The ‘A’ rating indicates that IntrustBank (JSCB) is 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 continuing growth of key performance indicators, the profitability of operations, the customer loyalty, and the good liquidity as the positive arguments essentially supporting the Bank’s rating.

The Bank’s equity capital is on the rise. As of December 1, 2012 it increased by RUB 289.6 million (24.5%) year-to-date (against 15.3% on average in Russia’s banking sector for the same period, for reference).

The Bank’s assets are going up. The asset growth rate roughly matches the average percentage in Russia’s banking system (21.4% in 2011, 13.8% for 3 quarters 2012 against the average growth rates of 23.1% and 10.2% in the banking sector, respectively).

Another positive signal for the rating is the increasing amount of the Bank’s net income: by RUB 157.9 million (50.1%) in 2011; by RUB 95.6 million (27.8%) for 9 months 2012.

Net interest incomes accounting for most of the Bank’s total incomes are growing (by RUB 174.3 million, or 80.1%, in 2011, by RUB 57.9 million, or 20.2%, for 9 months 2012), which is also favorable for the rating.

The Bank’s operations are profitable, with an upward trend in the amount of profit for 2011 and 9 months 2012. For 3 quarters 2012, pre-tax profit rose by RUB 3.1 million (4.0%), profit after tax by RUB 5.9 million (12.7%). In 2011, pre-tax profit increased 3.4-fold, profit after tax 11-fold year-on-year.

The growing amount of funds raised from both individuals and legal entities also contributes to the Bank’s rating. In particular, the amount of funds placed by the Bank’s customers increased by RUB 1,386.8 million (24.0%) in 2011, by RUB 614.0 million (8.6%) for 9 months 2012.

It will be noted that IntrustBank (JSCB) is improving its key performance indicators while retaining its major customers, which proves customer loyalty and efficiency of the Bank’s policy to assist their customers in achieving business success.

The fairly good liquidity position is a further argument for a high rating. In particular, on December 1, 2012, the N2 ratio was 72.8%, N3 was 87.42%, N4 was 26.26%. The average quality of liquidity ratios estimated using AK&M Rating Agency’s method is comfortably high (more than 100%).

At the same time, the relatively poor quality of the Bank’s capital and loan assets as well as the rather high credit risk concentration prevent a higher rating.

The Bank’s capital is of doubtful quality. The capital quality (i.e. the supplementary capital to core capital ratio) does not meet the Central Bank of Russia’s recommendation (no more than 30%). On December 1, 2012, the Bank’s last reporting date, this ratio was 75.9%.

The quality of loan assets at IntrustBank (JSCB) also leaves much to be desired, which is another negative signal for the Bank’s rating. Loans of quality classes 2 and 3 still account for most of the Bank’s loan portfolio (49.4% and 44.4%, respectively). The share of prime quality loans is a mere 2.6%, a dismal result against the average percentage in Russia’s banking sector of more than 50%). A silver lining is that the combined share of non-performing and problem loans is also small (3.6% as of December 1, 2012).

The fairly high credit risk concentration also weighs upon the Bank’s rating. The maximum amount of large credit risks (N7) is above the average level in Russia’s banking system, although still far below the maximum percentage of 800% set by the Central Bank of Russia. As of December 1, 2012, the N7 ratio was 519.98%.

Full business name: Joint-stock Commercial Bank IntrustBank

Short business name: IntrustBank (JSCB)

IntrustBank (JSCB) has been active in the market of banking services since 1994. The bank’s activity is regulated by the Central Bank of the Russian Federation (general banking license no. 3144 as of December 6, 2002).

The Bank participates in the compulsory deposit insurance scheme, DIS registration no. 916 as of September 15, 2005.

IntrustBank (JSCB) provides the standard range of banking products and services involving Russian rubles and foreign currencies. It mainly focuses on comprehensive services to corporate customers.

Apart from the headquarters, IntrustBank (JSCB) comprises 6 branches and 1 satellite office. Headquartered in Moscow, the Bank is operating units in St. Petersburg, Samara, Voronezh, Volzhsky, Izhevsk, Smolensk.

The Bank’s auditor is Finansoviye i Bukhgalterskiye Konsultanty LLC (FBK LLC), a member of the SRO nonprofit partnership Audit Chamber of Russia, membership certificate no. 5353 as of 12/21/2009, principal number of registration entry 10201039470).

This press release is based on the statement of assigning a credit rating to IntrustBank (JSCB).

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 (as a prerequisite for including bonds in the Corporate Bond Index / MICEX CBI and Municipal Bond Index / MICEX MBI calculation base and for listing bonds). 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.
E-mail: kuznetsova@akm.ru