Joint-Stock Commercial Bank “BANKank OFof INVESTMENTS AND SAVINGSIinvestments and Ssavings “Investsberbank” (Open Joint Stock Company ОAO) (стр. 3 )

The movements in allowance for losses on interest earning assets are presented as follows:

		Loans and advances to customers
31 December 2002		86,153
(Recovery)/pProvision		28,223
31 December 2003		114,376
(Recovery)/pProvision		66103,72361987
Bad debts written-off		(1,154)
31 December 2004		2179,94583209

The movements in allowances for losses on other transactions are presented as follows:

	Investments		Other assets		Legal claims		Guarantees		Total
31 December 2002	110		464		-		488		1,062
Provision/(recovery)	0-		48		-		(353)		(305)
Bad debts written-off	(110)		(464)		-		-		(574)
31 December 2003	-		48		-		135		183
(Recovery)/pProvision	-		292		12,315		1,120		13,727
31 December 2004	-		340		12,315		1,255		13,910

Allowances for losses on assets are deducted from the related assets. Provisions for guarantees and legal claims are recorded in liabilities.

(LOSS)/GAIN ON OPERATIONS WITH TRADING SECURITIES

Net (loss)/gain on operations with trading securities comprises:

	2004		2003
Net (loss)/gain on disposal of trading securities	8,748		43,057
Adjustment of the fair value of trading securities	9,155		23,533
Total net (loss)/gain on operations with trading securities	17,903 17,903		66,590

GAIN ON FOREIGN EXCHANGE OPERATIONS

Net gain on foreign exchange operations comprises:

	2004		2003
Net gain from operations Unrealized translation differences, net	28,172		12,994
Unrealized translation differences, netNet (loss)/gain from operations	(2,148)		1,236
Total gain on foreign exchange operations, net	26,024		14,230

8. FEES AND COMMISSIONS INCOME AND EXPENSE

Fees and commissions income and expense comprise:

	2004		2003
Fees and commissions income:
Settlements operations	19184,28564		49,419
Commissions on operations with precious metals	16,754		-
Cash operations	11,249		60
Guarantees issued	467		329
Other	3,009		4,127
Total fees and commissions income	22216,735333		53,935

	2004		2003
Fees and commissions expense:
Expenses on acquiring operations	7,314		5,834
Commissions paid on operations with plastic card	1,430		3,900
Cash operations	527		9
Settlements operations	361		-
Other	2,096		-
Total fees and commissions expense	11,728		9,743

9.  OTHER INCOME

As of 31 December 2004 and 2003 other income include property lease income amounting RUR 12,047 thousand and RUR 7,353 thousand, respectively.

As of 31 December 2004 other income includes gain on disposal of fixed assets amounting RUR 17,819 thousand.

10.  OPERATING EXPENSES

	2004		2003
Staff costs	2102,399674		64,83776
Operating lease expense	60,332		64,110
Taxes (other than income tax)	38,394		27,031
Advertising expenses	36,717		5,256
Repairs and maintenance expenseInsurance expensess	229,564190		143,33742
Repairs and maintenance expensesInsurance	1921,045941		941,819644
Stationery and inventory expenses	18,812		7,463
Professional service fee	18,379		12,962
Communication expenses	13,185		3,218
Office maintenance	8,541		2,945
Depreciation charge of fixed and intangible assets	8,467		4,423
Security expenses	4,221		2,216
Other	223,670419		135,696794
Total operating expenses	4735,185460		258,7712