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CreativitytoolsAnnual report

2011

CEO’s summary

A FINISHED YEAR is like a work of art, a canvas on which one can look from aside. At first, there was a light sketch and then a drawing appeared on the canvas, fol-lowed by wide touches, bright spots, general bright gamut, and afterwards – elabo-

ration of details. Finally, let us see the ready picture, when the finishing touches are put . We have created it together with you.

Throughout the year we continued active work with our customers (major corporations and private individu-als) and tried not only to live up to your expectations, but also to exceed them –making it possible with all capabilities and resources we have even in difficult times in economy. We enjoy the highest reliability rat-ings – Nordea Group and OJSC Nordea Bank remain one of the most stable banks in Europe and Russia. It ensures stable access to the market funding at favourable rates and enables us to continue providing credits with competitive terms. Our products and services meet Europe’s highest quality standards. We build on the experience of an old international bank and the Russian management team. And the bottom-line is our desire to be always there for our customers, helping you in your business and in fulfilling your life plans.

We are proud that we can say that today we are among the few European and Russian banks capable of developing and growing. We have started our preparation for Basel III well in advance, and our equity ratio already now corresponds to that of the top European banks. It means that we can operate in stable and pre-dictable manner. Now our efforts are focused on increasing internal efficiency, developing the product range, services/offers and expanding the opportunities for our customers.

Creative energy is always seeking an outlet for itself. After finishing one piece of art, the artist starts working on a new idea.May there be more passion, inspiration and more sketches for their realization. We shall succeed together!

Igor Bulantsev, CEO of OJSC Nordea Bank

Constructive work is a creative process.

Look how we are changing the world with you.

Constructive work is a creative process.

Look how we are changing the world with you.

Great customer experience

It’s all about people One Nordea team

A Great European Bank,

acknowledged for its people, creating superior value for customers

and shareholders

A big world of corporations

and a private world of each human being –

we are ready to help you achieve more.

Profit orientation and prudent cost, risk and capital management.

A Great European Bank,

acknowledged for its people, creating superior value for customers

and shareholders

Long and successful experience of building relations with customers. Our recipe for success is not only that we try to meet customers’ needs, but also anticipate their wishes.

People, customers and staff – key values for Nordea. It is people that generate new ideas and implement them.

All Nordea employees in all countries of presence are one team. We trust each other, so Nordea operates as one.

Great customer experience

It’s all about people One Nordea team

31.12.2011

RUB 274,475m

31.12.2010

Assets

RUB 191,696m

Equity 31.12.2011

RUB 30,557m31.12.2010

RUB 29,045m

31.12.2011

RUB 274,475m

31.12.2010

Assets

RUB 191,696m

Equity 31.12.2011

RUB 30,557m31.12.2010

RUB 29,045m

31.12.2011

RUB 108,431m

31.12.2010

RUB 39,062m

DepositsCredit portfolio

31.12.2011

RUB 193,380m

31.12.2010

RUB 163,317m

31.12.2011

RUB 108,431m

31.12.2010

RUB 39,062m

DepositsCredit portfolio

31.12.2011

RUB 193,380m

31.12.2010

RUB 163,317m

Corporate banking

Children are taught how to draw freely, brightly, without being afraid of the blank sheet.

Let us imagine that the world is a big sheet of paper where one can colour its part.

Let us take pencils and make the world a more colourful, brighter

and better place.

Corporate finance and

capital management services

International transactions,

including trade finance

Customization

High industrial

diversification Full range of

financial products and services

Our customers: largest Russian and international

companies – market leaders

Trade, project and structural

financing, including

syndicated loans

Leasing and factoring

Personal manager at all banking

stages

Business-based flexible pricing

Deposit products, cash management

services, FX, derivatives

High quality standards

Corporate deposits

31.12.2011

RUB 101,974 m

31.12.2010

RUB 33,747m

Corporate credit portfolio

31.12.2011

RUB 177,351m

31.12.2010

RUB 151,651m

Corporate finance and

capital management services

International transactions,

including trade finance

Customization

High industrial

diversification Full range of

financial products and services

Our customers: largest Russian and international

companies – market leaders

Trade, project and structural

financing, including

syndicated loans

Leasing and factoring

Personal manager at all banking

stages

Business-based flexible pricing

Deposit products, cash management

services, FX, derivatives

High quality standards

Retail banking

We want the life of each person to play in new colours. Your dreams come true

when we start working on it together.

