Russian bank, MDM Bank, has posted a 1H 2011 net income of 1.45 billion roubles under IFRS.
The net result is up from the 1.06 billion rouble net profit posted in 1H 2010, despite net interest income falling from 10.141 billion roubles in 1H 2010 to 7.825 billion for 1H this year.The bank added that equity rose 3.3% since the start of 2011 to reach 65.9 billion roubles, despite deposits falling from 225 225.2 billion roubles at the start of the year to 195.445 billion at the time of reporting.
MDM Bank CEO and Chairman, Sergey Timofeev, highlighted the improving non performing loan environment with NPL’s falling from 14.4% at the end of 2010 to 13.2% at the time of reporting, while the bank changed its lending focus from large corporates to the SME segment, which it said was more profitable.
“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.”
MDM Bank CFO, Konstantin Rogov, highlighted greater balance in the bank’s funding base.
“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. 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 balanced.”