This achievement is largely due to MDM Bank’s reorganization during the past year. The Bank’s new strategy, which was approved in October 2007, concentrates on quality of service for all client groups, including individuals and small businesses. In accordance with these goals, the Bank has improved quality monitoring and handling of customer complaints; the Bank is actively opening new and more convenient points of sale, upgrading and remodelling existing retail branches, and is conducting a comprehensive training of client managers as well as improving the material and non-material incentives for service quality.

The survey conducted by Senteo and PwC measured five areas: brand (do people identify with the bank’s brand); communications (conciseness, comprehension and availability of marketing materials); environment (comfort and convenience of the premises where a bank’s branches are located); offering (the product line and service range being in line with client needs); and culture (how a bank’s personnel service clients). MDM Bank was the leader in terms of environment, garnering a high score of 4.36 points.

Michel Perhirin, Chairman of the Management Board, said: “This is proof that we are moving in the right direction. We are pleased to already see positive results from the aggressive steps taken to implement the Bank’s retail business development strategy, where one of the key factors is improving the quality of service at our network branches. We strive to ensure that clients who visit our bank remain loyal customers, and we are prepared to take all steps necessary to ensure this. Being chosen as the leader in terms of the comfort and convenience of our branches is the result of more than a year’s effort on the part of MDM Bank’s entire team. This work has included analyzing and developing an organizational concept for the branches and their efficient zoning, as well as introducing friendly and client-oriented approaches to servicing our customers, starting from the moment a client enters a branch until he/she has been provided with the proper advice on our convenient products and comprehensive service.

“We have many more goals on our agenda. The introduction of a new operating model will play a key role in optimizing client service at the Bank’s branches. This will enable us to separate the sales and operating functions, thus allowing us to provide clients with quality service in a timely fashion. The most important factor, of course, is the Bank’s personnel. We are pleased that MDM Bank’s personnel have come to the understanding of how important it is for us to satisfy our clients. I am certain that we shall continue to improve our corporate culture, and that we shall achieve even more impressive results in the future.”

MDM Bank

MDM Bank was founded in December 1993 and holds a General Banking License issued by the Central Bank of Russia (#2361 dated 31 March 2008). MDM Bank is one of the most dynamically developing banks in Russia and is among the top Russian banks in terms of assets and equity. Today, MDM Bank is a modern universal financial institution offering a full range of services to its clients.

MDM has one of the highest credit ratings among privately-owned Russian banks – Standard & Poor’s (BB, stable), Fitch Ratings (BB, stable) and Moody’s (Ba1, stable) – and is the only Russian financial organization that has been given a public Corporate Governance Score by Standard & Poor’s (CGS-6+).

Standard & Poor’s awarded MDM Bank the highest ranking in its study of “Transparency and Disclosure by Russian banks” in 2006 and 2007. The Bank was also regarded by Euromoney magazine as “one of the leading banks in Russia and Emerging Europe, applying the most advanced standards of corporate governance.”

MDM Bank has received a number of awards from Global Finance magazine:
2005 – Best Domestic Bank and Editor’s Special Award for Transparency.
2006 – Best Forex Bank, Best Domestic Bank, Best Domestic M&A Arranger, and Best Bank in Corporate Governance. In October 2006, Euromoney magazine awarded MDM Bank Leading Bank in Corporate Governance in Emerging Europe.
2007 – Corporate Governance Editor’s Award, and Best Forex Bank.
2008 – Best Domestic Bond Research Team

Inquiries
Investor Relations                                                                                                    Public Relations
+7 495 221 30 75                                                                      +7 495 363 27 41
www.mdmbank.com

The Order was established on 3 December 1963 by then-President Charles de Gaulle and it is the second-highest ranking national order of France, following the Légion d'honneur. The Order is awarded to citizens of France who distinguish themselves in state, public or military service or in private business.

As with Légion d'honneur, the Ordre national du Mérite has three degrees – commandeur (Commander); officier (Officer); and chevalier (Knight) – and two ranks – grand-croix (Grand Cross); and grand officier (Grand Officer).

