Annual Report 2012 - Raiffeisen Bank Kosovo JSC

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44 The simple financial and market environment in Kosovo allows for the use of simple analysis method. Future more complex factors and risks in the banking industry will be supported by the development of new methods to better manage them. Based on the Bank policies, the Bank’s total assets are classified and analysed as follows: Catalogue); 4.2. Credit risk Credit risk is the risk of financial loss to the Bank if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Bank’s loans and advances to customers and other banks and investment securities. For risk management reporting purposes, the Bank considers all elements of credit risk exposure (such as individual obligor default risk, country and sector risk). The Bank takes on exposure to credit risk which is the risk that a counterparty will be unable to pay amounts in full when due. The Bank structures the levels of credit risk it undertakes by placing limits on the amount of risk accepted in relation to one borrower and to geographical and industry segments. Such risks are monitored on a revolving basis and subject to a monthly or more frequent review. Limits on the level of credit risk by borrower are approved by Management. Exposure to credit risk is managed through regular analysis of the ability of borrowers and potential borrowers to meet interest and principal repayment obligations and by changing these lending limits, where appropriate. Exposure to credit risk is also managed, in part, by obtaining collateral and corporate and personal guarantees. The Bank’s maximum exposure to credit risk is primarily reflected in the carrying amounts of financial assets on the statement of financial position. The impact of possible netting of assets and liabilities to reduce potential credit exposure is not significant. Credit risk for off-balance sheet financial instruments is defined as the possibility of sustaining a loss as a result of another party to a financial instrument failing to perform in accordance with the terms of the contract. The Bank uses the same credit policies in making conditional obligations as it does for on-balance sheet financial instruments through established credit approvals, risk control limits and monitoring procedures. The Bank holds different types of collateral as security for the credit risk. Additionally, other credit enhancement methods are applied. The main types of collateral are listed below: Impaired loans and securities Impaired loans and securities are loans and securities for which the Bank determines that it is probable that it will be unable to collect all principal and interest due according to the contractual terms of the loan / securities agreement(s). These loans are graded 0.5 to 5 in the Bank’s internal credit risk grading system. Past due but not impaired loans Loans where contractual interest or principal payments are past due but the Bank believes that impairment is not appropriate on the basis of the level of security / collateral available and / or the stage of collection of amounts owed to the Bank.
Loans with renegotiated terms Loans with renegotiated terms are loans that have been restructured due to deterioration in the borrower’s financial position and where the Bank has made concessions that it would not otherwise consider. Once the loan is restructured it remains in this category independent of satisfactory performance after restructuring. Allowances for impairment The Bank establishes an allowance for impairment losses that represents its estimate of incurred losses in its loan portfolio. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loan loss allowance established for Groups of homogeneous assets in respect of losses that have been incurred but have not been identified on loans subject to individual assessment for impairment. Write-off policy The Bank writes off a loan balance (and any related allowances for impairment losses) when Bank Problem Loans Committee determines that the loans / securities are uncollectible. This determination is reached after considering information such as the occurrence of significant changes in the borrower / issuer’s financial position such that the borrower / issuer can no longer pay the obligation, or that proceeds from collateral will not be sufficient to pay back the entire exposure. Set out below is an analysis of financial assets past due not impaired, and impaired assets: (amounts in € 000) Total gross Past due, Individually Individual Portfolio- Fair value carrying but not impaired loan loss based loan of the amount impaired assets (total provisions loss collateral assets carrying provisions 2012 amount) Corporate Customers 244,160 75,385 25,968 (11,624) (6,200) 251,714 Retail Customers 183,322 14,298 8,546 (6,928) (1,663) 173,486 Total Loans and Advances to Customers 427,482 89,683 34,514 (18,552) (7,863) 425,200 2011 Corporate Customers 242,484 48,313 29,952 (11,883) (6,334) 248,446 Retail Customers 186,592 13,657 7,304 (7,391) (1,358) 175,707 Total Loans and Advances to Customers 429,076 61,970 37,256 (19,274) (7,692) 424,153 45 Addresses Glossary Financial Statements Segment Reports Overview Macroeconomic Environment RBI Vision and Mission Management Board Introduction
Page 1 and 2: Annual Report 2012
Page 3 and 4: Content Report of the Supervisory B
Page 5 and 6: Report of the Management Board 2012
Page 7 and 8: Raiffeisen Bank Kosovo Organisation
Page 9 and 10: Raiffeisen Bank International at a
Page 11 and 12: Output The yearly aggregated growth
Page 13 and 14: Similar to the decline in the growt
Page 15 and 16: The banking sector in Kosovo contin
Page 17 and 18: Treasury Kosovo money market and th
Page 19 and 20: Given the focus on delivering value
Page 21 and 22: During 2012, the Bank was focused o
Page 23 and 24: Trade Finance Raiffeisen Bank Kosov
Page 25 and 26: E-Learning proved popular during 20
Page 27 and 28: Statement of Management’s Respons
Page 29 and 30: Independent Auditors’ Report To t
Page 31 and 32: Separate statement of comprehensive
Page 33 and 34: Separate statement of cash flow (am
Page 35 and 36: A parent need not present consolida
Page 37 and 38: 3.3.5. Investments at fair value th
Page 39 and 40: characteristics (i.e., on the basis
Page 41 and 42: can be subject to provisioning. For
Page 43: a) Impairment charge for credit los
Page 47 and 48: 4.3 Liquidity risk Liquidity risk i
Page 49 and 50: Geographical risk The geographical
Page 51 and 52: In management’s opinion, the sens
Page 53 and 54: 4.5 Operational risk The primary re
Page 55 and 56: 6. Cash and cash equivalents and ma
Page 57 and 58: 9. Other loans 2012 2011 Other loan
Page 59 and 60: 15. Deposits and borowings from ban
Page 61 and 62: 20. Other income 61 2012 2011 Incom
Page 63 and 64: 24. Contigencies and commitments Le
Page 65 and 66: 65 Addresses Glossary Financial Sta
Page 67 and 68: RBI Group in Europe 67 Addresses Gl
Page 69 and 70: Gjakova Branch Nena Tereza No. 328
Page 71 and 72: Bosnia and Herzegovina Raiffeisen L

Annual Report 2012 - Raiffeisen Bank Kosovo JSC

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