Sistema Acquires 20% Stake in Dalcombank.

MOSCOW, Russia -- Sistema (LSE:SSA), the largest private sector consumer services company in Russia and the CIS, today announced that it has completed the acquisition of a 20% stake in Dalcombank, a commercial bank based in the Far East of Russia, for a total cash consideration of US$ 8.3 million.

Founded in 1988, Dalcombank provides banking services across a wide retail network in 29 cities of Russia's Far East region, including its largest cities: Khabarovsk, Vladivostok, Yakutsk, Blagoveschensk, Birobidjan, Komsomolsk-on-Amur and Irkutsk. Dalcombank reported revenues of RUR 1.6 billion (approximately US$ 61.3 million) in the first half of 2007 and total assets of RUR 14.6 billion (approximately US$ 566.1 million) as at June 30, 2007.

Alexander Goncharuk, President and CEO of Sistema, commented: "Entering the Far East region will allow us to expand the banking network of the Sistema Group, which now comprises the Moscow Bank for Reconstruction and Development (MBRD) and East-West United Bank, and enable us to become a national player in the Russian banking sector. This transaction will both strengthen our local market position in several regions of the Far East and substantially broaden our customer base. Our expansion in this region reflects our ambitious growth strategy in the Russian banking sector and our commitment to developing the regional economy."

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Sistema is the largest private sector consumer services company in Russia and the CIS, with over 75 million customers. Sistema develops and manages market-leading businesses in selected service-based industries, including telecommunications, technology, insurance, banking, real estate, retail and media. Founded in 1993, the company reported revenues of US$ 2.7 billion for the first quarter of 2007, and total assets of US$ 21.6 billion as at March 31, 2007. Sistema's shares are listed under the symbol "SSA" on the London Stock Exchange, under the symbol "AFKS" on the Russian Trading System (RTS), and under the symbol "SIST" on the Moscow Stock Exchange (MSE).

JSC Dalcombank, founded in December 1988, operates in 29 cities in the Far East region: the Khabarovsk and Primorsk territories, the Jewish autonomous and Amur regions, the Republic of Sakha (Yakutia) and the Irkutsk region. In 2006 and the first half of 2007, Dalcombank opened 13 new branches and 2 mini offices in Khabarovsk, Belogorodsk, Angarsk, Nakhodka and Mongokhto. The bank's revenues increased by 36% year on year in 2006 to RUR 3.21 billion (approximately US$ 118 million) and by 8% year on year to RUR 1.6 billion (approximately US$ 61.3 million) in the first half of 2007. It had total assets of RUR 14.6 billion (approximately US$ 566.1 million) as at June 30, 2007.

Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Sistema. You can identify forward looking statements by terms such as "expect," "believe," "anticipate," "estimate," "intend," "will," "could," "may" or "might" the negative of such terms or other similar expressions. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements to reflect events and circumstances occurring after the date hereof or to reflect the occurrence of unanticipated events. Many factors could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, general economic conditions, our competitive environment, risks associated with operating in Russia, rapid technological and market change in our industries, as well as many other risks specifically related to Sistema and its operations.

Information contained in this announcement does not constitute a public offer or an advertisement of securities in Russia, is not an offer, or an invitation to make offers, to purchase any securities in Russia. The reverse convertible certificates have not been and will not be registered in Russia and are not intended for "placement" or "public circulation" in Russia.