Where Is My Friend?
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Annual report 2019 Where is my friend? WorldReginfo - 6d7d956a-d08e-4406-874f-a3df3fd8a00e Fibank Supports the Bulgarian Rhythmic Gymnastics Federation and the Animal Rescue Sofia pet shelter Cover (top to bottom): Margarita Vasileva – member of the Bulgarian National Rhythmic Gymnastics team and dog Stella from Animal Rescue pet shelter Nevyana Vladinova – member of the Bulgarian National Rhythmic Gymnastics team and cat Zory from Animal Rescue pet shelter Simona Dyankova – member of the Bulgarian National Rhythmic Gymnastics team аnd dog Buddy from Animal Rescue pet shelter Catherine Tsoneva – member of the Bulgarian National Rhythmic Gymnastics team and dog Belcho from Animal Rescue pet shelter WorldReginfo - 6d7d956a-d08e-4406-874f-a3df3fd8a00e With the rapid development of digitalization, technology and globalization, it is ever more important to preserve our human nature, spirituality and empathy. In this year’s report, along with our financial and corporate results, we tried to give a visual expression of that inner light that inspires us and makes us better and happier persons. Where is my Friend is not just a question, but also a matter of choice. The team of WorldReginfo - 6d7d956a-d08e-4406-874f-a3df3fd8a00e The present report is prepared on the grounds of and in compliance with the requirements of the Accounting Act, the Law on Public Offering of Securities, Ordinance №2 of the Financial Supervision Commission for the prospects of public offering and admittance for trade on a regulated market of securities and for the disclosure of information, Regulation (EU) No 575/2013 of the European Parliament and of the Council on prudential requirements for credit institutions and investment firms and the National Corporate Governance Code, approved by the Financial Supervision Commission. WorldReginfo - 6d7d956a-d08e-4406-874f-a3df3fd8a00e ANNUAL REPORT 2019 Who we are Business principles First Investment Bank AD (Fibank) is among the leading • We believe that trust is the basis of long-term banks in Bulgaria, offering various products and services relations for individuals, as well as for corporate clients. • We strive not only for the best practices and results, but we have the goodwill and discipline to achieve them Our business • We appreciate and respect our business partners • Retail banking • We strive for development and proactive solutions • Microlending • We are engaged in social issues and we make our contribution to their solution • SME banking • We bear responsibility for our decisions and actions • Corporate banking • Card payments • Digital banking Competitive advantages • Trade financing • International payments • Money and capital markets • Foreign exchange First-class Well • Gold and commemorative coins customer recognized service brand High Deep History professional knowledge standards of the market More than 25 years, First Investment Bank AD has developed as a universal credit institution, having its own image and a brand for superior quality of service, innovative, dynamic bank, preferred by the population and Flexibility in Wide supporting good projects, which competes with the best decision branch in the industry. making network Solid Innovative market digital Governance structure positions services A two-tier governance system consisting of a Supervisory Board and a Managing Board. Employees 2,825 employees at end-2019. Headquarters 37, Dragan Tsankov Blvd., 1797 Sofia WorldReginfo - 6d7d956a-d08e-4406-874f-a3df3fd8a00e 3 ANNUAL REPORT 2019 Selected indicators Assets Deposits Loan/deposit ratio CET1 ratio +9% +11% 12.5 10 80% 14.7 9.1 15% 10.7 68.5 13.3 8.3 68.1 66.1 12.9 10 9.6 8 7.6 8.9 60 10 7.5 6 40 CAGR: CAGR: 5 4 +9% +10% 5 20 2.5 2 0 0 0 0 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 Assets, BGNb Deposits, BGNb Loan/deposit ratio, % CET1, % Group profit after tax Return on equity (ROE) Cost/income ratio Cost of Risk 200 25% 60% 3% 171.5 53.0 46.5 20 19.2 44.6 150 137.9 15.1 40 2 1.8 15 1.6 100 92.2 1.4 10.2 10 20 1 50 CAGR: +22% 5 0 0 0 0 2017 2018 2019 2017 2018 2019 2017 2018 2019 2017 2018 2019 Group profit after tax, BGNm ROE, % Cost/income ratio, % Cost of Risk, % Operating income Operating income by Loans for individuals Portfolio by sectors by type of income business lines 0.2% 16.8% 9.9% 17.8% 23.8% 26.7% 3.5% 42.4% 44.2% 13.7% 55.6% 12.3% 45.7% 24.1% 30.7% 11.1% 21.4% 2019 2019 2019 2019 Net interest income Retail banking Consumer loans Industry Services Fee and commission Corporate customers Mortgage loans Trade Others Net trading income SME Credit cards Individuals Others Others Others WorldReginfo - 6d7d956a-d08e-4406-874f-a3df3fd8a00e 4 ANNUAL REPORT 2019 Table of contents Message from the Managing board ................................ 8 Risk management framework ................................. 49 Macroeconomic development .......................................10 Lines of defence ................................................ 49 The banking system .......................................................14 Structure and internal organisation .................... 50 Mission ...........................................................................18 Collective risk management bodies ................... 50 Development ..................................................................18 System of limits ..................................................51 Bank profile ................................................................... 20 Recovery plan .................................................... 52 Corporate status ...................................................... 20 Credit risk ................................................................. 52 Participations and memberships ............................. 20 Loan process ...................................................... 52 Market position ........................................................ 20 Models for credit risk measurement .................. 53 Market share .............................................................21 Credit risk mitigation methods ........................... 54 Correspondent relations ...........................................21 Problem exposures and impairment .................. 55 Branch network ........................................................21 Market risk ............................................................... 56 Subsidiaries.............................................................. 22 Interest rate risk ................................................. 56 Awards 2019 ............................................................ 23 Currency risk ...................................................... 57 First Investment Bank: dates and facts ......................... 24 Liquidity risk ............................................................. 57 Highlights 2019.............................................................. 27 Internal liquidity adequacy Financial review ............................................................. 32 assessment process .......................................... 58 Key indicators .......................................................... 32 Operational risk ........................................................ 59 Credit rating ............................................................. 33 Information security ........................................... 60 Financial results ....................................................... 33 Business continuity management ..................... 60 Balance .................................................................... 35 Risk exposures ........................................................ 60 Loan portfolio........................................................... 37 Internal capital adequacy analysis ........................... 61 Loans.................................................................. 37 Distribution channels ..................................................... 62 Related party transactions ................................. 39 Branch network ....................................................... 63 Commitments and contigent liabilities ............. 39 Contact center – *bank (*2265), 0800 11 011 ......... 64 Attracted funds ........................................................ 40 Corporate website – www.fibank.bg ...................... 64 Capital .......................................................................41 Corporate blog ......................................................... 64 Regulatory capital .............................................. 42 Sales ........................................................................ 65 Capital requirements .......................................... 43 Digital banking ......................................................... 65 Capital buffers .................................................... 44 My Fibank electronic banking ............................ 65 Leverage ............................................................ 44 Information technology ................................................ 66 Risk management ..........................................................47 Corporate governance ................................................... 69 Risk management strategy .......................................47 Corporate Governance Statement pursuant to Art. 100m of the Public Offering of Securities Act Risk map ............................................................47 and Art. 40 of the Accountancy Act. ...................... 69 Risk appetite .....................................................