Tinkoff Interim Report For the First Quarter 2009

Egidaco Investments PLC (“Tinkoff”), the parent company of ‘Tinkoff Credit Systems’ Bank (TCS Bank), announced the financial results of the first quarter 2009.

The flexible and resilient Tinkoff business model, with very low fixed cost, enabled it to respond quickly to changes in the economic environment and move into ‘steady-state’ in the Autumn of 2008. This entails liquidity management, close portfolio management, ongoing cost reduction and limited customer acquisition. While this approach has served Tinkoff well, two external, crisis-related problems have negatively impacted Tinkoff financial performance: FX as a result of RUB devaluation and deterioration in credit quality leading to an increase in Loan Loss Provisions. Despite this, Tinkoff remained profitable in the first quarter of 2009, and as the situation eases going into the second quarter, the outlook is set to improve further. The RUB devaluation that started in November 08 continued into first quarter 2009. FX losses were slightly lower than expected in 1Q09, and the RUB subsequently strengthened as result of the Russian Central Bank’s successful defense of its target of 41 (55 USD:45 EUR) dual currency basket. At the operating level, the Company performed slightly above plan. Operating Income was higher than forecast due to increased yield, ongoing cost-reduction and bond repurchases. However, overall Q1 results were lower than plan primarily due to a sharp increase in Loan Loss Provisions (LLP). The increase in provisioning was due to a market-wide deterioration in credit quality in Q1 (longstanding good customers turned delinquent as a result of lay-offs and delays in wage payments). February to March took the brunt of the increase in delinquency, with longstanding customers going delinquent and ‘roll-rates’ (migration from one delinquency cycle to another, the measure of ‘collectability’) deteriorating. Delinquency and Collections performance have improved in 2Q as the economic situation stabilises and companies that were previously withholding salaries from their employees begin to pay. In Rouble terms, the portfolio grew from 4 483 to 5 230 million Roubles in last six months. As a result of Rouble devaluation, however, the portfolio decreased in dollar terms in the fourth quarter 2008 from USD 163 million on 31 December 2008 to USD 154 million on 31 March 2009. Also as a result of Rouble devaluation, interest income growth in US dollar terms has slowed. Total interest income from credit cards reduced from USD 28.9 million in 4Q08 to USD 27.5 in 1Q09. Although Tinkoff did not do any mailings (our primary customer acquisition channel) as a result of the economic down-turn, there has been limited card issuance. This has come from the ‘pipeline’ of applications that have continued to come in as a result of mailings in 3Q 08. Total credit card issuance has therefore grown from 305 thousand pieces on 31 December 2008 to 341 thousand pieces on 31 March 2009. Card activation and utilisation remained strong, with total activated cards amounting to 272 thousand pieces on 31 March 09.