The 'A' rating indicates that PETERSBURG'S CITY BANK, INCORPORATED 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.

PETERSBURG'S CITY BANK, inc operating in the banking sector of Russia's St. Petersburg and Leningrad region qualifies as a medium-size credit institution in terms of equity capital and a minor institution in terms of the amount of business. The Bank was added to the Public Register on July 19, 1994 (registration number 2982). The Bank's activity profile includes raising funds from individuals and legal entities, serving and lending to corporate clients. Being focused on a narrow circle of privileged clients, the credit institution does not have branches, satellite offices or stand-alone cash desks.

The credit rating of PETERSBURG'S CITY BANK, inc reflects its high capital adequacy, low tier 2 to tier 1 capital ratio and rapid capital expansion, low percentage of loan arrears, and high business profitability.

The Bank's capital adequacy is extremely high. Since January 1, 2013, the N1.0 ratio has stayed within the 40-50% range, significantly above the average level in Russia's banking sector (ca. 13%) and the average capital adequacy ratio (CAR) of ca. 16% in the segment of banks with equity capitals of RUB 1-5 billion (PETERSBURG'S CITY BANK's equity capital reached RUB 3.27 billion on October 1, 2014).

The main sources of the Bank's own funds (the authorized capital, the retained earnings of this and prior years as well as a reserve fund accumulating them) make the high quality of the credit institution's capital. As of October 1, 2014, tier 2 to tier 1 capital ratio was 22.5%, meeting all the regulatory requirements with a good margin.

As of October 1, 2014, the loan arrears accounted for 3% of the Bank's loan portfolio, which is below the average level in Russia's banking sector. We also highlight the negligibly small percentage of loan arrears in 2011-2013 (no more than 0.1%).

We appreciate the credit institution's impressive business profitability. In particular, ROA was 32.8% and ROE reached 55.6% in 2013 (against 1.9% and 15.2% on average in Russia's banking sector). We expect the Bank to keep these ratios at around 20% and 40%, respectively, at the end of this year. The high profitability is a powerful growth driver for the Bank's equity capital that has almost doubled since the start of 2013 against a 22% increase for the same period in Russia's banking sector.

We also regard the high probability of financial support from the Bank owners as a positive rating argument. The Bank belongs to beneficial owners of CJSC Petersburg Fuel Company, one of the major players in the fuel market of Russia's northwest region.

At the same time, in our view, the Bank's promiscuous income profile and high concentration of liabilities in (groups of) largest depositors are constraining the credit institution's rating.

PETERSBURG'S CITY BANK, inc has recently been deriving a substantial part of its incomes from transactions not directly related to banking: dividends from subsidiaries (RUB 0.2 billion in 2012), revaluation of investment assets (RUB 1.7 billion in 2013), disposals of assets (RUB 0.5 billion in 2014). However, the earnings from these non-core businesses in 2012-2014 enabled the Bank to substantially increase its equity capital, with ensuing opportunities to place additional funds while meeting the regulatory limits per borrower / group of interrelated borrowers. Besides, the investment property disposal in the first half of 2014 enabled the Bank to shake off a non-core asset (not involved in its core banking business) and yielded cash resources that may later be invested for interest income purposes.

PETERSBURG'S CITY BANK, inc has been operating in the market of banking services since 1994. Registration number of the Bank of Russia no. 2982 as of July 19, 1994. Since October 14, 2004, PETERSBURG'S CITY BANK has been a member of the state compulsory deposit insurance system (certificate no. 82).

As of October 1, 2014, the Bank's equity capital was RUB 3,277 million, assets totaled RUB 4,563 million.

The Bank's ultimate beneficiaries are Andrei and Olga Golubev.

This press release is based on the Statement of assignment of a credit rating to PETERSBURG'S CITY BANK, inc.

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.