OREANDA-NEWS. July 15, 2008. Decrease in growth rates of the Bank’s net profit in IIQ2008 as compared to 1Q2008 resulted from the following:

1) pursuant to the tax legislation in effect, in IIQ the Bank made additional profit tax payment for the IQ period, and extended the amount of advance payments for the second quarter, calculated on the basis of 1Q profit. Therefore, increase in “Profit Tax Payment” item amounted to RUB 0.5 bln for IIQ as compared to IQ2008.

2) in April 2008, the Bank turned to more conservative LLP methodology for the loans overdue for more than 1 year. As a result, LLP amount increased by RUB 0.6 bln as compared to IQ2008.

Taken as a whole, the Bank demonstrates sound growth in financial performance. Based on 1H2008 results, the Bank’s book profit increased by 63%. Provided the occasional nature of the facts mentioned above and further compensation in the following reporting periods, IIQ decrease in profit shall not have material affect on the Bank’s financial performance for whole period of the year 2008.