation aimed support to 180 higher of the Russian Ministry remuneration for men consumption • Functioning as the Russian at improving the social education institutions of Economic Development • Developing and women • Extending the regional Executive Agency and economic wellbeing in 2019) (offering attractive loans and implementing network (creating jobs, • Gradually phasing out for the Arctic Council of people residing with an 8.5% interest rate) support for innovation • Hiring people investing in regional of paper-based media Project Support Instrument in regions of operation • VTB Bank specialised and several dedicated in the financial sector: with disabilities programmes) for Arctic nature department services to simplify 29 pilot projects • Working to ensure energy conservation • Implementing at the Financial University the operations of SMEs in cooperation with tech • Increasing financial literacy efficiency and optimisation entrepreneurship (SMEs, under the Government startups as part of the VTB among various groups of waste disposal • Participating in the Ecology startups) support of the Russian Federation • Financing socially corporate accelerator of people National Project programmes important industries • Working • Inclusion of the VTB Group • Contributing • Implementing with St. Petersburg • Increasing the availability in the list of the founders to the provision of equal environmental protection University’s Graduate of financial services of Data Economy ANO and simplified access initiatives in countries School of Management, in the regions of operation to healthcare, education, of operation including managing and financial services the business • Anti-corruption, prevention school, updating of money laundering and implementing its and financing of terrorism development strategy, and working together • Organising special to develop educational promotions to attract projects potential employees, participation in The Best • Implementing Employer competition charitable projects aimed at supporting education in the regions and countries of operation
28 29 Sustainability Report / 2019 1 2 3 4 5 6 7 8 About VTB Group
STAKEHOLDER ENGAGEMENT EMPLOYEES The VTB Group’s stakeholder engagement The VTB Group strives to build productive and efficient • Employee satisfaction and engagement survey 1 activities rely on the principles of fairness, stakeholder engagement using various interaction • Intranet portal channels and various methods of information due diligence, professional competence, • Team Spirit corporate magazine (a total of 15,000 copies printed) disclosure for this purpose. mutual trust and respect, focus on clients’ • Whistleblower hotline interests, and inviolability of obligations. • Team-building events, meetings with executives • Employee training portal KEY CHANNELS AND RESULTS OF STAKEHOLDER ENGAGEMENT • Gravitation system to collect and review employee ideas
SHAREHOLDERS AND INVESTORS POPULATION • Annual General Meeting of Shareholders (2,348 participants, +47% YoY) • Supporting amateur sports and physical fitness • Extraordinary General Meeting of Shareholders (2,759 participants, +106% YoY) • Participating in projects aimed at restoring national and spiritual values, heritage preservation • Three Shareholders’ Centres in Moscow, St. Petersburg, and Yekaterinburg • Financing significant exhibitions, staging shows and other cultural projects • Shareholders’ Consultative Council2 (five meetings already held) • Supporting higher education institutions, developing scientific potential and high-tech solutions • Receiving calls to the Shareholders Support Service (over 13,800 calls on matters related to organising • Supporting healthcare institutions and projects related to the development of advanced healthcare corporate events, client service, special offers for shareholders, shares, dividends, etc.) technologies • Fact Sheet (10 issues, 46,000 recipients) • Financing projects that help address environmental challenges • VTB Shareholder app (30,300 installations) • Promoting financial literacy, including financial education workshops for young people (700 participants • Three Investor Days (1,700 participants), 14 seminars dedicated to the stock market (782 participants), in 2019) TV streams, eight Doors Open Days, round-table discussion, online stream of the Annual General Meeting • VTB to Russia portal dedicated to social projects of Shareholders (2,028 participants) • Social media accounts • Special offers and benefits for Bank shareholders (more than 111,000 products and services of VTB Bank
are purchased by Bank shareholders) GOVERNMENT AND REGULATORY AGENCIES • Proactive cooperation with institutional investors, analysts and rating agencies (313 meetings • Information disclosure in accordance with legislative requirements with institutional investors and analysts, 538 participants of conference calls relating to reporting disclosure). • Agreements with government authorities in regions with operations Over half the meetings were arranged on an individual basis. A lot of effort was put into communicating the Bank’s financial performance and activities to investors • Participating in associations and charters, major business forums, and events • As part of introducing the VTB Group Development Strategy, the Bank hosted an event called Analyst Day, • Participating in working groups with the Russian Ministry of Finance to develop legislative acts and regulatory involving management and 26 sell-side analysts from major companies, both Russian and non-Russian documents • Participating in expert boards, parliamentary proceedings, round table discussions, and working groups
CLIENTS to develop proposed laws that are of relevance for the Bank • Participating in working meetings sponsored by the Russian Civic Chamber, the Russian Chamber • Client satisfaction research of Commerce and Industry, and the Russian Union of Industrialists and Entrepreneurs • Remote banking service channels including mobile and web VTB Online banking app, information support
through the Bank’s social media accounts and mobile apps BUSINESS PARTNERS • VTB Call Centre • Participating in international and national professional associations • Developing tendering procurement procedures • Preventing supply chain corruption
MEDIA AND ANALYSTS • Twelve events involving media representatives (86 participants) • Seven events for analysts (66 participants) • References to the Group in mass media (403,100 references)
1 Major stakeholder groups are defined in VTB Bank’s CSR Policy, which is available on the Bank’s official website at https://www.vtb.com/o-banke/bank-vtb/ socialnaya-otvetstvennost/. 2 More detailed information on the SCC can be found on the Bank’s official website at www.vtb.com/akcionery-i-investory/informaciya-dlya-akcionerov/ konsultacionnyj-sovet-akcionerov.
30 31 Sustainability Report / 2019 1 2 3 4 5 6 7 8 About VTB Group
Russia has a high degree of internet penetration: The Group also communicates with stakeholders VTB GROUP MATERIALITY MATRIX 95.8 million Russians use the internet, including by publishing its Sustainability Report1. To make social media. Considering the continuously it more interesting and useful, the VTB Group 5.0 growing amount of online communication follows a procedure each year to define the scope 3 with key stakeholders, VTB Group companies made of material topics that will be covered by the report, 1.6 million a persistent effort in 2019 to fill their social media including polling stakeholders. Based on the results, people took part in VTB Group web 7 pages with content, publishing information that a materiality matrix is developed that reflects the most 9 8 is relevant for all of the VTB Group’s stakeholders. significant aspects of sustainability-related Group projects in 2019 19 2 More than 1.6 million people took part in VTB Group activities as viewed by its internal and external 4.5 21 web projects in 2019. In addition, the united Bank’s stakeholders, as well as their impact on achieving 16 website was updated in 2019. The number of visitors strategic goals. 20 17 18 1 to it virtually doubled, reaching 41.6 million. 10 5
4.0 22 4 11 15
6 VTB GROUP’S OFFICIAL PAGES ON SOCIAL MEDIA PLATFORMS 3.5 13 14 12
27 million 206K 106.7K 3.0 views followers followers STAKEHOLDERS FOR IMPORTANCE
2.5 3.0 3.5 4.0 4.5 5.0
IMPORTANCE FOR VTB GROUP
18.8K 40.4K Economic category Environmental category Social category followers followers 1 Corporate governance 10 Waste management 16 Responsible business practices 2/ Procurement transparency 11 Reducing energy consumption 17 Corporate culture and business climate 3 Economic performance 12 Reducing fuel consumption 18 Occupational health and safety 4 Financing national projects 13 Reducing greenhouse gas emissions 19 Employee training 5 Social and economic and development development of regions 14 Reducing fresh water of operation consumption 20 Initiatives for young people 6 Import substitution 15 Supporting conservation 21 Employee engagement of biodiversity projects 7 Innovation 22 Charity and sponsorship 8 Client satisfaction 9 Affordability of banking products and services
1 Until 2018, VTB Group Social Report.
32 33 FINDING COMMON INTERESTS
14 million CLIENTS IN RUSSIA
My Smart City recognised as the best technology product of the year BY THE BANKER MAGAZINE Sustainability Report / 2019 1 2 3 4 5 6 7 8 VTB for clients
VTB is increasing the availability and quality “Client focus is the key value of the VTB Group. We are building VTB for clients of services, providing financing to socially important relationships with entrepreneurs and organisations based projects and contributing to job creation on principles of fairness, due diligence, professional competence, The VTB remote- in companies across industries. VTB is building its mutual trust and providing extensive support in bringing business in such a way as to provide maximum banking service their business ideas to life. We realise that we play an important contribution to the social and economic development has of the countries and regions where it operates, as well role as an engine of developing the real economy across Russia’s as to meet the expectations of its clients. regions, and we provide extensive support to all industries and ~5 million all major projects. Our clients include both industry leaders that active users 40 Support for socially important A new VTB Group Development Strategy was adopted produce numerous jobs and ambitious startups that are only businesses and cooperation in 2019, which includes an updated mission, vision, beginning to see the entire range of opportunities offered with governmental agencies and values. The Group set ambitious new goals by cooperation with VTB. Every day the Bank’s team is guided to significantly improve its business model and achieve by a slogan “We Help by Doing”, developing and implementing a net profit of more than RUB 300 billion by 2022 practical solutions that will be highly sought for”. 48 Promoting small and medium with a return on equity of 15%. enterprise development
Denis Bortnikov 52 Providing socially important retail Deputy President and Chairman of the Management Board, VTB Bank services
58 Availability and quality of banking The following results were achieved in 2019: the reporting year, VTB Bank worked on integrating services Zapsibkombank and Sarovbusinessbank into • Increase in net profit: the year’s profit the Group, as well as Vozrozhdenie Bank, which was RUB 201.2 billion (an increase of 12.9%1 was acquired in 2018; over 2018); • Modernisation: several large-scale digital • Banking business integration: VTB Bank merged projects were started in 2019, with the number its retail and corporate networks, thus making PRIORITIES OF THE VTB GROUP’S of remote-banking users growing by 31% it the largest merger of the kind in the history DEVELOPMENT STRATEGY FOR 2019–2022 to reach approximately five million. Most digital of the Russian banking system and a logical solutions were implemented across retail systems, continuation of the successful merger of VTB24 with their total number exceeding 9,000. and VTB Bank that was completed in 2018. During • Intense growth of the banking business, complemented by digital economy initiatives
• A focus on client interests and service quality
• New trends: increased efficiency, digitalisation, and advanced technologies
1 The comparison of P&L statement indicators is presented based on modified 2018 indicators for YoY comparability (excluding the operating results of Post Bank PJSC, Multicard LLC, VTB Insurance LLC, VTB Bank (Ukraine) JSC, and VTB Bank (Belgrade) JSC).
36 37 Sustainability Report / 2019 1 2 3 4 5 6 7 8 VTB for clients
VTB offers new products that are more attractive RUB 11.5 trillion. Individuals still account for 29.4% MAIN FOCUS AREAS OF PROJECTS IN KEY CLIENT and beneficial for its clients, which explains of the loan portfolio along with 10.9% accounted SEGMENTS OF VTB GROUP OPERATIONS the growth in the volume of lending services. In 2019, for by construction industry companies and 9.2% the size of the VTB Group’s loan portfolio reached by oil & gas companies. SEGMENTS RUB 11.5 trillion DISTRIBUTION OF VTB GROUP’S LOAN PORTFOLIO, 31 DECEMBER 2019 loan portfolio of the VTB Group 1.5% 1.5% 3.3% 1.0% 3.7% Individuals Telecommunications and media 4.0% 29.4% Construction Corporate-Investment Small and Medium Retail Business Power industry Business Business (RB) 4.3% Oil & gas: Food and agriculture (SMB) 5.3% Metallurgical industry Financial sector
5.9% Trade and Chemical industry commerce Coal-mining industry 6.1% Industrial Other 10.9% production 6.3% MAIN FOCUS AREAS Transportation 7.8% 9.2% State authorities
Financial and banking Supporting SMB • Providing support services for socially across all industries to specific community NUMBER OF GROUP BANKING CLIENTS IN 2017–2019 important projects in countries and regions groups across priority sectors with operations 2017 2018 2019 2019 for countries and regions, • Providing socially including support important retail Banking clients of VTB Group excluding new assets including new assets for infrastructure services Corporate-investment business 9,063 10,631 11,438 12,509 construction, Small and medium business 259,883 644,936 731,508 815,301 transportation, healthcare, • Providing support etc. for home buyers Retail business, thousand people 12,924 14,084 15,382 16,661
VTB PRIORITIES
• Achievement of VTB’s strategic goals
• Cooperation with governmental authorities
• Implementing projects focused on social and economic development of regions with operations and environmental improvement
• Improving the quality and availability of financial services for the Group’s clients
38 39 Sustainability Report / 2019 1 2 3 4 5 6 7 8 VTB for clients
During the reporting period, VTB Bank took In 2019, VTB was included in the list of founders SUPPORT FOR SOCIALLY IMPORTANT BUSINESSES part in the following events aimed at promoting of Data Economy ANO. This will let the Bank foster AND COOPERATION WITH GOVERNMENTAL AGENCIES interaction with governmental authorities, including a constructive dialogue with the government working meetings with the heads of member states and take part in making key decisions related In 2019, VTB took part In the course of its investment activity and other joint consultancy and holding events aimed of the Russian Federation: to developing advanced digital technology. in refining financial operations, the Bank pays due attention at promoting Russian products across external Data Economy ANO is a major site for fostering • Board meeting of the Civic Chamber dialogue between the government and business about to social factors that may have an impact on a broad markets; of the Russian Federation under the Russian spectrum of stakeholders. The Bank strives to provide community and is focused on elaborating a common Ministry of Finance; financing for projects that contribute to increasing • VTB Bank won the bidding process arranged strategy and implementing measures stipulated 60 Russian employment, wellbeing, and social security. by Moscow Metro to design e-Troika, • Meetings of legislative-development working by the Digital Economy national programme. As part draft laws an electronic version of the Troika travel pass groups under the Russian government of implementing the programme, representatives VTB pays special attention to projects aimed for smartphones; and scientific and expert centres; of the business community take part in work on six federal projects: at developing the social and economic potential • VTB Bank and Sodrugestvo Group signed of the countries and regions of operation. • Parliamentary proceedings, round-table a memorandum on strategic cooperation that discussions, working groups for proposed • HR for the Digital Economy; The companies in the Group support the development provides for collaboration in the area of financing laws relevant for the Bank (expert councils • Data Infrastructure; of all industries along with high-priority socially the company’s investment projects and arranging important projects in the area of housing service for the dedicated committees with the State settlements and collaboration as part of export Duma and the Federation Council of the Russian • Data Security; and utilities, healthcare, and infrastructure and import deals, including deals in the grain construction. Federation), and conventions and general • Digital Technology; market, etc; meetings of the Association of Regional Banks • Statutory Regulation; VTB makes a solid contribution to the economy • In 2019, VTB Bank and Russian Post continued of Russia; of the countries and regions where it operates through to further develop and improve the post offices • Working meetings sponsored by the Civic • Digital Government. its close cooperation with governmental authorities in Russia via a joint venture, National Logistic Chamber of the Russian Federation; Technologies. As part of this cooperation, to provide employment opportunities and thus PROVIDING SUPPORT TO STATE produce employment income of people and tax VTB Bank provided cash management services • Events of the Banking Commission AND MUNICIPAL AUTHORITIES revenues for municipal, regional, and state budgets. for Russian Post offices for the period of corporate under the Russian Union of Industrialists restructuring. Further, 38 new logistic post and Entrepreneurs and its other bodies; The VTB Group believes it is necessary to extend In 2019, the VTB Group continued to closely work centres were set up that have an increased cooperation with state and municipal authorities capacity owing to the use of state-of-the-art • Meetings of the Administrative Office together with state-run enterprises in the regions and Administration and conventions in the area of social and economic development of operation, including: equipment. The volume of financing amounted of the regions where it operates. to RUB 22 billion. In addition, VTB Leasing and nationwide associations of employers; • VTB Bank entered into a cooperation agreement provided Russian Post with 70 baggage and mail • Meetings of the Expert Council at the Main In 2019, VTB Bank entered into 27 agreements with Russian Railways, which stipulates cars on seven-year lease terms; the total amount Office for Protection of Rights and Legal Interests in cooperation with a number of regions across the principles for further development of various of the contract was RUB 2.9 billion. of Commercial and Investment Entities, Moscow. Russia. scopes of cooperation. In 2019, VTB Leasing closed a deal to deliver 13,000 low-sided cars VTB continues to work on amendments to draft to Federal Freight, a subsidiary of Russian Railways. laws as they are being deliberated. In 2019, The Leasing Federation recognised the deal VTB representatives took part in follow-up revision as the Lease Deal of the Year; of approximately 60 draft laws, including laws • The VTB Group and Russian Federal Centre on personal data protection, fast payment system for Development of Agricultural Products Export operation, development and implementation entered into a cooperation agreement providing of electronic infrastructure, etc.
40 41 Sustainability Report / 2019 1 2 3 4 5 6 7 8 VTB for clients
DEVELOPING RUSSIA’S TRANSPORT SYSTEM The VTB Group continued to support projects developing Russia’s transport sector. These projects chiefly aim to improve accessibility in the regions of operation and increase the mobility of local residents. Loans to transportation companies totalled RUB 673.6 billion.