The award was granted following Euromoney’s annual survey of European banking experts as part of the magazine’s Best Companies in Central and Eastern Europe research. This is the first time that an award for best management in corporate and investment banking has been granted.

The criteria applied by Euromoney in determining MDM Bank’s first place showing were: consistency and confidence in implementing strategy, success in operational management, transparency in financial reporting, high corporate governance standards, as well as transparency for investors and financial analysts.

MDM Bank is the only Russian Bank among financial institutions in Central and Eastern Europe awarded in this nomination. Among the other award recipients are: OTP Bank, Hungary; BRD – Group SocGen, Romania; and Erste Bank, Croatia.

MDM Bank CEO Michel Perhirin said: “As a universal bank, MDM Bank pays close attention to the development of corporate and investment banking, and quality management plays a key role in this business. In 2007, the Bank merged the corporate and investment banking units to create a single point of access for the Bank’s clients to receive comprehensive, high-quality service. I believe that our clients will recognize the advantages of this approach, and this award will not be the last.”

Inquiries

Investor Relations 
+7 495 363 27 41

Public Relations 
+7 495 221 30 75

Other highlights:

• Total assets decreased 5.0% from 31 December 2007 to RUB 305.5 billion (YE 2007: RUB 321.5 billion), on repayment of a syndicated loan and decline in volatile customer account balances in MDM Bank’s Latvian subsidiary, LTB;
• Net interest margin declined slightly from 5.2% in Q4 2007 to 4.8%;
• Total equity grew by 1.9% to RUB 39.7 billion during the quarter (YE 2007: RUB 38.9 billion);
• Cost/Income ratio increased to 57.5% from 43.6% for Q1 2007, mainly due to lower revenues impacted by the losses from securities;
• Deposits/Loans ratio declined slightly from 66.6% at 2007-end to 65.2%. Excluding customer accounts at LTB, deposits/loans ratio increased from 51.7% to 57.1%, on strong growth in deposits from individuals (+11.2%) as well as corporates and public entities (+12.8%);
• Provision coverage of non-performing loans totaled 145.0% (177.5% and 121.7% for the Corporate & Investment Banking and Retail books respectively);
• 11 new points of sale opened during the period.

The full text of the financial statements for Q1 2008 can be found here: www.mdmbank.com/about/financial

The Q1 2008 results call presentation will be available before the conference call here: www.mdmbank.com/about/calls

MDM Bank Q1 2008 Results Conference Call

MDM Bank will hold its Q1 2008 results conference call on Friday, 30 May 2008, at 5pm Moscow time (2pm London Time, 9am New York time). MDM management will discuss the Bank’s financial results and other developments for the quarter ended 31 March 2008.

For registration and instructions, please go to the following link: wcc.webeventservices.com/view/wl/r.htm?e=111179&s=1&k=73C3D3CEBF78764C80C21FB62809092F&cb=genesys

Inquiries

Investor Relations
+7 495 221 30 75

Public Relations
+7 495 363 27 41

For registration and instructions, please go to the following link: http://wcc.webeventservices.com/view/wl/r.htm?e=111179&s=1&k=73C3D3CEBF78764C80C21FB62809092F&cb=genesys

The Bank’s Q1 2008 Financial Statements, press release and results presentation will be available on the day of the call on MDM Bank’s website.

Financial statements: http://www.mdmbank.com/about/financial 
Press release: http://www.mdmbank.com/pr/press 
Presentation: http://www.mdmbank.com/about/calls

The call will be held in English. A recording and transcript of the call will be made available on the MDM Bank website.

