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ANNUAL REPORT 2008 This year has brought new challenges to the Russian economy, challenges that Alfa-Bank is well prepared to face. We will continue our work in all business segments as the largest universal private bank in Russia, and we hope our efforts will translate into excellent results. We believe that we are taking the right steps to improve our operations, and we have confidence in both our employees and our customers.

Mikhail Fridman Chairman of the Supervisory Board of Alfa Group Consortium ALFA-BANK 2008*

countries 6 branches and offices 364 employees 15 065 corporate clients 56 000 retail clients 3 500 000 profit (USD million) 230 equity (USD million) 2 161 gross loan portfolio (USD million) 19 160 total assets (USD million) 27 052

* For the purposes of this report, the term “Alfa-Bank” is used to describe ABH Financial Limited and its subsidiaries.

1 ALFA-BANK AWARDS AND RECOGNITION IN 2008

EUROMONEY MAGAZINE “Best Bank in Russia”

GLOBAL FINANCE MAGAZINE “Alfa-Click as the Best Internet Bank in Russia” “Best Domestic Russian Trade Finance Bank” “Best Equity Research Bank” “Best Domestic Bank”

INDEPENDENT EXPERT COUNCIL OF SUPERBRANDS INTERNATIONAL “Super Brand of the Year” “Innovation Award”

ROSBUSINESSCONSULTING Alfa-Bank Analysts Nominated Among Best Equity Analysts

JP MORGAN CHASE BANK “Elite Quality Recognition Award”

PriceWaterhouseCoopers AND SENTEO AWARD «Customer Experience Index — 2008: Who is Winning the Retail Banking Race in Russia»

NEXTEP GROUP OF COMPANIES AND KOMMERSANT-MONEY MAGAZINE 1st Place in Terms of Client Service Quality

MASS MEDIA ANALYSIS AND MONITORING SYSTEM MEDIOLOGIA 1st Place in most frequently quoted Russian bank in the mass media

BRAND OF THE YEAR/ EFFIE 2008 AWARDS The «My Alfa» bank card has won the Brand of the Year/EFFIE 2008 Award in the «Financial Institutions, Products and Services» category

2 CONTENT

Address to OUR Clients and Business Partners 4-5

Board of Directors and Executive Board 8-9

Statement on Key Achievements of 2008 and Strategy for 2009 10-13

Russian Economy and Banking Sector Review 14-17

Corporate Banking 20-25

Investment Banking 26-29

Retail Banking 32-37

Alfa Group Family Companies 40-45

Summarised Consolidated Financial Statements 46-50

Corporate Directory 51-52

3 Mikhail Fridman Chairman of the Supervisory Board of Alfa Group Consortium

Address to OUR Clients and Business Partners

Alfa-Bank* is proud to present its annual report for 2008. It was a difficult year, in which the entire Russian financial sector was put to the test. We are proud to say that Alfa-Bank has passed that test and confirmed its status as Russia’s leading private bank. This was possible thanks to the strategic decisions taken over the past few years and the far-sighted, forward-looking policy implemented by Alfa-Bank’s management, as well as the solid position built by Alfa-Bank over many years of successful operation.

Our 2008 results validate this statement. Last year, Alfa-Bank once again grew its market share in key areas, increased its number of retail clients and continued to work closely with corporate customers. The number of its customers increased even in a period of financial instability, proving that Alfa-Bank has gained the confidence of businesses of all sizes, as well as individuals.

Quality and teamwork are vital in complex financial conditions, which is why 2008 was a year of mergers. For example, Alfa-Bank merged all of its divisions that focus on working with retail clients, as well as those involved in the corporate and investment business lines. Combining the retail divisions enabled us to significantly cut costs and offer customers a broader array of products. This approach supported our lending operations during difficult times, creating synergy and, ultimately, making the retail business more profitable. The merger between the Corporate and Investment Banks was seen as a milestone at a time when investment banking is going through a particularly tough time.

Alfa-Bank continued its regional expansion in 2008. We now operate in all of Russia’s key regions and largest cities. We significantly increased our number of branches and almost doubled the size of our ATM network. Not only do we strive to be a universal, nationwide bank, but we also aspire to be a bank trusted by everyone in every corner of our country. In this context, the acquisition of Severnaya Kazna bank was an important step which put us in a dominant position in the Urals region and brought us many new customers.

Alfa-Bank is particularly focused on working with small- and medium-sized businesses, as this is one of the most promising segments of the Russian market. For

4 Johann Jonaсh Chairman of the Board of Directors

Rushan Khvesyuk Chairman of the Executive Board, Member of the Board of Directors example, we have made great strides in developing our lending program for small- and medium-sized enterprises. Also, the use of advanced technology to liaise with companies of various sizes across Russia ensures that Alfa-Bank can provide a high- quality service to any business that chooses us as its financial partner.

We have strived to develop Alfa-Bank’s technological advantage in our work with individual customers, e.g. remote customer service channels. Our efforts have won recognition from our own customers as well as professionals. In 2008, Alfa-Click was named the best Internet banking service in Russia and Central and Eastern Europe.

More importantly, however, we have been able to provide a consistent, high-quality service to all Alfa-Bank customers. We continue to work on improving our service tools, optimizing our service range and improving the quality of our customer service. Our efforts have not gone unnoticed by the public, as confirmed by both feedback from our customers and the number of awards given to Alfa-Bank. This year, we once again won the award for the best Russian bank in terms of customer service. We would like to thank all Alfa-Bank employees for their efforts in maintaining our reputation as a bank with an unmatched level of service.

Along with its financial activities, Alfa-Bank plays an active role in social and charity programs. We are fully aware of our responsibility for the future of our country and take an active part in cultural and social projects. Alfa-Bank’s current charitable initiatives include organizing guest performances of popular international celebrities in Russia, supporting Russian art and literature and assisting young talent. We support the Life Line Charity, which provides financial assistance to children with serious illnesses, and we contribute to the World Wildlife Fund (WWF).

This year has brought new challenges to the Russian economy, challenges that Alfa- Bank is well prepared to face. We will continue our work in all business segments as the largest universal private bank in Russia, and we hope our efforts will translate into excellent results. We believe that we are taking the right steps to improve our operations, and we have confidence in both our employees and our customers.

Mikhail Fridman Johann Jonaсh Rushan Khvesyuk Chairman of the Supervisory Chairman of the Board Chairman of the Executive Board of Alfa Group of Directors Board, Member of the Consortium Board of Directors

5 ALFA-BANK ENTITIES

Murmansk

Kaliningrad

Zelenogorsk

Pskov St.Petersburg Petrozavodsk Arkhangelsk

Noyabrskiy Tver Vologda Moscow Yaroslavl Kaluga Zheleznogorsk Ivanovo Tula Vladimir Syktyvkar Kursk Ryazan Cheboksary Belgorod Nizhny Novgorod Staryy Oskol Lipetsk Arzamas Kirov Voronezh Tambov

Kazan Glazov Penza Berezniki Nijnekamsk Izhevsk Votkinsk Ulyanovsk Perm Elabuga Chaykovskiy Noyabrsk Yakutsk Rostov on Don Syzran Sarapul Novorossisk Saratov Tolyatti Naberejnye Balakovo Chelny Neftekamsk Krasnodar Kamyshin Samara Nizhniy Tagil Almetevsk Surgut Tuapse Volgograd Raduzhny Ufa Ekaterinburg Uvat Megion Sochi Buzuluk Nizhnevartovsk Stavropol Zlatoust Sterlitamak Kamensk Uralsky Mias Tyumen Chelyabinsk Orenburg Magnitogorsk Astrakhan Kurgan Novotroitsk Orsk

Barnaul Omsk Tomsk Yuzhno Sakhalinsk Kemerovo Novosibirsk Krasnoyarsk Ust Kamenogorsk Khabarovsk Novokuznetsk Abakan

Chita Angarsk Irkutsk Ulan Ude

Vladivostok Nakhodka

Abakan Barnaul Ekaterinburg Kamensk-Uralsky Krasnoyarsk Moscow Nizhnevartovsk Noyabrskiy Almetevsk Belgorod Elabuga Kamyshin Kurgan Murmansk Nizhniy Tagil Omsk Amsterdam Berezniki Glazov Karaganda Kursk Naberejnye Chelny Nizhny Novgorod Orenburg Angarsk Buzuluk Irkutsk Kazan Lipetsk Nakhodka Novokuznetsk Orsk Arkhangelsk Chaykovskiy Ivanovo Kemerovo London Neftekamsk Novorossisk Penza Arzamas Cheboksary Izhevsk Kirov Magnitogorsk New York Novosibirsk Perm Astrakhan Chelyabinsk Kaliningrad Khabarovsk Megion Nicosia Novotroitsk Petrozavodsk Balakovo Chita Kaluga Krasnodar Mias Nijnekamsk Noyabrsk Pskov

6 ALFA-BANK ENTITIES

Murmansk

Kaliningrad

Zelenogorsk

Pskov St.Petersburg Petrozavodsk Arkhangelsk

Noyabrskiy Tver Vologda Moscow Yaroslavl Kaluga Zheleznogorsk Ivanovo Tula Vladimir Syktyvkar Kursk Ryazan Cheboksary Belgorod Nizhny Novgorod Staryy Oskol Lipetsk Arzamas Kirov Voronezh Tambov

Barnaul Omsk Tomsk Yuzhno Sakhalinsk Kemerovo Novosibirsk Krasnoyarsk Ust Kamenogorsk Khabarovsk Novokuznetsk Abakan

Chita Angarsk Irkutsk Ulan Ude

Vladivostok Nakhodka

Raduzhny Staryy Oskol Tomsk Ust-Kamenogorsk Yakutsk Alfa Capital Markets: London Rostov-on-Don Stavropol Tver Uvat Yaroslavl Ryazan Sterlitamak Tuapse Vladimir Yuzhnyy Sahalin Alforma Capital Markets Inc.: New-York Samara Surgut Tula Vladivostok Yuzhno-Sakhalinsk Amsterdam Trade Bank N.V.: Amsterdam Sarapul Syktyvkar Tyumen Vologda Zelenogorsk Saratov Syzran Ufa Volgograd Zheleznogorsk JSC Subsidiary Bank Alfa-Bank Sochi Tambov Ulan-Ude Voronezh Zlatoust (Kazakhstan): Almaty, Astana St.Petersburg Tolyatti Ulyanovsk Votkinsk

7 Board of Directors and Executive Board

Ildar Karimov Dmitry Andrei Member of the Ponomarev Kosogov Board of Directors Member of the Alexander Andrei Member of Rushan Andrew Baxter Mikhail Fridman Board of Directors GAFIN Sokolov the Board of Khvesyuk Deputy Chairman Chairman of the Member of First Deputy Directors Chairman of the of the Executive Supervisory Board the Board of Chairman of Executive Board, Board, Chief of Alfa Group Sergei Mednov Directors the Executive Member of the Board Financial Officer Consortium Alex Knaster Member of the Executive Board, Board of Directors Member of the Head of Information Technology Board of Directors

8 Board of Directors and Executive Board

Valeriy Novikov Alexey Marey Member of the Member of the Executive Board, Head of Retail Oleg Sysuev Petr Aven Executive Board, Chief Alexander Vladimir Tatarchuk Petr Smida Operating Officer Banking First Deputy President, Lukanov Deputy Chairman of the Member of Chairman of Member of Member of Executive Board, the Board of the Board of the Board of Johann Jonaсh Edward Kaufman the Board of Co-head of Corporate- Directors Directors Directors Chairman of the Board Member of the Executive Directors Investment Banking of Directors Board, Co-head of Corporate- Investment Banking

9 Rushan Khvesyuk Chairman of the Executive Board, Member of the Board of Directors

Statement on Key Achievements of 2008 and Strategy for 2009

In 2008, Alfa-Bank’s development strategy was closely linked to the current economic situation. The year evidenced that, despite large-scale changes in the national and global economy, Alfa-Bank, as the largest private bank in Russia, remains a reliable financial institution, ready to address any, even most complicated, situations, able to assess own capabilities and losses and continue to move forward demonstrating decent performance and increasing business volume and market share in its priority business segments.

This was enabled, among other things, by Alfa-Bank’s ability to change and adapt its strategy to the current situation as well as strive to continuous improvement of own operations. This was the aim of some of the large-scale strategic changes in the Bank’s structure in 2008: the merger of all retail business units and of Corporate and Investment blocks. Consolidation of Alfa-Bank’s retail businesses including mortgage lending and auto finance allowed cutting operating costs and achieving better performance indicators owing to more universal nature of the product line offered and sales channels used. The unified corporate and investment business enables us to create a universal offering for any company, featuring all the products and tools from both corporate and investment banking.

