The ‘B++' rating indicates that CB Altaikapitalbank LLC is qualified as a sufficiently reliable borrower (the highest sub-grade of the ‘B' grade). Risk of a delay in meeting liabilities is moderate, restructuring risk for the loan / part of the loan is insignificant.

The rating score of CB Altaikapitalbank LLC is supported by the high capital adequacy and capital quality, the high profitability and the comfortable level of liquidity.

Capital adequacy ratio as of June 1, 2012 was 19.96%, about 6 percentage points higher than then the average value in Russia’s banking system. Capital quality ratio was 13.7%, below the maximum value recommended by the Central Bank of the Russian Federation (30%).

Return on assets of the Bank exceeds the average level in Russia’s banking system (3.5% as of April 1, 2012) by 1.1 percentage points, even if its absolute profit for 2011 decreased. Return on equity was 0.8 percentage points below the average value in Russia’s banking system (17.4% as of April 1, 2012).

In 2011, profit of CB Altaikapitalbank LLC dropped by 55.7% year-on-year, yet the Bank ranked second in the amount of its net profit in absolute terms in Altai Krai in 2011 and first in Q1 2012 repeating its 2010 result. The Bank’s net profit totaled RUB 48,252 thousand for 2011, RUB 47,495 thousand for Q1 2012.

The bank’s liquidity is sufficient. Instant liquidity and current liquidity ratios are not exceeding the respective average values in Russia’s banking system, yet are considerably above the specified minimum values. As of June 1, 2012, quick liquidity ratio was 36.4%, current liquidity ratio was 70.7%, long-term liquidity ratio was 33.2% (better than in Russia’s banking sector on average).

The Bank’s rating score is restricted by the slow equity capital growth rate, credit risks, and outflow of funds.

In 2011, the Bank’s equity capital decreased by 8.8% (RUB 46,078 thousand) pursuant to the decision to distribute the Bank’s net profit for 2010. In the first quarter 2012, equity capital rose by 10.1% (RUB 48,159 thousand). As of April 1, 2011, the Bank’s capital increased by a mere 0.4% year-to-date (by RUB 2,081 thousand). As of June 1, 2012, the Bank’s capital totaled RUB 540,248 thousand.

The Bank’s loan portfolio is of acceptable quality. Class 1 loans and class 2 loans account for about 89% of the loan receivables and their equivalents. The share of class 2 loans alone is about 85%. Arrears on the Bank’s loans is not high (4.7% of the total amount of loan receivables and their equivalents as of June 1, 2012), yet about 87% of such loans are more than for 180 days in arrears.

Another negative signal is that the amount of customer funds placed by non-credit institutions is decreasing. In 2011 and Q1 2012, the amount of funds placed by non-credit institutions decreased by RUB 380,305 thousand (33.8%). Amount of physical persons’ deposits increased by RUB 235,635 thousand (33.8%) in 2011, which did not offset the outflow of funds placed by legal entities. In Q1 2012, physical persons’ deposits decreased by RUB 33,527 thousand (3.5%). Total amount of customer funds as of April 1, 2012 was RUB 1,678.332 thousand decreasing by 7.9% year-to-date.

Commercial Bank Altaikapitalbank (limited liability company) has been active in the market of banking services since 1994 (reg. no. 2659 at the Bank of Russia). The bank’s activity is subject to the banking license for operations involving Russian rubles and foreign currencies (without accepting deposits of cash funds from individuals) as of 3/16/2010 and the license for accepting deposits of cash funds from individuals, as of 3/16/2010. The Bank participates in the deposit insurance scheme, DIS scheme registration no. 83 as of October 14, 2004.

Headquartered in Barnaul, the Bank has a branch network in Barnaul, Altai Krai and in the Altai Republic. It provides the whole range of banking services involving Russian rubles, lends to legal entities and individuals.

The Bank's auditor is Audit Firm Altai-Audit-Consulting LLC, a member of the self-regulatory audit organization Moscow Audit Chamber. Registration no. in the SRO register: 10303003293. Location: pr. Lenina 3, 656043 Barnaul. Tax number 2225031749, taxpayer record validity code / KPP 222501001.

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

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

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Moscow, Russia

www.akmrating.ru

Press release by: A.M. Krachkovskaya

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