MDM bank posts 1H 2010 Net Income of 1.06 billion Roubles

MDM Bank has posted a 1H 2010 Net Income of 1.06 billion Roubles under IFRS.

The net result was a major turnaround from the 1H 2009 Net Loss of 4.3 billion Roubles, despite assets contracting 9% year on year to 366.4 billion Roubles, with liabilities down 8.9% to 304 billion Roubles, and loan impairment charges falling to 4.3 billion Roubles from 11.5 billion Roubles a year before.

The Bank attributed the fall in assets to a 20 billion Rouble fall in cash and cash equivalents, with fewer loans issued to other banks. However, client account balances grew by 15 billion Roubles. MDM Bank CEO, Sergey Timofeev, noted an improving economy and increasing loan book.

“We recognize obvious positive trends in the Russian operating environment and respectively in the business of the Bank. The financial position of borrowers has improved, and between May and August we recorded growth of customer loans by approximately 9% due to borrowers with good credit quality.”

MDM Bank’s CFO Vadim Sorokin, was upbeat about the results, also noting improving loan book quality.

“The share of loans over 90 days overdue in the loan book has decreased to 17.6% from 19.2% over the second quarter of this year, and the share of all overdue loans contracted to 21.4% from 28.8% over the same period. The Bank’s high capital position allows us to raise loan loss provisions to 26% from the current 15% of the total loan book while maintaining capital adequacy of 12% per Basel I standards. The declining impairment charges and stable operating income have allowed us to reach acceptable profitability: over the year past the merger of MDM Bank and URSA Bank (H209 and H110) the net profit amounted to RUB 5.3 bln or 8.9% of the average capital over the period.”