The 'B++' rating (tier 2) indicates that JSC IT Bank qualifies as a sufficiently creditworthy borrower. The risk of a delay in meeting obligations is moderate, the full or partial debt restructuring risk is insignificant.

JSC IT Bank qualifies as a medium-sized regional Russian credit institution in terms of the amount of business. The Bank's Headquarters and three satellite offices are located in Omsk, one branch in Angarsk city of Irkutsk region. The Bank provides all types of banking products and services involving Russian rubles and foreign currencies and performs securities transactions. The Bank's special feature is a traditionally high share of securities in assets. In terms of assets and equity capital, IT Bank is in the 400-500 range among Russian banks.

We appreciate the Bank's high equity capital adequacy, low share of loan arrears and robust reserves, high liquidity and credit exposure ratios as positive rating drivers.

One of the positive arguments for the Bank's rating is its good equity capital adequacy. Over the period since our previous review, the Bank's N1.0 ratios exceeded the minimum level set by the Central Bank of Russia and the average percentage in Russia's banking sector. As of the last reporting date, on December 1, 2014, this ratio was 17.6%.

The loans receivable of JSC IT Bank are of acceptable quality, with a moderate share of loan arrears and a high reserve rate, which, as a whole, has a positive impact on the Bank's rating. As of December 1, 2014, the share of sound loans (quality grades 1 and 2) was 80.9%, which is a strong result. Loan arrears accounted for 3.3% of the loan portfolio (against 3.8% on average in the banking sector). JSC IT Bank pursues a fairly conservative reservation policy. The level of reserves for possible losses from loans of quality grades 3-5 and the ratio of actual to estimated reserve are exceeding the corresponding levels in Russia's banking sector.

The Bank's liquidity and credit risk ratios are comfortably far from the regulatory limits. Over the period under review, the Bank has never failed to stay within these limits, which is a positive signal for its rating.

At the same time, the poor diversification of obligations in terms of funding sources and a decline in deposits made by legal entities, the loss-making operation in 2014, and the worse equity capital profile are constraining the Bank's rating.

The high dependence on personal deposits and the shrinking amount of legal entities' deposits makes a negative impact on the rating. The share of personal deposits was 85.7% on October 1, 2014, which indicates a weak diversification of liabilities across funding sources. Since the start of this year, deposits of legal entities decreased by 39.3% (RUB 201.1 million), their share dropped to 9.8%.

Even though the Bank earned RUB 15.7 million in net profit for 9 months of 2014, its current operations are actually unprofitable, as proven by a negative pre-tax financial result (-RUB 0.9 million). In 2013, the Bank's pre-tax profit decreased by 38.7%, net profit plummeted by 78.8%. Another point of concern we note is that the Bank's investment in securities accounting for half of its assets do not contribute much to the credit institution's net incomes.

The equity capital degradation is also putting pressure on the rating. Since our previous review, the share of JSC IT Bank's core capital has been on a negative trend hitting the minimum 12-month value of 67.4% as of December 1, 2014. As a result, the share of supplementary capital increased to 32.3%, with an ensuing negative change in the capital quality ratio (Tier 2 to Tier 1 capital ratio) reaching 48.4%. The total amount of the Bank's net worth decreased by 14.1% since the start of the year (-RUB 94.2 million), mainly resulting from this year's losses.

Bank official name: Joint stock company IT Bank.

IT Bank has been operating in the market of banking services since 1992. Registration no. 2609 of the Bank of Russia assigned on December 19, 1993. The Bank possesses a license for banking operations involving Russian rubles and foreign currencies (without accepting money deposits from individuals) as of April 28, 1999, and a license for accepting money deposits denominated in Russian rubles and foreign currencies from individuals, as of April 28, 1999. The Bank has been a member of Russia's compulsory deposit insurance system since December 2, 2004, registered in the DIS register under no. 246.

This press release is based on the Statement of assignment of a credit rating to JSC IT Bank.

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

Ul. Gubkina 3, Moscow, Russia

www.akmrating.ru

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