karta
2 www.rbb.bg www.rbb.bg 3 Financial Highlights
Financial Highlights
Monetary values in BGN Thousand 2006 Change 2005 2004
InInIncococommme StSte aaattteeemmmeeennnttt Net interest income after provisioning for possible loan losses 112,402 51% 74,306 48,293 Net commission income 27,121 40% 19,317 10,279 Trading profit (loss) 23,357 14% 20,542 7,795 Administrative expenses – 83,952 33% – 63,206 – 36,308 Profit before tax 78,533 49% 52,691 30,403 Profit after tax 66,970 50% 44,544 24,460
BalBalBalananance ShShce eeeeeettt Loans and advances to banks 856,467 56% 549,827 199,245 Loans and advances to customers 1,554,055 14% 1,362,877 971,767 Deposits from banks 479,506 24% 386,002 173,475 Deposits from customers 2,379,419 49% 1,597,311 1,325,223 Equity 248,025 28% 193,052 120,171 Balance–sheet total 3,907,957 39% 2,808,762 2,005,771
RRRegulegulegulaaatttooorrry ooy wn funfunwn dsdsds Total own funds 335,812 42% 237,017 155,237 Own funds requirement / According to Local Regulations 301,542 41% 214,583 128,967 Excess cover 34,270 53% 22,434 26,270 Core capital ratio 6,78% – 14% 7,89% 10,67% Own funds ratio 13,36% 1% 13,25% 14,44%
PPPeeerrrfofoforrrmmmananancecece Return of equity (ROE) before tax 43,4% 19% 36,4% 40,8% Cost/income ratio 48,4% – 4% 50,2% 45,2% Return on assets (ROA) before tax 2,6% 6% 2,5% 2,6% Provisions for possible loan losses/risk– weighted assets/ According to Local Regulations 54,404 24% 43,858 33,085
RRResoesoesourcesurcesurces Number of staff on balance–sheet date 1,921 43% 1,342 823 Banking outlets on balance–sheet date 110 51% 73 51
Official Exchange Rate (BNB) EUR 1 BGN BGN BGN 1.95583 1.95583 1.95583
Source: Audited Financial Statements of Raiffeisenbank (Bulgaria) EAD as of 31 December 2006
2 www.rbb.bg General Information
General Information
Establishment of the Bank
Raiffeisenbank (Bulgaria) EAD is the first greenfield foreign investment in the Bulgarian banking sector made in 1994.
Main Shareholder
Raiffeisenbank (Bulgaria) EAD is a 100% subsidiary of Raiffeisen International Bank-Holding AG, Vienna.
Banking License
Raiffeisenbank (Bulgaria) EAD has a full banking license for domestic and overseas banking and financial operations.
Profile
Raiffeisenbank (Bulgaria) EAD is a universal commercial bank with a focus on corporate and SME lending, retail banking, origination and trading of securities on the local and the international capital markets, bank provides services for institutional clients, etc.
Correspondent Relations
Raiffeisenbank (Bulgaria) EAD has established correspondent banking relations with more than 680 banks world-wide. The Bank maintains over 20 accounts in various currencies with first-class foreign banks.
Branch Network
As of 31 December 2005 the Bank operates through 110 branches; 20 outlets are located in Sofia. RBBG has a mobile bankers network – 147 consultants, operating in 13 towns in the country.
www.rbb.bg 3 General Information
Raiffeisen group in Bulgaria includes the companies as follows:
Company Capital
Raiffeisenbank (Bulgaria) EAD 100% ownership of Raiffeisen International Bank-
Holding AG, Vienna, Austria
Raiffeisen Services EAD 100% ownership of Raiffeisenbank (Bulgaria) EAD
Raiffeisen Leasing Bulgaria OOD 24.5% ownership of Raiffeisenbank (Bulgaria) EAD
75.5% ownership of Raiffeisen Leasing International
GmBH, Austria
Raiffeisen Auto Leasing Bulgaria EOOD 100% ownership of Raiffeisen Leasing Bulgaria OOD
Raiffeisen Asset Management (Bulgaria) EAD 100% ownership of Raiffeisenbank (Bulgaria) EAD
Raiffeisen Inssurance Broker EOOD 100% ownership of Raiffeisenbank (Bulgaria) EAD
Raiffeisen Real Estate EOOD 100% ownership of Raiffeisenbank (Bulgaria) EAD
4 www.rbb.bg Market Shares
Market Shares
Source: Official statistics published by the Bulgarian National Bank
www.rbb.bg 5 Market Shares
6 www.rbb.bg Contents
Contents
Statement by the Chairman of the Supervisory Board 8
Vision and Mission 9
Statement by the Chairman of the Management Board 10
Management Report 11 The Bulgarian Economy in 2006 11 Key Figures 13 Operations and Key Projects 15 Human Resources 16
Segment Reports 17 Corporate Banking 17 Public Sector and Institutional Clients 17 Retail Banking 18 Branch Network and Alternative Distribution Channels 19 Treasury and Investment Banking 21 Financial Institutions 23
Auditor’s Report 24
Awards 63
Corporate Social Responsibility 64
The Bank’s Management 65
RZB Group and Raiffeisen International at a glance 66
Raiffeisen Leasing Bulgaria OOD 68
Raiffeisen Insurance Broker EOOD 69
Raiffeisen Asset Management (Bulgaria) EAD 70
Raiffeisen Glossary 72
Addresses 73
www.rbb.bg 7 Statement by the Chairman of the Supervisory Board
Statement by the Chairman of the Supervisory Board
Ladies and Gentlemen,
On behalf of the Supervisory Board of Raiffeisenbank (Bulgaria) EAD, it is my pleasure to present the bank’s business results for 2006. Raiffeisenbank (Bulgaria) EAD significantly strengthened its position on the local market, once again achieving record results. It took good advantage of the favorable overall economic conditions and the fact that the Bulgarian economy noted significant growth in 2006, on the threshold of the future membership in the European Union in 2007.
The improvement of all financial ratios of the bank, in comparison to the already very good year 2005 was possible thanks to the efficient and effective management of the Bank and the staff, as well as the strong cooperation and support from Raiffeisen International Bank-Holding AG and the whole RZB Group.
