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Hungary’s OTP Group buys Donskoy Narodny Bank of Russia

In the capital of the Russian Federation, Moscow, the representative of the majority shareholder selling 100% of Donskoy Narodny Bank (DNB), and László Wolf Deputy CEO and Dr. Miklós Németh Managing Director, representing OTP Bank Plc. as buyer are signing a sale and purchase agreement.

The document containing the purchase price and all the material conditions and guarantee components of the transaction shall be signed on 12th November 2007. OTP Bank will pay a purchase price close to $40.95 million for 100% of the participation interests of Donskoy Narodny Bank after all the required Russian and Hungarian official licenses and permits have been obtained; the purchase price shall be transferred to the seller at the expected closing time of the deal, at the beginning of 2008.

OTP Bank regards the purchase price as realistic and commensurate to the market value of DNB. The transaction was preceded by comprehensive and detailed due diligence, with the participation of the Bank’s legal and auditing advisors, Bakers & McKenzie and Deloitte, in addition to the acquisition specialist team of OTP Bank. The acquisition target, a privately owned universal bank is located in the Southern Federation District of the Russian Federation, in the Rostov Region.

DNB ranks as one of the leading banks of the Rostov Region, with total assets amounting to $89.3 million as of the end of 2006 and with shareholder’s equity, which may reach $13 million by the end of the year. The Bank focuses primarily on the retail segment, managing nearly 170 thousand retail deposit accounts and 50 thousand loan agreements, and serves its customers through 46 branch offices.

Donskoy Narodny Bank fits well into the expansion strategy of OTP Bank: in addition to the impressive organic growth and market expansion of Investsberbank, OTP Bank’s Russian subsidiary acquired in 2006, OTP Bank’s new presence focused on the Southern part of the country provides additional impetus to using the economic and business opportunities offered in the spectacular progress made by the Russian Federation. OTP Bank’s strategic investor status provides a long-term stable background for this development.

After closing the acquisition transaction, expected in early 2008, the integration of DNB in Investsberbank will commence promptly to implement a standardized Russian operation in order to enable the earliest possible efficient utilization of the current synergies. Investsberbank ranks among the Top 50 players of the Russian banking market consisting of 1200 institutions, with total assets in excess of $2 billion at the end of 2007 H1 and after-tax profits of $15.92 million. The credit institution offering universal banking services currently has 880 thousand customers and serves them through 109 branch offices. (