Consolidated Financial Statements

Report Of The Independent Auditor on The Summary Consolidated Financial Statements

To the Shareholders and Board of Directors of Bank Vozrozhdenie:

The accompanying summary consolidated financial statements, which comprise the summary consolidated statement of financial position as at 31 December 2012, the summary consolidated statement of comprehensive income, the summary consolidated statement of changes in equity and the summary consolidated statement of cash flows for the year then ended are derived from the audited consolidated financial statements of Bank Vozrozhdenie and its subsidiaries (the “Group”) for the year ended 31 December 2012. We expressed an unmodified audit opinion on those consolidated financial statements in our report dated 25 March 2013.

The summary consolidated financial statements do not contain all the disclosures required by International Financial Reporting Standards (“IFRS”). Reading the summary financial statements, therefore, is not a substitute for reading the audited consolidated financial statements of the Group prepared in accordance with IFRS.

Management’s responsibility for the summary consolidated financial statements

Management of the Group is responsible for the preparation of a summary of the audited consolidated financial statements on the basis described in Note “Basis for preparation”.

Auditor’s responsibility

Our responsibility is to express an opinion on the summary consolidated financial statements based on our procedures, which were conducted in accordance with International Standard on Auditing (ISA) 810, “Engagements to Report on Summary Financial Statements”.

Opinion

In our opinion, the summary consolidated financial statements derived from the audited consolidated financial statements of the Group for the year ended 31 December 2012 are consistent, in all material respects, with those consolidated financial statements, on the basis described in Note “Basis for preparation”.

ZAO PricewaterhouseCoopers Audit, 10 Butyrsky Val, Moscow, Russian Federation, 125047 T:+7 (495) 967 6000, F: +7 (495) 967 6001, www.pwc.ru

Summary Consolidated Statement of Financial Position

In millions of Russian Roubles 31 December2012 31 December2011
Assets
Cash and cash equivalents 40 885 37 755
Mandatory cash balances with the Central Bank of the Russian Federation 2 097 1 939
Trading securities 5 884 7 347
Due from other banks 5 794 967
Loans and advances to customers 141 662 124 383
Investment securities available for sale 2 476 1 377
Premises and equipment 3 064 3 048
Other financial assets 1 103 1 254
Non-current assets classified as held for sale 898 975
Other assets 5 199 4 843
Total assets 209 062 183 888
Liabilities
Due to other banks 7 647 8 202
Customer accounts 163 876 145 142
Debt securities in issue 7 032 6 722
Other borrowed funds 2 803 -
Other financial liabilities 350 588
Other liabilities 496 555
Subordinated loans 6 051 4 217
Total liabilities 188 255 165 426
EQUITY
Share capital 250 250
Share premium 7 306 7 306
Retained earnings 13 124 10 807
Revaluation reserve for investment securities available for sale 127 99
TOTAL EQUITY 20 807 18 462
Total liabilities and equity 209 062 183 888

Approved for issue and signedon 25 March 2013..

A.V.Dolgopolov
Chairman of the Management Board		 A.A.Novikova
Chief Accountant

The consolidated financial statements, from which the summary consolidated financial statements have been derived,are available from Bank Vozrozhdenie upon request.

Summary Consolidated Statement of Comprehensive Income

Summary Consolidated Statement of Comprehensive Income

In millions of Russian Roubles 2012 2011
Interest income 16 611 13 959
Interest expense (7 553) (6 503)
Net interest income 9 058 7 456
Provision for loan impairment (2 722) (2 304)
Net interest income after provision for loan impairment 6 336 5 152
Fee and commission income 5 503 5 232
Fee and commission expense (442) (410)
Gains less losses from trading securities 6 7
Gains less losses from trading in foreign currencies 439 420
Foreign exchange translation gains less losses (40) (50)
Gains less losses on disposed investment securities available for sale 3 12
Other operating income 337 222
Administrative and other operating expenses (8 652) (8 353)
Impairment of investment securities available for sale (71) -
Provision for impairment of other assets (449) (216)
Profit before tax 2 970 2 016
Income tax expense (639) (422)
Profit for the year 2 331 1 594
Other comprehensive income:
Investment securities available for sale:
Gains less losses during the year 34 32
Income tax expense recorded directly in other comprehensive income (6) (10)
Other comprehensive income for the year 28 22
Total comprehensive income for the year 2 359 1 616
Earnings per share for profit attributable to the equity holders of the Bank, basic and diluted(expressed in RR per share)
Ordinary shares 93 64

The consolidated financial statements, from which the summary consolidated financial statements have been derived,are available from Bank Vozrozhdenie upon request.

