According to the monthly monitoring results, AK&M Rating Agency revised the outlook on the credit rating of Bank VENETS, JSC to stable. The revision reflects the continuing erosion of the Bank's loan book.

Since the Bank's rating was affirmed (the reporting date being July 1, 2014), arrears on the Bank's loans increased more than twice (by RUB 138.5 million) as its major corporate clients faced financial difficulties. As of February 1, 2015, the share of overdue loan debt in the loan portfolio was 9.9% compared with 4.1% in Russia's banking sector.

Besides, the structural impairments of the Bank's liabilities are putting pressure on its rating. Over the period under review, corporate deposits shrank by 15.6% (150.4 million), their share in total liabilities decreased to 29.8%. This made the Bank even more dependent on deposits raised from retail customers, their share in liabilities increasing by 4.8 p.p. to 66.7% on February 1, 2015.

At the same time, the Bank's rating is supported by the growing equity capital (+25.6% or 184.6 million), and higher assets (+4.5%). Many of the Bank's clients are major companies of Ulyanovsk region whose borrowings from the Bank increased by 211.2 million over the period under review.

The Bank possesses a license to provide banking services involving Russian rubles and foreign currencies (without accepting money deposits from individuals) as of July 30, 2012 and a license to accept ruble-denominated money deposits from individuals as of July 30, 2012. The Bank has been a member of the deposit insurance system since October 14, 2004, registered in the DIS register under no. 77.

Headquartered in Ulyanovsk, the Bank has a branch network in Ulyanovsk and Ulyanovsk region.

The bank provides all types of services involving Russian rubles and foreign currencies to legal entities and individuals, lends to individuals and legal entities.

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.