PODGORIČKA BANKA SOCIETE GENERALE GROUP A.D.

Transcription

PODGORIČKA BANKA
SOCIETE GENERALE GROUP A.D., PODGORICA
Financial Statements for the Year
ended December 31, 2010
PODGORIČKA BANKA SOCIETE GENERALE GROUP A.D., PODGORICA
FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010
CONTENTS
Page
Independent Auditors’ Report
1-2
Income Statement
3
Balance Sheet
4
Statement of Changes in Equity
5
Cash Flow Statement
6
Notes to Financial Statements
7 – 35
Analysis to the financial statements for 2010
36 - 47
Short form opinion
48 - 52
English Translation of Financial Statements issued in Montenegrin Language
This is English translation of the Report
originally issued in Montenegrin language
(For management purposes only)
INDEPENDENT AUDITORS’ REPORT
TO THE OWNERS OF PODGORICKA BANKA SOCIETE GENERALE GROUP A.D. PODGORICA
Report on Financial Statements
We have audited the accompanying financial statements of Podgoricka banka Societe Generale Group a.d.
Podgorica (hereinafter: the Bank), which comprise the balance sheet as at 31 December 2010, and the
income statement, statement of changes in equity and cash flow statement for the year then ended, and a
summary of significant accounting policies and other explanatory notes.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with the Law on Accounting and Auditing and regulations of Central Bank of Montenegro
governing financial reporting of banks, 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 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 the auditor’s 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, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the 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.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Bank as at
31 December 2010, and of its financial performance and its cash flows for the year then ended in
governing financial reporting of banks.
Other matter
The financial statements of the Bank for the year ended 31 December 2009 were audited by another
auditor who expressed an unmodified opinion on those statements on 28 February 2010.
Report on Other Legal and Regulatory Requirements
In accordance with the Law on Accounting and Auditing and regulations of Central Bank of Montenegro
governing financial reporting of banks, the Bank’s management has prepared analyses to financial
statements which are presented on pages 36 to 47. Information presented in analyses to the financial
statements does not form an integral part of the financial statements of the Bank. This information is the
responsibility of the Bank’s management. This information has been properly derived from the primary
financial statements which were prepared in accordance with the Law on Accounting and Auditing and
regulations of Central Bank of Montenegro governing financial reporting of banks as presented on pages 36 and are based on underlying accounting records of the Bank.
NOTES TO FINANCIAL STATEMENTS
1.
FOUNDATION AND BUSINESS ACTIVITY
Podgorička banka A.D., Podgorica was established as a spin-off of Montenegrobanka D.D., Podgorica
in the course of 1992.
On November 21, 2001, the Central Bank of Montenegro issued an approval enabling the Bank to
continue its operations pursuant to Decision 27.
Following the aforementioned privatization process that took place in 2005, the majority interest in
the Bank is held by Societe Generale, Paris, France. On September 26, 2006, the Bank was inscribed
in the Central Register of the Commercial Court in Podgorica under the registration number 40000880/019, operating the activities as Podgorička banka Societe Generale Group A.D.,
Podgorica.
The Bank is licensed to perform credit, depositary and guarantee operations, as well as foreign
payments transactions, depo transaction, to provide safekeeping services, issuance, processing and
recording of payment instruments (including credit cards, traveler’s and bank cheques).
The Bank is seated in Podgorica, at the street address Novaka Miloševa number 8a.
As of December 31, 2010, the Bank was comprised of a Central Office located in Podgorica and 19
branch offices located throughout the territory of Montenegro.
As of December 31, 2010, the Bank had 255 employees (December 31, 2009: 275 employees).
2.
BASIS OF PREPARATION AND PRESENTATION OF THE FINANCIAL STATEMENTS
2.1.
Basis of preparation and presentation of the financial statements
The Bank maintains its accounting records and prepares its statutory financial statements in
conformity with the Accounting and Auditing Law of Montenegro (Official Gazette of Montenegro,
no. 69/2005 and no. 80/2008) and specifically, in accordance with the relevant Decision pertaining
to the application of International Accounting Standards (“IAS”) in Montenegro (Official Gazette of
Montenegro, no. 69/2002).
The financial statements are presented in the format required under Articles 17 and 18 of the
Accounting and Auditing Law of Montenegro and European Union Directive numbered 86/635/EEC
dated December 8, 1986, which relates to the annual reports of banks and other financial
institutions. Such statements represent the complete set of financial statements as defined under
the law, which differ from those defined under the provisions of IAS 1, “Presentation of Financial
Statements”, and differ in some respects, from the presentation of certain amounts as required
under the aforementioned standard.
The accounting policies adopted in the preparation and presentation of the financial statements for
the period ended December 31, 2010 differ from the IFRS requirements primarly in the allowances
for the impairment of financial instruments as required by IAS 39 – “Financial instruments:
Recognition and measurement” and disclosures of financial instruments as required by IFRS 7 –
“Financial instruments: Disclosures“. The impairment of financial instruments was estimated in
accordance with the applicable Regulations of the Central Bank of Montenegro (Note 3.6). Such a
policy might result in significant departures from the amounts which would be determined, had the
allowances for the impairment of financial instruments been estimated based on discounted
expected future cash flows by applying the original effective interest rate, as required by IAS 39,
“Financial Instruments: Recognition and Measurement”.
7
2.
BASIS OF PREPARATION AND PRESENTATION OF THE FINANCIAL STATEMENTS
(continued)
2.1.
Basis of preparation and presentation of the financial statements (Continued)
Due to the potentially significant effects of the above-described matters, the accompanying
financial statements cannot be described as having been prepared in accordance with International
Financial Reporting Standards.
In the preparation of the accompanying financial statements, the Bank has adhered to the
accounting policies described in Note 3, which are in conformity with the accounting, banking and
tax regulations prevailing in Montenegro.
The official currency in Montenegro and the Bank’s functional currency is Euro (EUR).
2.2.
Use of Estimates
The presentation of financial statements requires the Bank’s management to make best estimates
and reasonable assumptions that affect the assets and liabilities’ amounts, as well as the disclosure
of contingent liabilities and receivables as of the date of the preparation of the financial statements,
and the income and expenses arising during the accounting period. These estimations and
assumptions are based on information available as of the date of the financial statements
preparation, mostly referring to estimations of provisions of loans and interests, provisions of
deposits held in other banks, permanent investments and off-balance-sheet events. However, the
Bank’s future operating results may vary from the estimated values.
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3.1.
Income and Expense Recognition
Interest income and expense are recognized in the income statement for all instruments measured
at amortized value using the effective interest method.
The effective interest rate method is a method of calculating the amortized cost of a financial asset
or a financial liability and of allocating the interest income or interest expense over the relevant
period. The effective interest rate is the rate that discounts estimated future cash payments or
receipts over the expected life of a financial instrument or, where appropriate, a shorter period, to
the net carrying amount of the financial asset or financial liability. When calculating the effective
interest rate, the Bank estimates cash flows considering all contractual terms of the financial
instrument (i.e. prepaid payment options) but does not consider future credit losses. The
calculations include all fees and commissions paid or received between parties to the contract that
are an integral part of the effective interest rate, transaction costs and all other premiums or
discounts.
Interest income and interest expense, including penalty interest and operating income and expenses
related to interest-bearing assets and liabilities are accounted for on an accrual basis.
Fees for banking services and fee and commission expenses are recorded when due, i.e., when
realized.
Income and expenses arising from loan and guarantee origination are also recorded when realized,
i.e. when due.
8
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3.2.
Foreign Exchange Translation
Transactions denominated in foreign currencies are translated into euros at the official exchange
rates prevailing on the Interbank Market effective at the date of each transaction.
Assets and liabilities denominated in foreign currencies are translated into euros by applying the
official average exchange rates, as determined on the Interbank Market, prevailing at the balance
sheet date.
Net foreign exchange gains or losses arising upon the translation of transactions, and the assets and
liabilities denominated in foreign currencies are credited or charged to the income statement.
Commitments and contingent liabilities denominated in foreign currencies are translated into euros
by applying the official exchange rates prevailing on the Interbank Market, at the balance sheet
date.
3.3.
Leasing
The leases entered into by the Bank are operating leases. The payments made under operating
leases are charged to operating expenses in the income statement on a straight-line basis over the
period of the lease period.
3.4.
Taxes and Contributions
Income Taxes
Current Income Taxes
Income taxes are calculated and paid in conformity with the income tax regulations defined under
the Montenegrin Income Tax Law, Article 28 (Official Gazette of Montenegro, no. 80/2004 and no.
40/2008) as per the effective proportional tax rate of 9% on taxable income.
A taxpaying entity’s taxable income is determined based on the income stated in its statutory
statements of income following certain adjustments to its income and expenses performed in
accordance with the Montenegrin Income Tax Law (Articles 8 and 9, regarding the adjustment of
income and Articles 10 to 20 pertaining to the adjustment of expenses).
Capital losses may be set off against capital gains earned in the same year. In case there are
outstanding capital losses even after the set-off of capital losses against capital gains earned in the
same year, these outstanding losses are available for carryforward in the ensuing 5 years.
The Montenegrin tax regulations do not envisage any tax losses of the current period to be used to
recover taxes paid within a specific carryback period. However, any current year losses reported in
the annual corporate income tax returns may be carried forward and used to reduce or eliminate
taxes to be paid in future accounting periods, but only for an ensuing period of a maximum of five
years.
