Bank Annual Report 2014

Transcription

ANNUAL REPORT 2014
Hypo Alpe Adria and
Hypo Alpe-Adria-Bank, d. d.
Slovenia
ANNUAL REPORT 2014 Hypo Alpe Adria and Hypo Alpe-Adria-Bank, d. d.
Index
Introduction4
Significant events in 2014
5
The Management Board
8
Responsibilities: 8
Address by the Management Board
9
Report by the President of the Supervisory Board
11
Presentation of the Bank in Slovenia 12
Vision of the Bank
12
Mission12
Values12
Customer relations
Milestones in the Bank’s history
13
Corporate and Working bodies
14
Organizational structure 16
Business network 17
Business report
Internal organization
39
Expectations for the Future
41
Social Responsibility of the Bank 42
Responsibility to employees
42
Responsibility to owners
45
Responsibility to clients
45
Responsibility to the wider community
45
Responsibility to supervisors and the state
46
Subsequent events
47
Financial Report
48
Statement of Management’s Responsibilities48
Independent Auditor’s Report
49
Financial statements
51
Income statement
51
Statement of comprehensive income
52
Statement of financial position 53
General economic conditions in 2014
18
18
Business results in 2014
20
Statement of changes in equity - Bank
54
Financial highlights
20
Statement of changes in equity - Group
54
Financial position
21
Statement of cash flows
55
Financial result 24
Notes to Financial Statements
57
Basic information
57
Highlights26
Important accounting policies
58
Financial position of the Group
27
Notes to the income statement
74
28
Notes to the statement of financial position
82
30
Other notes
105
Corporate Banking
30
Subsequent events
111
Retail Banking
33
Financial markets
36
Group financial results in 2014
Bank’s Operations by Segments
2
13
Operations37
26
Financial Risk Management
Credit risk 112
114
Liquidity risk
134
Market risk 136
Fair values of assets and liabilities (Bank)
142
Capital risk
145
Operational risk
147
Pertinent information
148
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introduction
Introduction
Hypo Alpe-Adria-Bank, d.d., with its headquarters at
Dunajska cesta 117, Ljubljana, is a Slovenian public limited
company, registered for the providing of universal banking
services in the Slovenian market.
Since 30 March 2014 Hypo Bank is in 100-percent ownership of
Hypo Group Alpe Adria AG (on 30 October 2014 the company
was renamed from SEE Holding AG), with its headquarters
in Klagenfurt, Austria.
Current ownership of Hypo Alpe Adria AG:
Republic of Austria (100 percent holding). On
22 December 2014, an American private equity firm Advent International and the European
Bank for Reconstruction and Development
(EBRD) signed an agreement for the purchase of Hypo network in Southeastern Europe.
Before that (since 30 September 2009) the Bank was in 100%
ownership of Hypo Alpe-Adria-Bank International AG with
its headquarters in Klagenfurt, Austria, also owned by the
Republic of Austria. For the purpose of restructuring at the
Group level, on 30 March 2014 shares were transferred from
Hypo Alpe-Adria-Bank International AG to SEE Holding AG.
Depending on the content of the annual report, the subsidiary Hypo Alpe-Adria-Leasing d.o.o. is referred to as Hypo
Leasing or Hypo Alpe-Adria-Leasing.
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introduction
Significant events in 2014
January
Together with Hypo Leasing and investor Tridana d.o.o.
the Bank presented to the general public the completed
Situal project in the center of Ljubljana and offered it on
the market for sale or renting.
Hypo sponsorship project, “The EuroBasket basket of
services 2013” received the ESA silver award in category “Best in Europe”. The prize was awarded at the award
ceremony in London.
February
On Valentine’s Day Hypo Bank held an Open Day in all
its branches with a special offer for all those who visited
the bank as a couple.
March
Our Bank is one of the two banks in Slovenia for which
the Bank of Slovenia confirmed that the recapitalization
is no longer necessary, taking in account the already executed activities and the capital adequacy ratio at the end
of 2013.
April
The Bank presented its range of services at the Career
Fair “Moje delo 2014”.
In the year of the Football World Cup within the all-year
sales campaign “Win with the Hypo team”, the Bank offered two attractive “football services” to the existing and
new customers - housing and cash loan, and prepared a
prize contest “With Hypo team to South America” with
the main prizes: 3-times exclusive trip with the Slovene
football team - a 14-day tour of South America and attendance of matches against Uruguay and Argentina for
two persons, as well as other practical prizes.
May
The Bank updated some personal packages for banking services and in cooperation with ERGO insurance
company’s subsidiary in Slovenia added a wide range of
insurance services.
The Bank prepared a new bank service for its customers,
insurance and at the same time saving for a care-free
senior age, called Hypo pension.
Under the sponsorship of the 9th dm run for women the
Bank presented its range of services.
In Jesenice branch the Bank prepared Open Door Days
for its clients.
As part of the Bank’s internal humanitarian project
“HypoDay for a good cause”, over 40 employees of the
Bank and Hypo Leasing helped clearing the area around
the Oton Župančič nursery, units Živ Žav and Ringaraja,
in Ljubljana.
Together with Hypo Leasing the Bank has in the context
of campaign “With Hypo team to South America” taken
the lucky winners, along with several clients, on a 14-day
tour of South America, in addition to attending the soccer
matches against Uruguay and Argentina.
June
The financial group Hypo Alpe Adria in Slovenia has
achieved a major step in the development and successfully
restructured Hypo Leasing d.o.o. This way it has fulfilled
one of the requirements of the European Commission
in the process of restructuring the international Group
Hypo Alpe Adria and underwent intensive preparation
for privatization.
Dejan Kaisersberger joined the Management Board of
the Bank as the forth member.
As the official financial partner and sponsor, the Bank
endorsed the local event “Brežice - my town”.
In the year of the Football World Cup the Bank offered
the second prepaid MasterCard card with a football motif,
and prepared a special range of services for customers
during the world championship. At the same time the
Bank carried out two prize games with practical rewards:
“Predict the winner of the Football World Cup” and “Sign
up 3 on 3 team in street football”.
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introduction
At the traditional annual Banking Games, the Bank employees took the overall 6th position among 21 Slovenian
banks. The Bank placed 1st place in cross country for
women and men, and 3rd place in the following categories:
women’s basketball, volleyball women, men shooting and
men shooting individually.
July
FATCA - The Foreign Account Tax Compliance Act enters into force, adopted by the United States on 18 March
2010. The Bank in accordance with the guidelines of the
Hypo Group carries out the necessary procedures for
compliance with the FATCA and is preparing the first
report, due in 2015.
As part of the final event of the Street Football the Bank
prepared Open Days at the Maribor Center branch.
August
Together with Hypo Leasing the Bank signed a new
sponsorship agreement with the Football Association of
Slovenia for the period until July 2016, i.e. until the end
of European Football Championship EURO 2016.
As part of the sponsorship of the Slovenian national football team, and in the light of the qualifying matches for
EURO 2016, the Bank together with Hypo Leasing prepared a prize game “With Hypo team to London” with the
grand prize being a VIP experience with the Slovenian
football team - an all expenses paid trip to London for
two to see a football match England : Slovenia EURO 2016
and other practical prizes.
The Bank together with Hypo Leasing presented its
range of financial services at the AGRA International
Agricultural Fair.
To mark the 63rd Ljubljana Festival, the Bank and Hypo
Leasing sponsored musical Evita.
September
The Bank has moved its Maribor branch from Ptujska
cesta 133 to a new location within the Mercator Centre
Maribor Tabor II, Ulica Eve Lovše 1, and on this occasion
prepared a special offer for its customers.
6
The Bank together with Hypo Leasing took part in the
47th International Trade Fair in Celje and presented its
range of financial services. On a municipal holiday of
Nova Gorica the Bank prepared a week of Open days for
its customers.
We also joined a humanitarian sponsorship program
“Botrstvo” (Godfatherhood), carried out by the Association
of Friends of Youth Moste Polje.
October
Hypo Alpe-Adria-Bank International AG has received
approval for the sale of all shares of Hypo SEE Holding
AG (and indirect participation that Hypo SEE Holding
has in “non-Austrian” banking subsidiaries) and, consequently, banking network in South-East Europe to
Advent International and its co-investor, European Bank
for Reconstruction and Development (EBRD).
With a capital injection of EUR 6 million in the equity of
the subsidiary Hypo Leasing the Bank became its 100%
owner.
As part of the sponsorship “Brežice - my town” we presented our products and services at the Business-craft
and Agricultural Fair in Brežice.
The Bank prepared for its Ljubljana - Šiška branch customers a one-day event called “Kostanjevanje”, related to
the season of chestnuts.
November
Together with Hypo Leasing the Bank has in the context
of campaign “With Hypo team to London” taken the lucky
winners, along with several clients to a qualifying match
England : Slovenia.
Together with Hypo Leasing, the Bank took the second
place at the SPORTO Conference 2014 in the category
of Best sports sponsorship with the project “Win with
Hypo team”.
December
Advent International and the European Bank for
Reconstruction and Development (EBRD) have signed
introduction
an agreement to acquire Hypo Group Alpe Adria AG, the
southeast banking network of former Hypo Alpe-AdriaBank International AG from HETA Asset Resolution AG.
The transaction will be carried out after the approval by
the European Commission. This is one of the major milestones in the history of Hypo Group.
The Bank, together with Hypo Leasing opened an art
exhibition of authors Barbara Zupanc and Franjo Funkl
- Frenk.
The Bank and Hypo Leasing awarded internal prizes
“HippOSCARs” for excellence in the Hypo Group, in
seven categories.
A New Year’s party was organized for children of
employees of the Bank and Hypo Leasing.
As part of the festive season celebrations and together
with Hypo Leasing we invited our top clients to attend
the theatre performance “Desert” with Tin Vodopivec.
Together with Hypo Leasing, the Bank sponsored the ice
hockey tournament “Ice Fest 2014” that took place at Trg
Republike in Ljubljana.
Together with Hypo Leasing the Bank signed a new sponsorship agreement with football club Olimpija for 2015.
As part of the festive season celebrations, the Bank
launched a basket of festive services for existing and potential customers (iQ transaction account free of charge
for ever, personal packages of banking services (PLUS,
E or TOP) with 6-month free-of charge account management), and improved access to the aforementioned
products with Hypo Banking Points in several shopping
centres: Planet Tuš Koper, Qlandia Nova Gorica and
Citycenter Celje (in addition to Qlandia Krško).
In cooperation with MasterCard Slovenia the Bank prepared a prize game and a number of benefits for all existing and new users of Hypo MasterCard cards.
We also created a new bonus program called “Invite your
friends and strenghten the Hypo team” which rewards
existing and new customers.
Employees of the Bank and Hypo Leasing collected more
than 30 boxes of food with longer shelf life for families in
need. This was organized as part of the “HypoDAY for a
good cause” project.
The Bank together with Hypo Leasing donated the funds
earmarked for New Year presents to socially deprived families chosen by the Association of Friends of Youth, thus
making their Christmas holidays special. Additional funds
were donated to “Sonček” (Sun) society, in support of their
socio-humanitarian program on the 18th “Sunshine Day”.
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introduction
From left to right: Dejan Kaisersberger, Member, dr. Heribert Fernau, President, mag. Marko Bošnjak, Member, mag. Matej Falatov, Vise - President
Responsibilities:
dr. Heribert Fernau,
President of Management Board (CEO, CFO, COO)
Internal Audit
Legal
Compliance & Security
Human Resources
Economic Research
Project Management
Procurement
Operations
ORG/IT
Collection
Real Estate Management
mag. Matej Falatov,
Vise – President of Management Board (CMO)
Marketing & Corporate communication
Sales Planning & Controlling
Segment, Product & Channel Mgt. Retail
Corporate & Public Finance
Retail Sales Force Mgt.
8
mag. Marko Bošnjak,
Member of Management Board (CRO)
Retail Risk Management
Credit Management
Risk Controlling
Credit Rehabilitation
Credit Processing
Dejan Kaisersberger,
Member of Management Board (CFO)
Accounting & Reporting
Financial Controlling
Balance Sheet Management & Treasury
introduction
Address by the Management Board
Dear Business Partners and Colleagues,
Year 2014 left a special mark on Hypo Slovenia and the entire Hypo Group. We made a last step in restructuring and
transferred the non-strategic part of the portfolio to the new
company, Heta Asset Resolution, d.o.o., whose mission is to
sell the investment portfolio while maintaining the value of
the property with the appropriate measures for the recovery
of debts or restructuring of assets. In this way we have fulfilled one of the commitments to the European Commission
and the owner, the Republic of Austria. In October 2014
we have received a confirmation that all the restructuring
activities were successful. Namely, Hypo Alpe-Adria-Bank
International AG has taken a decision to sell all shares of
Hypo SEE Holding to Advent International and its co-investor, the European Bank for Reconstruction and Development
(EBRD). Negotiations were completed in December 2014.
Advent International and the EBRD signed an agreement to
acquire Hypo Group Alpe Adria AG. Official confirmation
of the transaction by a competent authority is underway. We
believe the deal will be completed successfully, enabling our
Group a new perspective of growth.
On the Slovenian market activities and measures took place
to stabilize the banking system. Following the record high
recapitalization in 2013, the Government of the Republic of
Slovenia, after the approval of the European Commission,
recapitalized Abanka and Banka Celje and with the transfer
of bad assets of the two banks to the Bank Asset Management
Company (DUTB) completed the planned measures to stabilize the banking system.
Our competence and strategy for the continuation of Hypo
network in South Eastern Europe were key criteria in the
decision on the sale. We followed this strategy in Slovenia
as well. With quality services that provide customers with
more we were able to retain more than 70 thousand clients.
With individual approach we maintain professional, stable
and sustainable relationships with our clients. We optimized
our sales network and made it customer friendly to existing
and potential clients. With the purchase of Hypo Leasing
d.o.o. we integrated leasing services into the banking business, which allows us to offer our clients comprehensive
financial management in one place.
We achieved stabilization of the business, which is reflected
in the stable liquidity, greater pre-impairment operating
profit and ultimately, the arrival of a new strategic partner.
In the reporting year the Bank paid special attention to risk
management, which enabled timely, responsible and appropriate actions, thus delivering enhanced safety of operations,
particularly to its customers. In the interest of a successful
sale of Hypo to a new owner, two global auditors, KPMG
and Deloitte, were participating in this business year-end
closing. For the Bank and its new daughter in Slovenia, Hypo
Leasing d.o.o., the bank nominated KPMG Slovenia, which
in its work at the request of the upcoming new owner collaborated with the German subsidiary of Deloitte in order
to ensure the greatest possible transparency and compliance
with standards, legislation and the rules applicable for each
country where Hypo operates.
Despite the successful business operations, the consolidated
result of the Bank at the end of the year was negative in the
amount of EUR 42 million. This is mostly due to additional
impairments and provisions amounting to EUR 61 million
and which are primarily the result of the sale of the Group
with the intention to embark on a new path with the new
owner in a better condition and with a larger stock of impairments. As part of the restructuring, we transferred additional non-core investments to another company, which
decreased total assets by 4 percent and at the end of the
year amounted to EUR 1,349 million. We kept the number
of customers in Slovenia at the same level as the year before
(over 70 thousand), which shows that the customers have
confidence in us as the financial institution. Capital of the
Bank has decreased by EUR 36.6 million due to increased
operating losses. For this reason the Bank increased its capital in 2015 in the amount of EUR 47 million and ensured an
even higher capital adequacy than expected by the regulator.
The recapitalizations are carried out in accordance with the
restructuring plan of operations and the sale to the new owner. With this capital increase the Bank has strengthened its
commitment to maintain high levels of capital adequacy
which will further enhance the stability of the business.
From the outset on the Slovenian market our Bank has acted
as a socially responsible company. We want to give back to
9
introduction
the society in which we operate. For several years we have
been donating the funds earmarked as Christmas and New
Year’s gifts for our business partners to families in social
distress and we were able to at least during the holidays
bring smiles to their faces. Our employees were happy to
contribute their share as well. We have been actively involved
in the sponsorship program for the last two years.
We are also active in our care for employees. We have upgraded activities within the project “Family Friendly Company”
and introduced additional measures that help our employees
balance their family life with work. Along with their family members our employees are also regularly included in
sponsorship and donation activities which help enrich their
everyday workday.
Supporting sports and sporting activities is our contribution
to a better, healthier lifestyle. With sponsorship funds we
are involved in the lives of those who represent our country
in the European and global environment. In this way we
demonstrate our support of athletes, we salute their endurance, discipline, competitiveness and desire to accomplish
goals. We are actively involved in the cultural life by supporting events on national and local level and take part in
major trade fairs and business events.
We believe that by working hard in the past we have earned
a bright future. This has also been confirmed by the arrival
of a new owner. We are confident that after their formal
commencement of duties the new owner will be able to integrate into our operations in a positive manner, with the
aim of using their knowledge and different views to contribute to ensuring an even greater competition in the market.
Our goal is to create future from the core and focus on active communication with employees and customers. With
cross-selling we will focus on the sale of housing loans, deposits, investment and leasing services to individuals, micro
and medium-sized enterprises. We believe that our ambitious,
persistent, hardworking and positive attitude will help the
Hypo team raise the standards of excellence in the market
by offering high quality and innovative financial services.
Our clients are invited to our special events. We are always
preparing various benefits for customers and event appropriate activities so that they can actively participate. They
undoubtedly add value and strengthen professional relationships on an informal basis.
We will strive to be a SUPPORTIVE partner, work together with you in a FRIENDLY manner, and most of all, we are committed
to be FAIR. We believe that our partnership will last for many years to come.
10
Dejan Kaisersberger,
Mag. Marko Bošnjak,
Mag. Matej Falatov,
Dr. Heribert Fernau,
Member
Member
Vise President
President
introduction
Report by the President
of the Supervisory Board
In fiscal year 2014, the Supervisory Board of Hypo AlpeAdria-Bank, d. d., held four regular meetings. The work
was performed in accordance with the Bank’s Articles of
Association and Rules of Procedure of the Supervisory Board.
Materials prepared in advance and explanations given at
sessions enabled the Board to responsibly and in accordance
with the Slovenian and Austrian legislation supervise the
operations of the Bank. The Bank’s Management Board also
provided the Supervisory Board with all the documentation
on the basis of reviews of the Bank’s operations.
The Bank’s Management Board regularly informed the
Supervisory Board members about the Bank’s operations.
In accordance with Article 282 of the Companies Act and
based on current monitoring of the Bank’s operations, the
periodical reports by the Internal Audit department and the
unqualified opinion issued by the auditing company KPMG,
d.o.o., the Supervisory Board analysed the Business Report
of the Hypo Alpe-Adria-Bank in 2014. The Report will be
presented at the General Meeting. In accordance with Article
230 of the Companies Act, the Supervisory Board approved
the proposal by the Management Board regarding appropriation of the net profit/loss and recommended it for adoption
at the Bank’s General Meeting of Shareholders.
and provisions, leading to a negative result at the end of
the year. For this reason the Bank increased its capital in
2015 in the amount of EUR 47 million and ensured an even
higher capital adequacy than expected by the regulator. The
recapitalizations are carried out in accordance with the restructuring plan of operations and the sale to the new owner.
With this capital increase the bank has strengthened its commitment to maintain high levels of capital adequacy which
will further enhance the stability of the business.
The Bank paid special attention to risk management, which
enabled timely, responsible and appropriate actions, thus
delivering improved safety of operations, particularly to its
clients.
We believe that the managements of both Hypo Slovenia
companies (Hypo Alpe-Adria-Bank, d. d. and Hypo Leasing,
d. o. o.) will continue the good work, ensuring the Bank’s
successful performance in the Slovenian market under the
new owner.
Johannes Leopold Proksch
President of the Supervisory Board
Year 2014 left a special mark on Hypo Slovenia and the entire Hypo Group. We took the last step in restructuring and
transferred the non-strategic part of the portfolio to the new
company, Heta Asset Resolution, d.o.o., whose mission is to
sell the investment portfolio, while maintaining the value of
the property with the appropriate measures for the recovery
of debts or restructuring of assets. In this way we have fulfilled one of the commitments to the European Commission
and set firm foundations for the future owner. In December
2014 Hypo Alpe-Adria-Bank International AG (HBInt) made
a decision to sell all shares of Hypo SEE Holding to Advent
International and its co-investor, the European Bank for
Reconstruction and Development (EBRD). The sale of the
Hypo network will be official once the transaction is approved by all competent authorities.
Also in 2014 in the light of the poor conditions on the financial and economic markets and poor business decisions taken
in the past, the Bank was again forced to form impairments
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introduction
Presentation of the Bank in Slovenia
Vision of the Bank
Values
Hypo Alpe Adria is the leading provider of banking and leasing
services in the Alpe-Adria region. Our services are founded
on strong and reliable relationships with clients, which sets
us aside from other banks.
Every love begins with flirting and it is this very sensation
that leads to a relationship and partnership that inspired
our values:
We are an international Group operating locally as our roots
are set in individual regions and their traditions. Our services are adjusted to local clients and we assume economic
and social responsibility in individual regions. Local roots
and our high reliability help us build special and strong relationships with our clients that surpass the purely financial
transactions. This is the key characteristics that makes us the
leading provider of banking and leasing services in the region.
Mission
Our clients know that we are a reliable partner as we provide
sustainable services of the highest quality, thus supporting
them in achieving their business and personal goals.
We are a reliable partner, building our services on trust, safety
and sustainability. Our employees follow these values and
ethical principles and help to make the Group the best it can
be. We believe in the highest possible standards in terms of
sustainability and quality of our work and services we provide. This is our contribution to the future of the Alpe-Adria
region: supporting our clients in their efforts to achieve their
individual personal and business objectives.
F – Fair
L – Local
I – Integrity
R – Respectful and Responsible
T – Transparent
Fair
We are fair and helpful in our relationships. We share information and adapt our terms to the needs of our clients.
We do not promise anything that we cannot deliver. We are
reliable, and approachable even in difficult circumstances.
Local
We are proud to be part of the local community. We are
united through common habits and customs, tradition and
history. We speak the same language and together we create
future.
Integrity
Our integrity shines through the courtesy we show to each
and every customer. We treat our partners in dialogue as
equals and communicate with them in a manner that is frank,
fair and polite. Any problems that may come our way are
discussed and resolved objectively and amicably.
Respectful and Responsible
We listen to the needs of others with respect, tolerance and
responsibility. We value their opinions and listen carefully to
them in order to identify with them. We respect agreements
made and assist each other.
Transparent
Everything we do is clear and unambiguous and this is true
for our internal working relations as well as our relations
with our customers. We reveal processes and facts that lead
to our decisions.
12
introduction
Customer relations
Supportive. Friendly. Fair.
These words are the essence of our relationship with our
customers. They convey what we expect from ourselves and
our services.
Our advice is professional and directed towards reaching
solutions. Our approach to customers is sensitive; we take
time to listen in order to ensure efficient assistance. We act as
partners to our customers in order to achieve the set objectives. We take the initiative and are always ready and willing
to assist when the need arises.
Our approach to our business partners is friendly. Everything
we do is well considered, reliable and based on our understanding of individual issues. Our response is fast and to the
point, we approach every transaction with enthusiasm. Our
word is solid and sealed with a handshake; everything we
do and each of our solutions are based on the code of ethics.
We strongly believe in equal opportunities for all, fairness
and objectivity.
Milestones in the Bank’s history
1994 – entry of Hypo Leasing d.o.o. into Slovenian
market
1999 – establishment of Hypo Alpe-Adria-Bank d.d. with
its headquarters in Ljubljana
2000 – Hypo Alpe-Adria-Bank d.d., Business Unit Celje
2001 – Hypo Alpe-Adria-Bank d.d., Business Unit
Maribor
2009 – Hypo Alpe-Adria-Bank d.d., Branch Jesenice
2009 – Change in the ownership of the Hypo AlpeAdria Group following 100-percent holding
of the Republic of Austria
2010 – Reshuffle of the Management Board of Hypo
Alpe-Adria Group in Austria
2011 – Hypo Alpe-Adria-Bank d.d., Branch Moste
2002 – Hypo Alpe-Adria-Bank d.d., Business Units
Koper and Kranj
2011 – Hypo Alpe-Adria-Bank, d. d., Branch Trg Leona
Štuklja (change of venue)
2003 – Hypo Alpe-Adria-Bank d.d., Branch Tyrševa,
Maribor
2011 – Reshuffle of the Management Board at the
initiative of the Supervisory Board
2004 – Hypo Alpe-Adria-Bank d.d., Ljubljana – new
headquarters of the Bank
2012 – Changes in the composition of the
Management Board
2004 – Hypo Alpe-Adria-Bank d.d., Branch Trg
Osvobodilne fronte, Ljubljana and Business Unit
Murska Sobota
2014 – Changes in the composition of the
Management Board
2005 – Hypo Alpe-Adria-Bank d.d., Branch Domžale,
Ljubljana and Business Unit Novo mesto
2006 – Hypo Alpe-Adria-Bank d.d., Business Unit Nova
Gorica
2007 – Hypo Alpe-Adria-Bank d.d., Branch Center,
Ljubljana and Branch Trbovlje
2008 – Hypo Alpe-Adria-Bank d.d., Branch Šiška,
Ljubljana, Branch Brežice and Branch Velenje
2014 – Successful completion of the restructuring
of Hypo in Slovenia
2014 – Moving the Maribor branch from Ptujska cesta
to a new location in the shopping center Maribor
Tabor II, and partly to the existing office at Leon
Štukelj Trg.
2014 – Signing of the sales agreement for the sale of
Hypo Group
2008 – the Management Board reshuffle
13
introduction
Corporate and Working bodies
According to the Articles of Association, Hypo Alpe-AdriaBank has the following corporate bodies:
Management Board
Supervisory Board
Shareholders’ Assembly
According to the Articles of Association, the Management
Board is composed of two or more members appointed
by the Supervisory Board. As at 31 December 2014, the
Management Board members include:
dr. Heribert Fernau - President of the Management
Board,
mag. Matej Falatov - Member and Vice President,
mag. Marko Bošnjak - Member of the Management
Board,
Dejan Kaisersberger - Member of the Management
Board.
The fourth member, Dejan Kaisersberger, joined the
Management Board on 24 June 2014.
The Supervisory Board is composed of four members. As
at 31 December 2014, the following are the members of the
Supervisory Board:
Mag. Wolfgang Edelmüller’s and Sebastian Firlinger’s mandates expired in May 2014.
Shareholders Assembly Meeting
The Management Board convenes the Shareholders’ Meeting
in cases laid down by law or in the Articles of Association
or when this benefits the Bank. Four General Meetings of
Shareholders were convened in 2014, namely in June, July,
October and November.
At the Shareholders’ Meeting, the shareholders exercise their
rights in the matters concerning the Bank. Our Shareholders’
Meeting is universal as the Bank only has one shareholder
(Hypo Alpe-Adria International AG holds a 100-percent
interest in the Bank).
Advisory bodies of the Management Board:
Management Collegium
Committees:
Bank’s liquidity Committee
mag. Johannes Leopold Proksch - Chairman
Bank’s Management Board Credit Committee
mag. Stephan Norbert Holzer - Deputy Chairman
of the Supervisory Board
Bank’s Credit Committee
mag. Buchacher Gerhard – Member of the
Supervisory Board
Marko Popovič – Member of the Supervisory
Board
The Supervisory Board met four times in 2014. Changes in
the composition of the Supervisory Board were as follows:
at the second session, on 3 July 2014 Stephan Holzer
as Deputy Chairman and Gerhard Buchacher as
member joined the Supervisory Board
at the third session, on 17 September 2014, Claus
Peter Müller joined the Supervisory Board as member.
14
before the fourth session, on 10 December 2014,
mr. Claus Peter Müller resigned as the Member, and
Marko Popovič joined the Supervisory Board as the
new member. He was appointed on 28 November
2014.
Assets and Liability Committee - ALCO
Risk Executive Committee – RECO
Portfolio Steering Committee – PSC
Watch List Committee
Capital Steering Group Committee
Committee for Fraud Prevention
Committee for Approval of SRPs and impairments
Operational Risk Management, Internal Controls
and Reputation Risk Management Committee of
HAAB d. d. (OpRisk Committee)
introduction
Renumeration Committee
Complaint Commission
The Group’s Rules of Procedure of the Committee
for operational risk management, internal control
system, and reputation risk in Alpe-Adria-Bank, d.d.,
and Hypo Leasing, d.o.o.,
Integrated Operative Cost Management framework
- IOCOMO,
Rules of procedure of Capital Committee for monitoring the Bank’s capital,
Steering Committee RBACKO
Sales Committee - SACO
Audit Committee of the Supervisory Board
ISCO - Information Security Committee
The objectives, tasks, authorizations and composition of committees are laid down in the Rules on Organization and Job
Systematization of the Bank, as well as in the Rules on the
Powers, Authorization and Signatories in the Bank, while
the operation of the Bank’s corporate bodies is governed by
individual rules of procedure. Rules of procedure applicable
in 2014:
Rules of procedure of the Credit Committee of the
Management Board of Hypo Alpe-Adria-Bank d.d.,
Rules of procedure of Audit Committee of the
Supervisory Board in Hypo Alpe-Adria-Bank d.d.
Rules of Procedure of the Committee for operational
risk management, internal control system, and
reputation risk in Alpe-Adria-Bank, d.d., and Hypo
Leasing, d.o.o.,
Rules of procedure of the Committee for prevention
of fraud in Hypo Alpe-Adria-Bank d.d.,
Remuneration Policy
Fit & Proper Policy
Rules of procedure of the Credit Commitee of
Hypo Alpe-Adria-Bank d.d.,
Rules of procedure of the Management Board of
Rules of procedure of the Supervisory Board of
Rules of procedure and authorizations of the Risk
Executive Committee of Hypo Alpe-Adria-Bank d. d.,
Rules of procedure of Investment Committee for
supervision of specified investments,
Rules of procedure and authorizations of the Portfolio
Steering Committee of Hypo Alpe-Adria-Bank d.d.,
Rules of procedure and authorizations of the Assets
and Liabilities Committee of Hypo Alpe-AdriaBank d. d.,
Rules of procedure of the Investment Committee
for monitoring investments,
Rules of procedure of Capital Committee for monitoring the Bank’s capital,
15
introduction
Organizational structure
As at 31 December 2014
HBS Supervisory Board
Hypo Alpe Adria Bank d.d. Slovenia
Dunajska cesta 117, 1000 Ljubljana
Proksch J., Holzer S. Buchacher G., Muller C.P.M.
Hypo Alpe Adria Bank d.d.
Management Board
Fernau H., Falatov M., Kaisersberger D., Bošnjak M.,
CEO
Internal Audit
CFO
COO
Project management
ORG/IT
Accounting &
& Reporting
Reporting
Accounting
CMO
CRO
Credit Management
Marketing & Corporate
Communications
Sales Planning &
Controlling
Seniar Hren B.
Legal
Compliance & Security
Accounting & Tax
Business Solutions
IT Operations
Operative Regulatory
Reporting
Business Intelligence
Organisation Development
Financial Controlling
Real Estate Management
Procurement
Credit Underwitting
Operations
Production Support
CRE & Project Finance
& Turism Desk
Client & Account
Administration
AML
Investment Services
Balance Sheet
Management & Treasury
Ombudsman
Payment services
Economic research
Balance Sheet
Management
Debt Capital Markets
Corporate Monitoring
Payments
Treasury Sales
Collection
Early Collection
Financial Analysis
Market and Liquidity
Risk Control
Card Operations
Credit Back Office
Collection Back Office
Underwriting
Remarketing
Loan administration
Treasury & Investment
Banking Back Office
Credit Support
Back Office
Investment Banking
Back Office
Treasury Back Office &
Securities settlement
Restructuring
Effective from: 01.12.2014
Credit Processing
Credit Back Office
Credit & Collateral
Administration
Retail Sales Force Mgt.
Large Corporate Clients
& Int. desk
Product Management
Corporate & Public Finance
Public Finance
Project &
Structured Finance
CPF - East Region
Corporate Finance &
Leasing
Center LJ
Micro & SME Sales
CPF - W est Region
Stekleni Dvor Branch
Nova Gorica Branch
Corporate Finance &
Leasing Center NG
LJ Center Branch
Maribor Branch Center
Corporate Finance &
Leasing Center KP
Slovenska Branch
Maribor Branch Ptujska
Moste Branch
Murska Sobota Branch
Corporate Finance &
Leasing Center KR
Šiška Branch
Celje Branch
Corporate Finance &
Leasing Center NM
Domžale Branch
Velenje Branch
Credit Risk Control
Operational Risk and
Control Management
Forced Collection
Facility Management
Human Resources
Account Maintenance &
Client Support
Corporate & Public
Finance Desk
Corporate & Public
Finance
Risk Controlling
Corporate Finance &
Leasing Center CE
Corporate Finance &
Leasing Center MB
Corporate Finance &
Leasing Center MS
Trade Finanace
and Guarantees
CPF - Central Region
Document centre
Work out
Credit & Collateral
Administration
Contact centre
Portfolio and SRP reporting
Collateral Monitoring
Segment, Product
& Channel Mgt.Retail
SME
Individual Clients &
Retail Products
Distribution Channels
Affluent
Card Management
16
Area Manager - Leasing
Area Manager - Retail
Area Manager - Micro
& SME
Koper Branch
Kranj Branch
Ptuj Branch
Jesenice Branch
Trbovlje Branch
Novo mesto Branch
Brežice Branch
introduction
Business network
The Bank’s business network has not increased in 2014.
The Bank has 19 branches in 14 towns and cities. During
the year activities were undertaken to move some of the
branches to more appropriate locations and to optimize the
business premises.
The Maribor branch at Ptujska cesta was closed down. Its
Retail department was moved to the Mercator Tabor II shopping center and the Corporate department to Trg Leona
Štuklja, to the existing branch.
In November 2014 the Nova Gorica Retail and Corporate
departments were rejoined at the same site, which will surely
contribute to the improved results of the business unit.
As part of the reorganization of the Hypo Group in Slovenia
in 2014 at the company’s headquarters and in several business
units optimization of the business premises was carried out.
Balance as at 31 December 2014:
17
business report
Business report
General economic conditions in 2014
International environment
Slovenia
The global economy in 2014 grew at a slower pace than expected, suggesting that the developed countries are still facing the consequences of the recent financial crisis. Weaker
growth was caused also by lower growth rates in developing countries, greater political risk and various austerity
measures.
