Joint-Stock Commercial Bank “BANKank OFof INVESTMENTS AND SAVINGSIinvestments and Ssavings “Investsberbank” (Open Joint Stock Company ОAO) (стр. 9 )

Asset and liability maturity periods and the ability to replace interest liabilities at an acceptable cost when they mature are crucial in determining the Bank’s liquidity and its susceptibility to fluctuation of interest rates and exchange rate.

Currently, a considerable part of customer deposits are repayable on demand. However, the fact that these deposits are diversified by the number and type of customers and the Bank’s previous experience indicate that these deposits are a stable and long-term source of finance for the Bank.

The above data on time deposits received from individuals are recorded based on the contractual terms. However, Russian legislation allows individuals are entitled to withdraw those deposits before maturityon demand.

Long-term credits and overdraft facilities are generally not available in Russia. However, in the Russian marketplace, many short-term credits are granted with the expectation of renewing the loans at maturity. As such, the actual maturity of assets may be different from the analysis presented above.

While maturity of trading securities as shown above is up to one month, realizing such assets is dependent upon financial market conditions. Significant security positions may not be liquidated in a short period of time without adverse price effects.

Interest rate risk

Interest rate risk arises from the possibility that changes in interest rates will affect the value of the financial instruments. The Bank is exposed to accepts the risks connected with the marketd interest rates fluctuations on its financial performance and cash flows. Such fluctuations may increase the interest margin, however the unexpected changes of interest rates may cause decrease of interest margin or lead to losses. To minimize the interest rate risk, the Bank issued the Investmenting policy (a code of regulations to manage liabilities and assets of the Bank according to their terms and liquidity)due to liquidity. Investmenting policy is deassigned to obtain the positive level of margin, keeping within the liquidity ratios which are sufficientnecessary to pass the crisis environment.

The liquidity risk monitoring is performed twice a month by the risk-manager reporting to the Chairman of Directors and to Credit Committee.

The following table presents an analysis of interest rate risk, i. e. potential gain or loss of the Bank. Effective average interest rates as at 31 December 2004 and 2003 are presented by categories of financial assets and liabilities to determine interest rate exposure by every category of asset and liability and effectiveness of the interest rate policy used by the Bank. The Bank’s interest rate policy is reviewed and approved by the Bank’s Management Board.

					2004						2003
	RUR		USD		Other currencies		RUR		USD		Other currencies
ASSETS
Cash and cash equivalents	1.7%		1.3%		0.4%		3.6%		0.1%		-
Loans and advances to banks	-3.4%		3%-		-		1.9%		3%-		-
Trading securities	6.2%		-		-		7.65%		5.7%		3.6%
Loans and advances to customers	14.915%		14.5%		13%		15.6%		15.1%		14%
LIABILITIES
Deposits from banks	-		1.5%-		-		-		7.5%		-
Deposits from customers	12.3%		8.9%		8.5%		10.3%		4.4%		2.7%
Debt securities issued	9.9%		11.6%		-		4.5%		9.2%		-

Currency risk

Currency risk is defined as the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. The Bank is exposed to effects of fluctuation in the foreign currency exchange rates on its financial position and cash flows. The Credit Committee sets Bank management sets limits on the level of open currency position of the Bank, which is controlled by athe risk-manager, reporting to the exposure by currencies (primarily US Dollar) by industries and in total.Chairman of Directors. The Treasury performs the monitoring ofafter the level of open currency position by the means of limits set by the Bank. These limits also comply with the minimum requirements of the Central Bank of the Russian Federation.

The Bank’s exposure to foreign currency exchange rate risk is presented in the table below:

		RUR		USD USD 1 = RUR 27.7487		EUR EUR 1 = RUR 37.8104		Other currencies and precious metals		Currency undefined (incl. allowance for losses)		2004 Total RUR’000
ASSETS
Cash and cash equivalents		733,952		246,408		133,543		139		-		1,114,042
Obligatory reserves and balances with the CBRentral Bank of Russian Federation		91,827		-		-		-		-		91,827
Loans to banks		2,004		5,701		131		-		-		7,836
Trading securities		179,475		-		-		-		-		179,475
Loans and advances to banks		2,004		5,701		131		-		-		7,836
Loans and advances to customers, less allowance for loan losses		3,8067939,668312714		679,358		28,436		-		(179,94583)(217,209)		4,323471,519239254,290,299
Fixed and intangible assets, less accumulated depreciation		70,047		-		-		-		-		70,047
OInterest income accrued and other assets, less allowance for losses		5407,6795031629		583		-		664		(340)		54148,5862938536
TOTAL ASSETS		4,924,652484,924,648		932,050932,050		162,110162,110		803803		(17980,9283)(217,549)		5,839,33226885,802,062
LIABILITIES
Deposits from banks		3,593		5,002		731		-		-		9,326
Deposits from customers		3,195,606		811,560		162,555		415		-		4,170,136
Debt securities issued		911,065		103,301		-		-		-		1,014,366
Provisions for off-balance sheet commitmentsProvisions on guarantees		-		-		-		-		1,255		1,255
Provisions on legal claims		-		-		-		-		12,315		12,315
Income tax liabilityliabilities		30		-		-		-		-		30
Other liabilities		119,381596		2,851		-		-		-		124,232447
TOTAL LIABILITIES		4,12119,6745890		922,714		163,286		415		13,570		5,22119,6630875
OPEN BALANCE SHEET POSITION		80324,007973758		9,336		(1,176)		388

	RUR		USD USD 1 = RUR 29.4545		EUR EUR 1 = RUR 36.8240		Other currencies and precious metals		Currency undefined (including allowance for losses)		2003 Total RUR'000
ASSETS
Cash and cash equivalents	576,973		108,6910		35,738		1,110		-		722,501
Obligatory reserves with CBR	267,215		-		-		-		-		267,2155
Loans and advances to banks, less allowance for loan losses	140,309		5,588		-		-		-		145,897
Trading securities	750,776		26,961		19,708		-		-		797,445
Loans and advances to customers, less allowance for loan losses	1,278,549		787,832		24,212				(114,376)		1,976,217
Investment securities	50		-		-		-		-		50
Fixed and intangible assets, less accumulated depreciation	60,705		-		-		-		-		60,705
Other assets, less provision for losses	10,07275,123		-		-		5,096		(48)		15,12075
TOTAL ASSETS	3,084,5949,690		929,071		79,658		1,1106,206		(114,424)		3,985,105
LIABILITIES
Deposits from banks	1,283		27,341		35		-		-		28,659
Deposits from customers	2,199,062		690,239		82,589		58		-		2,971,948
Debt securities issued	252,258		169,060		5,294		-				426,612
Provisions for off-balance commitments									135		135
Income tax liabilitiesy	4306430		-		-		-		-		4306430
Other liabilities	755695		32		-		-		-		7827
TOTAL LIABILITIES	2,453,788782228		886,672		87,918		58		135		3,428,5671055711
OPEN BALANCE SHEET POSITION	630,80677280665,962		42,399		(8,260)		1,0526,148

Market risk