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Financial wisdom

NS BANK – WISDOM IN BUSINESS SOLUTIONS

ANNUL REPORT

2014

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TABLE OF CONTENTS

Section 1

Message from the President of the Bank. 5General information on the Bank 7Key events 2014 8Rating positions of the Bank 9Membership in professional organizations and payment systems. Licenses. 10

Section 2

Key indicators 13Management Board 15Customer service network 16

Section 3

Corporate business 18Credit policy 19Retail business 21Financial market activities 23Risk management 25

Section 4

Information technologies 28

Communication policy 30

HR policy 31

Section 5

Independent auditors report 33

Financial statements in compliance with IFRS 35

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Financial statements in compliance with RAS 40

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Reference information 46

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«THE LEVEL OF INCOME SHOULD BE DEFINED BY HABITS AND LIFESTYLE AND NOT BY THE REVENUES POSITION»

Mark Tulius Cicero

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4 Yury Petrov, President – Chairman of the Board

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Dear clients, partners and colleagues!

In 2014 NS Bank celebrated the 20th anniversary. An effective socially responsible financial institution meeting the latest requirements of business development. Аll these years, the bank consistently works by actively participating in the development of the Russian market of financial services, implementation of national projects and government social programs.

In 2014 NS Bank managed to maintain its position in the national banking sector and its reputation for high reliability of the credit institution.

The Banks own capital showed a steadily positive growing trend: it grew by 7,3% up to 6 242 million roubles (by RAS), the Banks profit reached 322 million roubles by the end of the year. As of 01.01.2015 the assets of the Bank amounted to 40,8 billion roubles and the Banks loan portfolio reached 16,0 billion roubles.

The Banks efficiency is confirmed by the international rating agencies. The agency Moodys Investor Service confirmed the following ratings by the global scalefor the NS Bank: b3/B3/NP. The Bank has Russian credit ratings as well: «Baa3.ru», Moodys Interfax Rating Agency, «А» (a very high level of credit solvency, first sublayer), «Expert RA», «A+» (a very high level of credit solvency, first level) NRA.

The NS Bank continues to actively credit both corporate and private customers.

The consistent realization of the credit policy including strict requirements of credit riskmanagement led to high figures characterizing the quality of the credit portfolio. The share of overdue loans in the Bank’s credit portfolio remains quite low – 1.5% while that of collateral is high.

In 2014 the Bank plans to substantially strengthen its competitive position in the sphere of servicing corporate bodies. The starting point for the supposed strengthening of the Bank’s market position is the realization of a client-oriented business model which allows providing high-quality and timely servicing of clients while preserving commercial viability of banking operations at a sufficient level.

In 2013 the Bank saw a high level of trust on the part of retail customers. The individual deposit

MESSAGE FROM THE PRESIDENT OF THE BANK

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portfolio growth occurred during the period of serious reduction of interest rates on deposits. This trend of successful client attraction testifies to the growth of trust in the Bank which is not related to the use of rich interest rates but tells about the Bank’s stability and diversification of its deposit base, the major part of which consists of deposits insured in the insurance scheme.Offering its clients a full range of services the development of the Bank’s retail business in the past year. The business took the following directions: improvement of the existing product line, creation and launch of new high-tech services and enhancement of servicing clients. Clients were offered a wide range of new deposit products. In a year balances on the individual clients’ accounts amounted up to 15,956 million roubles. In 2013 the customer base of NS Bank grew considerably. It was due to improvements in the customer service network, wider use of the latest technologies and encouraging electronic payments. Following the state of the market and specific character of the banking sector development the Bank actively uses electronic sales channels, thus optimizing its activities in the operation area. The Bank pays a most serious attention to the level of service. Active automation of business processes as well as enhancing the range of services based on information technologies allowed reducing time outlays considerably while servicing retail customers. Special attention was paid to the speed of carrying out operations and developing remote banking service.

Our aim was to integrate different banking products and services and offer our clients package solutions that take into account the whole range of individual requirements. The Bank successfully operated and actively developed during the last year. The basis of our successful work is creativity of the Bank’s team. The team of professionals allows solving most difficult tasks and standing up to the increased requirements to the banking sector.

The Bank’s conservative policy in operations with its own and clients’ funds guarantees its clients safety and growth of their assets.

The Bank will continue to strengthen its position on the Russian banking services market and show higher financial and operational figures that are on level with high-profile universal financial institutions.

President – Chairman of the BoardYury Petrov

MESSAGE FROM THE PRESIDENT OF THE BANK

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GENERAL INFORMATION ON THE BANK

Commercial Bank NS Bank - (Closed Joint-Stock Company) was founded on October 11, 1994. The Bank has been granted the General License of the Bank of Russia №3124. The NS Bank is audited by Russian and International financial reporting standards, auditors of the Bank are LLC «NORMAPROFAUDIT» and OSC «BDO Unikon» respectively. The Bank functions as a professional participant of the security market and is a member of the MICEX-RTS.

The NS Bank is a participant of the System of compulsory insurance of deposits.

The Bank is a universal credit and financial institution rendering a full range of up-to-date banking services. The Bank offers corporate and private customers broad usage of new technologies in IT and CRM.

Swiftly reacting to changes in banking market conditions, NS Bank realizes its plans of strategic development on the basis of the client-oriented business model, which allows providing customers with high-quality service while maintaining commercial viability of banking operations at a sufficient level.

In 2014 NS Bank celebrated its 20th anniversary.

The Bank’s customer base is actively growing, which is supported by the development and improvement of the service network. The

Bank’s network consists of 22 outlets in Moscow and major regions of Russia. The Bank put maximum effort to make its outlets closer to clients and its

services – more available. Annual figures of the Bank’s activities show constant dynamics of development, and the assessments of Russian rating agencies confirm its reliability, stability and a serious potential for further development.

The NS Bank takes part in the Electronic Trading System and is included in the Register of banks and other credit organizations having the right to issue bank guarantees to cover customs payments.

The Bank is accredited to the Federal Customs Service, RUSNANO, Agency for Housing and Mortgage Lending, Rosatom, Rosoboronexport. It is the official partner-bank of the government program of financing small and medium businesses together with the OJSC “MSP Bank”.

As a participant of the ARB and other self-regulatory non-governmental organizations the Bank is proactive in the sphere of forming regulatory support for banking activity.

*As of 01.01.2015

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KEY EVENTS OF 2014

January– March

• Aeroflot raised the limit level for operations with NS Bank guarantees up to $ 2 009 000 million.• NS Bank’s assets grew by 5,9 % to RUR 5 816 billion.• Mooody’s Investors Service confirmed the solvency rating for NS Bank at E+ level.

April – May

• NS Bank issued Junior card (bank card for children)• Bank's loan portfolio grew by 34, 6% to RUR 19, 6 billion.• NS Bank has joined the 3-D Secure Service for all payment systems Visa International and MasterCard.

