ANNUAL REPORT 2020 The Annual Report was approved by VTB Bank’s Annual General Meeting of Shareholders (Minutes No 56 as of 1 July 2021). Hello. Is this VTB Bank? Yes Today I would like to discover new opportunities Of course! CONNECTING YOU NOW Contents VTB Group Today Sustainable Development 200 Mission and Values 3 Personnel 201 VTB Group in the Financial Services Market 4 Responsible Resource Management 204 Key Financial Highlights 10 Social Projects 207 Statement of the Chairman of the Supervisory Council 12 Financial Statements 214 Responsibility Statement 214 Financial Statements under IFRS 215 Statement of the President and Chairman of the Management Board 14 Annexes 226 Share Capital 226 Dividends 228 VTB Group outstanding Public Debt Management Report 22 and Hybrid Capital Instruments 230 Report on Compliance with the Principles and Recommendations Russian Economy and Banking Sector 22 of the Corporate Governance Code 231 2020 Key Events 26 Bank’s Details and Contacts 254 Response of VTB to the COVID-19 pandemic 34 Strategy 40 Results Overview 52 • Financial Review 52 • Corporate-Investment Business 61 • Medium and Small Business 80 • Retail Business 90 Risk Management 106 Digital Transformation 124 Corporate Governance 132 Overview of the Corporate Governance System 132 General Meeting of Shareholders 138 Supervisory Council 142 Management Board 170 Control and Audit 179 Investor Relations 186 Disclosure Policy 198 INTERACTIVE ANNUAL REPORT 2020 VTB Group Today Management Report Corporate Governance VTBVTB GROUP GROUP TODAY TODAY MISSION WE HELP PEOPLE TO MAKE THEIR PLANS A REALITY BY CREATING THE BEST FINANCIAL SOLUTIONS. WE ARE A TEAM OF PROFESSIONALS WORKING FOR OUR CLIENTS AND FOR THE ENTIRE COUNTRY. IDENTITYIDENTITY VTB GROUP IS THE LEADING RUSSIAN FINANCIAL INSTITUTION WITH A STRONG PRESENCE IN KEY INTERNATIONAL MARKETS. VISION A UNIVERSAL FINANCIAL GROUP THAT IS DEVELOPING BOTH DYNAMICALLY AND SUSTAINABLY, ONE THAT IS FOCUSED ON BEING THE FIRST-CHOICE FINANCIAL PARTNER FOR ITS CUSTOMERS AND THAT PROVIDES THE MOST CONVENIENT AND CUTTING-EDGE SOLUTIONS TO MEET THEIR NEEDS. 2 Annual Report ‘20 Sustainable Development Financial Statements Annexes VTB GROUP TODAY Values We value our customers We put our customers’ needs first. We trust our customers and strive to earn their trust. We listen to our customers and act upon their feedback. We work as a team We respect and trust each other. We support each other and help our colleagues grow. We achieve common goals. IDENTITY We are responsible for our results We are focused on the result, not the process. Each of us is responsible for our contribution to the achievement of common goals. We openly discuss our successes and failures. We are proactive We are passionate about what we do. We are proactive in addressing common challenges. We go beyond formal duties. VISION We are constantly improving our performance We are open to change. We start by changing ourselves. We are not afraid to experiment. //vtb.com 3 VTB Group Today Management Report Corporate Governance VTBVTB GROUP GROUP IN THE FINANCIAL IN THE FINANCIAL SERVICESSERVICES MARKET 2020 MARKET 2020 18 1.5 countries thousand VTB Group worldwide Branches in Russia 15 336 million thousand Clients in Russia Retail shareholders 17 79 thousand thousand ATMs in Russia Employees №.1 №.1 Best investment bank Best bank of 2020 in Russia in the emerging markets according to The Banker according to Global Finance 4 Annual Report ‘20 Sustainable Development Financial Statements Annexes VTB GROUP IN THE FINANCIAL SERVICES MARKET 2020 Market shares of VTB Group in Russia VTB Bank’s credit as at 31 December 2020, % ratings RETAIL BUSINESS 19.2% Loans 23.0% Mortgages 14.8% Deposits ruAAA CORPORATE BUSINESS 17.2% Loans 19.8% Deposits BBB– INVESTMENT BUSINESS 33.0% DCM 22.3% ECM 13.2% M&A Вaa3 //vtb.com 5 VTB Group Today Management Report Corporate Governance VTB GROUP’S PRESENCE VTB GROUP INCLUDES RUSSIAN AND FOREIGN COMMERCIAL BANKS AS WELL AS FINANCIAL COMPANIES. VTB GROUP VTB GROUP’S GLOBAL NETWORK IS STRUCTURED AS A HOLDING COMPANY, WHICH ENVISAGES IS UNIQUE TO THE RUSSIAN A UNIFIED STRATEGY FOR THE DEVELOPMENT OF GROUP BANKING INDUSTRY COMPANIES, A SINGLE BRAND, CENTRALISED FINANCIAL MANAGEMENT AND RISK MANAGEMENT AND UNIFIED Group companies provide services CONTROL SYSTEMS. in the CIS, Europe and Asia, enabling the Group to facilitate international partnerships and promote Russian companies aiming to engage with global In Russia, the Group performs banking operations through a parent markets. The Group’s international company (VTB Bank) and a number of subsidiary banks – Vozrozhdenie operations enable diversification Bank, West Siberian Commercial Bank, Sarovbusinessbank – as well and increased profitability