Consolidation of business units as well as other extensive work aimed at optimising our business and reducing expenses yielded a 14-percent decrease in profit operating expenses against the plan and improved our cost to income ratio. We also used a significant share of our income to increase provision for loan impairment. In 2008, provisions increased up to $1.2 billion (6.2% of the total loan portfolio) compared to $0.4 billion (2.4% of the total portfolio) at the beginning of the year. This is especially important in the situation of overall financial instability we are experiencing today.

In this testing time for the global economy, Alfa-Bank managed to achieve good indicators in most of its priority business lines. Thus, on the basis of performance in 2008, we can speak of a record growth in profit before operating expenses, up to

10 On the basis of performance in 2008, we can speak of a record growth in profit before operating expenses, up to $1.21 billion. The Bank’s assets grew by 19.4% compared to 2007 reaching $27.1 billion.

It is noteworthy that these trends represent an excellent achievement amid financial turbulence as they evidence that the Bank.

$1.21 billion. The Bank’s total assets grew by 19.4% compared to 2007 reaching $27.1 billion. Outstanding performance was shown by our retail business – it succeeded in materially increasing its share in the market of demand deposits, which was 4.86% by the end of 2008. Alfa-Bank significantly improved its share on the market of term deposits demonstrating an 83% growth against the year 2007. The cumulative amount of demand and term deposits attracted from individuals in 2008 totalled $6.1 billion (compared to $4.9 billion at the end of 2007). It is noteworthy that these trends represent an excellent achievement amid financial turbulence as they evidence that we were able to reverse the negative trend and continue extending our customer base among individuals and grow account balances with Alfa-Bank.

As for corporate business, Alfa-Bank paid close attention to the quality and liquidity of collateral. Despite a loan portfolio cutback in accord with the general market trend, Alfa-Bank retained its status on the Russian market, finding itself in the 6th place at the year end in terms of corporate loan portfolio size (or second largest portfolio among private banks). Nuclear, oil & gas, electric power, telecommunications and retail remain our priority industries in corporate lending.

Alfa-Bank was actively liaising with reliable corporate borrowers of any scale – not only the country’s largest entities, but also representatives of small and medium- sized business. A significant number of loans were issued under the long-term SME crediting programme. This group of loans represents a reliable portfolio with high quality security.

Much attention was given in 2008 to development of the risk-free segment of our business, particulary settlement operations, and increasing fee and commission income. Milestone events in this context were the launch of settlements between wholesale electricity market participants (GOELRO project) and Alfa-Bank winning the contract for handling weekly settlements between insurance companies. The latter tender was held by the Russian Association of Auto Insurers.

Another business line the Bank developed in 2008 was assistance to companies in servicing different types of debt obligations. Operations in debt markets are currently seen as a most promising corporate business development line creating impressive possibilities for companies that have adopted qualitative and strategically correct risk management patterns.

11 Statement on Key Achievements of 2008 and Strategy for 2009

2008 saw Alfa-Bank preserving and reaffirming its status as the technology leader on the market for financial services both in corporate and retail segments. By the year end Alfa-Bank successfully completed implementing its Eurasia project to create a unified technology platform for all Russian regions. The platform ensures equal opportunities for our corporate customers from all regions of Russia and provides a c c e s s t o h i g h q u a l i t y s o l u t i o n s f o r a l l c o m p a n i e s t h a t o p t e d f o r t h e s e r v i c e s o f Alfa-Bank.

In retail banking we were actively developing remote customer service channels, which is fully in line with the current day needs of our retail clients. The number of functions and transactions accessible through the Internet, via mobile phones and Alfa-Bank cash dispensers has grown. The number of Alfa-Click Internet Bank users has nearly doubled reaching 415 thousand clients, while transaction turnover in Alfa-Click increased 200%. Today, we can quite positively say that Alfa-Click is among the best internet banks in Russia as well as in Europe. This is confirmed by awards we received in 2008 – as the Best Internet Bank from Global Finance magazine and the “Best Internet Bank for Retail Clients” in Account Management subcategory in Central and Eastern Europe.

The year 2008 was an important milestone from the viewpoint of Alfa-Bank’s regional development – our corporate customers were able to use the complete range of quality services owing to our Eurasia system, while our retail block completed Alfa-Bank’s regional development programme launched in 2005. By the end of 2008 we opened 22 new branches, increased the number of operating ATMs up to 2000 and opened four new A-Club offices for high-net-worth clients in the biggest cities – St. Petersburg, Ekaterinburg, Novosibirsk and Samara.

It should be noted that Alfa-Bank became a leading financial services provider in the Urals region owing to its acquisition of Severnaya Kazna bank with 30 offices across the region. The takeover brought 400 thousand new retail clients and 8 thousand corporate customers to the Bank.

We continued developing another competitive advantage that Alfa-Bank enjoys – the offering of banking products with added value. Alfa-Bank’s co-branding products: payment cards Aeroflot – MasterCard – Alfa-Bank and Alfa-Bank – Cosmopolitan – Visa were invariably popular among our customers, produced excellent performance results and won a lot of prestigious awards. The reporting year saw another innovative product created – individual design cards. This card project was named My Alfa and is very popular among our customers.

The effort of our retail segment to maintain sustainable high level of retail services and customer servicing was recognised by different awards. Thus, Alfa-Bank ranked

12 number one in the survey of financial institutions in terms of customer service level conducted jointly by Kommersant-Dengi magazine and NEXTEP Group, outpacing in this parameter all other largest banks operating in the country. The most important for us is, however, the award given by customers themselves. Alfa-Bank received this award for second year running – it was recognised as the best out of 50 biggest Russian banks in the joint survey “Customer Experience Index — 2008: Who is Winning the Retail Banking Race in Russia» by Senteo and PricewaterhouseCoopers. This award is a token that clients understand and value the quality of Alfa-Bank’s services while the Bank has chosen the right course and appropriate development strategy.

All our employees maintain the high reputation of Alfa-Bank. It is especially important in a complicated financial environment that all the company personnel and management in particular demonstrate their loyalty to the employer in taking strategic decisions and in everyday work, as is the situation with Alfa-Bank. Alfa-Bank, in turn, has always paid and is paying a lot of attention to personnel development and directs substantial funds to various kinds of staff incentive.

At this time, when the top priority is achieving high results in the long term, we decided to give up current annual bonuses for top management and replace them by long-term incentive programmes. This initiative has found understanding among Alfa-Bank’s management who are aware of this step’s importance for further development of Alfa-Bank.

If we are to speak of the outlook for banking business in 2009, we have to note that the overall situation in the financial sector may be expected to further deteriorate. Yet, Alfa-Bank views its future quite confidently, adapting its strategy and policy to current circumstances. Today’s retail and corporate portfolios of Alfa-Bank are absolutely manageable. Our plans for the year 2009 include further increasing Alfa-Bank’s share in the risk-free segment and developing our settlement business. Corporate sector will be focusing on liaising with reliable customers and attracting new companies that were serviced by less sustainable financial institutions and turn to more reliable and convenient banks in an environment of financial instability. In a similar manner, we will increase retail customer base, with clients to whom Alfa-Bank invariably rendered high quality services and offered its competitive advantages. In 2009, an essential focus will be on working with problem loans and developing debt business. In conclusion, I would like to note that financial crisis is a time for a grave economic renewal offering significant opportunities for those who know how to use them, who can think strategically and make plans for the future.

13 Petr Aven President, Member of the Board of Directors

Russian Economy and Banking Sector Review

Russian economy Last year, it became apparent that sooner or later, the real economy would be affected benefited from by the turmoil on financial markets. After the subprime crisis erupted in summer 2007, it positive expectations took about a year for the trouble to spread to the real sector. Confidence in financial until 2008 markets hit rock bottom in fall 2008, paralyzing economic growth and fuelling uncertainty around the globe. The World Bank now forecasts that the global economy will contract by 1.7% in 2009, reflecting weakness in the US economy and a lack of confidence in the global interbank market.

The Russian economy fared reasonably well during the first stage of the global crisis, when the turmoil was confined to financial markets. This was mainly due to the low penetration of financial services in Russia. In mid-2008, banking assets were equal to slightly more than 60% of GDP, and corporate loans around 30%. Russian banks were not involved in subprime lending, so they could maintain their mid-2007 growth levels. In fact, banks saw 2007 as an opportunity to gain market share by providing large loans to local enterprises that were cut off from foreign banks. Moreover, in the first half of 2008, corporate loans grew even more rapidly than they did in 2008.

Figure 1: Key figures for the 2000 2001 2002 2003 2004 2005 2006 2007 2008 Russian banking sector in Assets 83.8 105.0 130.4 189.4 255.9 336.9 530.3 819.8 953.8 2000-2008, $ bln, % GDP % GDP 32% 34% 38% 44% 43% 44% 54% 64% 67% Retail deposits 15.8 22.5 32.4 51.6 71.4 95.9 144.7 210.2 201.1 % GDP 6% 7% 9% 12% 12% 13% 15% 16% 15% Corporate loans 27.1 38.7 50.7 79.7 115.9 146.6 224.0 365.1 425.8 % GDP 10% 13% 15% 18% 20% 19% 23% 28% 30% Retail loans 1.6 3.1 4.5 8.4 19.1 36.0 69.6 117.1 131.7 % GDP 0.6% 1.0% 1.3% 2.0% 3.2% 4.7% 7.0% 9.1% 9.3%

Source: CBR, Alfa Research

Another reason why Russia was insulated from the financial turmoil in 2007 is that its economy was driven by very optimistic expectations on the part of households. Since 2000, real disposable incomes have seen double-digit growth, and the retail lending market rose from 0.6% of GDP in 2000 to the current 9%. Russia’s mortgage market, which did not exist in 2003-2004, reached 3% of GDP in 2008. Access to retail loans and rising disposable incomes were the two driving forces of consumption growth.

14 The global crisis means that Russia must find an internal source of growth if it is to resume rapid economic expansion.

In previous years, Russia was viewed as having a rapidly emerging middle class with a high consumption-growth potential. Around 10% of annual household income now comes from rent, suggesting that the general population’s wealth is closely linked to the residential real estate market. Therefore, the rapid growth in the value of Russian real estate was another factor that contributed to people’s optimism.

The final key factor behind Russian households’ positive outlook in recent years was the increase in investment activity. In 2006, Russia began to provide more funding to its infrastructure projects through the state investment fund, as well as through a number of federal projects. Private companies actively tapped the equity market to fund their projects. Investment growth was spread throughout the country via the creation of public-private partnerships. Russia was expected to account for around 10% of the total investment plans of the world’s largest countries in 2009-2017. Utility sector reforms also raised expectations that investments would increase.

These expectations went into reverse in 2008, when the dramatic decline in oil prices triggered the collapse of the equity market and brought Russia’s high dependence on fuel back to the fore. The real economy suffered greatly from the contraction in investment demand both at home and abroad. Industrial growth was 6.3% y-o-y in September but dropped to 0.6% in October and then to -16% in January 2009. This drop pushed companies to reduce salaries and cut staff, while banks became more cautious and began to reduce their loan books. As a result, in February 2009 consumption started to fall, triggering a 2.4% y-o-y drop in retail trade. The unemployment rate went up to 8.1% in February 2009, suggesting further deterioration of economic trends. GDP growth was reported at -7% for 1009.

Like a number of other countries, the Russian government has taken a proactive approach Government response to the economic crisis. During its first stage, in fall 2008, the government and the CBR came up with plans to support local liquidity, which had dried up owing to capital outflow and bank runs. In response to the lack of confidence in the interbank market, the CBR cut the reserve rate and injected up to RUB2 trln into banks, increasing its share from 2% of banks’ liabilities at the beginning of 2008 to 12% by year-end. Another important measure was the $50 bln VEB rescue package, which gave Russian companies the option to refinance their foreign debt through the State.

The second stage of the crisis, which saw the turmoil spread to the real economy, called for making adjustments to fiscal policy. After running a fiscal surplus of 4% of GDP in

15 Russian Economy and Banking Sector Review

2008, the Russian government is expected to run a fiscal deficit of some 8% of GDP in 2009. While federal budget revenues are expected to drop by around 30% y-o-y in 2009, expenditures have increased by 30% y-o-y. The government expects to use the Stabilization Fund to finance the fiscal deficit. RUB2.7 trln from the fund will be needed to cover the budget shortfall in 2009. However, there is some concern that the federal government will not only need to compensate for the decline in its own fiscal revenues, but also for the decline in regional budget revenues.

Another concern is that the State will have to continue supporting the banking sector. During the first stage of the crisis in the fall of 2008, the main problem facing banks was an outflow of deposits, which the CBR has since managed to stop. However, banks will now have to restructure a significant portion of their loan books. Russian companies’ debt burdens total 52% of GDP; this is not high by international standards, but the debt has a short maturity, and up to 40% of it is foreign (similar to Indonesia in 1997). Companies have to pay some $220 bln in the next 12 months, including $120 bln on local ruble loans, $40 bln on foreign-currency-denominated local loans and $60 bln on foreign debt. This represents around 20% of GDP and suggests that a huge amount of debt needs to be restructured. As a result, banks will have to be fully recapitalized, and the minimum cost of recapitalization could be as high as 5% of GDP.