MDM Bank
MDM Bank was founded in December 1993 and holds a General Banking License issued by the Central Bank of Russia (#2361 dated 31 March 2008). MDM Bank is one of the most dynamically developing banks in Russia and is among the top Russian banks in terms of assets and equity. Today, MDM Bank is a modern universal financial institution offering a full range of services to its clients.
MDM has one of the highest credit ratings among privately-owned Russian banks – Standard & Poor’s (BB, stable), Fitch Ratings (BB, stable) and Moody’s (Ba1, stable) – and is the only Russian financial organization that has been given a public Corporate Governance Score by Standard & Poor’s (CGS-6+).
Standard & Poor’s awarded MDM Bank the highest ranking in its study of “Transparency and Disclosure by Russian banks” in 2006 and 2007. The Bank was also regarded by Euromoney magazine as “one of the leading banks in Russia and Emerging Europe, applying the most advanced standards of corporate governance.”
MDM Bank has received a number of awards from Global Finance magazine:
2005 – Best Domestic Bank and Editor’s Special Award for Transparency.
2006 – Best Forex Bank, Best Domestic Bank, Best Domestic M&A Arranger, and Best Bank in Corporate Governance. In October 2006, Euromoney magazine awarded MDM Bank Leading Bank in Corporate Governance in Emerging Europe.
2007 – Corporate Governance Editor’s Award, and Best Forex Bank.
2008 – Best Domestic Bond Research Team

Inquiries

Investor Relations 
+7 495 363 27 41

Public Relations 
+7 495 221 30 75

At the AGM, the Bank’s shareholders re-elected the Board of Directors, keeping intact the previous composition: Oleg Viyugin, Sergey Popov, Martin Andersson, Luqman Arnold, Edward Nassim, Olga Selivanova and Sergey Shapiguzov. In accordance with Russian law, the Board will elect its chairman and appoint committee members at its next scheduled meeting. The re-election of all of the sitting Board members signals the desire to maintain consistency and to continue developing the Bank in line with its updated universal banking strategy approved in 2007.

The AGM also approved Ernst & Young as MDM Bank’s auditor for 2008.

In addition, the AGM adopted several changes to the Bank’s charter and by-laws, as well as approved the annual report for 2007. These documents can be found on the Bank website: www.mdmbank.com/about

The minutes of the AGM, which was held on 26 May 2008, are available in Russian on MDM Bank’s website: www.mdmbank.ru/events

Inquiries

Investor Relations
+7 495 221 30 75 

Public Relations
+7 495 363 27 41

Global Finance publishes an annual ranking of Russia’s Best Banks and Companies in various nominations based on a number of criteria, including: market share, profitability, long-term strategy, quality of management and adherence to the best corporate-governance standards.

Since 2005, MDM Bank has been named among the best Russian banks in Global Finance’s rating nominations for Best Domestic Bank, Editor’s Special Award for Transparency, Best Bank on the FOREX Market, Best Arranger of Eurobond Issues on the Russian Market, Best M&A Consultant on the Russian Market as well as for Corporate Governance.

This year, the award for best Domestic Bond Research was bestowed upon MDM Bank’s fixed income research team, which was recognized as the leader among research teams in this market. However, this is not the group’s first success: the Cbonds information agency ranked the Bank’s analysts second in 2007 for Best Domestic Research and Best Eurobonds Market Research in Russia.

Michel Perhirin, CEO of MDM Bank said: “Our analysts performed very well this year. A number of new research products, such as Fixed Income Research: Morning Comment and Fixed Income Research: Market Snapshots by the Numbers, as well as special strategy desknotes, were introduced. According to feedback from the Bank’s clients, these products are very popular and assist them in making informed investment decisions. We are certain that the team, under the direction of Mikhail Galkin, will continue to keep our clients well informed in the future. Indeed, quality research and risk assessment are especially important in constantly changing market conditions.”

MDM Bank was founded in December 1993 and holds a General Banking License issued by the Central Bank of Russia (#2361 dated 31 March 2008). MDM Bank is one of the most dynamically developing banks in Russia and is among the top Russian banks in terms of assets and equity. Today, MDM Bank is a modern universal financial institution offering a full range of services to its clients.
MDM has one of the highest credit ratings among privately-owned Russian banks – Standard & Poor’s (BB, stable), Fitch Ratings (BB, stable) and Moody’s (Ba1, stable) – and is the only Russian financial organization that has been given a public corporate governance rating by Standard & Poor’s (6+).
Standard and Poor’s awarded MDM Bank the highest ranking in its study of “Transparency and Disclosure by Russian banks” in 2006 and 2007. The Bank was also regarded by Euromoney magazine as “one of the leading banks in Russia and Emerging Europe, applying the most advanced standards of corporate governance.”
MDM Bank has received a number of awards from Global Finance magazine:
2005 – Best Domestic Bank and Editor’s Special Award for Transparency.
2006 – Best Forex Bank, Best Domestic Bank, Best Domestic M&A Arranger, and Best Bank in Corporate Governance. In October 2006, Euromoney magazine awarded MDM Bank Leading Bank in Corporate Governance in Emerging Europe.
2007 – Corporate Governance Editor’s Award, and Best Forex Bank.

