Annual Report - Raiffeisen Bank Kosovo JSC

Financial Statements
Operating lease commitments. The future minimum lease payments under non cancellable operating
leases, where the Bank is the lessee, are as follows:
31 December 2006 31 December 2005
Not more than 1 year 1,079 688
More than 1 year and not more than 5 years 2,468 1,193
Total operating lease commitments 3,547 1,881
Credit related commitments. The primary purpose of these instruments is to ensure that funds are
available to a customer as required. Guarantees and standby letters of credit, which represent
irrevocable assurances that the Bank will make payments in the event that a customer cannot meet
its obligations to third parties, carry the same credit risk as loans. Documentary and commercial
letters of credit, which are written undertakings by the Bank on behalf of a customer authorising a
third party to draw drafts on the Bank up to a stipulated amount under specific terms and conditions,
are collateralised by the underlying shipments of goods to which they relate or cash deposits and
therefore carry less risk than a direct borrowing.
Commitments to make loans at a specific rate of interest during a fixed period of time are accounted
for as derivatives. Unless these commitments do not extend beyond the period expected to be needed
to perform appropriate underwriting, they are considered to be “regular way” transactions.
Outstanding credit related commitments are as follows:
31 December 2006 31 December 2005
Commitments to extend credit 23,743 25,645
Guarantees and similar commitments issued (credit facility) 11,946 8,528
Guarantees and similar commitments issued (cash covered) 2,252 699
Letters of credit (credit facility) 1,607 538
Letters of credit (cash covered) - 132
TF line of credit 1,923 953
Letters of comfort 500 1,410
Total credit related commitments 41,971 37,905
Movements in the provision for losses on commitments and contingent liabilities are disclosed in note
12.
Commitments to extend credit represent loan amounts in which the loan documentation has been
signed but the money not yet disbursed and unused amounts of overdraft limits in respect of customer
accounts. With respect to credit risk on commitments to extend credit, the Bank is potentially exposed
to losses in an amount equal to the total unused commitments. However, the likely amount of loss is
less than the total unused commitments since most commitments to extend credit are contingent upon
customers maintaining specific credit standards. The Bank monitors the term to maturity of credit
related commitments because longer-term commitments generally have a greater degree of credit risk
than shorter-term commitments.
66
www.raiffeisen-kosovo.com Supervisory Board Management Board Organisational Structure Vision and Mission RZB and RI .