The recapitalization of the banking system, reduced political
uncertainty, and especially increased foreign demand and
investments have contributed to the recovery of economic
activity in Slovenia. The main reason for recovery is export,
as infrastructure investments related to the acquired EU funds
reached their peak in 2014. The biggest positive surprise is
personal consumption, which due to lower unemployment
rates, stabilization of wages and lenient fiscal measures is
starting to show signs of recovery. Taking into account the
above factors and the third quarter data for 2014, growth in
2014 reached 2.4%.
Of the major economies only the US and the UK have
achieved positive conditions on the basis of improvement
in labor market conditions and loose monetary policy, while
the area of the European Union was faced with decreasing
economic activity, structural variations and the risk of deflation. China has reduced its economic activity due to the
growing problem of shadow banking, while Japan, despite
the monetarily expansive economic policy, cannot find a way
out from zero economic growth and deflation.
The end of 2014 shows a slight improvement in the situation.
2015 will be marked by the persistence of zero interest rates,
expansion of monetary policies, volatility of raw material
prices and the reduction in world trade, where particularly
lower oil prices will have on average a positive impact on
the global economy.
The expected lower level of infrastructure investments, deleveraging and restructuring of companies, gradual recovery of households and slower recovery of the EU economies
will lead to lower growth rates in 2015. However, with the
projected 1.6% growth in 2015 Slovenia will reach one of the
largest growths in the EU, in particular due to greater export competitiveness, gradual internal devaluation of other
markets and lower oil prices. The ECB monetary measures
(buying government bonds) will also have a positive impact
on the development of economic activity, together with an
Quarterly contributions to the growth in economic activity
20
15
10
5
0
-5
-10
-15
Household consumption
18
Government consumption
Gross capital formation
Net exports
business report
expansionary fiscal policy in healthy EU members and faster
implementation of structural reforms. The main negative
factor could be the potential additional downturn in the EU
due to tighter financial conditions, as a result of the reversal
of the FED’s monetary policy and/or delayed ECB measures.
higher than average rate in the European Union. The high
proportion of non-performing loans and zero interest rates
remain the key limiting factor of profitability, which will be
in the next few years (almost) the only foundation for raising
the capital adequacy.
The inflation rate in 2014 has reached an average of only
0.2% growth, mostly due to the persistent decline in raw
materials (mainly oil) and slower normalization of prices
of imported food. With the gradual recovery in domestic
demand, continued fiscal consolidation and controlled wage
growth, inflation in 2015 shall remain below 1%.
The restructuring of the sector is reflected in the negative
results of operations, which, according to preliminary estimates exceed 50 million in losses, and in further drop in
balance-sheet total in 2014. Transfer of bad debts to the Bank
Asset Management Company and reduction of the loan portfolio of enterprises due to the continuation of active and
passive restructuring and of households due to the negative
mood, led to a reduction of the total assets by EUR 3 billion,
resulting in the final balance of EUR 38 billion.
Positive mood and the recovery in economic activity is affecting the increase in employment, which will continue
in 2015, despite the precaution of enterprises regarding the
new employment. The unemployment rate will also decrease
(down by 0,20.p to 9.8%) as a result of the implementation of
active employment policy measures. Average gross and net
wages show gradual recovery based on the growing business
in the private and public sectors, which for the first time
in two years is going to receive additional payments from
retained promotions. Total net earnings will grow in 2015
on an annual basis by 1%.
Slovenian banking environment
In 2014 the Slovenian banking system continued consolidation and restructuring. After a record recapitalization
in 2013, the government after the approval of the European
Commission increased the capital of Abanka and Banka Celje
and with the transfer of non-performing assets of the two
banks to the Bank Asset Management Company (DUTB)
completed the planned measures to stabilize the banking
system. In accordance with the commitments on state aid,
the Government of the Republic of Slovenia will privatize the
nationalized banks: the two largest Slovenian banks latest by
2017, and the two remaining banks latest by 2019.
In 2015, we expect further consolidation of business processes and business optimization and restructuring of the
underlying business policies in the field of retail banking
and small and medium-sized enterprises. Due to zero (negative) interest rates special focus will be on the provision of
cost-efficiency and upgrade of (new) non-interest income.
The process of deleveraging companies will pass into the
final phase, as a result of which the income risk will remain
high, but not as intense as in recent years. The deleveraging
process of the state will through redemption of obligations
also impact the lower liquidity of the banking system.
The stabilization of the banking system is also reflected in the
14.5% capital adequacy of the highest quality capital, ranking
Slovenian banking in the European average. Despite the
considerable improvement in capital adequacy last year, the
system still faces profitability risks, restructuring needs of
enterprises and, consequently, a relatively high proportion
of non-performing loans - the latter, despite the transfer
of non-performing loans, with 13% of bad debts presents a
19
business report
Business results in 2014
Financial highlights
INDICATORS
EUR 000’
31 December 2014
31 December 2013
31 December 2012
1,349,442
1,441,502
1,900,801
824,977
743,117
727,987
a) legal and other persons
543,705
494,778
474,921
b) retail
281,272
248,339
253,065
1,101,189
1,247,134
1,643,995
1. BALANCE SHEET
Total assets
Aggregate amount of deposits by non-banks
Aggregate amount of loans to non-banks
613,970
725,916
1,080,884
b) retail
487,219
521,218
563,567
Total capital
89,687
126,297
153,062
Impairment of financial assets at amortized cost, and provisions
100,353
54,829
69,146
Volume of off balance
721,434
960,057
896,716
27,722
22,706
33,396
2. INCOME STATEMENT
Net interest income
Net non-interest income
17,547
11,875
11,605
Labor costs, general and administrative expenses
25,698
25,540
28,983
2,274
2,240
2,319
Impairments and provisions
Depreciation
(56,133)
(96,528)
(23,363)
Pre-tax profit/loss from ordinary and discontinued operations
(38,836)
(89,727)
(9,663)
(1,521)
(5,934)
(1,753)
Capital adequacy
12.97%
14.31%
13.46%
Tier I capital ratio
9.31%
10.39%
9.55%
Tier I capital
86,140
120,388
147,579
5.51%
2.88%
3.31%
Interest margin
1.93%
1.28%
1.71%
Financial intermediation margin
2.95%
1.49%
2.22%
Income tax from ordinary and discontinued operations
3. PERFORMANCE INDICATORS
a) Capital
b) Quality of assets
Impairment of financial assets at amortized cost and provisions for commitments/
reclassified items
c) Profitability
(2.81%)
(5.07%)
(0.49%)
Pretax return on equity
Return on assets after tax
(30.39%)
(65.79%)
(6.12%)
Return on equity after tax
(31.58%)
(68.85%)
(7.23%)
1.95%
1.57%
1.60%
Average liquid assets/average short-term deposits of non-banks
4.85%
7.78%
7.64%
Average liquid assets/average assets
4.96%
4.90%
2.05%
481
487
473
1
1
1
41,706
41,706
41,706
2.15
3.03
3.67
d) Operating costs
Operating costs/average assets
e) Liquidity
4. EMPLOYEES
At year-end
5. SHARES AT YEAR-END
Number of shareholders
Number of shares:
Book value per share
20
Performance indicators are calculated using the Bank of Slovenia methodology.
business report
Financial position
At 31 December 2014 the Bank’s total assets amounted to EUR
1,349 million, a 6-percent decline over 2013.
The structure of assets:
The share of loans to non-banks accounts for 82 percent. In
2014 the long-term investment of the bank in the capital of
the leasing subsidiary totalled EUR 3,3 million.
During the year the structure of liabilities was changing
primarily with regards to deposits and loans; the share of
primary sources (used by the Bank to improve diversification
of its sources of financing) rose to 62.0 percent; debt securities are included as well. Deposits and loans of banks have
decreased from 36 to 30.0%. Provisions and other liabilities
remained at approximately the same level as in 2013.
Financial liabilities to non-banks increased by EUR 54 million
or 7 percent to EUR 835.4 million at the end of 2014. This
increase is the result of the Bank’s intense efforts to strengthen the primary sources and is in line with its strategy of
restructuring the liabilities towards primary sources of funds.
The Bank’s capital decreased in 2014 by 36.6 million due to
increased business loss.
Loans to banks increased by 18 percent in 2014 to EUR 11,9
million at the year-end. Almost the entire amount represents
demand deposits.
Loans to non-banks fell in 2014 by 12 percent or EUR 146,6
million due to higher repayments, additional risk provisions
and lower new business due to more conservative credit
policy. At the end of 2014 loans to non-banks amounted to
EUR 1,101 million.
Financial assets held for trading decreased by 34 percent in
2014 as a result of revaluation and disposal of certain financial
assets. By the end of the year, financial assets held for trading
amounted to EUR 4,3 million.
Available-for-sale financial assets decreased by 11 percent
in 2014. By the end of the year, available-for-sale financial
assets amounted to EUR 44,8 million, accounting for 3.3
percent of total assets.
Financial assets held to maturity remained at approximately
the same level as in 2013. The portfolio balance at the end
of 2014 amounted to EUR 84,6 million, accounting for 6.3
percent of total assets.
Financial liabilities to banks account for 30.4 percent of assets
and represent the second largest share in total structure of
liabilities. Compared to the previous year they fell by EUR
109.6 million. At the end of 2014 they amounted to EUR
409,6 million; of that, subordinated liabilities amounted to
EUR 73 million, whereas the remaining amount represents
deposits and borrowings from banks.
21
business report
Assets structure
2014
Financial assets held for trading
Available-for-sale financial assets
Loans to Banks
Loans to clients
Held-to-maturity financial assets
Investment in capital of subsidiaries
Cash in hand, tangible and other assets
22
Assets structure
2013
Loans to Banks
Loans to clients
business report
Liabilities structure
2014
Financial liabilities held for trading
Deposits from banks
Deposits from clients
Equity
Provisions and other liabilities
2013
Deposits from banks
Equity
23
business report
Financial result
General
The result of the Bank at the end of 2014 was negative. The
loss amounted to EUR 40,357 thousand.
The Bank recorded net financial and operating income of
total EUR 47,519 thousand in 2014, a rise of 26 percent compared to the year-end 2013. Administrative costs, labor costs
and costs of depreciation and amortization amounted to
EUR 27,972 thousand, which is at the same level as in the
previous year. The impairment of financial assets not measured at fair value through profit or loss and provisions for
off-balance-sheet items totaled EUR 55,077 thousand at the
year-end. The remaining part of the result is the loss of EUR
4,827 thousand, the majority due to taxes.
Financial result in the years 2014 and 2013
v
eur
EUR, 000’
,
,
,
-
,
-
,
-
,
-
,
-
,
-
,
-
,
-
,
-
,
,
Net interest
income
Net
commission
income
Income from
Dividends
Interest, fees and commission income
Net interest amounted to EUR 27,722 thousand at the end
of 2014, a 22 percent decrease over the previous year. Net
interest income represented with 59 percent the majority of
total net income. In the net income structure, the share of net
interest dropped by 2 percentage points, whereas the share
of net fees and commissions rose by 10 percentage points.
The net result from financial assets has increased sharply as
a result of the profit from the sale of financial investments.
A negative result from other net operating profit amounted
to EUR 1,848 thousand and mainly consists of tax on bank
assets and a tax on financial services. The increase in net
interest income resulted in an increase in the interest margin.
The interest margin compared to 2013 increased from 1.28
percent to 1.93 percent in 2014. The increase in net interest
margin is due to increased share of the primary sources of
24
Operating
expenses
Risk
provisions
Other
Profit/Loss
after tax
financing at lower interest rate rates. Lower interest rates on
primary deposits were a reflection of the general trend in
the Slovenian economy.
Net fees and commissions amounted to EUR 13,256 thousand
at the year-end and accounted for 28 percent of the Bank’s
net income. Compared to 2013, they decreased by 6 percent,
in accordance with the completed transfer of a portion of
loans to non-banks to a Group company, for which the Bank
received commission for the management of the transferred
portfolio. With net fees and commissions the Bank covered
47 percent of the Bank’s administrative costs.
At the end of the year net non-interest income amounted to
17,547 thousand EUR. Compared to 2013 it increased significantly (by 48 percent). Most of the increase was derived from
profits on sale of financial assets, realized in 2014.
business report
Income from dividends, net commission and interest income
Income from
Dividends
Net commission
income
2014
2013
Net interest
income
EUR 000’
Financial assets
In 2014 the Bank showed income in the amount of EUR
6,081 thousand from financial investments, which increased
significantly compared to 2013. Net profit from financial assets and liabilities not measured at fair value through profit
or loss is mainly generated with the divestment of shares of
Mercator, Petrol and Luka Koper, which in bank statements
represented financial assets available for sale.
Net loss from financial assets and liabilities held for trading
amounted to EUR 403 thousand and was realized primarily
from commissions for market risk security instruments.
The Bank realized EUR 110 thousand of net exchange rate
loss which is 10 percentage points less than in 2013.
Costs
In 2014 the Bank recorded EUR 27,972 thousand of administrative costs, which is an increase of 1 percent compared
to 2013. Majority of administrative costs are attributable to
labor costs, which accounted for 52 percent or EUR 14,432
thousand. General and administrative expenses accounted
for the remaining 48 percent or EUR 11,266 thousand.
The amortization/depreciation costs amounted to EUR 2,274
thousand in 2014, which represents a decrease of 1 percent
compared to the previous year.
Provisions
In 2014 the Bank set aside another EUR 881 thousand of net
provisions, which represents a decrease of almost 40 percent
compared to the previous year.
Impairment
In 2014 the Bank recognized EUR 55,252 thousand of impairment losses on loans. The Bank additionally impaired
in the amount of EUR 1,135 thousand and fixed assets in the
amount of EUR 175 thousand.
Tax
The Bank reversed EUR 1,521 thousand of deferred tax in 2014
on account of accumulated losses carried forward.
25
business report
Group financial results in 2014
Highlights
Highlights
EUR 000’
31 December 2014
1. BALANCE SHEET
Total assets
1,500,138
Aggregate amount of deposits by non-banks
816,562
535,290
b) retail
281,272
Aggregate amount of loans to non-banks
1,251,038
670,773
b) retail
580,265
Total capital
86,984
Impairment of financial assets at amortized cost, and provisions
106,577
Off-balance-sheet items
722,662
2. INCOME STATEMENT
Net interest income
36,141
Net non-interest income
16,415
Labor costs, general and administrative expenses
29,442
Depreciation
2,319
Impairments and provisions
(60,930)
Pre-tax loss from ordinary and discontinued operations
(40,134)
Income tax from ordinary and discontinued operations
(1,869)
3. PERFORMANCE INDICATORS
a) Capital
Capital adequacy
11.31%
Tier I capital ratio
8.04%
Tier I capital
83.363
b) Quality of assets
Impairment of financial assets at amortized cost and provisions for
commitments/reclassified items
5,14%
c) Profitability
Interest margin
Financial intermediation margin
Return on assets after tax
2,45%
3,57%
(2,85%)
Pretax return on equity
(31,46%)
Return on equity after tax
(34,22%)
d) Operating costs
Operating costs/average assets
2,16%
e) Liquidity
Average liquid assets/average short-term deposits of non-banks
4,85%
Average liquid assets/average assets
4,84%
4. EMPLOYEES
At year - end
The Bank acquired Hypo-Alpe-Adria Leasing d.o.o. on 31 October 2014, therefore compartive data for the Group for 2013 are not available.
26
572
business report
At 31 December 2014 the Bank’s total assets amounted to EUR
1,500 million.
Financial assets held to maturity in 2014 repesented 5.6 %
of total assets.
Loans to banks in 2014 amounted to EUR 11,9 million; almost
the entire amount represents demand deposits.
Financial liabilities to banks account for 37,6 percent of total
liabilities and at the end of 2014 amounted to EUR 563,4
million. Of that, liabilities to the central bank amounted
to EUR 131,3 million, subordinated liabilities amounted to
EUR 73 million, whereas the remaining amount represents
deposits and borrowings from banks.
Loans to non-banks in 2014 amounted to EUR 1,251 million,
of which 11.9 % was contributed by Hypo Alpe-Adria-Leasing
d.o.o..
Financial assets held for trading in 2014 amounted to EUR
4,3 million as a result of revaluation and disposal of certain
financial assets.
Financial liabilities to clients in 2014 amounted to EUR 827,8
million and represented 55.2 % of liabilities.
Available-for-sale financial assets in 2014 amounted to EUR
44,8 million and were fully owned by Hypo Alpe-Adria Bank
d.d..
Equity of the Group in 2014 amounted to EUR 87.0 million.
Assets structure
2014
2014
Loans to banks
Loans to clients
Deposits from banks
Equity
27
business report
General
The result of the Group at the end of 2014 was negative; the
loss amounted to EUR 42,003 thousand.
In 2014 the Group recorded net financial and operating income of total EUR 55,373 thousand. Administrative costs,
labor costs and costs of depreciation and amortization
amounted to EUR 31,761 thousand. The impairment of
financial assets not measured at fair value through profit or
loss and provisions for off-balance-sheet items totaled EUR
60,930 thousand at the year-end. The remaining part of the
result is represented by the loss of EUR 4,686 thousand, the
majority of this result is from taxes.
Consolidated financial result in the year 2014
EUR 000’
Net interest
income
Net
commission
income
Income from
Dividends
Interest, fees and commission income
Net interest amounted to EUR 36,141 thousand at the end of
2014 and with 66 percent represented the majority of the total
net income. Net fees and commissions amounted to EUR
12,701 thousand and rose by 23 percentage points. The net
result from financial assets has increased sharply as a result
of the profit from the sale of financial investments amounted
to EUR 6,071 or 11 %. The negative result from other net operating profit amounted to EUR 2,259 thousand and mainly
consists of tax on bank assets and financial services as well
as the derecognition of deferred taxes.
With net fees and commissions the Group covered 40 percent
of the administrative costs.
28
Operating
expenses
Risk
provisions
Other
Profit/Loss after
tax
business report
Consolidated income from dividends, net commission and interest income
Income from
Dividends
Net commission
income
Net interest
income
EUR 000’
Financial assets
In 2014 the Group showed income in the amount of EUR
6,071 thousand from financial investments. Net profit from
financial assets and liabilities not measured at fair value
through profit or loss is mainly generated with the divestment of shares of Mercator, Petrol and Luka Koper, which in
bank statements represented financial assets available for sale.
Net loss from financial assets and liabilities held for trading
amounted to EUR 403 thousand and was realized primarily
from commissions for market risks security instruments.
The Group realized EUR 140 thousand of net exchange rate
loss.
Costs
In 2014 the Bank recorded EUR 31,761 thousand of operating
costs. The majority are attributable to labor costs, which
accounted for 53 percent or EUR 16,686 thousand. General
and administrative expenses accounted for the remaining
47 percent or EUR 12,756 thousand.
The amortization/depreciation costs amounted to EUR 2,319
thousand in 2014.
Provisions
In 2014 the Group set aside EUR 4,115 thousand of net
provisions.
Impairment
In 2014 the Group recognized EUR 56,815 thousand of impairment losses on loans. The Group additionally impaired
shares in the amount of EUR 1,135 thousand and fixed and
other assets in the amount of EUR 535 thousand.
Tax
The Bank reversed EUR 1,327 thousand of deferred tax in
2014 on account of accumulated losses brought forward. The
Group realized EUR 542 thousand of income tax for the
current year.
29
business report
Bank’s Operations by Segments
Corporate Banking
Strategy and Results of Operations in the
Corporate Banking Sector
In 2014 expectations for a recovery of the economy have
also not realized entirely. While certain growth in economic
activity is noticable only in the second half of 2014, in the
first two quarters of 2014 stagnation of the Slovenian economy continued. While mainly export-oriented companies
and some high tech companies achieved growth (in some
cases high growth), the year was less successful for companies in the sectors of construction, real estate and financial
intermediation. Despite the (finally) completed takeover of
Mercator Group, the trading activity again more or less stagnated, which proves once again that the purchasing power
remains very low and that the subjects are still behaving very
carefully, and do not make bigger purchases. This applies to
both wholesale trade, as well as retail, and to legal persons
as well as individuals.
On the other hand, the Slovenian banking market finally
started the process of decreasing interest rates on deposits.
Especially banks in Slovenian ownership had a major role in
this, as they have received substantial inexpensive funding
at the time of the state recapitalization. Foreign affiliates and
certain banks in foreign ownership responded in the same
way. Our Bank followed the decrease of interest rates on
deposits; in corporate banking at the end of 2014 we were
fully comparable to the Slovene financial market, which has
resulted in cheaper sources of financing. Of course, such
a reduction in deposit rates also led to a reduction in active interest rates. Certain banks were quite aggressive and
considerably decreased interest rates on loans (both longterm as well as short-term) for first-class clients; to a large
extent we had to come close to their rates also in our Bank.
Nevertheless, the impact of high reduction in deposit interest
rates had a greater impact on interest margin, which was
achieved at a higher level than the previous year.
The result of such, still quite uncertain economic conditions
in the Republic of Slovenia, as well as the fact that in corporate banking the entire 2014 we operated according to the EC
guidelines, is still a conservative and cautious policy for loan
30
approvals, which in turn led to a drop in credit activities in
the field of corporate banking. Also, there was no increase in
investment activity of Slovenian companies in the past year.
Also in the Slovenian banking system there was a significant
drop in loans to non-banks. By the end of 2014 Slovenian
banks approved 17,6% fewer loans to corporates and other
clients than in 2013.
The volume of loans approved to clients in the Corporate
Banking sector by Hypo Alpe-Adria-Bank in 2014 fell against
the volume reported in 2013, as is true for Corporate Banking
sector of all banks. A significant reduction in loans is also a
result of extraordinary repayments, which took place mainly
in the second half of 2014, both in our bank as well as in the
entire Slovene banking sector. Especially major Slovenian
companies refinanced their financial obligations in 2014,
either by issuing and successful sale of bonds or by borrowing
abroad - directly at the headquarters of foreign banks. Of
course, this resulted in the inflow of fresh financial resources
in the Slovenian banking system, as these companies used
these funds to pay off the existing financial liabilities to banks
in Slovenia. Due to the aforementioned still low investment
activity of the Slovenian economy, it was not possible to place
the obtained additional funds back into Slovene companies
in a quality (safe) manner.
In addition to marketing efforts and increase in sales results,
the main objective of 2014 was regular servicing of existing
obligations of borrowers. The funds obtained this way should
be reinvested in the Slovenian economy - particularly in
first-class existing and new customers of the Bank. In doing
so, we will fully take into account the Group’s credit policy
and market conditions in the Slovenian economy. With the
arrival of a new owner we will also fully consider its performance plans, credit policy and the desired objectives, which
they will set out upon legally completed change of ownership.
In addition to interest income and concern for high net interest margin, corporate banking remains one of the key
focus areas, as well as increase in the share of commission
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(non-interest) income in 2015 compared to 2014 and previous years. Also in 2014, the issued bank guarantees had
the greatest impact on commission revenues, which was
fully in line with the strategy and plans for 2014. Guarantee
operations, as well as Trade Finance had a significant impact
on the outcome of the Corporate banking department in
2014. An increase is also planned for 2015. It will be achieved
mainly through cross-selling of other services (payment
services, investment banking, derivatives, documentary operations, leasing services). This will help increase the number
of services sold to each customer, build up the existing and
introduce new services. Taking into account the expectations
for economic growth of Slovenia in 2015, we can also expect
new increase in revenues of our companies (partners), which
will lead to a higher volume of payment transactions via
transaction accounts at our bank. Consequently, this shall
result in higher commissions from payment transactions.
The growth in commission from payment transactions will
be additionally induced by new - target companies, which
we plan to acquire in 2015 and which will open transaction
accounts at our Bank. At each investment we check the clients’ business transactions, determine their needs and based
on those offer and sell them appropriate banking services.
In any case, the new investment (product / service) includes
a new bank account, which will have a positive impact on
new (planned) growth in commission income.
With the integration of banking and leasing services, as
well as joint custody for one client (one client = one client manager) the goal of one client manager selling all the
services has already been achieved in 2014. At each visit of
existing or potential new customer, the sales person offers
banking and leasing services, which received a very positive
response from customers. The fact that our companies are
in contact with only one person regardless of the type of
service, their segment, or way of doing business has been
well received. Leasing is fully integrated in the sales process
of the Corporate banking dept. and the results of 2014 have
already exceeded the 2013 results. Increase in growth of these
services is also planned for 2015. As in 2014, we will pay
special attention to financial leasing of means of transport,
trailers, upgrading of trucks and mechanical equipment.
Again we plan to explore the possibilities and eligibility for
the introduction of the operational leasing in the future.
In Corporate banking department deposits form an important factor in the management of the Bank’s liquidity.
Collection of liquid assets will continue to be a priority. Also
in this year we achieved growth in deposits collected. Just as
important is the fact that despite growth we have managed to
achieve a significant reduction in the average interest rate for
all deposits in the Corporate dept. By increasing the number
of depositors we will continue to decrease our dependence
on large individual depositors. In addition to increasing the
total amount of deposits in the Bank, one of our main tasks
is also a reduction of the average amount of each deposit.
Also in 2014, in addition to classic deposits we offered our
business partners a Certificate of Deposit (CD), which helped
to collect the necessary financial resources.
The strategy of customer relationship management is one of
the key factors for the continued success of the Bank in the
corporate banking sector. The key factor in the strategy of
customer relationship management is the exact definition
of the duties of client managers of individual clients and
groups of related companies (global client manager). Our
goal is to deepen our customer relationships and develop
a long-term partnership with them. Each individual client
manager needs to know their customer and determine their
needs in a timely manner. We believe that despite the slightly
better expectations, the precarious situation in the markets
will continue in 2015. Regular and constant contact with
our customers - partners will be of paramount importance
also in the future. Our focus will be on our top existing customers, who we still need to provide with quality services at
competitive prices, as well as new customers who we plan to
acquire in the next year. Preservation and further improvement in satisfaction and communication with our existing
customers is a solid foundation for further development of
the Corporate dept. Of course, all new customers the Bank
is hoping to gain deserve the same professional, businesslike
and trusted relationship of our sales staff. Only in this way,
on the basis of the solid foundation (existing partners), we
are going to succeed in building an even taller and higher
quality house (new partners).
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business report
Distribution Channels
One of our significant competitive advantages remains
cross-selling of various banking services within the Bank
and within the Hypo Group Alpe Adria in Slovenia, which
consists of our Bank and Hypo Leasing.
Business cooperation with our sister banks within the Hypo
Group Alpe Adria, which runs through the so called Hypo
Network, is the added value which we can offer to our customers. The Hypo Network was established as a joint project
of banks and leasing companies in the Hypo Group Alpe
Adria with the purpose of assisting the clients in the Hypo
Group Alpe Adria to establish business partnerships in the
Alpe-Adria region.
Our existing customers, who meet the criteria set by the
European Commission present an important potential also
in 2015. These are mainly customers who satisfy a portion
of their financial requirements in other Slovenian banks.
To these customers we will offer additional financing as a
form of partial repayment of their liabilities to other banks.
Each of our sales people was explained the importance of
our existing customers for the results of the Bank. The fact
is that our existing customers are target clients for all other
banks in Slovenia. With this in mind we must make sure that
our relations with business partners are stable and long term.
We will reintroduce a quality list of our target customers
which will include businesses whose operations are fully
satisfying the conditions of our credit policy. In collaboration
with the CRM, which will pre-determine the minimum value
of the required indicators of target companies, a list will be
prepared and customers will be divided among sales people
who will in accordance with the agreed criteria visit and offer
the customers a package of our services (banking, leasing,
retail, treasury, etc.). This will provide clear objectives and
criteria for the client managers to assist them when acquiring
new clients who will bring improved added value to the Bank
and increase the volume of operations.
We continue to see major potential in employees, who are
employed in companies with which we do business. The
partnership concept where cooperation between Corporate
and Retail client managers presents one of the Bank’s advantages will continue to be one of our priorities also in the
next financial year. Accordingly, we expect major increase
in retail accounts. Whilst this may not have a direct impact
32
on the Corporate Banking, it will however, have an effect on
the overall result of the Bank as a whole. Cross-selling will
also take place between other segments in the bank.
Objectives for 2015
We will continue our successful operations of the Corporate
Banking sector also in 2015. We build our competitive advantages on solid foundations, which we established with a
clear strategy. In 2015 it will be directed to:
Acquiring new clients in the sector of small and medium-size companies,
Offering structured services (cross-selling of combined banking services suitable for our business
partners),
Increasing the number of services per client; increasing the number of transaction accounts, increasing
the volume of payment transactions with existing
clients, increasing the market share in the area of
letters of credit and deposits,
Taking full advantage of the potential presented by
existing banking customers,
Focusing on employees of corporates who are our
clients in order to increase the number of retail transaction accounts,
Promoting cross-selling between other banking segments in order to increase the Bank’s results, primarily on account of non-interest income,
Increasing overall income of the Corporate Banking
Sector, primarily on account of non-interest bearing
income. Main focus will be on Trade Finance and
Guarantee as these transactions do not require high
(expensive) liquid assets, while they ensure commission (non-interest bearing) income,
Trustees will continue to regularly monitor servicing
of contractual commitments by clients of the Bank
and Hypo Leasing, while strictly complying with the
Bank’s pricing policy,
Developing highly experienced and professional employees and adapting business processes and their
optimization.
business report
Retail Banking
2014 was marked by difficult economic conditions which are
reflected in the reduced consumption of goods and services,
prudent investing and prudent use of banking services. For
this reason, the retail banking sector was divided into two
departments, i.e. the Sales Force, comprised of a complete
sales and business network of 19 branch offices, servicing
retail customers, small companies and sole proprietors, and
Product Management, comprised of business support, services management, and sales channels management. Our efforts
in both these areas were adjusted to economic conditions.
Furthermore, our efforts were focused on innovation and
quality of the Bank’s services, as well as productivity and
profitability of our work. In 2014 we continued with projects
carried out at the Group and local levels. Some of these projects were completed succesfully, requiring our organization
of work to be to a certain extent tailored to these projects.
Business Strategy
In the area of retail banking and transactions with sole proprietors and limited liability companies, the Bank continued
with its modified strategy of deepening the relationships with
individual segments of clients and of ensuring even better
attention to the personal approach, which it started as early
as in 2010 with the fundamental aim to increase the number
of clients and the number of sold products per client.
Our total sales network was engaged on implementation of
the Sales Force Effectiveness project in order to increase the
sales of services per client particularly with a different work
organization and an increase in the productivity especially
in the sector of retail clients. The project, which began in
2011 and is upgraded each year, we updated in 2014 and
added improvements in transparency of monitoring and
higher efficiency. The project was introduced at the level of
the Group and presents completely new roles and approaches.
It is aimed at:
Sales organization: client managers shall focus most
of their time on sales,
Sales tools: we additionally equipped our sales staff
with sales tools that have increased sales performance,
Sales monitoring: we inspired our sales staff with motivational tools to ensure better sales performance and
to increase the transparency of operations.
The results of the sale and analysis of our clients’ and branch
visitors’ opinions show that the projects had a positive effect
on client satisfaction and on the improved efficiency of the
sales network.
While focusing on these projects, we complied with the new
credit policy, faced the challenges of worsening market conditions and strived to maintain liquidity. It is why we are
trying to change policies that constitute an obstacle to the
sales activities. At the same time we are ensuring quality
portfolio and timely monitoring.
We continued to implement the Affluent Banking project
which is an extended client service for more demanding clients. By supporting tailored services for individual segments
and taking care of a comprehensive solution of client needs
and wishes, we pursued the goals of positive operations of
the Bank, in particular:
To strengthen client loyalty,
To keep and stabilize the existing asset portfolio of
clients at the Bank,
To increase the cross-sale indicator with a special
client approach,
To attract new clients.
In 2014 we successfully implemented and monitored the
results of two projects: the “Complaint Management” project, the primary goal of which was to introduce a system of
dealing with customer complaints, and the “Service Quality”
project which set the standards for the servicing of clients,
employees, branches, and resulted in increased satisfaction
of our employees as well as our valued customers.
Sales activities were complemented with campaigns guided
by the Marketing department and their performance results
were monitored by the Sales Controlling department. Some
of the most successful campaigns were:
mobile banking points that were set up at special
events (e.g. Celje Fair, Ljubljana Festival)
campaign to gain new customers on the basis of a
data base from marketing sales activities
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business report
collaboration with societies - entering into contracts
and marketing to their members
Operation support, product management and
sales channels
cross-sales activities between segments (B2E concept)
In the context of optimization of the saving offers for individuals, we introduced a free of charge Deposit Transaction
Account, which made deposits more accessible to non-clients.
We have improved the properties of the Growing deposit by
reducing the total term of saving from 24 to 12 months and
increased the monthly mark-ups on the interest rate.
targeted marketing campaigns to attract new customers (Invite a friend, Pre-approved quick loans, cooperation with the Investment Banking department)
Transactions in 2014
The results of the modified strategy with these segments
are evident in the number of sold services per client, per
employee as well as per branch office.
In 2014, the Bank increased the number of retail clients by
2.14 percent compared to the previous year. The number of
products sold per customer has also improved.
Micro-enterprises - Commission income resulting from a
higher number of services per client and more frequent use
of individual services grew by more than 1.6 percent in 2014
as compared to the year before. The highest growth was recorded in the commission income from insurance services
(22%) and card transactions (14%).
Micro-enterprises - Commission income in this segment
decreased by 13.4 percent as a result of the transfer of clients
to HETA d.o.o., the new segmentation and consequently
transfer of clients to the Corporate segment. With the introduction of a new package for Micro clients we expect an
increase in commission income.
Financial leasing has been fully integrated in the sales network in 2012. Leasing has become one of the sales products
of the bank.
In 2014 we focused on the segment of agricultural machinery,
which has largely made up for the loss in car financing as a
result of market conditions.
In 2015 we plan to mainly with organizational changes and
IT solutions make a step further towards greater flexibility
and faster execution of transactions for end customers. We
are aware that our suppliers are one of the most crucial sales
channels. Our main goal remains a professional relationship
with existing and potential customers, which is achieved
through continuous education and training of employees.
34
In Card Operations we continued with the implementation
of card strategy. We introduced a prepaid MasterCard card
with contactless technology with two different motives: Hypo
and Football.
In the field of lending, we continued our policy of introducing electronic means of credit approvals, combining of
different applications, which are an integral part of the loan
process, and shortening the approval process, which results
in lower operating costs with an emphasis on transparent
risk management.
In this light, we have improved the conditions and criteria
for loans insured at an insurance company. Housing loans
approvals have been optimized with a successful upgrade of
an application for determination of risk-weighted interest
rates and the use of the application for the calculation of real
estate appraisals. We have prepared several special offers
to finance the purchase of real estate owned by the Hypo
Group (residential complexes Situla, Razgledi ob Paki, TCP
Livade). For Credit Express and MasterCard credit cards, we
replaced the payment of insurance premium with the cost for
risk estimates, which made the approval process even faster.