Figure 2: Companies’ Country Bank lending External debt, Internal Share of Total corporate Total corporate debt by country, $ bln to corporate % GDP corporate debt external debt debt, % GDP debt, $ bln and % GDP clients, through bond in total debt, % GDP issues, % GDP %

Malaysia 149 23 26 12% 198 120 1997 Singapore 90 3 5 3% 98 130

Philippines 65 15 1 19% 81 66 1997

Thailand 122 40 4 24% 166 150 1997

Indonesia 60 41 2 40% 103 118 1997

Korea 103 9 23 7% 135 450 1997

Russia 30 20 2 38% 52 780 2008

Source: World Bank, Alfa Research

Another very important area of restructuring is the consolidation of banking institutions, which needs to be encouraged. There are still over 1,000 banks operating in Russia, but the top 200 account for around 90% of deposits and lending. On the one hand, this means that the number of banks could easily be reduced, and consolidation could even take place among the top 200. However, since more than 900 banks are part of the deposit insurance system, consolidating the smallest banks would do a lot to boost confidence in the banking system.

16 Russia will begin to recover only if it focuses more on internal restructuring. The years Russia 2009: Time to of rapid economic growth did not give the country an opportunity to lay the groundwork put the house in order for a long-term recovery. Economic data from the past few years indicate that GDP growth became much more dependent on services starting in 2006. Before that, the share of industry in GDP was close to 28%, but it had dropped to 24% by 2008. In 2002- 2008, the share of the three key non-industrial sectors – trade, construction and real estate services – rose from 39% to 48%. In 2008, industries contributed only 3% of real GDP growth, while the construction, trade and real estate service sectors accounted for 70%.

One of Russia’s key problems is still its very low savings rate. Household deposits in Russian banks are still below 20% of GDP. Pension reform has to be revived, as 97% of private pension savings are still in the state pension fund. Pension savings are still a miniscule 1-2% of GDP, and there is little investment in insurance instruments and mutual funds. Household savings do not exceed 10% of annual revenues, and private savings in Russia have very short maturities.

In addition, Russia has not managed to reduce its exposure to fuel exports fast enough. The share of fuel in exports is still 60-65%, and it is not declining. To finance its real annual import growth of 20-30%, Russia needs oil prices to keep rising. Meanwhile, growth in commodity extraction and exports has been very weak. In real terms, annual export growth was a mere 6-7% in 2006-2007.

Paradoxically, while the global financial markets took a very optimistic view of Russia’s growth story in 1998-2008, this was not accompanied by an improvement in local trust. Therefore, as soon as oil prices fell and the equity market collapsed, generating fears of an outflow of foreign capital, local confidence in the ruble fell dramatically. Russian households increased their share of foreign-currency-denominated deposits from 13% in mid-2008 to 34% as of February 2009. Uncertainty surrounding the ruble exchange rate led Russians to withdraw around 8% of their retail deposits in banks in September- October 2008, reducing liquidity on the interbank market. Meanwhile, in 4Q08 the capital outflow generated by the Russian corporate sector totaled around $50 bln.

Another major concern is Russia’s high inflation, which is linked to structural problems, especially a lack of competition. A number of developed countries, and even some emerging markets, are now facing deflation. Nevertheless, in Russia price growth has actually accelerated slightly, from 13% in 4Q08 to 14% in 1Q09 on an annual basis. Significantly, this inflation is occurring against a backdrop of falling producer prices, which will most likely be reflected as payment arrears in the real sector.

Russia’s economic situation is different from that of other countries, so it needs slightly different economic remedies. Russia has low leverage, but it still suffers from low savings and low competition. Therefore, unlike developed countries, which must first address the decline in economic activity resulting from deleveraging, Russia needs to concentrate on supporting private businesses and generating private savings. Support for the banking sector and closer monitoring of banks would also be very important steps in ensuring that Russia improves its economic growth model in the future.

17 I n 2 0 0 8 , A l f a - B a n k o n c e a g a i n g r e w i t s m a r k e t s h a r e i n k e y a r e a s , increased its number of retail clients and continued to work closely with corporate customers. The number of its customers increased even in a period of financial instability, proving that Alfa-Bank has gained the confidence of businesses of all sizes, as well as individuals.

19 Vladimir Tatarchuk Deputy Chairman of the Executive Board, Co-head of Corporate- Investment Banking

Corporate Banking

The year 2008 transformed the global economic and financial environment. These changes affected all sectors of the world economy, and Corporate Banking was no exception. As in other spheres of banking, relationships with corporate customers last year can conveniently be divided into two periods: January-August and September- December. The first half of the year saw Alfa-Bank continue to grow as it had in 2007, which is why its overall financial performance for 2008 was positive and its corporate loan portfolio grew 20%. Alfa-Bank’s customer base continued to grow, while Russia’s rapid economic growth gave rise to high demand for its financial services. By the end of the year, funds attracted from corporate customers totaled $6.4 bln. The economic turmoil of the second half of the year posed a challenge to the entire Russian banking system and directly affected the customers and borrowers of Russian banks. The change in market conditions did not, however, prevent Alfa-Bank from continuing with its corporate banking operations in accordance with the concept of a universal bank. Alfa-Bank both preserved the complete range of banking products offered to its major customers and its universal offering for small and medium-sized business. We also continued to develop our system for settlement operations as well as other priority projects. To summarize its performance in 2008, Alfa-Bank held onto its position on the Russian market, ending the year as the country’s sixth-largest bank in terms of corporate loan portfolio. Our loan portfolio totaled $16.5 bln, and our market share grew by 0.24 ppts (compared with January 1, 2008) to reach 3.47% (the total includes state-owned banks). As of the end of the year, Alfa-Bank had 56,000 corporate clients. The key industries in Alfa-Bank’s loan portfolio in 2008 were construction (20% of corporate portfolio), trade and commerce (13%), railway transport (11%), machinery and metal working (7%), power generation (6%), non-ferrous metallurgy (5%), ferrous metallurgy (5%) and financial and investment companies (5%). At the end of the year, the ten largest borrowers accounted for 25.8% of the Alfa-Bank’s corporate loan portfolio. The economic background that developed in the second half of the year brought to the fore the issues of debt restructuring, handling troubled borrowers and assessing the risk inherent in debt instruments. In developing its loan portfolio, Alfa-Bank is currently focusing on increasing the security of its loans and ensuring the reliability of its

20 To summarize Alfa-Bank performance in 2008, we held onto our position on the Russian market, ending the year as the country’s sixth-largest bank in terms of corporate loan portfolio. Our loan portfolio totaled $16.5 bln, and market share grew by 0.24 ppts (compared with January 1, 2008) to reach 3.47% (the total includes state-owned banks). As of the end of the year, Alfa-Bank had 56,000 corporate clients.

borrowers. The crisis has made Alfa-Bank better acquainted with its customers and improved their confidence in us, which promotes robust relationships based upon mutual trust. Alfa-Bank is also paying close attention to developing the debt business of its Corporate Bank, in particular by helping companies to service their various debt obligations. In the summer of 2008, Alfa-Bank launched a factoring-financing program for its corporate customers under which they are provided with a dedicated software module that allows them to promptly receive accurate information on the status of receivables due from their buyers. Agama Trade was the first Alfa-Bank client to receive factoring financing. The past year marked an important stage for converging and finally merging our corporate and investment divisions. Today, Alfa-Bank’s managers can offer their customers virtually any banking product imaginable, including Corporate Banking, Investment Banking and Retail Banking instruments. This allows us to provide each client with a complete range of banking products and services. Examples of deals in which investment products were sold to the Corporate Bank’s customers include the acquisition of 100% of ISTIL Group by Estar Group’s shareholders, in which Alfa-Bank acted as exclusive advisor and also lent the acquirer funds to conduct a leveraged buyout. Another example of the universal bank at work was the organization of OOO RVK-Finance’s first bond issue. The total nominal value of the issue was RUB1.75 bln, which was placed at a coupon rate of 12% p.a. The bond issue was fully subscribed. OOO RVK-Finance was set up in August 2007 as a centralized entity for tapping the public debt capital markets in order to fund the Rosvodokanal Group’s development program. In August 2008, RVK-Finance was assigned a BB- by Fitch Ratings. In 2008, Alfa-Bank devoted a lot of attention to the regional development of its corporate banking division. The financial crisis forced many small, local banks to give way to universal, nationwide financial institutions. Alfa-Bank won the confidence of its corporate customers both in Moscow and in Russian's regions, and it increased its customer base by servicing companies operating in various cities all over the Russian Federation. Alfa-Bank focused on identifying regional leaders in specific industries and selling them comprehensive lending services comprising the whole range of products offered by Alfa-Bank, as well as on working with small and medium-sized companies in the regions.

In 2008, Alfa-Bank successfully completed the implementation of Project Eurasia. project eurasia Launched in late 2006, the program’s aim was to create a unified technology platform for all Russian regions. The platform ensures equal opportunities for our corporate customers from all regions of Russia. The innovative Project Eurasia includes five components: a centralized technology platform, unified banking systems and interfaces

21 Corporate Banking

(e-banking based on the Gemini platform), an optimized credit process, a unified product offering, an equally high quality of service and a unified reporting system for all of our customers irrespective of where they are in Russia. The implementation of this program, aimed at centralizing the Corporate Bank, makes quality solutions available to all our customers across the country and without a doubt gives us a major competitive advantage.

GOELRO In 2008, Alfa-Bank launched a system for settlements between participants in the wholesale electricity market. In November 2007, Trading System Administrator, a non-profit partnership, designated Alfa-Bank as the authorized bank for carrying out settlements. The decision to select Alfa-Bank was seen as recognition of its high-tech systems and its manifold settlement capabilities. In developing the GOELRO system – named after a plan for reviving the Russian economy in the 1920s – Alfa-Bank used state-of- the-art software applications and technology. Alfa-Bank also took advantage of its vast experience in working with companies in the energy sector. The launch of this project was a milestone in developing our settlement business. The project is especially useful when there is a liquidity shortage, as all market players deposit the settlement funds in their Alfa-Bank accounts.

Lending to Small In 2008, we paid special attention to liaising with small and medium-sized businesses and Medium-Sized and developing services for them in the cities where Alfa-Bank operates. Although many Enterprises banks suspended their lending programs for this segment, Alfa-Bank continued to extend loans to SMEs, including by accepting pledges of inventory as collateral. The loans were made in Russian rubles, US dollars and euros as one-time loans, loan facilities, bank guarantees or unsecured letters of credit. One advantage of our SME crediting program is its flexible approach to borrowers. Each customer is supported and assisted throughout the relationship by a personal client manager. The SME crediting market witnessed considerable growth in the first half of 2008, while Alfa-Bank’s competitive advantages – its transparent technology and credit-scoring system – ensured the growth of the Alfa-Bank’s indicators and made it one of the leaders in this segment. Despite the difficulties on credit markets around the globe, in the second half of 2008 small and medium-sized enterprises proved to be more reliable borrowers because their owners have a personal interest in the success of their businesses. Many small businesses are still rapidly increasing market share, while their owners take their obligations to the bank seriously. It is important to note that loans under the SME program are granted against high-quality security, which allows the bank to accurately assess the exposure associated with each customer. In 2008, Alfa-Bank’s overall SME portfolio increased by 42% to $284.1 mln. The Corporate Bank sees this program as one of its priority areas for development in 2009, and it expects performance indicators in this segment to continue to grow.

Alfa-Leasing Like all business areas with a prolonged payback period, leasing has suffered substantially from the crisis. For instance, nearly all types of transportation – the sector where leasing services enjoy most demand – currently demonstrate a significant decline in indicators by up to 40%-50%. Alfa-Bank is successfully coping with the tasks it now faces in connection with restructuring debts, searching for additional security for leasing deals and assisting customers in financial difficulty with finding solutions to their problems. The Corporate Bank is always ready to meet half-way companies that make an effort to fulfill their debt obligations and to continue working with them.

