ANNUAL REPORT the Heart of a Real Work Is Reflected Not So Much in the Cool and Grey Figures

2009

ANNUAL REPORT the heart of a real work is reflected not so much in the cool and grey figures ...... as in the vivid, bright, interesting and rich life hidden behind them. 2009ОГЛАВЛЕНИЕ

ANNUAL REPORT Annual report of Banking Group ZENIT 2009 CONTENTS

1...... Statement from the Chairman of the Board of Directors...... 7 2...... Banking Group ZENIT today...... 7 2.1...... Banking Group ZENIT — key facts...... 7 2.2...... History of the Banking Group ZENIT...... 9 3...... Corporate Governance...... 13 3.1...... Shareholders...... 13 3.2...... Group structure ...... 14 3.3...... Corporate governance structure...... 15 3.4...... Board of Directors...... 16 3.5...... Management Board...... 18 4...... Operations of the Banking Group...... 19 4.1...... Strategy of the Banking Group...... 20 4.2...... Review of the Russian economy and banking sector in 2009...... 25 4.3...... Summary of the Banking Group ZENIT development in 2009...... 29 4.4...... Overview of the Group business in 2009...... 32 4.5...... Development of the Banking Group's regional network...... 33 4.6...... Corporate banking...... 35 4.7...... Investment banking...... 42 4.8...... Retail banking...... 44 4.9...... Private Banking...... 46 4.10...... Risk management...... 47 4.11...... Charity and sponsorship projects...... 49 5...... IT development...... 52 6...... Organisational development...... 54 7...... Reference information...... 56 7.1...... Main foreign partner banks...... 57 7.2...... List of licences and participation in associations, ...... partnerships and organisations...... 58 ...... OJSC Bank ZENIT...... 58 ...... JSB Devon-Credit (OJSC) ...... 60 ...... OJSC Lipetskkombank...... 61 ...... Bank ZENIT Sochi LLC...... 62 ...... OJSC Spiritbank...... 62 8...... Financial statements...... 63 8.1...... Consolidated Statement of Income...... 64 8.2...... Consolidated Balance Sheet...... 65 8.3...... Consolidated Statement of Changes in Equity...... 66 8.4...... Consolidated Statement of Cash Flows...... 68 9...... List of subdivisions of the Banking Group ZENIT...... 70 9.1...... OJSC Bank ZENIT...... 71 9.2...... JSB Devon-Credit (OJSC)...... 75 9.3...... OJSC Lipetskkombank...... 77 9.4...... Bank ZENIT Sochi LLC...... 79 9.5...... OJSC Spiritbank ...... 80 Annual report of Banking Group ZENIT

2009 Dear shareholders, partners and colleagues! Presenting the Banking Group ZENIT 2009 Annual Report, Securing of these funds presented the opportunity to re- I am pleased to note that despite all of the challenges faced ceive a subordinated loan from Vnesheconombank under by the national and global financial systems, the position the Federal law “On additional measures to support the of the Group remains solid. We managed not just to retain financial system of the Russian Federation”. our customer base and strengthen our market positions, but we also successfully improved them in a number of cases. Twice, in March and November 2009, the rating agency Statement Such a positive assessment is applicable to the activities Fitch Ratings confirmed the Long-Term Issuer Default Rating of every participating bank of the Banking Group ZENIT. and National Long-term Rating at the level “B+”/”A—(rus)”. In April 2009, the rating agency Moody’s Investors Services In summary, I can note that 2009, just as previous years, confirmed the “Ba3” Long-term global local and foreign was profitable — the net profit of the Group increased by 77% currency deposit ratings. from the and amounted to 2.1 billion rubles. The total capital of the Banking Group increased significantly — by 30% — reaching The Group mainly focused on building up business amid 28.3 billion rubles. The pace of growth of this indicator of the the continuing financial and economic crisis, replenishing Group in the past year was higher than that of competitor banks. the capital base and maintaining financial stability. Most of The change in assets was only slight — less than 1% — our clients placed special emphasis on the adaptation of Chairman and by the end of 2009 they exceeded 186 billion rubles. business to the changed conditions. The Banking Group At that, the decrease in the corporate loan portfolio of the endeavoured to offer them all-round support, obviously taking Group, unlike many large banks, was minor and did not into account potential risks. 1 exceed 1.5%. At the same time, the Banking Group con- of the Board siderably built up the volume of individuals’ deposits over The Banking Group’s efforts during the crisis proved to the year. It grew by 29.3% and amounted to 39.6 billion be fruitful. Not a single ranking reflecting the Group’s rubles. The geography of the Group’s activity also expanded — business positions went down over the year while key indi- an additional office of Bank ZENIT Sochi was opened up cators (assets, capital, and profit) improved. in Krasnodar. of Directors Over many years the Group has been actively involved Taking into account the complex economic situation, the in charity and social work. Children’s programs, protection Banking Group actively implemented an anti-crisis policy. of low income population groups, support of sports and In particular, the Group worked on the modelling of scenarios cultural initiatives remain the priority directions of this work. of changes in the external and domestic macroeconomic Despite the complex economic environment, the charity environment to assess their impact on the business of the programs were not cut back. Banking Group and its clients. Stress testing of the liquidity position has been performed on an ongoing basis. Throughout I believe that the crisis year reaffirmed the strong foundation the year, work was carried out to improve the quality of of the Banking Group ZENIT’s business. Using the precondi- the loan portfolio and additional procedures for lowering tions for growth created over previous years, we will be con- credit and market risks were developed. sistently increasing financial efficiency of our operations. There is no doubt that our future work will be equally pro- The social and economic importance of the Group, along ductive and all our successes and achievements will contri- with the availability of the required ratings from international bute to the development of the Group as a universal and and Russian rating agencies allowed to participate in the reliable all-Russian financial structure and to the strengthen- financial sector support programs implemented by the ing of its positions not only in Russia but also on foreign Government of the Russian Federation and the Bank of Rus- financial markets. sia. The Banking Group actively collaborated with the Central Bank of the Russian Federation through its parent bank, under existing refinancing programs.

In order to replenish the capital base, a subordinated deposit Yours respectfully, of 2.14 billion rubles for the period of over 10 years was raised from OAO Tatneft (JSC) in March 2009. Chairman of the Board of Directors А.А.Sokolov The Cathedral of Our Lady of the Sign (Moscow) The icon of the Mother of God “The Sign” (XII century) in honour of which the Cathedral was built, was considered a protector of Romanov dynasty.

One of the few Moscow churches The wrecked Cathedral chapel that have never been closed, where the Cross made in memory with a special atmosphere of Metropolitan Varlaam which is usually called had been kept, was rebuild “a spirit of worship”. under financial assistance of Bank ZENIT Banking Banking Annual report Group ZENIT Group ZENIT — of Banking today key facts Group ZENIT 2 2.1 2009 7

2.1...... Banking Group ZENIT — key facts

The Banking Group ZENIT is one of Russia’s The total banking network covers 23 subjects of the largest privately owned banking structures. Federation in 6 federal districts. Branches of the Group’s Traditionally focused on operations in the corporate sec- banks are located in most cities with a population over tor, the Group has been developing as a universal bank and 1 million. The strongest position of the Banking Group is actively progressing in retail and investment banking as in the Privolzhsky federal district and particularly in the Banking well as in private banking. Republic of Tatarstan.

The Banking Group ZENIT comprises the parent Bank The considerable deterioration of the banking busi- ZENIT and subsidiary credit organisations: JSB Devon- ness environment, of which the greatest impact was felt Credit (OJSC), OJSC Lipetskkombank, Bank ZENIT Sochi LLC by the privately owned banks, did not affect the competitive Group ZENIT and OJSC Spiritbank. The subsidiary banks are among the position of the Group. The Banking Group ZENIT continues leaders in the regions of their presence — Tatarstan, Lipetsk to be among the largest Russian banking organisations. region, Krasnodar district and Tula region respectively. Not a single business ranking of the Group has deteriorated.

In particular, the Group occupied the following today positions based upon indicators of main business volumes: 2 indicator As at 01.01.2010 As at 01.02.2009* Assets 19th place 23th place th th 2.1...... Banking Group ZENIT — key facts...... 7 Capital 21 place 24 place th th 2.2...... History of the Banking Group ZENIT...... 9 Profit 15 place 16 place Source: «Profile», RAS data as at 01.01.2010 * — the Banking Group positions in the rankings are officially published since 1 February, 2009. The data as at 1 January, 2009 indicated rankings of Bank ZENIT In most business segments, the Banking Group ZENIT Considering that Bank ZENIT’s investment business ranks in the Top 20. The chart below shows the Group’s key makes up the bulk of the whole Banking Group’s investment positions in the corporate and retail business. unit, the rankings of investment business can also be attri- buted to the entire Group.

Investment banking Corporate banking Retail and Private banking

2th place 19th place Among the top banks in Private in terms of net AUM in Bank place in terms Banking in Russia Managed Mutual Funds (BMMFs)* of corporate loans*** (Bank ZENIT)****

16th place 22th place 19th place among arrangers of corporate place in terms in terms of funds raised bond issues (without taking of corporate deposits *** from individuals*** into account own issues)**

20th place Sources: in corporate bonds * — Investfunds.ru ** — Cbonds.ru underwriting** *** — «Profile» **** — Euromoney survey Banking Banking Group Banking History Group ZENIT ZENIT — Group ZENIT of the Banking Group 2 today 2.1 key facts 2 today 2.2 ZENIT 8 9

Comprehensive servicing of corporate clients The Banking Group considers an active partici- 2.2...... History of the Banking Group ZENIT represents the core business of the Banking pation in the life of the banking community as Group. part of its strategy. BRAND ESTABLISHING The main corporate partners and clients of the Group are Thus, the active cooperation with the Association of Russian enterprises in the oil and metal industry, energy, engineer- Banks and Banking Association “Russia”, allows the Group .Bank ZENIT is founded. ing and defence sectors as well as regional and municipal to put forward its proposals and initiatives on all relevant 1994 authorities. issues in the development of the banking sector. .An official adviser to the Ministry of Finance, Republic of Tatarstan. In its activities the Banking Group puts an emphasis on During the crisis, representatives of the Banking Group 1998 The first branch was opened up in Almetyevsk. establishing and maintaining long-term relationships with ZENIT submitted a number of proposals on support mea- . corporate clients. Broadly for this reason, the chosen busi- sures for credit institutions, which were subsequently .A branch in Saint Petersburg was opened up. ness model allowed the Group to retain its competitive posi- included in the regulatory novations of the Central Bank 1999 tions on the Russian banking market despite the negative of Russia. dynamics of the real sector of the economy. Moreover, the A financial advisor to OAO Tatneft (JSC) in negotiations with foreign credi- Group’s positions became stronger in certain areas such A conservative approach to maintaining the necessary . tors on the agreement for restructuring of the debt, amounting to $1 billion. as lending to the corporate sector and attracting individuals’ level of liquidity, minimisation of credit risks and measures 2000 funds. aimed at increasing the capital made it possible, despite the .A branch was opened up in Gorno-Altaysk. crisis, to preserve “B+”/”A—(rus)” credit ratings — the long- Despite the global downturn at financial markets, the term IDR and National long-term rating respectively from POSITIONS STRENGTHENING Group’s banks continued to provide a full range of invest- Fitch Ratings agency; “Bа3”/”D—” — the Long-term global ment and banking services in-demand in Russia, including local and foreign currency deposit ratings and the Finan- .Following the financial crisis of 1998, a syndicated loan was secured — debt financing, securities trading, transactions in the foreign cial Stability Rating respectively from Moody’s rating agency. 2001 the first among Russian banks. exchange and interbank markets, asset management and At the same time, in view of the lowering of the sovereign Private Banking operations started. brokerage services, research and market analysis. rating and company ratings during the deepest phase of the . crisis, rating outlooks were also revised. Nevertheless, there .Launching of operations with bank cards; membership in international In particular, during 2009 the Group arranged bond is- is every reason to expect improvement in these forecasts. payment systems VISA and MasterCard. sues with a total nominal value of 7.4 billion rubles for the It is worth mentioning that in August 2009, Finance magazine companies from the major sectors of the Russian economy: raised the solvency rating from “B” to “B+”. The high reliabi- construction, food industry and financial sector. lity of the Group’s banks was truly recognized and as such .Branches were opened up in Kemerovo and Kursk. The total number reflected in the Group’s own ruble bonds being placed on 2002 of regional branches reached five. The development of retail banking is based on the Lombard list of the Bank of Russia. the improvement of network and sales techniques, as well as providing comprehensive The social and economic importance of the Banking Group .New branches were opened up in Nizhniy Novgorod and Rostov-on-Don services to prospective client groups. ZENIT as well as the availability of the required ratings from 2003 providing a full range of services. international and Russian rating agencies, allow the Group The first issue of Eurobonds amounting to $125 million. In 2009, Bank ZENIT obtained a general acquiring license to participate in the financial sector support programs . f VISA IPS and currently holds the full spectrum of VISA and implemented by the Government of the Russian Federation .A full range of services for individuals. MasterCard IPS licences, which considerably widens the and the Bank of Russia. There are ample opportunities for Banking Group’s capacity to expand retail business. replenishing liquidity and refinancing through a wide class of assets. .The first bond issue to the amount of 1 billion rubles. For a long time, the Banking Group ZENIT has been 2004 Participation in the State Deposit Insurance System. a leader in providing private banking services. Its achieve- . ments have gained international recognition. For example, .New branches were opened up in Chelyabinsk, Kazan and Samara. within the framework of preparing the regular Private Bank- ing and Wealth Management Survey 2010, Euromoney magazine confirmed the Group’s status as one of the best Rus- sian financial institutions offering private banking services. Banking History Banking History Group ZENIT of the Banking Group Group ZENIT of the Banking Group 2 today 2.2 ZENIT 2 today 2.2 ZENIT 10 11

DYNAMIC GROWTH STABILITY

.Acquisition of the Joint Stock Bank Devon-Credit (OJSC), one of the leading .The project of setting up of a Banking Centre in the Republic of Tatarstan 2005 financial institutions in the Republic of Tatarstan. 2009 is underway. As a result of it, the internal structural subdivisions of Bank ZENIT located in Almetyevsk and Nizhnekamsk became part of the Kazansky branch. .In 2006, the Banking Group ZENIT’s capital amounted to $0.5 billion. 2006 An operating office Saratovsky of the Samarsky branch was opened up in .The first issue of foreign securities for the client (CLN for Mirax Group, . $100 million). Saratov, in the context of optimisation of the branch network. In October 2009, Krasnodar joined the area of the Banking Group ZENIT’s Bank ZENIT became the first of Russian companies and banks to manage . . regional presence where an additional office of Bank ZENIT Sochi LLC was a $250 million issue of CDOs backed by Russian debt instruments. opened up. .Subordinated loans are secured from shareholders as well as from Vnesh- .Acquisition of Sochigazprombank (assets ~ $29 mln / capital ~ $2 mln). econombank and the Black Sea Trade and Development Bank. 2007 This bank currently operates under the brand Bank ZENIT Sochi. .An arranger of a new 5-year bond issue to the amount of 3 billion rubles. .Acquisition of Lipetskkombank (assets ~ $600 mln / capital ~ $49 mln), the Also in 2009, put options were successfully exercised on three previous issues leading regional bank of the Lipetsk region. of ruble bonds which proved that investors and market players have conf- dence in the Bank. .Additional issue of shares increased the capital by $120 million. Bank ZENIT obtained a VISA IPS general acquiring license which allowed The regional network was expanded through the opening of 5 more branch- . . both the Group’s banks and partner banks to provide a full servicing of VISA es: in Kaliningrad, Surgut, Saratov, Perm and Novosibirsk. The total number cards across Russia. of the Banking Group’s points of sale reached 150. Amid the crisis in the Russian economy, in April 2009, Fitch Ratings Moody’s rating agency upgraded the Long-term foreign and local currency . . agency kept the Long-term Iissuer Default Rating at “B+” and the National deposit ratings to “Bа3” with a stable outlook. Long-term rating at “A—(rus)”, while changing the outlook to “negative”. STABILITY In March and November 2009, Moody’s rating agency also confirmed the Long-term global foreign and local currency deposit ratings (“Ba3”). .In 2008 one more bank joined the Banking Group — the OJSC Spiritbank, 2008 one of the leading regional banks in the Tula region. .The overall banking network covers six out of seven federal districts and operates in 23 out of 83 subjects of Federation and in 10 out of 13 cities with a population exceeding 1 million. .The number of the Banking Group’s corporate clients reached 38.6 thousand. .In August 2008, Fitch Ratings agency upgraded its ratings. The Long-term Issuer Default Rating was upgraded from “B” to “B+” while the National Long- term rating was moved up from “BBB+(rus)” to “A—(rus)”, with a stable outlook. .A pilot project was launched to set up a Banking Centre on the basis of the Bank ZENIT’s subdivisions situated in the Republic of Tatarstan. .The impeccable credit history, available required international ratings allow an access to the resources of the Central Bank of the Russian Federation and budgets of various levels made available to support the financial sector. Russian National Orchestra headed by Mikhail Pletnev

An academic musical collective set up in 1990 by M. Pletnev. Bank ZENIT has been a member of the Tutorial board and a permanent sponsor of the RNO for the last 10 years. Corporate Shareholders Annual report Governance of Banking Group ZENIT 3 3.1 2009 13

3.1...... Shareholders

The diagram below shows the structure of the share capital.