July – September

• NS Bank’s equity amounted up to RUR 6 billion.• The National Rating Agency and «Expert RA» confirmed NS Banks ratings.

October – December

• Aeroflot raised the limit level for operations with NS Bank guarantees up to $1.3 million.• NS Bank joined the list of banks with a right to work state corporations • NS Bank was awarded the diploma of Association of Russian banks.

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RATING POSITIONS OF THE BANK

International Ratings

b 3 basic credit score rating (International rating agency Moody's Investors Service)

Long-term foreign and local currencies deposits rating. В3, stable outlook (International rating agency Moody's Investors Service)

Short-term foreign and local currencies deposits ratingNot-Prime (International rating agency Moody's Investors Service)

Russian Ratings Long-term National Scale Rating«Baa3.ru»(International rating agency Moody's Interfax Rating Agency)

Creditworthiness ratings

А+ Very high level of creditworthiness (“Expert RA” Rating Agency)

AА- Very high level of creditworthiness, third level with positive outlook (National Rating Agency)

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MEMBERSHIP IN THE PROFESSIONAL ORGANIZATIONS AND PAYMENT SYSTEMS. LICENSES

The Bank is a member of the following professional organizations, unions and paymentsystems:

• the Association of Russian Banks• the Association of Russia's Regional Banks• Moscow Interbank Currency Exchange• Moscow International Currency Association• the Finance Managers Guild• Guild of Purveyors of the Kremlin• the National Stock Association• the Russian National SWIFT Association• International Payment System Visa International• nternational Payment System MasterCard Worldwide• International Money Transfer System Western Union• system «Zolotaya Korona - Money Transfer»• Money transfer system “UNISTREAM”

The NS Bank is

• a member of the System of compulsory insurance of deposits• a member of the System of electronic lot trading (SELT).

NS Bank is

• in the Register of banks and other credit organizations, holding the right to issue bank guarantees to cover customs payments,

• accredited by the Agency for Housing Mortgage Lending as a mortgage supplier,

• an official partner bank with the small and medium business financing program run by JSC “MSP Bank”,

• in the list of the banks providing settlement-cash service for project companies within the framework of investment projects, run with the participation of State Corporation “Russian Corporation of Nanotechnologies (RUSNANO).

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MEMBERSHIP IN THE PROFESSIONAL ORGANIZATIONS AND PAYMENT SYSTEMS. LICENSES

THE LICENSES OF THE NS BANK:

• The Bank of Russia's General Banking License № 3124, granted on 20.08.2003, for the rightto perform banking operations in roubles and foreign currencies with a right to attract private funds into deposits.

• The license to carry out banking operations with precious metals (№ 3124 granted on 20.08.2003).

• The license of the Federal Financial Markets Service to carry out dealer activities № 177-07409-010000 granted on 27.01.2004.

• The license of the Federal Financial Markets Service to carry out broker activities № 177-07407-100000 granted on 27.01.2004.

• The license of the Federal Financial Markets Service to carry out securities management № 177-07413-001000 granted on 27.01.2004.

• The license of the Federal Financial Markets Service to carry out custody activities № 177-07421-000100 granted on 30.01.2004.

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«ONE WAY LOOK DOWN UPON MONEY, BUT MUSTN’T LOSE SIGHT OF IT»

ANDRE PREVOST

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KEY INDICATORS

In 2014 NS Bank managed not only to maintain its position in the Russian banking sector but also to be in advance of its competitors in a number of aspects by showing a high rate of growth.

In last year the Bank paid special attention to capital management both in the quantitative and the qualitative aspects. In 2014 the Bank’s own capital showed a steadily positive growing trend: it grew by 7,3% up to 6,242 million roubles (by RAS), the Bank’s profit reaching 322 million roubles by the end of the year.

As of 01.01.2015 the assets of the Bank amounted to 40.8 billion roubles, and the Bank’s loan portfolio reached 16.0 billion roubles. Thus, its rate of growth was 44.8 % since the beginning of 2013.

The corporate loan portfolio dominates in the structure of the loan portfolio – 15.1 billion roubles (94 %). The retail loan portfolio is 0,9 billion roubles, which corresponds to the Bank’s conservative policy aimed at prioritizing financial demands of corporate clients and their personnel.

This sustained credit policy including strict requirements of the credit risk management resulted in high indicators of the quality of the loan portfolio: the share of overdue loans remains low: 4.7 % as of 01.01.2015 while the rate of the collateral remains high. The bond portfolio is an important part of the Bank’s assets (about 20 % as of 01.01.2015) which

allows optimizing resource management, profitability and liquidity of the Bank. High-grade securities included in the Lombard list of the Bank of Russia comprise the major part of the portfolio.

The Bank’s security portfolio assures an ordinary income during periods of liquidity surplus and serves as collateral for raising resources during liquidity shortage. Stability and diversification of funding are of great importance for the Bank’s clear-cut business ascendancy: e.g., as of 01.01.2015 43% of the Bank’s base of client funding was from corporate entities and 57 % - from individuals.

It should be mentioned that in 2014 the growth of retail deposits (+12.9 %) occurred when interest rates on deposits were decreasing significantly.

This trend of attracting customers attests to the increase of customers' confidence in the Bank which is not connected with artificially high interest rates, to stability and diversification of its deposit base, an important part of which comprise deposits insured in the system of insurance.

From 01.01.2014 to 01.01.2015 the Bank with its sufficient liquidity was an active member of the interbank market and used different financial instruments including repo and swap.

During this period the rates of compulsive

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KEY INDICATORS

standards of liquidity had a significant margin in relation to the set limits.

On the whole, the achieved financial results, the advance of the quality of corporate management and risk management system, ratings from international and Russian rating agencies attest to the correctness of the Bank’s course of strategic development and are a firm basis for solving new tasks. NS Bank is ready to strengthen its positions.

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PETROV YURY GEORGIEVICHPRESIDENT, CHAIRMAN OF THE BOARD OF DIRECTORS

KURTASOVA NADEZHDA EVGENIEVNAACTING CHAIRMAN OF THE BOARD, FIRST DEPUTY CHAIRMAN OF THE BOARD

MITINA SVETLANA NIKOLAEVNADEPUTY CHAIRMAN OF THE BOARD, MEMBER OF THE BOARD

BAZHENOV NIKOLAY DMITRIEVICHDEPUTY CHAIRMAN OF THE BOARD, MEMBER OF THE BOARD

ALEXEEVA SVETLANA ALEXANDROVNACHIEF ACCOUNTANT, MEMBER OF THE BOARD

TROPAREVSKY VLADIMIR NIKOLAEVICHDIRECTOR OF TREASURY, MEMBER OF THE BOARD

AGEYEV VICTOR OLEGOVICHVICE-PRESIDENT

LEGCHILIN MIKHAIL NIKOLAEVICHVICE-PRESIDENT

ALNIKINA NADEZHDA IVANOVNAVICE-PRESIDENT

AYGULIS OLGA YURIEVNAVICE-PRESIDENT

MANAGEMENT BOARD

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CUSTOMER SERVICE NETWORK

The building-up of efficient network of banking outletsthat service clients 7 days a week, 9.30 a.m. –8.00 p.m., remains one of NS Bank’s priorities. In addition, the Bank pursues a prudent policy working out an individual development concept for each branch and supplementary office and choosing locations of outlets on the basis of estimation and analysis of the market prospects.