The Supervisory Board highly judges Raiffeisenbank’s achievements. The accomplishment of the ambitious goals for 2006 has resulted in strengthening the bank’s position in all areas of its activities.
Despite of significant investments, Raiffeisenbank (Bulgaria) Herbert Stepic Chairman of the Management Board of Raiffeisen International EAD posted a record growth clearly above the average of the Bank-Holding AG and Deputy Chairman of Raiffeisen market during the year under review. Its balance sheet total Zentralbank Österreich AG (RZB) amounted to 2,4 bln euros, up 39%. Its distribution network has expanded by 37 locations to 110 outlets. Raiffeisenbank (Bulgaria) EAD continued its dynamic growth, especially in the Retail Banking segment. As one of the country’s foremost banks, its full range of innovative products provided the basis for a 48% increase to 342,000 private customers.
The Supervisory Board is very satisfied that the dynamic growth of the highly specialized companies of the Raiffeisen Group in Bulgaria allowed it to strengthen its positions on the leasing, asset management and insurance brokerage markets.
Current market positions, client confidence and thriving business should ensure that both Raiffeisenbank (Bulgaria) EAD and the RZB Group will further develop favorably in the years to come.
On behalf of the Supervisory Board, I thank and congratulate all the bank’s employees and its management for the excellent business results they delivered and count on their continual commitment. I also extend our thanks to the clients for choosing Raiffeisenbank (Bulgaria) EAD and other Raiffeisen Group members in Bulgaria as their partners.
Herbert Stepic Chairman of the Supervisory Board
8 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Vision and Mission
Vision and Mission
Raiffeisenbank (Bulgaria) EAD is one of the leading universal banks in the country, offering bank services in all customer segments – corporate and investment banking, small and middle sized enterprises and retail banking.
We seek long-term customer relationships.
We provide contemporary financial services to our customers meeting the highest professional standards and effectively satisfying the customers’ needs. We seek to be seen as a friendly and constructive partner for our customers and we are pro-active and quick in delivering our services.
As a member of the RZB Group, we cooperate closely with Raiffeisen Zentralbank, Raiffeisen International and its Network banks. We empower our employees to be entrepreneurial, to show initiative and we foster their development.
We conduct our business with integrity and are committed to create a positive and stimulating working atmosphere. We want to attract and keep the best people whom we offer first class training and help to develop long term careers within our institution. We encourage initiative and reward concrete performance and success.
Awards Corporate Social Responsibility The Bank’s Management RZB Group RLBG RIBG RAM Raiffeisen Glossary Addresses www.rbb.bg 9 Statement by the Chairman of the Management Board
Statement by the Chairman of the Management Board
Ladies and Gentlemen,
2006 was another record year for Raiffeisenbank (Bulgaria) EAD. The Bank achieved excellent results across all segments and continued to invest in product development, distribution network and personnel.
In 2006 the Bank reported record profit after tax of BGN 66.97 mln, posting over 50% increase, compared to the end of 2005. In 2006 balance-sheet total went up by 39% to BGN 3,907.96 mln and the total loan portfolio grew by 14.3%, reaching BGN 1,608.46 mln. Total deposits increased dynamically (plus 49%), reaching BGN 2,379.43 mln.
Despite of significant investments, Raiffeisenbank (Bulgaria) EAD continued to improve its efficiency ratios. Return on equity after tax reached 37% (2005: 30.8%). In 2006 the Bank maintained excellent cost/income ratio of 48.6%.
In 2006 our distribution network was expanded by 37 new offices, bringing the total number of outlets to 110. We continued to expand our network of mobile bankers, who offer consumer and mortgage loans, as well as bank cards, deposits and services to small and medium enterprises. The number of mobile consultants reached more than 140, operating in 13 Momtchil Andreev Chairman of the Management Board and Executive Director Bulgarian cities. In 2006 we created 800 new permanent jobs.
2006 was an exceptionally successful year also for the other members of Raiffeisen Group in Bulgaria.
Raiffeisen Leasing Bulgaria doubled its market share in terms of total assets from 4.15% as at the end of 2005, to more than 8% at the end of 2006. Its leasing portfolio increased by 279%, compared to the end of 2005, reaching BGN 183 mln. Our asset management company Raiffeisen Asset Management (Bulgaria) was the leading company it terms of assets under management. The net asset value accumulated by the mutual funds reached BGN 48.55 mln, which corresponds to a market share of around 16%.
In just a few months, the newly established subsidiary of Raiffeisenbank (Bulgaria) EAD Raiffeisen Insurance Broker boosted on the local insurance brokerage market, offering its customers insurance products of 14 companies.
On behalf of the Management Board, let me thank all our clients, business partners and staff of Raiffeisenbank (Bulgaria) EAD and its subsidiaries, for their contribution to Group’s successful development. I would like to wish all of you new achievements and success in 2007.
Momtchil Andreev Chairman of the Management Board
10 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Management Report
Management Report
The Bulgarian Economy in 2006
The Bulgarian economy retained its macroeconomic stability and robust growth in 2006 even though the C/ A deficit expanded to a new record high of almost 16% of GDP. The political environment also remained stable, as preparations for EU accession anchored government policies and kept the ruling coalition.
The economy expanded 6.1% YoY The Management Board of Raiffeisenbank (Bulgaria) EAD. From left to right: Ani Angelova – Member of in 2006, driven by industry and the MB and Executive Director from 12.04.2007, Evelina Miltenova – Member of the MB and Executive Director, Momtchil Andreev – Chairman of the MB and Executive Director, Tzenka Petkova – Member of services. However, the latest revision the MB and Executive Director, Nadezhda Mihaylova – Member of the MB and Procurator. of GDP data for 2002-2005 shows that the economy slowed down for a second year in a row in 2006. Among others, the slowdown can be attributed to an extraordinarily mild winter that inflicted a blow on tourism and utilities in the last quarter. Tight fiscal policy coupled with bank credit restrictions also had their negative impact. The general government budget ended 2006 with a record surplus of 3.6% while credit restrictions remained in effect in 2006 in a bid to rein in excessive credit growth.