22 In 2008, lease payments receivable by the Bank amounted to $1,305.1 mln. The following deals are worthy of special mention:

Company Leasing object Financing $, mln Ahmad Tea equipment for a tea-packing factory 1.6 DVTG Group rolling stock (railway cars) 162.6 Don-Stroy building machinery and equipment 7.8 ETK Group rolling stock (railway cars) 41.2 Irkutskgeophisika Geological seismological equipment 3.4 R&D Enterpris OOO Meta-Invest metal-working equipment 5.8 OOO TD Iskitimtsement rolling stock (railway cars) 20.1 OOO TD NKSZ in-pit machinery and production equipment 22.3 SIBIR Airlines diagnostic equipment and aircraft simulators 2.5

SOK Group car assembly line 7.7 TransContainer rolling stock (railway cars) 43.8

The financial crisis has had a major impact on the operations of banking institutions in Structured Finance the sphere of structured finance. On the one hand, the complexity of the situation is forcing banks to join forces in seeking solutions to various project-financing tasks; on the other hand, financial institutions are not willing to grant loans without high- quality security. These two considerations are compelling companies to search for new ways to develop their business and win market share by offering banks the chance to participate in their capital or future profits. All this brings to the fore the most promising projects, such as Nitol Solar’s plan to produce polysilicon in Russia. This structured-finance deal, arranged by Alfa-Bank in cooperation with RUSNANO – the Russian Corporation for Nanotechnologies – demonstrates that long-term and costly projects are possible even in times of crisis. The Bank and RUSNANO will direct over RUB12 bln to the construction in Siberia of innovative facilities to produce raw material for generating environmentally friendly electricity. To date, Alfa-Bank has allocated RUB4.5 bln to Nitol Solar. The need for alternative energy sources is becoming more and more pressing, which is why this project is hugely important for the Russian economy and has attracted the attention of international investors. Production is expected to begin later in 2009. The year 2008 saw Alfa-Bank serve as mandated lead arranger of a syndicated loan organized by the European Bank for Reconstruction and Development (EBRD), ING Wholesale Banking and BNP Paribas (Switzerland). This is the first time Alfa-Bank has collaborated with the EBRD on a syndicated loan. The loan was provided to Integra Group Holding Limited, which is part of Integra Group, a leading Russian oilfield services provider. $250 mln in funds will be used to refinance the company’s current debt and finance capital expenditures, including environmental actions. Alfa-Bank’s share in the syndicated loan amounts to $25 mln.

23 Corporate Banking

Other participants in the loan include the following well-known banks: ABN AMRO BANK N.V, Morgan Stanley Bank N.A., Commerzbank Aktiengesellschaft, VTB Bank (Deutschland) AG and Aljba Alliance CB Ltd. Cooperation with the EBRD is a sure sign of Alfa-Bank’s competitiveness and reliability. Alfa-Bank’s participation in this cross-border transaction attests to its readiness to implement initiatives aimed at supporting Russian industry even in the current financial environment. CJSC Alfa-Bank of Belarus and OJSC Alfa-Bank of Russia provided a one-year syndicated loan of $30 mln to OJSC Naftan. The money was used to fund trade contracts between OJSC Naftan and leading Russian oil companies. The deal’s structure allows for the possibility of both monetary and documentary settlements, allowing the borrower to optimize the cost of financing. OJSC Naftan processes about 11 mln tons of oil a year. The company's 2008 revenue under IFRS amounted to $3 bln, with net profit of $133 mln. The oil-processing facilities are owned by the State Property Committee of the Republic of Belarus (99.8%). OJSC Naftan’s main oil suppliers are OJSC Surgutneftegas and OJSC Rosneft.

Trade Finance Trade Finance is enjoying steady demand in this difficult financial period. Alfa-Bank has traditionally been one of Russia’s leaders in this market, and for several years running it has received awards from Global Finance magazine as the best trade finance bank in Russia (in 2001, 2003, 2004, 2005, 2007 and 2008). Alfa-Bank confirmed its leading position in the 2008 reporting year: guarantees and import letters of credit issued by Alfa-Bank to corporate customers totaled $1,189.3 mln. The largest trade finance deals funded by Alfa-Bank in 2008 included the noteworthy purchase of equipment for OJSC Stroytransgas as part of the SHBAB2 project in Saudi Arabia, guarantees ensuring that OJSC Severnaya Verf shipyard would honor its shipbuilding contracts, and funding an equipment-import contract with OJSC Admiralteyskiye Verfi shipyards as part of its shipbuilding contracts.

Subsidiary Bank Alfa- JSC Subsidiary Bank Alfa-Bank (Kazakhstan) was established in 1994 to ensure prompt Bank (Kazakhstan) and convenient servicing of cash flows between Russia and Kazakhstan. It is a reliable universal financial institution ensuring that Alfa-Bank is able to provide high-quality services to all of its customers with dealings in Kazakhstan: large companies, small and medium-sized enterprises and individuals. Alfa-Bank Kazakhstan’s head office is located in Astana. The Bank also has representative offices in Karaganda, Ekibastuz and Ust-Kamenogorsk. The subsidiary bank is a rapidly developing financial institution and one of the leaders in Kazakhstan’s banking sector.

Figure 3: Performance in 2008 $ mln 31.12.2007 31.12.2008 growth, % Assets 210 246 +17% Loan portfolio 150 145 -3% Equity capital 56 63 +13%

Alfa-Bank Kazakhstan is the country’s 20th-largest bank in terms of asset value. Its customer base includes 12,000 individuals and 3,000 legal entities.

24 The year 2008 brought major changes to Alfa-Bank Kazakhstan’s senior management as the Kazakh market took on a larger role in the economic space of the CIS. The changes were also aimed at making Alfa-Bank more active on the country’s market, expand its product range and develop new lines of business. This will create new opportunities for Alfa-Bank as a key player on the financial market of Kazakhstan and enable it to deal with the major strategic challenges it now faces.

Amsterdam Trade Bank N.V. (ATB) was incorporated in October 1994 in Amsterdam, the Amsterdam Netherlands, and holds a full banking license from the Dutch Central Bank Trade Bank N.V.* (De Nederlandsche Bank N.V.). In March 2001, Alfa-Bank acquired a 100% interest in ATB. ATB is a member of the SWIFT, TARGET and INTERPAY settlement systems and issues private and corporate MasterCards. ATB provides a wide range of banking services, including project finance services, to a range of corporate clients with a particular focus on trade finance involving Russia, other CIS countries and the European Union. ATB also facilitates foreign direct investment in Russia and the CIS. Despite the turbulence on international financial markets in 2008, the bank’s business volumes grew, and at the end of 2008, ATB’s assets totaled EUR2,921 mln. ATM continued to expand its corporate loan portfolio in close liaison with Alfa-Bank. By the end of 2008, it grew by nearly 22% and amounted to EUR1,701 mln compared with EUR1,395 mln in 2007. ATB continues to fulfill its high growth potential by attracting deposits on the Dutch and German retail markets. In 2008, ATB continued to successfully implement its deposit-servicing program in the Netherlands using Internet technology. The volume of total customer accounts attracted as of year-end 2008 was EUR2,350 mln and ATB’s net profit for 2008 was EUR30 mln. ATB’s equity on 31 December 2008 amounted to EUR223 mln, rising almost 16% over the whole of 2008.

2009 will be a difficult year for both the Russian and world economies, especially in the Strategic Priorities financial sector. Alfa-Bank has anticipated potential problems; this is why we are able for 2009 to acknowledge today that the situation on the lending market will become increasingly critical. In this context, the Corporate Bank will focus on managing problem debts, assisting customers in financial difficulty and and working with debt instruments. As before, Alfa-Bank will pay special attention to developing the technological aspects of its operations, particularly the implementation of new applications and systems such as the Eurasia platform, which will make customers’ dealing with Alfa-Bank more convenient. Alfa-Bank will remain Russia’s leader in banking technology and will promptly respond to the market’s needs in this area. Serving small and medium-sized businesses as part of our SME program will remain a priority in 2009, as these companies have enormous potential for development and growth. At the same time, Alfa-Bank will make an effort to identify leading businesses in all of Russia’s regions and in all sectors of its economy, offering them its universal- banking products and high-quality services wherever in the country they may be.

* Figures according to Dutch GAAP audited financial statements

25 Edward Kaufman Member of the Executive Board, Co-head of Corporate-Investment Banking

Investment Banking

2008 was the most difficult year for the global investment market for 80 years, since the Great Depression. Leading global economies experienced a severe downfall, causing some major banks and investment companies to go bankrupt. Emerging economies faced problems on a similar scale. In particular, Russia’s investment market fell by almost 80%; and trading volumes in bonds dropped 60%. The RTS index decreased from 2300 points to 600 and many banks found themselves on the verge of bankruptcy. In this challenging time, Alfa-Bank not only managed to close the year without losses, but actually generated a significant profit. This huge success was the result of the sound policy adopted by the Investment Bank, our conservative approach to risk and skilful calculation.

Equities As in all other financial segments, the situation on the equity market during the first half of Head of Equities - 2008 was strikingly different from that of the second half of the year. At the beginning of the Michael Pijiolis year, the volume of transactions conducted by our Markets and Equity Department grew, reaching its peak in May. In the second half of 2008, however, the market experienced a rapid decline alongside a material decrease in oil prices and other resources, whose exports largely determine Russia’s economy. During this difficult time, Alfa-Bank did everything in its power to minimize losses and took advantage of the forced operating downturn to renew its team. Today, we are able to say that personnel turnover in the Markets and Equity Department was completed successfully: the Investment Bank entered a challenging 2009 with a robust team of experts specializing in equity sales on both Russian and international markets, Alfa-Direct services and highly professional analysts.

Alfa-Direct Over the course of 2008, Alfa-Bank rapidly developed its Alfa-Direct system of Internet Director for Internet Trading in securities. On December 31, 2008, the online system had 30,000 active client Transactions with Securities – accounts, a 110% increase on year-end 2007 numbers. Alexey Potapov Even though trading volumes decreased significantly in the second half of the year, Alfa- Bank managed to avoid losses in this segment as well. Operations in Alfa-Direct are continuing, although the number of deals has dropped. Investors have been able to buy and sell foreign currency assets such as Eurobonds and American Depositary Receipts traded on the London stock exchange via Alfa-Direct since December 2009. This opportunity is very important during a period of ruble devaluation, as many investors prefer foreign-currency transactions. The advantage of the new service is that the investor does not need to sign any agreements with foreign counterparties or transfer foreign currency to its accounts abroad. Trading in Eurobonds and ADRs can be carried out using the same broker account at Alfa-Bank that clients use for equity transactions on MICEX. Alfa- Bank also tackles all the matters of withholding personal income tax from the client.

Alfa-Capital Ukraine Our Investment Bank has been present on the Ukrainian market since 2005. Our Ukrainian office is engaged in trade transactions with securities, analytical and financial activities.

26 In 2008 the RTS index decreased from 2300 points to 600 and many banks found themselves on the verge of bankruptcy. In this challenging time, Alfa-Bank not only managed to close the year without losses, but actually generated a significant profit.

In 2008, Alfa-Bank significantly curtailed its business in the Ukraine as a result of the global crisis on the equity market and subsequent decrease in the volume of operations. The Investment Bank supports Alfa-Capital Ukraine with Russian-based resources, while pursuing a conservative cost-cutting policy and waiting for a revival of the local market.

Registered in the Republic of Cyprus in 1996, investment company Alfa Capital Holdings Alfa Capital Holdings (Cyprus) Limited currently has a leading position on the market, both in terms of its (Cyprus) Limited complex financial parameters and its product range. Alfa Capital Holdings (Cyprus) Limited holds a European license from the Cyprus Securities and Exchange Commission for providing investment services, a wide range of financial services and financial instruments. The company operates on the key global markets, in Ukraine and in Russia. The company also has an active branch in the UK, Alfa Capital Markets (ACM UK), which arranges deals from Russia and other CIS countries.

Alfa Capital Markets (ACM UK) is the London branch of Alfa Capital Holdings (Cyprus) Ltd, Alfa Capital Markets which services numerous institutional investors and hedge funds in the UK and continental (UK) Europe and works with assets from Russia and other CIS countries. Chief Executive Officer – Simon Roache Today Alfa Capital Markets in the UK has a new team of highly qualified and experienced specialists with an excellent knowledge of the market. In the fourth quarter of 2008, the company launched bond-trading operations for the first time. Alforma Capital Markets, Inc. is an investment subsidiary of Alfa-Bank in New York. The Alforma Capital company has been operating in the USA since 2001. It holds a license from the US Securities Markets (USA) and Exchange Commission (SEC) and focuses on working with institutional investors and President – David Denson hedge funds in the USA, Canada and Latin America. Alfa-Bank has always been a leader on the Russian debt market. In 2008, the department Fixed Income and focused on working with bonds. Investments in these securities in the fourth quarter of Derivatives Brokerage 2008 generated considerable profits for Alfa-Bank. Head of Department – Simon Vine The Debt Securities Division of Alfa-Bank Group trades in a wide range of debt instruments, including government and corporate bonds and promissory notes; repo transactions as required by clients and for Alfa-Bank’s own needs; transactions on the debt capital market; sales of fixed income instruments to foreign and Russian customers; and its own analytical surveys of the market. In 2008, the Division reduced its own debt securities portfolio by 40% in August. There were no material losses in the fourth quarter 2008 owing to rigorous controls over credit risk, and the volume of financing deals during the last two weeks of September fell 80%, which enabled the Division to generate profits on repo transactions and financing deals on the basis of overall performance in 2008 and prevent losses from a compulsory close-out of customer positions. Taking advantage of the weakened position of major foreign banks, Alfa-Bank also established trading relations with the biggest pension funds and insurance companies. Because of high volatility on the market, the Investment Bank chose to curtail its operations with derivatives in the middle of 2008 in order to avoid potential losses and risks.

