Annual Report 2012 - Raiffeisen Bank Kosovo JSC

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54 The modified capital adequacy ratio is equal to the capital adequacy ratio. The Bank’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. The impact of the level of capital on shareholder return is also recognised and the Bank recognises the need to maintain a balance between the higher returns that might be possible with greater gearing and the advantages and security afforded by a sound capital position. The Bank and its individually regulated operations have complied with all externally imposed capital requirements throughout the period. There have been no material changes in the Bank’s management of capital during the period. Gearing ratio The Bank’s risk management committee reviews the capital structure on a continuously basis. As part of this review, the committee considers the cost of capital and the risk associated with each class of capital. The gearing ratio at the year ended was as follow: 2012 2011 Debt 3,728 12,663 Equity 99,236 99,057 Net debt to equity ratio 4% 13% 5. Fair value of financial instruments Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation, and is best evidenced by a quoted market price. The estimated fair values of financial instruments have been determined by the Bank using available market information, where it exists, and appropriate valuation methodologies. However judgement is necessarily required to interpret market data to determine the estimated fair value. The volume of activity in financial markets is not significant. While Management has used available market information in estimating the fair value of financial instruments, the market information may not be fully reflective of the value that could be realised in the current circumstances. Cash and cash equivalents and mandatory reserve Cash and cash equivalents include inter-bank placements and items in the course of collection. As these balances are short term and at floating rates their fair value is considered to equate to their carrying amount. 2012 2011 Assets Carrying value Fair value Carrying value Fair value Due from other banks 46,103 46,103 85,910 85,910 Loan and advances to customers 401,066 401,066 402,110 402,110 Other Loans 20,873 20,873 30,920 30,920 Investment securities 64,102 64,102 62,873 62,873 Liabilities Deposits from customers 513,869 513,869 557,277 557,277 Deposits from banks 4,213 4,213 12,684 12,684
6. Cash and cash equivalents and mandatory reserve 2012 2011 Cash on hand 37,140 29,814 Balances with the CBK 36,409 47,086 Correspondent accounts with other banks 10,872 11,271 Money market placements 1,797 2,194 Total 86,218 90,365 Cash, cash equivalents and mandatory reserve include a mandatory liquidity reserve balance with CBK of € 50,864 thousand (31 December 2011: € 56,628 thousand). The liquidity reserve balance requirement is calculated on the basis of a simple average over a week and should be maintained as 10 per cent of bank deposits payable within one year. It consists of balances with CBK and 50 per cent of cash on hand. As such the balance can vary from day-to-day. This balance is excluded from cash and cash equivalents for the purposes of the cash flow statement. As at 31 December 2012 and 2011 the Bank’s cash and cash equivalents for the purposes of cash flow statement were as follows: 2012 2011 Total cash and cash equivalents and mandatory reserve 86,218 90,365 Less: Mandatory liquidity reserve (50,864) (56,628) Cash and cash equivalents for the purposes of cash flow statement 35,354 33,737 The CBK pays interest on the Bank’s average assets holdings with the CBK above 5 per cent of the applicable deposit base up to the amount of its average minimum liquidity reserve requirement. As at 31 December 2012 the interest was paid at the rate of 0 per cent per annum (31 December 2011: 0.10 per cent per annum). 7. Due from other banks Term deposits and call deposits are placed with banks operating in OECD countries. Guarantee deposits represent placements with Raiffeisen Bank International as at 31 December 2012 and 2011. The balance due from other banks includes accrued interest income in the amount of € 1 thousand (31 December 2011: € 3 thousand). Guarantee deposits include an amount of € 348 thousand as at 31 December 2012 (31 December 2011: € 354 thousand) which represent restricted deposits with a related party in relation to guarantees issued on the Bank’s behalf, for its customers. The Bank does not have the right to use these funds for the purposes of funding its own activities. 2012 2011 Term deposits 45,755 85,556 Guarantee deposits 348 354 Total due from other banks 46,103 85,910 55 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 and 44: a) Impairment charge for credit los
Page 45 and 46: Loans with renegotiated terms Loans
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: 4.5 Operational risk The primary re
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
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Annual Report 2012 - Raiffeisen Bank Kosovo JSC

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