Annual Report 2010 - ProCredit Bank

Letter from the Board of Directors 5
Letter from the Board of Directors
ProCredit Bank Serbia responded to the many challenges and instabilities in the macroeconomic environment
during 2010 with unprecedented internal focus. The bank ended the year with all of its main
performance indicators at healthy levels in line with banking sector averages, and most importantly
with an innovative, more robust institutional structure, upon which it will continue to fulfil its vital
role in the future.
Despite relatively high inflation and local currency depreciation, the real sector of Serbia’s economy improved
slightly in comparison to 2009. In this context, the bank succeeded in preserving its market share
in lending by achieving reasonable loan portfolio growth, and thanks to its unrelenting commitment to
rigorous risk management and responsible banking, the quality of the portfolio remained significantly
higher than the sector average. Thus, ProCredit Bank is still the most recognisable partner of very small
and small enterprises and the leading provider of financial support and services to individual agricultural
producers. The stability of our overall level of deposits during the year reflected the strength of the bank’s
reputation as a reliable institution whose professional and courteous staff enable it to maintain long-term
relationships with clients by providing excellent service.
These efforts to deliver the best possible service resulted in 17% growth in the gross loan portfolio, including
cross-border loans, to RSD 55 billion (EUR 520.9 million). Total deposits slightly decreased by just
1% to RSD 37.1 billion (EUR 352 million). The bank’s prudent risk policy was reflected in a portfolio at risk
over 90 days of only 2.79%, contrasting starkly with the 12.84% 1 average for the Serbian banking sector.
Our net profit for 2010 amounted to RSD 445.2 million (EUR 4.2 million), representing a sustainable
return on equity of 5.17%. At the end of December, the bank’s capital adequacy ratio was 17.45%, and it
had a total of 227,263 clients on its books.
The year just ended saw the completion of the bank’s most ambitious reorganisation to date, which has
resulted in an improved business model that is more in tune with the needs of our clients. Core business
processes were redesigned, far-reaching structural modifications were carried out, and significant
changes were made to the branch network set-up, all of which culminated in a generally leaner organisation
with the know-how and capacity to take on the challenges that lie ahead. Additionally, the bank
invested significant effort in intensifying the use of automated processes, thus keeping abreast of the
fast-paced market in which it operates.
Successful reorganisation has already led to greater efficiency, swifter management decision-making and
streamlined execution of tasks, and will in future help to improve bank-client interaction and strengthen
the bank’s positioning as a reliable and flexible business partner for very small, small and medium-sized
enterprises, as well as for agricultural producers and private individuals. Essentially, we are striving to
become the house bank for very small and small businesses in Serbia. ProCredit Bank is fully aware that
it can only achieve this goal by continuing to build fulfilling relationships with clients, which in turn is
only possible through well-trained, professional and friendly staff. As in previous years, training was one
of the top priorities in 2010, and was provided both locally and at the ProCredit Academies in Germany
and Macedonia.
Thanks to the commitment, expertise and dedication of the staff and the management team, the bank’s
total assets increased by 6.81% to RSD 71 billion (EUR 672.1 million) by year-end. In 2011, ProCredit Bank
Serbia will remain focused on further increasing business volumes in a prudent way as well as on continuing
to offer a wide range of innovative, tailored products.
On behalf of the Board of Directors, I would like to express my gratitude to our shareholders for their continued
support of our vision. I would also like to extend my appreciation to the staff and management of
ProCredit Bank for their constant commitment and hard work. It is thanks to their dedication that we are
able to present this encouraging report.
Members of the
Board of Directors
as of December 31, 2010:
Borislav Kostadinov (Chairperson)
Goran Živkov
Dr. Philipp Pott
Dr. Klaus Glaubitt
Rainer Ottenstein
Members of the
Executive Board
as of December 31, 2010:
Svetlana Tolmacheva
Mirjana Garapic-Zakanyi
Dejan Janjatović
Borislav Kostadinov
Chairman of the Board of Directors
1
Credit bureau organised by the Serbian Bank Association; data are presented on bank’s request.