Bank Sankt-Peterburg OAO : The Supervisory Board of OJSC "Bank "Saint-Petersburg" has adopted a new development strategy for 2014-2017

For the upcoming 4 years OJSC "Bank "Saint-Petersburg" as a leading Russian regional bank is aiming to build an efficient financial institution with a business model that could expand towards new regions of presence.

The Bank's unique competitive advantage is and will continue developing on the basis of the synergy of high quality customer service and closeness to customers combined with global advanced technologies employed in electronic service environment. The Bank is always close to its customers, yet it is a world-class bank in terms of e-services environment.

The strategy is also focused on further improvement of the systemic approach to management processes allowing to decrease manual management practices and increase efficiency.

Financial efficiency: the long-term perspective is stable growth of the Bank's valuation, ROE of 15-17% and cost of risk at 1.3% due to:

• loan portfolio concentration decrease. Rise in the share of standard lending products for retail segment and SMEs in the structure of loan portfolio;
• cost of risk decrease through further improvement of risk management policies and focus on the existing customer base with regular income in retail lending. Given the low growth of the Russian economy, the Bank declares its moderate risk appetite.
• higher interest income through the changes in the loan portfolio structure toward higher yielding segments - retail secured loans (mortgages, car loans) and retail unsecured loans extended to payroll card holders and current Bank's customers, as well as SME lending;
• cost of funding decrease through the rise in the share of demand deposits;
• higher non-interest income through the increase in fee and commission income and trading income;
• increased staff efficiency due to automation and standardisation of sales, service and back-office processes.

Scalable business model: the Bank's growth will be on a par with the market for the upcoming 4 years. However, the Bank must be prepared to a more active growth, both in terms of balance sheet and income quality, as well as the quality of management. In order for the Bank to be better prepared to the potential expansion towards new regions of presence the following priorities are set out in the strategy:

• The Bank in the electronic environment. Transferring the material part of standard banking services into the electronic environment;
• Operating efficiency. Increasing staff efficiency due to standardisation, optimisation and automation of mass processes. Shifting the Bank's labor input towards sales departments;
• Branch network transformation. Adopting the module system of branches organization with the defined standard processes and role model;
• Developing process management competencies for mass sales of standard products.

Mr. Alexander Savelyev, Chairman of the Management Board of OJSC "Bank "Saint-Petersburg" has commented on the adoption of the new strategy: "Our long-term experience in developing the Bank with the focus on one of the leading regions of our country ensures the financial efficiency of a regional bank business model. For the upcoming 4 years our team will be focused on stable profitability and development capacity of this model in other regions."

Mr. Indrek Neivelt, Chairman of the Supervisory Board of OJSC "Bank "Saint-Petersburg": "The St. Petersburg market growth rates have always been higher that those of the market as a whole. Such dynamics will remain in future as well, including through the city population growth at approximately 1% p.a. This will create a positive environment ensuring bank assets growth at the rate of 10 to 15% p.a. which is the target growth rate for our Bank, as well as stable business profitability and dividend payment capacity throughout the scope of strategic planning in 2014-2017."