For private customers

Search

Various mortgage lending programmes.

The “Summer! Stripping off the mortgage!” programme

is one of the market’s best offers

Co-brand programmes

with major car dealers for promoting

car loans

Any-purpose consumer loans:

prompt credit decision, no fees

E-banking system “Nordea online”

Deposits. Special promo-actions

with gifts for depositors

“Nordea Voyage” programme – a target loan

with a free-first-period bank card

for holidaymakers

Customer advantage programme “Home Bank”

for loyal customers and their families

with assigning “Gold”, “Silver” and “Bronze”

statuses

Co-brand programmes with insurance companies,

loan brokers and developers

Bank cards of international

payment systems Visa and MasterCard,

including with overdrafts

31.12.2011

RUB 16,029m

31.12.2010

Retail credit portfolio

RUB 11,666m

31.12.2011

RUB 13,655m

31.12.2010

Mortgage portfolio

RUB 8,602m

Individual deposits

31.12.2011

RUB 6,457m

31.12.2010

RUB 5,315m

Individual deposits

31.12.2011

RUB 6,457m

31.12.2010

RUB 5,315m

Retail portfolio breakdown as at 31.12.2011

Mortgage loans85,19%

Car loans10,68%

Consumer loans3,86%

Other loans

0,27%

For private customers

Search

For private customers For private customers Various mortgage lending programmes.

The “Summer! Stripping off the mortgage!” programme

is one of the market’s best offers

Co-brand programmes

with major car dealers for promoting

car loans

Any-purpose consumer loans:

prompt credit decision, no fees

E-banking system “Nordea online”

Deposits. Special promo-actions

with gifts for depositors

“Nordea Voyage” programme – a target loan

with a free-first-period bank card

for holidaymakers

Customer advantage programme “Home Bank”

for loyal customers and their families

with assigning “Gold”, “Silver” and “Bronze”

statuses

Co-brand programmes with insurance companies,

loan brokers and developers

Bank cards of international

payment systems Visa and MasterCard,

including with overdrafts

1

ENTER PIN

2 3

4 5 6

7 8 9

Private customers

Search

31.12.2010

31.12.2011

52909 62745

The number of customers

Bank cards

31.12.2010

31.12.2011

Number of cards issued 2081827086

Mortgage loans

31.12.2010

31.12.2011

million Roubles8,602

13,655

customer�advantage�programme

“Home�Bank”��

Deposits31.12.2010

31.12.2011

million Roubles 5,315 6,457

31.12.2010

31.12.2011

Number of participants

1495083

$ € ¥ £ µ

%

10

1

ENTER PIN

2 3

4 5 6

7 8 9

Private customers

Search

31.12.2010

31.12.2011

52909 62745

The number of customers

Bank cards

31.12.2010

31.12.2011

Number of cards issued 2081827086

Mortgage loans

31.12.2010

31.12.2011

million Roubles8,602

13,655

customer�advantage�programme

“Home�Bank”��

Deposits31.12.2010

31.12.2011

million Roubles 5,315 6,457

31.12.2010

31.12.2011

Number of participants

1495083

$ € ¥ £ µ

%

10

Social responsibility

We do not forget about those who need our help. Let us think together about those

who need our care and about the Earth where everyone

wants to see all rainbow colours.

