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Syndicated Factoring joint project is launched by VTB and NFC

12 December 2006

VTB and the National Factoring Company (NFC) announce launching a Syndicated Factoring joint project.

Cooperation of key players in the banking and factoring markets suggests that the parties join together their efforts to ensure expanded access of trade and manufacturing companies to high quality factoring services.

Within the framework of the project, VTB and NFC will deliver joint factoring services to customers under tripartite agreements to be entered into between VTB, NFC and the customer.

And VTB will be engaged in preliminary marketing, negotiating with companies interested in factoring, handling of customers so as to gather the package of documents needed for the transaction, accepting original documents and a 100% funding. In its turn, NFC will undertake to arrange sales, to offer customer consulting, to discount monetary claims, manage customer’s accounts receivable and ensure safety of customers against credit risks (debtor default risks).

The Commercial Factoring line of products to be offered within the framework of this project comprises financing for deferred payment deliveries under the Factoring-Finance, coverage of credit risks under the Factoring-Guarant, and receivables assessment and management under the Factoring-Signal.

Partnership of the two companies which are leaders of the Russian financial market redoubles the opportunities to elaborate unique offers for the consumer both in terms of contents and quality of the services, and in terms of competitive pricing offer formation.

Alliance between VTB and NFC in this project will enable the Bank to diversify the existing line of products by a comprehensive package of factoring services and at the same time to avoid costs related to any factoring infrastructure. In its turn, NFC will have access to funding and an opportunity to increase business volumes by tapping resources of the vast regional network of the VTB Group. Joint efforts of the Bank and the Company will allow the two parties to gain strong leadership in the Russian financial market, and will result in a broader popularity of the commodity lending among households.

Through diversification of its activities, VTB continues expanding its range of transactions carried out in the Russian market and delivers its customers a wide range of financial instruments recognised in international banking practice. In addition to conventional banking services, VTB offers its customers cooperation with its subsidiaries and partners. To illustrate, in 2002, the Bank founded VTB-Leasing company engaged in financial lease of manufacturing machinery, motor vehicles; computer, office and trade equipment; real estate and others to large- and medium-sized companies. Developing such business lines on a comprehensive basis enables Russian enterprises to open new opportunities for further growth and for an efficient finance management system.

For reference:

The National Factoring Company (NFC) is the first independent professional factoring company in Russia holding leadership positions in the Russian market. In 2005, turnover of the company was USD1.6 billion, as compared to USD760 million year-on-year. By 2005 year-end, credit ratings from Standard & Poor’s assigned to the company were: long-term - «В-» and short-term - «С» with outlook «Stable». At the same time, Standard & Poor’s assigned NFC rating at «ruBBB» under the Russian scaling. NFC is a member of two most prestigious world factoring associations – International Factors Group (IFG) and Factors Chain International (FCI). In 2005, Mikhail Treivish, Chairman of the NFC Board, was elected a member of the IFG Board of Directors and stood at the head of the East European Chapter of the Association.

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