For our loan intermediaries, we have developed a HIP application, which has simplified and sped up the approval
process of consumer loans, both at the point of sale, as well
as in processes in the back office of the bank. Through our
loan intermediaries we launched the Mini HIP loan with a
limited amount of EUR 4,000 and maturity of 36 months
for the purchase of small value items.
In advisory banking we successfully implemented our goals
under “Project Affluent Version 2.0”, with the aim of further
development and optimization (segmentation of natural
persons, products and services, quality advice and additional
benefits for the Affluent segment).
business report
In addition, we introduced Affluent Banking in Koper and
Domžale branches.
In the area of Bancassurance in cooperation with ERGO
insurance company we “enriched” our core banking packages
and MasterCard payment cards with a range of insurance services and became the first bank in Slovenia to merge banking
and insurance services in one product. In cooperation with
the insurance company ARAG SE we offered our Affluent
clients also Legal Expenses Insurance.
In order to optimize our branch network, in October 2014
we relocated the Maribor (Ptujska cesta) branch to a more
attractive location in the shopping center Mercator (Maribor
Tabor). Our most visited ATMs were upgraded with cassettes
for €50. An automated process of internal communication
was introduced, which allows for faster transmission of information in the corporate network, better possibility of
subsequent inspection and search by keywords and more
transparent audit trail.
Objectives for 2015
We will continue with the expansion and optimization of
banking services. For the purpose of acquiring new customers a bonus program “Bring a friend” will have an important
role: a client who brings a new bank customer receives an
award in the amount of €40. We plan to expand our range
of bank deposits and packages. In the second half of the
year we plan to introduce mobile banking and completely
renovate our HYPOnet online bank.
need a housing loan. We are preparing an online version of
HIP application that will allow quick approval of mini Hip
credit without visiting a branch and will be adapted for use
in online stores. This will make our Bank the first bank in
Slovenia to facilitate the purchase of goods by a bank loan
through this fastest growing sales channel.
Our objectives in 2015 are to place special focus on three
majors goals: 1. Introduction of an additional banking services package for our clients in the Affluent segment based
on their saved funds, 2. Acquiring new Affluent customers,
3. Upgrading advisory tools and marketing materials for
Affluent segment.
In the field of banking and insurance, we will continue with
the optimization and business relationship with selected insurance companies as well as widening the range of products
for our customers.
We are also planning to relocate the Ptuj branch and some
ATMs with low turnovers.
We follow the changes and the guidelines of the Bank, therefore in 2015 we are planning to introduce mobile teams which
will help us reach customers in areas where we do not have
branches and in this way offer Hypo services to a wide range
of individuals and businesses.
In card operations we will continue with the implementation
of the Card Strategy project. The key challenge will be the
introduction of MasterCard Installment credit card, which
is scheduled in the first half of the year, and introduction of
insurance of approved overdrafts for MasterCard business
card at the insurance company.
In the field of loan operations, we plan to pursue active marketing by expanding marketing channels on the Internet and
the introduction of pre-approved loans. We will continue
with the expansion of the network of loan intermediaries.
Special attention will be paid to collaboration with real estate
agencies with the goal of referring our bank to clients who
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business report
Financial markets
Treasury sales
After a successful 2013 the Treasury Sales department has
operated successfully also in 2014 as a result of further extending its range of services, greater focus on currency risk
and upgrade of the basic services (Cross Selling). Our activities were intensified with existing customers and active
searching for new ones, despite the low liquidity and the huge
gap between the Slovenian and global markets. Nevertheless,
in 2014 we observed that the situation on the Slovenian market has stabilized. There were first indications of economic
growth and the business operations of our key customers
was stable. Due to the fact that in the world markets, which
Slovenian companies were heavily exposed to, the situation
greatly changed, we have intensified monitoring of the financial risks of companies that we work with. This resulted
in a very successful end of the year and fufilled plans in the
Treasury Sales dept. Projects for the expansion of operations
to areas where we have previously not been present, primarily
the retail business, are about to be completed.
interest rate risks. Furthermore, the department manages the
banking and trading book. In 2014, there were no significant
changes in the banking book portfolio, the largest portion of
which are still bonds and treasury bills issued by the Ministry
of Finance of the Republic of Slovenia. These securities as
well as an appropriate part of the loan portfolio the Bank
used as collateral for access to operations of the Eurosystem
via the pool of eligible assets at the Bank of Slovenia. In 2014
the Bank participated in a new long-term operation of the
European Central Bank TLTRO and thereby gained quality
long-term assets intended for lending to our customers. In
2014 the structure of the Bank’s liabilities changed and the
Bank decreased its dependency on the refinancing by the
parent bank on the account of collected primary sources
that are cheaper, which had a positive impact on the interest
result of the Bank.
In 2015, we expect the realization of optimistic forecasts of
economic growth, both on the domestic and foreign markets.
The Treasury Sales dept. will respond accordingly. Currency
risks are still a major challenge as they keep increasing and
reaching historical records. We will focus on interest rate
risks, especially for those customers who are exposed to
long-term risks. In the first half of 2015 we would also like to
offer our retail customers the option of financial protection
and advisory service. In addition to education and training
of our employees, which is implemented in our bank on a
regular basis, in 2015 we will organize several business events
(e.g. Business conference or traditional Business breakfast).
Customers will be invited who do business with the Treasury
Sales department. In the coming year we would like to finally
enter the commodity market.
In 2014, the Bank had much better results in Capital Markets
compared to the previous year. The announced privatization
of some stateowned enterprises has revived mainly the domestic capital market. Thus, we have witnessed the takeover
of Mercator, Helios, Ljubljana Airport, Letrika, Fotona, and
consequently some money from the sale of shares came back
to the capital markets, which was reflected in higher revenues
from brokerage fees. Due to the increased number of new
customers, revenues from the Central Securities Clearing
Corporation services have grown - opening the account,
account management, demurrage and other services. Deposit
interest rates which fell sharply in 2014 also resulted in higher
interest in investment banking services - consequently, more
people decided on an alternative form of bank deposits in
order to realize somewhat higher returns than with traditional deposits. The main focus in the department was in
the segment Asset management and active processing of
clients in Brokerage Services, where marketing activities
and upgrading of both services to a high professional level
were at the forefront.
Assets and Liabilities Management (ALM)
In 2014, the main task of balance sheet management was, as
in all the years before, providing bank liquidity, i.e. management thereof, in accordance with the adopted policies and
guidelines of Hypo Group and compliance with the set limits.
The Bank regularly settled all of its obligations. The Bank’s
liquidity has been good all year. In addition to liquidity risk
we carefully monitored and managed exchange rate and
36
Capital Markets
business report
Operations
In 2015 our focus will be on increasing income from stockbrokerage services on local and foreign markets (portfolio
optimization), attracting new active clients on the local
market through HypoBroker application, promotion of
sales through direct marketing, introduction of new product (combination of a deposit and asset management), and,
above all, on increasing the number of customers and volume
of assets under Asset Management segment.
In 2014 we introduced a number of process improvements by
using the methodology of “Lean Six Sigma” and automated
several processes in the back office in order to achieve higher
STP (Straight-through Processing) ratio, higher quality and
lower response time to requests from clients.
This has enabled us to achieve greater efficiency and higher productivity indicators. Key indicators of productivity
were introduced throughout the Operations dept. and are
monitored on the level of organizational units as well as by
individual key business processes.
We have completed the operational implementation of a
spin-off of the non-strategic loan and leasing portfolio and
accordingly optimized the required human resources.
With the aim of optimizing the cost of archiving and achieving high standards of environmental awareness, a project for
the transfer to e-archive was carried out. From the Archives
of Slovenia we received a decision on compliance which
allows us to implement paperless operation as well as e-archiving, and reduces the need for physical archives and the
associated costs.
Loan and leasing operations support
In 2014, we continued to actively optimize the loan origination process for individuals within the RBacko project. In this
context, we implemented a new workflow application to support loan origination flow in our sales network and external
loan intermediaries. In addition, we standardized products,
processes and documentation for all credit products.
By automating manual activities and eliminating activities
with no added value, we reduced the processing time of each
request in terms of workload time and response time to the
customer. For standardized loans we shortened the time to
approval by almost 60%.
For credit products for our retail clients we have introduced
paperless loan origination workload in the back-office and
thereby reduced our administrative costs.
With the introduction of shift work in the afternoons and
on Saturdays we have fulfilled the wishes of our loan intermediaries for greater accessibility.
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business report
In the area of leasing, we successfully carried out the splitoff of the non-core operations as well as effectively carried
out the sell-off and handed over a part of leasing portfolio
to an outside investor. We have implemented technical and
operational support for e-invoices.
Payment services
In the area of payment services in 2014 we introduced additional controls to prevent money laundering for SEPA
payments, as well as process improvements for SEPA direct
debits.
Card transactions
We implemented process improvements to support customers with prepaid cards and optimized the process for
approving and ordering credit cards.
Transaction Accounts
In 2014 we focused on the optimization of deposit operations
and transaction accounts with introduction of certain application modification for enhanced automation and hence
reduction in operational risks. We participated in the implementation of e-invoices for budgetary users.
Forced collection
With the possibility of judicial execution transition to paperless operations (VEP portal) and the planned transition of
tax and customs enforcement to e-commerce by the end of
2014, we carried out the necessary activities for the migration. This will allow us to reduce the costs of scanning and
archiving as well to speed up the process of data collection
and increase productivity.
Treasury support and Investment banking
In accordance with the requirements of EMIR (The European
Market Infrastructure Regulation), in 2014 we established
a system of reporting and collateralisation of derivatives. It
is a regulation that defines the obligations relating to the
trading of derivatives. The reason for the adoption of the
regulation is to establish requirements aimed at reducing
the risk of counterparties and enhancing the transparency
of transactions concluded with derivatives outside the regulated market.
38
Documentation Center
The Documentation center dept. performs the tasks associated with managing documents including recording of the
incoming mail, handling of the outgoing mail, managing
archive documentation in paper form and e-form, preparation of documentation for scanning and capturing of our
own documentation.
In 2014, we successfully completed the project for the development of Internal Rules for the capture and storage of documentation. Internal rules were submitted to the Archives
of Slovenia for approval and received their decision that the
Internal rules comply with the Protection of Documents and
Archives and Archival Institutions Act.
Our development in the coming years will be primarily focused on paperless operations, which we have successfully
started to implement in 2014. With the introduction of paperless operations we are more efficient in business processes
and also environmentally friendly.
business report
Internal organization
Real estate management
In collaboration with the IT dept. we also carried out a renovation of an existing backup center of the bank in order
to ensure business continuity of payment and settlement
systems.
Other activities in the Real Estate Management dept. were
focused on optimal management of real estate and cost reduction, both as regards maintenance as well as other costs
associated with real estate management.
Information Technology
In the past year, the Information Technology changed its
basic role of maintenance, development and ensuring a high
level of availability as well as elimination and reduction of
risk to being an active participant in each process in the
organization.
The IT dept. with its operations and the added value allows
for better decision-making (data/information), faster, more
secure, and quality performance of processes (process optimization and business solutions), carries out an active
role in the marketing of banking services/products (online
marketing channels, mobile points), while at the same time
with the introduction of improvements (technological and
processing) improves the cost-effectiveness and safety of the
entire organization and customers.
Internal control system
The internal control system are daily checks for the proper
application of policies, work processes, work instructions,
tools, etc. Daily controls have a preventive, corrective and
steering function, including daily monitoring controls. They
are implemented by all employees on a daily basis. They are
built-in in the applications, forms, instructions, processes,
policies, etc.
The main objectives of the internal control system is protection of the assets of owners and investors and building confidence in the correctness of financial reporting. To achieve
these objectives a consistent implementation and control
of high standards of financial reporting based on national
and international standards is required. The internal control
system is a product of established methods and criteria.
Responsibility for the establishment of daily checks lies on
the owners of individual activities. Owners of individual
activities are the heads of areas and departments.
The purpose of the system of internal control is to:
establish effective controls in all areas of the organization’s operations;
ensure clear accountability for the implementation
of identified controls;
ensure proper documentation - the objectives and
methods of implementation of internal controls;
ensure adequate traceability of the implementation
of internal controls.
Daily checks are a constantly changing process formed by
the administration (the management), the owners of individual activities and all other employees. The aim of the
internal control system is to as much as possible reduce the
incidence, number, and possibility of intentional and unintentional errors and in this way ensure a continuous trend
of their decline.
Documents that define the process of installing ICS, are
defined by Risk Controlling dept. and related to the project
work, preparation of policies, processes, rules of procedures
and work instructions. The basis for the framework are
Group policies of operational risk management, the internal
control system and reputation risk.
In 2014 we continued with an inventory of risks and defining
the controls and test definitions in the processes that have
been with the help of the “Account matrix” identified as
significant in terms of materiality for the Bank’s balance
sheet. Activities in the area of the internal control system
were regularly reported to the Committee on operational
risk management, internal control system, and reputation
risk (OpRisk Committee).
39
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Internal audit
The Internal Audit department, in accordance with the
Banking Act, reports to the Supervisory Board about the
realization of its annual plan, adequacy and efficiency of risk
management, adequacy and efficiency of internal controls
system operations, and about important findings and their
realization. The Internal Audit department’s annual report
is submitted to the Bank’s General Meeting of Shareholders.
In line with the Banking Act, the Bank also established the
Audit Committee in 2009, which met four times in 2014. In
accordance with the Companies Act, the Audit Committee
also monitors the Internal Audit efficiency.
The Internal Audit department also cooperates with the internal audit department of the parent bank, which at regular
meetings sets directives for harmonized operations and reporting. The Internal Audit department employs 5 internal
auditors; 2 of them have obtained the title of a certified internal auditor, whereas 1 is currently in the final stage of the
training course to obtain the licence.
In 2014, the Internal Audit department of the parent bank
carried out external assessment of all internal audit functions
in the Group. This time the focus was on key indicators,
communication with third parties, monitoring of recommendations and implementation of external audits. The report
issued confirmed compliance with standards in all material
respects. Based on the findings, the department will carry on
with the implementation of activities to improve the quality
of operations.
40
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Expectations for the Future
2014 was in Hypo Bank marked by successful sale of Hypo
Group to a new strategic owner Advent International and
the EBRD bank, which confirms that we have carried out
our strategic projects of recent years properly and in due
time. The sale of the bank will be completed in 2015, which
further motivates us to optimise the key business processes
and upgrade activities related to customers.
We strive for professionalism in all areas of our business as
we believe that by doing so we are realizing the expectations
of all our stakeholders: clients, local communities, employees and shareholders. Pursuing the set strategy is the key
to realization of our key objectives to prove to our strategic
investor that we continue to be the best organized and most
profitable financial institution in Slovenia.
At the end of 2014 the international environment shows a
varied picture. The first data are encouraging, which is also
reflected in the positive indicators of Slovenia’s position.
The negative impact is still expected in the Corporate sector
due to the ongoing deleveraging and restructuring of the
business, while positive signals are expected in particular
in retail banking which is already showing the first signs of
recovery after the financial crisis. Our mission remains the
strategy of universal financial intermediation, which provides
comprehensive financial experience to customers in a safe
and reliable partnership, regardless of their field of business:
banking, leasing, or bancassurance services.
Our general universal business model as well as capital stability, strong liquidity and financial position will ensure balanced operations and the flexibility to face future challenges.
We are confident that by placing clients in the center of our
focus we are supporting the wider economic development
in the country and by doing so we will realize our objective
of consolidating our reputation and profitability. Our aim
is to be one of the top five banks in Slovenia in terms of
performance indicators and clients’ choice.
2015 will be marked by the monetary easing by the ECB,
which will result in a decrease in interest margins and extension of zero interest rates for a longer period. The most
important aspect of our operations in the coming year will
be a continuation of focusing on dilligent and in-depth cooperation with our customers and expansion into areas where
in the past we have not yet participated. In order to ensure
the profitability of the business the Bank will continue with
the optimization of its business model, the upgrading of key
business processes, reduction of the operating and financing
costs, and provision of additional non-interest income.
41
business report
Social Responsibility of the Bank
At the Bank, we are aware of the fact that responsibility for
our activities that influence our internal and external environment is of crucial importance. Thus, we feel our responsibility to employees, owners, clients, wider community and
supervisors in all our operations.
Educational structure
Educational structure of our staff is at a very high level and
almost 64 percent of employees have either higher education
or university degree.
Level of
education
Employees by
educational structure
in 2014
Employees by
educational structure
in 2013
Responsibility to employees
IV.
2
2
Responsibility for our employees is one of the Bank’s core
values, and despite the adverse developments in the past
years we have not curtailed funds and activities related to
our employees. We are aware that our employees are the
foundation for our future development and success.
V.
169
163
VI.
45
43
VII./1
120
121
VII./2
123
138
VIII.
22
20
For the second year in a row activities relating to the “Family
Friendly Company” presented one of our main policies. In
accordance with the plan we took certain measures such as
allowing parents of children attending school for the first
time to take a day off of work, and when a family was going
through difficult times or family crisis, family members were
able to take unpaid leave. We also started with workshops
educating our employees about healthy lifestyle.
Balance at
31 December
481
487
Responsibility for our employees is also reflected in regular
meetings with the Management Board where employees are
able to speak freely about strategically important topics and
the Management is able to give answers to questions posed by
employees via several different channels agreed in advance.
At the end of 2014, the Bank had 481 employees.
Movement of employees is shown in the table below:
Headcount at 31
December
Headcount according to
working hours*
2013
487
422,5
2014
481
405,5
Year
*Number of employees from working hours shows real number of employees.
Following restructuring and integration of the leasing activities there is a number
of employees who have employment contracts with both, the Bank and Hypo
Leasing under the 50:50 principle. These employees are processed in the records
of both, the Bank and Hypo Leasing.
42
Recruitment
The recruitment and selection of new employees are supported by clearly defined goals of an individual organizational
unit. Priority is given to the internal labor market, and the
desires and ambitions of employees are taken into account,
allowing the employees career development and transitions
between job positions. The selection of employees is systematized in several circles of structured interviews carried out
business report
with the job applicants. Where certain more demanding job
positions are concerned, the candidates have to undergo
testing by a professional external partner. The final decision
is made on the basis of the analysis of their expertise and
personal competences needed for successful performance
at a specific post.
Education and training
We believe that only highly qualified staff can follow the
development and needs of the Slovene financial market. For
this reason, the Bank provides constant and comprehensive
expert training of all employees. This constant need for new
expertise, as well as for knowledge from the field of personal
development, are present all year round and each year more
employees participate in educational training, as compared
to the previous year. To achieve business objectives, we have
set key educational domains for the development of banking
business which arise from strategic requirements.
Each year, we organize various internal trainings in accordance with our needs. In 2014 we focused on the following
training and education activities:
banking basics - a comprehensive education on banking intended for all employees who have joined Hypo
recently,
Fit & Proper education for executives and key function holders on current requirements imposed by
European legislation and financial regulators,
training to obtain licenses for insurance brokerage,
international training in risk management,
training as part of the Hypo Business Academy
where our employees attended a number of different workshops including: Stress management, Team
work, Internal and Public Speaking, Communication,
and others.
All these courses were very versatile providing participants
with a wide spectrum of applicable knowledge and skills
required for successful performance of their jobs. For the
second year in the row the Hypo Business Academy was
received extremely well by the employees. It presents a direct
answer to employee satisfaction survey results.
Certain internal trainings are also organized at the Hypo
Group level, mostly for key management staff, as well as for
specific work fields where there is a requirement for specific
knowledge and expertise. We also offered different levels of
English language courses.
In addition to internal trainings, employees often participate
in seminars, conferences or debates, organized by the Bank
Association of Slovenia or other relevant institutions. Each
year selected employees take the exam or obtain a license
for insurance intermediaries and for the sale of investment
coupons or shares of investment funds. Besides the above
mentioned, the Bank often co-finances part-time studies
or educational courses to obtain various licenses in the financial field.
The employees transfer the knowledge obtained through
education or self-education to their colleagues through their
activities within sectors or departments.
In spite of our dedication to cost optimization, education
of our employees is high on the list of priorities and for this
reason we make sure funds are available for the implementation of a variety of courses and trainings.
HR projects
HypoDAY is definitely our biggest pride and one of the most
notable projects aimed at employees. After successful performances in previous years, in 2014 we continued with projects
that have attracted even more volunteers. The last campaign
was carried out in one of Ljubljana kindergartens, where
volunteers have arranged the surroundings and improved
the playground for children. Traditionally, the next project in
2014 was humanitarian - in the time preceding the Christmas
holidays, in the middle of December, we collected food for
socially disadvantaged families.
Another high-profile project also took place in December.
For the third time we awarded prizes for excellence HippOSCARs. More than 400 employees attended the event
and honoured the best employees in specific areas. The employees were rewarded with symbolic prizes.
In 2014 we also continued to publish our electronic newsletter “HyperAKTIVC”, which received enthusiastic reception
43
business report
from employees and will continue to be a source of in-depth
information presented in a light manner.
Employee satisfaction is important to us
Through donations, the Bank actively contributes to the
development of the Hypo Sports and Culture Association,
which enables its members to participate in chosen sports
and cultural activities at very favorable prices. By doing
this, we are strengthening the relations and cooperation
of employees also outside of the working environment.
The Association’s activities remain varied and attract large
numbers of employees. In 2014 we organised our first Hypo
Olympic games. Teams from different organizational units
in the Bank competed supported by loud cheers of their fans.
Annual interviews and management by
objectives
The aim of yearly interviews is to ensure, on a long-term basis,
successful operations of the Bank. Yearly interviews enable us
to systematically set new targets, review the implementation
of the agreed targets in the previous year, and provide for
systematic professional and personal development of the
managerial staff and associates. Annual interviews are first
held by the head of department with his/her superiors or the
Management Board, followed by an interview of the head
with its subordinates. After the conclusion of the interviews,
the head and the subordinate are responsible for the implementation of the agreed targets, while the human resources
department provides for the organization of agreed trainings
and implementation of the development plans in line with
the strategy of the Bank. Target interviews are held twice a
year and development interviews once a year.
Bonus system
Remuneration in the Bank is shown in the variable portion of the salary and is closely linked to management by
objectives. By applying individual remuneration, we want
to incite the development of an individual employee, while
the group remuneration aims at better motivation for team
work and achievement of targets as a team. The amount of
bonus and criteria were adapted to present conditions and
performance results, but we believe it is important to keep
44
the remuneration system, which has a positive impact on
employees and contributes to more successful operations
and development of the Bank.
Reward policy
Our reward policy complies with provisions of the labor legislation, CEBS guidelines, Bank of Slovenia decisions and EU
directives pertaining to capital requirements. In accordance
with the policy adopted by the parent bank in Austria, our
local policy that regulates payments to employees in Slovenia,
is drafted and adopted for each individual year. This policy
clearly sets criteria and conditions for payment of bonuses
to the managerial staff and employees. When a member of
management or staff qualifies for bonus, the payment is made
only after prior approval of the Supervisory Board. Members
of staff with special powers, who are able to significantly
affect the risk profile of the Bank, include members of the
Management Board and directors of individual sectors including risk management and internal audit.
The amount of reward and criteria for payment depend on
the economic situation. In accordance with the Group’s reward policy, no rewards were paid to employees in 2014.
Plans for the future
In 2015 we will continue with our projects, while also make
plans for new and additional activities prepared with the aim
of connecting various organizational units. The aim of these
activities is to strengthen inter-departmental cooperation
and, consequently, optimization of business processes in
the Bank, which will, among other things, raise the level of
banking services.
business report
Responsibility to owners
Responsibility to the owner of the Bank is expressed by our
daily communications, regular monthly reports, publishing
of the annual report and cooperation with the Supervisory
Board. The Bank has a single owner, to whom it used to pay
the total profit after taxes, decreased by statutory reserves in
the amount of five percent of the profit until 2009. However,
in 2009 the Bank transferred the total realized profit to reserves and did not pay out dividends. In 2014 and 2013, the
Bank realized no profit and did not pay dividends.
for unlimited net deposits of investors until 31 December
2010. As of 1 January 2011, such guarantee applies for the
pay-out of the banking deposits totaling up to EUR 100,000.
Responsibility to clients
Responsibility to the wider community
The Bank demonstrates responsibility to its clients through
a wide range of its products and services. Relations between
the Bank and its clients are based on trust and understanding
of the client’s needs. The Bank adapts to clients’ needs by
improving the existing and developing new banking services
through modern business channels and approaches.
The resources that the Bank dedicated to sponsorship and donations in 2013 and 2014 are presented in the following table.
In operations, the protection of the client’s personal data and
client’s rights present one of the most important principles of
the Bank. Of course, along with that, the soft factors of cooperation, aimed at keeping the clients or further improving the
professional relationship with them, are of key importance.
One of such approaches is the organization of various events
for clients (of cultural, sports or business nature), by which
we demonstrate our appreciation for their trust and loyalty.
One of the key tools available to us and also very useful, is
market research. At the Group level and in particular on the
local level, we performed numerous studies, the results of
which we have used to improve our operation in the market.
We monitor the market and economic trends and legislation,
both at home and in Europe. Accordingly, in the preparation
of new services we adapt to the requirements of customers, who are our first concern. We regularly monitor our
customer satisfaction, the results of which are our primary
consideration when introducing changes to improve service
quality and service delivery.
In accordance with the banking legislation, the Bank guaranteed for the pay-out of the banking deposits in the sum
of EUR 22,000 until 11 November 2008. After that date, the
banks, savings banks and the Republic of Slovenia guaranteed
EUR 000’
Advertising expenses
2014
2013
570
757
EUR 000’
Sponsorship
Donations
2014
2013
288
130
53
50
Through a wide network of its branches, the Bank covers
the whole territory of Slovenia and we have good relations
with local and wider community. Our involvement in social
activities is supported by our sponsorships and donations
as well as our active involvement in humanitarian, sports
and cultural events.
As part of the “Hypo Pro Futuro” project at the level of the
whole Hypo Alpe Adria Group, we are engaged in humanitarian events aiming at providing help to underprivileged
children. We are aware that there are large numbers of
children, who seldom experience the sunny side of life and
our goal is to bring smiles to their faces. In December, the
Bank and Hypo Leasing fulfilled their responsibility to social community through two cash donations. Some of the
funds earmarked as Christmas gifts for business partners
were donated to underprivileged families with the assistance of the Moste Polje Association of Friends of Youth
to make their Christmas and NewYear holidays a little bit
more festive. Employees also participated in this humanitarian assistance and collected a “Christmas tree” made up of
clothing, footwear, food and cosmetics for families most in
need of assistance. We donated the second part of the New
45
business report
Responsibility to supervisors
and the state
Year’s donation to the development of talented young athletes
within the 18th “Sonček” (Sun) day event. For several years
in a row we have contributed with our donations to quality
execution of a summer camp in Zorman Handball Academy.
In August 2014 we joined the project Sponsorship, which we
plan to continue in the future.The entire Hypo Alpe Adria
Group was also involved in the delivery of assistance (material and financial) to areas of flooding in countries where
Hypo Group is present (Serbia, Bosnia and Herzegovina
and Croatia).
Employees showed their compassion by taking part in the
project “HypoDAY for a good cause” the aim of which is
to join forces to provide assistance to the needy. Hypo volunteers spent a day in Oton Zupančič kindergarten units,
helping to clear their surroundings.
Supporting sports and sporting acitivities is our contribution
to a better, healthier lifestyle. With sponsorship funds we
are involved in the lives of those who represent our country
in the European and global environment. In this way we
demonstrate our support to athletes, we salute their endurance, discipline, competitiveness and desire to accomplish
goals. We have, among others, sponsored the Slovenian football team NK Olimpija, local sports and other events (e.g.
trotting races in Murska Sobota, jumping in Krka river in
Novo Mesto, “Brežice my city” event, Street football event,
etc).
With its donations and sponsorship contributions, the Bank
is actively involved also in the cultural happening in the
Slovenian area. Support of cultural events, festivals and performances is becoming a part of our activities. By donating,
we express our support to cultural activity as one of the most
important spheres of social life. In these cultural events we
also include our clients, thus adding value to our relationship
with them. For many years we have regularly collaborated
with the Ljubljana Summer Festival in Križanke.
We also support all activities that accelerate the economic
development. For a number of years, we have cooperated
with the Celje Fair and sponsored the International Trade
Fair. We were also active at the Career Fair “Moje delo 2014”
and the international Agriculture and Food Fair - AGRA.
46
In accordance with the Banking Act, the supervision of
banking operations is carried out by the Bank of Slovenia
within the framework of reviews at the supervised bank’s
headquarters and through reports which the Bank sends
regularly each month. This way, permanent supervision over
banks and savings banks is assured, which allows for the
safety and stability of the financial system in Slovenia.
Through cooperation with the financial system supervisory
institutions and external auditors, the Bank obtains appropriate assurances that its operations are within the framework
of the legislation of the Republic of Slovenia and within the
framework of the general norms in effect for well-regulated
and stable members of financial system. The Bank builds
the cooperation with institutions on an open and fair relationship, which leads to cooperative search for solutions.
This, according to independent supervisors and consultants,
assures long-term stability of the Bank’s operations. In case
of substantial changes in the systems of the Bank’s operations,
the Bank attempts to obtain in advance positive opinions
on the planned solutions, which it intends to implement in
its operating environment, with the purpose of obtaining
reassurance, that these are in accordance with the legislation and that they do not present significant threat to the
Bank’s development. The Bank strives to obtain independent
opinions for all key risks from at least one independent body.
The funds spent in 2013 and 2014 on payment of taxes are
illustrated in the following table.
EUR 000’
Taxes
2014
2013
3,216
3,133
Liability for taxes slightly increased in 2014. The value added
tax (EUR 1,306 thousand), tax on financial services (EUR
903 thousand) and tax on balance sheet (EUR 829 thousand)
represent the largest share of liabilities.
business report
Subsequent events
Change in the exchange rate between CHF and EUR
In the past, the Swiss central bank artificially maintained exchange rate between CHF and EUR at 1.20 CHF for 1 EUR, as
it was in the interests of the Swiss economy and its exporters.
On 15 January 2015, the Swiss central bank suddenly and
without notice withdrew the support to franc and let the
exchange rate be influenced by market conditions in the
financial market. As a result, the exchange rate fluctuated
significantly which has had a significant impact on loans
linked to the CHF currency. As a result, the principals of
loans in euro equivalent have increased, with the consequent
impact on late payments and higher impairments in 2015.
the second one on 27 April 2015 in the amount of 17 million
EUR. The Bank now complies with all regulatory capital
requirements set by the regulator.
Confirmation of the annual report
The Supervisory Board approved the Annual Report in
May 2015.
Conclusion of negotiations on the sale of Hypo
network in South Eastern Europe with Advent
International and EBRD
In December 2014, an American private equity firm Advent
International and the European Bank for Reconstruction and
Development (EBRD) signed an agreement for the purchase
of Hypo network in Southeastern Europe.
Hypo network consists of 6 banking groups in five countries of South Eastern Europe (Slovenia, Croatia, Bosnia
and Herzegovina, Serbia and Montenegro). The sale of Hypo
network, which was owned by the Republic of Austria, is a
result of the implementation of the measures taken by the
European Commission on 3 September 2013.
Under the new owner the business restrictions do not apply
to the Bank group any longer, which gives the potential for
additional growth.
Completion of the sales process is expected in mid 2015. Until
then, it is necessary to obtain approval from all relevant regulatory authorities and the European Union.
Recapitalization of the Bank
The Supervisory Board of the Bank in 2015 approved two
proposals for the recapitalization of the Bank, the first one
on 20 February 2015 in the amount of EUR 30 million and
47
financial report
Financial Report
Statement of Management’s
Responsibilities
The Management Board has approved the financial statements for the year ended 31 December 2014, the accounting
policies used, and notes to the financial statements.
Bank’s continued operation, and in accordance with the
current legislation and International Financial Reporting
Standards, effective in the EU.
The Management Board is responsible for the preparation
of the financial statements that give a true and fair presentation of the financial position of the Bank and of its financial performance for the year ended 31 December 2014. The
Management Board is also responsible for the appropriate
accounting system and adoption of measures to secure the
assets, and to prevent and detect fraud and other irregularities and/or illegal acts.
Tax authorities may, at any time within a period of five years
after the end of the year for which tax assessment was made,
carry out the audit of the company’s operations, which may
lead to assessment of additional tax liabilities, default interest
and penalties with regards to corporate income tax or other
taxes and levies. Management of the Bank is not aware of any
circumstances that may result in a significant tax liability.
The Management Board confirms that the appropriate accounting policies were consistently applied, and that the
accounting estimates were made under the principle of prudence and the diligence of a good manager. The Management
Board also confirms that the financial statements and notes
thereof have been compiled under the assumption of the
The most recent review of income tax compliance was performed by the tax authorities in 2011 when they reviewed
income tax declarations for the financial years 2008, 2009
and 2010.
The Management Board, 30.04. 2015
48
Dejan Kaisersberger
mag. Marko Bošnjak
mag. Matej Falatov,
dr. Heribert Fernau
Member
Member
Vice president
President
financial report
Independent Auditor’s Report
49
financial report
50
financial report
Financial statements
Income statement
EUR 000’
Notes
2014 Bank
2014 Group
2013 Bank
Interest income and similar income
1
50,676
62,236
62,398
Interest and similar expense
1
(22,954)
(26,095)
(39,692)
27,722
36,141
22,706
460
460
471
Fee and commission income
16,103
16,383
17,159
Fee and commission expense
(2,847)
(3,682)
(3,075)
Net interest income
Dividend income
2
Net fee and commission income
3
13,256
12,701
14,084
Realized gains / (losses) on financial assets and liabilities not
measured at fair value through profit or loss
4
6,081
6,071
(473)
Net gains / (losses) on financial assets and liabilities held for
trading
5
(403)
(403)
506
Net losses from currency translation
6
(110)
(140)
(121)
(14)
(14)
7
Net gains / (losses) on derecognition of assets excluding
non-current assets held for trading
Other net operating losses
7
(1,723)
(2,259)
(2,599)
Administrative expenses
8
(25,698)
(29,442)
(25,540)
Depreciation
9
(2,274)
(2,319)
(2,240)
Provisions
10
(881)
(4,115)
(1,460)
Impairments
11
(55,252)
(56,815)
(95,068)
(38,836)
(40,134)
(89,727)
(1,521)
(1,869)
(5,934)
(40,357)
(42,003)
(95,661)
LOSS FROM ORDINARY ACTIVITY
Income tax
NET LOSS FOR THE YEAR
12
The accompanying notes on pages 57 to 104 form an integral part of the financial statements and should be read in conjunction with them.