Consumer price inflation remained unchanged at 6.5% YoY in 2006, only marginally above the government’s projection of 6.4% YoY. One of the main proinflationary factors last year was a front- loaded hike of excise duties towards minimum EU levels. The reason for the steep rise of excises in 2006 was that in 2008-2009 Bulgaria will aim to meet the Maastricht criteria for eurozone entry.
Unemployment remained on a stable downward path in 2006 driven by robust economic growth and government-sponsored programmes. The ILO-compliant rate of unemployment fell from 10.1% in 2005 to 9% in 2006. At the same time, the employment rate for those 15 years or more rose from 44.7% to 46.7%.
Despite restrictive fiscal and credit policies, the C/A deficit expanded to 15.8% of GDP in 2006 against 12% in 2005. The biggest factor behind the increase of the C/A gap was the almost EUR 1 bln widening of the foreign trade deficit. Slight deterioration in all other items of the current account – tourism, transport, income, current transfers – boosted the CA gap further. Nevertheless, the C/A deficit was covered entirely by FDI, so that the overall balance of payments ended 2006 with surplus. Net FDI reached EUR 3,982.7 mln for the full year, offsetting the C/A gap more than 100%. However, 33.4% of gross FDI were investment in real estate, and another 10.5% represented related investment in construction. Investment in such industries cannot be relied on to cover the C/A deficit in the longer term. On the one hand, it may cease abruptly due to sudden reversal of investor sentiment. On the other hand, real estate and construction are not export sectors and cannot be relied on to generate exports.
Awards Corporate Social Responsibility The Bank’s Management RZB Group RLBG RIBG RAM Raiffeisen Glossary Addresses www.rbb.bg 11 Management Report
Fiscal performance remained sound and the budget ended last year with a record surplus, despite cuts in direct taxes. The surplus reached 3.6% of GDP in 2006, exceeding the IMF-advised target of 3%. The surplus was primarily due to overperformace on the revenue side, as revenues from VAT exceeded expectations due to larger-than-projected imports.
Gross external debt gained 30.5% YoY to EUR 19.7 bln as of end-2006 or 78.4% of GDP. The steep growth came entirely on the back of private debts while public debt continued to decline. Private borrowing was driven by rapid growth of commercial bank credits, intercompany credits, and credits between parent companies and subsidiaries. Short-term debt increased at a much faster rate than long-term debt, however. Short-term debt expanded 60.1% YoY as of December 2006, while long- term debt grew 20.5% YoY. Despite its steep growth, short-term debt still accounts for a relatively small share of 29% of all debts.
Following S&P’s upgrade of Bulgaria’s rating from BBB- to BBB in October 2005, a year later S&P raised Bulgaria’s rating by another notch to BBB+. The upgrade was attributed to the country’s accession to the EU and fiscal discipline that had helped reduce public debt.
Bulgarian Banking Sector Overview
As at year-end 2006 the Bulgarian banking sector consisted of 32 commercial banks. Over 95% of their total assets were controlled by private entities and more than 85% were owned by renowned foreign investors.
In 2006 the Bulgarian National Bank continued its efforts to keep the stability of the banking system. As of 31 December 2006 the total assets of the sector increased by 28% compared to the end- 2005, reaching BGN 42.19 bln. Customer deposits marked another period of high annual growth of 35%.
Complying with the Central Bank’s aim to keep moderate rates of credit growth, as at the end-2006 the Total loans of the Banking system increased by 24% compared to the previous year. Loans to individuals (housing and consumer) registered the highest growth of 32%, while lending to companies rose by 20%. Gross loans totalled BGN 22.77 bln and represented 54% of the total assets of the Bulgarian banking system. After-tax profit of the banking sector increased by 38% to BGN 807 mln mainly due to the 20% higher interest income from credits.
In 2006, commercial banks managed to preserve the high quality of their loan portfolios – the share of performing loans of the total system slightly increased to 92.5% Q3’06, compared to 92.3% Q3’05. As of September 2006 the Capitalization of the banking sector was high with capital to asset ratio of 15.21%.
In mid-2006, the Bulgarian National Bank started to gradually release the administrative credit restrictions, implemented during the previous years to control credit growth rates, as the targets had been achieved. Effective January 1, 2007 the Central Bank removed all operative limits. At the same time, the Regulator stated they will continue to apply strong supervision aimed at a moderate and sustainable banking credit growth within 20% on annual basis.
12 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Management Report
Key Figures
In 2006 Raiffeisenbank (Bulgaria) EAD proved to be one of the leading banking institutions in the country. The dynamic development of the Bank in 2006, fully supported by its shareholder, is illustrated by the improvement of its market positions at the end of 2006.
The total assets of the Bank surpassed BGN 3.9 bln. increasing by 39%. In absolute terms the balance sheet marked a strong growth of BGN 1.1 bln compared to the end-2005.
The loans extended by Raiffesienbank (Bulgaria) to private individuals and companies posted a 14% increase from BGN 1.4 bln in 2005 to BGN 1.6 bln in 2006, while maintaining the excellent quality of the loan portfolio.
Awards Corporate Social Responsibility The Bank’s Management RZB Group RLBG RIBG RAM Raiffeisen Glossary Addresses www.rbb.bg 13 Management Report
The total customer deposit base of Raiffeisenbank (Bulgaria) EAD grew by 49% to BGN 2,4 bln YoY.
During the reporting period, the paid-in capital of the Bank remained BGN 94.9 mln, while the total capital base rose to BGN 335.8 mln from BGN 237 mln in 2005. Raiffeisenbank (Bulgaria) EAD increased also its supplementary capital by another EUR 40 mln in the forms of debt-capital hybrid instrument from RZB.
As of 31 December 2006 the Bank reported a net profit of BGN 66.97 mln. representing 50% growth compared to 2005 (BGN 44.54 mln).
The operating income rose by 37% to BGN 172.8 mln. The net interest income was the major contributor and recorded an 45% increase to BGN 122.7 mln, while the net fees and commissions were up by 40% reaching BGN 27.1 mln.
Despite the dynamic expansion of the network of Raiffeisenbank (Bulgaria) EAD, in 2006 Cost/ Income Ratio decreased to 48.4% as compared to 50.2% in 2005.
