Annual report 2014 WorldReginfo - b4e8d5c1-486a-4fe9-b448-dd29cd898499 WorldReginfo - b4e8d5c1-486a-4fe9-b448-dd29cd898499 Our relentless pursuit of perfection in products and services, of providing superior customer service, of contributing to the success of our clients and realization of their plans, builds relations of partnership, trust and loyalty. The support and satisfaction of our customers is the driving force which fills us with confidence and makes us aspire to new heights. WorldReginfo - b4e8d5c1-486a-4fe9-b448-dd29cd898499 ANNUAL REPORT 2014 Development Assets Loans Retail deposits 8828 8778 6257 6334 5616 5729 CARG: 11.2% CARG: 12.1% CARG: 21.6% 4201 2848 BGN million BGN million BGN million 1455 // // // 2007 2013 2014 2007 2013 2014 2007 2013 2014 Total assets Gross loans Retail deposits Tier 1 capital Own funds Group equity CARG: 17.8% CARG: 12.8% 939 CARG: 12.1% 904 860 727 843 693 BGN million BGN million 405 BGN million 326 274 // // // 2007 2013 2014 2007 2013 2014 2007 2013 2014 Tier 1 capital Own funds Group equity Income from banking operations Net interest income Net fee and commission income 407 CARG: 11.1% CARG: 11.9% 292 CARG: 8.0% 87 87 284 182 51 195 133 BGN million BGN million BGN million // // // 2007 2013 2014 2007 2013 2014 2007 2013 2014 Income from banking operations Net interest income Net fee and commission income WorldReginfo - b4e8d5c1-486a-4fe9-b448-dd29cd898499 2 ANNUAL REPORT 2014 Table of contents Message from the Managing board......................................4 Telephone banking – Macroeconomic development ..............................................6 *bank (*2265), 0700 19 599 ...................................51 The banking system ............................................................10 My Fibank ................................................................51 Mission ................................................................................13 Information technologies ....................................................52 Bank profile ......................................................................... 17 Corporate governance .........................................................52 Corporate status ............................................................ 17 Corporate governance report ........................................53 Participations and memberships ................................... 17 Supervisory board ...................................................53 Market position ............................................................. 17 Managing board ......................................................54 Market share .................................................................18 General meeting of shareholders ............................54 Correspondent relations ................................................18 Audit and internal control ........................................54 Branch network .............................................................18 Protection of shareholders’ rights ...........................55 Subsidiary companies ...................................................19 Information disclosure .............................................55 Awards 2014 .................................................................20 Stakeholders ............................................................56 First Investment Bank: dates and facts ..............................21 Shareholders’ structure .................................................56 Highlights 2014 ...................................................................24 Share price of Fibank .....................................................57 Key indicators ......................................................................28 Human capital .....................................................................57 Credit rating ...................................................................29 Remuneration policy .....................................................59 Financial results ...................................................................31 Policy for nomination of senior management ...............59 Balance ................................................................................34 Social responsibility .............................................................61 Loan portfolio ......................................................................36 Management structure .......................................................62 Loans .............................................................................36 Supervisory board .........................................................62 Related party transactions ............................................37 Managing board ............................................................63 Commitments and contingent liabilities........................38 Business overview ..............................................................64 Attracted funds ...................................................................38 Retail banking ................................................................64 Capital .................................................................................40 Regulatory capital .......................................................... 41 Deposits ..................................................................64 Capital requirements .....................................................42 Loans .......................................................................65 Capital buffers ...............................................................42 Card payments ........................................................66 Leverage ........................................................................42 Gold and commemorative coins .............................67 Risk management ...............................................................43 Private banking ........................................................68 Risk management strategy ...........................................43 Corporate banking .........................................................68 Risk management framework .......................................43 Deposits ..................................................................68 Credit risk ......................................................................45 Loans .......................................................................69 Market risk ....................................................................46 Europrograms ................................................................73 Liquidity risk ..................................................................47 Payment services ..........................................................73 Operational risk .............................................................47 International payments ............................................ 74 Risk exposures ..............................................................48 Capital markets .............................................................75 Internal capital adequacy analysis .................................48 Consolidated financial statements Distribution channels...........................................................49 as at 31 december 2014 Branch network .............................................................49 with independent auditor’s report thereon ........................77 Contact centre – *bank (*2265), 0800 11 011 ...............49 Fullfilment of the goals for 2014 ....................................... 141 Corporate blog ...............................................................50 Goals for development during 2015 ..................................143 Sales ..............................................................................50 Other information ..............................................................144 Remote banking ............................................................50 Members of the Supervisory board ............................144 Virtual banking branch (e-fibank) .............................50 Members of the Managing board ...............................146 Mobile application (Fibank) .....................................51 Contacts ............................................................................154 WorldReginfo - b4e8d5c1-486a-4fe9-b448-dd29cd898499 3 ANNUAL REPORT 2014 Message from the Managing board Dear shareholders, clients and colleagues, In the past year, First Investment Bank AD (Fibank) achieved important successes and strengthened its position as a responsible and systemically important bank on the Bulgarian market, with a strong team of professionals and a well-functioning corporate structure. 2014 was another year of challenges from the external environment. The slow recovery of the economy and political instability on the one hand, and on the other the crisis situation which occurred with the placement under special supervision, and later the revocation of the license of a credit institution, put all banks in the country to the test. The crisis created had its impact on our bank which was subject to liquidity pressure at the end of June 2014. Thanks to the well developed corporate structure and the high levels of liquidity maintained by the Bank, it successfully passed this real-time stress test. The European Commission approved a State aid scheme in the amount of BGN 3.3 billion to support banks in Bulgaria. First Investment Bank used BGN 1.2 billion of it, repaying BGN 300 million in November 2014.