51
financial report
Statement of comprehensive income
EUR 000’
Notes
2014 Bank
2014 Group
2013 Bank
(40,357)
(42,003)
(95,661)
OTHER COMPREHENSIVE INCOME AFTER TAX
(2,553)
(2,553)
857
ITEMS THAT WILL BE RECLASSIFIED TO PROFIT OR LOSS IN THE
FUTURE
(3,050)
(3,050)
1,072
Net losses recognized as fair value reserve relating to
available-for-sale financial assets
(3,050)
(3,050)
1,072
Gains / (losses) recognized as revaluation reserve
(1,915)
(1,915)
4,324
Transfer of losses from revaluation reserve to profit and loss
(1,135)
(1,135)
(3,252)
497
497
(215)
(42,910)
(44,556)
(94,804)
NET LOSS FOR THE YEAR AFTER TAX
Income tax relating to components of other
comprehensive income
TOTAL NET COMPREHENSIVE INCOME FOR THE YEAR
30
All of the items in the comprehensive income will be reclassified to profit or loss sometime in the future.
52
financial report
Statement of financial position
EUR 000’
Notes
31.12.2014 Bank
31.12.2014 Group
31.12.2013- Bank
Cash and balances with Central Bank and demand
deposits with banks
13
90,542
90,542
35,102
14
4,272
4,272
6,474
15
44,797
44,799
50,331
1,107,888
1,257,396
1,250,457
Loans
- Loans to banks
16
4,033
4,033
1
- Loans to clients
17
1,101,189
1,251,039
1,247,134
- Other financial assets
18
2,666
2,324
3,322
Financial assets classified as held to maturity
20
84,559
84,559
83,748
Property, plant and equipment
21
3,752
3,791
4,067
Intangible assets
22
3,280
3,354
3,615
Non-current investments in capital of subsidiaries,
associates and jointly controlled entities
23
3,289
7
7
4,033
4,405
5,727
Income tax credits
- Deferred tax assets
30
4,033
4,405
5,727
Other assets
24
3,030
7,013
1,974
1,349,442
1,500,138
1,441,502
4,411
4,411
4,474
TOTAL ASSETS
25
1,245,039
1,391,234
1,300,578
- Deposits from banks and central banks
26a
160,342
160,342
219,348
- Deposits from clients
26a
824,929
816,562
743,117
- Borrowings from banks and central banks
26b
176,267
330,002
226,863
- Borrowings from clients
26b
48
1
-
- Debt securities
26c
4,568
4,568
14,800
- Subordinated liabilities
27
73,003
73,003
73,003
- Other financial liabilities
28
5,882
6,756
23,447
Provisions
29
8,103
12,083
7,636
Tax liabilities
-
182
670
- Current tax liabilities
-
182
-
Financial liabilities measured at amortized cost
- Deferred tax liabilities
30
-
-
670
Other liabilities
31
2,202
5,244
1,847
1,259,755
1,413,154
1,315,205
TOTAL LIABILITIES
Share capital
32a
174,037
174,037
174,037
Share premium
32b
6,300
6,300
68,000
Accumulated and other comprehensive income
32c
(310)
(310)
2,243
Profit reserves
32d
(49,983)
(49,386)
(22,322)
Retained loss (including net loss for the year)
32e
(40,357)
(43,657)
(95,661)
89,687
86,984
126,297
1,349,442
1,500,138
1,441,502
TOTAL EQUITY
TOTAL LIABILITIES AND EQUITY
53
financial report
Statement of changes in equity - Bank
EUR 000’
Share
capital
Share
premium
Accumulated
and other
comprehensive
income
Profit
reserves
Retained earnings
(including net
profit for the year)
Total
equity
174,037
2,696
1,386
1,862
(26,918)
153,063
Comprehensive income for the
year after tax
-
-
857
-
(95,661)
(94,804)
Payment of new capital
-
68,000
-
-
-
68,000
Settlement of losses
brought forward
-
(2,696)
-
(1,862)
4,558
-
Other (actuarial calculation)
-
-
-
-
38
38
174,037
68,000
2,243
-
(117,983)
126,297
year after tax
-
-
(2,553)
-
(40,357)
(42,910)
-
6,300
-
-
-
6,300
Settlement of losses brought
forward
-
(68,000)
-
-
68,000
-
174,037
6,300
(310)
-
(90,340)
89,687
Notes
Balance at 1 January 2013
Balance at 31 December 2013
32
32
32
Statement of changes in equity - Group
EUR 000’
Retained earnings
(including net
profit for the year)
Total equity
2,243
(117,983)
126,297
-
(2,553)
(43,657)
(46,210)
-
6,300
-
-
6,300
Settlement of losses brought
forward
-
(68,000)
-
68,000
-
Other (first consolidation
difference)
-
-
-
597
597
174,037
6,300
(310)
(93,043)
86,984
Notes
Share
capital
32
174,037
68,000
year after tax
-
32
Share Accumulated and other
premium comprehensive income
54
financial report
Statement of cash flows
EUR 000’
2014 Bank
2014 Group
2013 Bank
(38,836)
(40,134)
(89,728)
2,274
2,319
2,240
-
-
2,256
Impairment of property, plant and equipment, investment property,
intangible assets and other assets
175
175
928
Net losses from currency translation
110
141
121
Net losses on financial assets held to maturity
321
321
344
14
14
(7)
Other (profit) / loss from investing
(4,271)
(4,271)
840
Other (profit) / loss from financing
1,234
1,234
(1,472)
Other adjustments of net profit or loss before tax
2,004
5,245
3,674
(36,975)
(34,956)
(80,803)
93,588
148,041
413,261
Net decrease of financial assets held for trading
1,799
1,799
2,526
Net (increase) / decrease of available-for-sale financial assets
1,026
1,025
(8,356)
Net decrease of loans
91,900
146,340
413,099
Net (increase) / decrease of other assets
(1,137)
(1,123)
5,993
(59,102)
(115,815)
(436,363)
(63)
(63)
(3,372)
(59,393)
(117,070)
(434,420)
354
1,318
1,429
(2,489)
(2,730)
(103,905)
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax
Depreciation
Impairment of financial assets held to maturity
Net (gains) / losses on sale of property, plant and equipment, and
investment property
Operating cash flows before changes of operating assets and
liabilities
Decrease of operating assets (excluding cash equivalents)
Decrease of operating liabilities
Net decrease of financial assets held for trading
Net decrease of deposits and borrowings measured at amortized cost
Net increase of other liabilities
Cash flows from operating activities
Corporate income tax credits
-
175
-
(2,489)
(2,555)
(103,905)
3,460
3,461
9,046
Proceeds from sale of property, plant and equipment and investment
property
-
1
8
Proceeds from sale of financial assets held to maturity
-
-
5,383
3,460
3,460
3,656
Net cash flows from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Cash receipts from investing activities
Other proceeds from investing activities
55
financial report
EUR 000’
2014 Bank
2014 Group
2013 Bank
(5,093)
(5,169)
(1,651)
(Disbursements for acquisition of property, plant and equipment,
and investment property)
(898)
(922)
(811)
(Disbursements for acquisition of intangible assets)
(914)
(966)
(833)
(Disbursements for acquisition of investments in capital of
subsidiaries, associates and jointly controlled entities)
(3,281)
(3,281)
(8)
Net cash flows from investing activities
(1,633)
(1,708)
7,395
Cash receipts from financing activities
6,300
6,300
68,000
Other proceeds from financing activities
6,300
6,300
68,000
Cash disbursements from financing activities
(1,234)
(1,234)
(1,223)
(Repayments of subordinated debt)
(1,234)
(1,234)
(1,223)
5,066
5,066
66,777
Effects of exchange rate changes on cash and cash equivalents
728
869
1,170
Net increase of cash and cash equivalents
944
803
(29,733)
Cash and cash equivalents at beginning of period
17,684
17,684
46,247
Cash and cash equivalents at the end of period
19,356
19,356
17,684
Cash disbursements from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Net cash flows from financing activities
EUR 000’
Notes
2014 Bank
2014 Group
2013 Bank
Cash and balances with Central Bank and demand deposits with banks
13
15,323
15,323
17,683
Loans to banks with maturity up to three months
16
4,033
4,033
1
19,356
19,356
17,684
Cash and cash equivalents comprise:
Total
In the statement of cash flows, cash and cash equivalents
comprise of cash and balances with the Central Bank (excluding the obligatory reserves), and loans to banks with initial
maturity of up to 90 days. The same accounting policy in
respect of cash equivalents applies to the Group and the Bank.
Interest and dividends
2014 Bank
2014 Group
2013 Bank
Interest paid
17,621
20,733
26,800
Interest received
27,393
37,255
32,708
460
460
471
Dividends received
56
EUR 000’
financial report
Notes to Financial Statements
Basic information
Hypo Alpe-Adria-Bank, d. d., with its headquarters at
Dunajska cesta 117, Ljubljana, is a Slovenian public limited
company, registered for the provision of universal banking
services in the Slovenian market.
Full address of the Bank is: Hypo Alpe-Adria-Bank, d. d.,
Dunajska cesta 117, Ljubljana, Slovenia.
The Bank’s sole owner isHypo Group Alpe Adria AG,
Klagenfurt, Austria. Until 29 December 2009, the ultimate parent of the Bank was Bayern LB, Germany. On 30
December 2009, the ultimate parent of the Company became
the Republic of Austria, with 100-percent ownership of Hypo
Alpe-Adria-Bank International AG. For the purpose of restructuring at the Group level, as at 30 March 2014, shares
were transferred from Hypo Alpe-Adria-Bank International
AG to SEE Holding AG. On 30 October SEE Holding AG
was renamed to Hypo Group Alpe Adria AG.
The consolidated financial statements of the Group, in addition to Hypo Hypo Alpe-Adra-Bank d.d. also include Hypo
Leasing d.o.o., which is fully consolidated.
Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control,
and continue to be consolidated until the date when such
control ceases. The financial statements of the subsidiaries are
prepared for the same reporting period as the parent bank,
using consistent accounting policies. All intra-group balances, transactions, unrealised gains and losses resulting from
intra-group transactions and dividends are eliminated in full.
Losses within a subsidiary are attributed to the non-controlling interest even if that results in a deficit balance. A
change in the ownership interest of a subsidiary, without a
loss of control, is accounted for as an equity transaction. If
the Group loses control over a subsidiary, it:
The consolidated financial statements can be obtained at the
following addresses or web pages:
derecognises the assets (including goodwill) and liabilities of the subsidiary
Hypo Alpe-Adria-Bank, d. d.
derecognises the carrying amount of any non-controlling interest
Dunajska cesta 117
1000 Ljubljana
derecognises the cumulative translation differences,
recorded in equity
Slovenia
recognises the fair value of the consideration received
www.hypo-alpe-adria.si
recognises the fair value of any investment retained
recognises any surplus or deficit in profit or loss
Hypo Group Alpe Adria AG
Alpen-Adria-Platz 1
9020 Klagenfurt
Austria
www.hypo-alpe-adria.com
reclassifies the parent’s share of components
previously recognised in other comprehensive income
to profit or loss or retained earnings, as appropriate.
All the amounts in the financial statements and the accompanying notes are stated in thousands euros unless stated
otherwise.
The Company’s owners have the right to adjust the financial statements after their publication and approval by the
management.
57
financial report
Important accounting policies
The following accounting guidelines have been applied in
the preparation of the financial statements. These policies
were, unless otherwise stated, also used in previous years.
The presented accounting policies and estimates are used
throughout the Group despite indications that they are used
for the Bank.
Financial statements were prepared in accordance with the
International Financial Reporting Standards (hereinafter
IFRS) as adopted by the European Union.
The Bank prepares its financial statements (with the exception of the cash flow information) on the accrual basis of
accounting.
The financial statements of the Bank have been prepared
under the historical cost convention and modified by the
revaluation of available-for-sale financial assets, financial
assets and financial liabilities measured at fair value through
profit or loss, and all derivatives.
The Bank’s Annual report includes information and notes
as prescribed by the Companies Act, IFRS as adopted by
the EU, and the Decision on books of account and annual
reports of banks and savings banks.
The preparation of financial statements under IFRS requires
the use of estimates and fundamental accounting assumptions such as going concern and accrual. Under these assumptions, the effects of transactions and other business
events are recognized on accrual and not when they are paid,
and are recorded and reported for periods to which they refer.
The significant accounting estimates and assumptions are
presented in Section 24 of the financial statements.
The estimates and assumptions are continuously reviewed
and are based on the latest information or latest developments or past experience.
1. Going concern assumption
The financial statements have been prepared on the going
concern basis, which assumes that the process of selling the
Bank to the American fund Advent International in cooperation with the EBRD will be completed in 2015.
58
On 22 December 2014 Advent International and EBRD signed
an agreement on the purchase of Hypo Group Alpe Adria
AG. The decision concerning the new owner has been made
in accordance with the decision of the European Commission
adopted in September 2013. Completion of the sales process
is subject to approval by the European Commission and the
competent supervisory authorities. It is also conditional on
the fulfillment of a number of additional conditions. Group
and individual subsidiary banks actively participate in the
procedure to complete the sale. It is anticipated that the sales
process will be completed by the end of June 2015.
By the end of March 2014 the majority owner of Hypo AlpeAdria-Bank d.d. Ljubljana was Hypo Alpe-Adria-Bank
International AG in Klagenfurt.
In preparation for the process of selling the network of Hypo
Alpe-Adria-Bank subsidiaries operating in southeastern
Europe, the shares of Hypo Alpe-Adria-Bank d.d. Ljubljana
held at the Central Securities Depository were transferred
from the account of Hypo Alpe-Adria-Bank International
AG Klagenfurt to the account of the transferee Hypo SEE
Holding AG Klagenfurt, registration no. FN 350921, AlpenAdria-Platz 1 in Klagenfurt. On 30 October 2014 Hypo SEE
Holding AG changed its name to Hypo Group Alpe Adria
AG (HAAG).
At the end of October 2014 HGAA was sold to FIMBAG
and was in this way separated from the previous shareholder
Hypo Alpe-Adria-Bank International AG.
2. Segment Reporting
In accordance with IFRS 8, the Bank is not required to report per individual business segments as it has not issued
either debt or equity instruments that are traded publicly
(on domestic or foreign stock exchange or outside the stock
market inclusive of local or regional markets) and has not
submitted or is not in the process of submitting its financial
statements to the Securities and Exchange Commission or
another administrative organization with intention to issue
any group of instruments on a public market.
financial report
3. Foreign Currency Translation
Functional and reporting currency
The financial statement items of the Bank are measured using the currency of the primary economic environment in
which the Bank operates, i.e. euro, which is a functional and
presentation currency of the Bank.
Translation of foreign currency transactions
Translation gains and losses resulting from the change of
amortized cost of monetary securities nominated in foreign
currency that are classified as available-for-sale financial
assets are recognized in the profit or loss. Translation gains
and losses resulting from non-monetary securities, such as
equities, classified as available-for-sale financial assets, are
recognized in the revaluation reserves together with the fair
value measurement effect.
Gains and losses resulting from purchase and sale of foreign
currencies are recognized in the profit or loss as net profit
from financial assets and liabilities held for trading.
4. Interest Income and Expense
Interest income from debt securities is recognized in the
profit or loss using the effective interest method.
The effective interest method is a method of calculating the
amortized cost of a financial asset or a financial liability and
of allocating the interest income or interest expense over the
relevant period. The effective interest rate is the rate that
exactly discounts estimated future cash payments.
Interest income and expenses for other interest bearing financial instruments are recognized in the profit or loss in
the charged amounts on the basis of the amounts, deadlines,
and methods prescribed by the Bank’s interest rates price list.
Once a financial asset or a group of similar financial assets
has been written down as a result of impairment, interest
income is recognized using the rate of interest applied in
discounting future cash flows for the purpose of measuring
the impairment loss.
Interest income derived using the method described is unwinding and is recognized separately from the ordinary
interest income.
Interest income includes regular, default and deferred interest
for interest bearing financial instruments and prepaid fees
for approved loans.
Interest on liabilities for deposits and borrowings are recognized as interest expenses.
5. Fee and Commission Income and Expense
Fees and commissions are generally recognized on an accrual basis when the service has been provided. Fees and
commissions for services that are performed continuously in
a certain period of time are recognized proportionally over
the period in which the service is performed.
Fees and commissions include primarily fees for payment
transactions, commissions on loan transactions (loan management fees, costs of reminders), commission on brokerage
transactions and warranty fees.
Fees resulting from approval of loans are recognized as interest income and expenses.
6. Dividend income
Dividends are recognized in the income statement when
they are declared.
7. Financial assets
a) Classification
On initial recognition, the Bank classifies the financial assets
to the following groups according to the purpose of acquisition, duration of possession and type of financial instrument:
held to maturity investments, available-for-sale financial
assets, financial assets at fair value through profit or loss, or
investments in loans and receivables.
Held-to-maturity financial asset are non-derivative financial
assets with fixed or determinable payments that an entity
intends and is able to hold to maturity and that do not meet
the definition of loans and receivables and are not designated
on initial recognition as assets at fair value through profit or
loss or as available-for-sale. Held-to-maturity financial assets
are measured at amortized cost. If the Bank sells other than
59
financial report
insignificant amounts of held-to-maturity financial assets, or
as a consequence of a non-recurring, isolated event beyond
its control that could not be reasonably anticipated, all of its
other held-to-maturity financial assets must be reclassified as
available-for-sale in the current and next two financial years.
Available-for-sale financial assets are non-derivative financial
assets, which the Bank intends to hold for indefinite period of time and which may be sold in response to liquidity
requirements, changes of interest rates, currency exchange
rates or prices of financial instruments.
The Bank can exceptionally be allowed to use valuation
model for measurement of the fair value of defined financial
instruments, if it is able to prove, that the existing market
for these financial assets is not active. To define if a market
is active or inactive, the Bank must define the key parameters, which indicate market activity. It is also important to
follow up the trends in those parameters. The parameters
should be used consistently according to the content and in
time, so that as much of subjective judgement in interpretation of the given results can be eliminated as possible. The
Bank should take in account all risk parameters under the
conditions of inactive market, which would be under the
condition of the active market, required by the participants
on the market, most of all the issuer’s credit risk and the
premium for liquidity.
Financial Assets Held for Trading
A financial asset is classified as held-for-trading if it is acquired principally for sale of repurchase in the near term,
or forms part of a portfolio of financial instruments that
are managed together and for which there is evidence of
short-term profit taking. Derivative financial assets are also
classified as held for trading.
In the statement of financial position, derivative financial
instruments are initially recognized at cost which is equal
to the fair value of consideration received or granted. They
are measured at fair value which is determined on a daily basis using generally accepted financial methodology,
whereby quotations/prices of inputs (e.g. zero coupon yield
60
curve, FRA, interest rate differentials of currencies, etc.)
are obtained from information systems such as Reuters and
Bloomberg.
Fair values of derivatives are recognized either within assets
or liabilities when their fair value is negative. All derivative
financial instruments of the Bank are classified as financial
assets held for trading and are not used in hedge accounting.
Loans and Receivables
Loans and receivables are non-derivative financial assets
with fixed or determinable payments that are not traded on
an active market.
b) Initial recognition and measurement
All financial assets are recognized on the date of trading
at fair value, which equals their cost, increased (for instruments that are not recognized at fair value through profit or
loss) by costs that are directly attributable to the transaction,
whereas for financial assets at fair value through profit or
loss, costs of the transaction are reported in the profit or
loss. Subsequent measurement of a financial asset reflects
its initial designation.
Financial assets held for trading and available-for-sale financial assets are recognized at fair value. Gains or losses on
financial assets at fair value and held for trading are recognized in the profit or loss of the period in which they accrued.
Gains or losses on available-for-sale financial assets designated at fair value are recognized in the other comprehensive income until the asset is derecognized or impaired, in
which case gains and losses are transferred to profit or loss.
Interest accrued on the basis of effective interest rate method
and exchange-rate differences from cash items classified as
available-for-sale financial assets are recognized directly in
profit or loss.
Loans and receivables, and financial assets held to maturity
are carried at amortized cost.
financial report
c) Reclassification of financial assets
Financial instruments may only be reclassified from heldfor-trading group in exceptional circumstances such as
when balancing maturity structure of assets and liabilities
or natural hedging against market risks. The fair value at
the reclassification date becomes financial instrument’s new
amortized cost. Reclassification of an asset from the group
of financial assets held to maturity is not allowed.
d) Derecognition
Derecognition of financial assets is carried out when contractual rights to cash flows expire, or when they are transferred to another party and where such transfer fulfils the
criteria for derecognition (an entity has transferred all risks
and benefits of the asset).
e) Principles applied in fair value measurement
The calculation of the fair value of financial assets traded
on an active market is based on the published market value
on day of the statement of financial position, namely the
price that represents the highest demand value excluding
the transaction costs. The fair value assessment of financial instruments not traded in an active market is based on
values obtained from an external expert. The Bank verifies
the assessment values and if confirmed, the assessed values
are taken into account. In case there is no external expert’s
valuation an internal valuation is prepared. Internal valuations are prepared using standard valuation methods such
as discounted future cash flow model, peer-to-peer analysis
(direct comparison with companies that are publicly traded) and liquidation method. Final valuation of the financial
asset takes into account all approaches, but using different
weights, depending on industry, financial stability of the
company and other factors that can affect fair value of financial instruments.
In accordance with IFRS 13, for valuation of derivatives in
2013, the Bank for the first time considered CVA and DVA
parameters. The CVA parameter (credit valuation adjustment) equals expected losses due to counterparty credit
risks with whom a financial institutions (the Bank) enters
into an OTC transactions. Under consideration of the credit
risk, fair value is calculated as derivative’s market value less
CVA. The DVA concept (debt valuation adjustment) is a
self-assessment (cost price) of credit risk that is added to
the derivative’s market value.
8. Impairment of Financial Assets
a) Financial Assets at Amortized Cost
General:
The Bank makes an assessment of its financial assets
portfolio at amortized cost and off-balance exposure on
a monthly basis using its own methodology:
The necessary impairment is recognized for financial
assets at amortized cost, and
The required provisions are set aside for off-balancesheet exposures.
The method used to create the necessary impairment of financial assets at amortized cost depends primarily on the
exposure (the Bank distinguishes between individually relevant exposures and individually irrelevant exposures) and
on formal status of financial assets. The Bank distinguishes
between the financial assets that are subjected to breaches
of material factors defined by the Bank as objective factors
indicating an impairment of the financial asset, and the financial assets where no such factors are detected.
In accordance with the methodology of the HGAA Group,
the Bank treats each client, whose total exposure exceeds
EUR 150,000, as individually significant exposure.
Distinguishing Between Different Methods of Impairment of
Financial Assets at Amortized Cost
Financial assets at amortized costs are classified into one
of the following segments for the purpose of impairment:
Individually significant exposures, in relation to
which a breach of at least one objective factor indicating the impairment of the financial asset at amortized
cost is detected;
Individually insignificant exposures, in relation to
which a breach of at least one objective factor indicating the impairment of the financial asset at amortized
cost is detected;
61
financial report
All exposures where no breach of any of the objective
factors indicating the impairment of the financial
asset at amortized cost is detected and where an individual impairment is not required.
In its internal policies, the Bank specified the following objective factors indicating the impairment of the financial
asset at amortized cost:
Materially important delay in settlement of
contractual obligations lasting over 90 days;
Bankruptcy or compulsory settlement of the client;
Existence of proof of client’s serious financial
problems, including also:
Reprogramming due to client’s economic,
legal or other problems,
Irregular settlement of liabilities within
the group of related entities,
Poor client’s internal rating; or
Significant economic problems
in the client’s industry.
Detailed Presentation of Individual Methods of Impairment of
Financial Assets at Amortized Cost
Individual impairment
Individually relevant exposures are addressed individually;
in the event of a breach of at least one of previously determined factors that objectively indicate the impairment of an
individual financial asset at amortized cost, such exposures
are impaired individually. The Bank individually assesses
expected cash flows for repayment (it evaluates expected cash
flows from regular loan repayment as well as expected cash
flows from realization of collateral); in the event of negative
difference between the discounted value of all expected cash
flows and the book value of receivable, the Bank creates individual impairment. Realization of collateral is recognized as
potential future cash flow in cases where the collateral fulfils
the required formal criteria with regards to the degree of
legal certainty and recovery. Impairment of such exposures
is referred to individual impairment (also known as Specific
Risk Provisions – SRP).
62
Based on the available information, the Bank makes individual assessment in terms of the time and amount of expected
repayment, whereas current value of expected cash flows is
calculated with the use of discounted effective interest rate.
Collective impairment
Individually irrelevant exposures that also fulfil at least one
of the previously determined factors are grouped into groups
with similar characteristics, and collectively impaired using
the formula that reflects the fact that at least one factor, which
objectively indicates the impairment of individual financial
asset, was breached. The amount of impairments created
depends primarily on the scope of relevant collateral (it is
the exposed part of the investment that is subject to collective
impairment) and on the segment into which the exposure is
allocated. The loans and other financial assets at amortized
cost granted to the following borrowers are designated by
the Bank as groups of loans with similar attributes:
Group of financial assets granted to enterprises for
their regular operations;
Group of financial assets granted to sole
proprietors;
Group of financial assets granted to public sector
entities and budget users;
Group of financial assets granted to individuals.
The impairments for the above exposures are called Collective
Impairments (CI).
In 2014 the Bank followed the HAA Group’s methodology
relating to group impairments and achieved greater coverage
by those impairments.
Group Impairments - latent losses
Group impairments (Latent losses) are recognized for exposures that as of the reporting date do not violate any of the objective factors indicating the impairment of the financial asset
and for individually treated exposures where no individual
impairment is required. Group impairments (Latent losses)
are computed using mathematical formula that reflects the
fact that there are no objective factors indicating impairment
of the financial asset. The mathematical formula derives from
the Basel II methodology, adjusted for the assessment of the
financial report
scope of realized but not yet identified losses in the Bank’s
portfolio. The adjustment is made in respect of collateral
and determination of the time period in which the Bank is
capable of detecting the occurrence of the loss.
Relevant value of Collateral:
The relevant value of collateral used by the Bank is the market
value of collateral decreased by:
Expected costs of realization of such collateral,
Expected decrease of the collateral’s value due to
the realization process,
Considering the time component of the realization
of collateral (discounting).
The cumulative effect of all three factors, which cause the
current value of expected cash flows from realization of collateral to be normally lower than its current market value,
is reported by the Bank in its calculations through use of
special coefficients, in accordance with the policy of the
HGAA Group.
For collateral to be confirmed as being accounted for, it must
meet at least minimum criteria in terms of legal certainty and
recovery and the Bank must be in possession of an authentic
assessment of the collateral’s market value.
Probability of default
The Bank assesses the probability of default on the basis of
internal rating tools. According to the Hypo Group policy, different rating tools are used for individual segments
of clients. Regardless of the tool applied, the final results
are transferred to a single 25-level scale that determines the
probability of default for each client separately.
Expected loss in the event of default
The expected scope of loss in the event of default (loss given
default) is shown using the LGD coefficient, which indicates
what part of unsecured exposure the Bank can expect to
lose in the event of default. The coefficients are compliant
with the HGAA Group policies and follow the conservative
assessment of expected losses in the IRB approach to the
new Capital Directive CAD III.
Segment
LGD (Basel II
Standard)
Banks
0,50
Regional government and local authorities
0,45
Central government and central banks
0,45
Individuals
0,90
Legal entities
0,70
Public sector entities
0,50
Project financing
0,75
Period in which the Bank identifies the realization
of portfolio loss
The Bank has defined the period, in which it recognizes the
realization of loss in its portfolio (Loss identification period),
as a period during which the Bank can detect that the client
is breaching one of the objective indicators of impairment
of the financial asset. The Bank has implemented a monitoring system by means of which it believes that it is capable
of detecting the negative events for most of its clients in
relatively short time. The Bank uses the LIP factor of 1.0 for
financial assets where regardless of the sufficient frequency
in monitoring of the portfolio, the Bank is unable to assess
with sufficient probability potential loss since the regularity of repayments of liabilities does not reflect the ability of
clients to repay loans when they mature. Such transactions
include above all overdraft facilities on transaction accounts,
credit lines, guarantees, and loans with a single repayment
or loans with a moratorium. For all other exposure the Bank
uses the LIP factor 0.5.
b) Available-for-sale financial assets
The Bank assesses on a monthly basis whether there are any
indications of impairment of available-for-sale financial assets. If there is objective evidence that an impairment loss
on financial assets available for sale has been incurred, the
63
financial report
cumulative loss that has been (previously) recognized in
OCI impairment is transferred from equity to profit or loss.
Impairment losses included in profit or loss as equity instruments are not reversed through profit or loss. If the value of a
debt instrument classified as available-for-sale increases and
the increase can be related objectively to an event occurring
after the impairment loss was recognized, the previously
recognized impairment loss is reversed through profit or loss.
The Bank applies the following criteria to determine whether
available-for-sale financial assets have been impaired:
For debt instruments: fair value is lower than 90
percent of the purchase value (which represents the
value of 100 percent),
For equity instruments: significant decrease of the fair
value lasting more than 9 months, and the fair value
falls more than 20 percent below the purchase value.
c) Restructured loans
The Bank assesses the restructured loans individually at the
time of approval of restructured loan in order to determine
the need for impairment.
When a loan is restructured due to client’s economic, legal
or other problems that significantly affect the client’s future
ability to repay its obligations, the Bank accordingly reclassifies such client to a lower rating grade and individually
assesses on a monthly basis the need for individual impairment. If the Bank does not detect the need for individual
impairment, the client is considered within a group using
the same methodology as for other investments of the Bank.
9. Property, Plant and Equipment, and Intangible
Assets
Property, plant and equipment and intangible assets are
stated at cost in the financial statements less accumulated
depreciation and impairment losses.
On initial recognition, the cost of an asset includes all expenditures that are directly attributed to the acquisition and
are necessary to make the asset ready for its intended use.
Subsequent expenditure incurred on an item of property,
plant and equipment is added to the cost of the assets and
64
recognized only if it is probable that the future economic
benefits embodied in the item of property, plant and equipment will flow to the entity and if these costs can be reliably
measured. All other expenditure such as additional investment, maintenance and repairs, are recognized in profit or
loss as an expense when incurred.
Depreciation and amortization expense is accounted for
individually on a straight-line basis by allocation of the costs
of the assets to the residual value over the useful lives of the
assets.
The depreciation (amortization) rates applied are as follows:
Buildings
Computer hardware
Furniture and other
equipment
Cars
Investments in leasehold
improvements
Intangible assets
2014 Group
2013
2.5%
2.5%
20 to 50%
20 to 33.3%
5 to 50 %
5 to 50 %
12.5 to 20%
20%
5 to 50 %
5 to 50 %
10 to 20%
10 to 20%
The residual values of assets and their useful lives are reviewed as of the day of the statement of financial position
and are adjusted accordingly, if expectations differ from the
previous assessments.
The land is recognized separately from the buildings. As it
normally has unlimited useful life, the Bank does not depreciate it.
The assets are derecognized upon their disposal or when no
additional future economic benefits can be expected from
their use. Gains and losses resulting from disposal of assets
represent the difference between the net gain on disposal
and the carrying amount of the asset.
The Bank assesses on the day of the statement of financial
position, whether there is any impartial evidence that an asset
might be impaired. If there is objective evidence that an asset
has been impaired, the assessment of the recoverable amount
is made. The recoverable amount is the higher of the value
in use of the asset and its fair value less costs of disposal. If
the recoverable value is higher than the carrying amount, the
financial report
impairment of assets is not required, whereas if the contrary
is true, impairment loss is recognized in profit and loss in
the amount of the difference between the recoverable and
carrying amount of the assets.
10. Inventories
Inventories are included under item “Other assets”. On the
level of the Group the Inventories represent:
Repossessed vehicles and equipment under finance
lease contracts that were canceled. First inventories
are valued on the basis of the sum of future principle
repayments from each of the leasing contracts. If so
established carrying amount of the asset exceeds the
fair value of the asset the impairment is recognized
under revaluation expenses.
Items for subsequent financial leases, for which an
invoice for the payment of the purchase price by the
end of the financial year has already been obtained,
however the contract with the lessee has not yet been
activated. Inventories are stated at a lower cost than
the purchase price and the net realizable value.
Finance lease is a transfer of all significant risks and rewards
of the ownership of the leased asset. Finance leases are recognized as assets and liabilities in the amount of fair value
of the leased asset or, if lower, the present value of the minimum total of lease payments. Depreciation of leased assets
is consistent with the accounting policies of own depreciated
assets. In the event that there is no guarantee that the lessee
will take ownership of the leased asset at the end of the lease,
the depreciation period is shorter than the useful life of the
leased asset or the contractual period of the lease.
Bank or Group as the Lessor
For an asset leased as finance lease the present value of future
lease payments is shown as finance lease receivables. Finance
lease income is recognized in profit or loss over the entire
life of the lease. Finance lease receivables are recognized in
the amount of net investment in the lease inlcluding unguaranteed residual value.
The Group values inventories at purchase price.
For operating leases the lease payments received are included in income in proportion to the duration of the contract.
Assets leased under operating leases are recognized in the
statement of financial position as investment property or
tangible assets.
11. Leases
12. Cash and cash equivalents
A lease is a contractual relationship in which the lessor transfers the right to the asset for an agreed period of time to the
lessee in exchange for a payment or a series of payments.
Lease contracts are accounted for as finance or operating
lease in accordance with their initial classification. The key
factor for classifying a lease is the scope in which the risks
and rewards of ownership are transferred from the lessor
to the lessee.
In the statement of cash flows, cash and cash equivalents
comprise of cash and balances with the Central Bank excluding the obligatory reserves, short-term bank deposits and
other, short-term highly liquid investments with maturity
of up to 90 days.
Bank or Group as the Lessee
The cash flow statement has been prepared using the indirect
method, i.e. Version II.
Leases where the lessor retains a significant portions of the
risks and rewards of ownership (of the asset) are classified as
operating leases. Payments for operating leases are included
in the profit and loss statement in proportion to the duration
of the contract. When an operating lease is terminated prematurely, all payments required by the lessor are recognized
as an expense in the period the contract was terminated in.
Cash and cash equivalents are measured at amortized costs.
13. Statement of cash flows policy
14. Provisions
A provision is recognized when the Bank has a present legal
or constructive obligation as a result of a past event, and
it is probable that an outflow of economic benefits will be
required to settle the obligation and the amount thereof can
be reliably measured.
65
financial report
Where there are a number of similar obligations, the likelihood that an outflow will be required for the settlement
is determined by considering the class of obligations as a
whole. A provision is recognized even if the likelihood of an
outflow with respect to any one item included in the same
class of obligations may be small.
