Net Interest Income

Net interest income has historically been the largest component of the bank’s operating income.

For the year ended 31 December 2019, net interest income before charge for credit losses decreased by RUB 3.1 bln, or 6.5%, to RUB 45.3 bln from RUB 48.4 bln for the year ended 31 December 2018.

MKB’s net interest margin was 2.2% and 2.6% as of 31 December 2019 and 2018, respectively. MKB’s net interest margin was 2.6% and 2.2% as of 31 December 2019 and 2018, respectively. The net interest margin narrowed consistently in 2018 and 2019 because interest income rose by 6.8% and interest expense by 14.0% in 2019, due to accelerated growth of retail deposits and repricing of large corporate deposits in the first half of 2019.

Indicator, RUB bln 2019 2018
Interest income 147.4 137.9
Interest expense (102.1) (89.5)
Net interest income before charge for credit losses 45.3 48.4
Net interest margin 2.2% 2.6%