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VTB initial public offering and listing on the Russian and London stock exchanges planned for May 2007

10 April 2007


This document is not a prospectus. Investors should not subscribe
 for any transferable securities referred to in this announcement except on the basis of information in the prospectus.

For Immediate Release 10 April 2007


JSC VTB Bank ("VTB") today confirmed plans to proceed with a Global Offering of ordinary shares ("Shares") and Global Depositary Receipts ("GDRs") in May 2007.

Separately, VTB today published its audited consolidated IFRS financial results for the year ended 31 December 2006, announcing record net profit of US$1.179 billion, an increase of 130.7% over the previous year.

The Global Offering

The Global Offering is expected to comprise of an offer of Shares to international institutional investors in and outside of the Russian Federation and an offer of GDRs to international institutional investors outside of the Russian Federation. The Shares will also be offered to retail investors in the Russian Federation, the retail subscription period for which commenced yesterday, 9 April 2007. VTB intends to list the GDRs on the London Stock Exchange, and to list the Shares on the Russian Trading System (RTS) and the Moscow Interbank Currency Exchange (MICEX).

The Global Offering is subject to receipt of required regulatory approvals, including without limitation (a) the Central Bank of Russia registration of a report on the results of the issue of the Shares and (b) the Russian Federal Financial Market Service approval for the issuance of the GDRs.

The Global Offering will comprise solely of newly issued Shares. VTB is currently 99.9% owned by the Russian Government, whose shareholding will be diluted proportionately by the Global Offering.  VTB will receive all of the net proceeds of the Global Offering, which it intends to use to strengthen its capital base and support the ongoing expansion of its business including the expansion of its Russian retail banking operations in line with its growth strategy.

Citigroup, Deutsche Bank and Goldman Sachs International are the Joint Global Coordinators for the Global Offering and together with Renaissance Capital are the Joint Bookrunners.

Further details of the Global Offering, including a precise timetable, will be announced in due course.

VTB overview

VTB is a leading Russian universal banking group offering a wide range of banking services and products across Russia, certain CIS countries and selected countries in Western Europe, Asia and Africa.  It is the second largest banking group in Russia by assets, total loans and total deposits.

VTB has grown significantly in recent years through organic expansion and acquisitions in Russia, the CIS and Western Europe.  Already an established leader in Russian corporate banking, VTB has recently achieved faster than market growth in the attractive Russian retail banking sector, where it is focused on the growing, higher margin upper mass and affluent retail customer segments. It increased retail loans and deposits from 2004-2006 at CAGRs of 341% and 86% respectively against Russian average market CAGRs over the same period of 88% and 42% respectively (source: CBR).

The Group has achieved its growth while increasing efficiency, as reflected by the Group's RoE of 19.7% for 2006, compared with 8.2% for 2004.

As of December 31, 2006, the Group had $52.403 billion in total assets, $6.992 billion in shareholders' equity and generated $1.745 billion of net interest income and $401 million of fee and commission income for the year ended December 31, 2006, an annual increase of 91.8% and 111.1% respectively.

VTB's strategic goal is to strengthen its market position as a leading provider of banking services to Russian corporate and retail customers, and leverage its market position as the only Russian banking group capable of providing banking services to Russian and CIS clients in Europe, Asia and Africa. To achieve this strategic goal and maximize shareholder value, VTB seeks to further consolidate its position as a leader in the Russian corporate banking sector, develop select investment banking products and services and grow aggressively its market share in the attractive Russian retail banking sector.

Commenting on today's announcement, Andrey Kostin, President and Chairman of the Management Board of VTB, said:

"In just a few years we have built VTB into a universal bank that is competitively positioned for strong growth as the Russian economy continues to out-perform.  We now aim to use our scale to capture an increasing share of the fast-growing retail banking market in Russia and to build on our clear leadership in corporate banking. I am confident that the Global Offer we have announced today will provide the means and the enhanced capital markets profile to help deliver this."

- Ends -


VTB     Tel: +7 (495) 739-77-99 / 8-800-200-77-99 (toll free for Russia)
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Irina Mokeeva

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VTB's business:

The Group is a leading Russian universal banking group offering a wide range of banking services and products across Russia, certain CIS countries and in selected countries in Western Europe, Asia and Africa. At 31 December 2006, the Group had approximately 4.6 million individual accounts and provided banking services to approximately 181,700 legal entities in Russia.  It is focused on providing banking products and services to Russian and CIS clients through its domestic operations and to foreign clients doing business related to, or in, Russia and the CIS through its foreign banking subsidiaries and representative offices.  The Group is the second largest banking group in Russia by assets, total loans and total deposits.  Global Finance magazine recognised VTB in 2006 as the best commercial bank in Russia. As of December 31, 2006, the Group had $52.403 billion in total assets and $6.992 billion in shareholders' equity and generated $1.179 billion in net income for the year ended December 31, 2006. 