Deferred Income Taxes
Deferred income tax is determined using the balance sheet liability method, for the temporary
differences arising between the tax bases of assets and liabilities, and their carrying values in the
stand alone financial statements. The currently-enacted tax rates at the balance sheet date are
used to determine the deferred income tax amount. Deferred tax liabilities are recognized for all
taxable temporary differences. Deferred tax assets are recognized for the deductible temporary
differences, and the tax effects of income tax losses and credits available for carry forward, to the
extent that it is probable that future taxable profit will be available against which deferred tax
assets may be utilized.
9
3.
3.4.
Taxes and Contributions (continued)
Taxes, contributions and other duties not related to operating results
Taxes, contributions and other duties that are not related to the Company’s operating results,
include property taxes, employer contributions on salaries, and various other taxes and
contributions paid pursuant to republic and municipal regulations.
3.5.
Cash and Cash Equivalents
For the purposes of the cash flow statement, cash and cash equivalents comprise cash, balances
with the Central Bank of Montenegro and other banks.
3.6.
Loans
Loans approved by the Bank are recorded in the books of account when funds are transferred to the
loan beneficiaries account.
Loans are stated in the balance sheet in the amount of placement approved, as decreased by the
principal repaid and allowance for impairment which is based on the assessment of risk inherent in
certain placements and risks which have been historically identified in the credit portfolio. The
Bank’s management applies the methodology prescribed by the Central Bank of Montenegro in its
evaluation of the risks (Note 3.7).
3.7.
Allowances for Impairment and Provisions for Potential Losses
The Decision issued by the Central Bank of Montenegro regarding minimal standards for
management of credit risks in banks („Official Gazette of Montenegro, no. 60/2008 i 41/2009) i.e.
the Decision regarding temporary measures for management of credit risks in banks („Official
Gazette of Montenegro, no. 64/2009, 87/2009 and 66/2010) sets forth the following: elements of
credit risk management, minimum criteria and manner of classifying assets and balance sheet items
which render the Bank susceptible to credit risk, manner of calculating and suspending uncollected
interest, manner of determining the minimum provisions for potential losses contingent on the
Bank's exposure to credit risk. The Bank's risk-weighted assets, within the meaning of this Decision,
are comprised of loans, interest, fees and commissions, lease receivables, deposits with banks,
advances and all other items included in the balance sheet exposing the Bank to default risk, as well
as guarantees issued, other sureties, effectuated letters of credit and approved, but undrawn loan
facilities, as well as all other off-balance sheet items being the Bank's contingent liabilities.
10
3.
3.7.
Allowances for Impairment and Provisions for Potential Losses (continued)
Pursuant to the aforementioned Decision, loans and other risk-weighted assets are classified into
the following categories:
A category (“Pass”) – including assets assessed as collectible in full pursuant to the
agreement;
B category (“Special Mention”) – with B subcategorie including items for which there is low
probability of loss, but which, still the same, require special attention, as the potential risk,
if not adequately monitored, could diminish their collectibility;
C category (“Substandard assets”) – with C1, C2 and C3 subcategories for which there is
high probability of loss, due to the clearly identified collectibility issues;
D category (“Doubtful assets”) – including items the collection of which is, given the
creditworthiness of loan beneficiaries, quality of collaterals, highly unlikely;
E category (“Loss”) – including the items which are uncollectible in full, or will be collectible
in an insignificant amount.
The amount of provision for potential losses has not been provided for Bank's placements classified
into category A. The estimated amount of provision for potential losses is computed by applying the
following percentages to the corresponding categories: 3% to the placements classified into
category B, from 15% to 50% to the placements classified into category C, 75% to the placements
classified into category D and 100% to the placements classified into category E.
As in accordance with the Decision issued by the Central Bank of Montenegro, the Bank is to
suspend any accrued, uncollected interest and should terminate any further accruals of interest on
its non-performing assets, unless the non-performing assets are secured by quality collateral and
are in the process of collection, to the extent that such asset recoveries are anticipated within a
reasonable period of time (generally defined as not exceeding three months). Following the
suspension of interest accruals on non-performing assets, the Bank remains under an obligation to
record the subsequent, matured interest on the same basis, on its off-balance sheet records and
upon classification, designates the accrued income into E category The Decision further prescribes
that the risk-weighted assets be classified into E category be written off from the off-balance sheet
records under the heading of “Loans written off.”
Pursuant to the Decision, provisions for potential losses contingent on assets is calculated based on
the carrying value net of any deductible items of collaterals based on:
monetary deposits and
irrevocable guarantees of the Government of Montenegro
irrevocable guarantees of the countries or central banks of the OESD member countries, the
banks with credit rating better than BBB+ pursuant to the ratings of the agency Standard &
Poor’s, i.e., any equivalent rating of other internationally acclaimed rating agencies and legal
entities whose business operations are under the control of the Central Bank of Montenegro.
11
3.
3.7.
Allowances for Impairment and Provisions for Potential Losses (continued)
In accordance with the amendments to the abovestated Decisions on minimal standards for
management of credit risks in banks, the Bank applied the following percentages and days of delay
by categories of risk:
Risk category
As at December 31, 2010
%
provisions
Days of delay
A
B1
B2
C1
C2
C3
C4
D
E
3.8.
3
15
30
50
75
100
<30
31-90
91-150
151-210
211-270
271-365
>365
As at December 31, 2009
%
provisions
Days of delay
3
3
20
30
40
50
75
100
<30
31-60
61-90
91-110
111-130
131-150
151-180
181-270
>271
Equity Investments in Legal Entities and Securities Available-for-Sale
Equity investments in legal entities are comprised of investments in CG Broker A.D., Podgorica,
which are stated in these financial statements at cost, i.e. at their nominal value.
Securities available-for-sale include securities which cannot be classified as trading financial assets
or as held to maturity and are comprised of equity investments in other legal entities.
The Bank presents securities available-for-sale at cost, except for the investments in the entity
Plantaže A.D., Podgorica. The forgoing investment in Plantaže A.D., Podgorica is stated at fair
value.
Gains and losses arising from changes in the fair value of available-for-sale financial assets are
recognized directly in equity (provisions), until the financial asset is derecognized or impaired at
which time the cumulative gain or loss previously recognized in equity should be recognized in profit
or loss. Dividends on available-for-sale equity instruments are recognized in the income statement
when the entity’s right to receive payment is established.
3.9.
Business Premises, Other Property and Equipment and Intangible Assets
Business premises, other property, equipment and intangible assets at December 31, 2010 are
stated at cost or revalued cost less accumulated depreciation and/or amortization. Cost represents
the prices billed by suppliers together with all costs incurred in bringing the respective asset to the
location and condition necessary for its intended use.
Depreciation and/or amortization are provided for on a straight-line basis to the cost of business
premises and other property, equipment and intangible assets in order to write them off over their
expected useful lives. Depreciation and/or amortization are calculated using the following
prescribed annual rates::
Property
Computer equipment
Furniture and other equipment
Vehicles
Intangible assets
3.3%
25.0%
15.0%
15.0%
30.0%
12
3.
3.9.
Business Premises, Other Property and Equipment and Intangible Assets (continued)
The calculation of depreciation and/or amortization commences when an asset is placed into use.
Pursuant to the Article 13, paragraph 6 of the Income Tax Law ("Official Gazette of Montenegro"
no. 80/2004 and 40/2008 and 86/09) of buildings for tax purposes is calculated using the
proportional method or equipment and application software by applying digressive method for the
entire period, regardless the date of activation.
3.10.
Impairment of Tangible and Intangible assets
At each balance sheet date, the Bank’s management reviews the carrying amounts of the Bank’s
tangible and intangible assets. 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.
An impairment loss is recognized as an expense of the current period and is recorded under other
operating expenses. Where an impairment loss subsequently reverses, the carrying amount of the
asset is increased to the revised estimate of its recoverable value. However, this is performed so
that the increased carrying amount does not exceed the carrying value that would have been
determined had no impairment loss been recognized for the asset in prior years.
3.11.
Provisions
Provisions are recognized when the Bank has a present legal or constructive obligation as a result of
past events, it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation, and a reliable estimate of the amount of the obligation can be
made.
3.12.
Employee Benefits
Employee Taxes and Contributions for Social Security
In accordance with the regulations prevailing in Montenegro, the Bank has an obligation to pay
contributions to various State Social Security Funds. These obligations involve the payment of
contributions on behalf of the employee, by the employer in an amount calculated by applying the
specific, legally-prescribed rates. The Bank is also legally obligated to withhold contributions from
gross salaries to employees, and on behalf of the employees, to transfer the withheld portions
directly to government funds. These contributions payable on behalf of the employee and employer
are charged to expenses in the period in which they arise.
Retirement Benefits and Other Long Term Employee Benefits
In accordance with the Collective Bargaining Agreement, the Bank has an obligation to disburse an
employment retirement benefit to a retiree, in an amount equal to six average net salaries effective
in the Bank in the month prior to the employee’s retirement. In addition, employees are entitled to
receive jubilee awards at their 10th, 20th and 30th employment anniversaries with the Bank as
follows:
-
for 10 years of service – one minimal salary in the Bank,
for 20 years of service – two minimal salaries in the Bank,
for 30 years of service – three minimal salaries in the Bank.
