Auditors report for 2014

Transcription

ABCD
KPMG d.o.o. Beograd
Kraljice Natalije 11
11000 Belgrade
Serbia
Telephone:
Fax:
E-mail:
Internet:
+381 11 20 50 500
+381 11 20 50 550
[email protected]
www.kpmg.rs
TRANSLATION
Independent Auditors’ Report
TO THE SHAREHOLDERS OF
ČAČANSKA BANKA A.D. ČAČAK
Report on the financial statements
We have audited the accompanying financial statements of Čačanska banka a.d. Čačak (“the
Bank”), which comprise the balance sheet as at 31 December 2014, the income statement,
statement on other comprehensive income, statement of changes in equity and cash flow statement
for the year then ended, and notes, comprising a summary of significant accounting policies and
other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with the International Financial Reporting Standards and for such internal control
as management determines is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with the Law on Auditing of the Republic of Serbia, the
Decision on External Audit of Banks and International Standards on Auditing. Those standards
require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on our judgment,
including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, we consider internal control relevant to
the preparation and true and fair view of financial statements in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by management,
as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
© 2015 KPMG d.o.o. Beograd a Serbian limited company and a
member firm of the KPMG network of independent member firms affiliated
with KPMG International Cooperative (“KPMG International”), a Swiss entity.
All rights reserved. Printed in Serbia.
Matični broj:17148656
PIB: 100058593
Račun: 265-1100310000190-61
KPMG d.o.o. Beograd je jednočlano društvo.
ABCD
TRANSLATION
Audit Opinion
In our opinion, financial statements give a true and fair view of the financial position of the Bank
as at 31 December 2014, and of its financial performance and cash flows for the year then ended
in accordance with the International Financial Reporting Standards.
Report on Other Legal and Regulatory Requirements
The Bank is responsible for the preparation of the accompanying Annual Business Report in
accordance with the requirement of the Law on Accounting of the Republic of Serbia. Our
responsibility is to express an opinion on compliance of the Annual Business Report with the
financial statements for 2014. In accordance with this, our procedures are performed in
accordance with International Standard on Auditing 720 ISA The Auditor's Responsibilities
Relating to Other Information in Documents Containing Audited Financial Statements, and we
are limited to assessment of compliance of the Annual Business Report with the financial
statements.
In our opinion, the Annual Business Report is in compliance with the financial statements that
were audited.
Belgrade, 27 March 2015
KPMG d.o.o. Beograd
(L.S.)
James Thornley
Certified Auditor
This is a translation of the original Independent Auditors’ Report issued in the Serbian
language. All due care has been taken to produce a translation that is as faithful as possible to
the original. However, if any questions arise related to interpretation of the information
contained in the translation, the Serbian version of the document shall prevail.
Belgrade, 6 April 2015
KPMG d.o.o. Beograd
(L.S.)
James Thornley
Certified Auditor
2
Čačanska banka a.d. Čačak
Financial Statements
Statement of financial position for the year ended 31 December
(in thousands of dinars)
31 December
2014
31 December
2013
1 January
2013
13
5,491,976
6,541,440
6,321,222
14a
14b
281,805
37,343
-
803,689
-
216,586
936,625
15
2,799,186
3,530,503
2,770,425
16
17a
17b
17c
22,189,590
45,611
626,270
133,789
60,049
109,900
31,775,519
21,779,976
35,761
650,216
125,088
14,491
59,009
249,939
33,790,112
21,621,837
24,405
686,202
128,543
3,048
19,643
70,438
32,798,974
-
131
-
19
1,767,720
2,747,986
2,679,300
20
21
22
23
23,190,043
1,841,943
55,605
202,651
27,057,962
24,100,622
1,740,263
111,369
99,016
28,799,387
22,567,272
2,152,518
124,644
197,596
27,721,330
24
24
24
24
3,048,483
4,239
(275,654)
1,940,489
4,717,557
3,048,483
4,239
(86,919)
2,024,922
4,990,725
3,048,483
53,503
1,975,658
5,077,644
31,775,519
33,790,112
32,798,974
Note
ASSETS
Cash and balances with central bank
Financial assets at FVTPL held for
trading
Financial assets available for sale
Financial assets held-to-maturity
Loans and receivables from banks
and other financial institutions
Loans and receivables from
customers
Intangible assets
Property, plants and equipment
Investment property
Current tax assets
Deferred tax assets
Other assets
TOTAL ASSETS
LIABILITIES
Financial liabilities at FVTPL held for
trading
Deposits and other liabilities due to
banks, other financial institutions and
central bank
customers
Subordinated debts
Provisions
Other liabilities
TOTAL LIABILITIES
EQUITY
Shares capital
Profit
Losses
Reserves
TOTAL EQUITY
TOTAL LIABILITIES AND EQUITY
18
Čačak, 16 March 2015
Petar Pantović
Head of Accounting and
Planning Department
Aleksandar Ćalović
Deputy Chairman of the
Executive Board
Dragan Jovanović
Chairman of the Executive Board
Statement of profit and loss for the period from 1 January to 31 December 2014
Note
Interest income
Interest expenses
Net interest income
Fee and commission income
Fee and commission expenses
Net fee and commission income
Net gain on financial assets held for trading
Net loss from hedging activities
Net income / (expense) on foreign exchange
differences and FX contracts
Other operating income
Impairment losses on financial assets and off-balance
sheet credit risk items
TOTAL NET OPERATING INCOME / (LOSS)
Wages, compensation of wages and other personal
expenses
Depreciation expenses
Other expenses
LOSS BEFORE TAX
Income tax
NET LOSS
PERIOD RESULT - LOSS
Basic earnings / (loss) per share
2014
2013
1,879,187
(676,700)
1,202,487
642,765
(76,307)
566,458
19,489
-
2,030,869
(858,355)
1,172,514
626,793
(73,890)
552,903
26,528
(7,481)
7
8
13,978
32,605
(11,460)
60,867
9
(962,415)
872,602
(780,736)
1,013,135
10
(508,117)
(93,036)
(548,143)
(276,694)
1,040
(275,654)
(492,684)
(95,763)
(550,973)
(126,285)
39,366
(86,919)
(275,654)
(1,514)
(86,919)
(477)
4a
4b
5a
5b
6
11
12
24
Petar Pantović
Planning Department
Executive Board
Dragan Jovanović
Statement of other comprehensive income for the period from 1 January to 31 December 2014
LOSS FOR THE PERIOD
Actuarial gains / (losses)
Total positive / (negative) other income for the period
TOTAL NEGATIVE RESULT FOR THE PERIOD
2014
2013
(275,654)
2,486
2,486
(273,168)
(86,919)
(628)
(628)
(87,547)
Petar Pantović
Planning Department
Executive Board
Dragan Jovanović
Statement of changes in shareholder's equity for the period from 1 January to 31 December 2014
Balance as of 1 January 2013
Adjustments to the opening balance
Revised opening balance as of 1
January 2013
Actuarial losses
Current year loss
Distribution of profit
Balance as of 31 December 2013
Balance as of 1 January 2014
Actuarial gains
Current year loss
Distribution of profit (loss coverage)
Reserves
from profit
1,660,893
-
Revaluation
reserves
318,376
(3,611)
Profit
Loss
Total equity
1,821,160
-
Share
premium
1,227,323
-
49,892
3,611
-
5,077,644
-
1,821,160
1,227,323
1,660,893
314,765
53,503
-
5,077,644
1,821,160
1,821,160
1,821,160
1,227,323
1,227,323
1,227,323
49,892
1,710,785
1,710,785
(79,629)
1,631,156
(628)
314,137
314,137
2,486
(7,290)
309,333
628
(86,919)
(86,919)
4,990,725
4,990,725
2,486
(275,654)
4,717,557
Share capital
(49,892)
4,239
4,239
-
4,239
(86,919)
(86,919)
(275,654)
86,919
(275,654)
Petar Pantović
Head of Accounting and Planning
Department
Deputy Chairman of the Executive Board
Dragan Jovanović
Statement of cash flows for the period from 1 January to 31 December 2014
2014
2013
Cash inflows from operating activities
Interest receipts
Fee and commission receipts
Receipts from other operating income
Dividend and equity investments cash receipts
Cash outflows from operating activities
Interest payments
Fee and commission payments
Outflows for gross wages, compensation of wages and other
personal expenses
Taxes, contributions and other duties paid
Payments for other operating expenses
Net operating cash inflows before changes in placements and
deposits
2,620,656
1,964,596
637,039
18,129
892
(1,730,488)
(639,794)
(67,966)
2,498,413
1,878,004
614,776
5,099
534
(1,882,367)
(817,642)
(73,843)
(508,117)
(492,684)
(108,044)
(406,567)
(115,163)
(383,035)
890,168
616,046
Decreases in placements and increases in deposits
Decrease in deposits and other liabilities to banks, other financial
institutions, central bank and customers
Decrease in financial assets designated at FVTPL, financial assets
held for trading, and short-term securities that are not held for
investment
Increase in deposits and other liabilities to banks and customers
Increases in placements and decreases in deposits and other
liabilities
Increase in loans and receivables to banks, other financial
Decrease in deposits and other liabilities to banks, other financial
Net cash inflow from operating activities before taxes
Taxes paid
2,390,923
1,533,194
1,845,575
-
545,348
419,549
-
1,113,645
(1,579,661)
(1,765,824)
-
(1,765,824)
(1,579,661)
-
1,701,430
-
383,416
(11,443)
1,701,430
371,973
4,436
4,436
(69,839)
52,330
14,901
9,618
27,811
(137,765)
(69,839)
(82,331)
(65,403)
(55,434)
(85,435)
(1,489,369)
(1,489,369)
(1,489,369)
293,686
293,686
(446,762)
(446,762)
(153,076)
Net cash inflow from operating activities
Cash inflows from investing activities
Inflow from sale of intangible assets, property, plants and equipment
Inflow from sale of investment property
Other inflow from investment activities
Cash outflows from investing activities
Outflow for purchases of intangible assets property, plant and
equipment
Other outflow from investment activities
Net cash outflows from investing activities
Cash inflows from financing activities
Proceeds from new loans
Cash outflows from financing activities
Outflows from repayment of subordinated liabilities
Outflows from repayment of debt
Net cash outflow from financing activities
TOTAL CASH INFLOW
TOTAL CASH OUTFLOW
NET INCREASE IN CASH
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE
YEAR
POSITIVE FOREIGN EXCHANGE DIFFERENCES
NEGATIVE FOREIGN EXCHANGE DIFFERENCES
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
5,016,015
4,869,357
146,658
4,377,623
4,244,161
133,462
3,121,017
3,005,508
135,443
(16,576)
3,386,542
68,094
(86,047)
3,121,017
Petar Pantović
Planning Department
Executive Board
Dragan Jovanović
Notes to the financial statements for the year ended 31 December 2014
ČAČANSKA BANKA a.d. ČAČAK
FINANCIAL STATEMENTS
for the year ended 31 December 2014
Čačak, February 2015
CONTENTS
Financial statements of the Čačanska banka a.d. Čačak as of 31 December 2014 are
comprised of:
1.
Statement of financial position,
2.
Statement of profit and loss,
3.
Statement of other comprehensive income,
4.
Statement of changes in shareholder's equity,
5.
Statement of cash flows,
6.
Notes to the financial statements.
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2014
1.
FOUNDATION AND OPERATIONS
1.1.
Foundation
Čačanska banka has been operating since 1 July 1956, and during its operations and
development it has changed its legally-registered name and organisational form several times.
As a part of the overall restructuring of the Yugoslav banking system in 1990, the Bank was
reorganised as a shareholding entity. In accordance with the Law on Banks and Other
Financial Institutions and Decision of National Bank of Yugoslavia on Establishment of Banks,
the Bank was registered as Beogradska banka Čačanska banka d.d., Čačak in Commercial
Court in Kraljevo on 28 December 1990. On 13 July 1995, the Bank’s Shareholders Assembly
adopted the Statute of Beogradska banka Čačanska banka, and thereby complied its articles
with the provisions of the Law on Banks and Other Financial Institutions. Pursuant to its
Statute, Beogradska banka Čačanska banka was formed as a legal entity operating in
accordance with rights, obligations and responsibilities based on the law and the Articles of
association.
During 1999 and since end of 2000, the Bank operated as branch office of Beogradska banka
a.d., Beograd, after the merger conducted on the basis of the Decision of Commercial Court
in Belgrade dated 8 April 1999. Based on the court decision dated 2 November 2000, the legal
registration amendment with respect to the merger was erased. From 23 July, the Bank is
registered and operates as Čačanska banka a.d., Čačak (hereinafter “Bank”).
The Bank is registered in the Serbian Business Registers Agency under number BD 54244 as
of 13 September 2005.
1.2.
Operations
The Bank is registered in the Republic of Serbia for payment and credit and deposit operations
in the country and abroad and it operates in compliance with the Law on Banks.
The Bank’s head office is located in Pivarska 1, Čačak.
As of 31 December 2014, beside the branch office in Čačak, the Bank has 13 branch offices
located in Jagodina, Gornji Milanovac, Belgrade (2 branches), Kraljevo, Užice, Kragujevac,
Kruševac, Aranđelovac, Valjevo, Šabac, Niš, Novi Sad, Loan Service Center in Belgrade, and
9 sub-branches in Paraćin, Požega, Topola, Ivanjica, Vrnjačka Banja, Leskovac, Mladenovac
and Čačak (two sub-branches).
As of 31 December 2014 the Bank had 385 employees, and as of 31 December 2013, 391
employees.
The Bank’s tax identification number is 100895809.
1
2.
BASIS FOR PREPARATION AND PRESENTATION OF FINANCIAL
STATEMENTS
2.1
Statement on compliance
The Bank’s financial statements for the year ended 31 December 2014 have been prepared
in accordance with International Financial Reporting Standards (IFRS), published by the
International Accounting Standards Board (IASB). Enclosed financial statements have been
approved by the Bank’s Executive Board as of 16 March 2015.
For all previous periods, including the year ended 31 December 2013, the Bank prepared the
financial statements in accordance with Law on Accounting, Law on Banks and other relevant
bylaws of the National Bank of Serbia.
Financial statements for the year ended 31 December 2014 are the first financial statements
prepared in accordance with IFRS. The Bank has presented Statement of financial position
as of 1 January 2013 and 31 December 2013, as well as Statement of profit and loss for the
year ended 31 December 2013, in accordance with IFRS 1 First-time adoption of International
Financial Reporting Standards. Detailed overview of the reclassification of the Statement of
financial position as of 1 January 2013 and 31 December 2013, as well as the Statement of
profit and loss for the year ended 31 December 2013, with corresponding explanation, has
been presented within the point 2.9 – Reclassification of the Balance sheet and Income
statement items.
2.2.
Valuation principles
Enclosed financial statements have been prepared in accordance with historical cost principle,
except for the securities held for trading, securities available for sale and buildings, which are
carried at their market value.
2.3.
Functional and reporting currency
The amounts in the enclosed financial statements have been presented in thousands of
dinars, unless stated otherwise. Dinar (RSD) is the functional and reporting currency of the
Bank. All transactions in currencies other than functional currency, are treated as the foreign
currency transactions.
2.4.
Going concern principle
Financial statements are prepared based on going-concern principle, which presumes that the
Bank will continue to operate into the foreseeable future.
2.5.
Use of estimates
The preparation and presentation of the financial statements requires the Bank’s management
to make estimates and reasonable assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements, as well as income and expenses for the reporting period. These estimations and
related assumptions are based on the previous experience, as well as on the reasonable and
2
realistic information which are available as of the date of the preparation of the financial
statements. These information are the basis for the assumptions on the assets and liabilities
amounts, which could not be directly verified on the basis of other information.
Estimates and corresponding assumptions are the result of regular reviews. If it is determined
that there have been changes in estimated amounts of assets and liabilities, the effects of the
change are recognized within the statements of the period in which the change has happened.
2.6.
Comparative data
Comparative data is presented within the Bank’s annual financial statements for the year
ended 31 December 2013, which have been audited. In order to achieve harmonization with
the presentation of data in current year, certain reclassification of comparative data within
financial statements for 2013 have been done. These reclassification do not have significant
effect on current or previous presented period.
2.7.
Standards and interpretations applied for the first time as of this period
Standards and interpretations which have been changed or applied for the first time as of the
current period are as follows:
• Change in the IAS 1 – Presentation of Financial Statements;
• Change in the IAS 19 - Employee Benefits;
• Change in the IAS 27 – Separate Financial Statements;
• IFRS 13 – Fair value measurement;
• Addition to IAS 32 – Financial Instruments: Presentation - Offsetting financial assets and
financial liabilities (valid for financial periods as of 1 January 2014);
• Addition to IAS 39: Financial Instruments: Recognition and Measurement - Novation of
derivatives and continuation of hedge accounting (valid for financial periods as of 1
January 2014);
• Addition to IAS 36: Impairment of Assets: Recognition and Measurement – Recoverable
amount disclosures for non-financial assets (valid for financial periods as of 1 January
2014)
• Addition to IFRS 10: Consolidated Financial Statements – Investment Entities (valid for
financial periods as of 1 January 2014.
Adoption of these standards and interpretations have not led to changes in accounting
policies, that is it have not had significant effects on the Bank’s financial statements for the
year ended 31 December 2014.
3
2.8.
Standards and interpretations issued, but not applied or translated
During the period in which the financial statements have been approved, following standards
and interpretations, to be applied in the following period, as well as the standards not yet
translated, have been issued:
• IFRS 9 Financial Instruments (valid for financial periods as of 1 January 2018);
• IFRIC 21 Levies (valid for financial periods as of 1 January 2014);
• IFRS 15 Revenue from Contracts with Customers (valid for financial periods as of 1
January 2017);
• Annual Improvements Cycle, 2010-2012 Cycle (valid for financial periods as of 1 July
2014);
2014);
• IFRS 14 Regulatory Deferral Accounts (valid for financial periods as of 1 January 2016);
• Addition to IFRS 11 Joint Arrangements - Accounting for acquisitions of Interests in joint
operations accounting, (valid for financial periods as of 1 January 2016);
• Addition to IAS 16 Property, plant and equipment and IAS 38 Intangible Assets Clarification of acceptable methods of depreciation and amortization (valid for financial
periods as of 1 January 2016);
• Addition to IAS 16 Property, plant and equipment and IAS 41 Agriculture (valid for financial
periods as of 1 January 2016);
• Addition to IFRS 10 Consolidated financial statements and IAS 28 Investments in
Associates and Joint Ventures - Sale or Contribution of Assets between an Investor and
its Associate or Joint Venture (valid for financial periods as of 1 January 2016);
2016);
The Bank’s Management has considered the effect of listed standards and interpretations to
the financial statements, as well as the date they have become valid, and believes that their
implementation would not have significant effects on the financial statements, in the period of
their first application.
2.9.
Reclassification of the Statement of financial position and Statement of profit
and loss
Due to changes in the Law on Accounting, and in order to achieve comparability and
harmonization with IFRS requirements, that is with first application of IFRS, the reclassification
of certain balance and off-balance sheet items for the previous year has been done, including
opening balances as of 1 January 2013.
The abovementioned Law implies first application of IFRS for periods beginning as of 1
January 2014. The Bank has made changes on the Statement of financial position as of 1
January 2013, for the period in which the financial statements were prepared in accordance
with previously valid regulations, and prepared financial statements as of 1 January 2013 in
accordance with IFRS.
4
Accounting policies and estimates, concerning recognition and measurement of assets and
liabilities, applied in the preparation of the current financial statements, are in compliance with
the accounting policies and estimates applied in preparation of the Bank’s annual financial
statements for the year 2013.
5
2.9.1. Statement of financial position as of 31 December 2013
Previous
position of the
Balance sheet
as of 31
December 2013
Cash and cash
equivalents
Revocable
deposits and
loans
Interest and fee
receivables
Loans and
advances
Securities
(excluding own
shares)
Equity
investments
Other
placements
Intangible
assets
Property, plant,
equipment and
investment
property
Non-current
assets held for
sale and
discontinued
operations
Deferred tax
assets
Other assets
Total assets
Prepayments
and deferred
expenses, 193,
293 deductible
from liabilities
Total assets
Financial
assets at fair
value through
profit and
Cash and
balances with loss held for
central bank trading
Loans and
receivables
from banks
and other
financial
institutions
Loans and
receivables
from
customers
Property,
plants and
equipment
Intangible
assets
Investment
property
Current tax
assets
Deferred tax
assets
Other assets
Total
Total
1,942,246
-
1,178,771
-
-
-
-
-
-
-
-
3,121,017
4,599,181
-
2,000,416
-
-
-
-
-
-
-
-
6,599,597
13
-
1
138,011
-
-
-
-
-
185,600
-
323,625
-
-
341,632
20,980,851
-
-
-
-
-
-
-
21,322,483
-
796,797
-
9,561
-
-
-
-
-
-
-
806,358
-
-
-
-
-
-
-
-
-
17,189
-
17,189
-
-
6,002
599,644
-
-
-
-
-
-
-
605,646
-
-
-
-
35,761
-
-
-
-
-
-
35,761
-
-
-
-
-
650,216
125,088
-
-
-
-
775,304
-
-
-
-
-
-
-
-
-
-
-
-
6,541,440
6,892
803,689
3,681
3,530,503
51,909
21,779,976
35,761
650,216
125,088
14,491
14,491
59,009
59,009
73,180
275,969
33,816,142
59,009
150,153
33,816,142
6,541,440
803,689
3,530,503
21,779,976
35,761
650,216
125,088
14,491
59,009
(26,030)
249,939
(26,030)
33,790,112
-
6
ASSETS
•
•
•
•
•
•
•
•
The line item Cash and cash equivalents in the amount of RSD 1,178,771 thousand has
been reclassified to Loans and receivables from banks and other financial institutions,
which relates to assets on foreign currency account abroad.
The line item Revocable deposits and loans in the amount of RSD 6,599,597 thousand
has been reclassified to the item Cash and balances with central bank in the amount of
RSD 4,599,181 thousand, which relates to required reserves with NBS in foreign currency
and to line item Loans and receivables from banks and other financial institutions in the
amount of RSD 2,000,416 thousand, which relates to REPO loans;
The line item Interest and fee receivables and other receivables in the amount of RSD
323,625 thousand has been reclassified to the following line items and in the following
amounts:
– Cash and balances with central bank in the amount of RSD 13 thousand which relates
to accrued interest, fee and commission on the cash and assets at Central Bank;
– Loans and receivables from banks and other financial institutions in the amount of RSD
1 thousand which relates to other placements to the banks;
– Loans and receivables from customers in the amount of RSD 138,011 thousand, which
relates to receivables for calculated interest and fee on loans, deposits and other
placements in dinars and foreign currency;
– Other assets in the amount of RSD 185,600 thousand which relates to receivables for
calculated fee and commissions on other assets and bank’s services in dinars and
foreign currency, as well as other assets from regular business operations which
generate income (due, but uncollected subsidized interest booked from accruals);
The line item Loans and advances in the amount of RSD 21,322,483 thousand has been
reclassified to Loans and receivables from banks and other financial institutions in the
amount of RSD 341,632 and to Loans and receivables from customers in the amount of
RSD 20,980,851 thousand;
The line item Securities in the amount of RSD 806,358 thousand has been reclassified to
Financial assets held for trading in the amount of RSD 796,797 thousand which relates to
shares of banks and companies and old savings bonds, and to Loans and receivables from
customers in the amount of RSD 9,561 thousand which relates to receivables from the
discount of bills of exchange;
The line item Equity investments in the amount of RSD 17,189 thousand has been
reclassified to the Other assets;
The line item Other placements in the amount of RSD 605,646 thousand has been
amount of RSD 6,002 thousand and to Loans and receivables from customers in the
amount of RSD 599,644 thousand;
The line item Other assets in the amount of RSD 76,973 thousand has been reclassified
to the following items and in the following amounts:
– RSD 6,892 thousand to Financial assets held for trading, which relates to receivables
from change in fair value of derivatives;
– RSD 3,681 thousand to Loans and receivables from banks and other financial
institutions, which relates to accruals (accrued interest income in dinars and foreign
currency related to loans, deposits and other placements of banks for the current
accounting period, which are not due in that period);
7
–
–
RSD 51,909 thousand to Loans and receivables from customers, which relates to
accruals (accrued interest income in dinars and foreign currency related to loans,
deposits and other placements of customers for the current accounting period, which
are not due in that period);
RSD 14,491 thousand to Current tax assets.
8
2.9.1. Statement of financial position as of 31 December 2013 – continued
Previous
position of the
Balance sheet
as of 31
December 2013
Transaction
deposits
Other deposits
Borrowings
Interest
liabilities
Provisions
Tax liabilities
Other
liabilities
Total liabilities
Share capital
Reserves from
profit
Revaluation
reserves
Current year
profit
Loss
Total Equity
Total
Liabilities and
Equity
Accruals
deductible
from assets
Total
Liabilities and
Equity
Financial
liabilities at
fair value
through
profit and
loss held
for trading
Deposits
and other
liabilities
due to
banks,
other
financial
institutions
and central
bank
-
14,141
586,961
2,136,021
5,004,737
12,331,315
6,656,464
-
-
131
-
2,632
-
16,639
-
-
111,369
-
131
-
24,870
2,764,625
-
94,247 1,746,874
24,103,402 1,746,874
-
111,369
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
131
2,764,625
24,103,402 1,746,874
111,369
-
(16,639)
131
2,747,986
Deposits
and other
liabilities Subordin
due to
ated
customers
debts
(2,780)
Other
Provisions liabilities
(6,611)
-
24,100,622 1,740,263
111,369
Total
Total
liabilities
equity and equity
Total
liabilities
and equity
Total
liabilities
Shares
capital
Profit
Losses
Reserves
- 5,018,878
- 12,918,276
- 8,792,485
-
-
-
-
-
-
5,018,878
12,918,276
8,792,485
19,402
111,369
3,365
-
-
-
-
-
-
19,402
111,369
3,365
95,651 1,961,642
99,016 28,825,417
-
3,048,483
-
-
-
- 28,825,417
3,048,483
-
1,961,642
28,825,417
3,048,483
-
-
-
-
1,710,785
1,710,785
-
1,710,785
-
-
-
-
-
314,137
314,137
-
314,137
-
-
3,048,483
4,239
4,239
86,919
86,919
2,024,922
4,239
86,919
4,990,725
4,990,725
4,239
86,919
4,990,725
99,016 28,825,417
3,048,483
4,239
86,919
2,024,922
4,990,725 33,816,142
33,816,142
(26,030)
-
-
-
-
99,016 28,799,387
3,048,483
4,239
86,919
2,024,922
3,365
-
-
(26,030)
-
4,990,725 33,790,112
-
9
LIABILITIES
•
•
•
•
•
•
The line item Transaction deposits in the amount of RSD 5,018,878 thousand has been
reclassified to Deposits and other liabilities due to banks, other financial institutions and
central bank in the amount of RSD 14,141 thousand and Deposits and other liabilities due
to customers in the amount of RSD 5,004,737 thousand;
The line item Other deposits in the amount of RSD 12,918,276 thousand has been
central bank in the amount of RSD 586,961 thousand and Deposits and other liabilities
due to customers in the amount of RSD 12,331,315 thousand;
The line item Borrowings in the amount of RSD 8,792,485 thousand has been reclassified
to Deposits and other liabilities due to banks, other financial institutions and central bank
in the amount of RSD 2,136,021 thousand and Deposits and other liabilities due to
customers in the amount of RSD 6,656,464 thousand;
The line item Interest and fee liabilities in the amount of RSD 19,402 thousand has been
central bank in the amount of RSD 2,632 thousand, Financial liabilities at fair value through
profit and loss held for trading in the amount of RSD 131 thousand and Deposits and other
liabilities due to customers in the amount of RSD 16,639 thousand;
The line item tax liabilities in the amount of RSD 3,365 thousand has been reclassified to
Other liabilities;
The line item Other liabilities in the amount of RSD 1,866,018 thousand has been
central bank in the amount of RSD 24,870 thousand, which relates to deferrals (deferred
expenses in dinars and foreign currency on loans, deposits and other liabilities of the
current accounting period, but not due in it), Deposits and other liabilities due to customers
in the amount of RSD 94,247 thousand, which relates to deferrals (deferred expenses in
dinars and foreign currency on loans, deposits and other liabilities of the current accounting
period, but not due in it) and Subordinated debts in the amount of RSD 1,746,874
thousand.
10
2.9.2. Statement of profit and loss for the year ended 31 December 2013
Previous position of
the Income statement
as of 31 December
2013
Interest income
Interest expense
Fee and commission
income
Fee and commission
expenses
Net gain on sale of
securities
Net foreign exchange
losses
Dividend and other
income from equity
investments
Other operating
income
Net losses from
impairment of
placements and
provisions
Costs of salaries and
other benefits
Depreciation costs
Other operating
expenses
Income from
changes in value of
assets and liabilities
Expenses from
changes in value of
assets and liabilities
Income from
deferred tax
Net loss
Total
Net gain on
Fee and
Fee and
financial
Interest
Interest commission commission assets held
income expenses
income
expenses for trading
Net loss
from
hedging
activities
Net
expense on
foreign
exchange
differences
and FX
contracts
Impairment
losses on
financial
assets and
Other off-balance
operating sheet credit
income
risk items
Wages,
compensation of
wages and
other
personal Depreciation
expenses
expenses
Other
Loss
expenses before tax
Gain from
deferred
taxes
Total
1,968,261
-
858,355
-
-
-
-
-
-
-
-
-
-
-
- 1,968,261
858,355
-
-
626,793
-
-
-
-
-
-
-
-
-
-
-
626,793
-
-
-
73,890
-
-
-
-
-
-
-
-
-
-
73,890
-
-
-
-
2,634
-
-
-
-
-
-
-
-
-
2,634
-
-
-
-
-
-
157,139
-
-
-
-
-
-
-
157,,139
-
-
-
-
-
-
-
809
-
-
-
-
-
-
809
-
-
-
-
-
-
-
10,722
-
-
-
-
-
-
10,722
(62,608)
-
-
-
-
-
-
(9,346)
777,417
-
-
2,507
-
-
707,970
-
-
-
-
-
-
--
-
-
492,684
-
95,763
-
-
-
492,684
95,763
-
-
-
-
-
-
-
-
3,319
-
-
503,709
-
-
507,028
-
-
-
-
48,330
-
935,235
39,990
-
-
-
-
-
- 1,023,555
-
-
-
-
24,436
7,481
789,556
-
-
-
-
44,757
-
-
866,230
2,030,869
858,355
626,793
73,890
26,528
7,481
11,460
60,867
780,736
492,684
95,763
550,973 (126,285)
39,366
39,366
39,366
(86,919)
(86,919)
11
•
•
•
•
•
•
•
•
•
•
The line item Fee and commission income has been transferred to Fee and commission
income;
The line item Fee and commission expenses has been transferred to Fee and commission
expenses;
The line item Net gain on sale of securities at fair value through profit and loss has been
reclassified in the amount of RSD 2,634 thousand to Net gain on financial assets held for
trading;
The line item Net foreign exchange losses has been reclassified in the amount of RSD
157,139 thousand to Net expenses on foreign exchange differences and FX contracts;
The line item Dividend and other income from equity investments has been reclassified in
the amount of RSD 809 thousand to Other operating income;
The line item Other operating income has been reclassified in the amount of RSD 10,722
thousand to Other operating income;
The line item Net losses from impairment of placements and provisions in the amount of
RSD 707,907 thousand has been reclassified to Other operating income in the amount of
RSD 9,346 thousand, Interest income in the amount of RSD 62,608 thousand (relates to
rebooking Income from collected suspended interest), Other expenses in the amount of
RSD 2,507 thousand and to Impairment losses on financial assets and off-balance sheet
credit risk items in the amount of RSD 777,417 thousand;
The line item Other operating expenses in the amount of RSD 507,028 thousand has been
reclassified to Impairment losses on financial assets and off-balance sheet credit risk items
in the amount of RSD 3,319 thousand and Other expenses in the amount of RSD 503,709
thousand;
The line item Income from changes in value of assets and liabilities in the amount of RSD
1,023,555 thousand has been reclassified to Net gain on financial assets held for trading
in the amount of RSD 48,330 thousand, Net expense on foreign exchange differences and
FX contracts in the amount of RSD 935,235 thousand, and Other operating income in the
The line item Expenses from changes in value of assets and liabilities in the amount of
RSD 866,230 thousand has been reclassified to Net gain on financial assets held for
trading in the amount of RSD 24,436 thousand, Net loss from hedging activities in the
amount of RSD 7,481 thousand, Net expense on foreign exchange differences and FX
contracts in the amount of RSD 789,556 thousand and Other expenses in the amount of
RSD 44,757 thousand.
12
2.9.3. Statement of financial position as of 1 January 2013
Previous position
of the Balance
sheet as of 31
December 2012
Cash and cash
equivalents
Revocable
deposits and loans
Interest and fee
receivables
Loans and
advances
Securities
(excluding own
shares)
Equity investments
Other placements
Intangible assets
Property, plant,
equipment and
investment
property
Non-current assets
held for sale and
discontinued
operations
Deferred tax assets
Other assets
Total assets
Prepayments and
deferred expenses,
193, 293 deductible
from liabilities
Total assets
Financial
assets at fair
value through
profit and loss
held for trading
Cash and
balances
with central
bank
1,790,926
-
4,530,284
-
12
Loans and
receivables from
banks and other
Financial
assets held financial
to maturity institutions
Financial
assets
available
for sale
Loans and
receivables
from
customers
Property,
Intangible plants and
assets
equipment
Current Deferred
tax
Investment tax
Other
property
assets assets
assets
Total
Total
-
1,214,582
-
-
-
-
-
-
-
- 3,005,508
-
-
100,170
-
-
-
-
-
-
-
- 4,630,454
12,818
-
-
1,737
134,061
21,150,938
-
-
-
-
-
5,307
-
-
-
-
1,442,489
-
-
-
-
-
-
- 22,593,427
-
203,768
-
-
-
16,415
-
-
-
-
-
-
936,625
-
5,902
-
124,863
-
24,405
-
-
-
-
18,288
-
- 1,156,808
18,288
130,765
24,405
-
-
-
-
-
-
-
686,202
128,543
-
-
-
6,321,222
216,586
-
936,625
5,545
2,770,425
195,560
21,621,837
24,405
686,202
128,543
3,048
3,048
19,643
19,643
- 79,876
284,029
19,643 103,471 32,832,007 32,832,007
6,321,222
216,586
-
936,625
2,770,425
21,621,837
24,405
686,202
128,543
3,048
- (33,033)
(33,033)
19,643 70,438 32,798,974
-
-
153,935
814,745
-
13
ASSETS
•
•
•
•
•
•
•
•
The line item Cash and cash equivalents in the amount of RSD 1,214,582 thousand has
been reclassified to Loans and receivables from banks and other financial institutions,
which relates to assets on foreign currency account abroad.
