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Valuing Banks

Valuing Banks December 9, 2006 American Appraisal

December 9, 2006

Valuing Banks December 9, 2006 American Appraisal

American Appraisal

Structure

1. Introduction

The Value of a BankStructure 1. Introduction The Business of Banking 2. Analysis of a Bank Industry Analysis Company Analysis

The Business of BankingStructure 1. Introduction The Value of a Bank 2. Analysis of a Bank Industry Analysis Company

2. Analysis of a Bank

Industry Analysisof a Bank The Business of Banking 2. Analysis of a Bank Company Analysis 2 3.

Company AnalysisBusiness of Banking 2. Analysis of a Bank Industry Analysis 2 3. Valuation Approaches Income Approach

2

3. Valuation Approaches

Income Approach2. Analysis of a Bank Industry Analysis Company Analysis 2 3. Valuation Approaches Market Approach American

Market Approach2. Analysis of a Bank Industry Analysis Company Analysis 2 3. Valuation Approaches Income Approach American

of a Bank Industry Analysis Company Analysis 2 3. Valuation Approaches Income Approach Market Approach American
of a Bank Industry Analysis Company Analysis 2 3. Valuation Approaches Income Approach Market Approach American
of a Bank Industry Analysis Company Analysis 2 3. Valuation Approaches Income Approach Market Approach American
of a Bank Industry Analysis Company Analysis 2 3. Valuation Approaches Income Approach Market Approach American
of a Bank Industry Analysis Company Analysis 2 3. Valuation Approaches Income Approach Market Approach American
of a Bank Industry Analysis Company Analysis 2 3. Valuation Approaches Income Approach Market Approach American
of a Bank Industry Analysis Company Analysis 2 3. Valuation Approaches Income Approach Market Approach American
of a Bank Industry Analysis Company Analysis 2 3. Valuation Approaches Income Approach Market Approach American
of a Bank Industry Analysis Company Analysis 2 3. Valuation Approaches Income Approach Market Approach American
of a Bank Industry Analysis Company Analysis 2 3. Valuation Approaches Income Approach Market Approach American
of a Bank Industry Analysis Company Analysis 2 3. Valuation Approaches Income Approach Market Approach American

American Appraisal

The Value of a Bank

General

Financial Intermediary between depositors and borrowers depositors and borrowers

Special Information hyposesisFinancial Intermediary between depositors and borrowers Provision of liquidity and payments Banking Frachise -

Provision of liquidity and paymentsdepositors and borrowers Special Information hyposesis Banking Frachise - Bank’s individual characteristics

Banking Frachise - Bank’s individual characteristics which make it a going concern characteristics which make it a going concern

Ability to generate a net profit from deposit-related services deposit-related services

Ability to generate rents on the asset side as well side as well

Franchise ValueAbility to generate rents on the asset side as well Company specific Market vs. Investment Value

Company specific

Market vs. Investment Valueon the asset side as well Franchise Value Company specific Market share Intangible assets License –

Market shareFranchise Value Company specific Market vs. Investment Value Intangible assets License – access to the market

Intangible assetsCompany specific Market vs. Investment Value Market share License – access to the market Customer relationships

License – access to the market market

Customer relationships (Core deposit base) (Core deposit base)

Brandsto the market Customer relationships (Core deposit base) Assembled workforce Other (software, scoring methodologies)

Assembled workforcemarket Customer relationships (Core deposit base) Brands Other (software, scoring methodologies) Not a collection of

Other (software, scoring methodologies) methodologies)

Not a collection of assetsAssembled workforce Other (software, scoring methodologies) Going concern vs. Liquidation value 3 American Appraisal

Going concern vs. Liquidation valuebase) Brands Assembled workforce Other (software, scoring methodologies) Not a collection of assets 3 American Appraisal

3

(software, scoring methodologies) Not a collection of assets Going concern vs. Liquidation value 3 American Appraisal
(software, scoring methodologies) Not a collection of assets Going concern vs. Liquidation value 3 American Appraisal
(software, scoring methodologies) Not a collection of assets Going concern vs. Liquidation value 3 American Appraisal
(software, scoring methodologies) Not a collection of assets Going concern vs. Liquidation value 3 American Appraisal
(software, scoring methodologies) Not a collection of assets Going concern vs. Liquidation value 3 American Appraisal
(software, scoring methodologies) Not a collection of assets Going concern vs. Liquidation value 3 American Appraisal
(software, scoring methodologies) Not a collection of assets Going concern vs. Liquidation value 3 American Appraisal
(software, scoring methodologies) Not a collection of assets Going concern vs. Liquidation value 3 American Appraisal
(software, scoring methodologies) Not a collection of assets Going concern vs. Liquidation value 3 American Appraisal
(software, scoring methodologies) Not a collection of assets Going concern vs. Liquidation value 3 American Appraisal
(software, scoring methodologies) Not a collection of assets Going concern vs. Liquidation value 3 American Appraisal

American Appraisal

The Value of a Bank

The Value of a Bank Why value banks? M&A Determination of conversion ratios Minority stakes valuation

Why value banks?

M&AThe Value of a Bank Why value banks? Determination of conversion ratios Minority stakes valuation IPO’s

Determination of conversion ratiosThe Value of a Bank Why value banks? M&A Minority stakes valuation IPO’s Restructuring IFRS Corporate

Minority stakes valuationWhy value banks? M&A Determination of conversion ratios IPO’s Restructuring IFRS Corporate planning 4 American

IPO’sDetermination of conversion ratios Minority stakes valuation Restructuring IFRS Corporate planning 4 American Appraisal

RestructuringM&A Determination of conversion ratios Minority stakes valuation IPO’s IFRS Corporate planning 4 American Appraisal

IFRSDetermination of conversion ratios Minority stakes valuation IPO’s Restructuring Corporate planning 4 American Appraisal

Corporate planningM&A Determination of conversion ratios Minority stakes valuation IPO’s Restructuring IFRS 4 American Appraisal

4

of conversion ratios Minority stakes valuation IPO’s Restructuring IFRS Corporate planning 4 American Appraisal
of conversion ratios Minority stakes valuation IPO’s Restructuring IFRS Corporate planning 4 American Appraisal
of conversion ratios Minority stakes valuation IPO’s Restructuring IFRS Corporate planning 4 American Appraisal
of conversion ratios Minority stakes valuation IPO’s Restructuring IFRS Corporate planning 4 American Appraisal
of conversion ratios Minority stakes valuation IPO’s Restructuring IFRS Corporate planning 4 American Appraisal
of conversion ratios Minority stakes valuation IPO’s Restructuring IFRS Corporate planning 4 American Appraisal
of conversion ratios Minority stakes valuation IPO’s Restructuring IFRS Corporate planning 4 American Appraisal
of conversion ratios Minority stakes valuation IPO’s Restructuring IFRS Corporate planning 4 American Appraisal
of conversion ratios Minority stakes valuation IPO’s Restructuring IFRS Corporate planning 4 American Appraisal
of conversion ratios Minority stakes valuation IPO’s Restructuring IFRS Corporate planning 4 American Appraisal
of conversion ratios Minority stakes valuation IPO’s Restructuring IFRS Corporate planning 4 American Appraisal

American Appraisal

The Business of Banking

Distinctive characteristics of banks

Financial StructureThe Business of Banking Distinctive characteristics of banks Relatively few hard assets The majority of assets

Relatively few hard assetsDistinctive characteristics of banks Financial Structure The majority of assets are financial The majority of

The majority of assets are financialof banks Financial Structure Relatively few hard assets The majority of liabilities are deposits No inventory,

The majority of liabilities are depositsfew hard assets The majority of assets are financial No inventory, trade payables, no significant amount

No inventory, trade payables, no significant amount of receivables significant amount of receivables

Cash and marketable securities – operating assettrade payables, no significant amount of receivables No clear distinctions between operating and financing

No clear distinctions between operating and financing activities operating and financing activities

Income statementdistinctions between operating and financing activities Income is generated as an interest spread between interest

Income is generated as an interest spread between interest received and interest paid (“Marginal business’) and interest paid (“Marginal business’)

Revenue = Net interest income + Net commission income + Net trading gains + Net commission income + Net trading gains

Regulated Business= Net interest income + Net commission income + Net trading gains Importance of Risk Management

Importance of Risk ManagementRevenue = Net interest income + Net commission income + Net trading gains Regulated Business 5

5

income + Net commission income + Net trading gains Regulated Business Importance of Risk Management 5
income + Net commission income + Net trading gains Regulated Business Importance of Risk Management 5
income + Net commission income + Net trading gains Regulated Business Importance of Risk Management 5
income + Net commission income + Net trading gains Regulated Business Importance of Risk Management 5
income + Net commission income + Net trading gains Regulated Business Importance of Risk Management 5
income + Net commission income + Net trading gains Regulated Business Importance of Risk Management 5
income + Net commission income + Net trading gains Regulated Business Importance of Risk Management 5
income + Net commission income + Net trading gains Regulated Business Importance of Risk Management 5
income + Net commission income + Net trading gains Regulated Business Importance of Risk Management 5
income + Net commission income + Net trading gains Regulated Business Importance of Risk Management 5
income + Net commission income + Net trading gains Regulated Business Importance of Risk Management 5

American Appraisal

The Business of Banking

Financials

Bank’s Balance Sheet

ASSETS

Liquidity management + Obligatory reserves
Liquidity
management +
Obligatory reserves

Interest Earning Assets

Typically is an insignificant amount

Interest Bearing Liabilities
Interest Bearing
Liabilities

Cash and Due from CBRF Securities Loans and Advances to Banks Loans and Advances to Customers

Fixed Assets Other Assets

Loans and Advances to Customers Fixed Assets Other Assets LIABILITIES Amounts Due to Banks Customer Accounts

LIABILITIES

Amounts Due to Banks Customer Accounts Securities Issued Other Liabilities

Equity

Source of business growth, minimum level subject to regulation
Source of business
growth, minimum level
subject to regulation