13
3.
3.12.
Employee Benefits (continued)
Retirement Benefits and Other Long Term Employee Benefits (continued)
The Bank's financial statements as of December 31, 2010 include provisions calculated by an
actuary based on the estimated present value of retirement benefits and jubilee awards to
employees upon vesting in respective rights.
3.13.
Financial Liabilities – Borrowings
Borrowings are initially recognized at fair value net of transaction costs. Subsequently, borrowings
are carried at their amortized value; all differences between the realized inflows (net of transaction
costs) and the amounts repaid are carried through profit and loss over the period of using the
amounts borrowed by applying the effective interest rate method.
3.14.
Fair Value
In accordance with IAS, “Financial Instruments: Disclosures and Presentation”, the fair value of
financial assets and liabilities should be disclosed in the Notes to the Financial Statements. For
these purposes, the fair value is defined as an amount at which an asset can be exchanged, or a
liability settled, between knowledgeable willing parties in an arm’s-length transaction. The Bank
should disclose the fair value information of those components of assets and liabilities for which
published market information is readily available, and for which their fair value is materially
different from their recorded amounts.
In Montenegro, sufficient market experience, stability and liquidity do not exist for the purchase and
sale of receivables, investments and other financial assets or liabilities, for which published market
information is presently not readily available. Fair value cannot readily be determined in the absence
of active capital and financial markets, as generally required under the provisions of IFRS/IAS. In
the opinion of management, the reported carrying amounts are the most valid and useful reporting
values under the present market conditions. In the amount of the identified estimated risk that the
carrying value will not be realized, a provision is recognized based on a relevant decision of the
Bank’s management.
14
4.
INTEREST INCOME AND EXPENSE
a) Interest Income
In thousands of EUR
2010
2009
21
23
44
38
36
74
264
6,232
8,078
14,574
311
4,013
9,017
13,341
-
35
14,618
13,450
2010
2009
51
69
199
1,165
1,484
136
147
260
1,400
1,943
3,491
4,629
4,975
6,572
In thousands of EUR
2010
2009
Net, provisions /(release of provisions) based on:
- deposits with foreign banks
- loans
- interest
- permanent investments
- acquired assets
- country risk
- off-balance sheet items
- general provisions
- operating risk
(167)
969
576
(5)
(80)
60
122
2,620
6
(84)
(314)
(2)
(88)
(202)
102
1,353
2,160
Deposits with:
- foreign banks
- Central Bank
Loans:
- state institutions
- corporate customers
- retail customers
Securities held to maturities
b) Interest Expense
In thousands of EUR
Deposits with:
- financial institutions
- state institutions
- corporate customers
- retail customers
Liabilities arising on loans and other borrowings
5.
PROVISIONS FOR LOSSES
a) Charge for the Period
15
5.
PROVISIONS FOR LOSSES (continued)
b)
Movements on the Account of Allowance for Impairment of Uncollectible Receivables and
Provisions in 2010
Deposits
In thousands of EUR
Off-Balance
Sheet Items
(Note 20)
Provisions
for
Operating
Risk
(Note 20)
Total
5
-
211
-
119
60
4,320
1,605
-
(5)
(80)
-
(252)
(2,042)
(579)
-
-
-
(2,621)
2,733
9
-
131
179
3,052
with Banks
(Note 16)
Loans and
Lease
Operations
(Note 11)
Interest
(Note 14)
Country
Risk
(Note 15)
167
-
3,806
969
12
576
(167)
-
-
Balance, beginning of
year
Charge for the year, net
Release of allowances
for impairment and
provisions, net
Transfer to off-balance
sheet items
Balance, end of year
6.
FEE AND COMMISSION INCOME AND EXPENSE
a)
Fee and Commission Income
In thousands of EUR
2010
2009
Loan fees
Fee and commission income from off-balance-sheet operations
Fee and commission income from payment transactions
Fee and commission for foreign payments
Fees and commission on credit card business
Fee and commission for payroll
Other fee and commission income
765
512
1,233
809
1,264
314
548
680
165
1,310
777
1,109
406
498
5,445
4,945
2010
2009
276
37
265
135
289
201
20
368
42
230
133
239
154
32
1,223
1,198
16
b)
Fee and Commission Expense
In thousands of EUR
Fees and commissions payable to the Central Bank
Fee and commission expense from payment transactions
Deposit insurance premium fees
Loan and guarantees fees
Visa and Master card fees
Fees and commissions for electronic banking
Other fee and commission expense
7.
OTHER INCOME, net
In thousands of EUR
2010
2009
Collected receivables previously written off
Income from foreign exchange operations
Dividend income
Reversal of prior year expenses
Other income
1,871
67
54
38
16
944
70
1
50
85
2,046
1,150
In thousands of EUR
2010
2009
Net salaries
Taxes and contributions on salaries
Jubilee awards and severance pays for voluntary abandonment of
workplace
Remunerations to the Management Board members
Business trip expenses
Other fees
Rentals
Maintenance
Depreciation and amortization charge:
- property and equipment (Note 13)
- intangible assets (Note 15)
Security
Insurance premiums
Taxes payable
Sponsorships and donations
Advertising
Electricity and fuel
Telecommunication services and postal expenses
Office material
Cost of purchasing payment cards
Professional services
Provisions for employee benefits (Note 20)
Expences from operational losses
Other costs
3,382
1,925
3,475
1,906
1,294
52
74
232
448
624
689
71
78
215
511
538
854
111
286
118
92
34
333
180
329
62
194
421
(54)
237
414
943
109
352
90
222
21
329
267
325
92
245
919
58
278
11,642
11,733
8.
GENERAL EXPENSES
17
9.
INCOME TAXES
a)
Components of Income Taxes
In thousands of EUR
Current income taxes
Deferred income taxes
b)
2010
147
140
2009
(152)
287
(152)
Numerical reconciliation between tax expense and the product of accounting results
multiplied by the applicable tax rate
In thousands of EUR
2010
2009
(Loss)/Profit before tax
2,996
(2,055)
270
(185)
5
14
4
8
5
1
5
8
287
(152)
Tax rate of 9%
Tax effects of expenses unrecognized for tax purposes
Effects of changes in the accounting policies applied in
recognizing fee and commission income and effects of IAS 19
first time adoption
Equipment up to EUR 300 unrecognized for tax purposes
Value of investments not exceeding 5% of the tax group cost
Other
Tax effects
Effective interest rate
9.58%
The tax rate used in 2010 and 2009 amounts to 9% and is applied to the taxable profit of legal
entities in Montenegro as in accordance with the Corporate Income Tax Law.
c)
Deferred tax assets (Note 14)
In thousands of EUR
Arising from the temporary difference between the basis at
which property and equipment are recognized in the tax balance
and their carrying value
Deffered tax assets
December 31,
2010
December 31,
2009
12
-
2
150
12
152
18
9.
INCOME TAXES (continued)
c)
Deferred tax assets (continued)
Movement during the year was as follows:
In thousands of EUR
2010
2009
Balance, at the beginning of the year
Calculeted deferred tax during the year
Transferable tax losses
152
10
(150)
152
-
12
152
10.
CASH AND DEPOSIT ACCOUNTS HELD WITH DEPOSITORY INSTITUTIONS
In thousands of EUR
Cash in hand:
- in EUR
- in foreign currency
Gyro account
Correspondent accounts with foreign banks
Obligatory reserves with the Central Bank of Montenegro
Time deposits with foreign banks
Other
December 31,
2010
December 31,
2009
5,066
686
21,064
1,679
8,851
15,308
8
5,202
907
20,950
675
8,851
14,969
-
52,662
51,554
The Bank’s obligatory reserves at December 31, 2009 were set aside in accordance with the Central
Bank of Montenegro Regulation with respect to the “Reserve Requirements for Banks to Be Held
with the Central Bank of Montenegro” (Official Gazette of Montenegro no. 41/2010 dated June 26,
2010). Pursuant to the aforecited, the obligatory reserve is to be calculated by applying the reserve
percentages of 10%.
The obligatory reserve is to be calculated by applying the aforementioned ratios on an average
deposit from the first accounting period in June 2009. If the average amount of deposits is lower
than the average amount of deposits from the first accounting period in June 2009, the calculation
of the obligatory reserve is made by applying a rate of 10% on the average amount of total deposits.
The Bank’s obligatory reserves represent the minimum deposits set aside onto domestic accounts of
obligatory reserves and/or onto the accounts of the Central Bank of Montenegro (“CBM”) held
abroad, In accordance with the Decision, the Bank can hold up to 25% of the Bank’s obligatory
reserve requirements by restricting the treasury bills issued by the Government of Montenegro. For
the amount of 25% of the obligatory reserve requirement deposited by banks, the Central Bank pays
interest at the annual rate of 1% up to the eighth day of the month for the preceding month. The
obligatory reserve is held in EUR.
As of December 31, 2010, time deposits with foreign banks in the amount of EUR 15,308 thousand
relate to a deposit placed with Societe Generale Paris of EUR 1,800 thousand maturing over the
period of five days at an annual interest rate of 0.50% and EUR 12,000 thousand over the period of
four days at an annual interest rate of 0.26%, and a deposit placed with Societe Generale New York
of EUR 1,508 thousand maturing over the period of two days and accruing interest at an annual rate
of 0.8%.