The line item Revocable deposits and loans in the amount of RSD 4,630,454 thousand
has been reclassified to the item Cash and balances with central bank in the amount of
RSD 4,530,284 thousand, which relates to required reserves with NBS in foreign currency
and to the item Loans and receivables from banks and other financial institutions in the
amount of RSD 100,170 thousand, which relates to REPO loans;
The line item Interest and fee receivables and other receivables in the amount of RSD
153,935 thousand has been reclassified to Cash and balances with central bank in the
amount of RSD 12 thousand which relates to accrued interest, fee and commission on the
cash and assets at Central Bank; Financial assets held for trading in the amount of RSD
12,818 thousand; Loans and receivables from banks and other financial institutions in the
amount of RSD 1,737 thousand, which relates to accrued interest and fee on loans,
deposits and other bank’s placements in dinars and foreign currency; Loans and
receivables from customers in the amount of RSD 134,061 thousand, which relates to
accrued interest and fee on loans, deposits and other bank’s placements in dinars and
foreign currency and to Other assets in the amount of RSD 5,307 thousand, which relates
to receivables for accrued fee and commissions on other assets and bank’s services in
dinars and foreign currency;
The line item Loans and advances in the amount of RSD 22,593,427 thousand has been
amount of RSD 1,442,489 and to Loans and receivables from customers in the amount of
RSD 21,150,938 thousand;
The line item Securities in the amount of RSD 1,156,808 thousand has been reclassified
to Financial assets held for trading in the amount of RSD 203,768 thousand which relates
to shares of banks and companies and old savings bonds, and to Financial assets held to
maturity in the amount of RSD 936,625 thousand which relates to treasury bills in dinars
and treasury bills in foreign currency and Loans and receivables from customers in the
amount of RSD 16,415 thousand, which relates to receivables from the discount of bills of
exchange;
The line item Equity investments in the amount of RSD 18,288 thousand has been
reclassified to the Other assets;
The line item Other placements in the amount of RSD 130,765 thousand has been
amount of RSD 5,902 thousand and to Loans and receivables from customers in the
The line item Other assets in the amount of RSD 284,029 thousand has been reclassified
to Loans and receivables from banks and other financial institutions in the amount of RSD
5,545 thousand, which relates to accruals (accrued interest income in dinars and foreign
currency related to loans, deposits and other placements of banks for the current
accounting period, which are not due in that period); Loans and receivables from
customers in the amount of RSD 195,560 thousand, which relates to accruals (accrued
interest income in dinars and foreign currency related to loans, deposits and other
placements of customers for the current accounting period, which are not due in that
period); Current tax assets in the amount of RSD 3,048 thousand and Other assets in the
amount of RSD 79,876 thousand.
14
2.9.3. Statement of financial position as of 1 January 2013 – continued
Previous position of
the Balance sheet as
of 31 December 2012
Transaction deposits
Other deposits
Borrowings
Liabilities arising
from securities
Interest liabilities
Provisions
Tax liabilities
Liabilities arising
from profit
Other liabilities
Total liabilities
Share capital
Reserves from profit
Revaluation reserves
Loss
Total Equity
Total Liabilities and
Equity
Accruals deductible
from assets
Total Liabilities and
Equity
-
Deposits
and other
liabilities
due to
banks, other
financial
institutions
and central
bank
11,020
974,246
1,681,826
-
2,342
-
13,959
-
-
124,644
-
-
31,504
2,700,938
-
138,912
22,570,537
-
2,160,648
2,160,648
-
-
2,700,938
22,570,537
-
(21,638)
-
2,679,300
Financial
liabilities at
fair value
through
profit and
loss held
for trading
Deposits
and other
liabilities
due to Subordinated
Other
Total
customers
debts Provisions liabilities liabilities
3,583,724
- 3,594,744
12,110,386
- 13,084,632
6,723,556
- 8,405,382
1,921
Profit Losses
-
Reserves
-
Total
Total
Total liabilities
liabilities
equity and equity and equity
- 3,594,744
- 13,084,632
- 8,405,382
-
-
-
-
124,644
-
195,675 2,526,739
197,596 27,754,363
- 3,048,483
- 3,048,483
-
53,503
53,503
1,660,893
314,765
1,975,658
- 2,526,739
- 27,754,363 27,754,363
3,048,483
- 3,048,483
1,660,893
- 1,660,893
314,765
314,765
53,503
53,503
5,077,644 5,077,644 5,077,644
2,160,648
124,644
197,596 27,754,363 3,048,483
-
53,503
1,975,658
5,077,644 32,832,007 32,832,007
(3,265)
(8,130)
-
-
-
-
-
22,567,272
2,152,518
124,644
197,596 27,721,330 3,048,483
-
53,503
1,975,658
-
16,301
124,644
1,921
Shares
capital
-
(33,033)
-
-
-
(33,033)
16,301
124,644
1,921
-
5,077,644 32,798,974
15
LIABILITIES
•
•
•
•
•
•
The line item Transaction deposits in the amount of RSD 3,594,744 thousand has been
to customers in the amount of RSD 3,583,724 thousand;
The line item Other deposits in the amount of RSD 13,084,632 thousand has been
central bank in the amount of RSD 974,246 thousand and Deposits and other liabilities
due to customers in the amount of RSD 12,110,386 thousand;
The line item Borrowings in the amount of RSD 8,405,382 thousand has been reclassified
to Deposits and other liabilities due to banks, other financial institutions and central bank
in the amount of RSD 1,681,826 thousand and Deposits and other liabilities due to
customers in the amount of RSD 6,723,556 thousand;
The line item Interest and fee liabilities in the amount of RSD 16,301 thousand has been
to customers in the amount of RSD 13,959 thousand;
The line item tax liabilities in the amount of RSD 1,921 thousand has been reclassified to
Other liabilities;
The line item Other liabilities in the amount of RSD 2,526,739 thousand has been
central bank in the amount of RSD 31,504 thousand, Deposits and other liabilities due to
customers in the amount of RSD 138,912 thousand, and Subordinated debts in the amount
of RSD 2,160,648 thousand.
16
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3.1.
Interest Income and Expenses
Interest income and expenses, including penalty interest and other income and expenses
related to interest-bearing assets and interest-bearing liabilities, are calculated and recognized
in the Statement of profit and loss according to the matching principle.
Interest income and expenses are recognized within the income statement for all interestbearing instruments, on the basis of calculated interest by applying the effective interest rate
method, based on the Methodology of measuring amortized costs using the effective interest
rate method. Interest income includes calculated discount from financial instruments held to
maturity.
In accordance with accounting policies the Bank ceases to recognize income from accrued
regular interest in following cases:
- when decision on debtor’s bankruptcy has been made;
- when decision on initiation of court proceedings for collection of receivables has been
made;
- when decision on ceasing of recognition of income from accrued interest has been made
by the relevant board or when other circumstances, which aggravate the collection of
receivables, have been identified;
- when the debtor is a legal entity or entrepreneur overdue for more than 150 days.
Until now, the Bank recognized accrued unrecognized suspended interest as the interest
income only when it is collected. After the recognition of placements impairment, the Bank will
recognize interest income in the amount calculated by applying effective interest rate, which
has been applied for the discount of future cash flows, when impairment loss was measured
(original or current when variable interest rate is applied), on the carrying amount of placement
or on its net present value.
The Bank continues to calculate and recognize interest on impaired placements, as well as
impairment of receivables, with later correction within the Income statement (reversal of
recognized expenses from impairment of interest receivables and interest income).
3.2.
Fee and Commission Income and Expenses
Fee and commission income and expenses are recognized based on the matching principle,
and in accordance with the accrual basis, being recognized in the income statement when
incurred or upon maturity, except for loan origination fees, guarantees and other types of
sureties, in accordance with IAS 18 Revenues.
Loan origination fees, with known repayment schedule are recognized as interest income and
calculated based on effective interest rate method.
Loan origination fees, with unknown repayment schedule (credit facilities, overdrafts, credit
cards and other similar placements), guarantees and other types of sureties, are recognized
on proportional basis.
17
Card memberships and fees for funds management on behalf and for the account of third
parties are recognized on a proportional basis.
3.3.
Foreign Currency Translation
Transactions denominated in foreign currency are translated into dinars at official middle
exchange rate of the National Bank of Serbia at the date of transaction.
Assets and liabilities denominated in foreign currency as of balance sheet date are translated
into dinars by applying the official middle exchange rate of the National Bank of Serbia for that
date.
Net foreign exchange gains or losses arising from transactions in foreign currency and the
assets and liabilities denominated in foreign currency are recognized as foreign exchange
gains or losses, in accordance with IAS 21 The Effects of Changes in Foreign Exchange
Rates.
Gains and losses arising from embedded derivatives, in cases where the annuity is connected
with the dinar exchange rate to foreign currency are recognized as income or expenses from
change in fair value of derivatives, in accordance with IAS 39 Financial Instruments:
Recognition and Measurement. Contingent liabilities and commitments denominated in
foreign currency are translated into dinars by applying the official middle exchange rates at
balance sheet date.
3.4.
Property, plant and equipment
Buildings are carried at their fair value determined by certified appraisers as of 31 December
2012 decreased for depreciation in 2013 and 2014.
Plant and equipment are carried at cost, decreased by accumulated depreciation.
Depreciation is calculated on a straight-line basis by applying a depreciation rate on cost or
revalued amount of Property, plant and equipment and investment property, in order to write
them off over their useful lives.
During 2014, depreciation was calculated by applying the following annual rates:
Buildings
Computer equipment
Furniture and other equipment
3.5.
2.50%-3.33%
33.30%
16.67%-20%
Investment property
Investment property is property held by the Bank to earn rentals and regulated with IAS 40
Investment property.
Investment property is initially measured at cost, including transaction costs. After initial
recognition, the Bank measures investment property at cost less accumulated depreciation
and less accumulated impairment losses.
18
Investment property depreciation is calculated on proportional basis with 40 years useful live
i.e. 2.5% annual depreciation rate.
3.6.
Intangible assets
As of 31 December 2014 intangible assets are carried at cost decreased for accumulated
amortization. Intangible assets represent investments in licenses, patents and software.
Depreciation is provided on a straight-line basis to cost of an intangible asset by applying the
annual rates ranging from 16.67% to 33.33%, with the aim of write-off over its useful life.
3.7.
Financial instruments
Financial instruments are initially carried at fair value increased by transaction costs (except
financial assets and liabilities carried at fair value through profit and loss), which can be directly
related to acquisition or emission of financial asset or financial liability.
Financial assets and financial liabilities are recognized within the Bank’s Statement on
financial position, from the moment in which the Bank bound itself to the instrument,
considering contractual terms. Acquisition or sale of financial assets on “regular way” is
recognized by performing calculation on the settlement date, that is when the asset is
delivered to the other side.
Derecognition of financial assets and financial liabilities
Financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar
financial assets) is derecognized when:
•
•
•
the rights to receive cash flows from the asset have expired; or
the Bank has transferred its rights to receive cash flows from the asset or has assumed
an obligation to pay the received cash flows in full without material delay to a third party
under a ‘pass-through’ arrangement;
either the Bank has transferred substantially all the risks and rewards of the asset, or has
neither transferred nor retained substantially all the risks and rewards of the asset, but
has transferred control of the asset.
When the Bank has transferred its rights to receive cash flows from an asset or has entered
into a pass-through arrangement, and has neither transferred nor retained substantially all the
risks and rewards of the asset, nor transferred control of the asset, the asset is recognized to
the extent of the Bank’s continuing involvement in the asset. Continuing involvement that takes
the form of a guarantee over the transferred asset is measured at the lower of the original
carrying amount of the asset and the maximum amount of consideration that the Bank could
be required to repay.
19
Financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged or
cancelled or expires. Where an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as a derecognition of the original liability
and the recognition of a new liability, and the difference in the respective carrying amounts is
recognized in profit or loss.
The Bank classifies its financial assets in the following categories: financial assets at fair value
through profit and loss, loans and receivables, financial assets held-to-maturity and financial
assets available-for sale. Management of the Bank determines the classification of its
investments at the time of initial recognition.
3.7.1. Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments
which are not quoted on an active market.
Loans and receivables originated by the Bank are carried at gross amortized cost (GAC)
decreased by allowances for impairment as of reporting date. Gross amortized costs represent
total receivables from the Bank's clients (including unpaid principal, nominal interest, penalty
interest, receivables for fees and other receivables) adjusted by the amount of unamortized
fees and calculated based on the methodology for measuring amortized costs using the
effective interest rates.
Individual allowances for impairment and provisions represent decreased value of assets
(collectable amount) below net book value, caused by growth of credit risk for such assets,
leading to negative changes in expected cash flows for such assets and calculated based on
the Methodology for Calculating Allowance for Impairment.
By recording individual allowance for impairment as an expense, the Bank indirectly decreases
the value of loans and receivables when there is objective evidence of decrease in probability
of collection, as a result of one or more circumstances (circumstances that lead to an loss)
that occurred after the initial recognition of an investment, and such circumstance influences
future estimated cash flows.
Circumstances resulting in loss may be identified at the moment when:
- the debtor is overdue for more than 90 days or
- other circumstances that lead to a loss have occurred.
Loans nominated in dinars, for which safeguard on risk is agreed by linking dinar exchange
rate with foreign currency are revalued in accordance with relevant contract for each loan. The
difference between nominal value of principal outstanding and revalued amount is presented
within the basic financial instrument.
20
3.7.2. Financial assets held to maturity
Financial assets held to maturity are non-derivative financial assets with precisely determined
maturity that the Bank has intention to hold to maturity (except for assets classified as loans
and receivables).
Financial assets held to maturity include treasury bills of the Republic of Serbia, government
bills of the Republic of Serbia and bills of discount issued by companies.
Shares cannot be classified within this category as they do not have specified maturity.
At initial recognition the Bank recognizes the asset at amortized cost by applying effective
interest rate method. Transaction costs that may be directly linked with purchase of the
financial asset are included in amortized cost by applying effective interest rate method, i.e.
these costs are amortized through the income statement over the period of validity of that
instrument. The effective interest rate method represents calculation of amortized cost by
applying the market effective interest rate and distribution of interest income during the
relevant period. Income and expenses from the changes in amortized cost of financial assets
are recognized in the income statement by applying the effective interest rate method.
Subsequent measurement of changes in the amortized cost of these assets is performed daily
when interest for such assets is due, as well as on the last day of each month during the year.
Gains and losses from the changes in value of financial assets arising from changes in dinar
exchange rate (if the asset is denominated in a foreign currency or in dinars with foreign
currency clause) are also recognized in the income statement.
3.7.3. Financial assets at fair value through profit and loss
Financial assets at fair value through profit and loss represent assets that are classified as
available for trading, which assumes that they are acquired for sale or repurchase in the near
future, with the aim to earn a profit from short-term price fluctuations in the intermediary
margin.
Trading financial assets comprise foreign currency old savings bonds, shares of banks and
companies with continual trading on the Belgrade Stock Exchange. Securities held for trading
are measured at fair value, while the recognized gain or loss arising from the change in the
fair value of the financial assets is included in net profit or loss. Fair value is the market value
of the financial asset determined as of balance sheet date on the stock exchange.
Financial assets at fair value also include derivatives. A derivative is a financial instrument or
any other agreement with the following three characteristics:
- its value changes (as a result of the defined/agreed interest rate or the price of the
financial instrument or price on stock exchange or foreign exchange rate or growth of
price index or other variable value),
21
- it does not require any initial net investment or it requires an initial net investment which
is lower than in other agreements that are expected to have some similar reactions to the
changes in market conditions and
- it will be settled in the future.
Initial recognition of derivatives is carried out at the moment when the derivative agreement is
concluded, when the amount of the nominal principal of the derivative is disclosed within offbalance sheet items. The initial positive or negative difference of a fair value of a derivative is
disclosed in the balance sheet as an asset or liability. Subsequent valuation of a derivative’s
fair value is recorded at the end of each business day, while the effect of the change in fair
value is recorded in the income statement either as a positive or a negative effect of the
changes in the value of derivatives. Positive fair value of a derivative is recognized as an asset
and negative fair value, as a liability. The derivative is derecognized at the moment when the
contractual rights and obligations (exchange of cash flows) arising from the derivative expire,
and/or at the date of the execution. As of the execution date the book value of an asset and
all income and expenses from the changes in the value on that assets are derecognized. If
there is an active derivative market in the country, the final effect of the sale impacts on the
income statement as a profit or a loss from the derivative sale. If there is no active derivative
market in the country, the Bank will record the final effect of the sale on the income statement
in a different way, and in accordance with the Guidelines on the Implementation of the
Accounting Policies that relate to the recognition and valuation of financial instruments, except
for loans and receivables.
3.7.4. Financial assets available for sale
Financial assets available for sale represent non-derivative financial assets classified as
available for sale or which are not classified as loans and receivables, investments held to
maturity and financial assets at fair value through profit and loss.
Assets available for sale are acquired with purpose to be sold in indefinite future in order to
achieve profit.
At initial recognition, financial assets available for sale are carried at fair value increased by
transaction costs. These costs are initially recognized within capital and not as an expense in
income statement and they increase carrying amount of the asset.
After the initial recognition, financial assets available for sale are carried at fair value and gains
and losses from change in value of financial assets are recognized as revaluation reserves
within capital. Gains and losses from change in value of financial assets, which are not
recognized within the capital relate to:
- movements in dinar’s exchange rate (if the asset is in foreign currency or comprise foreign
currency clause);
- impairment of financial asset, which is recognized within the income statement.
22
Subsequent valuation is being performed monthly on the last day of each month during the
financial year. At the sales day, carrying amount of asset and corresponding revaluation
reserves are being closed by the amount acquired by sale and difference is recognized as
gain or loss from the sale.
3.7.5. Impairment of financial assets
In accordance with IAS 39, a financial asset or group of financial assets, are impaired or
impairment is reversed, only and only if, there is objective evidence of the uncertainty, due to
one or more circumstances, which have arisen after initial recognition of financial assets, and
if circumstances, which incur losses have effect on estimated future cash flows from financial
asset or group of financial assets, that can be reliably evaluated. Possible or expected future
trends, which can cause losses in future, do not provide objective evidence of uncertainty.
3.8.
Cash and balances with central bank are comprised of cash in dinars and foreign currency,
that is cash on gyro and current accounts, cash on hand and other monetary assets in dinars
and foreign currency, gold and other precious metals, deposited liquid surpluses with the
National Bank of Serbia and required reserves in foreign currency on accounts with the
National Bank of Serbia. For purposes of the cash flow statement, cash includes cash on hand
in local and foreign currency, assets on accounts with other banks, as well as available assets
held with the National Bank of Serbia.
3.9.
Funds Managed on Behalf of Third Parties
The Bank manages funds on behalf of, and for the account of third parties, and charges fees
for this service. These items are not recognized within the balance sheet.
3.10. Taxes and contributions
Income Tax
Income tax is recognized and calculated in accordance with IAS 12 Income Taxes and the
Law on Corporate Income Tax.
The annual corporate income tax is payable at the rate of 15% on profit before tax, adjusted
for permanent differences that prescribed tax rate adjusted to the effective tax rate.
The amount of liability for income tax is calculated by applying the prescribed tax rate to the
tax base in the tax balance.
The Law on Corporate Income Tax in the Republic of Serbia does not allow any tax losses of
the current period to be used to recover taxes paid in previous periods. However, any current
year losses disclosed in the tax balance up to 2009 may be used to reduce tax base for future
periods, but only for a period not longer than ten years. The losses in the tax balance for 2010
and thereafter may be used for reduction of tax base for the following accounting periods, but
for maximum 5 years. Such tax losses, up to the amount of assumed future taxable profit that
can be offset to tax losses, are recognized in the balance sheet as deferred tax assets.
23
Deferred tax assets are recognized for all deductible temporary differences and effects of tax
losses and tax credits that may be carried to the following periods, and effects of adjustment
of securities to fair value, up to the level of assumed tax profit which may be decreased for tax
losses and loans.
Deferred taxes
Deferred tax is calculated by applying the liability method to the balance sheet, on all
temporary differences at the balance sheet date between the carrying amounts of assets and
liabilities, for financial reporting purposes and their tax bases. Tax rate enacted at the balance
sheet date is used to determine the deferred income tax amount.
Deferred tax liabilities are recognized for all taxable temporary differences, except where the
deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss; and in respect of taxable temporary
differences associated with investments in subsidiaries and associates, where the timing of
the reversal of the temporary differences can be controlled and it is probable that the
temporary differences will not be reversed in the foreseeable future.
Deferred tax assets are recognized for all deductible temporary differences, carry forward of
unused tax credits and unused tax losses, to the extent that it is probable that taxable profits
will be available against which the deductible temporary differences, and the carry forward of
unused tax credits and unused tax losses can be utilized, except where the deferred tax asset
relating to the deductible temporary difference arises from the initial recognition of an asset or
liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit, nor taxable profit or loss; and in respect of deductible
temporary differences associated with investments in subsidiaries and associates when
deferred tax assets are recognized only to the extent that it is probable that the temporary
differences will be reversed in the foreseeable future and taxable profit will be available against
which the temporary differences can be utilized.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available
to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets
are reassessed at each balance sheet date and are recognized to the extent that it has
become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are calculated at tax rates that are expected to be effective
in the year when the asset is realized or the liability is settled, based on tax rates and tax laws
that have been enacted or substantively enacted at the balance sheet date.
Current and deferred taxes are recognized as income or expense and are included in the profit
for the period.
24
Taxes and contributions that do not depend on the result
Taxes and contributions not dependent on the result include property tax, taxes and
contributions on salaries as well as other taxes and contributions in accordance with the tax
legislation of the Republic of Serbia. These taxes and contributions are recognized as Other
operating expenses.
3.11. Fair value
The Bank’s policy is to disclose information on fair value of assets and liabilities if official
market information exists or information can be accessed by using alternative valuation
techniques and when fair value is significantly different than book value. There is no sufficient
market experience, stability and liquidity for buying or selling financial assets or liabilities due
to lack of consistency in available market information. Due to such reason, fair value cannot
be determined reliably. According to Management opinion, amounts presented in financial
statements reflect actual fair value that is most adequate and most useful for financial reporting
purposes in accordance with the Law on Accounting of the Republic of Serbia and relevant
regulations of the National Bank of Serbia that regulate the Bank financial reporting.
3.12. Capital and reserves
Capital represents the surplus of the Bank's assets after deduction of all its liabilities. Capital
is not assessed and measured separately. Total equity of the Bank is comprised of shares
capital, reserves and retained earnings from which the Bank forms reserves from profit.
3.13. Employee benefits
The Bank does not have its own pension funds or share-based payment options as of 31
December 2014 and consequently has no liabilities recognized on this basis.
As of 31 December 2014 the Bank made provisions for termination benefits and jubilee awards
and unused vacation days, based on evaluation carried out by a certified actuary. Provisions
have been recognized according to the following assumptions:
Annual growth of salaries
Discount rate
Fluctuation rate
3.14.
4.00%
8.00%
6.00%
Impairment of non-financial assets
At each balance sheet date, the Bank’s management reviews the carrying amounts of the
Bank’s intangible assets, property, plants and equipment. If there is any indication that such
assets have been impaired, the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss. If the recoverable amount of an asset is estimated
to be less than its carrying value, the carrying amount of the asset is reduced to its recoverable
amount. In order to determine if assets are impaired, the Bank’s management must objectively
review cash flows, growth rate and discount rates for cash generating units, which are being
reviewed.
25
3.15.
Provisions, contingent assets and contingent liabilities
Provisions are recognized when the Bank has a present obligation, legal or constructive, as a
result of a past event, and it is probable that an outflow of resources will be required to settle
the obligation and a reliable estimate can be made of the amount of the obligation. In order to
be maintained, the best possible estimates are considered, determined and, if necessary,
adjusted at each balance sheet date.
When the outflow of the economic benefits is no longer probable in order to settle legal or
constructive liabilities, provisions are derecognized in income. Provisions are taken into
account in accordance with their type and they can be used only for the expenses they were
initially recognized for. Provisions are not recognized for future operating losses.
Contingent liabilities are not recognized in the financial statements. Contingent liabilities are
disclosed in the notes to the financial statements, unless the possibility of outflow of resources
embodying economic benefits is remote (Note 25).
Contingent assets are not recognized in the financial statements. Contingent assets are
disclosed in the notes to the financial statements, when an inflow of economic benefits is
probable.
3.16.
Impairment of non-financial assets
In accordance with adopted accounting policy, at each balance sheet date, the Bank’s
management reviews the carrying amounts of the Bank’s intangible assets, property and
equipment. If there is any indication that such assets have been impaired, the recoverable
amount of the asset is estimated in order to determine the extent of the impairment loss. If the
recoverable amount of an asset is estimated to be less than its carrying value, the carrying
amount of the asset is reduced to its recoverable amount, being the higher of an asset’s fair
value less costs to sell and value in use. Impairment losses, representing the difference
between the carrying amount and the recoverable amount of tangible and intangible assets,
are recognized in the income statement as required by IAS 36 “Impairment of Assets”.
Non-financial assets (other than goodwill) that suffered impairment are reviewed for possible
reversal of impairment at each reporting date.
3.17. Information on operating segments
The Bank monitors and discloses information on operating segments – business lines (Note
28). The Bank mostly operates on the territory of the Republic of Serbia and therefore
information on geographical segments have not been disclosed. The Bank does not own
subsidiaries. Concentration of financial assets by debtors in respect to industry sectors and
regions has been disclosed within the Note 29. (Risk management in Note 29.1.2).
26
3.18. Fair value measurement
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.
The Bank measures fair value of an instrument by using quoted market prices on active market
for that instrument. The market is considered to be active, if transactions for the asset or
liability take place with sufficient frequency and volume to provide pricing information on an
ongoing basis.
If the market for certain financial instrument is not active, the Bank determines fair value by
using valuation techniques. The objective of using a valuation technique is to estimate the
price at which an orderly transaction to sell the asset or to transfer the liability would take place
between market participants and the measurement date under current market conditions.
Three widely used valuation techniques are: market approach, cost approach and income
approach. In some cases, a single valuation technique will be appropriate, whereas in others
multiple valuation techniques will be appropriate. If multiple valuation techniques have been
used, the result will be determined by taking into account logic of range of values induced by
the result. The fair value is the point within the range, which is the most appropriate given the
circumstances. Valuation techniques inputs are market expectation and measurements of risk
factors inherent to the financial instrument. The Bank forms valuation techniques and test their
validity by using current market transaction prices of the equal instrument or other available
market information which could be applied.
The most appropriate fair value to be used for the initial recognition, is the transaction price, if
the fair value of the instrument has not been determined in comparison with other market
transactions for that instrument.
27
4a)
INTEREST INCOME
RSD thousand
For the year ended 31 December
2014
2013
Loans in RSD:
Banks
Public sector
Corporate customers
Entrepreneurs
Local government
Retail customers
Other customers
Loans in foreign currency:
Corporate customers
Entrepreneurs
Retail customers
Deposits in RSD:
Banks
Deposits in foreign currency:
Banks
Securities interest income:
In RSD
In foreign currency
Other placements interest income:
In RSD
In foreign currency
TOTAL:
9,527
1,038,578
167,793
438
410,023
658
1,627,017
18,296
410
1,160,437
155,855
403,130
617
1,738,745
74,987
1,184
151
76,322
90,920
3,269
103
94,292
43,133
67,259
10,681
3,344
119,156
119,156
124,827
124,827
2,705
173
2,878
1,879,187
2,350
52
2,402
2,030,869
28
4b)
INTEREST EXPENSES
RSD thousand
2014
2013
Loans in RSD:
Banks
Loans in foreign currency:
Banks
Deposits in RSD:
Banks
Public sector
Corporate customers
Entrepreneurs
Local government
Retail customers
Other customers
Deposits in foreign currency:
Banks
Corporate customers
Entrepreneurs
Retail customers
Foreign entities
Other customers
TOTAL:
-
-
321,677
293,488
59,475
22,007
21,950
1,482
16
28,473
8,715
142,118
94,486
30,437
49,140
2,342
27,855
14,462
218,722
9,140
40,174
75
160,841
2,675
212,905
676,700
61,260
70,247
47
210,995
3,571
25
346,145
858,355
Out of total interest expenses from loans from banks in foreign currency, RSD 27,412
thousand relates to EBRD and IFC loans from related parties.
5a)
FEE AND COMMISSION INCOME
RSD thousand
2014
2013
In RSD:
Banks and other financial institutions
Public enterprises
Corporate customers
Entrepreneurs
Retail customers
Foreign legal entities and private individuals
Other customers
In foreign currency
64,396
3
374,335
1,769
186,006
21
3,902
630,432
12,333
74,995
4
357,242
1,332
178,414
80
4,191
616,258
10,535
TOTAL:
642,765
626,793
29
5b)
FEE AND COMMISSION EXPENSES
Fee and commission expenses in RSD
Fee and commission expenses in foreign currency
TOTAL:
6.
59,363
16,944
76,307
63,617
10,273
73,890
NET GAIN ON FINANCIAL ASSETS HELD FOR TRADING
RSD thousand
2014
2013
Gains from sale of securities and other financial assets
held for trading
Losses from sale of securities and other financial assets
held for trading
Net gains/losses
Income from change in fair value of securities and other
financial assets held for trading
Expenses from change in fair value of securities and
other financial assets held for trading
Net gains/losses
Income from change in value of derivatives held for
trading
Expenses from change in value of derivatives held for
trading
Net gains/losses
TOTAL:
1,239
2,638
(4,217)
(2,978)
(4)
2,634
39,577
41,438
(10,349)
29,228
(11,488)
29,950
131
6,892
(6,892)
(6,761)
(12,948)
(6,056)
19,489
26,528
7.
NET INCOME /(EXPENSES) ON FOREIGN EXCHANGE DIFFERENCES AND FX
CONTRACTS
RSD thousand
2014
2013
Income on foreign exchange differences
718,536
1,507,423
Income on positive foreign exchange differences from FX
1,168,651
935,234
contracts
TOTAL
1,887,187
2,442,657
Expenses on foreign exchange differences
(1,610,010)
(1,664,560)
Expenses on negative foreign exchange differences from
(263,199)
(789,557)
FX contracts
TOTAL
(1,873,209)
(2,454,117)
Net income/expenses on foreign exchange
differences
13,978
(11,460)
Income statement line item Net income on foreign exchange differences and FX contracts
amounts to RSD 13,978 thousand and is the result of currency structure and effects of FX
contracts for balance sheet assets and currency structure and effects of FX contracts for
balance sheet liabilities. Participation of foreign currency line items in total balance sheet
assets has been 73.03%, and participation of foreign currency line items in total balance sheet
30
liabilities has been 71.11%. Since the ratio between foreign currency assets and liabilities has
been well adjusted, there has not been significant effects on result, although there was
significant increase in the EUR and USD foreign exchange rate during 2014.
8.
OTHER OPERATING INCOME
Operating income
Reversal of unused provisions
Income on sales of fixed assets and intangible assets
Dividends and income from other equity investments
Surpluses
Other income
Income from change in liabilities amount
TOTAL
RSD thousand
2014
2013
3,907
5,104
383
568
2,440
892
809
282
281
21,730
11,860
5,226
39,990
32,605
60,867
9.
IMPAIRMENT LOSSES ON FINANCIAL ASSETS AND OFF-BALANCE SHEET
CREDIT RISK ITEMS
a)
(Expenses)/Income
Impairment of balance sheet items
Reversal of impairment of balance sheet items
Net income/expenses
Provisions for off-balance sheet items
Reversal of provisions for off-balance sheet items
Net income/expenses
Written-off uncollectible receivables
Income from collected written-off receivables
Net income/expenses
TOTAL:
RSD thousand
2014
2013
(1,366,828)
(1,212,936)
343,112
420,119
(1,023,716)
(792,817)
(2,835)
(28,463)
65,309
43,863
62,474
15,400
(1,184)
(3,319)
11
(1,173)
(3,319)
(962,415)
(780,736)
31
b)
Movements in the balances of impairments and provisions
Loans and Loans and
receivable receivables
s from
from
Financial
Other
banks
customers
assets
assets
(Note 15)
(Note 16)
(Note 14) (Note 18)
Opening balance
6,907
3,242,935
35,475
Impairment
1,346,366
167
18,111
Reversal of impairments
(7,604)
(329,548)
(5,960)
Foreign exchange gains
and losses
710
51,228
453
and losses from currency
clause
73,021
Write-off
(275,940)
(4,716)
Reversal of suspended
interest
(27,807)
Other
13
4,080,255
167
43,363
Closing balance
10.
Total
3,285,317
1,364,644
(343,112)
52,391
73,021
(280,656)
(27,807)
4,123,798
WAGES, COMPENSATION OF WAGES AND OTHER PERSONAL EXPENSES
Wages and compensation of wages
Taxes on wages and compensation of wages
Contributions on wages and compensation of wages
Other personal expenses
TOTAL
RSD thousand
2014
2013
348,865
338,357
43,917
45,831
94,580
88,835
20,755
19,661
508,117
492,684
Within the line item Wages and compensation of wages, the amount of RSD 18,710 thousand
relates to the Executive board members remunerations, and the amount of RSD 6,580
thousand within the line item Other personal expenses relates to remunerations to the
members of the Board of Directors.