The Bank recognizes the provisions in respect of potential
credit-related obligations (financial and service guarantees,
provisions for undrawn part of the loan), employees’ benefits
(jubilee awards, termination benefits upon retirement), and
provisions for potential litigation.
15. Taxes
The corporate income tax is accounted for at the tax rate
applicable on the date of the statement of financial position.
Tax is levied on the tax basis determined in accordance with
the Corporate Income Tax Act. The tax rate applicable for
2014 is 17 percent.
Deferred tax is provided using the balance sheet liability
method, providing for temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes;
deferred tax is recognized at the rate enacted/substantively
enacted that are expected to apply in the periods when temporary differences reverse. A deferred tax asset is recognized
only to the extent that it is probable that future taxable profit
will be available against which the deductible temporary
differences can be utilized.
The deferred tax, associated with the measurement of available-for-sale financial instruments, is recognized directly
in the equity.
16. Consolidation
At the cut-off date the Bank has two subsidiaries in its balance sheet:
Hypo Rešitve d.o.o.
Hypo Leasing d.o.o.
The consolidated financial statements and accompanying
notes are shown on separate financial statements and the
notes of the Bank.
66
The Bank fully consolidates the financial statements of the
subsidiary Hypo Leasing d.o.o. Full consolidation means that
the accounts of all companies in the group are added up from
item to item and the following are excluded:
direct and indirect equity investments of the Bank in
subsidiaries (consolidation of capital),
mutual receivables and liabilities,
mutual income and expense,
unrealized net gains and losses resulting from intra-group transactions.
In the consolidation the Bank takes into account the following assumptions:
separate financial statements have been prepared
on the basis of uniform accounting policies for like
transactions,
items in separate financial statements are equally
broken down and presented,
separate financial statements are prepared for the
same financial year.
The Bank as the acquiring company decided to use for the
accounting of the business combination the “pooling of interests” method. This decision enables it to use IAS 8 which
requires that in the absence of specific guidance in IFRS the
management at its own discretion develop and use appropriate and credible accounting policy.
Characteristics of the “Pooling of interest” method:
Both companies (the acquirer and the acquired company) keep their financial statements in a manner
that shows that the companies have always been in
the group. In the consolidated financial statements all
the assets acquired and liabilities are carried at book
value and shall not be revalued to fair value as at the
purchase method.
In addition, there is no adjustment to fair value and
no recognition of new assets or liabilities at the date
of acquisition as it would be in the case of the purchase method. The only adjustment that is needed is
to harmonize and standardize accounting policies.
financial report
Investment in subsidiary is recognized at nominal
value.
In the consolidated statements of financial position,
goodwill is not formed. Any difference between the
purchase value of the investment and the capital of
the acquired company at the level of consolidated
statements is reflected in equity (retained earnings
/ losses).
The consolidated income statement includes the
full-year financial results of both acquiring and the
acquired company, regardless of when the business
combination occurred.
17. Employee benefits
In accordance with the law, the Bank provides to its employees jubilee awards and termination benefits upon retirement.
An independent actuary calculates the provisions on the date
of the statement of financial position. The calculation of the
termination benefits upon retirement is tied to the pension
qualifying period of each individual employee. All the changes in provisions set aside for jubilee awards are recognized
in the profit or loss, as are changes in provisions created for
termination benefits on retirement. Actuarial gains and losses
recognized on account of provisions for pension benefits
are recognized in the statement of comprehensive income.
Employees are entitled to receive the jubilee award for every
ten years of service with the same employer.
The Bank pays social security contributions at the rate of
8.85 percent in accordance with the Slovenian legislation.
These payments are recognized in the financial statements
as labor costs in the period they refer to.
18. Financial liabilities
Financial liabilities (received loans, deposits, securities) are
initially recognized at fair value (normally at purchase price).
The costs of transaction are recognized in the profit or loss.
After initial measurement they are recognized at amortized
cost. The difference between the initially recognized value
and the final value of the asset is shown in the profit or loss
as interest expense using the effective interest rate method. A
financial liability is derecognized only when the contractual
obligation is fulfilled, cancelled or expired.
19. Share capital
Share capital is recorded in the nominal value and has been
subscribed and paid-up by the owners.
20. Financial guarantees
Financial guarantee contracts require the issuer to make
specified payments to reimburse the holder for a loss it incurs if a specified debtor fails to make payment when due
under the original or modified terms of a debt instrument.
Such guarantees are issued to banks, financial institutions,
and other entities as means of securing loans, overdrafts
and other banking facilities. Financial guarantee contracts
are initially recognized at fair value which is equal to the fee
received. Fees received are transferred to profit or loss using
the straight-line method.
21. Fiduciary accounts
The Bank also offers its clients securities brokerage services
and asset management services. Operations are conducted
through a separate account and the client assumes the operational risk. A commission charged for these services to
clients is recorded in the Note number 3b. These assets are
not included in the statement of financial position but rather
in the off-balance-sheet items as authorized operations.
Additionally, in accordance with the local legislation, assets
and liabilities of brokerage services’ clients as well as revenues and fee and commission income and expense related
to brokerage services are recorded in Note no. 34.
22. Fair value under IFRS 13
The Group measures derivative financial instruments at fair
value as at the reporting date. Fair value measurement is
also applied to the initial measurement of financial assets
subsequently measured at amortized cost.
Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date.
Fair value measurement is based on an assumption that the
sale or transfer transaction takes place either on:
The principal market for the asset or a liability, or
67
financial report
In the absence of a principal market, on the most
advantageous market for the asset or liability
The entity must have access to the principal or the most
advantageous market. Fair value of an asset or a liability is
measured under the assumptions which market participants
would use to determine the price of an asset or a liability
when acting in their own benefit, i.e. their own economic
interest.
A fair value measurement of a non-financial asset takes into
account a market participant’s ability to generate economic
benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the
asset in its highest and best use.
The Bank uses valuation techniques that are appropriate in
the circumstances and for which sufficient data are available
to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or
disclosed in the financial statements are categorized within
the fair value hierarchy, described as follows, based on the
lowest level input that is significant to the fair value measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 — Valuation techniques for which the lowest level
input that is significant to the fair value measurement is directly or indirectly observable
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is
unobservable
For assets and liabilities that are recognised in the financial
statements on a recurring basis, the Company determines
whether transfers have occurred between Levels in the hierarchy by re-assessing categorization (based on the lowest
level input that is significant to the fair value measurement
as a whole) at the end of each reporting period.
68
of the financial statements for the year that ended on 31
December 2013 with the exception of new and amended
standards and interpretations issued by the International
Accounting Standards Board (hereinafter IASB) and
Interpretations Committee of the International Financial
Reporting Standards (hereinafter IFRIC) and endorsed by
the European Union and whose application is mandatory
for annual reporting period that begins with 1 January 2014.
IFRS 11 - Joint Arrangements, adopted by the EU on
11 December 2012 (effective for annual periods beginning on 1 January 2014 or later);
IFRS 12 - Disclosure of Interest in Other Entities, adopted by the EU on 11 December 2012 (effective for
annual periods beginning on 1 January 2014 or later);
IAS 27 (changed in 2011) - Separate Financial Statements,
adopted by the EU on 11 December 2012 (effective for
IAS 28 (changed in 2011) - Investments in Associates and
Joint Ventures, adopted by the EU on 11 December
2012 (effective for annual periods beginning on 1
January 2014 or later);
Amendments to IFRS 10 - Consolidated Financial
Statements, IFRS 11 - Joint Arrangements and IFRS 12
- Disclosure of Interests in Other Entities - Instructions
for transition adopted by the EU on 4 April 2013
(effective for annual periods beginning on 1 January
2014 or later);
Statements, IFRS 12 - Disclosure of Interests in Other
Entities and IAS 27 (revised 2011) - Separate Financial
Statements - Investment companies adopted by the
EU on 20 November 2013 (effective for annual periods beginning on 1 January 2014 or later);
23. Amendments to standards and interpretations
Amendments to IAS 32 - Financial Instruments:
Presentation - Offsetting Financial Assets and Financial
Liabilities, which the EU adopted on 13 December
January 2014 or later);
The accounting policies used in the preparation of these
financial statements are the same as in the preparation
Amendments to IAS 36 - Impairment of Assets Disclosures of recoverable amount of non-financial
financial report
assets held by the EU on 19 December 2013 (effective
for annual periods beginning on 1 January 2014 or
later);
Amendments to IAS 39 - Financial Instruments:
Recognition and Measurement - Novation of derivative financial instruments and the continuation of
hedge accounting by the EU on 19 December 2013
2014 or later).
The adoption of these amendments to existing standards
has not led to changes in accounting policies of the Bank
and the Group.
Standards and interpretations issued by the IASB and adopted
by the European Union that are not yet in force
At the date of authorization of these financial statements the
following standards, amendments to existing standards and
interpretations issued by the IASB and adopted by the EU,
were issued but have not yet entered into force:
Amendments to various standards Improvements to
IFRS (2010-2012), resulting from the annual improvements to IFRS (IFRS 2, IFRS 3, IFRS 8, IFRS 13, IAS
16, MSR 24 and IAS 38), in particular with a view to
removing inconsistencies and clarifying text adopted by the EU on 17 December 2014 (amendments
should be applied for annual periods beginning on
1 February 2015 or later);
IFRS (2011–2013), resulting from the annual improvements to IFRS (IFRS 1, IFRS 3, IFRS 13 and IAS 40),
in particular with a view to removing inconsistencies and clarifying text adopted by the EU on 18
December 2014 (amendments should be applied for
Amendments to IAS 19 - Employee Benefits - Defined
benefit plans: Contributions of employee adopted by
the EU on 17 December 2014 (effective for annual
periods beginning on 1 February 2015 or later);
IFRIC 21 - Levies, adopted by the EU on 13 December
June 2014 or later);
The Bank and the Group forsee that the adoption of these
standards, amendments and interpretations will not have a
significant impact on the financial statements in the period
of initial application.
Standards and interpretations issued by the IASB and not yet
adopted by the European Union
Currently, IFRS, as adopted by the EU, do not differ significantly from the regulations adopted by the International
Accounting Standards Board (IASB), with the exception of
the following standards, amendments to existing standards
and interpretations that on the publication date of the financial statements (listed below dates of entry into force apply to
the entire IFRS) have not been validated for use in the EU:
IFRS 9 - Financial Instruments (effective for annual
periods beginning on 1 January 2018 or later);
IFRS 14 - Regulatory deferral accounts (effective for
IFRS 15 - Revenue from contracts with customers
2017 or later);
Statements and IAS 28 - Investments in associates
and joint ventures - Sale or contribution of funds
between investors and its affiliated companies and
joint ventures (effective for annual periods beginning
on 1 January 2016 or later);
Statements, IFRS 12 - Disclosure of Interests in Other
Entities and IAS 28 - Separate Financial Statements Investment companies: exemptions in consolidation
2016 or later);
Amendment to IFRS 11 - Joint Arrangements - accounting for acquisition of shares in the joint action (effective for annual periods beginning on 1 January
2016 or later);
Amendments to IAS 1 - Presentation of Financial
Statements - The initiative for disclosure (effective for
69
financial report
Amendments to IAS 16 - Property, plant and equipment and IAS 38 - Intangible Assets - Explanation
of acceptable methods of depreciation (effective for
Amendments to IAS 16 - Property, plant and equipment
and IAS 41 - Agriculture - Agriculture: bearer plants
2016 or later);
Amendments to IAS 27 - Separate Financial Statements
- equity method in separate financial statements (effective for annual periods beginning 1 January 2016
or later);
IFRS (2012–2014), resulting from the annual improvements to IFRS (IFRS 5, IFRS 7, IFRS 19 and IAS 34),
in particular with a view to removing inconsistencies
and clarifying text (amendments should be applied
for annual periods beginning on 1 January 2016 or
later);
The adoption of IFRS 9 will have an effect on the classification
and measurement of financial assets and liabilities of the
Bank and the Group. The introduction of other standards,
amendments to existing standards and interpretations in the
period of initial application will not have a significant impact
on the financial statements of the Bank and the Group.
24. Significant accounting policies and assessments
a) Impairments of loans and receivables
The Bank assesses its portfolio of financial assets valued at
amortized cost and off-balance-sheet exposure on a monthly
basis. In consideration of the objective factors indicating the
impairment of the financial asset valued at amortized cost,
the Bank assesses the need for its impairment. The objective
factors are above all: irregular settlement of liabilities and
material delay over 90 days; deterioration of economic conditions in the operating industry; reprogramming due to a
client’s economic, legal or other problems. If any client fulfils
any of the objective criteria the Bank individually assesses the
anticipated cash flows for repayment (it evaluates both the
70
expected cash flows from regular loan repayments as well as
potential cash flows resulting from realization of collateral).
In the case of a negative difference between the discounted
value of all expected cash flows and the carrying amount of
the receivable, the Bank makes individual impairments. The
Bank makes an assessment of the other clients collectively
using its own methodology and parameters, which are reviewed on a regular basis to decrease the differences between
estimated and actual losses.
Credit portfolio quality and related impairment of loans
are significantly dependent on macroeconomic factors.
Unexpected development of economic conditions, in particular those that affect the real estate market, cannot be
discounted and these could significantly affect the portfolio’s
market value.
Key assumptions affecting the need for additional impairment in
2015 are the following:
1. Probability of Default (PD): in case of further portfolio
deterioration as a result of worsening of economic conditions,
the Bank could expect higher default rates than anticipated,
which would require additional impairment. On the level
of the Group the Bank anticipates a 10% decrease in default
rates, which is estimated to require derecognition of EUR
1.8 million of impairment.
2. Collaterals: in case of declining market value of collaterals the Bank could expect reduced cash flows from sold
collaterals and therefore additional impairment would be
required. Collaterals are on the other hand seen as potential
risk mitigator and the Bank has put huge efforts on improving
the current portfolio collateralization rate.
For this reason, the Bank is considering the possibility to
increase the portfolio collateralization by 10 percent. This
would lead to an estimated EUR 2.5 million reduction in
impairments at the Bank level and EUR 3.0 million on the
level of the Group. Applying sensitivity of PD increased by
20 or 30 percent would lead to an estimated EUR 5.0 million
or EUR 7.5 million decrease in impairments. On Group level
this would lead to an estimated EUR 6.0 million or EUR 9.1
million decrease in impairments.
financial report
A detailed definition is described in point 8: Impairment of
financial assets in the context of disclosures – Most significant accounting policies.
b) Impairment of available-for-sale financial assets
Available-for-sale financial assets are impaired if there is
a material or prolonged decrease of their fair value below
their cost. Duration and the amount of decrease of their fair
value are taken into consideration. The need for impairment
may also be indicated by evidence of the deterioration in the
financial position of the financial instrument’s issuer and the
industry sector in which the issuer operates.
Criteria applied in recognition of impairment are described in detail in Note 21, Significant accounting policies
– Available-for-sale financial assets.
Key assumptions affecting the need for additional
impairment in 2015:
1. Instruments tied to equity securities;
Worsening of issuer’s credit quality as a consequence of
further deterioration in certain industries (construction,
financial holdings) and their slow recovery.
2. Instruments tied to debt securities:
Worsening of issuer’s credit quality and unfavorable movement of market parameters, especially interest rates, as a
consequence of the rapid rise in inflation in the EU area.
c) Impairment of HTM financial assets
Prior to any impairment of held-to-maturity financial assets,
the following impairment triggers are checked in relation to
individual issuer:
information of difficulties with repayments/insolvency, bankruptcy
decline in market value by certain percentage of the
cost
negative market information that could impact
solvency
past impairment experience.
The Bank may decide for impairment based on deterioration
of any of the above criteria.
d) Deferred taxes
The Bank has maintained deferred tax receivables at a slightly
lower amount than in the previous year, as in the next 5 years
it still expects a similar tax base. This is reinforced by the
further development and expansion of the network in the
field of retail business, maintaining successful cooperation
with businesses and favorable macroeconomic forecasts.
e) An investment in a subsidiary
The Bank assessed the value of investment in the subsidiary
company Hypo Leasing d.o.o. on the basis of an appraisal
report. A valuation report has been prepared on the basis
of discounting the 5 year plan of Hypo Leasing d.o.o. At the
same time the Bank on the basis of the purchase agreement
between the Bank and the former owners of Hypo Leasing
d.o.o. assessed deviations from the plan used in the valuation
report and on this basis, reduced the value of investments.
In the future the Bank will monitor the investment on a
quarterly basis and determine whether the conditions for
testing the investment for impairment are fulfilled.
f) Uncertainty in connection with derivative financial
instruments
In the valuation of derivative financial instruments The Bank
also takes into account the calculation parameters CVA and
DVA. Parameter CVA (credit valuation adjustment) corresponds to the expected loss due to counterparty credit risk of
the company, with which the financial institution (the Bank)
concludes the OTC business. Taking into account credit risk
the fair value is calculated as the market value of derivative
financial instruments minus CVA. The DVA concept (debt
valuation adjustment) represents the self valuation (own
estimate) of the credit risk, which is added to the market
changes in individual issuer’s credit rating
71
financial report
value of the derivative financial instrument. Credit risk that
is added to the derivative’s market value.
The Bank is not sensitive to market risks connected to derivatives due to the fact that each derivative sold to a client
is at the same closed with the offsetting transaction entered
into with the parent bank.
25. Comparative data
a) Comparative data of the Group for 2013
The Bank acquired Hypo-Alpe-Adria Leasing d.o.o. on 31
October 2014, therefore comparative data for the Group for
2013 are not available.
b) Reclassification of the statement of financial position
items in comparative data for 2013
In 2014, the Bank pursuant to the Decision amending the
Decision on books of account and annual reports of banks
and savings banks (Official Gazette No. 89/2014) for the purpose of publication reclassified the demand deposits with
banks (included in item A.5 Loans) to item A.1 Cash and
balances at central banks and demand deposits with banks,
and the entire item P.1 Financial liabilities to central bank to
item P.IV Financial liabilities measured at amortized cost.
The effects are shown in the table below:
Cash and balances with central bank
Loans
- loans to banks
Financial liabilities to central bank
Financial liabilities measured at amortized costs
- loans of banks and central banks
72
EUR 000’
31.12.2013
before reclassification
reclassification
31.12.2013
new balance
25,027
10,075
35,102
1,260,532
(10,075)
1,250,457
10,076
(10,075)
1
161,877
(161,877)
-
1,138,701
161,877
1,300,578
64,986
161,877
226,863
financial report
c) Reclassification of items of Capital Adequacy Calculation in
comparative data for 2013
In 2014 the Capital Requirement Directive entered into force
for banks, which prescribes new forms for the calculation
of the capital adequacy of banks. For this purpose the Bank
reclassified its comparative figures for 2013, as shown in the
table below:
EUR 000’
Before reclassification
New balance
Non recorded provisions and impairments
due to the delay in posting
Components or deductions
of the Common Equity Tier - other
Value adjustment of revaluation surplases from financial assets
available for sale – stocks and shares
Elements or deductions
of additional capital - other
Comparative figures amounts
(51)
2,713
73
financial report
Notes to the income statement
1. Interest income and expense
EUR 000’
2014 Bank
2014 Group
2013 Bank
18
18
50
2,025
2,025
3.199
1.085
1.085
1.273
17
17
34
43,150
54,710
53,169
4,271
4,271
4,568
110
110
105
50,676
62,236
62,398
95
93
146
4,574
4,574
10,768
12,092
12,017
19,536
Certificates of deposit
298
298
522
Short-term deposits from Central Bank
250
250
578
2,554
5,765
3,921
-
7
-
Interest on financial liabilities held for trading
1,856
1,856
2,997
Subordinated debt
1,234
1,234
1,224
Interest on other financial liabilities
1
1
-
Total interest and similar expense
22,954
26,095
39,692
NET INTEREST INCOME
27,722
36,141
22,706
Interest income and similar income
Deposits with Central Bank
Bank loans and deposits
Loans and deposits to clients
Other financial assets
Total interest income and similar income
Interest and similar expense
Demand deposits from clients
Bank deposits
Borrowings from banks
Loans to clients
In 2014, income recognized on account of the Bank’s impaired financial assets amounted to EUR 1,538 thousand
(2013: EUR 3,409 thousand). The same applies to the Group.
2. Dividend income
74
EUR 000’
2014 Bank
2014 Group
2013 Bank
Available-for-sale securities
460
460
471
Total dividend income
460
460
471
financial report
3. Fee and commission income and expense
EUR 000’
2014 Bank
2014 Group
2013 Bank
Total fee and commission income
16,103
16,383
17,159
Total fee and commission expense
2,847
3,682
3,075
Net fee and commission income
13,256
12,701
14,084
a) Fee and commission income and expense from trading for Bank’s own account
EUR 000’
2014 Bank
2014 Group
2013 Bank
Payment transactions
5,433
5,406
5.828
Loan transactions
2,147
2,317
2,318
Granted warranties
1,800
1,799
1,600
Other transactions
6,313
6,451
7,118
15,693
15,973
16,864
1,336
1,336
989
3
838
3
31
31
19
Other transactions
1,356
1,356
1,979
Total fee and commission expense
2,726
3,561
2,990
12,967
12,412
13,874
Fee and commission income
Total fee and commission income
Payment transactions
Loan transactions
Guarantees
NET FEE AND COMMISSION FROM TRANSACTIONS FOR BANK'S ACCOUNT
75
financial report
b)Fee and commission income from investing services and operations for clients’ account
EUR 000’
2014 Bank
2014 Group
2013 Bank
153
153
108
66
66
62
Administration of book-entry securities accounts of customers
191
191
125
Total fee and commission income from investing and auxiliary investing
services and operations for clients' account
410
410
295
Fee and commission paid to KDD and similar organizations
79
79
50
Fee and commission paid to the stock exchange and similar organizations
42
42
35
Total fee and commission expense from investing and auxiliary investing
121
121
85
NET FEE AND COMMISSION FROM INVESTING SERVICES AND OPERATIONS FOR
CLIENTS' ACCOUNT
289
289
210
Fee and commission income from investing and auxiliary investing services
and operations for clients' account
Receiving, brokerage and processing orders
Financial instruments' management
Fee and commission expense from investing and auxiliary investing
76
financial report
4. Realized gains (losses) from Financial Assets and Liabilities not Measured at Fair Value Through Profit or Loss
EUR 000’
2014 Bank
2014 Group
2013 Bank
6,887
6,887
(55)
(321)
(321)
(344)
Loans and other financial assets
(485)
(495)
(74)
Total
6,081
6,071
(473)
Gains and losses from available-for-sale financial assets comprise realized gains and losses on derecognition, whereas
gains and losses resulting from changes of fair value of available-for-sale financial assets are recognized directly in the
Statement of Comprehensive Income.
5. Net gains (losses) on financial assets and liabilities held for trading
EUR 000’
2014 Bank
2014 Group
2013 Bank
2
2
1
219
219
118
Derivatives
(624)
(624)
387
Total
(403)
(403)
506
Equity Securities
Foreign currency purchase and sale
6. Net gains (losses) from currency translation
EUR 000’
2014 Bank
2014 Group
2013 Bank
(3,865)
(3,895)
3,738
Items in foreign exchange
3,755
3,755
(3,859)
Total
(110)
(140)
(121)
Items in foreign currency
The currency translation differences in the table above refer
to financial assets and liabilities measured at amortized cost.
The currency translation differences resulting from financial
assets measured at fair value are recognized as part of net
gains or net losses from financial assets and liabilities classified as held for trading.
77
financial report
7. Other net operating income (expenses)
EUR 000’
2014 Bank
2014 Group
2013 Bank
1,234
559
1,730
259
398
551
1,493
957
2,281
(62)
(70)
(72)
Taxes and other duties
(1,920)
(1,954)
(1,967)
Other
(1,234)
(1,192)
(2,841)
Total other operating expenses
(3,216)
(3,216)
(4,880)
NET OTHER OPERATING INCOME (EXPENSES)
(1,723)
(2,259)
(2,599)
Other income
Non-banking services
Other
Total other operating income
Other expenses
Membership fees
The item »Other« in other operating income comprises income from legal proceedings, insurance proceeds and other
operating income.
The most significant item of “Other operating expenses” at
the level of the Bank is the cost of integration which was
invoiced by related parties (Hypo leasing d.o.o.). These costs
resulted from the provision of services in the integration
process of individual segments. This expense is eliminated
at the Group level because it is fall under mutual relations
within the Group.
The most significant item of income from non-banking services at the level of the Bank is the income from integration
which was invoiced to related parties (Hypo leasing d.o.o.)
for the provision of services in the integration process of
individual segments. This income is eliminated at the Group
level as it falls under mutual relations within the Group.
The major item of “Tax and other levies” is tax paid on financial services in the amount of EUR 857 thousand for the
Bank (2013: EUR 822 thousand), and EUR 891 thousand for
the Group, and tax on balance sheet total in the amount of
EUR 829 thousand for the Bank (2013: EUR 869 thousand).
78
Tax on total assets of banks is payable in compliance with
the Bank Balance Sheet Tax Act effective from 26 July 2011
(Official Gazette RS No. 59/2011). The tax is paid at the rate
of 0.1 percent of the annual average of total assets and may
be reduced by 0.167 of the annual average balance of loans
to non-financial organizations and sole proprietors. The tax
was in force until and including 31 December 2014.
Financial Services Tax is payable in compliance with the
Financial Services Tax Act, published on 10 December 2012
(Official Gazette RS no. 94/2012) and which became effective
on the fifteenth day after its publication. Tax in 2013 and
2014 was paid at the rate of 6.5 percent of the tax basis. On 1
January 2015 tax rate increased to 8.5 percent of the tax basis
(Official Gazette 90/2014).
financial report
8. Administrative expenses
EUR 000’
2014 Bank
2014 Group
2013 Bank
Labor costs
14,432
16,686
13,788
Gross wages and salaries
11,053
12,763
10,493
Social security contributions
804
923
762
Pension insurance contributions
982
1,177
929
1,593
1,823
1,604
11,266
12,756
11,752
685
762
791
Rent
1,581
1,757
1,531
Services provided by third persons
2,847
3,101
2,658
Business trips
89
102
84
Maintenance
1,948
2,159
2,028
Advertising
1,059
1,332
1,181
Hospitality
110
126
120
1,530
1,626
2,198
Education and training costs
343
365
277
Insurance premiums
892
1,244
652
Other administrative costs
182
182
232
25,698
29,442
25,540
Other employee benefit cost
Administrative expenses
Materials
Costs of consultations, audit and legal fees
Total administrative expenses
As at 31 December 2014, the Bank had 481 employees (31
December 2013: 487). At the level of the Group the bank had
572 employees on 31 December 2014.
Rental costs relate mainly to the property (Bank 2014: EUR
1,581 thousand; 2013: 1,531 thousand; Group 2014: 1,743 thousand). The Group has no non-cancellable lease agreements.
Contracts are concluded for a definite or indefinite period
of time. In cases where rents are not fixed they adapt to the
3-month Euribor.
79
financial report
a) Audit fees
EUR 000’
2014 - Bank
2014 - Group
2013 - Bank
KPMG
Ernst
&Young
Other
auditing
firms
KPMG
Ernst
&Young
Other
auditing
firms
Ernst
&Young
Other
auditing
firms
85
19
-
98
19
-
64
-
Other auditing services
5
-
4
10
-
8
-
-
Other non-auditing services
-
-
-
-
-
-
59
6
90
19
4
108
19
8
123
6
Audit of the annual report
Total
9. Amortization
EUR 000’
2014 Bank
2014 Group
2013 Bank
1,026
1,063
962
Intangible assets
1,248
1,256
1.278
Total depreciation and amortization expense
2,274
2,319
2,240
10. Provisions
2014 Bank
2014 Group
2013 Bank
(94)
(123)
(914)
Provisions for employee benefits
(103)
(129)
(78)
Other provisions
(684)
(3,863)
(468)
Total provisions
(881)
(4,115)
(1,460)
Provisions for off-balance-sheet liabilities
80
EUR 000’
financial report
11. Impairment
EUR 000’
2014 Bank
2014 Group
2013 Bank
(1,135)
(1,135)
(5,037)
-
-
(1,785)
(1,135)
(1,135)
(3,252)
-
-
(2,256)
(53,942)
(55,145)
(86,847)
- Government
(511)
(511)
(78)
- Customers
(665)
(977)
(7,710)
(52,766)
(53,657)
(79,059)
(175)
(175)
(928)
-
(360)
-
(55,252)
(56,815)
(95,068)
Impairment of available-for-sale financial assets
- Banks
- Customers
Financial assets held to maturity, measured at amortized cost
Financial assets at amortized cost (customers)
- Other clients
Impairment of other assets
Total impairment
12. Corporate Income tax
EUR 000’
2014 Bank
2014 Group
2013 Group
-
542
-
Deferred Tax
1,521
1,327
5,934
Total income tax
1,521
1,869
5,934
(38,836)
(40,134)
(89,727)
(6,602)
(6,823)
(15,254)
(76)
(373)
(77)
8,195
9,077
21,261
4
(12)
4
1,521
1,869
5,934
Current Income Tax
Difference between the income tax and tax determined using the
basic tax rate:
Profit/loss before tax
Tax at prescribed rates: (2014: 17%, 2013: 17%)
Tax on income not recognized for tax purposes
Tax on expenses not recognized for tax purposes
Tax on income that increase the tax basis
Total income tax
Majority of income not recognized for tax purposes relates
to exempt dividends received.
In 2014, the effective tax rate for the Bank was 3.92%. In 2013,
the effective tax rate was 6.61 %.
The bulk of expenses not recognized for tax purposes relates
to exemption of financial assets revaluation, interest on borrowings from related parties, bonuses and other payments
relating to employment, and the amount of provisions not
recognized as tax expenditure.
In 2014, the effective tax rate for the Group was 4.66%.
81
financial report
Notes to the statement of financial position
13. Cash and balances with Central Bank and demand deposits with banks
EUR 000’
31.12.2014 Bank
31.12.2014 Group
31.12.2013 Bank
Cash
7,471
7,471
7,608
Demand deposits with banks
7,852
7,852
10,075
15,323
15,323
17,683
2,985
2,985
1,401
Obligatory reserves with Central Bank
72,234
72,234
16,018
Total cash and balances with Central Bank
90,542
90,542
35,102
Cash included in cash equivalents
Other short-term deposits with Central Bank
Slovenian banks are required to maintain obligatory reserves
with the Bank of Slovenia; the amount of obligatory reserve
depends on the scope and structure of received deposits.
Currently, the Bank of Slovenia requires banks to calculate
obligatory reserve in the amount of 1 percent of all deposits
with maturity of up to 2 years.
Fair values of cash and balances with Central Bank are disclosed in more detail in Note “Fair value of assets and liabilities” on page 142.
14. Financial Assets Held for Trading
EUR 000’
31.12.2014 Bank
31.12.2014 Group
31.12.2013 Bank
43
43
303
346
346
534
-
-
1,953
61
61
-
Swaps - interest
3,802
3,802
3,665
Total derivatives
4,252
4,252
6,455
Other securities
20
20
19
Total securities
20
20
19
4,272
4,272
6,474
Derivatives
Forward contracts – foreign exchange
Options - interest
Options - securities
Swap contracts – foreign exchange
Securities
Total financial assets held for trading
As at 31 December 2014 and 2013, the Bank did not pledge
any securities designated as held for trading as collateral.
82
financial report
a)Contractual and fair values of derivatives
Presented table shows the contractual and fair values of
derivative financial instruments of the Bank and also applies
to the Group as subsidiaries do not disclose derivatives.
EUR 000’
Fair value
31.12. 2014
Contractual value
Fair value
31.12. 2013
31.12.2014
31.12.2013
Receivables
Liabilities
Receivables
Liabilities
1,970
43,749
43
37
303
289
Swap contracts – foreign
exchange
44,000
-
61
-
-
-
Options - interest
15,550
17,102
346
383
534
593
-
7,913
-
-
1,953
-
Swaps - interest
216,483
329,548
3,802
3,991
3,665
3,592
Total
278,003
398,312
4,252
4,411
6,455
4,474
Forward contracts – foreign
exchange
Options - securities
The contractual value represents derivative financial instruments reported in the off-balance-sheet records; however,
these amounts do not reflect the future cash flow or the
Bank’s current exposure to the currency or interest rate risk.
Fair value is the carrying amount of the instrument reported
in the Bank’s statement of financial position as follows: assets are reported under financial assets held for trading and
represent positive valuation of derivatives, whereas liabilities
are reported under trading financial liabilities and represent
negative valuation of derivative financial instruments.
15. Available-for-sale financial assets
EUR 000’
31.12.2014 Bank
31.12.2014 Group
31.12.2013 Bank
Bonds (gross)
16,979
16,979
25,087
- Republic of Slovenia
14,709
14,709
19,811
-
-
1,786
- central government
2,270
2,270
3,490
Shares (gross)
1,492
1,492
20,466
- other issuers
1,492
1,492
20,466
Treasury bills
27,397
27,397
9,815
- central government
27,397
27,397
9,815
64
66
-
(1,135)
(1,135)
(5,037)
- bonds
-
-
(1,785)
- shares
(1,135)
(1,135)
(3,252)
Total net
44,797
44,799
50,331
- banks
Loans and other financial assets
Impairment through profit or loss
83
financial report
Of the total amount of available-for-sale securities, EUR
44,390 thousand was quoted on the stock exchange as at 31
December 2014 (31 December 2013: EUR 49,230 thousand).
Fair values of available-for-sale financial assets are disclosed
in Note “Fair value of assets and liabilities” on page 142.
a) Movement of available-for-sale financial assets
EUR 000’
2014 Bank
2014 Group
2013 Bank
Balance at 1 January
50,331
50,331
46,155
Purchases
32,439
32,441
9,409
(12,339)
(12,339)
-
-
-
(41)
(21,294)
(21,294)
(1,190)
166
166
265
Fair value changes
(3,371)
(3,371)
770
Impairments
(1,135)
(1,135)
(5,037)
- bonds
-
-
(1,786)
- shares
(1,135)
(1,135)
(3,251)
Balance at 31 December
44,797
44,799
50,331
Sale
Withdrawal
Matured
Amortization plus interest
16. Loans to Banks
84
EUR 000’
31.12.2014 Bank
31.12.2014 Group
31.12.2013 Bank
Term deposits
4,033
4,033
1
Total net loans
4,033
4,033
1
Loans to banks – maturing within 12 months of the reporting date
4,033
4,033
1
financial report
17. Loans to clients
EUR 000’
31.12.2014
Bank
31.12.2014
- Group
31.12.2013
- Bank
1,165,022
1,317,030
1,263,949
17,170
17,170
20,221
Credit cards receivables
4,069
4,069
4,226
Receivables for collateral granted
1,252
1,252
821
Other
2,906
2,906
2,853
(89,230)
(91,388)
(44,936)
1,101,189
1,251,039
1,247,134
Loans to clients – maturing within 12 months of the reporting date
272,319
331,953
297,086
Loans to clients – maturing in a period of more than 12 months of the
reporting date
828,870
919,086
950,048
Notes
Loans
Credit lines
Impairment
TOTAL NET LOANS
19
Interest receivable is recognized as part of the basic financial
instrument. All loans were impaired to their replaceable
value.
in the new company in respect thereof. Should any unpaid
assets remain in the company, the Bank will have no liability
in respect thereof. The remaining assets would be acquired
by the Bank free-of-charge.