19
11.
LOANS AND LEASES
In thousand of EUR
Matured loans:
- funds
- municipalities (public institutions)
- privately-owned corporate entities
- corporate entities with majority state-owned equity interest
- retail customers
- other
Short-term loans:
- retail customers
- other
Long-term loans:
- retail customers
- other
Less: Provisions for losses on loans
December 31,
2010
December 31,
2009
232
2,389
202
1,375
5
3,000
72
8,735
135
1,202
9
13
29,205
2,134
30
583
13,730
2,610
12
64,518
7,842
1,776
87,564
53
197,338
(2,733)
51,479
9,470
2,384
83,533
25
176,979
(3,806)
194,605
173,173
Short-term loans to corporate entities are mostly approved for working assets with maturities from
1 to 12 months, while long-term loans are mostly approved with maturities from 12 to 180 months
and mostly relate to corporate entities operating in the field of trade, mining and energy and
construction industry. Short-term loans to corporate entities are mostly approved at an interest
rate of 2.5% to 19% per annum.
Short-term loans to retail customers are approved with maturities from 6 to 12 months at rates
ranging from 8% to 17.5% annually. Long-term loans to retail customers include loans for housing
construction, adaptation of residential and business premises, financing the purchase of
consumables and other purposes, maturing within 13 to 84 months at an annual interest rate
between 8% to 17.5%. Long-term loans to retail customers include home loans, loans for adaptation,
customer loans, maturing within 13 to 300 months at an annual interest rate between 4.5% to
14.5%.
As for the geographic concentration of loans placed with customers, the Bank’s portfolio mostly
includes loans to customers residing on the territory of Montenegro.
As of 31 December 2010, the total amount of loans that are secured by parent bank guarantees,
guarantees of some other members of the Group or guarantee issued by Government of Montenegro
is EUR 66,419. These loans are secured by guarantees in the amount of EUR 49,671.
20
11.
LOANS AND LEASES (continued)
The concentration of the Bank’s gross loan placements with clients per separate industries was as
follows:
December 31,
2010
December 31,
2009
126
10,675
13,143
25,463
40,818
858
666
1,809
88,077
15,703
86
3,333
14,314
27,778
24,096
378
277
5,620
87,346
13,751
197,338
176,979
Movements in 2010 ond 2009 are presented in the following table:
Equipment and
Buildings
Other Assets
Total
In thousand of EUR
Agriculture, hunting and fishing
Civil engineering
Mining industry and energy
Real-estate trade
Trade
Service industry, tourism and accommodation industry
Transport, storage, post and telecommunication
Administration and other public utilities
Retail customers
Other
12.
BUSINESS PREMISES AND OTHER FIXED ASSETS
Cost
Balance, January 1, 2009
Additions
Transfers from acquired assets
Sale and disposal
Balance, December 31, 2009
3,225
163
282
3,670
4,660
485
(104)
5,041
7,885
648
282
(104)
8,711
Additions
Sale and disposal
3,670
39
(65)
3,644
5,041
239
(39)
5,241
8,711
278
(104)
8,885
Accumulated Depreciation
Amortization
Sale and disposal
926
109
1,035
2,488
834
(56)
3,266
3,414
943
(56)
4,301
Amortization
Sale and disposal
1,035
121
(17)
1,139
3,266
733
(37)
3,962
4,301
854
(54)
5,101
Net Book Value:
- December 31, 2010
2,505
1,279
3,784
- December 31, 2009
2,635
1,775
4,410
As at December 31, 2010, the Bank doesn’t have property under pledge to ensure repayment of
loans and other liabilities.
21
13.
EQUITY INVESTMENTS IN OTHER LEGAL ENTITIES
December 31,
2010
December 31,
2009
7
3
6
10
7
3
6
10
32
32
58
58
5,317
5
5
3
7,887
5
5
3
5,330
7,900
5,388
7,958
December 31,
2010
December 31,
2009
Interest, fee and commission receivables
Deferred interest income
Deferred management fee on loans received
Intangible assets
697
600
134
129
245
428
159
Prepaid expenses:
- leasehold improvements
- other expenses
107
109
232
85
55
12
57
52
65
25
55
152
57
2,042
1,601
In thousand of EUR
Banks and financial institutions:
- AIK banka A.D., Niš, Republic of Serbia
- JUBMES banka A.D., Beograd, Republic of Serbia
- Beogradska berza A.D., Beograd, Republic of Serbia
- Lovćen osiguranje A.D., Podgorica
- CG Broker A.D., Podgorica (the Bank's equity interest
11.5684%)
Other legal entities:
- Plantaže A.D., Podgorica (the Bank's equity interest 9.2288%)
- Central Depository Agency, Podgorica A.D., Podgorica
- Tržište novca A.D., Beograd, Republic of Serbia
- Montenegro Airlines A.D., Podgorica
14.
OTHER ASSETS
In thousand of EUR
Receivables from employees
Deffered tax assets (Note 9)
Receivables arising from advance payments of income tax
Receivables from dividends
Receivables from from clients for legal costs
Other receivables
41
147
22
14.
OTHER ASSETS (continued)
Intangible assets are mostly comprised of licenses and software. The movements on intangible
assets in the course of 2010 and 2009 were as follows:
In thousand of EUR
2010
2009
Cost
Balance, beginning of year
Additions
526
81
461
65
607
526
Provisions
Balance, beginning of year
Amortization
367
111
258
109
478
367
129
159
December 31,
2010
December 31,
2009
9
-
167
12
5
9
184
Net Book Value:
- December 31
15.
PROVISIONS FOR POTENTIAL LOSSES ON OTHER ASSETS
In thousand of EUR
Provisions for losses contingent on other assets:
- deposits with banks
- interest
- country risk
23
16.
DEPOSITS
In thousand of EUR
Demand deposits:
- Government of Montenegro
- funds
- retail customers
- non-profit organizations
- other
Short-term deposits:
- Government of Montenegro
- funds
- retail customers
-non-profit organizations
- other
Long-term deposits:
- retail customers
December 31,
2010
December 31,
2009
4,117
1,174
50,200
140
3,762
493
27,356
4,196
58
5,408
546
49,113
263
2,024
449
24,776
3,991
88
91,496
86,658
589
150
293
19,061
20
-
1,025
635
3,000
481
25,467
320
149
20,113
31,077
1,000
543
203
500
137
-
2,246
137
113,855
117,872
Deposits of retail customers, corporate customers, public and other organizations are placed at an
interest rate of 0.3% annually. Short-term and long-term deposits of retail customers denominated
in EUR are deposited at an interest rate ranging from 0.30 % to 6.25 annually.
Short-term deposits of corporate customers denominated in EUR are placed at interest rates
ranging from 0.72% to 1% annually, depending on deposit periods. Long-term deposits of corporate
entities are deposited at an interest rate ranging from 1.5% to 8% annually.
24
17.
OBLIGATIONS BASED ON LOANS AND BORROWINGS
In thousand of EUR
Liabilities towards related parties:
Societe Generale, Paris, France
Liabilities towards foreign creditors:
European bank for reconstruction and development
(„EBRD“)
December 31,
2010
December 31,
2009
103,000
83,000
4,000
-
107,000
83,000
As of December 31, 2009, liabilities towards foreign creditors in the amount of EUR 107,000
thousand pertain to loans in the amount of EUR 103,000 thousand received from the parent bank
with two year maturities accruing interest at rates ranging from 0.99% to 4.2% annually.
As of December 31, 2010, the Bank has obligations toward the European bank for reconstruction
and development in the amount of EUR 4,000 thousand arising from long-term loans. The loan in the
amount of EUR 25,000 thousand is obtained for the period of five years and grace period of two
years, with interest at rate of od 2.65% + 6 month EURIBOR for financing development of small and
medium enterprises in Montenegro. The loan is to be repayed after grace period, in semi-annual
instalments. Foreclosed Bank’s liabilities as of December 31, 2010 amount to EUR 21,000
thousand.
Maturity of obligations on this basis is as folows:
In thousand of EUR
Up to 1 year
from 1 to 2 years
from 2 to 3 years
from 3 to 4 years
from 4 to 5 years
18.
December 31,
2010
December 31,
2009
103,000
571
1,142
1,143
1,144
83,000
-
107,000
83,000
OBLIGATIONS TO THE GOVERNMENT
As of December 31, 2009, obligations to the Government of Montenegro totaling EUR 12 thousand
pertain to the payables arising from long-term loans obtained from the Republic’s Development
Fund for the period from 4 to 5 years and a grace period of 12 months, compounding interest at
rates ranging from 3% to 4% annually.
25
19.
OTHER LIABILITIES
In thousand of EUR
Deferred interest on deposits
Deferred loan fees
Interest accrued on loans and deposits
Provisions for employee benefits
Insurance premiums for loans issued to retail customers
Payment transactions with foreign countries
Taxes payable
Advances received
Liabilities arising from foreign currency savings deposits
Dividends payable
Accounts payable to suppliers
Commission jobs
Payables to employees
Other liabilities
December 31,
2010
December 31,
2009
363
807
2,889
470
542
93
271
599
291
285
96
87
443
645
536
591
3,454
524
705
24
145
588
332
285
473
127
130
343
7,881
8,257
The provisions for employee benefits as of December 31, 2010 in the amount of EUR 470 are stated
at the present value of the expected future payments to employees with regard to retirement
benefits and jubilee awards after fulfilling the conditions.
