OREANDA-NEWS. December 20, 2010. MDM Bank announced results for the first nine months of 2010 based on International Financial Reporting Standards (IFRS).

Key highlights:

Net and comprehensive income amounted to RUB 1.54 bln and RUB 1.11 bln, respectively (RUB 0.48 bln and RUB 0.59 bln in the third quarter);

Equity increased by 1.8% (by 1.0% in the third quarter) and reached RUB 62.7 bln;

Assets decreased by 4.8% during nine months and totaled RUB 383,5 bln, however, there was an increase by 4.7% during the third quarter;

The asset increase during the third quarter by RUB 17,1 bln occurred mainly due to an increase in net loan portfolio by RUB 11.1 bln and loans issued to other banks by RUB 5.2 bln ;

Liquid assets (cash and cash equivalents, and interbank loans with the remaining maturity of up one month) totaled RUB 69,9 bln or 18.3% of all assets;

Liabilities have decreased by 6.0% (5.4% increase in the third quarter) and totaled RUB 320.8 bln;

The RUB 16.4 bln increase in liabilities was caused by an increase in client account balance by RUB 14.7 bln and debt securities in issue by RUB 6.9 bln;

Pre-provision operating income reached RUB 19.22 bln, with net interest income (RUB 14.25 bln) and net fee and commission income (RUB 2.37 bln) remaining its key components;

Operating expenses totaled RUB 11.09 bln;

Loan impairment charges totaled RUB 5.48 bln (RUB 1.18 bln in the third quarter), or 2.6% of average total loans, annualised (1.7% in the third quarter)

The Bank’s Tier 1 capital adequacy ratio calculated according to the standards of the Basel Committee on Banking Supervision (Basel I) totaled 18.7%;

Net profit to average capital totaled 3.3%, annualized, while comprehensive income to average equity was 2.4%, annualized.

“An upward trend in our consolidated statements and positive financial result demonstrate successful implementation of the Bank’s long-term strategy. We decreased the share of impaired loans from 17.6% at end-June 2010 to 15.8% at end-September 2010 as well as cautiously increased our customer loans by 4.6% in the third quarter, annualized”, remarked the CEO and Management Board Chairman of MDM Bank Sergey Timofeev. “Further efforts are made to provide better services and low risk products to our customers while recovery of non-performing loans is continuing. Solid capital position as well as competent and committed staff will allow us to grow business volumes and improve efficiency and profitability of the Bank.”

“We are successfully reducing our cost of credit risk: annualized yield on loans to customers after loan impairment charges comprised 13.2% of the average net customer loan book over the reporting period, annualized”, Konstantin Rogov, MDM Bank’s CFO, remarked. “We are expecting a decrease in our funding costs and either to maintain or to increase our net interest margin which stood at 5.9% during this period, annualized. We believe mild credit costs and expected business volumes growth are a strong basis for us to achieve solid results in 2011.”