14 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Management Report
In 2006 Raiffeisenbank (Bulgaria) EAD increased its market position by maintaining efficiency ratios, which are among the best in the sector with Return on Equity (RoE) after tax of 37.0% and Return on Assets (RoA) after tax of 2.2%.
Operations
During 2006 the Bank reported a twofold increase of the number of transactions processed and an 11% growth of the respective income compared to the previous year. In June 2006 the Bank started servicing 10 regional directorates of the National Revenue Agency, which lead to doubling of the local currency inbound payments for half a year only. The number of users of Raiffeisen online tripled from the service launch in June 2006, contributing further to the increase of the share of electronic banking payments versus the paper-filed payments.
Local Currency Payments
In 2006 the total number of local currency payments, initiated by Raiffeisenbank (Bulgaria) EAD clients grew by 34.2% compared to 2005. Commission income for the same period grew by 33% and the market share as of year-end reached 6.17%. Real-time local currency payments, processed via RINGS ensured a market share of 11.3% as of 2006 year-end.
In 2006 Raiffeisenbank (Bulgaria) EAD strengthened its position as one of the most active banks, offering the EXPRESS M local currency product. Two years after the product launch, the Bank still keeps a market share of about 61%.
Foreign Currency Payments
The number of customer clean payments in foreign currency grew by 26% in 2006, generating a revenue increase of 26.5% as EUR payments continued to predominate over USD payments number-wise.
Awards Corporate Social Responsibility The Bank’s Management RZB Group RLBG RIBG RAM Raiffeisen Glossary Addresses www.rbb.bg 15 Management Report
Custody and Documentary Transactions
The quality and range of custody services, provided by Raiffeisenbank (Bulgaria) EAD to local and foreign customers, as well as the potential for gaining profit from securities, that the dynamically developing local stock market offers, were among the key drivers for the strong interest of investors in domestic securities issues. In 2006 the volume of assets under custody grew by 46%, compared to 2005 year-end, with a continually increasing share of non-residents’ assets. The ability to offer global custodian services enabled the Bank to attract as its clients an increasing number of funds, investing in local and foreign securities.
2006 was successful considering also income generated from documentary business, the number of transactions processed realizing a growth of 12.5%, compared to 2005.
Human resources
As at the end-2006 the staff of Raiffeisenbank (Bulgaria) EAD grew by 43% to 1921 compared to the previous year. The largest increase was registered in the branch network – 44%, where 1335 workers were employed. 80% of the staff are university graduates and the average age is 32 years.
The Bank continues to be among the most active employers on the local market offering new jobs, 30% of which are for young university graduates and professionals. Through its internship and training programs, more than 250 students started their professional career with the Bank in the fastest developing segments – SME lending, Micro lending and Retail business.
The Bank also actively recruits specialists for its Mobile Agent Network, which as of 31.12.2006 reached 147 agents.
16 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Segment Reports
Segment Reports
Corporate Banking
2006 was another successful year for the corporate banking of Raiffeisenbank (Bulgaria) EAD. The Bank is the 4-th largest creditor to corporate clients with a market share of 8.55%.
As an universal bank, Raiffeisenbank (Bulgaria) EAD offers to small, medium and large companies a full range of banking products including lending, real estate financing, cash management, documentary operations, deposits, foreign exchange, custody, structuring and placement of bond issues, etc. At the end of 2006, the number of corporate customers increased by 53% in comparison to 2005.
The commercial loans increased by 17% compared to 2005, while the quality of the portfolio remains exceptionally good. Raiffeisenbank (Bulgaria) EAD continued to increase the volume of long-term loans. The attracted funds from corporate customers amounted to BGN 1,153 mln as at end-2006.
In 2006 the loans extended to small and medium sized Nadezhda Mihaylova Member of the MB and Procurator customers increased by 32% YoY basis. The attracted funds from customers in the segment increased by 38%, while the number of small and medium sized customers increased by 55% compared to 2005. Raiffeisenbank (Bulgaria) EAD was awarded The Best SME Bank for 2006 among all network banks in Raiffeisen International Bank Holding AG.
Public Sector and Institutional Clients
In 2006 our main target was the maximum market penetration within key clients from the Public sector, which increased to 8% at the end of 2006, compared to 4% at the end of 2005. The Bank expanded its relations with institutional clients from the public sector and as of December 31, 2006, the number of institutional clients grew by 103%, compared to the end-2005.
In 2006 Raiffeisenbank (Bulgaria) EAD focused its activity on municipalities and financed 5 new municipal investment projects with important social effect. As at the year-end, the Bank reached the highest share of 32% in municipal lending market, thus strengthening its leading position.
With the EU perspective, the Bank established an EU Funds Unit, which will offer qualified assistance during the project elaboration and implementation as well as different loan facilities to the beneficiaries.
Awards Corporate Social Responsibility The Bank’s Management RZB Group RLBG RIBG RAM Raiffeisen Glossary Addresses www.rbb.bg 17 Segment Reports
Retail Banking
In 2006 Raiffeisenbank (Bulgaria) EAD continued to actively expand its market positions in the Retail banking segment. The number of retail customers increased by 47% compared to the previous year and at the end of 2006 exceeded 308 thousand customers.
At the end of 2006 the total amount of retail assets was BGN 360 mln. At the same time total retail liabilities reached BGN 781 mln, showing a growth of 49% compared to 2005. Term deposits represent the biggest share – 61% of the total liabilities in the segment, followed by current accounts – 29%, and card accounts – 10%.
In 2006 Raiffeisenbank (Bulgaria) EAD introduced on the market some new products orientated to meet different customer needs, namely:
Jan Majtan Member of the MB and Executive Director untill 12.04.2007 ‘Mortgage loan for building under construction’ – intended for financing real estate that is under construction.
‘Payment protection insurance’ – a product that the Bank offered at the beginning of August 2006 for all debtors. The customers have the opportunity to choose among three insurance products – ‘Life insurance’, ‘Accident insurance’ and ‘Property insurance’.
‘Structured deposit’ – connected with the exchange rate EUR/USD on the international FX markets, which provides the possibility for higher profitability from the investment.
‘Child deposit’ – every customer has the opportunity to save money for their children and grandchildren.
In 2006 the number of ATM terminals installed by the Bank increased by 62% (107 new ATM terminals), thus their total number reached 280 as at the year-end.