The present value of expected future payments for leaving payment, retirement and jubilee awards
after fulfilling the requirements is established by the authorized Actuary in accordance with
actuarial mathematics.
The assumptions used for the purpose of assessment of the present value of liabilities are
summarized in the table below:
The assessment on
December 31,
December 31,
2010
2009
%
%
Discount rate – Jubilee awards
Discount rate – retirement benefits
Movement of labour
Inflation rate
The expected growth rate of earnings
3.99
3.56
1
1.65
0
5.01
4.55
1
2
0
The movements in the provisions for employee benefits are summarized in the table below:
2010
2009
Balance, beginning of the year
Provisions during the year (Note 8)
524
(54)
466
58
Balance, end of the year
470
524
26
20.
PROVISIONS FOR LOSSES ON OFF-BALANCE SHEET CREDIT EXPOSURES
In thousand of EUR
December 31,
December 31,
2010
2009
Provisions for losses contingent on:
- off-balance sheet items
- operational risk
21.
131
179
211
119
310
330
SHARE CAPITAL
At December 31, 2010 the Bank's share capital was comprised of 96,736 common shares
(December 31, 2009: 96,736 common shares), having the par value of EUR 255.65.
The Law on Banks (Official Gazette of Montenegro, no. 17/2008 and 44/2010) defines the minimum
amount of initial capital of Bank in the amount of EUR 5,000 thousand. As at December 31, 2009
the Bank’s capital complied with the prescribed minimum capital requirements.
The ownership structure of the Bank’s share capital as of December 31, 2010 and 2009 was as
follows:
2010
In
thousands
of EUR
Societe Generale, Paris, France 87,602
Plantaže A.D., Podgorica
2,824
Croatian Postal Bank Inc.,
Zagreb, Republic of Croatia
2,851
East Capital Holding,
Stockholm, Švedska
1,116
Other
2,343
96,736
Shareholder
22.
Number
of
Shares
2009
% Share
Number
of
Shares
In
thousands
of EUR
% Share
22,395
722
90.56%
2.92%
87,602
2,824
22,395
722
90.56%
2.92%
731
2.95%
2,851
731
2.95%
285
598
1.15%
2.42%
1,116
2,343
285
598
1.15%
2.42%
24,731
100.00%
96,736
24,731
100.00%
CONFORMATION WITH REGULATIONS OF THE CENTRAL BANK OF MONTENEGRO
In accordance with the regulations of the Central Bank of Montenegro, the Bank is under obligation
to maintain the minimum capital adequacy ratio of 10%. The Bank is also required to maintain
certain ratios pertaining to the volume of its activities and composition of risk assets in compliance
with the Law on Banks and regulations of the Central Bank of Montenegro.
The Bank’s solvency ratio as of December 31, 2010 amounted to 15.83%.
27
23.
OFF-BALANCE-SHEET ITEMS
In thousand of EUR
December 31,
2010
December 31,
2009
Guarantees, other contingent liabilities and commitments:
Guarantees to corporate entities:
- payment guarantees
- performance bonds
Irrevocable commitments for undrawn credit facilities
Unsecured letters of credit
13,070
5,120
7,537
1,757
6,547
6,452
4,511
1,661
Guaranties received
50,334
55,377
11,633
178,763
302,829
228,780
80,940
10,142
2,283
117,154
39
73
133,765
257,748
176,434
68,135
6,064
4,562
64,619
7,489
5,379
1,471
1,209
8,496
4,610
1,472
1,460
79
1,025,929
802,065
Received collaterals:
- administrative ban
- guarantees and piedge
- bonds
- mortgage and fiduciary
- - insurance policies
- movables
- deposits
- pledge of movable property
- other
Other off-balance sheet items:
- commission business
- loans written-off
- other written-off assets
- written-off and suspended interest
- other
As of December 31, 2010, the Bank disclosed within off-balance sheet items the amount of EUR
932,563 thousand comprised of all the types of collateral that Bank has received for due collection
of all the receivables on various related basis.
28
24.
RELATED PARTY TRANSACTIONS
Related party transactions relate to Parent Bank, other members of Societe Generale Group, Bank’s
shareholders, Bank’s management and employees of the Bank.
December 31,
2010
December 31,
2009
833
75
29
57
7
1,001
53
70
425
548
13,800
1,508
15,308
14,400
569
14,969
4,998
4,998
6,279
6,279
5,317
5,317
7,886
7,886
26,624
29,682
35
35
137
137
103,000
103,000
83,000
83,000
1,852
1,852
2,361
2,361
65
65
170
170
Total liabilities
104,952
85,668
Receivables / (Liabilities), net
(78,328)
(55,986)
In thousand of EUR
Receivables
Correspondent accounts with foreign banks:
- Societe Generale Paris
- Societe Generale New York
- Societe Generale Banka Srbija A.D., Beograd
- SKB Banka, Ljubljana
- Societe Generale Zurich Branch
Time deposits with related parties:
Loans:
- Plantaža A.D, Podgorica
Equity investments in other legal entities:
Total receivables
Payables
Deposits:
- Plantaža A.D., Podgorica
Borrowings:
Interest payables:
Other payables:
As of 12 December 2010, the total amount of guarantees received from the Parent bank and other
members of Societe Generale Group, used as collaterals for loans, amount to EUR 46,701.
29
24.
RELATED PARTY TRANSACTIONS (continued)
In thousand of EUR
December 31,
December 31,
2010
2009
Off-balance-sheet items
Guarantees issued:
- Građevinar d.o.o.,
Credentials:
Guarantees received:
50
153
100
-
203
100
-
176
-
176
203
276
46,600
55,377
46,600
55,377
At December 31, 2010, loans to employees amounted to EUR 2,817 thousand (December 31, 2009:
EUR 2,363 thousand) and mostly referred to the approved long-term loans bearing interest rates
ranging from 4.50% to 15.50% annually.
Income and expenses arising from related party transactions undertaken in the course of 2010 and
2009 were as follows:
In thousand of EUR
Income
Interest income:
Fee and commission income:
Total income
Expenses
Interest expenses:
Other expenses:
- Societe Generale Paris – za primljene garancije
Total expenses
Expenses, net
2010
2009
342
21
363
35
1
36
4
4
1
1
367
37
4,629
4,629
4,629
4,629
222
222
818
818
4,851
5,447
(4,484)
(5,410)
30
25.
MATURITY ANALYSIS OF FINANCIAL ASSETS AND LIABILITIES
The Bank is exposed to daily calls on its available cash resources which influence the available cash
resources held on the current accounts or from deposits. The Bank does not maintain cash
resources to meet all of these needs since historical experience demonstrates that a minimum level
of reinvestment of maturing funds can be predicted with a high degree of certainty.
The contractual maturities of the Bank’s asset and liability components as of December 31, 2010
were as follows:
In thousand of EUR
Up to one
month
From 1 to
3 month
From 3 to
6 month
From 6 to
12 month
From 1 to
5 years
Over 5
years
Total
Financial assets
Cash balances and deposit accounts
with depository institutions
Loans and other receivables
Other financial assets including
investments in shares
52,662
12,518
16,743
21,392
27,220
85,865
33,600
52,662
197,338
1,108
934
-
-
5,388
-
7,430
Total
66,288
17,677
21,392
27,220
91,253
33,600
257,430
94,578
5,331
3,852
8,376
1,718
-
113,855
53,500
0
6,887
27,500
4
27
22,000
4
27
4
323
4,000
293
380
107,000
12
7,937
154,965
32,862
25,883
8,703
6,011
380
228,804
Maturity gap:
- December 31, 2009
26,536
4,446
(12,725)
(55,981)
32,443
35,248
29,967
- December 31, 2010
88,677
(15,185)
(4,491)
18,517
85,242
33,220
28,626
Cumulative GAP:
- December 31, 2009
26,536
30,982
18,257
(37,724)
(5,281)
29,967
- December 31, 2010
88,677
73,492
69,001
87,518
172,760
205,980
12.8%
14.9%
8.8%
-18.1%
-2.5%
14.4%
-38.8%
-45.4%
-47.4%
-39.3%
-2%
12.5%
Financial liabilities
Deposits
Obligations based on loans and
other borrowings
Obligations to the Government
Other financial liabilities
Total
% of total liquidity-bearing
assets:
- December 31, 2009
- December 31, 2010
The Bank’s liquidity, characterized by its ability to settle its liabilities as these fall due, depends on
one hand on the balance sheet structure, and on the other hand, on the matching between cash
inflows and outflows. The structure of the Bank’s financial assets and liabilities classified according
to their relevant maturities at December 31, 2009 indicates the existence of a liquidity gap in the
period up-to-one-year. The primary reason for this gap lies with the fact that the short-term sources
of funds have maturities from one month up to one year, while loans from the Parent Bank have
been placed for longer periods of time.
31
26.
