The 'B+' rating indicates that CB Trust Capital Bank CJSC qualifies as a sufficiently reliable borrower. Restructuring risk for a loan / part of a loan is relatively low.

We appreciate the equity capital growth, its acceptable quality and adequacy, profitable operations, low funding costs, and fairly low concentration of liabilities as essential positive rating drivers for CB Trust Capital Bank CJSC.

Owing to profitable operations, the Bank has been steadily increasing its equity capital for the last six years, although the growth rates are rather moderate. The Bank's equity capital increased by 5% in 2012 and the first half of 2013, by 4% for eight months of 2013.

CB Trust Capital Bank CJSC maintains relatively high capital quality. As of September 1, 2013, its Tier 1 capital accounted for 68.5% of the Bank's equity capital. Accordingly, capital quality ratio (Tier 2 to Tier 1 capital ratio) was 46%. Besides, the share of authorized capital in the Bank's equity capital was 49%, more than twice above the average percentage in Russia's banking sector.

It should be noted that CB Trust Capital Bank CJSC is operating in the black. In 2012, the Bank's net profit increased by 10% year-on-year, reaching RUB 11.8 million. In the first half of this year, the Bank's net profit amounted to RUB 1.8 million.

In 2011, 2012 and Q1 2013, the Bank raised capital at a rate below the Bank of Russia's refinancing rate, which contributes to its rating. At the end of the first half year 2013, the cost of debt was 1.34% p.a., the interest rate on customer deposits was 0.5% p.a., the Central Bank of Russia's refinancing rate being 8.25%.

We regard the concentration of the Bank's liabilities as comfortably low. As of July 1, 2013, the maximum share of liabilities attributable to one group of lenders was a mere 4.13%, while 10 principal lenders accounted for 21.24% of the total liabilities.

At the same time, the credit rating of CB Trust Capital Bank CJSC is under pressure of the lower (compared with 2012) assets, liabilities and earnings, no increase in this year’s balance sheet profit and net profit, fairly low return ratios, and underwhelming quality of liquidity and credit risk ratios.

In 2012 and the first half of 2013, the Bank's assets decreased by 12%, liabilities by 32%. In 2012, total income dropped by 10.5% year-on-year; in January-June 2013, the Bank earned 4% less than for the same period last year.

The Bank's weak return ratios are also working against its rating. In 2012, its return on equity and assets ratios were below the average values in Russia's banking sector. In the first half of 2013, the ROE and ROA ratios equaled 1.24% and 0.25%.

Another negative signal is the underwhelming quality of liquidity and credit risk ratios. The acid test ratio (N2) and current liquidity ratio (N3), maximum amount of large credit risks (N7) and total magnitude of insider-specific risk (N10.1 ratio) were below the average values in Russia's banking sector. Sometimes, the N2 and N10.1 ratios would approach the limits established by the Bank of Russia, without breaking them, though.

Full name: Commercial Bank Trust Capital Bank closed joint-stock company.

Short name: CB Trust Capital Bank CJSC.

The Bank has been operating in the market of banking services since 1994, registration no. 2741 of the Bank of Russia. The Bank possesses a license for banking operations dated 4/28/2003. The Bank does not participate in the compulsory deposit insurance scheme and does not accept private deposits.

CB Trust Capital Bank CJSC headquartered in Moscow has branches in St. Petersburg and in Voronezh. The Bank provides all types of services involving Russian rubles and foreign currencies, lends to legal entities and individuals.

This press release is based on the statement of assigning a credit rating to CB Trust Capital Bank CJSC.

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