The ‘B++’ rating indicates that JSC Eurasian bank is qualified 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 growing equity capital and profit, high equity capital adequacy and liquidity, low credit risks as the main positive rating drivers for JSC Eurasian bank.

The equity capital of JSC Eurasian bank is on the rise. In 2012, the Bank’s capital increased by RUB 37.5 million (7.1%) and further improved by RUB 7.7 million (1.4%) in the first quarter of 2013. As of 4/1/2013, the equity capital amounted to RUB 572.8 million, 41.8% of that being the authorized capital. The Bank’s retained earnings were the main capital growth driver.

The Bank increased its profits considerably in 2012. According to the Bank’s preliminary annual statement, pre-tax profit grew 2.6 times year-on-year to RUB 41.27 million, net profit 3.4-fold to RUB 37.25 million. In the first quarter of 2013, pre-tax profit amounted to RUB 11.56 million, net profit was RUB 9.28 million (approximately 10% below the high Q1 2012 results).

The Bank has achieved high capital adequacy and liquidity positions (above the average levels in Russia’s banking sector). On most of the reporting dates in 2012 and early 2013, the capital adequacy ratio exceeded 30%. The instant and current liquidity ratios of JSC Eurasian bank, while lacking stability, are well above the minimum thresholds and even exceeding the average values in the banking sector.

The high quality of the Bank’s loan portfolio also supports its rating. Prime loans accounted for about 89%, nonprime loans for about 10% of the loans receivable and their equivalents as of 3/1/2013. The bank mainly lends to legal entities and credit institutions (ca. 61% and 39% of the loan receivables, respectively). The loan arrears accounted for less than 1% of the total loan portfolio. The maximum amount of major credit risks is below the average level in Russia’s banking sector (188.5% as of 3/1/2013). The maximum amount of loans, guarantees and sureties to the bank’s members (N9.1 ratio) and the total magnitude of insider-specific risk (N10.1 ratio) equaled zero in March and April 2013.

At the same time, the high credit risks on major borrowers, high concentration of liabilities to major depositors, low ROE and ROA ratios are working against the Bank’s rating.

The Bank is facing high credit risk exposure and a high concentration of liabilities to major customers. In particular, the maximum value of credit risk per borrower or group of related borrowers (N6 ratio) of JSC Eurasian bank was fairly high in 2012 (23% to 25%) and reached 25.2% as of 5/31/2012, exceeding the maximum threshold set by the Central Bank of the Russian Federation. In early 2013, however, this ratio decreased to 21%.

Also, the Bank’s liabilities are highly concentrated within 10 largest groups of depositors accounting for more than 90% of its total obligations at the end of Q1 2013.

Return on equity of JSC Eurasian bank is still low, despite the higher profits. As of 10/1/2012, the ROE ratio was almost twice below the average value in Russia’s banking sector (9.3% against 18.3%, respectively), the ROA ratio just over the average percentage (2.8% against 2.3%, respectively). According to preliminary results as of 4/1/2013, the Bank’s ROE ratio for the whole year 2012 period was below 7%, the ROA ratio less than 2%, both trailing the average levels in Russia’s banking sector.

Full name: Open Joint Stock Company Eurasian bank.

Short name: JSC Eurasian bank.

The bank has been active in the market of banking services since 1990. Central Bank of Russia’s registration no. 969 as of 11/27/1990. The Bank has a general banking license as of 4/8/2010, a license for accepting money deposits, deposits of precious metals as of 4/8/2010. The Bank participates in the compulsory deposit insurance scheme, DIS registration no. 538 as of 1/27/2005. Headquartered in Moscow, the Bank has no branches or satellite offices. JSC Eurasian bank provides the whole range of services involving Russian rubles and foreign currencies, lends primarily to legal entities, and is engaged in operations in the securities market.

This press release is based on the statement of assigning a credit rating to JSC Eurasian bank.

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 Analysis, Consulting and Marketing Rating Agency<br /> ul. Gubkina 3<br /> Moscow, Russia<br /> www.akmrating.ru<br /> Press release by: A.M. Krachkovskaya<br /> Phone no. (495) 916-70-30, fax no.: (499) 132-69-18