INTEREST RATE RISK
The Bank is exposed to various risks associated with the effects of fluctuations in the prevailing
levels of market interest rates on its financial position and cash flows. Interest rate risk requires
special treatment under the existing local circumstances of frequent interest rate movements, and
the irregular relationship between capital supply and demand. Interest rate risk is unfavourable
when there is fluctuation in the price of a loan with respect to the level of the interest rates applied
to deposits, on one side, and the potential to reduce the optimal difference between the average
interest rates on loans, and those on deposits, on the other.
The table below shows the Bank’s exposure to interest rate risk as of December 31, 2010:
In thousands of EUR
Interest rate sensitive assets
Interest-bearing deposits in other institutions
Loans and other receivables
24,160
116,122
29,931
5,995
10,369
34,921
24,160
197,338
Total:
140,282
29,931
5,995
10,369
34,921
221,498
% of total interest-bearing assets
63.33%
13.51%
2.71%
4.68%
15.77%
100.00%
Interest rate sensitive liabilities
Interest bearing deposits
Interest-bearing borrowings
77,389
53,500
5,007
27,504
3,798
22,004
8,483
4
1,509
4,000
96,186
107,012
130,889
32,511
25,802
8,487
5,509
203,198
64.41%
16%
12.70%
4.18%
2.71%
100%
14,047
3,714
(12,690)
(55,647)
60,553
9,997
- December 31, 2010
9.393
(2,580)
(19,807)
1,882
29,412
18,300
Cumulative GAP:
- December 31, 2009
14,047
17,761
5,071
(50,576)
9,997
- December 31, 2010
9,393
6,813
(12,994)
(11,112)
18,300
Total:
% of total interest-bearing
liabilities
Interest rate exposure:
- December 31, 2009
32
27.
CURRENCY RISK
The following table summarizes the net foreign currency exposure of the Bank as of December 31,
2010. The Bank takes on exposure resulting from fluctuations in prevailing foreign currency
exchange rates on its financial position and cash flows. The management establishes limitations on
the exposure level per currencies and in total amount and monitors such exposure on regular basis.
In thousands of EUR
RSD
USD
GBP
CHF
Other
Total
-
2,427
80
119
75
2,701
-
429
2,387
3
48
15
429
2,453
-
429
2,427
80
119
75
429
2,701
Net foreign exchange exposure:
- December 31, 2010
-
40
77
71
60
- December 31, 2009
-
(72)
7
68
26
% of first-tier capital:
- December 31, 2010
-
0.15%
0.28%
0.26%
0.22%
- December 31, 2009
-
-0.28%
0.03%
0.26%
0.10%
Assets in foreign currencies
Contracts for the purchase foreign
currencies and other off-balance
sheet accounts for foreign currency
exchange
Liabilities in foreign currencies
Contracts for the sale of foreign
exchange
Aggregate open position:
- December 31, 2010
248
- December 31, 2009
29
- December 31, 2010
0.91%
- December 31, 2009
0.12%
28.
LITIGATION
As of December 31, 2010, the Bank was involved in several litigations filed by legal entities and
private individuals, while the Bank runs a case against one legal entity for aquisition withoout
fondation. According to the assessments made by the Bank’s Legal Department, as at December 31,
2010 the total amount sought in legal suits totals EUR 2,450 thousand. As of December 31, 2010,
the Bank disclosed in the accompanying financial statements provisions for potential losses on
litigations in the amount of EUR 179 thousand.
In addition, the Bank filed several litigations against legal entities and private individuals to collect
receivables in the total amount of EUR 4,101 thousand.
33
29.
OPERATING LEASE
Agreements on operating lease, along with the contracted lease period refer to the lease of business
and residential premises. The Bank is not allowed to purchase the leased business premise after the
lease period expires.
During 2010, the lease expense amounted to EUR 448 thousand (2009: EUR 511 thousand).
The lease of business and residential premises represent the commitments for the average period
from one to five years with reference to the agreements concluded with the legal entities, i.e. from
3 to 5 years with reference to the agreements concluded with the physical entities
Commitments arising from the agreements on operating lease of business and residential premises
for the period ended as of balance sheet date not disclosed in the financial statements are as
follows:
Up to 1 year
from 1 to 2 years
from 2 to 3 years
from 3 to 4 years
30.
December 31,
2010
December 31,
2009
206
138
31
-
382
206
138
31
375
757
TAX RISKS
Montenegrin tax legislation is subjected to varying interpretations, and legislative changes occur
frequently. The interpretation of tax legislation by tax authorities as applied to the transactions and
activities of the Company may not concur with the views of the Bank’s management. Consequently,
transactions may be challenged by the relevant tax authorities and the Company could be assessed
additional taxes, penalties and interest, which can be significant. The fiscal periods remain open for
review by the tax and customs’ authorities with regard to the tax-paying entity’s tax liabilities for a
period of five years.
34
31.
EXCHANGE RATES
The official exchange rates for major currencies used in the translation of balance sheet items
denominated in foreign currencies, into euros as at December 31, 2010 and 2009 were as follows:
USD
CHF
GBP
32.
December 31,
2010
December 31,
2009
0.7530
0.8016
1.1625
0.6974
0.6721
1.1062
EVENTS AFTER THE BALANCE SHEET DATE
Management is not aware of any other events after the balance sheet date that would require either
adjustments or additional disclosures in the financial statements.
35
ANALYSIS TO THE
FINANCIAL STATEMENTS FOR 2010
ANALYSIS TO THE FINANCIAL STATEMENTS
A
ANALYSIS TO FINАNCIAL STATEMENTS
I
INTRODUCTION
Financial Statements of Podgoricka banka Societe Generale Group A.D., Podgorica (the "Bank"),
which were subject of audit have been prepared in accordance with Accounting standards and
regulations of Montenegro and regulations of Central Bank of Montenegro governing financial
reporting of banks. The prescribed forms of financial statements were submitted in due time to the
Central Bank of Montenegro.
II
INCOME STATEMENT AND BALANCE SHEET ANALYSIS
Detailed analysis of the balance sheet and income statement is provided within Notes 4 and 24 to
the financial statements.
B
REVIEW AND EVALUATION OF QUALITY AND FINANCIAL POSITION OF THE BANK
I
QUALITY OF THE BANK’S ASSET
Classification of asset and the corresponding balance sheet items, in terms of determining asset
quality, was carried out in accordance with the Decision of the classification of bank assets,
provisions and reserves for loan losses issued by the Central Bank of Montenegro (,,Official Gazette
of Montenegro", no. 41/2010) and the Decision of the Central Bank of Montenegro on temporary
measures for managing credit risk in banks ("Official Gazette of Montenegro" no. 64/2009, 87/2009
and 66/2010). On the basis of classification performed and in accordance with internal policies, the
Bank has made provisions for potential losses as at December 31, 2010 in amount of EUR 3,052
thousand (December 31, 2009: EUR 4,196 thousand).
Based on audit performed and classification of the selected sample of bank’s debtor checked, the
auditor, based on relevant Decisions of the Central Bank of Montenegro, has confirmed the
classification performed by the Bank.
Available information on indicators of business of the debtor are taken into account when
determining the classification of assets and the required reserves for potential losses of the Bank,
as well as the quality of debt service, renewal of loans to the same debtors during the year, the
quality of the collection instruments and evidence of credit and interest charges in 2010.
36
B
(continued)
I
QUALITY OF THE BANK’S ASSET (continued)
Summing up the results of a quality of balance sheet and off-balance sheet assets of the Bank from
the point of payment collection and the need to create reserves for the provision of the Bank from
potential losses in accordance with the stated approach, the following relations and parameters
were provided:
Risk-weighted balance sheet and off-balance sheet assets of the Bank as of December 31, 2010 and
2009 consists of the following:
In thousand of EUR
2010
Loans
Less: Loans secured by cash
deposit
Less: Loans secured by
guarantees
Amount
197,338
In %
2009
Formed
reserve
2,733
(1,564)
(49,671)
Amount
176,979
In %
Formed
reserve
3,806
(4,128)
-
123
(54,479)
221
146,103
76
2,856
118,372
79
4,027
Accured interest
Other asset items
577
23,816
12
9
287
16,821
11
12
167
Taken over and potential
obligations
22,117
12
310
14,146
10
211
192,774
100
3,175
149,626
100
4,417
Total exposure to risk
As at December 31, 2010, the structure of the Bank’s investments made by risk categories after
decresed for cash deposits is as folows:
In thousand ofEUR
Category
Loans
Calcualted
interest
Other
asset
Off-balance
record
A
B
C
D
168,970
20,174
5,490
1,140
210
317
37
13
23,816
-
195,774
577
23,816
Total
In %
17,713
4,404
210,709
24,859
5,527
1,153
87
10
2
1
22,117
242,258
100
Risk-weighted balance sheet and off-balance sheet assets comprising the total sum of assets
classified from the point of collection, as at December 31, 2010, represented 93.22% of total assets
(before impairment for loan loss provisions and impairment losses on other assets).
The loan policy of the Bank is in compliance with the Decision of the Central Bank of Montenegro on
minimum standards for the management of loans concentration and doing business with related
entities.
37
B
(continued)
II
EQUITY AND ADEQUACY OF EQUITY
As of December 31, 2010 the share capital of the Bank comprises of 96,736 common shares with
nominal value of 255.65 EUR.
