Annual Report - VÚB banka

33. Impairment losses and provisions
2007 2006
Net reversal of impairment losses (note 11) 424 1,483
Net (creation)/reversal of fi nancial guarantees and commitments (note 24) (40) 489
384 1,972
Non current assets sold (12) (68)
Nominal value of loans written-off (692) (1,555)
Nominal value of loans transferred (1,455) (1,346)
Proceeds from loans written-off 349 247
Proceeds from loans transferred 547 310
(1,251) (2,344)
(879) (440)
The VUB Group continues to write-off loans, primarily in its consumer fi nance business, which has a high
volume of receivables against which there was a very high level of impairment losses. These receivables
together with those held by the Group were sold to third parties on a non-recourse basis prior to 31 December
2007.
50
34. Income tax expense
2007 2006
Current income tax (1,071) (262)
Deferred income tax (77) (811)
(1,148) (1,073)
The movement in the income statement in deferred taxes is as follows:
2007 2006
Loans and securities (2) (639)
Intangible assets 29 28
Property and equipment (60) (191)
Other liabilities and provisions (34) 5
Tax losses carried forward (10) (20)
Other - 6
(77) (811)
The effective tax rate differs from the statutory tax rates in 2007 and in 2006.
Reconciliation of the VUB Group profi t before tax with the actual corporate income tax is as follows:
2007 2006
Profi t before tax 5,215 4,820
Applicable tax rate 19% 19%
Theoretical tax charge (991) (916)
Permanent differences and previously unrecognized deferred tax assets (146) (147)
Adjustments for current tax of prior periods (11) (10)
Tax expense (1,148) (1,073)
Effective tax rate 22% 22%
Annual Report 2007