Standard & Poor’s Ratings Services assigned its “BB-/B” counterparty credit and “ruAA-” Russia national scale ratings to Bank Vozrozhdenie

21 August 2008

Moscow, August 21, 2008. Yesterday Standard & Poor’s Ratings Services assigned its “BB-/B” counterparty credit and “ruAA-” Russia national scale ratings to Bank Vozrozhdenie. The outlook is stable.

“The ratings reflect the bank’s relatively high exposure to credit risk; moderate single-party concentrations in loans; and its high cost base”, commented Standard & Poor’s Rating Analyst Eugene Tarzimanov.

The ratings are supported by the bank’s good business profile in the Moscow region; satisfactory financial performance; good funding profile; and adequate capitalization. The ratings on Vozrozhdenie mirror its stand-alone credit quality, and do not include any uplift for extraordinary external support from its shareholders or the Russian government. With total assets of $5 billion at March 31, 2008, Vozrozhdenie ranks among the largest 30 Russian banks in assets.

“The stable outlook reflects our expectation that Vozrozhdenie will expand in line with strategy, while maintaining its commercial and financial profile. The bank’s focus on the SME segment should support margins and provide a flow of recurring revenues”, commented Mr. Tarzimanov.

A positive rating action could follow if the bank demonstrates its resilience to heavy competitive pressure by expanding its client base and keeping good margins; lowers its cost base; and maintains satisfactory capitalization. A negative pressure on ratings could materialize if capitalization falls significantly, lending concentration worsens, or the quality of the loan portfolio and earnings structure deteriorates.

“We received another international rating that will facilitate fund raising on international capital markets”, commented the member of Bank Vozrozhdenie Management Board Andrei Shalimov. “We are pleased that Standard & Poor’s has recognized the Bank’s potential on the SME market as such companies are our target segment”, said Mr. Shalimov.

Vozrozhdenie Bank, a community bank for companies and individuals, was founded in 1991. (General License from the Central Bank of the Russian Federation # 1439, March 24, 2003.) Among the Top 30 Russian Banks in the Central Banks rating, its network includes 172 offices and over 600 ATMs in 20 regions of Russia. The Bank provides more than 1,150,000 individual and 49,000 corporate clients with a range of services, from savings accounts, payment handling, payroll management, to mortgages, bank cards and business and consumer loans.

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