Alfa-Bank is proud to present its annual report for 2008. It was a difficult year, in which the entire Russian financial sector was put to the test. We are proud to say that Alfa-Bank has passed that test and confirmed its status as Russia’s leading private bank.

This was possible thanks to the strategic decisions taken over the past few years and the far-sighted, forward-looking policy implemented by Alfa-Bank’s management, as well as the solid position built by Alfa-Bank over many years of successful operation.

Our 2008 results validate this statement. Last year, Alfa-Bank once again grew its market share in key areas, increased its number of retail clients and continued to work closely with corporate customers. The number of its customers increased even in a period of financial instability, proving that Alfa-Bank has gained the confidence of businesses of all sizes, as well as individuals.

Quality and teamwork are vital in complex financial conditions, which is why 2008 was a year of mergers. For example, Alfa-Bank merged all of its divisions that focus on working with retail clients, as well as those involved in the corporate and investment business lines. Combining the retail divisions enabled us to significantly cut costs and offer customers a broader array of products. This approach supported our lending operations during difficult times, creating synergy and, ultimately, making the retail business more profitable. The merger between the Corporate and Investment Banks was seen as a milestone at a time when investment banking is going through a particularly tough time.

Alfa-Bank continued its regional expansion in 2008. We now operate in all of Russia’s key regions and largest cities. We significantly increased our number of branches and almost doubled the size of our ATM network. Not only do we strive to be a universal, nationwide bank, but we also aspire to be a bank trusted by everyone in every corner
of our country. In this context, the acquisition of Severnaya Kazna bank was an important step which put us in a dominant position in the Urals region and brought us many new customers.

Alfa-Bank is particularly focused on working with small- and medium-sized businesses, as this is one of the most promising segments of the Russian market. For example, we have made great strides in developing our lending program for smalland medium-sized enterprises. Also, the use of advanced technology to liaise with companies of various sizes across Russia ensures that Alfa-Bank can provide a highquality service to any business that chooses us as its financial partner.

We have strived to develop Alfa-Bank’s technological advantage in our work with individual customers, e.g. remote customer service channels. Our efforts have won recognition from our own customers as well as professionals. In 2008, Alfa-Click was named the best Internet banking service in Russia and Central and Eastern Europe.

More importantly, however, we have been able to provide a consistent, high-quality service to all Alfa-Bank customers. We continue to work on improving our service tools, optimizing our service range and improving the quality of our customer service. Our efforts have not gone unnoticed by the public, as confirmed by both
feedback from our customers and the number of awards given to Alfa-Bank. This year, we once again won the award for the best Russian bank in terms of customer service. We would like to thank all Alfa-Bank employees for their efforts in maintaining our reputation as a bank with an unmatched level of service.

Along with its financial activities, Alfa-Bank plays an active role in social and charity programs. We are fully aware of our responsibility for the future of our country and take an active part in cultural and social projects. Alfa-Bank’s current charitable initiatives include organizing guest performances of popular international celebrities in Russia, supporting Russian art and literature and assisting young talent. We support the Life Line Charity, which provides financial assistance to children with serious illnesses, and we contribute to the World Wildlife Fund (WWF).

This year has brought new challenges to the Russian economy, challenges that Alfa-Bank is well prepared to face. We will continue our work in all business segments as the largest universal private bank in Russia, and we hope our efforts will translate into excellent results. We believe that we are taking the right steps to improve our operations, and we have confidence in both our employees and our customers.

Mikhail Fridman
Chairman of the Supervisory
Board of Alfa Group
Consortium

Johann Jonaсh
Chairman of the Board
of Directors

Rushan Khvesyuk
Chairman of the Executive
Board, Member of the Board
of Directors

Source: Alfa-Bank
Date: 23.06.2009