The 'B++' rating indicates that Bank VENETS, JSC 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.

The outlook revision is motivated by a reduction in overdue debt, an increase in highly liquid assets, and customer deposit improvements.

The Bank improved the quality of its loan portfolio: since the previous revision, arrears on retail and corporate loans decreased from RUB 315.2 million as of August 1, 2015 to RUB 236.0 million at the start of H2 2016. As a result, the share of overdue debt in the Bank's loan book decreased to 8% on June 1, 2016. In addition, the Bank pursues a rather conservative provisioning policy: its reserve for possible bad debts reaches 11.8% exceeding the average percentage of 8.5% in the Russian banking system.

Bank VENETS, JSC has a comfortable liquidity position, the share of highly liquid assets in total assets increased from 10.2% to 28%. The Bank's acid test and current liquidity ratios (N2 and N3, equal to 176.1% and 136.3%, respectively) are considerably above the minimum required levels.

We appreciate the stability and improvements in the Bank's main source of funding, client deposits. Retail deposits increased by RUB 222.3 million (9.9%), corporate deposits by RUB 76.6 million (9.6%). These improvements testify to persisting confidence of clients and partners in the credit institution.

AK&M Rating Agency assigned a credit rating to Bank VENETS, JSC for the first time on November 18, 2010. The last rating action in relation to the Bank was taken on September 18, 2015. All rating action announcements are available on the akmrating.ru website.

The rating is valid until August 2016. AK&M Rating Agency may revise the rating and/or the outlook during this period if circumstances fundamentally influencing the Bank's creditworthiness are revealed.

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 Bank VENETS, JSC and the Credit Rating Methodology for Banks and their Debt Instruments rev. November 27, 2015.

The rating, along with any information and conclusions provided in this press release, only conveys our creditworthiness opinion 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

Ul. Gubkina 3, Moscow, Russia

www.akmrating.ru

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