The negative rating action was motivated by the Bank's continued loss-making activity. For three months on end, PJSC BALTINVESTBANK has been posting a negative financial result. The Bank's loss amounted to RUB 123.4 million in October resulting in a decline in post-tax profits as of November  1, 2015 to RUB 54.3 million.

The Bank is also unable to overcome the negative trend in the amount of highly liquid assets, which negatively affects the rating of the credit institution. As of November 1, 2015, the ratio of highly liquid assets to total assets of PJSC BALTINVESTBANK fell to 3.6% indicating a weakening liquidity position of the rated Bank.

Concurrently with a reduction in highly liquid assets, we note a notable growth in the amount of incomplete transfers of client funds. As of November 1, 2015, the amount of transfers pending completion reached RUB 61.3 million, although it stayed much lower (no more than RUB 1.2 million) for most of this year.

AK&M Rating Agency assigned a credit rating to PJSC BALTINVESTBANK for the first time on December 2, 2008. The last rating action in relation to the Bank was taken on October 30, 2015. All rating action announcements are available on the akmrating.ru website.

For estimation purposes, we completely rely on the reliability of information provided by the Bank. The rationale for AK&M Rating Agency's judgment on the rating may include information acquired from other sources we deem to be reliable; however, the agency does not check the input data exhaustively and disclaims all responsibility for their possible errors.

This press release is based on the monitoring results of the current credit rating assigned to PJSC BALTINVESTBANK and the Credit Rating Methodology for Banks and their Debt Instruments rev. August 14, 2015.

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.

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) and is on the Central Bank of Russia's Register of Accredited Rating Agencies.

AK&M Rating Agency

Ul. Gubkina 3, Moscow, Russia

www.akmrating.ru

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