32
11.
OTHER EXPENSES
RSD thousand
2013
2014
Operating expenses
Material costs
Production service costs
Non-material costs
Taxes
Contributions
Other expenses
Other operating expenses
Written-off uncollectible receivables
Losses on sales of fixed assets
Other expenses
Expenses from change in liabilities amount
TOTAL
50,198
148,616
218,731
6,699
87,986
89
53,179
150,261
194,227
14,966
85,277
324
1,700
7,498
624
26,002
2,507
5,475
44,757
548,143
550,973
Production service costs mostly relate to rental costs and they amount RSD 64,370 thousand,
while Non-material costs mostly relate to paid insurance premium, which amounts RSD 82,787
thousand, and from that amount RSD 74,167 thousand relates to paid insurance premium for
retail deposits.
12.
INCOME TAX
a)
Income tax components
Deferred tax
RSD thousand
2014
2013
1,040
39,366
Effect on gross profit/loss
b)
1,040
39,366
Income tax reconciliation with prescribed tax rates
Profit/Loss before Tax
Income tax at 15%
Tax effects of expenses not recognized in tax balance
Tax effects of income from debt securities
Income tax in tax balance
RSD thousand
2014
2013
(299,479)
(126,285)
(15,477)
(8,286)
17,786
18,555
-
33
c)
Components of deferred tax assets
Temporary differences on fixed assets
Tax credits related to tax losses
Tax credits from investment in fixed assets
Impairment of securities held for trading
Deferred tax assets
13.
RSD thousand
2014
2013
8,208
7440
29,746
29,746
14,524
14,524
7,571
7,299
60,049
59,009
CASH AND BALANCES WITH CENTRAL BANK
RSD thousand
2014
2013
Gyro account
1,474,459
1,372,884
Cash on hand in RSD
221,758
267,421
Receivables for calculated interest, fee and compensation
related to Cash and balances with central bank
16
13
Cash on hand in foreign currency
466,924
301,941
Required reserves with NBS in foreign currency
3,328,819
4,599,181
Balance as of 31 December
5,491,976
6,541,440
Required reserves in dinars is the minimal reserve in dinars allocated in accordance with the
National Bank of Serbia’s Decision on Banks’ Required Reserves with the National Bank of
Serbia (Official Gazette of Republic of Serbia no. 3/2011, 31/2012, 57/2012, 78/2012, 87/2012,
107/2012, 62/2013, 125/2014 and 135/2014).
In accordance with article 5 of the Decision the Bank is obliged to calculate and hold on gyro
account the required reserve in dinars at 5% rate of the amount of average daily balance of
dinar deposits, loans and other liabilities with maturity of up to 2 years during a calendar month,
whereas for the deposits, loans and other liabilities with maturity of over 2 years the required
reserves rate is 0%. The required reserve is calculated on a monthly basis. The NBS
calculated and paid interest on required reserves in dinars in 2014 at 2.5% per annum interest
rate.
As of 31 December 2014 required reserves in dinars was calculated in the amount of RSD
1,324,806 thousand.
34
In accordance with the Decision on Banks’ Required Reserves with the National Bank of
Serbia (Official Gazette of Republic of Serbia no. 3/2011, 31/2012, 57/2012, 78/2012, 87/2012,
107/2012, 62/2013, 125/2014 and 135/2014), foreign currency required reserves represent
minimal average balance of foreign currency assets on the Bank’s account with NBS. The
Bank calculates foreign currency required reserves by applying 27% on the amount of the
average daily balance during one calendar month of the foreign currency deposits, loans and
other liabilities with maturity of up to 2 years, as well as 20% on foreign currency liabilities with
maturity of over 2 years, while 50% is applied on the average daily balance of dinar liabilities
indexed in foreign currency. Percent of calculated foreign currency required reserves, which
are allocated in dinars, is 36% for deposits, loans and other financial liabilities with maturity of
up to 2 years and 28% for deposits, loans and other financial liabilities with maturity of over 2
years. The central bank does not pay interest on foreign currency required reserves.
Repo placements relate to treasury bills purchased from the National Bank of Serbia with 7
days maturity period. During 2014 the Bank earned annual interest rate from 5.90% to 7.50%
on this basis.
As of 31 December 2014 the Bank was completely in compliance with the Decision on Banks’
Required Reserves with the National Bank of Serbia.
14.
FINANCIAL ASSETS
RSD thousand
2014
2013
a) Financial assets at fair value through profit and loss
held for trading
Banks shares in RSD
11,522
7,399
Corporate shares
10,567
13,277
RS Government bonds
259,716
776,121
Receivables related to derivatives held for trading
6,892
281,805
803,689
Allowances for impairment
281,805
803,689
b) Financial assets available for sale
Local government bonds
37,510
Allowances for impairment
(167)
37,343
As of 31 December 2014, the Bank trades at Belgrade stock exchange with following securities
and placements: RS government bonds, local government bonds, banks shares and corporate
shares.
The line item Securities held for trading is comprised of RS government bonds in the amount
of RSD 259,716 thousand, banks shares in the amount of RSD 11,522 thousand and corporate
shares in the amount of RSD 10,567 thousand.
During 2014 the Bank purchased securities available for sale indexed in euro and as of 31
December 2014 it owns municipal bonds in the amount of RSD 37,510 thousand.
35
15.
LOANS AND RECEIVABLES FROM BANKS AND OTHER FINANCIAL
INSTITUTIONS
RSD thousand
2014
2013
600,000
400,069
2,000,416
Revocable deposits
REPO loans
Receivables for calculated interest on loans, deposits and
other placements
Foreign currency accounts
Loans in RSD
Other placements in RSD
Deposits in foreign currency
Other placements in foreign currency
Accrued receivables for interest calculated on loans, deposits
and other placements
and other placements in foreign currency
Accrued income for receivables at amortized cost by
applying effective interest rate
Gross loans and receivables from banks and other
financial institutions
Allowances for impairment (Note 9)
7
1,223,401
267
566,641
12
1
1,178,771
6,016
348,512
12
7,108
2,764
1,695
918
(1)
-
2,799,199
(13)
2,799,186
3,537,410
(6,907)
3,530,503
As of 31 December 2014 the line item revocable deposits is comprised of placements to the
following other banks: ProCredit bank, Erste bank and Unicredit bank in the amount of RSD
200,000 thousand each. The item REPO loans relates to NBS treasury bills in the amount of
RSD 400,000 thousand, which have been purchased within the REPO transactions with NBS.
As of 31 December 2014 foreign currency assets with Central securities depository and
clearing house and foreign currency assets on accounts abroad, at Deutsche bank and
Commerzbank, amount RSD 1,223,401 thousand and they are located at Foreign currency
accounts item.
Deposits in foreign currency are the Bank’s deposits with Halk bank in the amount of EUR
3,000 thousand and USD 2,000 thousand.
36
16.
LOANS AND RECEIVABLES FROM CUSTOMERS
RSD thousand
2014
2013
other placements
Receivables for calculated fee and commission on loans,
deposits and other placements
other placements
Loans in RSD
Other placements in RSD
Loans and placements in foreign currency
Other placements in foreign currency
and other placements
Accrued income for receivables at amortized cost by
Gross loans and receivables from customers
Allowances for impairment (Note 9)
92,269
133,441
16,933
17,927
2,150
24,317,279
557,964
1,175,013
37,669
6,940
23,213,745
615,141
1,071,869
38,889
169,670
51,891
(99,102)
26,269,845
(4,080,255)
(126,932)
25,022,911
(3,242,935)
22,189,590
21,779,976
Loans and receivables from customers’ structure:
- Gross loans and receivables from customers – Corporate
Gross amount of loans and receivables from customers – Corporate, as of 31 December 2014
is RSD 22,431,584 thousand and has the following structure:
RSD thousand
Balance as of 31 Balance as of 31
Loan type
December 2014 December 2013
Long-term loans to customers – other purposes
9,062,030
6,785,241
Long-term SME loans from assets at Revolving
loans fund (EAR)
1,699,225
1,627,758
Long-term HIT loans from EFSE credit facility
1,160,119
1,255,974
Long-term HIT Energy loans
315,638
327,219
Long-term loans from EBRD credit facility
61,236
161,475
Long-term loans from EIB credit facility
2,797,876
4,006,179
Long-term investment loans from the Government of
the Republic of Italy credit facility
144,463
159,154
Long-term loans from IFC credit facility
32,497
84,434
Long-term loans from FMO credit facility
338,331
623,841
Short-term gross placements to Corporate
customers
6,820,169
6,476,265
22,431,584
21,507,540
37
-
Gross loans and receivables from customers – Retail
Total gross amount of loans and receivables from customers – Retail, as of 31 December
2014 is RSD 3,838,261 thousand and has the following structure:
RSD thousand
Balance as of 31 Balance as of 31
Loan type
December 2014
December 2013
Consumer loans – energy efficiency
586,401
428,087
Consumer loans – vehicle purchase
95,111
140,331
Consumer loans – other purposes
244,892
356,219
Cash loans
879,222
860,443
Mortgage loans
1,835,163
1,543,508
Receivables related to DinaCard credit card
20,595
26,612
Allowed overdrafts
89,318
83,657
Disallowed overdrafts and due loan receivables
87,559
76,514
3,838,261
3,515,371
Movements in the balances of impairments during the year (RSD thousand)
Opening balance (Note 9)
Individual impairment
Group impairment
Impairment (Note 9)
Group impairment
Reversal of impairments
(Note 9)
Group impairment
and losses
Group impairment
and losses from currency
clause
Group impairment
Write-offs
Group impairment
Reversal of suspended
interest
Group impairment
Other
Group impairment
Closing balance
Group impairment
Loans and
Loans and receivables
receivables
from
from banks customers
6,907
3,242,935
3,185,223
6,907
57,712
1,346,366
984,217
362,149
Financial
assets
167
167
Other assets
35,475
35,475
18,111
18,111
-
Total
3,285,317
3,220,698
64,619
1,364,644
1,002,328
362,316
(7,604)
(7,604)
(329,548)
(58,619)
(270,929)
-
(5,960)
(5,960)
-
(343,112)
(64,579)
(278,533)
710
710
51,228
51,091
137
-
453
453
-
52,391
51,544
847
-
73,021
48,095
24,926
(275,940)
(275,940)
-
-
(4,716)
(4,716)
-
73,021
48,095
24,926
(280,656)
(280,656)
-
13
13
(27,807)
(27,807)
4,080,255
3,906,260
173,995
167
167
43,363
43,363
-
(27,807)
(27,807)
4,123,798
3,949,623
174,175
38
Short-term loans have been granted to corporate customers and entrepreneurs for the
improvement of production, trade, services, import, export, liquidity and other purposes. Shortterm loans have been granted with repayment period from 1 to 12 months in dinars, dinar
equivalent of foreign currency amount and in foreign currency.
Loans from Bank’s potential with repayment period of up to one year in dinars have been
granted with interest rates ranging from 1M BELIBOR + 0.90% to 28.34% per annum, while
the loans with repayment period of up to one year with currency clause and foreign currency
loans, have been granted with interest rates ranging from 6M EURIBOR + 3.80% to 10.00%
per annum.
Long-term loans have been granted in dinars, with or without currency clause, and in foreign
currency at fixed or variable interest rates.
Long-term loans granted in 2014 mostly relate to:
- EUR 6,250,791 from NBS credit facility – Revolving loans fund management department.
Loans have been granted to SME for the purchase of equipment, purchase and
construction of production premises, as well as for the working capital. Repayment period
is up to 5 years, with grace period of up to 12 months and interest rate of 3M LIBOR for
EUR + 3.25% per annum;
- RSD 3,741,553 thousand (1,170 loans in total) from the Government of the Republic of
Serbia subsidized loans program. Assets have been granted to corporate customers and
entrepreneurs for the purposes of funding current assets and liquidity, for the period of up
to 18 months, with grace period of up to 6 months, with annual interest rate equal to key
policy rate for loans in dinars or at the most 5.45% per annum.
- EUR 3,904,307 from EFSE credit facility have been granted to small and medium entities,
as well as to entrepreneurs through long-term HIT loans with purpose to fund investment
in fixed and current assets with repayment period of up to 5 years and grace period of up
to 12 months. Average interest rate on these loans has been 8.67% per annum;
- EUR 3,929,500 from EFSE funds with the guarantee from European Investment Fund
(EIF). At the end of 2011 the Bank has concluded the Guarantee agreement – Guarantee
facility with SME/frame for micro loans, with EIF. Purpose of this agreement is to provide
guarantee, which partially covers Bank’s risk when granting loans, with aim to expand
access of micro entities to funds. Since 1 February 2012, The Bank has begun to offer
loans secured by EIF guarantee, and as of 31 December 2014 1,314 loans has been
granted in the total amount of EUR 14,172,932. Interest rate on these loans is 6M
EURIBOR + 9.00% per annum;
- EUR 250,000 from Government of the Republic of Italy credit facility. These funds have
been used by micro, small and medium entities in accordance with EU standards.
Purpose of these funds is to fund purchase of equipment, technology and technical
support, their maintenance, purchase of spare parts and industrial licenses of Italian
origin, as well as working capital. Repayment period is up to 8 years, with grace period of
up to 24 months and interest rate of 4.35% per annum;
39
- EUR 723,200 from the KfW credit facility. As of 20 November 2012 Individual promotional
agreement on credit facility for energy efficiency and utilization of renewable sources of
energy in the amount of EUR 5 million has been signed with KfW – the German
Development bank and the National Bank of Serbia. Purpose of the credit facility is
funding measures for more efficient utilization of energy. By signing this agreement,
Čačanska banka has continued to provide support to funding projects with aim to reduce
energy consumption and to increase use of renewable sources of energy. This is the third
credit facility intended for energy efficiency. Repayment period of loans from this credit
facility is 7 years with possibility of 12 month grace period. Energy savings loans have
been granted to corporate sector at 4.70% or 7.50% interest rate, depending on the loan
amount.
Receivables, contingent rights and claims arising from sub-loans granted based on the Loan
Agreement signed on 9 June 2011 with GGF Southest B.V. were pledged in the amount of
EUR 5,000 thousand with maturity of receivables on 15 December 2018.
17.
FIXED ASSETS, INVESTMENT PROPERTY AND INTANGIBLE ASSETS
a)
INTANGIBLE ASSETS
RSD thousand
2014
2013
Cost
Balance as of 1 January
Increase
Sale
Disposals and write-offs
Accumulated amortization
Amortization
Sale
Net carrying amount
59,628
26,986
86,614
39,237
20,391
59,628
23,867
17,136
41,003
14,832
9,035
23,867
45,611
35,761
40
b)
PROPERTY, PLANT AND EQUIPMENT
RSD thousand
2014
2013
Cost
Increase
Sale
Accumulated depreciation
Depreciation
Sale
Net carrying amount
c)
1,239,882
52,236
(11,346)
(7,591)
1,273,181
1,216,026
59,744
(21,831)
(14,057)
1,239,882
589,666
72,361
(7,525)
(7,591)
646,911
529,824
83,273
(9,374)
(14,057)
589,666
626,270
650,216
INVESTMENT PROPERTY
RSD thousand
2013
2014
Cost
Increase
Sale
Accumulated depreciation
Depreciation
Sale
Net carrying amount
135,405
12,238
147,643
135,405
135,405
10,317
3,537
13,854
6,862
3,455
10,317
133,789
125,088
Appraisal of buildings and investment property is performed in compliance with the Bank’s
accounting policies every three years. The last assessment was performed in 2012, by an
independent certified appraisers. The method applied was the market approach.
Amount of RSD 82,512 thousand within the property line item relates to two duplex apartments
with area of 377.99 m2 in Belgrade, 62 Prote Mateje Street. Considering that the Bank has
intention to sell these apartments, certified appraiser has appraised their market value as of
24 December 2014. Appraised value of EUR 1,790 per m2 and applied foreign currency
exchange rate as of that day, was at the level of the Bank’s carrying amount. Amount of RSD
35,740 thousand relates to business premises in Čačak, Gradsko šetalište Street with an area
of 325.07 m2. Market value of these business premises has been appraised by a certified
41
appraiser as of 5 November 2012. Appraised market value of EUR 1,020.92 per m2, with
applied foreign exchange rate as of the date of appraisal, was of the level of the Bank’s
carrying amount. Amount of RSD 3,614 thousand relates to apartment with area of 57.78 m2
in Čačak, Sinđelićeva Street. Market value of this apartment has been appraised by a certified
appraiser as of 2 November 2012. Appraised market value of the apartment in the amount of
EUR 550 per m2 was greater than the carrying amount of property, therefore the Bank has
adjusted carrying amount to be equal to market value by increasing it in the amount of RSD
3,413 thousand. Other two investment properties have been recognized during the current
year and the comments for them are disclosed as well.
The Bank has no property under pledge.
In 2014, the line item property has increased due to recognition of asset acquired through
collection of receivables within the fixed assets in the amount of RSD 6,827 thousand.
Recognized assets relate to business premises for archiving purposes with area of 350 m2
located in Čačak, 17 Oslobođenja Street. During 2014, the Bank has sold business premises
in Preljina, having area of 147m2, considering that counter in Preljina was closed in 2013.
These premises were sold for RSD 3,820 thousand, which resulted in increase of retained
earnings in the amount of RSD 1,759 thousand due to derecognition of revaluation reserves.
During the year, the Bank has recognized within the investment property, business premises
at 21, Bate Jankovića Street, having area of 52m2, and business premises at 17, Oslobođenja
Boulevard, having area of 716 m2. Stated investment properties have been acquired through
collection of receivables. By renting these properties the Bank has gained right to recognize
them as investment property, which resulted in the increase of investment property in the
Increase in equipment and other assets mostly relates to IT equipment in the amount of RSD
38,228 thousand, and the most of it is the equipment for storing data.
Increase in intangible assets mainly relates to purchase of DMS user licenses in the amount
of RSD 17,340 thousand.
42
18.
OTHER ASSETS
RSD thousand
2014
2013
Receivables for calculated fee and commission related to
other assets
Receivables from sale
Other receivables from regular operating activities that
generate income
Receivables for calculated interest related to other assets
Other receivables in RSD
Other receivables in foreign currency
Other investment
Other accrued expenses
Accrued interest expenses in foreign currency
Inventories
Allowance for impairment (Note 9)
19.
9,512
1,188
7,596
954
48,201
10
46,374
7,220
22,294
2,367
6,310
9,787
153,263
(43,363)
109,900
172,800
10
43,733
7,304
22,294
2,613
7,196
20,914
285,414
(35,475)
249,939
DEPOSITS AND OTHER LIABILITIES DUE TO BANKS, OTHER FINANCIAL
INSTITUTIONS AND CENTRAL BANK
RSD thousand
DEPOSITS FROM BANKS
2014
2013
9,849
14,141
Special-purpose deposits
6,844
6,265
Other deposits
157,249
580,696
Other financial liabilities due to banks
668
18,172
Interest and fee liabilities due to banks
1,253
2,632
Accrued liabilities for calculated interest and other financial
liabilities due to banks
13,315
8,378
Total deposits and other liabilities due to banks and
other financial institutions
189,178
630,284
RSD thousand
BORROWINGS FROM BANKS
2014
2013
Borrowings from banks
1,577,555
2,117,849
Accrued liabilities for calculated interest on borrowings
11,693
16,492
Accrued expenses for liabilities at amortized cost by applying
effective interest rate method
(10,706)
(16,639)
Total borrowings from banks
1,578,542
2,117,702
1,767,720
2,747,986
43
Borrowings in foreign currency in the amount of RSD 1,577,555 thousand relate to revolving
credit facility granted by EAR – European Agency for Reconstruction, with assistance of
Revolving loans fund of National Bank of Serbia. At the end of 2005 the EAR has transferred
ownership over the Fund to the Republic of Serbia, with obligation to use assets for the same
purpose till the end of 2015.
20
DEPOSITS AND OTHER LIABILITIES DUE CUSTOMERS
RSD thousand
DEPOSITS FROM CUSTOMERS
2014
2013
5,932,994
5,004,737
Savings deposits
5,988,860
6,001,633
Deposits related to loans
759,764
1,164,703
Special-purpose deposits
99,111
146,122
Other deposits
4,086,658
5,018,857
Other financial liabilities due to customers
85,294
Interest and fee liabilities due to banks
6,662
16,638
Accrued liabilities for calculated interest and other financial
liabilities due to banks
66,337
85,912
Total deposits and other liabilities due to customers
17,025,680
17,438,602
RSD thousand
BORROWINGS FROM CUSTOMERS
2014
2013
Borrowings from customers
6,158,572
6,656,464
Accrued liabilities for calculated interest on borrowings
8,108
8,336
Accrued expenses for liabilities at amortized cost by applying
effective interest rate method
(2,317)
(2,780)
Total borrowings from customers
6,164,363
6,662,020
23,190,043
24,100,622
Avista deposits in dinars are, for the most part, comprised of balances at current accounts of
corporate customers and other institutions. Interest is calculated and paid on these assets, if
average balance during the previous month was above RSD 500 thousand. Standard annual
interest rate ranged from 0.25% to 1.50% (for an average deposit of RSD 500 thousand to
RSD 5,000 thousand) and from 1.00% to 3.50% (for an average deposit of over RSD 20,000
thousand).
Avista savings deposits in dinars and current accounts of retail sector have been deposited
with interest rate ranging from 0.05% to 0.15% per annum. Avista savings deposits in foreign
currency have been deposited at 0.05% per annum for EUR and USD and for other currencies
the Bank does not calculate interest.
Short-term retail deposits have been deposited at interest rate ranging from 5.90% to 10.00%
per annum for dinar deposits and from 1.60% to 3.40% for foreign currency deposits.
Corporate avista deposits in foreign currency do not bear interest. Standard interest rates for
short-term corporate deposits in dinars were ranging from NBS key policy rate decreased by
44
5.00 percentage points to NBS key policy rate decreased by 2.50 percentage points,
depending on maturity and amount.
Long-term retail deposits have been deposited at interest rate ranging from 10.50% to 11.00%
per annum for dinar deposits and from 2.80% to 3.40% for foreign currency deposits.
Borrowings refer to long-term loans from European Investment Bank in the amount of EUR
45.2 million, European Bank for Reconstruction and Development (EBRD) in the amount of
EUR 2 million, German Development Bank (KfW) in the amount of EUR 4.5 million,
Government of the Republic of Italy in the amount of EUR 1.1 million, International Finance
Corporation (IFC) in the amount of EUR 2.1 million, Green for Growth Fund - GGF in the
amount of EUR 3.6 million and Netherlands Development Finance Company (FMO) in the
amount of EUR 5.3 million.
In accordance with the terms of agreements concluded with following international financial
institutions: the European Fund for Southeast Europe (EFSE), German Development Bank
(KfW), European Bank for Reconstruction and Development (EBRD), Green for Growth Fund
(GGF), Netherlands Development Finance Company (FMO) and International Finance
Corporation (IFC), the Bank is obligated to meet certain loan covenants (financial ratios) until
the loans are fully repaid. As of 31 December 2014, the Bank was not in compliance with the
following covenants:
Financial
institution
Covenant
Prescribed value
Realized value
30.00%
58.67%
9.00%
7.82%
EBRD
Open credit exposure ratio
EFSE
Tier 1 equity ratio
KfW
Single entity/group credit exposure
ratio
20.00%
24.26%
FMO
Single entity/group credit exposure
ratio
20.00%
22.16%
IFC
25.00%
52.55%
In accordance with concluded agreements, the Bank reports on a regular basis to international
financial institutions on achieved performance indicators, with a detailed explanation of each
breached covenant. The Bank does not expect any negative reactions from creditors due to
breach of covenants.
Open credit exposure ratio, in respect of EBRD loan, increased during 2014 due to increase
of non-performing loans, which was caused by negative macroeconomic movements and
decrease of the debtors liquidity, as well as by reduction of the Bank’s equity, which is the
result of subordinated debt reduction.
Tier 1 equity ratio, in respect of subordinated loan agreement with EFSE, will be adjusted by
the increase of Banks equity. In accordance with subordinated loan agreement, EFSE cannot
demand premature loan repayment.
Single entity/group credit exposure ratio, defined by agreement with EFSE, exceeds 20% limit,
related to Fabrika rezanog alata (FRA) group. The ratio has been exceeded due to equity
45
reduction and EUR exchange rate growth in comparison to RSD, and not due to granting new
placements. Bank’s receivables from the FRA group have been impaired in total. Single
entity/group credit exposure ratio, defined by agreement with KfW, exceeds 20% limit, related
to groups Metal sistemi and Mašinac. The ratio has been exceeded due to equity reduction
and EUR exchange rate growth in comparison to RSD, and not due to granting new
placements. Bank’s receivables from both groups have been impaired for the most part,
therefore net exposure is much under 20% of the Bank’s equity.
Since 31 December 2013, OCER ratio, in respect of IFC agreement, has been above the
prescribed limit. For the year 2013, the Bank received Waiver letter from IFC, which required
maintenance of OCER ratio at the level of 57%. During 2014, the Bank has increased
impairment of non-performing loans, therefore realized OCER ratio is 52.55% as of 31
December 2014.
The Bank has received Waiver letter from FMO and expects to receive one from EBRD, since
the request to EBRD for Waiver letter has been submitted.
Relating other creditors (EBRD, KfW and IFC) for which covenants have been breached, but
Waiver letter has not been received before the publication of the Notes to the financial
statements, the Bank has performed assessment of effects of loans repayment on its liquidity.
The results have shown that prescribed narrow and wide liquidity indicator would not be
breached.
BORROWINGS MATURITY
Borrowings amount by credit facilities which are to be due in 2015
EUR thousand
Balance as of 31
Creditor
December 2014
Due in 2015
EIB
45,248
6,627
IFC
2,143
1,429
KFW
4,545
909
GGF
3,635
910
EBRD
2,014
1,343
FMO
5,250
3,500
Republic of Italy government
1,121
336
TOTAL
63,956
15,054
21.
SUBORDINATED DEBTS
Subordinated debts
Accruals for interest liabilities and other expenses
compensations related to subordinated debts
Accrued expenses for liabilities at amortized cost by
RSD thousand
2014
2013
1,814,375
1,719,632
32,660
27,242
(5,092)
1,841,943
(6,611)
1,740,263
46
Subordinated liabilities in foreign currency as of 31 December 2014 amounted to EUR 15
million. These funds were obtained from the European Fund for Southeast Europe (EFSE),
with repayment period up to 2018. Annual interest rate equals to six-month EURIBOR
increased by 6.00% margin.
22.
PROVISIONS
a) Movements in provisions for potential losses on off-balance sheet items were as
follows:
RSD thousand
2014
2013
65,525
80,925
Increase of provisions
2,835
28,464
Reversal of provisions
(65,309)
(43,863)
3,051
65,526
Balance as of 31 December (subtotal)*
b) Movements in provisions for retirement benefits:
c)
RSD thousand
2014
2013
3,051
65,526
45,843
43,719
8,033
2,507
(3,022)
(383)
50,854
45,843
53,905
111,369
Movements in provisions for litigation and claims:
RSD thousand
2014
2013
53,905
111,369
1,700
1,700
55,605
111,369
As of 31 December 2014, there are 6 litigations against the Bank, in total amount of RSD 7,900
thousand. The Bank expects negative outcome in one case and therefore provision on this
basis have been recognized in the amount of RSD 1,700 thousand.
47
23.
OTHER LIABILITIES
Trade payables
Received advances
Liabilities related to commission operations
Accrued liabilities
Temporary and suspense accounts
Liabilities for salaries
VAT liabilities
Liabilities for other taxes and contributions
Accrued other expenses
Other accruals
Other liabilities
24
RSD thousand
2014
2013
22,038
19,049
269
208
858
362
3,274
6,041
18,045
14,220
104
63
834
1,328
1,502
2,037
23,175
112,446
48,465
20,106
7,243
202,651
99,016
EQUITY
Equity and shares capital structure
In accordance with the Articles of Association and Statute, the Bank’s capital consists of:
- shares capital and
- reserves.
The Bank is managed by its founders proportionally with the funds invested in ordinary shares,
in accordance with the Articles of Association and Statute of the Bank.
The structure of the Bank’s equity as of 31 December 2014 was as follows:
Shares capital – ordinary shares
Shares capital – preference shares
Share premium
Retained earnings
Loss
31 December
2014
1,819,820
1,340
1,227,323
309,333
1,631,156
4,239
275,654
RSD thousand
31 December
2013
1,819,820
1,340
1,227,323
314,137
1,710,785
4,239
86,919
4,717,557
4,990,725
Share capital consists of 181,982 ordinary shares and 134 preference shares with nominal
value of RSD 10 thousand. Total Bank’s equity consist of share capital in the amount of RSD
1,821,160 thousand, share premium in the amount of RSD 1,227,323 thousand, reserves from
profit in the amount of RSD 1,631,156 thousand, revaluation reserves in the amount of RSD
309,333 thousand. In 2014, the Bank reported a loss in the amount of RSD 275,654 thousand
which represents an item that is deductible from equity.
48
The Bank has recognized retained earnings in the amount of RSD 4,239 thousand, which
resulted from reversal of revaluation reserves, due to sale of business premises in Preljina,
and revaluation reserves related to investment property, as well as from recognizing actuarial
gains from long-term provisions for retirement benefits and jubilee awards.
The Bank is required to maintain a minimum capital adequacy ratio of 12%, as prescribed by
the National Bank of Serbia. As of 31December 2014, the Bank’s capital adequacy ratio
amounts to 12.81% which exceeds the NBS prescribed minimum of 12%.
Basic earnings per share
RSD thousand
2014
2013
Net profit/loss
Weighted average number of shares
Loss per share in RSD
(275,654)
182,116
(86,919)
182,116
(1,514)
(477)
The structure of the Bank’s holders of ordinary shares as of 31 December 2014 was as follows:
No
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
Shareholder
REPUBLIC OF SERBIA
EBRD – London
IFC – Washington
RAIFFEISEN BANK – CASTODY ACCOUNT KOPER
EAST CAPITAL - BALKAN FUND– Luxembourg
BEOGRADSKA BANKA AD BEOGRAD U STEČAJU Beograd
METALAC AD – G. Milanovac
ORGANIC FOODS, DRINKS – Bristol
MANDAT DOO - Beograd
JP ELEKTROSRBIJA KRALJEVO - Kraljevo
OTHERS
TOTAL:
Number of
shares
51,840
45,494
36,395
8,065
6,879
Share %
28.47%
24.98%
19.98%
4.43%
3.78%
5,951
3,044
2,941
2,334
1,518
17,521
181,982
3.27%
1.67%
1.61%
1.28%
0.83%
9.69%
100.00%
49
The structure of the Bank’s preference shareholders as of 31 December 2014 was as follows:
No
1.
2.
3.
4.
5.
6.
7.
8.
9.
Shareholder
SP Jugoprevoz DP u stečaju - Jagodina
Domis d.o.o - Čačak
Interfood d.o.o - Čačak
DP Enipeks u stečaju - Čačak
Lazović Zvonko - Čačak
BANCA INTESA – castody account, Beograd
Optikom d.o.o. - Čačak
Elektrovat – Enel d.o.o. - Čačak
Elektrovat d.o.o. - Beograd
TOTAL:
25.
OFF-BALANCE SHEET ITEMS
Number of
shares
44
29
18
16
12
11
2
1
1
134
Share %
32.84%
21.64%
13.43%
11.94%
8.96%
8.21%
1.49%
0.75%
0.74%
100.00%
RSD thousand
2014
2013
a) Transactions for and on behalf of third parties
b) Guarantees, sureties, collaterals and irrevocable
commitments
Guarantees:
In RSD
In foreign currency
Sureties and Acceptances:
In RSD
In foreign currency
Commitments and irrevocable commitments for undisbursed
loans and placements:
In RSD
In foreign currency
Total b)
c) Derivatives
d) Other off-balance sheet items
Calculated suspended interest
Other off-balance sheet items
321,422
300,450
3,264,729
586,601
3,851,330
3,364,835
765,440
4,130,275
1,772
1,772
12,942
12,942
675,011
675,011
4,528,113
-
882,846
882,846
5,026,063
1,384,923
2,738,965
41,411,308
44,150,273
1,952,976
4,307,122
6,260,098
48,999,808
12,971,534
50
As of 31 December 2014, transactions for and on behalf of third parties amounted to RSD
321,422 thousand. These assets for the major part refer to assets received from the Republic
of Serbia based on the participation in subsidies of housing loans, assets of the Ministry for
Agriculture used to finance registered agricultural land holdings, assets of Čačak Municipality
intended for financial support to individual farmers, as well as assets of legal entities intended
for long-term financing. Based on these operations, the Bank charges commission in the range
from 0.5% to 1% annually, except for the administration of the funds received from the
Government of the Republic of Serbia as participation in subsidies of housing loans.
In 2014, the amount of performance guarantees increased compared to 2013, while the
payment guarantees have decreased compared to 2013. As of 31 December 2014,
commitments refer to undisbursed loans and placements of corporate customers in the
amount of RSD 512,456 thousand, undisbursed loans and placements of retail customers in
the amount of RSD 146,435 thousand and undisbursed loans and placements of
entrepreneurs in the amount of RSD 16,120 thousand.
As of 31 December 2014, there is no balance at the Derivatives item, however, during the
year, the Bank used, in its operations, financial instruments meeting the criteria of the
definition of financial derivatives in accordance with IAS 39 ”Financial instruments Recognition and Measurement,” for which primary market variable is foreign exchange rate.