SCOPES OF COOPERATION BETWEEN VTB AND RUSSIAN REGIONS PARTICIPATION IN PROJECTS AIMED AT INCREASING THE ACCESSIBILITY AND QUALITY OF SERVICES
• Development of regions’ social and economic • Facilitation of investment in the regions St. Petersburg Metro potential • Development of a credit system • Implementation of cutting-edge banking technologies and increasing the availability of financial services • Development of housing construction
• Development of bank card service infrastructure A single card for Saint Petersburg residents that can also serve as a travel ticket • Industrial complex modernisation
Moscow Metro
Installation of bank card readers on turnstiles in the Moscow Metro
Funding the construction of a power plant in Bilibino, Chukotka Mosgortrans Autonomous district VTB Bank signed a deal with Chukotka Autonomous Approximately 500 vehicles are equipped with validators district’s government to roll out projects in Russia’s for contactless fare payment Arctic region. As part of this cooperation, RUSSIAN REGIONS WITH WHICH VTB BANK HAS the Bank financed a project to construct Social Taxi: over 100 vehicles are equipped with terminals COOPERATION AGREEMENTS IN PLACE and commission a diesel-generator electric to accept payments using the Moscow resident card Chelyabinsk region, Tomsk region, Vladimir region, and thermal power plant in Bilibino’s permafrost and bank cards Mari El Republic, Udmurt Republic, Tyumen region, terrain. Given the planned decommissioning Novosibirsk region, Kursk region, Chechen Republic, of the Bilibino Nuclear Power Plant and the need Primorsky territory, Republic of Tatarstan, Krasnoyarsk to replace its capacity, the project is of the utmost territory, Orlov region, Kamchatka territory, Arkhangelsk importance to the region. The Bank is currently Department of Transport and Infrastructure of Moscow region, Ryazan region, Kaliningrad region, Tula region, considering issuing a guarantee for the contract Novgorod region, Samara region, Rostov region, and is funding the project. The project value stands Orenburg region, Amur region, Khabarovsk territory, at over RUB 8 billion. Sakha Republic (Yakutia), Magadan region, Buryat Republic New version of the Moscow Parking Lots app, supporting ApplePay
42 43 Sustainability Report / 2019 1 2 3 4 5 6 7 8 VTB for clients
SAMPLE PROJECTS TO DEVELOP THE TRANSPORT SYSTEM IN RUSSIA IMPLEMENTED Additionally, the VTB Group facilitates surgeries. The Next Generation project will enable WITH VTB BANK PARTICIPATION the development of health care in the regions even more residents of various Russian regions to seek of Russia. In particular, in 2019, VTB Bank (Georgia) medical advice from the leading private clinic. Effect provided funds for the construction and purchase Amount, of the project of equipment for hospitals and healthcare units 20% Project Company Description RUB million implementation in Tbilisi, Rustavi, Kutaisi, and Batumi. COOPERATION WITH COMPANIES share IN THE HOUSING CONSTRUCTION SECTOR Construction of the M4 Don Donaerodorstroy Guarantee line 10,000 Traffic in Russia’s housing- highway connecting Tambov, infrastructure The availability of living accommodation is a top NEXT GENERATION INSURANCE PRODUCT construction Volgograd, and Astrakhan improvement, priority in the development of urban infrastructure funding and reconstruction of specific development VTB Bank has been financing multi-functional centres for improving the quality of life. The VTB Group parts of the highway of additional and the Mother and Child Group of Companies since transport routes provides extensive support for housing construction Construction 2011. In 2019, VTB Bank joined Mother and Child projects in the regions of operation. In 2019, and reconstruction of sections Group and SOGAZ Insurance Company to launch VTB focused on collaboration with real estate of the R22 Kaspiy highway a fully packaged insurance product, a unique prenatal developers. Construction of the M-11 Neva Russian Highways Credit limit 10,200 Traffic care and labour management programme across (Moscow–Saint Petersburg) Bank infrastructure the Russian Mother and Child private clinics network. The amount of VTB funding for housing construction motorway guarantees 16,700 transformation, in the reporting period reached RUB 150 billion, development The Mother and Child company has extensive which makes up 20% of the total amount of additional experience in obstetrics and gynaecology. of the Russian market. transport The company’s clinics are able to perform unique routes Trunk infrastructure modernisation SAMPLE VTB BANK PROJECTS AIMED AT THE DEVELOPMENT OF HOUSING CONSTRUCTION Reconstruction Moscow Metro Guarantee 4,861 Metro of the Filyovskaya Line infrastructure Type improvement Client Project description of product Amount, RUB billion Ingrad Group RiverSky Housing Estate (Moscow) Line of credit 21.7 RosStroyInvest Group Terra Housing Estate (St. Petersburg) Line of credit 5.6 In 2019, VTB Bank also purchased the Novorossiysk FINANCING OF HEALTHCARE PROJECTS Mavis Investment & Urbanist Housing Estate in Murino Grain Terminal; a 50% share in Gelendzhik Airport; IN 2019 Credit limit 3.1 and a controlling interest in RusTransCom, a leading Construction Group (Leningrad region) • Credit agreement with Samara Medical Products Russian operator of special-purpose grain, timber, Plant; RosStroyInvest Group 11 housing estate (Moscow) Line of credit 2.0 and mineral fertiliser transportation cars. Novy dom Hotel complex in Kamchatka territory Credit limit 2.0 • Line of credit to the University Clinic Group to construct a family medicine centre operating SZ Drevo.Centre Panova Park Housing Estate (Samara) Credit limit 1.9 SUPPORT FOR HEALTHCARE PROJECTS as part of the compulsory health insurance system, Marshal Grad Housing Estate SZ ObjectStroy Credit limit 1.6 VTB understands that developing social infrastructure designed to accommodate 10,000 patients; (Nizhny Novgorod) is essential for living standards to increase • Loan to PetScan to purchase medical equipment in the regions of operation. Companies in the Group for the Positron Emission Tomography (PET) traditionally pay special attention to supporting Centre, the first healthcare institution in Southern healthcare projects and invest heavily in those Russia to use this diagnostic method for research; projects involving the construction and renovation of healthcare institutions. • Line of credit for the Saint Petersburg Scientific and Research Institute of Vaccines and Serums (Enterprise for the Production of Bacterial Preparations) under Russia’s Federal Biomedical Agency (to produce flu vaccines as part of the National Calendar of Preventive Vaccinations and to upgrade the existing capacities for the production of flu drugs, allergens, and combined vaccines).
44 45 Sustainability Report / 2019 1 2 3 4 5 6 7 8 VTB for clients
Additionally, VTB Bank provided funds to improve AGRICULTURAL DEVELOPMENT urban amenities: The VTB Group is implementing a number of projects • Repurposing the building of the former aimed at developing Russia’s agricultural industry. Zotov Bread-Baking Plant No. 5 for museum VTB pays special attention to agricultural development, RUB and exhibition events; 427.7 which is explained primarily by long-term benefits billion • Renovating 39 cinemas in Moscow’s dormitory that the development of this sector provides lent to food FRUITFUL BUSINESS districts (463,000 square metres of usable floor in terms of import substitution and supporting local and agricultural area upon completion); manufacturers. companies by the VTB Group • Outfitting a park complex in a former industrial The volume of loans provided to food and agricultural In 2019, VTB updated its Fruitful Business product family for agricultural companies to provide park in Moscow’s Shelepikhinskaya Naberezhnaya. companies increased by 3.7% YoY, reaching support for SMEs. The minimum amount of credit is now RUB 4 million. RUB 427.7 billion. The funds are provided for the purposes of increasing float fund, purchasing property, In addition to actively working within the framework and performing repairs and reconstruction. Moreover, the updated family of credit products offers of the Russian Ministry of Agriculture’s preferential- significantly simplified collateral requirements. In particular, deals may now be closed with the only loan programme, the Bank is also modernising its pledged property being agricultural lands – the core asset of the agribusiness industry. own offerings.
SAMPLE VTB BANK PROJECTS AIMED AT AGRICULTURAL DEVELOPMENT
Client Project description Type of product Amount, RUB billion RosAgroMarket Construction of a wholesale distribution centre Line of credit 5.0 ACQUISITION OF MIROGROUP RESOURCES Group in Novosibirsk region Resource Development of a state-of-the-art Line of credit manufacturing and logistics complex 2.5 In 2019, VTB Bank purchased a 70% interest in Mirogroup Resources. The deal is an important step in Chelyabinsk region in implementing VTB’s new development strategy as it applies to the grain market. Mirogroup Russian Cotton Construction of irrigation systems and purchase Line of credit 1.5 Resources has an extensive network of regional branches and long-term partnerships with a variety investment project of equipment for irrigation systems of agricultural producers, from smaller farm businesses to nationwide agricultural groups. Volga Grain Group Construction of two grain elevators for storage Credit limit and sale of grain, expansion of territories 1.0 This transaction will enable transparent grain pricing across the Russian domestic market intended for sowing of grains, oilseed, and support the organisation of stock exchange trading. and technical crops Master Mushroom Construction of a full-service farm for growing Line of credit 1.2 Owing to the trading and logistics infrastructure, the Bank will be able to sell high-quality champignons in Kaluga region grain directly to end consumers across global markets. Such a system will enable risk mitigation Dolina Solntsa Completion of the second phase of greenhouse Line of credit for all participants and facilitate efficient cooperation with export companies, manufacturers, 0.9 complex construction in Stavropol territory and infrastructure companies.
46 47 Sustainability Report / 2019 1 2 3 4 5 6 7 8 VTB for clients
PROMOTING SMALL AND MEDIUM ENTERPRISE DEVELOPMENT NON-BANKING SERVICES PLATFORM Understanding that SMEs play an important In 2019, VTB Bank joined the renewed programme role in the economy of any country, of the Russian Ministry of Economic Development to finance SMEs in Russia’s priority industries, VTB Group companies strive to increase VTB launched a platform that lets entrepreneurs use business services online, such as agriculture, construction, transportation, the availability of long-term financial including tax management and accounting solutions, 24/7 legal support, manufacturing, tourism, and healthcare, resources to SMEs through actively a package of services to take businesses online, a contractor search service at a preferential rate of up to 8.5%. participating in government support to complete one-off tasks, and express services for checking contractors programmes and developing in-house and registering trademarks. products and initiatives that meet the needs of clients within this segment.
SERVICE FOR OPENING CURRENT ACCOUNTS VTB BUSINESS CONNECT
An entirely new client account was designed that offers the ability to open bank An online B2B service system, including a corporate purchasing platform accounts remotely, making banking services even more accessible and convenient. and a digital distribution service that brings together non-network retailers Another new offer is Field Service, a service that lets legal entities, sole traders, and vendors for direct interaction. VTB Business Connect works to unite the B2B and individuals engaged in private practice open bank accounts without having market, giving the players jumping-off points for further growth. to visit a Bank’s office in person. Besides, VTB Bank joined forces with ESK (Perviy OFD brand) to launch a new one-stop-shop service, allowing SMEs to open bank The platform also features Secure Payment, a service protecting business accounts and purchase online cash registers. This will minimise costs and time transactions; and Export Accelerator, a service that helps businesses assess for clients. their export opportunities and enter markets outside of Russia.
EQUITY PARTICIPATION AGREEMENT FOR BUSINESS START.VTB.RU SERVICE
VTB Bank launched a pilot project for SMEs to receive loans to purchase The service allows users to complete a free online procedure to register a limited commercial real estate properties under construction subject to an equity liability company or sole proprietor with the Federal Tax Service and apply to open participation agreement. Companies will be able to grow their assets an account with VTB Bank. The remote company registration involves issuing and expand their operations at minimal risk, as the rights to cash assets of buyers the client with a qualified e-signature. The client uses it to sign the required will be protected. documents and then sends them online to the Federal Tax Service.
48 49 Sustainability Report / 2019 1 2 3 4 5 6 7 8 VTB for clients
VTB Bank provides extensive support for SMEs across The VTB Group’s banks also provide support In 2019, the Bank continued to strengthen its and services. Through the accelerator, rapid pilots Russia. For example, in 2019: to companies in the countries and regions market positions, especially by deploying new are conducted to assess the potential business impact of operation: formats to support the SME sector. To support and technological feasibility of innovative solutions, • a credit limit was set to Dekorativno-tsvetochnyye SMEs and promote this market segment, VTB Bank and the most successful ones are scaled up. kultury (Udmurt Republic) for the purposes • Owing to cooperation with the Investor launched several advertising activities. These include: of constructing a state-of-the-art greenhouse Support Centre, VTB Bank (Armenia) provided 8 As part of the second enrolment, VTB started pilot business units and purchasing innovative gas-powered electrical an opportunity to obtain pledge-free loans • We Help by Doing, a project (together projects involving startups. These included: acted as internal generators for heating and lighting; for startups during their first year of existence; with RBC) that involved an all-Russian competition customers for entrepreneurs, with all three winners • behavioural data assessment service for borrowers; • a target-specific loan was issued to Bunker • VTB Bank (Belarus) continued to issue Remeslennik for VTB Accelerator receiving certificates for advertising campaigns Company (Arkhangelsk region) to purchase two consumer loans for the self-employed; • remote verification of mobile services users; pilot projects (the Bank prepared a complete set of creative reinforced ice-class ships; • VTB Bank (Georgia) issued a loan to provide handouts and conducted the campaigns), free • interactive assistant for employee training; • a line of credit was opened to SELF for the purposes funding for the St. Andrew the First-Called one-year payment and cash services from VTB, • a platform for creating virtual voice operators. of reconstructing the Altai territory Museum of Art; University with the Patriarchy of Georgia; and an opportunity to receive training in export market entry; • a line of credit was opened to KamchatTralFlot • Zapsibkombank opened lines of credit for projects The second accelerator enrolment also saw for the purposes of constructing a fish-processing to develop agriculture and provide support • A federal advertising campaign along with a special 301 applications received from tech companies plant in Kamchatka territory; for agricultural companies in Tyumen region offer as part of the At the Start bundled service in five countries that met the Bank’s requirements. and Khanty-Mansi Autonomous district; (opening and maintaining a bank account free In 2019, two enrolments took place • VTB Leasing and Yandex.Taxi entered into for one year); for the programme, with ten projects now being a cooperation agreement, allowing Yandex.Taxi • Vozrozhdenie Bank issued a loan to construct piloted, four projects completed, and one project partners to use a simplified procedure to expand a greenhouse complex in Volgograd region. • Fair Table, a project (together with RBC) put into service. Eight business units of the Bank and upgrade taxi fleets. that involved a national competition called acted as internal customers for the pilots. Challenge Leads to Success for entrepreneurs, with the winner receiving the grand prize – Furthermore, in 2019, a number of events was held RUB 1 million to develop a business – and all three and sponsored as part of the VTB Accelerator, which winners getting free one-year payment and cash were aimed at developing innovations and creating services from VTB along with the opportunity a venue for interaction between corporations to receive specialised training; and startups: • A series of dedicated projects involving the leading • a Demo Day for the pilots of VTB Accelerator information media: The Village, vc.ru, Rusbase, with the participation of internal VTB’s customers PRODUCT FACTORY AND DIGITAL FACTORY LifeHacker, and The Firm’s Secret and over 300 attendees (startups, investors, • Support for the national Business Success award corporations); promoting SME development; sponsorship • a conference called Pilot with the Bank: How In 2019, VTB launched two initiatives – Product Factory and Digital Factory – to work with SMEs. for the Best Web Project award; and participation to Prove the Value of an IT Solution and Start The VTB product factory will improve and accelerate the development of new offers that in regional forums called Territory of Business Cooperating; meet business needs, and it will ensure that they are brought to market as quickly as possible. Is the Territory of Life. Digital Factory’s objectives include introducing and developing non-banking services • Urban Tech Moscow hackathon (2,000 for entrepreneurs, providing clients with state-of-the-art digital solutions for business, participants), an international project to develop and developing new digital communication channels. VTB ACCELERATOR student entrepreneurship, arranged by the Moscow In 2019, VTB Bank joined the Internet Initiatives Government; Development Fund to create the VTB Accelerator. • GoTech Arena forum dedicated to business This corporate accelerator was designed to search and technology; the market for ready-made innovative solutions that can reduce costs or bring the Bank additional • Spb Startup Day conference, Saint Petersburg’s profit through the creation of new products largest startup event (2,000 participants).
