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MDM Bank Comment on S&P Outlook Change for Long Term Credit Rating

10.10.2008 21:36

Moscow, 10 October 2008 – Today Standard & Poor’s lowered its outlook for thirteen Russian banks and financial institutions. As a result, MDM Bank’s Long Term Credit Rating has changed from ‘BB’ (Stable) to ‘BB’ (Negative) in connection with mediumterm risks related to the global credit crisis and its impact on the Russian banking sector. It is important to note that MDM Bank remains one the two highest-rated private Russian banks.

MDM Bank was one of the first Russian banks to take steps to address the crisis and in August 2007 began to hold a reserve of excess liquidity, which today exceeds USD 1 bln. In addition, MDM Bank would like to point out the following about the Bank’s current position:

MDM Bank has not seen any signs of a significant decline in asset quality in its corporate, consumer or small business loan books: the share of non-performing loans (NPLs), as well as coverage of NPLs by loan loss provisions, remained stable during the third quarter, based on preliminary reporting; during 3Q 2008 NPLs decreased in retail and small business lending due to the Bank’s ongoing improvements to underwriting and collection in these segments;

• The Bank continues lending to corporate, small business and retail clients, though has taken measures to reduce credit risks on new loans and any roll-overs on existing loans by obtaining additional collateral and using other credit enhancements, as well as to reduce exposure to higher-risk sectors of the economy;

MDM Bank has not seen any unplanned material deposit outflows from corporate or retail customers;

• The excess liquidity held by MDM Bank is more than sufficient for full and timely repayments of all the bank’s existing international borrowings. Further, MDM Bank has sufficient nationwide network infrastructure to continue to accelerate depositgathering efforts;

• As one of the largest and most respected privately-owned banks in Russia, MDM Bank has full access to, but is not dependent upon, the wide array of liquidity measures available from the Russian Central Bank and Ministry of Finance, other than those intended solely for state-owned banks;

• The Bank has minimized its equity portfolio, and is a selective lender on the interbank market;

• The continued global credit crisis has not led the Bank to alter its strategy to become a leading universal financial institution, providing top-quality banking services to clients throughout Russia.


MDM Bank 

MDM Bank was founded in December 1993 and holds a General Banking License issued by the Central Bank of Russia (#2361 dated 31 March 2008). MDM Bank is one of the most dynamically developing banks in Russia and is among the top Russian banks in terms of assets and equity. Today, MDM Bank is a modern universal financial institution offering a full range of services to its clients.
MDM has one of the highest credit ratings among privately-owned Russian banks – Standard & Poor’s (BB, negative), Fitch Ratings (BB, stable) and Moody’s (Ba1, stable) – and is the only Russian financial organization that has been given a public Corporate Governance Score by Standard & Poor’s (CGS-6+). Standard & Poor’s awarded MDM Bank the highest ranking in its study of “Transparency and Disclosure by Russian banks” in 2006 and 2007. The Bank was also regarded by Euromoney magazine as “one of the leading banks in Russia and Emerging Europe, applying the most advanced standards of corporate governance.”
MDM Bank has received a number of awards from Global Finance magazine:
2005 – Best Domestic Bank and Editor’s Special Award for Transparency.
2006 – Best Forex Bank, Best Domestic Bank, Best Domestic M&A Arranger, and Best Bank in Corporate Governance. In October 2006, Euromoney magazine awarded MDM Bank Leading Bank in Corporate Governance in Emerging Europe.
2007 – Corporate Governance Editor’s Award, and Best Forex Bank.
2008 – Best Domestic Bond Research Team
2008 - Euromoney magazine named MDM Bank the Best Managed Bank in Corporate and Investment Banking in Central and Eastern Europe – 2007


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10.10.2008 21:44

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