Shareholders of OJSC Bank ZENIT

Corporate [1] [2] [3] [4] [5] [6] 41,92% 24,56% 14,42% 6,80% 3,01% 9,29% Governance 0 10 20 30 40 50 60 70 80 90 100

One of the principal shareholders is OAO Tatneft (JSC), [1] IPCG Fund the sixth largest oil company in Russia. The Government [2] OAO Tatneft (JSC) of the Republic of Tatarstan holds a 30.44% stake in the [3] V.S. Lisin company. OAO Tatneft (JSC) is also one of the investors [4] М.R. Safin 3 in International Petro-Chemical Growth Fund Limited, in [5] Members of the Boarb of Directors which it holds a 35.74% stake. and Management Board 3.1...... Shareholders...... 13 [6] Others 3.2...... Group Structure...... 14 International Petro-Chemical Growth Fund Limited was 3.3...... Corporate governance structure...... 15 established in October 2005 to attract large strategic invest- 3.4...... Board of Directors...... 16 ments into the economy of the Republic of Tatarstan. 3.5...... Management Board...... 18 Along with OAO Tatneft (JSC), four independent private investors hold shares: I.G. Avanesyan, A.A. Bolshakov, M.V. Demin, and T.P. Shishkina.

The fund administrator and registrar is Standard Bank Fund Administration Jersey Limited, which is a subsidiary of Standard Bank Jersey Limited, a Standard Bank Group company. The Fund is managed by MARS Capital Manage- ment Limited. Corporate Group Corporate Corporate Governance Structure Governance Governance 3 3.2 3 3.3 Structure 14 15

3.2...... Group Structure 3.3...... Corporate governance structure

The Banking Group ZENIT was formed in 2005 as a result of the acquiring by Bank ZENIT Considering corporate governance as one of the major the banking group fully complies with the cor- of a controlling stake in JSB Devon-Credit (OJSC). In 2007, OJSC Lipetskkombank and factors affecting the economic performance of the Banking porate governance code. Sochigazprombank LLC (later renamed to Bank ZENIT Sochi) joined the Banking Group. Group ZENIT and determining its sustainable development, In 2008, one more bank — OJSC Spiritbank (the city of Tula) — became part of the Group. the Group’s banks pay significant attention to this issue.

The graph below shows Among corporate governance priorities, there the Banking Group ZENIT structure are measures and activities aimed at: at the end of 2009. .ensuring efficient protection of shareholders’ rights and interests; .ensuring transparency of decision-making; OJSC Bank ZENIT .observing professional and ethical responsibility of the members of the Board of Directors, members of the collegiate executive bodies, executives and other employees, and shareholders; Banks Non-banking .ensuring information transparency; entities .ensuring that shareholders can exercise their right to take part in governance through decision- making at the General Shareholders Meeting, their right to receive dividends, and are provided JSB Devon-Credit 97.3% 100% ZENIT Investment with exhaustive and reliable information on the operations of the Banking Group. (OJSC) Services Inc. The current corporate governance structure Acquired in December 2005 Securities transactions of Bank ZENIT as the parent bank of the Group

OJSC 99.0% 100% Regional Registrar OJSC Agency General Shareholders Inspection Committee Lipetskkombank Development LLC “Regional Independent Meeting (3 members) Registrar” Acquired in June 2007 Real estate Board of Directors (15 directors, incl. 3 independent Internal Audit Bank ZENIT Sochi, 99.5% 99.8% OJSC Corporate Secretary (Secretary of the Board directors and 3 members Unit LLC Pushnoi dom of Directors) of the Management Board) Acquired in January 2007 Real estate in Saint Petersburg

OJSC 96.4% Management Board Chairman of the Strategic Planning Spiritbank (12 members) Management Board Committee Acquired in December 2008 (4 members) COMMITTEES Assets and Liabilities Private Banking Audit Committee Management Committee Committee (5 members)

Credit Committee SMB Programs Committee Nominations and Budget Committee Retail Lending Committee Remunerations Committee (4 members) Technology Committee Personnel Lending Committee

Investor Relations Committee Market Risks Committee Corporate Composition Corporate Composition Governance of the Board Governance of the Board 3 3.4 of Directors 3 3.4 of Directors 16 17

3.4...... Composition of the Board of Directors Sokolov Born in 1956. Alexey Arkadievich Graduated from the Order of Lenin Moscow Aviation Institute named after S.Ordzhonikidze The Board of Directors of OJSC Bank ZENIT exercises The Chairman of the Board of Directors of Bank ZENIT is in 1979, and from the Moscow Finance Institute in 1990. overall direction of the Group’s operations, except for ques- Alexey Arkadievich Sokolov. Chairman of the Board of Directors of OJSC Bank ZENIT. tions within the competence of the General Shareholders Meeting. The Board of Directors' competence includes issues The Board of Directors of Bank ZENIT includes three Tubb Born in 1964. enumerated in the Federal Law “On Joint-Stock Companies” independent directors: Alexander Yevgenyevich Makhotin, Jonathan Member of the Association of Financial Accountants (AFA). and the Bank's Charter. Jonathan Tubb, and Philip Heyes. Director of Lanka Ocean Partnership.

Composition of the Board of Directors Takhautdinov Born in 1946. as at 31.12.2009 Shafagat Fakhrazovich Graduated from the Moscow Institute of Petrochemical and Gas Industry named after I.M.Gubkin in 1971. Avanesyan Born in 1953. Member of the Board of Directors, Chairman of the Management Board and CEO of OAO Igor Grigorievich Graduated from the Moscow Institute of Petrochemical and Gas Industry named after Tatneft (JSC). I.M.Gubkin in 1975. Chairman of the Board of Directors of CJSC United Leasing Company CENTER-CAPITAL. Tikhturov Born in 1960. Yevgeny Alexandrovich Graduated from the Moscow Institute of Administration in 1982. Aganbegyan Born in 1932. Member of the Management Board, Head of Department of Finance, OAO Tatneft (JSC). Abel Gezevich Graduated from the Moscow State Institute of Economics in 1955. Head of the department of Economic Theory & Politics, the Academy of the National Economy Fyodorov Born in 1966. under the Government of the Russian Federation. Vyacheslav Petrovich Graduated from the Moscow Institute of Chemical Engineering in 1990, from the Institute of World Economy and Informatisation in 1996, from the Institute of Business Garifullin Born in 1960. and Business Administration of the Academy of National Economy under the Govern- Iskandar Gatinovich Graduated from the Kazan Institute of Finance and Economics in 1981. ment of the Russian Federation in 2002. In 2003 defended a PhD thesis at the Institute Member of the Management Board, Chief Accountant — Head of Accounting and of Economy of the Russian Academy of Sciences and was awarded a Ph.D. in Eco- Financial Reporting Department of OAO Tatneft (JSC). nomics. President of the Non-governmental pension fund “Social development”. Zabelkin Born in 1968. Igor Gennadievich Graduated from the All-Russian State Distance Learning Institute of Finance and Economics Heyes Born in 1961. in 1994. Philip Graduated from Christ Church, Oxford University, with BA Jurisprudence. CEO of CJSC Management Company “Libra-Capital”. From 1985 to 1989 — a lecturer in civil and administrative law at the Oxford University. Solicitor at the Supreme Court of England and Wales since 1988. Maganov Born in 1958. Was a partner at the law firm “Linklaters LLP” for 12 years from 1995. Nayil Ulfatovich Graduated from the Moscow Institute of Petrochemical and Gas Industry named after I.M.Gubkin in 1983. Shishkina Graduated from the Moscow State Pedagogical Institute of Foreign Languages named after Member of the Board of Directors, Member of the Management Board, First Deputy Tatiana Petrovna Maurice Thorez. CEO — Head of Department of Oil and Oil Products Sales, OAO Tatneft (JSC). Since June 2000 — Deputy Chairman of the Management Board of OJSC Bank ZENIT, since April 2001 — First Deputy Chairman of the Management Board of OJSC Bank ZENIT. Makhotin Born in 1953. Alexander Yevgenievich Graduated from the Moscow Finance Institute in 1977. Shpigun Born in 1970. Financial adviser to the President of SAFIN Companies Group. Kirill Olegovich Graduated from the Moscow State University named after M.V.Lomonosov in 1992 and from the Institute of Re-training and Professional Skills Extension in Finance and Economics Safin Born in 1977. of the Finance Academy under the Government of the Russian Federation (in Banking) Marat Ralifovich Graduated from the London School of Economics and Political Science in 2000. in 1997. Executive director of MARR Group. Chairman of the Management Board of OJSC Bank ZENIT. Kul Sharif Mosque of the Kazan Kremlin Its building was launched in 1996 as a reconstruction of a legendary mosque of the Kazan Khanate capital. The Mosque was opened up by the Kazan 1000-year anniversary in 2005.

The Mosque’s architectural style Bank ZENIT had been providing stands in line with the millennial financial assistance traditions of the Tatar national to the construction architecture. It was named after of Kul Sharif Mosque the Tatar warrior, poet for several years. and thinker Kul Sharif. Corporate Management Annual report Governance Board of Banking 3 3.5 Group ZENIT 18 2009

3.5...... Composition of the Management Board

Composition of the Management Board as at 31.12.2009.

№ Full name Position Operations

1 Shpigun Kirill Olegovich Chairman of the Management Board 2 Gubaydullin Rashit Shaykhullovich First Deputy Chairman of the Management Board of the Banking 3 Shishkina Tatiana Petrovna First Deputy Chairman of the Management Board 4 Gornaya Elena Vladimirovna Deputy Chairman of the Management Board Group 5 Gorovoy Rodion Vladimirovich Deputy Chairman of the Management Board 6 Padanin Vladimir Valentinovich Deputy Chairman of the Management Board 4 7 Paschenko Stanislav Sergeevich Deputy Chairman of the Management Board 4.1...... Strategy of the Banking Group...... 20 8 Grishin Evgeniy Lvovich Member of the Management Board, Head of Risk Management 4.2...... Review of the Russian economy and banking sector in 2009..... 21 Department 4.3...... Summary of the Banking Group ZENIT development in 2009.... 29 4.4...... Overview of the Group business in 2009...... 32 9 Isakov Viktor Anatolievich Member of the Management Board, Head of Cash Operations 4.5...... Development of the Banking Group's regional network...... 33 Department 4.6...... Corporate banking...... 35 4.7...... Investment banking...... 42 10 Mnatsakanov Alexander Alexandrovich Member of the Management Board 4.8...... Retail banking...... 44 4.9...... Private Banking...... 46 11 Rozorenov Alexey Viktorovich Member of the Management Board, Head of Retail Business 4.10...... Risk management...... 47 Department 4.11...... Charity and sponsorship projects...... 49

12 Fyodorov Vyacheslav Petrovich Member of the Management Board Operations Strategy Operations Review of the Russian of the Banking of the Banking of the Banking economy and banking 4 Group 4.1 Group 4 Group 4.2 sector in 2009 20 21

4.1...... Strategy of the Banking Group 4.2...... Review of the Russian economy and banking sector in 2009

Despite significant changes in the business environment, the Banking Group ZENIT has retained The increased uncertainty of the macroeconomic climate was characteristic of 2009. its strategic priorities and continues developing as a universal financial and lending structure of This predetermined the behaviour of market participants in the Russian Federation, for the majority a federal scale. At the same time, in 2009 the Group undertook additional measures to preserve of which the principal tasks of the year were optimisation of activities and maintaining stability financial stability with the aim of creating prerequisites for further development, taking into of business. For the financial sector of the Russian Federation, this year became a strength test, account macroeconomic trends. This required an efficient amendment of target parameters and which was generally passed successfully albeit with a significant state support. time frames for the achievement of strategic goals. One of the main challenges that the business had to face from the very beginning of the crisis year In 2010, the Banking Group ZENIT will continue its operations in accordance with the approved of 2009 was the lack of reference points and solid predictive data. In early 2009, the crisis continued Development Strategy. to deepen globally while the forecasts of world’s leading institutions with regards to its duration and values of key indicators were constantly reviewed towards a deteriorating situation. In view of the changes taking place in the financial and economic environment and the business climate, For the Russian Federation, the external economic environment set a negative trend for most the main objectives for the upcoming fiscal year will be as follows: of the year. According to the International Monetary Fund, world trade reduced by 12% and demand Ensuring a sufficient level Ensuring economic Ensuring business growth Modernisation of the banking for certain products of the Russian export such as some types of metal fell by 30%. Accordingly, of financial stability. efficiency. in line with the tendencies network. there were no stimuli for the recovery of economic activity in the country. The only exception observed in the economy was associated with a rapid yet partial recovery of prices for oil and some other commodity and monetary sphere. groups against the background of increased risk appetite and high growth rates of the China 1 2 3 4 economy. Nonetheless, these factors did not appear sustainable which increased the uncertainty about the prospects of economic development. The signs of stabilisation of the situation were Among the most important plans of the Group is the optimisation of the structure and methods only recorded at the very end of the year. of banking network management in a strategic region, namely the Republic of Tatarstan, and Main factors of the external economic environment in 2009: further realisation of development projects aimed at improving financial and risk management, developing sales techniques and customer service, and improving IT technology based on the .Large-scale state programmes in developed countries aimed at stimulation of domestic world’s best practices and standards. demand and active policy of protectionism in all regions of the world. Excess liquidity against the background of “soft” monetary policy and minimal discount rates. According to the Development Strategy, the Banking . Increased volatility in the international financial markets. Group positions itself as: . .Deterioration of business activity — released capacities, deflationary expectations, growth .Banking Group ranked in the TOP-20 of the Russian Federation banking system based on of unemployment, on the back of shrinkage of demand and non-investment. key indicators, that provides profitability and growth rates above those of the market. A Group .Persistence of the crisis of confidence expressed in the unwillingness to increase lending with a scope of business operations sufficient for comprehensive servicing of the largest national to the economy amid rising defaults and delinquencies on loans. companies. .Increased volatility in the foreign currency market amid fears about the financial standing .Banking Group that is transparent for the market and potential investors and that uses the of the largest economies in the world. best international practices of corporate governance. .Drop in the quality of life. .Banking Group that provides a wide range of banking services for corporate, investment, private and retail lines of business. In Russia the economic crisis reached a peak in the second half of 2009. The fall of the real .Banking Group that provides a high level of service based on efficiency, knowledge of its GDP in the second quarter amounted to 10.9%. By the end of the second half of 2009, mainly clients’ business and integrated personified service aimed at long-term partnership. influenced by the low base effect, the pace of economic decline began to slow, and following .Banking Group that strictly maintains a balanced approach to risk-taking. the year-end results the decline in GDP was just 7.9%. .Banking Group with an optimal banking network that ensures the provision of efficient services to various client groups in most federal districts and cities of the Russian Federation. .Banking Group that actively participates in the work of the professional community and provides assistance to federal authorities in the improvement of banking law. .Banking Group that sees a teamwork of like-minded people, trust, recognition of personal contribution, dedication, professionalism and loyalty of every employee as the fundamental principles of the corporate culture. Operations Review of the Russian Operations Review of the Russian of the Banking economy and banking of the Banking economy and banking 4 Group 4.2 sector in 2009 4 Group 4.2 sector in 2009 22 23

Dynamics of GDP and assets of the Russian banking system The curtailment of investment activity and devaluation of the ruble at the turn of 2008 — 2009 led to a substantial decline in imports in early 2009. This process coincided with 1800 10 7.7 8.1 a growing appetite for a short-term risk in the global financial markets, which showed itself 7.2 8 in a partial recovery of global oil prices and a cessation of capital flight from the developing 1600 6.4 1666 5.6 6 markets. As a result, net exports consolidated their position in the positive zone — a process 1400 of gradual strengthening of the ruble began. Nevertheless, given the high level of uncertainty 4 in the system as a whole, it was not possible to identify this trend as a stable one. Thus, 1200 1302 1230 2 yet in summer, amid recurrent fears regarding the global economic recovery and falling oil 1000 0 prices, the capital flight resumed, and the ruble weakened again, though on a smaller scale.