6

Issued Other Liabilities Equity Source of business growth, minimum level subject to regulation 6 American Appraisal
Issued Other Liabilities Equity Source of business growth, minimum level subject to regulation 6 American Appraisal
Issued Other Liabilities Equity Source of business growth, minimum level subject to regulation 6 American Appraisal
Issued Other Liabilities Equity Source of business growth, minimum level subject to regulation 6 American Appraisal
Issued Other Liabilities Equity Source of business growth, minimum level subject to regulation 6 American Appraisal
Issued Other Liabilities Equity Source of business growth, minimum level subject to regulation 6 American Appraisal
Issued Other Liabilities Equity Source of business growth, minimum level subject to regulation 6 American Appraisal
Issued Other Liabilities Equity Source of business growth, minimum level subject to regulation 6 American Appraisal
Issued Other Liabilities Equity Source of business growth, minimum level subject to regulation 6 American Appraisal
Issued Other Liabilities Equity Source of business growth, minimum level subject to regulation 6 American Appraisal
Issued Other Liabilities Equity Source of business growth, minimum level subject to regulation 6 American Appraisal

American Appraisal

The Business of Banking

Financials

Bank’s Profit and Loss Account

Interest Income Interest Expense

Net Interest Income

Provision for Losses

Earned on loans issued and fixed income securities owned Paid on deposits and securities issued
Earned on loans issued
and fixed income
securities owned
Paid on deposits and
securities issued
Estimate of how well loans are repaid
Estimate of how well
loans are repaid
Net Commission Income + Net trading gains on securities and currencies
Net Commission Income +
Net trading gains on
securities and currencies

Net Interest Income after provision for losses

+

Non-interest Income

=

REVENUE OF A BANK

Shows the efficiency of a bank’s operations

Administrative, Staff and Other Fixed Expenses Non-recurring Gains/Losses Pre-Tax Income NET INCOME

Result of non-typical, one- off transactions
Result of non-typical, one-
off transactions

7

Non-recurring Gains/Losses Pre-Tax Income NET INCOME Result of non-typical, one- off transactions 7 American Appraisal
Non-recurring Gains/Losses Pre-Tax Income NET INCOME Result of non-typical, one- off transactions 7 American Appraisal
Non-recurring Gains/Losses Pre-Tax Income NET INCOME Result of non-typical, one- off transactions 7 American Appraisal
Non-recurring Gains/Losses Pre-Tax Income NET INCOME Result of non-typical, one- off transactions 7 American Appraisal
Non-recurring Gains/Losses Pre-Tax Income NET INCOME Result of non-typical, one- off transactions 7 American Appraisal
Non-recurring Gains/Losses Pre-Tax Income NET INCOME Result of non-typical, one- off transactions 7 American Appraisal
Non-recurring Gains/Losses Pre-Tax Income NET INCOME Result of non-typical, one- off transactions 7 American Appraisal
Non-recurring Gains/Losses Pre-Tax Income NET INCOME Result of non-typical, one- off transactions 7 American Appraisal
Non-recurring Gains/Losses Pre-Tax Income NET INCOME Result of non-typical, one- off transactions 7 American Appraisal
Non-recurring Gains/Losses Pre-Tax Income NET INCOME Result of non-typical, one- off transactions 7 American Appraisal
Non-recurring Gains/Losses Pre-Tax Income NET INCOME Result of non-typical, one- off transactions 7 American Appraisal

American Appraisal

The Business of Banking

Types of Banks

8

Criteria

Types of banks

Target market

Retail

Corporate

 

Investment

Ownership

State and Quasi-state Private Banks

Independent

Captive

Foreign

Geographic

International

focus

National

Regional

Size

Large

Small

Foreign Geographic International focus National Regional Size Large Small American Appraisal

American Appraisal

Foreign Geographic International focus National Regional Size Large Small American Appraisal
Foreign Geographic International focus National Regional Size Large Small American Appraisal
Foreign Geographic International focus National Regional Size Large Small American Appraisal
Foreign Geographic International focus National Regional Size Large Small American Appraisal
Foreign Geographic International focus National Regional Size Large Small American Appraisal
Foreign Geographic International focus National Regional Size Large Small American Appraisal
Foreign Geographic International focus National Regional Size Large Small American Appraisal
Foreign Geographic International focus National Regional Size Large Small American Appraisal
Foreign Geographic International focus National Regional Size Large Small American Appraisal
Foreign Geographic International focus National Regional Size Large Small American Appraisal

Valuation Procedures

Preparatory StageValuation Procedures Collection of Data Management Interviews Analysis Stage Economy and Industry Analysis Understanding

Collection of DataValuation Procedures Preparatory Stage Management Interviews Analysis Stage Economy and Industry Analysis Understanding

Management InterviewsValuation Procedures Preparatory Stage Collection of Data Analysis Stage Economy and Industry Analysis Understanding the

Analysis StagePreparatory Stage Collection of Data Management Interviews Economy and Industry Analysis Understanding the background

Economy and Industry AnalysisCollection of Data Management Interviews Analysis Stage Understanding the background of the transaction Calculations

Understanding the background of the transactionInterviews Analysis Stage Economy and Industry Analysis Calculations Stage Valuation Approaches Final Stages

Calculations StageAnalysis Understanding the background of the transaction Valuation Approaches Final Stages Preparation of the report

Valuation Approachesthe background of the transaction Calculations Stage Final Stages Preparation of the report Presentation to the

Final Stagesof the transaction Calculations Stage Valuation Approaches Preparation of the report Presentation to the client 9

Preparation of the reportof the transaction Calculations Stage Valuation Approaches Final Stages Presentation to the client 9 American Appraisal

Presentation to the clientof the transaction Calculations Stage Valuation Approaches Final Stages Preparation of the report 9 American Appraisal

9

Stage Valuation Approaches Final Stages Preparation of the report Presentation to the client 9 American Appraisal
Stage Valuation Approaches Final Stages Preparation of the report Presentation to the client 9 American Appraisal
Stage Valuation Approaches Final Stages Preparation of the report Presentation to the client 9 American Appraisal
Stage Valuation Approaches Final Stages Preparation of the report Presentation to the client 9 American Appraisal
Stage Valuation Approaches Final Stages Preparation of the report Presentation to the client 9 American Appraisal
Stage Valuation Approaches Final Stages Preparation of the report Presentation to the client 9 American Appraisal
Stage Valuation Approaches Final Stages Preparation of the report Presentation to the client 9 American Appraisal
Stage Valuation Approaches Final Stages Preparation of the report Presentation to the client 9 American Appraisal
Stage Valuation Approaches Final Stages Preparation of the report Presentation to the client 9 American Appraisal
Stage Valuation Approaches Final Stages Preparation of the report Presentation to the client 9 American Appraisal
Stage Valuation Approaches Final Stages Preparation of the report Presentation to the client 9 American Appraisal

American Appraisal

Analysis of a Bank

Major Analytical Tools

Top down approachAnalysis of a Bank Major Analytical Tools Economy, Industry, Subject Financial Statements analysis Ratio analysis Growth

Economy, Industry, SubjectAnalysis of a Bank Major Analytical Tools Top down approach Financial Statements analysis Ratio analysis Growth

Financial Statements analysisTools Top down approach Economy, Industry, Subject Ratio analysis Growth Profitability Capitalization Liquidity

Ratio analysisEconomy, Industry, Subject Financial Statements analysis Growth Profitability Capitalization Liquidity Common-sized

GrowthSubject Financial Statements analysis Ratio analysis Profitability Capitalization Liquidity Common-sized

ProfitabilitySubject Financial Statements analysis Ratio analysis Growth Capitalization Liquidity Common-sized financials Peer

CapitalizationStatements analysis Ratio analysis Growth Profitability Liquidity Common-sized financials Peer comparison

Liquidityanalysis Ratio analysis Growth Profitability Capitalization Common-sized financials Peer comparison Non-operating assets

Common-sized financialsRatio analysis Growth Profitability Capitalization Liquidity Peer comparison Non-operating assets (real estate, other)

Peer comparisonCapitalization Liquidity Common-sized financials Non-operating assets (real estate, other) Non-recurring

Non-operating assets (real estate, other)Liquidity Common-sized financials Peer comparison Non-recurring income or expenses Unusual material

Non-recurring income or expensesPeer comparison Non-operating assets (real estate, other) Unusual material transactions Acquisitions and disposals

Unusual material transactionsassets (real estate, other) Non-recurring income or expenses Acquisitions and disposals Large write offs of loans

Acquisitions and disposalsincome or expenses Unusual material transactions Large write offs of loans Public companies and transaction

Large write offs of loansUnusual material transactions Acquisitions and disposals Public companies and transaction analysis 1 0 American

Public companies and transaction analysisor expenses Unusual material transactions Acquisitions and disposals Large write offs of loans 1 0 American

10

Acquisitions and disposals Large write offs of loans Public companies and transaction analysis 1 0 American
Acquisitions and disposals Large write offs of loans Public companies and transaction analysis 1 0 American
Acquisitions and disposals Large write offs of loans Public companies and transaction analysis 1 0 American
Acquisitions and disposals Large write offs of loans Public companies and transaction analysis 1 0 American
Acquisitions and disposals Large write offs of loans Public companies and transaction analysis 1 0 American
Acquisitions and disposals Large write offs of loans Public companies and transaction analysis 1 0 American
Acquisitions and disposals Large write offs of loans Public companies and transaction analysis 1 0 American
Acquisitions and disposals Large write offs of loans Public companies and transaction analysis 1 0 American
Acquisitions and disposals Large write offs of loans Public companies and transaction analysis 1 0 American
Acquisitions and disposals Large write offs of loans Public companies and transaction analysis 1 0 American
Acquisitions and disposals Large write offs of loans Public companies and transaction analysis 1 0 American

American Appraisal

Analysis of a Bank

Industry

Historical Background

2006

•General economic recovery •Growing competition - Entry of new players, incl. International •Industry
•General economic recovery
•Growing competition - Entry of new players, incl.
International
•Industry consolidation
•Importance of retail
Financial Crisis •Many banks experience losses: •Liabilities in USD – assets in Roubles •Losses on
Financial Crisis
•Many banks experience losses:
•Liabilities in USD – assets in Roubles
•Losses on government bonds and derivaties
• Borrowers default
•Massive industry restructuring
•Growing number of banks
•Mainly corporate short-term lending, foreign exchange and
securities trading
•A lot of captive, non-market players
•First commercial banks are established on the basis of the
branches of state banks

American Appraisal

1998

1991 -

1992

commercial banks are established on the basis of the branches of state banks American Appraisal 1998