The Bank is interested in long-term cooperation with its clients that is why in 2014 the Bank while creating new banking products oriented itself to the demands of the existing customer base.

However, the Bank actively attracts new clients offering them a full range of banking services. The Bank strives to make its services for target customer segments more available by moving its outlets maximally closer to its customers. Serious attitude to the quality of service,

active use of innovative developments and advanced ideas underlie the Bank’s success.

As of January 1, 2015 the total amount of the Bank’s organization units reached 22 in the following cities: Moscow, St. Petersburg, Veliky Novgorod, Nizhny Novgorod, Ivanovo, Tula, Dmitrov, Krasnogcrsk, Kotel’niki.

The Bank pays special attention to constantly improving the quality of servicing customers. To increase the professionalism, expertise and skills of its personnel the Bank organized Training center, which successfully functions.

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« FINANCES MAKE UP FOOTHOLD WHICH ALLOWS, ACCORDING TO ARCHIMEDES, TURNING THE WORLD UPSIDE DOWN»

СARDINAL RICHELIEU

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CORPORATE BUSINESS

Today banks actively look for new ways of business development using well known and the most modern banking products.

Formation of long-term partnership relations with customers, organization of mutually beneficial cooperation, increase in the number of banking products and services with the use of electronic means of payment, reasonable tariff policy traditionally remain for NS Bank the top priorities in its work with corporate clients.In 2014 the product line was actively expanded and improved. Corporate clients were offered the whole line of banking products: from opening different kinds of bank accounts (settlement, current, saving,special card accounts) to a wide variety of deposits with attractive interest rates and individual (flexible) conditions of acquiring free money resources.

To implement the system of complexity in providing services and individual attitude to every customer, the Bank pays special attention to safeguarding a client’s interest while using means of remote service.

As a part of measures taken to improve the protection against unapproved access to the remote service “BS-KLIENT” the Bank offers to use different tools for storing keys that provide storing electronic digital signature.The Bank sees the expansion of the customer base, the core of which (as in previous years) consisted of medium and small Russian enterprises and the companies of different branches of the economy, as an additional reserve for stability and steady growth of income.

The stable balances on settlement and depositary accounts of the corporate customers testify to the high level of trust from their part, and also give ground to believe that the Bank carries out right policy in the field of settlement-cash service, offers competitive and demanded bank products and services.

In 2014 the Bank continued to successfully develop and perfect the system of the personal management. Personal managers, attracting and attending customers, actively promote banking products and services. The system proved its efficiency and allowed maximum meeting individual requirements of customers.

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CREDIT POLICY

In 2014 NS Bank has tightened its approaches to credit risk assessment and conducted considerable efforts to reduce assets with signs of increased risk.

As previous years the Bank actively worked to attract new customers and to enhance the loan portfolio. Loan services for corporate bodies and individuals were based on agreement basis while keeping the key principles, such as promptness, payment of interest, repayment, security. Special attention was paid to the proper use of loans. The client management was based on the principle of forming the customer base on the territorial-sectoral grounds.

Development of business cooperation with enterprises from the different sectors of economy allowed the Bank to form the loan portfolio, diversified by market segments, terms and types of security.

Loans were given to customers, who have settlement accounts in the Bank and receive settlementcash services in the Bank for purposes specified in the organizational documents of the Borrower.

Under the conditions of loans repayment of the resources provided is made from the resources received during current production and financial operations.

During the whole of the year the Bank actively cooperated with corporate clients in the sphere of loan services. Customers were offered

individual solutions and high-quality service.The Bank offered credit facilities to finance commercial and investment projects, industrial activities of enterprises, replenishing of working capital. To minimize credit risks for the Bank and to improve the quality of the loan portfolio loan provision for new clients was made in the top-priority spheres such as road building, housing and public utility sector, economy class residential building.

In 2014 the Bank continued to actively finance those customers who participated in the electronic auctions on open e-trading platforms and to give bank guarantees on agreeing and performing contract obligations as well as bank guarantees on the return of an advance.

As in previous years in 2014 the Bank attracted customers from different economic industries. The steady growth of the loan portfolio resulted in the growth of the customer base and maintained its branch diversification. The Bank gave loans both in roubles and in foreign currency to enterprises and organizations of different economic sectors that have their own capital and liquid assets. As collateral the Bank accepted highly liquid property of enterprises, investment rights for residential and non- residential premises, real estate, motor vehicles, fixed capital, rights of claim for state contracts, the guarantee of business owners. The Bank paid individual attention to each customer,

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CREDIT POLICY

making swift decisions on disbursement of loans and all credit arrangements.

The line of credit products for the customers includes one-time loans, credit lines with fixing disbursement limit, debt limit, overdrafts, bank guarantees for electronic tenders, contract obligations performance, refund of advance payment to the Federal customs service, guaranties to the JSC «Aeroflot» agents. The Bank formed packet offers for industrial groups of clients from a wide range of credit products.In 2014 the Bank significantly expanded the range of credit products for individuals. In addition to mortgage programs traditional for the Bank it offered various purpose-oriented consumer crediting programs with collateral: for tuition fee, purchase of commercial real estate, overseas real estate, vehicles, special-purpose machinery and construction of a country house.

At the end of the year a new action started that include special offers for the staff of organizations participating in salary projects.The Bank is accredited to the Agency for Housing Mortgage Lending as a mortgage provider. Also, the Bank participates in the program “Stimulus” created by the agency.

Further extension of the loans services rendered to the customers will be the first priority of the Bank in 2015.

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RETAIL BUSINESS

Provision of a full range of services for banking products consumers underlay the retail business development of NS Bank in 2014. The focal areas of retail business development were: expansion and perfection of the existing product line, working-out and implementation of new high-tech products and services, cutting of customer delivery time, enhancement of service opportunities for clients.

RETAIL DEPOSITS

Considering retail deposits as one of the major sources for formation of the resource base, in 2014 the Bank continued to actively operate on the retail deposit market pursuing reasonable interestrate policy. Individual customers’ account balances reached RUR 17,515 million at the year-end.Customers were offered new products that allow profitable long-term investment of funds as well as saving existing ones including such deposits as “Reliable”, “Family circle”, «Saving». For those who opened the deposit «Family circle» there was a gift action «Family circle». During this period 379 contracts were concluded.

