CORPORATE-INVESTMENT BUSINESS CORPORATE-INVESTMENT BUSINESS

The Corporate-Investment Business (CIB) global business line specialises in servicing major corporate clients through sales of lending, transaction and investment products as well as leasing and factoring services in Russia, the CIS countries, Europe, Asia and Africa.

To maximise the impact of its CIB customer service, VTB created a dedicated client coverage unit and product units that are responsible for maintaining and developing a line of cutting-edge banking products.

The customer service model within sector-focused divisions and departments uses sector-specific expertise and builds products and solutions tailored to the needs of particular clients.

The product units are also structured for sector specialisation and to meet the requirements of major corporate clients. This allows the Group to enhance its approach to credit analysis and improve the quality of its corporate loan portfolio.

Transaction banking comprises two main product lines: the documentary business, which includes a variety of guarantees and letters of credit; and liquidity management products, including account management products, financing products, as well as acquiring services, remote banking services, and settlement and cash services.

The Group’s investment banking business offers a full range of investment banking products, including trading operations, organising debt and equity issuance, consulting services on M&A transactions, private equity, asset management, conversion operations as well as hedging of FX and interest rate risks.

In 2020, the Bank achieved its targets in terms of key financial indicators in the Corporate-Investment Business and was able to maintain its leading positions thanks to its flexible business model and its willingness to use innovative approaches while making decisions based on market conditions.

The Bank focused in particular on improving the efficiency of internal processes, digitalising its product offer and continued cost optimisation.

Share of VTB Group total, %
Maintaining leading market positions in 2020

Leader in Investment banking products


No.1
in ECM, DCM, M&A
15%
market share in bond trading
No.1
with 45% share in the Russian equity market
30%
market share in derivatives market

Lending products


154
housing projects worth a total of RUB 354 billion
500
RUB billion: trade-export financing portfolio
No.1
by the factoring portfolio volume with a 30% market share
TOP-3
by size of the leasing portfolio

Wealth Investment Management

(Individuals+Legal entities)

21%
market share in the retail segment
Assets under management, RUB trillion

Transaction products

15%
market share in documentary services (No. 2 in Russia)
>110
groups of clients with comprehensive transaction solutions
  • Considerably optimised process of account opening
  • Remote execution of bank guarantees
95% 95
coverage of major clients by revenue
23% 23
market share in payrolls segment
64% 64
of clients actively use transaction products

Customer experience quality management

In 2020, VTB carried out its first-ever comprehensive assessment of CIB customer loyalty and satisfaction. According to the survey, the degree of loyalty among customers who indicated that VTB was their main bank was 99 points out of 150, which is equivalent to the top 10% of European corporate banks.

  • during the loyalty assessment, customers of VTB’s Corporate-Investment Business provided detailed feedback on the quality of the customer experience in the context of key processes (payment processing, lending, payroll projects, etc.);
  • a comprehensive system for assessing the quality of the customer experience when using the VTB Business Online remote banking service 2.0 is in place and is constantly being developed;
  • based on a comprehensive analysis of customer feedback and internal data, action plans are being developed to further improve the quality of customer experience.

Lending to CIB clients

VTB offers a wide range of lending products for corporate clients, providing financing for various terms in all major global currencies. The Bank also offers a variety of credit lines with drawdown limits, credit limits or a combination of these limits.

In addition to traditional financing, and in an effort to meet market needs, VTB also offers major corporate clients complex, personalised credit products, including structured repo, investment and project financing, debt and equity financing services, consulting services on structuring investment projects, trade finance services and direct financing from institutional investors and banks. VTB’s clients have access to structured financing products that make it possible to reduce interest rates considerably by allowing the Bank to select the repayment currency. Leasing and factoring products are provided to the Group’s customers through VTB Leasing and VTB Factoring.

In 2020, the Russian economy found itself in a perfect storm; overcoming it required a concerted effort on the part of all economic actors, institutions and government agencies. The Bank played an active role in this process, participating in the preparation of legislative initiatives aimed at supporting the economy as well as providing financing within the framework of state-run business support programmes. Amid increased demand for credit, the Group expanded its portfolio by RUB 1.2 trillion, which ensured above market-average growth rates. This was driven by the Bank’s timely response to restrictions and the restructuring of business processes, which enabled the Bank to avoid work disruptions and losses in operational efficiency. In addition, in an effort to support customers, to prevent a qualitative loss in terms of its loan portfolio and to maintain returns on equity capital, the Bank restructured loans to large businesses worth a total of RUB 1.3 trillion.

