Annual Report - VÚB banka

Address by the Chairman of the VUB
Management Board
4
Dear Shareholders, Clients and Business Partners,
VUB has had a strong year in 2007. In fact, commercially,
it was the most successful year of VUB
since privatization. We have enjoyed solid growth
across all client segments, retail, SME, corporate
and Treasury activities. Importantly, while focusing
on growth, we have remained disciplined over costs
and further improved effi ciency of our operations.
Focus on healthy, value-based improvement of our
market position paid off in further improvement of
our profi tability.
VUB’s strong performance, admittedly, partly owes
to strong growth of the Slovak economy. Indeed,
with GDP gain of nearly 10% in real terms, well balanced
between the corporate and the household
sector, commercial banks enjoyed yet another year
of strong demand for their products and services.
In particular, volumes of bank loans grew 24%,
overtaking the already strong 20% growth in the
previous year. The volumes of bank deposits grew
at stable 13%, whereas the mutual funds business,
after the previous year stagnation, recovered
smartly in 2007, growing assets under management
by 20%.
Importantly, growth of banking sector volumes in
2007 has not only been strong, it also was well distributed
between client segments. In fact, last year
delivered the most balanced volume growth rates
in recent history. This is especially striking for the
loan market, in which lending to households had
recently grown at rates multiple of those observed
in the previously depressed corporate market. In
2007, the growth gap between the two nearly closed,
with 22% increase in corporate credit volumes
vs 27% in the retail. The deposit market has historically
posted less uneven trends among segments
than the loan market. Last year, nonetheless, has
delivered remarkably even results, with both retail
and corporate clients having grown their deposits
in the local banks by 13%.
VUB has rightly anticipated the newly found balance
on the loan and deposit markets. We have increased
efforts to grow across all clients and product
segments and, as a result, have taken sizable shares
of the overall market growth: 19% of the rise
in bank loan volumes and 20% of the increment in
combined bank deposits and mutual fund volumes,
respectively. This was a sharp improvement over
the previous year when our commercial growth results
have been uneven and we lost market share in
several business segments.
In 2007, we have, again, been very successful on
the retail front, in which we increased market shares
of both the household credit and the deposit
markets. We have continued to grow strongly our
mortgage book and systematically expanded volumes
of consumer loans, both via the Bank as well
as our specialized subsidiary, the Consumer Finance
Holding. On the household deposit market, we
have confi rmed position of the leader in innovation
through introduction of high interest current account
– Flexi Extra. By rewarding current account
activity through above-market interest rate, we
allow clients to offset transactional costs through
interest earned on account balance, providing
the most competitive offer on the market. We also
have been successful in competing for household
savings, increasing volumes of bank term deposits
Annual Report 2007