FINANCIAL PLANNING IN UNICREDIT BANK RUSSIA

AGENDA  About a company  Budget process before implementation  Project targets and scope  Selection of solution  Project roadmap  Project results  Development of the system

Стр. 3 UniCredit Bank: in Russia since 1989 (International Moscow Bank before 2007). Starting from 2005 Bank is part of UniCredit Group Key performance indicators:  106 branches in Russia and 1 Representative office in Belarus  Around employee  More than retail customers *  More than corporate clients  Ratings: BBB (Fitch), ВВВ- (Standard & Poor’s)  Total assets: RUR billion *  Equity: RUR billion *  UniCredit Bank has General Licence for banking operations №1 of Bank of Russia * As of About a company

Стр. 4 Budget process before implementation of Oracle Hyperion Planning  Tool  Microsoft Excel model based on collection of Excel spread sheets and Pivot tables as aggregation tool  Limitations  Relatively long term budget cycle  Low number of iteration during coordination of budget data  Significant time constraints for support and administration of model  Not sufficient granularity of the model  Lack of data quality, necessity to input same data several times for usage in different parts of the model  Solution  Implement modern IT system to eliminate limitations mentioned above and realize management requirements foe reporting and budget processes

Стр. 5 Targets and scope of the project  В части обеспечения процесса бюджетного процесса  Decrease resources required for technical calculation of the model  Increase detailing of budget information  Create united budget information sphere and support simultaneous work of users in the model  Automate budget coordination process  Implement Plan – Actual analysis  Develop reporting portal with pre defined and ad-hoc reports for different categories of users  Develop Forecast model

Selection of Solution  IT TOOL  Criteria:  Usability for end users  Powerful modelling and analysis tools  Time and sources for implementation  Simple build in data integration tools  Reporting system  Total cost of ownership  Choice: Oracle Hyperion Planning  VENDOR  Criteria: availability of highly qualified project team with experience of successful project implementation with similar complexity  Choice : LANIT

Стр. 7 Project Roadmap  Terms  Start: April 2003  Finish: December 2003  Project phases working days  1. Coordination of methodology43  2. Development86  3. Testing phase44  4. Commercial operation24  Project team  LANIT team: 3-5 persons depended on project phase  Bank team: 3 persons  Budget of the project  In line with initially approved budget

Стр. 8 Project Results  Results:  Implementation od Budget system based on Oracle Hyperion planning  Trained users and administrators of the model  Integration of Budget system with management information system  Budget 2004 was formed in new system  Main modules of Budget model:  Planning of business in detailed per clients, units and products based on funding transfer pricing principles  Administrative expenses are planned on units level  HR expenses are planned on personal level  Allocation of expenses from cost centres to profit centres  Profit sharing agreements  Financial and management reporting  Liquidity and interest Gap analysis  Forecast

UCBR Budgeting Model Data Input Actual data import (monthly) GAE Planning Forecasting (top- down, bottom-up) Bank’s products planning Financial statements: Applying FTP policy Shadow accounting Cost allocations Balance sheet Profit & Loss Management accounting: Profit-center profitability GAP analysis ICT Budget, Premises Budget… Business Area Report

Стр. 10 Budget model Support  Budget system is supported by Planning team with involvement of IT for granting users access and HW support  Update of model is done by Planning team:  Modification of dimensions  Update and development of calculation scripts  Development of new data input forms  Development of new reporting forms

Bank Development Parameter2002 г.2014 г. Number of Branches Headcount Number of clientsMore than 43 thsБолее ths. Total assetsRUR 80 blnRUR CapitalRUR 4.8 blnRUR bln

12 Budget Approach Development Top-DownBottom-Up

Budget Structure Development Planning of Business per clients, units and products based on FTP principles No planning on client level, reserved analytical dimentions eliminated from budget model. Planning is done business sebsegment level Admistrative expenses are planned on unit level Implementstion of additional functionality for Cost management unit veing responsible for particular cost category HR expenses planned on the level of single employee HR expenses are planned on Unit level based on date from HR system Cost allocation system from cost centers to profit centers Simplifiaction of allocation rules, update of allocation rules in accordance with new organizational structure Profit sharing agreements Substituted with «Shadow accounting» reporting Liquidity and Interest Gap analysis Out of the Budget model scope Forecasting module based on trend analysisIntegration of Forecast model with Excel based reporting for coordination with Business lines. Forecast based on Budget adjustment principles.

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