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MDM Bank Announces IFRS Results for the Nine-Month Period ended 30 September 2009

26.01.2010

Today MDM Bank released reviewed condensed financial statements for the period ended 30 September 2009 in accordance with International Financial Reporting Standards (IFRS).

In the third quarter of 2009, the Bank earned a comprehensive income of RUB 808 mn, or up by 131% from the net income for the same quarter of 2008. The capital adequacy level remains one of the best among Russian banks at 18.4% as of 30 September 2009.

An important trend of the reporting quarter is the slowdown of NPL growth compared to prior quarters of 2009. The problem loans went up by only 1.1% to reach 15.3% of gross loans, while remaining flat in absolute terms. The Bank maintains 100% provisioning for problems assets.

The core income in the third quarter amounted to RUB 7.6 bn, while the net interest margin on a quarterly basis improved to 7.7% from 6.1% for the same period of 2008. Income from trading securities totaled over RUB 2 bn in the third quarter of 2009. The focus on cost-control and realized merger synergies enabled the Bank to continue reducing operating and staff expenses quarter-on-quarter since the beginning of 2009, keeping its cost-to-income ratio at a low level of 35.6%.

The Bank is consistent in implementing its strategic intent of increasing customer accounts, and retail deposits in particular, as a strategic source of funding. This resulted in a 14.6% growth of retail deposit since the beginning of the year. Combined with the 8% reduction of loans and the repayments of syndicated loans and state organizations’ deposits in the third quarter, this helped in reducing the loans to deposits ratio to 148%.

The liquid assets were at a comfortably high level of 16% of total assets as of 1 October 2009, ascertaining the Bank’s ability to fully and timely meet its upcoming obligations. In addition, MDM Bank was the first private Russian Bank since mid-2008 to have successfully accessed debt capital markets:

  • in October 2009, the Bank successfully signed its syndicated loan in the amount of   USD 250 mn.  The transaction was oversubscribed.
  • In December 2009, the Bank closed a local RUB 5 bn bond issue due 2012.

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