Annual Report - VÃB banka

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34. Estimated fair value of certain assets and liabilities The fair value of fi nancial instruments is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm‘s length transaction. Where available, fair value estimates are made based on quoted market prices. However, no readily available market prices exist for a signifi cant portion of the Bank’s fi nancial instruments. In circumstances where the quoted market prices are not readily available, the fair value is estimated using discounted cash fl ow models or other pricing models as appropriate. Changes in underlying assumptions, including discount rates and estimated future cash fl ows, signifi cantly affect the estimates. Therefore, the calculated fair market estimates might not be realized in a current sale of the fi nancial instrument. In estimating the fair value of the Bank’s fi nancial instruments, the following methods and assumptions were used: (a) Cash and balances with central banks The carrying values of cash and cash equivalents are generally deemed to approximate their fair value. (b) Loans and advances to banks The estimated fair value of amounts due from banks approximates their carrying amounts. Provisions are taken into consideration when calculating fair values. (c) Loans and advances to customers The fair value of loans and advances to customers is estimated using discounted cash fl ow analyses, based upon the risk free interest rate curve adjusted by relevant credit spreads. Provisions are taken into consideration when calculating fair values. (d) Held-to-maturity investments The fair value of securities carried in the ‘Held-tomaturity investments’ portfolio is based on quoted market prices. Where no market prices are available, the fair value was calculated by discounting future cash fl ows using risk free interest rate curve adjusted to refl ect credit risk. (e) Subsidiaries, associates and jointly controlled entities The estimated fair value of investment in subsidiaries, associates and jointly controlled entities approximates their carrying amounts. (f) Deposits from banks and customers The estimated fair value of deposits from banks approximates their carrying amounts. The fair value of deposits from customers with short term maturity (under one year) is estimated by discounting their future cash fl ows using the risk free interest rate curve. Fair value of deposits with maturity over than one year are discounted using the appropriate current interest rates offered by the Bank to these clients. (g) Debt securities in issue The fair value of debt securities issued by the Bank is based on quoted market prices. Where no market prices are available, the fair value was calculated by discounting future cash fl ows using the risk free interest rate curve adjusted by credit spreads refl ecting the credit quality of VUB as the issuer. 99 VUB, a bank of Intesa Sanpaolo group
34. Estimated fair value of certain assets and liabilities (continued) Notes Trading Held-to Loans and Available- Other Total Fair maturity receivables for-sale amortized carrying value cost amount 31 December 2007 Cash and balances with central banks 4 - - 4,493 - - 4,493 4,493 Loans and advances to banks 5 - - 35,090 - - 35,090 35,090 Financial assets held for trading 6 10,664 - - - - 10,664 10,664 Derivative fi nancial instruments 7 1,055 - - - - 1,055 1,055 Available-for-sale fi nancial assets 8 - - - 2,673 - 2,673 2,673 Loans and advances to customers 9 - - 119,931 - - 119,931 119,971 Held-to-maturity investments 11 - 90,721 - - - 90,721 90,086 Subsidiaries, associates and jointly controlled entities 12 - - - - 3,430 3,430 3,430 11,719 90,721 159,514 2,673 3,430 268,057 267,462 Deposits from central and other banks 17 - - - - 16,145 16,145 16,145 Derivative fi nancial instruments 7 1,034 - - - - 1,034 1,034 Deposits from customers 18 - - - - 205,137 205,137 204,909 Debt securities in issue 19 - - - - 26,727 26,727 26,646 1,034 - - - 248,009 249,043 248,734 100 Notes Trading Held-to Loans and Available- Other Total Fair maturity receivables for-sale amortized carrying value cost amount 31 December 2006 Cash and balances with central banks 4 - - 4,872 - - 4,872 4,872 Loans and advances to banks 5 - - 38,566 - - 38,566 38,566 Financial assets held for trading 6 3,489 - - - - 3,489 3,489 Derivative fi nancial instruments 7 2,388 - - - - 2,388 2,388 Available-for-sale fi nancial assets 8 - - - 2,667 - 2,667 2,667 Loans and advances to customers 9 - - 89,169 - - 89,169 88,962 Held-to-maturity investments 11 - 86,580 - - - 86,580 86,757 Subsidiaries, associates and jointly controlled entities 12 - - - - 2,485 2,485 2,485 5,877 86,580 132,607 2,667 2,485 230,216 230,186 Deposits from central and other banks 17 - - - - 10,758 10,758 10,758 Derivative fi nancial instruments 7 2,054 - - - - 2,054 2,054 Deposits from customers 18 - - - - 179,084 179,084 178,717 Debt securities in issue 19 - - - - 22,278 22,278 22,086 2,054 - - - 212,120 214,174 213,615 <strong>Annual</strong> <strong>Report</strong> 2007