As at 31 December 2014, the Bank had pledged loans for longterm refinancing operations and settlements in relation to
STEP2. The total value of pledged loans amounted to EUR
80,017 thousand (31 December 2013: EUR 81,726 thousand).
In 2014, on the basis of the Pass-Through Agreement (with
an Agreement on the division by acquisition) the Bank transferred part of the portfolio to the acquiring company.
In accordance with the pass through agreement, as of 31
October 2013, the Bank transferred one part of loans with
maturity at 31 October 2052 to the affiliated company within
the Hypo Group. On the date of transfer, the Bank disposed
of the assets and transferred all the risks and rewards in
the amount of EUR 216 million to another company in the
amount of EUR 234 million. The company the assets were
transferred to is not directly owned by the Bank.
In 2014, we disposed part of the unsecured receivables from
credit exposure to the Bank and Hypo Leasing. The book
value of the contracts at the Bank amounted to EUR 256
thousand and at the Group level EUR 265 thousand.
Other disclosures pertaining to loans are included in section
Financial risk management: Credit risk.
A service agreement, based on which the Bank manages the
transferred portfolio on behalf and for the account of the
issuer, was signed.
The Bank expects the entire portfolio to be paid by the maturity date (the year 2052) and that no assets will remain
85
financial report
18. Other financial assets
EUR 000’
31.12.2014
- Bank
31.12.2014
- Group
31.12.2013
- Bank
889
889
778
Trade receivables
1,162
757
2,039
Other receivables
3,634
3,756
505
(3,019)
(3,078)
-
Total net other financial assets
2,666
2,324
3,322
Other financial assets maturing within 12 months of the reporting date
2,666
2,324
3,322
Notes
Commission receivable
Risk provisions
19
19. Movement of Impairment of Loans to Clients
EUR 000’
2014 - Bank
2013 - Bank
Government
Retail
Other
Total
Government
Retail
Other
Total
301
11,955
32,680
44,936
225
4,863
57,228
62,316
Formation
622
6,316
63,452
70,390
127
11,506
103,824
115,457
Release
110
5,605
10,312
16,027
51
2,654
25,905
28,610
Net
512
711
53,140
54,363
76
8,852
77,919
86,847
Utilization and
unwinding
-
802
4,542
5,344
-
293
3,594
3,887
Derecognition of loans
-
-
1,706
1,706
-
1,467
98,873
100,340
813
11,864
79,572
92,249
301
11,955
32,680
44,936
Balance at
31 December
EUR 000’
2014 - Group
Government
Retail
Other
305
12,403
33,245
45,953
Formation
622
6,821
64,576
71,019
Release
111
5,798
10,542
16,451
Net
511
1,023
54,034
55,568
Utilization and
unwinding
-
802
4,542
5,344
Derecognition of loans
-
5
1,706
1,711
816
12,619
81,031
94,466
Balance at 31
December
Utilization relates to the write-off of loans recorded under the
net principle, whereas unwinding represents technical interest.
Derecognition of loans in 2013 was made pursuant to the Pass
Through Agreement dated 31 October 2013.
86
Total
financial report
Derecognition in 2014 was linked to the disposed portion
of unsecured receivables from credit exposure to the Bank
and Hypo Leasing.
Pursuant to Article 25a of the Decision on estimating credit risk losses of banks and savings banks (Official Gazette
RS No. 29/2012), the Bank wrote-off a total of EUR 2,363
thousand of loans (2013: EUR 693 thousand). Until the legal
basis needed for the completion of the recovery process becomes available, these are reported in the off balance sheet
records.
20. Financial assets classified as held to maturity
EUR 000’
31.12.2014
Bank
31.12.2014
- Group
31.12.2013
- Bank
Bonds (gross)
84,559
84,559
86,004
- Republic of Slovenia
77,422
77,422
76,806
7,137
7,137
6,942
-
-
2,256
84,559
84,559
86,004
-
-
(2,256)
Total
84,559
84,559
83,748
Financial assets held to maturity quoted on stock market
84,559
84,559
83,748
Financial assets held to maturity - maturing within 12 months of the
reporting date
3,250
3,250
2,671
Financial assets held to maturity - maturing in a period of more than
12 months of the reporting date
81,309
81,309
81,077
- Other issuers
- Bonds issued by banks
Total
Impairment recognized through profit or loss
a) Movement of HTM financial assets
Matured
Amortization plus interest
Impairment
As at 31 December 2014, the Bank pledged securities classified
as held to maturity for long-term refinancing operations
and settlements in relation to STEP2 in total EUR 76,420
thousand (31.12.2013: EUR 69,232 thousand).
EUR 000’
2014 Bank
2014 Group
2013 Bank
83,748
83,748
90,501
-
-
(5,409)
811
811
912
-
-
(2,256)
84,559
84,559
83,748
Fair values of assets classified as held to maturity are disclosed
in Note “Fair value of assets and liabilities” on page 141.
87
financial report
21. Property, plant and equipment
a) Movement - Bank
EUR 000’
2014
Notes
Land
Real estate
Computer
hardware
Furniture
and other
equipment
Motor
Leasehold
vehicles improvements
Vehicles
under
finance
lease
Fixed
assets
under
construction
Total
Cost
367
2,244
3,252
6,521
219
472
-
101
13,176
Additions to assets under
construction
-
-
-
-
-
-
-
894
894
Transfer to assets
-
30
337
169
111
243
5
(891)
4
Disposals
-
-
(195)
(177)
-
-
-
-
(372)
367
2,274
3,394
6,513
330
715
5
104
13,702
-
(406)
(2,047)
(5,337)
(219)
(172)
-
-
(8,181)
-
(33)
(546)
(343)
(5)
(98)
(1)
-
(1,026)
Decrease
-
-
195
164
-
-
-
-
359
-
(439)
(2,398)
(5,516)
(224)
(270)
(1)
-
(8,848)
-
(928)
-
-
-
-
-
-
(928)
Impairment
-
(174)
-
-
-
-
-
-
(174)
-
(1,102)
-
-
-
-
-
-
(1,102)
367
910
1,205
1,184
-
300
-
101
4,067
367
733
996
997
106
445
4
104
3,752
Accumulated depreciation
Depreciation
9
Impairment
Carrying amount
In 2014 there were reasons for impairment of bank branches in
the amount of EUR 174 thousand (in 2013: EUR 928 thousand).
88
financial report
b)Movement – Group
EUR 000’
2014
Notes
Land
Real estate
Computer Furniture
hardware and other
equipment
Motor
vehicles
Leasehold
improvements
Equipment
acquired
under finance
lease
Fixed
assets
under
construction
Total
367
2,244
3,508
7,276
495
472
-
101
14,463
construction
-
-
-
-
-
-
-
920
920
Transfer to assets
-
30
363
169
111
243
5
(917)
4
Disposals
-
-
(195)
(199)
-
-
-
-
(394)
367
2,274
3,676
7,246
606
715
5
104
14,993
(406) (2,300)
(6,058)
(480)
(172)
-
-
(9,416)
Cost
2014
-
Depreciation
9
-
(33)
(554)
(358)
(19)
(98)
(1)
-
(1,063)
Decrease
-
-
195
184
-
-
-
-
379
2014
-
(439) (2,659)
(6,232)
(499)
(270)
(1)
-
(10,100)
-
(928)
-
-
-
-
-
-
(928)
Impairment
-
(174)
-
-
-
-
-
-
(174)
2014
-
(1,102)
-
-
-
-
-
-
(1,102)
367
910
1,208
1,218
15
300
-
101
4,119
2014
367
733
1,017
1,014
107
445
4
104
3,791
Impairment
Carrying amount
89
financial report
c) Movement - Bank
EUR 000’
2013
Notes
Land
Real estate
Computer
hardware
Furniture
and other
equipment
Motor
Leasehold
vehicles improvements
Fixed
assets
under
construction
Total
367
2,244
4,051
6,458
246
468
104
13,938
construction
-
-
-
-
-
-
827
827
Transfer to assets
-
-
707
119
-
4
(830)
-
Disposals
-
-
(1,505)
(56)
(27)
-
-
(1,588)
367
2,244
3,252
6,521
219
472
101
13,176
-
(350)
(3,090)
(5,023)
(227)
(117)
-
(8,807)
-
(56)
(462)
(370)
(18)
(55)
-
(961)
Decrease
-
-
1,505
56
27
-
-
1,588
-
(406)
(2,047)
(5,337)
(219)
(172)
-
(8,181)
-
-
-
-
-
-
-
-
Impairment
-
(928)
-
-
-
-
-
(928)
-
(928)
-
-
-
-
-
(928)
367
1,894
961
1,435
19
351
104
5,131
367
910
1,205
1,184
-
300
101
4,067
Cost
Depreciation
9
Impairment
Carrying amount
In 2014, the Bank wrote off property, plant and equipment
(fixed assets) the original cost of which amounted to EUR
372 thousand. At the Group level the cost of written-off fixed
assets amounted to EUR 386 thousand. The book value of
fully depreciated tangible fixed assets which the Bank still
90
uses amounts to EUR 5,714 thousand (2013: 5,333 thousand)
and at the group level EUR 6,918 thousand.
The Group did not pledge any fixed assets as collateral in the
period under review.
financial report
22. Intangible assets
a) Movement - Bank
EUR 000’
2014
Notes
Software
Long-term deferred Other intangible
development costs
assets
Assets being
developed
Total
Cost
10,154
32
42
-
10,228
-
-
-
918
918
918
-
-
(918)
-
(4)
-
-
-
(4)
11,068
32
42
-
11,142
(6,540)
(32)
(42)
-
(6,614)
(1,248)
-
-
-
(1,248)
(7,788)
(32)
(42)
-
(7,862)
3,615
-
-
-
3,615
3,280
-
-
-
3,280
Additions to assets under construction
Transfer to assets
Decrease
Depreciation
9
Carrying amount
91
financial report
b)Movement - Group
EUR 000’
2014
Notes
Software
Long-term deferred Other intangible
development costs
assets
Assets being
developed
Total
Cost
10,192
32
42
-
10,266
-
-
-
970
970
970
-
-
(970)
-
(4)
-
-
-
(4)
11,158
32
42
-
11,232
(6,548)
(32)
(42)
-
(6,622)
(1,256)
-
-
-
(1,256)
(7,804)
(32)
(42)
-
(7,878)
3,644
-
-
-
3,644
3,354
-
-
-
3,354
Additions to assets under construction
Transfer to assets
Decrease
Depreciation
9
Carrying amount
92
financial report
c) Movement - Bank
EUR 000’
2013
Notes
Software
Long-term deferred
development costs
Other intangible
assets
Assets being
developed
Total
9,322
32
42
-
9,396
832
-
-
833
1,665
-
-
-
(833)
(833)
10,154
32
42
-
10,228
(5,262)
(32)
(42)
-
(5,336)
(1,278)
-
-
-
(1,278)
-
-
-
-
-
(6,540)
(32)
(42)
-
(6,614)
4,060
-
-
-
4,060
3,615
-
-
-
3,615
Cost
Additions
Decrease
Depreciation
9
Decrease
Carrying amount
The book value of fully amortized intangible assets which
continue to be used by the Bank amounts to EUR 2,446
thousand (2014: EUR 2,239 thousand). Value at the level of
the Group is the same.
In the year under review, no items of intangible assets were
pledged as collateral.
23. Long term investments in equity of subsidiaries, associated and jointly controlled entities
EUR 000’
31.12.2014 Bank
31.12.2014 Group
31.12.2013 Bank
Equity investments in subsidiaries
3,289
7
7
Total
3,289
7
7
In 2014 the Bank acquired an interest in Hypo Leasing d.o.o.
The Bank fully consolidates the financial statements of the
subsidiary Hypo Leasing d.o.o.
93
financial report
24. Other assets
EUR 000’
31.12.2014 Bank
31.12.2014 Group
31.12.2013 Bank
4
657
20
Advances
88
767
21
Tax credits
891
2,222
74
Deferred costs
2,047
3,367
1,859
Total
3,030
7,013
1,974
Inventories
25. Financial liabilities held for trading
EUR 000’
31.12.2014 Bank
31.12.2014 Group
31.12.2013 Bank
37
37
289
383
383
593
Swaps (interest)
3,991
3,991
3,592
Total derivatives
4,411
4,411
4,474
Forward contracts – foreign exchange
Options (interest)
The contractual values of derivatives are presented in Note 14a.
26. Deposits, loans
a) Deposits of banks and clients
31.12.2014 Bank
31.12.2014 Group
31.12.2013 Bank
182,911
182,911
139,502
- banks
664
664
318
- clients
182,247
182,247
139,184
Term deposits
802,360
793,993
822,963
- banks
159,678
159,678
219,030
- clients
642,682
634,315
603,933
Total
985,271
976,904
962,465
Deposits of banks and clients maturing within 12 months
of the reporting date
739,458
731,091
773,242
Deposits of banks and clients maturing in a period of more
than 12 months of the reporting date
245,813
245,813
189,223
Demand deposits
94
EUR 000’
financial report
b)Borrowings from banks and clients
EUR 000’
31.12.2014 Bank
31.12.2014 Group
31.12.2013- Bank
Borrowings from banks
176,267
330,002
226,863
Borrowings from clients
48
1
-
Total
176,315
330,003
226,863
Borrowings from banks – maturing within 12 months
of the reporting date
103,571
178,877
3,177
72,744
151,126
223,686
Borrowings from banks maturing in a period of more than
12 months of the reporting date
c) Debt securities
EUR 000’
31.12.2014 Bank
31.12.2014 Group
31.12.2013- Bank
Certificates of deposit issued to customers
4,568
4,568
14,800
Total
4,568
4,568
14,800
Financial liabilities maturing within 12 months of the reporting date
-
-
14,750
Financial liabilities maturing in a period of more than 12 months of
the reporting date
4,568
4,568
50
d) ECB collateral
EUR 000’
2014 Bank
2014 Group
2013 Bank
Assets suitable for ECB collateral
174,872
174,872
170,516
Assets pledged into ECB Pool
130,000
130,000
162,000
- Available-for-sale financial assets
21,512
21,512
32,495
- Held-to-maturity financial assets
87,146
87,146
70,423
- Loans
66,214
66,214
67,598
Non-pledged assets (pledge-free assets)
44,872
44,872
8,516
174,872
174,872
170,516
Value of ECB pool
Individual disclosures of loans in 17 and 20 indicate amounts with ECB inclusive of interest.
95
financial report
27. Subordinated liabilities
Currency
Subordinated
borrowings
Maturity
EUR 000’
APR
31.12.2014 - Bank
31.12.2014 - Group
31.12.2013- Bank
Principal
Interest
Principal
Interest
Principal
Interest
EUR
25.06.2016
3mEUR+0,80%
20,000
-
20,000
-
20,000
-
EUR
21.02.2017
6mEUR+0,65%
38,000
1
38,000
1
38,000
1
EUR
30.10.2018
3mEUR+4,00%
15,000
2
15,000
2
15,000
2
73,000
3
73,000
3
73,000
3
Total
Total amortized cost
73,003
73,003
73,003
Subordinated borrowings maturing in a period of more than 12
months of the reporting date
73,003
73,003
73,003
In the financial years 2006, 2007 and 2008, the Bank signed
3 contracts for subordinated borrowings which meet conditions to classify as an innovative instrument as specified
in Article 25 of the Decision on capital calculation of banks
and saving banks (Official Gazette RS No. 100/2012). In
accordance with the Decision, subordinated non-current
borrowings are included in the Bank’s Tier 2 capital.
The issued contracts do not include any provisions on the
conversion to capital or any other obligation, such as a withdrawal clause.
Fair value is disclosed in Note “Fair value of financial assets
and liabilities” on page 142.
28. Other financial liabilities
31.12.2014 Bank
31.12.2014 Group
31.12.2013 Bank
32
32
8
1,053
2,121
1,782
Wages and salaries payable
640
738
616
Tax and contributions payable
401
423
363
1,881
1,558
861
16
16
20
Other liabilities from business relations
1,859
1,868
19,797
Total
5,882
6,756
23,447
Fees and commission payable
Trade payables
Accrued costs
Deferred revenue
The largest part of the item “Other liabilities from business
relationships” are liabilities from card business and liabilities
for the outstanding payments.
96
EUR 000’
financial report
29. Provisions
a) Movement Bank
EUR 000’
Provisions for offbalance-sheet liabilities
Provisions for employee
benefits
Provisions
for
guarantees
Provisions
for undrawn
borrowings
Pension benefits
on retirement
Jubilee
awards
Provisions
for legal
disputes
Balance at 1.1.2013
3,170
2,415
257
105
342
540
-
6,829
Additions
4,189
8,339
43
36
65
403
-
13,075
Reversals
3,658
7,957
39
-
-
-
-
11,654
-
-
-
9
65
540
-
614
Balance at 1. 1.2014
3,701
2,797
261
132
342
403
-
7,636
Formation
3,060
8,152
91
30
724
-
142
12,199
Reversals
2,386
8,732
18
-
181
-
-
11,317
-
-
-
12
-
403
-
415
4,375
2,217
334
150
885
-
142
8,103
Utilization
Utilization
Balance at 31. 12. 2014
Provisions for
restructuring
Other
provisions
Total
b) Movement Group
EUR 000’
Provisions for offbalance-sheet liabilities
Provisions for employee
benefits
Provisions
for
guarantees
Provisions
for undrawn
borrowings
Pension benefits
on retirement
Jubilee
awards
Provisions
for legal
disputes
Balance at 1. 1.2014
3,701
2,797
289
149
342
403
690
8,371
Additions
3,060
8,185
189
69
724
-
3,320
15,547
Release
2,386
8,735
83
33
181
-
-
11,418
-
-
-
14
-
403
-
417
4,375
2,247
395
171
885
-
4,010
12,038
Utilization
Balance at
31. 12. 2014
Provisions for
restructuring
Other
provisions
Total
97
financial report
c) Provisions for termination benefits on retirement and jubilee awards
EUR 000’
Provisions for
termination benefits
on retirement - Bank
Provisions for jubilee
awards - Bank
Provisions for
on retirement -Group
Provisions for
jubilee awards
- Group
261
132
289
149
8
4
9
4
Past employee benefit costs
23
(1)
47
2
Current employee benefit costs
41
21
48
24
Actuarial gains or losses on account of
1
6
2
7
- changes in financial assumptions
1
6
2
7
Pay-outs made during the year
-
(12)
-
(15)
334
150
395
171
Balance at 1.1.2014
Interest costs
Balance at 31.12.2014
Significant assumptions used in the actuarial calculation are:
Discount rate: 2.7% annually
Number of employees eligible for payments: Group
540, Bank 449
Assessment of future wage growth in the company:
2% per year
Assessment of staff turnover
All changes in provisions for jubilee awards and termination
benefits on retirement are recognised in the profit or loss,
whereas actuarial gains and losses arising from provisions
for pension benefits on retirement are recognised in the
comprehensive income.
98
financial report
d)Sensitivity analysis of provisions for termination benefits on retirement and jubilee awards to changes in assumptions
EUR 000’
Assumptions
Discount interest rate
Salary increase
Death rate
Changes in
assumptions
Provisions for
on retirement
- Bank
Provisions for
Provisions for
jubilee awards
on retirement
- Bank
- Group
Provisions for
jubilee awards
- Group
-0.5% change in
discount rate
28
7
34
8
+0.5% change in
discount rate
(25)
(6)
(30)
(7)
-0.5% change in
salaries
(22)
-
(27)
-
+0.5% change in
salaries
26
-
32
-
Fixed decrease in
death rate for 1 year
3
-
4
-
Fixed increase in
death rate for 1 year
(3)
-
(4)
-
e) Anticipated payments of termination benefits on retirement
EUR 000’
Current FY - Bank
Current FY - Group
Previous FY - Bank
Next 2 to 5 years
5
5
3
Next 5 to 10 years
63
78
34
2,002
2,307
225
25,8
25,51
27,0
In the next more than 10 years
Average duration of termination benefits on retirement
99
financial report
30. Deferred Tax
31.12.2014 Bank
31.12.2014 Group
31.12.2013 Bank
17%
17%
17%
135
135
210
1,391
1,391
3,403
Financial assets classified as held to maturity (impairment)
-
-
384
Loans (risk provisions)
-
364
-
142
142
145
36
44
67
2,092
2,092
1,149
335
335
369
4,131
4,503
5,727
Available-for-sale financial assets (through special capital
revaluation reserve)
(99)
(99)
(669)
Different depreciation rates for operating and tax purposes
-
-
(1)
Tax rate
Available-for-sale financial assets (impairment)
Tax loss
Unutilized tax allowance and other
Total deferred tax assets
Total deferred tax liabilities
(99)
(99)
(670)
4.033
4,405
5,057
Included in the profit or loss
(1,521)
(1,327)
(5,934)
Available-for-sale financial assets (impairment)
(2,012)
(2,012)
1,120
(384)
(384)
384
(3)
(3)
37
(31)
(28)
2
Tax loss
943
943
(7,640)
Unutilized tax allowance and other
(34)
157
163
Included in equity (through other comprehensive income)
497
497
(215)
Revaluation of available-for-sale financial assets through statement
of comprehensive income
497
497
(215)
Net deferred tax assets
Financial assets classified as held to maturity (risk provisions
Deferred tax is recognized on account of temporary differences using the balance sheet liability method. Tax rates
applicable in the period when temporary differences are
reversed are used; the tax rate was 17 percent.
100
EUR 000’
Due to unforeseeable future circumstances and uncertainties
regarding tax loss utilization, deferred tax was not recognized
for the whole amount of the loss incurred. Due to aforementioned factors the Bank did not recognize deferred tax assets
of EUR 30.5 million in the statement of financial position.
financial report
31. Other liabilities
Liabilities for down payments received
Tax and contributions payable
Deferred revenue
Other liabilities
Total
EUR 000’
31.12.2014 Bank
31.12.2014 Group
31.12.2013 Bank
-
1,091
-
1,299
2,458
986
903
1,672
861
-
23
-
2,202
5,244
1,847
32. Equity
EUR 000’
31.12.2014 Bank
31.12.2014 Group
31.12.2013 Bank
174,037
174,037
174,037
Share premium
6,300
6,300
68,000
Fair value reserve
(310)
(310)
2,243
Profit reserves (including retained earnings)
(49,983)
(49,386)
(22,322)
- accumulated loss
(49,983)
(49,386)
(22,322)
Net loss for the year
(40,357)
(43,657)
(95,661)
89,687
86,984
126,297
Share capital
Total
Hypo Bank is in 100-percent ownership of Hypo Group Alpe
Adria AG with its headquarters in Klagenfurt, Austria. On
30 March 2014 a transfer of shares from Hypo Alpe-AdriaBank International AG to SEE Holding AG was carried out
due to restructuring at the group level. On 30 October 2014
Hypo SEE Holding AG changed its name to Hypo Group
Alpe Adria AG.
101
financial report
a) Share capital
Share capital is recorded in the nominal value and has been
subscribed and paid-up by the owners.
There were no changes in share capital in 2014 as compared
to 2013.
The last increase in the share capital was carried out in 2008,
when the Bank raised EUR 60,000 thousand by issuing
14,378,489 of no-par value shares representing 52.61 percent
increase in the subscribed capital.
A total of 41,706,318 no-par value shares labelled HYPG are
registered with the central register of book-entry securities.
In terms of their rights, all shares are ordinary registered
no-par value shares.
b) Capital reserves
In 2014 the change in capital reserves amounted to EUR
61,700 thousand. The increase in the amount of EUR 6,300
thousand was from subsequent payments of the owner. The
reduction in the amount of EUR 68,000 thousand was intended to cover the loss and net loss for 2013.
In 2013 based on the Decision of the Assembly the Bank
used EUR 2,696 thousand of capital reserves to cover the
transferred losses of the company.
c) Revaluation reserve
The revaluation reserve relates to changes in fair value of
available-for-sale financial assets.
As at 31 December 2014, the revaluation reserve is negative
in the amount of EUR 310 thousand (31 December 2013: EUR
2,243 thousand).
d) Profit reserves
Profit reserves may only be made from the amounts of net
profit for the year and retained earnings. They are intended
primarily for settlement of potential future losses. They are
classified as obligatory reserves, reserves for own shares, own
shares, statutory reserves and other profit reserves.
102
According to the provisions of the Companies Act, the
amount of the Bank’s reserves, which comprise obligatory
reserves and share premium, has to be equal to 10 percent
of the share capital of the Bank or more if so defined by
the statute. When obligatory reserves and share premium
together do not amount to the above stated amount of the
share capital, the Bank has to transfer 5 percent of the net
profit less the amount used to cover potential losses brought
forward, to the obligatory reserves as at the reporting date.
In accordance with a decision adopted by the General
Meeting of Shareholders, in 2013 EUR 1,862 thousand of
profit reserves was used to cover losses carried forward.
Share premium and obligatory reserves (time reserves) may
only be used under the following conditions:
If the total amount of these reserves does not reach the percentage of the share capital determined by law or the Articles
of Association, they may only be used:
to cover a net loss for the financial year if it cannot
be covered from retained net earnings or from other
profit reserves;
to cover a loss brought forward if it cannot be covered
from the net profit for the financial year or from other
profit reserves;
If the total amount of these reserves exceeds the percentage
of the share capital determined by law or the Articles of
Association, the surplus amount of these reserves may be
used:
to increase the share capital from the Bank’s assets;
to cover a net loss for the financial year if it cannot be
covered from retained earnings, provided that profit
reserves are not simultaneously used for a pay-out of
profit to the members, and
to cover a net loss brought forward if it cannot be covered from a net profit for the financial year, provided
that profit reserves are not simultaneously used for a
pay-out of profit to the members.
Other profit reserves may be used for any purpose, unless
stated otherwise in the statute.
financial report
e) Net profit / loss for the year
Net profit for the year may be used to:
Create obligatory reserves,
Create reserves for own (treasury) shares,
Create statutory reserves and
Create other profit reserves.
The table below shows the accumulated losses:
EUR 000’
2014 Bank
2014 Group
2013 Bank
(40,357)
(43,657)
(95,661)
(117,983)
(117,983)
(37,030)
68,000
68,000
2,696
Decrease in profit reserves
-
-
11,974
-Decrease of legal reserves
-
-
1,862
-Decrease of other reserves
-
-
10,112
Retained earnings
-
-
38
- Actuarial gains
-
-
38
(90,340)
(93,043)
(117,983)
Loss for the year
Accumulated losses brought forward
Decrease in share premium
Total accumulated losses carried forward
In 2014 the Bank recorded a loss for the financial year in the
amount of EUR 40,357 thousand (2013: net loss in the amount
of EUR 95,661 thousand). Loss for the financial year of the
Group is EUR 43,657 thousand. Total accumulated losses
of the Bank amounted to EUR 90,340 thousand, and of the
Group EUR 93,043 thousand.
The Supervisory Board approved the Management Board’s
proposal that the loss of the Bank in the amount of EUR
6.300 thousand be covered from capital reserves and that
the remaining amount of the loss for the year be transferred
to retained net loss.
103
financial report
33. Contingent liabilities and assumed financial obligations
31.12.2014 Bank
31.12.2014 Group
31.12.2013- Bank
Guarantees
97,971
97,971
89,053
Service guarantees
77,162
77,162
61,527
Short-term
16,314
16,314
12,685
Long-term
60,848
60,848
48,842
Financial guarantees
20,809
20,809
27,526
Short-term
8,214
8,214
10,223
Long-term
12,595
12,595
17,303
Assumed obligations from approved loans
67,543
68,719
81,849
Approved Loans
8,392
8,392
17,853
Short-term
8,085
8,085
17,437
Long-term
307
307
416
59,151
60,327
63,996
Derivatives
278,003
278,003
398,312
Total
443,517
444,693
569,214
Approved credit lines
Assumed liabilities from approved loans can be withdrawn
within one year at the latest.
Residual maturities of financial guarantees are presented in
section “Financial risk management: Liquidity risk”.
104
EUR 000’
financial report
Other notes
34. Fiduciary accounts
In accordance with the local legislation (Decision on disclosure of banks and savings banks published in the Official
Gazette RS No. 100/2011), this Note includes presentation of
assets and liabilities of clients resulting from brokerage. As
at 31 December 2014, the Bank managed assets of total EUR
1,789 thousand (31 December 2013: EUR 1,563 thousand)
on account of brokerage services. These assets are recorded
separately from the Bank’s own assets in the off-balance-sheet
records as authorized operations.
EUR 000’
Notes
31.12.2014 Bank
31.12.2014 Group
31.12.2013 Bank
1,789
1,789
1,563
471
471
268
81
81
88
- To Central Securities Clearing Corporation or Bank's settlement
account for financial instruments disposed of
84
84
43
- To other settlement systems and institutions for sold (clients')
financial instruments
306
306
137
Clients’ cash
1,318
1,318
1,295
- On the settlement account for client’s assets
1,318
1,318
1,295
LIABILITIES
1,789
1,789
1,563
Liabilities of the settlement account or transaction accounts
for clients' assets
1,789
1,789
1,563
- To clients from cash and financial instruments
1,708
1,708
1,474
42
42
65
-
-
5
39
39
19
ASSETS
Receivables of the settlement account or transaction accounts
for clients' assets
- From financial instruments
- To Central Securities Clearing Corporation or Bank's settlement
account for purchased financial instruments
- To other settlement systems and institutions for purchased
(suppliers') financial instruments
- To bank or bank’s settlement account for commission, costs and
similar items
35.a
Among others, the off balance sheet records include fiduciary
transactions with securities for customers. The Bank assumes
no credit risk with regards to fiduciary accounts.
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financial report
a) Receivables of the settlement account or transaction accounts for clients’ financial instruments
EUR 000’
31.12.2014 Bank
31.12.2014 Group
31.12.2013 Bank
Clients' financial instruments, separately by services
81
81
88
Receiving, brokerage and processing orders
80
80
88
1
1
-
Off-balance-sheet records
Financial instruments' management
35. Related party transactions
Exposure to persons in special relationship with the Bank
and the Group.
EUR 000’
Members of the Management Board and their close family members,
staff with individual contracts of employment and the members of
management of related parties
2014 Bank
2014 Group
2013 Bank
2,868
2,868
2,955
New Loans
152
152
389
Repayments
356
356
476
Reduction
105
105
-
2,559
2,559
2,868
55
55
36
Balance on 1 January
736
736
786
Balance on 31 December
825
825
736
13
13
20
259
259
195
206
206
259
1,906
2,437
1,732
63
78
36
Granted loans
Interest, fee and commision income
Received deposits
Interest expense
Approved overdrafts and loans
Earnings
Salaries and other short-term benefits
In accordance with the Rules of procedure of the Supervisory
Board of Hypo Alpe-Adria-Bank, members of the
Supervisory Board who are employed in the Hypo Group
Alpe Adria, are not entitled to attendance fees or incentives.
In 2014 and 2013, members of the Supervisory Board were
not clients of the Bank.
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financial report
Remunerations of the Management Board in 2014
EUR 000’
Matej Falatov
Marko Bošnjak
Dejan Kaisersberger
(Member)
(Member)
(Member)
187
158
61
Refund of work-related costs
1
1
1
Other (additional pension insurance)
3
3
2
11
-
-
Salaries
Other earnings in accordance with the decision of the Supervisory
Board
Heribert Fernau, President of the Management Board, is
employed by HETA Asset Resolution AG, and is on assignment in the Bank.
Exposure to related parties
a) Bank
EUR 000’
Controlling company
Related parties*
2014
2013
2014
2013
2,520
-
-
579
83
2,520
-
-
8,547
37,284
317
249
5,430
8,547
175
317
-
-
-
-
4,031
-
-
-
-
-
-
-
New Loans
-
41,058
-
-
Repayments
-
41,058
-
-
-
-
-
-
-
-
8,108
2
-
-
888
8,108
-
3
1,986
667
-
-
-
1,986
ASSETS
Demand deposits
Current deposits
Loans
Other assets
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financial report
EUR 000’
Controlling company
Related parties*
2014
2013
2014
2013
3,870
7,177
-
20
4,017
3,870
-
-
14
13
33,294
24,244
-
14
1,056
33,294
LIABILITIES
Demand deposits
Current deposits
11,067
255,337
16,478
28,084
Other decrease
-
-
16,478
-
Increase
-
492,730
88,647
-
Decrease
11,067
737,000
80,671
-
-
11,067
7,976
16,478
199,734
412,155
-
-
Non-current deposits
Increase
21,608
91,640
-
-
Decrease
62,458
304,061
-
-
158,884
199,734
-
-
Subordinated debt
73,003
73,003
-
-
Increase
-
-
-
-
Decrease
-
-
-
-
73,003
73,003
-
-
184
334
614
664
18
184
518
614
-
2,094
25
492
-
-
256
25
4
32
-
234
1,717
11,958
77
217
22
-
30
3.399
216
1,584
3
12
-
1
784
436
18
781
418
1,508
(459)
870
-
171
Other liabilities
OFF-BALANCE-SHEET RECORDS
Issued Guarantees
PROFIT AND LOSS
Interest income
Interest expense
Fee and commision income
Other income
Other expenses
Trading result
*Hypo Group Alpe Adria AG, Hypo Alpe-Adria Leasing d.o.o. Ljubljana, Hypo Alpe-Adria-Bank d.d. Zagreb, Hypo Alpe-Adria-Bank d.d. Mostar, Hypo
Alpe-Adria-Bank A.D. Banja Luka, Hypo Alpe-Adria-Bank AD Beograd.