Charity bazaar among staff for orphans

Environmental and social

responsibility

Participation in projects

of The Volunteers Club, assistance

in organizing events Funding for the treatment of sick children

Contribution to the climate

change control

Charity bazaar among staff for orphans

Environmental and social

responsibility

Participation in projects

of The Volunteers Club, assistance

in organizing events Funding for the treatment of sick children

Contribution to the climate

change control

OJSC Nordea Bank

Summary unconsolidated financial statementsderived from the audited unconsolidated financial statements prepared inaccordance with International Financial Reporting Standards for the year ended 31 December 2011

NORDEA BANK | ANNUAL REPORT 201138

Report of the Independent Auditors on the Summary Unconsolidated Financial Statements

To the Shareholders and Board of DirectorsOJSC Nordea Bank

ZAO KPMG1 March 2012

ZAO KPMG10 Presnenskaya NaberezhnayaMoscow, Russia 123317

Telephone +7 (495) 937 4477 Fax +7 (495) 937 4400/99 Internet www.kpmg.ru

The accompanying summary unconsolidated financial statements, which comprise the summary unconsolidated statement of financial position as at 31 December 2011, the summary unconsolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, and related notes, are derived from the audited unconsolidated financial statements of OJSC Nordea Bank (the “Bank”) as at and for the year ended 31 December 2011. We expressed an unmodified audit opinion on those unconsolidated financial statements in our report dated 1 March 2012. The summary unconsolidated financial statements do not contain all the disclosures required by International Financial Reporting Standards. Reading the summary unconsolidated financial statements, therefore, is not a substitute for reading the audited unconsolidated financial statements of the Bank.

Management’s Responsibility for the Summary Unconsolidated Financial Statements Management is responsible for the preparation of a summary of the audited unconsolidated financial statements on the basis described in Note 1.

Auditors’ ResponsibilityOur responsibility is to express an opinion on the summary unconsolidated financial statements based on our procedures, which were conducted in accordance with International Standard on Auditing 810 Engagements to Report on Summary Financial Statements.

OpinionIn our opinion, the summary unconsolidated financial statements derived from the audited unconsolidated financial statements of the Bank as at and for the year ended 31 December 2011 are consistent, in all material respects, with those unconsolidated financial state-ments on the basis described in Note 1.

NORDEA BANK | ANNUAL REPORT 2011 39

OJSC Nordea BankThe Summary Unconsolidated Statement of Financial Position as at 31 December 2011

The summary unconsolidated financial statements are derived from the audited unconsolidated financial statements of OJSC Nordea Bank, which were approved for issue and signed on behalf of the Management Board on 1 March 2012.

I.V. Bulantsev Chairman of the Board

T.N. SharovaChief Accountant

In thousands of Russian Roubles 31 December 2011 31 December 2010

ASSETS

Cash and cash equivalents 60 036 811 11 149 116

Mandatory cash balances with the CBRF 2 801 242 1 034 936

Trading securities 8 552 588 6 398 537

Due from other banks 9 308 478 9 849 835

Loans and advances to customers 191 904 802 161 709 758

Premises and equipment and intangible assets 688 515 376 073

Derivative financial instruments 147 626 67 561

Other assets 1 034 900 1 110 355

TOTAL ASSETS 274 474 962 191 696 171

LIABILITIES

Due to other banks 128 927 353 120 214 751

Customer accounts 108 431 664 39 062 715

Promissory notes issued 2 406 673 1 262 071

Deferred income tax liability 265 145 108 825

Derivative financial instruments 1 119 264 13 641

Other liabilities 1 058 695 1 220 506

Subordinated debt 7 947 005 7 552 910

TOTAL LIABILITIES 250 155 799 169 435 419

EQUITY

Share capital 11 233 639 11 233 639

Retained earnings 13 085 524 11 027 113

TOTAL EQUITY 24 319 163 22 260 752

TOTAL LIABILITIES AND EQUITY 274 474 962 191 696 171

The summary unconsolidated financial statements on pages 39 - 45 should be read in conjunction with the unconsolidated financial statements from which they were derived.


OJSC Nordea BankThe Summary Unconsolidated Statement of Comprehensive Income for the Year Ended 31 December 2011

In thousands of Russian Roubles 2011 2010

Interest income 10 681 305 10 392 750

Interest expense (3 385 761) (2 324 147)

NET INTEREST INCOME 7 295 544 8 068 603

Loan impairment losses (265 730) (150 612)

NET INTEREST INCOME AFTER LOAN IMPAIRMENT LOSSES 7 029 814 7 917 991

Fee and commission income 673 806 684 157

Fee and commission expense (1 204 184) (895 303)

(Losses net of gains)/gains less losses arising from trading securities (103 642) 86 669