11

commercial banks are established on the basis of the branches of state banks American Appraisal 1998
commercial banks are established on the basis of the branches of state banks American Appraisal 1998
commercial banks are established on the basis of the branches of state banks American Appraisal 1998
commercial banks are established on the basis of the branches of state banks American Appraisal 1998
commercial banks are established on the basis of the branches of state banks American Appraisal 1998
commercial banks are established on the basis of the branches of state banks American Appraisal 1998
commercial banks are established on the basis of the branches of state banks American Appraisal 1998
commercial banks are established on the basis of the branches of state banks American Appraisal 1998
commercial banks are established on the basis of the branches of state banks American Appraisal 1998
commercial banks are established on the basis of the branches of state banks American Appraisal 1998

Analysis of a Bank

Industry

Russian Economy experiencing a steady GDP GrowthAnalysis of a Bank Industry Banking Industry has been outpacing general economy Russian Banking Assets and

Banking Industry has been outpacing general economyIndustry Russian Economy experiencing a steady GDP Growth Russian Banking Assets and Loans to GDP 12

Russian Banking Assets and Loans to GDP

12

50,0% 45,0% 40,0% 35,0% 30,0% 25,0% 20,0% 15,0% 10,0% 5,0% 0,0% 1999 2000 2001 2002
50,0%
45,0%
40,0%
35,0%
30,0%
25,0%
20,0%
15,0%
10,0%
5,0%
0,0%
1999
2000
2001
2002
2003
2004
2005
2006
Total Banking Assets / GDP
Total Loans / GDP
0,0% 1999 2000 2001 2002 2003 2004 2005 2006 Total Banking Assets / GDP Total Loans

American Appraisal

0,0% 1999 2000 2001 2002 2003 2004 2005 2006 Total Banking Assets / GDP Total Loans
0,0% 1999 2000 2001 2002 2003 2004 2005 2006 Total Banking Assets / GDP Total Loans
0,0% 1999 2000 2001 2002 2003 2004 2005 2006 Total Banking Assets / GDP Total Loans
0,0% 1999 2000 2001 2002 2003 2004 2005 2006 Total Banking Assets / GDP Total Loans
0,0% 1999 2000 2001 2002 2003 2004 2005 2006 Total Banking Assets / GDP Total Loans
0,0% 1999 2000 2001 2002 2003 2004 2005 2006 Total Banking Assets / GDP Total Loans
0,0% 1999 2000 2001 2002 2003 2004 2005 2006 Total Banking Assets / GDP Total Loans
0,0% 1999 2000 2001 2002 2003 2004 2005 2006 Total Banking Assets / GDP Total Loans
0,0% 1999 2000 2001 2002 2003 2004 2005 2006 Total Banking Assets / GDP Total Loans
0,0% 1999 2000 2001 2002 2003 2004 2005 2006 Total Banking Assets / GDP Total Loans

Analysis of a Bank

Industry

Ukraine

Turkey

Hungary

Slovak Republic

Slovenia

Latvia

Kazakhstan

Romania

Russia

Bulgaria

Lithuania

Estonia

Croatia

Poland

Czech Republic

13

Bulgaria Lithuania Estonia Croatia Poland Czech Republic 13 Nevertheless, the penetration of banking services remains

Nevertheless, the penetration of banking services remains low compared to other countries

140%

120%

100%

80%

60%

40%

20%

0%

Lending to GDP

Average Developed Europe
Average
Developed Europe
compared to other countries 140% 120% 100% 80% 60% 40% 20% 0% Lending to GDP Average
compared to other countries 140% 120% 100% 80% 60% 40% 20% 0% Lending to GDP Average
compared to other countries 140% 120% 100% 80% 60% 40% 20% 0% Lending to GDP Average
compared to other countries 140% 120% 100% 80% 60% 40% 20% 0% Lending to GDP Average
compared to other countries 140% 120% 100% 80% 60% 40% 20% 0% Lending to GDP Average
compared to other countries 140% 120% 100% 80% 60% 40% 20% 0% Lending to GDP Average
compared to other countries 140% 120% 100% 80% 60% 40% 20% 0% Lending to GDP Average
compared to other countries 140% 120% 100% 80% 60% 40% 20% 0% Lending to GDP Average
compared to other countries 140% 120% 100% 80% 60% 40% 20% 0% Lending to GDP Average
compared to other countries 140% 120% 100% 80% 60% 40% 20% 0% Lending to GDP Average
compared to other countries 140% 120% 100% 80% 60% 40% 20% 0% Lending to GDP Average

American Appraisal

Analysis of a Bank

Industry

14

Analysis of a Bank Industry 1 4 Fragmented Industry Large number of banks – steadily decreasing

Fragmented Industry

Large number of banks – steadily decreasing – steadily decreasing

Majority are small banksIndustry Large number of banks – steadily decreasing Concentrated Industry Significant role of largest banks

of banks – steadily decreasing Majority are small banks Concentrated Industry Significant role of largest banks

Concentrated Industry Significant role of largest banks – steadily increasing

Significant role of largest banks – steadily increasing Number of operating banks in Russia 1340 1300
Number of operating banks in Russia 1340 1300 1260 1220 1180 01.2004 01.2005 01.2006
Number of operating banks in Russia
1340
1300
1260
1220
1180
01.2004
01.2005
01.2006

Role of the largest banks

75% 70% 65% 60% 55% 50% 45% 1.2005 7.2005 1.2006 7.2006
75%
70%
65%
60%
55%
50%
45%
1.2005
7.2005
1.2006
7.2006

Share of 30 largest banks in total capitalShare of 30 largest banks in total assets Share of 30 largest banks in total

Share of 30 largest banks in total assetsShare of 30 largest banks in total capital Share of 30 largest banks in total loans

Share of 30 largest banks in total loansShare of 30 largest banks in total capital Share of 30 largest banks in total assets

total capital Share of 30 largest banks in total assets Share of 30 largest banks in

American Appraisal

total capital Share of 30 largest banks in total assets Share of 30 largest banks in
total capital Share of 30 largest banks in total assets Share of 30 largest banks in
total capital Share of 30 largest banks in total assets Share of 30 largest banks in
total capital Share of 30 largest banks in total assets Share of 30 largest banks in
total capital Share of 30 largest banks in total assets Share of 30 largest banks in
total capital Share of 30 largest banks in total assets Share of 30 largest banks in
total capital Share of 30 largest banks in total assets Share of 30 largest banks in
total capital Share of 30 largest banks in total assets Share of 30 largest banks in
total capital Share of 30 largest banks in total assets Share of 30 largest banks in
total capital Share of 30 largest banks in total assets Share of 30 largest banks in

Analysis of a Bank

Industry

Analysis of a Bank Industry Role of the international players in the Russian banking sector 16%

Role of the international players in the Russian banking sector

16% 180 160 14% 140 12% 120 10% 1998 crisis Russia upgraded to investment grade
16%
180
160
14%
140
12%
120
10%
1998
crisis
Russia upgraded to
investment grade
100
8%
80
6%
60
4%
40
2%
20
0%
0
01.1996
01.1997
01.1998
01.1999
01.2000
01.2001
01.2002
01.2003
01.2004
01.2005
01.2006
Share of non-residents in the total charter capital
Number of operating banks with foreign participation
Share of non-residents in total charter capital. %
Number of operating banks with foreign participation

15 Source: Central Bank of Russia

capital. % Number of operating banks with foreign participation 15 Source: Central Bank of Russia American
capital. % Number of operating banks with foreign participation 15 Source: Central Bank of Russia American
capital. % Number of operating banks with foreign participation 15 Source: Central Bank of Russia American
capital. % Number of operating banks with foreign participation 15 Source: Central Bank of Russia American
capital. % Number of operating banks with foreign participation 15 Source: Central Bank of Russia American
capital. % Number of operating banks with foreign participation 15 Source: Central Bank of Russia American
capital. % Number of operating banks with foreign participation 15 Source: Central Bank of Russia American
capital. % Number of operating banks with foreign participation 15 Source: Central Bank of Russia American
capital. % Number of operating banks with foreign participation 15 Source: Central Bank of Russia American
capital. % Number of operating banks with foreign participation 15 Source: Central Bank of Russia American
capital. % Number of operating banks with foreign participation 15 Source: Central Bank of Russia American

American Appraisal

Analysis of a Bank

Industry

Trends to watch in the banking industry

Historical and expected growth Penetration Penetration

banking industry Historical and expected growth Penetration Regulatory environment Licensing Minimum capital and
banking industry Historical and expected growth Penetration Regulatory environment Licensing Minimum capital and

Regulatory environment

Licensingand expected growth Penetration Regulatory environment Minimum capital and reserves requirements Deposit insurance

Minimum capital and reserves requirements reserves requirements

Deposit insurance scheme scheme

Risk supervision – concentration, capital adequacy concentration, capital adequacy

Financial reporting requirements requirements

Economic and disposable income

Economic and disposable income

growth Diversification and new services

growth Diversification and new services

Competitive Environment Porter Analysis Industry Consolidation Share of foreign banks The role of the State and State- Porter Analysis Industry Consolidation Share of foreign banks The role of the State and State- related banks Drive for cost-efficiency Increase of the role of brands

of the State and State- related banks Drive for cost-efficiency Increase of the role of brands
of the State and State- related banks Drive for cost-efficiency Increase of the role of brands
of the State and State- related banks Drive for cost-efficiency Increase of the role of brands
of the State and State- related banks Drive for cost-efficiency Increase of the role of brands
of the State and State- related banks Drive for cost-efficiency Increase of the role of brands
of the State and State- related banks Drive for cost-efficiency Increase of the role of brands

16

of the State and State- related banks Drive for cost-efficiency Increase of the role of brands

American Appraisal

of the State and State- related banks Drive for cost-efficiency Increase of the role of brands
of the State and State- related banks Drive for cost-efficiency Increase of the role of brands
of the State and State- related banks Drive for cost-efficiency Increase of the role of brands
of the State and State- related banks Drive for cost-efficiency Increase of the role of brands
of the State and State- related banks Drive for cost-efficiency Increase of the role of brands
of the State and State- related banks Drive for cost-efficiency Increase of the role of brands
of the State and State- related banks Drive for cost-efficiency Increase of the role of brands
of the State and State- related banks Drive for cost-efficiency Increase of the role of brands
of the State and State- related banks Drive for cost-efficiency Increase of the role of brands
of the State and State- related banks Drive for cost-efficiency Increase of the role of brands

