The deal amounted to USD 576 mln.

On October 31, 2008, the deal of purchase of 80% of the UNIASTRUM BANK shares by the Bank of Cyprus was closed. The deal amounted to USD 576 mln. The charter capital of UNIASTRUM BANK was raised by USD 50 mln. This purchase is the biggest investment in the Russian banking sector on behalf of the financial institutions of Greece and Cyprus. The deal was closed after permissions of the Central Bank of Cyprus and Central Bank of Russia, as well as of the Federal Antimonopoly Service had been obtained.

The deal was funded with the working assets of the Bank of Cyprus and liquid assets reserves. The Bank of Cyprus experts forecast that the deal will pay off within the first full year after its conclusion (2009), and in two years it will bring profit of 10% (2010). The two key current shareholders of UNIASTRUM BANK George Piskov and Gagik Zakarian remain the heads of UNIASTRUM BANK and retain the positions of the Chairman of the Board of Directors and President of the Bank, respectively. They will keep a 10%-stake in the charter capital each. Their stakes may be bought within three years by the new owner within an option depending on the bank’s financial results.

The Bank of Cyprus Group is a big international holding structure established in 1899. It has had a history exceeding one hundred years and is the leading Cypriot banking and financial services group (the bank’s share in the internal banking market of Cyprus constituted 30.2% of the total amount of deposits and 29.2% of the total amount of issued loans). At present the Group operates through a total of 335 banking outlets, 143 of which are located in Cyprus, 145 in Greece, 5 in the United Kingdom, 10 in Australia, 1 in the Channel Islands, 4 in Romania, 1 in Russia, and 26 in Ukraine. The Group also has representation in Canada and Republic of South Africa.

The Bank of Cyprus Group employs 7,600 staff worldwide. As of June 30, 2008, the Group's Total Assets reached USD 41.4 bln. and the Group's Shareholders' Funds were USD 2.7 bln. which proves the scale of business and stable position of the Bank of Cyprus. The Bank of Cyprus shares are listed on the Cyprus and Athens Stock Exchanges. The market share of the Bank of Cyprus in the total Cypriot banking system constitutes 30%.

UNIASTRUM BANK has a stable position and a powerful banking potential. Set up in Moscow in 1994, UNIASTRUM BANK is one of the biggest Russian banks operating in the regions more than 220 outlets including 42 branches in 45 Russian regions. UNIASTRUM BANK is focused on development of retail banking and service supply to small and medium-size enterprises. In nearest future the charter capital of UNIASTRUM BANK will be increased by USD 50 mln. which should raise the capital adequacy level constituting as of September 30, 2008, 12.5%. The charter capital increase will boost further rise of the Bank’s business operations volume. Besides, UNIASTRUM BANK has an experienced team of managers which also proves a potential for a fast growth of the organization.

UNIASTRUM BANK will keep focusing on the profitable market of banking services and SME sector. After incorporation of UNIASTRUM BANK to the Bank of Cyprus Group, the network of the Group outlets will comprise over 550 outlets in Cyprus, Greece, Russia, Romania, Ukraine, Great Britain and Australia.

Following the successful conclusion of the deal, the Chairman of the Board of Directors of the Bank of Cyprus Group Theodoros Aristodemou stated:

“The Bank of Cyprus Group with a history of 110 years have made today a huge step forward having closed the deal of purchase of 80% of the UNIASTRUM BANK shares in Russia. This purchase was made to pursue our strategy to expand ourselves to the emerging markets. UNIASTRUM BANK has a good stand in the Russian market and uses every opportunity for development. Incorporation of UNIASTRUM BANK strengthens its potential to become an influential regional banking institution”.

The Chairman of the Management Board of the Bank of Cyprus Group Andreas Eliades made the following statement:

“The successful purchase of UNIASTRUM BANK is an important step to implement out strategy of expansion in the target markets. UNIASTRUM BANK has great scope now having stabilized its positions in Cyprus and in Greece even more. A powerful base of deposits and increased capital assets of UNIASTRUM BANK will boost growth of assets and expansion of the banking network. Interest of UNIASTRUM BANK in service supply to SMEs supplements ideally our focus on corporate development in this country”.

The Chairman of the Board of Directors of UNIASTRUM BANK George Piskov made the following statement:

“This deal is a unique opportunity for UNIASTRUM BANK to continue to expand its influence and improve the customer service supply, and eventually to raise its significance and the importance of the Group as a whole”.

The President of UNIASTRUM BANK Gagik Zakarian made the following statement:

“The UNIASTRUM BANK team is prepared very well to achieve high targets we have set to ourselves jointly with the Bank of Cyprus. We hope that the power of our network will be supplemented by the best practices, technologies and capital of the Bank of Cyprus, and all these components will enable us to offer to our customers new profitable products and services”.

For additional information
please contact Ms. Olga Kurganova,
tel. +7 (495) 783 58 10 ext. 1066
kurganova@uniastrum.com

For more detailed information on the Uniastrum Bank incorporation of see www.bankofcyprus.com