The negative rating action reflects the imbalance in the Bank's lending and deposit transactions. In particular, its 9-month interest margin was RUB -62.6 million; in the third quarter of 2015, the Bank's interest expenses also stayed above the interest incomes (RUB -1.8 million).

This imbalance of asset-side and liabilities-side operations (interest incomes

The Bank's highly liquid assets are going down, their total amount shrinking by 35% in January-September 2015, their relative share in total assets decreasing to 4.2% (almost 2.5 times below the average percentage in Russia's banking sector), which exerts pressure on the credit institution's rating.

At the same time, we appreciate the Bank's higher equity capital, which we regard as a positive rating driver. In 2015, the equity increased by 10.7% reaching RUB 7,951.2 million. This has enabled PJSC BALTINVESTBANK to maintain a comfortable capital adequacy ratio (N1.0) at 11.66% as of October 1, 2015. The growing equity of the credit institution strengthens its protective power, improves the capacity to absorb potential losses and to safeguard the interests of clients.

We also appreciate the steady support from the Bank's shareholders. In 2015, the total amount of assistance from them 2015 exceeded 1.5% of the Bank's total assets.

AK&M Rating Agency assigned a credit rating to PJSC BALTINVESTBANK for the first time on December 2, 2008. The last rating action in relation to the Bank was taken on August 25, 2015. All rating action announcements are available on the akmrating.ru website.

For estimation purposes, we completely rely on the reliability of information provided by the Bank. The rationale for AK&M Rating Agency's judgment on the rating may include information acquired from other sources we deem to be reliable; however, the agency does not check the input data exhaustively and disclaims all responsibility for their possible errors.

This press release is based on the monitoring results of the current credit rating assigned to PJSC BALTINVESTBANK and the Credit Rating Methodology for Banks and their Debt Instruments rev. August 14, 2015.

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.

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) and is on the Central Bank of Russia's Register of Accredited Rating Agencies.

AK&M Rating Agency

Ul. Gubkina 3, Moscow, Russia

www.akmrating.ru

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