50 51 Sustainability Report / 2019 1 2 3 4 5 6 7 8 VTB for clients
In 2019, Zapsibkombank created a “northern deals” of auto loans for specific social groups such as families PROVIDING SOCIALLY IMPORTANT RETAIL SERVICES mortgage line for residents of the North, offering with two or more children and people purchasing them an opportunity to submit an application their first car. The amount of loans issued reached Over 68,000 new clients got VTB Bank cards Retail business services provided in the city of their residence and later receive RUB 8.2 billion, and over 17,000 people took part to receive pension and welfare payments or store by the Group support clients in emergency the loan and buy a home in any other city where in the programme. life savings. Unemployed retired people, including 17K life situations, help socially vulnerable Zapsibkombank operates. participants military servicemen, got an opportunity to receive groups, and provide support for home In 2019, the VTB Group focused its efforts in VTB’s programme loans in cash provided that they receive their pension buyers. In 2019, the activities of companies VTB Bank was one of the first banks to offer auto on digitalisation and offered new online services for discounted on a VTB bank card. The Bank also offered loans for cars registered with an electronic vehicle designed with specific social categories in mind. auto loans of VTB Group aimed at providing support clients a special-purpose Retirement Plan deposit licence. The Bank also attended the meetings In particular, VTB Pension Fund updated the Personal to socially vulnerable groups were focused at an increased rate. Special terms were offered of task forces working to roll out electronic vehicle Account service for the participants of non-state on developing products and services that to recipients of military pensions. licences across Russia (as part of the Digital Economy pension programmes. They now don’t need to post took account of the needs of clients who programme). documents with personal data or visit a Bank or Fund In 2019, we released a new feature that lets in most cases couldn’t afford traditional office to submit them; they only need to submit clients use Russia’s Public Services Portal to draft banking products. VTB Bank took part in a national discounted-auto- an online application to receive the pension and get an application to have their pension paid into loan programme intended to increase the accessibility an additional consultation if necessary. a VTB account. Now clients can apply for switching their pension-paying banks without visiting VTB Bank was the winner in the Breakthrough an office of the Pension Fund or the Centre for of the Year in the Retail Financial Business category Public Services. at the 12th annual Retail Finance Awards hosted by The Retail Finance magazine to recognise VTB Group’s banks are specially developing products achievements in Russia’s financial business. Experts for retirement-age individuals. In particular, noted VTB Bank’s record-setting performance in terms VTB Bank (Belarus) increased the maximum age of mortgages, lending, savings and commission of loan recipients to 69 years. VTB Bank (Armenia), products, and the My Investments app. VTB Bank (Azerbaijan), and Zapsibkombank SOFTPOS APP FOR MICROBUSINESSES continued to issue pension cards with the ability PROVIDING SUPPORT TO SPECIFIC to cash them out in ATMs. Besides, Zapsibkombank COMMUNITY GROUPS offers a special-term deposit for the retired people VTB Bank started connecting clients to a service that enables contactless payments for smartphones with a minimum amount of in-payment. to be received. SoftPOS is an app that will completely replace classic POS terminals. The Bank The VTB Group is actively working on projects that provides acquiring services for this platform for self-employed Russians and micro-enterprises. They take account of the needs of specific community Another social category that Group companies can now accept payment for services without purchasing specialised equipment. groups: students, the retired, beneficiaries are developing specialised products for is people of maternity capital, families with many children, civil facing difficult life situations. For instance, servants, and military servicemen. in 2019, VTB Bank issued funds and the bank guarantees for the construction of houses In 2019, VTB Bank implemented a number for orphaned children and for those relocated of important projects for retirement-age individuals. from dilapidated dwellings.
52 53 Sustainability Report / 2019 1 2 3 4 5 6 7 8 VTB for clients
PROVIDING SOCIALLY IMPORTANT RETAIL SERVICES UNIFIED VTB CARDS FOR VARIOUS SOCIAL GROUPS The Group companies tend to view the improvement of people’s quality of as one of the most important business goals. Various socially important projects help achieve the goal. MOSCOW RESIDENT’S CARD UNIFIED SAINT PETERSBURG CAMPUS CARD > 300K for all residents of Moscow RESIDENT’S CARD for students and employees of higher VTB clients for all residents of Saint Petersburg education institutions improved “This year we continued improving our Payroll Programme, their terms which is an opportunity for any client to open a special-purpose of loan servicing account with VTB Bank to receive their salary payments. Besides standard banking services, VTB Bank offers card holders special terms on retail loans. The product is attractive to clients: starting from early 2019, the number of clients that decided in favour of the transition to VTB from other financial institutions increased by 82%, totalling around 700,000 people”. • Banking app • Banking, public transportation, • Pass and social services, including • Compulsory medical insurance • For receiving scholarship or salary the ability to receive salary payments payments Mikhail Bolonyaev • Pass to the card Deputy Head of Retail Business • Electronic document flow Senior Vice-President, VTB • Government services • Healthcare services • Library card • Troika / concessionary tickets • Discounts from trade and service companies • Concessionary tickets In late 2018, VTB launched a Borrower option that In 2019, VTB Bank launched a virtual mobile carrier, • Electronic signature for healthcare allows the loan rate to be lowered. Clients who use VTB Mobile, based on Tele2’s radio access network workers a VTB Multicard a lot for their day-to-day purchases and infrastructure. VTB offers mobile connection qualify for a discounted loan interest rate. During without any hidden charges and subscriptions, the year, over 300,000 clients of the Bank improved offering an opportunity to shape one’s own plan their terms of loan servicing. connecting only the desired services.
MY SMART CITY
In 2019, the VTB Group created My Smart City, an app that brings together Moscow municipal services and VTB Bank. The app allows users to view event posters, top up their parking account, pay utility bills and traffic fines, top up the balance of their Troika transport card, see the latest Active Citizen votes, and more.
My Smart City was recognised as the best technology product of the year by The Banker magazine. VTB’s solution was the winner in the Mobile Apps category at the Tech Projects Awards, beating out mobile products created by some of the world’s top banks.
Further plans include adding schedules and routes for public transport, a parking lot map indicating available parking spaces, and a feature to search the closest car-sharing opportunities, purchase tickets for cultural events, and book tables in nearby restaurants. We are also working on adding some new sections – for instance, one for mothers, to include information about restaurants offering play areas and events for children, and a healthcare section with contact information for healthcare facilities and the ability to schedule a medical appointment.
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SUPPORT FOR HOME BUYERS VTB actively participated in national programmes DIGITAL SERVICES IN MORTGAGE LENDING increasing the accessibility of mortgage lending. In 2019, VTB’s residential-loan portfolio increased In 2019, VTB decreased the interest rate on mortgage by 20%, reaching RUB 1.7 trillion, while the volume loans from 6% to 5% as part of a programme of mortgage loans broke a record of RUB 712 billion. to subsidise the rate on mortgage loans for families > 30K clients DIGITAL MORTGAGE The reporting period saw VTB become the absolute with two or more children across Russia. VTB’s service of the Bank leader for the growth of the market share simplified and accelerated access to new terms employed in the mortgage loan segment: one out of four for receiving state subsidies. in healthcare, mortgage loans in Russia is issued by VTB. education, The service enables clients to submit a mortgage loan application right from the Bank’s website, receive a preliminary decision, and gain access As part of VTB’s Working Professionals mortgage and law enforcement to the Personal Account where they can attach the required documents VTB Bank is working to transition the entire client programme, over 30,000 Bank clients employed agencies have been to obtain approval for the selected real estate property and final approval service process when obtaining a mortgage loan in healthcare, education, and law enforcement able to improve of the application. After that, users will only have to choose a convenient date to a remote format, which will make the process agencies have been able to improve their living their living and branch for a visit to sign papers. In 2019, VTB’s online mortgage loan simple and intuitive for clients. conditions thanks to preferential mortgage loans conditions thanks application won the annual Bank of the Year award sponsored by the largest (the interest rate is decreased by 0.3%–0.5%). to preferential In 2019, VTB Bank continued with its effort mortgage loans independent financial website Banki.ru. to increase the accessibility of mortgage loans In 2019, VTB accepted applications and issued for specific community groups, having renewed mortgage loans as part of a new state subsidy a number of residential loan programmes. Thus, programme for residents of Russia’s Far East, offering in 2019: an interest rate of 2%. Young families purchasing • Over 1,500 military servicemen benefited real estate in the Far East (both spouses 35 years VR MORTGAGE from preferential loans (a total of RUB 2.6 billion); or younger) and single parents with children under 18 were eligible to receive mortgage loans. Preferential • Over 12,000 people receiving maternity capital loans are available to purchase homes in new could use it to improve their living conditions developments or existing homes from developers The Bank’s VR mortgage service lets clients use a VR headset to evaluate (a total of RUB 29.5 billion); in the Far Eastern Federal District. all the features of a property: its location on a city map, infrastructure, • Almost 16,000 people took part in the layout, and a possible detailed design of the rooms. VTB was the first bank State-Aided Mortgage Service programme in the market to issue a mortgage loan through a VR mortgage service. (a total of RUB 44 billion). A client from Krasnoyarsk completed the purchase of an apartment in St. Petersburg using the service.
DYNAMICS OF MORTGAGE LENDING AT VTB BANK, 2017–2019
Indicator 2017 2018 2019 Mortgage loans issued, RUB million 433,812 670,411 675,4401 Number of mortgage loans issued 201,633 289,898 275,546 CIAN.MORTGAGE Number of mortgage loans issued to purchase homes in new developments 74,503 102,565 87,047
In 2019, VTB Bank joined the CIAN service for home buyers and lease providers to launch a remote mortgage application submission service for users. With the CIAN.Mortgage service, clients can obtain the Bank’s preliminary lending decision within two minutes, an easy and convenient option.
In 2019, the Bank also initiated three issues Housing and Urban Environment project and of mortgage bonds by DOM.RF Mortgage Agent, Presidential Decree No. 204 dated 7 May 2018 secured by VTB Bank’s mortgage loan portfolio. (“Concerning national goals and strategic The third issue, RUB 96.6 billion, became the largest development objectives of the Russian Federation in the entire history of the Russian mortgage for 2024”), which sets out the goal of improving securitisation market. Mortgage bonds are a key tool living conditions for at least five million families 1 Generally, the market observed a 6% decrease in the volume of mortgage loans issued in 2019. used to achieve the goals set by the national every year.
56 57 Sustainability Report / 2019 1 2 3 4 5 6 7 8 VTB for clients
AVAILABILITY AND QUALITY OF BANKING SERVICES INCREASED ACCESSIBILITY FOR PEOPLE to help them overcome the barriers preventing WITH DISABILITIES their access to services. The VTB Group is increasing the number of sales DEVELOPMENT OF A CLIENT SERVICE The VTB Group strives to provide equal access There are tactile information plates in Braille offices in the countries and regions where NETWORK to its services for all clients. New sales offices letters, tactile floor tiles, and tactile trail markers million it operates, expanding the network of ATMs 14 are equipped with infrastructure that ensures free for the visually impaired. Starting from 2018, individual clients and striving to improve the quality of its products In 2019, VTB continued to provide services to retail access to premises for people with disabilities, all purchased ATMs are equipped with Braille in Russia, and services for all clients, regardless of how clients in Russia, Azerbaijan, Armenia, Belarus, people with restricted mobility, and the elderly. keyboards. Furthermore, the Bank’s website offers with over distant their regions are or what the opportunities Georgia, Kazakhstan, Germany, and Austria. The Group operates a total of 1,815 sales offices , an opportunity to convert text to clear and distinct of clients are. Many VTB Bank sales offices are equipped with ramps % over 90% of which are located in Russia. The growth speech. 60 and devices that facilitate access to the services of them in the number of sales offices in the reporting period for people with disabilities and the elderly. regularly using is associated with the purchase of new assets that The VTB Group’s banks are also working towards VTB Online have an extensive network of offices across regions. facilitating interaction between people with disabilities The VTB Group employees are properly trained and the Bank. to service and assist people with disabilities in order One of the key goals of client service is to increase the accessibility of financial services to people living in small or distant locations. INITIATIVES IMPLEMENTED BY VTB GROUP BANKS TO INCREASE ACCESSIBILITY
VTB Group’s banks Description VTB Bank (Belarus) 38 offices equipped with ramps VTB Bank (Armenia) 25 offices equipped with ramps, 187 ATMs equipped with Braille keyboards VTB Bank (Kazakhstan) 16 offices equipped with ramps VTB Bank received an award for high-quality service, as it became one of the top banks VTB Bank (Georgia) 7 offices equipped with ramps in the world to have the fewest fraudulent transactions involving Visa cards. Zapsibkombank 41 offices equipped with ramps Vozrozhdenie Bank 75 offices equipped with ramps, mobile crawler hoists, and anti-vandal assistant call buttons
NUMBER OF GROUP SALES OFFICES IN 2017–2019 DEVELOPMENT OF REMOTE BANKING technologies. VTB rose to the occasion and continued to develop its digital projects for all client categories In 2019, the role of digitalisation and the introduction 2017 2018 2019 2019 of new technologies reached the national level. In 2019, VTB broke a new historical record – Sales offices excluding new assets including new assets At the level of the Russian government, several the number of active Bank clients reached 14 million In Russia 1,341 1,345 1,395 1,638 national projects were created to encourage individuals, over 60% of whom are active users the country’s economic growth and further including low-populated and of VTB Online. 247 251 266 305 economically disadvantaged areas development by introducing state-of-the-art Outside Russia 180 183 177 177
In 2019, the VTB Group operated 18,000 ATMs of remote services. Self-service kiosks are currently across Russia. being equipped with contactless readers.
The year saw VTB Bank increase the number of ATMs Furthermore, VTB is offering its clients an opportunity equipped with a recycling feature, which helps extend to open deposits and savings accounts via ATMs. the service life of the ATM. The Bank is Russia’s leader A deposit can be opened in any self-service kiosk. for this indicator. A number of deposits offer higher profitability than similar products opened in the Bank’s branches. Each year more and more clients prefer going digital, An ATM can also be used to add and withdraw cash communicating through messengers and chats. in a savings account. In 2019, VTB Bank significantly expanded the range
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The opportunity to use VTB Bank’s services via remote The VTB Group’s banks also recognise the need DIGITAL SOLUTIONS FOR VTB’S RETAIL CLIENTS channels is available not only to retail clients but also to improve client engagement. For instance, to companies and sole proprietors. A capability was at VTB Bank (Belarus), client satisfaction reached implemented to enable remote signing of deposit 9.4 points out of 10 by early 2020, and the statistics and loan e-agreements with corporate clients along from phone surveys show that clients tend to consider 95% with signing the documents by enhanced qualified the polite attitude and professional competence client satisfaction digital signature. Furthermore, services were launched of Bank employees to be the most important thing rating enjoyed commercially to submit applications for issuing about being a Bank client. by the contact Virtual assistant in a mobile app Automated recognition Online deposits guarantees electronically with the ability to make centre of passport data amendments. In 2019, VTB Bank (Armenia) conducted a review of VTB Bank (Armenia) In 2019, VTB launched a virtual assistant In 2019, VTB simplified the process of operations of the branches using the secret in its app. Its core function is to provide VTB Bank implemented a new of making deposits online in both Systems for remote interaction across Group shopper method as part of the Service Quality assistance with frequently asked technology of automated recognition the mobile app and web-based companies, such as VTB Bank (Belarus), VTB Bank Monitoring project. 74 service criteria were assessed questions and to facilitate navigation and entry of passport data when browser. The new service users (Kazakhstan), VTB Bank (Armenia), VTB Bank in the course of this review. across the app. The virtual assistance servicing individuals. This technology the ability to obtain all information (Georgia), Vozrozhdenie Bank, and Zapsibkombank, can also provide clients with information allows documents to be scanned about each deposit, from the interest were improved and streamlined. A QR code–based The research led to a range of measures being taken on bank card payment details, account and automatically recognised rate to validity period to top-up payment service was created; a feature to submit to correct the detected deficiencies, and training balances, minimum payments due, and client data to be filled out and withdrawal options. VTB Online short loan applications was made available; credit sessions were given to enhance employee or the last five card transactions. in the Bank’s accounting systems, now offers a unified table of interest repayment services were enhanced; and display qualifications. Client satisfaction with contact centre Launch of the virtual assistant all as a single operation. This rates that allows users to immediately of current and obsolete bank products was added. employees grew from 86% to 95% within a year. enabled VTB to reduce by almost half method will avoid mistakes when find the most suitable offer. the work load of employees who would data are entered manually, while BETTER SERVICE AND DATA PRIVACY GROWTH OF CLIENT SATISFACTION previously reply to clients in the chat increasing client loyalty thanks FOR VTB BANK (ARMENIA) IN 2019 while automating the processing to better and quicker service VTB’s activities aim to improve operations and service of a significant number of client calls. and streamlining banking processes. quality for all client categories. The Group’s Development Strategy sees improved service quality The automated passport data Office operation standards 13% recognition project covers the Bank’s and client loyalty across all segments as a top priority for the Group’s development. For this reason, entire network, which comprises Individual performance 5.5% over 1,500 offices. the Group’s banks carry out annual research to assess client satisfaction with the service provided across POS credit provision 5.5% branches.
Contact centre 8.5% In the reporting period, VTB Bank carried out a range of online and phone surveys, analysed client calls and used the secret shopper method to assess VTB Pension Fund also strives to improve the quality the level of satisfaction with client service across sales of services and calculates the level of client Collection of biometric data Remote account opening offices. satisfaction. In 2019, a number of phone surveys and an assessment of client satisfaction for OmniChat According to a monthly survey conducted VTB has provided for collection of client data as part In early 2019, VTB Bank added to its website a service interactions were conducted. The results showed by VTB Bank, clients demonstrate a steady level of the Unified Biometric System across all regions for remote opening of accounts using the national that the client satisfaction index was 4.8 out of 5 of satisfaction with client service across online of Russia where the Bank operates. People can provide biometric data system. Now each citizen of the Russian (for the phone survey) and 4.6 out of 5 channels (mobile banking app, web banking app, their biometric samples (facial image and voice sample) Federation that is registered on Gosuslugi portal may (for OmniChat). ATMs). Furthermore, growth in the satisfaction in full compliance with the requirements of the Bank become a client of VTB without visiting VTB’s offices. level is observed as it relates to ATM use, which of Russia at any VTB branch where the appropriate To do so, people should simply confirm their identity is explained by a range of measures taken in 2019 equipment is available. Clients who complete on the portal by taking a photo of themselves to increase the stability of their operations. VTB Bank the procedure will be able to open deposits, savings and pronouncing a set of numbers out loud. uses state-of-the-art systems to protect information and current accounts, make payments and wire transfers, and strives to eliminate violations of personal data. and use other services remotely. This will make banking services more accessible to residents in distant locations.