27 Investment Banking

Corporate Finance Mergers and Acquisitions Head of Department – As the investment division is actively linked to the corporate bank, it was able to do Gene Moldavsky extremely well in the M&A segment. This was accomplished thanks to our active work with the Corporate Bank’s customer base and arranging M&A deals for third party clients. The most significant deals included the acquisition of ISTIL Group by ESTAR Group shareholders, which was recognized as the best M&A transaction of 2008 in the CIS, according to EMEA Finance. Alfa-Bank also acted as financial advisor in a number of successful transactions in the power sector, including the sale of TGK-10 to Fortum of Finland. This was the largest deal concluded in 2008 ($3.1 bln) and the most successful M&A transaction in the Russian electric power sector, in terms of the selling price. Another very successful deal was in advising Golden Telecom on its acquisition of a 49% stake in Corbina Telecom. In addition to giving financial advice to Alfa-Bank’s clients, the Corporate Finance team also participated in M&A transactions undertaken by Alfa-Bank itself, including the acquisition of Severnaya Kazna bank in the autumn of 2008. In 2008, Alfa-Bank participated in six M&A deals, with an aggregate worth of around $6 bln, and ended the year as the number three financial advisor on the Russian M&A market, according to the Mergermarket agency. Debt Capital Markets 2008 provided quite a challenge for the Russian debt market. Alfa-Bank, however, managed to arrange bond placements for a number of companies. In particular, for the first time in the history of the Russian market, Alfa-Bank issued commercial papers for RBC holding (two tranches worth RUB1.5 bln each) and placed bonds worth RUB1.75 bln for RVK Finance of the Rosvodokanal Group. Equity Capital Markets Even though 2008 was not a favorable year for public share offerings globally, Alfa-Bank completed a secondary GDR offering for X5 Retail Group, with the papers distributed among existing shareholders and third-party investors. This transaction was the biggest floatation on the Russian equity market in 2008, with the deal price totaling $1.158 bln, while cumulative demand among third-party investors exceeded the offering by three times. Cooperation with Alfa-Bank devotes a lot of time and effort to developing ties with foreign financial and International Banks lending institutions. Alfa-Bank’s global correspondent network currently comprises more than 400 banks. Alfa-Bank has correspondent accounts with the leading clearing banks, such as Commerzbank, Wachovia, HSBC and UBS. Alfa-Bank has always viewed the availability of loan facilities offered by foreign partner banks as a key element to ensure our growth. In the current market environment, and considering current-day specifics, only well-established and long-term relations with these banks can create the foundation for effective liaisons. An excellent example of this concept is that the volume of trading and project finance over the difficult 2008 materially exceeded that of the problem-free 2007. Alfa-Bank is still able to meet all the clients’ needs for their international operations, and sees this ability as its competitive advantage. We are convinced that constructive dialogue with our partners from all over the world will inevitably restore the level of trust and business relations that we achieved over the past ten years. Funding on International In July 2008, Alfa-Bank was granted a syndicated loan for $315 mln to fund clients’ foreign Markets trade transactions. This deal saw the continuation of our successful record in attracting external borrowing in recent years. For example, in 2007, Alfa-Bank attracted $900 mln in July and $307 mln in November in the form of syndicated loans.

28 In June 2008 Alfa-Bank issued medium term notes with an aggregate nominal amount of $400 mln, which carry a fixed coupon of 9.25% per annum and mature in June 2013. The bonds were issued as part of a $2 bln Euro Medium Term Note Programme. Issuers particpating in the program are: Alfa MTN Issuance Ltd., Alfa MTN Markets Ltd., Alfa MTN Invest Ltd. and Alfa MTN Projects Limited. According to the terms of the issue, investors can redeem the bonds before maturity, either on June 24, 2011 or earlier if certain conditions are met. Notably, the volume of bilateral credits increased significantly. In 2008, financial institutions from Europe, the USA and Asia acted as lenders of Alfa-Bank, and more than $122 mln obtained under these bilateral agreements contributed to financing purchases of imported equipment and other goods. Alfa-Bank offers its corporate customers a wide range of trade finance products, including Trade Finance services supporting export and import transactions, insurance of exports and imports, issuance of stand-by letters of credit, guarantees and the provision of import and export financing. In addition to the above products, Alfa-Bank engages in financing import contracts using the funds and resources of foreign banks and export credit agencies that are not ready to assume the risk associated with Russian companies directly, but are positive about Alfa-Bank’s risk. For several years, Alfa-Bank has offered short-term financing (up to three years) to its customers through direct arrangements with foreign financial institutions and mid-term lending (three to seven years) engaging Euler Hermes of Germany, SACE of Italy, the Export-Import Bank of Korea (South Korea), CESCE of Spain, SERV of Switzerland and other export credit agencies. In 2008, Alfa-Bank arranged more than 20 investment conferences, workshops, non-deal Investment Conferences road shows and conference calls in Russia, Ukraine, Switzerland, USA, the Gulf countries, and Events Japan, Singapore and Hong Kong, which were attended by more than 200 Russian and foreign investment funds. The events included conferences on the general development of the Russian share market as well as specialized conferences on performance results and outlooks of Russian companies operating in the oil & gas, banking, agricultural, telecommunications, retail and transportation industries and a workshop on derivative instruments and their use by Russian UITs. A milestone event for Ukraine in 2008 was the Fifth Ukrainian Investment Forum “Ukraine 2008: Reality and Prospects” hosted by Alfa-Bank and Alfa Capital Ukraine in June. The forum was attended by business leaders and prominent political figures of Ukraine, including the largest portfolio investors. Attendees discussed the future development of Ukrainian businesses, political risks and investment climate improvement opportunities. Alfa-Bank also sponsored the national conference, “The Russian Banking Sector: Meeting the Global Challenge” that took place on October 31, 2008. The conference was attended by over 100 journalists from leading foreign and domestic media. Analysis of the latest trends in the banking sector and forecasts of developments in 2009 were the key topics under discussion at the conference. Representatives from the Russian Ministry of Finance, the Russian Government, the State Duma, the Bank of Russia and other authorities all spoke and Alfa-Bank was represented by Petr Aven, President of Alfa-Bank, and Rushan Khvesyuk, Chairman of the Executive Board. The year 2009 will be a trying time for the Russian investment market. We expect the Outlook for 2009 majority of the challenges to arrive in the second half of the year. In this context, streamlined cooperation between Corporate and Investment Banks as a single business with common customer base and sales channels will be vital. The complete integration of the two divisions will give our customers who use both our corporate and investment bank products qualitative and beneficial offerings, and also ultimately it will improve the profitability of the integrated business unit.

29 30 An important area of restructuring is the consolidation of banking institutions, which needs to be encouraged. There are still over 1,000 banks operating in Russia, but the top 200 account for around 90% of deposits and lending. On the one hand, this means that the number of banks could easily be reduced, and consolidation could even take place among the top 200. However, since more than 900 banks are part of the deposit insurance system, consolidating the smallest banks would do a lot to boost confidence in the banking system.

31 Alexey Marey Member of the Executive Board, Head of Retail Banking

RETAIL BANKING

The year 2008 showed that Alfa-Bank’s retail business model allows it to achieve strong financial results in any financial environment. Despite a material difference in economic conditions during the first and second halves of the year, our customer relations were invariably productive.

Nonetheless, it should be noted that the crucial differences between the two periods (from January to August and from September to December) could not but impact Alfa- Bank’s retail business as well as that of all financial institutions in Russia. In the first half of 2008, we saw a continuation of the same trends that shaped 2007: rapid development of the lending and settlement businesses, rising incomes and increasing consumption. In the third and especially in the fourth quarter, however, the balance shifted towards settlement offerings, while lending was pushed to the sidelines. Alfa-Bank managed to be flexible and promptly adapted its product line, fees for its own services and development strategy to the new economic conditions. Our efforts resulted in substantial growth in performance indicators and market share in priority areas and services.

Thus, as of December 31, 2008, Alfa-Bank’s share of the market for demand deposits received from individuals had increased to 4.86% from 4.41% at the beginning of the year. In November 2008, Alfa-Bank was the only top-ten Russian bank whose overall demand deposits increased in absolute dollar terms. This is evidence that its customers trust Alfa-Bank even in this difficult period.

Term deposits placed by customers increased by 75%, from $1.6 bln to $2.8 bln. Our retail business met its 2008 goals despite the changes in the financial climate. The aggregate amount of demand and time deposits increased to $6.1 bln from $4.9 bln in 2007.

As for lending services for individuals, Alfa-Bank stuck to its conservative policy and focused on preserving its diversified earnings structure. The year 2008 did, however, see Alfa-Bank continue to develop its lending products. The portfolio of general-purpose retail loans amounted to $962 mln, car loans to $705 mln, and mortgage loans to $509 mln. We were very active on the consumer lending market, with loans extended totaling $499 mln owing to our productive efforts in the area of primary and secondary sales. In 2008, we issued 186,000 credit cards, bringing our total number of customers in this area to more than 341,000 at the end of the year.

32 Today, Alfa-Bank is represented in all Russian cities with more than 1 mln people, in nearly all cities with more than 500,000 people and in a number of cities with more than 250,000 people. As of December 31, 2008, we had 266 branches across all of Russia’s 11 time zones.

All in all, our performance in 2008 and so far in 2009 indicates that in an uncertain financial environment, Alfa-Bank is the bank of choice for many customers looking for a stable rate of return accompanied by high-quality service.

A landmark event of 2008 was the merger of all retail banking segments into a single business unit. This allowed us to cut costs significantly and gain substantial synergies from productive team work. Today, Alfa-Bank offers both its settlement and credit products to all its customers using a single sales channel.

Also in 2008, Alfa-Bank completed the implementation of its regional development plan launched in 2005. Today, we are present in all Russian cities with more than 1 mln people, in nearly all cities with more than 500,000 people and in a number of cities with more than 250,000 people. As of December 31, 2008, we had 266 branches across all of Russia’s 11 time zones. Thus, our retail banking division has achieved the goal of regional expansion set for it several years ago.

Regional development also involves growing Alfa-Bank’s share of each individual regional market. This target was also met; Alfa-Bank is successfully competing with the largest nationwide banks as well as local ones, which traditionally enjoy the confidence of people residing in the same region. We are able to do this thanks to the quality of our relations with customers, as well as to our participation in local charities and cultural events.

In 2008, Alfa-Bank acquired Severnaya Kazna bank, a major financial institution in the Urals region. This brought us more than 400,000 new customers, making us a leader on this regional market. We are now energetically integrating this business into Alfa-Bank. Most of the customers are concentrated in Yekaterinburg and the Sverdlov Oblast, as well as in Chelyabinsk, Perm, Tyumen and other regional cities. Severnaya Kazna’s 31 retail branches will be converted to the Alfa-Bank format using our advanced technology platform.

Last year, Alfa-Bank opened 22 new branches that use a high-tech format that is new in Regional Development Russia and based on the open-space concept. These branches are open 24 hours a day, 7 days a week. Alfa-Bank’s number of ATMs rose to 2,000 from 1,250 at the beginning of the year, of which 1,040 are capable of receiving cash deposits. We also installed 200 Cash-In devices intended for depositing cash in bank accounts, primarily to repay loans.

Our high-net-worth clients are now able to use four new A-Club offices in St. Petersburg, Yekaterinburg, Novosibirsk and Samara. According to our estimates, demand for these services in regional cities is high even during periods of crisis, so in 2009 we will continue to expand this model to more of Russia’s largest cities.

33 RETAIL BANKING

The country’s new financial situation led us to make certain changes to our product range, which are now complete. Alfa-Bank now offers three tariff plans (service packages), different payroll-card programs for our customers, and every type of credit product available on the Russian market.

Remote Customer A strategic priority for all of Alfa-Bank’s business units is being able to adapt to the Service Channels requirements of the market. This is why we are actively improving our technological capabilities and retail banking advantages. For instance, Alfa-Bank is making a major effort to develop remote-banking channels, including via the Internet, mobile phones and ATMs, and to add to the number of services offered via these channels. We believe it is very important that customers find it convenient to use our services, make loan payments and deposit cash into their accounts. Remote-banking allows customers to perform numerous transactions on their own, saving both time and money.

