In the first quarter of 2006 based on unaudited management IFRS figures, Alfa Banking Group continued to post solid balance sheet growth. Total assets of the Group increased by 5.4% from the year end 2005 breaking the US$ 10 billion mark for the first time in company history. The Banking Group net loan portfolio grew by 14.2% to approximately US$ 6.5 billion compared to US$ 5.7 billion at the end of 2005.

Strong growth in the first quarter by all retail banking divisions drove Alfa Banking Group’s retail loan portfolio before provisions higher by approximately 67% to US$ 242.3 million from US$ 145.0 million at the end of 2005. Key consumer gains were achieved in the consumer, auto finance, credit card and private loan portfolios granted in 39 Russian regions. By the end of March 2006, the total number of Alfa Banking Group’s retail customers grew by almost 200 000 to 1.6 million.

Record results have also been achieved in the Group’s corporate loan portfolio. By the end of March 2006, corporate loans before provisions increased by 12.9% to US$ 6.6 billion from US$ 5.8 billion at the end of 2005. Alfa Banking Group continued to diversify its corporate loan portfolio and focused on increasing the number of medium-sized clients. The result was a further improvement of the top 20 largest borrowers share in Alfa Banking Group’s total loan portfolio from approximately 37% at the end of December 2005 to below 34% at the end of March 2006.

Alfa Banking Group continues its strategy of diversifying funding sources. While funds raised from individuals and corporate clients remained stable at US$ 5.5 billion at the end of March 2006, the Group’s international borrowings increased to US$ 2.0 billion, up from US$ 1.7 billion at the end of 2005. In March 2006, Alfa Banking Group successfully closed its debut US$ 350 million transaction for the securitization of diversified payment rights (largely international swift payments). This transaction marked the first ever securitization of diversified payment rights by a Russian institution and was also Alfa Banking Group’s first 144A offering targeting US investors.

By the end of March 2006 total equity of Alfa Banking Group increased to US$ 901.6 million, up from $855.8 million on December 31, 2005.