OREANDA-NEWS. September 30, 2010. Bank of Moscow’s Group announces its unaudited condensed interim consolidated financial results in accordance with international financial reporting standards (IFRS) for the six month ended 30 June 2010.

Financial Highlights of the Group’s performance in the first half of 2010:
     •  Net profit reached RUB 6 billion
     •  Operating income before provisions increased by 26.5% yoy to RUB 24.9 billion
     •  Net interest income amounted to RUB 20.2 billion, up 49.3% yoy
     •  NIM reached 5.21%
     •  Conservative approach to credit risk management: NPLs ratio at 4.2%
     •  Continued rigorous control over costs and expenses: CIR at 28.8% compared to 30.8% for 2009 and 36.2% for the first half of 2009
     •  Total loan portfolio grew by 8.1% to RUB 624.4 billion
     •  Customer accounts increased by 14.5% to RUB 489.9 billion
     •  Strong capital position — total capital adequacy ratio (BIS) at 17.8%

The Group recorded net profit of RUB 6 billion for the first half 2010 compared to RUB 655 million in the first half of 2009. Based on the results of the Group’s strong performance in the first half 2010, a return on equity (annualised) stood at 13.5% and a return on assets (annualised) — at 1.4%.

The Group’s operating income before provision reached RUB 24.9 billion, up 26.5% yoy from RUB 19.6 billion for the first half of 2009. This increase resulted primarily from increase in net interest income.

The Group’s net interest income before provisions reached RUB 20.2 billion, up 49.3% yoy from RUB 13.5 billion for the first half of 2009 primarily due to a decline in interest expense. Interest expense fell by 30.4% yoy to RUB 18.9 billion from RUB 27.2 billion for the first half of 2009, as a result of lower funding costs, as the Group repaid the amounts due to the Bank of Russia and two syndicated loans totalling USD 705 million raised in the international capital market over the previous years.

The Group’s net interest income after provision for loan impairment soared by 429.3% yoy to RUB 11.1 billion compared to 2.1 billion for the first half of 2009.

The Group’s annualised net interest margin rose to 5.21% for the first half of 2010 compared to 4.01% for the first half of 2009.

With the total general and administrative expenses remaining relatively stable, the Group continued to improve its CIR, which stood at 28.8% compared to 30.8% for 2009 and 36.2% for the first half of 2009.

The Group’s total gross loans increased by 8.1% to RUB 624.4 billion from RUB 577.8 billion as at December 31, 2009. The growth of the loan book was driven by increase in corporate loans which were up by 10.7% to RUB 541.6 billion compared to RUB 489.5 at the end of 2009.

The Group continued to follow a conservative risk management policy. Still, in the context of the economic improvement in the country and stabilised quality of the loan portfolio the Group’s provision charge was down by 20.2 % yoy to RUB 9.1 billion versus RUB 11.4 billion for the first half of 2009. As at June 30, 2010 the loan loss provisions constituted 8.4% of the Group’s total loan book. The non-performing loans accounted for 4. 2 % of the Group’s total loan portfolio and were two-times covered by provisions.

Customer accounts remained one of the Group’s key sources of funding. In the first half of 2010 the customer accounts grew by 14.5% to RUB 489.9 billion compared to RUB 428.0 billion at the beginning of 2010. Corporate accounts and deposits were up 20.9% to RUB 302.9 billion from RUB 250.6 billion at the end of 2009 and funds attracted from retail customers increased by 5.4% to RUB 187 billion compared to RUB 177.5 billion at the beginning of 2010.

The Group continued to diversify its funding base and optimise the liability costs. In March the Group placed USD 750 million 5-year Eurobond out of its debut LPN Programme. The coupon rate was set at 6.699% per annum.

In the first half of 2010 the Group repaid two syndicated loans raised previously in the international capital markets. The repaid amounts totalled USD 705 million.
As at June 30, 2010 the Group had strong capital position with the Tier 1 ratio at 12.3% and total capital adequacy ratio at 17.8%.