991 (%) 800 895 940 — 2 bln dollars bln dollars 600 764 670 — 4 Capital movements and the ruble exchange rate 592 400 429 — 6 15 41 200 294 219 —7.9 — 8 10 40 0 —10 5 2004 2005 2006 2007 2008 2009 0 39 Assets of banking 1230 Nominal GDP, $ bln Real growth of GDP, % system of RF, av.Y, $ bln —5 38 Reduced production output was observed in almost all economic activities, and it was a reaction —10 to the massive reduction of external and domestic demand. Companies cut down investment bln dollars —15 37 programs, stopped production facilities, and dismissed staff. In some industries, the impact of ubles per basket R ubles the crisis was significantly smaller (oil extraction and refining, agriculture, education, power —20 36 industry, telecommunications), but there was still a considerable decrease in investment activity —25 even in these sectors. —30 35 The level of real reduction of gross fixed capital formation reached 22.1% in the second quarter January February March April May June July August September October November December of 2009 and amounted to 15.7% following the results of the year. 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 Dynamics of business activity in the RF Capital outflow ( — ) / inflow, $ bln Exchange rate of dual currency basket 30 11 20 10

, % A large number of companies were caught out in the crisis in a state of considerable debt burden. 10 9 In the context of actual closing of the external and domestic debt markets and rising interest rates, massive defaults, non-payment of loans and of public borrowing began. In the real sector, there 0 1230 8 was a shortage of working capital. The risk of collapse of the entire financial system, as well —10 7 as the scale of problems and structural changes in the real sector of the economy, threatening

,% R eal growth negative social consequences, forced the state to support strategic and backbone enterprises.

—20 6 U nemployment —30 5 The banking system, which became a hostage to problems in the real sector, was also supported 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q by subordinated loans (408 billion rubles) from VEB (Vnesheconombank), Bank of Russia loans 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 and deposits of the Ministry of Finance. The support provided to the banking system in total exceeded 10% of GDP (over 4 trillion rubles). Nevertheless, throughout the year the tension in the Investment, real growth, Manufacturing, Unemployment, economy and banking system associated with the expectations of a new wave of defaults continued. Q/Q YoY % real growth, Q/Q YoY % end of period By year-end the level of delinquencies on the loan portfolio of the banking system exceeded 6%, and the volume of defaults on public borrowings amounted to 132 billion rubles. Rugby One of the main social projects of Bank ZENIT since its establishment has been popularising of a rare sport for our country — rugby.

In 2009 at the Congress of the Bank ZENIT is an Official International Olympic Committee Sponsor of the Rugby Union in Copenhagen, Rugby-7 of Russia and a General competition was included Sponsor of the National rugby in the program of the Olympic team of Russia. games starting from 2016. Operations Review of the Russian Operations Review of the Russian of the Banking economy and banking of the Banking economy and banking 4 Group 4.2 sector in 2009 4 Group 4.2 sector in 2009 24 25

Crisis of defaults in the RF in 2009 Large-scale programs of the state support to the economy amid falling tax revenues have led to the formation of a substantial budget deficit (6.2% of GDP). Previously accumulated state 217 ussuers, 132 bin rubles reserves allowed financing of the deficit without a substantial increase in the level of national debt, which rose from 8% to 10% of GDP, remaining very low in comparison with other countries of the world. In future, this fact will have a positive impact on the possibility for domestic corporations 20 6.1 6.4 6.2 7 5.5 5.8 5.8 to obtain funding in foreign markets. 15 5.0 6 4.2 4.6 5 10 3.7 With the background of abandoning the policy of fixed exchange rate for the ruble, budget 3.4 4 (%) 2.8 has become the main source of expansion of money supply. The monetary policy underwent bln rubles 5 1230 3 a process of transformation throughout the year from being oriented at the exchange rate priori- 0 2 ties to targeting inflation. The role of the refinancing rate was gaining importance, with the refinancing rate being decreased by the regulator (from 13% to 8.75%) following lowering infla- January February March April May June July August September October November December tion (from 13.3% to 8.8%). The easing of inflation, even against the backdrop of ruble devaluation, 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 was due to a significant reduction in effective demand. Defaults on bonds of Russian issuers, Overdue loans to non-financial companies bln rubles and individuals, % Refinancing of the banking system by the Bank of Russia 3500 The rise in unemployment (up to 10% in early 2009) forced the government to find a solution for escalating social problems. At the beginning of the year an indexation of state employees’ salaries was carried out, assistance to the unemployed increased, and pensions were raised in the second 3000 half of the year. In addition to financial assistance, the state also used administrative measures to act upon employers and regional authorities in order to minimize social risks. The result of this 2500 policy was the achievement of a relative stability in the real disposable income of population. 2000 At the same time, households responded to the crisis by significantly reducing their consumption. There was a marked increase in the propensity of population to save (up to 19.9% in 2009 against 1500

13.6% in 2008). In the context of rising unemployment and devaluation of the ruble, delinquency bln rubles on loans to individuals continued to rise. In the absence of demand for new loans, banks were 1000 reducing retail loan portfolios, trying to minimize the increased risks as much as possible. By the end of the year, the fall in the final consumption of households made 7.7%. The volume 500 of bank loans to individuals dropped by 11%; individual’s deposits increased by 26.7%.

Financial standing of households 0 Savings: 2008 — 14%, 2009 — 20% 15

10 01.01.08 01.10.08 01.11.08 01.12.08 01.01.09 01.02.09 01.03.09 01.04.09 01.05.09 01.06.09 01.07.09 01.08.09 01.09.09 01.10.09 01.11.09 01.12.09 01.01.10 01.02.10 01.03.10 01.04.10 Repo at a fixed rate Unsecured loans Lombard loans 5 Auction repo Other loans Overnight 0 1230 Despite the massive injection of liquidity into the banking sector and the reduced refinancing —5 rate, the monetary policy of the Bank of Russia in 2009, unlike in most developed countries, ,% R eal growth —10 remained tight. The volume of money supply (M2) and the monetary base only started to grow at the end of 2009. Furthermore, the Bank of Russia continued to deliberately pursue a policy of —15 stricter regulation of banking activities. In particular, notwithstanding the crisis, the minimum 1Q 2008 2Q 2008 3Q 2008 4Q 2008 1Q 2009 2Q 2009 3Q 2009 4Q 2009 required capital of the bank was raised, requirements to capital formation were tightened and mandatory provision requirements were increased (having been temporarily reduced in late 2008). Real growth of final consumption Real disposable income, There were also changes in the legislation, tightening rules for banks’ deposit and lending of households, %, Q/Q YoY % Q/Q YoY % operations. Operations Review of the Russian Operations Review of the Russian of the Banking economy and banking of the Banking economy and banking 4 Group 4.2 sector in 2009 4 Group 4.2 sector in 2009 26 27

Monetary policy and inflaton At the same time, the monetary factors inhibiting the banking business were not dominant. The real sector was virtually unable to service loan obligations, and the banking liquidity accumu- 60 16 lated by the year-end could not contribute to the typical credit activities. 50 15 As a result of this situation, banks’ investments in the debt market began to grow intensively. 40 14 At the same time, an unprecedented growth of the proportion of debt instruments in the banks 30 assets structure was recorded for the year — from 6.3% to 11.2%. The total banks’ securities 13 portfolio increased by over 82%. 20 12 10 Besides the securities portfolio, the banking system has only been virtually increasing liquid 11 assets. The loan portfolio was in profit in the last quarter of the year, however its year-on-year 0 increase was 0.3%.

10 C PI and CB R rate,%

Monetary aggregates, % aggregates, Monetary —10 The liability-side operations of the banks, as noted above, were focused on households. —20 9 The lack of working capital did not allow legal entities to accumulate funds for most of —30 8 the year. However, budgetary injections into the economy still reached the enterprises by the end of the year, which allowed an increase in the volume of attracted funds from legal entities by 8.9% year-on-year. 01.08 02.08 03.08 04.08 05.08 06.08 07.08 08.08 09.08 10.08 11.08 12.08 01.09 02.09 03.09 04.09 05.09 06.09 07.09 08.09 09.09 10.09 11.09 12.09

Dynamics of money М2 dynamics (without Consumer price index, CBR refinancing rate, The main challenge for the banks in 2009 was maintaining the stability of operations and the supply, YoY foreign currency), YoY YoY, % end of month, % need to build up sufficient reserves due to the sharp deterioration in the quality of the loan portfolio. The increase in reserves for the whole banking system has more than doubled. At the same Although in 2009 the monetisation of the economy continued to grow, reflecting the decline in time, bank capital increased by 21.2%, largely due to subordinated loans from the Central Bank GDP and increase in the cost of dollar deposits, the sharp rise in the volume of domestic credit of the Russian Federation and shareholders, thereby helping to keep a reserve for capital adequacy, recorded at the turn of 2008-2009 blocked further expansion of lending. In early 2009, it aggravated which amounted to 20.9% at the end of the year. competition for resources and became apparent in the retail deposit segment, which experien- ced strong growth in interest rates. At the same time the banks were actively using the population’s Key parameters of the banking system development in the RF (changes in %) increased propensity to save. Fearing the consequences of a significant contraction of bank margins amidst expectations of lower inflation, the regulator has resorted to administrative pressure Reserves 102.6 on the banks with the aim of reducing their interest rates on deposits. 100 80 Deposits Monetisation and credit to the economy Profit 60 of individuals 50 40 45 20 45 44 40 0 26.7 35 —20 36 36 37 30 33 34 Loans —49.9 —10 31 31 32 to individuals —30 21.2 Capital 25 28 —11 26 25 26 20 23 % to G D P % to 22 20 21 15 0.3 8.9 10 5 5 Loans Accounts 0 to legal of legal entities 2004 2005 2006 2007 2008 2009 entities Average annual credit Average annual ruble Average annual monetisation of economy to the real economy monetisation (М2) (М2+foreign currency deposits) Assets Operations Review of the Russian Operations Summary of the Banking of the Banking economy and banking of the Banking Group ZENIT 4 Group 4.2 sector in 2009 4 Group 4.3 development in 2009 28 29

The major decline in lending activity, mass failures of clients to service loans and generally 4.3...... Summary of the Banking Group ZENIT development in 2009 a significant reduction in interest margin resulted in the substantial, two-fold decrease in profits of the banking system. Under these conditions, it was mainly state-controlled banks or subsidiaries of foreign credit institutions with cheap funding that appeared to be profitable. The stagnation in the key sectors of the Russian economy, Therefore, the performance of the Banking Group in 2009 the unstable situation on financial markets typical of 2009, was determined by the need to maintain a substantial liqui- Functioning in difficult macroeconomic conditions, the banks were engaged in optimising especially its first half, resulted in a significant hampering dity cushion, the measures to minimize credit risks, the need their operating activities. As a result, operating efficiency of many banks has improved. of business processes. A number of quantitative and quali- to replenish capital base and to build reserves in accordan- tative indicators of banking activities deteriorated. These ce with the negative changes in the credit portfolio quality, processes affected the Banking Group ZENIT, although com- which were caused by the general economic and financial pared with many privately owned Russian banks, the Group conditions in the country. demonstrated a significantly greater resistance to negative processes. Despite this, the Group was able to improve its main market shares and to achieve a positive financial result in 2009. The main constraints to the development were: a precarious financial condition of potential borrowers, which limited the growth of credit portfolio; significant risks at financial markets; and the need to preserve the resource base.

Assets (mln rubles)

2005 70 395 2006 102 470 2007 163 098 2008 187 317 2009 186 041

0 20 000 40 000 60 000 80 000 100 000 120 000 140 000 160 000 180 000 200 000 Net profit (mln rubles)

2005 1 148* 2006 1 837 2007 2 390 2008 1 177 2009 2 090

0 500 1 000 1 500 2 000 2 500 3 000 * — Excluding one-off gain from acqusition of JSB Devon Credit in the amount of $24 million

Given the decline in virtually all sectors of the economy, The Group plans to continue minimizing the possible the Banking Group notes the decline in the creditworthiness consequences of rising credit risks by increasing loan port- of borrowers, as reflected in the increasing share of overdue folio provisioning and refinancing promising avenues of and problem loans in the loan portfolio. However, it should business as well as by enhancing the quality of new loans be noted that the growth of overdue loans is decelerating in the Group’s banks’ portfolio. and, as the recovery of the economy progresses, their volume will decrease. Sculptor Leonid Baranov A master of monumental-decorative sculpture, member of the Union of Artists of the USSR (1969), Corresponding member of the Academy of Arts (2007).

In 2004 in Baden-Baden Under assistance of Bank ZENIT, (Germany) a monument on 2 December, 2008 a monument of F.M.Dostoevsky was placed, of Peter the Great and the founder made by L.Baranov of the Russian state medicine and presented to the town Nicholas Bidloo was opened by Bank ZENIT. at the Main military clinical hospital named after N.N.Burdenko. Operations Summary of the Banking Operations Summary of the Banking of the Banking Group ZENIT of the Banking Group ZENIT 4 Group 4.3 development in 2009 4 Group 4.3 development in 2009 30 31

Loans (mln rubles) Despite the need to replenish reserves, the Group has In particular, in 2009 the cost/income ratio hit a historical demonstrated growth of return on assets and capital. low of 41.6%. This was made possible through implementing 2005 43 300 The Banking Group has undertaken significant steps an efficient program aimed at reducing operating costs. 2006 62 175 to minimize costs. 2007 104 025 ROAE/ROAA Cost/income 2008 113 999 20 65 2009 109 358 18 16.8 59.4 59.1 15.3* 60 0 20 000 40 000 60 000 80 000 100 000 120 000 16 14.9 14 Loan quality (%) 55 53.1 11.5 52.8 1.4 12 2005 3.7 10 50 (%) 1.0 6.8 (%) 2006 8 3.1 45 1.0 6 2007 2.9 4 1.9* 2.1 40 3.6 1.8 1.1 41.6 2008 0.7 4.2 2 7.4 0 35 2009 7.5 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 ROAE ROAA 0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 * — Excluding one-off gain from acqusition of JSB Devon Credit in the amount of $24 million Share of problem loans LLP rate

The Banking Group continued to pursue a strategy that aims At the same time, the new methods to expand and diver- to expand relationships with existing customers and diversify sify the resource base saw rapid development. In general, the potential customer base. the deposit base, as regards the Group’s clients’ funds, has improved significantly.

