Based on the monthly monitoring data, AK&M Rating Agency downgraded the credit rating of CB Trust Capital Bank CJSC to 'B', with a stable outlook. The downgrade follows a substantial reduction in the Bank's liabilities, the reduction in assets and the growing corporate loan arrears.

The funds raised in deposits from legal entities as well as the bills issued have traditionally been the key funding sources for CB Trust Capital Bank CJSC. Since we last affirmed the Bank's rating (the reporting date being October 1, 2014), its corporate deposits have decreased by 24.7% (RUB 249.1 million), while the volume of bills issued for the period under review dropped 14.7 times  (10 times for the last month) to a mere 2.7% of the total obligations.

As a result of the shrinking funding base, assets of CB Trust Capital Bank CJSC contracted by 29.6% to RUB 1,270.5 million as of April 1, 2015. Total amount provided in loans to legal entities decreased by 21.2% (RUB 194.4 million), while the share of loan arrears on them increased by 1.4 p.p. to 5.3%. This is particularly disturbing given that the share of corporate loans constantly accounts for most of the Bank's earning assets (ca. 57%).

The effect of the Bank's new development strategy was contrary to the management team's expectations. Far from growing as projected, the Bank's equity capital decreased by 4.7% for the last two months, and the improvements in other performance indicators we took account of in the previous rating action faded away soon.

In AK&M Raring Agency's view, the frequent change of shareholders is another risk factor for the Bank. Since October 1, 2014, the ownership structure of CB Trust the Capital Bank CJSC underwent numerous transformations with the result that almost all shareholders (except for one) changed. Similar processes usually impair the corporate governance making the Bank less efficient.

CB Trust Capital Bank CJSC possesses a license for baking operations with funds denominated in Russian rubles and foreign currencies (without accepting money deposits from individuals) as of 03/05/1994.

Headquartered in Moscow, CB Trust Capital Bank CJSC has branches in St. Petersburg and Voronezh.

The Bank provides all types of services involving Russian rubles and foreign currencies, lends to legal entities and individuals.

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.