108
financial report
b) Group
EUR 000’
Controlling company
Related parties*
2014
2013
2014
2013
2,520
-
-
579
83
2,520
-
-
8,547
37,284
317
249
5,430
8,547
175
317
-
-
-
-
4,031
-
-
-
-
-
-
-
New Loans
-
41,058
-
-
Repayments
-
41,058
-
-
-
-
-
-
-
-
8,108
2
-
-
-
8,108
-
3
1,986
667
-
-
-
1,986
3,870
7,177
-
20
4,017
3,870
-
-
14
13
33,294
24,244
-
14
559
33,294
ASSETS
Demand deposits
Current deposits
Loans
Other assets
LIABILITIES
Demand deposits
109
financial report
EUR 000’
Controlling company
Related parties*
2014
2013
2014
2013
11,067
255,337
16,478
28,084
Other decrease
-
-
16,478
-
Increase
-
492,730
88,647
-
Decrease
11,067
737,000
80,671
-
-
11,067
-
16,478
199,734
412,155
-
-
Increase
175,268
91,640
-
-
Decrease
62,458
304,061
-
-
312,544
199,734
-
-
73,003
73,003
-
-
Increase
-
-
-
-
Decrease
-
-
-
-
73,003
73,003
-
-
184
334
614
664
94
184
-
614
-
2,094
25
492
-
-
204
25
4
32
-
234
2,405
11,958
-
217
22
-
2
3,399
216
1,584
3
12
-
1
-
436
18
781
-
1,508
(459)
870
-
171
Current deposits
Non-current deposits
Subordinated debt
Other liabilities
OFF-BALANCE-SHEET RECORDS
Issued Guarantees
PROFIT AND LOSS
Interest income
Interest expense
Fee and commision income
Other income
Other expenses
Trading result
*Hypo Group Alpe Adria AG, Hypo Alpe-Adria-Bank d.d. Zagreb, Hypo Alpe-Adria-Bank d.d. Mostar, Hypo Alpe-Adria-Bank A.D. Banja Luka, Hypo
Alpe-Adria-Bank AD Beograd.
110
financial report
The Bank is in 100-percent ownership of Hypo Group Alpe
Adria AG with headquarters in Klagenfurt, Austria. Since 30
October 2014 the Bank has a subsidiary Hypo Leasing d.o.o..
In addition, through its parent bank, the Bank is indirectly
linked to banks and companies in the Hypo group.
The Bank cooperates with its parent bank, related banks and
enterprises in transactions involving loans, deposits, issuing
of letters of credit and guarantees, as shown in the table above.
In accordance with Article 545 of the Companies Act, we
hereby declare that to the extent of circumstances known
to it, the Bank performs services between related parties
under market conditions.
In all transactions with the parent bank and other related
parties in 2014, the Bank has obtained appropriate payments
and has not suffered any loss as a result of related party
transactions.
b) Conclusion of negotiations on the sale of Hypo network
in South Eastern Europe with Advent International and
EBRD
In December 2014, an American private equity firm Advent
International and the European Bank for Reconstruction and
Development (EBRD) signed an agreement for the purchase
of Hypo network in Southeastern Europe.
Hypo network consists of 6 banking groups in five countries of South Eastern Europe (Slovenia, Croatia, Bosnia
and Herzegovina, Serbia and Montenegro). The sale of Hypo
network, which was owned by the Republic of Austria, is a
result of the implementation of the measures taken by the
European Commission on 3 September 2013.
Under the new owner the business restrictions do not apply
to the Bank group any longer, which gives it the potential
for additional growth.
Completion of the sales process is expected in mid 2015. Until
then, it is necessary to obtain approval from all relevant regulatory authorities and the European Union.
c) Recapitalization of the Bank
Subsequent events
a) Change in the exchange rate between CHF and EUR
In the past, the Swiss central bank artificially maintained
exchange rate between CHF and EUR at 1.20 CHF to EUR 1,
as it was in the interests of the Swiss economy and its
exporters.
The Supervisory Board of the Bank in 2015 approved two
proposals for the recapitalization of the Bank, the first one
on 20 February 2015 in the amount of EUR 30 million and
the second one on 27 April 2015 in the amount of 17 million
EUR. The Bank now complies with all regulatory capital
requirements set by the regulator.
d) Confirmation of the Annual Report
The Supervisory Board approved the Annual report in
May 2015.
On 15 January 2015, the Swiss central bank suddenly and
without notice withdrew the support to franc and let the
exchange rate be influenced by market conditions in the
financial market. As a result, the exchange rate fluctuated
significantly which has had a significant impact on loans
linked to the CHF currency. As a result, the principals of
loans in euro equivalent have increased, with the consequent
impact on late payments and higher impairments in 2015.
111
financial report
Financial Risk Management
Risk awareness and proactive focus on risk management are
the two key elements, which are reflected in the operating
activities of the Hypo Group.
Risk management procedure in Hypo Alpe-Adria-Bank d.d.
is composed of three components:
The controlling component, which consists of identification, measurement (analyzing, valuation) and
monitoring of risks in terms of portfolio and risk
reporting;
The risk limiting component;
The risk managing component, which consists of risk
acceptance, risk avoidance and mitigation, transfer
and risk diversification.
The Bank set up a single organizational structure in HAA
where risk management responsibilities for individual
sections are segregated and they all answer directly to the
CRO (member of the Management Board responsible for
risk management).
In 2014 the Retail Risk Management dept. continued to adjust credit policies to current trends in the retail sector and
small and medium-sized enterprises. Individual products
are monitored regularly through portfolio analyzes, which
is the basis for adjusting the credit policy in the direction
of the target bank portfolio. On the basis of changes in the
portfolio of individuals and micro and medium-sized enterprises different strategies of recovery to minimize exposure
to non-payers are being developed.
Organizational structure of the risk management segment:
Credit Risk Management
Risk Controling
Credit Processing
All the above are continually involved in active monitoring
and assessment of the risk management process in order to:
Identify individual risk exposure,
112
Define methods used to measure risks that are materially significant,
Define risk management policies pertaining to individual risks,
Propose individual risk exposure limits and
Perform other tasks to mitigate the risks the Bank
is exposed to.
The Bank's Management Board defines the Bank's strategy
and goals and is responsible for assumed risks (within the
Group’s strategy and goals). The strategy is explained in more
details at the ALCO (Asset and Liabilities Committee) meetings. Business divisions are responsible for implementing
business goals and for risk management related to these goals.
Risk is managed actively on all levels and within the valid risk
limits (defined by divisions/functions that are independent
in respect of operating sectors) by performing activities for
assuming risk, avoiding risk and mitigating, transferring
and diversifying risk.
In 2014, the Bank continued the appropriate internal capital
adequacy assessment process as defined by the second pillar
of the new equity directive (Basel II). The Bank monitored
some specific key indicators of economic development (GDP,
consumer spending index, industrial orders and similar)
through its RECO Committee that deals with all important
risks comprehensively and in one place and identified potential exposures to the most problematic debtors, industrial
segments, collateral and ratings, etc.
Within the scope of credit risk management the Bank independently assesses credit risk and performs the function of
observation, i.e. monitoring of the corporate and public institutions portfolio. Credit Risk Management has the function
of voting and approving credit proposals in accordance with
the document Local principles of financing. The department
is responsible for approvals, recommendations and transmission of credit proposals to relevant decision-making bodies;
It makes financial, industry and other analyzes; using the
expertise it advises on the structure of credit proposals. In
the process of loan approvals in 2014 the Bank complied
with the guidelines of the European Commission and the
credit policy.
financial report
In 2014 the Bank continued to pursue its objectives of efficient management and control of risk weighted assets and
its optimization, to ensure quality capital management. The
Capital Steering Group was set up in 2012 for this particular
purpose. Capital Steering Group meets monthly or as necessary, and is monitoring the amount and structure of capital
and capital requirements, and implementing processes that
ensure capital adequacy as prescribed by the Bank of Slovenia
and internally set limits.
The Bank is aware of the effect the global decline of economic
activity has on collaterals, above all on values of real estate
property and securities; this is why it regularly runs the so
called “stress scenarios” in respect of decrease of the credit
collateral and studies the results of these simulations. Once
the value of the collateral falls below the internally defined
minimum ratio, the Bank calls upon its clients to either provide additional collateral or repay the loan. Management
of collateral is the key to managing the Bank's capital and
required impairments of the Bank's credit portfolio. One of
the fundamental tasks of the new department is to monitor
and ensure appropriate collateral.
The Bank manages its capital adequacy from a regulatory
perspective as well as from the internal planning perspective (ICAAP – International Capital Adequacy Assessment
Procedure) on a monthly basis. Monthly credit portfolio
monitoring allows appropriate measures to be taken in
the event when the set limit exposures are exceeded. To
ensure appropriate level of capital adequacy, the Bank has
set the RWA (Risk Weighted Assets) limits for controlling
the capital adequacy ratio. Within the framework of its risk
management activities the Bank pursues legislative changes
and guidelines, while in the context of the implementation
of the new capital directive CRD IV/CRR and Basel III it
successfully completed the project and introduced all the
necessary activities in the reporting process and in the future operations of the Bank in accordance with the strategy.
In respect of the liabilities related to obtaining additional
financing sources, the Bank acts pursuant to instructions
of the parent bank in Austria. The agreed credit lines are
compliant with the plans for continuing growth of the credit
portfolio. On the other hand, the Bank plans to acquire new
assets for financing of investments through received deposits
from legal entities as well as individuals, as set in the planned
goals. This will provide the resources for financing the assets.
The Bank has assessed that despite the positive economic
indicators and GDP index in 2014 we cannot expect significant improvement in Slovenia in 2015 in the economic
environment, mainly due to the still high indebtedness of
individual companies and lengthy court and bankruptcy
proceedings, as well as danger of the downturn of the initial
economic recovery due to deflation pressure in the EU and
export restrictions to EU Member States in trading with
Russia. All this and active monitoring and risk management
(above all credit and liquidity risk) in respect of the clients
and collateral continues to be the Bank’s primary task for
the future.
113
financial report
Credit risk
Credit risk is a risk of financial loss resulting from the debtor’s inability to fulfil his financial or contractual obligation
towards the Bank, in part or in full, for any reason. Credit risk
management is a key component of the Bank’s diligent and
safe operations. Diligent credit risk management comprises
prudent management of the relationship between risk and
return and supervision and reduction of credit risk through
different perspectives, such as quality, concentration, currency, maturity, collateral and type of loans.
Throughout the duration of the credit relationship with the
client, the Bank monitors client’s operations and quality of
the financial asset’s collateral or the assumed liability.
The starting point for monitoring and classification of clients is a systematic review of the Bank’s portfolio. The Bank
classifies the financial assets measured at amortized costs
or assumed liabilities in the off-balance sheet items on the
basis of the internal methodology.
In 2010 in accordance with the International Financial
Reporting Standards (IFRS) adopted by the EU and the
decisions of the Bank of Slovenia, the Bank deemed all the
exposures to a single debtor which exceed EUR 150,000 as
individually significant financial assets, i.e. assumed liability
according to the offbalance sheet items and had regularly
and individually assessed them.
Other key indicators of the potential impairment of the
financial asset, which are used by the Bank as criteria for
individual assessment of the debtor, are:
The client is in delay with repayment of its obligations in the materially important amount for at least
90 days;
Bankruptcy or compulsory settlement of the client;
Proof of client’s serious financial problems, including
reprogramming due to the client’s economic, legal
or other problems, irregular settlement of liabilities
within the group of related entities and significant
economic problems in the client’s industry.
114
For clients that represent individually insignificant exposure
for the Bank or for clients for which the Bank estimates,
upon individual assessment, that individual impairment of
the financial asset is not required, a collective calculation of
the portfolio impairment of the financial asset is made in
accordance with IFRS’ requirements. The Bank recognizes
the percentage of the group impairment as loss in the profit
or loss.
The Bank has established procedures for monitoring the
credit quality of debtors, which enable timely detection of
debtors in financial difficulty. In the case of financial difficulties of the debtor, the Bank addresses them in the process
of restructuring in order to limit the Bank’s losses – this is
done for debtors who have no perspective or possibilities
for successful restructuring, survival and at least partial repayment of debts by viable debtors.
In the process of restructuring the Bank uses the following
measures:
Postponement or deferral of repayment of receivables;
Decrease of the interest rate and other costs;
Waiver (write off) of receivables;
Conversion of receivables into equity;
Acquisition of other assets for a partial or full
repayment of receivables.
In the process of restructuring the Bank regularly monitors
the debtor’s compliance with the obligations under the new
conditions and adopts further measures to achieve successful
restructuring of the debtor.
The Bank has adopted additional measures designed to ensure the appropriate supervision over credit risks. New tools
were implemented to the investment decision procedure in
this respect; these tools are used for credit rating of clients.
financial report
The table of the Bank’s internal credit ratings mapped pursuant to the credit ratings of external credit rating agencies.
Internal
rating
PD
S&P
Moody's
Fitch
Description of the grade
1A
0,00%
AAA, AA+
Aaa, Aa1, Aa2
AAA, AA+, AA, AA-, A+, A
Investment grade
1B
0.03%
AA, AA-
Aa3
Investment grade
1C
0.07%
A+, A, A-
A1, A2, A3
Investment grade
1D
0.15%
BBB+
Baa1, Baa2
1E
0.30%
BBB
Baa3
2A
0.50%
BBB-, BB+
2B
0.80%
BB
2C
1.20%
BB-
2D
1.70%
2E
2.30%
3A
3.00%
3B
3.90%
3C
5.00%
3D
6.30%
3E
7.50%
4A
9.00%
4B
11.00%
4C
14.00%
4D
19.00%
4E
25.00%
CCC
Caa3, Ca - C
CCC - C
Non-investment grade
5A
100.000%
D
D
D
Default class
5B
100.000%
D
D
D
Default class
5C
100.000%
D
D
D
Default class
5D
100.000%
D
D
D
Default class
A-, BBB+, BBB
Investment grade
BBB-
Ba1, Ba2
Ba3
Investment grade
Investment grade
BB+, BB
BB-, B+
B+
B1
B2
B, B-
B
B3
B-
Caa1
Caa2
The Bank also places special attention to identification and
monitoring of credit risk concentration. The risk management department prepares regular monthly reports on risks
in the credit portfolio of the Bank for the decision makers;
part of this report is notification on exposure to excessive
concentration, above all in specific industries, credit rating
groups and type of collateral.
Total credit risk exposure of the Bank at 31 December 2014
amounts to EUR 1,604,865 thousand and at the level of the
Group EUR 1,759,794. The capital requirement in respect of
the credit risks is presented in the Equity calculation table.
115
financial report
Different outlines of the credit risk exposures as at
31 December 2014 are presented below:
a) The highest (maximum) credit risk exposure without
taking into consideration the collateral or other improvements (the carrying value of the receivable decreased
for potential losses, impairment; in the case of financial
assets at fair value, the amounts in the table below show
present fair value rather than the risk resulting from the
future change of the fair value).
EUR 000’
Bank
2013
Gross
Adjustment
Net
Gross
Adjustment
Net
1,515,455
94,464
1,420,991
1,494,868
47,728
1,447,141
90,542
-
90,542
25,027
-
25,027
2. Loans to Banks
5,285
767
4,518
575
39
536
3. Loans to clients
1,266,312
93,698
1,172,614
1,311,827
47,688
1,264,139
3a Loans to individuals
497,180
9,910
487,270
532,471
11,549
520,922
- Housing loans
353,705
5,944
347,760
392,857
6,334
386,523
- Consumer loans
52,084
2,757
49,327
81,652
4,292
77,361
- Other
91,391
1,208
90,183
57,961
923
57,038
3b Corporate loans
769,132
83,788
685,344
779,356
36,139
743,217
- Large enterprises
303,448
34,390
269,059
292,713
14,160
278,552
- Small and medium enterprises
208,495
18,706
189,790
211,630
6,272
205,358
- Other
257,188
30,692
226,495
275,014
15,707
259,307
6,628
-
6,628
7,986
-
7,986
132,593
-
132,593
134,071
-
134,071
14,095
-
14,095
15,383
-
15,383
II. Off-balance-sheet items
89,410
3,228
86,182
110,821
3,474
107,347
15,283
1,011
14,272
18,965
677
18,288
2. Undrawn loans
74,127
2,217
71,910
91,856
2,797
89,058
1,604,865
97,693
1,507,173
1,605,689
51,201
1,554,487
I. Balance sheet items
1. Cash and balances with
Central Bank
4. Financial assets
held for trading
5. Financial assets held
to maturity and available-forsale financial assets
Total maximum exposure
to credit risk
116
2014
financial report
EUR 000’
Group
2014
Gross
Adjustment
1,669,208
96,681
1,572,614
90,542
-
90,542
2. Loans to Banks
5,285
767
4,518
3. Loans to clients
1,418,776
95,914
1,322,948
554,534
10,553
543,981
- Housing loans
353,705
5,944
347,760
- Consumer loans
52,084
2,757
49,327
- Other
148,744
1,851
146,893
3b Corporate loans
864,242
85,274
778,968
- Large enterprises
309,045
34,406
274,639
292,449
19,820
272,630
- Other
262,748
31,049
231,699
6,628
-
6,628
129,306
-
129,306
18,671
-
18,671
90,586
3,257
87,329
15,283
1,011
14,272
2. Undrawn loans
75,303
2,246
73,057
1,759,794
99,938
1,659,943
Central Bank
4. Financial assets
held for trading
5. Financial assets held
to maturity and available-forsale financial assets
to credit risk
Net
117
financial report
b)Summarized exposure and impairment percentage for individual credit rating segments
Bank
2014
Gross (%)
Impairment (%)
Gross (%)
Impairment (%)
Investment grade
14.42
2.17
5.83
2.17
71.69
12.95
85.57
27.05
Default class
13.90
84.88
8.59
70.79
100.00
100.00
100.00
100.00
Credit rating
Group
2014
Gross (%)
Impairment (%)
Investment grade
13.54
2.14
73.47
13.29
Default class
12.99
84.57
100.00
100.00
Credit rating
The Bank values the received collateral pursuant to the internal Manual on management and valuation of collateral.
The value of collateral depends above all on market conditions, time remaining to the realization of the collateral and
related costs. Conditions for the appropriate collateral for
those exposures are defined in the Bank’s internal acts. The
Bank pays special attention to continuous improvement of
all conditions for legal executability of collaterals. In the case
of the payment default the Bank is entitled to sell the assets
received as collateral in accordance with the contractual and
applicable legal provisions.
118
2013
financial report
c) Credit risk concentration as per geographic location
31.12.2014 Bank
EUR 000’
Slovenia
EU member Countries of former
states
Yugoslavia
Other
Total
Content
1,477,731
29,971
1,693
6,060
1,515,455
90,542
-
-
-
90,542
2. Loans to Banks
499
4,785
-
-
5,285
3. Loans to clients
1,234,697
23,861
1,693
6,060
1,266,312
496,929
179
20
53
497,180
- Housing loans
353,537
117
-
51
353,705
- Consumer loans
52,047
21
16
-
52,084
- Other
91,345
42
3
1
91,391
3b Corporate loans
737,768
23,682
1,674
6,008
769,132
- Large enterprises
301,184
2,264
-
-
303,448
208,495
-
-
-
208,495
- Other
228,088
21,418
1,674
6,008
257,188
5,305
1,324
-
-
6,628
132,593
-
-
-
132,593
14,095
-
-
-
14,095
88,065
1,331
7
6
89,410
15,283
-
-
-
15,283
2. Undrawn loans
72,782
1,331
7
6
74,127
1,565,797
31,301
1,701
6,067
1,604,865
1. Cash and balances with Central Bank
5. Financial assets held to maturity and available-for-sale
financial assets
Total maximum exposure to credit risk
119
financial report
EUR 000’
Slovenia
EU member
states
Countries of
former Yugoslavia
Other
Total
1,625,878
30,686
1,699
6,290
1,669,208
90,542
-
-
-
90,542
2. Loans to Banks
499
4,785
-
-
5,285
3. Loans to clients
1,381,554
24,577
1,699
6,290
1,418,776
554,231
224
26
53
554,534
- Housing loans
353,537
117
-
51
353,705
- Consumer loans
52,047
21
16
-
52,084
- Other
148,647
87
9
1
148,744
3b Corporate loans
827,323
24,353
1,674
6,237
864,242
- Large enterprises
306,780
2,264
-
-
309,045
292,449
-
-
-
292,449
- Other
228,093
22,088
1,674
6,237
262,748
5,305
1,324
-
-
6,628
129,306
-
-
-
129,306
18,671
-
-
-
18,671
89,241
1,331
7
6
90,586
15,283
-
-
-
15,283
2. Undrawn loans
73,958
1,331
7
6
75,303
1,715,119
32,016
1,707
6,296
1,759,794
31.12.2014 Group
Content
5. Financial assets held to maturity and available-forsale financial assets
120
financial report
EUR 000’
31. 12. 2013 Bank
Slovenia
EU member
Countries of
states former Yugoslavia
Other
Total
Content
1,468,264
24,009
2,546
48
1,494,868
25,027
-
-
-
25,027
2. Loans to Banks
555
20
-
-
575
3. Loans to clients
1,287,565
21,668
2,546
48
1,311,827
532,088
282
53
48
532,471
- Housing loans
392,702
108
-
48
392,857
- Consumer loans
81,608
24
21
-
81,652
- Other
57,779
150
32
-
57,961
3b Corporate loans
755,477
21,386
2,493
-
779,356
- Large enterprises
292,713
-
-
-
292,713
211,630
-
-
-
211,630
- Other
251,134
21,386
2,493
-
275,013
5,664
2,321
-
-
7,986
134,071
-
-
-
134,071
15,383
-
-
-
15,383
101,940
8,870
8
2
110,821
18,965
-
-
-
18,965
2. Undrawn loans
82,975
8,870
8
2
91,856
1,570,204
32,880
2,554
50
1,605,688
5. Financial assets held to maturity
and available-for-sale financial assets
121
financial report
d) Credit risk concentration as per industry sector
31. 12. 2014 Bank
Financial
Manufacturing
institutions
Real estate
Wholesale and
retail trade
Public sector
Other
industries
Individuals
Total
215,991
154,434
112,652
96,320
180,540
258,338
497,180
1,515,455
90,542
-
-
-
-
-
-
90,542
2. Loans to Banks
5,285
-
-
-
-
-
-
5,285
3. Loans to clients
99,186
153,489
112,336
95,650
61,012
247,458
497,180
1,266,311
-
-
-
-
-
-
497,180
497,180
- Housing loans
-
-
-
-
-
-
353,705
353,705
- Consumer loans
-
-
-
-
-
-
52,084
52,084
- Other
-
-
-
-
-
-
91,391
91,391
3b Corporate loans
99,186
153,489
112,336
95,650
61,012
247,458
-
769,132
- Large enterprises
96,037
63,405
34,203
46,607
-
63,195
-
303,448
- Small and medium
enterprises
2,012
68,724
14,701
39,144
1,341
82,573
-
208,495
- Other
1,136
21,360
63,432
9,899
59,671
101,690
-
257,188
4. Financial Assets Held for
Trading
1,324
945
316
670
-
3,374
-
6,628
5. Financial assets held to
maturity and available-forsale financial assets
5,559
-
-
-
119,527
7,507
-
132,593
14,095
-
-
-
-
-
-
14,095
1,361
26,120
8,229
11,210
6,979
17,773
17,737
89,410
-
3,309
31
5,618
6,326
-
-
15,283
1,361
22,812
8,198
5,592
654
17,773
17,737
74,127
217,352
180,554
120,881
107,530
187,519
276,112
514,917
1,604,865
Central Bank
2. Undrawn loans
to credit risk
122
EUR 000’
financial report
EUR 000’
31. 12. 2014 Group
Financial
Manufacturing
institutions
Real estate
Wholesale and
retail trade
Public sector
Other
industries
Individuals
Total
217,768
175,104
123,976
102,907
186,051
308,856
554,544
1,669,208
90,542
-
-
-
-
-
-
90,542
2. Loans to Banks
5,285
-
-
-
-
-
-
5,285
3. Loans to clients
99,675
174,159
123,661
102,237
66,524
297,976
554,544
1,418,775
-
-
-
-
-
-
554,533
554,533
- Housing loans
-
-
-
-
-
-
353,705
353,705
- Consumer loans
-
-
-
-
-
-
52,084
52,084
- Other
-
-
-
-
-
-
148,744
148,744
3b Corporate loans
99,675
174,159
123,661
102,237
66,524
297,976
11
864,242
- Large enterprises
96,037
64,922
35,518
46,648
-
65,919
-
309,045
- Small and medium
enterprises
2,483
87,767
24,422
45,584
2,806
129,377
11
292,449
- Other
1,154
21,470
63,721
10,005
63,718
102,680
-
262,748
Trading
1,324
945
316
670
-
3,374
-
6,628
2,272
-
-
-
119,527
7,507
-
129,306
18,671
-
-
-
-
-
-
18,671
1,361
27,296
8,229
11,210
6,979
17,773
17,737
90,586
-
3,309
31
5,618
6,326
-
-
15,283
1,361
23,988
8,198
5,592
654
17,773
17,737
75,303
219,130
202,401
132,206
114,117
193,030
326,630
572,281
1,759,794
Central Bank
2. Undrawn loans
Total maximum exposure to
credit risk
123
financial report
EUR 000’
31. 12. 2013 Bank
Financial
Manufacturing
institutions
Wholesale and
Real estate
retail trade
Public sector
Other
industries
Individuals
Total
85,386
150,821
101,488
144,413
187,487
292,801
532,471
1,494,868
Central Bank
25,027
-
-
-
-
-
-
25,027
2. Loans to Banks
575
-
-
-
-
-
-
575
3. Loans to clients
42,371
149,454
101,249
127,716
72,576
285,991
532,471
1,311,827
-
-
-
-
-
-
532,471
532,471
- Housing loans
-
-
-
-
-
-
392,857
392,857
- Consumer loans
-
-
-
-
-
-
81,652
81,652
- Other
-
-
-
-
-
-
57,961
57,961
3b Corporate loans
42,371
149,454
101,249
127,716
72,576
285,991
-
779,356
- Large enterprises
38,015
62,999
33,801
74,241
-
83,657
-
292,713
- Small and medium
enterprises
3,020
58,572
18,510
41,832
1,809
87,887
-
211,630
- Other
1,335
27,883
48,938
11,643
70,767
114,447
-
275,014
Trading
2,031
1,368
239
1,035
-
3,313
-
7,986
-
-
-
15,663
114,911
3,497
-
134,071
15,383
-
-
-
-
-
-
15,383
6,924
26,843
12,561
14,938
6,202
25,406
17,948
110,821
-
4,304
271
8,475
5,915
-
-
18,965
6,924
22,539
12,290
6,463
287
25,406
17,948
91,856
92,310
177,664
114,049
159,351
193,688
318,207
550,419
1,605,689
2. Undrawn loans
to credit risk
124
financial report
As at 31 December 2014 the Bank shows the maximum
exposure to credit risk in the amount of € 1,604,865 and at
the Group level € 1,759,794. Exposure in loans to customers
other than banks, amounts to € 1,266,311 and € 1,418,775 for
the Group. The largest share in the segment of retail loans
belongs to housing loans (Bank 71.1%, Group 63.8%). For
corporate loans the largest share belongs to large enterprises
(Bank 39.5%, Group 35.8%).
The majority of receivables under this title relates to
enterprises located in the Republic of Slovenia and accounts
for 93.3% of the total exposure.
The Bank continuously monitors the movement of its
credit portfolio and assesses the possibilities of excessive
concentration in individual industries by using SWOT
analysis of individual industries. These analyses are the
basis for adoption of business decisions affecting the Bank’s
and Group’s investment policies in respect of reduction of
excessive exposure to industries with identified increased
credit risk. Thorough analyses are prepared on a quarterly
basis as a means of regular reporting and discussion at the
risk management committee.
e) Overview of the credit risk for the item »Loans to banks« and »Loans to clients« including offbalance
sheet credit exposures
EUR 000’
Bank
Exposure
2014
2013
Loans to Banks
Loans to clients
Loans to Banks
Loans to clients
4,096
542,018
2,579
522,125
Exposure that is past due but is not individually impaired
-
17.214
-
26,307
Exposure that is not past due and is collectively impaired
1,156
644,013
854
802,137
-
130,546
-
42,270
5,252
1,333,791
3,433
1,392,839
767
93,698
39
47,688
4,485
1,240,093
3,394
1,345,151
-
77,346
-
30,036
767
16,352
39
17,652
-
93,698
-
47,688
Exposure that is not past due, nor impaired
Iindividually impaired exposure
Total
Value of adjustments (impairment)
Net
Individual Impairments
Group Impairments
Total
125
financial report
EUR 000’
Group
2014
Exposure
Loans to Banks
Loans to clients
4,096
60,061
Exposure that is past due but is not individually impaired
-
18,953
Exposure that is not past due and is collectively impaired
1,156
736,009
-
131,407
5,252
1,487,431
767
95.943
4,485
1,391,488
-
78,015
767
17,928
-
95,943
Exposure that is not past due, nor impaired
Iindividually impaired exposure
Total
Value of adjustments (impairment)
Net
Group Impairments
Total
*The tables include the balance sheet and off-balance sheet exposure, excluding service guarantees.
f) Loans and advances neither past due nor impaired
EUR 000’
31. 12. 2014 Bank
Loans to clients
Loans to individuals
Credit rating
Investment grade
Default class
Total
126
Corporate loans
Housing
loans
Consumer
loans
Other
Large
enterprises
Small and
medium
enterprises
Other
Total loans to
clients
Loans to
Banks
7,298
6,875
16,703
94,118
3,218
5,056
133,268
-
129,219
31,699
71,135
59,155
56,143
44,934
392,285
4,096
1,071
472
380
2,891
3,451
8,200
16,464
-
137,588
39,046
88,218
156,164
62,812
58,190
542,018
4,096
financial report
EUR 000’
31. 12. 2014 Group
Loans to clients
Credit rating
Investment grade
Default class
Total
Corporate loans
Housing
loans
Consumer
loans
Other
Large
enterprises
Small and
medium
enterprises
Other
Total loans to
clients
Loans to
Banks
7,298
6,875
20,180
94,168
6,566
6,264
141,351
-
129,219
31,699
122,807
64,700
133,715
48,778
531,139
4,096
1,071
472
2,584
2,891
7,662
8,708
23,166
-
137,588
39,046
145,571
161,760
147,942
63,750
695,657
4,096
EUR 000’
31. 12. 2013 Bank
Loans to clients
Credit rating
Investment grade
Default class
Total
Corporate loans
Housing
loans
Consumer
loans
Other
Large
enterprises
Small and
medium
enterprises
Other
Total loans to
clients
Loans to
Banks
3,444
20,231
1,601
-
4,412
501
30,188
-
157,910
43,218
59,498
89,769
46,361
50,938
447,693
2,579
1,411
911
198
31,026
10,061
637
44,244
-
162,765
64,361
61,296
120,795
60,833
52,076
522,125
2,579
127
financial report
g)Loans and advances past due but not impaired
EUR 000’
31.12.2014 Bank
Loans to individualsw
Housing loans
Consumer loans
Other
Delay up to 30 days
4,050
1,669
2,045
Delay from 31 to 60 days
1,027
837
196
-
8
60
Total
5,077
2,513
2,301
Internal collateral value
5,077
2,513
1,910
-
-
391
Unsecured part of the exposure
EUR 000’
31. 12. 2014 Bank
Corporate loans
Large enterprises
Small and medium enterprises
Other
1,345
2,889
2,801
347
932
7,596
-
46
1,806
Total
1,693
3,867
12,202
1,663
3,721
12,197
29
146
5
Delay up to 30 days
EUR 000’
31. 12. 2014 Group
Housing loans
Consumer loans
Other
Delay up to 30 days
4,050
1,669
5,606
1,027
837
1,205
-
8
442
Total
5,077
2,513
7,253
5,077
2,513
6,862
-
-
391
128
financial report
EUR 000’
31. 12. 2014 Group
Corporate loans
Large enterprises
Other
1,510
7,287
2,846
347
3,187
7,597
-
628
1,925
Total
1,857
11,102
12,368
1,828
10,834
12,326
29
268
42
Delay up to 30 days
EUR 000’
31.12.2013 Bank
Housing loans
Consumer loans
Other
4,007
2,760
2,037
889
896
210
110
4
95
Total
5,006
3,653
2,341
5,006
3,653
1,808
-
-
533
Delay up to 30 days
EUR 000’
31. 12. 2013 Bank
Corporate loans
Large enterprises
Other
6,723
1,421
5,362
632
922
972
196
1,276
4,134
Total
7,552
3,619
10,468
7,419
3,481
10,383
133
138
85
Delay up to 30 days
In the calculation the value of collateral is taken into account up to the exposure value of the loan. In cases where the unsecured part of the exposure
is 0, the amounts of overdue loans are fully secured.
129
financial report
h)Past due and impaired loans and advances to clients
Only individually impaired assets are taken into consideration. Collective impairments are calculated and treated as
portfolio risk provisions.
EUR 000’
Loans to clients
31.12.2014 Bank
Corporate loans
Housing loans
Consumer
loans
Other
Large
enterprises
Small and
medium
enterprises
Other
Total
Iindividually impaired
exposure
4,846
3,498
464
49,563
39,777
34,550
132,698
3,494
2,491
459
28,006
16,119
11,574
62,143
3,282
1,897
239
18,017
21,579
23,160
68,173
EUR 000’
Loans to clients
31.12.2014 Group
Corporate loans
Housing loans
Consumer
loans
Other
Large
enterprises
Small and
medium
enterprises
Other
Total
exposure
4,846
3,498
464
49,563
41,613
34,826
134,810
3,494
2,491
459
28,006
16,607
11,755
62,812
3,282
1,897
239
18,017
23,168
23,292
69,894
EUR 000’
Loans to clients
31.12.2013 Bank
130
Corporate loans
Housing loans
Consumer
loans
Other
Large
enterprises
Small and
medium
enterprises
Other
Total
exposure
4,815
4,050
199
17,970
4,620
13,428
45,081
3,997
3,714
195
4,542
2,736
9,555
24,739
3,472
1,156
7
6,645
962
4,961
17,201
financial report
The table demonstrates:
Exposure of loans which are individually impaired
before taking collaterals into consideration
Amounts of individual impairments
Internal value of collateral for loans which are individually impaired up to the exposure.
The share of exposure that is not past due and is not impaired
represents 42.80 percent of the total exposure of “Loans to
clients” in the Bank and at the Group level 49.03 percent.
Exposures that are past due but are not impaired represent
2.18 percent of the total exposure of “Loans to clients” in
the Bank. At the Group level this accounts for 2.83 percent.
*The tables include the balance sheet and off-balance sheet exposure,
excluding service guarantees.
i) Restructured loans
EUR 000’
Bank
Restructured loans to clients
2014
2013
Gross
Value adjustments
Gross
Value adjustments
Reprogrammed loans on 1. 1.