Customer accounts (mln rubles)

2005 37 737 2006 50 428 2007 92 414 2008 96 343 2009 104 659

0 20 000 40 000 60 000 80 000 100 000 120 000 Operations Overview Operations Development of the Banking of the Group of the Banking of the Banking Group’s 4 Group 4.4 business in 2009 4 Group 4.5 regional network 32 33

4.4...... Overview of the Group business in 2009 4.5...... Development of the Banking Group's regional network

The diagram below shows the key business areas of the Banking Group In 2009, the Group’s banks continued working on the As part of the development strategy of the Banking Group ZENIT and their banking product lines in the consolidated form. optimisation of the structure of points of sale in order to ZENIT in 2009 the presence of the Banking Group was exten- reduce additional costs and increase unit efficiency of the ded in the regions of the Russian Federation with a great regional business. Subdivisions with overlapping functions potential. An additional office of Bank ZENIT Sochi LLC was The Banking Group ZENIT were closed down based on geographical location. The net- opened up in Krasnodar. work of the Banking Group’s POS located in St. Petersburg, Corporate Investment Retail Rostov-on-Don, Nizhniy Novgorod, Yelabuga, Gelendzhik For the Moscow banking network, the priority area of banking banking and Private Banking and Lipetsk was optimised, through the closure of additional development in 2009 was the organisation of its presence offices and cash offices outside the cash unit. at the premises of corporate clients. Four such subdivisions were opened up during the year. In total, 57 remote subdivi- Commercial Debt financing Car loans, mortgages, In 2009, work continued on the creation of a Banking sions operated in Moscow and the Moscow region at the end lending arrangement consumer loans Center on the basis of subdivisions located in the Republic of of 2009.

Tatarstan. As a result of this work, the points of sale located Project Securities Bank in Almetyevsk and Nizhnekamsk became part of the Ka- In the coming year work will continue in the Moscow region finance trading cards zansky branch of Bank ZENIT. In addition, the Saratovsky aimed at opening new cash offices at the location of corpo- branch was converted into an operating office of the Samarsky rate clients, as well as additional offices in accordance with branch. Thus the foundation was laid for the establishment the approved concept of development of the Moscow network. Trade Brokerage Cash/Settlement Services of the Banking Center in another key region for the Banking finance and FX Group.

Cash/Settlement Services Asset Money transfers and FX management and cheques POS network dynamics

Deposit Derivative Family 2004 38 38 operations instruments Office 2005 57 21 78 SMB Financial consulting Alternative 2006 69 23 92 and M&A investments 2007 94 29 21 6 150 2008 93 35 23 6 7 164

2009 84 34 22 5 7 152 Loan portfolio Deposit portfolio [1] 90% [2] 10% [1] 62% [2] 38% 0 20 40 60 80 100 120 140 160 180

[1] Corporate clients [1] Corporate clients [2] Individuals [2] Individuals Bank ZENIT Devon-Credit Lipetskkombank Bank ZENIT Sochi Spiritbank Operations Development Operations Corporate of the Banking of the Banking Group's of the Banking banking 4 Group 4.5 regional network 4 Group 4.6 34 35

Currently the subdivisions are located in 23 out of 83 Regional POS network at the end of 2009: 4.6...... Corporate banking Russian regions and in 9 out of 11 cities with population Head offices — 5; exceeding 1 million. branches — 35; additional/operating offices — 49; In the past year, most customers of the Banking Group paid In 2009 considerable attention was given to lending to cash offices — 63. close attention to the adaptation of business to the changing the priority and socially important industries, therefore the Total — 152. conditions. The Group’s banks endeavoured to offer them share of loans to the companies from these industries all available support, at the same time taking into account in the total loan portfolio increased. Kaliningrad potential risks. The main corporate partners and clients of the Group are enterprises in the oil and metal industry, ener- The results of these efforts can be seen in the minimum gy, engineering and defence sectors, construction industry, outflow of existing clients and the steady attraction of new St. Petersburg development as well as regional and municipal authorities. ones. At the end of 2009, the total number of corporate clients Lending to enterprises in the real sector of the economy of amounted to about 38 thousand. The breakdown of corporate the Russian Federation, and strategically important and back- clients by subdivisions of the Banking Group in 2009 did not bone subjects of the Russian economy, was continued. change and is as follows: Moscow — 16%, regions — 84%.

Corporate clients (‘000) Moscow 2005 3.7 11.1 14.8 Kursk Tula Nizhny 2006 4.4 12.6 17.0 Lipetsk Novgorod 2007 31.2 Belgorod 5.3 25.9 Cheboksary 2008 6.2 32.4 38.6 Kazan Rostov-on-Don Perm 2009 Saratov 6.1 31.9 38.0 Krasnodar Surgut Samara Ufa Yekaterinburg 0 5 10 15 20 25 30 35 40 Sochi Moscow Chelyabinsk Regions

. Moscow . Permsky krai Novosibirsk Moscow region Republic of Altai . . Kemerovo . Tatarstan . Rostov region . Bashkortostan . Samara region . Belgorod region . St. Petersburg . Kaliningrad region . Saratov region . Kemerovo region . Sverdlovsk region Gorno-Altaisk . Krasnodarsky krai . Tula region . Kursk region . Chelyabinsk region . Lipetsk region . Chuvash Republic . N. Novgorod region . KMAD-Yugra . Novosibirsk region Raifa monastery Zelenodolsk (Republic of Tatarstan) It was passed on to the Russian Orthodox Church in 1991. A miraculous Georgian icon of the Mother of God was brought back to Raifa monastery from Kazan.

During the 1990th, the whole Under assistance of Bank ZENIT, ensemble of the cloister was a Piligrim house and a church restored, as well as monkhood life. shop were constructed. An orphanage school for In 2009 the Bank took part orphans and unmanageable in the restoration of children works at the monastery. a Treasury building. Operations Corporate Operations Corporate of the Banking banking of the Banking banking 4 Group 4.6 4 Group 4.6 36 37

Among the new major clients in 2009, the following companies have joined the Group:

.OJSC CONCERN PVO one of Russia’s largest groups of companies whose major clients are the Russian Defence .REGIONGAZFINANS LLC an independent Russian company offering a full range of services in the field of trust ALMAZ-ANTEI Ministry and the Federal State Unitary Enterprise Rosoboroneksport. mANAging Company asset management. The company focuses on professional management of mutual funds and private pension funds. .RTI Group (OJSC Radio Technology Institute named after A.L. Mints, OJSC Concern Radio Technology Of Companies and Information Systems) — the companies of Joint-Stock Financial Corporation Sistema’s .TRANSNEFT Private a pension fund. The only founder of the Fund is OJSC AK Transneft. radio engineering division (Sistema is one of Russia’s major strategic enterprises). Pension Fund The Group participates in the development and implementation of the GLONASS global navigation satellite system. Its major clients are the Russian Ministry of Defence and .YUGRAFINANS a managing company providing investment of private pension funds in residential construc- the Ministry of Emergency Situations. mANAging Company tion projects.

.OJSC ENERGOMASHINO- one of Russia’s largest power machine-building companies, which has global experience .OJSC AGENCY a state-owned company created in 1997 for the purpose of developing unified standards of sTROITELNYI ALLIANCE and expertise in engineering, production and supply of boiler equipment for thermal power fOR HOUSING housing mortgage lending, ensuring mortgage lending accessibility to a wider public across (EMAlliance) plants, including projects under EPC contracts. EMAlliance owns 70.83 per cent shares mORTGAGE LENDING Russia, offering refinancing opportunities to mortgage lenders, establishing a secondary of the boiler-manufacturing plant Krasnyi Kotelshchik. There are engineering subsidiaries market for collateralised mortgage obligations, organisation of the market for mortgage- of EMAlliance in Taganrog, Podolsk, Barnaul and Ivanovo. backed securities.

.CJSC MAGISTRAL-NK a rapidly growing group of companies which incorporates 20 modern petrol service stations .VOSTOK-SERVICE GROUP one of the leaders in design, manufacturing and supply of specialised clothing, footwear, (TRASSA Group) providing retail sales of all high quality grades of fuel, fuel transportation by the company’s and tools for the worker-protection market. Vostok-Service Group operates in all Russian tank trucks, and petrol station design and construction services. The petrol station chain regions and across the CIS (Ukraine, Belarus, Kazakhstan, Turkmenistan, Armenia and of Trassa Group sells automotive petrol of TNK-BP produced by Ryazan Oil Refinery. Uzbekistan), the Baltic States and Eastern Europe. In Russia the company operates via a network of regional offices. Currently Vostok-Service Group has over 100 production and .FARMAKOM LLC develops a chain of modern pharmacies in Moscow and the Moscow region. The company trade facilities and over 200 brand retail outlets across the Russian regions. Among the mANAging Company was registered in 2008 and currently operates eight working pharmacies; a further four clients of the company are large corporations, including TNK, Roszheldorsnab, Surgut- pharmacies are due to be opened in the near future. The company’s aim is to create a new neftegaz and Gazpromneft-NNG. generation of pharmacies offering leading services to consumers. The company’s suppliers are only from the so-called “big five” distributors on the Russian market. .CJSC SIBERIAN the market leader for Russian anthracite with over 25 years of experience in independent ANTHRACITE coal mine developing and exploration. The company specialises in mining, washing and .AVTOGERMES Group In May 2009 the company merged with Avto'key Group in order to secure its position on trading of high-quality coal from Russia’s West Siberian coal fields. Of companies the market. The new AUTOGERMES GROUP operates ten car show rooms (six from AVTO- (Severianin-Avto LLC GERMES and four from AVTO'KEY). The newly created company plans to take up a market .UNITED MEDIA GROUP a media holding created in 2007 on the basis of Moskovskiye Novosti Publishing House and GL-Tsentr LLC) share of over 50 per cent for Lada and Daewoo cars in Moscow. The group’s AUTOGER- (Business FM) which was bought by the businessman Arkadi Gaydamak in 2005. On 1 March 2007 the MES brand also sells such makes as UAZ, FIAT, CHERY, GREAT WALL, SSAN YONG radio station Business FM began broadcasting on 87.5 FM in Moscow. On 1 May 2007 and HYUNDAI. AVTO'KEY also sells SUZUKI, KIA and RENAULT cars through its showrooms. the first business radio station Business FM launched broadcasting in St. Petersburg, and on 12 November 2007 — in Ufa. On 12 November2008 the holding launched the .CJSC TRINFICO manages investment funds, mutual funds and private pension funds as part of TRINFICO business portal BFM.ru. The advertising agency United Media was created in March 2007. mANAging Company Investment Group and specialises in managing closed mutual funds of different types. The Bank has opened settlement accounts for seven companies of the Group.

.CJSC EUROPLAN the Russia’s leading leasing company. It offers leasing of cars, trucks, specialised machinery, .OJSC OBUKHOV STATE the major Russian/Soviet metallurgy and heavy machine-building plant. equipment and commercial real estate to small and mid-sized businesses through a nationwide PLANT network covering more then 70 Russian regions. .OJSC one of the industry’s leading producers specialising in manufacturing equipment for .CJSC REGION ASSET a part of REGION Group. It specialises in managing investment funds, mutual funds, private dZERZHINSKHIMMASH chemical, petrochemical, microbiological, medical, food, cereal-processing, and gas-pro- mANAGEMENT pension funds and securities. cessing industries.

.KAPITAL LLC one of Russia’s leading asset management firms. It mainly focuses on trust management .TRANSPORT ASSET a transport holding comprising the Sea Port of Saint Petersburg Group of companies, Universal mANAging Company of private pension funds assets, accumulating component of labour pension of individuals mANAGEMENT LLC Transshipment Complex in Ust-Luga, commercial seaports of Taganrog and Tuapse. and assets of macro funds. mANAging Company Operations Corporate Operations Corporate of the Banking banking of the Banking banking 4 Group 4.6 4 Group 44.2.6 38 39

.OJSC UTAIR AIRLINE one of the world’s leading helicopter service providers and ranks among Russia’s top four In 2009, the Banking Group ZENIT paid particular gas, metallurgical industries, construction, trade and manu- largest air carriers. attention to the preservation and development facturing organisations, as well as financial sector enter- of the resource base. prises, such as insurance, investment and management .KURSKENERGOSBYT the largest energy company in the region. It distributes 52 per cent of all electricity in companies. OJSC the Kursk Region. At the same time as working to increase balances in current accounts, significant efforts were directed at Further, taking into account market trends, work was .OJSC NPP MOTOR designs and manufactures gas turbine engines and components. ensuring the growth of long-term deposit base for the carried out aimed at reducing the cost of funding in order implementation of investment projects, lending to corpo- to maintain interest margin amid growing competition from .OJSC OBORONPROM a diversified industrial and investment group specialising in the engineering and high tech rate clients and individuals. The main depositors with the the large state-owned and foreign banks. CORPORATION sectors. It is a part of the State Corporation ’Russian Technologies'. Group’s banks are companies from the petrochemical, .OJSC STAR was established in 1943. It specialises in the design and manufacturing of hydro-mechanical and electronic aircraft engine control systems. Loans to corporate customers (bln rubles) .OJSC PMZ a company specialising in the serial manufacturing of civil and military aircraft engines, [Perm Engine Plant] gas turbines for power plants and gas transportation. The company is managed by United 2005 26.2 Enginebuilding Corporation LLC managing company, a part of OJSC Oboronprom Corporation. 2006 35.6 .CJSC METALLIST – a steel plant within the Perm Engine-building Complex. Its output is primarily earmarked 2007 63.7 PERM MOTORS for companies within the complex. 2008 65.7 provides companies within the Perm Engine-building Complex with energy, gas, water and .OJSC ENERGETIK-PM 2009 65.0 special transport.

.OJSC ARZAMAS a Russian military vehicle, automotive component and specialised vehicle manufacturer. 0 10 20 30 40 50 60 70 ENGINEERING PLANT It is a part of the GAZ Group holding. Corporate customer accounts by industry .OJSC NIZHFARM one of Russia’s leading pharmaceutical companies. Over the last 90 years NIZHFARM has been developing, manufacturing and offering medical products to consumers. [1] [2] [3] [4] [5] [6] [7] [8] [9] 30% 18% 18% 9% 8% 4% 1% 0.1% 12% .OJSC BOGORODSKNEFT an oil extractor from the Saratov region. The company owns Krotovskoye and Vasilkovskoye oil fields.

.OJSC PERM PLANT a major company in the engineering sector specialising in the design and manufacturing 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% “MASHINOSTROITEL“ of aircraft engines. [1] Oil & gas [4] Trade [7] Energy .OJSC NPO ELSIB has been on the market for over 50 years designing and manufacturing high-performance [2] Manufacturing [5] Construction [8] Local authorities electrical equipment. [3] Finance [6] Transport [9] Other

.OJSC KUZOCM Russia’s leading manufacturer of wire and specialised cables. The main objective of the Group’s bank’s credit policy It should be noted that in the current economic conditions in 2009 was to strengthen their competitive position on the and due to the increased requirements to the level of credit .OJSC PLANT “EKRAN“ a stable business and a leading manufacturer of glassware on the Russian territory east lending market for Tier-2 and Tier-3 companies and impro- risk, the number of potential borrowers of an acceptable of the Urals. ve the quality of loans. Procedures have been developed and loan quality has declined considerably. At the same time, implemented aimed at improving the processes of credit competition in lending to such clients has significantly .OJSC KRASNYI one of Russia’s and Europe's largest manufacturers of steam boilers and boiler, heat-exchange, risk monitoring and management. increased. kOTELSHCHIK water treatment and supplementary equipment. Operations Corporate Operations Corporate of the Banking banking of the Banking banking 4 Group 4.6 4 Group 4.6 40 41

In order to maintain the quality of the loan portfolio at a high Furthermore, the usual work continued with leading The methodical work on expanding the customer base In 2009, the Group continued executing structured level, a more stringent approach to risk assessment of companies in their industrial sectors. A considerable num- is an essential part of the Group’s credit policy. It resulted in transactions to raise long-term financing for clients’ foreign borrowers and the collateral offered was applied within ber of large enterprises financed by the Banking Group have a significant industrial diversification of the loan portfolio. contracts on security provided by the European export lending the Banking Group ZENIT. This work has allowed to reduce social significance at the federal and local levels. Some of agencies. the risk of companies defaulting on their loan obligations. them are town-forming. At the same time, the Group has With an extensive experience in servicing international Also, regarding the need to reduce the proportion of loans been actively involved in lending to enterprises included in operations and having qualified specialists, the Banking In 2009, as has been the case for many years, acting in the with higher credit risk, measures were taken aimed at the the List approved by the Governmental Commission on su- Group ZENIT advises clients on issues of foreign trade, on best interest of its clients, the Group remained one of the partial repayment of a high risk debt. stainable development of the Russian economy. the structuring and implementation of projects in the sphere largest players in the market of clearing currencies used of economic cooperation with foreign countries; provides in payments for the redemption by foreign countries of By virtue of being included in the number of credit institu- Thus, despite the deteriorating macroeconomic environ- assistance to Russian companies in establishing business state and commercial loans granted by the former Soviet tions that were able to take advantage of the increased liqui- ment, the banks of the Group not only preserved the volume contacts with foreign officials and business communities. Union and Russia, as well as in the current settlements with dity base within the Government’s anti-crisis measures of their loan portfolio, but also increased the proportion of certain countries for machinery and equipment provided to through a subordinated loan from VEB (Vnesheconombank), priority and socially important industries in it. Despite the financial crisis, an active work was carried out them previously. In recent years clients could virtually only additional funding was received to finance strategically in the trade finance and documentary transactions market in use clearing currencies in settlements with the Republic of important enterprises and companies from the priority sec- 2009. For the first time, deals were completed with the use of India. The total volume of transactions in clearing curren- tors of the economy. credit lines opened by banks such as Banco Popolare (Italy), cies in 2009 (in settlements with India) amounted to about Banca Monte dei Paschi di Siena SpA (Italy), Caixa D'estalvis $90 million in the dollar equivalent. Loans to corporate customers (bln rubles) de Catalunya (Spain), Caixa General de Depositos (Portugal). The total of issued import LCs amounted to over $335 million, In order to provide the best service to its clients, aside with most of them having been opened on an unsecured basis from cooperation with the key largest banks of the USA 2005 42.3 using the risk limits set forth by the foreign contracting parties. and Western Europe, the Banking Group ZENIT has also 2006 58.7 The volume of export LCs in 2009 reached $1,374 million. established and maintains business relations with the LCs were used to finance imports of high-tech equipment, largest banks from India, China, the Middle East and South- 2007 93.2 computer components, motor vehicles and consumer goods. East Asia. 2008 100.1 The Bank's guarantee business has also been developing 2009 98.7 successfully: in 2009 the volume of issued guarantees of all types amounted to over $562.5 million.

