Mosgorlombard: H1 profit up a third, but net interest income turned negative

On August 25, Mosgorlombard released its results for the first half of 2026. Net profit rose 32.9% year on year, but net interest income fell by 136.8%, pointing to a shift in the revenue mix. This review examines what drove profit growth and why interest income turned negative.

Key takeaways

— Net profit for the half-year rose 32.9% despite negative net interest income

— Net interest income turned negative at -136.8% year on year, indicating a shift in the revenue model

— Return on equity reached 47.8%, reflecting high efficiency in capital use

— Trailing dividend yield stood at 13.1%, above our fair level of 10.5%

— Capex in Q2 2025 was RUB 33.3 million, suggesting continued investment in growth

Key figures, RUB bn

Net profit for the half-year rose 32.9% despite negative net interest income

In the first half of 2026, Mosgorlombard's net profit reached RUB 724.0 million on an LTM basis, up 32.9% year on year. Profit growth occurred despite negative net interest income, indicating a shift in the revenue mix toward fees and other items.

As a bank and broker, the company demonstrates an ability to generate profit even with unfavorable interest income dynamics. This could be related to higher fee income or asset revaluation, but the exact reasons are not disclosed in the provided data.

Net interest income turned negative at -136.8% year on year, indicating a shift in the revenue model

Net interest income for H1 2026 fell by 136.8% year on year, turning negative. For comparison, in Q2 2023 net interest income was RUB 216.8 million and in Q3 2023 – RUB 187.8 million, illustrating the scale of the change.

Negative net interest income could result from higher funding costs or lower asset yields. At the same time, profit growth suggests the company compensates with other income lines, possibly fees and trading operations.

Return on equity reached 47.8%, reflecting high efficiency in capital use

Return on equity (ROE) for the trailing twelve months stood at 47.8%. This is a high figure, indicating that the company efficiently uses shareholders' funds to generate profit.

For the banking sector, such an ROE level is exceptional, possibly due to a low capital base or one-off income. It is important to note that the metric is based on LTM profit, which includes the last four quarters.

Trailing dividend yield stood at 13.1%, above our fair level of 10.5%

Over the last 12 months, the company paid dividends of RUB 0.28 per share, providing a yield of 13.1% at the current market cap of RUB 2,114.3 million. Our model estimates a fair yield of 10.5% for this name, meaning the current yield is above our target.

The projected dividend for the next period is also RUB 0.28 per share, giving a forward yield of 13.1%. The payout ratio is 0.26 of profit, leaving a significant portion of earnings for reinvestment.

Capex in Q2 2025 was RUB 33.3 million, suggesting continued investment in growth

In Q2 2025, capital expenditures amounted to RUB 33.3 million, similar to Q4 2025. This indicates a stable level of investment in fixed assets and network development.

For comparison, in Q3 2023 capex was RUB 42.0 million, showing some decline but continued investment activity. This could be related to branch modernization or IT infrastructure development.

Valuation on the latest reported figures

Bottom line

Mosgorlombard showed strong profit growth in H1 2026, but it was accompanied by negative net interest income, which requires attention. ROE of 47.8% is impressive, but may be partly due to one-off factors. The dividend yield is above our fair estimate, making the shares attractive to investors, but the sustainability of payments depends on the company's ability to generate profit going forward. The key question for holders is whether the company can restore positive interest income or compensate with other items.