25 August 2014

MDM Bank (MDM) today released its interim consolidated IFRS financial statements for the six month period ended 30 June 2014.

In H1 2014, the Bank delivered a commendable improvement in financial performance:

  • Profit before tax of RUB972 million, compared to RUB20 million in H1 2013 (49-fold increase)
  • Recurring profit before tax (excluding trading and other income) of RUB493 million, compared to losses before tax of RUB860 million in H1 2013 (+ RUB1,353 million)
  • Net profit of RUB738 million, compared to RUB5 million in H1 2013 (148-fold increase)

Stable net interest margin, despite a challenging operating environment: NIM of 4.5% in H1 2014 compared to 4.0% in H1 2013

Strong capital position maintained: The Bank continues to lead its peer group in terms of Tier 1 (IFRS Basel I) capital adequacy ratio, which stood at 13.0% as at 30 June 2014. MDM's CBR total regulatory capital ratio stood at 12.0% as at 1 July 2014, in line with its peer group.

Robust funding and liquidity position, despite volatile environment:

  • Stable / resilient customer funding base: total customer funding grew 2%, while the core mass retail segment grew by 5%, compared to YE2013
  • Low dependence on market funding maintained: loan / deposit ratio of 87% as at end H1 2014
  • Strong liquidity position: liquid assets stood at 33% of total assets as at end H1 2014

Modest / cautious asset growth in the context of a challenging macro environment: Total asset growth of RUB16.4 billion in H1 2014 (+6%).

NPLs marginally lower in Q2 2014: NPL portfolio decreased by RUB 1 billion in Q2 2014, such that the NPL ratio stood at 12.2% as at end H1 2014, with a comfortable provision coverage ratio of 151%.

"MDM Bank has shown stable improvement in its financial performance and a significant increase in profit, despite the deteriorating macro environment in Russia. The Bank's H1 2014 results confirm the effectiveness of our adopted strategy and conservative approach to risk. We will seek to maintain this trend going forward," commented MDM Bank CEO Timur Avdeyenko. "I would also underline that improving the Bank's asset quality remains a key focus of management attention."

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