0 20 40 60 80 100 120

Loan portfolio by sectors

[1] [3] [5] [7] [9] [11] [13] [15] [17] 3.4% 5.3% 18.2% 1.5% 2.7% 4.1% 10.3% 7.6% 0.9%

[2] [4] [6] [8] [10] [12] [14] [16] [18] 5.0% 6.6% 0.7% 1.8% 7.9% 6.1% 8.3% 0.9% 8.8%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

[1] Oil & gas [6] Trade (metals) [10] Trade (food) [14] Real estate (residential) [2] Agricultural [7] Trade (oil) [11] Trade (automotive) [15] Real estate (suburban) [3] Food [8] Trade (electronics) [12] Trade (other) [16] Real estate (commercial) [4] Financial services [9] Trade (alcohol and tobacco) [13] Real estate (offices) [17] Real estate (other) [5] Manufacturing [18] Other Arts School Master-Class Was founded by Bank ZENIT and the Russian Cultural Fund on 19 October, 2000.

A multi-day seminar for The Interregional competition talented children from Russian of young artists “My sunrise” regions is held every year involves over 15 thousand children at the Composers’ across Russia each year. Art Centre “Ruza”. The best artworks are selected for an exhibition in Moscow. Operations Investment Operations Investment of the Banking banking of the Banking banking 4 Group 4.7 4 Group 4.7 42 43

4.7...... Investment Banking 4.7.2...... Client brokerage

In 2009 the brokerage client base grew by 13% against The Bank Managed Mutual Funds (BMMFs) have fully The main part of the Banking Group ZENIT’s Notwithstanding the complicated macroeconomic envi- the 2008 figures as client brokerage services saw further exploited the potential of financial markets in 2009. Following investment business is currently concentrated ronment, the positive dynamics of the stock market has development on international securities markets. The Group the end-of-year results, three equity funds (Profitable, in Bank ZENIT. allowed for building up the customer base for brokerage also continued its work on the organisation of sales of Profitable II, and Prospective) not only outperformed services, which has risen by 13%. Brokerage services on investment products and services in the regions where the RTS and MICEX indices, but were also the most profi- However, the plans of the Group’s development suggest the international securities markets also saw further the Banking Group ZENIT has a presence. table on the Russian stock market. a wide regional development of investment banking, particu- development; the range of services was expanded and the larly via offering a line of investment products to corporate volume of transactions increased. and retail clients through the existing POS network. The strategic goal of the Banking Group ZENIT is consi- 4.7.3...... Fundraising transactions The economic situation in 2009 led to a significant decrease dered to be the amplification of opportunities for the sale in the activity in the financial markets. In these circumstances, of investment banking services in the regions through its 2009 was marked by the depressed state of the world Funding provided by this bank once again demonstrated investment banking operations were rebuilt and the most points of presence. By the end of 2009, investment products economy. Nevertheless, the Group managed to implement the confidence that the international financial community demanded services were offered. were being sold in St. Petersburg, Tatarstan, Nizhny Novgorod a number of projects aimed at retaining positions on the has in the Banking Group ZENIT. and Novosibirsk regions, along with sales through the head international financial markets and broadening the range For example, the debt finance market specialists of the office. of partners among the major foreign banks. One of the most In the first half of the year, syndicated loans were repaid Group offered new tools and market instruments, adapted prominent deals was securing of a $20 million subordina- worth $218 million and in the amount of =C 95.75 million to the crisis conditions. During the year, the Group provided To best meet the increased needs of clients in high-quality ted loan from the Black Sea Trade and Development Bank. and $5 million. Also, in accordance with the issuance support to corporate clients in execution of put options interbank services, the Group successfully continued to This organisation is one of the supranational banking terms, a 3-year Eurobond loan of $200 million was repaid on ruble-denominated bond issues. In addition, the banks expand its correspondent network. At the end of 2009, the institutions, which implies a special approach to the assess- in October 2009. of the Group acted as agents in the restructuring of bonds Banking Group ZENIT had direct correspondent relations with ment of counterparty credit risk. of se-veral major borrowers and as arrangers of promissory over a hundred of major international financial institutions, notes. representing more than 30 countries, including in Europe, America and Asia. General structure of the own securities portfolio of the Banking Group ZENIT [1] [2] [3] [4] [5] [6] 4.7.1...... Arrangement of debt finance transactions 55.37% 16.9% 8.44% 9.4% 7.57% 2.32%

In 2009, the Group took part as an arranger in the place- In 2009, the Group arranged and placed the 6th issue of ment of a number of bond issues totalling to 7.4 billion rubles. its own bonds to the amount of 3 billion rubles and success- 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% The issuers were companies representing the major sectors fully executed put options on the previous 4th, 3rd and of the Russian economy such as construction, food indust- 5th ruble bond issues. [1] Corporate bonds [3] Federal and local authorities [5] Particpating shares ry and finance. Among the secondary offerings arranged [2] Corporate Eurobonds bonds of investment funds in 2009 were bond issues for OJSC Cherkizovo Group, OJSC In order to reduce credit risk on a number of companies, [4] CBRF bonds [6] Corporate shares Generating Company and others. Also, during 2009, the the Group worked on the restructuring and converting Group acted as an agent for the restructuring of bonds unsecured debt into secured loans. The total amount of such of companies CJSC Karat and Mirax Group LLC. transactions amounted to approximately 1.82 billion rubles.

Bond issues arragement by industry, 2009

[1] [2] [3] [1] Banks 65% 29% 6% [2] Construction [3] Manufacturing

0% 20% 40% 60% 80% 100% Operations Retail Operations Retail of the Banking banking of the Banking banking 4 Group 4.8 4 Group 4.8 44 45

4.8...... Retail Banking Dynamics of ATM network* and issued cards 279 2005 The Banking Group ZENIT is taking active steps to Retail banking is one of the Banking Group ZENIT’s key 354 develop retail banking on the back of its corporate banking business areas. It provides a full range of services to indivi- 432 achievements, cross-selling opportunities and growth duals. Despite the crisis state of the economy, the Banking 2006 415 through the expansion of the banking network. In 2009, Group ZENIT managed to facilitate a significant growth of 770 the number of its clients increased considerably and the deposit base of this client segment. 2007 amounted to 1.1 million people. 614 997 2008 Deposits of individuals (bln rubles) Loans to individuals (bln rubles) 700 1036 2005 2005 1.0 2009 11.6 735 2006 14.8 2006 3.5 0 100 200 300 400 500 600 700 800 900 1000 1100 2007 28.7 2007 10.8 ATMs (units) Issued cards ('000) 2008 30.7 2008 13.9 * — Taking into account partner banks' ATMs, excluding Tatfondbank which moved to its own processing 2009 39.6 2009 10.7

While actively developing various lines of retail banking, 0 5 10 15 20 25 30 35 40 0 2 4 6 8 10 12 14 the Group is making a particular effort to increase the sales of plastic cards under approved programs. The unified In 2009, the further development of retail lending was The approach to allowable levels of accepted risks was ATM network of the Banking Group ZENIT and partner greatly complicated by the decline in the income of popula- radically reviewed, and by late 2009 a substantial part of banks in 2009 exceeded one thousand units. The expanded tion and a progressive wave of unemployment in most loans to individuals was represented by secured loans. functionality of the ATMs allows cardholders not only to subjects of the Russian Federation. Therefore, the principle At the same time, monitoring procedures for existing bor- withdraw cash and replenish their card accounts but of all-inclusive banking services, which is fundamental rowers were tightened, which helped to considerably restrict also to make payments for utility services, pay for cable for the Banking Group’s customer service approach, the growth of overdue loans. TV and Internet and top-up their mobile phone accounts. gained significant importance for the sustainability of retail business. During the economic recovery, the Banking Group ZENIT sees the following priorities Types of loans to individuals in the development of the retail side of [1] [2] [3] [4] [5] its business: 63% 29% 4% 2% 2% .further expansion of the range of available banking services through the development of remote client service chan- nels — Internet banking and mobile banking; .expansion of the unified ATM network; 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% .increasing the number of cards serviced by the processing centres of the Banking Group; [1] Consumer loans .adding new functions on ATMs; [2] Mortgages .increasing the number of banks that collaborate with the [3] Car loans Group on sponsorship and partnership programs; [4] Bank card overdraft facilities .expansion of the network of enterprises using trade [5] Securities loans acquiring service. Operations Private Operations Risk of the Banking Banking of the Banking management 4 Group 4.9 4 Group 4.10 46 47

4.9...... Private Banking 4.10...... Risk Management

Expanding of the range of services offered to affluent customers — Private The Risk Management System of the Group The purpose of this monitoring system is to identify Banking — has been and remains one of the priority business lines of is aimed at monitoring and management of possible problems with standard loans at early stages. In 2008 the Banking Group ZENIT. major risks typical of its activities. Bank this technology was complemented by the investment project ZENIT is the coordinating, methodological and monitoring. In 2009, the Group confirmed/revised business The product range of this segment currently risk-controlling centre of the Group. plans of monitored investment projects taking into account includes: crisis conditions associated with reduced demand and Traditional Investment Consulting services: financial and Family Office. Support of non- The Group's subsidiaries independently perform ongoing lending. banking services. management. tax planning, tax lawyer’s services, banking transactions management of their own risks through the introduction of a consultation on investments in foreign of the client, unified methodology of risk management in the Group. Within As with credit risks, the market risk management system financial markets, inheritance issues including real estate the framework of the Group's consolidated management of includes procedures for independent risk assessment in 1 2 3and private pension provision. 4 5transactions. risk there is an assessment of economic capital, the concentra- transactions (investments in financial instruments) initiated tion on related parties and business areas is controlled, and by the investment division. Risk is assessed through detailed Despite the complicated market situation, 2009 was a year in which the key indicators of uniform standards for underwriting of borrowers, issuers analysis of the transaction structure, issuer analysis and by the Private Banking operations of the Group strengthened and amplified. and counterparties are introduced. Further, the Group is means of statistical evaluation methods (VaR risk assess- implementing a single policy on currency, interest rate and ment). In 2009, taking into account crisis developments on The Banking Group ZENIT steadily competes with the leaders of the Private Banking market. liquidity risks, and monitoring of capital adequacy. As well the securities market in autumn 2008, more optimised In its Private Banking and Wealth Management Survey 2010, Euromoney magazine once again the Group is introducing common approaches and methods approaches were adopted in defining loss limits, stop- confirmed the Group to be one of the leaders in Private Banking among the Russian market to control business processes and policies on operating loss and take-profit. The set limits (subject to the approval participants. For the second year in a row, Euromoney magazine awarded the Group with risks, and undertaking work to introduce the use of a single of a limit application by the authorised collegiate bodies) are a certificate of market leadership for showing consistent development. software for risk assessment. checked for compliance on a regular basis. The reports on adherence to the set limits for investments in securities are Regarding business performance, retention of a stable customer base and sustainable growth In 2009 a new version of the Risk Management Concept submitted to the Assets and Liabilities Management Com- in attracting funds should be viewed as the main achievements of 2009. was approved; it reflected changes that happened to mittee on a monthly basis. In 2009, a Market Risks Commit- the business volume and structure since the initiation of tee was established and began operating. Its main purpose Holders of various investment portfolios (bank managed mutual funds, trust management, the previous version of the document (2000), including became controlling and prompt decision-making on the limits brokerage portfolios) were offered advice on decision-making in the conditions of extreme vola- the formation of the Group ZENIT. The document defines being approved — stop-loss and take-profit. tility in the stock and currency markets. Information and professional support from specia- the general principles and approaches to the building lists within the Group helped the majority of clients to obtain a significant positive re-evaluation and functioning of the Group’s risk management sys- Much attention is paid to improving the quality of the retail of their investments in 2009 compared with the levels of 2008. tems at the current stage of its development. loan portfolio. From the onset, the Group’s policy thereof was built primarily on the development of lending prog- The key factors, which ensured growth of Private The concentration of Bank ZENIT activities as the Group’s rams for individuals who were employees of the Group’s Banking indicators, are as follows: parent bank in the market of large corporate clients defines client companies which significantly reduces credit risks. the corporate clients’ credit risk as one of the key risks for .Reliable business relations, maintaining a respectable and stable client base; the Bank. The Group manages this risk subject to under- Starting from the second half of 2008, the Group has .Excellent reputation in Private Banking, leading positions in the Private Banking market; writing procedures, set-up and further compliance control been using additional procedures for stress-testing possible .Wide range of services; of a credit limit for the borrower (issuer, counterparty), loan resources outflow in order to establish the adequate amount .Profound knowledge of the client base, extensive experience in Private Banking; loss provisioning, regular monitoring of transactions and and structure of liquid assets. This system allows assessing .Efficient technologies and qualified staff. of the borrower’s financial standing for as long as the deal the possible outflow of resources across the entire funding is in effect, as well as through the use of credit risk reduc- base at a time of adverse developments in financial markets. tion instruments (pledges, guarantees, sureties). In 2007, The model’s output data are used as a basis for calculation an on-line monitoring technology for evaluating the borro- of future liquidity and for setting a task of ensuring a positive wers’ financial standing and business by risk factors was accumulated balance of the gaps, provided that the stress- developed and introduced. scenario is modelled at least one month in advance from the calculation date. The Tatar national holiday Sabantuy and Kuresh wrestling

Bank ZENIT supports Mass sportive events are the folk holiday Sabantuy financed directed included in the UNESCO list at popularisation and of “Masterpieces of the verbal development of the national and non-material heritage sports — Kuresh wrestling of humanity”. and kettlebell lifting. Operations Risk Operations Charity of the Banking management of the Banking and sponsorship 4 Group 4.10 4 Group 4.11 projects 48 49

As an additional liquidity instrument, the Bank maintains 4.11...... Charity and sponsorship projects a substantial amount of bonds included in the Lombard List of the Central Bank of the Russian Federation, enjoys a significant amount of limits imposed on Bank ZENIT by The Banking Group ZENIT aims to take an active part in the social and cultural life of the the market participants and is also able to attract funds regions in which it is present. The realisation of charity projects in the arts and sports, organisa- from the non-collateral auctions arranged by the Bank of tion of cultural events, and support of socially disadvantaged groups of population and ongoing Russia as well as to use other financial instruments. projects for younger people are important areas of activity of the parent and subsidiary banks. The Bank does not finance risk-bearing assets (loan portfolio, securities, etc.) by taking foreign exchange expo- Most of the programmes in 2009 were based on long-term collaboration. sure, and at least quarterly performs a stress-analysis of its interest margin in respect of the probable and stress- 4.11.1...... Culture and arts scenario of changes in the market interest rates.