In light of the importance of the pharmaceutical industry in responding to the pandemic, the Bank and its partners (Sistema and the Russian Direct Investment Fund) participated in the creation of the pharmaceutical holding Binnopharm Group, which unites four production sites: Alium, Binnopharm (where production of the Sputnik V vaccine was launched in 2020), Sintez (Kurgan) and Biocom (Stavropol).

In the context of the increasing importance of ESG factors for the Bank’s operations and for the market as a whole, the Bank is playing an active role in the development of Russia’s green agenda and is also working hard to implement sustainability principles throughout its operations. In the corporate finance segment, the Bank is developing a pilot green lending programme, through which it provides its customers with financing for the implementation of environmental initiatives and initiatives to improve the sustainability performance of borrowers. In the project financing segment, the Bank is one of the leading lenders in financing projects for the development of renewable energy sources, with a loan portfolio of RUB 34 billion.

In project financing for industry and infrastructure, the Bank continued to finance a number of large projects despite COVID-19 restrictions. VaninoTransUgol’s state-of-the-art transhipment facility in Vanino was put into operation; financing of the construction of Gazprom’s Amur gas processing plant continued; financing got under way for the largest project in the Russian energy sector, the modernisation of Tatenergo’s Zainsk regional power station; and the Jerui gold mine in Kyrgyzstan was prepared for commissioning.

Despite the fact that certain segments of the construction and real estate industry experienced temporary difficulties due to the spread of COVID-19, the decrease in the key rate and the vigorous growth in mortgage lending contributed to the expansion of the Bank’s operations in the industry:

  • the Bank continued to expand housing finance, partnering with key developers to scale up its housing finance model with escrow coverage. By the end of 2020, the Bank had financed 154 housing projects worth more than RUB 354 billion. During the year, VTB clients opened more than 47 thousand escrow accounts, with balances in excess of RUB 240 billion;
  • lending for commercial real estate construction projects continued, and a number of properties were delivered in 2020 despite the pandemic;
  • the development of a promising new product line based on collective investments is being explored.

VTB Bank’s trade and export finance business adapted to new challenges by continuing to support clients using both classic products such as confirmation and discounting of letters of credit, issuing guarantees and providing trade financing and long-term export financing.

In 2020, VTB Group completed transactions in more than 45 countries around the world with the participation of about 100 partner banks. The volume of the Bank’s trade and export finance business portfolio exceeded RUB 500 billion.

VTB Group is a key financial partner for clients working with counterparties in the CIS, and the Bank continues to expand its business in the Middle East, Africa and Asia. Clients from all major industries make good use of the Bank’s trade and export finance products. In 2020, the most active companies were in the oil and gas, mining and metals, chemicals, telecommunications and agribusiness sectors.

In order to improve the effectiveness and the digitalisation of credit products in 2020, the Bank launched a platform for corporate lending, Digital Credit, which increases the transparency of the process and reduces the time needed for decision-making on corporate loans. The system enables Bank divisions to collaborate in a single digital space, making it possible to progress from the application stage to approval of the credit limit and agreement on the loan terms with the client practically without the use of paper. At this stage, the platform has limitations in terms of the types of transactions it can work with. The Bank will continue to develop the platform in order to further reduce costs associated with the lending process, shorten the time period for issuance and increase satisfaction with the process among the Bank’s customers and employees.

The pandemic and remote working arrangements dictated the need to transform internal processes. For example, the Bank began permitting the remote signing of guarantee transactions in 2020, and it plans to extend this service to credit transactions in 2021.

Deposits and accounts from CIB clients

Attracting deposits and accounts from CIB clients is an important part of VTB’s business. The Bank is constantly taking steps to improve customer service and streamline business processes to further develop deposit products and reduce operating expenses.

In 2020, the structure of contracts was revised for the investment of funds in the form of deposits in minimum-balance accounts, which made it easier to invest customer deposits. VTB’s flexible policy in setting rates and its individual approach to customers made it possible to respond in a timely manner to market changes and requests from companies.

