Expert RA Rating Agency

Russian National scale

^* — date of initial rating assignment
^** — date of rating confirmation

Web-site of the agency: raexpert.ru

Expert RA Assigns 'Stable' Outlook to Credit Rating of Bank Petrocommerce

On 27 October 2011, Expert RA Rating Agency assigned 'Stable' outlook to the credit rating of Bank Petrocommerce. Therefore, the Bank’s rating is highly unlikely to change within the following 12 months.

The Bank has currently 'A+' rating ('Very high credit standing').

The rating is underpinned by such factors as a relatively high capital adequacy ratio for a bank of federal importance, a robust 'collateral to loan' ratio, strong diversification by industry of the corporate loan portfolio, access to a wide range of extra liquidity sources, solid geographical presence, and a strong risk management function.

Expert RA Affirms Credit Rating of Bank Petrocommerce

On 06 June 2011, Expert RA Rating Agency affirmed its A+ credit rating assigned to Bank Petrocommerce («Very high credit standing»).

The credit standing is underpinned by such factors as a high capital adequacy ratio for a bank of federal importance, access to a wide range of extra liquidity sources and high probability of shareholders’ support.

Expert RA Affirms Credit Rating of Bank Petrocommerce

On 15 June 2010, Expert RA Rating Agency affirmed its A+ credit rating assigned to Bank Petrocommerce («Very high credit standing»).

The credit standing is underpinned by such factors as a relatively high capital adequacy ratio for a bank of federal importance, access to a wide range of extra liquidity sources, high probability of shareholders’ support, a high ‘collateral to loan’ ratio, strong levels of instant and current liquidity ratios, adequate reliability of the securities portfolio as well as a developed geographical presence.

Expert RA Affirms Credit Rating of Bank Petrocommerce

On 4 September 2009, Expert RA Rating Agency (Moscow) affirmed its A+ credit rating assigned to Bank Petrocommerce (“Very high credit standing with stable outlook”).

The credit standing is underpinned by such factors as the shareholders’ support, a robust ‘collateral to loan’ ratio, a strong level of current liquidity, a relatively high for a federal bank capital adequacy ratio, access to additional liquidity sources, lack of default bonds in the securities portfolio as well as a broad regional coverage.

“Affirmation of our credit rating by such a reputable rating agency as Expert RA is an important sign which proves reliability and financial stability of the Bank”, - says Alexander Medvedovsky, Head of Investor Relations of Bank Petrocommerce.

Expert RA Affirms A+ Credit Rating of Bank Petrocommerce

On 22 January 2008, Expert RA affirmed its A+ rating assigned to Bank Petrocommerce (high credit standing with stable outlook).

The Bank's robust credit standing is underpinned by a well-balanced structure of assets and liabilities in terms of maturity and sources, a low risk of liquidity shortfalls, a low level of non-performing corporate and retail loans, risk management procedures adequate for the volume and specifics inherent in the Bank's business as well as a thoroughly developed strategy.

Expert RA Upgrades Rating of Bank Petrocommerce

On 25 October 2006, Expert RA upgraded the rating of Bank Petrocommerce to A+ (high level of reliability, outlook — stable).

The Bank's high level of reliability is underpinned by the matching of the maturities of assets and liabilities as well as a well-diversified loan portfolio. The Bank is one of the major players of the factoring market and ranks among the leaders in terms of funds under management.

The first rating assigned by Expert RA

"Expert" magazine, #48 from December 22, 2003

Bank Petrocommerce became the first bank to be assigned the credit rating by Expert RA. Its ’A’ Russian national scale rating reflects the Bank's high credit standing. According to the rating analysts, in the short run the Bank is very likely to promptly perform all of its financial obligations, both current and arising in the course of its activity. In the mid-term, the likeliness of performance of its obligations to effect large payments is considerably dependent on the stability of macroeconomic and business environment.

The Bank previously focused on servicing the LUKOIL group companies, but presently it is expanding its activities to cover the competitive market. This is particularly confirmed by the following figures: the Bank is ranked 16th by the volume of individuals' deposits, 20th by the volume of loans to customers, 9th by the size of securities portfolio and, finally, 20th by the ratio of business activity (RBA). As for the RBA, the analysts consider that it normally ranges from 10 to 20. The Bank's RBA for the 3rd quarter of 2003 exceeds 50, that expressly signals its aggressive market policy.

The Bank's rapid development is reflected by the high rate of its risky assets growth, first of all, of its loan portfolio. However, the Bank's system of risk management demonstrates that its aggressive strategy is under control. The decision to undergo the rating procedure can also be considered as an element of this system. According to Mr. V. Nikitenko, President of the Bank, "the cooperation with Expert RA and other rating agencies is an integral part of the program implemented by Bank Petrocommerce among the measures aimed at managing its risks and achieving world standards of financial institutions transparency". Finally, the Bank's credit standing is enhanced by the presence of the Bank's shareholder — oil company LUKoil, whose management has repeatedly demonstrated interest in its business development.

The conclusion drawn by Expert RA signals that the Bank is currently one of the largest banks in Russia (16th in terms of assets). It has 17 branches and 4 subsidiaries in Russia and in the CIS countries. High rates of qualitative and quantitative development are backed by the efficient customer policy and product range as well as the high level of technical equipment. The robust ratios of profitability and return are, inter alia, among the factors contributing to the further development of the Bank. The Bank has strong ratios of liquidity position and assets/liabilities tenor match.