PLASTIC CARDS

The Bank activities in the bank cards market in 2014 is characterized by the following indicators: the amount of active bank cards exceeded 68,000; the turnover on transactions with bank cards was over RUR 12,5 billion. As of January 1, 2015 the Bank installed 49 ATMs and 91 POS- terminals. The Bank launched 3-D

Secure System.

NS Bank is an associated member of VISA Int. and MasterCard WW payment systems. Holders of the Gold and Platinum type Bank cards automatically achieve medical insurance from AIG with coverage of 100,000 and 150,000 US dollars respectively and get an access to the concierge-service ISOS.

The Bank plans to widen a network of ATM and service points in Moscow, the Moscow region and other regions of Russia.

COINS

In 2014 the Bank continued its effective operations on the precious-metals coin market. Due to the partnership with major suppliers of foreign coins from the world leaders in coinage, established during specialized coin exhibitions and conferences, the Bank significantly widened the range of the offered coins. At present about 4 843 types of coins of different price segments are presented in the Bank, 1827 – investment coins of the Bank of Russia, commemorative coins – 1827. All offices of the Bank are equipped with show displaying coins, which - along with competitive prices, automation of business-processes and development of programs that are convenient for clients – allowed increasing the customer base significantly in 2014.The amount of coins sold totaled about RUR 6.1 million

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RETAIL BUSINESS

PAYMENTS SYSTEMS

Intensive development of sales channels facilitates the creation of full package of services for clients and increases operating efficiency.

To increase convenience and availability of payment services in 2014 the Bank has been offering its clients services of the International money transfer systems “UNISTREAM”, Golden Crown”, “Western Union”.

In 2014 the Bank carried 157 915 outbound transfers and 46 635 incoming transfers. The Bank’s active operation in the sphere of money transfer resulted in the growth of money transfer volume in 2014, which amounted up to about RUR 6.4 billion.

CUSTOMER SERVICE IMPROVEMENTS

In 2014 special attention was paid to improving the quality of servicing clients. Due to active automation of business processes and expansion of the range of services that use informational technologies time costs of servicing individual customers were significantly reduced. Of primary importance were the speed of performing transactions and the development of remote banking system. Optimization of business processes together

with the well-functioning system of personnel motivation allowed lowering human error probability and thus reducing the Bank’s operational risks and improving the quality of customer service.

Taking into account the customers’ needs in remote service facilities, in 2014 the Bank continued improving the service of remote banking “NS-ONLINE”, which significantly enhances opportunities to control one’s own accounts and allows opening deposits with increased interest rates. By the end of the year there are 2185 clients of remote banking “NS-ONLINE” service.

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FINANCIAL MARKET ACTIVITIES

The Bank’s activities on the security market and the currency market are aimed at increasing the efficiency of liquidity management, optimizing the usage of the Bank’s free resources and receiving additional profit.

In its work on the security market the Bank pays special attention to the reliability of financial tools in use that is why the portfolio mostly consists of federal loan bonds and corporate bonds of Russian emitters with investment-grade credit rating. The Bank’s security portfolio includes both bonds issued on the Russian market and Eurobonds. The use of the security portfolio in the processes of financial borrowing and investment of funds through repo operations as well as operations on the currency market give the Bank an opportunity to significantly increase liquidity management efficiency.

The fact that the Bank is a member of MICEX and has licenses of a professional member of the security market as well as agreements with a wide range of leading Russian operators to conduct trading operations both on the security market and on the fixed-term contracts market allows the Bank to efficiently control its security portfolio as well as to conduct transactions in other sectors of the financial market including the market of derivatives. In 2014 transactions on the derivatives market with derivative financial instruments allowed the Bank not only to receive additional profit but also to reduce risks on current positions

and reach the optimum balance between risks and profitability.

The average monthly amount of investments into financial instruments reached the level of 9.97 billion roubles in 2014 and the Bank’s profits grew more than by 50% exceeding 720 million roubles.

The Bank possesses advanced informational technologies and a well-developed infrastructure of accessing both Russian and leading international trading platforms; it is also a client of the leading international news agencies Bloomberg and Thomson Reuters, which allows keeping track of all current market information on line.

The Bank’s client service also includes the system of remote internet-trading QUIK, which facilitates the Bank’s customers access to trading operations as well as a team of highly professional specialists with great experience of working on financial markets; it guarantees individual attitude to each client and works entirely in their interest.

The Bank used the currency market to control liquidity and to conduct arbitrage operations including those between different markets. A more active position and the improvements in planning mechanisms allowed the Bank to significantly increase the volume of such operations. The total volume of MBC deals increased more than three times, which

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FINANCIAL MARKET ACTIVITIES

allowed NS Bank to go the 51st by the volume of transactions in the DELTA trading system (acts under the aegis of Moscow International Forex Organization). In addition to MBC deals the Bank actively used SWAP operations, the total volume of which exceeds the corresponding figure of 2013 by 82 %.

In 2014 the Bank paid great attention to expanding the circle of its agency banks as well as to increasing the stated limits. What is important that the emphasis was made on enhancing cooperation with highly reliable strategic government-sponsored banks.

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RISK MANAGEMENT

In 2014 NS Bank’s main goal in risk management was to provide financial stability, good business reputation and steadiness of the Bank’s operation.

The “Strategy of NS Bank’s development for the period till 2016” accepted by the Bank’s Board in 2014 was of great importance for defining priorities in the sphere of risk management. It includes the strategy of risk management aimed at implementing systematic risk-oriented approach to running the Bank’s activities. The Strategy concerns administering all kinds of risks that are crucial for the Bank.

It covers both external (instable development of the world economy, increasing financial instability, further development of risk-oriented regulation and control, growing inter-bank competition and complication of banking technologies and products) and internal (expansion of the business, customer base and the range of products as well as implementation of new technologies etc.) causes of their appearance.

One of the top-priority tasks of putting the Strategy, aimed at implementing risk-oriented approach to the management of the Bank and corresponding increase in the quality of management decisions, into effect was the rationalization of the structure and organization of work of the management, business divisions and personnel that control risk management and formation of a new motivation and remuneration system including management of the risk of financial incentives.

An important way to increase the efficiency of risk management was, in 2014, the

improvement of methods of risk assessment. In this aspect the Bank preferred methods recommended by the Central Bank in connection with implementations of the Basel Committee’s documents and/or those that belong to advanced methods used in the Russian banking community taking into account the task of optimizing up-to-date and high-quality risk assessment and its costs.Among the main methods used for risk assessment were the following:

• Day-to-day monitoring as well as forecasting of statutory ratio figures as at the end of thereporting period to control their conformance with those specified by the Bank of Russia;

• Stress-testing, scenario modeling and risk sensitivity analysis.

Special attention was paid to conducting efficient limit and reserve policy, improving procedures of monitoring and risk control that were performed depending on the risk level. The priority was placed on the most complex areas of the Bank’s activities where there is a greater possibility of substantial losses.