from as through the Post Bank joint venture. its transactions in high-margin markets. As of the end of 2020, the Group’s banking and investment banking business was present in 18 countries around the world. Outside Russia, the Group operates through subsidiary banks located in Germany, the United Kingdom, Georgia, Armenia, Belarus, Kazakhstan, Azerbaijan and Angola and through representative offices located in Italy and China, as well as VTB branches in China and India, a branch of VTB Bank (Europe) in Austria and a branch of VTB Capital in Singapore. The Group’s investment banking division conducts operations with securities and provides financial advisory services in Hong Kong, while also conducting investment banking services in Bulgaria and offering commodities financing in Switzerland. The Group operates in all major segments of the financial market. Corporate-Investment Business, Medium and Small Business and Retail Business are the Group’s global business lines, which specialise in servicing various client segments. AS OF THE END OF 2020, THE GROUP’S BANKING AND INVESTMENT BANKING BUSINESS WAS PRESENT IN 18 COUNTRIES 6 Annual Report ‘20 Sustainable Development Financial Statements Annexes VTB GROUP’S STRUCTURE VTB BANK West Siberian Commercial VTB Capital Holding VTB Factoring Bank VTB Pension Fund Sarovbusinessbank VTB Forex VTB Pension administrator Vozrozhdenie Bank VTB Real Estate VTB Specialised Depository BM-Bank VTB DC VTB Bank (Belarus) Business-Finance VTB Registrar VTB Bank (Armenia) VTB-Leasing VTB Bank (Kazakhstan) VTB Bank (Azerbaijan) VTB Bank (Georgia) Banco VTB Africa VTB Bank (Europe) //vtb.com 7 VTB Group Today Management Report Corporate Governance OWNERSHIP STRUCTURE December 2020 STRUCTURE OF EQUITY CAPITAL, % STRUCTURE OF VOTING RIGHTS, % 5.4 12.1 7.8 State-owned 33.7 Free float 47.2 92.2 39.1 32.9 60.9 Ordinary shares (held by Federal Agency Federal Agency for State Property Management) for State Property Management Ordinary shares in free float Institutional investors Type 1 preference shares (held by Ministry Retail investors of Finance of the Russian Federation) Type 2 preference shares (held by State Corporation Deposit Insurance Agency) GEOGRAPHICAL DISTRIBUTION OF INVESTORS REGIONAL DISTRIBUTION (% OF SHARES IN FREE FLOAT), % (% OF THE TOTAL NUMBER OF RETAIL INVESTORS), % 15.0 16.8 8.0 41.4 7.7 65.7 1.7 43.6 Retail shareholders Moscow Russian investors Moscow region International investors Saint-Petersburg Leningrad region Other regions 8 Annual Report ‘20 Sustainable Development Financial Statements Annexes LISTINGS Ordinary shares ISIN VTB Bank shares are included in Moscow Exchange’s Level 1 list and RU000A0JP5V6 are included in the Moscow Exchange Index and the RTS Index, as well as the Moscow Exchange Index (evening LEI trading session), the Subindex, the Broad Market Index, the Responsibility 253400V1H6ART1UQ0N98 and Transparency Index, the Sustainability Vector Index, the Finance Index, the RTS Finance Index and the RTS Broad Market Index. Ordinary shares are also included in the international MSCI Russia Index and the MSCI EM Index. Global depositary receipts (GDRs) LEI Each GDR is equivalent to 2 thousand VTB ordinary shares. 253400V1H6ART1UQ0N98 VTB Bank’s GDRs are included Programme 144-A in the FTSE All-World Index, FTSE EMEA Index and MVIS Russia Index. ISIN US46630Q1031 Programme Reg-S ISIN US46630Q2021 //vtb.com 9 VTB Group Today Management Report Corporate Governance KEY FINANCIAL HIGHLIGHTS TOTAL ASSETS, RUB BILLION CUSTOMER LOANS, RUB BILLION +44% +17% +39% +15% Compared Compared Compared Compared with 2016 with 2019 with 2016 with 2019 31.12.2020 68% 32% 18,142 31.12.2020 71% 29% 13,163 31.12.2019 69% 31% 15,516 31.12.2019 71% 29% 11,462 31.12.2018 72% 28% 14,761 31.12.2018 74% 26% 11,424 01.01.2018 70% 30% 12,940 01.01.2018 74% 26% 9,841 POST-IFRS 9 POST-IFRS 9 PRE-IFRS 9 PRE-IFRS 9 31.12.2017 70% 30% 13,009 31.12.2017 75% 25% 9,773 31.12.2016 70% 30% 12,588 31.12.2016 77% 23% 9,487 Other assets Loans and advances to individuals (before provisions) Loans and advances to customers Loans and advances to legal entities (net of provisions) (before provisions) TOTAL LIABILITIES, RUB BILLION CUSTOMER FUNDING, RUB BILLION +47% +18% +75% +17% Compared Compared Compared Compared with 2016 with 2019 with 2016 with 2019 31.12.2020 78% 22% 16,420 31.12.2020 55% 45% 12,831 31.12.2019 79% 21% 13,863 31.12.2019 54% 46% 10,974 31.12.2018 79% 21% 13,238 31.12.2018 58% 42% 10,404 01.01.2018 79% 21% 11,529 01.01.2018 60% 40% 9,145 POST-IFRS 9 60% POST-IFRS 9 PRE-IFRS 9 PRE-IFRS 9 31.12.2017 79% 21% 11,530 31.12.2017 60% 40% 9,145 31.12.2016 66% 34% 11,175 31.12.2016 59% 41% 7,347 Customer funding Deposits and accounts of legal entities Other liabilities Deposits and accounts of