National Bank TRUST and TRUST Investment Bank Release 1H08 IFRS Unaudited Results and Update on Key Financial Indicators as of 24 September 2008 and Details of Upcoming Investor Call

26/09/2008 17:14

PR Newswire

MOSCOW, September 26 /PRNewswire/ -- In light of the current market turmoil, management of National Bank TRUST ("NBT") and TRUST Investment Bank ("IBT") releases today its 1H08 unaudited IFRS management accounts and key financial indicators as of 24 September 2008 to provide transparency to the marketplace. Net income for the proforma combined Bank ("TRUST") for 1H08 is RUR 433mln (NBT, RUR 370mln; IBT, RUR
63mln) versus RUR109mln (NBT, RUR 145mln; IBT, RUR (36)mln) for 1H07, a year on year increase of 296%. Assets in the proforma combined Bank increased 4% to RUR 103bln from 1H07, while net loans increased 34% to RUR 47.3bln. Shareholders equity for the proforma combined Bank at 1H08 is RUR 15.2bln, a
25% increase from the previous year, resulting in a total capital adequacy ratio of 18.5%.

The 1H08 results directly reflect the business strategy
consistent with the merger announcement of NBT and IBT announced in July
2007, in focusing regionally on retail and SME clients while substantially de-risking and deleveraging TIB to free up capital for the growth of its core business. NBT now operates in 170 cities across Russia with 1.4mln retail,
20,000 SME and 12,000 corporate clients. Core funding of the institution comes from a diverse base of retail and corporate clients rather than repo agreements or other wholesale funding. Expenses continue to be managed to reflect management's outlook of reduced growth expectations.

Key financial indicators as of 24 September 2008 are as
follows (using RUR25.01 per 1USD):


- Total marketable securities in the proforma combined bank - US$154.2mln, broken down as:


- US$109.0mln Fixed Income Securities (72% USD Eurobonds), IBT
- US$ 5.6mln Equities, IBT

- US$ 39.6mln OFZ (treasury position), NBT


- Total repo outstanding is as follows:


- US$46.5mln Fixed Income USD Securities, IBT

- US$22.0mln Fixed Income RUR Securities, IBT (bonds in Lombard list)
- US$ 0.0mln Equities

- US$31.4mln OFZ (with CBR), NBT


- The pre-tax unrealized loss on the above positions in the 3rd quarter only, on an MTM basis, is US$17mln (US$9.4mln in September) in IBT and US$8.2mln (US$5mln in September) in NBT. The approximate post-tax effect of this unrealized loss in the 3rd quarter represents approximately 3% of the proforma capital of the combined Bank.
- Credit quality of the portfolio remains robust and management does not envisage actual credit losses in any of the positions.
- There have been no payment defaults given the low levels of securities positions and related repo. Current liquidity is sufficient to manage re-financings and all obligations of the banks.

- The Banks do not run an open currency position (although for technical reasons this may be +/- US$5mln from zero on a given day)
- Other business lines continue to perform according to plan prior to the current market upheaval. Given the current situation, the plan has been modified to focus on building a liquidity cushion by moving to a highly conservative lending program; which management expects to be the case until at least the end of the year.

Mr Michael Eggleton, CEO of TRUST, states "although we are not pleased with the trading results of the last month and a half, given the very difficult market conditions, our business plan has proven to be the correct model. Reducing reliance on the investment bank business of the past, reduced focus on wholesale funding, the announced merger and related efficiencies, and substantial de-risking of the business has enabled us to work through the current market volatility without incident. On a relative basis we expect that our results will favorably compare with our peers in the market."

Mr Ilya Yurov, Chairman of the Board of Director of TRUST, further states "the merged bank, expected to be formally completed any time now is properly structured in both balance sheet and operations to continue preserving our capital base during this market turmoil."

Details for the Investor Conference Call

Date: Monday, 29 September
Time: 2:30 pm London/5:30 pm Moscow
Title of the call: National Bank Trust Investor Call
Speakers: Michael Eggleton, Chief Executive Officer, Trust Investment Bank
Nikolay Fetisov, President of National Bank Trust and shareholder in Trust Banking Group

Participants need to register at the following link and will be given the dial in/an individual pin code:
https://eventreg2.conferencing.com/webportal3/reg.html?Acc=937467?=197934

The replay number is below and will be available for 7 days following the call.

Replay dial in: +44-207-031-4064 -- UK London

1-954-334-0342 -- US Toll

Access code: 811321

Website: http://www.trust.ru

Contacts: Andrey Sogrin, Head of external communications, National bank TRUST, tel: +7-495-647-90-21 (ext. 2234), mob: +7-903-969-16-52, e-mail: andrey.sogrin@trust.ru






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