(Losses net of gains)/gains less losses from financial derivatives (2 420 800) 50 051

Gains less losses from trading in foreign currencies 420 340 331 219

Foreign exchange translation gains less losses 2 484 184 133 976

Other operating income 56 764 48 290

Administrative and other operating expenses (4 192 570) (3 739 090)

PROFIT BEFORE TAX 2 743 712 4 617 960

Income tax expense (691 024) (1 025 507)

PROFIT AND TOTAL COMPREHENSIVE INCOME FOR THE YEAR 2 052 688 3 592 453



OJSC Nordea BankThe Summary Unconsolidated Statement of Changes in Equity for the Year Ended 31 December 2011In thousands of Russian Roubles Share capital Retained earnings Total equity

At 1 January 2010 11 233 639 7 429 046 18 662 685

Profit for the year – 3 592 453 3 592 453

Total comprehensive income for 2010 – 3 592 453 3 592 453

Employee share scheme – 5 614 5 614

Balance at 31 December 2010 11 233 639 11 027 113 22 260 752

Profit for the year – 2 052 688 2 052 688

Total comprehensive income for 2011 – 2 052 688 2 052 688

Employee share scheme – 5 723 5 723

Balance at 31 December 2011 11 233 639 13 085 524 24 319 163



OJSC Nordea BankThe Summary Unconsolidated Statement of Cash Flows for the Year Ended 31 December 2011


CASH FLOWS FROM OPERATING ACTIVITIES

Interest received 10 748 531 10 765 996

Interest paid (2 749 831) (2 428 580)

Fees and commissions received 705 136 679 270

Fees and commissions paid (1 156 370) (868 443)

Net receipts from trading securities 38 249 168 434

Net payments from financial derivatives (1 395 242) (147 615)

Income received from trading in foreign currencies 420 340 331 219

Other operating income received 52 400 45 525

Administrative and other operating expenses paid (3 761 622) (3 644 455)

Income tax paid (634 875) (1 098 190)

CASH FLOWS FROM OPERATING ACTIVITIES BEFORE CHANGES IN OPERATING ASSETS AND LIABILITIES 2 266 716 3 803 161



OJSC Nordea BankThe Summary Unconsolidated Statement of Cash Flows for the Year Ended 31 December 2011


CHANGES IN OPERATING ASSETS AND LIABILITIES

Net increase in mandatory cash balances with the CBRF (1 766 306) (232 763)

Net increase in trading securities (2 284 041) (625 042)

Net decrease/(increase) in due from other banks 1 133 895 (6 424 184)

Net increase in loans and advances to customers (21 285 203) (33 084 323)

Net (increase) in other assets (26 575) (222 755)

Net increase in due to other banks 389 271 33 840 975

Net increase/(decrease) in customer accounts 68 726 562 (2 537 760)

Net increase/(decrease)/ in promissory notes issued 1 147 453 (73 494)

Net (decrease)/increase in other liabilities (315 118) 319 698

NET CASH FROM/(USED IN) OPERATING ACTIVITIES 47 986 654 (5 236 487)

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of premises and equipment (423 427) (220 024)

Proceeds from disposal of premises and equipment 25 223 3 273

NET CASH USED IN INVESTING ACTIVITIES (398 204) (216 751)

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 1 299 245 (59 051)

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 48 887 695 (5 512 289)

Cash and cash equivalents at the beginning of the year 11 149 116 16 661 405

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR 60 036 811 11 149 116



OJSC Nordea BankNotes to the Summary Unconsolidated Financial Statements - 31 December 2011

1 General information and the basis of preparation

These summary unconsolidated financial statements, which comprise the summary unconsolidated statement of financial position as at 31 December 2011, the summary unconsolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, and related notes are derived from the audited unconsolidated financial statements for Open Joint Stock Company Nordea Bank (the “Bank”).

The unconsolidated financial statements of the Bank for the year ended 31 December 2011 are prepared in accordance with International Financial Reporting Standards (“IFRS”) and signed on behalf of the Management Board on 1 March 2012.

