Market Analysis

Net profit of Bank of Moscow IFRS for 1 half of 2009 totaled 650 million rubles, according to the materials bank.

Bank of Moscow has published consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) for the I half of 2009.

Key figures:

- Assets of the beginning of 2009 increased by 2,8% to 824 billion rubles;

- return on equity - 1.92%, return on assets - 0.16%;

- net profit was 650 million rubles;

- capital adequacy to international standards (Basel I) - 15,7%.

On 30 June 2009 the Group's profit before taxation amounted to 1.097 billion rubles, net profit of shareholders - 650 million rubles, return on equity - 1.92%, return on assets - 0.16%. Reduction of net profit of the Group due to the establishment of substantial reserves in comparison with previous periods (from early 2009, the reserves increased by 88%).

In the first half of 2009, the assets of the Group of Bank of Moscow have increased by 2,8% to 824 billion rubles. As of June 30, 2009 the credit portfolio of the Group excluding established reserves totaled 549.5 billion rubles, an increase of 3,8% since the beginning of the year. Growth portfolio occurred due to increases in corporate business. The total portfolio of loans to enterprises amounted to 30 June 2009 447.6 billion rubles, an increase from the beginning of the year at 7.5%. The volume of retail portfolio for the I half of 2009 decreased by 113.1 billion rubles to 101.9 billion rubles. The reduction reflects a decrease in demand of private clients in the retail credit products in connection with the economic downturn.

With the Bank of Moscow in the first half of 2009 continued its conservative policy, building up reserves for possible loan losses, which on June 30, 2009 amounted to 24.2 billion rubles (4.41% of total loan portfolio). The share of overdue debt - 2,98% of the total loan portfolio, the coverage ratio of overdue debt reserves of 1.48.

On June 30, 2009 balances in customers increased by 18,6% to 482 billion rubles. Bank of Moscow took 3 rd place among Russia's credit institutions for the volume of retail deposits. Since the beginning of 2009 the volume of private deposits increased from 151.2 billion rubles to 164.4 billion rubles.

With the Bank of Moscow has a large capital base: on 30 June 2009 total capital amounted to 95.3 billion rubles, while capital adequacy to international standards (Basel I) - 15,7%. The level of capital adequacy - 10,3%. In July 2009 the Bank of Russia registered the results of the 13th issue of shares of the Bank of Moscow, which resulted in fixed assets grew by 20 billion rubles. Thus, on September 1, 2009 capital adequacy ratio (H1, by the method of the Bank of Russia) increased to 15.94%.

In the I half of 2009 operating revenue of the Group prior to the establishment of reserves for possible losses on loans increased by 27,6% compared to the same period in 2008.

- Net interest income grew by 7.7%;

- net commission income increased by 20,1%;

- the amount of reserves has increased in 3,4 times;

- benefit-cost ratio decreased to 36.18% (in I half of 2008 - 42.87%).

At the balance sheet date the Group's profit before the establishment of reserves totaled 19.7 billion rubles, an increase over the same period of 2008 - 27,6% (on 30 June 2008 - 15.4 billion rubles). Growth in operating income associated with an increase in interest income from lending operations and increasing fee income.

Net interest income amounted to 13.5 billion rubles, an increase compared with the I half of 2008 - 7,7%. Fee and commission income of the Group of Bank of Moscow amounted to 4.5 billion rubles (16,9%). Net commission income increased by 20,1% to 3,8 billion rubles. The growth of fee income associated with an increase in fees and settlement and cash operations.

With improved the ratio of operating expenses to operating income (Cost /Income ratio), lowering the rate from 42.87% in I half of 2008 to 36.18% in I half of 2009. Decrease due to increased cost control, and optimization of staff. In the first half of 2009, administrative expenses increased by 7,8% compared with the I half of 2008. This compared with II half of 2008 this figure had fallen to 15,3%.

Network Bank of Moscow - one of the largest in Russia. On June 30, 2009 the Bank's network consisted of 396 offices. Also provided services to private clients in 471 postal-banking division of the capital region.

On June 30, 2009 With the Bank of Moscow included 5 foreign credit organizations: Open Society BM Bank (Kiev, Ukraine), OJSC Bank Moscow-Minsk (Minsk, Belarus), Latvian Businessbank ( Riga, Latvia), the Estonian Credit Bank (Tallinn, Estonia) and JSC Bank of Moscow - (Belgrade) (Belgrade, Serbia). Also, Bank of Moscow has 2 Russia's credit institutions - OAO KB Mosvodokanalbank and KAB Bezhitsa-Bank JSC.
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