Saint-Petersburg Commercial Bank “Tavrichesky” (joint-stock) (стр. 8 )

	RUR	USD	Other currencies	Total
Net balance item	1		67 514	1
Liabilities of credit character			40 578	1
Net contingent item on off-balance liabilities	74 130			553

The Bank issues credits in convertible currencies. Though generally such credits are granted by means in these currencies, sharp increase of the price compared to the exchange rate of the ruble may negatively influence the consistency of the Borrower to pay back the debt and, correspondingly, increases in some cases the possibility of losses on credits in future.

Liquidity risk

Liquidity risk arises when the terms of claims to active transactions and the terms of redemption on passive transactions do not coincide. The Bank runs the risk related to daily necessity to use available monetary funds for settlements on bills of clients in case of maturity of deposits, issuance of credits, payments on warranties and on derivative financial instruments, settlements on which are executed in the form of monetary funds. The Bank does not accumulate monetary funds for the case of one-time fulfillment of liabilities on all above-stated claims, because, judging by the existing practice, it is possible to predict the necessary level of monetary funds for fulfillment of such liabilities with a sufficient level of accuracy. The table given below presents the distribution of assets and liabilities as of December 31, 2006 on terms that still exist until the demand and redemption. Some active transactions, however, may be long-term ones, e. g. as a result of frequent prolongations the short-term credits may get a longer term.

	On demand and less than 1 month	1 – 6 months	6 months – 1 year	Over 1 year	Overdue and with uncertain term	Total
Assets
Monetary funds and their equivalents	2	-	-	-	-	2
Mandatory reserves in the Bank of Russia		-	-	-	-
Financial assets calculated at fair value using profit or loss	3 635	1 107	-	-	-	4 742
Assets in other banks		-	-	-	-
Credits and receivables		2	2	1	1 030	6
Financial assets available for sale	-	-	-	-	71 766	71 766
Fixed assets	-	-	-	-	65 650	65 650
Currently paid profit tax	-	9 235	-	-	-	9 235
Other assets	8 689	-	-	-	-	8 689
Assets, total	3	2	2	1		9
Liabilities
Assets of other banks		-	-	-	-
Assets of clients	3	1	1	62 921	-	6
Issued debt securities				92 133	-	2
Other borrowed assets	-	45 163	-		-
Deferred tax liabilities	-	-	-	-	3 280	3 280
Other liabilities	38 041	328	-	-	-	38 369
Liabilities, total	4	2	1		3 280	8
Net spread	(1			1		1
Accumulated item as of December 31, 2006	(1	(	(		1
Accumulated item as of December 31, 2005	(		1		1

The ability of the Bank to fulfill its obligations depends on its ability to realize the equal sum of assets within certain period of time.

All financial assets evaluated at fair value using profit or loss are classified as “on demand or less than one month” (excluding derivative financial instruments), as this portfolio is of a trade nature and, to the opinion of the management, such approach reflects better its position for liquidity.

For the majority of overdue assets a reserve in full amount is accumulated, that’s why they do not influence the above-mentioned data.

Coincidence and/or controlled non-coincidence of redemption terms and interest rates on assets and liabilities is a crucial aspect of the management. As a rule, there is no complete coincidence on these items among banks, as transactions have often uncertain terms of redemption and different nature. If these items do not coincide, this fact potentially increases profitability but, as well, increases the risk of losses. The terms of redemption of assets and liabilities, as well as the possibility of replacement of interest liabilities at reasonable value in case of forthcoming terms of their redemption, are important factors for evaluation of the Bank’s liquidity and of its risks in case of change of the interest rates and the official exchange rates of the Bank of Russia.

Interest rate risk

The Bank secures the risk related to influence of fluctuations of market interest rates on its financial standings and money flows. Such fluctuations may increase the level of the interest margin but, in case of unexpected change in interest rates, the interest margin may also decrease and result in losses.

The Bank bears the interest risk, first of all, as a result of its activities on granting credits with fixed interest rates in amounts and on terms that differ from the amounts and terms of inflow of assets at fixed interest rates. In fact interest rates as a rule are set for a short term. Additionally, interest rates fixed under the terms of a contract both for assets and liabilities are often reset by mutual agreement in accordance with the current market situation. The Bank’s management expects that the terms of redemption of interest liabilities, realization of interest assets and revaluation of interest rates will not substantially differ from the terms given in the table of terms of redemption of money assets and liabilities above.

Interest risk management is performed by means of increase or decrease of interest items within the limits approved by the Bank’s management. These limits restrict potential influence of interest rates fluctuations on the interest margin and the value of interest assets and liabilities.

In the table below there is a general analysis of the Bank’s interest risk. Monetary assets and liabilities are given in the table at the balance value specified according to the dates of revaluation of interest rates as provided by contracts or terms of redemption, whichever of these dates is the earlier.

(purposed gap)

	On demand and less than 1 month	1 – 6 months	6 months – 1 year	Over 1 year	Non-interest/ overdue	Total
Assets
Monetary funds and their equivalents	22 486	-	-	-	2	2
Mandatory reserves in the Bank of Russia	-	-	-	-
Financial assets calculated at fair value using profit or loss	3 635	-	-	-	1 107	4 742
Assets in other banks		-	-	-	1 343
Credits and receivables		2	2	1	21 032	6
Financial assets available for sale	-	-	-	-	71 766	71 766
Fixed assets	-	-	-	-	65 650	65 650
Currently paid profit tax	-	-	-	-	9 235	9 235
Other assets	-	-	-	-	8 689	8 689
Assets, total		2	2	1	2	9
Liabilities
Assets of other banks		-	-	-	306
Assets of clients		1	1	62 921	2	6
Issued debt securities				92 133		2
Other borrowed assets	-	45 163	-		-
Deferred tax liabilities	-	-	-	-	3 280	3 280
Other liabilities	-	-	-	-	38 369	38 369
		2	1		3	8
Net spread	(			1	(	1
Accumulated item as of December 31, 2006	(			1	1

Accumulated item as of December 31, 2005

1

1

1

1

In the table below there is an analysis of effective average interest rates of general currencies for general monetary financial instruments. The analysis is prepared basing on weighted average effective interest rates at the year end.