The rating action follows a substantial deterioration in the Bank's key performance indicators since the last rating affirmation.

The Bank's funding base has shrunk considerably since this May. In particular, current account balances of both legal entities and individuals decreased by 39.3% and 76.1%, respectively. The fundamental operational performance indicators have weakened: assets decreased by 12.8%, equity capital by 8.7%, highly liquid assets by 53.8%.

The capital adequacy and current liquidity ratios have gone down approaching the lower limits set by the Bank of Russia, which is also putting pressure on the credit rating. As of September 1, 2014, the N1 ratio was 10.30%, the N1.2 ratio was 5.83%, the N3 ratio being 52.12%. Also, the percentage of loan arrears in the Bank's loan portfolio as of the same date was fairly high (6.6%).

However, we note that the weakening of Tempbank's financial position was triggered by the sanctions imposed against it by the U.S. Treasury Department this May. The Bank is taking reasonable measures to stabilize its performance. The bank registered an issue which, if successful, will push up its authorized capital almost three times to RUB 1.164 billion, easing pressure on the capital and cementing the Bank's financial soundness.

As of September 1, 2014, the Bank's assets totaled RUB 9,788.4 million, equity capital was RUB 1,203.4 million.

Full name: Open Joint-Stock Company "Moscow Joint-Stock Bank "Tempbank".

Short Bank name: OJSC MJSB "Tempbank".

The rating, along with any information and conclusions provided in this press release, only conveys our opinion on the Bank's creditworthiness and shall not be construed as a recommendation to purchase or sell securities, or to lend funds.

AK&M Rating Agency shall not be held liable for any interpretations, inferences and consequences related to the application of results of the rating estimation procedure by any third parties.

CJSC Analysis, Consulting and Marketing 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) and is on the Central Bank of Russia's Register of Accredited Rating Agencies.

CJSC AK&M Rating Agency

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www.akmrating.ru

Phone no. (495) 916-70-30, fax no.: (499) 132-69-18.