The Bank used an exemption from presenting consolidated financial statements according to IAS 27 Consolidated and Separate Financial Statements. Consolidated financial statements of the parent company Nordea Bank AB prepared under IFRS are available for public use at Smalandsgatan 17, SE-105 71 Stockholm, Sweden and at www.nordea.com.

The Bank was established in 1994.

The Bank’s sole shareholder is Nordea Bank AB. Nordea Bank AB is a public company and has no majority shareholders.

The Bank’s principal business activity is commercial banking operations within the Russian Federation. The Bank operates under a general banking license No. 3016 issued by the Central Bank of the Russian Federation (“CBRF”) since 1994. The Bank participates in the state deposit insurance scheme. The State Deposit Insurance Agency guarantees repayment of 100% of individual deposits up to RUB 700 thousand per individual in case of a withdrawal of a bank’s licence or moratorium on payments imposed by the CBRF.

The Bank has 10 branches (2010: 11) and 20 additional offices (2010: 38).

As at 31 December 2011 the number of employees was 1 702 (2010: 1 825).



OJSC Nordea BankNotes to the Summary Unconsolidated Financial Statements - 31 December 2011

2 Operating environment of the Bank

The Russian Federation displays certain characteristics of an emerging market, including relatively high inflation and high inter-

est rates. The international sovereign debt crisis, stock market volatility and other risks could have a negative effect on the Russian financial and corporate sectors.

Management is unable to predict all developments which could have an impact on the banking sector and the wider economy and consequently what effect, if any, they could have on the future financial position of the Bank. Management determined loan impairment provisions by considering the economic situation and outlook at the end of the reporting period, and applied the ‘incurred loss’ model required by the applicable accounting standards. These standards require recognition of impairment losses that arose from past events and prohibit recognition of impairment losses that could arise from future events, no matter how likely those future events are.

The tax, currency and customs legislation within the Russian Federation is subject to varying interpretations and frequent changes. Furthermore, the need for further developments in the bankruptcy laws, the absence of formalised procedures for the registration and enforcement of collateral, and other legal and fiscal impediments contribute to the challenges faced by banks currently operating in the Russian Federation. The future economic direction of the Russian Federation is largely dependent upon the effectiveness of economic, financial and monetary measures undertaken by the Government, together with tax, legal, regulatory and political developments.

The financial statements reflect management’s assessment of the impact of the Russian business environment on the operations and the financial position of the Bank. The future business environment may differ from management’s assessment. Management believes that all necessary steps have been made to ensure sustainability and growth of the Bank’s business.



Statuses, licences, membership in associations and organisations

Licences and authorisations:

Open joint stock company registered in the Main State Register of Legal Entities 1 027 739 436 955

General Licence No. 3016 of the Central Bank of the Russian Federation to conduct banking operations

Licence as a professional participant on the securities market for brokerage operations, issued by the Federal Securities Commission

Licence as a professional participant on the securities market for dealing activities, issued by the Federal Securities Commission

Licence as a professional participant on the securities market for depository operations, issued by the Federal Securities Commission

Licence as a professional participant on the securities market for asset management operations, issued by the Federal Securities Commission

Licence for dealing in precious metals

Authorised bank of the State Customs Committee of the Russian Federation empowered to act as a guarantor in transactions with customs authorities

Licences for rendering services and performance of work related to secret state data, issued by the Federal Security Service

A licence from the Center of Licensing, Certification and State Secrecy Protection under the Federal Security Service of Russia for distribution of encryption (cryptographic) devices

A licence from the Center of Licensing, Certification and State Secrecy Protection under the Federal Security Service of Russia for providing data encryption services

A licence from the Center of Licensing, Certification and State Secrecy Protection under the Federal Security Service of Russia for technical maintenance of encryption (cryptographic)

Membership and participation:

Moscow Interbank Currency Exchange (currency market section and stock market section)

National Association of Professional Stock Market Participants (NAUFOR)

GKO/OFZ market (dealer status)

Interbank Clearing System (ICS clearing and depository bank)

Office of Credit Histories of Interbank Clearing System (member)

Association of Regional Banks “Russia” (member)

Association of Russian Banks (member)

State deposit insurance system (participant)International payment system MasterCard Europe (affiliate membership) VISA International (associated membership)

Customs Card Russian customs duties payment system (issuing bank)

REUTERS

SWIFT.