27,235
1,649
94,900*
11,150
Net increase/decrease
71,442
45,553
4,452
770
-
-
(72,117)
(8,638)
98,677
47,202
27,235
3,282
Net decrease due to transfer of receivables
from the balance sheet
EUR 000’
Group
Restructured loans to clients
2014
Gross
Value adjustments
27,235
1,649
Net increase/decrease
71,442
45,553
-
-
98,677
47,202
Net decrease due to transfer of receivables
from the balance sheet
* Taking into account contracts which were later eliminated from the balance sheet on the basis of the
pass-through agreement
– see note to point 17 - Loans to clients.
131
financial report
j) Debt securities
The tables below present an analysis of the non-trading book
and trading book securities by rating grades.
31.12.2014
Bank
Investment grade
Default class
Total
EUR 000’
Available-for-sale
financial assets
Financial assets classified
as held to maturity
44,376
81,309
3,643
3,251
14
-
(48,034)
84,559
EUR 000’
31.12.2014
Group
Investment grade
Default class
Total
Available-for-sale
financial assets
as held to maturity
44,376
81,309
335
3,251
14
-
44,725
84,559
EUR 000’
31. 12. 2013
Bank
Investment grade
Non investment grade
Total
k) Repossessed collateral
EUR 000’
Group
Nature of assets
31. 12. 2014
Carrying amount
Vehicles and equipment
Group does not use these assets in its operations.
132
180
Available-for-sale
financial assets
as held to maturity
29,626
80,702
3,490
3,047
33,116
83,748
financial report
l) Fair value of collateral
Bank
EUR 000’
2014
2013
Individuals
Corporates and
sole proprietors
Individuals
Corporates and
sole proprietors
Collateral for individualy impaired exposures
6,230
69,596
5,429
56,710
Land, real estate
5,654
56,625
4,587
35,757
545
-
765
61
31
12,971
77
20,892
Collateral for group impaired exposures
529,744
539,515
453,755
412,604
Land, real estate
370,810
396,781
281,997
320,503
434
6,732
267
9,767
Other (guarantees, pledges, insurances)
158,500
136,002
171,491
82,334
Total
535,974
609,111
459,184
469,314
Securities (shares, bonds, mutual fund points)
EUR 000’
Group
2014
Individuals
Corporates and
sole proprietors
Collateral for individualy impaired exposures
6,230
71,126
Land, real estate
5,654
56,625
545
-
31
14,501
Collateral for group impaired exposures
577,459
612,540
Land, real estate
371,941
396,781
434
6,732
205,084
209,027
Total
583,689
683,666
*Collateral represents weighted amount of the collateral value. For calculation purposes, the value of collateral
up to the loan exposure is taken into account for individual transaction.
Factors affecting the value of collateral depend on the type
of collateral. Pledge values are determined based on past
experience and are dependent on marketability, rating, time
required for the realization of collateral and its costs, proceeds from realization, and foreign currency risk.
133
financial report
Liquidity risk
Liquidity risk is a risk that the Bank will not be able to timely
and continually fulfil its financial obligations. It derives from
time inconsistency between received assets and liabilities.
The importance of effective controlling and managing of
the liquidity risk has increased at the time of financial crisis.
For the purpose of monitoring the future liquidity needs,
Hypo Group Alpe Adria uses an internally developed
Liquidity Ratio Tool (LRT) to monitor:
short-term liquidity (just for the Bank),
structured liquidity (separately for the
Bank and Leasing).
The Bank manages short-term liquidity risk on the basis of
weekly cash flows planning for various intervals. The LRT
provides the basis for analysis of short-term and long-term
liquidity structure as it classifies cash flows to individual time
pockets at actual contractual plans, which allows for more
realistic presentation of the deterministic cash flows, in addition to stochastic cash flows, which result from modification
of certain assets and liabilities that have no maturity and are
not liquid. By using the LRT tool, planned cash flows and
the Bank’s liquidity potential that includes assets designated
for liquidity requirements, are classified to time pockets in
accordance with the adopted model. For monitoring shortterm liquidity (Bank), a liquidity ratio is calculated based
on scenarios prepared in advance for general and specific
liquidity crisis.
The Bank’s liquidity is managed by the Asset Liability
Management dept. where all known liquidity flows are recorded. Liquidity calculations and reporting are the responsibility of the Market and Liquidity Risk Control department.
Realization of the liquidity management is reviewed at weekly
Liquidity meetings and monthly ALCO meetings, where the
following information is presented:
The amount and compliance with
the obligatory reserve,
Achieved liquidity ratios,
Status of refinancing by the parent bank and
Access to the primary liquidity of the Central Bank.
134
Indicators of liquidity do not need to be reported to the
banking regulator on the consolidated level. LRT tool is also
not suitable for a consolidated view. Bank and Leasing contain different based data structures. Leasing does not have
planning data, there are also various assumptions in the modeling of stochastic data. The annual report therefore shows
the so-called contractual run-off analysis of cash flows. The
table shows the consolidated cash flows (Bank and Leasing
together) and a separate table shows cash flows of the Bank.
Run-off analysis represents the cash outflows and inflows
for the future, according to 31 December 2014. ANNUAL REPORT 2014 Hypo Alpe Adria and Hypo Alpe-Adria-Bank, d. d.
financial report
Contractual cash flows of the Group as at 31 December 2014:
EUR 000’
2015
2016
2017
2018
>2018
Nr*
Total
82,690
-
-
-
-
-
82,690
4,272
-
-
-
-
-
4,272
21,455
23,344
-
-
-
-
44,799
362,920
185,187
131,662
101,519
416,817
77,700
1,275,806
3,251
-
40,111
-
41,197
-
84,559
471,584
206,998
170,683
100,679
454,564
77,057
1,481,566
81,265
-
-
50,000
-
-
131,265
875,706
149,348
169,730
44,607
18,343
2,235
1,259,968
TOTAL LIABILITIES
956,971
149,348
169,730
94,607
18,343
2,235
1,391,233
Cash and balances with Central Bank
Loans
TOTAL FINANCIAL ASSETS
Financial liabilities to the Central Bank
*NR (not relevant) Balance sheet item where cash flow is not expected.
Contractual cash flows of the Bank as at 31 December 2014:
EUR 000’
2015
2016
2017
2018
>2018
Nr*
Total
82,690
-
-
-
-
-
82,690
4,272
-
-
-
-
-
4,272
21,454
23,344
-
-
-
-
44,797
305,983
144,933
106,974
89,493
401,128
77,700
1,126,212
3,251
-
40,111
-
41,197
-
84,559
414,805
166,929
146,090
88,661
438,595
76,978
1,332,058
81,265
-
-
50,000
-
-
131,265
810,131
117,585
123,110
44,607
18,343
-
1,113,775
TOTAL LIABILITIES
891,396
117,585
123,110
94,607
18,343
4,411
1,249,451
Cash and balances with Central Bank
Loans
TOTAL FINANCIAL ASSETS
Financial liabilities to the Central Bank
*NR (not relevant) Balance sheet item where cash flow is not expected.
The Bank calculates the liquidity ratios on a daily basis in
accordance with the Decision of the Bank of Slovenia on
minimum requirements for ensuring an adequate liquidity
position of banks and savings banks. These ratios are calculated as the ratio between investments and liabilities under the
residual value principle. First class liquidity ratio (maturity
up to 30 days) must not fall below 1.
In accordance with the Basel III standards, the Bank is
obliged to calculate the monthly LCR (liquidity coverage
ratio) and three-month state of NSFR (Net Stable Funding
Ratio). As at 31 December 2014 they are as follows:
LCR:
NSFR:
128.52 %
95.67 %
The joint liquidity ratios as per 31 December 2014 are as
follows:
First class investments/assets (0–30 days)
1,23
Second class investments/assets (0–180 days)
0,66
135
financial report
Market risk
Market risk represents a potential loss that occurs due to
changed market conditions in respect of the Bank’s exposure
to individual market parameters or risk factors (currency
exchange rates, interest rates, share prices, credit spread).
Managing market risks in the Bank is a procedure that comprises identification, measuring, monitoring and mitigation of individual market risks designed to minimize the
potential negative financial consequences. The set of rules,
methodologies and responsibilities in respect of market risk
management is written in the Framework Risk Policy and
the Framework Manual for Market Risk Management. The
competences of the Bank and Leasing differ here. Reporting
of market risks hereinunder is relating to the Bank and its
operations and to Leasing only where this is expressly stated.
In the case of Leasing we only monitor foreign exchange and
interest rate risks, which are not calculated using models.
Monitoring and reporting standards for Leasing are not as
precise and binding as for the Bank.
The Bank is exposed to different market risks through its
daily operations, amongst other to position risk, currency
risk, interest risk and credit spread risk. The risk is managed
through daily reporting on risk levels, monitoring, calculating and utilization of limits and the achieved operational
results.
The system of limits only applies to the Bank. Market risk
limits are determined pursuant to the annual plan and the
appetite for assuming market risks by the owner; the competent departments of the parent bank determine these limits
at least once a year. The procedure of confirmation of limits
is formally concluded with acceptance of the suggested limits by the parent bank’s management and the Management
Board of the Bank.
a) Trading book
The Bank’s trading book serves primarily for ensuring services to clients. The Bank offers its clients a possibility of
concluding derivative transactions, which, in line with confirmed limits for market risk, it closes immediately and thus
minimizes market risks. By doing this, the Bank exposes
136
itself to counter party credit risk, which is mitigated with
the amount of limit for credit exposure to each individual
client, while it is measured and reported in accordance with
the standardized approach. The Bank enters into foreign
currency purchase/sale transactions in order to serve its
clients and to balance its overall foreign currency position.
Equity securities are reported in the non-trading book and
were purchased mainly as a result of realizing collateral on
non-performing investments. A minor trading book net
position is presented by the Hypo fund, which the Bank
maintains for the purpose of selling it to clients.
For measuring position risk in the trading book, the Bank
uses the value at risk (VaR) method. This method gives information with a specific level of probability (which is defined
with a confidence interval) that maximum expected loss
within a defined time horizon (a period of holding a position)
shall not exceed the calculated amount. As a system support
for calculation of value at risk, the Bank uses the PMS system
(Portfolio Risk Management System), for the development
and improvement of which is responsible the department
of Information technology and Market Risk Controlling of
the parent bank. In order to determine the risk parameters,
the Bank uses its own, exponentially weighted history of
250 days. The used methodology for calculation of value at
risk is the Monte Carlo method with 10,000 simulations and
a 99-percent confidence interval (1-day position holding).
financial report
Movement of VaR value in 2014
(Trading and Banking book)
Equity securities
Derivatives
EUR 000’
Maximum
Minimum
Average
503
5
209
3,635
316
666
Movement of VaR value in 2013
(Trading and Banking book)
EUR 000’
Maximum
Minimum
Average
Equity securities
1,019
227
595
Derivatives
1,570
520
888
In 2014 the VaR of equity securities is lower due to the sale of
major positions in shares of Mercator, Petrol and Luka Koper.
The result of monthly measuring of the Bank’s exposure to interest rate risk is the net present value of differences between
assets and liabilities, which are subject to market interest rate
changes in the given time period. With respect to the Basel II
guidelines, the Bank regularly checks the influence of interest
rate shock in the amount of 200 basis points and internally
tightens a 20-percent absorption effect of net equity of the
Bank at the prescribed interest rate shock. Besides the described interest rate shock with the parallel shift of the yield
curve, the Bank also measures the effect of other interest rate
shocks on a monthly basis.
The interest rate shock in the amount of 200 basis points
would absorb approximately 1.30 percent of the Bank’s equity
at the end of 2014 (2013: 1.88 percent).
Effect of yield curve shift can be displayed on a consolidated
basis (we add up the consolidated interest rate positions at
different periods for the Bank and Leasing) and separately
only for the Bank. The effects are shown in the tables below
and apply for the stated scenarios of yield curve shift.
Besides the value at risk limits (VaR-limits), the entire system
of position risks is supplemented by exposure limits, limits
of the maximum permitted loss and other limits, among
which are, for example, the minimum rating of the securities
issuer, allowed forms of products and allowed markets for
trading, and which ensure that the positions are in line with
the outlined business strategy.
b) Interest rate risk in the Banking book
The interest rate risk is the risk of loss incurred on interest-sensitive assets with different maturities and different
interest fluctuation dynamics, as suitable resources of financing these assets.
Management of the interest rate risk from the items in the
trading book is included in the trading book’s risk position
management, whereas for the purpose of management of interest rate risk, which results from the items of the non-trading book and off-balance sheet items, the Bank uses methodology of interest rate gaps with respect to the date of the
next change of interest rates.
137
financial report
The effects of the yield curve shift by different scenarios (only interest bearing positions)
on 31 December 2013; Bank view
Scenario
ICAAP scenario => -50% negative case
(927)
ICAAP Scenario => 90% stress case
(1,530)
+ 10 bps parallel shift
(170)
- 10 bps parallel shift
170
rotation (ON-3M -> +60 BP, 3M-5Y -> -20 BP, 5Y -> -50 BP)
(563)
rotation (ON-3M -> +60 BP, 3M-5Y -> +20 BP, 5Y -> +50 BP)
86
The effects of the yield curve shift by different scenarios (only interest bearing positions)
on 31 December 2014; Group view
Scenario
138
EUR 000’
Effect of yield curve shift
EUR 000’
Effect of yield curve shift
ICAAP scenario => -50% negative case
272
ICAAP Scenario => 90% stress case
810
+ 10 bps parallel shift
30
- 10 bps parallel shift
(30)
rotation (ON-3M -> +60 BP, 3M-5Y -> -20 BP, 5Y -> -50 BP)
(992)
rotation (ON-3M -> +60 BP, 3M-5Y -> +20 BP, 5Y -> +50 BP)
125
financial report
Interest Rate Risk by individual time buckets and currencies (the interest bearing positions only) on
31.12.2013 for the Bank and 31.12.2014 for the Group
2013 Bank
Time bucket
EUR 000’
2014 Group
Gap EUR
Gap CHF
Gap other
currencies
Total
Gap EUR
Gap CHF
Gap other
currencies
Total
ON
4,479
(114)
-
4,365
190
1
-
190
1M
(152,586)
1,330
4,495
(146,762)
(135,408)
1,615
3,554
(130,239)
3M
220,237
(136,164)
(613)
83,461
330,153
(116,764)
(419)
212,970
6M
249,361
141,117
(417)
390,061
127,633
163,860
(443)
291,050
1Y
(60,634)
(1,301)
(438)
(62,373)
8167,358)
(1,951)
(507)
(169,816)
2Y
(159,410)
(2,294)
(1,413)
(163,117)
(31,953)
(995)
(1,093)
(34,041)
3Y
(1,771)
(953)
(413)
(3,138)
24,092
229
(275)
24,047
4Y
30,417
(953)
(413)
29,050
(70,146)
(305)
(255)
(70,707)
5Y
(15,945)
(953)
(413)
(17,312)
(22,546)
(305)
(255)
(23,106)
7Y
17,050
(89)
(173)
16,788
24,934
(74)
(152)
24,708
10Y
13,873
-
-
13,873
3,194
-
-
3,194
15Y
12,262
-
-
12,262
12,027
-
-
12,027
20Y
(1,022)
-
-
(1,022)
(1,022)
-
-
(1,022)
-
-
-
-
-
-
-
-
>20Y
The structure of assets and liabilities in terms of the type of interest rate on 31.12.2013 for the
Bank and 31.12.2014 for the Group
TYPE OF INTEREST RATE
Fixed interest rate
UFN*
Variable interest rate
Non-interest bearing items
2013 Bank
2014 Group
Assets
Liabilities
Assets
Liabilities
15.80%
50.59%
14.13%
46.21%
2.24%
12.56%
8.83%
16.55%
80.21%
24.92%
75.67%
27.18%
1.75%
11.93%
1.37%
10.06%
*Items with undefined interest fixing
139
financial report
c) Currency risk
Currency risk is a risk of a loss arising from mismatch of
the currency sub-balance and inconsistencies of foreign
currencies.
The Bank monitors on a daily basis exposure to foreign
currency risks and limits them by setting volume limits by
individual currencies, groups of currencies and total open
position. The measurement method is based on the principle of net open position, which is reported in domestic
currency. The group of volume limits is rounded up by the
VaR limit on total open position. The VaR methodology is
the same as the methodology in the trading book (250-day
history – ECB fixed rate, weighted daily changes of exchange
rate, 99-percent confidence interval and 1-day exponentially
weighted history holding period).
Narrow volume limits by individual currencies, groups of
currencies and total open position indicate a conservative
approach to managing currency risks. According to the regulatory capital requirement for currency risk, the Bank does
not have to calculate a capital requirement for currency risk,
as its total net position in foreign currencies does not exceed
2 percent of its capital.
Movement of VaR value for total open FX position
of the Bank for 2013 and 2014
EUR 000’
140
Maximum
Minimum
Average
VaR 2013
17,652
300
2,487
VaR 2014
17,652
346
2,055
For Leasing we monitor the currency position on the weekly
level. Position is operated only with foreign currency balance
of active and passive balance sheet items. VaR model for
calculating the risk of foreign exchange positions is not used.
Total consolidated foreign currency position (for the Bank
and Group view) is shown in the table below.
financial report
Exposure to currency risk as at 31 December 2014
EUR 000’
2014 Bank
2014 Group
STATEMENT
OF FINANCIAL
POSITION
USD
CHF
Other
currencies
EUR
Total
USD
CHF
Other
currencies
EUR
Total
Cash and balances
with Central Bank
180
214
455
81,841
82,690
180
214
455
81,841
82,690
Loans
4,065
187,533
508
923,635
1,115,740
4,065
191,104
508
1,069,571
1,265,247
TOTAL FINANCIAL
ASSETS
4,245
187,747
963
1,005,476
1,198,430
4,245
191,318
963
1,151,412
1,347,937
Financial liabilities
to the Central Bank
-
-
-
131,265
131,265
-
-
-
131,265
131,265
measured at
amortized cost
4,438
145,030
715
963,592
1,113,775
4,438
148,921
715
1,105,895
1,259,968
TOTAL LIABILITIES
4,438
145,030
715
1,094,857
1,245,040
4,438
148,921
715
1,237,160
1,391,234
Exposure to currency risk as at 31 December 2013 (Bank)
EUR 000’
2013 Bank
STATEMENT OF
FINANCIAL POSITION
USD
CHF
Other
currencies
EUR
Total
Cash and balances
with Central Bank
191
286
249
24,300
25,027
Loans
179
209,972
600
1,057,958
1,268,109
TOTAL FINANCIAL
ASSETS
370
210,258
849
1,222,851
1,443,681
Financial liabilities to
the Central Bank
-
-
-
160,000
160,000
measured at
amortized cost
5,499
214,835
683
920,305
1,141,322
TOTAL LIABILITIES
5,499
214,835
683
1,080,305
1,301,322
141
financial report
Fair values of assets and liabilities (Bank)
a)Financial instruments not measured at fair value
The table below summarizes the carrying amounts and fair
values of those financial assets and financial liabilities that
are not reported in the Bank’s statement of financial position
at fair values.
EUR 000’
2014
2013
Carrying amount
Fair value
Carrying amount
Fair value
82,690
82,690
25,027
25,027
2. Loans to Banks
11,885
11,885
10,076
10,076
3. Loans to clients
1,136,909
1,184,285
1,258,033
1,258,833
84,559
98,010
83,748
86,906
3,030
3,030
1,974
1,974
1. Financial liabilities to the Central Bank
131,265
131,265
160,444
160,444
2. Financial liabilities to banks measured at amortized cost
160,342
160,342
219,348
219,348
3. Financial liabilities to clients measured at amortized cost
824,929
842,142
734,303
738,954
45,002
45,002
64,986
64,986
5. Debt securities
4,568
4,716
14,710
14,881
2,202
2,202
1,851
1,851
Financial assets
4. Borrowings from banks
Financial assets held to maturity: the fair value is
based on the quoted market price.
Loans (to banks and clients): for short-term assets,
the fair value is not calculated as it is assumed that
the carrying amount represents a reasonable approximation of the fair value; carrying amount of assets at
variable interest also represents reasonable approximation of the fair value if the repricing dates are no
longer than 12 months; for long-term assets at fixed
interest, the fair value is calculated (zero coupon yield
and discount factors from the PMS application are
used for discounting the future cash flows).
142
Liabilities at amortized cost: the assessed fair value
is based on discounted contractual values, using the
market interest rates that should be currently paid by
the Bank for replacement of these liabilities by new
debts with similar residual maturity.
For short-term receivables and liabilities it is expected
(according to the standard) that the carrying amount
is a reasonable approximation of the fair value.
financial report
b)Financial instruments measured at fair value
The fair value assessments of financial instruments that are
not traded in an active market are based on the assessments
made by an external expert. The Bank verifies the assessment values and if confirmed, the assessed values are taken
into account. Values of investments presented in Level 3
are obtained using the standard valuation techniques such
as discounted expected future cash flows, market method
(comparative entities listed on the stock exchange – direct
comparison to entities quoted in an organized market)
and liquidation value approach. The final estimated value
of financial instruments considers all approaches, taking
into consideration assessments of importance in respect of
company activity, financial stability of an entity, as well as
other factors that could impact the fair value of financial
instruments.
Financial assets at fair value as at 31.12.2013 and 31.12.2014
EUR 000’
31.12.2014 Bank
31.12.2013 Bank
4,272
6,474
44,797
50,331
Financial assets at fair value
c) Fair value hierarchy
IFRS 7 specifies a hierarchy of valuation techniques based on
whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data
obtained from independent sources, whereas unobservable
inputs reflect market assumptions of the Bank. The two types
of inputs have resulted in the following fair value hierarchy:
Level 1 – quoted prices (unadjusted) in active markets
for identical assets or liabilities. This level includes
listed equity securities and debt instruments on stock
exchanges (e.g. London Stock Exchange, Frankfurt
Stock Exchange, New York Stock Exchange) and traded derivatives such as futures.
Level 3 – Inputs for the assets and liabilities that are
not based on observable market data (unobservable inputs). This level includes equity investments
and debt instruments with significant unobservable
components.
This hierarchy requires the use of observable market data
when they are available. The Bank considers significant and
observable market prices in its valuations whenever possible.
For measurement of non-marketable securities the Bank uses
methods prescribed in accordance with IVS (International
Valuation Standards) 2012.
Level 2 – Inputs other than quoted prices of Level 1;
these observable inputs relate to assets and liabilities
either directly (as prices) or indirectly (as derived
from prices). Level 2 includes the majority of OTC
derivative contracts, traded loans and issued structured bonds. The sources of input parameters such as
yield curves or the relevant increases for credit risk
are Bloomberg and Reuters.
143
financial report
Hierarchy of financial assets measured at fair value as at 31.12.2014 (Bank):
EUR 000’
Level 1
Level 2
Level 3
Total
-
4,272
-
4,272
-
44,463
334
44,797
Financial assets at fair value
Changes in the portfolio value classified as Level 3 in 2014 are presented in the table below:
EUR 000’
Balance at
31. 12. 2013
Purchases
Disposal
Revaluation
effect
Balance at
31. 12. 2014
(759)
334
Assets
1,093
-
-
Hierarchy of financial instruments not measured at fair value as at 31.12.2014 (Bank)
EUR 000’
Level 1
Level 2
Level 3
Total
-
82,690
-
82,690
2. Loans to Banks
-
11,885
-
11,885
3. Loans to clients
-
1,148,565
-
1,148,565
-
98,010
-
98,010
-
2,666
-
2,666
1. Financial liabilities to Central Bank
-
131,265
-
13,265
2. Financial liabilities to banks measured at amortized cost
-
160,342
-
160,342
3. Financial liabilities to clients measured at amortized cost
-
842,142
-
842,142
4. Borrowings from banks
-
45,002
-
45,002
5. Debt securities
-
4,716
-
4,716
-
2,202
-
2,202
Financial assets
144
financial report
Capital risk
The Bank is required to have adequate capital at all times,
as a provision for different risks to which it is exposed in
the course of its operations. This is an ongoing process of
determining and maintaining a sufficient volume and quality of capital, taking into consideration the assumed risks,
which is defined in the Bank’s capital management policy.
To this effect, in 2012 the Bank set up a Capital monitoring
committee whose task is monitoring and management of
capital adequacy on a monthly basis, while pursuing the
5-year strategic business plan of the Bank.
Regulatory capital adequacy is the ratio between own funds
and risk-weighted assets that should not fall below 8 percent.
The table below shows the calculation of regulatory capital
and the capital adequacy ratio.
EUR 000’
Bank
31.12.2014
Group
31.12.2014
Bank
31.12.2013
120,017
117,241
165,901
TIER 1 CAPITAL
86,140
83,363
120,388
COMMON EQUITY TIER 1 CAPITAL
86,140
83,363
120,388
Capital instruments eligible as CET1 Capital
180,337
180,337
242,037
Paid up capital instruments
174,037
174,037
174,037
6,300
6,300
68,000
(90,340)
(93,042)
(117,983)
(310)
(310)
(-) Other intangible assets
(3,280)
(3,354)
(-) Deferred tax assets that rely on future profitability and do not arise from temporary
differences net of associated tax liabilities
(2,092)
(2,092)
-
(34,909)
(37,609)
-
36,735
39,435
-
-
-
(51)
TIER 2 CAPITAL
33,877
33,877
45,513
Capital instruments and subordinated loans eligible as T2 Capital
33,877
33,877
42,800
-
-
2,713
TOTAL RISK EXPOSURE AMOUNT
925,305
1,037,071
1,159,150
RISK WEIGHTED EXPOSURE AMOUNTS FOR CREDIT, COUNTERPARTY CREDIT AND DILUTION RISKS
AND FREE DELIVERIES
838,532
940,465
1,058,163
112
112
6,338
86,572
96,405
94,650
89
89
-
CET1 Capital ratio
9,31%
8,04%
10,39%
T1 Capital ratio
9,31%
8,04%
10,39%
12,97%
11,31%
14,31%
Position
OWN FUNDS
Share premium
Retained earnings
Accumulated other comprehensive income
(-) Excess of deduction from AT1 items over AT1 Capital (see 1.2.10)
Other transitional adjustments to CET1 Capital
CET1 capital elements or deductions - other
T2 capital elements or deductions - other
TOTAL RISK EXPOSURE AMOUNT FOR POSITION, FOREIGN EXCHANGE AND COMMODITIES RISKS
TOTAL RISK EXPOSURE AMOUNT FOR OPERATIONAL RISK (OpR )
TOTAL RISK EXPOSURE AMOUNT FOR CREDIT VALUATION ADJUSTMENT
Total capital ratio
(3,615)
145
financial report
The Bank’s capital is calculated as the sum of share capital
and Tier II capital, whereby the share capital consists of: subscribed share capital, share premium, reserves and retained
earnings, loss of the period and revaluation reserve; tier II
capital is composed of: subordinated debt and adjustments
of revaluation reserve in association with available-for-sale
financial assets.
In 2014, the Bank fully complied with the legal requirements
regarding capital. As at the end of year 2014, the Bank’s capital
amounted to EUR 120,117 thousand, Tier 1 or core capital
amounted to EUR 86,140 thousand, while the capital adequacy ratio stood at 12.97 percent. Tier I capital ratio stood
at 9.31 percent in 2014 and at 10.39 percent in 2013.
On consolidated basis the Bank fully complied with the legal
requirements regarding capital in 2014. As at the end of 2014,
the Bank’s capital amounted to EUR 117,241 thousand, Tier 1
or core capital amounted to EUR 83,363 thousand, while the
capital adequacy ratio stood at 11.31 percent. Tier I capital
ratio stood at 8.04 percent.
In 2014, the Bank calculated capital requirements in accordance with Regulation (EU) NO 575/2013 and in accordance
with Directive 2013/36/EU.
The amount of individual capital requirement is evident from
the calculation of regulatory capital and capital adequacy
ratio. In accordance with the process of assessing adequate
internal capital of the Bank and the Bank’s internal policies,
the Bank regularly monitors the capital risk profile, assesses
the Bank’s ability to assume risk and provides capital adequacy assessments as well as internal capital requirements
for all types of risks. The results are reported at monthly
meetings of the ALCO.
The Bank of Slovenia expected higher capital ratios, therefore the owner in order to ensure sufficient capital, paid
part of the required recapitalization funds in the amount of
EUR 30,000 thousand in February 2015. In April 2015, the
Supervisory Board approved capital increase in the amount
of EUR 17,000 thousand, as stated in the heading “Events
after the Balance Sheet Date”.
146
financial report
Operational risk
The Bank includes in the definition of operational risk also
legislative risk and model risk, as well as the reputation risk.
Business and strategic risks are not included in the operational risk as they are addressed separately.
To calculate the capital requirement for operational risk, the
Bank applies simple approach.
of the Bank and the Committee for operational risk management, internal control system, and reputation risk (OpRisk
Committee). In the case of significant losses and exposure
the Board and senior management of the Bank are informed
immediately.
As the Bank is aware of the importance of operational risk
management, it decided that in addition to satisfying legally prescribed general standards for risk management,
it will perform activities that are carried out in more advanced approaches in accordance with the decision on risk
management.
Assessment and measurement of operational risk is based on
the collection of loss events that are registered in the central
database. This allows for a more efficient reporting of loss
events, their causes and proposed measures.
All loss events which present an actual direct or indirect financial loss for the Bank, are registered, regardless of whether
financial losses occurred during the event or subsequently.
Registered are also events which could present potential
loss for the Bank.
This year the Bank recorded 46 loss events. The Bank defined
as a loss event any event whose gross loss exceeds EUR 5,000.
At the end of the year, the balance of gross losses that are not
connected with impairments or provisions resulting from
credit risk, from loss events amounted to EUR 7,715 million.
Preventive assessment of potential operational risk is carried
out with the procedure of detection of selected risk scenarios
on an annual basis, when in cooperation with area managers
the business impact is reassessed.
The Bank measures and monitors individual risk indicators
on the basis of which, in the event of unacceptable deviations,
it plans control activities.
Based on perceived and assessed operational risk and damage
that occurred, for significant risk, the Bank plans and carries
out activities to prevent, mitigate, transfer or assume the risk.
Realized loss events and the status of implementation of
control measures are regularly reported to the Management
147
Pertinent information
Hypo Alpe-Adria-Bank, d.d. fact sheet:
Corporate name:
Hypo Alpe-Adria-Bank d.d.
Registered office:
Dunajska cesta 117, SI-1000 Ljubljana
Court registration: 1/31020/00, SRG 99/01362
Company number: 1319175
VAT ID: SI75482894
Transaction Account: SI56 0100 0000 3300 023
SWIFTHAABSI22
Share capital: EUR 174,036,881.54
T: +386 1 580 40 00
F: +386 1 580 40 01
Web Address: http:/www.hypo-alpe-adria.si
Facebook profile: https://www.facebook.com/hyposlovenija
Instagram: https://instagram.com/mojabanka/
e-mail: [email protected]
Ljubljana
Registered office and branch at Stekleni Dvor
Branch office Moste
Branch office Maribor - Tabor
Zaloška cesta 51, si-1000 Ljubljana
Ulica Eve Lovše 1, si-2000 Maribor
Dunajska cesta 117, si-1000 Ljubljana
T: +386 (0)1 580 48 50, F: +386 (0)1 755 47 90
T: +386 (0)2 450 39 30, F: +386 (0)2 234 39 32
T: +386 (0)1 580 40 00, F: +386 (0)1 580 41 25
[email protected]
[email protected]
Domžale
Ptuj
Branch office Domžale
Business Unit Maribor, Branch office Ptuj
Ljubljanska cesta 82, si-1230 Domžale
Minoritski trg 2, si-2250 Ptuj
T: +386 (0)1 580 42 48, F: +386 (0)1 721 17 32
T: +386 (0)2 450 38 90, F: +386 (0)2 780 90 99
[email protected]
[email protected]
Trg Osvobodilne fronte 12, si-1000 Ljubljana
Maribor
Murska Sobota
T: +386 (0)1 580 42 50, F: +386 (0)1 230 17 56
Branch office Maribor
Business Unit Murska Sobota
[email protected]
Trg Leona Štuklja 4, si-2000 Maribor
Kocljeva ulica 2, si-9000 Murska Sobota
T: +386 (0)2 450 39 41, F: +386 (0)2 450 39 31
T: +386 (0)2 530 81 80, F: +386 (0)2 530 81 90
[email protected]
[email protected]
[email protected]
Branch office Center
Slovenska cesta 29, si-1000 Ljubljana
T: +386 (0)1 580 41 40, F: +386 (0)1 425 50 38
[email protected]
Branch office Trg Osvobodilne fronte
Branch office Šiška
Trg komandanta Staneta 8, si-1000 Ljubljana
T: +386 (0)1 580 48 00, F: +386 (0)1 518 18 80
Branch office Maribor - Center
[email protected]
Trg Leona Štuklja 4, si-2000 Maribor
T: +386 (0)2 450 39 49, F: +386 (0)2 234 79 01
[email protected]
148
Celje
Kranj
Nova Gorica
Business Unit Celje
Business Unit Kranj
Business Unit Nova Gorica
Ljubljanska cesta 20, si-3000 Celje
Koroška cesta 1, si-4000 Kranj
Kidričeva ulica 20, si-5000 Nova Gorica
T: +386 (0)3 425 73 30, F: +386 (0)3 425 73 31
T: +386 (0)4 201 08 80, F: +386 (0)4 201 08 81
T: +386 (0)5 335 47 00, F: +386 (0)5 335 47 01
[email protected]
[email protected]
[email protected]
Trbovlje
Jesenice
Novo mesto
Business Unit Celje, Branch office Trbovlje
Branch office Jesenice
Business Unit Novo mesto
Obrtniška cesta 30, si-1420 Trbovlje
Delavska ulica 1, si-4270 Jesenice
Rozmanova ulica 34 a, si-8000 Novo mesto
T: +386 (0)3 425 73 53, F: +386 (0)3 562 84 82
T: +386 (04) 201 08 70, F: +386 (0)4 583 14 16
T: +386 (0)7 371 90 60, F: +386 (0)7 371 90 61
[email protected]
[email protected]
[email protected]
Velenje
Koper
Brežice
Business Unit Celje, Branch office Velenje
Business Unit Koper
Business Unit Novo mesto, Branch office Brežice
Šaleška cesta 19, si-3320 Velenje
Ferrarska ulica 30, si-6000 Koper
Cesta Prvih borcev 29, si-8250 Brežice
T: +386 (0)3 425 73 58, F: +386 (0)3 587 16 81
T: +386 (0)5 663 78 00, F: +386 (0)5 663 78 14
T: +386 (0)7 371 90 71, F: +386 496 66 81
[email protected]
[email protected]
[email protected]
149

Bank Annual Report 2014

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