OREANDA-NEWS. December 31, 2012 in accordance with the International Financial Reporting Standards (IFRS).

Key Performance Indicators:

Assets of the Financial Corporation grew by 36% to RUB 326.9 billion at YE 2012

Loans to customers (before provisions for impairment) amounted to RUB 166.8 billion, having increased by 21% from YE 2011

Total securities portfolio (including trading and investment securities available for sale) increased by 35% to RUB 76.0 billion

Customer deposits and current accounts were up by 21% to RUB 150.7 billion

Total equity increased by 73% to RUB 27.9 billion from YE 2011

In 2012, the Financial Corporation earned a net profit of RUB 1.0 billion.

Overview of the Consolidated Statement of Financial Position

Assets

Total assets reached RUB 326.9 billion by YE 2012, a 36% increase compared to YE 2011. The main growth drivers were business expansion of FC Otkritie Group companies and M&A deals, in particular, the purchase of 19.9% stake in NOMOS-BANK.

Liquid assets (cash and cash equivalents and trading securities) accounted for 23% of total assets.

The total securities portfolio, which includes trading securities and investment securities available for sale, amounted to RUB 76.0 billion, or 23% of the assets. Compared to YE 2011, the securities portfolio grew by 35%, or RUB 19.8 billion, driven mainly by the acquisition by Otkritie FC of 19.9% stake in NOMOS-BANK*. This investment was included in the portfolio of investment securities available for sale at fair value of RUB 15.1 billion as at YE 2012.

Overall, the share of debt securities in the securities portfolio, including government and corporate bonds and Eurobonds, was 73%, of which 53% were issued by issuers with an investment-grade rating.

Loans to Customers

Loans to customers continued to account for the bulk of the assets - 48%. The loan portfolio (before provisions for impairment) grew by 21% to RUB 166.8 billion, mainly driven by the increased lending to individuals and small and medium-sized businesses (SMEs) by Otkritie Bank.

Lending to retail customers and SMEs increased by 25% to RUB 52.2 billion. In 2012, Otkritie Bank's strategy included a shift of focus towards higher-margin products - primarily consumer loans and credit card loans. At YE 2012, these segments showed impressive growth: consumer loans increased by 56% and credit card loans - by 86% (their share in the portfolio, however, remains low at 2%).

Loans to corporate clients, including private companies, municipal and regional authorities, as well as institutional clients of Otkritie FC, amounted to RUB 90.3 billion. Their share in the total loan portfolio, compared to YE 2011, decreased to 54% from 63% following the above-mentioned strategy of prioritizing higher-margin segments.

Liabilities and Equity

Amounts due to customers traditionally account for the largest share of the Corporation's liabilities. As at 31 December 2012, their share stood at 50%. Customer deposits increased by 21% to RUB 150.7 billion compared to YE 2011. Amounts due to legal entities - state and state-owned organisations and private companies - accounted for 52% of the client funding, and deposits and current accounts of private companies showed the most marked increase of 68%. Funding by individuals decreased by 2% from the previous year and amounted to RUB 73.0 billion at YE 2012.

The brokerage business development resulted in the increase of the share of balances on brokerage accounts (accounts payable to customers) - up to 16% of liabilities from 13% at YE 2011. In absolute terms, the accounts were RUB 46.4 billion.

The share of debt securities issued in the liabilities remained virtually unchanged from YE 2011 at 22%, or RUB 67.0 billion. Their structure changed, however, with bond issues replacing promissory notes. The latter's share in debt securities issued fell to 37% from 79% at YE 2011.

Total equity of Otkritie FC substantially increased - by 73% to RUB 27.9 billion, mainly due to the additional share issue of RUB 9.0 billion in August 2012. Its proceeds were intended to finance the purchase of 19.9% stake in NOMOS-BANK.

After the reporting date, in April 2013, Otkritie FC placed another additional share issue in the amount of RUB 30 billion. The proceeds from this additional share issue will be applied towards consolidation of a controlling stake in NOMOS-BANK in H2:2013.

Overview of the Consolidated Income Statement

The Corporation's operating income amounted to RUB 23.3 billion, up 24% from 2011.

In its structure, net interest income increased by 25% to RUB 10.1 billion. The growth was largely achieved thanks to increased income from customer lending following loan portfolio growth and the focus on higher-margin products. Non-interest income was up by 24% to RUB 13.3 billion.

In the structure of the fee and commission income, brokerage fees stood for the largest share (52%), followed by fees and commissions from commercial banking operations - cash and settlement operations, guarantees and letters of credit (42%). In the expense structure, expenses related to securities operations stood for the largest share at 79%. Net fee & commission income from commercial banking operations increased due to the Corporation's strategy to develop its transactional business model. Income from brokerage services largely remained unchanged, while the services-related expenses increased in proportion to the growth of customer turnover and were primarily due to the fee revision for large customers, as well as expansion into new trading floors. As a result, net fee & commission income decreased by 9% to RUB 3.5 billion.

Net gains from investment securities available for sale amounted to RUB 3.1 billion. The result was largely due to sales of investment securities, including the sale of shares in the Moscow Stock Exchange. Net gains from derivative instruments increased to RUB 4.5 billion (from RUB 2.3 billion in 2011) through an efficient derivative desk strategy and the growth of customers' interest in derivative transactions.

Staff costs and administrative expenses increased by 11% to RUB 14.4 billion and stayed within the planned budget. Payroll and other social security expenses stood for the largest share at 63%, or RUB 9.0 billion, and grew at an equal rate of 11%. The number of employees in the Otkritie FC group of companies also increased - by 10% to 7,970 people following business expansion particularly in the retail banking, brokerage and insurance businesses.

Net provision charge for loan impairment rose 37% to RUB 4.5 billion from RUB 3.3 billion in 2011 following loan portfolio growth.

Net profit of the Financial Corporation for 2012 amounted to RUB 1.0 billion.