Moody’s assigns E+_B2_NP ratings to Bank Vozrozhdenie (Russia)

13 August 2004

Limassol, August 13, 2004 — Moody’s Investors Service has assigned to Russia’s Vozrozhdenie Bank an E+ Financial Strength Rating and ratings of B2/NP for long- and short-term foreign currency deposits. All ratings carry stable outlooks.

First-time Rating

Limassol, August 13, 2004 — Moody’s Investors Service has assigned to Russia’s Vozrozhdenie Bank an E+ Financial Strength Rating and ratings of B2/NP for long- and short-term foreign currency deposits. All ratings carry stable outlooks.

According to Moody’s, the ratings assigned to Vozrozhdenie Bank reflect its market position and its well developed market sector servicing mid-sizedcorporate clients outside Moscow, predominately in the Moscow region. Vozrozhdenie Bank also benefits from a well developed retail franchise that serves as a source of relatively stable funding. Even though the bank is still small by international standards, it ranks among the thirty largest in Russia, and is one of the few banks that have a widely diversified shareholder base and are publicly traded.

Vozrozhdenie Bank’s relatively small size limits its importance for the economy as a whole; hence the B2 deposit rating does not take into consideration the possibility of support from the Russian authorities in case of distress, says Moody’s. However, the rating agency notes that the Central Bank of Russia did provide such support to the bank during the 1998 crisis. The capability of the owners to support the bank is uncertain, and thus no support is imputed in the bank’s deposit ratings, although since 1998 Vozrozhdenie Bank has twice raised new capital from independent shareholders.

In addition, the ratings are constrained, among other factors, by the bank’s insufficient track record of financial stability and profitability, by a rapid expansion of the lending operations that could compromise the asset quality, and by a high level of costs resulting from aggressive expansion of the franchise.

Vozrozhdenie Bank is headquartered in Moscow, Russia and reported total IAS assets of US$904 million at 31 December 2003.

Vozrozhdenie Bank successfully finished the first six months of year 2004
International Rating Agency Moody’s for the first time assigned E+/B2/NP rating to Bank “Vozrozhdeniye”