In 2008, the number of Alfa-Click Internet Bank users nearly doubled to 415,000. More than 700,000 people use our Alfa-Check SMS banking service. About 20,000 customers use Alfa-Mobile services. Alfa-Bank earned a total of $17.5 mln from remote customer- service channels, nearly three times as much as in 2007. Alfa-Click’s turnover grew 200% (from RUB20 bln in 2007 to RUB60 bln in 2008).

All remote services are interactive. Thus, by using the Alfa-Check service, a user may obtain information on transactions that have been carried out and also initiate certain transactions. For example, he may pay for mobile services or make payments based on templates created using the Internet Bank. The Alfa-Check service may be enabled using Alfa-Click or ATM machines. In other words, it is obvious that remote-banking channels have been integrated into a single platform. Alfa-Bank will continue to develop this service in 2009.

Alfa-Bank’s achievements in the area of remote-banking channels have been recognized with major awards. For example, Global Finance magazine recognized Alfa-Click as the Best Internet Bank in Russia in 2008. Alfa-Bank was also named the Best Internet Bank for Retail Clients in the Account Management subcategory in Central and Eastern Europe.

Another important service, prepared and technically implemented in 2008 and launched in January 2009, is a joint project between Alfa-Bank and the Yandex.Dengi service, Money from A to Y. The project allows a client to link an account with Alfa-Bank to an electronic wallet with the Yandex.Dengi payment system, giving him maximum remote access to own cash. An instant pay-in to the virtual account is performed using Alfa- Click Internet Bank. If necessary, the unused funds may be returned to Alfa-Bank and used as usual. The project has aroused great interest among Alfa-Bank customers, as both services supplement each other, providing even more opportunities to users of each.

My Alfa Another innovative product launched in 2008 was customized banking cards. The project was called “My Alfa” and allows customers to participate in designing their own banking cards using their home photo archive, their own drawings or a template from Alfa-Bank’s

34 general gallery. Customers may also use a design developed by other customers. The project is hugely popular among our customers and is the latest in a range of products with added value that Alfa-Bank has been developing successfully for several years. Increasing the array of products on offer is one of our priorities in developing our retail product line.

My Alfa banking card was awarded the BRAND OF THE YEAR/EFFIE 2008 prize in the category “Financial Institutions, Products and Services.”

Alfa-Bank’s other added-value products are its co-branding projects, such as Aeroflot– Co-branding Projects MasterCard–Alfa-Bank and Alfa-Bank–Cosmopolitan–Visa payment cards. Our experience has shown that cards with additional value perform better than regular payment cards, with the customers’ behavior differing significantly from that of standard customers. The average monthly turnover on such cards is generally 1.5 times higher than on regular cards, and the number of card owners continues to increase. That is why co-branding projects are of special importance for us, and we pay a lot of attention to developing this initiative.

The joint program between Aeroflot and Alfa-Bank to issue Aeroflot–MasterCard–Alfa- Bank cards allows card holders to accumulate points (miles) in a variety of ways by paying for goods and services with their MasterCard. The points can then be used to purchase air tickets. Last year we issued 105,698 Aeroflot–MasterCard–Alfa-Bank payment cards. This initiative was named the best co-branding project in 2008 by Banki. ru. The award was presented at the annual Banks of the Year ceremony.

Alfa-Bank’s other co-branding project, launched in 2007 together with Cosmopolitan magazine – the Alfa-Bank–Cosmopolitan–Visa card – was also continued. The program is intended primarily for women, as Alfa-Bank–Cosmopolitan–Visa is a payment card as well as a discount card entitling customers to discounts in partner shops, beauty salons and restaurants. The project won global recognition in 2008, with the Cosmo card design named as the best among all Visa cards issued during the year in Central Europe, the Middle East and Russia.

The range of products offered by Alfa’s Retail Bank was widened to include products that Mortgage Lending and used to be offered by its mortgage lending and auto finance business units. The Auto Finance unification of the retail business proved to be a strategically important step that was opportunely prepared and completed in 2008. The merger changed the organizational structure of the whole segment as well as its separate business lines, eliminated duplicate functions and substantially reduced costs. Alfa-Bank also optimized its rental expenses by combining the offices of retail banking, mortgage lending and auto finance in Moscow as well as in all other regions of Russia.

During a period of financial crisis, mortgage and car lending businesses are unable to survive independently; however, they continue to perform well as elements of Alfa- Bank’s product range, along with credit or debit cards and term or demand deposits. Nowadays, mortgage and car loans are sold through all existing points of sale, while

35 RETAIL BANKING

mortgage and car loan sales channels are being used successfully to offer the whole range of Alfa-Bank’s retail products.

Despite the significant drop in sales of mortgage and car loans in the second half of 2008, these business lines are still operating. Attention is being paid to developing schemes for possible debt-restructuring. Alfa-Bank values its customers and understands that even the most reliable borrowers may encounter problems in a complex financial environment. That is why it is a priority for the mortgage lending business to prepare offerings for customers with financial difficulties. We continue to maintain and ensure the quality of our loan portfolio and collect loans granted in previous years.

The auto lending market also changed substantially in September 2008. While in the first half of 2008, the business developed rapidly as it had in previous years, the increased cost of funding pushed up prices for car loans while demand simultaneously dropped. All the same, in 2008 we launched an online auto lending program that allows customers to apply for loans on the Alfa-Bank’s web site. A customer needs to visit Alfa-Bank in person only when it is time to receive the loan in order to execute the loan agreement.

Consumer Lending As for consumer lending, last year marked an important stage in this retail segment’s development. In 2008, we concluded agreements with Russia’s major consumer- electronics retail chains – MVideo, Tekhnosila and Svyaznoy – and we negotiated a potential agreement with Evroset. Alfa-Bank is currently present in all nationwide and major regional retail chains and intends to further expand this presence. One of the reasons for this is the existing customer demand for these services even during a financially challenging period; another is the quality of this type of loan portfolio. Having studied the behavior of retail loan portfolios in different countries around the world during various recessions and crises, Alfa-Bank’s analysts have concluded that smaller, short-term loans with small monthly payments create the most reliable portfolio from the viewpoint of retail loans during crisis periods. That is why the decision was made to actively develop this business line. As a result, in 2008, especially in the last quarter of the year, Alfa-Bank managed to significantly strengthen its position in this sector.

As in the past, Alfa-Bank actively improved its routine operations. This included implementing new technologies and also continuously monitoring client experience in order to further improve the level of service that already bears the distinguished Alfa- Bank brand. Retail businesses cannot just tread water, which is why we are always striving to improve in this area.

Awards A confirmation of the high quality of our client services was Alfa-Bank’s being named the best of the 50 biggest Russian banks in the joint survey “Client Experience Index 2008: Who Is Winning the Retail Banking Race in Russia?” by Senteo and PricewaterhouseCoopers. This was the second year in a row that the Bank received this award. Another survey conducted jointly by Kommersant-Dengi magazine and NEXTEP Group also ranked Alfa- Bank number one among financial institutions in terms of customer service.

36 The high level of service is ensured by Alfa-Bank’s employees. These are people who are Personnel Management interested in making things happen, assisting both each other and our customers. They are our strongest competitive advantage and one that is virtually impossible to replicate. Personnel management starts even before the first interview and continues for as long as an employee works at Alfa-Bank. To retain its title as the best bank in the country in terms of customer service, Alfa-Bank spends a significant amount of money developing its own front-office staff. In our Moscow training center we have created a mock-up bank branch where we hold role-playing and training exercises for future employees. Alfa-Bank has such training centers in other Russian cities as well, including St. Petersburg, Yekaterinburg, Nizhniy Novgorod and Novosibirsk. Another center in Rostov-on-Don is expected to open in the near future. After the basic course, employees are trained in the “Quality Service: The Five Steps” program, which lasts for eighteen months and is aimed at further improving their qualifications, while Alfa-Bank’s front- office employees are evaluated by the customers themselves.

During a financial crisis, companies win if they are able to improve themselves and adapt Priorities for 2009 their strategy to the needs of the present. Alfa-Bank is one such company. It has priorities in developing its retail business that will remain unchanged in any financial environment.

One of these is actively improving remote customer service channels, primarily via the Internet. All Alfa-Bank’s initiatives in this area, as well as its efforts focused on improving technological support for its operations, yield excellent results. That is why we will doubtless continue to develop this competitive advantage.

For several years, a strategic priority of Alfa-Bank has been developing banking card projects with added value. In addition to our existing programs, we plan to launch several similar initiatives before the year’s end.

We will continue to pay a lot of attention to high-net-worth customers. Demand for the quality products and exclusive services offered by A-Club is high, both in Moscow and the regions. The Bank plans to open several new A-Club offices in major cities around the country.

Finally, Alfa-Bank’s permanent strategic objective is to be the best Russian bank in terms of quality of service. Today, Alfa-Bank already has the most important thing: the trust of its customers, as evidenced by the steady growth of its customer base even now, during a period of financial difficulty. To preserve this trust, we need to continuously improve the quality of our services and make Alfa-Bank even more attractive as a universal settlement bank. Alfa-Bank’s customers are a special class of people who understand the importance of service and quality banking products, and who are ready to pay for them and seek solutions to their financial problems and opportunities to achieve their goals in any environment. Alfa-Bank is proud of its customers and will continue to make every effort to ensure that in 2009, more people will say that Alfa-Bank is their bank.

37 38 2008 saw Alfa-Bank preserving and reaffirming its status as the technology leader on the market for financial services both in corporate and retail segments. By the year end Alfa-Bank successfully completed implementing its Eurasia project to create a unified technology platform for all Russian regions.

39 Alfa Group Family Companies

ALFASTRAKHOVANIE AlfaStrakhovanie Group is the brand umbrella of AlfaStrakhovanie PLC and AlfaStra- GROUP khovanie-Zhizn Ltd. AlfaStrakhovanie Group has a total of RUB5 bln in consolidated authorized capital. The Group offers over 100 insurance products, including various kinds of life insurance and accident insurance. The Group’s customers may use the services of 380 regional establishments all over Russia.

AlfaStrakhovanie Group is accredited by the largest banks operating in Russia, including Sberbank, VTB 24, Alfa-Bank, Raiffeisenbank, MDM-Bank, UniCreditBank, Rossel’hozbank, Impexbank and TransCreditBank. It is an approved provider of property insurance to these banks’ customers.

In the year 2008 the Group’s net loss amounted to RUB46,0 mln. The Group’s premiums amounted to RUB18,9 bln in 2008. This includes premiums for property insurance of RUB13,1 bln personal insurance – RUB2,3 bln and life insurance – RUB522,0 mln, obligatory motor insurance – RUB2,0 bln. The total amount of claims paid in 2008 equals RUB7,1 bln. AlfaStrakhovanie Group has a reputation of a reliable and stable insurance company. The Group re-insures risks in largest re-insurance companies, including Munich Re, Swiss Re, Hannover Re, SCOR, GenRe, Partner Re, Lloyd’s of London, as well as large Russian companies.

THE GROUP’S PRINCIPLES According to the Expert RA rating agency, the Group is one of the top ten companies on the Russian open insurance market. In December 2008, Expert RA confirmed the Group’s A++ rating, the highest rating assigned in 2003. In April 2008, the Group received a Financial Strength Rating from Fitch.

The Group’s basic principle is the improvement of services and development of new insurance products and flexible programs to satisfy the individual needs of a client. The effectiveness of this strategy has been demonstrated by independent researches, and for two years (2007-2008) AlfaStrakhovanie Group has achieved the best results among Russia’s top ten insurance companies, according to research by the NEXTEP group of companies and the Kommersant Publishing House. Also in 2008, the Group received a Financial Olympics award in the Customer Service and Results and Success categories for achievements in customer service.

The Group’s services are used by approximately 1 mln private customers and more than 25,000 companies, including leading banks, large shipping companies, nuclear-power firms, metallurgy and machine-building enterprises, local offices of major foreign companies, public companies and government enterprises and institutions.

In September 2008, Kommersant published a ranking of Russia’s top 1,000 managers, AWARDS compiled annually by the Association of Managers and including the best professional managers in various businesses. For the last five years, AlfaStrakhovanie’s senior executives have been regularly named among the best in their sector. This year for the first time, Group executives were nominated in all six insurance-company categories: CEO, CFO, HR Director, Commerce/Marketing Director, IT Director, PR Director and Corporate Relations Director.

AlfaStrakhovanie Group became the most attractive company of insurance sector at annual ceremony «HR-brand». Group merits have been estimated by bronze in «Federal project» nomination for effective work with regional employees. The AlfaStrakhovanie Group was awarded with award «EFFIE 2008» for successful project with «Odnoklassniki.ru».

AlfaStrakhovanie Group, in cooperation with Lowe Adventa, has developed a number of successful promotional campaigns, including two that are especially worthy of note: AlfaREMONT and AlfaKASKO 50x50, a unique offering on the insurance market. The success of the AlfaKASKO 50х50 campaign last year was recognized with a Golden Salamander award in the category “Innovation in Insurance: New Insurance Product.”

