1. P O L I C Y On Armeconombank’s Risk Assessment

2. GENERAL PROVISIONS The system of execution of the bank’s risk assessment policy is drafted and implemented by risk subdivision in cooperation with other responsible subdivisions participating in the process. The risk management policy of the Bank is executed in 2 phases: Implementation of system of current management of determined risks Processing and implementation of partial or complex models of risk management I phase II phase

3. TYPES OF RISKS OuterInner Legal risks Competition stiffening risks Country’s general and economic environmental risks Natural disasters’ and other force majeure situations’ risks Financial risks Operational risks from rendering financial services Managerial risks

4. Types of Financial Risks Balance sheetOff-balance-sheet Liquidity risks Loan risks Market risks Operational risks Currency risks Interest risks Price risks Long term risks Short term risks Financial guarantee risks Warranty risks Pledge risks Other accounting units’ risks

5. RISK MANAGEMENT Objectives Exclude or drive to minimum the losses associated with the potential bank-related risks Targets Optimal correlation of risk-income ratio to the existing standard requirements in the environment of acceptable ratios of profitability, security, solvency indicators and weighed strategy of the Bank’s development.

6. Risk Management Methods Analytical method Dovetail of Operations Setting limits Hedging Loan Loss Provisioning Diversification Modeling

7. RISKS’ MODELING Risk subdivisions of the Bank conduct works directed to “micro” and “macro” risk’s modeling, by means of respective implementation of RAROC, RARORAC, VAR, CAR and other mathematical models accepted in International practice and elaboration of the Bank’s own risk models.