The 'B++' rating indicates that Bank of Development of Technologies qualifies as a sufficiently reliable borrower. Risk of a delay in meeting liabilities is moderate, restructuring risk for a loan / part of a loan is insignificant.

We appreciate the growth of equity capital and assets, high quality of capital, strong liquidity position, and low funding costs as essential positive rating drivers for Bank of Development of Technologies.

BDT has been constantly increasing its equity capital since 2006. For 2012 and the first half of 2013, the Bank's authorized capital increased by RUB 230 million (56%), equity capital by RUB 251.6 million (40%); while the Bank's equity capital grew slower than it did on average in Russia's banking sector, the Bank kept its quality high (as of July 1, 2013, the authorized capital accounted for 72.4% of equity capital). Within a one-year period, the Bank intends to increase its authorized capital by 43% to RUB 915.4 million. In this case, the Bank's equity capital will exceed RUB 1 billion.

The Bank's assets also increased by RUB 430 million since the start of 2012 reaching RUB 5.2 billion as of July 1, 2013.

As a whole, we regard the Bank's capital adequacy as high. Throughout 2012 and the first half of 2013, the Bank's capital adequacy ratio (N1) exceeded the average levels in Russia's banking sector. As of July 1, 2013, the Bank's N1 ratio was 19.32%.

The Bank meets the Central Bank of Russia's liquidity requirements. Over the last year, its liquidity ratios stayed above the average values in Russia's banking sector. The strong liquidity position results from investing significant amounts in deposits with the Central Bank of Russia, interbank loans, and highly liquid securities.

The low funding costs are also contributing to the Bank's credit rating. At the end of the first half of 2013, the cost of debt was 2.03% p.a., the interest rate on customer deposits 1.93% p.a., against the Central Bank of Russia's refinancing rate of 8.25%.

At the same time, the higher growth of interest paid vs. interest earned, relatively low return ratios, loan portfolio weaknesses, and fairly high concentration of liabilities are exerting pressure on the rating of Bank of Development of Technologies.

In 2011 and 2012, the Bank's interest expenses grew 2.2-2.4 times faster than its interest earnings did. It should however be noted that the Bank's interest earnings in absolute terms exceeded interest expenses at least 2.4 times in the same periods.

The Bank's return on equity and assets ratios was 1.96% and 0.33%, respectively, as of July 1, 2013, which is far below the average ratios in Russia's banking sector.

We also regard the relatively low (compared with the average level in Russia's banking sector) share of prime loans (18.9%) and high share of doubtful and problem loans (15.1% and 8.4%, respectively) in the loan portfolio as a negative rating driver, even though this is a common thing for credit institutions of similar scale.

We also regard the high concentration of the Bank's liabilities as a risk factor. As of July 1, 2013, the maximum share of liabilities attributable to one group of lenders was 23.4%, while 10 principal lenders accounted for 56% of the total liabilities.

Full name: Bank of Development of Technologies (reproduced from the Bank in English page on the Bank's official website).

Short name: BDT.

The Bank has been operating in the market of banking services since 2003. In 2012, the Bank secured a new general banking license (no. 3441); in March 2009, it was licensed to accept deposits of precious metals. In March 2009, the Banking Supervision Committee of the Central Bank permitted BDT to join the Deposit Insurance System (DIS). The Bank's auditor is Alt-Audit LLC.

The Bank qualifies as a mid-sized Russian credit institution in terms of the amount of business. As of July 1, 2013, the Bank ranked 377th among Russian banking institutions in the amount of net assets (RUB 5.2 billion), 368th in the equity capital as of the same date (RUB 885 million).

The Bank's core business is the provision of all types of banking products and services involving Russian rubles and foreign currencies, along with operations in the market of precious metals and securities.

This press release is based on the statement of assigning a credit rating to Bank of Development of Technologies (BDT).

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
ul. Gubkina 3
Moscow, Russia
www.akmrating.ru
Press release by: S.V. Avdoshin
Phone no. (495) 916-70-30, fax no.: (499) 132-69-18