60 61 UNLOCKING PERSONAL POTENTIAL
68.6 K AVERAGE HEADCOUNT
83% EMPLOYEE ENGAGEMENT INDEX Sustainability Report / 2019 1 2 3 4 5 6 7 8 VTB for employees
“To maintain our success, we need a highly PERSONNEL MANAGEMENT VTB engaged team where everyone loves what they do, is enterprising, and strives A result-oriented, initiative-driven, In addition to streamlining all processes, the VTB for employees to achieve outstanding results. This makes well-knit team is by far the most important Group is actively expanding its business. The Group’s developing our corporate culture – component in implementing the VTB Group’s average headcount rose to 68,561 , in 2019, the cultural code that unites employees Development Strategy for 2022. That is why a 19% increase YoY. Out of that number, 14% was due to newly acquired assets. from different divisions – a prime objective Group companies’ efforts in developing in personnel management. We share a highly effective organisation and culture, 1 65 Personnel management common goals, and it is paramount that The voluntary turnover rate in 2019 was around continuously increasing employee 21%, both including and excluding newly acquired all of our employees are on the same page, engagement, and improving remuneration assets. The total employee turnover (outflow believing in and pursuing our values”. 2 68 Talent training and development and training systems are an immediate of staff ) was 28% with new assets included priority for VTB. and 27% with new assets excluded.
74 Employee motivation Andrey Kostin President and Chairman of the Management Board, VTB Bank VTB GROUP’S AVERAGE HEADCOUNT VTB GROUP’S HEADCOUNT ON 31 DECEMBER and remuneration IN 2017–20193 2019, % (INCLUDING NEW ASSETS3)
76 Corporate culture and internal 30 communications 29 215 5,125 70 303 172 215 71 4,948 5,009 5,125 79 Occupational health and safety Permanent employees Permanent employees
63,221 52,632 22 52,793 54,962 34
66 78
Temporary employees Temporary employees 2017 2018 2019 2019 excluding including new assets new assets Part time Full time
Russia men CIS and Georgia women Europe
1 Voluntary turnover is the ratio of the total of employees who left the company of their own accord to the average headcount. 2 The total turnover is calculated as the ratio of the total of employees who left the company of their own accord, were terminated for other reasons, retired, or died as an employee of the company to the average headcount. 3 The data on the average headcount for the previous years differ from those in previous sustainability reports because of changes to the asset base. 4 Our new assets include Vozrozhdenie Bank, Sarovbusinessbank, and Zapsibkombank.
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VTB GROUP’S HEADCOUNT BY AGE GROUP ON 31 DECEMBER 2019 (including new assets3)
1.0 8.5
28.6 32.4 HUMAN RIGHTS, GENDER EQUALITY, AND INCLUSION
VTB Bank’s Code of Ethics prohibits discrimination on political, religious, ethnic, gender, or other similar grounds in hiring, remunerating, and promoting employees. The Code 66.7 of Ethics also prohibits securing unwarranted privileges or advantages in hiring, promoting, and rewarding employees. 62.8 VTB provides equal opportunities for men and women, creating equal conditions for training and career advancement. In 2019, women accounted for 34% of senior Senior management Employees managers and 66% of all employees hired in the reporting period. The average annual number of training hours per employee totalled 43 academic hours for men and 45 academic Under 30 hours for women. Fair remuneration and workplace equality are the purpose of a grading 30–50 system the Bank put in place to objectively assess all jobs it offers.
Over 50 The Group also puts great emphasis on promoting employment for socially vulnerable groups. In 2019 the VTB Group employed 154 people with disabilities, a 12% increase YoY.
VTB GROUP’S VOLUNTARY TURNOVER RATE IN 2019, % VTB Bank operates an anonymous employee complaint hotline. In 2019 the hotline received 3 (including new assets ) 16 complaints regarding professional ethics, employee–management relationships, and fair remuneration. All the complaints were reviewed and resolved. Employee category Rate By gender Men 18 Women 21 By age under 30 32 30–50 17 over 50 8
1 Our new assets include Vozrozhdenie Bank, Sarovbusinessbank, and Zapsibkombank.
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Training extends to all staff, from managers at various distance learning accounted for 44%. Over 87,600 TALENT TRAINING AND DEVELOPMENT levels to employees, including front-office staff. full-time employees received training in 20193. The number of trainees grew 47% YoY. The average In 2019, our priorities in professional and personal The VTB Group offers employees ample The average annual hours of training per Group number of training events per employee in 2019 was The average development focused on fostering a culture opportunities for training and professional employee (including new assets) totalled over 10. annual hours of leadership and efficiency based on the VTB Group development. Various training initiatives 45 academic hours . Among all Group companies, of training per Development Strategy and on establishing are regularly run across the Group, VTB Bank provided the largest amount of training. VTB widely uses the feedback process in place Group employee a balance of team and individual success in keeping allowing our team members to gain new In 2019, the average number of training hours per to make employee training more efficient totalled with the highest service standards in interactions knowledge and skills so that they can realise Bank employee was 54 academic hours, of which and to improve training programmes. with external and internal clients. 45 their potential to the fullest. academic hours
VTB BANK TRAINING
Management Specialists Front-office employees
• Improving managerial skills • Developing functional skills • Developing professional • Developing strategic thinking • Integrating employees into corporate culture and behavioural skills for faster • Improving client focus • Personal efficiency and focus on results and more efficient service • Managing service quality
1 The number of trainees exceeds the headcount because some employees were re-trained for various reasons such 68 as promotion, termination, and departures to and returns from maternity leave. 69 Sustainability Report / 2019 1 2 3 4 5 6 7 8 VTB for employees
VTB BANK’S KEY TRAINING PROGRAMMES IN 2019
Development programmes for line Technology Breakfast, short VTB Bank performance Product-related sessions held Engagement with minority Conflict Management, management events for all employees to expand management as part of training initiatives shareholders a development programme knowledge on new topics for client service and sales teams for the regional network’s A set of development tracks covering A set of on-site, online, Introduction to stock and securities management various corporate areas: negotiations, Short-term training programmes and distance-learning courses Training client service and sales market; VTB’s shareholder cross-functional engagement, promoting innovation to improve in employee performance teams on the Transactional Business engagement practices Developing conflict-handling skills conflict management, employee employees’ professional knowledge management (in place since 2018) Department’s banking products and creating a cooperative team motivation and engagement, change and set up an internal tech and services environment management, team leadership, etc. community
1,028 20 > 1,000 > 986 12,919 826 events An integrated programme > 40 academic hours > 4,000 From 2 to 21 21 academic hours 1 academic hours consisting of three module per course academic hours activities (distance and on-site) Three distance modules 2 academic hours and one on-site module 2.5 months
Master Migrator Secrets to a Successful Team Digital Transformation 2.0, Emotional Intelligence, Management approach a business simulation a development programme Developing client focus and client Developing team communication for the regional network’s A set of programmes for new point- management skills in remote skills Developing skills to manage goals management of-sales management (designed banking channels in a dynamic environment to help managers quickly adapt Training in how to a changing situation and improve to influence the team atmosphere their self-organisation skills and, as a result, employee and personal effectiveness) performance
participants
497 621 136 574 > 100 duration
12 academic hours 2 academic hours 4 academic hours 21 academic hours From 3 to 21 academic hours
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In 2019, VTB Bank made active efforts to promote The year saw over 7,500 project participants take ATTRACTING YOUNG TALENT Examples of ongoing paid internship programmes mentoring. The mentoring project trains and adapts part in VTB Mentoring Practice webinars and training include VTB Junior (for Bachelor graduates) new employees for the Bank’s integrated regional sessions. The participants studied the key aspects, The VTB Group puts great emphasis on attracting and VTB Rost (for Master graduates with little work network. Mentors are appointed from among roles, and processes relating to mentors’ activity young talent and engaging with potential experience) – initiatives VTB Bank has been pursuing VTB Bank has employees, including heads of regional offices who at VTB Bank, looked into nuances of and various employees – students from major universities both for nine years. The year saw 177 and 19 people cooperation have passed the screening process and received approaches to adult education, and learnt how to use in and outside Russia. participate in VTB Junior and VTB Rost programmes, agreements specialised training. teaching and feedback tools. respectively. In 2019, the VTB Junior programme was with over VTB Bank has cooperation agreements expanded to include the Bank’s integrated regional with over 180 universities nationwide. The objectives network, running both in Moscow and in 60 cities 180 of this cooperation include developing graduates’ across Russia. universities skills; hosting and taking part in events for university nationwide students and graduates; organising internships The year also saw internship initiatives launched at VTB Bank; and providing professional training, for young IT specialists – IT Junior and the Java re-training and development programmes and JavaScript developer schools. In addition for Bank employees. VTB Bank hosted 549 events to the primary courses for 86 IT interns, technology- COLLABORATION WITH INSEAD AND IMD in collaboration with its partner universities in 2019. related sessions were held, attended by internal and external experts. Every year, young professionals take internships at VTB Bank. In 2019, a total of around 2,300 In 2019, VTB Bank strengthened its partnerships with INSEAD and IMD. More than 200 VTB executives students took pre-graduation internships and studied international management tools in the INSEAD online programmes Leading Organisations on-the-job training at the Bank. in Disruptive Times and Building Digital Partnerships and Ecosystems, which are among the school’s most popular online programmes. Further, 2019 saw a unique on-site module programme for management developed, called Innovations and Value Creation in Banking. The programme is slated for 2020.
PARTNERSHIPS WITH EDUCATIONAL INSTITUTIONS IN 2019 TALENT POOLING The merger of the Bank’s retail and corporate networks in 2019 marked a new milestone in its As part of its talent management programmes, talent pool management, resulting in a major project VTB focuses on creating the conditions to encourage to nurture future leaders for the new network. Moscow Institute of Physics and Technology professional development of its teams and improve The project involved a total of 1,723 employees. their skill. Setting up and developing a talent pool In 2019, the Bank ran integrated development helps achieve that objective. programmes geared towards its middle and line North-West Institute of Management of the Presidential Academy management pools. of National Economy and Public Administration
Lomonosov Northern (Arctic) Federal University
Orenburg State University
Voronezh State University
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In 2019, VTB Bank spent about RUB 2.4 billion EMPLOYEE EVALUATION EMPLOYEE MOTIVATION AND REMUNERATION on a variety of community programmes, of which the voluntary medical insurance Employee evaluation is an integral part of VTB’s They annually run detailed salary surveys to make An effective remuneration framework programme accounted for 60% (RUB 1.5 billion). personnel management system. Employee evaluation sure they provide competitive pay. The VTB Group is a must for ensuring loyalty and high The programme covers all employees, including those is not only an important component of an employee’s RUB uses findings from those surveys to adjust its pay 2.4 performance among employees. That on maternity leave and those who retired before professional development but also a tool that makes billion scale with current economic opportunities and market is why Group companies are making 29 December 2017. employee promotion objective. spent conditions in mind. continued efforts to improve the workplace in 2019 on a variety In 2019, VTB Bank continued to operate environment and enhance employee The Bank also offered employees two non-state of community In 2019, VTB Bank developed a grading system a performance management system, setting programmes motivation. pension plans in 2019: whose principal purpose is to make the Bank’s individual annual goals for employees early in the year for employees employee remuneration system fairer and more • A programme to support employees of pre- that focused on their activities and on developing competitive. This system allows the Bank to more retirement and retirement age: participants their behavioural competency. The results were flexibly and quickly respond to market changes are entitled to a double contribution assessed by management at the end of the year. identified through regular monitoring of the labour from the Bank, receiving a monthly pension market and to make more informed decisions increase of up to RUB 3,500 if the employee Performance management helps employees engage in establishing competitive wages. has participated in the programme for at least in dialogue with management to receive feedback, five years; outline development plans, and identify priorities in implementing the VTB Group Development VTB’S SOCIAL BENEFITS FOR EMPLOYEES • A vesting programme to support employees with at least five years of service: participants Strategy, criteria to evaluate the results, and the need are entitled to a monthly3 pension increase to develop behavioural competencies. An automated of at least RUB 8,000 if the employee has performance management system stores employees’ participated in the programme for at least goals and expected results, making the process ten years. transparent and providing a clear understanding of what is expected from each employee. HEALTH FAMILY To recognise employees for personal contributions In 2019, 39,700 employees – about 80% of the total to the Bank’s performance in 2019, we held headcount – took part in performance management • Voluntary health insurance, including • Payment in addition to maternity benefit an annual ceremony to award outstanding employees pregnancy coverage procedures. • One-off payments for family emergencies with VTB Top Performer badges and letters • Accident and sickness insurance of appreciation from the President and Chairman • Paid compassionate leave of the Management Board and other Bank executives.
FINANCIAL STABILITY IMPROVING STANDARDS OF LIVING
• Corporate pension programme • Partial reimbursement of tuition fees under job-related higher-education • Financial aid in the event of exceptional programmes circumstances • Retirement and jubilee benefits • Payment in addition to the statutory amount of temporary disability benefits • Reimbursement of relocation expenses, including the costs of relocating to Extreme North regions • Corporate discounts and special offers from VTB partners
1 Vesting is to give a deferred right to the pension reserve formed by the employer in the employee’s registered pension account.
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CORPORATE CULTURE AND INTERNAL COMMUNICATIONS
The VTB Group’s new Development In April 2019 the VTB Group revised its mission Strategy for 2019–2022 laid the foundations and vision statements and values. The year saw for further developing the corporate culture a series of dedicated on-site meetings take place all EVALUATING EMPLOYEE ENGAGEMENT and internal communications. across Russia, involving more than 4,500 participants in 10 cities. An online broadcast of the Group management’s presentation on the new strategy, In the autumn of 2019, VTB surveyed employees both in and outside Russia to measure the employee mission, and values raked in over 12,000 views. engagement index using, for the first time, a single method across all participating Group companies. “In updating our values, we looked into our team’s behaviour The Group employee engagement index stood at 83%, indicating, according to the research method, that employees understand the Group’s strategic goals, mission, vision, and values and that they have and operation to find the benchmarks and attitudes we need the resources necessary to make an extra effort in order to achieve their goals. The findings identified to achieve the goals envisaged by our ambitious business strategy both strengths and areas for improvement. The strengths included: on the one hand and to culturally integrate people of various professions, ages, and experience on the other, with an ultimate • Engagement with line management view to achieving our shared objectives. We needed to find the cultural code that would help us reach our goal, building • Accessible information on our strengths and clearly understanding our areas • Adequate authority to complete assignments for improvement”. • Strong team spirit
Gleb Yermakov At the same time, employees pointed out some areas for improvement, such as Head of Human Resources, Senior Vice President the need to make the change process faster and more efficient, support employee initiatives, and streamline workflows.
The findings will provide the basis for a roadmap to be developed in the first quarter of 2020 in order (including from mobile devices) and by incorporating INTERNAL COMMUNICATIONS to further improve employee engagement and, therefore, efficiency. self-service technology. Work on the new intranet In 2019, VTB put strong emphasis on developing portal is expected to continue until late 2020. and reinforcing internal communication channels. The Bank put an updated intranet portal into The editorial style and design of Team Spirit magazine service that proved a convenient tool and improved were revised. The publication frequency increased communication among divisions of the Bank’s parent from four to six issues a year. The magazine is now The VTB Group is aware that having an efficient both employees and their families. In 2019, company and network. It also boosted employee accessible electronically (including on mobile devices) corporate culture is a key to the successful functioning VTB held more than 300 IC events attended by efficiency by providing employees with uniform as well as on hard copy. of the Group’s business. That is why VTB hosts a total of over 20,000 employees. access to information resources and services a lot of team-building and sporting events, involving
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VOLUNTEERING culture every year. Traditionally, employees helped disadvantaged adults and children, single retirees, OCCUPATIONAL HEALTH AND SAFETY Volunteering is becoming an increasingly customary and other people in need of support. and indispensable practice in VTB’s corporate The most important social objective 19,791 workplaces across the Group. of VTB Group companies is to provide a safe workplace environment and keep In addition, 7,058 Group employees had medical VTB BANK’S SELECT VOLUNTEERING INITIATIVES IN 20193 employees healthy. check-ups to identify any early signs of occupational diseases. Initiative Description The VTB Group operates an accident insurance New Year’s Eve Day for children from orphanages 500 participants The health and safety system in place at VTB Group and hospitals 430 New Year presents programme that covers those categories of employees companies includes a number of interrelated at high risk of injury on the job (drivers, cash School supply assistance for low-income families 400 participants and interacting procedures and initiatives, the most collectors, etc.). Insurance benefits are payable if Form I Pupil Kits for 225 children important of which are: an injury results in full or partial disability or death. Children’s Day assistance 245 participants • Employee safety training; Sports gear and stationery supplies for 220 children In 2019, VTB Group companies saw a downward at schools and hospitals • Specialised workplace assessment; trend in workplace injuries, with a total of 21 reported No One Is Forgotten 80 participants • Risk assessment; injuries representing a 30% drop YoY. Each accident Support and presents for 30 World War II veterans was investigated in the manner required by law, • Dynamic monitoring of employees’ health; Support for orphanages and disadvantaged children 50 participants and steps were taken to prevent similar accidents Clothing and stationery supplies for 150 children • Workplace injury tracking and investigation. in future. Concerts and collaborative activities Support for disadvantaged people 50 participants In 2019, over 24,500 Group employees received Warm clothing for 60 disadvantaged people safety training. As part of initiatives to improve the workplace environment in 2019, VTB assessed
Group companies also took an active part animals at an animal shelter (85 participants). in volunteering campaigns. Vozrozhdenie Bank In addition to customarily supporting orphan VTB GROUP’S ACCIDENT FREQUENCY RATES IN 2019 employees took part in several major campaigns, children, Zapsibkombank employees took part including blood donation (141 employees), in the 5th Russian Financial Literacy Week for children Description Rate financial support for about 200 orphan children and adolescents, hosting a total of 42 events (179 participants), and support for 450 for over 1,000 participants. Lost-time accident frequency rate (the number of accidents per thousand employees), LTAFR 0.306 Lost-time injury frequency rate (the number of accidents per million of hours worked), LTIFR 0.199
Among the health and safety priorities for 2020 are protecting employees’ lives and health, observing safety regulations, and improving risk and safety management practices.