CIB transaction banking

Products for managing payments and liquidity

VTB offers companies a wide range of cash management and payment services as well as liquidity management services, which the Bank is constantly developing. In 2020, VTB Bank introduced a number of new services aimed at improving the quality of customer service and increasing the convenience, speed and functionality of the payment services available:

  • the process for large business clients to open a first and subsequent accounts was considerably streamlined. Clients can now open an account in Russian roubles and in 18 foreign currencies by completing an online form through their personal account. The account number is reserved instantly, and the account is opened once the required documents are submitted to the Bank. VTB made it possible for existing clients who already have accounts with the Bank and a valid electronic signature to open a second and subsequent accounts for the same list of currencies online. Accounts are opened completely remotely: all the necessary documents can be filled out and submitted in electronic form by signing them with an electronic signature. At the same time, for the convenience of users, the service gathers some of the necessary information automatically with the help of internal and external sources; companies for which there are restrictions that prevent the opening of a subsequent account can reserve an account online;
  • together with a Russian airline and the largest supplier of aviation fuel, an online payment service was introduced on a blockchain platform. The new payment system, based on smart contracts, will enable airlines to pay for fuel instantly at the time of refuelling by making a completely secure, real-time financial transaction through a service that is available 24/7. At the same time, the parties to electronic clearing payments are no longer required to make an advance payment and apply for a bank guarantee; this innovation enables them to reduce their costs while also speeding up the completion of the transaction;
  • one of the critical tasks in ensuring uninterrupted banking services during the pandemic was enabling the remote signing of contracts between the Bank and customers. For example, VTB Bank and a leading Russian telecommunications company signed an agreement to open a bank account using, for the first time, an electronic document management system and an enhanced qualified electronic signature. To enable the electronic signing of contracts, the Bank introduced corresponding services using the Diadoc system and the Bank’s BS Client 3.17 remote banking system, and it also developed its own VTB Business Online e-workflow system, which makes it possible to conclude contracts involving up to four parties using an enhanced qualified electronic signature. The solution provides a simple and fast tool for the exchange of legally binding electronic documents between the Bank and its clients;
  • the Bank made it possible for scrap metal companies that are clients to make real-time cash payments to the cards of individuals. The new service makes it possible to transfer funds to the cards of any Russian bank securely and within a few minutes. The entire operation – from the moment the necessary documents are submitted to the crediting of funds to an individual’s card – takes no more than three minutes. The solution makes it possible to comply with all legal requirements related to the acceptance of scrap metal, provides scrap metal companies with quick and safe access to primary documents for each transaction and makes it possible to generate the necessary reports with various breakdowns;
  • in 2020, VTB Bank continued expanding its service for accepting payments from individuals to legal entities using the Faster Payments System (FPS). As part of the service, the Bank enabled payments through the FPS using a dynamic QR code. The use of the new payment technology enables individual customers to pay for purchases without the use of bank cards, and for merchants to reduce their acquiring costs and receive funds in their account instantly. During the year, a number of very large companies were connected to the service, including in telecommunications, transport, retail and the food service industry;
  • in the interests of servicing one of Russia’s largest rail carriers, a project was launched to make it possible to accept cash through specialised devices installed on behalf of the client and to credit the amount of funds deposited to the client’s current account in real time. This solution increases the efficiency of the client’s business processes related to the processing and collection of cash revenue, including by enabling the client to avoid errors while processing cash payments, to reduce paperwork and to become independent of the collection schedule.

Documentary business

VTB Group remained one of the leaders in the documentary business (ranked second) with a market share of 15%Market share was calculated using VTB Bank’s own methodology. in terms of the volume of guarantees and letters of credit issued in 2020.

Considerable attention has traditionally been paid to the development of technologies and processes to ensure the implementation of documentary products and services for customers using the most advanced technology platform available. In 2020, VTB Bank continued to improve its remote service system for documentary operations and played an active role in joint work the FinTech Association on digital bank guarantees using the Masterchain blockchain platform.

In December 2020, VTB Bank became the first bank in Russia to issue a digital bank guarantee for a commercial operation using the Russian blockchain platform Masterchain. The guarantee for the fulfilment of payment obligations was issued in favour of one of Russia’s leading providers of digital, media and telecommunication services.

In 2020, VTB Bank continued to cooperate with its clients on a wide range of documentary products, including documentary letters of credit with deferred payment on uncovered RUB letters of credit offered and executed by the Bank by means of early payment at the request of the beneficiary. The service allows sellers, pursuant to delivery contracts with deferred payment, to receive money for delivered goods before the date of deferred payment according to the letter of credit (within the risk limit that the Bank has accepted for the buyer).