Inquiries
Investor Relations 
+7 495 221 30 75
Public Relations 
+7 495 363 27 41

The issue was placed among a wide range of investors, with around 52% of the placement going to foreign investors and the remaining 48% placed in Russia. The foreign investor breakdown is as follows: 38% from the UK, 12% from Switzerland, and around 2% from Asia and other European countries. During marketing, the arranger received 25 orders totaling USD 130 mln. The placement was preceded by road shows in London and Geneva.

OAO Sibirtelecom has attracted funds for refinancing part of its current debt portfolio as well as for financing its 2008 investment program.

Nikolai Rybakov, Financial Director at Sibirtelecom, said that the Company is pleased with its cooperation with MDM Bank and RCF Capital Trust as well as with the results of the placement: “We are happy with our cooperation with MDM Bank and the significant amount of work the Bank put into this placement. I would especially like to thank RCF Capital Trust, which has helped the Company for a number of years in forming its financial strategy. It is well-known that we had to postpone the placement several times as a result of the difficult market conditions, but the success of the issue underscores the interest on the part of investors in reliable borrowers from Russia, as well as and the arranger’s professionalism. The CLN issue is our first experience with international public debt markets, and the Company plans to use on this source of financing in the future.”

Anton Kirukhin, Managing Director, Head of the MDM Bank Capital Debt Markets, said: “The Sibirtelecom placement is the first time a subsidiary of the Svyazinvest Group has attracted funds on the international capital markets. This is a very interesting category of issuer for investors, and we are glad to have paved the way for Sibirtelecom and Svyazinvest to the international financial markets. Additionally, we believe that Sibirtelecom’s placement is the first truly market-based securities issue since the beginning of the year by a Russian company with a lower-than-investment-grade rating.”

Agaron Papoyan, a partner at RCF Capital Trust, said: “We are satisfied with the successful placement of Sibirtelecom’s notes on the international capital market. Sibirtelecom is the first of the Svyazinvest group of companies to realize a strategy of diversifying its borrowing portfolio. This strategy was developed with the assistance of our company and approved by the Board of Directors of OAO Sibirtelecom last year.”

MDM Bank was founded in December 1993 and holds a General Banking License issued by the Central Bank of Russia (#2361 dated 31 March 2008). MDM Bank is one of the most dynamically developing banks in Russia and is among the top Russian banks according to assets and equity. Today, MDM Bank is a modern universal financial institution offering a full range of services to its clients. MDM has one of the highest credit ratings among privately-owned Russian banks – Standard & Poor’s (BB, stable), Fitch Ratings (BB, stable) and Moody’s (Ba1, stable) – and is the only Russian financial organization that has been given a public corporate governance rating by Standard & Poor’s (6+). Standard and Poor’s awarded MDM Bank the highest ranking in its study of ‘Transparency and Disclosure by Russian banks’ in 2006 and 2007. The Bank was also regarded by Euromoney magazine as “one of the leading banks in Russia and Emerging Europe, applying the most advanced standards of corporate governance.”
MDM Bank has received a number of awards from Global Finance magazine:
2005 – ‘Best Domestic Bank’ and ‘Editor’s Special Award for Transparency’.
2006 – ‘Best Forex Bank’, ‘Best Domestic Bank’, ‘Best Domestic M&A Arranger’, and ‘Best Bank in Corporate Governance’. In October 2006, Euromoney magazine awarded MDM Bank ‘Leading Bank in Corporate Governance in Emerging Europe’.
2007 – ‘Corporate Governance Editor’s Award,’ and ‘Best Forex Bank.’