As of December 31, 2010, retained earnings amount to EUR 1,142 thousand.
The core capital of the Bank, formed in accordance with the Decision on Adequacy of equity
("Official Gazette of Montenegro", no. 41/2009), as at December 31, 2010 amounts to EUR 27,104
thousand. The core capital of the Bank as at December 31, 2010 comprises of the basic elements of
the Bank's own funds: paid share capital at nominal value, reserves that were formed at the expense
of profit after tax (legal, statutory and other reserves) and retained earnings, decreased for the
amount of intangible assets.
Supplementary capital of the bank as at December 31, 2010 amounted to EUR 3,622 thousand and
consists of revaluation surplus achieved by reducing to the market fair value of investments in
equity of other legal entities.
Bank’s own funds as at December 31, 2010 amounted to EUR 28,481 thousand and represent the
sum of core capital, supplementary capital and deduction in the amount of EUR 2,245 thousand for
direct investment in the entity that is engaged in non-financial business activities.
Risk-weighted balance sheet assets, formed in accordance with the Decision on Adequacy of equity
of the Bank at December 31, 2010 amounted to EUR 148,843 thousand.
As at December 31, 2010 the solvency ratio of the Bank amounted to 15.83%.
III
LIQUIDITY OF THE BANK
Liquidity risk management is defined by the Procedure for managing liquidity risk which defines the
responsibilities of the fund departments (handling the funds and the first level of responsibility),
Financial director (the function of financial control and the second level of responsibility) and
General Executive director (the highest level of responsibility) and ALCO Committee.
Liquidity of the Bank is defined as its ability to settle its liabilities as these fall due. The Bank is
exposed to daily management of withdrawal of funds by customers, affecting the funds available
from current accounts, deposits, withdrawals of loans. The Bank does not have a need to maintain
the level of funds so that it could come out to meet all potential claims, estimating that the minimum
level of reinvestment of maturing funds can be predicted with certainty. Compliance and controlled
non-compliance of maturities and interest rates of assets and liabilities are fundamental for the
Bank's management. It is unusual for banks to ever fully agree on investments and resources, since
the different types of business transactions are carried out for an indefinite period.
Procedure for managing liquidity risk defines that the Bank's liquidity is based on a regular and
stable collection of receivables in their due dates, and accordingly the Bank monitors the funds
disbursed from the point of probability of charging in due time. The primary sources of Bank’s funds
are deposits of domestic legal entities and individuals as well as short-term loan lines approved by
the parent bank.
38
B
(continued)
III
LIQUIDITY OF THE BANK (continued)
The Bank maintains its liquidity by constantly monitoring the alignment of resources and
placements in order to be able to all its and commitments of their depositors, settles when mature,
while at the same time trying to meet the needs of the founder and business customers in approving
the loans, i.e. to adjust maturities of loans with borrower’s needs.
Liquidity of the Bank as at December 31, 2010 and 2009 can be closely looked from the following
indicators:
2010
2009
Loans
---------------------Deposits
=
197,339
---------------------113,885
x 100 =
173.28%
150.15%
Liquid assets
---------------------Deposits
=
52,662
---------------------113,885
x 100 =
46.24%
43.74%
Liquid assets
---------------------Total assets
=
52,662
---------------------259,913
x 100 =
20.26%
21.46%
Liquid assets
---------------------Short-term liabilities
=
52,662
---------------------222,413
x 100 =
23.68%
32.50%
Maturity alignment of financial assets and Bank’s liabilities as at December 31, 2010 has been
shown in note 25 to financial statements.
IV
INTEREST RATE RISK
Existing interest rates are determined by a decision on the interest rate for the individuals and legal
entities. This decision defines the basic goals and guidelines for interest rate policy, principles and
methods of determining the interest rates by which the Bank arranges an agreements, calculate and
charge interest on loans and other receivables, i.e. pays on deposits and other funds received.
The Bank is exposed to various risks associated with the effects of fluctuations in the prevailing
levels of market interest rates on its financial position and cash flows. As a result of such changes,
an interest margin of the Bank could be increased, but also decrease and loss in a case of
unexpected interest rate fluctuation can occur. In accordance with the policy for managing market
risks, the Bank controls the risk of interest rate fluctuations by establishing internal limitations for
the ratio of total bank exposure to interest rate changes in each period and total assets of 6%.
39
B
(continued)
IV
INTEREST RATE RISK (continued)
Lending interest rates applied to loans granted to corporate entities during 2010 are as follows:
Type of a loan
Interest rate
Corporate entities:
- short-term loans from a Bank
- short-term loans from other resources
- short-term loans provided to banks and other financial
organizations
- arranging loan
- long-term loans from Bank
- long-term loans from other resources
- loans for small and medium entities up to 24 months
- loans for small and medium entities over 24 months
- loans for entrepreneurs up to 24 months
- loans for entrepreneurs over 24 months
7.39% to 14% p.a.
by individual contracts
3/6M EURIBOR + 8% do 15% p.a.
from 11.00% to 18% p.a.
3M EURIBOR + 10.50% to 14.50% p.a.
from 15% to 19% p.a.
3M EURIBOR + 11.50% to 16.50% p.a.
Lending interest rates applied to loans granted to individuals during 2010 are as follows:
Type of a loan
Interest rate
Individuals:
- cash loans
- customers loans
- car loans
- loans for renovation and financing up to 40 months
- loans for renovation and financing over 60 months
- home loans
13.50% - 17.50% p.a.
11.00% - 15.00% p.a.
10.50% - 14.50% p.a
9.55% - 14.55% p.a
3M euribor + 8.25% to 13.25%
6M EURIBOR + 7% to 9% p.a.
Deposit interest rates which were applicable on corporate during 2010 were as folows:
Deposit type
Interest rate
Demand deposits
Short-term deposits
Long-term deposits
from 0.30% p.a.
40
B
(continued)
IV
INTEREST RATE RISK (continued)
Deposit interest rates which were applicable on deposits of retail customers during 2010 were as
folows:
Deposit type
Interest rate
Demand deposits
Savings deposits:
- EUR
- other currencies
Time deposits in EUR:
- a month
- three months
- six months
- 12 months
- 24 months
- 36 months
Time deposits in foreign currencies (USD):
- three months
- six months
- 12 months
V
0.30% p.a.
0.50% p.a.
Interest free
1.00% - 1.15% p.a.
1.50% - 3.75% p.a.
3.50% - 4.25% p.a
5.50% - 8.25% p.a.
4.50% - 6.00% p.a.
4.50% - 6.25% p.a.
0.30% p.a.
0.60% p.a.
0.75% p.a.
CURRENCY RISK
The Decision issued by the Central Bank of Montenegro regarding minimal standards for
management of credit risks in banks („Official Gazette of Montenegro, no. 60/2008) establishes the
following limits regarding the open foreign currency position:
Individual open position at the end of the day for the currencies of daily exchange rate on the
reference list of the European Central Bank - max 15% of the core capital.
The aggregate open position at the end of the day for the currencies of daily exchange rate on
the reference list of the European Central Bank - max 20% of the core capital
The net open positions at the end of the day for other currencies, may amount to no more
than 5% of the core capital on an individual basis (currencies which are not at the reference
exchange rate list of the European Central Bank)
The net open positions at the end of the day for other currencies, may amount to no more
than 10% of the core capital on an aggregate basis.
41
B
(continued)
V
CURRENCY RISK (continued)
As at December 31, 2010 foreign currency exposure of the Bank was as follows:
In thousands of EUR
RSD
USD
GBP
CHF
Other
Total
-
2,427
80
119
75
2,701
-
429
2,387
3
48
15
429
2,453
-
429
2,427
80
119
75
429
2,701
Net foreign exchange exposure:
- December 31, 2010
-
40
77
71
60
- December 31, 2009
-
(72)
7
68
26
- December 31, 2010
-
0.15%
0.28%
0.26%
0.22%
- December 31, 2009
-
-0.28%
0.03%
0.26%
0.10%
Assets in foreign currencies
Contracts for the purchase foreign
exchange
Liabilities in foreign currencies
Contracts for the sale of foreign
exchange
Aggregate open position:
- December 31, 2010
248
- December 31, 2009
29
- December 31, 2010
0.91%
- December 31, 2009
0.12%
42
B
(continued)
VI
COUNTRY RISK
In accordance with the Decision on minimum standards for Country Risk management (“Official
Gazette of Montenegro” no. 08/05), the Bank has adopted a Policy and Procedures of country risk
management. Country risk presents a probability of incurring losses to the Bank, due to the inability
to collect receivables from entities outside Montenegro because of political, social and economic
reasons of the country where the seat of the debtor is. As at December 31, 2010, the Country risk
as well as the required capital for country risk, were calculated using the current Decision on
methodology for measuring country risk in the banks ("Official Gazette of Montenegro" no. 60/08
dated on October 9, 2008).
Country risk as at December 31, 2010 was calculated using the current methodology Rating of
debtor countries. Country risk management policy defines the following percentages of reserves in
line with the “rating” of land the bank has exposure to (Standard & Poors'):
Risk categories
Non-risk countries
Low-risk countries
Medium-risk countries
High-risk countries
Risk weight
0%
50-100%
150-250%
minimum 300%
During 2010, the Bank has presented income from cancellation of reserves from the Bank's
exposure to country risk in the amount of EUR 5 thousand.