VTB Group continues to be an active participant in industry and professional associations in the documentary business, including ICC Russia, and it makes significant contributions of expertise to improving mechanisms that have a regulatory impact on the market and the development of its infrastructure.

Comprehensive transactional solutions for the largest companies

During the reporting period, VTB was actively involved in large-scale projects to centralise the management of cash flows, liquidity and financial risks at leading Russian corporations.

In 2020, VTB implemented comprehensive transactional solutions for more than 110 groups of companies that include more than 3 thousand legal entities.

In 2020, VTB Bank retained its position as the main settlement bank for some of the largest companies in Russia: Russian Railways, Russian Post, Transneft, Rostelecom, Moscow Metro, the Air Traffic Management State Corporation, Rosneft and Rosatom.

Cutting-edge solutions for transport and for cities

The Banker magazine recognised the Bank’s solutions as the best for the Moscow transport sector in 2020:

  • the Bank introduced a single Transport Processing system for all carriers: apart from one-time trips, passengers now have access to seamless transfers between different modes of transport in the Moscow metropolitan area and integrated tariffs (uniform tariffs when making a trip using various carriers); to determine tariffs, the system processes all operations using bank cards through payment devices over a given period of time and determines the routes taken by passengers using their bank card;
  • the Bank has introduced a single personal account for passengers, the main functionality of which is to inform passengers about the trips they have made using transport carriers and to enable payment for those trips;
  • the Bank introduced an innovative technology that enables the downloading of tickets onto a passenger’s mobile device in the form of bank tokens for the purpose of subsequent payment for travel on municipal public transport equipped with a contactless bank reader connected to the carrier’s fare control system. At present, this technology is available exclusively in the Moscow Metro as part of a pilot for a limited number of passengers using smartphones with the Google Pay or Samsung Pay applications;
  • the Bank and the Moscow Metro have been successfully piloting a fare payment system using bank cards for biometric passenger identification. The Bank’s solution was recognised as the best available and was selected for use in all Moscow Metro vestibules in 2021.

Custody services

VTB Group Custody ranks second among the largest custody services in Russia and offers a full range of custody services for all types of securities issued by Russian and foreign issuers. The majority of companies operating in the Russian market hold depository accounts with VTB Bank. The account service on Russian and foreign securities through Euroclear Bank’s accounts is constantly in high demand among domestic and foreign market players. Euroclear Bank is one of the largest international settlement depositories, for which VTB Bank’s depository acts as an agent for depository operations in Russia.

The Bank’s depository acts as a Russian sub-custodian for the BNY and Deutsche Bank Trust Company Americas, holding the underlying assets for issuing depository receipts for shares in a number of major Russian issuers.

CIB investment banking

VTB Group is Russia’s leader in investment banking services and one of the key players providing access to global capital markets for Russian corporate clients. In 2020, the Group retained its leading position in the investment banking services market in Russia.

Global markets

VTB Group offers a full range of services for fixed income, equity and FX trading, as well as interest rate and global commodities market operations. The Group also provides currency and interest rate risk management services, including hedging solutions, as well as structured finance, structured deposits and notes, structured credit and hybrid products.

The Group’s clients are able to access equity capital markets in Russia, Europe and the United States. VTB Capital is a member of Moscow Exchange (MOEX) and the London Stock Exchange, and it also has access to a number of foreign markets through its extensive network of local brokers. In 2020, VTB Capital became a member of the Astana International Exchange (AIX).

In 2020, VTB Capital continued to hold a leading position in the Russian stock market. VTB Group was one of the three largest stock market operators and also bolstered its market share in terms of trading with international clients. In 2020, a significant part of MOEX trading was transferred to the Group’s own algorithms based on the algorithmic trading platform created at VTB Capital, which enhanced the efficiency of exchange trading, increased market share and improved the quality of customer service. VTB Group also strengthened its position in terms of trading volume in the Moscow Exchange repo market and was one of the three largest operators in the repo exchange market.

VTB Group is a major player in currency markets and is a well-known brand not only in the CIS but also abroad, and is licensed to conduct currency trading in countries such as Germany, the United Kingdom, India, China and others. VTB Bank’s connection to China’s domestic payments systems enabled it to become the first Russian bank to be a full-fledged direct participant in yuan-denominated payments.

