Retail banking is a key growing area for the business and has been considerably enhanced by the acquisition of Bank of Khanty Mansiysk and a few other smaller banks. The development of the retail banking business remains one of the principal strategic priorities of Nomos.

Retail Banking Strategy

Nomos has set the following general strategic priorities with regard to small business banking:

• Maintain consistent upsell from payroll projects and cross-sell of new product propositions
• Open market acquisitions through focused advertising and promotions
• Continue developing a comprehensive private banking offer
• Target the affluent segment of retail with more sophisticated, higher after-risk margin products
• Introduction of modern logo and communication guidelines

Retail Operating Model

Nomos’ unique retail banking operating model encompasses the following:

• Value and life style based segmentation of the client base (mass, affluent, private banking)
• Best-in-class segmentation and cross-sell to leverage corporate relationships
• Prudent risk management with three main Credit Bureaus and the Fraud Prevention Service
• Focused and efficient distribution structure
• Innovative product offering
• New team with strong proven track record

The retail customer base exceeds 1.43 million individuals serviced across Russia with the distribution network of 300 branches and outlets and 1,680 ATMs.

Number of Clients, in thousands

The expanding retail distribution platform covers the key regions of economic importance nationwide. Nomos’ retail customer base is comprised of over 713,000 payroll customers, over 1,900 private banking clients and close to 714.000 clients serviced by the branch network.

Retail Banking Products and Services

NOMOS’s principal retail banking products and services include current accounts, term deposits, credit and debit cards, personal loans, mortgage loans and settlement and cash services.

Lending Activity

Source: IFRS results

Deposits of individuals, RUB in millions

Source: IFRS results

Retail banking revenues (RUB in millions, breakdown in %)

Source: IFRS results, Q1 2011 — annualized