In 2014, other off-balance sheet items increased significantly compared to 2013, at which, in
accordance with International Financial Reporting Standards and the latest Chart of Accounts
for the Banks, all collaterals, for securing repayment, are registered. In respect to this, the
amount of RSD 37,153,107 thousand is registered at this item and it relates to appraised value
of collateral. In addition, other off-balance sheet items include receivables for suspended
interest in the amount of RSD 2,738,965 thousand, Republic of Serbia savings bonds in the
amount of RSD 1,376,463 thousand, as well as commitments for credit lines and placements
in the amount of RSD 2,715,558 thousand.
51
26.
RELATED PARTY TRANSACTIONS
The following table represents total balance sheet exposure to related parties that may have
an impact on the Bank’s operations:
RSD thousand
31 December 2014
31 December 2013
Loans and advances and other placements
Republic of Serbia
364,905
824,560
RVM d.o.o. Kraljevo
58,753
82,353
TRC Pro d.o.o. Petrovaradin
10,800
Agrohemija d.o.o. Čačak
8,867
13,068
Apoteka Iva, Čačak
2,503
771
Animalis d.o.o. Aranđelovac
1,704
1,226
Jewelry by Jelena Jevtić, Čačak
1,208
Dekorateks STKR, Čačak
397
279
Retail customers
116,437
112,130
565,574
1,034,387
31 December 2014
RSD thousand
31 December 2013
7,722
4,663
732
340
68
32
26
11
5
2,130
2,983
19
13
45
11
3
13,599
5,204
Interest liabilities and other liabilities
EBRD
IFC
247,797
259,696
391,448
410,204
507,493
801,652
Deposits
RVM d.o.o. Kraljevo
Simit ML, RES, Dragomir Gavrilović, Čačak
Dekorateks STKR, Čačak
Vodopromet d.o.o. Čačak
Retail customers
52
31 December 2014
RSD thousand
31 December 2013
4,254
780
360
239
212
11
7,759
5193
667
229
177
35
9,206
13,615
15,507
31 December 2014
RSD thousand
31 December 2013
16,378
22,682
14,090
189
37
15
3
3
1
4,555
20,597
90
66
5,942
35,271
49,377
Interest and fee income – related parties
RVM d.o.o. Kraljevo
PD Banprom d.o.o. Pirot
Retail customers
TOTAL
Interest and fee expenses – related
parties
International Finance Corporation
European Bank For Reconstruction And
Development
RVM d.o.o. Kraljevo
PD Banprom d.o.o. Pirot
Retail customers
TOTAL
26.
RELATED PARTY TRANSACTIONS-continued
Gross and net remunerations to the Chairman and members of the Board of Directors and the
Executive Board in 2014 and 2013 were as follows:
Gross remunerations
Executive Board Chairman
Other Executive Board members
2014
8,999
14,201
RSD thousand
2013
8,654
13,641
Total
23,200
22,295
Executive Board Chairman
Other Executive Board members
2014
7,376
11,335
RSD thousand
2013
7,048
10,819
Total
18,711
17,867
Net remunerations
53
Gross remunerations
Chairman of the Board of Directors
Other members of the Board of Directors
2014
1,395
8,371
RSD thousand
2013
1,308
7,273
Total
9,766
8,581
Chairman of the Board of Directors
Other members of the Board of Directors
2014
894
5,684
RSD thousand
2013
854
5,036
Total
6,578
5,890
Net remunerations
27.
FOREIGN CURRENCY POSITION
OPERATING ASSETS
-summary line items1
Pledged financial assets
Financial assets at FVTPL held for
trading
Financial assets initially carried at fair
value through profit and loss
Loans and receivables from banks and
Loans and receivables from customers
Changes in fair value of hedging items
Receivables from hedging financial
derivatives
Investments in associates and joint
ventures
Investments in subsidiaries
Intangible assets
Property, plants and equipment
Investment property
Current tax assets
Deferred tax assets
Non-current assets held for sale and
discontinued operations
Other assets
Foreign currency items in RSD
USD
2
13,867
-
EUR
Other
3
4
3,700,184 81,692
-
RSD
Total
items
5=2+3+4
6
3,795,743 1,696,233
-
Total
7=5+6
5,491,976
-
-
259,716
-
259,716
22,089
281,805
-
-
-
-
37,343
-
37,343
-
293,142
1,371,172 127,423 1,791,737 1,007,449
- 16,216,352
- 16,216,352 5,973,238
-
2,799,186
22,189,590
-
-
-
-
-
-
-
-
-
-
-
45,611
626,270
133,789
60,049
45,611
626,270
133,789
60,049
214
12,277
47
12,538
97,362
307,223 21,559,701 209,162 22,076,086 9,699,433
109,900
31,775,519
54
OPERATING LIABILITIES
Foreign currency items in RSD
USD
EUR
Other
Total
-summary line items1
2
3
4
5=2+3+4
Financial liabilities at FVTPL held for
trading
Financial liabilities initially carried at fair
value through profit and loss
Liabilities based on hedging derivative
instruments
central bank
- 1,767,720
1,767,720
customers
307,659 18,506,030 151,592 18,956,281
Changes in fair value of hedging items
Issued own securities and other
borrowings
Subordinated debts
- 1,841,943
1,841,943
Provisions
Liabilities under non-current assets held
for sale and discontinued operations
Currant tax liabilities
Deferred tax liabilities
Other liabilities
41
20,045
20
20,106
Shares capital
Own shares
Profit
Losses
Reserves
Unrealized losses
Equity investments without the right to
control
307,700 22,135,738 151,612 22,595,050
NET FOREIGN CURRENCY POSITION
2014
2013
(477)
(429)
(576,037)
393,916
57,550
54,026
(518,964)
447,513
RSD
items
6
Total
7=5+6
-
-
-
-
-
-
-
1,767,720
4,224,762
-
23,190,043
-
55,605
1,841,943
55,605
182,545
3,048,483
4,239
(275,654)
1,940,489
-
202,651
3,048,483
4,239
(275,654)
1,940,489
-
9,180,469
31,775,519
518,964
(447,513)
-
55
28.
SEGMENT OPERATIONS
For the year ended 31 December 2014
Investment
banking and
Retail
Corporate
interbank
operations
operations operations
External income
596,029
1,659,475
240,684
External expenses
189,313
129,896
433,798
Income from other sources
13,905
32,678
19,489
Expenses from other sources
8,563
935,136
18,716
Result by segments
412,058
627,121
(192,341)
508,117
548,143
(96,059)
78,978
(192,341)
Net gains from recognition of
deferred tax assets and
derecognition of deferred tax
liabilities
Profit/Loss
(96,059)
78,978
(192,341)
Assets by segments
Liabilities by segments
Other items by segments
Capital investment
Amortization and Depreciation
3,925,035
8,041,426
21,545,203
8,491,598
-
64,474
75,900
Other
25,764
25,764
93,036
(67,272)
Total
2,521,952
753,007
66,072
962,415
872,602
1,149,296
(276,694)
1,040
(66,232)
1,040
(275,654)
3,591,973 2,713,308 31,775,519
10,353,282 171,656 27,057,962
-
26,986
17,136
91,460
93,036
For the year ended 31 December 2013
Investment
banking and
Retail Corporate
interbank
operations operations
operations
Other
Total
External income
585,104
1,787,181
285,377
- 2,657,662
External expenses
238,350
390,134
303,761
932,245
Income from other sources
18,763
42,104
26,528
87,395
Expenses from other sources
85,235
623,205
91,865
800,305
Result by segments
280,282
815,946
(83,721)
- 1,012,507
492,672
550,357
95,763 1,138,792
(212,390)
265,589
(83,721) (95,763) (126,285)
Net gains from recognition of
deferred tax assets and
derecognition of deferred tax
liabilities
39,366
39,366
Profit/Loss
(212,390)
265,589
(83,721) (56,397)
(86,919)
Assets by segments
3,583,481 17,909,009
9,517,443 2,780,179 33,790,112
Liabilities by segments
7,281,061
8,695,630
12,621,311 201,385 28,799,387
Other items by segments
Capital investment
59,744
20,391
80,135
Amortization and Depreciation
83,273
3,455
9,035
95,763
56
29.
RISK MANAGEMENT
In accordance with the Law on Banks and the Decision on Risk Management by Banks
issued by the National Bank of Serbia, in Čačanska banka a.d. Čačak (hereinafter: the
“Bank”) the risks to which the Bank is exposed in its operations are as follows:
• Liquidity risk;
• Credit risk, including residual risk, receivables impairment risk, settlement / delivery
risk, counterparty risk and credit - foreign currency risk;
• Interest rate risk;
• Foreign currency risk and other market risks;
• Concentration risk
• Risks of investment in other legal entities and of capital expenditures;
• Risks relating the country of origin of the Bank’s counterparty;
• Operational risk, including legal risk;
• Risk of inadequate information system management;
• Strategic risk;
• Regulatory compliance risk, which encompasses risk of sanctions by the regulatory
authority, risk of financial losses and reputational risk;
• Environmental risk.
The Bank’s objectives in respect of risk management, set by risk management system, are to
minimize exposure to all these risks and their potential adverse impact on result and equity,
with respect to defined limits of acceptable risk level and maintaining acceptable capital
adequacy level.
The Bank’s risk management system includes the following:
- Risk management strategies and policies, as well as procedures and guidelines for
identification, measurement, assessment and risk management;
- Internal organization i.e. organizational structure ensuring that the risk management and
supporting activities are functionally and organizationally separated from risk-taking
activities , with clearly defined employee responsibilities, thus preventing conflicts of
interest;
- Effective and efficient risk management process that includes mitigation, monitoring and
control of risks to which the Bank is exposed or may be exposed;
- Internal control system as a set of processes and procedures in place to adequately
control risk, monitoring operations effectiveness and efficiency, reliability of financial and
other Bank’s data and information, as well as their compliance with regulations and
internal procedures and policies, in order to provide operations security and stability;
- Appropriate information system.
The Board of Directors is responsible for establishing complete management system in the
Bank and for monitoring such system. The Board of Directors is required to ensure that the
Executive Board identifies risks to which the Bank is exposed, as well as to monitor these risks
in accordance with the adopted policies and procedures.
The Executive Board is responsible for the implementation process of risk management
strategies and policies established by the Board of Directors, establishing procedures and
guidelines for identifying, assessing, measuring and managing risk, analyzing the
effectiveness of their implementation, and reporting to the Board of Directors regarding
aforementioned activities. Audit Board is responsible for continuous monitoring of application
of risk management policies and procedures and implementing internal control system.
57
The ALCO is responsible for monitoring the Bank's exposure to risks arising from the structure
of its balance sheet assets and liabilities and off-balance sheet items, and proposing measures
for risk management.
The Liquidity Committee considers the Bank’s exposure to liquidity risk on a daily basis and
suggests activities regarding engaging and acquiring funds, bearing in mind the established
liquidity goals.
Responsible credit committees decide on loans approval and issuing other placements, as
well as altering the terms of aforementioned placements.
The committee for monitoring and collection of potential NPLs, NPLs and disputable loans
considers and adopts proposals for resolving settlement of potentially problematic and
doubtful receivables, gives suggestions to the Executive Board on closing-out of court
settlement agreements and full and partial write-off of problematic and disputable receivables.
The IT Committee reviews and approves IT standards and policies, reports by regulatory and
independent controls and gives suggestions to the Executive board regarding implementation
of new IT technologies.
29.1
Credit risk
Credit risk management
Credit risk is the risk of negative effects on the financial result and capital of the Bank that may
arise as a result of the debtor's failure to meet its obligations toward the Bank. Effects of this
risk are measured by the Bank’s expenses arising from default on contracted obligations.
The following are responsible for credit risk management in the Bank:
• The Board of Directors adopts the Credit risk management policy;
• The Executive Board implements the adopted policy and determines procedures and
instructions for risk management;
• ALCO monitors the Bank’s exposure to credit risk and proposes appropriate measures
for managing this risk;
• Bank’s Credit Committees approve individual placements;
• Committee for monitoring and collection of potential NPLs, NPLs and disputable loans;
• Risk management department that assesses clients’ credit risk and observes the credit
portfolio quality.
According to decisions of the Bank’s Board of Directors and the Executive Board, the following
Credit committees have been formed:
•
•
•
•
The Credit Committee of Čačanska banka a.d. Čačak;
The Credit Committee for exposures up to EUR 200,000;
Credit Committees in branches and
Credit Committee in Čačak 1 sub-branch and Čačak 2 sub-branch.
The Credit Committee of Čačanska Banka a.d. Čačak makes decisions on approving
placements to legal entities and private individuals when the Bank's total exposure to one
party or a group of related parties exceeds EUR 200,000 including the requested placement.
58
The Credit Committee for exposures up to EUR 200,000 makes decisions on approving
placements to legal entities and private individuals when the Bank's total exposure to one
party or a group of related parties, including the requested placement does not exceed EUR
200,000.
Credit Committees in branches make decisions on approving placements to legal entities and
private individuals when the Bank's total exposure to one party or a group of related a party,
including the requested investment, does not exceed EUR 20,000 and EUR 40,000
respectively.
Credit Committees in Čačak 1 and Čačak 2 Sub-Branches make decisions on approving
placement to individuals when the Bank's exposure to single party or a group of related parties,
including the requested investment, does not exceed EUR 10,000.
The assessment of credit risk exposure is made in the Risk management department,
Treasury department, Corporate clients department, Offering and marketing department and
Branch network department.
In Treasury department, Corporate clients department, Offering and marketing department
and Branch network department credit risk exposure is assessed in the process of client’s
loan application analysis.
Credit risk exposure is identified, controlled and monitored on individual client basis in the
Credit analyses department and Placements management department through solvency
analysis and collateral quality assessment.
Valuation of collateral and collateral management is performed by the Collateral management
department.
Identification, control and credit risk monitoring on portfolio basis are performed by Portfolio
management and reporting department through assembling and analyzing the Bank’s portfolio
report, classification of balance sheet assets and off-balance sheet items, calculation and
recording of reserves for potential losses, calculation of allowances for impairment and
provisions, control of balance sheet assets and off-balance sheet items quality.
29.1.2 Financial assets, financial liabilities and off-balance sheet items analysis
The Bank’s financial assets and financial liabilities have been presented in the following tables
as of 31 December 2014 and 31 December 2013:
• By Balance sheet items, in net amount;
• By credit risk exposure, in gross amount;
• By impairment, in gross and net amount;
• By internal categories in accordance with IFRS, in gross and net amount;
• By fair value of collaterals, in gross amount;
• By LTV ratio for financial assets secured by mortgage;
• By delays in payment intervals, in gross and net amount;
• By industry sector, in gross and net amount;
• By regions, in net amount;
• By fair value;
59
•
Overview of restructured financial assets.
Financial assets, financial liabilities and off-balance sheet items structure
Financial assets, financial liabilities and off-balance sheet items have been presented in the
following overview in the net amount. Loans and receivables from banks and other financial
institutions and Loans and receivables from customers have been reduced for the amount of
collected, but not yet recognized as income, fees for loan servicing expenses, which are taken
into account when effective interest rate is calculated in the process of loan approval and latter
recognized within interest income by applying effective interest rate method, as well as for the
impairment. The Bank does not have accrued fees arising from servicing expenses (effective
interest rate) for off-balance sheet items, for the fees are later proportionally accrued, therefore
off-balance sheet items are presented in net amount i.e. gross amount is reduced by
provisions.
Loans and receivables from customers increased as of 31 December 2014 compared to 31
December 2013 in the amount of RSD 409,614 thousand and loans and receivables from
banks and other financial institutions decreased in the amount of RSD 731,317 thousand.
As of 31 December 2014, cash, cash equivalents and balances with central bank decreased
by RSD 1,049,464 thousand compared to 31 December 2013 and financial assets at fair value
through profit and loss held for trading have decreased by RSD 521,844 thousand in the same
period.
On both observed dates the Bank does not own financial assets initially carried at fair value
through profit and loss, nor any financial assets held-to-maturity.
As of 31 December 2014, deposits and other liabilities due to banks, other financial institutions
and central bank have decreased by RSD 980,266 thousand, deposits and other liabilities due
to customers decreased by RSD 910,579 thousand, however subordinated debts has
increased by RSD 101,680 thousand, due to growth in EUR exchange rate compared to dinar.
60
FINANCIAL ASSETS AND FINANCIAL LIABILITIES (net amount, RSD thousand)
Financial assets
Cash, cash equivalents and balances with central bank
Financial assets at FVTPL held for trading
Financial assets initially carried at fair value through profit and
loss
Loans and receivables from banks and other financial institutions
Other assets
Financial liabilities at FVTPL held for trading
Deposits and other liabilities due to banks, other financial
institutions and central bank
Deposits and other liabilities due to customers
Subordinated debts
Other liabilities
31 December 31 December
2014
2013
30,891,336
32,874,823
5,491,976
6,541,440
281,805
803,689
37,343
2,799,186
22,189,590
91,436
26,866,736
-
3,530,503
21,779,976
219,215
28,639,553
131
1,767,720
2,747,986
23,190,043
24,100,622
1,841,943
1,740,263
67,030
50,551
2014
2013
Off-balance sheet items (Net amount)
7,331,041
7,676,093
Guarantees and letters of credit
3,852,310
4,079,265
Public sector
Large corporate customers
374,022
685,119
Medium, small and micro corporate customers and entrepreneurs
3,474,500
3,392,426
Retail customers
1,814
1,720
Other customers
1,974
2014
2013
Undisbursed liabilities
3,478,731
3,596,828
Public sector
275,142
368,955
Medium, small and micro corporate customers and entrepreneurs
3,034,705
2,990,939
Retail customers
165,096
223,737
Other customers
3,788
13,197
Other liabilities
-
-
Gross credit risk exposure
Gross credit risk exposure for loans and receivables from customers increased as of 31
December 2014 compared to 31 December 2013 in the amount of RSD 1,119,970 thousand,
for loans and receivables from banks and other financial institutions decreased in the amount
of RSD 738,212 thousand, and for financial assets at FVTPL held for trading decreased in the
61
In the gross amount of loans and receivables from customers, the greatest relative increase
relates to the public sector (although it still does not have significant share in total loans) by
283.30% and large corporate customers by 26.50%. Gross loans to medium, small and micro
corporate customers and entrepreneurs have increased by 8.46%, to retail customers by
8.32%, however loans to other customers have decreased by 25.36%.
Credit risk - gross exposure (RSD thousand)
Financial assets
Financial assets at FVTPL held for trading
Financial assets initially carried at fair value
through profit and loss
Loans and receivables from banks and other
Comprising:
Public sector
Medium, small and micro corporate customers and
entrepreneurs
Retail customers
Other customers
Other assets
31 December
2014 31 December 2013
29,523,158
29,618,701
281,805
803,689
37,510
-
-
2,799,199
26,269,845
3,537,410
25,022,911
185,669
1,003,882
48,439
793,551
18,738,243
3,823,645
2,518,407
134,799
17,276,833
3,529,879
3,374,209
254,691
Gross exposure to credit risk due to guarantees and letters of credit has decreased as of 31
December 2014 compared to 31 December 2013 by RSD 290,114 thousand, whereby there
have been no significant changes by sectors, except for the public sector, which decreased
by RSD 335,277 thousand ie. 47.26%.
Undisbursed liabilities decreased as of 31 December 2014 compared to 31 December 2013
by RSD 117,413 thousand ie. 3.26%, whereby undisbursed liabilities of large corporate
customers decreased by 25.42%, undisbursed liabilities of medium, small and micro corporate
customers and entrepreneurs have increased by 1.48% and undisbursed liabilities to retail
customers have decreased by 26.21%.
62
Gross exposure by off-balance sheet items (RSD thousand)
Off-balance sheet items (gross amount)
Guarantees and letters of credit
Public sector
entrepreneurs
Retail customers
Other customers
Undisbursed liabilities
Public sector
entrepreneurs
Retail customers
Other customers
Other liabilities
31 December
2014
7,334,092
3,853,102
374,178
3,475,136
1,814
1,974
3,480,990
275,209
3,036,881
165,098
3,802
-
31 December
2013
7,741,619
4,143,216
709,455
3,432,041
1,720
3,598,403
368,992
2,992,469
223,741
13,201
-
Financial assets by impairment
Individual assessment
In accordance with IFRS 39, the Bank first assess if there is objective evidence of impairment
(“circumstances leading to loss”) of an individual financial asset, or group assessment of nonmaterial financial assets will be performed. Financial assets which exceed set limits or bear
special risk related to client/transaction (e.g. industry sector concentration, rating categories,
delay status, loan type, client’s risk, etc.) are considered to be individually significant.
Based on the Bank’s internal Methodology for calculation of impairment and provisions in
accordance with IFRS (further: The Methodology), each financial asset amounting to over
RSD 2,500 thousand is considered to be significant, and therefore, for those assets, objective
circumstances for the individual assessment of impairment are analyzed. The Methodology
further specifies that for each financial asset, no matter if it is individually material or not, which
is in delay, individual assessment is performed.
Objective evidence of impairment of financial asset include following circumstances, which
could cause losses:
1) The Debtor is in delay by any materially significant liability due to the Bank;
2) If there are other circumstances that could cause loss, no matter the possibility of
collection by recognizing the collateral, and especially:
 Corporate customers Suspense of interest in accordance with the Bank’s
internal regulations;
 Partial or total impairment of receivable;
 Restructuring of receivable due to aggravation of the debtors financial
position, including reduction of principal or repayment period prolongation for
principal, interest or fees;
 Bankruptcy or liquidation of the debtor.
63
Materially significant amount is the amount which exceeds 1% of single receivable which client
is due to the Bank, but not less than RSD 1,000 for retail customers i.e. RSD 10,000 for
corporate customers. Therefore, receivables in delay include only materially significant
amounts.
The Bank determines and reports default status of corporate customers on the basis of
individual debtor and for all receivables from that debtor. Default status of debtors, who are
entrepreneurs, agricultural households and private individuals, the Bank determines and
reports on the basis of single receivable.
Definition of default, in repayment of liabilities to the Bank, depends on the type of
corresponding financial asset. For this purpose, financial assets are divided into four portfolios:
 Retail customers;
 Corporate customers;
 Banks and other financial institutions;
 Public sector (Government).
Default definition:
For financial assets having retail customers as debtors, there has been a default if:
 Single receivable from customer is overdue for more than 90 days, as of reporting day;
 There are other circumstance that could cause loss.
Due to uniqueness of the product, it is considered that the granted loans is in default, if it is
overdue for more than 60 days. Those transactions are to be considered in default, when the
client breaches current account limit or has been noticed that limit is less than current debt.
For corporate customers to be in default, at least one of the following conditions must be met:
 The client is overdue for more than 90 days, whereby delay by all currently existing
receivables from the client is taken into account;
For entrepreneurs and agricultural households to be in default, at least one of the following
conditions must be met:
 Single receivable from customer is overdue for more than 90 days, as of reporting day;
Granted loans (Overdrafts) are considered to be in default if the client breaches current
account limit or there is unsettled amount, after the granted loan has become due.
There is default in repayment of bank, if:
 Bank is late in its payments (even for 1 day);
For the impairment purposes, it is considered that placements to public sector (Government)
have probability of default (PD) equal to 0. Therefore, it is believed that Government cannot
be in default in the repayment of its liabilities and there is no need for impairment.
64
Individual assessment process comprises two phases:
- Identification of circumstances which could cause loss;
- Assessment of individual cash flow for impairment purposes.
Individual assessment is performed based on cash flows, depending on:
- Number of days overdue;
- Repayment dynamic in the previous period;
- Collateral quality;
- Concluded protocols, related to repayment of receivables, agreements (eg. Suritie
agreement, Debt assumption agreement).
Impairment is formed as a difference between the net present value of receivable and
discounted net cash inflows, by discounting future cash flows to it’s net present value.
For the calculated impairment of financial assets, the Bank recognizes an expense in the
Statement of profit and loss and corresponding allowances for impairment, while for the
calculated probable loss on off-balance sheet items the Bank recognizes expense and
corresponding provisions.
Group assessment
It the Bank determines that there is no objective evidence of impairment for the Corporate
client or individual financial asset of an entrepreneur, agricultural household or private
individual, each financial assets for which there is no objective evidence of impairment, are
included in the group of receivables with similar credit risk characteristics and impairment is
assessed for the group as a whole. The Bank forms allowances for impairment for financial
instruments, which are not in default, in the amount of share of the placement for which is
presumed that circumstances that could cause loss have occurred, but still have not been
objectively identified by the Bank.
For that purpose, for client/financial asset that are not in default, part of the placement, for
which it is assumed that after the loss identification period (LIP), it will become overdue in
repaying its liabilities, is identified. That way, based on the review of previous events,
allowances for impairment are determined based on assumptions that for the certain number
of placements, circumstances that represent probability of default in repayment have
happened, but have not yet been identified. Financial instruments, for which objective
evidence for individual impairment have arisen, are removed from the group and for them
individual assessment is performed.
Group assessment is performed by the related groups of clients, divided into groups in
accordance with Methodology, based on the classification category, regularity of repayments,
sector, type of product, type of collateral.
When performing group assessment, the impairment amount is equal to product of the
probability of scenario that causes loss, (PD*(1-RI)) and the loss amount (LA), that is:
Impairment Loss = PD * (1 – RI) * LA
Inputs:
PD – probability of default
RI - repayment indicator, which shows share (percent) of the transaction in default, which has
been realized naturally (without sale of collateral) during the given time period;
LA – Loss Amount, in the case of repayment,
65
In order to calculate RI, the Bank determines probability of return to no default group for all
groups that are in default, in 6 month time period.
Discount rates, which the Bank uses to discount market value to the amount used in the
calculation of impairment are defined in the collateral valuation procedure, however for the
purposes of calculation of impairment of pledged, debt and equity, securities, market value of
the security as of calculation date is applied. Allocation of collateral is performed in accordance
with instructions on collateral registration and allocation.
Impairment should be equal to the carrying amount of financial asset reduced by net present
value of estimated future cash flows, by presuming that it will enter in default and that it will be
collected through collateral. These cash flows should be comprised of estimated repayment
of principal and interest by client and collection from collateral, decreased by all expenses
arising from collection process. Present value of these cash flows is calculated by discounting
estimated cash flows by applying effective interest rate.
Total allowance for impairment for financial assets as of 31 December 2014 amounts RSD
4,123,798 thousand (31 December 2013: RSD 3,285,317 thousand), therefore it increased by
RSD 838,481 thousand compared to 31 December 2014 i.e. by 26.03%.
Because of the increase in default of clients for which impairment is assessed individually,
transfer of certain clients from group to individual assessment of impairment and prolonging
periods of collection, arising from sale of business property, in cash flows used in the
impairment calculation from three to four years, individual impairment increased by RSD
728,925 thousand, i.e. by 22.63%.
Transfer of clients from group to individual assessment of impairment did not lead to decrease
of group impairment, for the Bank severed assumptions used for the group impairment, that
is, beside prolongation of period of collection, arising from sale of business property, from
three to four years, the sample, which represents basis for repayment indicator in the group
assessment (RI) calculation, has been widened, by including group A7 in addition to group A6
in RI calculation for all legal entities, as well as group
A6 in addition to group A5 for
private individuals, agricultural households and entrepreneurs. The result is increase of group
impairment in the amount of RSD 109,556 thousand, i.e. 69.54%.
Overview of financial assets by impairment (RSD thousand)
Undue and unimpaired
Due, unimpaired
Impaired
Total gross amount
Group impairment
Total impairment
Total net amount
31 December 2014 31 December 2013
27,691,056
29,585,580
271,850
542,881
7,052,228
6,031,679
35,015,134
36,160,140
174,175
64,619
3,949,623
3,220,698
4,123,798
3,285,317
30,891,336
32,874,823
66
Financial assets by IFRS categories
The following overview presents financial assets used for impairment calculation in
accordance with IFRS. During 2014, the gross and net amount of financial assets without
category – not to be classified, has decreased (by RSD 1,035,652 thousand and RSD
1,275,832 thousand, respectively), due to reduction of receivables from the Government and
the National Bank of Serbia. The difference between gross and net amount of financial assets
without category, according to IFRS comes from calculation of impairment for subsidized
interest. The Bank has performed individual impairment for all receivables from the
Government (Ministry of Agriculture, Ministry of finance, Development fund) for subsidized
interest, which are in default.
The amount of financial assets classified in better categories – A1 and A2 according to IFRS,
has not been significantly changed during 2014. The amount classified in worse categories
A3, A4 and A5 has been decreased by RSD 585,313 thousand due to default increase and
transfer to the worst categories, A6 and A7, for which gross amount increased by RSD
1,053,243 thousand during the year (the increase of financial assets in this category has been
reduced due to collection of non-performing loans during 2014 in the amount of RSD 354,822
thousand (RSD 325,661 thousand from corporate customers, RSD 29,161 thousand from
retail customers).
Net amount of A6 and A7 categories has increased, significantly less than the gross amount,
by RSD 324,318 thousand, due to significant increase of impairment for clients within A6 and
A7 categories.
The share of specific categories of gross and net amounts of financial assets in the total
amount of financial assets as of 31 December 2014 and 31 December 2013, is presented as
follows:
Overview of financial assets by categories in accordance with IFRS Impairment
calculation methodology (RSD thousand)
Categories
A0 - no category
Categories A1 and A2
Categories A3, A4, A5
Total
31 December 2014
31 December 2013
Gross
Net
Gross
Net
exposure
exposure exposure
exposure
6,768,335
6,710,774
7,803,987
7,986,606
19,816,537
19,784,071
20,393,821
20,259,178
1,509,628
1,425,480
2,094,941
1,982,346
6,920,634
2,971,011
5,867,391
2,646,693
35,015,134
30,891,336
36,160,140
32,874,823
Share of specific IFRS categories in the total amount of financial assets presented as percent
is as follows:
Categories
A0 - no category
Categories A3, A4, A5
Total
31 December 2014
Gross
Net
19.34%
21.72%
56.59%
64.05%
4.31%
4.61%
19.76%
9.62%
100%
100%
31 December 2013
Gross
Net
21.58%
24.29%
56.40%
61.63%
5.79%
6.03%
16.23%
8.05%
100%
100%
67
Fair value of collaterals
Fair value of collaterals is presented in the following overview by estimated market value, but
only to the amount of receivable it secures. This is valid for mortgages, pledges, deposits and
guarantees by debtors.
Coverage of financial assets in total by collaterals valued this way as of 31 December 2014
amounts 49.86%. Coverage of individually secured gross financial assets is 74.41%, while
coverage with only mortgage is 69.38%. Coverage of due, but not impaired financial assets
by the collaterals in total, amounts 41.18%, and by mortgage 31.34%. Coverage of undue and
unimpaired financial assets by the collaterals in total, amounts 43.70%, and by mortgage
37.23%.
Assessment of collaterals fair value by placements as of 31 December 2014 (RSD
thousand)
Gross
assets
Mortgages
35,015,134 15,584,049
7,052,228 5,188,602
271,850
85,223
27,691,056 10,310,224
Financial assets
Individually impaired
Due, unimpaired
Undue, unimpaired
Pledges
Deposits
1,026,201
506,133
50,579
1,410
15,976
8,334
959,646
496,389
Other
343,830
6,885
2,418
334,527
Assessment of collaterals fair value by placements as of 31 December 2013 (RSD
thousand)
Gross
assets
Mortgages
36,160,140 14,431,738
6,031,679 4,272,946
542,881
146,179
29,585,580 10,012,613
Financial assets
Due, unimpaired
Undue, unimpaired
Pledges
Deposits
1,084,968
870,013
81,674
2,348
23,641
8,149
979,653
859,516
Other
390,922
5,894
2,673
382,355
LTV ratio
In financial assets secured by mortgage, the largest share (41.95%) have mortgages with LTV
ratio under 50%, further mortgages with LTV ratio from 51% to 70% (27.06%), then mortgages
with LTV ratio from 71% to 90% having share of 18.10%, mortgages with LTV ratio from 91%
to 100% have share of 7.87% and mortgages with LTV ratio above 100% (which are
inadequate collateral) have participation of only 5.02%.
LTV ratio as of 31 December 2014 (RSD thousand)*
Under 50% 51%-70%
Financial assets secured by
mortgage
Due, unimpaired
Undue, unimpaired
6,537,390
1,307,989
50,946
5,178,455
4,215,936
1,329,382
16,499
2,870,055
71%-90%
2,820,432
1,036,731
14,518
1,769,183
91%-100% Above 100%
1,226,467
940,031
1,924
284,512
783,824
574,469
1,336
208,019
*Ratio between loan amount as of 31 December 2014 and the market value of mortgaged
property applying exchange rate as of 31 December 2014
68
LTV ratio as of 31 December 2013 (RSD thousand)
Under 50% 51%-70%
Financial assets secured by
mortgage
Due, unimpaired
Undue, unimpaired
5,159,263
554,501
80,028
4,524,734
4,111,841
986,856
38,612
3,086,373
71%-90%
2,804,785
1,152,600
20,184
1,632,001
91%-100%
Above 100%
1,099,949
676,179
3,717
420,053
1,255,900
902,810
3,638
349,452
Financial assets by delay
As of 31 December 2014, share of financial assets with no delay in total financial assets
amounts 74.14%, in delay from 1 to 30 days 6.43%, in delay from 31 to 90 days 3.11%, in
delay from 91 to 180 days 0.75%, in delay from 181 to 365 days 1.03% and in delay for more
than 365 days 14.53% of financial assets in total.
Overview of financial assets by the intervals of delay (RSD thousand)
No delay
1-30 days
31-90 days
91-180 days
181-365 days
Over 356 days
Total
31 December 2014
31 December 2013
Gross
Net
Gross
Net
exposure
exposure exposure
exposure
25,961,397
25,709,753
26,746,935
26,700,805
2,253,406
2,167,261
2,819,913
2,788,187
1,090,413
973,579
910,822
794,582
262,879
186,946
702,654
553,626
359,329
242,071
1,131,964
686,406
5,087,710
1,611,726
3,847,852
1,351,217
35,015,134
30,891,336
36,160,140
32,874,823
Financial assets by industry sectors
The following overview presents financial assets structure by industry sectors, in gross and
net amount:
As of 31 December 2014, the largest share in gross amount of financial assets has processing
industry with 31.83%, than banks, other financial organizations and insurance with 23.21%,
than trade having share of 18.00%, retail customers with 10.96%, transportation and
warehousing, accommodation and food services, information and communication have share
of 6.12% and construction 3.65%.