VTB Bank is strengthening its position in the Russian FX market, constantly expanding its range of traded currencies and improving its toolkit for executing customer requests. In order to simplify the completion and execution of transactions and to reduce the processing time involved, the Bank continues to develop electronic trading platforms, which have quickly become popular with clients.

In addition to performing conversions, VTB Group is also one of the leaders in the derivatives market, with an estimated market share of 30% in this segment.

VTB Group is one of the leading traders of Russian government and corporate bonds (on Moscow Exchange and in over-the-counter markets, denominated both in roubles and in foreign currencies). The Group conducts trading operations with a wide range of Russian and foreign clients, providing them with liquidity in the secondary market in a wide range of debt securities, with an estimated market share of about 15%. The Group also expanded its presence in corporate debt markets in 2020 for borrowers from Europe and the CIS.

Сommodities business

VTB Group’s commodities business – a strategic area of development for VTB Group – has established a well-developed infrastructure to support the complete sales cycle from national producers to end consumers all over the world. VTB was able to create, in a very short time, a national universal trader in Russian and international markets and a full-fledged product line for business development.

Commodities business highlights in 2020:
  • No. 1 in Russia for gold purchases
  • Successful launch of Russia’s first ETF fund secured with physical gold held in VTB’s vault
  • No. 1 in the CIS countries in terms of operations with physical aluminium
  • Trading company launched in mainland China to develop business with Chinese clients
  • Business for the sale of tangible goods developed in Russia
  • Presence in the agriculture market developed in cooperation with a major market participant, Demetra-Holding

In 2020, VTB Capital retained its leading position in terms of the volume and number of M&A transactions in Russia and the CIS countries, according to a number of independent international agencies, such as Refinitiv, Dealogic and Mergermarket.

VTB’s commodities business is currently represented by a top international team with expertise in all major areas, including oil and petroleum products, coal, precious and industrial metals, agricultural products and fertilisers.

In 2020, VTB Group bolstered its presence in commodities markets, including international markets, enjoying record results for the year. Its line of basic assets includes precious and non-ferrous metals (gold, aluminium, copper and tin), oil, petroleum products and petrochemical products, coking and power-generating coal, and agricultural products (soybeans, wheat, barley and sunflower seeds). VTB Bank continues to offer commodity risk hedging strategies to its clients. The Group’s trading companies – VTB Capital Trading (Zug, Switzerland) and VTB Capital Trading (Moscow) – continue to expand their range of services. Structured finance transactions (stocks and cargo in transit), advances on future deliveries (prepayment), and deliveries with delayed payments were concluded during the reporting period. The client base was expanded in the CIS countries and other international locations, and a trading company was created in mainland China to increase turnover and interact with Chinese customers.

Investment banking

VTB Group offers a full range of investment banking products, including advising on M&A transactions and organising the issuance of debt and equity securities. The business is focused on serving customers in key sectors of the economy in both Russia and international markets.

Corporate financing

In 2020, VTB Capital retained its leading position in terms of the volume and number of M&A transactions in Russia and the CIS countries, according to a number of independent international agencies, such as Refinitiv, Dealogic and Mergermarket.

VTB Capital successfully completed 14 transactions worth a total of USD 7.9 billion, making it the leader in Russia and the CIS with a 13% market shareAccording to Dealogic data for 2020..

VTB Capital also provided advisory services both in Russia and in international M&A markets in Europe, Asia and Africa. Deals completed in Russia included the sale of 100% minus one share of Vagonnaya Remontnaya Kompaniya-2, a rail carriage repair company owned by Russian Railways, for the amount of RUB 10.7 billion. VTB Capital acted as a financial advisor to Russian Railways. Among VTB Capital’s largest M&A deals was the acquisition of Highland Gold, a gold mining company, by Fortiana Holdings, worth GBP 1.1 billion. VTB Capital acted as financial advisor to Fortiana.

VTB Capital once again received several prestigious awards for its advisory services, including:
The Best Financial M&A Advisor in Russia in 2020, according to Mergermarket


Global Finance
The Best Investment Bank in Emerging Markets in 2018–2020, according to Global Finance


EMEA Finance
The Best Investment Bank in Russia 2010–2020, according to EMEA Finance Europe Banking

Equity capital markets

As of the end of 2020, VTB Capital was recognised as the leader in the equity capital markets of Russia, the CIS and Eastern Europe by the international agencies Refinitiv and Bloomberg. VTB Capital ranked first in Russia and Eastern Europe in terms of transaction volume in 2020, organising eight deals worth a total of USD 1.7 billionAccording to Refinitiv..

