OREANDA-NEWS. September 7, 2007. Standard & Poor’s Ratings Services raised its long-term counterparty credit rating on Rosbank to 'BB-' from 'B+'. At the same time, the ' B' short-term rating and ' ruAA-' Russian national scale ratings on the bank were affirmed. The outlook remains positive.

The rating action reflects Rosbank’s improving commercial and financial profile. Support from minority shareholder French group Societe Generale, Rosbank’s granular loan portfolio, and expectation of higher core profitability in the medium term support the bank’s current ratings. Improvements in operating efficiency are starting to materialize, with the cost-to-income ratio reducing to 55% in 2006 from 64% in 2005. Optimization of the distribution network is a continuous and challenging task for Rosbank but we believe that it has a good potential to further improve the efficiency of its large network.

Rosbank’s recurrent profitability is adequate, with an ROA of 2.4% in the first quarter of 2007, supported by higher margin in its retail business. Although long-term earnings potential appears more promising due to higher margin, profitability should remain pressured by a large cost base.

The positive outlook reflects Standard & Poor's Ratings Services' expectation that Societe Generale 's operational and managerial support will intensify in the medium term, positively affecting Rosbank in areas such as funding, risk management, and IT.