MOSCOW. April 29 (Interfax) - Gazprombank reduced its loan loss reserves to 4.7% of the total loan portfolio in 2010 under International Financial Reporting Standards (IFRS), down from 6.9% in 2009.

Overdue loans fell to 2.1% of the loan portfolio from 3.9%, the bank said in a statement.

The reserves were equal to 220% of non-performing loans.

The provisioning expense declined 93.6% to 1.7 billion rubles from 25.9 billion rubles in 2009.

The net interest margin was 2.5% compared with 2.6% in 2009. "At the same time net interest margin started to increase in the second half of 2010 as a result of declining funding cost," the press release says.

"Gross loan portfolio increased by 34.7% compared to year-end 2009 and reached RUR 1,084.0 billion. The volume of corporate loans outstanding increased by 36.6% compared to 2009 and comprised RUR 988.2 billion. Retail lending increased as well from RUR 81.3 billion as of year-end 2009 to RUR 95.8 billion as of 31 December 2010," it says.

"In 2010, securities portfolio increased by 27.9% to RUR 233.6 billion mainly due to growth of investments into corporate bonds by Russian issuers and domestic government bonds."

"In 2010, Gazprombank disposed of some of its investments in non-banking assets, i.e. a 51% stake in Sibneftegas, an oil & gas company, and a 27% stake in SIBUR Holding, a petrochemicals company. Profit from these transactions amounted to RUR 23.3 billion. Gazprombank's management also decided to dispose of the rest of the investment in SIBUR Holding. As a result, in December 2010 the Group ceased the consolidation of SIBUR Holding Group."

"In 2010, profit from other operations with securities amounted to RUR 4.6 billion compared to a profit of RUR 34.3 billion in 2009."

"The net assets growth of non-banking equity investments in 2010 was RUR 37.7 billion compared to RUR 11.8 billion in 2009. The Group's non-banking investments in 2010 included petrochemical assets (SIBUR Holding Group), machinery group of companies (the Uralmash-Izhora Group and other machinery assets), media business (Gazprom Media Group) and other investments."

"In 2010, net gains from operations with foreign currency, including revaluation of derivative exposures, amounted to RUR 12.3 billion compared to RUR 28.0 billion in 2009."

"Despite significant business growth Gazprombank imposes strict control over administrative costs. In 2010, the cost to income ratio was 32.1%, which is within Gazprombank's targeted level."

Client deposits accounted for 68.5% of liabilities, up from 57.0%, and increased 34.6% to 1.185 trillion rubles at the end of 2010. Corporate client funds were up 33.3% to 947 billion rubles and funds from individuals increased 39.8% to 238.4 billion rubles. The ratio of loans before provisioning to client funds amounted to 91.5% as of December 31, 2010, up from 91.3% a year earlier.

Gazprombank posted a net profit of 66.3 billion rubles in 2010, up from 58.8 billion rubles in 2009. Excluding the share attributable to minority shareholders, Gazprombank net profit rose 4.9% to 56.881 billion rubles in 2010 compared with 54.255 billion rubles in 2009.

Total comprehensive income was 76.6 billion rubles, up from 65.1 billion rubles in 2009.