The most notable transactions included Sovcomflot’s initial public offering (IPO) worth USD 500 million, in which VTB Capital acted as the global coordinator and bookrunner, as well as Aeroflot’s share capital increase of RUB 80 billion, in which VTB Capital acted as the sole global coordinator and bookrunner. Other notable deals in which VTB Capital acted as a bookrunner were Ozon’s IPO worth USD 1.14 billion and Yandex’s placement of convertible bonds worth USD 1.25 billion.

Debt capital markets

VTB Capital retained its leading position in the debt capital markets of Russia, the CIS and Eastern Europe in 2020, according to Refinitiv, Dealogic and Bloomberg. VTB Capital confirmed its leading position among bookrunners in Russia and the CIS, having organised more than 100 debt placements worth a total of more than USD 9.5 billion and with a market share of 23% in Russia and 18% in the CISAccording to Dealogic data for 2020..

The most notable deals completed in 2020 included the organisation of a sovereign issue of Eurobonds by the Republic of Uzbekistan in two tranches in the amount of USD 555 million and UZS 2 trillion, the placement of perpetual green bonds for Russian Railways in the amount of RUB 100 billion with a floating coupon rate, and the organisation of an issue of Eurobonds for Gazprom in the amount of USD 1 billion.

Investment management – VTB Capital Investments

VTB Capital Investments, VTB Group’s unified platform, is one of the largest and most successful platforms in the Russian market for the provision of comprehensive investment services for a wide range of investors.

With its effective business strategy, excellent team of professionals, focus on the development of digital services, in-depth expertise and optimal risk management system, VTB Capital Investments is able to occupy a leading position in the investment services market.

VTB Capital investments

provides a full range of investment services for a broad array of investors and consolidates the following companies:

VTB Capital Investment Management: the largest asset management company for Russian and international investors

VTB Bank’s Brokerage Department: brokerage services for retail customers and opportunities to trade in both Russian and foreign markets

VTB Capital Broker: brokerage services for institutional investors using state-of-the-art technologies for remote servicing and margin lending

VTB Forex: a Forex dealer for retail clients

Best in 2020

Brokerage company of the year, according to Stock Market Elite by National Association of Stock Market Participants

Russia’s first responsible investment funds (ESG)

The largest fund in Russia 2020 VTB – Treasury Fund

Best Mobile App of a brokerage company (Investfund Awards)

With its effective business strategy, excellent team of professionals, focus on the development of digital services, in-depth expertise and optimal risk management system, VTB Capital Investments is able to occupy a leading position in the investment services market.

VTB Capital Investments’ assets under management increased by 74% in 2020 to over RUB 3.4 trillion. The retail client segment saw the most growth, with assets increasing by 88% to RUB 1.8 trillion. Funds invested by legal entities increased by 60% to RUB 1.6 trillion. VTB Capital Investments’ client base increased 1.6x to 1.2 million, and its fee and commission income for 2020 nearly doubled year-on-year to RUB 21.8 billion.

Total trading volume for 2020 exceeded RUB 23 trillion, a threefold increase from 2019.

VTB Capital Investments remains focused on the development of its digital investment platform, VTB My Investments. The number of users of the VTB My Investments mobile application increased fourfold in 2020 to over 1 million; the average number of daily active users (DAUs) increased fivefold to 260 thousand.

To improve functionality and expand the range of investment instruments and trading services available, clients were given the opportunity to participate in IPOs and secondary public offerings (SPOs) on Moscow Exchange. Sovcomflot’s IPO was the first to be made available via a mobile investment application in Russia. Customers were also given the opportunity to participate in over-the-counter IPOs in 2020. During the reporting period, customers were able to use artificial intelligence to create portfolios of securities through a roboadvisor, a new service called Investment Targets was added, a functionality was added that connects various investment consulting services to different sub-accounts with separate fees, and a support function was introduced to reflect funds credited to user accounts through the new Investments bonus option. In addition to the above-mentioned new features, the option to top up a brokerage account was made available 24/7 in 2020.