1 The centralised initiatives listed are handled by the HR Department. Every year, employees also take the initiative to organise their own volunteering projects.
78 79 SUPPORTING CLEANTECH
EUR 500 million THE AMOUNT OF GREEN EUROBONDS OF RUSSIAN RAILWAYS (VTB CAPITAL WAS A CO-ORGANISER FOR PLACEMENT OF THE BONDS)
100% ELECTRONIC INTERNAL DOCUMENT FLOW AT VTB BANK BY 2022 Sustainability Report / 2019 1 2 3 4 5 6 7 8 VTB for the environment
“We are proud of the fact that VTB’s effort FINANCING ENVIRONMENTAL PROJECTS VTB for in preserving the unique natural treasures of our country and its inhabitants bring Care for the environment is one of the most participation in shaping a low-carbon the environment even more tangible results from year important aspects of the Group’s social economy and is developing green- to year. Among other things, our work aims and economic activities. VTB understands financing tools to support the government to draw the attention of the professional the importance of financial institutions’ on this path. community to the urgency of environmental issues in Russia. We are going to continue 83 Financing environmental projects providing funds, administrative and charitable support to the most important environmental projects”. 88 Environmental impact management
93 Charitable environmental projects Aleksandr Gogolev VTB’S APPROACH TO GREEN FINANCING Senior Vice President, VTB Bank CEO, VTB Ecology Member of the WWF Russia Supervisory Council In 2019, VTB began elaborating new principles and approaches to green financing, as well as to accounting and monitoring of environmental factors that influence the Bank’s investment and other financial operations.
The VTB Group strives to prevent negative environmental impact by keeping clients aware of and imposing environmental requirements on them prior to implementing projects financed by the Bank or, where possible, at the early stages of project implementation.
As part of green financing, the Bank also strives to provide loans to implement projects improving environmental indicators, reducing natural resource consumption, and promoting the use of renewable energy sources.
In 2019, VTB Capital was a co-organiser on environmental projects, for instance, for transition in the placement of green Eurobonds of Russian to renewable energy sources or reducing hazardous Railways, the first ever placement of such bonds emissions. The total amount of green Eurobonds by an issuer from the CIS. Issuers of green reached EUR 500 million at a coupon rate of 2.2% Eurobonds spend the money earned from them with a maturity term of eight years.
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The project was implemented with the support VTB Bank opened a 13-year line of credit for Second of an Austrian export and credit agency, Wind Farm’s construction project. VTB Bank also “VTB Bank encourages clients to carry out projects with a lower Oesterreichische Kontrollbank AG. The project was established letters of credit for a total amount CO emissions environmental impact. In addition to pursuing economic goals, initiated by an association of Austrian and Russian of over EUR 36 million to organise equipment delivery 2 expected such projects help preserve natural resources through informed companies: Core Value Capital GmbH, Green Source from Germany and Great Britain. These letters of credit to drop by management of environmental risks. What we are doing today GmbH, and Vershina Development. Solar power were confirmed by first-class international banks. will make it easier to satisfy the needs of all stakeholders plants will be generating over 140 million kW·h of green energy annually, reducing CO emissions into In addition, as part of a three-year energy service 24K in the future”. 2 the atmosphere by at least 24,000 tonnes a year. agreement for an amount of RUB 3.9 billion, tonnes a year VTB Factoring provided funding for delivery following Furthermore, as part of RES development support, by MRSK of the state-of-the-art energy flow accounting the construction Dmitry Snesar VTB Bank facilitated the implementation systems that will help reduce the loss of energy of seven solar Head of Client Coverage, Senior Vice President, VTB Bank of one of Russia’s most important wind power plant and make power consumption more efficient. power plants construction projects in Rostov region in 2019. funded by VTB The project is being implemented by the Wind Power VTB Bank also approved a 10-year credit limit 1 One of VTB’s top priorities is financing renewable Providing guaranteed stability, ecological safety, Development Fund and plays a key role in creating of RUB 2.55 billion for Atomstroykompleks. energy source (RES) projects. This type of activity renewability and cost-effectiveness, solar and wind a new renewable energetics industrial cluster in Russia. The purpose of the loan is to construct a cement is consistent with the measures taken by the Russian power generation is the future of green energy. The total capacity of the Wind Power Development mill in Sverdlovsk region, with a planned capacity government aimed at promoting the development Fund’s Second Wind Farm will reach 200 MW, of about 460,000 tonnes a year. The mill will be part of RES-based generation facilities. As part of this activity, VTB provided long-term and the farm will comprise 26 Vestas wind power of a waste-free cluster that produces construction project funding in an amount of EUR 187.4 million plants, each having a capacity of 3.8 MW. materials. As one of the most promising alternative energy lines, to construct and commission seven solar power plants solar and wind power plants generate energy based with a total capacity of 105 MW in Astrakhan region, on a limitless permanent source, including in distant Buryat Republic, and Zabaykalsky territory. and poorly accessible regions.
1 The Wind Power Development Fund was created on a parity basis by Rusnano and Fortum for the purposes of investing in wind farm construction. The fund chose Vestas (Denmark), a global leader in wind turbine manufacturing, installation, and maintenance, to be a partner for this project because the company opened an equipment manufacturing facility in Russia. In 2019, 65% of the necessary components were manufactured in Russia.
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The Russian Executive Agency is continuously working • organising manufacturing using innovative waste with VTB Bank’s clients and other companies, searching recovery technologies; for potential projects consistent with the goals • transition of coal and oil-fuelled boiler systems of the Arctic Council and attracting additional funds. to bio-fuel. In particular, negotiations are underway regarding joint 16 projects in the following areas: environmental The major goals of the RIA for the upcoming period FINANCING ENVIRONMENTAL PROJECTS BY GROUP BANKS projects • modernising cement production and increasing are to continue actively working on approved of the Arctic its environmental efficiency; projects in close cooperation with Russia’s Ministry Council developed of Natural Resources and Environmental Protection • eliminating accumulated environmental damage and implemented and to continue searching for new project ideas. Banks of the Group also provide funding for projects that enable reduction of greenhouse gas in the areas of the Far North; with VTB Bank emissions and discharge of polluting agents into water. Since 2018, VTB Bank (Kazakhstan) has been providing funding for projects saving energy and reducing GHG emissions as part • creating an enterprise for recovering waste of the UN development programme called Sustainable Cities for Low-Carbon Development and making products from recycled materials in Kazakhstan. As part of that programme, VTB Bank (Kazakhstan) provided funding for a project in Russia’s Arctic; to reconstruct the boiler facility in Karaganda, which allowed GHG emissions to be reduced by over 3,000 tonnes per heating season.
In 2019, Sarovbusinessbank, in turn, provided funding to renovate waste treatment facilities in the city of Vyksa (Nizhny Novgorod region) as part of two programmes: Volga Sanitation and High-Quality Utility Services for Residents of Nizhny Novgorod region.
ARCTIC COUNCIL In 2019, the Russian Executive Agency participated in developing and implementing 16 projects Since 2014, VTB Bank has acted as the Russian of the Arctic Council to prevent climate change, Executive Agency for the Arctic Council Project manage hazardous waste, and preserve Support Instrument, a fund that finances projects biodiversity. The most important outcome of these to reduce pollution and improve environmental projects is the reduced emission of GHGs, footprint control practices in the Arctic. charcoal black, and other pollutants in the Republic of Karelia, Murmansk region, Arkhangelsk region, and Russia’s Arctic, all thanks to the transition to renewable power sources and optimised waste disposal.
NATIONAL ECOLOGY PROJECT
In 2019, VTB Bank was invited to take part in a national project called Ecology1 and was included in the Business and Biodiversity working group of Russia’s Ministry of Natural Resources and Environmental Protection. The major goal of the working group was to achieve synergy in implementing corporate programmes to preserve biodiversity and protect the environment, run by Russian government agencies across designated natural areas of federal importance. Following the working group’s meeting in 2019, the Bank decided to enter into a cooperation agreement with Russia’s Ministry of Natural Resources and Environmental Protection (currently in development).
1 To comply with section 7 of Presidential Decree No. 204 dated 7 May 2018 (“Concerning national goals and strategic development objectives of the Russian Federation for 2024”).
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ENVIRONMENTAL IMPACT MANAGEMENT
Reducing the environmental footprint Year after year VTB continues to increase its energy is an important part of the VTB Group’s efficiency, renovating the operated facilities, new Development Strategy. A high degree implementing resource saving technologies of digitalisation and the use of innovative and training its employees to use resources rationally. The Group thus strives to minimise its negative tech solutions across business processes environmental footprint through stringent control call for the transition to paperless internal of all types of resource use. and external workflows and to more efficient use of resources by all Group companies.
KEY MEASURES TO MINIMISE VTB BANK’S ENVIRONMENTAL FOOTPRINT IN 2019
Optimisation of energy consumption and renovation of the heating system
• Optimisation of air conditioning system operation Car fleet optimisation
• Replacement of fluorescent lights with LED lamps The total energy saving topped • Optimisation of car fleet use Reduction of petrol consumption 25,100 kW·h by 39% and diesel fuel • Partial repair of thermal insulation of heating system pipes • Reduction of Bank-owned passenger cars by 41% consumption by and special-purpose cars by 32% 23% • Correction of ventilation systems operations schedule in the reporting period • Replacement of engineering equipment • Car fleet renewal • Installation of thermostats and temperature regulators
All office waste1 was handed to contractors Waste management optimisation for recycling Optimisation of paper consumption 346 tonnes of paper • Sorting of waste by type on-site and transferring Waste is sorted in Moscow • Gradual transition to electronic document flow passed to recycling it for recycling and Saint Petersburg • Application of duplex printing • Organisation of sales of metal-containing waste
1 Luminescent tubes, batteries, used office machines and cartridges.
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Another important line of VTB’s activity is increasing employee functions, thus reducing consumption Companies of the Group actively took actions to environmentally-friendly means of transport, the efficiency of real estate use. To create of resources and environmental footprint. The first to use resources more efficiently in 2019. and optimisation of existing floor spaces. unified centres of operation, the Bank strives outcomes of reduced environmental footprint These actions included, among other things, An important role in these activities is played by lean for optimal distribution of infrastructure assets under this initiative are expected in late 2020. replacement of filament lamps with LED lamps, projects – steps that optimise internal workflows, by reducing office area and minimising duplicated implementation of e-document flow, transition making for more efficient use of resources.
RUB 200 million PROJECT FOR THE GRADUAL TRANSITION TO ELECTRONIC LEAN PRACTICES AT VTB BANK impact from lean projects DOCUMENT FLOW completed in 2019 In 2019, VTB Bank continued extensive implementation of lean practices across its everyday activities. In 2019, the Bank started implementing the Paperless Document Flow initiative. The goal of the This approach implies company management based on continuous reduction of all types of loss. initiative is to significantly reduce paper consumption and cut costs by following an end-to-end Lean operations involve each employee in business optimisation, focusing on clients’ needs. approach to document management and storage. In 2019, the Lean Lab was created. Lab experts developed learning courses based on Lean Six Sigma. By late 2021, all of the Bank’s internal workflows will use e-documents while paper documents Over 130 employees from across VTB Bank’s branches passed the training in basic Lean concepts will only be stored for the purposes of legal compliance. The Bank’s corporate environment and tools within a year. Furthermore, for the purposes of exchanging best practices, the Bank and infrastructure will be improved, which will enable interactions in digital space with both arranged for a Territory of Lean Leaders conference where over 150 lean production activists the Bank’s clients and employees. attended and participated.
In order to achieve the required results, the Bank implements the following measures: In 2019, the Bank implemented over 200 lean projects that yielded a total economic impact of RUB 200 million. • implementing paperless document flow principles in everyday activities;
• coordinating the Bank’s activities in the transition to e-document flow along with taking actions to optimise workflows and reject the use of paper for current projects;
• developing technologies to support the implementation of e-workflows;
• identifying sources of paper documents and transformation of relevant business processes;
• optimising logistics, storage, and destruction processes for paper documents.
VTB became one of the first banks to offer such services in 155 offices across Russia. The technology allows clients to sign the required documents online without using paper media. By late 2019, the service was available for 17 types of lending, card, and account transactions. In 2020, the Bank plans to increase the number of transactions, adding those that involve deposits, payments, wire transfers, cash, escrows, and investment products. By late 2020, 40% of transactions across 1,500 offices will be paperless (80% by the end of 2022).
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Total fuel consumption in the reporting period showed including the new assets, electric energy consumption insignificant growth considering new purchased and associated indirect greenhouse gas emissions CHARITABLE ENVIRONMENTAL PROJECTS assets. In the last year, fuel consumption decreased remained approximately at the same level as in 2018. The Bank traditionally supports a number by 32%. This achievement was due to the optimised Charitable activity aimed at preserving of non-profit organisations and funds primarily use of the car fleet. Optimised fuel consumption Paper consumption also grew insignificantly, % biodiversity and rational use of natural 32 aimed at addressing environmental challenges. by VTB Group companies (including new assets) considering the inclusion of new assets. Paper less fuel consumed resources is another line of VTB’s activity had a corresponding effect on direct greenhouse gas consumption (excluding that by new assets) by VTB Group in the area of environmental protection. emissions. In 2019, total electric energy consumption decreased by 9%. In the future, the VTB Group plans companies in 2019 reached 275,050 kW·h . The year-on-year growth to significantly decrease this indicator following is due to the inclusion of new assets. Without the implementation of e-document flow. THE MOST IMPORTANT CHARITABLE ENVIRONMENTAL PROJECTS BY VTB BANK
KEY INDICATORS FOR THE GROUP’S ACTIVITIES TO DECREASE CONSUMPTION OF RESOURCES AND GREENHOUSE GAS (GHG) EMISSIONS IN 2017–2019
2017 2018 2019 2019 Amur Tiger Centre World Wildlife Fund (WWF) Russian Geographical Society including new Indicator excluding new assets assets Growth of the Amur tiger Sustaining the Amur tiger, Preserving Russia’s natural, population and nature Amur leopard, and snow historical, and cultural heritage Total electric energy consumption, kW·h 234,846.1 233,544.5 230,044.8 257,049.4 preservation in the Russian Far leopard populations, renewal Total fuel consumption, thousand litres 4,015.1 3,661.7 2,486.3 3,780.3 East of the Persian leopard population Paper consumption, tonnes 3,238.6 3,305.8 2,993.9 3,437.6 Direct GHG emissions, 9,519.0 8,711.2 5,940.3 9,272.4 in tonnes of CO2 equivalent Indirect GHG emissions, 159,393.4 159,644.3 159,191.0 177,878.2 RUB 150 million in tonnes of CO2 equivalent Since 2017
CONSUMPTION OF RESOURCES BY GROUP COMPANIES IN 2017–2019 PER EMPLOYEE RUB 212.5 million Fuel (petrol and diesel), Electric energy, Paper, Since 2016 litres per person MW·h per person kg per person
56.2 57.7 69.7 50.2 50.6 RUB million 63.9 4.1 4.1 3.9 130 55.6 3.8 Электроэнергия, Since 2014 41.7 МВт⋅ч на человека
Companies of the Group also provide support pollution sources, and creation of a park space along for sponsors’ projects aimed at improving with beautification and greenspace expansion. the environment in regions. Zapsibkombank carries out a corporate treeplanting event each year: in 2019, 250 bank employees e in in in e in in in e in in in Vozrozhdenie Bank supported a community project planted 40 trees in a Tyumen municipal park. new assets new assets new assets new assets new assets new assets for the recovery of the Temernik river in Rostov- Employees of VTB Bank (Azerbaijan) joined a city on-Don and the creation of the longest linear event to plant 650,000 trees as part of the celebration recreational park in Europe. The project involves of the 650th Anniversary of the famous poet creation of an environmental monitoring system and thinker Imadeddin Nesimi. to track the condition of the river, elimination of all
92 93 PROMOTING CREATIVE INITIATIVES
6 major dedicated programmes PROMOTING SPORTS, EDUCATION, HEALTHCARE, CULTURE, PRESERVATION OF TRADITIONS, AND BUSINESS DEVELOPMENT
77 cultural projects IMPLEMENTED BY VTB BANK Sustainability Report / 2019 1 2 3 4 5 6 7 8 VTB for society
“VTB is traditionally proactive MANAGING SPONSORSHIP AND CHARITY PROJECTS VTB in supporting sports, education, culture, and healthcare. We take a responsible VTB makes a solid contribution to the social and charity support requests, develops proposals for society approach to managing our sponsorship and economic well-being of the regions on the amount and structure of Bank expenditures and charitable activity by continuously where it operates, supporting professional associated with these activities, and approves sponsorship and charitable activity plans to be improving our management system. and amateur sports, stimulating education included in the Bank’s draft budget for the upcoming and healthcare improvement, and taking care In 2019, key documents governing this area financial year. Since 2019, meetings of the Committee were updated. Apart from the effect of cultural traditions. have been regularly conducted in a remote paperless 97 Managing sponsorship and charity achieved regionally, VTB focuses its format, saving time and paper. projects efforts on addressing global challenges, including by pursuing the UN Sustainable In 2019, VTB Bank continued to provide extensive Furthermore, the Sponsorship Policy and Charity support for socially important projects through its Policy were updated. According to these two 100 A Sporting Country Development goals”. sponsorship and charitable activities. The structure documents, basic principles followed by the Bank of these activities saw significant changes. in these two areas are transparency, targeted focus, and efficiency of use of the allocated funds. 104 Patriotism and a Country of Traditions Natalia Germanova Advisor to the President and Chairman of the Management Board, VTB Bank The Sponsorship and Charity Committee Policy was approved. The Committee processes sponsorship 105 A Cultured Country
108 An Educated Country
111 A Country for Business
114 A Healthy Country
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RESULTS OF SPONSORSHIP AND CHARITY COMMITTEE OPERATIONS IN 2019 Since 2018, the VTB Group has adhered In 2019, the Group’s spending on charity to the previously chosen approach in implementing totalled RUB 9.6 billion , of which 85% was six large-scale targeted programmes. VTB also has contributed by VTB Bank. In 2019, the Bank a subgroup of strategic projects (long-term projects spent a total of RUB 16.3 billion on 562 projects, of national significance). of which charity projects accounted for 50.3% (RUB 8.2 billion) and sponsorship projects totalled 46 distance 588 charity-related decisions In addition to working towards VTB’s goals, 49.7% (RUB 8.1 billion). Spending remained around / / made programme accounting helps Group companies the same level YoY. organise their charity and sponsorship activities and pool their efforts to achieve the UN Sustainable 49 3 on-site 733 145 sponsorship-related meetings issues examined Development Goals. / / decisions made
VTB BANK’S SPENDING ON CHARITY AND SPONSORSHIP IN 2017–2019, RUB billion SPENDING BY PROGRAMME1, %
7 LARGE-SCALE TARGETED SPONSORSHIP AND CHARITY PROGRAMMES 5
9 35 8.2 A Sporting Country 9.4 6.4 (development of professional sports and promotion of healthy lifestyles)
16 Patriotism and a Country of Traditions 8.1 7.2 (support for foundations, religious organisations, veterans, and people with disabilities) 6.8
28 A Cultured Country 2017 2018 2019 (working with theatres and museums, support for the cultural sector as a whole) Sponsorship Patriotism and a Country of Traditions Charity Sporting Country An Educated Country (contribution to education and science) Cultured Nation Educated Nation Country for Business A Country for Business (involvement in business communities, forums, and conferences) Healthy Country
A Healthy Country (support for healthcare and environmental initiatives)