Analysis Analysis of of a a Bank Bank

Company-specific

factors

17

Company-specific

factors

Business profile (model)Company-specific factors 1 7 Company-specific factors Corporate, retail, investment Clients and Markets Strategy

Corporate, retail, investment investment

Clients and MarketsBusiness profile (model) Corporate, retail, investment Strategy Risk Concentration Liquidity Capital adequacy /

Strategy(model) Corporate, retail, investment Clients and Markets Risk Concentration Liquidity Capital adequacy /

RiskCorporate, retail, investment Clients and Markets Strategy Concentration Liquidity Capital adequacy /

Concentrationretail, investment Clients and Markets Strategy Risk Liquidity Capital adequacy / Overcapitalization Size

Liquidityinvestment Clients and Markets Strategy Risk Concentration Capital adequacy / Overcapitalization Size Transparency

Capital adequacy / Overcapitalization Overcapitalization

SizeLiquidity Capital adequacy / Overcapitalization Transparency Economy and Industry Valuation Assumptions

TransparencyLiquidity Capital adequacy / Overcapitalization Size Economy and Industry Valuation Assumptions (Income and

Economy and Industry

Valuation

Assumptions

(Income and Market Approaches)

Size Transparency Economy and Industry Valuation Assumptions (Income and Market Approaches) American Appraisal

American Appraisal

Size Transparency Economy and Industry Valuation Assumptions (Income and Market Approaches) American Appraisal
Size Transparency Economy and Industry Valuation Assumptions (Income and Market Approaches) American Appraisal
Size Transparency Economy and Industry Valuation Assumptions (Income and Market Approaches) American Appraisal
Size Transparency Economy and Industry Valuation Assumptions (Income and Market Approaches) American Appraisal
Size Transparency Economy and Industry Valuation Assumptions (Income and Market Approaches) American Appraisal
Size Transparency Economy and Industry Valuation Assumptions (Income and Market Approaches) American Appraisal
Size Transparency Economy and Industry Valuation Assumptions (Income and Market Approaches) American Appraisal
Size Transparency Economy and Industry Valuation Assumptions (Income and Market Approaches) American Appraisal
Size Transparency Economy and Industry Valuation Assumptions (Income and Market Approaches) American Appraisal
Size Transparency Economy and Industry Valuation Assumptions (Income and Market Approaches) American Appraisal

Valuation Approaches

18

Income Approach Market Approach Market Value of Shareholders’ Equity Minority / Marketability discounts (if
Income Approach
Market
Approach
Market Value of
Shareholders’ Equity
Minority / Marketability
discounts (if
applicable)
Allocation for
Equity Stakes

Net Asset Position

Minority / Marketability discounts (if applicable) Allocation for Equity Stakes Net Asset Position American Appraisal
Minority / Marketability discounts (if applicable) Allocation for Equity Stakes Net Asset Position American Appraisal
Minority / Marketability discounts (if applicable) Allocation for Equity Stakes Net Asset Position American Appraisal
Minority / Marketability discounts (if applicable) Allocation for Equity Stakes Net Asset Position American Appraisal
Minority / Marketability discounts (if applicable) Allocation for Equity Stakes Net Asset Position American Appraisal
Minority / Marketability discounts (if applicable) Allocation for Equity Stakes Net Asset Position American Appraisal
Minority / Marketability discounts (if applicable) Allocation for Equity Stakes Net Asset Position American Appraisal
Minority / Marketability discounts (if applicable) Allocation for Equity Stakes Net Asset Position American Appraisal
Minority / Marketability discounts (if applicable) Allocation for Equity Stakes Net Asset Position American Appraisal
Minority / Marketability discounts (if applicable) Allocation for Equity Stakes Net Asset Position American Appraisal
Minority / Marketability discounts (if applicable) Allocation for Equity Stakes Net Asset Position American Appraisal

American Appraisal

Income Approach

Income Approach Major Questions Where the Bank will be 3-5 years from now What are the

Major Questions

Where the Bank will be 3-5 years from nowIncome Approach Major Questions What are the Company’s Prospects and its Strategy What is the Company’s

What are the Company’s Prospects and its StrategyMajor Questions Where the Bank will be 3-5 years from now What is the Company’s current

What is the Company’s current and target market position position

Who are the Potential InvestorsWhat is the Company’s current and target market position Financial Future Major Projection Drivers Reporting

Financial Futureand target market position Who are the Potential Investors Major Projection Drivers Reporting standards used Level

Major Projection Driversposition Who are the Potential Investors Financial Future Reporting standards used Level of uncertainty Uncertainty of

Reporting standards usedInvestors Financial Future Major Projection Drivers Level of uncertainty Uncertainty of the results

Level of uncertaintyFuture Major Projection Drivers Reporting standards used Uncertainty of the results Company-specific risk factors 1

Uncertainty of the resultsProjection Drivers Reporting standards used Level of uncertainty Company-specific risk factors 1 9 American Appraisal

Company-specific risk factors

19

standards used Level of uncertainty Uncertainty of the results Company-specific risk factors 1 9 American Appraisal
standards used Level of uncertainty Uncertainty of the results Company-specific risk factors 1 9 American Appraisal
standards used Level of uncertainty Uncertainty of the results Company-specific risk factors 1 9 American Appraisal
standards used Level of uncertainty Uncertainty of the results Company-specific risk factors 1 9 American Appraisal
standards used Level of uncertainty Uncertainty of the results Company-specific risk factors 1 9 American Appraisal
standards used Level of uncertainty Uncertainty of the results Company-specific risk factors 1 9 American Appraisal
standards used Level of uncertainty Uncertainty of the results Company-specific risk factors 1 9 American Appraisal
standards used Level of uncertainty Uncertainty of the results Company-specific risk factors 1 9 American Appraisal
standards used Level of uncertainty Uncertainty of the results Company-specific risk factors 1 9 American Appraisal
standards used Level of uncertainty Uncertainty of the results Company-specific risk factors 1 9 American Appraisal
standards used Level of uncertainty Uncertainty of the results Company-specific risk factors 1 9 American Appraisal

American Appraisal

Projected Cash Flows

Consider expected operating and financial results of a bank reflected in the Projected Financials reflected in the Projected Financials

Balance Sheetresults of a bank reflected in the Projected Financials Income Statement Represents “potential dividends”

Income Statementa bank reflected in the Projected Financials Balance Sheet Represents “potential dividends” available to

Represents “potential dividends” available to shareholdersin the Projected Financials Balance Sheet Income Statement NOT Extrapolation 2 0 Depreciation Net Income CAPEX

NOT Extrapolation“potential dividends” available to shareholders 2 0 Depreciation Net Income CAPEX Increase in

20

Depreciation

Net Income

NOT Extrapolation 2 0 Depreciation Net Income CAPEX Increase in reserves with CBRF Additional

CAPEX

Increase in reserves with CBRF

Additional Capital Requirements

Net Income CAPEX Increase in reserves with CBRF Additional Capital Requirements Free Cash Flow American Appraisal

Free Cash Flow

Net Income CAPEX Increase in reserves with CBRF Additional Capital Requirements Free Cash Flow American Appraisal

American Appraisal

Net Income CAPEX Increase in reserves with CBRF Additional Capital Requirements Free Cash Flow American Appraisal
Net Income CAPEX Increase in reserves with CBRF Additional Capital Requirements Free Cash Flow American Appraisal
Net Income CAPEX Increase in reserves with CBRF Additional Capital Requirements Free Cash Flow American Appraisal
Net Income CAPEX Increase in reserves with CBRF Additional Capital Requirements Free Cash Flow American Appraisal
Net Income CAPEX Increase in reserves with CBRF Additional Capital Requirements Free Cash Flow American Appraisal
Net Income CAPEX Increase in reserves with CBRF Additional Capital Requirements Free Cash Flow American Appraisal
Net Income CAPEX Increase in reserves with CBRF Additional Capital Requirements Free Cash Flow American Appraisal
Net Income CAPEX Increase in reserves with CBRF Additional Capital Requirements Free Cash Flow American Appraisal
Net Income CAPEX Increase in reserves with CBRF Additional Capital Requirements Free Cash Flow American Appraisal
Net Income CAPEX Increase in reserves with CBRF Additional Capital Requirements Free Cash Flow American Appraisal

Projected Cash Flows

Typical projection drivers

Balance

Sheet

Drivers

Profit &

Loss

Drivers

Balance Sheet Structure

Growth

Drivers

Growth Drivers Return Drivers Growth Drivers

Return

Drivers

Growth Drivers Return Drivers Growth Drivers

Growth

Drivers

Total Loans / Customer and Bank Accounts and Securities Issued

Loan Loss Provision / Gross Loans and Advances

Due to banks / Customer Accounts and Securities Issued

Equity /

Total

Assets

Deposits

(Retail,

Corporate)

growth rate

% Interest

income on

loans

(securities)

Trading

securities

growth rate

% Interest

expense on

deposits

(securities)

Other assets

(liabilities)

growth rate

Effective tax

rate

Non-interest

Operating

income

Expenses

growth rate

growth rate

21

rate Effective tax rate Non-interest Operating income Expenses growth rate growth rate 2 1 American Appraisal
rate Effective tax rate Non-interest Operating income Expenses growth rate growth rate 2 1 American Appraisal
rate Effective tax rate Non-interest Operating income Expenses growth rate growth rate 2 1 American Appraisal
rate Effective tax rate Non-interest Operating income Expenses growth rate growth rate 2 1 American Appraisal
rate Effective tax rate Non-interest Operating income Expenses growth rate growth rate 2 1 American Appraisal
rate Effective tax rate Non-interest Operating income Expenses growth rate growth rate 2 1 American Appraisal
rate Effective tax rate Non-interest Operating income Expenses growth rate growth rate 2 1 American Appraisal
rate Effective tax rate Non-interest Operating income Expenses growth rate growth rate 2 1 American Appraisal
rate Effective tax rate Non-interest Operating income Expenses growth rate growth rate 2 1 American Appraisal
rate Effective tax rate Non-interest Operating income Expenses growth rate growth rate 2 1 American Appraisal
rate Effective tax rate Non-interest Operating income Expenses growth rate growth rate 2 1 American Appraisal