Total balance and off-balance sheet exposures by specific industry sectors have been moving
within the internally determined limits:
69
Concentration of financial assets by industry sectors (RSD thousand)
Agriculture, forestry, fishing
Mining
Processing industry
Supply of electric energy, gas and
conditioning
Construction
Trade, repair of motor vehicles
and motorcycles
Transportation and warehousing,
accommodation and food
services, information and
communication
Real estate, professional,
scientific and technical activities,
activities, arts, entertainment and
recreation
Banks, financial organizations,
insurance
Retail customers
Other
31 December 2014
31 December 2013
Gross
Net
Gross
Net
exposure
exposure exposure
exposure
374,819
280,580
383,665
329,895
274,466
273,983
278,914
277,475
11,144,791
9,069,053 10,205,344
8,717,788
105
1,278,588
105
995,980
1,531
1,250,974
1,520
1,053,365
6,303,303
5,392,094
6,107,442
5,282,422
2,144,526
1,546,139
2,152,373
1,531,772
559,744
548,994
583,079
465,171
8,101,918 10,399,757
3,768,578
3,541,734
913,912
1,255,327
30,891,336 36,160,140
10,391,190
3,450,097
1,374,128
32,874,823
8,127,515
3,839,433
967,844
35,015,134
Concentration of off-balance sheet items by industry sectors (RSD thousand)
Agriculture, forestry, fishing
Mining
Processing industry
Supply of electric energy, gas and
conditioning
Construction
Trade, repair of motor vehicles and
motorcycles
Transportation and warehousing,
accommodation and food services,
information and communication
Real estate, professional, scientific
and technical activities, activities,
arts, entertainment and recreation
Banks, financial organizations,
insurance
Retail customers
Other
31 December 2014
31 December 2013
Gross
Net
Gross
Net
exposure
exposure exposure
exposure
56,912
56,878
48,595
48,571
10,000
10,000
2,799
2,799
2,448,993
2,447,791
3,092,430
3,027,943
1,391
1,934,698
1,391
1,934,456
1,021
1,498,989
1,021
1,498,847
1,832,598
1,831,444
2,150,270
2,149,613
544,935
544,658
482,883
482,741
267,120
267,007
163,898
163,834
6,442
166,912
64,091
7,334,092
6,439
166,910
64,067
7,331,041
38,416
225,461
36,857
7,741,619
38,414
225,457
36,853
7,676,093
70
Financial assets by regions
Financial assets by exposure to specific regions are presented in the following overview.
Debtors from Serbia have dominant share in total net exposure (94.25%). European Union
debtors are involved with 3.76%, debtors from USA and Canada with 0.16% and debtors from
other regions with 1.83%.
Concentration of financial assets by regions in net amount (RSD thousand)
Serbia
European Union
USA and Canada
Other
31 December
2014
31 December 2013
29,115,797
31,364,550
1,161,361
1,131,731
50,680
33,698
563,498
344,844
30,891,336
32,874,823
Loan rescheduling and restructuring
In 2014 the Bank has extended maturities of receivables according to National Bank of
Serbia’s Decision on Classification of Balance Sheet Assets and Off-Balance Sheet Items. For
these loans days of delay are calculated starting with the new agreed upon date of maturity
for all debtors who have met the requirements of above-mentioned Decision, while for debtors
who had not met these requirements, days of delay are calculated starting with the original
due date.
During the 2014 the Bank has restructured its receivables in accordance with the Decision on
Classification of Balance Sheet Assets and Off-Balance Sheet Items.
Restructured receivables are regulated by a contract that redefines the contractual relations
between the Bank and borrowers due to the borrowers’ financial difficulties in such a way that:
- It replaces all balance sheet receivables or a greater part of them,
- It significantly alters the terms under which the loan has been approved (extension of
principal and interest repayment period, lowering the interest rate or the amount to be
repaid, as well as other changes to relieve the debtor financial difficulties) and
- An adequate plan of financial consolidation is adopted for the debtor that is a legal entity,
while in the case of a debtor that is a private individual, the Bank carries out
creditworthiness analysis and determines whether the borrower is able to meet his
financial obligations within the following period and consequently makes an restructuring
agreement providing that the debtor states that he will not fall into debt further more.
During 2014, the repayment period has been prolonged for loans in the amount of RSD
824,284 thousand, that is for 32 clients (46 loans), from which 29 clients (42 loans) have met
the requirements for calculating days of delay with the new agreed upon date of maturity.
Overview of loans restructured during 2014 is presented as follows (in RSD thousand, by the
number of clients and loans):
Restructured
amount
1,041,757
Balance as of 31
December 2014
863,830
Client number
38
Restructured loan
number
52
71
As of 31 December 2014, the Bank has 68 clients with 89 restructured loans. Total gross
amount of restructured and impaired loans is RSD 1,526,186 thousand, and net amount is
RSD 1,134,638 thousand. For the clients who have been settling their liabilities regularly after
the restructuring or implementing reorganization plan, in accordance with regulations, the
Bank calculates days of delay with the new agreed upon date of maturity, while for the other
clients it calculates days of delay with the original due date.
Overview of total restructured and impaired loans
Gross exposure
in RSD
Allowances for Net exposure in Number of
31 December 2014 thousand
impairment
RSD thousand clients
A1
121
18
103
A2
A3
147
28
119
A4
55,132
10,765
44,367
A5
77,568
14,254
63,314
A6
27,690
8,596
19,094
A7
1,365,528
357,887
1,007,641
Balance as of 31
December
1,526,186
391,548
1,134,638
Number of
parties
1
1
4
3
30
29
1
2
6
4
30
46
68
89
Overview of total restructured and impaired loans
Net exposure
Gross exposure Allowances for in RSD
Number of
31 December 2013 in RSD thousand impairment
thousand
clients
A1
A2
8,625
903
7,722
A3
A4
A5
286,064
63,006
223,058
A6
219,496
41,277
178,219
A7
95,109
35,393
59,716
Balance as of 31
December
609,294
140,579
468,715
Number of
parties
1
4
20
10
1
10
26
12
35
49
Fair Value of assets and liabilities
The fair value which is stated in the financial statements is the amount for which an asset
could be exchanged, or a liability settled, between knowledgeable, willing parties in an
independent transaction.
The fair value is calculated by using market information available at the reporting date.
The fair value of a financial instrument shown at its nominal value is approximately equal to
it’s carrying amount. This includes cash, as well as receivables and liabilities without a defined
maturity or fixed interest rate. For other receivables and liabilities, expected cash flow is
discounted to their net present value by applying current interest rates. Regarding that the
variable interest rates have been agreed for the most of the Bank’s financial assets and
liabilities, changes in current interest rates lead to changes in the agreed rates.
72
Quoted market prices are used for securities held for trading. The fair value of other securities
is calculated as the net present value of expected future cash flows.
The fair value of irrevocable credit commitments and contingent liabilities is the same as their
carrying amount.
Fair value of assets and liabilities (RSD thousand)
31 December 2014
Financial assets at fair value
Financial assets at fair value through
profit and loss held for trading
Financial assets initially carried at
fair value through profit and loss
Financial assets held to maturity
Level 1
Level 2
Level 3
Total
281,805
-
-
281,805
37,343
-
-
-
37,343
-
803,689
-
-
803,689
-
-
-
-
31 December 2013
Financial assets at fair value through
profit and loss held for trading
Financial assets initially carried at
fair value through profit and loss
Financial instruments assessment
The Bank measures the fair value using the following fair value hierarchy that reflects the
significance of the inputs used in making the measurements:
•
•
•
Level 1: quoted market prices on active markets for identical assets or liabilities;
Level 2: valuation techniques based on directly or indirectly determined inputs, other the
level 1 quoted prices. Indirectly determined inputs are used for valuation of instruments,
based on quoted market prices on active markets, for similar instruments; stated prices for
same or similar instruments on less active markets; other valuation techniques in which all
significant inputs are, directly or indirectly, determined from market data;
Level 3: Valuation techniques that use significant undeterminable inputs. This category
includes all instruments for which the valuation technique includes inputs based on
determinable data and undeterminable inputs have significant effect on the instrument
valuation. This category includes instruments valued based on quoted prices of similar
instruments, for which significant invisible adjustments or assumptions are required to
reflect differences between the instruments.
Fair values of financial assets and financial liabilities traded in active markets are based on
quoted market prices or prices quoted by dealers. For all other financial instruments the Bank
determines fair value by using valuation techniques.
73
Valuation techniques include net present value and discounted cash flow models, comparing
to similar instruments for which there is visible market price and other evaluation models.
Assumptions and inputs used in valuation techniques include free from risk and benchmark
interest rates, credit margins and other premiums used in estimating discount rates, bond and
equity securities prices, foreign exchange rates, equity and equity-indexed prices and
expected price fluctuations and correlations. Aim of valuation techniques is to determine fair
value which reflects price of the financial instrument at the reporting date, which would be
defined by the market participants in free and independent transactions.
The Bank uses widely accepted models of valuation to determine the fair value of common
and simpler financial instruments, as interest rates and currency swaps, which use only visible
market data and require somewhat judgment and estimates by the management. Quoted
prices and inputs for the models are usually available on the market for quoted debt and equity
securities, derivatives traded and simple derivatives as interest rate swaps.
The availability of visible market prices and model inputs, reduces the need for management’s
estimates, and therefore reduces the uncertainty associated with the determination of fair
value. The availability of visible market prices and inputs varies depending on product and
market and it is prone to changes caused by specific events and general conditions on future
markets.
74
Financial assets and liabilities not carried at fair value (RSD thousand)
31 December 2014
Financial assets
Cash and cash equivalents
customers
Other assets
Financial liabilities at fair value
through profit and loss held for trading
central bank
customers
Subordinated debts
Other liabilities
31 December 2013
Financial assets
Cash and cash equivalents
customers
Other assets
through profit and loss held for trading
central bank
customers
Subordinated debts
Other liabilities
Level 1
Level 2
Level 3
Total
5,491,976
-
- 5,491,976
-
2,799,186
-
22,189,590
91,436
- 2,799,186
22,189,59
0
91,436
-
-
-
1,767,720
-
23,190,043
1,841,943
67,030
- 1,767,720
23,190,04
3
- 1,841,943
67,030
6,541,440
-
- 6,541,440
-
3,530,503
-
21,779,976
219,215
- 3,530,503
21,779,97
6
219,215
131
-
-
2,747,986
-
24,100,622
1,740,263
50,551
-
-
-
131
- 2,747,986
24,100,62
2
- 1,740,263
50,551
If possible, fair value of loans and receivables is based on determinable market transactions.
If determinable market transactions are not available, fair value is determined by discounting
cash flows to net present value. Inputs for valuation techniques include expected loan losses
through loan’s life time, interest rates, advances rates and original data and secondary market
data.
For impaired loans, fair value is based on the value of corresponding collateral or expected
cash inflows. Inputs also include the Bank’s data from all available sources from the real estate
arket and information from other markets, which includes visible primary and secondary
transactions.
75
For improvement of valuation of loans which are not in default, similar loans are grouped in
portfolio with similar characteristics and their assessment is based on payments in previous
periods, valuated collateral amount, collateral quality, type of product and debtor, standard
default probabilities.
Fair value of bank’s and client’s deposits is determined by discounting cash flows technic, by
applying rates offered for deposits with similar maturity and terms. Fair value of demand
deposits is the amount which would be paid as of reporting day.
Overview of financial assets and financial liabilities by fair value (RSD thousand)
31 December 2014
Financial assets
Cash, cash equivalents and
balances with central bank
through profit and loss held for
trading
Financial assets initially carried
at fair value through profit and
loss
Financial assets available for
sale
banks and other financial
institutions
customers
Other assets
At fair
value
Held to
maturity
Other
Total
amortized carrying
cost
amount
Available
for sale
Total fair
value
-
-
- 5,491,976 5,491,976 5,491,976
281,805
-
-
-
281,805
281,805
-
-
-
-
-
-
-
-
37,343
-
-
37,343
-
37,343
-
-
-
-
-
Deposits and other liabilities due
to banks, other financial
customers
Subordinated debts
Other liabilities
- 1,767,720
23,190,04
3
67,030
- 2,799,186 2,799,186 2,799,186
22,189,59 22,189,59 22,189,59
0
0
0
91,436
91,436
91,436
-
- 1,767,720 1,767,720
23,190,04 23,190,04
3
3
- 1,841,943 1,841,943 1,841,943
67,030
67,030
67,030
29.2. Capital and capital adequacy
The goal of the Bank’s management on capital adequacy ratio is to provide maintenance of
required capital level in order to support Bank’s development and growth of business activities.
Bank’s capital adequacy ratio represents the ratio between the capital and the Bank’s risk
assets. The Bank’s risk assets are equal to the sum of market risk weighted assets and the
capital requirement, related to foreign currency and operational risk multiplied by the reciprocal
value of the capital adequacy ratio.
76
The Bank’s capital is the sum of the core capital and additional capital decreased for capital
deductions, provided that the Bank is required to maintain its capital above the dinar equivalent
value of EUR 10,000,000.
The Bank calculates capital requirement for credit risk by applying standard approach, that is,
by multiplying total credit risk weighted assets by 12%. Credit risk weighted assets represent
the sum of gross balance sheet assets carrying amount decreased by allowances for
impairment and required reserve for potential losses, and gross off-balance sheet carrying
amount decreased by provisions and required reserve for potential losses, multiplied by
conversion factors.
Capital requirement for foreign exchange risk is calculated by multiplying net open foreign
currency position and the absolute value of net open position in gold by 12%. Total net open
foreign currency position represents the absolute value of the higher of, total long or total short
foreign currency position.
The Bank calculates capital requirement for operational risk by applying the basic indicator
approach which is equal to three-year’ average of exposure indicators multiplied with the
capital requirement rate of 15%.
Taking into consideration that the Bank does not reach the prescribed limits, it is not obliged,
apart from capital requirements for credit, foreign currency and operational risk, to calculate
and ensure coverage for capital requirements in connection with other market risks arising
from the items in the trading book.
As of 31 December 2014, capital and the capital adequacy ratio are calculated in accordance
with NBS’s regulations that comply with phased application of Basel standards.
The Bank’s capital adequacy ratio exceeds 12.81% and therefore exceeds the 12% minimum
prescribed by the NBS’s Decision on Capital Adequacy of Banks.
77
Capital and capital adequacy structure as of 31 December 2014 (RSD thousand)
No
1.
1.1
1.2
1.3
1.4
1.5
1.6
1.7
2.
2.1
2.2
2.3
2.4
3.
3.3.1
3.3.2
3.3.3
3.3.4
4.
5.
6.
7.
8.
9.
10.
Item
Core capital
Nominal value of paid shares excluding
preference cumulative shares
Share premium
Previous year loss
Current year loss
Intangible assets
Required reserves from profit for expected losses
Additional capital
Nominal value of paid preference cumulative
shares
Part of revaluation reserves
Subordinated debts
Amount of capital which exceeds additional
capital limit
Items deductible from capital
Deduction from core capital
Deduction from additional capital
Amount for which qualified investments in nonfinancial entities are exceeded
Required reserves from profit for expected losses
Total core capital
Total additional capital
TOTAL CAPITAL
Capital requirement for credit risk
Capital requirement for foreign currency risk
Capital requirement for market risk
CAPITAL ADEQUACY RATIO
31 December
2014
1,855,178
31 December
2013
3,379,878
1,819,820
1,227,323
1,631,156
275,654
45,611
2,501,856
1,188,954
1,819,820
1,227,323
1,710,785
86,919
35,762
1,255,369
1,733,181
1,340
260,025
1,088,625
1,340
267,016
1,467,419
161,036
6,229
3,114,5
3,114,5
1,261,598
1,261,598
630,799
630,799
6,229
1,852,064
1,185,839
3,037,903
2,530,434
52,097
263,110
12.81%
6,229
1,255,369
2,749,080
1,102,382
3,851,462
2,540,132
10,365
255,121
16.47%
78
29.3. Assets acquired through collection of receivables
Acquired assets portfolio as of 31 December 2014 (RSD thousand)
Acquired assets
Investment property
- Business premises, Čačak,
Gradsko šetalište bb, area
325,07 m2
- Residential space, Belgrade,
Prote Mateje 60-62, area
377,69 m2
- Business premises – Buffalo,
Čačak, Bate Jankovića bb,
area 52 m2
- Business premises, area
716m2 (two rooms), Bulevar
oslobođenja 17
Material assets acquired
through collection of
receivables
- Land class 2 – Šumadijadrvo, Kruševac, area 4,214 m2
- Business premises – Buffalo,
Čačak, Bulevar oslobođenja
17, area 350 m2
- Business premises, counter
room, area 48 m2, CM Šume,
Ivanjica
Acquisition
date
Net carrying amount
of acquired assets
31 December
2013
2014
124,163 130,408
30 November
2009
36,740
15 April 2011
84,851
26 December
2013
2,572
8 August 2014
-
11,705
28 November
2013
4,878
3 Jun 2013
6,827
26 December
2014
-
Coment
Business premises have
35,740 been rented.
Residential space has been
rented and currently it is in
82,512 the sale process.
Business premises have
been rented and as of 30
April 2014 recognized as
2,530 investment property.
Business premises, taken
from enforcement debtor
Tiffany Production, has
been recognized as
investment property as of 22
October 2014. The premises
9,626 have been rented.
4,866
2,694 The land is to be sold.
Material asset recognized to
the Bank’s fixed assets as of
- 25 Jun 2014.
- Business premises taken
from enforcement debtor,
“Mercury internacional” a.d.
2,172 Ivanjica
29.4. Liquidity risk
Liquidity risk is the risk of negative effects on the financial result and capital of the bank caused
by the bank's inability to meet its obligations as they fall due.
The purpose of liquidity risk management is maintaining the Bank’s liquid funds at the level
that ensures that the Bank is able to settle its liabilities as they fall due.
The Bank manages its assets and liabilities in such a way that meets its due liabilities (liquidity)
and to permanently meet all its liabilities (solvency).
79
Liquidity risk management is the responsibility of:
- The Board of Directors that adopts the Liquidity risk management policy and the Liquidity
crisis plan;
- The Executive Board that implements adopted policy and establishes the Procedure for
liquidity risk management;
- ALCO that monitors the Bank’s exposure to liquidity risk and propose appropriate
measures for managing liquidity risk;
- The Liquidity Committee establishes and monitors liquidity on a daily basis and takes
appropriate measures for the prevention or elimination of causes of illiquidity;
- The Risk Management department and The Treasury department monitors and
maintains liquidity on a daily basis.
Liquidity risk is measured in the Market, operational and other risk management department
by calculating the Liquidity ratio and Acid-test liquidity ratio, additional liquidity ratios, Deposit
concentration ratio, GAP analysis and stress tests.
Measuring exposure to liquidity risk is performed by observing wide and acid-test liquidity
ratios prescribed by the NBS Decision on Risk Management by Banks and the Procedure for
liquidity risk management. This ratio is the sum of first rate liquid receivables and second rate
liquid receivables on the one hand, and the sum of avista liabilities or liabilities without
contracted maturity and liabilities with contracted maturity within a month after the calculation
date, on the other hand. The Acid-test liquidity ratio is calculated as the ratio between the sum
of first rate liquid receivables, on the one hand, and sum of avista liabilities and liabilities
without contracted maturity and liabilities with contracted maturity within a month after the
calculation date, on the other hand.
Realized values of Liquidity ratio and Acid-test liquidity ratio
Liquidity ratio
2014
31 December
Average value
Maximal value
Minimal value
31 December
Average value
Maximal value
Minimal value
2013
2.79
2.71
3.61
1.80
Acid-test liquidity ratio
2014
2013
1.86
1.52
2.33
0.92
2.66
2.67
3.55
2.10
1.63
1.78
2.29
1.22
The Bank's liquidity was monitored also by liquid assets ratio as the ratio of liquid assets to
total assets.
80
Realized values of Liquid assets ratio
2014
31 December
23.93%
Average value
26.91%
Maximal value
31.35%
Minimal value
23.57%
2013
30.80%
30.57%
32.45%
28.03%
During 2014 the Bank also monitored liquidity risk through additional liquidity ratios prescribed
by the Procedure for liquidity risk management and according to covenants in agreements that
the Bank signed with international financial institutions. These ratios ranged within the limits
prescribed by the procedure and the limits agreed with international financial institutions.
In 2014 the Bank calculated the Deposit concentration ratio. The ratio decreased from 27.97%
at the beginning of the year to 20.00% at the end of the year, which is in accordance with the
Bank’s Business policy for 2014.
Monitoring the matching between maturities of assets and liabilities is of key importance for
monitoring and managing liquidity risk. Maturity matching and control of the maturity gap of
assets and liabilities are fundamental for the Bank's management. It is not unusual for banks
to have a maturity gap, because transactions are made for an unspecified period and are of
various types. Mismatched items may potentially increase profitability, but at the same time
they can increase risk of loss.
The following table shows assets and liabilities of the Bank by maturities from the balance
sheet date to contracted maturities:
81
31 December 2014
trading
loss
sale
institutions
customers
Other assets
Total financial assets
Trading liabilities
to customers
Subordinated debts
Other liabilities
Total financial liabilities
Maturity match / gap
Up to 30
days
30 to 90
days
90 to 365
days
1 to 5 years
Over 5
years
Total
5,491,976
-
-
-
-
5,491,976
-
-
150,615
109,101
22,089
281,805
-
-
-
-
-
-
-
-
-
-
37,343
-
37,343
-
1,808,401
761,803
265
-
228,717
2,799,186
2,089,159
58,116
9,447,652
-
235,366
997,169
-
1,262
177,984
8,683,417
782
8,685,461
762,191
3,795,038 11,161,963
3,945,918 11,271,064
-
1,460
916,048 5,507,677
1,094,032 5,509,137
(96,863) (1,563,219)
1,577,555
4,908,064 22,189,590
33,320
91,436
5,229,533 30,891,336
-
9,459
1,767,720
971,685 7,111,216 23,190,043
1,841,943
- 1,841,943
66,248
67,030
4,391,183 7,186,923 26,866,736
6,879,881 (1,957,390) 4,024,600
82
31 December 2013
trading
loss
sale
institutions
customers
Other assets
Trading liabilities
to customers
Subordinated debts
Other liabilities
Maturity match / gap
Up to 30
days
30 to 90
days
90 to 365
days
1 to 5 years
Over 5
years
Total
6,541,440
-
-
-
-
6,541,440
773,452
4,825
4,737
-
20,675
803,689
-
-
-
-
-
-
-
-
-
-
-
3,186,577
-
343,926
-
-
3,530,503
2,187,187
9,496
12,698,152
-
657,422
14,491
676,738
-
3,519,369
172,800
4,040,832
-
9,113,266
9,113,266
-
630,137
-
-
2,117,849
7,870,616 2,148,414 5,280,245
8,500,753 2,148,414 5,280,245
4,197,399 (1,471,676) (1,239,413)
6,302,732 21,779,976
22,428
219,215
6,345,835 32,874,823
-
-
2,747,986
695,702 8,105,645 24,100,622
1,740,263
- 1,740,263
50,551
50,551
4,553,814 8,156,196 28,639,422
4,559,452 (1,810,361) 4,235,401
29.5. Market risk (interest rate risk, foreign currency risk and risk of change in the
price of securities)
29.5.1 Interest rate risk
Interest rate risk is risk of negative effects on financial result and capital of the Bank caused
by changes in interest rates. The Bank is exposed to interest rate risk based on items in the
banking book.
The objective of managing interest rate risk is to minimize losses arising from changes in
market interest rates.
Interest rate risk management is responsibility of:
 The Board of Directors that adopts the Interest rate risk management policy;
 The Executive Board that implements adopted Policy and establishes the Procedure
for interest rate risk management;
 ALCO monitors the Bank’s exposure to interest rate risk and proposes appropriate
measures for risk management;
 Risk management department implements policy and procedures and reports to
Management regarding risk exposure.
 The Offering and Marketing department that daily monitors market interest rates and
proposes interest rates for the Bank’s products.
83
Interest rate risk is measured in Risk management department through measurements of
interest rate revaluation risk (repricing risk), base interest rate risk, yield curve risk and option
risk.
The following table gives overview of interest-bearing assets and liabilities by maturities for
the items with fixed interest rate and/or by the period of repricing for the items with variable
interest rate.
(RSD thousand)
Up to 30
days
30 to 90
days
90 to 365
days
1 to 5
years
31 December 2014
Cash, cash equivalents
and balances with central
bank
1,324,806
Financial assets at fair
value through profit and
loss held for trading
150,615
109,101
Financial assets initially
carried at fair value
Financial assets available
for sale
Financial assets held to
maturity
from banks and other
800,069
761,803
from customers
13,020,634
111,033 2,883,493 2,639,784
Other assets
15,145,509
872,836 3,034,108 2,748,885
Trading liabilities
Deposits and other
liabilities due to banks,
and central bank
177,984 1,579,015
Deposits and other
liabilities due to
customers
5,850,858 5,539,697 5,860,908 1,000,923
Subordinated debts
- 1,841,943
Other liabilities
Total financial liabilities 5,850,858 5,717,681 9,281,866 1,000,923
Nonbearing
interest
Over 5
years
Total
- 4,167,170
5,491,976
-
22,089
281,805
-
-
-
37,343
-
37,343
-
-
-
- 1,237,314
2,799,186
3,534,646
0 22,189,590
91,436
91,436
3,571,989 5,518,009 30,891,336
-
-
10,721
1,767,720
1,569,219 3,368,438 23,190,043
- 1,841,943
67,030
67,030
1,569,219 3,446,189 26,866,736
84
Up to 30
days
30 to 90
days
90 to 365
days
1 to 5
years
Over 5
years
Nonbearing
interest
31 December 2013
Total
Cash, cash equivalents
and balances with central
bank
1,284,050
- 5,257,390 6,541,440
Financial assets at fair
value through profit and
loss held for trading
803,689
32,328
750,685
20,676
Financial assets initially
carried at fair value
Financial assets available
for sale
Financial assets held to
maturity
from banks and other
2,000,416
343,926
- 1,186,161 3,530,503
from customers
13,796,642
383,799 2,627,853 2,563,534 2,408,148
- 21,779,976
Other assets
219,215
219,215
17,081,108
383,799 3,004,107 3,314,219 2,408,148 6,683,442 32,874,823
Trading liabilities
Deposits and other
liabilities due to banks,
and central bank
500,000
- 2,117,849
130,137 2,747,986
Deposits and other
liabilities due to
customers
3,861,926 7,193,386 5,286,162
652,789 1,540,364 5,565,995 24,100,622
Subordinated debts
- 1,740,263
- 1,740,263
50,551
Other liabilities
50,551
Total financial liabilities 4,361,926 7,193,386 9,144,274
652,789 1,540,364 5,746,683 28,639,422
Overview of interest sensitivity has been presented in the following table. Sensitivity is
measured as an effect of parallel movement of yield curve by 200 bps on the Bank’s capital
and income:
2014
31 December
Average value
Maximal value
Minimal value
Effect on capital
94,101
102,161
123,835
68,734
Effect on
income
65,403
66,784
70,405
64,487
(RSD thousand)
2013
Effect on
Effect on capital
income
89,516
72,684
135,865
80,942
214,909
87,367
89,516
72,078
29.5.2. Foreign currency risk
Foreign currency risk is the risk of negative effects on financial result and capital of the bank
caused by changes in foreign-exchange rates. The Bank is exposed to foreign currency risk
based on items in the banking book and trading book.
85
The aim of foreign currency risk management is to minimize losses arising from changes in
foreign-exchange rates.
Foreign currency risk management is the responsibility of:
- The Board of Directors that adopts the Policy for market risk management;
- The Executive Board that implements the adopted policy and establishes the Procedure
for foreign currency risk management;
- ALCO that monitors the Bank’s exposure to foreign currency risk and proposes
appropriate measures for risk management;
- The Risk management department and Treasury department monitor on daily basis and
manage currency structure of asset sources and placements.
Foreign currency risk is measured in the Market, operational and other risk management
department on the basis of the Foreign currency risk ratio, as a ratio of net open foreign
currency position to capital, pursuant to the Decision on Capital Adequacy of Banks and
Decision on Reporting Requirements for Banks by Banks issued by NBS and the Procedure
of foreign currency risk management.
Realized values of foreign currency risk ratio
2014
2013
31 December
14.29%
1.73%
Average value
4.94%
4.66%
Maximal value
14.80%
13.05%
Minimal value
1.13%
1.46%
Foreign currency risk, measured by foreign currency risk ratio, in 2014 was mostly in low risk
category. Average value of foreign currency risk ratio was 4.94%.
The following table presents a breakdown of open foreign currency positions by currencies as
of 31 December 2014.
86
Analysis of assets and liabilities by currencies
(RSD thousand)
31 December 2014
EUR
3,700,185
Financial assets at fair value through profit and loss held for trading
259,716
Financial assets initially carried at fair value through profit and loss
1,371,201
594,226
Other assets
35,411
5,960,739
Trading liabilities
Deposits and other liabilities due to banks, other financial institutions
and central bank
1,767,720
18,073,350
Subordinated debts
1,841,943
Other liabilities
21,742
21,704,755
Net position
(15,744,016)
Currency
clause
USD
13,867
293,142
214
307,223
-
CHF
37,014
106,613
10
143,637
-
Other
Total
44,678
- 3,795,744
259,716
37,343
37,343
20,810
- 1,791,766
- 15,690,358 16,284,584
36
35,671
65,524 15,727,701 22,204,824
-
RSD
1,696,232
22,089
1,007,420
5,905,006
55,765
8,686,512
-
Total
5,491,976
281,805
37,343
2,799,186
22,189,590
91,436
30,891,336
-
307,322
307,322
(99)
126,149
254
126,403
17,234
- 1,767,720
25,021
411,113 18,942,955
- 1,841,943
16
22,012
25,037
411,113 22,574,630
40,487 15,316,588 (369,806)
4,247,088
45,018
4,292,106
4,394,406
1,767,720
23,190,043
1,841,943
67,030
26,866,736
4,024,600
(RSD thousand)
31 December 2013
EUR
USD
4,478,911
54,377
Financial assets at fair value through profit and loss held for trading
776,121
Financial assets initially carried at fair value through profit and loss
1,171,856 148,030
952,066
Other assets
4,084
220
7,383,038 202,627
Trading liabilities
Deposits and other liabilities due to banks, other financial institutions
and central bank
2,247,986
19,545,982 217,604
Subordinated debts
1,740,263
Other liabilities
23,534,231 217,604
Net position
(16,151,193) (14,977)
Currency
clause
CHF
24,508
148,285
26
172,819
-
Other
Total
12,061
- 4,569,857
776,121
37,780
- 1,505,951
- 16,582,138 17,534,204
37
4,367
49,878 16,582,138 24,390,500
-
RSD
1,971,583
27,568
2,024,552
4,245,772
214,848
8,484,323
-
Total
6,541,440
803,689
3,530,503
21,779,976
219,215
32,874,823
-
153,560
153,560
19,259
- 2,247,986
15,112
502,340 20,434,598
- 1,740,263
15,112
502,340 24,422,847
34,766 16,079,798
(32,347)
500,000
3,666,024
50,551
4,216,575
4,267,748
2,747,986
24,100,622
1,740,263
50,551
28,639,422
4,235,401
87
Effects of changes in exchange rates by 15% on net foreign currency position as of 31 December 2014 and 31 December 2013 are presented
as follows. Items with currency clause have been presented within EUR position for placements in dinars and liabilities indexed in euros,
that is within USD position for placements in dinars and liabilities indexed in dollars.
(RSD thousand)
31 December 2014
Financial assets
Net position
EUR
21,681,724
22,115,863
(434,139)
EUR
+15%
24,933,983
25,433,242
(499,259)
EUR
-15%
18,429,465
18,798,484
(369,019)
USD
313,938
307,322
6,616
USD
+15%
361,029
353,420
7,609
USD
-15%
266,847
261,224
5,623
CHF
143,637
126,403
17,234
CHF
+15%
165,183
145,363
19,820
CHF
-15%
122,091
107,443
14,648
31 December 2013
Financial assets
Net position
EUR
23,950,504
24,036,571
(86,067)
EUR
+15%
27,543,080
27,642,057
(98,977)
EUR
-15%
20,357,928
20,431,085
(73,157)
USD
217,299
217,604
(305)
USD
+15%
249,894
250,245
(351)
USD
-15%
184,704
184,963
(259)
CHF
172,819
153,560
19,259
CHF
+15%
198,742
176,594
22,148
CHF
-15%
146,896
130,526
16,370
88
29.5.3. Risk of changes in securities prices
Risk of changes in securities prices is the risk of negative effects on the Bank’s financial result
due to changes in price of the securities in the Bank’s portfolio.
The aim of risk of changes in securities prices management is to minimize negative effects
arising from changes in prices of securities in the Bank’s portfolio.
Risk of changes in securities prices management is the responsibility of:
• Board of Directors, responsible for adopting the Securities portfolio management policy
and Market risk management policy;
• The Executive Board, which is responsible for implementation of the adopted policy;
• ALCO, which monitors the Bank’s exposure to risk of changes in securities prices and
proposing appropriate risk management measures and
• The Treasury department responsible for managing securities portfolio on a daily basis
and the Risk management department monitoring trends of positions from the trading
book and reports to the Bank’s management.
The Risk management department, on the basis of relevant sources of market information,
actively monitors values of securities owned by the Bank and controls their compliance with
internally prescribed limits.