VII
OPERATIONAL RISK
In accordance with the Decision on minimum standards for operational risk management in banks
("Official Gazette of Montenegro" no. 24/2009), which was adopted at the Council meeting of the
Central Bank of Montenegro, held on February 23 and 24, 2009 the Bank has adopted a Policy for
managing operational risk.
Operational risk is defined as the risk of loss due to improper or inappropriate conduct and actions
of employees, inadequate and / or errors in processes and organization, inadequate and / or errors
in systems and infrastructure or due to external factors and influences.
In accordance with the Decision of the Central Bank of Montenegro, the Bank is obliged to inform the
Central Bank of losses arising from operational risk exceeding 1% of venture capital, at the latest
within eight working days from the date of loss.
As at December 31, 2010, the provisions for operational risk amount to EUR 179 thousand
(December 31, 2009: EUR 119 thousand).
43
B
(continued)
VIII
INTERNAL CONTROL AND INTENAL AUDIT SYSTEM
Organizational structure of the Bank establishes levels and lines of authority and responsibility with
a clear delimitation between the function of management and leadership function. The management
bodies are: the Assembly of the Bank and the Board of Directors of the Bank.
Bank is managed by the General Executive Director of the Bank.
The Bank, as a separate organizational unit, organized Internal Audit department. Internal audit
department performs its activities in accordance with the internal audit procedures and annual plan
of activities.
In accordance with these internal procedures the internal audit activities include but are not limited
to:
Compliance with relevant rules, guidelines, instructions and standards;
Evaluation of the reliability of rules and diversification of duties within the banking operations;
Review and estimation of effectiveness and benefits of financial and administrative controls;
Monitoring the adequacy, reliability, safety integrity of accounting and other management
information systems;
Review of effectiveness and efficiency of banking operations;
Testing the validity of measures used to achieve banking operations;
Test and evaluation of the adequacy and effectiveness of internal control system;
Review of application and effectiveness of risk management procedures and assessment of
the methodology of risk assessment;
Assessment of information systems, with special emphasis on electronic information systems
and banking application;
Assessment of the accuracy and reliability of accounting financial statements;
Assessment of the banking system in the determination of capital in relation to the estimated
risk;
Testing of transactions and functioning of specific internal control procedures;
Adherence to legal and statutory regulations, code of ethics, implementation of policies and
procedures;
Conducting special investigations.
When reporting to the Bank's management, internal audit operates independently in order to
establish and report on the adequacy, reliability and effectiveness of controls used by the Bank's
risk management, which has a preventive effect on achievement of the objectives of banking, and
reporting whether the banking resources are used efficiently and effectively in achieving the
objectives of banking.
44
C
REVIEW OF BANK’S ORGANIZATIONAL STRUCTURE
The Bank is seated in Podgorica with branch offices in Podgorica, Danilovgrad, Nikšić, Kolašin, Biјelo
Polje, Rožaje, Berane, Cetinje, Ulcinj, Bar, Budva, Tivat and Igalo.
The Bank performs its activity through the following organizational units – Departments, i.e.
Independent Departments, which are:
 Sectors related to Board of directors
Prevention of money laundering and terrorism financing
Monitoring Bank’s compliance with the legislations
Internal Audit
Management Operations Division
Risk management - RISK
Legal affairs
Internal communication
- General department
Commercial Division
- Retail (branch offices)
- Central region
- South region
- North region
- Corporate
- Operations with Bank’s key clients- KAM
- Loan analysis
- Quality department
- Strategy, marketing & advertising
Finance Division
- Accounting department
- Asset management
- Treasury chief
- Financial planning and control
Resources Division
- Human resources
- Projects and organization – DPO
- Informative technologies - IT
- Supply and Logistics
As of December 31, 2010, the Bank had 255 employees (December 31, 2009: 275 employees).
45
C
REVIEW OF BANK’S ORGANIZATIONAL STRUCTURE (Continued)
Qualification structure of the Bank, as at December 31, 2010 were as folows:
No. of
employees
Ph.D.
Masters
University degree (four years)
College degree (two years)
High school degree
Qualified
Low qualification
In %
1
2
109
21
114
2
6
0.39
0.78
42.75
8.24
44.71
0.78
2.35
255
100.00
As at December 31, 2010 the General Executive Director of Podgorička banka Societe Generale
Group А.D., Podgoricа was Mrs Branka Pavlović.
The members of Board of Directors as at December 31, 2010 were:
Name
Bank/Company
Mladen Rabrenović
Branka Pavlović
Andre-Marc Prudent
Jean-Dider Reigner
Sonja Miladinovska
Verica Maraš
Marc Monel
Podgorička banka Societe Generale Group A.D.,
Podgorica
Podgorica
Societe Generale banka Slovenija
Societe Generale Group, Francuska
Societe Generale banka, Srbija
Societe Generale Group, Francuska
Function
President
Member
Member
Member
Member
Member
Member
The members of Credit Risk Management Committee, as at December 31, 2010 were:
Name
Bank
Radule Raonić
Marjana Drašković
Miodrag Radonjić
Branka Pavlović
Podgorica
Podgorica
Podgorica
Podgorica
Function
President
Member
Member
Member
46
C
REVIEW OF BANK’S ORGANIZATIONAL STRUCTURE (Continued)
The members of the Audit Board, as at December 2010, were:
Name
Bank
Marc Monel
Bojana Glavina
Jitka Pantučkova
D
Societe Generale Group France
Societe Generale bank Slovenia
Ohridska bank Macedonia
Function
President
Member
Member
REPORT IN SHORT FORM
In accordance with the Decision on Reports which banks submit to the Central Bank of Montenegro,
the report in a short form consists of Auditor’s opinion on financial statements of the bank, Income
Statement and Balance Sheet, data on the composition of the Board of Directors, the Committee on
Credit Risk Management and Supervisory Committee, information about the General Executive
director and Internal Auditor of the Bank and data on performance indicators.
47
This is English translation of the Report
originally issued in Montenegrin language
(For management purposes only)
INDEPENDENT AUDITORS’ REPORT
TO THE OWNERS OF PODGORICKA BANKA SOCIETE GENERALE GROUP A.D. PODGORICA
Report on Financial Statements
We have audited the accompanying financial statements of Podgoricka banka Societe Generale Group a.d.
Podgorica (hereinafter: the Bank), which comprise the balance sheet as at 31 December 2010, and the
income statement, statement of changes in equity and cash flow statement for the year then ended, and a
summary of significant accounting policies and other explanatory notes.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
governing financial reporting of banks, 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 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 the auditor’s 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, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the 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.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Bank as at
31 December 2010, and of its financial performance and its cash flows for the year then ended in
governing financial reporting of banks.
Other matter
The financial statements of the Bank for the year ended 31 December 2009 were audited by another
auditor who expressed an unmodified opinion on those statements on 28 February 2010.
SHORT FORM OPINION
DATA ON BOARD OF DIRECTORS COMPOSITION, CREDIT RISK MANAGEMENT COMMITTEE,
SUPERVISORY COMMITTEE, GENERAL DIRECTOR AND INTERNAL AUDITOR OF THE BANK
As at December 31, 2010 the members of Bank’s Board directors were:
Name
Bank/Company
Mladen Rabrenović
Podgorica
Branka Pavlović
Podgorica
Andre-Marc Prudent Societe Generale bank Slovenia
Jean-Dider Reigner Societe Generale Group, France
Sonja Miladinovska Societe Generale bank, Republic of Serbia
Verica Maraš
Marc Monel
Societe Generale Group, France
Function
President
Member
Member
Member
Member
Member
Member
As at December 31, 2010 the members of Credit risk management committee were:
Name
Bank
Function
Radule Raonić
Podgorica
President
Marjana Drašković
Podgorica
Podgorica
Member
Podgorica
Member
Miodrag Radonjić
Branka Pavlović
Member
The members of the Audit Board, as at December 31, 2010 were:
Name
Bank
Marc Monel
Bojana Glavina
Jitka Pantučkova
Societe Generale Group Francuska
Societe Generale banka Slovenija
Ohridska banka Makedonija
Function
President
Member
Member
As at December 31, 2010 the General Executive director of Podgorička banka Societe Generale
Group А.D., Podgoricа was Mrs Branka Pavlović.
As at December 31, 2010 the directior of Internal audit department was Mrs Vukosava Kuburović.
BANK’S PERFORMANCE INDICATORS AS AT DECEMBER 31, 2010
Bank’s performance indicators as at December 31, 2010 were as folows:
Indicators
Core equity
Additional equity
Bank’s funds
Weighted balance sheet assets
Solvency ratio
Return on average assets
Return on average equity
Achieved
27,104 thousand EUR
3,622 thousand EUR
28,481 thousand EUR
148,843 thousand EUR
15.83%
1.16%
9.16%
52

PODGORIČKA BANKA SOCIETE GENERALE GROUP A.D.

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PODGORIČKA BANKA - Societe Generale Montenegro

international conference places on the edge creating a sense of

Presentation for Investors

AIK Banka - Vladimir Cupic

Business Zone Brinje – Križpolje

LOVCENINVEST A.D.

- Hambros

View Report - Financial Center Credit Union

Member Services - Credit Union 1