American Appraisal

Projected Cash Flows

Estimating Projection DriversProjected Cash Flows Subject’s historical financials Industry Analysis Peer Analysis Company’s strategy and

Subject’s historical financialsProjected Cash Flows Estimating Projection Drivers Industry Analysis Peer Analysis Company’s strategy and competitive

Industry AnalysisProjection Drivers Subject’s historical financials Peer Analysis Company’s strategy and competitive position

Peer AnalysisDrivers Subject’s historical financials Industry Analysis Company’s strategy and competitive position 2 2 Special

Company’s strategy and competitive positionhistorical financials Industry Analysis Peer Analysis 2 2 Special Considerations Financial reporting standards

22

Special ConsiderationsAnalysis Company’s strategy and competitive position 2 2 Financial reporting standards Fair Value vs. Book Value

Financial reporting standardsand competitive position 2 2 Special Considerations Fair Value vs. Book Value of Assets and Liabilities

Fair Value vs. Book Value of Assets and Liabilities Liabilities

Non-recurring operationsConsiderations Financial reporting standards Fair Value vs. Book Value of Assets and Liabilities American Appraisal

reporting standards Fair Value vs. Book Value of Assets and Liabilities Non-recurring operations American Appraisal

American Appraisal

reporting standards Fair Value vs. Book Value of Assets and Liabilities Non-recurring operations American Appraisal
reporting standards Fair Value vs. Book Value of Assets and Liabilities Non-recurring operations American Appraisal
reporting standards Fair Value vs. Book Value of Assets and Liabilities Non-recurring operations American Appraisal
reporting standards Fair Value vs. Book Value of Assets and Liabilities Non-recurring operations American Appraisal
reporting standards Fair Value vs. Book Value of Assets and Liabilities Non-recurring operations American Appraisal
reporting standards Fair Value vs. Book Value of Assets and Liabilities Non-recurring operations American Appraisal
reporting standards Fair Value vs. Book Value of Assets and Liabilities Non-recurring operations American Appraisal
reporting standards Fair Value vs. Book Value of Assets and Liabilities Non-recurring operations American Appraisal
reporting standards Fair Value vs. Book Value of Assets and Liabilities Non-recurring operations American Appraisal
reporting standards Fair Value vs. Book Value of Assets and Liabilities Non-recurring operations American Appraisal

Projection Drivers – Industry and Peer Analysis

115%

95%

75%

55%

35%

15%

23

Deposits Growth

Russian Largest 30 Sberbank VTB Rosbank Bank of Vozrozhdenie Banking Banks Moscow Industry 03 04
Russian
Largest 30
Sberbank
VTB
Rosbank
Bank of
Vozrozhdenie
Banking
Banks
Moscow
Industry
03
04
05
06F
07F
08F
04
05
06F
03
04
05
06F
07F
08F
03
04
05
06F
07F
08F
03
04
05
06F
07F
08F
03
04
05
06F
07F
08F
03
04
05
06F
07F
08F

Source: Company Reports, analyst estimates

08F 03 04 05 06F 07F 08F 03 04 05 06F 07F 08F Source: Company Reports,
08F 03 04 05 06F 07F 08F 03 04 05 06F 07F 08F Source: Company Reports,
08F 03 04 05 06F 07F 08F 03 04 05 06F 07F 08F Source: Company Reports,
08F 03 04 05 06F 07F 08F 03 04 05 06F 07F 08F Source: Company Reports,
08F 03 04 05 06F 07F 08F 03 04 05 06F 07F 08F Source: Company Reports,
08F 03 04 05 06F 07F 08F 03 04 05 06F 07F 08F Source: Company Reports,
08F 03 04 05 06F 07F 08F 03 04 05 06F 07F 08F Source: Company Reports,
08F 03 04 05 06F 07F 08F 03 04 05 06F 07F 08F Source: Company Reports,
08F 03 04 05 06F 07F 08F 03 04 05 06F 07F 08F Source: Company Reports,
08F 03 04 05 06F 07F 08F 03 04 05 06F 07F 08F Source: Company Reports,
08F 03 04 05 06F 07F 08F 03 04 05 06F 07F 08F Source: Company Reports,

American Appraisal

Projection Drivers – Industry and Peer Analysis

120%

110%

100%

90%

80%

70%

60%

50%

40%

24

Loans / Interest bearing liabilities

Russian Largest 30 Sberbank VTB Rosbank Bank of Vozrozhdenie Russian Banking Banks Moscow Standard Industry
Russian
Largest 30
Sberbank
VTB
Rosbank
Bank of
Vozrozhdenie
Russian
Banking
Banks
Moscow
Standard
Industry
03
04
05
06F
03
04
05
06F
03
04
05
06F
07F
08F
03
04
05
06F
07F
08F
03
04
05
06F
07F
08F
03
04
05
06F
07F
08F
03
04
05
06F
07F
08F
03
04
05
06F

Source: Company Reports, analyst estimates

06F 07F 08F 03 04 05 06F 07F 08F 03 04 05 06F Source: Company Reports,
06F 07F 08F 03 04 05 06F 07F 08F 03 04 05 06F Source: Company Reports,
06F 07F 08F 03 04 05 06F 07F 08F 03 04 05 06F Source: Company Reports,
06F 07F 08F 03 04 05 06F 07F 08F 03 04 05 06F Source: Company Reports,
06F 07F 08F 03 04 05 06F 07F 08F 03 04 05 06F Source: Company Reports,
06F 07F 08F 03 04 05 06F 07F 08F 03 04 05 06F Source: Company Reports,
06F 07F 08F 03 04 05 06F 07F 08F 03 04 05 06F Source: Company Reports,
06F 07F 08F 03 04 05 06F 07F 08F 03 04 05 06F Source: Company Reports,
06F 07F 08F 03 04 05 06F 07F 08F 03 04 05 06F Source: Company Reports,
06F 07F 08F 03 04 05 06F 07F 08F 03 04 05 06F Source: Company Reports,
06F 07F 08F 03 04 05 06F 07F 08F 03 04 05 06F Source: Company Reports,

American Appraisal

Projection Drivers – Industry and Peer Analysis

23%

21%

19%

17%

15%

13%

11%

9%

7%

5%

25

Equity / Total Assets

Russian Largest 30 Sberbank VTB Rosbank Bank of Vozrozhdenie Russian Banking Banks Moscow Standard Industry
Russian
Largest 30
Sberbank
VTB
Rosbank
Bank of
Vozrozhdenie
Russian
Banking
Banks
Moscow
Standard
Industry
03
04
05
06
03
04
05
06
03
04
05
06
03
04
05
06
03
04
05
06
03
04
05
06
03
04
05
06
03
04
05
06

Source: Company Reports, analyst estimates

04 05 06 03 04 05 06 03 04 05 06 03 04 05 06 Source:
04 05 06 03 04 05 06 03 04 05 06 03 04 05 06 Source:
04 05 06 03 04 05 06 03 04 05 06 03 04 05 06 Source:
04 05 06 03 04 05 06 03 04 05 06 03 04 05 06 Source:
04 05 06 03 04 05 06 03 04 05 06 03 04 05 06 Source:
04 05 06 03 04 05 06 03 04 05 06 03 04 05 06 Source:
04 05 06 03 04 05 06 03 04 05 06 03 04 05 06 Source:
04 05 06 03 04 05 06 03 04 05 06 03 04 05 06 Source:
04 05 06 03 04 05 06 03 04 05 06 03 04 05 06 Source:
04 05 06 03 04 05 06 03 04 05 06 03 04 05 06 Source:
04 05 06 03 04 05 06 03 04 05 06 03 04 05 06 Source:

American Appraisal

Projected Cash Flows

Corporate Banks

Projected Cash Flows Corporate Banks Factors to watch for Income generation ability Target vs. Existing Client

Factors to watch for

Income generation abilityProjected Cash Flows Corporate Banks Factors to watch for Target vs. Existing Client Base Market position

Target vs. Existing Client BaseBanks Factors to watch for Income generation ability Market position and competitive advantages Large

Market position and competitive advantagesIncome generation ability Target vs. Existing Client Base Large non-recurring transactions Non-interest income

Large non-recurring transactionsClient Base Market position and competitive advantages Non-interest income generation Cost-efficiency Risks

Non-interest income generationand competitive advantages Large non-recurring transactions Cost-efficiency Risks Concentration of clients (industry,

Cost-efficiencynon-recurring transactions Non-interest income generation Risks Concentration of clients (industry, individual

Riskstransactions Non-interest income generation Cost-efficiency Concentration of clients (industry, individual clients)

Concentration of clients (industry, individual clients)Non-interest income generation Cost-efficiency Risks Operations with related parties (critical factor for captive

Operations with related parties (critical factor for captive banks) banks)

Non-performing loans (history and expectations)individual clients) Operations with related parties (critical factor for captive banks) 2 6 American Appraisal

26

parties (critical factor for captive banks) Non-performing loans (history and expectations) 2 6 American Appraisal
parties (critical factor for captive banks) Non-performing loans (history and expectations) 2 6 American Appraisal
parties (critical factor for captive banks) Non-performing loans (history and expectations) 2 6 American Appraisal
parties (critical factor for captive banks) Non-performing loans (history and expectations) 2 6 American Appraisal
parties (critical factor for captive banks) Non-performing loans (history and expectations) 2 6 American Appraisal
parties (critical factor for captive banks) Non-performing loans (history and expectations) 2 6 American Appraisal
parties (critical factor for captive banks) Non-performing loans (history and expectations) 2 6 American Appraisal
parties (critical factor for captive banks) Non-performing loans (history and expectations) 2 6 American Appraisal
parties (critical factor for captive banks) Non-performing loans (history and expectations) 2 6 American Appraisal
parties (critical factor for captive banks) Non-performing loans (history and expectations) 2 6 American Appraisal
parties (critical factor for captive banks) Non-performing loans (history and expectations) 2 6 American Appraisal

American Appraisal

Projected Cash Flows

Retail Banks

Projected Cash Flows Retail Banks Factors to watch for Income generation ability Business profile Collateralized

Factors to watch for

Income generation abilityProjected Cash Flows Retail Banks Factors to watch for Business profile Collateralized lending (autoloans and

Business profile

Business profile

Collateralized lending (autoloans and mortgages)Business profile Uncollateralized lending (consumer finance) Penetration of services rendered on the target market Market

