Annual Report - VÃB banka

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The following table describes the Bank’s credit portfolio in terms of classifi cation categories: Loans and advances to banks Loans and advances to customers Held-to-maturity investments 2007 2006 Category Cost Impair- Carrying Cost Impair- Carrying ment amount ment amount losses losses Performing 35,116 (26) 35,090 38,599 (33) 38,566 Performing 122,023 (2,597) 119,426 90,674 (2,330) 88,344 Substandard 228 (75) 153 771 (234) 537 Bad and Doubtful 1,092 (740) 352 1,583 (1,295) 288 123,343 (3,412) 119,931 93,028 (3,859) 89,169 Performing 90,678 - 90,678 86,539 - 86,539 Substandard 63 (20) 43 65 (24) 41 90,741 (20) 90,721 86,604 (24) 86,580 At 31 December 2007, the Bank had a potential credit exposure of Sk 1,686 million (31 December 2006: Sk 3,050 million) in the event of non-performance by counterparties to its fi nancial derivative instruments. This represents the gross replacement cost at market rates at 31 December 2007 and 31 December 2006 of all outstanding agreements in the event of all counterparties defaulting and not allowing for netting arrangements. The credit risk of fi nancial assets not discussed above approximates their carrying amounts. The payment discipline of each client is monitored regularly. If a client is past due with some payments, appropriate action is taken. The following table shows the Bank’s credit portfolio in terms of delinquency of payments. 103 2007 2006 Cost Impair- Carrying Cost Impair- Carrying ment amount ment amount losses losses Loans and advances to banks No delinquency 34,846 (12) 34,834 38,599 (33) 38,566 31 - 60 days 205 (10) 195 - - - 91 - 180 days 65 (4) 61 - - - 35,116 (26) 35,090 38,599 (33) 38,566 Loans and advances to customers No delinquency 117,207 (2,556) 114,651 88,291 (2,396) 85,895 1 - 30 days 4,404 (265) 4,139 2,667 (241) 2,426 31 - 60 days 590 (78) 512 624 (144) 480 61 - 90 days 262 (63) 199 247 (80) 167 91 - 180 days 376 (169) 207 357 (249) 108 Over 181 days 504 (281) 223 842 (749) 93 123,343 (3,412) 119,931 93,028 (3,859) 89,169 Held-to-maturity investments No delinquency 90,741 (20) 90,721 86,604 (24) 86,580 VUB, a bank of Intesa Sanpaolo group
35. Financial risk management (continued) Write-off policy The Bank writes off a loan or security balance (and any related allowances for impairment losses) when it determines that the loans or securities are uncollectible. As the standard, the Bank considers the credit balances to be uncollectible based on the past due days, i.e. 180 or 360 days past due depending on the type of segment or product. All credit balances are being reviewed for eligibility to be written off on a monthly basis. The credit balance can be written off earlier than defi ned in conditions described above if there is evidence that the receivable cannot be collected. The write off of such receivables is subject to the approval of the Credit Risk Offi cer. The Bank holds collateral against loans and advances to customers in the form of mortgage interests over property, other registered securities over assets, and guarantees. Estimates of fair value are based on the value of collateral assessed at the time of borrowing and generally the Bank updates the fair value on a regular basis. An estimate of the fair value of collateral and other security enhancements held against fi nancial assets is shown below: 2007 2006 Clients Banks Clients Banks Debt securities 2 28,668 12 22,435 Other 9,853 607 9,177 609 Property 97,768 - 73,586 - 107,623 29,275 82,775 23,044 104 The debt securities collateral received from banks represents the fair value of the collateral received in the reverse REPO trades with banks. The Bank is permitted to sell or repledge this collateral in the absence of default by the owner of the collateral. None of the collateral was sold or repledged at 31 December 2007 and 2006. The Bank monitors concentrations of credit risk by geographic location. An analysis of concentrations of credit risk at the reporting date is shown below. 2007 2006 Cost Impair- Carrying Cost Impair- Carrying ment amount ment amount losses losses Europe Loans and advances to banks 34,409 (2) 34,407 35,486 (2) 35,484 Loans and advances to customers 123,286 (3,411) 119,875 92,991 (3,859) 89,132 Held-to-maturity securities 90,671 (20) 90,651 86,531 (24) 86,507 248,366 (3,433) 244,933 215,008 (3,885) 211,123 North America Loans and advances to banks 700 (24) 676 3,098 (31) 3,067 Loans and advances to customers 34 (1) 33 14 - 14 Held-to-maturity securities 70 - 70 73 - 73 804 (25) 779 3,185 (31) 3,154 Asia Loans and advances to banks 7 - 7 11 - 11 Loans and advances to customers 7 - 7 20 - 20 14 - 14 31 - 31 Rest of the World Loans and advances to banks - - - 4 - 4 Loans and advances to customers 16 - 16 3 - 3 16 - 16 7 - 7 Under Europe, substantially all loans are made to Slovak entities or residents. Generally, the Bank does not engage in cross border lending. <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
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24. Other liabilities 2007 2006 Var
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(a) Issued guarantees Commitments f
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31. Salaries and employee benefits
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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 100 and 101: 34. Estimated fair value of certain
Page 102 and 103: 35. Financial risk management Intro
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