“Fitch Ratings” raises the “MDM Bank” rate up to “BB”

The international rating agency “Fitch Ratings” raised the long-term rate of “MDM Bank” in foreign currency from “BB-“to “BB”. The bank’s national long-term rate is also raised from the level “A (rus)” to “A+ (rus)”. The agency excluded the MDM Bank rate from the list “Rating Watch Positive” and gave it the forecast “Stable”.

This rating action means the demonstrated ability of the bank to stand a serious stress on the quality of its assets because of the crisis without the need in extraordinary support by capital and takes the existing ability of the bank to absorb its losses into account.

“Strong capitalization of MDM Bank means that it would be able to absorb the credit losses at the level of 29% at the end of the first quarter of 2010 before its norm of the capital adequacy dropped to the minimal permissible level at 10%. Besides, the shareholders of MDM Bank stated they were ready to deposit 500 million USD if necessary to keep the index of the bank’s capital adequacy at the level of 12%. In opinion of “Fitch Ratings” the bank has rather good level of liquidity (its money supply and the securities, not burdened with debts, stayed at the level of approximately 16% of the assets at the end of the first quarter 2010) and the bank managed this liquidity conservatively. MDM Bank possesses strong corporate management to the measures of Russian banks and low level of crediting for the bounded parties and that also represents a positive factor of creditability”-said in the “Fitch” message.

“We welcome the “Fitch” decision concerning the rise of our rate” – the MDM Bank financial director Vadim Sorokin says – “Our bank traditionally follows quite conservative approach to keeping of a high level of capitalization and liquidity, so the rise of our credit rate is the evidence that our cautious approach to the capital and liquidity management allowed us overcoming the “bottom” of the crisis successfully. The rise of the rate is also the evidence that the risks, concerned with the integration of MDM Bank and URSA bank are left behind and we are sure our new development strategy will allows us making even stronger and more reliable bank”.