Summary Consolidated Statement of Changes in Equity

In millions of Russian Roubles Share capital Share premium Revaluation reserve for investment securities available for sale Retained earnings Total
Balance at 1 January 2011 250 7 306 77 9 227 16 860
Profit for the year - - - 1 594 1 594
Other comprehensive income - - 22 - 22
Total comprehensive income for 2011 - - 22 1 594 1 616
Dividends declared - - - (14) (14)
Balance at 31 December 2011 250 7 306 99 10 807 18 462
Profit for the year - - - 2 331 2 331
Other comprehensive income - - 28 - 28
Total comprehensive income for 2012 - - 28 2 331 2 359
Dividends declared - - - (14) (14)
Balance at 31 December 2012 250 7 306 127 13 124 20 807

The consolidated financial statements, from which the summary consolidated financial statements have been derived,are available from Bank Vozrozhdenie upon request.

Summary Consolidated Statement of Cash Flows

In millions of Russian Roubles 2012 2011
Cash flows from operating activities
Interest received 16 652 14 660
Interest paid (7 679) (6 601)
Fees and commissions received 5 464 5 244
Fees and commissions paid (442) (410)
Net income received/(losses paid) from trading in trading securities 3 (32)
Net income received from trading in foreign currencies 439 420
Other operating income received 335 178
Administrative and other operating expenses paid (8 226) (7 708)
Income tax paid (966) (825)
Cash flows from operating activities before changes in operating assets and liabilities 5 580 4 926
Changes in operating assets and liabilities
Net increase in mandatory cash balances with the Central Bank of the Russian Federation (158) (867)
Net decrease in trading securities 1 357 4 920
Net (increase)/decrease in due from other banks (4 846) 4 912
Net increase in loans and advances to customers (20 994) (24 039)
Net (increase)/decrease in other financial assets (125) 407
In millions of Russian Roubles 2012 2011
Net increase in other assets (189) (213)
Net increase in due to other banks 105 215
Net increase in customer accounts 20 338 13 773
Net increase in other borrowed funds 2 803 -
Net increase in debt securities in issue 304 819
Net decrease in other financial liabilities (236) (24)
Net increase/(decrease) in other liabilities 4 (110)
Net cash from operating activities 3 943 4 719
Cash flows from investing activities
Acquisition of investment securities available for sale (3 128) (762)
Proceeds from disposal of investment securities available for sale 1 981 1 491
Acquisition of premises and equipment (479) (442)
Proceeds from disposal of premises and equipment 21 15
Proceeds from disposal of non-current assets held for sale 204 38
Proceeds from disposal of investment properties 27 181
Dividend income received 2 3
Net cash (used in)/from investing activities (1 372) 524
In millions of Russian Roubles 2012 2011
Net increase in other assets (189) (213)
Net increase in due to other banks 105 215
Net increase in customer accounts 20 338 13 773
Net increase in other borrowed funds 2 803 -
Net increase in debt securities in issue 304 819
Net decrease in other financial liabilities (236) (24)
Net increase/(decrease) in other liabilities 4 (110)
Net cash from operating activities 3 943 4 719
Cash flows from investing activities
Acquisition of investment securities available for sale (3 128) (762)
Proceeds from disposal of investment securities available for sale 1 981 1 491
Acquisition of premises and equipment (479) (442)
Proceeds from disposal of premises and equipment 21 15
Proceeds from disposal of non-current assets held for sale 204 38
Proceeds from disposal of investment properties 27 181
Dividend income received 2 3
Net cash (used in)/from investing activities (1 372) 524
Cash flows from financing activities
Receipt of subordinated loans 2 000 -
Repayment of subordinated loans - (226)
Repayment of funding from international financial institution (470) -
Dividends paid (14) (14)
Net cash from/(used in) financing activities 1 516 (240)
Effect of exchange rate changes on cash and cash equivalents (957) 601
Net increase in cash and cash equivalents 3 130 5 604
Cash and cash equivalents at the beginning of the year 37 755 32 151
Cash and cash equivalents at the end of the year 40 885 37 755

The consolidated financial statements, from which the summary consolidated financial statements have been derived,are available from Bank Vozrozhdenie upon request.

Note to the Summary Consolidated Financial Statements

Basis for preparation

These summary consolidated financial statements of Bank Vozrozhdenie and its subsidiary (the “Group”) have been prepared by extraction, without any modification, of the consolidated statement of financial position, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows from the consolidated financial statements of the Group prepared in accordance with International Financial Reporting Standards.

The consolidated financial statements, from which the summary consolidated financial statements have been derived, are available from Bank Vozrozhdenie upon request at Luchnikov pereulok, 7/4 bld. 1, 101990, Moscow, Russian Federation.