An important role in realizing the Strategy of banking risk management in 2014 played procedures of planning, monitoring and capital adequacy control on the basis of the estimation of the existing and anticipated capital requirements. The greatest influence on the Bank’s financial condition and business structure had the following major types of risks: credit, market, liquidity, operational and strategic ones, to management of which was paid special attention.

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RISK MANAGEMENT

The main element of ensuring the Bank’s financial stability was the management ofcredit business and credit risk associated with it. Unsteady economic growth, still uncertain prospects of some industries, processes of changes of ownership, consolidations and mergers that became more active, limited supply of highly liquid assets offered as collateraland other factors led to maintaining of ahigh level of credit risk in operations of corporate and individual clients in 2014. In such a situation the Bank placed a priority on operations with low and medium risk levels and undertook a complex of measures aimed at reducing possible losses due to credit risk realization. To control credit risks the Bank’s Board regularly examined management reporting that provided data on the total amount of the credit risk, the structure and quality of the assets portfolios, the volume of troubled assets. A considerable influence on the Bank’s financial condition had market risks: interest,currency,stock market and commodity ones whose volatility rose in the latter part of 2014. Hence the market risk management of the Bank successfully minimized negative impact of this high volatility and adapted the business to strict measures of the government regulation.

The Bank monitored the statutory liquidity ratio day-to-day, participated in the programs of the Bank of Russia on liquidity standby and in 2014 provided a high level of current liquidity exceeding the one specified by the statutory ratio of the Central Bank of the Russian Federation. One of the most important risks for the Bank in the highly competitive banking sector became strategic one. Strategic risk management was

the key instrument of the Bank’s business administering in the long run. The top-priority tasks here were the following:

Formation of advanced system of risk management providing among other things long-term efficiency of the banking business, reasonability of management decision and up-to-date identification of all the risks as well as conservative assessment of possible consequences of their realization and taking adequate measures of risk management;

• formation of advanced system of the Bank’s corporate management which includes responsibility of managers, members of the Board and the Bank’s shareholders for respectable and well-balanced business operations as well as for reliability of published and submitted to supervisors and regulators information;

• high level of transparency and market discipline of the Bank.

On the whole, the risk management system that functioned in the Bank in 2014 was adequate to the scale and complexity of the business, allowed timely identifying, assessing and controlling existing and potential risks, compensating losses connected with risk realization, deciding on complex of actions aimed at support of the Bank’s financial stability. At the same time the work on improving risk management is one of the focal areas for the increase of efficient operation of the Bank and will be continued.

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«MONEY IS NEEDED EVEN FOR DEALING WITH IT»

HONORE DE BALSAC

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INFORMATION TECHNOLOGIES

In 2014 the NS Bank was actively developing the automated support for a functional part of the business, as well as continued the technological modernization and improvement of its information infrastructure. The information security of the customer service was being improved, including providing required defense level for their personal data. The Management and shareholders of the Bank paid great attention to these questions, systematic support was given to implementing decisions in the sphere of the automation of the Bank’s day-to-day operation.

In 2014 in the interest of the business a further development of the automated banking system “CFT-Bank (Platform 1)” (ABC) was undertaken: new subsystems were implemented (“Registration of guarantees”, “Loan and guarantee requests”). The functionality of the Stock subsystem was greatly enhanced: registration of transactions with the Central Bank of the Russian Federation as well as with the basket of securities and others was implemented. The functionality that allows transferring money through the system “Unistream” commenced commercial operations.

In compliance with the requirements of the Regulator measures to get ready for delivering regulatory reports on Basel-III were taken.

The General agreement on cooperation between the Center of Financial Technologies and the Bank was prolonged for another 5 years

concerning maintenance and development of the ABC, which will allow providing the required level and promptness of further automation of business processes mutually beneficial basis. The system of connectivity with GIS GMP was implemented into full scale operation which provides for meeting the legal requirements on reporting information about customers’ payments into the budget. To assure secure and fail-safe functioning of the ABC modernization of the complex of technical tools was performed.

Decisions on providing for the necessary and sufficient level of the Bank’s data security were prepared and made as well as on enhancing the efficiency of measures aimed at assuring and maintaining the data security. To improve the data security of remote banking for clients (corporate bodies) through the BS-Client system mechanisms of implementing payments with advanced reliability were adopted:

registry reconcilement of payment documents that come to the Bank; smart-card readers giving the opportunity to visually control the data being signed – Safe-Touch that provide visualization of actual references of payment orders being implemented. Measures to bring personal data security into compliance with the requirements of federal law №152 – Federal Law of the Russian Federation

“On personal data” were systematically taken. In 2015 the Bank plans to further develop the

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INFORMATION TECHNOLOGIES

functionality of the automated banking system by means of implementing new subsystems: “Opening of new deposits through a single point of contact”, “Identification of clients by means of scanning”, “Calculator of the rent price of a safe deposit box”, “Registration and proceeding of credits” and others. The Bank will continue to purposefully develop the complex of its technological tools for it to work reliably and without failures as well as to minimize risks connected with the performance of the complex by means of implementing systems of fail-safe and guaranteed energy supply. The activities of the Bank in the area of data security will be carried out in compliance with the requirements of the complex standards of the Central Bank of the Russian Federation, federal laws №152 – Federal Law of the Russian Federation “On personal data” and №161 - Federal Law of the Russian Federation “On the national paymentsystem”. The Bank will continue its practice of making investment decisions in IT on the principle of developing its activities and of correspondence between the volume of informational resources and demands of business-units - both currently and in a long-term perspective. As a part of developing IT the Bank will continue providing a reasonable accordance between the software developed by external partners and in-house solutions.

Suppliers of computing hardware and software will be chosen only by tender.

The key aspects of the Bank’s activity in 2014 in information banking technologies are further automation of business processes of day-to day banking operations aimed at minimizing the number of time-consuming hand operations and increasing the efficiency of performed banking services, providing the required level of information security as well as reliability and fail-safe work of the complex of the software and hardware of the Bank.

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COMMUNICATION POLICY

In 2014 the main goal of the Bank's communication policy was to further form its image as a modern and effective financial institution, to create a positive information coverage of the Bank's activities for an organic development and growth of its business.

The Bank worked on promoting its brand by the use of main communicative means of the Internet: it tapped onto Russian and foreign social networks, worked with social instruments of major blogging services as well as with Internet mass media. Image positioning by means of these instruments allowed reaching the interested audience, strengthening the brand and accentuating it against its main competitors.

The Bank actively expanded cooperation with traditional mass media to spread true and maximally complete information about its activities. The volume of information presented in mass media increased notably, raising of customers’ awareness about conditions of products and services on offer and the Bank’s technological capabilities improved.

In 2014 the Bank rolled out massive advertising campaigns to launch new products and services on the market. The combined use of traditional mass media together with interactive communicational resources promoted the

growth of trust towards NS Bank and the development of its business.

During 2014 NS Bank implemented a number of advertising campaigns.

