The ‘A’ rating indicates that CB OBRAZOVANIE is qualified as a highly reliable borrower. Risk of a delay in meeting liabilities is relatively low, restructuring risk for a loan / part of a loan is minimal.

Revising the outlook from stable to positive, we appreciate the improving performance of the Bank.

Equity capital of CB OBRAZOVANIE continues to grow: in 2011, it expanded more than twice; as of July 1, 2012, it further increased by 19.0% year-to-date.

The Bank’s assets increased by 49.1% year-on-year in 2011. As of July 1, 2012, its assets were estimated at RUB 20.1 billion increasing by 10.4% year-to-date.

Deposits of individuals increased, the growth rate of the amount of personal deposits being above the average level in Russia’s banking system. For 2011, the amount of deposits increased by 60.4%, while the average percentage in Russia’s banking system was 20.9%. As of July 1, 2012, the amount of contributions increased by 22.0% year-to-date (against 8.1% in Russia’s banking system).

The Bank’s activity is profitable. For the first half year 2012, its pre-tax profit was RUB 192.3 million, 3.8 times above the result achieved over the same period in 2011 (RUB 50.9 million). Almost all the items of the Bank’s net incomes (except for incomes from operations with securities) grew unanimously. Net profit of the Bank for H1 2012 was RUB 156.2 million exceeding the result for the same period in 2011 almost 5-fold.

Other arguments for the rating score are: the good diversification of funding sources, the low dependence on large clients, the successful efforts to maintain the high quality of the loan portfolio; the good current and instant liquidity levels.

CB OBRAZOVANIE has achieved a comfortable diversification of funding sources. Funds placed by customers account for the largest share of the Bank’s obligations. The concentration of liabilities within one group of depositors is also favorable. The current concentration of liabilities indicates that its dependence on large clients is low producing a positive impact on the rating score.

The loan portfolio of CB OBRAZOVANIE is still of fairly good quality. The share of non-performing and problem loans as of July 1, 2012 was 2%, below the average level in Russia’s banking system (about 7-8%). Class 1 loans and class 2 loans together account for 92.9% of the loan receivables exceeding the average level in Russia’s banking system (82-83%).

Another positive signal for the rating score comes from the permanently low arrears on the loans: as of July 1, 2012, the loan arrears accounted for 1.3% of the loan receivables, below the average level in Russia’s banking system (4.2%).

We also appreciate the good instant and current liquidity ratios of the Bank (as of July 1, 2012, N2 was 60.25%; N3 was 70.57%).

The rating score is restricted by the dominating share of incomes from operations with foreign currencies in the net income structure of the Bank, and the high loan risk concentration.

In 2011-2012, the relative weight of incomes from operations with foreign currencies became a dominating item in the Bank’s income structure. Therefore, the dependence of the Bank’s profit on its exchange operations still constitutes a risk factor.

The credit risk concentration is fairly high. As of July 1, 2012, the maximum amount of large credit risks (N7) was 406.4%, above the average level, although not exceeding the upper threshold set by the Central Bank of the Russian Federation.

CB OBRAZOVANIE has been active in the market of banking services since 1991. The bank possesses general banking license no. 1521 of the Central Bank of the Russian Federation as of from December 1, 2011.

The Bank participates in the deposit insurance scheme DIS registration number 939 as of November 28, 2005.

CB OBRAZOVANIE provides the standard range of banking products and services involving Russian rubles and foreign currencies, focusing on lending SME businesses and exchange operations.

Apart from its HQ, the Bank’s network consists of 10 branches, 13 additional outlets, 2 operational offices and 17 stand-alone cash desks. CB OBRAZOVANIE is active in 14 regions in 6 federal districts of the Russian Federation. CB OBRAZOVANIE is headquartered in Moscow.

The Bank’s auditor is Alt-Audit LLC, certificate of membership in the SRO Audit Chamber of Russia (a non-profit partnership) no. 463 as of 12/28/2009, principal registration number 10401001986).

This press release is based on the statement of assigning a credit rating to CJSC CB OBRAZOVANIE.

The credit rating, along with any information and conclusions provided in this press release, only conveys our opinion on the Company's reliability and shall not be considered as advice on the purchase and sale of securities or the provision of loan facilities to the Bank.

AK&M Rating Agency will not incur any responsibility for any interpretations, inferences and consequences related to the application of results of the rating estimation procedure by any third parties.

AK&M Rating Agency is a leading independent national rating agency engaged in rating activities since 1993.

AK&M Rating Agency is accredited by the Ministry of Finance of the Russian Federation (order no. 452 as of September 17, 2010).

AK&M Ratings are recognized by the Central Bank of Russia (for providing unsecured lending facilities – Provision 323-P), Vnesheconombank (for granting subordinated loans) and SME Bank (for its program of lending to SME businesses), RUSNANO (when selecting banks to provide business banking services to project and engineering entities implementing investment projects), the MICEX (as a prerequisite for including bonds in the Corporate Bond Index / MICEX CBI and Municipal Bond Index / MICEX MBI calculation base and for listing bonds). Pursuant to an order of Russia's Government AK&M Ratings count for approving the capitalization increase procedure for banks. Besides, AK&M Rating Agency is recognized by AHML and accredited by SRO National Securities Market Association.

CJSC Analysis, Consulting and Marketing Rating Agency
ul. Gubkina 3
Moscow, Russia
www.akmrating.ru
Press release by: Y.B. Kuznetsova
Phone no. (495) 916-70-30, fax no.: (499) 132-69-18.
Email: kuznetsova@akm.ru