Culture is one of the main areas of charitable support provided by the Group. In 2009, the Banking Group ZENIT continued its long-term cooperation with the Arts School “Master Class” which has yielded tangible results: in 2009, one of the School’s young musicians won the World Cup for banyan and accordion in New Zealand. The Group also maintains a long established link with the Russian National Orchestra (RNO). In 2009 the tradition of providing sponsorship support to concerts continued: the Group was a sponsor of the RNO Grand Festival, the “New Year with the RNO” concert and provided support to the RNO in organisation of the traditional music and painting festival “December nights” which has been held at the A.S.Pushkin’s Museum of Fine Arts since 1981. With the financial support from the Banking Group ZENIT, a book by L.Tokareva “Mikhail Pletnev’s musical discoveries” was released. Charitable assistance was given to the Municipal Institution of Additional Education for Children “Centre of Children’s Technology Crafts of Kazan” for educational needs and technical equipment of laboratories.

During 2009, the Group implemented a number of long-term projects for the conservation and restoration of cultural heritage. Financial assistance was provided to the Seraphim-Diveevskiy Monastery, Raifa Monastery, and the Annunciation Cathedral of the Kazan Kremlin and the Cathedral of Our Lady of the Sign in Pereyaslavl suburb, Moscow.

In Lipetsk, the Group provided financial assistance to St.Tikhon Nunnery, Zadonsk Monastery of Nativity and Mother of God, Church of the Smolensk Mother of God and the parish of the Church of St.Michael the Archangel.

High emphasis is placed on supporting national holidays, development of national traditions and cultures. The Group provides assistance to local governments for the organisation of the Tatar and Bashkir Sabantuy national holiday, sponsors competitions of “Kuresh“ national wrestling, kettlebell lifting and Greco-Roman wrestling. Operations Charity Operations Charity of the Banking and sponsorship of the Banking and sponsorship 4 Group 4.11 projects 4 Group 4.11 projects 50 51

4.11.2...... Support of sports Charitable aid was also given to the Kazan local branch of the All-Russian Society for the Blind which provides care to about 2000 visually impaired people. The Banking Group does not overlook the seriously ill and disabled, allocating funds for the purchase of necessary equipment, Support of sports, especially children’s sports, is a priority of the Group’s charitable expensive drugs and provision of individual treatments. program. The Banking Group ZENIT’s interaction with “Slava” Rugby Club is aimed at popularising this rare sport and has helped to involve over 3,500 children in rugby training Another project of high importance for the Group ZENIT is cooperation with the charity in many towns of Russia. organisation “Operation Smile”. Every year the Bank participates in the charitable activities of this organisation through sponsoring corrective surgery of congenital maxillo-facial defects In 2009, the VIII All-Russian Youth Rugby Tournament for the Banking Group ZENIT Cup of children from low-income families. took place in Anapa. The Tournament is recognised by the Russian Rugby Union as the official All-Russian annual competition in children's rugby. It was dedicated to the 35th anniversary The Group continued its cooperation with the charity fund “Miloserdie” which aim is to promote of “Slava” Rugby Club. assistance in the sphere of education, enlightenment, science, culture, healthcare, sports and social support of population throughout the Republic of Tatarstan and beyond. In 2009, cooperation with the Rugby Union for sponsorship of the Russian national rugby team was also continued. Under the rugby program, financial assistance was provided to Holding New Year concerts and shows is becoming yet another tradition of the Group. A charity the National specialised youth sport fund and support was given to the Nizhniy Novgorod New Year party — the ice show “Beauty and the Beast” — took place in Kazan, at the “Tatneft- Regional Public Organisation “Rugby Federation” to purchase prizes for the best players of Arena” Ice Palace with financial support from ZENIT. It was held for children from low-income the Nizhniy Novgorod Regional Rugby Championship. families and Raifa Monastery students left without parental care.

The Banking Group also continued its long-lasting association with the Rowing Slalom and In Lipetsk, the Banking Group supported the national edu-cation system under the program Rafting Fund “Altai-Raft” whose athletes were awarded medals of various merits at international “Personal bank scholarships” for students who had won academic competitions in economic competitions. disciplines.

In 2009, assistance was given to the Basketball Club “Unix” which has been one of undisputed In Sochi, the Group contributed to the program “For the sake of the future — let us help leaders of Russian and European basketball for eight years in a row. Financial support the children”, one of the priorities of which is the provision of high-tech medical care and was provided to the professional Union of Continental Hockey League players, which brings the purchase of expensive drugs for seriously ill children. together trade union organisations of twenty-four hockey clubs. The Banking Group ZENIT can certainly be called one of the leaders among major sponsors The Group also supports sports programs in the Tula region: charitable aid was given to and philanthropists of Russia, both in terms of funding charitable programs in 2009 — the Children’s and Youth’s Sports Schools “Younost” and “Arsenal” including support for the about 117 million rubles — and the systemic approach taken in implementing them. This con- football tournament between teams of Tula and the Tula region. firms the Group's commitment to good traditions of domestic entrepreneurship, philanthropy and social responsibility. 4.11.3...... Healthcare and disadvantaged groups of population

Long-term programs of the Banking Group ZENIT are also aimed at supporting the most vulnerable groups of population — children and the elderly. Over 2009, the Group provided financial assistance to 48 professors of the Moscow Aviation Institute and honorary pensioners from Kazan by paying them an additional life pension.

In 2009, ZENIT helped the non-profit institution ”Retirement Home of Veterans of Cinema”, which has yet for over 30 years been a place of permanent residence for veterans of national cinematography who had created internationally recognised masterpieces.

The Group continued to provide ongoing financial support in the form of personal pensions to the children of killed miners from 114 low-income families with many children living in various towns in the Kemerovo region. IT development Annual report of Banking Group ZENIT 5 2009 53

The need OF optimisation of the Banking Group ZENIT activities during the crisis period has led to intensive work in the field of information technology. The focus areas in 2009 were:

Data centre Тechnological Тechnological Development Development IT development improvement. support of changes support of a network of anti-crisis banking in accounting of information of terminal stations products in association policies. security. of the processing with business 1 2 3 4centre. 5subdivisions. During 2009, the Group replaced the computer system and software used for the central database. The new computer system incorporates cutting edge solutions for high accessibility and scalability of computing resources and data storage systems. In autumn 2009, the automated banking system was moved to a new computing platform and a new version of the Oracle database management system.

As part of the Banking Group’s regional strategy in the past year, the IT infrastructure for the Banking Center in the Republic of Tatarstan was developed. Also, the reorganisation 5 of information systems of subdivisions in Tatarstan was carried out, in accordance with the Banking Centre concept.

Considerable work was implemented, associated with the need for meeting changing requirements of regulatory bodies in the field of information security and personal data protection.

The network of terminal stations of the processing centre underwent certification to enable acceptance of microprocessor cards of main international payment systems.

In accordance with the rapidly changing demands of business, software was developed to service new banking products, such as loans to private customers by AHML standards and loans to corporate clients with flexible terms of repayment.

By improving the operational efficiency through optimising the IT infrastructure, the Group’s expenditure on information technology was significantly reduced. Rugby One of the main social projects of Bank ZENIT since its establishment has been popularising of a rare sport for our country — rugby.

Bank ZENIT granted funds The All-Russian Rugby youth to “Slava” Rugby Club to finance tournament for the Bank ZENIT establishment of a unique cup was included in the official interregional network of children- agenda of the children-youth youth rugby schools across rugby and rugby-7 competitions all the Russian territory in the of the Rugby Union of Russia. regions of the Bank’s presence. Organisational development Annual report of Banking Group ZENIT 6 2009 55

The priority task in the sphere of human resources during the crisis period in 2009 was to retain key skilled professionals on staff within the Banking Group.

A system of goal-setting, adjusted to the level of each specialist, with an assessment at the end of the year based on achievements and demonstrated competencies became Organisational one of the methods of motivation. During the 2009 Staff Evaluation, medium-level executives of branches of the Group’s parent bank received expert assessment of their corporate competencies for the first time. development In staff training in 2009, emphasis was placed on internal corporate training involving 258 employees, including 127 people in Moscow and 131 people in the regional branches.

In 2009, the ”Integrated system of motivation” project was launched as part of the Banking Group’s program of strategic projects approved by the Board of Directors. 6 The aim of the project is to introduce a transparent system of motivation on the basis of best international practices in line with the development strategy of the Group. Reference Main foreign Annual report information partner banks of Banking Group ZENIT 7 7.1 2009 57

7.1...... Main foreign partner banks

.Commerzbank AG Frankfurt am Main, Germany. .Dresdner Bank AG Frankfurt am Main, Germany. .Deutsche Bank AG Frankfurt am Main, Germany. .VTB Bank (Deutschland) AG Frankfurt am Main, Germany. Reference .BHF-Bank AG Frankfurt am Main, Germany. .DZ Bank AG Frankfurt am Main, Germany .Bayerische Hypo- und Vereinsbank AG Munich, Germany. .Bayerische Landesbank Munich, Germany. information .Landesbank Berlin AG Berlin, Germany. .ING Group Amsterdam, The Netherlands. .Bank of Montreal Toronto, Canada. .JPMorgan Chase Bank New-York, USA. .Standard Chartered Bank NY New-York, USA. .Raiffeisen Zentralbank Oesterreich AG Vienna, Austria. .UniCredit Bank Austria AG Vienna, Austria. 7 .Erste Group Bank AG Vienna, Austria. 7.1...... Main foreign partner banks...... 57 .VTB Bank (Austria) AG Vienna, Austria. 7.2...... List of licences and participation in associations, partnerships and organisations...... 58 .Credit Suisse Zurich, Switzerland...... OJSC Bank ZENIT...... 58 .UBS AG Zurich, Switzerland...... JSB Devon-Credit (OJSC) ...... 60 .Banque de Commerce et de Placements Geneva, Switzerland...... OJSC Lipetskkombank...... 61 Barclays Bank plc. London, UK...... Bank ZENIT Sochi LLC...... 62 . Royal Bank of Scotland plc. London, UK...... OJSC Spiritbank...... 62 . .BNP Paribas Paris, France. .Societe Generale Paris, France. .BRED Banque Populaire Paris, France. .Intesa Sanpaolo SpA Milan, Italy. .Banco Popolare Italy .Banca Monte dei Paschi di Siena Siena, Italy .Canara Bank New Delhi, India. Reference List of licences and participation Reference List of licences and participation information in associations, partnerships information in associations, partnerships 7 7.2 and organisations 7 7.2 and organisations 58 59

7.1 List of licences and participation in associations, partnerships and organisations Participation in associations, partnerships and organisations .Association of Russian Banks (ARB). OJSC Bank ZENIT .Chamber of Commerce and Industry of the Republic of Tatarstan. .Non-profit Partnership ”Moscow Banking Union”. List of licences .All-Russian Public Organisation ”The Russian Union of Industrialists and Entrepreneurs (Employers)”. .General licence of the Central Bank of the Russian Federation of 02.10.2002 № 3255 for banking .Regional Public Organisation ”The Club of Heads of Bank PR and Promotion Units”. transactions in Russian rubles and foreign exchange; .The National Securities Market Association (a self-regulating non-profit organisation). .Licence of the Central Bank of the Russian Federation for banking transactions in deposits .Self-regulating (Non-profit) Organisation ”The National Association of Securities Market and placement of precious metals; Participants”. .Licence of the Federal Service for Financial Markets of Russia for depositary operations; .Non-profit Organisation ”Association of Bill of Exchange Market Participants”. .Licence of the Federal Service for Financial Markets of Russia for brokerage; .Non-profit Partnership ”The International Association of Business Cooperation”. .Licence of the Federal Service for Financial Markets of Russia for dealing; .Non-profit Partnership ”The Interregional Petroleum Partnership”. .Licence of the Federal Service for Financial Markets of Russia for securities management; .Non-profit Partnership ”The National Committee for Promotion of Economic Cooperation with .Licence of the Federal Service for Financial Markets of Russia to act as an Exchange intermediary Latin American Countries”. to deal in traded futures and options; .The Union of Gold Producers. .Licence of the Federal Commission for the Securities Market of Russia to act as a specialized Association of Russian Banks / Members of Visa (a non-profit organisation). depositary of investment funds, mutual funds, and nongovernmental pension funds; . Visa International Service Association. Licence of the Center for Licensing, Certification and Protection of State Secrets for operations . . MasterCard Europe S.A. that utilise information classified as state secret; . Nongovernmental non-profit organisation ”The Association of Russian Europay Members”. .Licence of the Center for Licensing, Certification and Protection of State Secrets to distribute . encryption (cryptographic) equipment; .Association of Banks of Central Russia. .Licence of the Center for Licensing, Certification and Protection of State Secrets to provide .Non-profit Partnership ”The Russian National Committee of the International Chamber of encoding/decoding services; Commerce / The World Business Organization (ICC Russia)”. .Licence of the Center for Licensing, Certification and Protection of State Secrets for technical .Non-profit Partnership ”The Partnership of Information Exchange Participants”. maintenance of encryption (cryptographic) equipment. .The Bankers Association of Tatarstan. .Association of Banks of North-West Russia. .Odintsovo Chamber of Commerce and Industry.

Authorised statUSes .Authorised bank of the Government of the city of Moscow. .Authorised bank of the Committee of Finance of the city of Saint Petersburg in attraction of Saint Petersburg’s budget funds into bank deposits. .Authorised bank of the Fund of Assistance to the Reformation of Housing and Communal Services in attraction of Fund’s means into bank deposits. .Participant of the Federal Purpose-Oriented Program “Housing”. .The status of inclusion in the Register of banks and other credit organisations with a right of issuing bank guarantees for payment of customs duties. Arts School Master-Class Was founded by Bank ZENIT and the Russian Cultural Fund on 19 October, 2000.

A student of the Arts school The Interregional festival Lev Lavrov won the “Young talents of Russia” World Cup 2009 for bayan is held with the participation and accordion held by of young Moscow virtuosos the International confederation at the largest concert halls of accordion players. of Russia’s regional centers. Reference List of licences and participation Reference List of licences and participation information in associations, partnerships information in associations, partnerships 7 7.2 and organisations 7 7.2 and organisations 5860 61

JSB Devon-Credit (OJSC) OJSC Lipetskkombank

List of licences List of licences .General licence of the Central Bank of the Russian Federation for banking transactions .General licence of the Central Bank of the Russian Federation for banking transactions in Russian rubles and foreign exchange with legal entities. in Russian rubles and foreign exchange. .General licence of the Central Bank of the Russian Federation for banking transactions in Russian .Licence of the Federal Service for Financial Markets of Russia for brokerage. rubles and foreign exchange with individuals. .Licence of the Federal Service for Financial Markets of Russia for dealing. .Licence of the Federal Service for Financial Markets of Russia for brokerage. .Licence of the Federal Service for Financial Markets of Russia for securities management; .Licence of the Federal Service for Financial Markets of Russia for dealing. .Licence of the Federal Service for Financial Markets of Russia for depositary operations. .Licence of the Federal Service for Financial Markets of Russia for depositary operations. .Licence of the Center for Licensing, Certification and Protection of State Secrets under .Licence of the Federal Service for Financial Markets of Russia for securities management. the Federal Security Bureau of Russia to provide encoding/decoding services. .Licence of the Federal Service for Financial Markets of Russia to act as an Exchange intermediary .Licence of the Center for Licensing, Certification and Protection of State Secrets under to deal in traded futures and options. the Federal Security Bureau of Russia to distribute encryption (cryptographic) equipment. .Licence of the Center for Licensing, Certification and Protection of State Secrets under the Fede- Participation in associations, partnerships and organisations ral Security Bureau of Russia for technical maintenance of encryption (cryptographic) equipment. .Licence for construction of buildings and facilities of I and II levels of responsibility in accordance .The Bankers Association of Tatarstan. with the State Standard. .Non-profit organisation ”The Association of Regional Banks of Russia”. .Licence of the Federal Service for Financial Markets of Russia to act as an Exchange intermediary .Closed Joint Stock Company ”Saint Petersburg Currency Exchange”. to deal in traded futures and options. .Closed Joint Stock Company ”Moscow Interbank Currency Exchange”. .Closed Joint Stock Company ”Moscow Interbank Currency Exchange — Povolzhye”. Participation in associations, partnerships and organisations Association of Lending Agencies of the Republic of Bashkortostan. . Self-regulating Organisation National Securities Market Association. .Non-profit Partnership RUGBY CLUB ”SLAVA”. . .Association of Russian Banks. .Lipetsk Chamber of Commerce and Industry. .Moscow Interbank Currency Exchange. .Association of Global Interbank Financial Telecommunications. .Visa International Service Association. .MasterCard Int. .Regional Union of Employers “The Union of Industrialists and Entrepreneurs of Lipetsk Region“. .Non-governmental Pension Fund “Social Development“. .Non-profit Partnership RUGBY CLUB “SLAVA“. Reference List of licences and participation Annual report information in associations, partnerships of Banking and organisations 7 7.2 Group ZENIT 62 2009

Bank ZENIT Sochi LLC

List of licences .Licence of the Central Bank of the Russian Federation for banking transaction with Russian rubles and foreign exchange (without the right of attracting monetary funds of individuals). .Licence of the Central Bank of the Russian Federation for attraction of funds of individuals in Russian rubles and foreign exchange into bank deposits. Financial

Participation in associations, partnerships and organisations .Visa International Service Association. statements .MasterCard Int.

