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THE MOST PROFITABLE BANK IN

Central and Eastern Europe SOVCOMBANK is one of the largest in terms of assets and most profitable banking groups in Russian Federation. Sovcombank identifies market niches with limited competition and focuses on achieving and maintaining strong competitive advantages in these niches. The bank management believes that a disciplined execution of this strategy enables it to maintain high profitability and excess capital through the economic cycles and to take advantage of market opportunities as they occur. Sovcombank achieved RUB 16bn of net profit for the nine months ended 30 September 2018. Return on equity (ROE) in annual terms was 20.5% (ROE of regular business was 18.7%).

The Sovcombank Group has two operating segments: Retail: providing mass market financial services to low- and middle-income retail customers residing primarily in small towns. These services include issuance of mortgage, car and consumer loans, placement of term deposits and insurance products provided by third-party companies. The basis of the Group’s retail model is the “mini-office”, which is a small office of up to 30 square meters staffed by one or two employees and supported by a centralized cutting edge technology platform supporting both customers and employees. Mini-offices represent 90% of the bank’s retail network by number of branches as at 01 January 2019. Sovcombank has 15,681 employees and 2,666 offices located in 1,052 towns of the Russian Federation. Corporate and investment business (“CIB”): extending loans (both in form of bonds and loans) and providing investment banking services to the major Russian corporations and Russian regional governments and municipalities. CIB services also include enabling small and medium businesses, individual entrepreneurs access to public procurement through the Group’s digital platform for electronic procurement auctions and online bank guarantees. In 2018 Sovcombank was included in Cbonds Arranger League Table (all issues) as No.6, Arranger League Table (market issues) as No.5 and Arranger League Table for municipal bonds as No.1. Sovcombank was also awarded «Best Investment Bank - Arranger for Second and Third Tier Issuers», «Best Bond Market Sales» and «Best Investment Bank – Arranger for Subfederal/Municipal Bonds» in Cbonds rankings.

“We started as a retail bank focused on pensioners as the target audience but over the past three years the bank's portfolio has been diversified. As of the recent acquisition of Rosevrobank’s corporate business, we became a full-scale universal bank, which provides a full range of services both to individual and corporate clients. And uniting the business of the banks allows us to implement even more ambitious and large-scale projects.” Dmitry Gusev, CEO and Chairman of Management Board of Sovcombank

“We are pleased to note a significant increase in profits from regular operations, including interest and commission income in the retail banking. In the secured retail lending market, the bank is among the top five largest auto loan banks and the top 20 mortgage banks, while improving the quality of its loan portfolio. This allowed us to maintain high growth rates of the bank's assets and capital.” Sergey Khotimskiy, First Deputy Chairman of Sovcombank.

Since 2014, Sovcombank acquired a number of Russian banks and subsidiaries of international banking groups in Russia. The most notable acquisitions are:

• GE Money Bank Russia, a Russian subsidiary of GE Capital in 2014; • ICICI Bank Eurasia, a subsidiary of ICICI Bank Limited of India, in 2015; • Metcombank, an auto loan specialist Russian bank; • Garanti Bank Moscow, a subsidiary of Turkish Garanti Bankasi A.S. in 2016; • Rosevrobank, Russian bank with expertise primarily in corporate segment, in 2018.

Sovcombank PJSC Head office: 46 Tekstilschikov Avenue City of Kostroma Kostroma Region 156000, Russia www.sovcombank.ru

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