8 October 2013

Standard & Poor's (S&P) has confirmed MDM Bank as one of the top 10 best capitalized amongst Russia's 30 largest banks in its latest report on the capitalization of the Russian banking system published yesterday ("Asset Quality Issues Become The Major Threat To Russia's Largest Banks' Capitalization").

The rating agency, based on its own methodology, calculated a risk-adjusted capital (RAC) ratio for MDM Bank of 8.1% as at year-end 2012, more than two percentage points above the weighted average ratio for Russia's 30 largest banks (6.0%) and representing a 50bp improvement on the Bank's year-end 2011 RAC ratio. In addition, S&P project a RAC ratio range for MDM Bank for the next 12-24 months of 7%-10%. Under S&P's risk-adjusted capital framework, the rating agency considers "that a RAC ratio of 8% indicates that a bank should have sufficient capital to withstand a substantial stress scenario in developed markets."

"We continue to adopt a conservative approach, focusing on asset quality and medium-term profitability over growth, conscious of the importance of maintaining a robust capital position. De-risking the balance sheet, strengthening risk management and improving asset quality remain our overriding priority," said CFO Tina Kukka. "We believe this is the right approach, particularly considering the current economic slowdown and resultant stress on asset quality across the banking sector," she added.

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