Key metrics dynamics
+60%
growth of legal entities assets under management
+88%
growth of retail clients assets under management

Advanced technologies


Brokerage services for individuals
  • 97% of brokerage accounts opened on-line
  • VTB My Investments:
    • Robo-advisory
    • Artificial intelligence
    • Participation in IPOs
    • Access to international markets
    • Portfolio analytics
  • Partnership projects with Yandex.Investments, Magnit, RBC, Post Bank, joint marketplace with Moscow Exchange
Asset Management
  • Widest range of funds – 57 funds
  • Widest range of exchange-traded funds– 9 funds with unique investment strategies
  • The only Russian exchange-traded fund investing in physical gold and backed by gold bars

In June 2020, VTB Capital Investments launched a partner programme for customers of the Magnit chain: participants were offered special conditions when installing the VTB My Investments mobile application and opening (remotely) a brokerage account with VTB Bank. The promotional terms are described in detail in the Partners section on Magnit’s website.

As of the end of 2020, VTB Capital Investments was managing RUB 160 billion in mutual funds, an increase of 59% year-on-year. Funds invested in open-end mutual funds increased by 51% to RUB 150 billion; funds invested in exchange-traded funds increased 6.3x to RUB 10 billion. The number of customers who invested in VTB mutual funds increased by 45% to 92.6 thousand.

VTB MY INVESTMENTS WON AN INVESTFUNDS AWARD IN THE CATEGORY BEST BROKERAGE COMPANY MOBILE APPLICATION.

As of today, VTB’s offer includes 57 funds, including nine exchange-traded funds and 23 open-end funds. VTB Capital Investments offers the widest range of exchange-traded funds available in the Russian market.

VTB Capital Investments’ Treasury Fund was the largest mutual fund in Russia at the end of 2020. The amount of funds invested in the Treasury Fund increased by 75% by the end of the reporting period to RUB 70.8 billion.

In 2020, VTB Capital Investments launched six new strategies in the form of open-end funds, including unique funds for the Russian market (two money market funds in RUB and USD, two ESG funds – bonds and stocks – and two funds for investing in gold) and four new exchange-traded funds: VTB Gold Fund Exchange (VTBG), VTB Eurobonds Euro Fund (VTBY), VTB MOEX Fund (VTBX) and VTB Money Market Fund (VTBM). Launched in 2020, the VTB Money Market Fund is the first, and currently the only, exchange-traded money market fund in Russia. The fund is intended for the short-term investment of free funds and liquidity management. As of the end of 2020, the fund had over RUB 2.8 billion in assets. VTB Gold Fund Exchange is currently the only Russian fund with assets backed by actual gold bullion, which is held in VTB Bank’s vault in Russia. In 4Q 2020, the fund switched to the physical replication of gold by purchasing gold funds, and the first delivery of physical gold to the fund was made.

In 2020, the open-end RFI investment fund VTB RUB Money Market Fund and the open-end RFI investment fund VTB USD Money Market Fund were launched for the short-term investment of free funds and liquidity management in RUB and USD, respectively.

VTB Capital Investments was the first in Russia to launch open-end active management funds based on ESG principles: VTB Equity Fund: Responsible Investments and VTB Bond Fund: Responsible Investments. When selecting and managing the funds’ assets, factors related to responsible investment are taken into account along with traditional fundamental indicators. The VTB funds were the first in Russia to include environmental, social and corporate governance factors in the process of selecting investment targets.

Also in the reporting period, VTB Capital Investments launched a programme with philanthropy built in based on the open-end mutual fund VTB Gold Fund. VTB Capital Investments earmarks 20% of the fund’s income – commissions for the management of the fund – for the Starost v Radost charitable foundation for seniors. In 2020, some RUB 4 million was donated to the charity.

In 2020, marginal costs and commissions were reduced for all open-end and exchange-traded funds. As a result, VTB’s mutual funds occupy leading positions in Russian rankings of the lowest overhead costs.

VTB Capital Investments continues to develop funds for real estate investment. In 2020, an agreement was signed for the purchase of industrial buildings with rental income with a total area of 45 thousand square metres through the VTB Capital Rental Income closed-end investment fund; an additional issue of investment units was placed worth RUB 1 billion.

In 2020, VTB Capital Investment Management retained its status as the largest asset management company in Russia in terms of funds under management, with assets of RUB 1.275 trillion under management and a market share of 16% among the 15 largest asset management companiesAccording to preliminary data provided by Expert RA..

VTB Bank was named Brokerage Company of the Year in the annual Financial Market Elite competition run by the National Association of Stock Market Participants.