Value of the Bank’s portfolio
(RSD thousand)
Shares – banks
Shares – other entities
Old savings bonds
Municipal bonds
Total
29.6
2014
2013
Market value
Cost
Market value
Cost
7,852
19,468
7,399
19,468
14,237
16,116
13,277
18,597
259,716
226,181
776,121
740,052
37,510
37,800
319,315
299,565
796,797
778,117
Operational risk
Operational risk is the risk of negative effects on financial result and the capital of the Bank
caused by omissions in employee work, inadequate internal procedures and processes,
inadequate information and other systems management as well as by unforeseeable external
events. Operational risk excludes reputational and strategic risk but includes legal risk.
The following bodies are responsible for managing operational risk in the Bank:
• Board of Directors is responsible for adopting Operational risk management policy;
• The Executive Board is responsible for implementation of the adopted policy and
establishing the Operational risk management procedure;
• ALCO is responsible for monitoring Bank’s exposure to operational risk and proposing
appropriate risk management measures;
• The Risk management department is responsible for monitoring and collecting data on
operational risk events on a daily basis and reporting to the Bank’s management on
exposure to this risk.
89
•
Exposure to operational risk is measured at the Market, operational and other risks
management department through operational risk identification, database registering and
analysis, in accordance with Operational risk management procedure.
Exposure to operational risk is measured by monitoring number of events of the same type
during a calendar year and the financial impact of an individual event.
Operational risk exposure
2014
Number of events
Gross loss (EUR)
Net loss (EUR)
93
107,519
3,542
2013
63
51,917
5,809
Total net financial effect of operational risk events recorded in 2014 amounted to RSD 3,542
thousand.
29.7
Inadequate management of information system risk
The aim of risk management of information system inadequacy is aimed at minimizing the
negative effects that can occur due to the Bank’s information system exposure to public
networks, malicious internal attacks, hardware failures, sabotage and maintenance of these
exposures within prescribed limits. In compliance with the National Bank of Serbia Decision
on Minimal Standards for Management of Information System of Financial Institutions, the
Bank has performed a series of activities for becoming fully compliant with the Decision.
Accordingly, the Bank implemented the Strategy on information system development,
Business continuity strategy, Exit strategies for outsourced activities and Information system
safety policy. Also, the set of quality procedures and instructions in compliance with NBS
Decision on minimal standards for management of information system of financial institutions
has been adopted.
The Bank owns a certificate which states that it has complied its business activities i.e.
information security management system, with requests of standard ISO/IEC 27001:2005.
The process of adjustment with the requests has initiated not only procedural improvements,
but also improvements of business processes supported by the Bank’s information system.
The Bank’s information system has functionalities to support operating processes, provide
prompt, correct and complete information for decision making and risk management.
The Bank continuously works on improvements of information system through continuous
updates of Strategy on information system development.
In order to provide quality management of information system, the Bank established
Committee for Information technologies.
A framework for information system management consists of the methodology for project
management, as well as reporting on functionalities and information system security.
90
The following bodies are responsible for managing risk of inadequate information system
management in the Bank:
• The Board of Directors that adopts the Information system development strategy,
Information system safety policy and Business continuity strategy;
• The Executive Board that implements adopted strategies and policies and defines
procedures and instructions;
• Information System Committee that monitors functioning and development of information
system, makes decision and suggest appropriate measures to the Executive Board;
• Information security department that plans, suggests and execute all the activities related
to information system and reports to Information System Committee;
• Security department that identifies, assesses, monitors up and controls IT risk by safety
control within Information technologies department and reports to Information System
Committee.
29.8 Exposure risk
The objective of exposure risk management is to minimize losses against exposure to one
party, a group of related parties and parties related to the Bank and to retain these exposures
at the acceptable level.
The following bodies in the Bank are responsible for managing exposure risk:
• The Board of Directors that makes decisions on the Bank’s exposure to one person or a
group of related parties in the amount exceeding 10% of the Bank’s capital, as well as
decisions on the Bank’s exposure to parties related to the Bank;
• The Executive Board that establishes the Procedure for exposure risk management and
makes decisions for the Bank’s exposure to one party or a group of related parties up to
10% of the Bank’s capital, as well as decisions on the Bank’s exposure to parties related to
the Bank pursuant to the Decision by the Board of Directors on authorizing Executive Board
to conclude legal arrangements with related parties;
• ALCO that monitors the Bank’s exposure to one person, a group of related parties and
persons related to the Bank and proposes measures for managing exposure risk and
• Market, operational and other risk management department that monitors on a daily basis
the Bank’s exposure to one party, a group of related parties and parties related to the Bank.
Exposure risk is measured by the Market, operational and other risk management department
on the basis of reports preparation prescribed by relevant National Bank of Serbia decisions
and the Bank's procedures.
Net exposure to related parties and large exposures
(RSD thousand)
2014
2013
Exposure
Exposure
Share in
amount
Share in capital
amount
capital
Related parties
199,822
6.58%
222,265
5.77%
Large exposures
2,745,507
90.38%
3,315,772
86.09%
During 2014 exposures to one party/group of related parties and parties related to the bank
were within the prescribed limits. For all of the Bank’s exposures, that were in medium risk
category, that exceeded 10% of the Bank’s capital, prior approval of the Board of Directors
was provided.
91
The Bank monitors Concentration ratio of 20 largest gross exposures and Concentration ratio
of gross exposure over EUR 1.5 million. The concentration ratio for 20 largest gross exposures
represents the ratio between balance sheet assets and off-balance sheet items to be classified
of 20 largest economic groups, except banks, and the total assets to be classified, decreased
by assets, which represent exposure to other banks. Bank’s aim is to maintain this ratio at the
level of up to 26%. Concentration ratio of gross exposure over EUR 1.5 million is the ratio
between balance sheet assets and off-balance sheet items to be classified of all
groups/individual debtors to which Bank is exposed over EUR 1.5 million. Bank’s aim is to
maintain this ratio at the level of up to 27.5%.
As of 31 December 2014, balance sheet assets and off-balance sheet items to be classified
of the 20 largest economic groups, except Banks, amounted RSD 7,764,869 thousand. Total
balance sheet assets and off-balance sheet items to be classified, decreased by deposits at
banks, amounted RSD 33,741,420 thousand. Concentration ratio of 20 largest gross
exposures as of 31 December 2014 amounted 23.01%.
As of 31 December 2014, balance sheet assets and off-balance sheet items to be classified
of all groups/individual debtors to which Bank is exposed over EUR 1.5 million amounted RSD
8,742,831 thousand. Concentration ratio of gross exposure over EUR 1.5 million was 25.91%.
29.9 Risk of investment in the other non-financial legal entities and the fixed assets
Investment in other legal entities refers to the investment by which the Bank acquires a stake
or shares of non-financial legal entities. Such investment does not include acquisition of
shares with intention to sell them in the period of six months after the date of acquisition.
The following bodies are responsible for investment risk management:
•
The Board of Directors that makes decisions on individual investments in fixed assets in
the amount exceeding EUR 250,000 translated in RSD;
•
The Executive Board that has adopted the Procedure for investment risk management
implements adopted procedures and makes decisions on investments into fixed assets
up to EUR 250,000 translated in RSD.
•
ALCO monitors exposure risk of the Bank’s investments and proposes certain measures
for managing this risk and
•
IT Department, Security department and the Department of technical operations that are
in charge of fixed assets procurement.
Risk measurement is within the competence of the Plan and analysis department and the
Market, operational and other risk management department.
Investments into non-financial entities and fixed assets in relation to capital
2014
Investments in non-financial entities
Total investments in non-financial entities and
fixed assets
2013
0.50%
0.39%
25.52%
20.52%
During 2014 the Bank’s investment risk level was within the low risk category.
92
29.10 Risks relating the country of origin of the Bank’s counterparty
Country risk is risk relating the country of origin of the Bank’s debtor, that is risk of the
possibility that negative effects may develop to the financial result and the capital of the Bank
due to the inability of the Bank to collect receivables due to political, economic, social or other
circumstances in the country of its debtor’s origin.
The following bodies in the Bank are responsible for country risk management:
• The Board of Directors that adopts the Policy for country risk management;
• The Executive Board that implements the adopted Policy and establishes the Procedure
for country risk management;
• ALCO that monitors the exposure to country risk and proposes certain measures for risk
management and
• The Payment operations department that performs accounts opening and closure
accounts and executes transfers of funds with foreign correspondent banks.
Country risk measurement is performed in the Market, operational and other risk management
department, where country risk is identified on a monthly basis, when preparing monthly risk
report.
In 2014, the Bank had deposited funds with banks that operate in the countries classified as
low or medium risk countries by OECD methodology and the Bank's procedures.
29.11 Compliance risk and risk management activities on anti-money laundering and
terrorism financing
Business operations compliance refers to performing bank activities in accordance with
legislation, regulations, standards, procedures, business policy and other internal regulations.
This risk occurs as a consequence of an inadequate compliance of bank’s activity with
aforementioned.
The objective of compliance risk management is to avoid sanctions of regulatory authorities,
financial losses, loss of business reputation and clients’ trust.
The following bodies in the Bank are responsible for compliance risk management:
• The Board of Directors that adopts the Policy for compliance risk management;
• The Executive Board that implements the adopted policy and determines the Procedure
on compliance risk management;
• Department for business operations compliance and money laundering prevention that
identifies, estimates and monitors the business compliance risk.
Department for business operations compliance and anti-money laundering has identified and
estimated compliance risk in 2014 by performing adequate control procedures provided by
Work plan in a way prescribed by business operations compliance risk management
procedure.
In 15 reports of controls performed, control findings are estimated as «Acceptable with
corrections» in agreed deadlines and in on report of controls performed estimation is
93
«Adjusted» because all reviewed processes are in compliance with Bank's procedures and
regulations.
By summarizing control findings on implementation of legislation and company regulations it
can be concluded that there is no high risk of non-compliance, taking into account that for all
noticed small non-compliances, recommendations for improvement are given and realized
within deadline.
For the purpose of timely protection from risk that could cause damage to the Bank’s
reputation and credibility, special attention has been paid to client’s complaints and
impressions, with goal to improve quality of products and services in accordance with client’s
needs, expectations and wishes. During 2014, the Bank received 10 complaints from clients,
which is five less than previous year. All complaints have been solved. Complaints analysis
did not identify reputational risk for the Bank, since eight out of ten complaints was unjustified.
Each complaint is reviewed and resolved on the prescribed way and reported to the National
Bank of Serbia within determined deadline.
For the purpose of recognition and identification of suspicious transactions, employees in the
Department perform daily activities on obtaining, control, analysis and reporting, of cash
transactions and parties involved in transactions, on the amount of EUR 15 thousand or above,
translated into RSD, by NBS middle rate to the Administration for the Prevention of Money
Laundering. In order to lower money laundering and terrorism financing risk to minimal level,
employees pay special attention to monitoring, analyzing and identifying suspicious
transactions. After the analysis of transaction and corresponding documentation had been
performed, suspicious transactions were reported to the Administration.
Cash transactions amounting EUR 15
thousand and above translated to RSD
2013
2,050
2014
2,202
Suspicious transactions
2013
3
2014
3
There was no mismatch between reported transactions and parties in transactions. The Bank
manages money laundering and terrorism financing risk in order to reduce them to a minimal
level.
Employees in the Department followed innovations and changes in regulations, informed
responsible management on obligation of harmonizing procedures and instructions and
controlled implementation of legal regulations in quality management system documentation.
During the previous year, 67 notices on changes and additions to legal regulations have been
forwarded.
29.12 Environmental and social risk
The objective of Environmental and social risk management is to identify, assess and control
risks that may jeopardize the environment and it is performed according to the Environmental
and social risk management policy and BPI – 751 – 503 Procedure - Management of social
and environmental risk.
94
The following bodies are responsible for environmental and social risk management:
• The Board of Directors, that implements and at least annually reviews the
Environmental and social risk management policy and decides on required changes;
• The Executive Board determines and implements the Procedure for managing social
and environmental risk;
• The Credit risk management department which makes a decision on granting
placements concerning environment, pursuant available information and Solvency
assessment department opinion;
• The Credit risk management department, that evaluates impact of business activities
and object of funding during client’s creditworthiness analysis;
• Portfolio management and reporting department that monitors placements by activities,
industrial sectors and environmental and social risk through preparing and analyzing
reports, which are delivered to EBRD and IFC Environment department;
• Person appointed by the Executive Board as responsible for adequate functioning and
maintenance of the Bank's environment and social risk management system.
When processing individual clients’ applications, environmental and social risk is classified for
the client’s primary activity and the activity which is subject to financing. Environmental and
social risk categories are as follows:
- High – Exclusion List
- High – Referral List,
- High – Category A,
- High,
- Medium
- Low.
If the activity which is subject to financing is included in the Exclusion list, the application will
be rejected. If the activity is included in the Referral list, and it is evaluated that the project
should be financed, the approval is requested from the EBRD and IFC Environment
department. The Bank had not have application for financing activities or projects included in
this risk category. If the activity is classified in high risk category A, the assessment of impact
on environment be provided from the client.
If it is determined by the Procedure, further evaluation of impact on environment will be
performed before the relevant credit committee makes a final decision.
Credit risk management department, when reviewing application with the decision draft for the
relevant credit committee, will verify classification of the activity by the extent of environmental
and social risk and data regarding the environmental and social impact by the client and activity
subject to financing.
Loan agreements and agreements on other exposures contain environmental and social
provisions that should be obeyed by both the client and the Bank.
The Bank will monitor the balance of exposures by activities, industries and environmental and
social risk categories through the reports and their analysis, delivered to the EBRD and IFC
environment department.
95
Overview of corporate placements by environmental and social risk categories (RSD
thousand)
Risk category
High – Exclusion List
High – Referral List
High – Category A
High
Medium
Low
Total:
Number of clients
2013
2014
1
1
4
7
269
260
1,010
1,122
2,359
2,374
3,643
3,764
Amount of placements
(balance and off-balance
sheet)
2013
2014
3,385
1,050
257,701
231,430
6,336,642
6,921,451
8,937,498
9,456,083
13,720,139
13,881,182
29,255,365
30,491,196
Increase/
Decrease
-2,335
(26,271)
584,809
518,585
161,043
1,235,831
Placements classified in the High risk category – Exclusion list are collected in accordance
with agreed maturity, which is also prescribed by the Subscription agreement concluded with
the EBRD and IFC as of 14 December 2010. The Bank has met all its obligations arising from
the Subscription agreement relating to the decrease in exposure to the activities listed in the
Joint IFI Exclusion list. Exposure to customers whose activities are classified in High risk –
Exclusion list, has been reduced by RSD 2,335 thousand compared to 31 December 2013
and amounts to RSD 1,050 thousand.
30.
COMPLIANCE OF BUSINESS ACTIVITIES WITH THE NBS REGULATIONS
Indicator
Limits prescribed Realized values as of Realized values as of
by NBS
31 December 2014
31 December 2013
Min 10,000,000 €
25,115,292 €
33,595,529 €
min 12%
12.81%
16.47%
max 20%
14.29%
1.73%
Min 1
2.79
2.66
Min 0.7
1.86
1.63
Capital
Capital adequacy ratio
Foreign currency risk ratio
Liquidity ratio
Acid-test liquidity ratio
Exposure to one party related to
Bank
Total related party exposure
Exposure to one party or group of
related parties
Total large exposures
Investments in non-financial entity
Total investments in non-financial
entities and fixed assets
max 5%
max 20%
1.93%
6.58%
2.13%
5.77%
max 25%
max 400%
max 10%
19.16%
90.38%
0.50%
18.02%
86.09%
0.39%
max 60%
25.52%
20.52%
96
31.
SUBSEQUENT EVENTS
There have been no events subsequent to the balance sheet date having materially significant
effect on financial statements for the year ended 31 December 2014.
The Sale Purchase Agreement for the purchase of shares of Čačanska banka a.d. Čačak was
singed on 20 March 2015 at the Ministry of Finance, between the Republic of Serbia,
International Finance Corporation, European Bank for Renewal and Development and
Beogradska banka a.d. Beograd under bankruptcy, as the sellers, and Turkiye Halk Bankasi
A.Ş, from the Republic of Turkey, as the buyer.
According to contract, Turkiye Halk Bankasi A.Ş, as the buyer, undertakes to pay 10.1 million
euro for a package of 139,680 shares, which comprise 76.74% of the share capital of
Čačanska banka.
This amount will be paid out in cash or piecemeal upon transfer of ownership over shares,
which will be carried out within a period not longer than 60 working days, whereby Turkiye
Halk Bankasi A.Ş will officially become the majority owner of Čačanska banka.
Besides the offered price, Turkiye Halk Bankasi A.Ş plans additional investments in order to
ensure growth and development of Čačanska banka. Besides a capital increase and
expansion of business network, planned investments relate to IT, credit cards, personal
banking system development, etc.
32.
EXCHANGE RATE
The middle exchange rates, determined for foreign currencies in the Interbank Exchange
Market, applied in translation of balance sheet items denominated in foreign currencies into
dinars, for certain major currencies were as follows:
(RSD thousand)
31 December 2014
31 December 2013
USD
EUR
CHF
99.46
120.96
100.55
83.13
114.64
93.55
Petar Pantović
Director of accounting and
planning department
Executive Board
Dragan Jovanović
Chairman of the Executive
Board
97
ANNUAL OPERATING REPORT
FOR 2014
Čačak, March 2015
TABLE OF CONTENTS
page
I DEVELOPMENT, ORGANISATIONAL STRUCTURE AND BUSINESS ACTIVITIES 3
1.
ESTABLISHMENT
3
2.
ORGANISATION OF OPERATIONS
3
3.
BASIC OPERATING INDICATORS
4
II FINANCIAL POSITION AND OPERATING RESULTS
1.
MACROECONOMIC ENVIRONMENT
5
2.
IMPLEMENTATION OF BASIC OPERATING TARGETS
7
3.
BALANCE SHEET
8
3.1 Assets
8
3.1.1 Cash and cash equivalents
9
3.1.2 Financial assets fair value through income statement held for trading
10
3.1.3 Loans and receivables from banks and other financial organisations
11
3.1.4 Loans and receivables from customers
12
3.2 Liabilities
15
3.2.1 Deposits and other liabilities to banks, other financial organisations and central bank16
3.2.2 Deposits and other liabilities to other customers
16
3.2.3 Subordinated liabilities
17
3.2.4 Equity
18
4.
OFF-BALANCE SHEET ITEMS
20
5.
STATEMENT OF INCOME
22
5.1. Income
24
5.2. Expenses
25
6.
CASH FLOWS FROM OPERATING ACTIVITIES
27
7.
PAYMENT OPERATIONS
28
7.1. Dinar payment operations
28
7.2. Foreign payment operations
28
7.3. Documentary operations
29
8.
COMPLIANCE WITH THE NBS REGULATIONS AND IFI AGREEMENTS
30
9.
HUMAN RESOURCES
32
10.
INVESTMENT PLAN
33
11.
PR AND MARKETING
34
12.
QUALITY MANAGEMENT SYSTEM
35
13.
REPORT OF THE BOARD OF DIRECTORS MEETINGS IN 2013
36
III
INVESTMENT FOR THE PURPOSE OF ENVIRONMENTAL PROTECTION
41
IV
MATERIAL EVENTS
42
V
ANTICIPATED FUTURE DEVELOPMENT
43
VI
RESEARCH AND DEVELOPMENT ACTIVITIES
43
VII
INFORMATION OF PURCHASE OF OWN SHARES
43
VIII
EXISTENCE OF AFFILIATES
43
IX
RISK MANAGEMENT ADEQUACY
44
X
CORPORATE GOVERNANCE RULES
52
Annex 1: ORGANISATIONAL SCHEME
2
I DEVELOPMENT, ORGANISATIONAL STRUCTURE AND BUSINESS ACTIVITIES
1. ESTABLISHMENT
Čačanska banka has been operating since 1 July 1956, and during its activities it has
changed its legally-registered name and organisational form several times. As a part of
the overall restructuring of the Yugoslav banking system in 1990, the Bank was
reorganised as a shareholding entity. On 28 December 1990, in conformity with the
Law on Banks and Other Financial Institutions, and with the National Bank of
Yugoslavia Regulations pertaining to the Establishment of Banks, the entity,
Beogradska banka Čačanska banka D.D. Čačak was registered with the District
Commercial Court of Kraljevo. On 13 June 1995, the Bank’s Assembly adopted the
Statute of Beogradska banka Čačanska banka, a joint-stock company, thereby
adjusting the by-laws of Beogradska banka Čačanska banka with the provisions of the
Law on Banks and Other Financial Institutions. Pursuant to this Statute, Beogradska
banka Čačanska banka a.d. Čačak was formed as a legal entity with rights and
obligations granted to it under the applicable banking legislation and the Bank’s
Foundation Agreement.
During 1999, following the consummation of a merger between the Bank and
Beogradska banka a.d. Belgrade as further approved by the Decision of Commercial
Court of Belgrade dated 8 April 1999, the Bank began to operate as a branch office of
Beogradska banka a.d. Belgrade up until the end of October 2000. Pursuant to a legal
decision dated 2 November 2000, the legal registration amendment with respect to the
afore-described merger was nullified. Since 23 July 2001, the Bank has been
registered as, and has been operating under the name of Čačanska banka a.d. Čačak
(the “Bank”).
The Bank is registered in the Registry of Business Entities of the Republic of Serbia
under no. 54244 of 13 September 2005.
2. ORGANISATION OF OPERATIONS
The Bank is registered in the Republic of Serbia to provide payment operations and
credit and deposit operations in the country and abroad and it operates in compliance
with the Law on Banks.
As at 31 December 2014 the Bank was comprised of the Head office in Čačak and of
13 branch offices located in the towns of Jagodina, Gornji Milanovac, Belgrade (2
branches), Kraljevo, Užice, Kragujevac, Kruševac, Aranđelovac, Valjevo, Šabac, Niš,
Novi Sad, SME Credit Centre in New Belgrade and 9 sub-branches in Paraćin,
Požega, Topola, Ivanjica, Vrnjačka Banja, Leskovac, Mladenovac and Čačak (2 subbranches).
3
3. BASIC OPERATING RATIOS
Income Statement (in RSD
000)
Net interest income
Net fee and commission
income
Loss before taxation
Loss after taxation
Balance Sheet (in RSD
000)
Loans and receivables to
customers
Total deposits
Equity
Balance sheet assets
Off-balance sheet items
Basic financial ratios
Operating expenses / Net
interest, fee and
commission income
Capital adequacy
Number of employees
Exchange rate
RSD/EUR
Liquidity ratios
Average liquidity ratio
Average liquid assets ratio
31.12.2013
1,172,514
552,903
(126,285)
(86,919)
31.12.2014
Plan for 31.12.2014
1,202,487
1,159,000
566,458
(276,694)
(275,654)
564,000
12,000
10,200
31.12.2013
31.12.2014
Plan for 31.12.2014
21,080,500
14,223,908
4,990,725
33,790,112
12,971,534
31.12.2013
21,927,364
20,026,385
14,668,411
14,366,147
4,717,557
5,000,925
31,775,519
32,464,305
48,999,808
12,063,600
31.12.2014
Plan for 31.12.2014
63.10%
16.47%
31.12.2013
391
31.12.2013
114.64
2013
2.67
30.57%
62.61%
61.93%
12.81%
13.25%
31.12.2014
Plan for 31.12.2014
385
392
31.12.2014
Plan for 31.12.2014
120.96
117.5
2014
Plan for 2014
2.71
1.50
26.91%
24%
Čačanska banka concluded its operations in 2014 with a loss of RSD 276,694
thousand. The loss after taxation is RSD 275,654 thousand, due to creating gains from
an increase in deferred tax assets during 2014.
Balance sheet assets amounted to RSD 31,775,519 thousand as at 31.12.2014 which
accounts for a decrease of 5.96% relative to the end of 2013.
Off-balance sheet assets as at 31.12.2014 came to RSD 48,999,808 thousand,
growing by 277.75% compared to the end of 2013 because all collateral took as
payment security in the amount of RSD 37,153,107 thousand was booked within the
item Other off-balance sheet records in accordance with the International Financial
Reporting Standards and the new Chart of Accounts for Banks.
Relative to the end of 2013, during 2014 loans to business and retail client increased
by 4.02%, while total deposits grew by 3.13%.
4
During 2014 the Bank conducted domestic payment operations and processed
8,242,735 orders of legal entities amounting approximately to RSD 843,211 million. Of
such amount, 5,992,175 orders accounted for the executed orders of the Bank's clients
(inflows and outflows in internal and external payments) in the amount of approximately
RSD 401,355 million. As compared to 2013, the number of orders grew by 1.99%,
whereas the volume of payment operations increased by 5.58%.
II FINANCIAL POSITION AND OPERATING RESULTS
1. MACROECONOMIC ENVIRONMENT
During 2014 the growth of consumer prices equalled cumulatively 1.7%. The highest
monthly growth was 1.4% in January.
5
During 2014, RSD depreciated against EUR and USD by 5.51% and 19.65%
respectively. The National Bank of Serbia, endeavouring to mitigate excessive shortterm oscillations of foreign currency exchange rate at the interbank foreign currency
market, intervened in both directions during 2014, by the sale of EUR 1,880 million and
purchase of EUR 260 million. Foreign currency reserves amounted to EUR 9,907.2
million at the end of 2014.
Reference rate trend
%
10.00%
9.50%
9.00%
8.50%
8.00%
7.50%
7.00%
31.12.2013 - 07.05.2014.
08.05.2014 - 11.06.2014.
12.06.2014 - 13.11.2014.
14.11.2014 - 31.12.2014.
The National Bank of Serbia Executive Board reduced the reference rate three times
during 2014, which was 9.50% in the beginning of the year, while on 31.12.2014 it was
8.00%. The NBS Executive Board stated that the main reason for the reduction was
the year-over-year inflation rate that moved below the upper limit. Year-over-year
inflation was 1.7% in December, which was below the lower limit of deviation from the
target (4±1.5%). According to the NBS statement, low annual inflation resulted from the
lack of growth in regulated prices, which came to 1.1% p.a. Year-over-year core
inflation (consumer prices index upon exclusion of food, energy, alcohol and cigarettes)
was 2.3% in December.
6
2. IMPLEMENTATION OF BASIC OPERATING TARGETS
The targets set out in the Operating Policy for 2014 were implemented through the
following activities:
1.
Capital Adequacy Ratio was 12.81% as at 31.12.2014 which was less than
anticipated by the Operating Policy for 2014 to keep it above 13%, but it was above the
regulatory minimum of 12%.
2.
During 2014 the Bank was successfully maintaining the average Liquidity Ratio
and Liquid Assets Ratio above the planned values for 2014. Minimum Liquidity Ratio
was 1.80 (according to the plan it should not fall below 1.50), while minimum Liquid
Assets Ratio was 23.57% and it was below the plan for only 11 days (according to the
plan it should not fall below 24%).
3.
During 2014 the Bank's net loan portfolio increased by RSD 846,864 thousand,
or 4.02%. In the same period, the number of retail credit clients grew from 12,880 to
12,961 (0.63% growth), while the number of business credit clients and entrepreneurs
increased from 3,674 to 3,739 (1.77% increase), which was in line with the plan to keep
the number of credit clients as at the year beginning.
4.
Concentration ratio regarding exposure to persons/groups whose aggregate
exposure exceeds EUR 1.5 million in the Bank's total balance sheet and off-balance
sheet assets eligible for classification reduced for bank deposits, came at 25.91% as at
31.12.2014. Compared to 31.12.2013 this ratio fell by 3.20 pp and was complied with
the plan to keep it below 27.5%.
5.
The Bank finished 2014 with the loss of RSD 275,654 thousand, resulting from
a significant increase in expenses of indirect write off of loans and provisions, that were
by RSD 365,439 thousand higher than planned for 2014. The ratio of operating
expenses to net interest, fee and commission income was 62.61% in 2014 which was
near the target to keep it below 62%.
6.
At the end of 2014 the ratio of NPL coverage by total reserve, consisting of
allowances for impairment, provisions for losses against off-balance sheet items and
required reserve, came at 99.19% which was a bit lower than the planned 100%. The
ratio of NPL coverage by impairments of total loans was 60.70%, which was above the
target of 55%.
7.
In 2014 interest expenses were by 21.16% lower than in 2013, so that the fall of
these expenses was much stronger than the planned 8%. In 2014 the Bank repaid
EUR 12.8 million foreign loans to IFIs, which is in compliance with the plan for 2014.
8.
During 2014 the complete integration of the Customer Relationship
Management (CRM) application with the Bank's core system was done, and visual
presentations of Customers' Profiles and Product Profiles were completed. In this
period solutions for Product Catalogues were fully developed and adopted, while the
process of recording clients in the core system through the CRM application was
finished. The sales process flow was defined with the set of activities regarding the
establishment of a system for monitoring implementation of targets at the branch level
and employee level. In the last quarter, the last and most complex pre-production
phase was done - transfer from the development environment to test environment, and
the activities started regarding adjustments of current data to the CRM requirements.
9.
In the beginning of 2014 the Bank signed a contract with Ernst & Young d.o.o.
Belgrade regarding consultancy services for the development of the Credit Scoring
model for retail customers, entrepreneurs and SMEs. The activities on the project
commenced in the last quarter of 2014. Until 31.12.2014 the first phase of the project
(GAP analysis) was completed and conditions were made for the phase of model
development for single segments in the Bank's portfolio, which will start in the
beginning of 2015.
7
10.
During 2014 Halkbank from Turkey was provided by the National Bank of
Serbia a pre-approval for the acquisition of shares of Čačanska banka, completed the
due diligence process, submitted a binding bid and commenced direct negotiations with
existing shareholders in order to establish the price and other details of the Sales and
Purchase Agreement for 76.74% of the Bank's shares.
3.
BALANCE SHEET
As at 31.12.2014 the Bank's total assets came to RSD 31,775,519 thousand and
accounts for a 6.34% decrease relative to the end of 2013.
3.1. Assets
ASSETS
31.12.2013 31.12.2014
6,541,440
5,491,976
assets held with the central bank
Financial assets recognised at fair
vale through income statement
803,689
281,805
and held for trading
37,343
3,530,503
2,799,186
organisations
21,779,976 22,189,590
clients
Intangible investments
35,761
45,611
Property, plant and equipment
650,216
626,270
Investment property
125,088
133,789
Current tax assets
14,491
Deferred tax assets
59,009
60,049
Other assets
249,939
109,900
TOTAL ASSETS
33,790,112 31,775,519
(in RSD 000)
Plan for 31.12.2014
6,500,000
810,000
40,000
2,900,000
21,151,364
64,735
653,729
122,288
60,000
162,189
32,464,305
The following table gives the currency structure of assets:
Assets
Dinars
Foreign currency
Total:
31.12.2013
9,671,165
24,118,947
33,790,112
%
31.12.2014
28.62%
9,699,433
71.38% 22,076,086
100.00% 31,775,519
%
30.52%
69.48%
100.00%
In total assets, short-term assets accounted for 37.88%, long-term 62.12%.
8
3.1.1 Cash, cash equivalents and assets held with the central bank
Cash, cash equivalents and foreign currency part of required reserve with the central
bank amounted to RSD 5,491,976 thousand as at 31.12.2014, relating to the following:
Item
Giro account and cash on hand in RSD
Cash on hand in foreign currency
Required reserve with the NBS – fx part
Foreign currency deposits with the NBS
Total:
31.12.2013
1,640,305
301,954
2,256,465
2,342,716
6,541,440
(in RSD 000)
31.12.2014
1,696,217
466,940
1,980,083
1,348,736
5,491,976
The balance of the deposited funds – the funds set aside with the NBS for the required
reserve as at 31.12.2013 and 31.12.2014 is presented in the following table:
Item
Required reserve - dinars
Required reserve – foreign currency
Total:
(in RSD 000)
31.12.2013 31.12.2014
1,284,050
1,324,806
2,256,465
1,980,083
3,540,515
3,304,889
During 2014 the funds set aside for a required reserve with the NBS decreased by
RSD 235,626 thousand RSD.
3.1.2 Financial assets recognised at fair value through income statement and
held for trading and financial assets available for sale
During 2014 the Bank ran a conservative policy of investing in securities, so that it
mostly invested in the Republic of Serbia bonds, of which EUR 700 thousand was
purchased in 2014.
(in RSD 000)
Item
31.12.2013 31.12.2014
Financial assets at fair value recignised through
803,689
281,805
income statement held for trading:
- shares of banks and other financial organisations
7,399
7,852
- shares of enterprirses
13,277
14,237
- the Republic of Serbia bonds – foreign exchange
776,121
259,716
savings
- receivables under derivatives held for trading
6,892
37,343
- local government bonds
37,343
Total:
803,689
319,148
Total Bank's portfolio at the end of 2014 amounted to RSD 281,805 thousand and
consisted of shares of banks and other financial organisations, shares of enterprises
and bonds of the Republic of Serbia.
As at 31.12.2014 the Bank owned old foreign savings bonds in the nominal value of
EUR 2.2 million, and/or RSD 259,716 thousand market value. Bonds accounted for
92.16% of the Bank's total portfolio.
9
In the securities portfolio the Bank had 13 different shares of total market value RSD
22,089 thousand, which is 7.84% of total portfolio.
On 24.12.2014 the Bank purchased municipal bonds issued by the City of Šabac in the
nominal value of RSD 37.8 million. The bonds were issued on the issue price of RSD
10 thousand, denominated in dinars and indexed in euros. The maturity of these
bonds is 7 years, while interest rate is fixed 6% p.a.
3.1.3 Loans and receivables from banks and other financial organisations
Foreign currency accounts with banks, NBS placements under repurchase
transactions, revocable deposits and loans to banks amounted to RSD 2,799,186
thousand as at 31.12.2014.