A lot of new program services and modules were developed, many of which are innovative.

In 2014 the work on forming the Bank’s image as a high-tech structure and yet a bank to work easily with will continue (personal attitude to customers, flexibility of services).Communication programs and projects on effective promotion of new products and services are constantly created and carried out.

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HR POLICY

NS Bank’s successful operation is due to its well-qualified personnel capable of solving tasks set by the Bank’s Management in any economic situation.

The Bank’s HR policy is aimed at retaining qualified workers and maximum using their potential as well as attracting talented specialists, highly qualified employees who could take part in the Bank’s development. Besides high professionalism the Bank also appreciates skills in problem solving and decision making, openness and honesty, potential to develop and being result-oriented. The system of personnel selection through interviews and trial periods helps to create a team of professionals. Training of personnel of all ranks is a stimulus to develop for the personnel and contributes to strengthening of the Bank’s competiveness.

The main goals of personnel training are:- preparation of the personnel for performing new production objectives, ability to workproactively;- systematic updating of personnel’s knowledge;- mprovement of the personnel’s professional culture;- training of the talent pool.

One of the main goals of the Bank's HR policy is to give the personnel an opportunity for the professional growth and career development.

The talent pool is the main source for positions of middle managers and chief specialists in

the Bank. An employee may be included in the talent pool after working in the Bank for minimum two years.

The system of formation of the talent tank is to solve the following tasks:

- recognition of key positions in the Bank;- identification of employees with a potential to be promoted to senior positions;- training of promising employees for senior positions;- provision for planned replacement of workers on senior positions.

The main goal of the staff stimulation system is to increase the level of their motivation to achieve high personal results of labor in accordance with criteria of performance and professionalism determined for each position. The Bank developed an Act, which regulates salary manner and conditions, material stimulation and motivation of personnel. It was created in the accordance with the Labor Code of the Russian Federation and other statutes of the Russian Federation. In order to stimulate productivity and initiative the Bank annually carries out the «The best in the profession» competition. It is aimed at promoting productive labor among the staff, rising and perfecting professional skills, improving the quality of work, stimulating professional growth.

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«DON’T SEEK MONEY – MEET IT HALFWAY»

ARISTOTLE ONASSIS

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INDEPENDENT AUDITOR’S REPORTBDO UNICON GROUP

To the Shareholders and the Board of Commercial Bank «NS Bank» (CJSC)

Audited Entity Commercial Bank “NS Bank” (CJSC) (abbreviation - “NS Bank” (CJSC)). State registration number: PSRN 1027739198200 issued on 17.09.2002; registered by the Bank of Russia on 08.08.2001, № 3124. Location: 20, Dobrovolcheskaya St., 20, construction 2, Moscow, 109004

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of NS Bank, which comprise the statement of financial position as at 31 December 2014, and the statement of comprehensive income, statement of cash flows and statement of changes in equity for the year then ended, and a summary of significant accounting policies and other explanatory information.

MANAGEMENT’S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from ++material misstatement, whether due to fraud or error.

AUDITOR'S RESPONSIBILITY Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence

AuditorCJSC “BDO”Registered by Inspectorate of the Ministry for Taxes and Duties №26 SAD primary registration number1037739271701Contacts117587, Moscow, Varshavskoye av.,125 - 1, section 11General registration number10201018307 in the register of auditors and auditing organizations of the self-regulated organization of auditors non-profit partnership “Audit Chamber of Russia”.Power of attorney by auditorD.A. TaradovPartner of the CJSC “BDO”N 15-01/2015-BDO01.01.2015

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INDEPENDENT AUDITOR’S REPORTBDO UNICON GROUP

about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OPINION

In our opinion, the financial statements present fairly, in all material respects, the financial position of NS Bank as at 31 December 2014, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

EMPHASIS OF MATTER

Without qualifying our opinion, we draw attention to Note 7 to the financial statements describing the concentration of credit risks.

D.A. TaradovPartner of the CJSC “BDO”

April, 30, 2015

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FINANCIAL STATEMENTS IN COMPLIANCE WITH IFRSStatement of financial PoSition as of 31 December 2014 (in thousands of Russian Roubles)

Name of the article Notes 2014 2013Cash Cash and cash equivalents 5 8 124 329 7 800 749Mandatory cash balances with CBR 243 998 272 431Due from other banks 6 3 009 478 1 524 428Loans to customers 7 15 541 227 17 891 827Financial assets available for sale 8 6 443 380 9 958 311Investment held to maturity 9 2 272 004 -Non-current assets held for sale 10 54 624 6 400Premises and equipment 11 1 426 415 1 281 688Other assets 12 4 370 091 3 985 123Current tax assets 73 029 -Deferred tax assets 24 - 22 798Total assets 41 558 575 42 743 755Liabilitiesi Due to other banks 13 3 189 962 4 864 941Customer accounts 14 30 831 758 31 580 327Debt securities issued 15 216 793 98 474Other borrowed funds 16 2 375 000 2 375 000Other liabilities 17 789 936 461 836Current tax liabilities - 6 594Deferred tax liabilities 24 69 933 -Total liabilities 37 473 382 39 387 172 Equity Share capital 18 1 953 158 1 693 158Share premium 18 26 26Revaluation reserve for premises and equipment 11 354 177 225 921Fair value reserve for financial assets available for sale 8 (400 641) 2 390Retained earnings 2 178 473 1 435 088Total equity 4 085 193 3 356 583Total liabilities and equity 41 558 575 42 743 755

Acting Chairman of the Board,First Deputy Chairman of the Executive Board N.E. Kurtasova

Chief Accountant S.A. Alexeeva

30 апреля 2015 года

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FINANCIAL STATEMENTS IN COMPLIANCE WITH IFRS Statement of financial PoSition as of 31 December 2014 (in thousands of Russian Roubles)

Name of the article Notes 2014 2013Interest income 20 2 995 853 2 897 258Interest expense 20 (2 112 073) (2 280 728)Net interest income 883 780 616 530Provision for impairment of due from 6, 7 (460 359) (642 100)other banks and loans to customers Net interest (expense)/income after provision 423 421 (25 570)for impairment of due from other banksand loans to customers Gains less losses arising (51 602) (21 360)financial assets at fair valuethrough profit or loss Gains less losses arising from financial (143 747) 137 633assets available for sale Gains less losses from dealing in foreign (212 800) (5 803)currency and precious metals Gains less losses from revaluation of foreign 674 832 352 872 currency and precious metalsFee and commission income 21 951 372 901 413Fee and commission expense 21 (98 672) (96 088)Provision for impairment of other assets 12, 29 196 238 (99 323)and credit related commitments Dividends received 2 735 1 244Income from participation interests in other entities 4 136 5 269Proceeds from sale of subsidiary - 273Proceeds from sale of real estate and property 23 346 487 59 809rights under investment contractsOther operating income 42 654 124 288Operating income 2 135 054 1 334 657Operating expense 22 (1 178 135) (1 160 921)Profit before taxation 956 919 173 736Income tax expense 24 (185 523) (44 844)Net profit 771 396 128 892Other comprehensive icome Items that will not be reclassified subsequently to profit or loss Effect of revaluation of premises and equipment 11 160 320 53 706Income tax relating to items that will not be 24 (32 064) (10 741)reclassified subsequently

