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Fitch Rates Russia’s ZAO Raiffeisenbank Austria «A-»

Fitch Ratings has today assigned Russia-based ZAO Raiffeisenbank Austriaratings of Long-term Issuer Default (IDR) ’’A-’’ (A minus), Short-term IDR’’F2’’, Support ’’1’’, Individual ’’C/D’’ and National Long-term ’’AAA(rus)’’. AStable Outlook has been assigned to both Long-term IDR and NationalLong-term rating.

The Long- and Short-term IDRs, Support and National Long-term ratingsfor Raiffeisenbank are underpinned by the potential support fromRaiffeisen Zentralbank Oesterreich (RZB, Support‘1’), the third largest bank in Austria and the central institution of Raiffeisen Banking Group. The Individual rating reflects significant business concentrations, risks associated with the ongoing merger with Impexbank and rapid asset growth including into new segments and regions, where the bank has less experience. It also considers Raiffeisenbank’’s good customer franchise, low loan impairment levels, sound risk management framework and strong profitability.

In case of need, Raiffeisenbank would first turn to RZB, its indirectowner, for support. In Fitch’s view, given RZB’s ability and propensity to provide support, there is an extremely high probability that it would be forthcoming, if required. Upward movement in Raiffeisenbank’’s Long-term IDR would require both a strengthening of RZB’s credit profile and an upgrade of Russia’s Country Ceiling (‘A-’), while a weakening of RZB or a Country Ceiling downgrade could drive a downgrade for Raiffeisenbank.

Upside for the Individual rating could result from a reduction inconcentration levels, further building out of franchise and assetquality track record and improvements in the Russian operatingenvironment. A significant deterioration in asset quality asRaiffeisenbank expands into small business and regional lending,including through the merger with Impexbank, would likely exert downwardpressure on the rating.

ZAO Raiffeisenbank Austria is ranked 8th in terms of assets among topRussian banks based on H1 2007 results (Interfax-СЕА). At present the Bank disposes of 32 branches in Moscow, 6 branches in Saint Petersburg and regional branches in Ekaterinburg, Samara, Novosibirsk, Chelyabinsk, Nizhny Novgorod, Krasnodar, Krasnoyarsk and Perm, representative office and credit cash office in Ufa. Raiffeisenbank is ranked 7th in terms of corporate lending based on H1 2007 results (Interfax-СЕА). Among the leading retail banks Raiffeisenbank is the 6th largest bank in Russia in terms of private deposits based on H1 2007 results (Interfax-СЕА).

ZAO Raiffeisenbank Austria is a subsidiary of Raiffeisen InternationalBank-Holding AG, which operates the largest banking network in CEE. 18markets of Europe’’s growth region are covered by subsidiary banks,finance leasing companies, two representative offices and a number ofother financial service providers. About 12.7 million customers areattended to through more than 2,950 business outlets. RaiffeisenInternational is a fully consolidated subsidiary of RaiffeisenZentralbankЦsterreich AG (RZB), which owns 70 per cent of the common stock. The remaining 30 per cent is free float, the shares are traded on the Vienna Stock Exchange. RZB is a leading corporate and investment bank in Austria and the central institution of the Austrian RaiffeisenBanking Group, the country’’s largest banking group.

Fitch’’s rating definitions and the terms of use of such ratings areavailable on the agency’’s public site, ratings, criteria and methodologies are available from thissite, at all times. Fitch’’s code of conduct, confidentiality, conflictsof interest, affiliate firewall, compliance and other relevant policiesand procedures are also available from the ’’Code of Conduct’’ section ofthis site.

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