/KASE, October 11, 07/ - Alliance Bank JSC (Almaty), shares and bonds of which are traded in Kazakhstan stock exchange's (KASE) category "A" official list had provided KASE with the press-release with next contention:

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Due to appearing in some sources of mass media of message about possible violation by Alliance Bank of credit covenants in case of further outflow of deposits, the press-service of alliance Bank is authorized to make the next announcement.

The given message contains partial or not full information, no reflecting in full the real situation and indicators of activity of Alliance Bank, which were scoring by representatives of bank on October 8, 2007 during telephone conference with investors from number of world countries.

So, in particular, information about possible violation of credit covenants was provided during telephone conference on the question form one of investors. It was the following question: "Is it possible the violation of covenant by Alliance Bank in case of the worst variant of events, development, and exactly in case of reduction of deposit base?" For that question was given the positive answer, because the reduction of deposit base of any bank lower than particular level will break the corresponding credit covenants. In case of Alliance Bank the violation of credit covenants is possible at only one loan in size of $45 m. in case if deposit base of banks decreases by KZT10 bn ($83 m.). on other loans, received by Alliance Bank, the violation of credit covenants is not forecasted even in case of the worst variant of events' development on capital markets, that's what was scored during telephone conference with investors on October 8, 2007.

According to politics of assets and liabilities management, Alliance Bank is constantly conducting the monitoring of observation of all covenants as of current and forecasted dates, flows of payment and borrowing of loan funds are regulating by sums and terms. So the possibility of covenant violation is maximally excluded.

Concerning question about outflow of deposits, than Alliance Bank considers it necessary to inform the following: in August 2007 were noted several factors, negatively influenced on Kazakhstan banking system, and Alliance bank inclusive. Firstly, was observed the short-term loss of trust in tenge on the background of speculative growth of dollar arte, which had caused some particular outflow of tenge deposits in order to convert them to cash dollars. Secondly, due to finishing of term of capitals' legalization after August 1 of current year had started the mass drawing out of legalized money from accounts in Kazakhstan banks, which had touched Alliance Bank too. Thirdly, financial corporation Seimar Alliance exactly in August had at first placed on accounts of alliance Bank the money funds received as the result of primary offering of shares of alliance Bank on London stock exchange and then had withdrawn the majority part from bank. The remains of these funds in size of about $220 m. was transferred from current account to the fixed deposit of financial corporation Seimar Alliance.

As the result dynamics of change of deposit base of alliance Bank, including fixed deposits and remains on current accounts, for the third quarter of year 2007 looks in next way:

• for July - August 2007 net outflow made KZT27 bn.;
• for September net growth made about KZT2 bn, that is the positive dynamics to the fore.

Alliance Bank is forecasting the stabilization and further growth of deposit base, starting from October of current year.

About stability and enough liquidity of Alliance Bank are evidencing its financial indicators. By results of third quarter of year 2007 current liquid assets of Alliance Bank are making more than $ 2 bn., from which 11% are for cash funds, 27% - on the correspondent account if National Bank of RK, 13% - for deposits in other banks and 50% - for securities. Net income of Alliance Bank for 9 months of current year made KZT30bn., or about $248 m.

More than bright sign of Alliance Bank's reliability is the first in its history appropriation of ratings of international rating agency Standard & Poor's on October 10, 2007. Ratings on the level of "B+/B", corresponding to place of Alliance Bank in Kazakhstan banking system, are showing such positive moments in Bank's activities as adequate risks' management, support form the side of shareholders, improvement of profitability indicators, competent command of managers and good dynamics of development. "Stable" forecast shows that by opinion of experts of the Agency, tensity in banking sphere of Kazakhstan is balanced with adequate commercial and financial management with Alliance Bank, and let to protect its credit situation.

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[2007-10-11]