1 Strategic projects are not included.
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In 2019, VTB Bank implemented 32 major sporting As part of its CSR programme, VTB ran a campaign A SPORTING COUNTRY projects. Notable events included: offering Bank clients to attend basketball games free of charge for the first few days. Students • VTB Formula One Russian Grand Prix; VTB’s Sporting Country programme SUPPORT FOR PROFESSIONAL SPORTS at 300 Moscow general-education schools also provides support for professional sports In 2019, VTB Bank continued to support professional • VTB United League Basketball Tournament; received complimentary tickets. A charity initiative gave 32 and a healthy lifestyle in regions where children aided by the Gift of Life and T-Shirt Gives Life major sporting sports federations such as the International • VTB Kremlin Cup Tennis Tournament; the Group operates. Gymnastics Federation, the Russian Gymnastics foundations an opportunity to attend the tournament. projects Federation, the Russian National Volleyball Federation, • KamAZ Master Rally Team events. The games drew more than 61,000 attendees. implemented and the Beach Volleyball Federation. by the Bank in 2019 VTB Bank is the title sponsor for the VTB United Traditionally, the VTB Group continued to sponsor League, a basketball league founded in 2008 together the KamAZ Master Rally Team and the KamAZ 2019 VOLLEYBALL SUPPORT IN FIGURES with the Russian Basketball Federation. In 2019, gas-fuelled sports-truck project. July 2019 saw the Bank sponsored the VTB United League’s All-Star the Silk Way Rally 2019 Russia – Mongolia – China Game, the premier basketball event of the year. take off from Irkutsk, Russia. The game took place at the VTB Arena, a recently Volleyball Beach volleyball opened multi-purpose stadium in Moscow. In 2019, VTB Bank (Georgia) was a general sponsor for football, water polo, equestrian, and fencing The VTB Group has sponsored the VTB Kremlin Cup organisations as well as for children’s rugby and ski Tennis Tournament since 1998. In 2019, Moscow clubs. The bank sponsored the year’s David Kipiani hosted the XXXth Kremlin Cup tournament. The prize Cup football tournament, triathlon tournament, VTB funding, RUB million 30 20 money provided by VTB totalled USD 1,954,520. and European Under-21 Championship.
> 150 Matches > 400
415 Attendance, thousands 26
VTB FORMULA ONE RUSSIAN GRAND PRIX 2019
VTB Bank was the title sponsor for the 2019 Russian Grand Prix. The sixteenth round of the Formula One World Cup contributed greatly to promoting professional sports the world over. Russia’s most anticipated motorsport event of the year drew Formula One fans from more than 1,000 cities in Russia and 49 other countries.
The Russian Grand Prix was held in September at the Sochi Autodrom, Russia’s only purpose-built Formula One facility. The event featured a rich entertainment programme for attendees. The Grand Prix also saw Formula Two and Formula Three junior championship races held on the Sochi Olympic Park’s racing street circuit.
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SUPPORTING AMATEUR SPORTS by encouraging the use of alternative transport. AND PHYSICAL FITNESS In 2019, Velobike entered its seventh season. Muscovites used bikes to commute to work and get Promoting amateur sports in Russia is a top priority around as well as to take part in the Moscow Cycling on VTB’s CSR agenda. The Group seeks to support Festival. a new generation of future champions by developing urban infrastructure and promoting amateur sports The VTB Group plans to make the service available and a healthy lifestyle. in other cities. VTB and Murmansk region’s government signed a deal to open ten bikesharing In 2013, VTB Bank and Moscow’s Department stations in Murmansk. The stations will be designed of Transportation joined forces to support Velobike, with the region’s climate and terrain in mind. There a bikesharing service, helping it make it to the world’s are also plans to extend the project to Saint Petersburg top five bikesharing systems. The initiative promotes and Nizhny Novgorod. fitness and reduces traffic and carbon emissions
VELOBIKE – 2019 FIGURES
> 5 million 528 660K bicycle rentals a year bicycle stations memberships
24.5K 415K 5.5K To spur public interest in cycling, VTB Bank in 2019 the bank sponsored Euro 2020 broadcasts, bicycle rentals users shared bikes and Velobike sponsored Moscow’s traditional cycling the Under the Tbilisi Sky Festival, and the Zurab a day events held in 2019 such as Autumn Veloparade Sakhelashvili Zuka Cup Water Polo Tournament. (30,000 cyclists), Moscow Veloparade (over 40,000 cyclists), and Night Veloparade (over 40,000 cyclists). Vozrozhdenie Bank sponsored the Pushkin Municipal District Futsal Championship, Novorossiysk’s Track- In winter 2019, VTB Bank ran a New Year advertising and-Field Relay Race, and Klin’s City on Your Palm campaign that involved sponsoring Moscow’s best aviation festival and Klin Fest dance festival. ice rinks: Gorky Park’s Factory of Happy People, the VDNKh Winter City Ice Skating Rink, the Sokolniki Zapsibkombank provided support for the Open Ice Skating Rink, and the Red Square GUM Ice Rink. Youth Festival of Extreme Sports (Surgut, Russia) Over the winter season of 2018–19, Bank-sponsored and the Open Equestrian Championship (Tyumen ice rinks drew 1.7 million attendees. region). A total of RUB 1.1 million was donated to the Thank You Yugra foundation to organise VTB Bank (Georgia) is making a major contribution and hold events that promote youth sports. to promoting amateur sports as well. For instance,
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PATRIOTISM AND A COUNTRY OF TRADITIONS A CULTURED COUNTRY
The principal purpose of this programme sports drama film about the legend of the USSR As part of this programme, the Bank supports Boris Eifman Ballet Theatre, Yevgeny Vakhtangov is to inspire patriotism and interest in the football team. The film’s premiere marked Russia’s principal cultural institutions Theatre, Oleg Tabakov Theatre, and Pyotr nation’s history. The programme includes the 90th anniversary of the birth of the great and their new projects (major exhibitions Fomenko Workshop Theatre. VTB-sponsored supporting unique projects aiming to renew Soviet football player; at Russia’s leading museums; theatre performances drew a total of over 66,000 theatregoers. In particular, the Bolshoi Theatre’s national and religious values and preserve • Godunov: A Sequel, the second season productions; federal theatre show tours), new production of Giselle had a total audience of the historical miniseries Godunov (This large national heritage. The Bank also provides art associations, and channels promoting of 7,500. The premiere was prepared by Alexei project looks into one of the hardest periods support for socially important foundations, cultural values (TV and film producers). Ratmansky, one of the most famous choreographers in Russia’s history. In 2019, the miniseries won including those helping people in need. The programme gives priority to projects of our time. His team seeks to combine the grace the Golden Eagle Award for the Best Miniseries, that help achieve Russia’s strategic objectives and virtuosity of classical dance with the technology drawing a total of over three million viewers); for 2024 envisaged by a national project available to actors today. The Alexandrinsky Theatre In 2019, VTB Bank completed 151 projects • Ivan the Terrible, a 2019 historical series called Culture. staged The Pygmalion Effect, a new tragicomedy as part of this programme, including support about the notorious Russian tsar Ivan IV. ballet from the artistic director and choreographer for 17 veteran foundations, the New Jerusalem Boris Eifman. A total audience of more than 9,000 Monastery, and the Valaam Monastery. Vozrozhdenie Bank signed on as a partner enjoyed his choreographic interpretation of the Greek for the 16th Volokolamsky Rubezh International In 2019, VTB took part in implementing 77 cultural mythological tale, taking a fresh look at the intricate projects. Traditionally, VTB supported film projects promoting Military Patriotic Film Festival. The bank has supported relationship between art and life. the festival over the past ten years. The festival aims interest in Russian history. In 2019, VTB sponsored VTB focused on working together with theatres, the following films: to stimulate interest through films in Russia’s history, culture, and achievements. 2019 being the Year of Theatre in Russia. The Bank • Lev Yashin, The Dream Goalkeeper, a biographical supported the State Academic Bolshoi Theatre,
ILYA REPIN EXHIBITION 300 paintings from 35 collections > 600K visitors
In 2019, the VTB Group took part in hosting a large Ilya Repin exhibition at the Tretyakov Gallery to mark the 175th birth anniversary of the Russian realist painter.
A large section of the exhibition was devoted to the painter’s late period, which has not yet been studied in depth. Apart from renowned paintings by Repin, the exhibition featured his less-known paintings such as Religious Procession in an Oak Forest: Appearance of the Icon, Self-Portrait at Work, Portrait of Nadya Repina, and Hopak: The Zaporozhye Cossacks Dancing (his last painting).
The exhibition also featured a body of studies on the painter. The accompanying entertainment and educational programmes included a host of activities such as lectures, presentations, and video tours.
From Moscow, the exhibition travelled to Saint Petersburg as part of a Russian Museum curatorial project.
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In 2019, VTB Bank supported the 39th international In 2019, VTB Bank continued to work together VTB Group companies also took part in organising of Pushkinsky.Youth, a Pushkin Museum facility music festival Sviatoslav Richter’s December Nights: with the MusicAeterna Orchestra led by Theodore cultural events. VTB Bank (Armenia) supported for adolescents. The museum now has its own Walks with Thomas Gainsborough. The festival Currentzis. The Bank took part in organising a series concerts dedicated to the 75th birth anniversary space at the Lopukhin Estate, running all of its youth is unique in that it builds on the idea of synthesising of concerts in Saint Petersburg (the St. Petersburg of the Armenian jazzman Levon Malkhasyan. VTB programmes in a single location. The building houses fine art, music, words, theatre, and dance. State Academic Capella) and Moscow (the Moscow Bank (Georgia) supported the Vaja-Pshavela State a research lab, reading room, exhibition area, media The 2019 programme featured English music played Conservatory and Zaryadye Park). The concerts Professional Drama Theatre and the Kote Marjanishvili library, and lecture, coworking, and relaxation spaces. by the world’s leading musicians. The event took had a total audience of 7,000. Their original State Academic Drama Theatre and sponsored Programme participants can do research using place at the Pushkin State Museum of Fine Arts, which approaches to performing classical pieces are making a concert by the singer Stefane as well as cultural media library sources, self-study after school, talk, we support as the general sponsor. an important contribution to the formation of modern events held by Georgia’s Italian Embassy. VTB and engage in other beneficial activities. musical culture. Bank (Belarus) signed on as the general partner for the projects Artist and the City (Minsk) Given the crucial role that television plays in modern 2019 GROUP-SPONSORED EXHIBITIONS and the Civic Art Gallery (Novopolotsk). culture, VTB Bank is systematically developing this strategic discipline. In 2019, VTB continued Attendance, VTB Bank believes that creative young people to work together with the Russia-K and VGTRK Exhibition Exhibition thousands should have an opportunity to develop artistically. television networks. A Retrospective 300+ paintings from 35 collections 601 For this purpose, the Bank supported the creation of Ilya Repin’s work Tretyakov Gallery
Ilya Repin: The 175th Birth 250+ paintings and drawings 300 Anniversary State Russian Museum
Francis Bacon, Lucian Freud, 80 paintings and drawings 113 NEW FARM CHILDREN’S MUSEUM CENTRE and the School of London Pushkin State Museum of Fine Arts The New Farm Museum Centre is a collaborative project of VTB Bank and Peterhof, a state-financed Avant-Garde: List No. 1; 250+ exhibits: paintings, drawings, 76 museum. One of the centre’s goals is to revive Russian family traditions such as reading together, The 100th Anniversary of the sculptures, archive documents, playing educational games, and staging home plays. New Farm’s play spaces and creative workshops Museum of Pictorial Culture and books make achieving that goal easier. All courses at the centre are taught interactively. New Tretyakov Gallery, Krymsky Val In a span of about five years, the centre has achieved some outstanding results: Guests from Naples: Judith Slaying Holofer-nes 76 Artemisia Gentileschi by Artemisia Gen-tileschi; • The number of programme participants skyrocketed from 4,647 to 21,670; and Her Contemporaries Angel with Dice and the Holy Pushkin State Museum Tunic by Simon Vouet; Saint • The number of museums included in New Farm programmes increased from 10 to 24; of Fine Arts Agatha by Francesco Guarino; and their contemporaries • New Farm is regularly attended by students from 20 schools and children from 9 kindergartens; A Forgotten Russian Patron: 140+ exhibits: paintings, sculptures, 64 The Collection of Count Pavel photos, watercolours, and books • Every year, New Farm takes part in the Children’s Days in Petersburg and Great Regatta festivals Sergeevich Stroganov as well as in a variety of other local and national events; State Hermitage Museum, the Winter Palace • Intermuseum 2019, a Russian museum festival, recognised New Farm with a diploma in the Best Union of Youth: Russian 80 paintings by 35 artists 62 Educational Project category. Avant-Garde in 1909–1914 Jewish Museum and Tolerance Centre
Leonardo and the Madonna Litta by Leonardo 27 Madonna Litta da Vinci Poldi Pezzoli Museum, Milan
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AN EDUCATED COUNTRY “Support for the education sector is becoming an integral part of the current corporate sustainability model for Russia’s and the Russian economy’s long-term development As part of the Educated Country programme, economic leaders. VTB’s active involvement in the activities the VTB Group aims to improve the quality goals. In 2019, universities such as the Higher School of Economics, Moscow School of Social and Economic of Russia’s universities is in line with international best practices of financial and economic education in CSR. In particular, our cooperation with the Graduate School and develop educational infrastructure, Sciences, MGIMO University, and Far Eastern Federal University received financial support from VTB. VTB of Management seeks to ensure that Russia’s business education scientific potential, and high technology. Bank supported a total of 124 educational institutions matches the highest international standards”. in 2019.
Pursuing the objectives set by the Education In 2019, VTB and 28 leading Russian universities Olga Dergunova and Science national projects, VTB Bank launched campus projects, issuing over 100,000 Deputy President and Chairman of the Management Board, VTB Bank provides long-term financial support to Russia’s campus cards. Campus cards are used to pay student Director of the Graduate School of Management, St. Petersburg University leading universities to ensure their educational stipends and salaries and gain access to university and scientific programmes cater to societal demands premises and IT systems.
The Educated Nation programme also includes projects VTB Group companies not only train adults improving financial literacy, supporting startups, and students but also strive to teach finance to children and finding talented students through professional of preschool and primaryschool age. Since learning contests and grant and scholarship programmes. through play is the best way for children those ages to learn, VTB Bank continues to support Kidburg Career As part of the programme, the VTB Group strives City’s bank theme spaces. The Bank’s game library STRATEGIC COOPERATION WITH ST. PETERSBURG UNIVERSITY’S to improve the financial literacy of the public. is available at Kidburg’s ten locations in Moscow, St. GRADUATE SCHOOL OF MANAGEMENT For that purpose, the Bank joined forces with Russia’s Petersburg, Samara, and Nizhny Novgorod, Voronezh, other leading banks to set up the Financial Literacy and Yaroslavl regions. Development Association. The association is working on educational campaigns together with Russian St. Petersburg University’s Graduate School of Management is Russia’s leading business school. It holds governmental agencies such as the Department a unique set of accreditations, enjoying steadily high international rankings. Since 2012, the school has of Education and Science, the Healthcare Department, been headed by Andrey Kostin, VTB’s President and Chairman of the Management Board. The period and the Ministry of Defence. saw the school enter the ratings of Financial Times and The Economist, an achievement unprecedented in Russia’s business education system. In 2013 the school’s Master in Management programme was ranked #65 worldwide on the FT Masters in Management ranking. In the years that followed, the school moved up in the rankings, making it to #23 in 2018.