18 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Segment Reports
The Bank continued to expand its POS terminals network, which at the end of 2006 reached 2,620, representing a 76% growth compared to the previous year.
In 2006 the number of issued credit cards increased by nearly 34,000. During the last year the Bank issued more than 80,000 debit cards. The growth in the number of debit and credit cards compared to year 2005 is aproximately 40%.
During the year Raiffeisenbank (Bulgaria) EAD introduced the international credit revolving Visa card with a chip and a credit card co-branded with the most popular Bulgarian Internet portal Dir.bg.
Aiming at a better customer service quality, Raiffeisenbank (Bulgaria) EAD launched a 24 hour card center for support of card payments.
In 2006 the Bank migrated all its ATM terminals and most of the POS terminals towards the more reliable EMV technology for accepting chip cards.
Branch Network and Alternative Distribution Channels
In 2006 Raiffeisenbank Bulgaria EAD continued its branch network expansion. With 37 newly opened offices the total number of business outlets reached 110 at the year-end.
The Bank continued further penetration in the capital city and major towns by 23 new offices: Sofia (4 new offices), Varna, Plovdiv, Burgas (2 new offices), Russe, V. Tarnovo, Sliven, Haskovo (3 new offices), Pazardzik (2 new offices), Shumen (2 new offices), Yambol, Razgrad, Targovishte, Vratza and Vidin. Raiffeisenbank (Bulgaria) EAD also stepped into uncovered smaller markets by opening 14 new offices:
Awards Corporate Social Responsibility The Bank’s Management RZB Group RLBG RIBG RAM Raiffeisen Glossary Addresses www.rbb.bg 19 Segment Reports
Pernik, Botevgrad (2 new offices), Samokov, Svishtov, Svilengrad, Panagjurishte, Byala, Razlog, Svoge, Elin Pelin, Ihtiman, Kostinbrod and Pirdop.
At year-end 2006, the total number of clients serviced in the branch network reached 348,000. The number of corporate and individual customers grew by 48% in 2006 compared to 2005. The Branches’ total credit portfolio increased by BGN 747 mln (a 54% growth) and attracted funds – with BGN 773 mln (a 49% growth).
In 2006 Raiffeisenbank Bulgaria EAD expanded its own agent network of mobile bank consultants. As at year-end 2006 the total number of mobile bankers reached 147, up from 106 a year before. The mobile bankers service retail clients in total of 13 cities countrywide as follows: Sofia, Plovdiv, Varna, Burgas, Pleven, Russe, Shumen, Pazardjik, Stara Zagora, Blagoevgrad, Sliven, Haskovo and Veliko Tarnovo. The agent network’s contribution to the total sales of retail products is about 22%. Within the agent network of mobile bank consultants, Raiffeisenbank (Bulgaria) EAD established a specialized agent network of Small end Medium Enterprises mobile bank consultants.
20 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Segment Reports
Treasury and Investment Banking
Foreign Exchange Trading
2006 marked another successful year for Raiffeisenbank (Bulgaria) EAD on the local interbank and customer FX market. The Bank affirmed its position as a leading market-maker with a 14% growth of generated FX income, confirming the clear trend of rising FX volumes above the market average. The continued expansion of the branch network contributed to the increased FX income generated from transactions with private individuals and SMEs. Regardless of the tough bank competition, which resulted in tightening of currency spreads Raiffeisenbank (Bulgaria) EAD managed to evade this trend succeeding in generating higher income as a result of increased transactional volumes and diversified Treasury products – structured deposits, derivatives sales (digital options, interest rate swaps) etc.
Being an integral part of an international banking Evelina Miltenova Member of the MB and Executive Director group Raiffeisenbank (Bulgaria) EAD successfully exploits the experience of the other network banks and strives to further diversify the range of traded market instruments offered to corporate and institutional clients.
Capital Market Operations
Raiffeisenbank (Bulgaria) EAD firmed up its position as the leader on the securities market and one of the major primary dealers in Government securities approved by the Ministry of Finance/BNB. The Bank submitted orders in excess of 18% of the total volume of securities offered by the Ministry of Finance for the Jan-Dec 2006 regular BNB auctions of Government securities. For the same period Raiffeisenbank’s government securities portfolio increased by 24%. Net interest income from securities held in trading and investment portfolios increased by 80% YoY on the back of the stable rise in the volume of the portfolio at the end of 2006, the value of the trading portfolio reached BGN 600 mln of the total balance sheet compared to BGN 330 mln a year ago. The fixed income portfolio is made up primarily of bonds issued
Awards Corporate Social Responsibility The Bank’s Management RZB Group RLBG RIBG RAM Raiffeisen Glossary Addresses www.rbb.bg 21 Segment Reports
by the Bulgarian and the G7 Governments, as well as corporate and mortgage-backed securites of high rated local issuers.
Raiffeisenbank (Bulgaria) EAD further strengthened its leading role on the local market of newly issued debt instruments – corporate and mortgage bonds. In 2006 the Bank reaffirmed its prime position in this segment having structured and placed debt issues with total nominal value over BGN 550 mln, or 69.52% market share. The number of newly launched corporate and mortgage bond deals managed by Raiffeisenbank (Bulgaria) EAD reached 17 (38% market share) out of 45, acting as a Lead Manager of 14 issues.
In 2006 Raiffeisenbank (Bulgaria) EAD was among the leading investment intermediaries in terms of traded volumes on the local regulated stock exchange market – BSE-Sofia AD. The Bank was a Lead Manager of the capital increase of Melinvest Agricultural Land REIT and an underwriter of the capital increase of Euroins AD – one of the most rapidly growing companies on the local insurance sector.
Raiffeisenbank (Bulgaria) EAD and RZB Vienna were Joint Lead Managers of the biggest Eurobond FRN in local currency – BGN 200 mln issued by the European Investment Bank. Raiffeisenbank (Bulgaria) EAD issued its second corporate bond, which is the largest bond of a Bulgarian bank with (BGN 100 mln) nominal value. The Bank was a Lead Manager of the first ever securitization of credit card receivables in Bulgaria launched by Transinvestment SPIV (Special Purpose Investment Vehicle).