Uncollateralized lending (consumer finance)profile Collateralized lending (autoloans and mortgages) Penetration of services rendered on the target market Market

Penetration of services rendered on the target market

Penetration of services rendered on the target market

Market share: retail network

Market share: retail network

Brand power: sales and promotion channels

Brand power: sales and promotion channels

Quality of execution – “commodity” business

Quality of execution – “commodity” business

27

Risks Determined by business profile and quality of risk management Growing competition Deteriorating quality of loan Determined by business profile and quality of risk management Growing competition Deteriorating quality of loan portfolio

management Growing competition Deteriorating quality of loan portfolio Lack of funding for growth American Appraisal
management Growing competition Deteriorating quality of loan portfolio Lack of funding for growth American Appraisal
management Growing competition Deteriorating quality of loan portfolio Lack of funding for growth American Appraisal
management Growing competition Deteriorating quality of loan portfolio Lack of funding for growth American Appraisal

Lack of funding for growth

management Growing competition Deteriorating quality of loan portfolio Lack of funding for growth American Appraisal
management Growing competition Deteriorating quality of loan portfolio Lack of funding for growth American Appraisal
management Growing competition Deteriorating quality of loan portfolio Lack of funding for growth American Appraisal
management Growing competition Deteriorating quality of loan portfolio Lack of funding for growth American Appraisal
management Growing competition Deteriorating quality of loan portfolio Lack of funding for growth American Appraisal
management Growing competition Deteriorating quality of loan portfolio Lack of funding for growth American Appraisal
management Growing competition Deteriorating quality of loan portfolio Lack of funding for growth American Appraisal
management Growing competition Deteriorating quality of loan portfolio Lack of funding for growth American Appraisal
management Growing competition Deteriorating quality of loan portfolio Lack of funding for growth American Appraisal
management Growing competition Deteriorating quality of loan portfolio Lack of funding for growth American Appraisal
management Growing competition Deteriorating quality of loan portfolio Lack of funding for growth American Appraisal

American Appraisal

Projected Cash Flows

Retail Banks

Projected Cash Flows R e t a i l B a n k s Special Consideration:

Special Consideration: Fast Lending Growth

Increasing bad loans (especially for non-collateralized lending) – makes risk management extremely important ially for non-collateralized lending) – makes risk management extremely important

Lack of cheap and long term fundinglending) – makes risk management extremely important Fast growth requires significant equity injections from

Fast growth requires significant equity injections from shareholdersextremely important Lack of cheap and long term funding Increasing competition with foreign market players 9

Increasing competition with foreign market players foreign market players

9 000 3,0% Share of overdue loans to individuals grows to 2.7% 8 000 2,5%
9
000
3,0%
Share of
overdue loans
to individuals
grows to 2.7%
8
000
2,5%
7
000
6
000
2,0%
5
000
1,5%
4
000
Share of Loans to
Individuals 22%
3
000
1,0%
Share of
Loans to
2
000
0,5%
Individuals
1
000
7%
-
0,0%
01.2003
01.2004
01.2005
01.2006
28
Total Loans
Total Loans to Individuals
Share of Overdue Loans to Individuals
Source: CBRF
RUR bln
Total Loans Total Loans to Individuals Share of Overdue Loans to Individuals Source: CBRF RUR bln
Total Loans Total Loans to Individuals Share of Overdue Loans to Individuals Source: CBRF RUR bln
Total Loans Total Loans to Individuals Share of Overdue Loans to Individuals Source: CBRF RUR bln
Total Loans Total Loans to Individuals Share of Overdue Loans to Individuals Source: CBRF RUR bln
Total Loans Total Loans to Individuals Share of Overdue Loans to Individuals Source: CBRF RUR bln
Total Loans Total Loans to Individuals Share of Overdue Loans to Individuals Source: CBRF RUR bln
Total Loans Total Loans to Individuals Share of Overdue Loans to Individuals Source: CBRF RUR bln
Total Loans Total Loans to Individuals Share of Overdue Loans to Individuals Source: CBRF RUR bln
Total Loans Total Loans to Individuals Share of Overdue Loans to Individuals Source: CBRF RUR bln
Total Loans Total Loans to Individuals Share of Overdue Loans to Individuals Source: CBRF RUR bln

American Appraisal

Discount Rate Development

Discount Rate Development = + β × r f CAPM r e Risk free rate Beta

= +β×

r

f

CAPM

r

e

Risk free rateDiscount Rate Development = + β × r f CAPM r e Beta Company specific risk

BetaRate Development = + β × r f CAPM r e Risk free rate Company specific

Company specific riskRate Development = + β × r f CAPM r e Risk free rate Beta Size

Sizeβ × r f CAPM r e Risk free rate Beta Company specific risk Uncertainty of

Uncertainty of projectionsr f CAPM r e Risk free rate Beta Company specific risk Size MRP CSR +

MRP CSR

+

Historical Adjusted Betas for Guideline Companies

1,2 1 Average beta for Guidelines = 0.975 0,8 0,6 0,4 0,2 0 Sberbank ING
1,2
1
Average beta
for Guidelines
= 0.975
0,8
0,6
0,4
0,2
0
Sberbank
ING Bank
BRE Bank
Komercni
OTP Bank
Garanti Bank
Finansbank
AKBank
Unibanco
Banco
29
Slaski
banka
Bradesco
Komercni OTP Bank Garanti Bank Finansbank AKBank Unibanco Banco 29 Slaski banka Bradesco American Appraisal
Komercni OTP Bank Garanti Bank Finansbank AKBank Unibanco Banco 29 Slaski banka Bradesco American Appraisal
Komercni OTP Bank Garanti Bank Finansbank AKBank Unibanco Banco 29 Slaski banka Bradesco American Appraisal
Komercni OTP Bank Garanti Bank Finansbank AKBank Unibanco Banco 29 Slaski banka Bradesco American Appraisal
Komercni OTP Bank Garanti Bank Finansbank AKBank Unibanco Banco 29 Slaski banka Bradesco American Appraisal
Komercni OTP Bank Garanti Bank Finansbank AKBank Unibanco Banco 29 Slaski banka Bradesco American Appraisal
Komercni OTP Bank Garanti Bank Finansbank AKBank Unibanco Banco 29 Slaski banka Bradesco American Appraisal
Komercni OTP Bank Garanti Bank Finansbank AKBank Unibanco Banco 29 Slaski banka Bradesco American Appraisal
Komercni OTP Bank Garanti Bank Finansbank AKBank Unibanco Banco 29 Slaski banka Bradesco American Appraisal
Komercni OTP Bank Garanti Bank Finansbank AKBank Unibanco Banco 29 Slaski banka Bradesco American Appraisal

American Appraisal

Terminal Value

How to determine the terminal valueTerminal Value Gordon stable growth model Sustainable long-term growth rate Long-term profitability and capital structure

Gordon stable growth modelTerminal Value How to determine the terminal value Sustainable long-term growth rate Long-term profitability and capital

Sustainable long-term growth rateto determine the terminal value Gordon stable growth model Long-term profitability and capital structure Applying

Long-term profitability and capital structureGordon stable growth model Sustainable long-term growth rate Applying market-derived ratios Checking the terminal value

Applying market-derived ratiosgrowth rate Long-term profitability and capital structure Checking the terminal value for consistency Stabilization of

Checking the terminal value for consistencyand capital structure Applying market-derived ratios Stabilization of cash flows Consistent return on equity and

Stabilization of cash flowsratios Checking the terminal value for consistency Consistent return on equity and total assets Sustainable

Consistent return on equity and total assetsterminal value for consistency Stabilization of cash flows Sustainable capitalization levels Potential sale

Sustainable capitalization levelsof cash flows Consistent return on equity and total assets Potential sale considerations 3 0 American

Potential sale considerationsof cash flows Consistent return on equity and total assets Sustainable capitalization levels 3 0 American

30

return on equity and total assets Sustainable capitalization levels Potential sale considerations 3 0 American Appraisal
return on equity and total assets Sustainable capitalization levels Potential sale considerations 3 0 American Appraisal
return on equity and total assets Sustainable capitalization levels Potential sale considerations 3 0 American Appraisal
return on equity and total assets Sustainable capitalization levels Potential sale considerations 3 0 American Appraisal
return on equity and total assets Sustainable capitalization levels Potential sale considerations 3 0 American Appraisal
return on equity and total assets Sustainable capitalization levels Potential sale considerations 3 0 American Appraisal
return on equity and total assets Sustainable capitalization levels Potential sale considerations 3 0 American Appraisal
return on equity and total assets Sustainable capitalization levels Potential sale considerations 3 0 American Appraisal
return on equity and total assets Sustainable capitalization levels Potential sale considerations 3 0 American Appraisal
return on equity and total assets Sustainable capitalization levels Potential sale considerations 3 0 American Appraisal
return on equity and total assets Sustainable capitalization levels Potential sale considerations 3 0 American Appraisal

American Appraisal

Market Approach

Two major variationsMarket Approach Guideline Companies Analysis Guideline Transactions Analysis Applicability varies with Availability of

Guideline Companies AnalysisMarket Approach Two major variations Guideline Transactions Analysis Applicability varies with Availability of guidelines

Guideline Transactions AnalysisApproach Two major variations Guideline Companies Analysis Applicability varies with Availability of guidelines Size

Applicability varies withGuideline Companies Analysis Guideline Transactions Analysis Availability of guidelines Size Business profile Risk

Availability of guidelinesGuideline Transactions Analysis Applicability varies with Size Business profile Risk profile Availability of data 3 1

SizeApplicability varies with Availability of guidelines Business profile Risk profile Availability of data 3 1

Business profileApplicability varies with Availability of guidelines Size Risk profile Availability of data 3 1 American Appraisal

Risk profileApplicability varies with Availability of guidelines Size Business profile Availability of data 3 1 American Appraisal

Availability of dataAnalysis Applicability varies with Availability of guidelines Size Business profile Risk profile 3 1 American Appraisal