In 2019, Olga Dergunova, VTB’s Deputy President and Chairman of the Management Board, was appointed the school’s director. The reporting period saw a record-high acceptance rate for the school. The numbers of the school’s academic awards, research grants, and research papers published in high- ranking journals are on the increase. Together with corporate partners, the school completed several unique projects, such as the <5G_Dream_Lab> project with MegaFon and a boot camp with Severstal. In late 2019, the school began updating its development strategy for 2025. VTB’s expert team is actively involved in shaping the vision of the school’s future and in developing educational programmes using modern technology.
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A COUNTRY FOR BUSINESS
VTB sponsors and organises business events growth, monetary policy, and steps to strengthen both in Russia and internationally. Russia’s economic competitiveness and enhance VTB Group companies take part in hosting resource mobility, as well as key factors for economic major industry events relevant to VTB Bank’s growth and the risks faced by investors, companies, I AM A PROFESSIONAL and the public. strategically important lines of business. We support projects aiming to develop In 2019, VTB Capital hosted a business breakfast modern technology in Russia’s banking In 2019, the 2018–2019 season continued for I Am a Professional, at the World Economic Forum in Davos. The event dealt an olympiad for students in engineering, humanities, and the natural and other economic sectors, including with maintaining Russia’s competitiveness. Participants sciences. VTB Bank has been the olympiad’s principal partner projects that help achieve the strategic looked into supporting talent; industry diversification; and organiser since day one. objectives for 2024 envisaged by a national opportunities that cities have as platforms for global 2019 olympiad: project called Digital Economy. cooperation; Middle East military and political Olympiad finalists had the opportunity to enrol in Winter School, a series season 2 results interactions; and the Eurasian economic and political of educational forums set up by VTB Bank together with the Higher agenda. School of Economics. For VTB Bank, Winter School forums focusing • 54 on economic fields are an effective tool for promoting employers’ disciplines To strengthen its business reputation and develop Positioning itself as a leader in innovative financial brands, allowing the Bank to attract smart and motivated interns. the business community in 2019, the Bank supported technology, VTB Bank takes an active part in discussions The project’s purpose is to provide upward social mobility for talented • More than 520K more than 40 events, including 9 major international and events relating to this topic. Examples include children. applications forums (Saint Petersburg International Economic three high-tech conferences supported by the Bank: Forum, Eastern Economic Forum, Russian Investment Joker, a JAVA developer and team leader conference; The Business Information Science forum was attended by 144 olympiad • Almost 3.5K Forum, Russia Calling Forum, etc.) and several the SQA (Software Quality Assurance) Days International finalists. The event included team games and case studies as well award winners industry conferences. The forums drew more than Conference; and Mobius, a mobile-developer as clinics by VTB and HSE experts. The Finance and Lending forum 60,000 attendees. The events discussed economic conference. brought together 139 students from 30 regions and 48 universities across • 190 Russia. Presentations by Winter School experts, including HSE teachers bronze medals and VTB top managers, discussed a variety of topics such as the value of higher economic education, machine learning technology in banking, • 139 nuances and trends of the financial world, and the major problems faced silver medals by the digital economy. • 106 In just two seasons, more than 70 prize-takers and winners from gold medals 40 Russian regions got internships at VTB, some of those ending up in full-time employment. Season 3 winners will also be invited to VTB’s internship programme.
To improve employees’ competence, VTB Bank took with outstanding performance are selected part in the 2019 Changellenge Cup Moscow case on the online stage to take part in the competitions. competition. A case competition is an event where participants familiarise themselves with a company’s In addition to supporting professional science, operations and work to solve associated problems. the VTB Group encourages initiatives that The Changellenge Case Study League is a large- promote learning and education through games scale system of case competitions aiming to prepare and entertainment. In 2019, VTB Bank continued participants for a career through a practice-oriented to sponsor What? Where? When?, a one-of-a-kind approach. Every year, Changellenge organises national intellectual game show the Bank has more than 200 projects, and over 500 students supported since 2011.
110 111 Sustainability Report / 2019 1 2 3 4 5 6 7 8 VTB for society
KEY EVENTS SUPPORTED BY VTB BANK IN 2019
Russian Investment Forum (Sochi) Moscow Financial Forum • 1,501 media stories, including TV coverage • Address by President and Chairman of the Management Board Andrey Kostin as a keynote speaker at the forum plenary attended by Chairman of the Russian Government Dmitry Medvedev and Sergei Sobyanin, mayor of Moscow • About 10 products featured on the Bank’s stand St. Petersburg International Economic Forum • 866 media stories • 25 agreements in place • 80+ talks and meetings • 30+ media scrums • 8,408 media stories, including TV coverage
Joker 2019: International Java Conference • 549 games • 500+ potential candidates
International Financial Congress (Saint Petersburg) • 26 VTB delegates • 5 VTB speakers SUPPORT FOR FEMALE ENTREPRENEURSHIP • 196 media stories FINOPOLIS: Forum of Innovative Financial Technologies (Sochi) • 10 VTB technology products and services • 442 purchases via the VTB app As part of the Country for Business programme in 2019, Vozrozhdenie Bank supported female • 176 media mentions entrepreneurship, taking part in organising regional exhibitions and forums on the topic. • 10+ hours of public presentations Moscow Urban Forum Mom Can Do Everything, Serpukhov Business Incubator. The Bank supported a photo exhibition • 88 VTB delegates for the Mom Can Do Everything project in Serpukhov. The project is running in Moscow region • 7 VTB Bank speakers • Address by President and Chairman under the patronage of Oksana Pushkina, a State Duma deputy, seeking as its chief aim to advance of the Management Board Andrey Kostin as a keynote female entrepreneurship. The project involves holding photo exhibitions at Moscow region business speaker at the plenary 26th International Conference Software incubators, featuring female entrepreneurs as the main focus. • Panel discussion called Smart City Today: How Quality Assurance Days Is Digitalisation Changing the Quality of Life • 200+ potential candidates Business the Women’s Way, Rostov-on-Don. The year 2019 was the first time the Bank had in Russian Cities? • 190 Bingo participants supported Business the Women’s Way, a forum organised by Rostov region’s Chamber of Commerce • 10 products featured on the Bank’s stand and Industry and Regional Agency for Entrepreneurship Support. The event included panels, • 129 media stories discussions, training sessions, and clinics, bringing together over 200 female entrepreneurs.
Lady Business Forum, Chekhov. The year also saw the Bank become a partner for the Lady Business competition in Chekhov. The competition was organised by the Chekhov branch of the Moscow Mobius Conference 2019 region Chamber of Commerce and Industry together with the Chekhov Town Government. • 500+ participants Eastern Economic Forum • 300 potential candidates The event’s purpose was to promote women-led business across the region. Some 50 entrepreneurs • 16 agreements • 171 games took part, presenting their projects. Six of them were recognised with awards. • 20+ talks and meetings • About 20 media scrums and interviews • 2,652 media stories
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A HEALTHY COUNTRY
This programme facilitates achieving For over 15 years, VTB Bank has been running the objectives of the Health and Environment a national corporate programme called World national projects. We support healthcare without Tears for buying equipment for children’s providers and projects related to developing hospitals. Since the programme’s launch, more than 100 children’s hospitals in 52 regions across Russia advanced healthcare technology. We have received financial support to purchase high- also support projects that help solve tech equipment, expensive medication, and supplies. 1 environmental problems . The campaign is open to any paediatric healthcare provider.
In 2019, VTB supported 77 healthcare projects, In 2019, the Bank allocated a total of over including events held by 59 healthcare providers RUB 75 million to support the project, almost twice and 7 foundations. VTB held 26 events (4 in Moscow as much as in 2018. Donations to regional hospitals and 22 across Russia) as part of the World without grew from RUB 1.5 million to 3.0 million, while Tears programme. Moscow hospitals received a total of RUB 3.5 million.
SUPPORT FOR THE DMITRY ROGACHEV NATIONAL RESEARCH CENTRE OF PAEDIATRIC HAEMATOLOGY, ONCOLOGY, AND IMMUNOLOGY
In 2019, VTB Bank donated, for the second time, 75 million roubles to Doctors, Innovations, and Science for Children Endowment Fund, a foundation set up in 2014 to provide sustainable funding for scientific and clinical research at the Dmitry Rogachev National Research Centre of Paediatric Haematology, Oncology, and Immunology.
The centre’s central purpose is not only to provide effective treatment for children but also to develop and implement uniform, internationally recognised treatment protocols. The centre is the driver behind the development of children’s haematology and oncology in Russia. Thanks to cutting-edge technology, over 80% of patients fully recovered, including those with conditions previously considered incurable.
Doctors, Innovations, and Science for Children uses advanced methods and technology to treat childhood cancer and other serious diseases, acquires resources for scientific research, delivers Vozrozhdenie Bank sponsored Podmoskovye’s Good producing tactile books for visually impaired lectures and training, and holds seminars and conferences. Room project organising play spaces for children children. The bank has participated in the foundation’s in hospitals and clinics. The project kicked off in late projects virtually since its inception in 1995. 2019. Over 60 Good Rooms have been opened Over its history, the foundation has published to date in 47 municipal districts across Moscow over 150,000 book sets. The foundation’s region, and the project is still underway. programme involves over 1,000 children’s institutions in 300 Russian cities. The VTB Group also provided Since 2011, VTB Bank has supported Illustrated massive support for the Deaf-Blind Support Books for Little Blind Children, a charity foundation Foundation.
1 For details on charitable environmental projects, see VTB for the environment section.
114 115 Sustainability Report / 2019 1 2 3 4 5 6 7 8 About the Report
This 2019 VTB Group Sustainability Report VTB GROUP COMPANIES FALLING WITHIN THE SCOPE OF THE REPORT About is the 12th non-financial report issued by VTB Bank. The Report is published annually VTB Bank’s own- and forms an integral part of the Group’s ership interest the Report as on annual reporting. It is for employees, clients, 31 December 2019 shareholders, investors, local communities, Country Full name Type of business (percent-age) and non-profit organisations. The Report Russia VTB Bank (PJSC) Bank – is intended to inform stakeholders of the Holding VTB Capital JSC1 Finance 100.00 116 Scope of the Report VTB Group’s CSR and sustainability activities in the reporting period. This Report Vozrozhdenie Bank PJSC Bank 100.00 is published in Russian and in English. Sarovbusinessbank PJSC Bank 84.36 118 Approach to determining In the case of any conflict, the Russian version Zapsibkombank PJSC Bank 100.00 material topics will prevail. HALS Development PJSC Real estate 99.76 UK Dinamo JSC Real estate 75.00 VB Service LLC Facility operation and mainte-nance 100.00 SCOPE OF THE REPORT VTB Factoring LLC Factoring 100.00
Entities falling within the scope of the Report VTB Leasing JSC Leasing 100.00 were determined based on two criteria: control VTB Specialised Depository JSC Non-bank custodial institution 100.00 over the entities’ activities (more than 50% of VTB Pension Fund Pension fund 100.00 voting shares held by VTB Bank) and/or importance in terms of the entities’ economic, social, VTB DC LLC Finance 100.00 and environmental aspects. VTB Registrar JSC Registrar 100.00 CIS VTB Bank (Armenia) CJSC Bank 100.00 and Georgia VTB Bank (Belarus) CJSC Bank 100.00 VTB Bank (Azerbaijan) OJSC Bank 100.00 VTB Bank (Georgia) JSC Bank 97.38 VTB Bank (Kazakhstan) Bank 100.00 JSCbranch office Europe VTB Bank (Europe) CE Bank 99.39
Unless otherwise indicated, the financial information 2019, prepared in accordance with International on the VTB Group is presented as stated in VTB Bank’s Financial Reporting Standards. consolidated financial statements as of 31 December
1 Including the subsidiaries VTB Capital JSC and VTB Capital PLC.
116 117 Sustainability Report / 2019 1 2 3 4 5 6 7 8 About the Report
APPROACH TO DETERMINING MATERIAL TOPICS VTB GROUP’S MATERIAL INDICATORS SUBJECT TO INDEPENDENT ASSURANCE Indicator Description This Report presents information on Group This Report has been prepared in accordance companies’ sustainable development with the GRI Standards: Core Option. To comply Charitable donations These refer to charitable contributions made by Group companies (within the scope of the Group’s consolidated and CSR activities. Because the Group’s reporting with GRI Standards, we identified material topics made, RUB billion financial statements) in the reporting period. Where charitable donations were made in foreign currencies, they were systems differ, some of the quantitative indicators to be covered in the Report. converted into roubles using the average exchange rate of the Bank of Russia for the year. presented in this report refer only to the Bank’s performance. Number of sales offices, The number of sales offices is determined by summing the offices of Group banks, excluding retail desks and POS including number terminals. IDENTIFYING MATERIAL TOPICS TO BE INCLUDED IN THE 2019 SUSTAINABILITY REPORT of sales offices Sales offices in underpopulated and economically underdeveloped regions are those located in regions with lower in underpopulated population density (less than 50% of Russia’s average) and lower income per capita (less than 65% of Russia’s average), and economically according to state statistics. Material topics were identified through interviews with heads of relevant business underdeveloped regions Step 1. Identifying all units, reviews of non-financial reports issued by domestic and foreign peer companies, of Russia material topics and analysis of internal regulations and media coverage. Electric energy This refers to the reporting period’s electricity consumption by all Group companies (within the scope of this Report, consumed, kW·h excluding UK Dinamo and HALS Development, whose electricity consumption was negligible).
Paper consumed, tonnes This refers to the reporting period’s paper consumption by all Group companies (within the scope of this Report, Step 2. Prioritising material To identify how important each material topic was to stakeholders, we surveyed employees, excluding UK Dinamo and HALS Development, whose paper consumption was negligible). The amount of paper topics top managers, non-profit organisations, investors, and partners. consumed was determined by converting the number of paper packs used into metric tonnes. Where there was no information on the weight of an A4 or A3 sheet pack, average values were used (2.5 kg and 4.8 kg, respectively). Fuel (petrol and diesel) This refers to the reporting period’s fuel consumption by all Group companies (within the scope of this Report, consumed, thousand excluding UK Dinamo and HALS Development, whose fuel consumption was negligible), which was limited to the fuel Step 3. Building a materiality We built a materiality matrix to highlight the most significant sustainability topics based litres consumed by vehicles held in inventory. matrix on their influence on both stakeholders and corporate strategic goals. Direct and indirect GHG This refers to the reporting period’s direct (Scope 1) and indirect (Scope 2) energy GHG emissions by all Group emissions, in tonnes companies (within the scope of this Report, excluding UK Dinamo and HALS Development, whose emissions were of CO2 equivalent negligible). Direct GHG emissions were determined based on the amount of fuel (gasoline and diesel) consumed. Step 4. Validating material We had the identified material topics expertly evaluated for completeness and balanced Indirect GHG emissions were determined based on the amount of electricity consumed. topics presentation and determined limits of coverage for each topic. Average headcount The average headcount is the sum of Group companies’ employees for each calendar day of a given month in the reporting period (including weekends and holidays) divided by the number of calendar days in that month. The average headcount for the reporting period is the sum of Group companies’ employees for all months in the reporting period (including weekends and holidays) divided by the number of months in the reporting period. This Report covers all material topics, including Part-time employees as defined by their employment contracts are counted proportionally to the number of hours ENGAGEMENT TO OBTAIN LIMITED they worked. results for the reporting period and performance ASSURANCE ON THE MATERIAL The average headcount does not include: assessment findings. Topics that are not considered INDICATORS DISCLOSED IN THE REPORT • women who were on maternity leave or extended child-care leave; relevant are not subject to disclosure according to GRI • employees who were on unpaid leave to undertake a course of study at an educational institution or to take Standards. This Report, however, addresses some The Bank engaged external experts to gain entrance exams to be admitted to an educational institution. independent assurance of selected performance of them since they may be important to stakeholders. Accident frequency rate This refers to the accident frequency rate across all Group companies (within the scope of the Report) in the reporting indicators presented in the Report. The assessment period. The accident frequency rate is calculated as the number of accidents per 1,000 employees. To ensure the quality of the Report, the Group focused on material indicators of the VTB Group’s followed the principles of balance, comparability, CSR activities in the reporting period. Headcount by gender This refers to the number of full-time employees, excluding external part-time employees and independent and employee category contractors at the end of the reporting period. A part-time employee on an employment contract counts as one accuracy, timeliness, reliability, and clarity, as defined employee in the actual headcount. The data are broken down by the employee category (full-time/part-time) in the GRI Standards. and by gender.
Information for this Report was collected Average hours This refers to the total academic hours of employee training divided by the average headcount for the period (within of training per year per the scope of this Report, excluding UK Dinamo, HALS Development, VB Service, and Sarovbusinessbank). and consolidated by relevant functional divisions employee of VTB Group companies. Total employee turnover This indicator is calculated as the ratio of the total of employees who left the company of their own accord, were (outflow of staff) terminated for other reasons, retired, or died as an employee of the company to the average headcount.