OJSC Spiritbank

List of licences 88.1...... Consolidated Statement of Income...... 64 .General licence of the Central Bank of the Russian Federation for banking transactions 8.2...... Consolidated Balance Sheet...... 65 in Russian rubles and foreign exchange with individuals. 8.3...... Consolidated Statement of Changes in Equity...... 66 .General licence of the Central Bank of the Russian Federation for banking transactions 8.4...... Consolidated Statement of Cash Flows...... 68 in Russian rubles and foreign exchange with legal entities. .MasterCard Int.

Participation in associations, partnerships and organisations .Association of Russian Banks. .Tula Chamber of Commerce and Industry. .Member of payment systems Contact and WesternUnion. Financial Consolidated Financial Consolidated 8 statements 8.1 Statement of Income 8 statements 8.2 Balance Sheet 64 65

8.1...... Consolidated Statement of Income 8.2...... Consolidated Balance Sheet (Thousands of Russian Roubles, except for Earning per share) (Thousands of Russian Roubles) Year ended 31 December Year ended 31 December 2009 2008 2009 2008 Interest income 19,513,637 18,625,111 Assets Interest expense (11,915,460) (9,582,065) Cash and cash equivalents 30,986,124 43,210,564 Mandatory reserve deposits with the Central Bank of the Russian Federation (CBRF) 949,216 209,255 Net interest income 7,598,177 9,043,046 Due from banks 30,063,790 11,644,984 Provision for loan impairment (3,749,171) (1,876,024) Financial assets at fair value through profit or loss 3,909,046 2,701,689 Available-for-sale financial assets 12,247,564 13,734,004 Net interest income after changes in provision for loan impairment 3,849,006 7,167,022 Loans to customers 101,121,877 109,177,374 Property, plant and equipment 3,649,700 4,171,019 Net gain/(loss) on financial assets at fair value through profit or loss 206,085 (967,001) Investment property 201,779 — Goodwill 156,248 156,248 Net realised gain/(loss) from available-for-sale financial assets 281,835 (1,325,719) Other assets 598,121 725,170 Impairment of available-for-sale financial assets (846,698) (1,862,830) Current income tax asset 283,574 608,540 Net gains arising from dealing in foreign currencies 2,045,785 894,429 Deferred income tax asset 763,095 978,088 Net loss arising on foreign exchange translation (1,153,431) (39,664) Non-current assets held for sale 1,110,646 — Fee and commission income 3,679,928 3,906,429 Total assets 186,040,780 187,316,935 Fee and commission expense (427,821) (490,478) Recovery of provision/(provision) for losses on credit related commitments 138,682 (143,624) Liabilities Impairment of property, plant and equipment (355,275) — Due to banks and CBRF 25,367,556 38,080,727 Customer accounts 104,659,285 96,342,911 Fair value movement of investment property (24,330) — Debt securities issued 14,230,870 13,614,418 Impairment of non-current assets held for sale (23,937) — Eurobonds and RUR-denominated bonds issued 10,020,406 14,892,240 Impairment of goodwill — (369,054) Other liabilities 745,604 664,612 Provision for contingent liability (82,612) Current income tax liability 24,408 7,096 Other operating income 512,372 199,050 Deferred income tax liability 149,453 4,678 Subordinated debt 11,119,858 6,945,503 Net revenues 7,799,589 6,968,560 Total liabilities 166,317,440 170,552,185 Operating expenses (4,951,665) (5,526,158) Equity Share capital 12,698,104 12,698,104 Profit before income tax expense 2,847,924 1,442,402 Treasury shares (699,900) — Income tax expense (758,096) (264,917) Share premium 1,545,000 1,545,000 Cumulative translation reserve 346 — Net profit 2,089,828 1,177,485 Revaluation reserve for available-for-sale financial assets 221,950 (1,723,926) Property, plant and equipment revaluation reserve 47,288 — Attributable to: Retained earnings 5,833,089 4,176,395 Equity holders of the parent 2,056,694 1,162,538 Equity attributable to shareholders of the Bank 19,645,877 16,695,573 minority interest 33,134 14,947 Minority interest 77,463 69,177 Total equity 19,723,340 16,764,750 Earnings per share, basic and diluted (Russian rubles) 0.179 0.101 Total liabilities and equity 186,040,780 187,316,935 Altai Raft team Since 2003, Bank ZENIT has been actively supporting the sports popular in the Republic of Altai — rafting and rowing slalom

In 2009 Kirill Setkin became As of today, 6 rowing slalom the youngest winner oarsmen from “Altai-Raft” of the Russian Cup in Canoe-1 team are members of in the history the different select teams — of rowing slalom. youth, junior and primary. Financial Consolidated Statement Financial Consolidated Statement 8 statements 8.3 of Changes in Equity 8 statements 8.3 of Changes in Equity 66 67

8.3...... Consolidated Statement of Changes in Equity Consolidated Statement of Changes in Equity (Thousands of Russian Roubles) (Thousands of Russian Roubles)

Share Trea- Share Accu- Reva- Property Retained Equity Minority Total Share Trea - Share Accu- Reva- Property Retained Equity Minority Total capital sury premium mulated luation and earnings attri- interest equity capital sury premium mulated luation and earnings attri- interest equity shares trans- reserve equip- butable shares trans- reserve equip- butable ferable for ment to ferable for ment to pro- available- reva- share- pro- available- reva- share- vision for-sale luation holders vision for-sale luation holders financial reserve of the financial reserve of the assets Bank assets Bank

31 December 2007 12,698,104 — 1,545,000 — (75,646) — 3,913,857 18,081,315 41,584 18,122,899 31 December 2008 12,698,104 — 1,545,000 — (1,723,926) — 4,176,395 16,695,573 69,177 16,764,750 Net profit — — — — — — 2,056,694 2,056,694 33,134 2,089,828 Net profit — — — — — — 1,162,538 1,162,538 14,947 1,177,485 Dividends for the year Dividends for the year 2007 — — — — — — (900,000) (900,000) (4,150) (904,150) 2008 — — — — — — (400,000) (400,000) (686) (400,686) Fair value adjustment Purchase of treasury on available-for-sale shares — (699,900) — — — — — (699,900) — (699,900) financial assets recognised in the Translation movement — — — 346 — — — 346 — 346 statement of income Fair value adjustment (net of deferred on available-for-sale income tax of financial assets RUR265,144 thousand) — — — — 1,060,575 — — 1,060,575 — 1,060,575 recognised in the statement of income Impairment of (net of deferred available-for-sale income tax financial assets of RUR56,367 thousand) — — — — (225,468) — — (225,468) — (225,468) recognised in the statement of income Impairment of (net of deferred available-for-sale income tax of financial assets recognised in the RUR372,566 thousand) — — — — 1,490,264 — — 1,490,264 — 1,490,264 statement of income (net of deferred Fair value adjustment income tax of on available-for-sale RUR 169,340 thousand) — — — — 677,358 — — 677,358 — 677,358 financial assets (net of deferred Fair value adjustment income tax of on available-for-sale RUR1,049,780 thousand) — — — — (4,199,119) — — (4,199,119) — (4,199,119) financial assets (net of deferred Acquisition of additional income tax of shares in subsidiary — — — — — — — — (16,523) (16,523) RUR 373,497 thousand) — — — — 1,493,986 — — 1,493,986 — 1,493,986 Revaluation of property, Minority interest plant and equipment on acquisition — — — — — — — — 33,319 33,319 (net of deferred income tax of 31 December 2008 12,698,104 — 1,545,000 — (1,723,926) — 4,176,395 16,695,573 69,177 16,764,750 RUR 11,822 thousand) — — — — — 47,288 — 47,288 — 47,288 Acquisition of additional shares in subsidiary — — — — — — — — (24,162) (24,162) 31 December 2009 12,698,104 (699,900) 1,545,000 346 221,950 47,288 5,833,089 19,645,877 77,463 19,723,340 Financial Consolidated Statement Financial Consolidated Statement 8 statements 8.4 of Cash Flows 8 statements 8.4 of Cash Flows 68 69

8.4...... Consolidated Statement of Cash Flows Consolidated Statement of Cash Flows (Thousands of Russian Roubles) (Thousands of Russian Roubles) 2009 2008 2009 2008

Cash flows from operating activities Cash flows from investing activities

Interest received 17,722,465 18,070,777 Acquisition of subsidiary, net of cash acquired — (31,281) Interest paid (11,313,038) (9,444,690) Subsequent acquisition of shares in subsidiary (30,695) (29,434) Cash received on dealing in foreign currencies 2,016,883 892,434 Purchase of property, plant and equipment (238,942) (2,266,868) Cash paid on dealing in financial assets at fair value through profit or loss (568,501) (1,642,772) Purchase of available-for-sale financial assets (20,114,448) (13,131,481) Cash received/(paid) on operations with available-for-sale financial assets 281,835 (1,325,719) Proceeds from sales of available-for-sale financial assets 23,940,714 10,030,902 Fees and commissions received 3,665,909 3,874,144 Proceeds from sale of equipment 26,350 50,037 Fees and commissions paid (432,252) (478,519) Proceeds from sale of non-current assets held for sale 100,521 — Other operating income received 362,998 128,438 Operating expenses paid (4,708,716) (5,280,612) Net cash (used in) / from investing activities 3,683,500 (5,378,125) Income tax paid (554,342) (1,211,069) Cash flows from financing activities Operating activities before changes in operating assets and liabilities 6,473,241 3,582,412 Re-issuance/Issuance of RUR-denominated bonds 3,000,000 5,553,000 Net cash increase/(decrease) from operating assets and liabilities Redemption of Eurobonds and RUR-denominated bonds (8,840,938) — Dividends paid (400,686) (904,150) Mandatory reserve deposits with the Central Bank of the Russian Federation (739,961) 1,680,207 Subordinated debt 4,146,414 2,926,175 Due from banks (18,312,368) 85,830 Purchase of treasury shares (699,900) — Financial assets at fair value through profit or loss and foregn currencies (241,537) 2,101,514 Loans to customers 6,960,121 (3,783,556) Net cash (used in) / from financing activities (2,795,110) 7,575,025 Other assets 39,788 167,064 Due to banks (14,911,923) 18,802,125 Effect of exchange rate changes on cash and cash equivalents 1,024,074 2,120,382 Customer accounts 6,702,072 (475,632) Debt securities issued 209,284 (7,623,440) Net (decrease)/increase in cash and cash equivalents (12,221,484) 18,554,911 Other liabilities (312,665) (298,895) Cash and cash equivalents, beginning 43,207,053 24,652,142

Net cash (used in)/ from operating activities (14,133,948) 14,237,629 Cash and cash equivalents, ending 30,985,569 43,207,053 List of subdivisions OJSC Annual report of the Banking Bank ZENIT of Banking Group ZENIT Group ZENIT 9 9.1 2009 71

9.1...... OJSC Bank ZENIT

List Head Office: 9, Banny pereulok, Moscow, 129110 Tel.: +7 (495) 937 07 37, +7 (495) 777 57 07 Moscow and the Moscow region of subdivisions № City Subdivision Mailing address, telephone 1 Moscow Subsidiary office №1 “Kuntsevo” 14, Gorbunova street, Moscow, 121596 OJSC Bank ZENIT Tel.: +7 (495) 642-93-58

2 Moscow Subsidiary office №3 “Ostozhenka” 28, Ostozhenka street, Moscow, 119034 of the Banking OJSC Bank ZENIT Tel.: +7 (495) 933-29-56 3 Moscow Subsidiary office №4 “Yugo-Zapadny” 8, block 1, Akademika Anokhina street, 9 OJSC Bank ZENIT Moscow, 117602 Group ZENIT Tel.: +7 (495) 937-07-37 (ext. 28-24) 4 Moscow Subsidiary office №5 “Evropeisky” 2, Kievsky railway station square, OJSC Bank ZENIT Evropeisky Trade and Entertainment Center, 1st Floor, Moscow, 121059. Tel.: +7 (495) 229-19-70 (ext.101)

5 Moscow Subsidiary office №6 “Semyonovsky” 40-42, bldg.1, Shcherbakovskaya street, OJSC Bank ZENIT Moscow, 105187. Tel.: +7 (499) 166-71-76

9.1...... OJSC Bank ZENIT...... 71 6 Moscow Subsidiary office №8 “Dobryninsky” 7, Pavlovskaya street, Moscow, 115093. 9.2...... JSB Devon-Credit (OJSC)...... 75 OJSC Bank ZENIT Tel.: +7 (495) 937-36-64 9.3...... OJSC Lipetskkombank...... 77 9.4...... Bank ZENIT Sochi LLC...... 79 7 Moscow Subsidiary office №9 “Client Center 69, Sadovnicheskaya street, Moscow, 115035. 9.5...... OJSC Spiritbank ...... 80 «Sadovaya sloboda» OJSC Bank ZENIT Tel.: +7 (495) 980-75-78, +7 (495) 980-75-79

8 Moscow Subsidiary office №10 “Filyovsky” 10, block 2, Kurina Gerasima street, OJSC Bank ZENIT Moscow, 121108. Tel.: +7 (495) 937-68-36

9 Moscow Subsidiary office №11 “Leningradsky” 27, Leningradsky prospekt, Moscow, 125284. OJSC Bank ZENIT Tel.: +7 (495) 981-15-04

10 Moscow Subsidiary office №13 “Olimpiisky” 7, Olimpiisky prospekt, Moscow, 129110. OJSC Bank ZENIT Tel.: +7 (495) 937-07-37 (ext. 39-90)

11 Mytishchi, Subsidiary office №12 “Mytishchi” 24/5, Mira street, Mytishchi, Moscow OJSC Bank ZENIT 141008, Moscow region. region Tel.: +7 (499) 940-91-14 Tiger Romashka In 2002 Bank ZENIT granted funds to buy four-months old Siberian tiger for the Kazan zoo and became an official tutor of the animal.