At the Retail Finance awards ceremony, AlfaStrakhovanie Group won in the category “Creative Idea of the Year” for the best original promotional campaign, which was conducted on the web site Odnoklassniki.ru. The campaign, which lasted from July 1 until November 30, offered the users of Odnoklassniki.ru to “insure” their photos on the web site against receiving low ratings. During the five months of the campaign, more than 6 mln users participated by insuring their photos.

AlfaStrakhovanie Group’s corporate university came in first in a contest run by WebSoft, Russia’s leading provider of distance-training courses. The winning training course was for AlfaKASKO 50х50.

In addition, the Group’s corporate university won a Training INDEX professional award in the category “Effective T&D Decisions for Achieving Business Targets.” This is the most prestigious award in the sphere of personnel training and education in Russia.

Alfa Capital Management has been in operation since 1996 and is one of the largest and Alfa Capital most experienced asset managers in Russia. Key business areas include managing mutual Management funds, Non-State Pension Fund (NSPF) assets, insurance companies, corporate accounts, and trust accounts of wealthy individuals. It would not be an exaggeration to say that the Alfa Capital brand is widely recognized as a symbol of high-quality service on the asset management market. www.alfacapital.ru

2008 was a year of milestones for Alfa Capital Management. The company made great 2008: A year of strides over the course of the year: it opened several regional braches, restructured its innovation

41 Alfa Group Family Companies

sales and asset management units, and updated and expanded its product range to provide customers with a wider array of investments to choose from.

Alfa Capital Management’s Board of Directors renewed the company’s contract with CEO Mikhail Khabarov until the end of 2012. In 2008, the company restructured its portfolio-management division in order to improve efficiency and allow portfolio managers to specialize in a particular asset class and investment product. Alfa Capital’s portfolio-management division is now made up of the following units: liquid stocks, small-cap stocks, loan instruments and investment-product development. The main aims of the newly established units are to expand the company’s product range and to focus more on existing products. The creation of the new units has broadened the range of products available to clients, including low-risk and capital- protected products as well as strategies for commodity markets. Alfa Capital increased the range of products it offers to private investors with its new trust management strategy, called Cash Market, followed by the launch of Alfa Capital- Rentier, an exclusive new closed-end mixed mutual fund. This product is a pioneer in its class, with no comparable funds on the domestic investment market. Last year, Alfa Capital Management’s share of the Russian mutual fund market grew from 9.27% to 9.85%. The company has adopted a new client service development strategy for 2009 aimed at improving the quality of the flow of information from portfolio managers through relationship managers to clients, and expanding our range of expertise and analysis. The Key Accounts Center was set up as a part of this strategy. Also, the Client Support Service was created to provide additional support to clients, including a special personal service package for private investors. In 2008, the company won several tenders, including the contract to manage the assets of the Russian government’s Fund to Assist Housing and Communal Services Reform.

Prospects for 2009 For the year ahead, Alfa Capital Management has set its sights on the currency market (FOREX), fixed-income instruments (ruble bonds and Eurobonds) and structured products with capital protection. Specifically, clients will be offered trust-management strategies, including investing in state bonds (treasuries), quasi-sovereign Eurobonds, credit notes, contracts for bond pools, hard currency and gold. The company manages the distressed-asset portfolios of corporate and institutional clients, including corporate bonds, loans and real estate. In particular, Alfa Capital’s expertise has been put to good use in developing financial consultancy services for customers who prefer direct investment instruments. The company’s advisers help clients choose the optimal basic assets, providers and investment terms. This year, the company plans to launch a Multi-Family Office offering a full range of investment products and services, including financial consulting by Alfa Capital Management, financial products (e.g. investments, banking and insurance) from outside providers and nonfinancial lifestyle services.

Market recognition In 2008, Alfa Capital Management’s professionalism in asset management was highly praised by independent experts

42 • The National Rating Agency verified Alfa Capital’s individual reliability rating as ААА, the highest grade;

• The Expert RA Rating agency gave Alfa Capital Management an А++ rating, indicating that “Services provided are of an exceptionally high level of reliability and quality”;

• Won award in the “Best Russian Asset Management Company” category at the annual Russian Mutual Investments Market Awards organized by the National League of Management and Training section of the MFC;

• Won award in the “Best Equity-Fund Company” category at the annual Russian Mutual Investments Market Awards, organized by the National League of Management and Training section of the MFC;

• Won award in the “Breakthrough of the Year” category at the annual Russian Mutual Investments Market Awards, organized by the National League of Management and Training section of the MFC;

• Won award in the “Best Mutual Fund Manager” category at the Equity-Market Elite Awards organized by the National Association of Equity-Market Participants;

• Won award in the “Best Business Development Project” category at the Equity-Market Elite Awards organized by the National Association of Equity-Market Participants;

• Won award for “Most Popular Mutual Investment Fund” at the annual Russian Financial Olympics organized by RosBusinessConsulting;

• Won award for “Most Profitable Mutual Investment Fund” at the annual Russian Financial Olympics organized by RosBusinessConsulting;

• Won award for “Best Mutual Fund Manager” at the annual Russian Financial Olympics organized by RosBusinessConsulting;

• Alfa Capital CEO Mikhail Khabarov was selected as one of the top five executives in the Russian financial sector in the “Top 1,000 Professionals in Russia” rating, conducted by Kommersant in collaboration with the Russian Association of Managers. The list also includes: Alexander Goncharenko, Alfa Capital CFO; Irina Krivosheeva, Alfa Capital COO; Ilya Khaikin, Alfa Capital Head of Marketing & PR; Alexander Stetsenko, Alfa Capital IT Manager; and Dmitry Nazarkin, Alfa Capital PR Manager.

230 (1,2%) Alfa Capital 1 797(9,1%) 1 837 (9,3%) Institutional clients Management AUM 1055 (5,3%) State funds structure (end of 2008) 908 (4,6%) Mutual investment fund

6 507 (32,9%) Individual trust accounts

Corporate accounts

Pension savings (excluding RF Pension)

NSPF assets MLN RUB 7 415 (37,5%)

43 Alfa Group Family Companies

Alfa Capital Partners ALFA CAPITAL PARTNERS (ACP), A PRIVATE EQUITY AND REAL ESTATE INVESTMENT ADVISORY FIRM, ADVISES FUNDS THAT INVEST IN LEADING COMPANIES AND REAL ESTATE PROPERTIES IN RUSSIA, UKRAINE AND THE COMMONWEALTH OF INDEPENDENT STATES (CIS). INTERNATIONAL INSTITUTIONAL AND PRIVATE INVESTORS FROM NORTH AMERICA, EUROPE, ASIA AND MIDDLE EAST, MULTILATERALS (EBRD, IFC) AS WELL AS ALFA GROUP, HAVE COMMITTED US$701 MLN IN CAPITAL TO ACP’S THREE FUNDS.

www.alfacp.ru

ACP is a partner to international and local investors seeking access to attractive private equity investment opportunities in the region and is a partner to local entrepreneurs, companies and developers seeking financing for growth and acquisitions. ACP employs a rigorous investment process which combines the best of international and local approaches. ACP currently serves as advisor to three investment fund initiatives – corporate private equity, infrastructure and real estate. While there is significant potential for cooperation and synergy among the three funds, each fund has a dedicated team, targets a large and attractive market, and has the ambition to raise follow on funds in the future.

Private Equity Fund In February 2007, Alfa Private Equity Partners LP (APEP) held its final closing with $200 mln in commitments. ACP is the Fund Manager of APEP. APEP’s investment strategy is to provide equity capital to companies which are emerging leaders in the new economy in Russia, Ukraine and the CIS. To date the Fund has made four investments totaling $95.5 mln. The Fund made its first investment in February 2006, acquiring a 50% stake in Russia’s leading chain of upscale fitness clubs, World Class. World Class subsequently merged with Maxisport and reorganized into a holding as Russian Fitness Group. In 2007, APEP made three more investments, entering Russia’s thriving automotive retail market through an investment in Nezavisimost, a leading dealership chain, launching a consumer finance retail mortgage business, IpoTech Bank, and acquiring control of Yolki-Palki, a popular mid-market Russian cuisine restaurant chain.

In the face of economic slowdown and sharply reduced liquidity, the APEP fund team is working closely with management of its portfolio companies to protect the core business and value proposition, maintain positive cash flow and liquidity, and preserve the growth potential which can be realized when market conditions stabilize. The fund team continues to selectively pursue new investments which satisfy its investment mandate and strategy with emphasis given to sound businesses, positive operating cash flow, proven management teams, and most of all, compelling valuations, increasingly driven by a need to restructure debt laden balance sheets.

Infrastructure Fund In April 2005 Alfa Capital Partners negotiated the restructuring and re-launch of the $180 mln Great Circle Fund. Alfa Group is a limited partner in, and ACP is the Regional Manager of, the Great Circle Fund LP. With sponsorship and leverage financing from the US Government's Overseas Private Investment Corporation, the Great Circle Fund’s mandate is to invest in maritime transportation, transportation infrastructure and logistics in Russia, Ukraine, Central Asia, Central and Eastern Europe, the Baltic States and Turkey.

44 Modernization and expansion of existing infrastructure is a top priority for governments throughout the region due to the critical role this plays in facilitating trade and efficient supply chain management. We are witnessing growing demand for investment in this sector.

To date the Great Circle Fund has made five investments totaling $103 mln. Investments include significant minority stakes in three leading logistics service companies: Russian Logistics Service, a Russian nationwide logistics company serving the consumer sectors; STS Logistics, a leading Russian logistics company serving industrial sectors; and Balnak Logistics, an established Turkish logistics company focusing on warehouse operations and supply chain management. In addition, in 2008 Great Circle invested $15 mln via a convertible loan to Caspian Services, based in Kazakhstan, a leading provider of seismic services, off shore supply service and a supply base servicing the oil exploration and production industry; and $20 mln in equity in FESCO, Russia’s leading container port operator, dry cargo ship owner, and one of the largest private rail transport service providers. The Great Circle Fund management team actively supports portfolio companies’ strategic development, growing sales and consolidating market positions, to create companies that will be preferred targets of international service companies seeking market entry.

In June 2007 the Marbleton Property Fund LP (“Marbleton”) closed with equity Real Estate Fund commitments of $321 mln from institutional and private investors in the United States, Canada and Europe. Marbleton was sponsored and is managed by a joint venture between ACP and JER Partners, a leading international real estate private equity firm based in McLean, Virginia. Marbleton pursues investments in real estate opportunities in Russia, Ukraine and the CIS countries, seeking to build a diversified portfolio of real estate and real estate-related assets. Marbleton utilizes leverage where it deems appropriate.

Modern commercial and residential property in Russia has developed rapidly in recent years. Excess liquidity ultimately led to a property bubble in 2008, and the property market is now undergoing a painful but healthy correction. With a slow down in economic activity and hence property demand, there is a short term supply excess; however, there remains a large structural shortage of modern property in Moscow and throughout Russia, creating significant potential for sustained real estate development, investment and asset management for quality market participants who develop a strong platform with a medium to long tem perspective.

In 2007 The Fund made three investments in partnership with developers and on a standalone basis in Russia and Georgia for a total of $90 mln. These investments include a suburban office park development in southern Moscow, acquisition of two big-box retail DIY stores in St. Petersburg and an investment in GRDC, a portfolio of standing assets and development projects in and around Tbilisi, Georgia, managed by Georgia’s leading developer. With the majority of Fund capital still available to invest, the Marbleton fund team is currently focused on asset management of the existing portfolio, selective review of new opportunities, and development of local relationships.

45 SUMMARISED CONSOLIDATED FINANCIAL STATEMENTS

INDEPENDENT AUDITOR’S REPORT

ZAO PricewaterhouseCoopers Audit To the Shareholders and Board of Directors of ABH Financial Limited: Kosmodamianskaya Nab. 52, Bld. 5 1 The accompanying summarised consolidated financial statements have been derived from the 115054 Moscow consolidated financial statements of ABH Financial Limited and its subsidiaries (the “Group”) for Russian Federation the year ended 31 December 2008. These summarised consolidated financial statements are the Telephone +7 (495) 967 6000 Facsimile +7 (495) 967 6001 responsibility of the Group’s management. Our responsibility is to express an opinion on whether www.pwc.com these summarised consolidated financial statements are consistent, in all material respects, with the consolidated financial statements from which they were derived.

2 We have audited the consolidated financial statements of ABH Financial Limited for the year ended 31 December 2008, from which these summarised consolidated financial statements were derived, in accordance with International Standards on Auditing. In our report dated 20 April 2009 we expressed an unqualified opinion on the consolidated financial statements from which the summarised financial statements were derived.

3 In our opinion, the accompanying summarised consolidated financial statements are consistent, in all material respects, with the consolidated financial statements from which they were derived.