An assessment of Raiffeisenbank’s leading position on the local capital market was the award of the Bulgarian Stock Exchange ‘Investment Intermediary with biggest contribution to the investment banking in 2006’.
22 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Segment Reports
Financial Institutions
Raiffeisenbank (Bulgaria) EAD has established correspondent banking relations with more than 680 banks worldwide. The Bank maintains over 20 accounts in various currencies with first-class foreign banks, including Raiffeizen Zentralbank Oesterreich AG – Vienna, Deutsche Bank AG – Frankfurt, Commerzbank AG – Frankfurt, American Express Bank NA – New York, Wachovia Bank NA – New York, The Bank of Tokyo – Mitsubishi, UFJ – Tokyo, UBS AG – Zurich, Danske Bank – Copenhagen, etc.
For the past four years Raiffeisenbank (Bulgaria) EAD has actively used the benefits of the increasing confidence and support of International Financial Institutions and foreign banks. The Bank confirmed its position as one of their leading partners in Bulgaria in negotiating and concluding long-term loan agreements for lending to local SMEs, municipalities and private individuals.
As of December 31, 2006 Raiffeisenbank (Bulgaria) EAD has attracted EUR 295 mln in total, including a EUR 150 mln syndicated loan, EUR 125 mln credit lines and EUR 20 mln Guarantee facilities from international organizations.
In the course of 2006, Raiffeisenbank (Bulgaria) EAD signed a EUR 20 mln credit line agreement with the European Bank for Reconstruction and Development for financing energy efficiency and renewable energy projects for corporate clients, as well as a credit line agreement with the Council of the European Development Bank to the amount of EUR 20 mln for the financing of SMEs. The amount of the credit line from KfW signed in 2004 for on-lending to SMEs was increased from EUR 10 mln to EUR 15 mln. At the same time the Bank concluded a guarantee agreement for SMEs with the European Investment Fund to the total amount of EUR 20 mln.
Awards Corporate Social Responsibility The Bank’s Management RZB Group RLBG RIBG RAM Raiffeisen Glossary Addresses www.rbb.bg 23 Independent Auditors’ Report
Independent Auditors’ Report
24 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Balance Sheets
AwardsAwards Corporate Social Social Responsibility Responsibility The Bank’s Management Management RZB Group RZB RLBG Group RIBG RAM RLBG Raiffei sen Glossary RAM Addresses Addresses www.rbb.bg 25 Income Statement
26 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Statements of Cash Flows
AwardsAwards Corporate Social Social Responsibility Responsibility The Bank’s Management Management RZB Group RZB RLBG Group RIBG RAM RLBG Raiffei sen Glossary RAM Addresses Addresses www.rbb.bg 27 Statements of Cash Flows
28 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Statements of Changes in Shareholders’ Equity
AwardsAwards Corporate Social Social Responsibility Responsibility The Bank’s Management Management RZB Group RZB RLBG Group RIBG RAM RLBG Raiffei sen Glossary RAM Addresses Addresses www.rbb.bg 29 Notes to the Financial Statements
Notes to the Financial Statements
1. Basis of Preparation
(a) Statute
Raiffeisenbank (Bulgaria) EAD has been entered in the company’s register of Sofia City Court on 01.08.1994 as a subsidiary of Raiffeisen Zentralbank Austria AG (RZB), Vienna. In 2003 the ownership has been transferred in full to Raiffeisen International Bank Holding AG, Vienna, which is the holding company controlling the subsidiaries of RZB in Central and Eastern Europe. In April 2005 Raiffeisen International started a procedure of Initial Public Offer (IPO), directed towards private individuals in Austria, as well as Austrian and international institutional investors. At present Raiffeisen International is owned 70% by RZB. The remaining 30% is free-float, owned by institutional and retail investors.
The Bank has a general banking license issued by the Bulgarian National Bank (BNB), according to which it is allowed to conduct all banking transactions permitted by the Bulgarian legislation.
(b) Statement of compliance
The financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), and interpretations issued by the Standing Interpretations Committee of the IASB.
The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Bank’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 2 (o).
Raiffeisenbank (Bulgaria) EAD does not prepare consolidated financial statements, as it applies the exemptions from consolidating investments in subsidiaries in accordance with IAS 27. These investments in subsidiaries are consolidated by Raiffeisen Zentralbank Austria AG (the ultimate parent of Raiffeisenbank (Bulgaria) EAD), which produces consolidated financial statements available for public use that comply with International Financial Reporting Standards.
(c) Basis of preparation
The financial statements are presented in Bulgarian Levs (BGN) rounded to the nearest thousand.
The financial statements are prepared on a fair value basis for derivative financial instruments, financial assets and liabilities held for trading, available-for-sale assets and financial instruments at fair value through profit or loss, except those for which a reliable measure of fair value is not available. Other financial assets and liabilities and non-financial assets and liabilities are stated at amortised cost or historical cost convention and restated for the effects of hyperinflation where necessary.
2. Significant Accounting Policies
(a) Income recognition
Interest income and expense are recognized in the income statement for all interest bearing instruments on an accrual basis using the effective interest rate method. The effective interest rate is the rate that exactly discounts the estimated future cash payments and receipts through the expected life of the financial asset or liability (or, where appropriate, a shorter period) to the carrying amount of the financial asset or liability. The effective interest rate is established on initial recognition of the financial asset and liability and is not revised subsequently.
30 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Notes to the Financial Statements
The calculation of the effective interest rate includes all fees and points paid or received, transaction costs, and discounts or premiums that are an integral part of the effective interest rate. Transaction costs are incremental costs that are directly attributable to the acquisition, issue or disposal of a financial asset or liability.
Interest income and expense presented in the income statement include:
interest on financial assets and liabilities at amortized cost on an effective interest rate basis
interest on available-for-sale investment securities on an effective interest basis
the effective portion of qualifying hedge derivatives designated in a cash flow hedge if the hedged item is recorded in interest income/expense
fair value changes in qualifying derivatives (including hedge ineffectiveness) and related hedged items when interest rate risk is the hedged risk
Interest income and expense on all trading assets and liabilities are considered to be incidental to the Bank’s trading operations and are presented together with all other changes in the fair value of trading assets and liabilities in net trading income.
