Prospects for Securitisation in Russia Key Consideration Securitisation

Prospects for Securitisation in Russia: Key Consideration Securitisation in Russia and the CIS London, October 2006

Contents Ø Transactions in 2004 - 2006 Ø Securitisable assets Ø Reasons to securitise Ø Structure considerations Ø Problem areas Ø Looking forward 2

Volumes of transactions in 2004 -2006 3

Transactions in 2004 -2006 4

In the pipeline 5

Securitisable assets ABS: Ø Car loans Ø Consumer loans Ø Credit cards Ø Leases Ø SME loans Ø Future flows MBS: Ø Residential Ø Commercial 6

Reasons to securitise Funding: Capital: Ø New investor base Ø Repeating transactions Ø Longer term Ø Regulatory capital Ø Improve returns Risk: Ø Assets versus cash 7

Structure considerations Ø Warehouse Ø Conduit Ø Term deal Ø Public versus private Ø Synthetic transactions Ø Open versus closed pool 8

Problem areas Ø Small pools of assets Ø Centre versus regions Ø Assets are not standardised Ø Legislation and tax issues Ø RUR versus USD assets (hedging) 9

Looking forward Ø Increase of the amounts Ø Becoming cheaper Ø Capital relief importance (Basle II) Ø Domestic market and development of the regions 10

Contacts Tengiz Kaladze Managing Director International Interbank Funding MDM Bank +7 -495 -745 -9640 (direct tel. ) +7 -495 -797 -9507 (tel) +7 -495 -797 -9522 (fax) +7 -495 -233 -0935 (mobile) tkaladze@mdmbank. com 11

MDM Bank n Established in 1993 as a Moscow-based bank focused on trading n Today, one of the largest privately-owned banking groups in Russia by assets (Year-end 2005: USD 5. 6 bn ), capital (YE 2005: USD 886 mn) and net profit (YE 2005: USD 134 mn) n Owned by two Russian entrepreneurs, Andrey Melnichenko (one of the Group’s original founders) and Sergey Popov, his long-standing business partner n Three core business areas: corporate banking, investment banking and retail banking n Business is based on financial intermediation between non-related parties: total related party exposure is capped at 10% of assets n MDM has one of the highest credit ratings among Russian privately-owned banking groups from Moody’s (Ba 2), Fitch (BB-) and Standard & Poor’s (B+; positive outlook) n The only Russian financial institution with a corporate governance rating from Standard & Poor’s; the rating was increased to CGS-6. 0 in December 2005 n Received numerous awards from Euromoney, Emerging Markets, Global Finance and The Banker in 2003 -2005; Global Finance also named MDM Bank the Best Bank in Russia in four categories: n Best Foreign Exchange Bank n Best Domestic Eurobond Arranger n Best Domestic Mergers and Acquisitions Arranger n Best Bank in Corporate Governance 12