Annual Report 2010 - ProCredit Bank

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14 Annual Report 2010 tighter lending criteria, rising unemployment and austerity measures. However, the low demand for credit from the real economy was offset by the government’s appetite for funds to finance the growing budget deficit. On the deposit side, there was a 6.2% 4 increase, resulting in total deposits of RON 192.1 billion (EUR 44.8 billion). 5 The quality of the Romanian banking sector’s loan portfolio fell sharply in 2010, primarily as the result of the economic downturn. The indicator of portfolio quality published by the National Bank, which is similar to portfolio at risk over 90 days (PAR>90), rose swiftly to 11.85% 6 in 2010 (2009: 8% 7 ). The high arrears were especially detrimental to very small and small companies and private individuals with un-hedged debts in foreign currency; almost 60% 8 of private sector loans are denominated in hard currency. The banking system did not exert a pull effect due to the dynamics of its total assets and to the relatively low level of financial intermediation of 41% 9 loans to GDP and 30% 10 deposits to GDP, figures that carried over from 2009. In this environment, the country’s banks focused on managing their arrears, primarily by restructuring them; they also tightened their lending criteria and restricted access to credit, particularly for very small and small clients. ProCredit Performance 2010 was a hard year for everyone, including our clients. Businesses suffered from depressed consumption and tight liquidity, while private individuals grappled with unemployment, falling wages and a sizable jump in sales tax. As a development-oriented bank committed to supporting our clients through times of economic hardship, we offered our customers expert financial advice and restructured their loans to help them get back on their feet. And, as always, we offered convenient, transparent and affordable products and services. Thanks to our staff’s hard work, our overall results were promising despite the many challenges we faced in 2010. The bank strove to maintain its outstanding loan portfolio, which at year-end amounted to RON 766 million (EUR 179 million), a slight decrease of 1.24% (2009: decrease of 11.0%). Customer accounts followed suit, closing the year with a total volume of RON 617 million (EUR 144 million), a 7.9% increase over the previous year. The quality of the loan portfolio deteriorated throughout 2010; however, thanks to our strong institutional focus and efforts to maintain portfolio quality, it was still clearly better than the market average at year-end. 11 In keeping with our positioning as the house bank for small businesses, we reached out to small urban and rural small enterprises, which are vital contributors to economic growth. The bank will continue to devote attention and resources to its Very Small and Medium clients, but will approach these segments defensively. As the competition on the retail market in Romania is mainly dominated by big players, which even on a post-crisis landscape continue to heavily engage in consumer lending, ProCredit Bank’s key strategic goal regarding private individuals is to strengthen its reputation as a professional and inclusive savings institution that provides basic financial services. Our aim has always been to provide high-quality service for our clients and to ensure the most appropriate environment for building up and maintaining long-term relationships. To this end, in 2010 we optimised our branch structure, establishing even more efficient and client-friendly processes. We also created a strong, dedicated client acquisition force consisting of Business Client Advisers (BCA), whose role is to establish contact and 4 Ibid. 5 Ibid. 6 Loss 2 category: loans for which payment of principal or interest is overdue by more than 90 days and/or legal proceedings against the debtor have been initiated. 7 National Bank of Romania, Financial Stability Report 2010, p. 44. 8 National Bank of Romania, “Statistical Report”, December 2010, p. 37 / Financial Stability Report 2010, p. 39. 9 National Bank of Romania, Financial Stability Report 2010, p. 38. 10 Op. cit., p. 22. 11 According to the statutory reporting principles defined by the National Bank of Romania (www.bnr.ro), 15.34% of loans issued by ProCredit Bank were classified as “doubtful or loss”, compared with 20.81% for the banking sector as a whole.
maintain relationships with potential clients from our various target groups, identify their needs, and make appropriate recommendations. The acquisition process had previously been conducted by various staff; the new, consolidated approach has proven to be more efficient and effective. Lending Despite the unpredictable macroeconomic environment, we focused on loan portfolio development and quality throughout the year. We were acutely aware of the need to provide affordable Management Business Review 15 funding to our clients at a time when other banks were charging high risk premiums. While it is true that our Very Small and Small clients were the hardest hit by the decline in consumption, the bankruptcy of their partners and higher taxes, they were and are the key to economic recovery. We ended the year with a gross loan portfolio of RON 766 million (EUR 179 million) and 28,900 loans, which represented a slight decrease of 1.24% in volume and a decrease of 18.7% in number. We disbursed 10,411 loans totalling RON 396 million (EUR 94 million) with an average amount of RON 38,066 (EUR 9,042). Allowances
Page 1 and 2: Annual Report 2010
Page 3 and 4: Contents 3 Mission Statement 4 Lett
Page 5 and 6: Letter from the Board of Administra
Page 7 and 8: Commerzbank is Germany’s leading
Page 9 and 10: The Bank and its Shareholders 9
Page 11 and 12: entrepreneurs to better manage thei
Page 13: Political and Economic Environment
Page 17 and 18: Business Loan Portfolio - Breakdown
Page 19 and 20: Domestic Money Transfers Volume (in
Page 21 and 22: Management Business Review 21
Page 23 and 24: position to detect risks and take t
Page 25 and 26: sometimes engages in transactions w
Page 27 and 28: NRA process does management give it
Page 29 and 30: where they could make the greatest
Page 31 and 32: outside Romania at the internationa
Page 33 and 34: These six values represent the back
Page 35 and 36: The ProCredit Group: Responsible Ne
Page 37 and 38: The ProCredit Group: Responsible Ne
Page 39 and 40: Switzerland Germany Italy Czech Rep
Page 41 and 42: Name ProCredit Bank Albania ProCred
Page 43 and 44: Rodica and Ciprian Lazar, Producers
Page 45 and 46: Mr. Valeriu Dacius Masalar, 35, sta
Page 47 and 48: Financial Statements 47
Page 49 and 50: Statement of Financial Position As
Page 51 and 52: Statement of Cash Flows For the yea
Page 53 and 54: assets and liabilities denominated
Page 55 and 56: In assessing collective impairment
Page 57 and 58: Given the nature of the Bank’s op
Page 59 and 60: higher than EUR 30,000. These loans
Page 61 and 62: The following table shows the inter
Page 63 and 64: maintain a balance between continui
Page 65 and 66:
Compliance with Bank standards is s
Page 67 and 68:
6. Financial assets and liabilities
Page 69 and 70:
Deferred taxes The deferred tax ass
Page 71 and 72:
Operating leases Non-cancellable op
Page 73 and 74:
26. Reserves In EUR 31 Dec 2010 31
Page 75 and 76:
Financial Statements 75
Page 77 and 78:
Baia Mare Branch 9 Unirii Blvd. Bai
Page 79:
Contact Addresses 79
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Annual Report 2010 - ProCredit Bank

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