Item
31.12.2013
Foreign currency accounts with banks
NBS placements under repurchase
transactions
Revocable deposits to banks
Loans and deposits to banks and other
financial organisations
Accrued interest receivable under
loans, deposits and other placements
Total:
% of increase/
decrease
1,223,401
3.79%
31.12.2014
1,178,771
2,000,416
400,069
-80.00%
-
600,000
-
347,633
566,906
63.08%
3,683
8,810
139.21%
3,530,503
2,799,186
-20.71%
3.1.4 Loans and receivables from clients
The structure of item Loans and receivables from clients as at 31.12.2014 is given in
the following table:
Loans and receivables from clients
Loans and deposits to business and
retail clients
Other loans to business and retail
clients
Receivables for accrued interest and
fees under loans, deposits and other
placements
Total:
31.12.2013
31.12.2014
(in RSD 000)
% of increase/
decrease
20,480,850
21,559,861
5.27%
599,650
367,503
-38.71%
699,476
262,226
-62.51%
21,779,976
22,189,590
1.88%
The growth of total placements to customers in 2014 amounted to RSD 409,614
thousand or 1.88%.
10
The Bank's loan portfolio consisting of business and retail loans increased during 2014
by 4.02%. The portfolio structure is provided in the following table:
Loan portfolio
Business clients
Retail clients
Total:
(in RSD 000)
% of
Plan
31.12.2013 31.12.2014
increase/
31.12.2014
decrease
17,619,407 18,149,988 16,474,146
3.01%
3,461,093
3,777,376
3,552,239
9.14%
21,080,500 21,927,364 20,026,385
4.02%
The business loan portfolio grew due to a significant increase in loans with subsidised
interest rate. On 03.06.2014 the Bank signed with the Republic of Serbia Development
Fund an agreement on governing relations regarding subsidising interest rates for
liquidity loans and loans for durable current assets in 2014. During 2014 the Bank
disbursed 1,170 of these loans in the total amount of RSD 3,741,553 thousand.
Loan portfolio
Business clients
Retail clients
Total:
(in RSD 000)
Portfolio change during
Plan for 2014
2014
(1,145,261)
530,581
91,146
316,283
(1,054,115)
846,864
In 2014 the Bank approved to business and retail clients RSD 13,803,426 thousand of
loans, of which RSD 4,182,608 thousand for loans up to one year maturity and RSD
9,620,818 thousand of loans over one year maturity.
- Business lending
Long-term gross business loans as at 31.12.2014 totalled RSD 15,611,415 thousand
with the following structure:
Loan type
Long-term loans – other purposes
Long-term loans to SMEs from the
Revolving Credit Fund (EAR)
Long-term HIT loans from the EFSE
facility
Long-term HIT Energy loans
Long-term loans from the EBRD facility
Long-term loans from the EIB facility
Long-term investment loans from the
Italian Government facility
Long-term loans from the IFC facility
Long-term loans from the FMO facility
Total:
(in RSD 000)
Balance
Balance
% of increase /
31.12.2013 31.12.2014
decrease
6,785,241
9,062,030
33.56%
1,627,758
1,699,225
4.39%
1,255,974
1,160,119
-7.63%
327,219
161,475
4,006,179
315,638
61,236
2,797,876
-3.54%
-62.08%
-30.16%
159,154
144,463
-9.23%
84,434
623,841
15,031,275
32,497
338,331
15,611,415
-61.51%
-45.77%
3.86%
11
Short-term gross business loans without interest, fee and commission receivables as at
31.12.2014 equalled RSD 6,638,249 thousand, increasing by 15.27% relative to the
end of 2013.
Total gross placements to business clients without interest, fee and commission
receivables as at 31.12.2014 came to RSD 22,229,933 thousand accounting for a
6.92% increase compared to the end of 2013.
The number of credit clients is presented in the following table:
Number of credit
clients
Business clients
31.12.2013
3,674
31.12.2014
3,739
% of increase /
decrease
1.77%
The plan for 2014 is to retain the current base of business credit clients, which means
that the achieved result is slightly better than anticipated.
- Retail lending
The total gross retail placements as at 31.12.2014 amounted to RSD 3,838,261
thousand with the following structure:
(in RSD 000)
Balance
Balance
% of increase /
Type of loan
31.12.2013 31.12.2014
decrease
Consumer loans – EE/RE
428,087
586,401
36.98%
Consumer loans – car loans
140,331
95,111
-32.22%
Consumer loans – other purposes
356,219
244,892
-31.25%
Cash loans
860,443
879,222
2.18%
Housing loans
1,543,508
1,835,163
18.90%
Receivables against DinaCard credit
26,612
20,595
-22.61%
card
Overdraft
83,657
89,318
6.77%
Unauthorized overdraft against current
76,514
87,559
14.44%
accounts and loan receivables due
Total:
3,515,371
3,838,261
9.19%
Retail gross placements in terms of RSD grew by 9.19% in 2014.
The number of retail credit clients is given in the following table:
Number of credit
clients
Retail clients
31.12.2013
12,880
31.12.2014
12,961
% of increase /
decrease
0.63%
The retail credit base was retained as at the end of 2013, which is according to the plan
for 2014.
12
Regarding card operations, the Bank issued four types of payment cards in 2014:
Type of card
Visa Business
Visa Classic
Dina Debit
Dina Credit
Total:
No.of active cards
No.of active cards
from 01.01. to
from 01.01. to
31.12.2013
31.12.2014
692
764
668
879
9,463
10,598
805
654
11,628
12,895
% of increase /
decrease
10.40%
31.59%
11.99%
-18.76%
10.90%
3.2. Liabilities
Total liabilities as at 31.12.2014 came to RSD 31,775,519 thousand with the following
structure:
(in RSD 000)
LIABILITIES
31.12.2013 31.12.2014 Plan for 31.12.2014
through income statement and
131
held for trading
Deposits and other liabilities to
banks, other financial
2,747,986
1,767,720
2,660,000
organisations and central bank
24,100,622 23,190,043
22,817,000
other clients
Subordinated liabilities
1,740,263
1,841,943
1,762,500
Provisions
111,369
55,605
100,000
Other liabilities
99,016
202,651
123,880
TOTAL LIABILITIES
28,799,387 27,057,962
27,463,380
Share capital
3048483
3,048,483
3,048,483
Profit
4,239
4,239
10,200
Loss
86,919
275,654
0
Reserves
2,024,922
1,940,489
1,942,242
TOTAL CAPITAL
4,990,725
4,717,557
5,000,925
TOTAL LIABILITIES
33,790,112 31,775,519
32,464,305
In terms of maturity, short-term liabilities accounted for 44.97%, and long-term for
55.03%.
In terms of currency structure, there was the following balance:
Liabilities
Dinars
Foreign currency
Total:
31.12.2013
10,557,444
23,232,668
33,790,112
%
31.24%
68.76%
100.00%
31.12.2014
9,180,469
22,595,050
31,775,519
(in RSD 000)
%
28.89%
71.11%
100.00%
13
3.2.1 Deposits and other liabilities to banks, other financial organisations and
central bank
The structure of the item Deposits and other liabilities to banks, other financial
organisations and central bank and a comparative analysis as at 31.12.2013 and
31.12.2014 is presented in the following table:
(in RSD 000)
% of increase/
Item
31.12.2013 31.12.2014
decrease
Borrowed loans in foreign
2,117,849
1,577,555
-25.51%
currency:
- EBRD
384,870
243,645
-36.69%
- GGF
521,048
439,683
-15.62%
- IFC
409,436
259,196
-36.69%
- FMO
802,495
635,031
-20.87%
banks, other financial
630,137
190,165
-69.82%
organisations and central bank
Total:
2,747,986
1,767,720
-35.67%
3.2.2 Deposits and other liabilities to other customers
The structure of the item Deposits and other liabilities to other customers and a
comparative analysis as at 31.12.2013 and 31.12.2014 is presented in the following
table:
(in RSD 000)
% of increase/
Item
31.12.2013 31.12.2014
decrease
Transaction and other deposits
17,336,052 16,867,387
-2.70%
- transaction deposits
5,004,737
5,932,994
18.55%
- other deposits
10,790,951
9,365,174
-13.21%
- RCF-EAR long-term deposits
1,540,364
1,569,219
1.87%
Borrowed loans in foreign
6,656,464
6,158,572
-7.48%
currency:
- KfW
573,211
549,811
-4.08%
- EIB
5,940,894
5,473,169
-7.87%
- Italian Republic Government
142,359
135,592
-4.75%
Other liabilities
108,106
164,084
51.78%
Total:
24,100,622 23,190,043
-3.78%
The total deposit base of Čačanska banka, comprising of business and retail deposits,
amounted to RSD 14,668,411 thousand and had the following structure:
Deposit base
Business clients
Retail clients
Total:
31.12.2013
6,492,326
7,731,582
14,223,908
31.12.2014
6,535,281
8,133,130
14,668,411
(in RSD 000)
Plan for
% of increase /
31.12.2014
decrease
6,550,000
0.66%
7,816,147
5.19%
14,366,147
3.13%
14
Average daily balance of business transaction deposits in 2014 amounted to RSD
2,315,065 thousand, where the lowest average of RSD 1,933,407 thousand was made
in February and the highest of RSD 2,663,672 thousand in July.
In 2014 retail deposits rose by RSD 401,548 thousand which accounted for a 5.19%
increase relative to 2013 end.
(in RSD 000)
% of increase /
Retail deposits
31.12.2013 31.12.2014
decrease
In dinars
834,898
761,589
-8.78%
- sight deposits
538,347
555,243
3.14%
- term deposits
296,551
206,346
-30.42%
In foreign currency
6,896,684
7,371,541
6.89%
- sight deposits
1,462,730
2,004,667
37.05%
- term deposits
5,433,954
5,366,874
-1.23%
Total:
7,731,582
8,133,130
5.19%
During 2014 the retail foreign savings in terms of EUR increased by EUR 784
thousand, or 1.30%.
In 2014 the Bank regularly repaid the principal of long-term loans to IFIs in the total
amount of EUR 12,830 thousand.
3.2.3 Subordiniated liabilities
The structure of the item Subordinated liabilities is given in the folliowing table:
Structure of item Other liabilities
31.12.2013 31.12.2014
Subordinated liabilities
1,719,632
1,814,375
Liabilities arising from interest and other
20,631
27,568
expenses under subordinated liabilities
Total:
1,740,263
1,841,943
(in RSD 000)
% of change
5.51%
33.62%
5.84%
Subordinated liabilities in foreign currency related to the liabilities towards the
European Fund for Southeast Europe – EFSE and they totalled EUR 15 million.
3.2.4 Capital
The capital of Čačanska banka as at 31.12.2014 equalled RSD 4,717,557 thousand
and comprised the following:
(in RSD 000)
Item
31.12.2013 31.12.2014
Share capital – ordinary shares
1,819,820
1,819,820
Share capital – preference shares
1,340
1,340
Share premium
1,227,323
1,227,323
314,137
309,333
1,710,785
1,631,156
Retained earnings
4,239
4,239
Loss up to the level of capital
86,919
275,654
Total capital:
4,990,725
4,717,557
15
The top ten shareholders of Čačanska banka as regards the number of shares and the
percentage of their share in equity as at 31.12.2014 are presented in the following
table:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
SHAREHOLDERS
No.of shares % of share
REPUBLIC OF SERBIA
51,840
28.47%
EBRD – London
45,494
24.98%
IFC – Washington
36,395
19.98%
RAIFFEISEN BANK AD CUSTODY ACCOUNT 8,065
4.43%
Koper
EAST CAPITAL – BALKAN FUND – Luxembourg
6,879
3.78%
BEOGRADSKA BANKA AD IN BANKRUPTCY –
5,951
3.27%
Belgrade
METALAC AD – G. Milanovac
3,044
1.67%
ORGANIC FOODS, DRINKS – Bristol
2,941
1.61%
MANDAT DOO – Belgrade
2,334
1.28%
ELEKTROSRBIJA JP – Kraljevo
1,518
0.83%
OTHERS
17,655
9.69%
TOTAL:
182,116
100.00%
The information about the number of shareholders and the basic information of shares:
Information of shares
Number of shareholders
Number of shares
Nominal value per share
Book value per share
31.12.2013 31.12.2014
417
409
182,116
182,116
10,000
10,000
27,404.10
25,904.13
The price of Čačanska banka's share as at 31.12.2014 was RSD 8,501 accounting for
a 14.99% decrease relative to the price in the year beginning.
Price of Čačanska banka share
from 01.01. to 31.12.2014
20000
8000
6000
14.200
15.000
15.750
16.300
16.300
16.990
16.300
13.500
4000
16.905
14.100
11.001
2000
10.000
0000
8.501
8000
6000
4000
2000
31.12.13 31.01.14 28.02.14 31.03.14 30.04.14 31.05.14 30.06.14 31.07.14 31.08.14 30.09.14 31.10.14 30.11.14 31.12.14
date
16
During 2014, 8,656 shares changed their holders which accounted for 4.75% of the
total number of ordinary trading shares of the Bank. The largest daily turnover was
made on 27.08.2014 when it was traded with 3,410 shares.
4. OFF-BALANCE SHEET ITEMS
During 2014 the Bank issued performance and payment guarantees, opened letters of
credit and avalised bills for its customers. Compared to the end of 2013 the item „Other
off-balance sheet items“ considerably increased, where, in accordance with
International Financial Reporting Standards and new Chart of Accounts for Banks, all
collateral taken as security of loans was recorded.
(in RSD 000)
Item
31.12.2013 31.12.2014 Plan 31.12.2014
Operations performed for and behalf of
300,450
321,422
300,000
third parties
Contingent liabilities (guarantees, avals,
5,026,063
4,528,113
4,500,000
acceptances and irrevocable liabilities)
Derivatives
1,384,923
1,350,000
6,260,098 44,150,273
5,913,600
Total:
12,971,534 48,999,808
12,063,600
The following table compares the structure of the item guarantees, avals, acceptances
and irrevocable liabilities as at 31.12.2013 and 31.12.2014:
Guarantees, avals, acceptances and
irrevocable liabilities
Payment guarantees
Issued uncovered letters of credit in
foreign currencies
Performance guarantees
Avals and bill acceptances
Irrevocable commitments
Total:
(in RSD 000)
% of increase /
31.12.2013 31.12.2014
decrease
2,341,510
1,590,915
-32.06%
26,089
36,544
40.07%
1,762,676
12,942
882,846
5,026,063
2,223,871
1,772
675,011
4,528,113
26.16%
-86.31%
-23.54%
-9.91%
In this period the Bank issued guaranteeing instruments in the total amount of RSD
4,097,951 thousand, namely:
(in RSD 000)
Guarantees, L/Cs, avals and bill
01.01 –
01.01 –
% of increase /
acceptances
31.12.2013 31.12.2014
decrease
Payment guarantees
1,111,045
1,117,447
0.58%
Uncovered LCs
172,977
226,964
31.21%
Performance guarantees
2,248,105
2,752,648
22.44%
Avals and bill acceptances
7,806
892
-88.57%
Total:
3,539,933
4,097,951
15.76%
In 2014 the amount of issued guarantees increased by 15.76% compared to 2013,
primarily due to a rise in the volume of issued performance guarantees.
17
The table below presents a comparative analysis of the structure of Other off-balance
sheet items:
Receivables for evidencing interest
Republic of Serbia bonds by maturities
Unconditional revocable commitments
under frame loans and revocable
commitments for unutilised off-balance
sheet items in RSD and fx
Loan frame
Received material assets of collateral in
favour of the Bank
Received guarantees and other sureties
for settlement of obligations by the
Bank's borrowers
Total:
(in RSD 000)
% of increase /
31.12.2013 31.12.2014
decrease
1,952,975
2,738,965
40.25%
1,525,909
1,376,463
-9.79%
1,795,876
1,748,312
-2.65%
919,682
1,057,666
15.00%
-
36,278,551
100.00%
-
874,556
100.00%
65,656
6,260,098
75,760
44,150,273
15.39%
605.26%
In accordance with the new Chart of Accounts for Banks, off-balance sheet records are
kept for received material assets, guarantees and other sureties for settlement of
obligations by the Bank's borrowers, starting from the annual financial statements for
2014. The amount booked in 2014 is RSD 37,153,107 thousand and relates to the
estimated collateral value.
18
5. STATEMENT OF INCOME
The Bank calculated items of the Statement of Income during 2014 in compliance with
the Law on Accounting, IFRS and NBS regulations.
The Bank finished its operations in 2014 with a loss of RSD 276,694 thousand. After
creating profit from deferred tax assets during 2014 in the amount of RSD 1,040
thousand, the loss after taxation is RSD 275,654 thousand.
ITEM
Interest income
Interest expenses
Net interest income
Fee and commission
income
Fee and commission
expenses
Net fee and commission
income
Net gains on financial
assets held for trading
Net losses on hedging
Net gains on exchange rate
and effects of contracted
index clause
Net losses on exchange
rate and effects of
contracted index clause
Net losses on impairment of
financial assets and credit
risk-weighted off-balance
sheet items
TOTAL NET OPERATING
INCOME
Salaries, salary
compensation and other
personal expenses
Depreciation costs
Other expenses
PROFIT / LOSS BEFORE
TAXATION
Profit tax
Gains from deferred taxes
PROFIT / LOSS AFTER
TAXATION
(in RSD 000)
Plan for
% ostvarenja
31.12.2013 31.12.2014
31.12.2014.
plana
2,030,869
1,879,187
1,949,000
96.42%
858,355
676,700
790,000
85.66%
1,172,514
1,202,487
1,159,000
103.75%
626,793
642,765
635,000
101.22%
73,890
76,307
71,000
107.47%
552,903
566,458
564,000
100.44%
26,528
19,489
1,691
-
7,481
-
-
-
-
13,978
10,000
-
11,460
-
-
-
60,867
32,605
12,309
264.89%
780,736
962,415
605,000
159.08%
1,013,135
872,602
1,142,000
76.41%
492,684
508,117
507,820
100.06%
95,763
550,973
93,036
548,143
95,892
526,288
97.02%
104.15%
(126,285)
(276,694)
12,000
-
39,366
1,040
1,800
-
-
(86,919)
(275,654)
10,200
-
The net interest income was by 3.75% higher than the plan for 2014, resulting mostly
from booking RSD 89,339 thousand of collected suspended interest on the position of
interest income, which is in accordance with the application of the new chart of
accounts for banks. Net fee and commission income was within the planned limits for
2014.
19
The net losses on impairments and provisions exceeded the plan by RSD 365,439
thousand and directly contributed to the negative result.
The largest additional impairments during 2014 were the following:
Client
Concern Farmakom MB d.o.o. – in
bankruptcy, Šabac
Valleta d.o.o. - in bankruptcy, Čačak
Pajić Company Group d.o.o. Paraćin
Vino Župa a.d. Aleksandrovac
Inter-Kop d.o.o. Šabac
Europolis d.o.o. Mesarci
Metal sistemi d.o.o. Kragujevac
Vojvoda Prijezda d.o.o. Stalać
Total:
(in RSD 000)
Increase in impairments of loans in
2014
212,301
110,415
81,689
78,236
74,157
66,171
52,782
50,350
726,101
The largest single impairment was recorded with the client Concern Farmakom in the
The increase in calculated impairments was affected by amendments in the internal
methodology for impairment calculation according to the IFRS, the major ones being
the following:
− extension of the deadline for collection from business real-estate in cash flows
projected for the calculation of single and group impairments from three to four
years, and
− inclusion of all overdue clients (instead of only the first group) in the calculation
of Recovery Indicator (RI) in the group assessment of impairment, which
resulted in reduction of the projected amount of recovery and increase in the
amount of group impairments.
20
5.1. Income
The income structure during 2013 and 2014 was as follows:
Income
Interest income
Fee and commission income
Net gains on financial assets held for
trading
- net gains on the sale of securities
- net gains on the change in fair value
of securities
- net gains on the change in derivative
value
Net gains on exchange rate and
effects of contracted index clause
- net exchange rate gains
- net gains exchange rate under
contracted index clause
- income from operations
- income on reversal of unused
provisions
- income on the sale of fixed assets and
intangible investments
- income on dividend and equity
investment
- other income
- income on changes in value of
liabilities
Net income on impairment of
financial assets and credit riskweighted off-balance sheet items
- income on reversal of impairment of
balance sheet items
- income on reversal of provisions for
off-balance sheet items
- income on collected written-off
receivables
Total:
(in RSD 000)
% of increase /
31.12.2013 31.12.2014
decrease0
2,030,869
1,879,187
-7.47%
626,793
642,765
2.55%
50,968
40,947
-19.66%
2,638
1,239
-53.03%
41,438
39,577
-4.49%
6,892
131
-98.10%
2,442,657
1,887,187
-22.74%
1,507,423
718,536
-52.33%
935,234
1,168,651
24.96%
60,867
5,104
32,605
3,907
-46.43%
-23.45%
383
-
-
2,440
568
-76.72%
809
892
10.26%
12,141
22,012
81.30%
39,990
5,226
-86.93%
463,982
408,432
-11.97%
420,119
343,112
-18.33%
43,863
65,309
48.89%
-
11
-
5,676,136
4,891,123
-13.83%
The interest income in 2014 was lower by 7.47% than in the same period in 2013, while
the fee and commission income grew by 2.55%. The achieved interest income was
lower than planned by 3.58%, whilst the fee and commission income was lower by
1.22% than planned for 2014.
21
5.2. Expenses
Expenses had the following structure in 2013 and 2014:
Expenses
Interest expenses
Fee and commission expenses
Net losses on financial assets held
for trading
- losses on the sale of securities
- losses on change in fair value of
securities
- losses on changes in derivative value
Net losses on hedging
Net losses on exchange rate and
effects of contracted index clause
- net losses on exchange rate
- exchange rate gains under contracted
index clause
Net losses on impairment of financial
assets and credit risk-weighted offbalance sheet items
- losses on impairment of balance sheet
assets
- losses on provisions for off-balance
sheet items
- losses on write-off of unrecoverable
receivables
Salaries, salary compensations and
other personal expenses
Depreciation costs
Other expenses
Operating expenses
- material costs
- production services
- intangible costs
- tax and contribution costs
- other operating expenses
- write-off of unrecoverable receivables
- other provisions
- other expenses
- losses on changes in value of
liabilities
Total:
(in RSD)
% of increase /
31.12.2013 31.12.2014
decrease
858,355
676,700
-21.16%
73,890
76,307
3.27%
24,440
21,458
-12.20%
4
4,217
-
11,488
10,349
-9.91%
12,948
7,481
6,892
-
-46.77%
-
2,454,117
1,873,209
-23.67%
1,664,560
1,610,010
-3.28%
789,557
263,199
-66.66%
1,244,718
1,370,847
10.13%
1,212,936
1,366,828
12.69%
28,463
2,835
-90.04%
3,319
1,184
-64.33%
492,684
508,117
3.13%
95,763
550,973
498,234
53,179
150,261
194,227
100,243
324
52,739
2,507
5,475
93,036
548,143
512,319
50,198
148,616
218,731
94,685
89
35,824
1,700
7,498
624
-2.85%
-0.51%
2.83%
-5.61%
-1.09%
12.62%
-5.54%
-72.53%
-32.07%
-88.60%
44,757
26,002
-41.90%
5,802,421
5,167,817
-10.94%
Interest expenses were lower by 21.16% in 2014 than in 2013, and lower by 14.34%
than the anticipated values. The Bank particularly focused on further reduction of these
expenses by negotiating lower interest rates on deposits.
22
Salary, depreciation and other operating expenses in 2014 were by 1.81% higher than
in 2013 but lower by 1.30% than the plan for 2014. The overall growth of operational
expenses resulted from the growth of expenses of deposit insurance premium of RSD
29,814 thousand after introduction of extraordinary insurance premium.
6. CASH FLOWS FROM OPERATING ACTIVITIES
Cash flows from operating activities
Item
Cash flows from operating activities
Interest
Fees
Dividend and share in profit
Cash outflows from operating
activities
Interest
Fees
Salaries
Tax and contribution
Net cash inflows from operating
activities
2,498,413
1,878,004
614,776
5,099
534
2,620,656
1,964,596
637,039
18,129
892
(in RSD 000)
Increase /
decrease
122,243
86,592
22,263
13,030
358
1,882,367
1,730,488
-151,879
817,642
73,843
492,684
115,163
383,035
639,794
67,966
508,117
108,044
406,567
-177,848
-5,877
15,433
-7,119
23,532
616,046
890,168
274,122
I – XII 2013
I – XII 2014
Net cash inflows from operating activities in 2014 amounted to RSD 890,168 thousand.
Cash inflows from operating activities in 2014 increased by RSD 122,243 thousand
compared to 2013, while cash outflows reduced by RSD 151,879 thousand. The
increase in cash flows from interest related to collected subsidised interest and this
increase amounted to RSD 147,188 thousand in 2014. The reduction of outflows from
operating activities resulted from the decrease in interest outflows on dinar and fx
deposits of banks in bankruptcy and insurance companies in the amount of RSD
95,061 thousand, as well as the reduction of interest outflows on fx retail savings
equalling RSD 59,889 thousand.
Net cash inflows from the operating activities in 2014 cumulatively increased by RSD
274,122 thousand relative to 2013.
7. PAYMENT OPERATIONS
7.1. Dinar payment operations
In 2014. total volume of domestic payment operations of business and retail clients
amounted to RSD 410,555 million with the following structure:
23
Volume of domestic payment operations
Dinar inflows and
payments
Dinar business inflows
Dinar retail inflows
Business payments
Retail payments
Total:
01.01 –
31.12.2013
190,369,297
7,988,874
189,776,429
871,874
389,006,474
(in RSD 000)
01.01 Plan for
% of the plan
31.12.2014
2014
achieved
200,777,875 194,087,000
103.45%
8,235,297
8,500,000
96.89%
200,576,794 195,000,000
102.86%
964,738
950,150
101.54%
410,554,704 398,537,150
103.01%
Fee and commission income from domestic business and retail payment operations is
shown in the following table:
Fee from domestic
payment operations
Business clients
Retail clients
Total:
01.01 –
01.01 31.12.2013 31.12.2014
204,016
228,955
77,661
88,861
281,677
317,816
(in RSD 000)
Plan for
% of the plan
2014
achieved
213,200
107.39%
80,000
111.08%
293,200
108.40%
The total volume of dinar payment operations of business and retail clients rose during
2014 by 5.54% relative to 2013. Income from domestic payment operation fees
increased by 12.83%.
7.2. Foreign payment operations
In 2014 the total volume of foreign payment operations that the Bank made was EUR
494,213 thousand.
Foreign payment operations
(in EUR 000)
Foreign inflows and
01.01 01.01 Plan for
% of the plan
payments
31.12.2013 31.12.2014
2014
achieved
Foreign business inflows
238,210
253,836
250,290
101,42%
Foreign retail inflows
4,975
4,909
5,110
96,07%
Foreign business
178,886
232,708
208,100
111,83%
payments
Foreign retail payments
1,525
2,760
2,200
125,45%
Total:
423,596
494,213
465,700
106,12%
The volume of foreign payment operations, both business and retail, grew in 2014 by
11.54% relative to 2013. There were 62,431 transactions of foreign inflows and
payments in 2014, which was by 14.79% more than in 2013.
24
7.3. Documentary operations
In 2014 the operations in the Documentary Operations Unit were carried out in
accordance with applicable procedures of the Payment Operation Department
governing documentary operations.
Documentary operations in 2014
Item
Made from 01.01. to
31.12.2014
Number
Import L/Cs
Plan for 2014
Amount
Amount
Number
(000 EUR)
(000 EUR)
40
1,934
39
1,587
124
4,898
142
5,046
Export L/Cs
41
25,806
29
2,651
Export guarantees
23
253
29
1,400
Import guarantees
% of the plan
accomplished for
2014
Amount
Number
(000 EUR)
102.56
121.86%
%
87.32%
97.07%
141.38
973.44%
%
79.31%
18.07%
Fee and commission income from foreign payment operations and documentary
business are presented in the following table:
(in RSD 000)
Fee and commission
01.01 01.01 Plan for
% of the plan
income
31.12.2013 31.12.2014
2014
accomplished
- for foreign payment
29,461
37,848
31,705
119.37%
operations
- for issued guarantees and
103,418
91,370
95,000
96.18%
other sureties
Total:
132,879
129,521
126,705
102.22%
Fee and commission income from foreign payment operations grew in 2014 by 28.47%
while fees for issued guarantees reduced by 11.65% relative to 2013.
25
8. COMPLIANCE WITH THE NBS REGULATIONS AND IFI AGREEMENTS
During 2014 all the operating ratios of Čačanska banka were within the limits
prescribed by the Law on Banks and NBS decisions.
The values
prescribed by the
NBS regulations
Bank's equity
Min 10,000,000 €
Capital adequacy ratio
min 12%
Foreign exchange risk ratio
max 20%
Liquidity ratio
Min 1
Narrow liquidity ratio
Min 0.7
Exposure to a person related to the Bank
max 5%
Total exposure to persons related to the Bank
max 20%
Exposure to a person / group of related
max 25%
persons
Sum of large exposures
max 400%
Investing into non-financial persons
max 10%
Total investments into non-financial persons
max 60%
and fixed assets of the Bank
Ratio
Values as at
31.12.2014
25,115,292 €
12.81%
14.29%
2.79
1.86
1.93%
6.58%
19.17%
90.38%
0.50%
25.52%
Compliance with the covenants from the agreements concluded with the
international financial institutions (IFIs)
Pursuant to the defined limits in the agreements concluded with the IFIs - the European
Fund for Southeast Europe (EFSE), German Development Bank (KfW), European
Bank for Reconstruction and Development (EBRD), Green for Growth Fund (GGF),
Netherlands Development Bank (FMO) and International Finance Corporation (IFC) the
Bank is required to comply with certain financial covenants until the final repayment of
the loans. As at 31.12.2014 the Bank was not complied with the following ratios:
Financial
institution
EBRD
EFSE
KfW
FMO
IFC
Ratio
Tier 1 capital ratio
Single party/group exposure ratio
Single party/group exposure ratio
Prescribed
30.00%
9.00%
20.00%
20.00%
25.00%
Achieved
58.67%
7.82%
24.26%
22.16%
52.55%
According to the loan agreements, the Bank regularly reports to the international
financial institutions of its financial ratios in accordance with its financial liabilities, with
detailed elaboration on each exceeded limit. The Bank does not expect any negative
reactions by the creditors regarding this matter.
26
9. HUMAN RESOURCES
The number of employees in the Bank's head office and branches as at 31.12.2014 is
presented in the following table:
Number of employees
Head office
Branches and
sub-branches
Total:
31.12.2013
173
31.12.2014
Plan 31.12.2014
181
173
218
204
219
391
385
392
During 2014, 23 employees terminated their employment with the Bank for the
following reasons:
Reason for terminating the
employment
Temporary agreement expiry
Retirement
Movement to another company
Redundancy
Total:
No. of employees
terminating their
employment in 2013
4
7
8
6
25
No. of employees
terminating their
employment in 2014
7
3
8
5
23
The following graphs show the qualification and age structure of employees as at
31.12.2013 and 31.12.2014.
Age structure of employees
Qualification structure of employees
450
450
400
2,56%
2,34%
400
33,25%
32,99%
300
10,49%
9,35%
350
350
300
250
250
200
200
150
150
100
55,32%
53,71%
50
0
0
High school
College
University
0,26%
25,83%
27,53%
17,90%
17,40%
38,87%
39,74%
17,14%
15,06%
100
50
Others
0,26%
Up to 30
31 to 40
51 to 60
Over 60
41 to 50
Regarding the qualification structure of employees, the Bank met anticipated share of
employees with university degree, accounting for 55.32% of total. The share of staff
below 40 years of age was 54.80%. Average age was 41.
Expenses for salaries and other fringe benefits in 2014 amounted to RSD 577,532
thousand accounting for 99.56% of the total budget planned. The aggregate amount of
RSD 2,405 thousand or 46.25% of total training budget was spent for staff training in
2014.
27
10. INVESTMENT PLAN
In 2014 investments in fixed asses, investment property and intangible investments
amounted to RSD 91,460 thousand out of which RSD 19.065 thousand related to
collateral enforcement.
Changes are presented in the following table:
(in RSD 000)
Buildings Equipment
Balance 01.01.2014
Increase:
- Collateral
enforcement
- IT
- Security
- Other
Decrease:
Amortisation
Sale
Write off
Balance –
31.12.2014
Investment Intangible
property investments
534,033
116,183
125,088
8,199
44,037
6,827
Total
Plan for
2014
35,761 811,065
811,065
12,238
26,986
91,460
129,661
-
12,238
-
19,065
-
1,372
(21,295)
(17,475)
(3,819)
-
38,228
2,100
3,709
(54,888)
(54,888)
-
(3,537)
(3,537)
-
26,986 65,214
2,100
5,081
(17,136) (96,855)
(17,136) (93,036)
- (3,819)
-
99,820
6,341
23,500
(98,257)
(95,892)
(4,082)
-
520,938
105,332
133,789
45,611 805,670
840,752
Most of the investment in IT equipment relates to Storage VNX 5400 and CISCO blade
centre, costing in total RSD 26,434 thousand. The capacity of the new storage system
was projected to support all existing requests for data warehousing as well as the
activities anticipated by the Information System Development Strategy of the Bank in
the following three years. The amount of RSD 5,293 thousand was spent for the
purchase of laptop and desktop computers. The amount of RSD 3,266 thousand was
invested into CISCO network infrastructure, while RSD 1,456 thousand was spent for
the purchase of Bizhub device.
The business premises that the Bank acquired by collection of receivables in 17
Bulevar oslobođenja street of 350m², were activated as fixed assets to be used for
document archiving. The business premises also acquired by collection of receivables
in bb Bate Jankovića Street in Čačak, of 52 m², as well as business premises in 17
Bulevar oslobođenja street in Čačak of 716 m², were rented out and activated as
investment property.
In August 2014 business premises in Preljina of 147m² and land of 997 m2 were sold.
Under that ground, due to reversal of revaluation reserves, retained earnings of the
current year in the amount of RSD 1,759 thousand and capital gain in the amount of
RSD 34 thousand were achieved.