A contest was held among By 2010, Romashka the Bank’s employees already was a mother on the best name for the tiger. of 24 little tigers — Following its results she a kind of a record was named Romashka — for zoos. in the honour of Romashkinskoe oilfield. List ofДеятельность subdivisions OJSCОбзор экономики РФ List ofДеятельность subdivisions OJSCОбзор экономики РФ of theБанковской Banking Bankи ZENITбанковского сектора of theБанковской Banking Bankи ZENIT банковского сектора 94Groupгруппы ZENIT 94.1.2 в 2009 году 94Groupгруппы ZENIT 94.1.2 в 2009 году 2572 2573

Moscow and the Moscow region Regions of Russia

№ City Subdivision Mailing address, telephone № City Subdivision Mailing address, telephone

12 Odintsovsky Subsidiary office №2 “Odintsovo” 1, Lugovaya street, Townsite 21 Kaliningrad Kaliningradsky branch 155a, Leninsky prospekt, Kaliningrad, 236040, district, OJSC Bank ZENIT Novoivanovskoye, Tri kita Hypermarket. OJSC Bank ZENIT Russian Federation. Moscow Odintsovsky district, Moscow region, 143026, Tel.: +7 (4012) 92-00-01 region Tel.: +7 (495) 723-82-82 (ext.22-61) 22 Kemerovo Kemerovsky branch 74/1, prospekt Sovetsky, Kemerovo, 650000, 13 Khimki, Subsidiary office №7 “Khimki-2” 4, Butakovo, Grand-2 Multifunctional OJSC Bank ZENIT Kemerovo region, Russian Federation. Moscow OJSC Bank ZENIT Shopping Mall, Khimki, Moscow region, 141400. Tel.: +7 (3842) 58-21-99 Tel.: +7 (495) 723-80-01 (ext.12-30) 23 Kursk Kursky branch 9, Kati Zelenko street, Kursk, 305004, OJSC Bank ZENIT Russian Federation. Tel.: +7 (831) 278-97-77 Regions of Russia 24 Nizhny Nizhegorodsky branch 148, Maksima Gorkogo street, № City Subdivision Mailing address, telephone Novgorod OJSC Bank ZENIT Nizhny Novgorod, 603000, Russian Federation. Tel.: +7 (8312) 278-97-77 14 Almetyevsk Subsidiary office “Na Beloglazova” 26a, Beloglazova street, Almetyevsk, 423450, in Almetyevsk of Kazansky branch Republic of Tatarstan, Russian Federation. 25 Nizhnekamsk Subsidiary office “Nizhnekamsky” 53a, Shinnikov street, Nizhnekamsk, 423570, OJSC Bank ZENIT Tel.: +7 (8553) 37-65-90 of Kazansky branch Republic of Tatarstan, Russian Federation. OJSC Bank ZENIT Tel.: +7 (8555) 42-03-51 15 Almetyevsk Subsidiary office “Panorama” 100, Lenina street, Almetyevsk, 423450, in Almetyevsk of Kazansky branch Republic of Tatarstan, Russian Federation. 26 Novokuznetsk Subsidiary office “Novokuznetsky” 48, prospekt Metallurgov, Central district, OJSC Bank ZENIT Tel.: +7 (8553) 30-39-60 of Kemerovsky branch Novokuznetsk, 654005, Russian Federation. OJSC Bank ZENIT Tel.: +7 (3843) 46-60-11 16 Almetyevsk Subsidiary office “Na Gertsena” 94, office 1, Gertsena street, Almetyevsk, 423450, in Almetyevsk of Kazansky branch Republic of Tatarstan, Russian Federation. 27 Novosibirsk Novosibirsky branch 13, Chelyuskintsev street, Novosibirsk, 630132, OJSC Bank ZENIT Tel.: +7 (8553) 37-55-30 OJSC Bank ZENIT Russian Federation. Tel.: +7 (383) 298-94-30 17 Arzamas Subsidiary office “Arzamassky” 26, Kulikova street, Arzamas,607226 of Nizhegorodsky branch Nizhny Novgorod region, Russian Federation. 28 Perm Permsky branch 27, prospekt Komsomolsky, Perm, 614072, OJSC Bank ZENIT Tel.: +7 (83147) 2-37-57 OJSC Bank ZENIT Permsky krai, Russian Federation. Tel.: +7 (342) 211-12-20 18 Gorno- Gorno-Altaysky branch 29, Choros-Gurkina street, Gorno-Altaysk, Altaysk OJSC Bank ZENIT 649000, Altay Republic, Russian Federation. 29 Rostov- Rostovsky branch 144a, Pushkinskaya street, Rostov-on-Don, Tel.: +7 (38822) 2-50-18 on-Don OJSC Bank ZENIT 344006, Russian Federation. Tel.: +7 (863) 250-11-56 19 Yekaterinburg Yekaterinburgsky branch 28, Kirova street/43, Toledova street, OJSC Bank ZENIT Yekaterinburg, 620219, Sverdlovsk region, 30 Samara Samarsky branch 139/3, A. Tolstogo street/L.Tolstogo street, Russian Federation. OJSC Bank ZENIT Samara, 443099, Russian Federation. Tel.: +7 (343) 310-32-70 Tel.: +7 (846) 310-28-60

20 Kazan Kazansky branch 21-1, Telmana street, Kazan, 420111, 31 Saint Peterburgsky branch 20, letter Ya, Yablochkova street, Saint Petersburg, OJSC Bank ZENIT Republic of Tatarstan, Russian Federation. Petersburg OJSC Bank ZENIT 197198, Russian Federation. Tel.: +7 (843) 230-40-05 Tel.:+7 (812) 448-22-48 List ofДеятельность subdivisions OJSCОбзор экономики РФ List ofДеятельность subdivisions JSB Devon-CreditОбзор экономики РФ of theБанковской Banking Bankи ZENITбанковского сектора of theБанковской Banking (OJSC)и банковского сектора 94Groupгруппы ZENIT 94.1.2 в 2009 году 94Groupгруппы ZENIT 94.2.2 в 2009 году 2574 2575

Regions of Russia 9.2...... JSB Devon-Credit (OJSC) № City Subdivision Mailing address, telephone Head office: 77, Lenina street, Almetyevsk, 423450, Republic of Tatarstan, Russian Federation. Tel./fax: +7 (8553) 456-777, 317-513 32 Saint Subsidiary office 32, Suvorovsky prospekt, Saint Petersburg, Petersburg of Peterburgsky branch 191015, Russian Federation. OJSC Bank ZENIT Tel.: +7 (812) 324-69-24 № City Subdivision Mailing address, telephone

33 Saratov Operating office Saratovsky 66, Moskovskaya street, Saratov, 410012, 1 Aznakaevo Aznakaevsky branch №1972/5 11, Shaikhutdinova street, Aznakaevo, 423300, of Samarsky branch Russian Federation. JSB Devon-Credit (OJSC) Republic of Tatarstan, Russian Federation. OJSC Bank ZENIT Tel.: +7 (8452) 48-97-17 Tel.: +7 (85592) 7-32-27

34 Surgut Surgutsky branch 30/1, Profsoyuzov street, Surgut, 628415, 2 Almetyevsk Subsidiary office 96, Gertsena street, Almetyevsk, 423450, OJSC Bank ZENIT Tyumen region, Khanty-Mansiisky Autonomous JSB Devon-Credit (OJSC) Republic of Tatarstan, Russian Federation. District — Yugra, Russian Federation. Tel.: +7 (8553) 30-28-01 Tel.: +7 (3462) 22-81-50 3 Bavly Bavlinsky branch №1972/6 63, F. Engelsa street, Bavly, 423930, 35 Tolyatti Subsidiary office “Tolyattinsky” 15 A, boulevard Lenina, Tolyatti, 445021, JSB Devon-Credit (OJSC) Republic of Tatarstan, Russian Federation. of Samarsky branch Russian Federation. Tel.: +7 (85569) 5-51-25 OJSC Bank ZENIT Tel.: +7 (8482) 31-99-50 4 Bugulma Bugulminsky branch №1972/4 32, Dzhalilya street, Bugulma, 423230, 36 Chelyabinsk Chelyabinsky branch 21, Sovetskaya street, Chelyabinsk, 454091, JSB Devon-Credit (OJSC) Republic of Tatarstan, Russian Federation. OJSC Bank ZENIT Russian Federation. Tel.: +7 (85594) 4-40-50 Tel.: +7 (351) 247-91-94 5 Bugulma Subsidiary office of Bugulminsky branch 39, Gafiatullina street, Bugulma, 423236, JSB Devon-Credit (OJSC) Republic of Tatarstan, Russian Federation. Tel.: +7 (85594) 4-14-05

6 Dzhalil Dzhalilsky branch №1972/8 24/1, Akhmadieva street, townsite of Dzhalil, JSB Devon-Credit (OJSC) 423368, Sarmanovsky district, Republic of Tatarstan, Russian Federation. Tel.: +7 (85573) 6-00-99

7 Yelabuga Yelabuzhsky branch №1972/3 41, prospekt Neftyanikov, Yelabuga, 423603, JSB Devon-Credit (OJSC) Republic of Tatarstan, Russian Federation. Tel.: +7 (85557) 3-56-16

8 Yelabuga Subsidiary office №2 7n, 14 street, Alabuga industrial estate, 423600, of Yelabuzhsky branch Yelabuzhsky district, Republic of Tatarstan, JSB Devon-Credit (OJSC) Russian Federation. Tel.: +7 (85557) 5-90-69

9 Zainsk Zainsky branch №1972/12 1/13, prospekt Pobedy, Zainsk, 423520, JSB Devon-Credit (OJSC) Republic of Tatarstan, Russian Federation. Tel.: +7 (85558) 3-41-11

10 Kazan Kazansky branch №1972/9 58, K. Marksa street, Kazan, 420015, JSB Devon-Credit (OJSC) Republic of Tatarstan, Russian Federation. Tel.: +7 (843) 264-51-82 List ofДеятельность subdivisions JSB ОбзорDevon-Credit экономики РФ List ofДеятельность subdivisions OJSCОбзор экономики РФ of theБанковской Banking (OJSC)и банковского сектора of theБанковской Banking Lipetskкombankи банковского сектора 94Groupгруппы ZENIT 94.2.2 в 2009 году 94Groupгруппы ZENIT 94.3.2 в 2009 году 2576 2577

JSB Devon-Credit (OJSC) 9.3...... OJSC Lipetskкombank

№ City Subdivision Mailing address, telephone Head office: 8, Internatsionalnaya street, Lipetsk, 398600. Tel: +7 (4742) 32-92-38

11 Kazan Subsidiary office of Kazansky branch 3, Lomzhinskaya street, Kazan, 420140, № City Subdivision Mailing address, telephone JSB Devon-Credit (OJSC) Republic of Tatarstan, Russian Federation. Tel.: +7 (843) 262-53-79 1 Gryazi Subsidiary office “Gryazninskoye outlet” 32-A, Krasnaya Ploshchad street, Gryazi, OJSC Lipetskkombank 399059, Lipetsk region, Russian Federation. 12 Leninogorsk Leninogorsky branch №1972/1 54, Shashina street, Leninogorsk, 423250, Tel.: +7 (47461) 2-10-42 JSB Devon-Credit (OJSC) Republic of Tatarstan, Russian Federation. Tel.: +7 (85595) 9-01-02 2 Dankov Subsidiary office 11, Mira street, Dankov, 399852, “Dankovskoye outlet” Lipetsk region, Russian Federation. 13 Naberezhnye Naberezhno-Chelninsky branch 26, prospekt Syuyumbike, Naberezhnye Chelny, OJSC Lipetskkombank Tel.: +7 (47465) 6-07-41 Chelny №1972/7 423823, Republic of Tatarstan, JSB Devon-Credit (OJSC) Russian Federation. 3 Yelets Yeletsky branch № 1242/2 79, Lenina street, Yelets, 399770, Tel.: +7 (8552) 39-60-75 OJSC Lipetskkombank Lipetsk region, Russian Federation. Tel.: +7 (47467) 2-00-75 14 Naberezhnye Subsidiary office 21, Gidrostroiteley, Naberezhnye Chelny, Chelny of Naberezhno-Chelninsky branch 423807, Republic of Tatarstan, 4 Lebedyan Subsidiary office 5-A, Pobedy street, Lebedyan, 398610, JSB Devon-Credit (OJSC) Russian Federation. “Lebedyanskoye outlet” Lipetsk region, Russian Federation. Tel.: +7 (8552) 77-66-32 OJSC Lipetskkombank Tel.: +7 (47466) 5-20-15

15 Nizhnekamsk Nizhnekamsky branch №1972/11 38, prospekt Khimikov, Nizhnekamsk, 423550, 5 Lipetsk Subsidiary office 2-2a, Mira square, Lipetsk, 398005, JSB Devon-Credit (OJSC) Republic of Tatarstan, Russian Federation. “Novolipetskoye outlet” Russian Federation. Tel.: +7 (8555) 31-80-32 OJSC Lipetskkombank Tel.: +7 (4742) 43-02-21

16 Novo- Subsidiary office of Cheboksarsky branch 44, Sovetskaya street, Novocheboksarsk, 6 Lipetsk Subsidiary office “Sovetskoye outlet” 66, Pervomaiskaya street, Lipetsk, 398001, cheboksarsk JSB Devon-Credit (OJSC) 429955, Chuvash Republic, Russian Federation. OJSC Lipetskkombank Russian Federation. in Novocheboksarsk Tel.: +7 (8352) 73-77-73 Tel.: +7 (4742) 77-37-85

17 Nurlat Nurlatsky branch №1972/2 3, Kooperativnaya street, Nurlat, 423042, 7 Lipetsk Subsidiary office “Ploshchad Pobedy” 21, prospekt Pobedy, Lipetsk, 398024, JSB Devon-Credit (OJSC) Republic of Tatarstan, Russian Federation. OJSC Lipetskkombank Russian Federation. Tel.: +7 (84345) 2-95-18 Tel.: +7 (4742) 23-32-38

18 Oktyabrsky Oktyabrsky branch № 1972/14 13, Khalturina street, Oktyabrsky, 452612, 8 Lipetsk Subsidiary office 102, prospekt Pobedy, Lipetsk, 398024, JSB Devon-Credit (OJSC) Republic of Bashkortostan, Russian Federation. “LKB PLUS Pobedy outlet” Russian Federation. Tel.: +7 (34767) 3-14-00 OJSC Lipetskkombank Tel.: +7 (4742) 47-75-70, +7 (4742) 47-78-77

19 Tuimazy Tuimazinsky branch № 1972/15 7, Ostrovskogo street, Tuimazy, 452755, 9 Lipetsk Subsidiary office 2, Vermisheva street, Lipetsk, 398036, JSB Devon-Credit (OJSC) Republic of Bashkortostan, Russian Federation. “LKB PLUS Vermisheva outlet” Russian Federation. Tel.: +7 (34782) 7-67-35 OJSC Lipetskkombank Тел.: +7 (4742) 32-24-98, +7 (4742) 32-24-99

20 Cheboksary Cheboksarsky branch №1972/10 98, prospekt Mira, Cheboksary, 428024, 10 Lipetsk Subsidiary office 13, Semashko street, Lipetsk, JSB Devon-Credit (OJSC) Chuvash Republic, Russian Federation. “LKB PLUS Semashko outlet” 398002, Russian Federation. Tel.: +7 (8352) 63-74-43 OJSC Lipetskkombank Tel.: +7 (4742) 47-61-80

21 Chistopol Chistopolsky branch №1972/13 2A, Lenina street, Chistopol, 422980, 11 Lipetsk Subsidiary office 8, 15th mikrorayon, Lipetsk, 398046, JSB Devon-Credit (OJSC) Republic of Tatarstan, Russian Federation. “LKB PLUS Stroiteley outlet” Russian Federation. Tel.: +7 (84342) 5-48-19 OJSC Lipetskkombank Tel.: +7 (4742) 46-79-80, +7 (4742) 46-79-81 List ofДеятельность subdivisions OJSCОбзор экономики РФ List ofДеятельность subdivisions BankОбзор экономики РФ of theБанковской Banking Lipetskкombankи банковского сектора of theБанковской Banking ZENITи банковского сектора 94Groupгруппы ZENIT 94.3.2 в 2009 году 94Groupгруппы ZENIT 94.4.2Sochiв LLC 2009 году 2578 2579

OJSC Lipetskкombank 9.4...... Bank ZENIT Sochi LLC

№ City Subdivision Mailing address, telephone Head office: 14, Navaginskaya street, Sochi, 354000, Krasnodarsky krai, Russian Federation. Tel: +7 (86