Annual report 2011 - VTB

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VTB BankNotes to the Consolidated Financial Statements – 31 December 2011 and 2010(in billions of Russian Roubles)42. Business Combinations (continued)The goodwill is primarily attributable to the profitability of the acquired business, potential synergies and combinedcost savings. The goodwill will not be deductible for tax purposes in future periods. The non-controlling interest hasbeen recognized as a proportion of net assets acquired.The initial accounting for this business combination had not been completed as at 30 September 2011 because thevaluation of loans and advances to customers had not yet been finalized. When finalized, the fair value of loans andadvances to customers at the acquisition date decreased by RUR 5.1 billion with a related increase in deferred taxasset of RUR 1.0 billion, increase in goodwill by RUR 3.3 billion and decrease of non-controlling interest byRUR 0.8 billion respectively.The gross contractual amounts of loans and advances to customers of “Bank of Moscow”, OJSC at the acquisitiondate amounted to RUR 918.7 billion. The estimate of the contractual cash flows which are not expected to becollected amounted to RUR 273.7 billion.The amounts of revenues and net profit of "Bank of Moscow", OJSC since the acquisition date included in theconsolidated statement of comprehensive income of the Group are RUR 41.7 billion and RUR 7.5 billion, respectively.Revenues were calculated in accordance with methodology applied in analysis by segment disclosure.For the purpose of determining goodwill from the acquisition the fair values of identifiable assets and liabilities of“Bank of Moscow”, OJSC based on results of both an independent external appraisal and managementconsiderations, at the acquisition date were as follows:Fair valueAssetsCash and short-term funds 61.1Mandatory reserve deposits with central banks 8.2Financial assets at fair value through profit or loss 16.8Financial assets pledged under repurchase agreements and loaned financial assets 13.1Due from other banks 78.5Loans and advances to customers 648.2Financial assets available-for-sale 18.6Investments in associates 6.0Investment securities held-to-maturity 0.2Premises and equipment 14.8Investment property 3.3Intangible assets (including core deposit and customer loan intangible) 26.9Deferred tax asset 5.7Other assets 11.1Total assets 912.5LiabilitiesDue to other banks 47.1Customer deposits 513.1Other borrowed funds 153.9Debt securities issued 75.8Deferred tax liability 0.1Subordinated debt 36.0Other liabilities 6.1Total liabilities 832.1Fair value of identifiable net assets of subsidiary 80.4Goodwill arising from the acquisition:Consideration paid 50.2Non-controlling interests (proportionate share of the acquiree’s identifiable net assets) 15.7Fair value of the acquirer's previously held interest in the acquiree 99.2Less: fair value of identifiable net assets of subsidiary (80.4)Goodwill arising from the acquisition 84.795
VTB BankNotes to the Consolidated Financial Statements – 31 December 2011 and 2010(in billions of Russian Roubles)42. Business Combinations (continued)In December 2011 the Group obtained control in several interrelated companies by acquiring a 100% ownershipshare in "Consolidated companies", OJSC including: "Kornet", OJSC (94.2%), "Moscow Inter-Republic Winery",OJSC (94.1%), "Inter-Republican Winery Trading House Limited", OJSC (95.6%).The valuation of assets and liabilities, except for brands and trademarks, was carried out by the Group’s internalappraisers. The valuation of brands and trademarks was carried out by independent appraisers.The fair values of identifiable assets and liabilities of this group of companies at the acquisition date were as follows:Fair valueAssetsInvestments in associates and joint ventures 0.5Premises and equipment 3.5Intangible assets (brands and trademarks) 0.5Other assets 1.2Total assets 5.7LiabilitiesDue to other banks 1.6Customer deposits 0.5Deferred tax liability 0.4Other liabilities 3.1Total liabilities 5.6Fair value of identifiable net assets of subsidiary 0.1Goodwill arising from the acquisition:Consideration paid 0.0Non-controlling interests (proportionate share of the acquiree’s identifiable net assets) 0.1Less: fair value of identifiable net assets of subsidiary (0.1)Goodwill arising from the acquisition –If the acquisition of the OJSC “Consolidated companies” had taken place at the beginning of the year, the net profit ofthe Group and operating income would not have been materially different.43. Capital Management and Capital AdequacyThe Group’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence andto sustain future development of its business.Capital adequacy ratio in accordance with CBR requirementsThe CBR requires Russian banks to maintain a minimum capital adequacy ratio of 10% of risk-weighted assets,determined in accordance with CBR’s requirements. In other countries the Group members comply with theregulatory capital requirements of the local central banks or other supervisory authorities.During 2010 and 2011 the Bank’s capital adequacy ratio in accordance with CBR requirements exceeded theminimum level and as at 31 December 2011 and 2010 was as follows:31 December201131 December2010Capital 443.3 529.7Risk-weighted assets 4,017.9 2,347.7Capital adequacy ratio 11.0% 22.6%96
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VTB Annual Report 2011Statement of
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VTB Annual Report 20118. 8. Выд
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VTB Annual Report 201111. Other Gro
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VTB Annual Report 201112. Sharehold
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VTB Annual Report 2011144VTB places
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VTB BankConsolidated Financial Stat
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Annual report 2011 - VTB

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