VTB was established in 1990 as the Bank for Foreign Trade of Russian Federation.  Since that time, VTB has, through acquisitions and organic expansion, transformed itself into a banking group with a strong presence in Russia, which continues to represent a significant majority of the Group's activities, and an expanding presence in the CIS and elsewhere. VTB has thirteen subsidiary banks in nine countries, including four subsidiary banks in Russia, one subsidiary bank in each of Armenia and Georgia, two subsidiary banks in Ukraine, four subsidiary banks in Western Europe (in Austria, Cyprus, Switzerland and Great Britain) and one subsidiary bank in Africa, as well as two associated banks in Luxembourg and Vietnam. VTB Europe has two subsidiary banks in Germany and France and a branch in Singapore.  In addition, the Group has representative offices in Belarus, China, India and Italy. The Group recently rebranded the majority of its subsidiaries so that "VTB" now forms part of their names and the Group is in the process of integrating its subsidiaries. As of December 31, 2006, the Group operated its banking business in Russia through 524 branches1.

The Russian Federation, acting through the Federal Property Agency, owns 99.9% of VTB's ordinary shares and is the controlling shareholder of the Group.

The Group is a full service commercial banking group with three principal areas of business:

  • Corporate banking, which provides a broad range of commercial banking services and products to large- and medium-sized corporations, financial institutions and governmental agencies, including corporate lending, foreign trade transactions, syndicated loans, deposit and settlement services, and precious metals operations, as well as custody services;
  • Retail banking, which provides financial services to individuals and small-sized corporations, including deposit accounts, lending and certain ancillary services; and
  • Investment banking, which provides underwriting, project financing and advisory services, merger and acquisition financing and advisory services, portfolio management services and also manages the Group's proprietary trading activities.

*  *  *

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of VTB. You can identify forward-looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might" the negative of such terms or other similar expressions. These statements are only predictions and actual events or results may differ materially. VTB does not intend to or undertake any obligation to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in VTB's projections or forward-looking statements, including, among others, general economic conditions, VTB's competitive environment, risks associated with operating in Russia, rapid technological and market change, and other factors specifically related to VTB and its operations.

This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares or other securities of VTB, nor shall any part of it nor the fact of its distribution form part of or be relied on in connection with any contract or investment decision relating thereto, nor does it constitute a recommendation regarding the securities of VTB.

This press release is not for distribution, directly or indirectly, in or into the United States (including its territories and dependencies, any State of the United States and the District of Columbia), Australia, Canada, Japan or Russia. This press release is not an offer for sale of any securities in the United States.  Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933.  VTB has not registered and does not intend to register any portion of any offering of securities in the United States or to conduct a public offering of any securities in the United States.
This announcement is an advertisement and not a prospectus and investors should not subscribe for or purchase any shares or other securities referred to in this announcement except on the basis of information in the prospectus which is intended to be published by VTB in due course in connection with the admission of GDRs representing the VTB shares to the Official List of the U.K. Financial Services Authority. Such prospectus will, following publication, be available in a printed form at the registered office of VTB.

This communication is directed only at (i) persons who are outside the United Kingdom or (ii) persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") and (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2) of the Order (all such persons together being referred to as "relevant persons").  Any investment activity to which this communication relates will only be available to and will only be engaged with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.
Any offer of securities to the public that may be deemed to be made pursuant to this communication in any EEA Member State that has implemented Directive 2003/71/EC (together with any applicable implementing measures in any Member State, the "Prospectus Directive") is only addressed to qualified investors in that Member State within the meaning of the Prospectus Directive.

Information contained in this document is not an offer, or an invitation to make offers, sell, purchase, exchange or transfer any securities in Russia or to or for the benefit of any Russian person or any person in Russia, and does not constitute an advertisement of any securities in Russia. The GDRs have not been and will not be registered in Russia and are not intended for "placement" or "public circulation" in Russia.

1 Sub-branches and outlets are also included in the definition of "branch".

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