For the fourth year in a row, VTB Capital Investments received the Best Broker award from Moscow Exchange. The company was named the winner in the Best Private Investor competition for having the largest number of clients among the top 100 participants – one in three of the 100 participants with the best trading results was a VTB client. In addition, VTB Capital Investments received the Runet 2020 prize for making a significant contribution to the development of the Russian-language Internet and the digital economy. The prize was awarded in the Economy and Business category for the VTB My Investments mobile application.

Research

VTB Capital provides its clients with high-quality investment analytics on the economy, sovereign debt and the corporate sector and is a recognised source of information on the markets of Russia, Central and Eastern Europe, the Middle East and Africa.

VTB Capital analysts cover the activities of more than 110 companies, publishing over 3 thousand reviews every year with analysis of financial information and major events that have a direct impact on the activities and results of the companies and sectors of the economy subject to analysis.

VTB Capital analysts work closely with the Equity and Fixed Income Market Operations Departments, while also providing analytical support for strategic decision-making by VTB Group management.

According to the Institutional Investor 2020 Emerging EMEA Research Team survey, VTB Capital analysts ranked seventh in the Emerging EMEA region, ahead of other Russian banks.

The metallurgy team was the best in its sector, and other industry teams also won prizes in their sectors. VTB Capital analysts covering banking, oil and gas, telecommunications, power engineering, consumer goods and investment strategy won prizes.

In addition, VTB Capital ranked first in the Emerging EMEA: Russia category in a separate survey by the Institutional Investor Global Fixed Income Research Team. VTB’s credit analyst was also named the best in Russia in a rating of analysts.

Awards received by vtb capital in 2020


VTB capital’s major investment transactions in 2020


CIB Non-banking financial business

Along with providing corporate clients with banking and insurance services, VTB Group also offers clients leasing and factoring services. Synergies and cross-selling of banking and non-banking products remain one of the Group’s main development priorities.

Leasing

VTB Leasing is one of Russia’s leading leasing companies and is consistently ranked among the three largest market players. The company has offices in 61 Russian cities and also in Belarus, Ireland and Cyprus.

The main sectors of its leasing portfolio are rail transport, specialised machinery and auto leasing. As of the end of 2020, air transport and railway equipment (40% each) as well as cars and commercial automobiles (11%) accounted for the main part of VTB Leasing’s portfolio. The fastest-growing segments in the reporting period were medical equipment (27x) and telecommunications equipment, office equipment and computers (2x); marine vessels were also added to the portfolio. The segments of specialised machinery (up 16%), automobiles (up 14%), railway equipment and air transport (up 12% each) and freight transport (up 6%) showed increases.

VTB Leasing’s clients include both state and private companies that are standard bearers in their industries: Aeroflot, SUEK, Novotrans, Russian Post, Rostelecom and many others. In the area of auto leasing, the company collaborates with more than 28 thousand small and medium-sized businesses and individual entrepreneurs. In 2020, VTB Leasing delivered 29.4 thousand vehicles to customers in 60 regions of the country.

As of the end of the yearCurrent portfolio: volume of leasing payments receivable (before provisions)., VTB Leasing’s portfolio amounted to RUB 602 billion, while its volume of new leasing contracts amounted to RUB 120 billion. The company’s largest contracts included a deal for 1,162 Lada Largus cars for Russian Post, a lease agreement with the Rosseti Centre Voronezhenergo for an integrated automated electricity metering system, and an agreement for the supply of medical and IT equipment for the construction of the Institute of Nuclear Medicine in Khimki.

Factoring

VTB Factoring, the leader in the Russian factoring market, provides a full range of factoring services for working with receivables and payables, as well as managing stocks and warehousing of finished goods. The VTB Factoring group of companies includes ABF Finance, ABL Trade and joint venture partnerships for building VTB Group’s business. The company operates across Russia through its network of affiliates located in 15 of the country’s largest cities and also through branches of VTB Bank.

In 2020, the company provided RUB 1 trillion in financing. VTB Factoring’s portfolio exceeded RUB 335 billion, with a market share of 30%. The company is a member of FCI, the largest international factoring association, as well as the Association of Factoring Companies of Russia.

The main focal areas of VTB Factoring’s strategy are working with large nationwide companies and their suppliers, continuing digitalisation of customers’ acquisition and services for factoring business scaling to companies in the Medium and Small Business segment and development of new areas for financing working capital.