Bank announces new ordinary share issue

Bank Saint Petersburg announces a 14th Additional Issue of Common Registered Non-Documentary Shares. In accordance with the Bank’s Supervisory Board decision of June 7, 2011 the issue will be placed under the following terms and conditions:

•    Maximum number of shares to be issued – 24,000,000;
•    Price of placement is set at RUB 146.66 per share;
•    Type of offering – open subscription;
•    Form of payment for the shares- Russian roubles.

The price of placement was set by the Bank’s Supervisory Board; it was calculated as a weighted average price on MICEX for the period from March 1, 2011 to May 31, 2011 (excluding five trading days with maximum trading volumes). The gross proceeds raised under the offering could reach RUB 3.5 billion should the issue be placed in full.

The owners of the Bank’s ordinary shares are entitled to exercise their pre-emptive rights. The closing date to determine the list of shareholders having the pre-emptive right is June 7, 2011. The procedure and effective placement date for the persons having pre-emptive rights will be announced after registration of share issue by the CBR.

The Bank’s management and a number of minority shareholders controlling in total about 75 percent of the voting shares have expressed their intent not to exercise their pre-emptive rights in favor of the European Bank for Construction and Development (EBRD).

On June 1, 2011, the Board of Directors of the EBRD approved participation in the Bank Saint Petersburg’s additional ordinary share issue in the amount of up to RUB 2.75 billion. If the EBRD participates in the subscription up to the indicated level, it will acquire approximately 6% of the Bank’s ordinary shares including the new share issue.

Upon the acquisition of the newly issued shares by the EBRD, the Bank intends to repay the USD 75 million subordinated loan attracted from the EBRD in 2009 (subject to the CBR approval). This would ease the loan service burden on the Bank in the amount of approximately USD 30 million in 2012-2014.

Alexander Savelyev, Chairman of Bank Saint Petersburg, commented: “Bank’s Management is happy with the EBRD’s decision to enter the Bank’s capital as a strategic shareholder. Our five-year-long cooperation has moved to a new level. This decision will contribute to the development of the modern banking technologies, adoption of the best European practices and general improvement of the corporate governance in the Bank”.

Bank Saint Petersburg cooperated with the EBRD since 2006, when the first loan agreement was signed for USD 30 million for purposes of funding loans to small and medium businesses. The relationship was extended in 2008, when Bank Saint Petersburg attracted a USD 100 million syndicated loan with the EBRD acting as a lead arranger. In 2009 the EBRD provided Bank Saint Petersburg with a USD 75 million subordinated loan with maturity in 2019 to strengthen its capital base. In November 2010, Bank Saint Petersburg entered into a loan agreement with the EBRD under which it attracted USD 65 million to fund the small and medium businesses of North-West region of Russia.

These materials may not be published, distributed or transmitted in or into the United States.  Nothing in these materials constitutes an offer to sell or the solicitation of an offer to buy the securities discussed herein.  The securities mentioned herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (“the Securities Act”), or the securities laws of any state of the United States and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons (as such term is defined in Regulation S under the Securities Act), except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state or local securities laws..  There will be no offering or sale of the securities in the United States.

These materials are directed solely at persons who (i) are outside the United Kingdom of Great Britain and Northern Ireland or (ii) are investment professionals falling within Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order") or (iii) are entities falling within Article 49(a) to (d) of the Order (all such persons together being referred to as "relevant persons"). These materials must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which these materials relate is available only to relevant persons and will be engaged in only with relevant persons.

This announcement does not constitute an offer to sell, exchange or transfer any securities of the Bank and is not soliciting an offer to purchase, exchange or transfer such securities in any jurisdiction where the offer, sale, exchange or transfer is not permitted or to any person or entity to whom it is unlawful to make that offer, sale, exchange or transfer.

Any offer of securities to the public that may be deemed to be made pursuant to this communication in any EEA Member State that has implemented Directive 2003/71/EC and amendments thereto, including Directive 2010/73/EU to the extent implemented in the relevant Member State (together with any applicable implementing measures in any Member State, the “Prospectus Directive”) is only addressed to and is only directed at qualified investors in that Member State within the meaning of the Prospectus Directive.

These materials do not constitute a public offering of securities in the Russian Federation or an offer or a proposal to make offers or to acquire any securities in the Russian Federation.

Notwithstanding the aforesaid any public offering of the bank’s securities which can follow the distribution of this message will be made in strict accordance with the effective law of the RF subject to compliance with rights and legal interests of the existing shareholders of the Bank as well as rights and legal interests of prospective investors granted to them by the RF law.

This announcement contains "forward-looking statements".  Forward-looking statements provide Bank's current expectations or forecasts of future events.  Any statement in this announcement that expresses or implies Bank Saint Petersburg's intentions, belief, expectations or predictions (and the assumptions underlying them) is a forward looking statement.  Forward-looking statements involve inherent risks, uncertainties and assumptions, and if such risks or uncertainties materialize or such assumptions prove incorrect, actual results could differ materially from those expressed or implied by such forward-looking statements and assumptions.  The forward-looking statements contained in this announcement are made as of the date hereof, and Bank Saint Petersburg expressly disclaims any obligation to update or correct any forward-looking statements made herein due to the occurrence of events after the issuance of this announcement.