European Bank for Reconstruction and Development - Trade Facilitation Program

Current ratings OJSC Nordea Bank:

Long Term Issuer Default Rating: «BBB+»

Short Term Issuer Default Rating: «F2»

Individual – «D»

Support – «2»

National Long Term Rating: AAA (Rus)

Forecast IDR – Stable

Forecast long-term national ratings – Stable

International ratings Fitch Ratings


Arkhangelsk Office

of the St. Petersburg Branch of OJSC Nordea Bank

ulitsa Voskresenskaya 17, Arkhangelsk 163000 Russia

+7 (8182) 20-38-68; 64-64-89

Volgograd Office

of the Rostov-on-Don Branch of OJSC Nordea Bank

prospekt Lenina 46, Volgograd 400005 Russia

+7 (8442) 777-111; 24-35-41

Yekaterinburg Branch

of OJSC Nordea Bank

ulitsa Malysheva 31K, Yekaterinburg 620075 Russia

+7 (343) 286-01-50

Novosibirsk Branch

of OJSC Nordea Bank

ulitsa Sovetskaya 15, Novosibirsk 630007 Russia

+7 (383) 325-11-77

Penza Branch

of OJSC Nordea Bank

ulitsa Suvorova 144 B, Penza 440008 Russia

+7 (8412) 26-00-52; 26-00-53

Rostov-on-Don Branch

of OJSC Nordea Bank

ulitsa Pushkinskaya 105 / 79, Rostov-on-Don 344007 Russia

+7 (863) 255-98-38; 255-97-877

Samara Branch

of OJSC Nordea Bank

ulitsa Chapayevskaya 138 A, Samara 443010 Russia

+7 (846) 333-13-33; 269-60-80

Samara Branch

of OJSC Nordea BankOktyabrski Office

ulitsa Avrory 150, Samara 443045 Russia

+7 (846) 273-99-99

St. Petersburg Branch

of OJSC Nordea Bank

ulitsa Promyshlennaya 19, Saint Petersburg 198099 Russia

+7 (812) 747-34-30


of OJSC Nordea Bank

Primorsky Office

Torfyanaya Doroga 7, 2N-11N, letter А, Saint Petersburg

197374 Russia

+7 (812) 441-21-96; 441-23-08


of OJSC Nordea Bank

Tavrichesky Office

ulitsa Kirochnaya 12, Saint Petersburg 191028 Russia

+7 (812) 635-70-85, 635-70-86

Saratov Branch

of OJSC Nordea Bank

ulitsa Kiselyova 65, Saratov 410012 Russia

+7 (8452) 73-50-74; 73-50-81; 73-51-33,

Voronezh Office

Moskovski prospect 53, Voronezh 394016 Russia

+7 (473) 261-11-17; 261-11-15

Chelyabinsk Office

ulitsa Tswillinga 66-b, Chelyabinsk 454091 Russia

+7 (351) 218-38-98

Offices outside Moscow


Offices in Moscow

‘Tsentralny’ (Head Office)

3-ya ulitsa Yamskogo Polya 19, building 1

Moscow 125040 Russia

+7 (495) 777-34-77; 921-25-03

‘Yamskoye Pole’

ulitsa Pravdy 4


+7 (495) 777-34-77

‘Butyrsky Val 52 – Mortgage Center’

Butyrsky Val 52


+7 (495) 662-11-55

‘Smolensky’

Smolenskaya naberezhnaya 5/13


+7 (495) 777-34-78, 795-11-20

‘Yugo-Zapadny’

ulitsa Namyotkina 14, korpus 1


+7 (495) 967-12-06; 777-34-77

‘Sukharevsky’

1-y Koptel’ski pereulok 4, building 1


+7 (495) 777-34-77

‘Serpukhovsky’

Stremyanny pereulok 38,


+7 (495) 745-60-77

‘Kotelnichesky’

Kotelnicheskaya naberezhnaya 1/15, korpus B


+7 (495) 723-75-35

Documents

Creativity tools - услуги · financial products and services Our customers: largest Russian and international companies – market leaders Trade, project and structural financing,