OREANDA-NEWS. October 27, 2011. MDM Bank has announced results for the first half of 2011 based on International Financial Reporting Standards (IFRS).

Key highlights:

— Comprehensive and net income amounted to RUB 2.12 bn and RUB 1.45 bn, respectively (against RUB 0.52 bn and RUB 1.06 bn in 1H2010);

— Equity increased by 3.3% over 1H2011 and reached RUB 65.9 bn;

— The gross loan portfolio decreased by 2.9% during the first half and totaled RUB 257.7 bn; however, newly originated loans during the same period equaled RUB 73.7 bn;

— Liquid assets (cash and cash equivalents, and interbank loans with remaining maturities of up to one month) amounted to RUB 57.65 bn or 16.5% of total assets;

— Liabilities contracted by 11.6% over the reporting period and totaled RUB 282.7 bn, mainly due to a decrease in customer accounts as expensive deposits accepted earlier were repaid;

— Pre-provision operating income reached RUB 9.63 bn, with net interest income (RUB 7.83 bn) and net fee and commission income (RUB 1.50 bn) remaining its key components;

— Operating expenses decreased by 15.5% to RUB 6.73 bn from RUB 7.97 bn in 2H2010 thanks to continued tight cost control;

— Loan impairment charges totaled a modest RUB 0.75 bn, or 0.6% of average gross loans, annualized, as the NPL ratio continued to decline (to 13.2% from 14.4% as of YE2010);

— The Bank’s Tier 1 capital adequacy ratio, calculated according to Basel I totaled 20.2%;

— Net profit to average capital totaled 4.5%, annualized, while comprehensive income to average equity was 6.5%, annualized.

Sergey Timofeev, the CEO and Chairman of the Management board, said of the results: “We are delighted to post positive financial results for the first half of 2011. MDM Bank asset quality has significantly improved: the share of non-performing loans has continued to decline, with the corresponding provision charge decrease”.

Konstantin Rogov, the CFO of MDM Bank, added: “We have achieved a significant reduction of funding costs (up to 6,5%), that impacted positively on the bank’s net interest margin and net interest income”. He continued, “Amid economic volatility, we have managed to increase the share of long-term deposits to 26%, from 21% in the beginning of 2011, and this has made the Bank’s funding base more balance