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Contents Address by the Chairman of
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a socially useful construction, fur
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y 16%, assets under management of o
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Development of the External Environ
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VUB’s 2007 Commercial Performance
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Basic Indicators Basic Indicators i
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Consolidated balance sheet at 31 De
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Consolidated statement of changes i
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Notes to the consolidated financial
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The assets and liabilities arising
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the fair value of the assets given,
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The fair value of securities held f
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Embedded derivatives The VUB Group
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3.16 Intangible assets Intangible a
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3.22 Legal reserve fund In accordan
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3.30 Future changes in accounting p
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7. Financial assets held for tradin
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10. Loans and advances to customers
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Maturities of gross fi nance lease
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13. Investments in associates and j
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The goodwill is reviewed for impair
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17. Current income tax assets 2007
Page 46 and 47:
24. Other liabilities 2007 2006 Var
Page 48 and 49:
(a) Issued guarantees Commitments f
Page 50 and 51: 31. Salaries and employee benefits
Page 52 and 53: 35. Profit before changes in operat
Page 54 and 55: 37. Financial risk management Intro
Page 56 and 57: The following table describes the G
Page 58 and 59: (b) Market risk Market risk is the
Page 60 and 61: The re-pricing structure of assets
Page 62 and 63: (c) Liquidity risk Liquidity risk i
Page 64 and 65: The Intesa Sanpaolo Group’s inter
Page 66 and 67: 39. Related parties Related parties
Page 68 and 69: Balance sheet at 31 December 2007 (
Page 70 and 71: Statement of changes in equity for
Page 72 and 73: Notes to the separate financial sta
Page 74 and 75: 2.5 Foreign operations The fi nanci
Page 76 and 77: 2.10 Repurchase and reverse repurch
Page 78 and 79: 2.12 Offsetting financial instrumen
Page 80 and 81: 2.18 Leasing The determination of w
Page 82 and 83: 2.28 Significant accounting judgeme
Page 84 and 85: 3. Cash and cash equivalents For th
Page 86 and 87: 2007 2006 2007 2006 Assets Assets L
Page 88 and 89: During 2007, the Bank wrote off loa
Page 90 and 91: 12. Subsidiaries, associates and jo
Page 92 and 93: 15. Current income tax assets 2007
Page 94 and 95: 22. Other liabilities 2007 2006 Var
Page 96 and 97: (a) Issued guarantees Commitments f
Page 98 and 99: 30. Other operating expenses 2007 2
Page 102 and 103: 35. Financial risk management Intro
Page 104 and 105: The following table describes the B
Page 106 and 107: (b) Market risk Market risk is the
Page 108 and 109: The re-pricing structure of assets
Page 110 and 111: (c) Liquidity risk Liquidity risk i
Page 112 and 113: The Intesa Sanpaolo Bank’s intern
Page 114 and 115: 37. Related parties Related parties
Page 116 and 117: Review of the Economic and Financia
Page 118 and 119: List of VUB Branches Retail Busines
Page 120 and 121: Postal Code Address Tel. No. Fax Re
Page 122 and 123: Postal Code Address Tel. No. Fax Re
Page 124 and 125: Corporate Branches Firemné obchodn
Page 126 and 127: Structure of VUB Shareholders as at
Page 128 and 129: VUB, a bank of Intesa Sanpaolo grou
Page 130 and 131: Vladimíra Josefiová - Member of M
Page 132 and 133: ticipate in all meetings of the Man
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Annual Report - VÃB banka