Interfax Rating Agency, in association with Moody’s Investors Service, affirms Вaa3 (rus) long-term rating to Bank Vozrozhdenie

9 April 2004

MOSCOW. April 9 (Interfax) — Interfax Rating Agency, in association with Moody’s Investors Service, affirmed its Ваа3 (rus) long-term rating to the Vozrozhdenie bank. The agency also affirmed its short-term credit rating of RUS-3 to the bank.

MOSCOW. April 9 (Interfax) — Interfax Rating Agency, in association with Moody’s Investors Service, affirmed its Ваа3 (rus) long-term rating to the Vozrozhdenie bank. The agency also affirmed its short-term credit rating of RUS-3 to the bank.

The rating reflects the bank’s strong market position in the Moscow region (Moscow oblast) and support from the administrations of a number of Russian regions with which the bank does business. The rating is constrained by the risk of the bank’s biggest loan to the Moskvich carmaker being rescheduled again, however the ratio of this credit to the bank’s assets decreased significantly towards the end of 2003 and early 2004, strengthening the bank’s creditworthiness.

The bank’s core business is in the Moscow region, which is one of Russia’s biggest in terms of per capita income. The bank has a fairly extensive and diverse clientele. The bank also lends heavily in the city of Moscow.

During the fourth quarter, the bank’s assets grew 15.4%. They grew more than 50% in 2003 as whole. But the profit margin fell from 1.2% to 0.5% of assets over the year compared with 2.8% for the Russian banking sector as a whole.

The bank’s equity increased 85% after shareholders paid in additional capital. This lifted the capital adequacy ratio from 10.6% to 14.3%.

The bank’s shareholder structure altered at the start of 2004, with its president, Dmitry Orlov, being registered as the biggest shareholder with 23.91% of the shares.

In November 2003, Vozrozhdenie assigned a debt to the Finance Ministry to another party, with the sale of a block of government securities used as collateral for the debt, but the transactions did not result in a significant increase in profits for 2003.

The bank in the fourth quarter also assigned the Moskvich credit to third parties and the bank’s risk attached to its biggest borrower decreased significantly from 36.7% to 23.5% of its capital.

Also, due to the rising cost of metals, the collateral on this credit increased in value and is currently considerably higher than the bank’s indebtedness. As of April 1, 2003, reserves exceeding 50% of the debt had bee created for this loan.

The Baa3 (rus) national scale long-term rating reflects sufficient credit-worthiness in comparison to other Russian borrowers. It indicates that borrowers can meet financial obligations in favorable conditions, but they are vulnerable to negative changes in external conditions.

The RUS-3 national scale short-term rating reflects average credit- worthiness among Russian borrowers. Changes in external conditions could increase the credit risk.

Bank Vozrozhdeniye issued the first multi-application Visa Smart Debit Credit card
Bank Vozrozhdeniye has successfully completed the first quarter of the year 2004. The Bank’s net assets have grown by RUR 1.4 billion compared to the beginning of the year