Annual report 2011 - VTB

VTB BankNotes to the Consolidated Financial Statements – 31 December 2011 and 2010(in billions of Russian Roubles)25. Other liabilities (continued)As at 30 September 2011 the Group recognized obligation to purchase non-controlling interests of RUR 21.9 billionas a financial liability arising from a forward purchase agreement with a related party to the Group to acquire a noncontrollinginterest share in “TransCreditBank”, JSC held by this related party. In accordance with the forwardpurchase agreement the settlement amount to be paid by the Group in the future period is calculated in accordancewith a formula specified in the forward purchase agreement. The determination of the fair value is based ondiscounted cash flows method, and key assumptions take into consideration the expected performance of“TransCreditBank”, JSC and the discount factor.The Group continues to recognize non-controlling interests in “TransCreditBank”, JSC over which the forwardpurchase agreement is concluded as the non-controlling shareholder has a present ownership interest in theunderlying shares. As at 31 December 2011 the carrying amount of obligation to purchase non-controlling interestswas RUR 21.1 billion.26. Share CapitalAuthorized, issued and fully paid share capital of the Bank comprises:31 December 2011 31 December 2010Nominal Numberamount of sharesNumberof sharesNominalamountOrdinary shares 10,460,541,337,338 113.1 10,460,541,337,338 113.1Total share capital 10,460,541,337,338 113.1 10,460,541,337,338 113.1Contributions to the Bank’s share capital were originally made in RUR, foreign currency and gold bullion. All ordinaryshares have nominal value of RUR 0.01, rank equally and carry one vote.During 2011 the net change in Group members’ balances of the Bank’s shares increased by 6,542,473,783 and thenumber of treasury shares increased to 9,677,493,999. As a result, the number of the outstanding shares at31 December 2011 amounted to 10,450,863,843,339.During 2010 the net change in Group members’ balances of the Bank’s shares increased by 357,608,449 and thenumber of treasury shares increased to 3,135,020,216. As a result, the number of the outstanding shares at31 December 2010 amounted to 10,457,406,317,122.As at 31 December 2011 authorized but not issued shares comprise 10,263,597,171,681 shares (2010:10,263,597,171,681) with a par value of RUR 0.01 each.As at 31 December 2011 and 2010, the reserves included both distributable and non-distributable reserves.27. Interest Income and ExpenseInterest income2011 2010Financial assets at fair value through profit or loss 28.3 19.2Loans and advances to customers 376.7 301.5Due from other banks 8.8 7.1Other financial assets, including securities 2.9 2.7Financial assets not at fair value through profit or loss 388.4 311.3Total interest income 416.7 330.5Interest expenseCustomer deposits (112.6) (85.9)Debt securities issued (36.8) (40.1)Due to other banks and other borrowed funds (23.1) (16.4)Subordinated debt (17.2) (17.0)Total interest expense (189.7) (159.4)Net interest income 227.0 171.143