Annual Report - VÚB banka

10. Impairment losses (continued
1 Jan (Reversal)/ Other (1) FX 31 Dec
2006 creation gains 2006
(note 31)
Loans and advances to banks (note 5) - 33 - - 33
Loans and advances to customers (note 9) 4,415 (739) 235 (52) 3,859
Held-to-maturity investments (note 11) 176 (147) - (5) 24
Subsidiaries, associates and JVs (note 12) 542 - - - 542
Property and equipment (note 14) 481 (480) - - 1
Non-current assets held for sale (note 14) 64 (52) - - 12
Other assets (note 16) 32 (5) - - 27
5,710 (1,390) 235 (57) 4,498
(1) Provision transfer from CFH due to the transfer of credit risk
88
11. Held-to-maturity investments
2007 2006
State restructuring bonds 35,065 35,072
State bonds 47,134 42,947
Bank bonds and other bonds issued by fi nancial sector 7,270 7,275
Corporate notes and bonds 1,272 1,310
90,741 86,604
Impairment losses (note 10) (20) (24)
State restructuring bonds
As part of the pre-privatization restructuring process
of the Bank, the Slovak government decided
to transfer the receivables of the Bank arising from
non-performing loans to state agencies. These special
purpose agencies were created and are under
the full control of the state. In December 1999 and
June 2000, the Slovak government recapitalized
the Bank by transferring the non-performing loans,
including principal and interest, to Konsolidačná
banka Bratislava (‘KBB’) with a gross value of Sk
58.6 billion, and Slovenská konsolidačná (‘SKO’)
with a gross value of Sk 7.6 billion, which gave rise
to the Bank’s receivables from KBB and SKO in
the total amount of Sk 66.2 billion. In January and
March 2001, these receivables were swapped at
par for state restructuring bonds with a total nominal
value of Sk 66.2 billion.
Restructuring bonds were issued by the Ministry of
Finance of the Slovak Republic, acting on behalf of
the Slovak government as the fi nancial intermediary.
The bonds are legally considered to represent
sovereign and unconditioned direct obligations of
the Slovak Republic and therefore there is no need
for additional state guarantees.
90,721 86,580
The bond conditions are the same as for any other
similar type of securities issued by the Slovak Republic,
i.e. are fully redeemable by the Slovak Republic,
there is no clause regarding rollover, early or
late extinguishments and do not allow for conversion
into any other type of fi nancial instruments.
At 31 December 2007 and 2006, the Bank held in its
portfolio the following state restructuring bonds:
(a) 7-year state bonds with a nominal value of Sk
11,300 million, due on 30 January 2008, bearing
variable interest rate of 6M BRIBOR;
(b) 10-year state bonds with a nominal value of Sk
11,044 million, due on 30 January 2011, bearing
variable interest rate for 6M BRIBOR;
(c) 7-year state bonds with a nominal value of Sk
4,700 million, due on 29 March 2008, bearing variable
interest rate of 6M BRIBOR;
(d) 10-year state bonds with a nominal value of Sk
7,497 million, due on 29 March 2011, bearing variable
interest rate of 6M BRIBOR.
The 7-year state restructuring bond with a nominal
value of Sk 11,300 million was fully repaid on 30
January 2008.
Annual Report 2007