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Message from the Chairman

We increased our recognition in Russia…

Dear Shareholders and Customers,

In an economic environment focused on recovery, global economies welcomed giant stimulus packages and other necessary measures during 2009. The global financial crisis, which began in the US housing market in 2007 spread to developed and developing economies in 2008, was severely felt in the real economy throughout 2009. By the beginning of 2009, the crisis had become a global recession. Many developed countries withstood the crisis with individual rescue packages or took collective steps to ease credit and freshen up the liquidity in the markets. In this respect, capital injected to the real economy helped relieve the financial system and proved to be successful. Yet, a full recovery and an environment of trust was not able to be achieved.

The Russian economy was severely affected by the crisis in 2009. Eleven years earlier, it managed to steer clear of another crisis and gained experience in turbulent economic conditions, just like Turkey. Russia, with its vast natural resources of oil and gas, overcame the economic collapse of the late 1990s and once again is able to rely on its key natural resources. While the Russian economy is enjoying the advantages of being the largest exporter of natural gas and the second largest exporter of oil in the world, it suffers the vulnerability of being openly dependent on oil and natural gas prices. The government has been embarking on an ambitious program to reduce this dependency and for more than two years has focused on other sectors involving high technology commodity products to reduce this risk but still has far to go to attain this goal.

The sharp down turn of oil prices to US$ 34 per barrel in the first quarter of the year directly affected the Russian stock exchange and ruble/US dollar parity. Through the second half of 2009, oil prices hit US$ 70 per barrel and the Russian domestic market returned to normal.

Despite measures taken, the world economy ended the year with an overall -0.6% contraction in 2009, due for the most part to the recession in the developed economies, which shrank -3.2% on average during the year. Far below the world average, the Russian economy recorded a -7.9% contraction in 2009. The general projection for 2010 is more optimistic and it is anticipated that the Russian economy will attain 4.3% growth.

During the year, the Russian government took a number of necessary steps, including the injection of US$ 200 billion to increase the liquidity in the banking sector and aid Russian firms unable to roll over large foreign debt coming due.

With a capital outflow of nearly US$ 130 billion, the ruble lost 35% through the end of 2008. The ruble started regaining value with the increase in the oil and natural gas prices and the purchase of US dollars by the Russian Central Bank in the second half of the year. National reserves increased to US$ 450 billion from the low of US$ 376 billion during the crisis. The economic decline seemed to have bottomed out in the first half of the year and the Russian economy demonstrated an upward trend in the second half of 2009.

Thanks to a strong shareholders' equity, totaling _ 18.5 billion as of December 31, 2009, the Dexia Group maintained its position as a major player in public and infrastructure finance, the financing of health and social housing sectors and the social economy regardless of the ongoing global financial crisis. Dexia ranks among the top three major banks in Belgium and Luxembourg and has a strong position in Turkey. The Dexia Group focuses on public and wholesale banking as it provides local public finance players with comprehensive banking and financial solutions. It also targets retail and commercial banking in Europe, mainly Belgium, Luxembourg and Turkey. Its strategy in these fields aims at strengthening its range of products and services available to customers.

CJSC Denizbank Moscow operations in Russia are based on the best international practices of the Group and a highly qualified local team of professionals. Equipped with these strong features, Denizbank Moscow is looking toward the future aiming toward becoming a major player in the promising Russian banking sector.

With six years experience in Russia, Denizbank Moscow is able to provide a large group of corporate and individual clients with a wide range of contemporary financial services, while becoming an active player in the Russian foreign exchange and money markets as well as fixed-income securities trading and investments.

Even with the negative impact of the global crisis, Russia, with its high potential for business expansion, continues to be an attractive and promising market for Dexia. Increasing commercial and investment relationships aided by the new bilateral ruble trade agreement between Turkey and Russia are providing a unique opportunity for CJSC Dexia Bank Russia to become a large commercial bank able to offer credit, non-credit and trade finance products to entrepreneurs conducting business in Russia. The agreement to lift visa requirements between the two countries in the first half of 2010 will be fruitful for the trade volume, which is anticipated to reach US$ 100 billion over the next five years.

In 2009, CJSC Denizbank Moscow was added to the Russian Federation Customs bank list. In Russia, 131 banks out of a total 1,047 operating banks are accepted by Russian Federation Customs, 23 out of which are multinational banks. CJSC Dexia Bank Russia can now directly issue Letter of Guarantee directly to Russian Federation Customs with competitive commissions. Moreover, CJSC Denizbank Moscow was also accepted by the Russian Federation Ministry of Finance as one of 200 banks (34 of which are multinational) out of 1,047, which enables importers to benefit from early receipt of their tax returns by providing a Letter of Guarantee from the Bank.

Above all else, we owe our Bank's successful results to our employees. On behalf of the Board of Directors, I would like to thank them all with whom we will carry Denizbank Moscow success forward into the future.

I would also like to thank our esteemed shareholders for their trust in our vision and our business partners, stakeholders and customers for sharing our objectives with long-lasting cooperation.

Hakan ATES