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Items that will be reclassified subsequently to profit or lossEffect of revaluation of financial assets 8 (503 788) (11 863)available for sale Income tax relating to items that 24 100 757 2 372will be reclassified subsequently Other comprehensive income (274 775) 33 474after taxation Other comprehensive income for the year 496 621 162 366

30. 04. 2015

FINANCIAL STATEMENTS IN COMPLIANCE WITH IFRS Statement of financial PoSition as of 31 December 2014 (in thousands of Russian Roubles)

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Acting Chairman of the Board,First Deputy Chairman of the Executive Board N.E. Kurtasova

Chief Accountant S.A. Alexeeva

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AUDITOR’S REPORTon Financial Statements

To the Shareholders and the Board of Commercial Bank «NS Bank» (CJSC)Audited EntityTitle: Commercial Bank “NS Bank” (CJSC) (abbreviation - “NS Bank” (CJSC)).State registration number: PSRN 1027739198200 issued on 17.09.2002;registered by the Bank of Russia on 08.08.2001, № 3124.Location: 20, Dobrovolcheskaya St., 20, construction 2, Moscow, 109004We have conducted an audit of the attached financial statements of CB “NSBank” (CJSC), which, according to the Instruction of the Bank of Russia issued on 04.09.2013 № 3054-U “On the credit organizations' procedure for preparing the annual report”, consist of:• Balance sheet (form 0409806) as of January, 1 2015;• Profit and loss statement (form 0409807) for 2014;• Notes on accounting balance sheet and financial statements:- Statement on the capital adequacy level, provisions capacity to cover doubtful loans and other assets (form 0409808) as of January 1, 2015- Information on statutory requirements (form 0409813) as of January 1, 2015;- Cash flow statement (form 0409814) for 2014;• Explanatory note for the financial report for 2014.

AUDITED ENTITY RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The management of the audited entity bears responsibility for composition and reliability of the annual report in accordance with the Russian rules of the accounting reporting composition as well as for the system of the internal control necessary for the composition of the annual report, which does not contain significant misstatements due to improper actions or errors.

AUDITOR’S RESPONSIBILITY

Our responsibility is to express an opinion about the reliability of the annual report on the basis of the carried audit. We have carried out the audit in accordance with the federal law “On auditing”, federal and corporate standards of auditing. These standards require observance

LLC “Norma-Profaudit” 119333, Moscow, Fotiefoy St.,18, c. 2PSRN: 1027739262924 issued on26.09.2002Member of the ProfessionalAudit Association of thenon-commercial partnership«Audit Chamber of Russia”,which is included in the StateRegister of self-regulated auditorganizations by the order ofthe Ministry of Finance № 455issued on 01.10,2009 undernumber 1. Number of the auditorganization in the register ofthe non-commercial partnership“Audit Chamber of Russia” (PNRE)10301001996

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AUDITOR’S REPORTon Financial Statements

Bank” (CJSC) as of January, 1, 2014, results of its financial activities and cash flow in 2013, the capital adequacy level, provisions capacity to cover doubtful loans and other assets as of January, 1, 2014, information on statutory requirements assets as of January, 1, 2014in compliance with the established rules of the Russian Federation for accounting reporting and preparation of the annual report.

REPORT IN ACCORDANCE WITH THE REQUIREMENTS OF THE FEDERAL LA W № 395-1

“On banks and banking operations” from December, 2 1990As the result of the auditing procedures we note that we have not found any facts demonstrating contradiction of the control system to the character and volume of operations performed by CB “NS Bank” (CJSC) in the frame of the current stage of development of the banking services sector in the Russian Federation or any non-compliance of the inner control organization with regulatory requirements.

OTHER INFORMATION

We point out that the given auditor’s report refers to the whole body of the annual report and should be considered together with the whole body of the annual report including the Explanatory note which provides the complete disclosure of the relevant information about the credit institution not represented in the complex of the annual report.

of applicable ethical norms as well as planning and carrying out the audit in the way enough to receive sufficient confidence that the annual report contains no essential distortions.

The audit included carrying out the auditing procedures, aimed at the reception of auditor proofs, which could confirm numerical indicators in the annual report and disclosure of the information in it. The choice of auditing procedures is a subject of our judgment, which is based on the evaluation of the risk of the significant misstatements admitted due to improper actions or errors.

In the course of the evaluation of the given risk we considered the system of internal control, which provides guidelines for reliable composition of the annual report in order to choose proper auditing procedures.

The audit also included the evaluation of appropriate character of the registration policy in use and validity of the evaluation indicators, received by the management of the audited entity as well as the evaluation of the process of financial reporting on the whole. We believe that the auditing we have carried out presents reasonable grounds to express our opinion on the reliability of the annual report.

OPINION

We believe that the annual report gives a fair representation in all significant factors of the financial condition of Commercial Bank “NS

Member of the self-regulated organization, nonprofitpartnership “Audit Chamber of Russia” Number in the register of SRO NP ACR 5108; Principal registration number of the Auditors Register record 29501037022; Auditor’s qualification certificate № 01-000322 for the right of bank audit for unlimited period April, 10, 2015

General Director lyakhovskiy victor semenovich

of llc “norma-ProfauDit”

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BALANCE SHEETas of January, 01 2015 (thousands of roubles)

№ Name of Data for the period Data for the report corresponding the article under report period of the previous year

1 2 3 4 5I. CASH1 Cash 7 1505147 9671372 Balances with the Central Bank of the 7 4653764 2230232 Russian Federation2.1 Statutory provisions 243998 2724313 Due from other banks 7 401947 28704014 Net investment in the traded 0 0 securities evaluated at fair value through profit or loss5 Net lending receivables 10 20567971 216252646 Net investment in the securities and 11 9132044 12415747 other available-for-sale financial assets6.1 Investments in subsidiaries and affiliates 0 0 7 Net investments in the securities 12 2238767 66152 deferred for redemption8 Requirements for current tax 72494 1569 Deferred tax asset 44316 010 Main assets, intangible assets 13 1260581 1249121 and material assets11 Other assets 14 970111 134808012 Total assets 40847142 42772290

II. LIABILITIES

13 Loans, deposits and other assets of the Central 3013000 4613955 Bank of the Russian Federation14 Due to other credit institutions 15 173488 24951215 Customers accounts excluding 16 33044146 33539675 credit institutions accounts 15.1 Retail deposits 17514737 15954529 16 Financial liabilities evaluated at fair 18 0 243 value through profit or loss17 Debt securities issued 17 301688 13950018 Liability for current income taxes 0 019 Deferred tax asset 120981 020 Other liabilities 19 253607 53215621 Provision on possible losses on contingent credit liabilities, other possible losses 305550 311139 and operations with residents of offshore zones22 Total liabilities 37212460 39386180