Fair value changes on other derivatives, held for risk management purposes, and other financial assets and liabilities carried at fair value through profit or loss, are presented in net income on other financial instruments carried at fair value in the income statement.
Fees and commission income and expenses that are integral to the effective interest rate on a financial asset or liability are included in the measurement of the effective interest rate.
Other fees and commission income, including account servicing fees, investment management fees, sales commission, placement fees and syndication fees, are recognized as the related services are performed. When a loan commitment is not expected to result in the draw-down of a loan, loan commitment fees are recognized on a straight-line basis over the commitment period.
Other fees and commission expense relate mainly to transaction and service fees, which are expensed as the services are received.
Net trading income comprises gains less losses related to trading assets and liabilities, and includes all realized and unrealized fair value changes, interest, dividends and foreign exchange differences.
Net income from other financial instruments at fair value relates to non-qualifying derivatives held for risk management purposes and financial assets and liabilities designated at fair value through profit or loss, and includes all realized and unrealized fair value changes, interest, dividends and foreign exchange differences.
(b) Foreign currency transactions
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies, which are stated at historical cost, are translated at the foreign exchange rate ruling at the date of initial recognition. Foreign exchange differences arising on translation are recognized in the income statement.
Non-monetary assets and liabilities denominated in foreign currencies, which are stated at historical cost, are translated at the foreign exchange rate ruling at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to the reporting currency at the foreign exchange rates ruling at the dates that the values were determined.
AwardsAwards Corporate Social Social Responsibility Responsibility The Bank’s Management Management RZB Group RZB RLBG Group RIBG RAM RLBG Raiffei sen Glossary RAM Addresses Addresses www.rbb.bg 31 Notes to the Financial Statements
All assets and liabilities denominated in foreign currencies are translated into Bulgarian Lev at the rates of exchange prevailing at the balance sheet date.
(c) Financial assets
The Bank classifies its financial assets in the following categories: trading assets, derivatives held for risk management purposes, loans and receivables, financial assets at fair value through profit or loss, held-to-maturity investments and available-for-sale financial assets. Management determines the classification of its investments at initial recognition.
(i) Trading assets and liabilities
Trading assets and liabilities are those assets and liabilities that the Group acquires or incurs principally for the purpose of selling or repurchasing in the near term, or holds as part of a portfolio that is managed together for a short-term profit or position taking.
Trading assets and liabilities are initially recognized and subsequently measured at fair value in the balance sheet with transaction costs taken directly to profit or loss. All changes in fair value are recognized as part of the net trading income in profit or loss. Trading assets and liabilities are not reclassified subsequent to their initial recognition.
(ii) Derivatives held for risk management purposes
Derivatives held for risk management purposes include all derivative assets and liabilities that are not classified as trading assets or liabilities. Derivatives held for risk management purposes are measured at fair value in the balance sheet.
When a derivative is not held for trading, and is not designated in a qualifying hedge relationship, all changes in its fair value are recognized immediately in profit or loss as a component of net income on other financial instruments carried at fair value.
(iii) Loans and receivables
Loans originated by the Bank by providing money directly to the borrower or to a sub-participation agent at draw-down, other than those that are originated with the intent of being sold immediately or in the short term which are recorded as trading assets, are categorized as loans originated by the Bank and are carried at amortized cost, which is defined as the fair value of cash consideration given to originate those loans as is determinable by reference to market prices at origination date.
(iv) Financial assets at fair value through profit or loss
The Bank has designated financial assets and liabilities at fair value through profit or loss when either:
the assets or liabilities are managed, evaluated and reported internally on a fair value basis;
the designation eliminates or significantly reduces an accounting mismatch which would otherwise arise; or
the asset or liability contains an embedded derivative that significantly modifies the cash flows that would otherwise be required under the contract.
(v) Held-to-maturity
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Bank’s management has the positive intention and ability to hold to maturity. Were the Bank to sell other than an insignificant amount of held-to-maturity assets, the entire category would be tainted and reclassified as available for sale.
32 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Notes to the Financial Statements
(vi) Available-for-sale
Available-for-sale investments are those intended to be held for an indefinite period of time, which may be sold in response to needs for liquidity or changes in interest rates, exchange rates or equity prices.
(vii) Measurement
Purchases and sales of financial assets at fair value through profit or loss, held to maturity and available for sale are recognized on the date of the actual delivery of the assets. Loans are recognized when cash is advanced to the borrowers. Financial assets are initially recognized at fair value plus transaction costs for all financial assets. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or when the Bank has transferred substantially all risks and rewards of ownership.
Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables and held-to-maturity investments are carried at amortized cost using the effective interest method. Gains and losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are included in the income statement in the period in which they arise. Gains and losses arising from changes in the fair value of available-for-sale financial assets are recognized directly in equity, until the financial asset is derecognized or impaired, at which time the cumulative gain or loss previously recognized in equity should be recognized in profit or loss.
However, interest calculated using the effective interest method is recognized in the income statement. Dividends on available-for-sale equity instruments are recognized in the income statement when the entity’s right to receive payment is established.
The fair values of quoted investments in active markets are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Bank establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions, discounted cash flow analysis, option pricing models and other valuation techniques commonly used by market participants.
(d) Fair values of financial assets and liabilities
The determination of fair values of financial assets and financial liabilities is based on quoted market prices or dealer price quotations for financial instruments traded in active markets. For all other financial instruments fair value is determined by using valuation techniques. Valuation techniques include net present value techniques, the discounted cash flow method, comparison to similar instruments, for which market observable prices exist, and valuation models. The Bank uses widely recognized valuation models for determining the fair value of common and more simple financial instruments like options and interest rate and currency swaps. For these financial instruments, inputs into models are market observable.
For more complex instruments, the Bank uses proprietary models, which usually are developed from recognized valuation models. Some or all of the inputs into these models may not be market observable, and are derived from market prices or rates or are estimated based on assumptions. When entering into a transaction, the financial instrument is recognized initially at the transaction price, which is the best indicator of fair value, although the value obtained from the valuation model may differ from the transaction price. This initial difference, usually an increase, in fair value indicated by valuation techniques is recognized in income depending upon the individual facts and circumstances of each transaction and not later than when the market data becomes observable.