4 For a better understanding of the Group’s financial position and the results of its operations for the year and of the scope of our audit, the summarised consolidated financial statements should be read in conjunction with the consolidated financial statements from which the summarised consolidated financial statements were derived and our independent auditor’s report thereon.

20 April 2008 Moscow, Russian Federation

46 ABH FINANCIAL LIMITED CONSOLIDATED BALANCE SHEET

In thousands of US Dollars 31 December 2008 31 December 2007

ASSETS Cash and cash equivalents 3 860 019 2 634 359 Mandatory cash balances with central banks 79 313 308 092 Trading securities 588 281 841 457 Repurchase receivables relating to trading securities 150 821 534 426 Due from other banks 1 837 436 1 916 685 Loans and advances to customers 17 969 661 15 330 090 Investments 371 676 114 201 Repurchase receivables relating to investments 215 070 - Other financial assets 1 194 887 498 003 Other assets 371 144 180 417 Premises and equipment 389 595 274 526 Deferred tax asset 24 483 62 304 TOTAL ASSETS 27 052 386 22 694 560

LIABILITIES Due to other banks 7 407 065 2 849 461 Customer accounts 12 583 066 12 180 392 Debt securities issued 2 390 550 3 178 936 Syndicated and other loans 1 063 848 1 354 090 Subordinated debt 463 715 526 006 Other financial liabilities 832 940 565 594 Other liabilities 110 622 128 545 Deferred tax liability 39 135 56 839 TOTAL LIABILITIES 24 890 941 20 839 863

EQUITY Share capital 944 800 694 800 Fair value reserve for investments available for sale (44 911) 39 Revaluation reserve for premises 53 201 56 785 Cumulative translation reserve (359 131) (217 890) Retained earnings 1 553 678 1 320 963 Net assets attributable to the Company’s equity holders 2 147 637 1 854 697 Minority interest 13 808 - TOTAL EQUITY 2 161 445 1 854 697

TOTAL LIABILITIES AND EQUITY 27 052 386 22 694 560

The consolidated financial statements, from which the summarised consolidated financial statements have been derived, are available from ABH Financial Limited upon request.

47 ABH Financial Limited Consolidated Statement of Income

In thousands of US Dollars 2008 2007

Interest income 2 824 291 1 706 243 Interest expense (1 405 733) (790 211) Expenses directly attributable to lending operations (36 665) (17 015)

Net margin from lending operations 1 381 893 899 017 Provision for loan impairment (956 128) (222 875)

Net margin after provision for loan impairment 425 765 676 142 Fee and commission income 420 693 318 973 Fee and commission expense (79 754) (60 606) Gains less losses arising from trading securities 73 523 43 303 Gains less losses arising from foreign currencies and precious metals 280 678 18 957 (Losses less gains)/gains less losses arising from investments (22 829) 34 630 Share of results and impairment of associates (49 414) (30 304) Gains arising from acquisition of own debts 138 837 2 737 Other impairment provisions (52 602) (8 370) Other operating income 79 041 15 437 Operating expenses (813 249) (681 965)

Profit before tax 400 689 328 934 Income tax expense (170 559) (75 448)

Profit for the year 230 130 253 486

Profit attributable to: Equity holders of the Company 230 164 253 486 Minority interest (34) -

Profit for the year 230 130 253 486

The consolidated financial statements, from which the summarised consolidated financial statements have been derived, are available from ABH Financial Limited upon request.

48 ABH FINANCIAL LIMITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Attributable to the equity holders of the Company Minority Total equity interest Share Fair value Revalua- Cumulative Retained Total capital reserve for tion re- translation earnings investments serve for reserve available premises In thousands of US Dollars for sale

Balance as at 31 December 2006 344 800 70 25 929 (216 461) 1 155 837 1 310 175 9 1 310 184 Revaluation of premises, net of taxation - - 33 108 - - 33 108 - 33 108 Investment securities available for sale - revaluation to fair value - 39 - - - 39 - 39 - disposals - (70) - - - (70) - (70) Translation movement - - - 90 867 - 90 867 - 90 867 Net change in hedge of net investment - - - (74 607) - (74 607) - (74 607) in foreign operations Share of other equity movements - - - (17 689) - (17 689) - (17 689) of associates Net income/(loss) recorded directly - (31) 33 108 (1 429) - 31 648 - 31 648 in equity Profit for the year - -- - 253 486 253 486 - 253 486

Total recognised income/(loss) - (31) 33 108 (1 429) 253 486 285 134 - 285 134 for the year Share capital contribution 350 000 -- - - 350 000 - 350 000 Dividends declared - -- - (92 393) (92 393) - (92 393) Other movements - - (2 252) - 4 033 1 781 (9) 1 772

Balance as at 31 December 2007 694 800 39 56 785 (217 890) 1 320 963 1 854 697 - 1 854 697 Revaluation of premises, net of taxation - (4 022) - (4 022) - (4 022) Tax rate change - - 2 989 - - 2 989 2 989 Investment securities available for sale - revaluation to fair value - (60 975) - - - (60 975) - (60 975) - disposals - 5 204 - - - 5 204 - 5 204 - income tax - 10 821 - - - 10 821 - 10 821 Translation movement - - - (388 783) - (388 783) (989) (389 772) Net change in hedge of net investment in - - - 248 948 - 248 94 - 248 948 foreign operations Share of other equity movements of - - - (1 406) - (1 406) - (1 406) associates Net loss recorded directly in equity - (44 950) (1 033) (141 241) - (187 224) (989) (188 213) Profit for the year - -- - 230 164 230 164 (34) 230 130

Total recognised income/(loss) for - (44 950) (1 033) (141 241) 230 164 42 940 (1 023) 41 917 the year Share capital contribution 250 000 -- - - 250 000 - 250 000 Business combinations ------14 831 14 831 Realised revaluation reserve - - (2 551) - 2 551 -- -

Balance 944 800 (44 911) 53 201 (359 131) 1 553 678 2 147 637 13 808 2 161 445 as at 31 December 2008

The consolidated financial statements, from which the summarised consolidated financial statements have been derived, are available from ABH Financial Limited upon request.

49 ABH Financial Limited Consolidated Statement of Cash Flows

In thousands of US Dollars 2008 2007 Cash flows from operating activities Interest received 2 836 574 1 677 579 Interest paid, other than on debt securities issued, syndicated and other loans and subordinated debt (1 070 755) (485 728) Expense directly attributable to the lending operations (36 468) (16 910) Fees and commissions received 419 566 316 113 Fees and commissions paid (80 964) (59 342) Net income received from trading securities (174 560) 36 930 Net income received from trading in foreign currencies (506 908) 63 346 Other operating income received 45 119 10 912 Staff costs paid (452 747) (374 779) Other operating expenses paid (329 094) (281 649) Income tax paid (117 063) (146 507) Cash flows from operating activities before changes in operating assets and liabilities 532 700 739 965 Changes in operating assets and liabilities Net decrease/(increase) in mandatory cash balances with central banks 193 477 (30 975) Net decrease/(increase) in trading securities and repurchase receivables 141 012 (369 767) Net increase in due from other banks (96 114) (186 599) Net increase in loans and advances to customers (4 307 009) (5 234 509) Net decrease/(increase) in other assets and other financial assets 44 556 (225 210) Net increase in due to other banks 5 306 162 1 314 268 Net increase in customer accounts 1 076 065 3 676 325 Net (decrease)/increase in other liabilities and other financial liabilities (106 313) 31 183 Net cash from/(used in) operating activities 2 784 536 (285 319) Cash flows from investing activities Acquisition of investments available for sale (421 099) (8 902) Proceeds from disposal of investments available for sale 12 893 374 Acquisition of investments at fair value through profit and loss (6 335) (5 409) Proceeds from disposal of investments at fair value through profit and loss 14 166 16 134 Proceeds from disposal of investment property 53 435 - Acquisition of premises, equipment and intangible assets (68 405) (90 372) Proceeds from disposal of premises, equipment and intangible assets 10 219 15 353 Proceeds from disposal of subsidiaries - 19 792 Acquisition of subsidiaries (103 399) - Cash outflow on disposal of subsidiaries - (1 557) Dividend income received 2 358 4 005 Net cash used in investing activities (506 167) (50 582) Cash flows from financing activities Share capital contribution 250 000 350 000 Proceeds from syndicated and other loans 577 888 1 200 846 Repayment of syndicated and other loans (885 125) (832 063) Interest paid on syndicated and other loans (61 219) (59 313) Proceeds from debt securities issued 815 311 1 323 715 Repayment of debt securities issued (1 356 305) (864 272) Interest paid on debt securities in issue (233 965) (158 645) Proceeds from subordinated debt - 298 525 Interest paid on subordinated debt (46 029) (32 359) Net cash (used in)/from financing activities (939 444) 1 226 434 Net increase in cash and cash equivalents 1 338 925 890 533 Cash and cash equivalents at the beginning of the year 2 634 359 1 672 681 Effect of exchange rate changes on cash and cash equivalents (113 265) 71 145 Cash and cash equivalents at the end of the year 3 860 019 2 634 359

The consolidated financial statements, from which the summarised consolidated financial statements have been derived, are available from ABH Financial Limited upon request.

50 СORPORATE DIRECTORY

Corporate Head Office General licence No. 1326 issued 27 Kalanchevskaya Street by the RF Central Bank on January 29, 1998 Moscow 107078 Russian Federation Tel.: + 7 495 620 91 91 + 7 495 974 25 15 Telex: 412089 ALFARU S.W.I.F.T.: ALFARUMM E-mail: [email protected] www.alfabank.com www.alfabank.ru

Corporate-Investment Media and Public Relations BankING Director for Communications Co-head of Corporate- and PR Investment Banking Leonid Ignat Vladimir Tatarchuk Tel.: + 7 495 788 69 79 Tel.: + 7 495 795 36 36 Fax: + 7 495 788 69 81 Fax: + 7 495 745 87 07 E-mail: [email protected] E-mail: [email protected] Research Head of Research Financial Institutions Ronald P. Smith Head of International Banking Tel./Fax: + 7 495 783 50 05 and Financial Institutions E-mail: [email protected] Marina Denisova Tel.: + 7 495 792 58 52 Equities Fax: +7 495 792 58 43 Managing Director E-mail: [email protected] Michael Pijiolis Tel./Fax: + 7 495 223 55 22 + 7 495 788 64 88 INvestor Relations E-mail: [email protected] Head of Investor Relations Svetlana Demyashkevich Retail BANKING Tel.: + 7 495 795 36 41 Head of Retail Banking Fax: + 7 495 786 48 72 Alexey Marey E-mail: [email protected] Tel./Fax: + 7 495 786 29 74 E-mail: [email protected]

Derivatives and Fixed Income Corporate-Investment Managing Director, Head of BankING Derivatives and Fixed Income Co-head of Corporate- Simon Vine Investment Banking Tel.: + 7 495 792 58 44, Edward Kaufman + 7 495 788 03 09 Tel.: + 7 495 795 37 58 Fax: + 7 495 788 67 17 Fax: + 7 495 795 37 21 E-mail: [email protected] E-mail: [email protected]

51 СORPORATE DIRECTORY

Alfa Capital Alfa-Bank KAZAKHSTAN Chairman of the Board of Directors 57A Masanchi Street Mikhail Khabarov Almaty 050012 31 Sadovaya-Kudrinskaya Street, Kazakhstan Building 1 Tel.: + 7 727 292 00 12 Moscow 123001 Fax: +7 727 292 08 21 Russian Federation E-mail: [email protected] Tel.: + 7 495 797 31 52 Fax: + 7 495 797 31 51 E-mail: [email protected] Amsterdam Trade Bank N.V. Chairman of the Board Alfa Capital Partners Ltd. of Managing Directors, Chief Executive Officer Chief Executive Officer Richard Sobel Alexei V. Drovossekov 31 Sadovaya-Kudrinskaya Street, Herengracht 475 Building 1 Amsterdam 1017 BS Moscow 123001 The Netherlands Russian Federation Tel.: + 31 20 520 92 12 Tel.: + 7 495 775 18 28 Fax: + 31 20 520 92 08 Fax: + 7 495 775 18 27 E-mail: [email protected] E-mail: [email protected] www.atbank.nl

Alfa Capital Markets, Inc. Chief Executive Officer Alforma Capital Markets, Inc. Simon Roache President 21st Floor, City Tower David Denson 40 Basinghall Street 540 Madison Avenue, 30th Floor London EC2V 5DE New York NY 10022 United Kingdom United States Tel.: + 44 (0) 20 7382 41 82 Tel.: + 1 212 421 75 00 Fax: + 44 (0) 20 7382 41 70 Fax: + 1 212 421 86 33 E-mail: [email protected] E-mail: [email protected]

52 www.alfabank.com