The 'A' rating indicates that EVROPEISKY ICB (CJSC) 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.

We appreciate the continuously growing key performance indicators, profitability of operations and high return ratios, sustained high quality of loan assets and strong liquidity position as positive rating drivers for the Bank.

The Bank's well-structured and growing equity capital is a positive argument for its rating. As of December 1, 2013, equity capital reached RUB 1,329.3 million increasing by RUB 248.3 million (23.0%) since the start of this year. While the share of Tier 1 capital is impressive (81.7%), the Bank's authorized capital accounts for a mere 11.7% of the total equity.

The Bank benefits from well-structured and growing assets and liabilities. As of October 1, 2013, its assets increased by 18.2% (RUB 1,828.9 million), almost twice the average growth rate in Russia's banking sector. Liabilities increased by 19.1% (RUB 1,719.5 million), mainly due to higher customer deposits.

For 9 months 2013, net loans receivable of EVROPEISKY ICB (CJSC) increased by RUB 1,235.7 million (18.1%), the Bank generally maintaining a fairly strong loan portfolio. Quality class 1 loans account for most of the loan book (73.0%).

Net earnings of EVROPEISKY ICB (CJSC) are fairly steady and growing in recent years, which we regard as a positive rating driver. The Bank's principal net income sources are its net fee & commission income and net interest income after provisions for losses. The Bank increased its overall net income by RUB 90.8 million (15.7%) in 2012, by RUB 144.8 million (33.2%) for 9 months 2013.

EVROPEISKY ICB (CJSC) is a profitable banking institution, which is a strong argument for its rating. Over the period under review, the Bank's return on equity and assets ratios matched or exceeded the average levels in Russia's banking sector. As of October 1, 2013, its ROE was 22.2%, ROA was 2.2% (against 16.1% and 2.0%, respectively, in Russia's banking sector).

The Bank's liquidity ratios are comfortably far from the regulatory limits. Average quality of EVROPEISKY ICB (CJSC)'s liquidity ratios is good (1.14). The Bank has never failed to stay within these limits, which is a positive signal for its rating.

At the same time, the high concentration of liabilities in one group of investors, heavy percentage of short-term liabilities, and significant credit risk assumed are working against the Bank's rating.

The concentration of liabilities in one group of investors stays fairly high. The ten largest investors (groups of investors) account for 42.07% of the total liabilities.

The maturity breakdown of the Bank's liabilities as of December 1, 2013 shows that more than half of the total liabilities (58.3%) mature on demand or overnight, 6.7% within up to 90 days, while 35.0% in longer than 90 days (including 14.7% maturing in over a year). Therefore, short-term obligations are still dominating the Bank's liability profile, which we regard as a negative rating driver.

Just as before, the N7 and N10.1 ratios are exceeding the respective average values in Russia's banking sector, although staying below the upper limits set by the Central Bank of Russia. Since our previous review, the N7 ratio has varied in the 334.5-462.2% range, the N10.1 ratio was 2.2-2.4%.

Full name: Evropeisky Investment Commercial Bank Closed Joint Stock Company.

Short name: Evropeisky ICB (CJSC).

Evropeisky ICB (CJSC) has been active in the market of banking services since 1991. The Bank possesses general banking license no. 1616 issued by the Central Bank of the Russian Federation on July 25, 2012.

The Bank is operating within the compulsory deposit insurance scheme, DIS registration no. 260 as of December 2, 2004.

Evropeisky ICB (CJSC) provides the standard range of banking products and services involving Russian rubles and foreign currencies. It focuses on providing comprehensive services to corporate customers (prioritizing enterprises engaged in foreign trade activities), lending to small and middle-sized businesses.

Evropeisky ICB (CJSC) is headquartered at: ul. Kutuzova 39, Kaliningrad, Russia. The Bank's retail network, apart from its HQ, comprises 5 satellite offices. The bank is only active in Kaliningrad region of Russia.

The Bank's reports are audited by Finansoviye i Bukhgalterskiye Konsultanty LLC (FBK LLC) (member of SRO Nonprofit Partnership Audit Chamber of Russia, principal number of registration entry 10201039470 as of December 28, 2009).

This press release is based on the statement of assigning a credit rating to Evropeisky ICB (CJSC).

The credit rating, along with any information and conclusions provided in this press release, only conveys our opinion on the Bank's reliability and shall not be considered as advice on the purchase and sale of securities or the provision of loan facilities to the Bank.

CJSC 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.

CJSC 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).

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), and 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
ul. Gubkina 3
Moscow, Russia
www.akmrating.ru
Press release by: Y.B. Kuznetsova
Phone no. (495) 916-70-30, fax no.: (499) 132-69-18.
Email: kuznetsova@akm.ru