118 119 Sustainability Report / 2019 1 2 3 4 5 6 7 8 About the Report
Ernst & Young LLC ООО «Эрнст энд Янг» Sadovnicheskaya Nab., 77, bld. 1 Россия, 115035, Москва Moscow, 115035, Russia Садовническая наб., 77, стр. 1 Tel: +7 (495) 705 9700 Тел.: +7 (495) 705 9700 +7 (495) 755 9700 +7 (495) 755 9700 Fax: +7 (495) 755 9701 Факс: +7 (495) 755 9701 www.ey.com/ru ОКПО: 59002827 ОГРН: 1027739707203 ИНН: 7709383532
Translation of the original Russian version
mmar o or per orme ur evidence gathering rocedures are ore li ited than Translation of the original Russian version for a reasona le assurance engage ent and therefore ur engage ent as conducted in accordance ith n less assurance is o tained than in a reasona le assur ternational Standard on Assurance Engage ents ance engage ent. Independent Assurance Report The Indicators have been selected and prepared by the SAE evised Assurance Engagements Other Bank management based on the relevant sustainability than Audits or Reviews of Historical Financial Information on l sion on selected indicators disclosed in and accordingl included the follo ing rocedures reporting principles, scope and methods. ased on the rocedures erfor ed and evidence o the VTB Group Sustainability Report Applicable criteria ► ntervie s ith re resentatives of the an ana tained nothing has co e to our attention that causes us for 2019 ge ent and s ecialists res onsi le for sustaina ilit to elieve that the ndicators are not re resented fairl The criteria of our engagement are disclosed in the chap- olicies activities and sustaina ilit erfor ance in all aterial res ects in accordance ith the criteria To the Supervisory Council of PJSC VTB Bank ter About the Report on pages 116-119 of the Report. relevant to the ndicators and re aration of rele that are disclosed in the cha ter A out the e ort on We believe that these criteria are appropriate given the vant re orting ages of the e ort. purpose of our assurance engagement. Subject matter ► Anal sis of e docu ents related to sustaina ilit Management’s responsibilities At the request of PJSC VTB Bank (hereinafter “the olicies erfor ance and sustaina ilit re orting of rou Bank”) we have obtained a limited level assurance on the The management of the Bank is responsible for the prep- following eleven material sustainability performance in- aration of the Report and for the Indicators for the year ► taining understanding of the rocess of re orting dicators included in the 2019 VTB Group Sustainability ended 31 December 2019 included in the Report are dis- on the ndicators and other engage ent circu Report (hereinafter “the Report”) and identified there by closed fairly in all material respects and in compliance stances revie ing the re orting rocess used for the symbol (hereinafter “the Indicators”): with the criteria that are disclosed in the chapter About re orting on sustaina ilit issues the Report on pages 116-119 of the Report. This respon- ► Number of sales offices including number of sales sibility includes designing, implementing and maintaining ► evie of data sa les and its collection rocess re offices in under-populated and economically under- internal controls relevant to the preparation of the Indi- garding the ndicators at the an and its su sidiar developed regions of Russia (pages 10, 58 of the cators that are free of material misstatements. The man- ies including revie on a sa le asis of docu en Report); agement of the Bank is also responsible for selecting and tation evidence of the ndicators value for the ear ended ece er to assess hether these ► Average headcount (pages 10, 65 of the Report); applying appropriate reporting principles and using measurement methods and estimates that are reasona- data have een collected re ared collated and re ► Headcount by gender and employee category ble in the circumstances. orted a ro riatel . (page 65 of the Report); Our responsibilities ► Average hours of training per year per employee (pages 10, 69 of the Report); Our responsibility is to independently express conclusion that the Indicators have been fairly stated in all material . . SE E YA ► Total employee turnover (outflow of staff) (page 65 respects. artner of the Report); We apply International Standard on Quality Control 1 and Ernst & Young LLC
► Charitable donations made (pages 10, 99 of the Re- accordingly maintain a comprehensive system of quality port); control including documented policies and procedures re- une garding compliance with ethical requirements, profes- ► Accident frequency rate (page 79 of the Report); sional standards and applicable legal and regulatory re-
► Electric energy consumed (page 92 of the Report); quirements.
► Direct and indirect GHG emissions (page 92 of the We have complied with the independence and other ethi- Report); cal requirements of the Code of Ethics for Professional Accountants issued by the International Ethics Standards ► Fuel (petrol and diesel) consumed (page 92 of the Board for Accountants, which is founded on fundamental Report); principles of integrity, objectivity, professional compe- ► Paper consumed (page 92 of the Report). tence and due care, confidentiality and professional be- etails o t e a ite entit havior. a e an Entered in the nified state register of legal entities ove er and assigned state registration nu er . Address olsha a ors a a Saint eters urg ussia.
etails o t e a itor
a e Ernst & Young LLC Entered in the nified state register of legal entities ece er and assigned state registration nu er . Address Sadovniches a a na erezhna a uilding osco ussia. Ernst & Young LLC is a e er of Self regulator organization of auditors Association “Sodruzhestvo”. Ernst & Young LLC is included in the control co of the register of auditors and audit organizations ain registration nu er .
A member firm of Ernst & Young Global Limited A e er fir of Ernst & Young lo al Li ited
120 121 Sustainability Report / 2019 1 2 3 4 5 6 7 8 Appendices
MEMBERSHIP IN BUSINESS Appendices ASSOCIATIONS
VTB Group company Business association VTB Group company Business association VTB Bank American Chamber of Commerce in Russia (AmCham) VTB Pension Fund National Association of Non-Governmental Pension Funds Asia-Pacific Economic Cooperation Business Advisory VTB Capital American Chamber of Commerce in Russia (AmCham) 122 Membership in business associations Council National Association of Securities Market Participants SME Corporation Association of Corporate Lawyers London Bullion Market Association Russian National SWIFT Association International Capital Market Association 124 Abbreviations Russo-British Chamber of Commerce International Chamber of Commerce British Bankers Association National Council on Corporate Governance Association of Foreign Banks Russian Union of Industrialists and Entrepreneurs Association for Financial Markets 125 GRI Standards reference table Climate Partnership of Russia German–Bulgarian Industrial and Commercial Chamber National Securities Market Association International Capital Markets Association CIS Financial and Banking Council) The Association of Banks in Singapore Russian Managers Association Financial Industry Disputes Resolution Centre (Singapore) Association of Banks of Russia Singapore Business Federation Association of Corporate Treasurers VTB Registrar National Securities Market Association Vozrozhdenie Bank Opora Russia (Moscow region and Volgograd region National Settlement Depository offices) Moscow region Chamber of Commerce and Industry VTB Specialised Depository National Association of Securities Market Participants National Association of Securities Market Participants VTB Bank (Kazakhstan) Kazakhstan Taxpayers Association National Finance Association Financial Institutions’ Association of Kazakhstan Zapsibkombank Association of Banks of Russia Kazakhstan Stock Exchange Association of Tyumen region Lending Institutions Kazakhstan Deposit Insurance Fund National Finance Association Society for Worldwide Interbank Financial Telecommunication (S.W.I.F.T. SCRL) Regional Association of Tuymen region Employers Council of Representatives of Banking Ombudsman Yamalo-Nenets Autonomous district Chamber Damu Entrepreneurship Development Fund of Commerce and Industry VTB Bank (Azerbaijan) Azerbaijan Banks Association VTB Factoring Association of Factoring Companies National Confederation of Entrepreneurs of Azerbaijan Republic Factors Chain International Azerbaijani–Russian Chamber of Business Cooperation United States–Azerbaijan Chamber of Commerce VTB Bank (Armenia) Union of Banks of Armenia VTB Bank (Belarus) Association of Belаrusian Banks Association of Securities Market Participants of the Republic of Belarus VTB Bank (Georgia) Association of Banks of Georgia VTB Bank (Europe) International Capital Market Association
122 123 Sustainability Report / 2019 1 2 3 4 5 6 7 8 Appendices
ABBREVIATIONS GRI STANDARDS REFERENCE TABLE
The principal initialisms and abbreviated names used in this 2019 Sustainability Report are listed in the table below. Indicator Definition Report section / notes Page of Report External assurance GENERAL DISCLOSURES Abbreviation Full name / meaning 102–1 Name of the organisation Section 6. About the Report 116–119 Bank, VTB Bank VTB Bank PJSC Contact information 130 CJSC Closed joint-stock company 102–2 Primary brands, products, and services Section 2. VTB for clients 36–61 CSR Corporate social responsibility 102–3 Location of headquarters Contact information 130 FGUP Federal state unitary enterprise 102–4 Location of operations Section 1. About VTB Group 10, 14 Section 2. VTB for clients 116–119 GHG Greenhouse gas Section 6. About the Report GRI Global Reporting Initiative 102–5 Ownership and legal form Section 1. About VTB Group 14, 117 GUP State Unitary Enterprise 102–6 Markets served Section 2. VTB for clients 36–61 IFRS International Financial Reporting Standards Section 6. About the Report 116–119 JSC Joint-stock company 102–7 Scale of the organisation Section 1. About VTB Group 10 + (number of sales Section 2. VTB for clients 36–61 offices) LLC Limited liability company Section 6. About the Report 116–119 OJSC Open joint-stock company 102–8 Information on employees and other Section 3. VTB for employees 65 + (average headcount, PJSC Public joint-stock company workers headcount by gender and employee category Report 2019 VTB Group Sustainability Report 102–9 Supply chain The Group’s procurement policy RES Renewable energy source is available at https://www.vtb. SME Small and medium-sized enterprise ru/o-banke/bank-vtb/zakypki/ zakupki/. Supervisory Council VTB Bank Supervisory Council Procurement records for local UN United Nations suppliers are not maintained VTB Bank (Armenia) VTB Bank (Armenia) CJSC 102–10 Significant changes to the organisation Statement of Andrey Kostin, 4–7 and its supply chain President and Chairman 116–119 VTB Bank (Belarus) VTB Bank (Belarus) CJSC of the Management Board VTB Bank (Europe) VTB Bank (Europe) CE Section 6. About the Report VTB Bank (Georgia) VTB Bank (Georgia) JSC 102–11 Precautionary principle or approach The Group does not explicitly use the precautionary principle VTB Bank (Kazakhstan) VTB Bank (Kazakhstan) JSCbranch office 102–12 External initiatives The VTB Group endorses VTB Capital Holding VTB Capital JSC the Banks Against Money Laundering Declaration and the Russian Anti- VTB Factoring VTB Factoring LLC Corruption Charter for Business VTB Leasing VTB Leasing JSC 102–13 Membership of associations Appendices. Membership in business 122–123 VTB Pension Fund VTB Pension Fund JSC, non-state pension fund associations VTB Registrar VTB Registrar JSC 102–14 Statement from senior decision-maker Statement of Andrey Kostin, 4–7 President and Chairman VTB, Group, VTB Group VTB Group (within the scope of this Report) of the Management Board WMD Weapons of mass destruction 102–15 Key impacts, risks, and opportunities Statement of Andrey Kostin, 4–7 President and Chairman 14–33 of the Management Board Section 1. About VTB Group 102–16 Values, principles, standards, and norms Section 1. About VTB Group 14–33 of behaviour https://www.vtb.ru/o-banke/ gruppa-vtb/missiya-i-cennosti/
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Indicator Definition Report section / notes Page of Report External assurance Indicator Definition Report section / notes Page of Report External assurance 102–18 Governance structure Section 1. About VTB Group 18–20 Management approach www.vtb.com 103–1 Explanation of material topics Section 1. About VTB Group 30–33 102–35 Remuneration policies for the highest www.vtb.ru and their boundaries Section 6. About the Report 116–119 governance body and senior executives 103–2 The management approach and its Section 1. About VTB Group 14–33 102–40 List of stakeholder groups Section 1. About VTB Group 30–33 components Section 2. VTB for clients 36–61 Section 3. VTB for employees 64–79 102–41 Collective bargaining agreements No collective bargaining agreement Section 4. VTB for the environment 82–93 in place Section 5. VTB for society 96–115 102–42 Identifying and selecting stakeholders Section 1. About VTB Group 30–33 103–3 Evaluation of the management approach Statement of Andrey Kostin, 4–7 Section 6. About the Report 116–119 President and Chairman 14–33 102–43 Approach to stakeholder engagement Section 1. About VTB Group 30–33 of the Management Board Section 2. VTB for clients 36–61 Section 1. About VTB Group Section 3. VTB for employees 64–79 MATERIAL TOPICS Section 6. About the Report 116–119 Economic category 102–44 Key topics and concerns raised Section 1. About VTB Group 30–33 Section 2. VTB for clients 36–61 Economic performance Section 3. VTB for employees 64–79 201–1 Direct economic value generated VTB Group’s consolidated 102–45 Entities included in the consolidated Section 6. About the Report 116–119 and distributed financial statements together financial statements with the independent auditor’s report for the year ended 102–46 Defining Report content and topic Section 6. About the Report 116–119 31 December 2019: p. 11–12 boundaries 201–3 Defined benefit plan obligations and other Section 3. VTB for employees 74–75 102–47 A list of the material topics identified Section 6. About the Report 116–119 retirement plans VTB Group’s consolidated in the process for defining report content financial statements together 102–48 Restatements of information and reasons Section 6. About the Report 116–119 with the independent auditor’s for the changes report for the year ended 31 December 2019: p. 58 102–49 Changes in reporting Section 6. About the Report 116–119 Indirect economic impacts 203–1 Development and impact of infrastructure Section 2. VTB for clients 36–61 investments and services provided primarily Section 5. VTB for society 96–115 102–50 Reporting period Section 6. About the Report 116–119 for public benefit through commercial, in-kind, or pro bono engagement 102–51 Date of most recent report Section 6. About the Report 116–119 203–2 Significant indirect economic impacts, Section 2. VTB for clients 36–61 102–52 Reporting cycle Section 6. About the Report 116–119 including the extent of impacts Section 5. VTB for society 96–115 102–53 Contact point for questions regarding Contact information 130 the report Environmental category 102–54 Claims of reporting in accordance Section 6. About the Report 116–119 Materials with the GRI Standards 301–1 Materials used by weight or volume Section 4. VTB for the environment 92 + (paper consumed) 102-55 GRI Standards reference table Appendices. GRI Standards reference 125–129 table Energy 102–56 External assurance Section 6. About the Report 120–121 302–1 Energy consumption within the organisation Section 4. VTB for the environment 92 + (electricity and fuel consumed) 302–4 Reduction of energy consumption Section 4. VTB for the environment 88–92
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Indicator Definition Report section / notes Page of Report External assurance Indicator Definition Report section / notes Page of Report External assurance Emissions Society 305–1 Direct GHG emissions (Scope 1) Section 4. VTB for the environment 92 + (direct GHG emissions) Local communities 305–2 Energy indirect GHG emissions (Scope 2) Section 4. VTB for the environment 92 + (indirect GHG 413–1 Percentage of operations with implemented Not applicable to Group financial emissions) local-community engagement, impact companies assessment, and development programmes Social category Anti-corruption Employment 205–2 Communication and training about anti- Section 1. About VTB Group 21–22 401–1 Total number and rates of new employee Section 3. VTB for employees 64–66 + corruption policies and procedures hires and employee turnover by age group, (total employee turnover gender, and region [employee churn]) Financial service indicators 401–2 Benefits provided to full-time employees Section 3. VTB for employees 74–75 FS5 Interactions with clients, investees, Section 1. About VTB Group 26–33 that are not provided to temporary or part- and business partners regarding Section 2. VTB for clients 40–59 time employees environmental and social risks Section 3. VTB for employees 64–79 and opportunities Section 4. VTB for the environment 96–115 Labour/management relations Section 5. VTB for society 402–1 Minimum notice periods regarding The minimum notice period FS6 Percentage of the portfolio for business lines Section 2. VTB for clients 36–61 operational changes, including whether is defined by the applicable laws by specific region, size, and sector these are specified in collective agreements of the countries of operation and is strictly observed by all Group FS7 Monetary value of products and services Section 2. VTB for clients 40–61 companies designed to deliver a specific social benefit for each business line broken down Occupational health and safety by purpose 403–9 Work-related injuries Section 3. VTB for employees 79 + FS13 Access points in low population Section 2. VTB for clients 58–59 (accident frequency rate) or economically disadvantaged areas Training and education by type 404–1 Average hours of training per year per Section 3. VTB for employees 68–72 + (average annual hours FS14 Initiatives to improve access to financial Section 2. VTB for clients 58–59 employee by gender and employee category of training per Group services for disadvantaged people employee) Charity and sponsorship Section 5. VTB for society 96–115 Diversity and equal opportunity 405–1 Composition of governance bodies Section 3. VTB for employees 64–67 and breakdown of employees per employee http://www.vtb.ru/group/ category according to gender, age group, management/ minority group membership, and other indicators of diversity
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Contact information VTB BANK (Public Joint-Stock Company)
MAILING ADDRESS: 43 Vorontsovskaya St., bldg. 1, Moscow, Russia 109147
DELIVERY ADDRESS: 12 Presnenskaya Naberezhnaya, Moscow, Russia 123112
CALL CENTRE 8 (800) 100-24-24 (for calls within Russia)
+7 (495) 777-24-24 (for calls from Moscow and international calls)
www.vtb.com, www.vtbrussia.ru
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