The ‘A’ rating indicates that JSCB Primorye 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.

The rating score of JSCB Primorye are essentially supported by the continuing increase in assets, the high return on equity and return on assets ratios, the acceptable capital quality, the fairly low funding costs, the high combined share of class 1 / class 2 loans and the low share of loans arrears in the loan portfolio.

As a whole, the Bank’s asset growth rates over the period under review mainly exceeded the average levels in Russia’s banking system, which is a good signal for the rating score.

Also, JSCB Primorye achieved a higher capital quality than other banks of the Russian Federation. As of October 1, 2012 capital quality ratio (the ratio of tier 2 capital to tier 1 capital) at JSCB Primorye was 33.08%.

JSCB Primorye is a profitable bank steadily improving its efficiency. In particular, return on equity for the period under review was always at least twice above the average percentage in Russia’s banking system. At the end of the first half year 2012, return on equity at JSCB Primorye was 37.9%.

The good operational efficiency also resulted in a higher return on assets against the average percentage in Russia’s banking system. At the end of the second quarter 2012, return on assets of JSCB Primorye reached 3.67%.

One of the key drivers of JSCB Primorye’s growing efficiency is the low funding costs (more than twice below the Bank of Russia’s current interest rate).

The competent loan portfolio building policy made a certain contribution to the positive development results of the Bank. Being better than the average level in Russia’s banking system, the appreciable combined share of class 1 / class 2 loans and the low percentage of loans arrears in the loan portfolio of JSCB Primorye certainly support the rating score.

However, the rating score is restricted by the recent equity capital reduction trend, the falling net profit growth rate and the decreasing amount of funds borrowed from legal entities who are the Bank’s customers.

The downward trend in the equity capital manifesting itself in the second half of the year casts shadow on the Bank’s development. For the third quarter 2012, the Bank’s equity capital decreased by 9%.

Another argument against a higher rating score is a slowdown in the net profit growth rate in 2012 against what it was in 2011. In the third quarter 2012, the Bank’s net profit increased by a mere 3%.

Besides, the amount of credit facilities received from the legal entities who are the Bank’s customers is currently looking down, also sending a negative signal for JSCB Primorye. From September 1 till September 1, 2012, the amount of funds borrowed from such legal entities decreased by 21.5%.

JSCB Primorye has been active in the market of banking services since 1994, registration no. 3001 of the Bank of Russia as of July 27, 1994, lic. no. 3001 of the Bank of Russia as of August 31, 2012.

Since 2004, JSCB Primorye has been participating in the deposit insurance scheme, DIS registration no. 147 as of November 4, 2004. JSCB Primorye provides all kinds of banking products and services involving Russian rubles and foreign currencies and is active in the securities market.

The Bank’s auditor is CJSC BDO, principal state registration number: 1037739271701, tax number: 7716021332. rian-audit.ru/images/moap.gif

Since May 20, 2009, CJSC BDO has been a member of the self-regulatory organization Audit Chamber of Russia (a non-profit partnership), primary registration number in the register of audit firms: 10201018307. The non-profit partnership Audit Chamber of Russia is registered in the State Register of Self-regulatory Audit Organizations under no. 455 as of October 1, 2009.

This press release is based on the statement of assigning a credit rating to JSCB Primorye.

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.

CJSC 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.

CJSC AK&M 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).

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 companies implementing investment projects), and 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: A.G. Chumachenko
Phone no. (495) 916-70-30, fax no.: (499) 132-69-18.