28
11. PUBLIC RELATIONS AND MARKETING
The amount of RSD 25,624 thousand was spent for the implementation of marketing
activities in 2014, or 93.01% of total planned marketing budget. In total marketing
costs donations and sponsorship accounted for 62.51%, advertising and propaganda
37.19% and gifts 0.30%.
Marketing costs
(in RSD 000)
Costs
ADVERTISING AND
PROPAGANDA
Head office
Marketing expense account
Advertising material
Advertising in media
The Bank's Day
Other
Branches
DONATIONS AND SUPPORT
Head office
Branches
SPONSORSHIP
Head office
Branches
GIFTS
TOTAL MARKETING COSTS ON
THE BANK'S LEVEL
Implemented from
01.01. to
31.12.2014
Plan for
2014
% of the
plan
9,530
10,000
95.30%
9,530
2,270
719
3,189
954
2,398
15,931
15,226
705
86
86
77
10,000
2,500
900
3,150
1,450
2,000
16,005
14,575
1,430
995
995
550
95.30%
90.80%
79.89%
101.24%
65.79%
119.90%
99.54%
104.47%
49.30%
8.64%
8.64%
14.00%
25,624
27,550
93.01%
Within the total donations during 2014, the most important were the finances intended
for remediation activities on property after destruction and damage caused by floods in
May 2014. The Bank donated RSD 3 million for that purpose.
The financial support to the national team of athletes amounted to RSD 8.4 million in
2014, out of RSD 10.9 million donations for sport. The rest of donations were granted
to health care and cultural institutions.
For the celebration of the Bank's Day the budget of RSD 954 thousand was allocated,
out of which RSD 430 thousand for the stage play of the theatre “Atelje 212”, RSD 105
thousand for three performances of children's play “The Goat's Ears of the Emperor
Trojan” and RSD 154 thousand for “The Seeds of Success” award. The rest of the
funds used for the celebration of the Bank's Day related to the rent of the House of
Culture hall – RSD 173 thousand, design services and printing of advertising materials.
The amount of RSD 1.9 million was invested in advertising of cash loans in 2014. RSD
647 thousand was allocated for the promotion of saving, while RSD 309 thousand was
spent for advertising energy efficiency loans. The importance of alternative
communication channels was growing in advertising bank products, and the amount of
RSD 1.1 million was allocated to Android application and the Bank's Facebook
corporate page.
29
12. QUALITY MANAGEMENT SYSTEM
During 2014 Čačanska banka maintained, developed and improved its quality
management system.
In January 2014 quality targets were reviewed and after detailed analysis of the
accomplished results, planned strategic targets and other planned activities, quality
targets for 2014 were established.
In accordance with the schedule of internal controls in January and February 2014
there were quality management internal controls carried out in all Bank's organisational
units. Their purpose was to identify compliance of the implemented quality
management system with standard requirements, as well as the manner in which
permanent improvements were made. The controls did not identify any noncompliances, and heads of the Bank's organisational units were acquainted with
findings and recommendations.
During February the quality management system was reviewed in line with the relevant
procedure. During such review, the Bank’s management concluded that permanent
improvement in work organisation, application solutions, work methodology, training of
employees, monitoring events at the banking market, strengthening marketing activities
etc. contributed to the quality of services in all segments of banking services.
The supervision of the quality management system by the certifying company SGS
d.o.o. Belgrade (Societe Generale de Surveillance), was done on 05.03.2014 in
organisational units that were subject to the supervision. During supervision
(discussions, review of activities, documents and records), the SGS supervising team
concluded that QMS in the Bank was complied with standard requirements and that it
ensured systematic fulfilment of relevant requirements for banking services within the
scope of their application, the policy and quality targets. QMS documentation was in
line with tested standard requirements and ensured sufficient structure to support the
QMS implementation, maintenance and permanent improvement. The SGS supervising
team did not identify any non-compliances requiring any corrective measures and they
proposed to SGS Geneva that Čačanska banka retained the current certificate for
design and provision of banking services ISO 9001:2008.
The annual evaluation of the Information Security Management System according to
ISO/IEC 27001:2005 standard requirements was carried out from 12 – 14 November
2014 by SGS d.o.o. according to the plan provided by SGS. During the supervisory
visit the team of supervisors identified two minor discrepancies that did not affect the
Information Security Management System and proposed SGS Group in Geneva that
the Bank should retain its Certificate which was complied with ISO/IEC 27001:2005
standard requirements
30
13. REPORT ON BOARD OF DIRECTORS MEETINGS IN 2014
During 2014 the Board of Directors held 9 meetings.
The 1st meeting of the Board of Directors was held in Belgrade on 30.01.2014 with
the following agenda:
1. Adoption of the Minutes of the last meeting
2. A report on the liquidity ratio stress tests in the period from 01.12. – 31.12.2013
3. Passing a decision on adopting the Annual Report on Inventory of Assets and
Assets Sources of Čačanska banka a.d. Čačak
4. Report on privatisation of the Bank
5. Reviewing credit procedures
6. Reviewing the report of the Internal Audit Department for the period from 01.07. 31.12.2013, with regard to the Annual Plan 2013 implementation
7. Passing decisions on approving legal agreements with a person related to the Bank
8. Reporting on the Audit Committee Activities in the period from 01.12. – 31.12.2013
9. Information of the decisions passed by the Executive Board under the authorisation
of the Board of Directors in the period from 01.12. – 31.12.2013
10. Miscellaneous
The 2nd meeting of the Board of Directors was held in Čačak on 28.02.2014 with
2. Passing a decision on approving the Bank’s Financial Statements with the Operating
Report for 2013
3. Decision on re-election and appointment of the president and members to the
Executive Board
4. Report on the liquidity ratio stress tests in the period from 01.01.2014 – 15.02.2014
5. Report on the Bank's privatisation
6. Annual report on compliance controls in 2013 with identified and assessed major
compliance risks and the Risk Management Plan
7. Passing a decision on approving the Annual Report on Risk Management Adequacy
and Internal Control of the Bank in 2013
8. Report of the Bank's receivables from the Republic of Serbia under subsidised
interest
9. Approval for the Bank's exposure to one party or a group of related parties over 10%
of capital
10. Passing decisions on approving legal agreements with persons related to the Bank
13. Miscellaneous
31
The 3rd meeting of the Board of Directors was held in Vrdnik on 25.04.2014 with
2. Operating Report for the period 01.01 – 31.03.2014
3. Report on the liquidity ratio stress tests in the period from 16.02 – 31.03.2014
4. Report of the external auditor KPMG d.o.o. Belgrade on the audit of financial
statements of the Bank for 2013
5. Management Letter provided by the external auditor KPMG d.o.o. Belgrade
7. Action Plan in the event privatisation fails
8. Passing a decision on revoking Amendment Agreements relating to Subordinated
Loan Agreement concluded with EFSE
9. Report on Internal Capital Adequacy Assessment Process
10. Information of the Bank's activities for improvement in managing and monitoring
overdue customers
11. Passing a decision on amendments and modifications to the Accounting Policy
12. Concluding Amendment to Employment Contract with the president and members
of the Executive Board
13. Concluding Amendment to Employment Contract with the head of the Internal Audit
and the of the Compliance and AML Department
16. Passing a Decision on scheduling the 32nd regular meeting of the Shareholders'
Assembly and draft decisions to be reviewed at the meeting
17. Passing a decision on concluding an agreement with a person related to the Bank
18. Miscellaneous
The 4th meeting of the Board of Directors was held in Belgrade on 12.06.2014
with the following agenda:
2. Information of the Bank's operations for the period 01.01 – 30.04.2014
5. Report on the performance of the Early Workout Department and the portfolio quality
6. Passing a decision on amendments to the Risk Management Strategy
7. Passing a decision on amendments to the Capital Management Strategy and Plan
8. Passing a decision on amendments to the Lending Policy Guidelines
9. Passing a decision on concluding the agreement on the assignment of receivables
and write-off of part of receivables that the Bank has towards the client Srbolek a.d.
Belgrade in bankruptcy
32
10. Information of the received approval for appointment of the president and members
of the Executive Board
11. Report on damage from floods on the property of Čačanska banka
12. Report on damage from floods on the property of the Bank's clients
13. Passing decisions on concluding agreements with persons related to the Bank
14. Reporting on the Audit Committee Activities in the period from 01.04 – 31.05.2014
16. Acquainting with the statements of the Executive Board members pursuant to
article 78 of the Law on Banks
17. Miscellaneous
2. Operating Report for the period from 01.01 – 30.06.2014
5. Passing a decision on concluding an agreement with a person related to the Bank
6. Report on the Internal Audit Department performance in the period from 01.01 –
30.06.2014
7. Reporting on the Audit Committee Activities in the period from 01.06 – 30.06.2014
of the Board of Directors in the period from 01.06 – 30.06.2014
9. Miscellaneous
The 6th meeting of the Board of Directors was held in Čačak on 25.09.2014 with
2. Information of the Bank's operations in the period from 01.01 – 31.08.2014
5. Information regarding request and decision of the Anti-Corruption Agency
6. Information on activities regarding the recommendation of the Commissioner for
Protection of Equality
7. Report on activities regarding the implementation of Microsoft Dynamics CRM and
Credit Scoring Model
8. Passing a decision on appointing the Commission for Procurement and Alienation of
Fixed Assets
9. Reviewing of the Policy of Salaries
10. Reporting on the Audit Committee activities in the period from 01.07 – 31.08.2014
33
of the Board of Directors in the period from 01.07 – 31.08.2014
12. Miscellaneous
2. Operating Report for the period from 01.01 – 30.09.2014
5. Decision on calling an extraordinary meeting of the Shareholders' Assembly of the
Bank and
establishing draft agenda and resolutions
6. Reporting on the Audit Committee activities in the period from 01.09 – 30.09.2014
of the
Board of Directors in the period from 01.09 – 15.10.2014
8. Miscellaneous
2. Reviewing the operating results of the Bank in the 01.01 – 31.10.2014
4.Major financial indicators and guidelines for Business Plan 2015
5. Reviewing the IS Development Strategy
6. Reviewing the Recovery Strategy to be implemented in case of interruption of
operations
7. Reviewing the Business Continuity Plan (BCP)
8. Passing a decision on adopting the Disaster Recovery Plan (DRP)
9. Reviewing the IT Security Policies
10 Reviewing risk management strategies and policies
11. Passing a decision on adopting the Internal Audit Annual Operating Plan for 2015
12. Passing a decision on adopting the Annual Operating Plan of the Compliance and
AML Department for 2015
13. Passing a decision on approving legal agreements with a person related to the
Bank
of the Board of Directors in the period from 16.10. –15.11.2014
34
16. Miscellaneous
2. Reviewing the information of operating results of the Bank in the period 01.01 –
30.11.2014
4. Passing a decision on amendments and modifications to the Accounting Policy
5. Passing a decision on approving the Bank's exposure above 10% of capital
6. Passing a decision on the sale of investment property
7. Passing a decision on the removal and appointment of the president and members
of the Audit Committee
8. Passing a decision on scheduling the 7th Extraordinary General Meeting of
Shareholders and establishing its agenda and resolutions
of the Board of Directors in the period from 16.11. –15.12.2014
10. Miscellaneous
35
III INVESTMENTS FOR THE PURPOSE OF ENVIRONMENTAL PROTECTION
The Bank is particularly cautious to invest only in the projects that do not cause any
environmental and social harm. Environmental and social (E&S) protection includes,
besides ecological aspects, the issues of a local community and employee protection.
The aim of managing E&S risk is identification, assessment and control of the risks that
may cause E&S harm and it is carried out in accordance with the E&S Risk
Management Policy and Procedure BPI-751-503 E&S Risk Management.
The following bodies are responsible for managing the E&S risk in the Bank:
• Board of Directors that establishes and at least once a year reviews E&S Risk
Management Policy and identifies the need for any amendments thereto,
• Executive Board that establishes and implements the E&S Risk Management
Procedure,
• Credit Committees that make decisions on loan disbursement on the basis of
the E&S information available and the opinion of the Creditworthiness Appraisal
Department,
• The Creditworthiness Appraisal Department that assesses the impact of the
activity and the project during the process of appraising customers'
creditworthiness,
• The Portfolio Management and Reporting Department that monitors loans by
their activities, industrial sectors and E&S risk categories, by making and
analysing reports that are delivered to the EBRD and IFC Environmental
Department
• A person appointed by the Bank's Executive Board as responsible for
appropriate functioning and maintenance of the Social and Environmental
Management System (SEMS) in the Bank.
The E&S risk is measured in the Branch Network Division and Corporate Clients
Division, when analysing loan requests and monitoring the environment, while such
analyses will be verified by the Creditworthiness Appraisal Department.
When processing individual clients’ applications, E&S risk is classified for the basic
activity of the client and the activity which is subject to financing.
There are the following E&S risk categories:
• High – Exclusion List
• High – Referral List
• High – Category A
• High
• Medium
• Low
If the activity which is subject to financing is included in the Exclusion List, the
application will be rejected. If the activity is included in the Referral List, and it is
evaluated that the project should be financed, the approval is requested from the
EBRD and IFC Environmental Department. The Bank has had no application for
financing activities or projects included in this risk category so far.
In the event that they are classified in high risk category A, the Environmental Impact
Assessment will be provided from the client, and the person appointed by the
Executive Board for the SEMS maintenance will provide a prior consent for financing
the project.
36
When reviewing application with the decision draft for the relevant credit committee, the
Creditworthiness Appraisal Department will verify classification of the activity with
regard to E&S risk and the data about the E&S impact of the client and the financed
activity.
In the events anticipated by the Procedure, the integral part of the application analysis
will be the opinion of the Creditworthiness Appraisal Department about how the client
submitting the application complies with E&S regulations and standards.
Loan agreements and agreements on other exposures contain E&S provisions that
should be obeyed by both the client and the Bank.
Environmental risk
Overview of the Bank's exposures by environmental and social risk categories
(in RSD 000)
Risk category
High – Exclusion
List
High – Referral
List
High – Category A
High
Medium
Low
Total:
Amount (balance and
Number of clients
off-balance)
31.12.2013 31.12.2014 31.12.2013 31.12.2014
Increase/
decrease
1
1
3,385
1,050
-2,335
-
-
-
-
-
7
257,701
231,430
260 6,336,642 6,921,451
1,122 8,937,498 9,456,083
2,374 13,720,139 13,881,182
3,764 29,255,365 30,491,196
-26,271
584,809
518,585
161,043
1,235,831
5
233
904
2,007
3,150
Investments classified in category High Risk – Exclusion List were collected pursuant
to the agreed maturity, which was also prescribed by the Subscription Agreement of
14.12.2010 concluded with the EBRD and IFC. The Bank fulfilled all its obligations
arising from the Subscription Agreement relating to the decrease in exposure to the
activities listed in Joint IFI Exclusion List. The exposure to customers whose financed
activity was classified in High Risk – Exclusion List reduced when compared to
31.12.2013 by RSD 2,235 thousand and amounted to only RSD 1,050 thousand.
Since 15.11.2010 the Bank has been applying the EBRD and IFC Exclusion List, not
financing the listed activities.
During 2014 the Bank continued its firm support to financing energy efficiency and
renewable energy projects, disbursing in total 914 loans in the amount of EUR 3,239
thousand.
37
IV MATERIAL EVENTS AFTER THE END OF BUSINESS YEAR
After the business year ended, on 20 March 2015 the Agreement on Sale and
Purchase of Shares of Čačanska banka was signed in the Ministry of Finance among
the Republic of Serbia, International Finance Corporation, European Bank for
Reconstruction and Development and Beogradska banka a.d. in Bankruptcy as the
seller and Türkiye Halk Bankası A.Ş from the Turkish Republic as the buyer. By this
agreement Türkiye Halk Bankası A.Ş as the buyer took upon itself the obligation to
pay EUR 10.1 million for 139,680 shares, which represents 76.74% of the shareholders
capital of Čačanska banka. This amount will be paid in full in cash at the transfer of
ownership over shares, not later than within 60 business days, after which Türkiye Halk
Bankası A.Ş will officially become the majority owner of Čačanska banka. Except for
the price offered, Türkiye Halk Bankası A.Ş plans additional investments to secure the
further development and growth of Čačanska banka. In addition to the recapitalization
and expansion of the business network, investments are planned also in the IT, credit
cards, development of the private banking segment, etc.
V ANTICIPATED FUTURE DEVELOPMENT
When preparing the Major Financial Indicators and Guidelines for Business Plan 2015,
different options of completion of the process of finding a strategic partner for the Bank
were reviewed, resulting in two scenarios.
The first scenario of major financial indicators for 2015 is based on an assumption that
the process of finding a strategic partner for the Bank will not be completed during
2015, but existing shareholders will make equity investment in the amount of one billion
dinars. The equity investment is necessary for the purpose of maintaining the capital
adequacy ratio above the prescribed limit. This scenario of major financial indicators for
2015 anticipates making a positive financial result. The profit would be generated
primarily from a saving made through a 10% reduction of salary costs and maintenance
of other operating expenses at the level as during 2014, regardless of an expected
growth in exchange rate and inflation. The plan is to keep the ratio of operating
expenses to net interest, fee and commission income below 60%. The Bank anticipates
that it will continue maintaining high liquidity.
The second scenario of major financial indicators for 2015 is based on an assumption
of the sale of the Bank to a strategic partner and capital investment in the first half of
2015 in the amount of EUR 20 million. This investment is necessary for the purpose of
maintaining the projected capital adequacy ratio and increasing loan portfolio and total
assets. This scenario of major financial indicators for 2015 anticipates that the Bank
will, owing to the investment of EUR 20 million, open 10 new organisational units and
increase the number of employees to 460. It will still focus on SMEs with the Bank's
exposure of up to EUR 1.5 million and retail clients. The Bank's target is to raise the
number of clients in these segments, and/or develop loan and deposit base and
increase interest, fee and commission income. Since the Bank plans to open new
organisational units during 2015, operating expenses would significantly grow (salaries,
IT expenses, amortisation, training, large marketing investments), the growth of
interest, fee and commission income would be somewhat slower, and the Bank would
not be able to make a positive financial result in 2015, which will be expected in 2017.
38
VI RESEARCH AND DEVELOPMENT ACTIVITIES
The Bank carries out a regular financial market research, analyses customers' financial
needs and investigates a degree of satisfaction of the users of financial services.
The Offering and Marketing Division of Čačanska banka continuously develops new
products and services and endeavours, on the basis of the information and conclusions
acquired upon the market research and customers' needs, to develop and place at the
market modified existing products, as well as completely new products and services.
As a result of the research and development activities, during 2014 the Bank offered
new options for cash loans, as well as conveniences for the usage of current account
and its accompanying services.
VII INFORMATION OF PURCHASE OF OWN SHARES
The Bank never owned its own shares and did not acquire them during 2014.
VIII EXISTENCE OF AFFILIATES
The Bank operates in the head office and 14 branches registered in Čačak, Jagodina,
Gornji Milanovac, Belgrade (two branches), Kraljevo, Užice, Kragujevac, Kruševac,
Aranđelovac, Valjevo, Šabac, Niš, Novi Sad, SME Credit Centre in New Belgrade, and
9 sub-branches in Paraćin, Požega, Topola, Ivanjica, Vrnjačka Banja, Leskovac,
Mladenovac and Čačak (two sub-branches).
IX RISK MANAGEMENT ADEQUACY
The Bank's targets in risk management are identification, measuring, mitigating and
monitoring all types of risks and thus minimizing the Bank's exposure to such risks.
Credit Risk
The Bank measured and monitored the credit risk level through assessing the clients’
solvency and controlling the loan portfolio through the calculation of a loan loss reserve
pursuant to the NBS regulations and impairment and provisions pursuant to the IFRS.
Structure of gross risk-weighted assets in terms of classification categories
(in RSD million)
Classific
Classified
ation
amount
categori
31.12.2013.
es
A
B
C
D
E
Total:
18,267
8,433
2,265
303
5,237
34,505
Plan for 31.12.2014
% of the
% of the
share in
share in
% of the
Classified
gross
gross
share in
amount
Classifie
riskriskgross risk31.12.2014.
d amount
weighte
weighted
weighted
d assets
assets
assets
52.94%
19,547
54.19%
16,429
50.03%
77.38%
77.74%
74.08%
24.44%
8,497
23.55%
7,897
24.05%
6.56% 6.56%
831
2.30% 2.30%
1,882
5.73%
5.73%
0.88%
1,212
3.36%
394
1.20%
16.06%
19.96%
20.19%
15.18%
5,989
16.60%
6,236
18.99%
100.00%
36,076 100.00%
32,838
100.00%
39
As at 31.12.2014 the share of gross risk-weighted assets classified in A and B was
77.74% while the share of gross risk-weighted assets classified in D and E stood at
19.96%, so that the Bank's credit risk as at 31.12.2014 was classified in a critical risk
category, according to the internal procedure.
Compared to 31.12.2013 the share of receivables classified in A and B categories
increased by 0.36 pp, while the share of receivables classified in the C category fell by
4.26 p.p. and in D and E categories increased by 3.90 p.p.
Negative macroeconomic trends, particularly slowdown of economic activities and
deterioration of liquidity and profitability of enterprises, resulted in worsening of the
quality of the Bank's loan portfolio.
Pursuant to the Procedure for Credit Risk Management at the portfolio level, the Bank
will amortise the critical level of the credit risk measured through the assets quality by
establishing adequate reserves for assets to be classified in D and E categories.
Loan loss reserve pursuant to the NBS Decision on Classification
(in RSD 000)
31.12.2013 31.12.2014 Plan for 31.12.2014
Loan loss reserve under balance
5,583,706
6,516,058
6,672,091
sheet assets
Loan loss reserve under off179,444
68,775
122,300
balance sheet items
Total:
5,763,150
6,584,833
6,672,091
Provisions according to the Bank's internal methodology
31.12.2013
Impairment of balance sheet
assets to be classified
Provisions for losses under offbalance sheet items
Total:
31.12.2014
(in RSD 000)
Plan for 31.12.2014
3,283,744
4,122,755
3,914,728
65,526
3,050
39,542
3,349,270
4,125,805
3,954,270
Required loan loss reserve
Required reserve
(in RSD 000)
31.12.2013 31.12.2014 Plan for 31.12.2014
2,510,737
2,501,856
2,840,121
A required loan loss reserve is the sum of positive differences between the estimated
loan loss reserve and the established impairment of the balance sheet and provisions
for off-balance sheet losses at the borrower's level. As at 31.12.2014 the required
reserve was RSD 2,501,856 thousand and was a deductible from the Bank's equity.
Compared to 31.12.2013 the required reserve reduced by RSD 8,881 thousand.
40
Liquidity Risk
Liquidity Ratio and Narrow Liquidity Ratio in 2014
Liquidity Ratio
2.79
2.71
3.61
1.8
31 December
Average
Maximum
Minimum
Narrow Liquidity Ratio
1.86
1.52
2.33
0.92
The Bank's liquidity measured by the Liquidity Ratio and Narrow Liquidity Ratio was in
a low risk category.
Additional liquidity ratios in 2014
Liquid assets ratio
Net loans to total deposits
ratio
Customers' deposits to total
deposits ratio
Foreign
currency
receivables against loans to
foreign currency liabilities
Open
foreign
currency
position ratio
Deposit concentration ratio
Min.
23.57%
Max.
31.35%
Average
26.91%
Limit
20.00%
117.68%
133.82%
127.54%
200.00%
96.65%
100.00%
99.79%
75.00%
77.31%
91.12%
83.75%
95.00%
1.49%
14.80%
5.81%
10.00%
20.00%
27.97%
24.39%
30.00%
The trend of additional liquidity ratios implies that the Bank had high liquidity level in
2014
Foreign Exchange Risk
Foreign exchange risk ratio in 2014
31 December
Average
Maximum
Minimum
14.29%
4.94%
14.80%
1.13%
Foreign exchange risk, measured by the foreign exchange risk ratio was mostly in a
low risk category.
Interest Rate Risk
The interest rate risk was monitored through the value of risk-weighted interest gap
with regard to the Bank's capital. As at 31.12.2014 the value of risk-weighted interest
gap was 3.10% of the Bank's capital, which is much below the cap of 20% prescribed
by the Procedure for Interest Rate Risk Management.
41
Operational risk
As at 31.12.2014 there were 93 operational risk events reported of total net loss
amounting to EUR 3,542. The robberies of Požega Sub-Branch and retail office in
Radiše Poštića Street in Čačak were classified in a high risk category. There was no
material adverse effect on the Bank, because the total amount was collected from
insurance.
01.01.2014 – 31.12.2014
No. of events
93
Gross loss in EUR
107,519
Net loss in EUR
3,542
Exposure Risk
The Bank's exposure to persons related to the Bank and its large exposures as
at 31.12.2014
Persons related to the Bank
Large exposures
(in RSD 000)
199,822
2,745,507
% of equity
6.58%
90.38%
The sum of all large exposures of the Bank as at 31.12.2014 was in a low risk category
(up to 200% of equity). From the aspect of the total exposure to persons related to the
Bank, the Bank was in a low risk category as at 31.12.2014 (below 12% of equity). The
exposure of each individual person related to the Bank was below 5% of the Bank's
equity.
Loan concentration risk
31.12.2013
Concentration ratio of 20 largest
exposures
Concentration ratio of exposures
exceeding EUR 1.5 million
31.12.2014
Prescribed
value
24.81%
23.01%
Max 26.00%
29.11%
25.91%
Max 27.50%
Both ratios used for monitoring loan concentration risk reduced during 2014 and were
within the plan for 2014.
42
Investment Risk
The Bank's investments into non-financial persons were in a low risk category (below
6% of equity).
Total investments into non-financial persons and fixed assets were also in a low risk
category (below 45% of equity).
Bank's investments into non-financial persons and fixed assets as at 31.12.2014
Investments into
non-financial
persons
Amount
(RSD 0000)
Share in equity
Investments into
fixed assets
Total
15,185
760,059
775,244
0.50%
25.02%
25.52%
Country Risk
The Bank holds deposits in the accounts of three banks that operate in the countries
classified as low risk countries by OECD methodology and the Bank's procedures, and
in one bank in the country classified as a medium risk country.
Countries in which the Bank holds deposits
Country
Risk category
Germany
Low
USA
Low
Turkey
Medium
According to the Decision of the Executive Board the limit for the Bank's exposure to
Turkey is 20% of the Bank's capital. Total Bank's exposure to Turkey as at 31.12.2014
was RSD 563,499 thousand or 18.55% of capital and related to deposits with
Halkbank.
Risk of Changes in Prices of Securities
The total value of the securities held for trade on 31.12.2014 was RSD 319,315
thousand.
43
Securities portfolio
(in RSD 000)
31.12.2013
31.12.2014
Securities portfolio
Purchase
Purchase
Market value
Market value
value
value
Shares of banks
7,399
19,468
7,852
19,468
Shares of other enterprises
13,277
18,597
14,237
16,116
Bonds of foreign currency
776,121
740,052
259,716
226,181
savings
Municipal bonds
37,510
37,800
Total:
796,797
778,117
319,315
299,565
During 2014 the value of items of securities was within the limits prescribed by the
Bank's Operating Policy.
Recovery and coverage of NPLs
Gross NPLs as at 31.12.2013 and 31.12.2014 are presented in the following table:
Gross NPLs
Ratio
Gross NPLs
31.12.2013
5,655,966
31.12.2014
6,681,940
(in RSD 000)
% of change
18.14%
Gross NPLs as on 31.12.2014 grew by RSD 1,025,974 thousand compared to
31.12.2013.
During 2014 the total amount of RSD 354,822 thousand of NPLs was collected, namely
RSD 325,661 thousand from business clients and RSD 29,161 thousand from retail
clients.
Share of NPLs in total Bank's loans
Ratio
Share of gross NPLs in total
gross loans
Share of net NPLs in total
net loans
31.12.2013
31.12.2014
Plan for 31.12.2014
22.56%
25.62%
24.00%
11.85%
12.42%
12.50%
The Strategy for NPL Management and Collection defines basic ratios and their values
for ensuring satisfactory coverage of NPLs, as well as the level of loan loss reserves
that enables minimising negative effects of any deterioration of asset quality on the
Bank's capital adequacy.
In accordance with this Strategy, the NPL coverage is ensured through the following:
- maintaining NPL coverage ratio by impairment, loan loss provisions on off-balance
sheet items and required reserve, with the aim to keep it over 100%
- maintaining NPL coverage ratio by impairment of total loans above 55%.
44
NPL coverage
Ratio
31.12.2013
Impairment, loan loss provisions on offbalance sheet items and required
reserve / NPL
Impairment of total loans / NPL
31.12.2014
Plan for
31.12.2014
103.61%
99.19%
100%
57.01%
60.70%
55%
Compared to 31.12.2013 as at 31.12.2014, the ratio of NPL coverage by impairment,
loan loss provisions on off-balance sheet items and required reserve for estimated
losses, reduced by 4.42 p.p, while the ratio of NPL coverage by impairment increased
by 3.69 p.p.
The Strategy for NPL Management and Collection defines the maximum annual
amount of write off of receivables at the level of 3% of the gross loan portfolio. Total
write-off during 2014 was RSD 278,880 thousand, which accounts for 1.07% of the
gross loan portfolio and was significantly lower than the value prescribed by the
Strategy.
Portfolio of acquired assets as at 31.12.2014
Acquired assets
Investment property
Gradsko šetalište bb, area
325,07 m2
- Residential premises,
Belgrade, Prote Mateje 6062, area 377,69 m
Net carrying value
Acquisition
date
31.12.2013 31.12.2014
121,591
130,408
Comment
30.11.2009
36,740
35,740
Rented out
15.04.2011
84,851
82,512
Rented out
Bate Jankovića bb, area 52
m²
26.12.2013
2,572
- Business premises, area
716 m² (two premises),
Bulevar oslobođenja 17
08.08.2014
-
Material assets acquired
upon collection of
receivables
- Land 2nd class – Šumadijadrvo, Kruševac, area 4,214
m²
- Business premises –
Buffalo, Čačak, Bulevar
oslobođenja 17, area 350 m²
28.11.2013.
4,878
03.06.2013.
6,827
- Business premises, counter
hall, area 48 m², KO Šume,
Ivanjica
26.12.2014.
-
14,277
Business premises
rented out and on
2,530
30.04.2014 activated as
Business premises taken
over by the pledgor,
company Tiffany
9,626 Production. On
22.10.2014 activated as
Rented out.
4,866
2,694 Intended for sale.
Material assets activated
- into fixed assets of the
Bank on 25.06.2014
Business premises taken
over by judgement
2,172 debtor „Mercury
international“ a.d.
Ivanjica
45
Compliance Risk and activities on managing AML/TF risks
The compliance risk was identified and assessed in 2014 by the Compliance and AML
Department through the appropriate controls prescribed by the Work Plan, in the
manner as regulated by the Procedure for Managing Compliance Risk.
No. of
performed
Findings upon controls
Recommendations
controls
Acceptable
Complied
subject to
Non-complied Implemented Undergoing
corrections
16
1
15
/
42
/
In 15 reports on controls the rating was “Acceptable subject to corrections” within the
agreed terms and in 1 report the rating was “Complied” because all controlled
processes were carried out in accordance with legal regulations and the Bank’s
procedures.
Upon summarizing the findings in the controlled operations regarding the
implementation of regulations and internal documents, we may conclude that no high
non-compliance risks were identified, because for all minor irregularities
recommendations for their elimination were made and implemented within the defined
deadlines.
In order to prevent the reputation risk in a timely manner, we particularly focused on
customers’ complaints and impressions with the aim to improve the quality of products
and services in line with requirements, expectations and wishes of customers. During
2014 there were 10 customers complaints or 5 complaints less than in 2013. All of
them were resolved. Upon the analysis of complaints no reputation risk was identified
in the Bank because out of the 10 complaints, 8 were groundless. All customers'
complaints were reviewed and settled in a regulated manner and reported to the
National Bank of Serbia within the agreed terms.
For the purpose of recognising and detecting suspicious transactions, officers in the
Department conducted activities relating to provision, control, analysis and reporting of
cash transactions and persons participating therein in the amount of and exceeding
EUR 15,000.00 in RSD equivalent on the NBS middle exchange rate, to the
Administration for the Prevention of Money Laundering on a daily basis. For the
purpose of minimising the AML/TF risk, employees particularly focused on monitoring,
analysing and detecting suspicious transactions of customers. After transactions and
related documentation were analysed, suspicious transactions were reported to the
Administration.
Cash transactions of and exceeding
EUR 15,000 in RSD equivalent
2013
2014
2,050
2,202
Suspicious transactions
2013
3
2014
3
There were no non-compliances in reporting transactions and persons. The Bank
managed AML/TF risks with the aim to reduce it as much as possible.
Employees in the Department observed amendments and new legal regulations and
notified relevant managers on the obligation to adjust procedures and guidelines, and
controlled the implementation of legal regulations with the quality management system
documents. In 2014 the Department forwarded notifications about amendments and
supplements in 67 legal regulations.
46
X CORPORATE GOVERNANCE RULES
Corporate governance rules of Čačanska banka a.d. are regulated in the following bylaws:
•
Statute;
•
Foundation Agreement;
•
Corporate Governance Code;
•
Business Code of Board of Directors Members and
•
General Operating Conditions.
These
documents
are
www.cacanskabanka.co.rs
publicly
available
at
the
Bank's
website:
Petar Pantović
Director of accounting
and planning department
Executive Board
Dragan Jovanović
Chairman of the Executive
Board
47

Auditors report for 2014

Transcription

Similar documents

here. - Hotel Premier Aqua

AIK Banka - Vladimir Cupic

Commercial Tire Systems Application Guide

RSD MOTOSHED

banco depositario bbva, sa

Serbian Bank sc

Living with CRPS and New Advances From a Podiatric Perspective

Project Bike Sands