Annual Report 2010 - ProCredit Bank

Financial Statements 67
2010 2009
Placements to clients % Placements to clients %
Financial Institutions 724,432 1.83% 779,572 2.36%
Trade 10,891,059 27.45% 7,746,659 23.46%
Industry and other production 6,951,638 17.52% 6,739,394 20.41%
Construction 921,274 2.32% 1,073,458 3.25%
Transport 2,754,183 6.94% 2,708,263 8.20%
Tourism 1,140,574 2.87% 1,038,699 3.15%
Other Services 3,601,872 9.08% 2,296,927 6.96%
Mixed 902,375 2.27% 628,455 1.90%
Agricultural Loans 11,787,339 29.71% 10,011,840 30.32%
Total 39,674,746 100.00% 33,023,267 100.00%
B.6. 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
Group will make payments in the event that a customer cannot meet
its obligations to third parties, carry the same credit risk as loans.
Guarantees or letters of credit are subjected to the same approval
mechanism as regular loans. This also implies that the same collateral
requirements apply for off balance commitments as for loans.
Moreover, the bank measures total client exposure and creditworthiness
by adding also off-balance commitments to him/her and by
taking into consideration the connected parties and their exposure
and creditworthiness.
C) Market risk
Policy of the Group is not to take any speculations and to keep all
kind of risk on acceptable level. Market risks arise from open positions
in interest rate, currency and equity products, all of which are
exposed to general and specific market movements and changes
in the level of volatility of market rates or prices such as interest
rates, credit spreads, foreign exchange rates and equity prices. The
Group complies with the limits on value of risk that may be accepted
that are prescribed by the Central Bank as well as with limits set by
Risk Committees.
Foreign currency risk exposure is monitored regularly through compliance
with the regulatory limits prescribed by the Central Bank.
The Group maintains the foreign currency position by granting loans
with foreign currency clauses. On the other hand, the Group has
active approach to currency risk management, and it is prudently
assessing and managing open foreign currency position through
making foreign currency swaps and keeping open currency risk exposure
in limits set by Central Bank, as well as with internal rules
and limits prescribed by Management and Risk Committees.
The table below summarizes the Group exposure to foreign currency
exchange risk at 31 December. In the table are included Group’s
assets and liabilities at carrying amounts, categorized by currency.
31 December 2010 EUR USD Other Total foreign Local Total
currencies currencies Currency
Assets
Cash and balances with the Central Bank 17,812,781 532,032 92,464 18,437,277 2,588,068 21,025,345
Loans and advances to banks 576,567 100,595 32,836 709,998 3,647 713,645
Loans and advances to customers 34,292,740 – – 34,292,740 12,683,616 46,976,356
Derivative Financial Assets – – – – 105 105
Available-for-sale financial assets 1,979 11,639 – 13,618 – 13,618
Other financial assets – – – – 7,924 7,924
Intangible assets – – – – 220,676 220,676
Property, plant and equipment – – – – 1,316,447 1,316,447
Deferred income tax assets
and Current Tax assets – – – – 253,344 253,344
Other assets 15,272 8 – 15,280 360,514 375,794
Total assets 52,699,339 644,274 125,300 53,468,913 17,434,341 70,903,254
Liabilities
Deposits from banks 947,968 – 2,215 950,183 1,244,997 2,195,180
Derivative financial liabilities 4,460 – – 4,460 1,189 5,649
Due to customers 27,851,654 1,121,077 138,872 29,111,603 8,021,123 37,132,726
Other borrowed funds 19,350,784 – – 19,350,784 – 19,350,784
Subordinated debt 2,886,643 – – 2,886,643 – 2,866,643
Tax liabilities – – – – – –
Provisions – – – – 92,232 92,232
Other liabilities 22,611 182 – 22,793 546,159 568,952
Equity – – – – 8,671,088 8,671,088
Total liabilities and equity 51,064,120 1,121,259 141,087 52,326,466 18,576,788 70,903,254
Net on-balance sheet position 1,635,219 (476,985) (15,787) 1,142,447 (1,142,447) –
Credit commitments (Note 34) – – – – 1,961,441 1,961,441