Annual Report: - Gorenjska banka

Review of banking operations by key business lines
Obtaining funds
In compliance with the secure operations principles, the Bank provided for adequate liquidity in 2011
as the level of liquidity ratios consistently exceeded class 1 as defined by the Decision of the Bank of
Slovenia on Minimum Requirements for Providing Adequate Liquidity Position.
In 2011, the Bank managed its liquidity in the domestic currency mostly by obtaining and granting
short-term liquidity loans on the interbank money market and borrowing under operations of longterm
refinancing with the ECB. In December, the Bank obtained the ECB funds in the amount of EUR
40 million within the framework of operations for long-term financing. In 2011, EUR 67.2 million loans
obtained from foreign banks and EUR 79.6 millions loans with domestic banks fell due (of which EUR
57.5 million were refinanced). In the previous year the Bank thus decreased the amount of long-term
loans obtained from foreign and domestic banks by EUR 45.2 million, whilst also repaying EUR 146.7
million due long-term loans and tranches under long-term loans.
In 2011, the Bank also obtained seven long-term loans from domestic commercial banks in the total
amount of EUR 76.5 million and two long-term loans from the European Investment Bank in the total
amount of EUR 25.0 million.
By way of its well-deliberated interest-rate policy, the Bank systematically encouraged individuals as
well as small and medium-sized enterprises to save over shorter periods of time. The short-term nature
of assets obtained in this manner requires a more precise management of liquidity and interest-rate
risks; however, this segment also contributes the most to the Bank's stable operations. In the field of
non-bank deposits, the market share of Gorenjska banka remained at the level of 5.1% in 2011.
The Bank collateralised the ECB credit operations through the Bank of Slovenia by establishing an
adequate financial assets fund. Its declared value at the end of 2011 equalled EUR 141 million, of
which EUR 79 million of collateral and EUR 62 million of freely available financial assets.
Fund placement
In the field of fund placement, the Bank additionally tightened its credit risk management policy in
2011. The policy was based on an extremely selective loan granting, active management of exposure
for individual clients, consistent implementation of adequate collateral and restructuring of the
investment portfolio.
Due to the lower number of clients of adequate credit rating, the inability to ensure adequate
collateral and lack of suitable projects to the financed by the Bank, the volume of operations in
the field of corporate fund placement decreased. The increase in impairments of bad receivables
also had an impact on the lower value of loans. Despite the aforementioned, the market share for
corporate lending increased in 2011.
The complexity of operations related to corporate financing was consistently growing in 2011. A
major share of activities was thus aimed at managing and regulating bad investments, restructuring
the investment portfolio, and solving problems related to the poor financial situation of companies.
Due to the growing number of insolvency proceedings, more instances of collection and sale of
pledged property were recorded.
In the field of retail lending, the trend of growth and rising market share of Gorenjska banka continued
also in 2011. Besides the competitive offer, this was achieved mostly through innovative market
channels as well as better visibility and reputation of Gorenjska banka.
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Gorenjska banka, d. d., Kranj
Annual Report 2011
Management Report