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Fitch Ratings Raises Outlook to Stable from Negative for MDM Bank Long Term Credit Rating

06.11.2009

Today Fitch Ratings raised its credit rating outlook for MDM Bank. MDM Bank’s Long Term Credit Rating has changed from ‘BB-’ (Negative) to ‘BB-’ (Stable), while its National Scale Long Term Rating changed to ‘A+ (rus)’ (Stable) from ‘A+ (rus)’ (Negative).

Fitch Ratings notes MDM Bank’s solid capital cushion, high quality of capital (mostly being Tier 1) and significant unutilised Tier 2 capacity. Also, the rating agency takes additional comfort from commitments by MDM Bank’s shareholders to provide additional capital if needed.

This raise in the credit rating outlook, in the view of the Bank’s management, reflects a strong capital position, high loss absorption capacity and the stabilization of loan portfolio quality. In particular, MDM Bank has seen stabilization in the level of nonperforming loans in 3Q2009 as compared to 2Q2009. Asset quality has stabilized due to macroeconomic factors as well as the Bank’s sound loan portfolio management and consistent approach to dealing with clients facing temporary difficulties due to the crisis. This approach is expected to yield medium-term benefits for the Bank.

The Bank also believes the change in rating outlook reflects confidence in the post merger integration of MDM Bank and URSA Bank, which has thus far proceeded as anticipated.


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