The 'A' rating indicates that Bank Solidarnost qualifies 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.

Affirming the Bank's rating at last year's level we appreciate its sustainable development. In particular, the rating is essentially supported by the Bank's growing capital and assets, high-quality loan book, and profitable operations.

As of November 1, 2013 the Bank's equity capital was RUB 1,411.1 million including the authorized capital of RUB 300 million. Since January 1, equity capital increased by RUB 60.6 million, i.e. by 4.5%.

Since the start of the year, the Bank has added RUB 592.1 million to its assets (+4.8%). As of November 1, 2013, its assets amounted to RUB 12,891.8 million, most of them being net loans receivable (ca. 45.6%) and net investments in securities (33.9%).

We also regard Bank Solidarnost's growing net profit as a major positive rating driver. In 2013, the Bank increased its 9-month net profit by 7% year-on-year to RUB 31.9 million. The net profit growth trend persisted in the fourth quarter of 2013.

The Bank's loan assets are well-structured. Loans of quality grades 1 and 2 account for more than 90% of the Bank's loan book. Also, an overwhelming majority of the loans granted by the Bank are fully secured by pledges or guarantees, Loan arrears do not exceed 2.5% of a loan portfolio, the share of non-performing loans is low and still going down (from 1.82% to 1.17% since the start of the year). This advantage certainly contributes to the Bank's credit rating.

At the same time, the low share of net loans receivable in the Bank's assets at the end of 9 months 2013, the loan arrears being more than four times in excess of the current net profit, and unimpressive capital quality are working against the Bank's rating.

As of October 1, 2013, the share of net loans receivable in Bank Solidarnost's assets was 45.4%, significantly above the average percentage in Russia's banking sector (approximately 70%).

Another source of concern is a reduction in net profit against total loan arrears. At the end of the third quarter of 2013, the Bank's total loan arrears exceeded its net profit more than four times.

Another negative signal for the rating of Bank Solidarnost is its unimpressive capital adequacy and quality. Since the start of the year, the Bank's capital adequacy ratio decreased from 11.7% to 10.6%, which is below the average value in Russia's banking sector (13.4% and higher). Capital quality ratio (Tier 2 to Tier 1 capital ratio) of Bank Solidarnost is about 80%, much worse than the level recommended by the Bank of Russia (30%). As of the last reporting date, the main sources of the Bank's equity capital were its retained earnings (35.9%), property revaluation (31.5%), authorized capital (21.4%) and a subordinated loan (13.2%).

Bank Solidarnost has been active in the market of banking services since 1991. The Bank of Russia assigned it registration number 1555 as of September 2, 1991, license 1555 as of August 10, 2012.

Since 2005, Bank Solidarnost has been operating within the deposit insurance scheme (registered in the DIS register on February 10, 2005). Bank Solidarnost focuses on providing all types of banking products and services involving Russian rubles and foreign currencies, as well as operations in the securities market.

Headquartered in Moscow, Bank Solidarnost has seven branches in St. Petersburg, Vladimir, Smolensk, Nizhny Novgorod, Rostov-on-Don, Tula, and Bryansk. Bank Solidarnost ranks in the 200s among Russian banks in terms of assets and equity.

Full name (reproduced from the corporate website): Bank of trade-unions' solidarity and social investment "Solidarnost"

Short business name: Bank Solidarnost

The Bank's reports are audited by audit firm Kollegiya Nalogovykh Konsultantov LLC (Panel of Tax Advisers), PSRN 1025005242140. The audit firm is a member of SRO Nonprofit Partnership “Auditor Association Sodruzhestvo”, principal registration number 10206018011. Location: Keramicheskiy proezd 47, bld. 2, office 189 – 127540 Moscow.

This press release is based on the statement of assigning a credit rating to Bank Solidarnost.

The credit rating, along with any information and conclusions provided in this press release, only conveys our opinion on the Bank's credit standing 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 – Regulation 323-P), Vnesheconombank (for granting subordinated loans) and SME Bank (for its program of lending to SME businesses), RUSNANO (when selecting banks to provide cash and settlement services to project and engineering companies implementing investment projects), the MICEX (for the Corporate Bond Index / MICEX CBI and Municipal Bond Index / MICEX MBI calculation and bond listing purposes). By a resolution of Russia's Government AK&M Ratings count for the recapitalization of banks. Besides, AK&M Rating Agency is recognized by AHML and accredited by SRO National Securities Market Association.

CJSC AK&M Rating Agency
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www.akmrating.ru
A.G. Chumachenko
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