OAO Sibirtelom is one of Russia’s largest telecommunications providers operating in the Siberian Federal District (SFD). The Company today is a telecoms leader in the SFD, with a market share of 41% and provides 82% of local service, 97% of intra-zone connections, 52% of Internet access and 23% of the cellular phone service. The Company has nearly 4.3 mln fixed-line subscribers and nearly 4.27 mln cellular-phone subscribers, with its advantage being the development of its network infrastructure and the offer of a full range of services to a wide variety of users among the general and private population throughout its service area. The major shareholder is OAO Svyazinvest with 50.67% of the Company’s common shares.

RCF Capital Trust offers a wide range of investment and banking services as well as corporate financing and asset-management services. RCF is the financial advisor to OAO Svyazinvest and Interregional Electricity Companies. Contact: www.rcfcap.com tel. +7(495) 9335454.

Inquiries:

Investor Relations: +7 495 221 30 75
Public Relations: +7 495 363 27 41

The terms of the agreement stipulate that JBIC will directly provide 60% of the sum, while the remaining 40% will be provided by Japanese commercial banks and secured by Nippon Export and Investment Insurance (NEXI). The agreement will enable MDM Bank to offer new long-term financing to its corporate clients that have business relationships with Japanese manufacturers. The agreement will also help to develop business ties and partnerships between Japan and Russia.

Japan Bank for International Cooperation (JBIC) was founded in October 1999 with the purpose of supporting Japan’s economic policies and developing economic cooperation, taking into consideration the changes taking place in the world economy. JBIC was created to strengthen and integrate the functions of two other Japanese banks, Export-Import Bank of Japan (JEXIM) and the Overseas Economic Cooperation Fund, Japan (OECF). The government of Japan owns 100% of the Bank’s shares.

Nippon Export and Investment Insurance (NEXI) began operations in April 2001. The agency’s main purpose is to insure the exports and investments of Japanese companies, with the goal of reducing risks associated with operating abroad.

MDM Bank was founded in December 1993 and holds a General Banking License issued by the Central Bank of Russia (#2361 dated 13 February 2003). MDM Bank is one of the most dynamically developing banks in Russia and is among the top Russian banks according to assets and equity. Today, MDM Bank is a modern universal financial institution offering a full range of services to its clients. MDM has one of the highest credit ratings among privately-owned Russian banks – Standard & Poor’s (BB, stable), Fitch Ratings (BB, stable) and Moody’s (Ba1, stable) – and is the only Russian financial organization that has been given a public corporate governance rating by Standard & Poor’s (6+). Standard and Poor’s awarded MDM Bank the highest ranking in its study of ‘Transparency and Disclosure by Russian banks’ in 2006 and 2007. The Bank was also regarded by Euromoney magazine as “one of the leading banks in Russia and Emerging Europe, applying the most advanced standards of corporate governance.”
MDM Bank has received a number of awards from Global Finance magazine:
2005 – ‘Best Domestic Bank’ and ‘Editor’s Special Award for Transparency’.
2006 – ‘Best Forex Bank’, ‘Best Domestic Bank’, ‘Best Domestic M&A Arranger’, and ‘Best Bank in Corporate Governance’. In October 2006, Euromoney magazine awarded MDM Bank ‘Leading Bank in Corporate Governance in Emerging Europe’.
2007 – ‘Corporate Governance Editor’s Award,’ and ‘Best Forex Bank.’

Inquiries:

Investor Relations 
+7 495 221 30 75

Public Relations  
+7 495 363 27 41

In accordance with the decision of the Extraordinary General Shareholders’ Meeting held on 22 October 2007, regarding the change in the full corporate name of MDM Bank, as entered in the Bank’s Charter as Change No. 12, the Central Bank of the Russian Federation approved and assigned the Bank on 3 April a registered Change to the Charter and a new General License.

As of 4 April 2008, the official full corporate name of MDM Bank, translated from Russian, is Open Joint-Stock Company MDM Bank (Открытое акционерное общество «МДМ-Банк»), abbreviated as OJSC MDM Bank (ОАО «МДМ-Банк»).

The official name in English is MDM Bank (Open Joint-Stock Company), abbreviated as MDM Bank.