OREANDA-NEWS. December 29, 2010. Financial Highlights of the Group’s performance for the first nine months of 2010:
     • Net profit reached RUB 8.8 billion
     • Operating income before provisions amounted to RUB 37.5 billion having increased 23% YOY versus RUB 30.5 billion for 9M 2009
     • Net interest income amounted to RUB 29.5 billion, and demonstrated growth up to 41% YOY versus RUB 21 billion for 9 M 2009
     • Efficient control over costs and expenses coupled with increase in operating income sustained the cost-to-income ratio (CIR) at a record low level of 28.7%
     • Total loan portfolio increased by 15.8% YTD and amounted to RUB 669.1 billion
     • Non performing loans (NPL) totalled 4.1% of the Group’s loan portfolio as at 30.09.2010.
     • Customer accounts and deposits reached RUB 544.5 billion, having increased by 27.2% from the beginning of 2010.
     •  High capitalisation level  — the total capital adequacy ratio (CAR) stood at 20.4% and Tier 1 capital ratio — at 15.2% as at 30.09.2010.

The Group’s net profit for the first nine months of 2010 reached RUB 8.8 billion, having increased 17.8 times, compared to RUB 497.8 million for the same period of 2009. Earnings per share stood at RUB 53.3. Based on the results of the Group’s strong performance in the reporting period, an annualised return on equity was 11.6% and an annualised return on assets — 1.3%.

The Group’s operating income before provisions reached RUB 37.5 billion, up 23% YOY compared to RUB 30.5 billion for the first nine months of 2009. This growth resulted primarily from increase in net interest income.

The Group’s net interest income before provisions soared by 41% YOY and amounted to RUB 29.5 billion compared to RUB 21 billion for the same period of 2009, where this growth was generated mainly by a decrease in interest expense. Interest expenses totalled RUB 28.4 billion, down by 29% YOY, compared to RUB 39.9 billion for the first nine months of 2009. This decrease was primarily a result of reduction of the Group’s funding costs in the lowering interest rates environment. For the first nine months of 2010 the Group’s annualised net interest margin stood at 4.8% versus 4.08% for the nine months of 2009.

The efficient control over the Group’s general and administrative expenses coupled with increase in operating income allowed to sustain the cost-to-income ratio at low 28.7%, the same ratio for the first nine months of 2009 was 34.8%.

The Group’s total gross loans (before provisions for loan impairment) increased by 15.8% and amounted to RUB 669.1 billion versus RUB 577.8 billion at the beginning of 2010. The growth of the loan book was driven by increased volumes of corporate lending: for the reporting period the corporate loan book was up 19.9% to RUB 586.9 billion compared to RUB 489.5 billion at the beginning of the year.

During 2010 the Group adhered to its traditional conservative risk management policy. As at September 30, 2010 the loan impairment provisions constituted 8.7% of the Group’s total loan portfolio and provided 211% coverage of non-performing loans. The NPL ratio stood at 4.1%.

As at September 30, 2010 customer accounts and deposits amounted to RUB 544.5 billion, having increased by 27.2% over the reporting period, compared to RUB 428.0 billion at the beginning of 2010. In the nine months of 2010 balances on accounts of legal and budget entities grew up by 42.3% and amounted to RUB 356. 5 billion compared with RUB 250.6 billion at the beginning of the year. Funds deposited by retail customers reached RUB188.0 billion, having increase в by 5.9% over the reporting period, compared to RUB 177.5 billion at the start of 2010.

With the aim to optimise and improve its funding costs, in September 2010 the Group issued the CHF 350 million 3-year Eurobond. Through this placement and the USD 750 million Eurobond issue in March 2010 the Group efficiently refinanced its debt obligations maturing in 2010, which were previously raised in international capital market.

On July 26, 2010 the Bank of Russia registered the results of the fourteenth share issuance of the Bank of Moscow, as a result of which the capital of the Bank was increased by RUB 21.7 billion. There were 21 632 017 ordinary voting shares totally placed in the share issuance. As at September 30, 2010 the capital adequacy ratio of the Group calculated in accordance with the Basel Capital Accord dated 1988 exceeded the recommended minimum of 8%: Tier 1 capital ratio stood at 15.2% and total capital adequacy ratio — at 20.4%.