31

varies with Availability of guidelines Size Business profile Risk profile Availability of data 3 1 American
varies with Availability of guidelines Size Business profile Risk profile Availability of data 3 1 American
varies with Availability of guidelines Size Business profile Risk profile Availability of data 3 1 American
varies with Availability of guidelines Size Business profile Risk profile Availability of data 3 1 American
varies with Availability of guidelines Size Business profile Risk profile Availability of data 3 1 American
varies with Availability of guidelines Size Business profile Risk profile Availability of data 3 1 American
varies with Availability of guidelines Size Business profile Risk profile Availability of data 3 1 American
varies with Availability of guidelines Size Business profile Risk profile Availability of data 3 1 American
varies with Availability of guidelines Size Business profile Risk profile Availability of data 3 1 American
varies with Availability of guidelines Size Business profile Risk profile Availability of data 3 1 American
varies with Availability of guidelines Size Business profile Risk profile Availability of data 3 1 American

American Appraisal

Market Approach

Major Industry Valuation Metrics: PB and PE MultiplesMarket Approach PB (“Price to Book”) Market Capitalization / Book Value of Shareholders’ Equity Usually Exceeds

PB (“Price to Book”)Major Industry Valuation Metrics: PB and PE Multiples Market Capitalization / Book Value of Shareholders’ Equity

Market Capitalization / Book Value of Shareholders’ EquityMetrics: PB and PE Multiples PB (“Price to Book”) Usually Exceeds 1.0 Growth of PB multiples

Usually Exceeds 1.0Market Capitalization / Book Value of Shareholders’ Equity Growth of PB multiples with time - Recent

Growth of PB multiples with time - Recent Trend in the Emerging Markets/ Book Value of Shareholders’ Equity Usually Exceeds 1.0 Sberbank's share price Price to 600% Book

Sberbank's share price

Price to 600% Book 06F 4.3 500% Price to 400% Book 04 1.75 300% 200%
Price to
600%
Book 06F
4.3
500%
Price to
400%
Book 04
1.75 300%
200%
100%
0%
01.2005
07.2005
01.2006
07.2006

Source: RTS

to 400% Book 04 1.75 300% 200% 100% 0% 01.2005 07.2005 01.2006 07.2006 Source: RTS 3
to 400% Book 04 1.75 300% 200% 100% 0% 01.2005 07.2005 01.2006 07.2006 Source: RTS 3
to 400% Book 04 1.75 300% 200% 100% 0% 01.2005 07.2005 01.2006 07.2006 Source: RTS 3
to 400% Book 04 1.75 300% 200% 100% 0% 01.2005 07.2005 01.2006 07.2006 Source: RTS 3
to 400% Book 04 1.75 300% 200% 100% 0% 01.2005 07.2005 01.2006 07.2006 Source: RTS 3
to 400% Book 04 1.75 300% 200% 100% 0% 01.2005 07.2005 01.2006 07.2006 Source: RTS 3
to 400% Book 04 1.75 300% 200% 100% 0% 01.2005 07.2005 01.2006 07.2006 Source: RTS 3
to 400% Book 04 1.75 300% 200% 100% 0% 01.2005 07.2005 01.2006 07.2006 Source: RTS 3
to 400% Book 04 1.75 300% 200% 100% 0% 01.2005 07.2005 01.2006 07.2006 Source: RTS 3
to 400% Book 04 1.75 300% 200% 100% 0% 01.2005 07.2005 01.2006 07.2006 Source: RTS 3
to 400% Book 04 1.75 300% 200% 100% 0% 01.2005 07.2005 01.2006 07.2006 Source: RTS 3

32

American Appraisal

Market Approach

Why PB multiples for banks are usually above 1.0? for banks are usually above 1.0?

Technical explanation: Actual Return exceeds Required Return on Equity

Other factors:Actual Return exceeds Required Return on Equity PB vs. ROE 4,0 3,5 Finansbank Sberbank 3,0 Banco

PB vs. ROE

4,0 3,5 Finansbank Sberbank 3,0 Banco Bradesco 2,5 BRE Bank Komercni Bank OTP Bank AKBank
4,0
3,5
Finansbank
Sberbank
3,0
Banco Bradesco
2,5
BRE Bank
Komercni Bank
OTP Bank
AKBank
2,0
ING Bank Slaski
Unibanco
Garanti Bank
1,5
1,0
10%
12%
14%
16%
18%
20%
22%
24%
26%
28%
30%
Price to Book 2006

ROE (2005-2007F)

High Expected Growth (Industry and Company)22% 24% 26% 28% 30% Price to Book 2006 ROE (2005-2007F) Fair Values vs. Book Values

Fair Values vs. Book ValuesROE (2005-2007F) High Expected Growth (Industry and Company) Intangible Assets not registered on the balance sheet

Intangible Assets not registered on the balance sheetGrowth (Industry and Company) Fair Values vs. Book Values Price to Book alone not sufficient –

Price to Book alone not sufficient – other value indicators (ratios) and approaches should also be used: – other value indicators (ratios) and approaches should also be used:

33

indicators (ratios) and approaches should also be used: 33 PE, Price to Total Assets, Price to

PE, Price to Total Assets, Price to Gross Operating Profit, Price to Cash Flow American Appraisal

also be used: 33 PE, Price to Total Assets, Price to Gro ss Operating Profit, Price
also be used: 33 PE, Price to Total Assets, Price to Gro ss Operating Profit, Price
also be used: 33 PE, Price to Total Assets, Price to Gro ss Operating Profit, Price
also be used: 33 PE, Price to Total Assets, Price to Gro ss Operating Profit, Price
also be used: 33 PE, Price to Total Assets, Price to Gro ss Operating Profit, Price
also be used: 33 PE, Price to Total Assets, Price to Gro ss Operating Profit, Price
also be used: 33 PE, Price to Total Assets, Price to Gro ss Operating Profit, Price
also be used: 33 PE, Price to Total Assets, Price to Gro ss Operating Profit, Price
also be used: 33 PE, Price to Total Assets, Price to Gro ss Operating Profit, Price
also be used: 33 PE, Price to Total Assets, Price to Gro ss Operating Profit, Price
also be used: 33 PE, Price to Total Assets, Price to Gro ss Operating Profit, Price

Market Approach

Market Approach Publicly Traded Guidelines Lack of actively traded bank stocks in Russia   Average daily

Publicly Traded Guidelines

Lack of actively traded bank stocks in RussiaMarket Approach Publicly Traded Guidelines   Average daily trading volume, 000 USD 2005 2006 Sberbank

 

Average daily trading volume, 000 USD

2005

2006

Sberbank Promstroibank Rosbank Bank of Moscow Vozrozhdenie

16,900

75,100

675

486

-

218

70

118

29

45

Guidelines from other markets may be usedof Moscow Vozrozhdenie 16,900 75,100 675 486 - 218 70 118 29 45 3 4 American

34

675 486 - 218 70 118 29 45 Guidelines from other markets may be used 3
675 486 - 218 70 118 29 45 Guidelines from other markets may be used 3
675 486 - 218 70 118 29 45 Guidelines from other markets may be used 3
675 486 - 218 70 118 29 45 Guidelines from other markets may be used 3
675 486 - 218 70 118 29 45 Guidelines from other markets may be used 3
675 486 - 218 70 118 29 45 Guidelines from other markets may be used 3
675 486 - 218 70 118 29 45 Guidelines from other markets may be used 3
675 486 - 218 70 118 29 45 Guidelines from other markets may be used 3
675 486 - 218 70 118 29 45 Guidelines from other markets may be used 3
675 486 - 218 70 118 29 45 Guidelines from other markets may be used 3
675 486 - 218 70 118 29 45 Guidelines from other markets may be used 3

American Appraisal

Market Approach

Public Guidelines

1. Analysis of ratios indicated by guidelines

 

Price to Shareholders' Funds

 
 

Market Capitalisation : Price to Shareholders' Funds

 

4 Yr Avg 2004 to 2007

Previous Year

Current Year

Forecast Year

Concluded

Guideline Companies

Country

2005

2006

2007

Weights

Sberbank ING Bank Slaski BRE Bank Komercni banka, a.s. OTP Bank Garanti Bank Finansbank AKBank

Russia

3,5

4,2

3,1

2,4

15%

Poland

2,2

2,3

2,1

2,0

11%

Poland

2,3

2,7

2,2

2,0

7%

Czech

2,4

2,7

2,2

2,0

11%

Hungary

2,6

2,9

2,5

2,2

7%

Turkey

1,9

2,1

1,8

1,6

8%

Turkey

3,6

3,9

3,5

2,6

10%

Turkey

2,1

2,2

2,3

1,8

8%

Unibanco (Uniao de Bancos Brazil

2,0

2,1

1,8

1,6

15%

Banco Bradesco S.A.

Brazil

3,2

3,7

2,8

2,3

10%

Average Std Deviation Std Deviation / Average

2,6

2,9

2,4

2,0

100,0%

0,6

0,8

0,6

0,3

0,2

0,3

0,2

0,2

35

2,6 2,9 2,4 2,0 100,0% 0,6 0,8 0,6 0,3 0,2 0,3 0,2 0,2 3 5 American
2,6 2,9 2,4 2,0 100,0% 0,6 0,8 0,6 0,3 0,2 0,3 0,2 0,2 3 5 American
2,6 2,9 2,4 2,0 100,0% 0,6 0,8 0,6 0,3 0,2 0,3 0,2 0,2 3 5 American
2,6 2,9 2,4 2,0 100,0% 0,6 0,8 0,6 0,3 0,2 0,3 0,2 0,2 3 5 American
2,6 2,9 2,4 2,0 100,0% 0,6 0,8 0,6 0,3 0,2 0,3 0,2 0,2 3 5 American
2,6 2,9 2,4 2,0 100,0% 0,6 0,8 0,6 0,3 0,2 0,3 0,2 0,2 3 5 American
2,6 2,9 2,4 2,0 100,0% 0,6 0,8 0,6 0,3 0,2 0,3 0,2 0,2 3 5 American
2,6 2,9 2,4 2,0 100,0% 0,6 0,8 0,6 0,3 0,2 0,3 0,2 0,2 3 5 American
2,6 2,9 2,4 2,0 100,0% 0,6 0,8 0,6 0,3 0,2 0,3 0,2 0,2 3 5 American
2,6 2,9 2,4 2,0 100,0% 0,6 0,8 0,6 0,3 0,2 0,3 0,2 0,2 3 5 American
2,6 2,9 2,4 2,0 100,0% 0,6 0,8 0,6 0,3 0,2 0,3 0,2 0,2 3 5 American

American Appraisal

Market Approach

Public Guidelines

2. Weighing procedure

 

Price to Shareholders' Funds

 

Multiples times Weights

 

4 Yr Avg 2004 to 2007

Previous Year

Current Year

Forecast Year

2005

2006

2007

Sberbank ING Bank Slaski BRE Bank Komercni banka, a.s. OTP Bank Garanti Bank Finansbank AKBank Unibanco (Uniao de Bancos Brasileiros SA Banco Bradesco S.A.

