Moody’s changes outlook on Bank’s Vozrozhdenie’s (Russia) long-term foreign currency deposit rating and E+ financial strength rating (FSR) to positive from stable

30 May 2006

Moscow, May 30, 2006 — Moody’s Investors Service has changed the outlook on Vozrozhdenie Bank’s (“VBank”) B1 long-term foreign currency deposit rating and E+ Financial Strength Rating (FSR) to positive from stable. At the same time, Moody’s Interfax Rating Agency has upgraded to A1.ru from A2.ru the bank’s longterm national scale credit rating (NSR). Moscow-based Moody’s Interfax is majority-owned by Moody’s, a leading global rating agency.

MOODY’S INTERFAX RATING AGENCY HAS UPGRADED TO A1.RU FROM A2.RU THE BANK’S LONGTERM NATIONAL SCALE CREDIT RATING (NSR)

Moscow, May 30, 2006 — Moody’s Investors Service has changed the outlook on Vozrozhdenie Bank’s (“VBank”) B1 long-term foreign currency deposit rating and E+ Financial Strength Rating (FSR) to positive from stable. At the same time, Moody’s Interfax Rating Agency has upgraded to A1.ru from A2.ru the bank’s longterm national scale credit rating (NSR). Moscow-based Moody’s Interfax is majority-owned by Moody’s, a leading global rating agency.

According to Moody’s and Moody’s Interfax (“Moody’s”), the outlook change and the NSR upgrade reflect (i) strengthening of the bank’s franchise, particularly through its growing market share in the retail segment; (ii) its entrenched positions in Moscow oblast, the region surrounding the city of Moscow, which is one of Russia’s most dynamic banking markets; and (iii) its improving financial fundamentals, including the expected increase in capitalisation.

However, in Moody’s opinion, the bank’s low capitalisation and its high burden of non-interest expense remain the most important constraints on the evolution of its E+ FSR. The rating agency views positively the bank’s plans to improve capitalisation through public offering of shares which is planned to start in 2006 when about 10% of its equity will be available for purchase by either Russian or non-resident investors. The expected implementation of these plans is a major positive rating driver, which has triggered the current outlook change on the bank’s E+ FSR and B1 long-term deposit rating, However, according to Moody’s, failure to raise new capital, although not presently anticipated, would be likely to result in a revision of the positive outlook and, potentially, also the B1 long-term deposit rating.

Moody’s notes that a possible future upgrade of V-Bank’s E+ FSR and B1 long-term deposit ratings is contingent on the bank’s ability to demonstrate a track record of sustained franchise growth, coupled with sound financial performance, efficient cost controls and good asset quality.

V-Bank is headquartered in Moscow, Russian Federation. The bank reported total assets of RUB49.1 billion (US$1,7 billion) and shareholders’ equity of RUB3.3 billion (US$114 million) under IFRS as at 31 December 2005. The bank is now among the 25 largest banks in Russia in terms of total assets.

Vozrozhdenie Bank Reports First Quarter 2006 IFRS Net Income of RUR 166 million, almost triple 2005 first quarter.
Moody’s changes outolook on Vozrozhdeniye’s Bank (Russia) long-term foreign currency deposit rating and E+ financial strength rating (FSR) to positive from stable