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Fitch Changes Credit Bank of Moscow’s Outlook to Positive.

13.09.2006

Fitch Ratings-London/Moscow-12 September 2006: Fitch Ratings has today changed Russia-based Credit Bank of Moscow's ("CBOM") rating Outlooks to Positive from Stable. Its ratings are affirmed at Issuer Default 'B-' (B minus), National Long-term 'BB+' Short-term 'B', Individual 'D' and Support '5'.

"Enhancement of profitability, as the bank expands into the new segments of SME and mortgage lending and new regions, coupled with planned increased diversification of funding could result in a rating upgrade for CBOM," says Alexei Kechko, Associate Director in Fitch's Financial Institutions team. "Although not expected in the currently favourable environment, a liquidity crisis or significant asset quality deterioration could exert downward pressure on CBOM's ratings."

CBOM's ratings reflect its improved but still potentially vulnerable liquidity and currently modest profitability, as well as certain weaknesses in the Russian operating environment. However, capitalisation is adequate, customer concentration levels have fallen and the bank has made some progress in diversifying its funding base.

CBOM was ranked the 57th-largest Russian bank by total assets at end-H106. Its core business lies in providing banking services to medium-sized trading companies and also retail customers (notably car lending) in Moscow and the Moscow region.