CJSC AK&M Rating Agency affirmed the national scale credit rating of OJSC Sotsinvestbank (license no. 1132) at 'A', tier 3. The outlook is stable.

The 'A' rating indicates that OJSC Sotsinvestbank qualifies as a highly creditworthy borrower. The risk of a failure to meet obligations in time is low, the full or partial debt restructuring risk is minimal.

We regard the significant growth of the key balance sheet and operational performance indicators in 2013 and this year as a key positive rating driver for the Bank.

The Bank's follow-on offering in the third quarter of 2013 increased the credit institution's equity capital more than 1.5 times from RUB 1,534 million as of January 1, 2013 to RUB 2,356 million as of June 1, 2014. This significantly eased the pressure on the equity capital adequacy and gave the Bank objective reasons for increasing the amount of active transactions.

In 2013-2014, Sotsinvestbank capital adequacy ratio reached 22%, which is above the average level in Russia's banking sector. Today, the authorized capital accounts for most of the Bank's equity capital (65.3% as of June 1, 2014). This pushed up the Tier 1 capital to 70.3% and improved the tier 2 to tier 1 capital ratio to 42.2%. The high capital adequacy and quality support the rating of OJSC Sotsinvestbank.

The well-structured and growing assets are contributing to the Bank's rating. In 2013-2014, assets increased by RUB 2,513.7 million (24.9%), the share of net loans receivable in net assets staying fairly high (60.0%).

OJSC Sotsinvestbank continued to derive most of its total net income from net interest earnings in 2013 and the first quarter of 2014 (60.3% and 62.8%, respectively). In absolute terms, they increased by RUB 131.8 million in 2013, by RUB 17.8 million in the first quarter of 2014. This achievement also supports the Bank's rating.

We also appreciate the low concentration of obligations and small loan arrears as positive signals for the Bank's rating.

The Bank keeps its obligations well-spread across groups of depositors. As of June 1, 2014, the maximum share of liabilities attributable to one group of depositors was 0.9%, the ten largest depositors (groups of depositors) account for a mere 3.6% of the total liabilities.

The percentage of arrears on the loans provided by OJSC Sotsinvestbank and other funds placed by it was 2.1% as of April 1, 2014, below the average level in Russia's banking sector (ca. 3.6%).

The key constraints for the rating are the lower net profit in the first quarter 2014, the loan portfolio deterioration, and a reduction in legal entities' deposits.

In particular, the Bank's pre-tax profit in the first quarter of 2014 decreased by 4.9% year-on-year, profit after tax by 15.9% year-on-year. It should however be noted that the downward trend is the mainstream in Russia's banking sector this year.

The total percentage of the loans of quality grades 1 and 2 decreased to 75.6%, below the average level in Russia's banking sector. The share of doubtful and non-performing loans in the loan portfolio increased to 5.1%.

In AK&M Ratig Agency's view, the shrinking deposits of legal entities (decreasing by RUB 364.2 million, i.e. -14.8%, in 2013 and the first quarter of 2014) are also generating risks for the Bank.

Full Bank name: Open Joint Stock Company Sotsinvestbank

Short name: OJSC Sotsinvestbank

OJSC Sotsinvestbank has been operating in the market of banking services since 1990. The Bank possesses general banking license no. 1132 as of December 15, 1988 issued by the Central Bank of the Russian Federation.

The Bank is a member of the compulsory deposit insurance system (registered under no. 50 as of October 7, 2004).

OJSC Sotsinvestbank provides the standard range of banking products and services involving Russian rubles and foreign currencies.

Headquartered at Zeki Velidi Street 42, Ufa, Russia, OJSC Sotsinvestbank has one branch, 38 satellite offices, 60 operational offices and 26 stand-alone cash desks. The bank is operating in two regions of the Russian Federation: Republic of Bashkortostan and Moscow.

The Bank's auditor is CJSC Yekaterinburg Audit Center, a member of SRO nonprofit partnership Audit Chamber of Russia, principal number of registration entry 10201046624).

This press release is based on the Statement of assignment of a credit rating to OJSC Sotsinvestbank.

The rating, along with any information and conclusions provided in this press release, only conveys our opinion on the Bank's creditworthiness and shall not be construed as a recommendation to purchase or sell securities, or to lend funds.

AK&M Rating Agency shall not be held liable for any interpretations, inferences and consequences related to the application of results of the rating estimation procedure by any third parties.

CJSC Analysis, Consulting and Marketing Rating Agency is a leading independent national rating agency engaged in rating activities since 1993. CJSC AK&M Rating Agency is accredited by the Ministry of Finance of the Russian Federation (order no. 452 as of September 17, 2010) and is on the Central Bank of Russia's Register of Accredited Rating Agencies.

CJSC AK&M Rating Agency

Ul. Gubkina 3, Moscow, Russia

www.akmrating.ru

Phone no. (495) 916-70-30, fax no.: (499) 132-69-18.