Bank cards — Annual report 2010

Annual Report 2010
To the bank’s web-site по-русски

- Portrait of the Bank
- Letter from the Chairman of the Management Board
- Strategy
- Main Events of 2010
- The Russian Economy and Banking Sector
- Business Overview
  - Analysis of financial results
  - Corporate business
  - Retail business
  - Bank cards
  - Operations on financial markets
  - Banking technologies
- Shareholder Structure
- Corporate Governance
- Risk Management
- Social Responsibility
- Financial Statements
- Branches in Russia
- Offices of Bank Vozrozhdenie
- Address and Contacts

# Bank cards

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The bank-cards market underwent structural changes in 2010, as the position of state-owned banks strengthened. In this context, Bank Vozrozhdenie’s priority goals were to retain its client base and to implement a strategy of active cross-selling of banking products and incentivizing clients to make more active use of cards.

During the reporting period, the Bank focused its business-development efforts in the bank-cards business on increasing the number of customers on payroll projects. The use of payroll projects to attract clients and subsequently create cross-selling opportunities across all of the Bank’s products and service lines has proven its value as a strategy. In mid-2010, the 10,000 mark was reached, and by the end of the year, the number of payroll projects totaled some 10,600.

The Bank issued almost 250,000 new debit cards, increasing the overall number of cards in circulation to 1.392 million and strengthening its position in this respect 1 . The volume of operations using the Bank’s cards grew by 28% to RUB199 billion.

Retention of the client base laid the foundations for the Bank to increase cross-selling of banking products during the year, which was a defining factor in revenue growth amid increasing competition among banks and a sector-wide narrowing of bank margins.

The main area for cross-selling in the bank-cards segment was offering remote services accessible using Bank Vozrozhdenie’s cards. In total, the number of clients using the “Your Account 24/7” service (internet and text-message information) increased by a factor of 2.6, exceeding 475,000 by the end of 2010, while credit-card issuance volumes reached 37,000. The number of clients depositing funds into the ATM deposit account rose during the year, and the average account size grew to RUB136,000. This growth was largely driven by a targeted approach to clients.

A priority goal for Bank Vozrozhdenie is to expand the range of services available through cards. The Bank’s ATMs can be used to pay cell-phone and communal-services bills, as well as to pay off loans, make transfers and carry out other operations. In 2010, the list of organizations that received payments through Bank Vozrozhdenie’s ATMs included the Moscow Unified Information and Settlements Center, Mosoblgaz, internet services provider Domolink and cellular operator Just For Communication.

In response to greater demand for non-cash payment for goods and point-of-sale services, the Bank sought to expand its presence among trading and services companies in 2010. Agreements for accepting and servicing bank cards were signed with 500 new trade outlets, expanding the Bank’s total sales-point network by 25% to 2,455. During the year, operations using Bank Vozrozhdenie cards at trade outlets climbed by 46.8% to more than RUB5.8 billion in absolute terms.

Thanks to the measures taken in 2010, fees from bank-card operations increased to 25% of the Bank’s total non-interest income.

In 2010, Bank Vozrozhdenie continued to expand its ATM network. Here the Bank adopts an approach of following its clients, rather than setting fixed targets to cover as large an area as possible. This approach maximizes the efficiency of the ATM network; at the end of 2010, each of the Bank’s ATMs had served 1,800 people. The total number of ATMs, including cash-in ATMs, reached 730 at the end of the year, including 431 in Moscow Region.

In 2011, the Bank’s main priorities in the bank-cards segment will continue to be further increasing client numbers and actively cross-selling credit cards and self-service operations through remote channels.

#### Number of payroll projects

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#### Number of ATMs

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## IR contacts

Tel.: +7 (495) 620 9071
Fax: +7 (495) 620 1953
Web-site: http://www.vbank.ru
Email: investor@voz.ru

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Related sections:

- Financial Statements
- Portrait of the Bank
- Risk management

See also:

- News for Investors
- Presentations for Investors