III. SOURCES OF OWN CAPITAL

23 Funds of shareholders (participants) 20 1760000 1500000

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24 Own shares bought back from 0 0 shareholders (participants)25 Share premium 17 1726 Provision fund 95700 7500027 Revaluation at fair value -357713 -29234 available-for-sale securities

28 Revaluation 118948 138378 of fixed assets29 Retained earnings (uncovered losses) 1695764 1435762 of previous years 30 Profit (loss) outstanding for the reported period 321966 26618731 Total sources of own funds 3634682 3386110

IV. OFF-BALANCE -SHEET LIABILITIES

32 Irrevocable liabilities of the credit institution 3882445 727703533 Guarantees issued by the credit institution 11245074 939140634 Non-credit contingent liabilities 0 0

Acting Chairman of the Board,First Deputy Chairman of the Executive Board N.E. Kurtasova

Chief Accountant S.A. Alexeeva

BALANCE SHEETas of January, 01 2015 (thousands of roubles)

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PROFIT AND LOSSES STATEMENTaS of 2014 (in thouSandS of RuSSian RoubleS)

№ Name of Data for the period Data for the report corresponding the article under report period of the previous year

1 2 3 4 51 Total interest income, including: 3087385 30455771.1 Due from other 10444 100208 banks 1.2 Loans granted to customers other than credit institutions 2485875 22226041.3 Leasing 0 0 1.4 Investment in securities 591066 7227652 Total interest expenses 2112075 2280696 2.1 Due to other banks 335810 214358 2.2 Borrowing from customers other 1757085 2053061 than credit institutions 2.3 Debt securities issued 19180 13277 3 Net interest income 975310 764881 (negative interest margin) 4 Provision change on possible -269449 -620114 loss on loans, debt under loans and 21 стр.51 debt equivalent to it, funds on correspondence accounts, accrued interest income,4.1 Provision change on possible loss on -6774 -2497 accrued interest income5 Net interest income after 705861 144767 provision on possible loss (negative interest margin)6 Net income onfinancial assets -87443 1102 evaluated at fair value through profit or loss7 Net income on available-for-sale -141735 376615 securities deals 8 Net income on hold to maturity 0 0 securities deals9 Net income on foreign currency operations -212801 -178910 Net income on foreign currency revaluation 21 стр.52 667765 35445611 Income on holdings in other companies 6872 651312 Commission income 857112 77272413 Commission expenses 98672 9608814 Provision changes on possible 21 стр.51 -36525 5342 loss on available-for-sale securities 15 Provision changes on possible loss 21 стр.51 -64970 0 on hold to maturity securities16 Provision changes on other loss 21 стр.51 -117587 -3359517 Other operating income 342066 146574

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18 Net income (expenses) 1819943 167662119 Operating expenses 1325108 128112620 Profit (loss) before tax 494835 39549521 Accrued (paid) tax 21 стр.52 172869 12930822 Profit (loss) after tax 321966 26618723 Payments out of net profit, 0 0 total, including:23.1 Distribution of dividends among 0 0 shareholders3.2 Allowances for 0 0 provisions 24 Retained profit (loss) 321966 266187 for the period under report

PROFIT AND LOSSES STATEMENTaS of 2014 (in thouSandS of RuSSian RoubleS)

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Acting Chairman of the Board,First Deputy Chairman of the Executive Board N.E. Kurtasova

Chief Accountant S.A. Alexeeva

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Head office of the Bank20, Dobrovolcheskaya St., Bld. 2MoscowMulti-channel telephone: Tel. +7 (495) 662-53-53

“Yugo-Zapadny”50 Novocheremushkinskaya St.,Moscow

“Tverskoy boulevard”

20 Tverskoy boulevard, 1,Moscow

“Na Kropotkinskoy”

20 Tverskoy boulevard, 1,Moscow

“Na Kurskoy”

36 Zemlianoy Val,Moscow

“Tsvetnoy boulevard”

5/14 Samotechnaya St.,Moscow

“Leningrasky prosect”

31 Leningradsky avenue, Bld. 3,Moscow

“Kon’kovo”

7 Ostrovitianova St.,Moscow

“Yuzhnoye Chertanovo”

152 Varshavskoye highway, Bld. 11,Moscow

“Na Semenovskoy”

5 Tkatskaya St., Bld. 3,Moscow

“Na Azovskoy”

25 Azovskaya St., Bld. 1,Moscow

“Pavshino”

1 Podmoskovny boulevard,Krasnogorsk, Moscow region

ADDRESSES OF OFFICES AND BRANCHES OF THE BANKaS of 01.06.2015

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“Dmitrov”

4 Professionalnaya St., SEC “B-Class”, Dmitrov,Moscow region

“Kotel’niki”

1 3-d Pokrovsky lane,

Kotel’niki, Moscow region

St. Petersburg’s Branch

3 Bankovsky lane, Bld. B,

St. Petersburg

Tel. +7 (812) 406-98-08

Supplementary office “Obukhovsky”

120, Bld. B, Obukhovskoy Oborony avenue,

St. Petersburg

Tel. +7 (812) 326-62-82

Nizhny Novgorod’s Branch

52 Maxima Gorgogo St.,

Nizhny Novgorod

Tel. +7 (831) 212-00-21

Veliky Novgorod’s Branch

4 Voskresensky boulevard,

Veliky Novgorod

Tel. +7 (816) 278-60-01Tula’s Branch

9 Leitenzen St.,

Tula

Tel. +7 (4872) 70-07-06

Ivanovo’s branch

33 Bagaeva St.,

Ivanovo

Tel. +7 (4932) 47-15-15

Supplementary office “DSK”

1 Kokhomskoye highway,

Ivanovo

Tel. +7 (4932) 56-96-44

Supplementary office “Na Sarmentovoy”

9 Sarmentovoy St.,IvanovoTel. +7 (4932) 93-93-28

ADDRESSES OF OFFICES AND BRANCHES OF THE BANKaS of 01.06.2015

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Full name:

Commercial Bank “NS Bank”

Short name:

CB “NS Bank” (CJSC)

Registration date:

October 11,1994

General License of the Bank of Russia:

№3124

Bank details:

Tax-payer Registration Number: 7744001024

Correspondent account:

30101810800000000158 with the banking outlet 4,

Moscow Central Territorial Administration of the Bank of Russia

RCBIC: 044579158

RNNBO: 29308428

SIC: 96120

PSRN: 1027739198200

Address:

20 Dobrovolcheskaya St., construction 2

Moscow 109004

Multi-channel telephone:

8(800) 555 43 24

Web-site:

www.NSBank.ru

REFERENCE INFORMATION

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