0,5

0,6

0,5

0,4

0,2

0,0

0,2

0,2

0,2

0,2

0,2

0,1

0,2

0,3

0,2

0,2

0,2

0,2

0,2

0,2

0,1

0,2

0,1

0,1

0,4

0,4

0,4

0,3

0,2

0,2

0,2

0,1

0,3

0,3

0,3

0,2

0,3

0,4

0,3

0,2

Sum of Weighted Multiples Percent of Weight Used

2,6

2,7

2,4

2,0

100,0%

89,5%

100,0%

100,0%

"Comparably" Weighted Multiple

2,6

3,0

2,4

2,0

36

89,5% 100,0% 100,0% "Comparably" Weighted Multiple 2,6 3,0 2,4 2,0 3 6 American Appraisal
89,5% 100,0% 100,0% "Comparably" Weighted Multiple 2,6 3,0 2,4 2,0 3 6 American Appraisal
89,5% 100,0% 100,0% "Comparably" Weighted Multiple 2,6 3,0 2,4 2,0 3 6 American Appraisal
89,5% 100,0% 100,0% "Comparably" Weighted Multiple 2,6 3,0 2,4 2,0 3 6 American Appraisal
89,5% 100,0% 100,0% "Comparably" Weighted Multiple 2,6 3,0 2,4 2,0 3 6 American Appraisal
89,5% 100,0% 100,0% "Comparably" Weighted Multiple 2,6 3,0 2,4 2,0 3 6 American Appraisal
89,5% 100,0% 100,0% "Comparably" Weighted Multiple 2,6 3,0 2,4 2,0 3 6 American Appraisal
89,5% 100,0% 100,0% "Comparably" Weighted Multiple 2,6 3,0 2,4 2,0 3 6 American Appraisal
89,5% 100,0% 100,0% "Comparably" Weighted Multiple 2,6 3,0 2,4 2,0 3 6 American Appraisal
89,5% 100,0% 100,0% "Comparably" Weighted Multiple 2,6 3,0 2,4 2,0 3 6 American Appraisal
89,5% 100,0% 100,0% "Comparably" Weighted Multiple 2,6 3,0 2,4 2,0 3 6 American Appraisal

American Appraisal

Market Approach

Public Guidelines

3. Applying concluded multiples to the Subject

 

Concluded

Subject

Indicated

Concluded

Weighted

Period

Multiples

Company

Value

Weights

Conclusions

 

US$ 000,000

US$ 000,000

US$ 000,000

4 Yr Average 2004 to 2007

2,6

1 000

2 624

20%

525

2005

3,0

1 600

4 816

20%

963

2006

2,4

2 000

4 890

50%

2 445

2007

2,0

2 200

4 508

10%

451

Sum of Weighted Streams Percent of total Weight Used

4 384

100%

Indicated Market Capitalisation

4 384

37

Percent of total Weight Used 4 384 100% Indicated Market Capitalisation 4 384 3 7 American
Percent of total Weight Used 4 384 100% Indicated Market Capitalisation 4 384 3 7 American
Percent of total Weight Used 4 384 100% Indicated Market Capitalisation 4 384 3 7 American
Percent of total Weight Used 4 384 100% Indicated Market Capitalisation 4 384 3 7 American
Percent of total Weight Used 4 384 100% Indicated Market Capitalisation 4 384 3 7 American
Percent of total Weight Used 4 384 100% Indicated Market Capitalisation 4 384 3 7 American
Percent of total Weight Used 4 384 100% Indicated Market Capitalisation 4 384 3 7 American
Percent of total Weight Used 4 384 100% Indicated Market Capitalisation 4 384 3 7 American
Percent of total Weight Used 4 384 100% Indicated Market Capitalisation 4 384 3 7 American
Percent of total Weight Used 4 384 100% Indicated Market Capitalisation 4 384 3 7 American
Percent of total Weight Used 4 384 100% Indicated Market Capitalisation 4 384 3 7 American

American Appraisal

Market Approach

Public Guidelines

4. Reconciliation of the results

 

VALUATION SUMMARY

 
 

Selected

 

Approach

Detailed in

Table

Concluded Equity Value

Value

Weights

Weighted

Conclusions

 

(g)

 

US$ 000,000

US$ 000,000

Price to

Shareholders' Funds

1

4 384

70%

3 069

Price to

2

4 039

20%

808

Price to

Net Income Total Assets

3

3 126

10%

313

Total

0,0%

4 189

Rounded to

4 200

38

Total Assets 3 3 126 10% 313 Total 0,0% 4 189 Rounded to 4 2 0
Total Assets 3 3 126 10% 313 Total 0,0% 4 189 Rounded to 4 2 0
Total Assets 3 3 126 10% 313 Total 0,0% 4 189 Rounded to 4 2 0
Total Assets 3 3 126 10% 313 Total 0,0% 4 189 Rounded to 4 2 0
Total Assets 3 3 126 10% 313 Total 0,0% 4 189 Rounded to 4 2 0
Total Assets 3 3 126 10% 313 Total 0,0% 4 189 Rounded to 4 2 0
Total Assets 3 3 126 10% 313 Total 0,0% 4 189 Rounded to 4 2 0
Total Assets 3 3 126 10% 313 Total 0,0% 4 189 Rounded to 4 2 0
Total Assets 3 3 126 10% 313 Total 0,0% 4 189 Rounded to 4 2 0
Total Assets 3 3 126 10% 313 Total 0,0% 4 189 Rounded to 4 2 0
Total Assets 3 3 126 10% 313 Total 0,0% 4 189 Rounded to 4 2 0

American Appraisal

Market Approach

Guideline Transactions

Target

Invest-

Promstroi-

Impexbank

Rosbank

Vozrozh-

Texaka-bank,

Aval,

Mriya,

sberbank

bank

denie

Kazakhstan

Ukraine

Ukraine

Date

07-2006

12-2005

07-2006

07-2006

07-2006

07-2006

10-2005

01-2006

Buyer

OTP

VTB

Raiffeisen

SocGen

Inst. Investors

Sberbank

Raiffeisen

VTB

Stake purchased

96%

50%

100%

10%

10%

80%

94%

98%

Transaction Value, USD m

477

480

550

317

54

50

1 036

70

PB'05 Ratios

6,0 5,0 4,0 3,0 2,0 1,0 - Investsberbank Promstroibank Impexbank Rosbank Vozrozhdenie Texakabank Aval Mriya
6,0
5,0
4,0
3,0
2,0
1,0
-
Investsberbank Promstroibank
Impexbank
Rosbank
Vozrozhdenie
Texakabank
Aval
Mriya
Impexbank Rosbank Vozrozhdenie Texakabank Aval Mriya Special Considerations in analyzing transactions Intent of

Special Considerations in analyzing transactions

Intent of the purchaser / Potential synergiesAval Mriya Special Considerations in analyzing transactions Market Entry “Overheated” market Inter-group

Market Entrytransactions Intent of the purchaser / Potential synergies “Overheated” market Inter-group transactions (portfolio

“Overheated” marketIntent of the purchaser / Potential synergies Market Entry Inter-group transactions (portfolio optimization) 3 9

Inter-group transactions (portfolio optimization)/ Potential synergies Market Entry “Overheated” market 3 9 Source: Companies’ press-releases, financial

39

Inter-group transactions (portfolio optimization) 3 9 Source: Companies’ press-releases, financial statements
Inter-group transactions (portfolio optimization) 3 9 Source: Companies’ press-releases, financial statements
Inter-group transactions (portfolio optimization) 3 9 Source: Companies’ press-releases, financial statements
Inter-group transactions (portfolio optimization) 3 9 Source: Companies’ press-releases, financial statements
Inter-group transactions (portfolio optimization) 3 9 Source: Companies’ press-releases, financial statements
Inter-group transactions (portfolio optimization) 3 9 Source: Companies’ press-releases, financial statements
Inter-group transactions (portfolio optimization) 3 9 Source: Companies’ press-releases, financial statements
Inter-group transactions (portfolio optimization) 3 9 Source: Companies’ press-releases, financial statements
Inter-group transactions (portfolio optimization) 3 9 Source: Companies’ press-releases, financial statements
Inter-group transactions (portfolio optimization) 3 9 Source: Companies’ press-releases, financial statements

Source: Companies’ press-releases, financial statements

transactions (portfolio optimization) 3 9 Source: Companies’ press-releases, financial statements American Appraisal

American Appraisal

Reconciliation

40

Banks’s size and business profile Reliability of information Relevance of information Income Guideline Approach
Banks’s size and
business profile
Reliability of
information
Relevance of
information
Income
Guideline
Approach
Companies

Reconciled

Value

Continuous Process

Relevance of information Income Guideline Approach Companies Reconciled Value Continuous Process American Appraisal
Relevance of information Income Guideline Approach Companies Reconciled Value Continuous Process American Appraisal
Relevance of information Income Guideline Approach Companies Reconciled Value Continuous Process American Appraisal
Relevance of information Income Guideline Approach Companies Reconciled Value Continuous Process American Appraisal
Relevance of information Income Guideline Approach Companies Reconciled Value Continuous Process American Appraisal
Relevance of information Income Guideline Approach Companies Reconciled Value Continuous Process American Appraisal
Relevance of information Income Guideline Approach Companies Reconciled Value Continuous Process American Appraisal
Relevance of information Income Guideline Approach Companies Reconciled Value Continuous Process American Appraisal
Relevance of information Income Guideline Approach Companies Reconciled Value Continuous Process American Appraisal
Relevance of information Income Guideline Approach Companies Reconciled Value Continuous Process American Appraisal
Relevance of information Income Guideline Approach Companies Reconciled Value Continuous Process American Appraisal

American Appraisal

Спасибо за внимание!

Спасибо за внимание ! American Appraisal
Спасибо за внимание ! American Appraisal

American Appraisal