The value produced by a model or other valuation technique is adjusted to allow for a number of factors as appropriate, because valuation techniques cannot appropriately reflect all factors market participants take into account when entering into a transaction. Valuation adjustments are recorded to allow for model risks, bid-ask spreads, liquidity risks, as well as other factors. Management believes that these valuation adjustments are necessary and appropriate to fairly state financial instruments carried at fair value on the balance sheet.
AwardsAwards Corporate Social Social Responsibility Responsibility The Bank’s Management Management RZB Group RZB RLBG Group RIBG RAM RLBG Raiffei sen Glossary RAM Addresses Addresses www.rbb.bg 33 Notes to the Financial Statements
(e) Derecognition
The Bank derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction, in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognized as a separate asset or liability.
The Bank derecognizes a financial liability when its contractual obligations are discharged or cancelled or expire.
The Bank enters into transactions whereby it transfers assets recognized on its balance sheet, but retains either all risks and rewards of the transferred assets or a portion of them. If all or substantially all risks and rewards are retained, then the transferred assets are not derecognized from the balance sheet. Transfers of assets with retention of all or substantially all risks and rewards include, for example, securities lending and repurchase transactions.
The rights and obligations retained in the transfer are recognized separately as assets and liabilities as appropriate. In transfers where control over the asset is retained, the Bank continues to recognize the asset to the extent of its continuing involvement, determined by the extent, to which it is exposed to changes in the value of the transferred asset.
In certain transactions the Bank retains rights to service a transferred financial asset for a fee. The transferred asset is derecognized in its entirety if it meets the derecognition criteria. An asset or liability is recognized for the servicing rights, depending on whether the servicing fee is more than adequate to cover servicing expenses (asset) or is less than adequate for performing the servicing (liability).
(f) Cash and cash equivalents
Cash and cash equivalents comprise cash balances on hand and in ATM, cash deposited with the central bank and placements with banks with original maturity of less than 3 months.
(g) Investments
Investments that the Bank holds for the purpose of short-term profit taking are classified as trading instruments. Debt investments that the Bank has the intent and ability to hold to maturity are classified as held-to-maturity assets. Other investments are classified as financial assets at fair value through profit or loss.
(i) Securities borrowing and lending business and repurchase transactions
(i) Securities borrowing and lending
Investments lent under securities lending arrangements continue to be recognized in the balance sheet and are measured in accordance with the accounting policy for assets held for trading or at fair value through profit or loss. Cash collateral received in respect of securities lent is recognized as liabilities to either banks or customers. Investments borrowed under securities borrowing agreements are not recognized. Cash collateral placements in respect of securities borrowed are recognized under loans and advances to either banks or customers. Income and expenses arising from the securities borrowing and lending business are recognized on an accrual basis over the period of the transactions and are included in interest income or expense.
(ii) Repurchase agreements
The Bank enters into purchases (sales) of investments under agreements to resell (repurchase) substantially identical investments at a certain date in the future at a fixed price. Investments purchased subject to commitments to resell them at
34 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Notes to the Financial Statements
future dates are not recognized. The amounts paid are recognized in loans to either banks or customers. The receivables are shown as collateralized by the underlying security. Investments sold under repurchase agreements continue to be recognized in the balance sheet and are measured in accordance with the accounting policy for either assets held for trading or at fair value through profit or loss as appropriate. The proceeds from the sale of the investments are reported as liabilities to either banks or customers.
The difference between the sale and repurchase considerations is recognized on an accrual basis over the period of the transaction and is included in interest.
(j) Borrowings
Borrowings are recognized initially at ‘cost’, being their issue proceeds (fair value of consideration received) net of transaction costs incurred. Borrowings are subsequently stated at amortized cost and any difference between net proceeds and the redemption value is recognized in the income statement over the period of the borrowings using the effective yield method.
If the Bank purchases its own debt, it is removed from the balance sheet and the difference between the carrying amount of a liability and the consideration paid is included in net trading income.
(h) Offsetting
Financial assets and liabilities are offset and the net amount is reported in the balance sheet when the Bank has a legally enforceable right to set off the recognized amounts and the transactions are intended to be settled on a net basis.
(i) Impairment
At each balance sheet date the Bank assesses whether there is objective evidence that financial assets not carried at fair value through profit or loss are impaired. Financial assets are impaired when objective evidence demonstrates that a loss event has occurred after the initial recognition of the asset, and that the loss event has an impact on the future cash flows on the asset that can be estimated reliably.
The Bank considers evidence of impairment at both a specific asset and collective level. All individually significant financial assets are assessed for specific impairment. All significant assets found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Assets that are not individually significant are then collectively assessed for impairment by grouping together financial assets (carried at amortized cost) with similar risk characteristics.
Objective evidence that financial assets (including equity securities) are impaired can include default or delinquency by a borrower, restructuring of a loan or advance by the Bank on terms that the Bank would not otherwise consider, indications that a borrower or issuer will enter bankruptcy, the disappearance of an active market for a security, or other observable data relating to a group of assets such as adverse changes in the payment status of borrowers or issuers in the group, or economic conditions that correlate with defaults in the group.
In assessing collective impairment the Bank uses statistical modeling of historical trends of the probability of default, timing of recoveries and the amount of loss incurred, adjusted for management’s judgments as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical modeling. Default rates, loss rates and the expected timing of future recoveries are regularly benchmarked against actual outcomes to ensure that they remain appropriate.
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Impairment losses on assets carried at amortized cost are measured as the difference between the carrying amount of the financial assets and the present value of estimated cash flows discounted at the assets’ original effective interest rate. Losses are recognized in profit or loss and reflected in an allowance account against loans and advances. Interest on the impaired asset continues to be recognized through the unwinding of the discount.
When a subsequent event causes the amount of impairment loss to decrease, the impairment loss is reversed through profit or loss.
Impairment losses on available-for-sale investment securities are recognized by transferring the difference between the amortized acquisition cost and current fair value out of equity to profit or loss. When a subsequent event causes the amount of impairment loss on an available-for-sale debt security to decrease, the impairment loss is reversed through profit or loss.
However, any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognized directly in equity. Changes in impairment provisions attributable to time value are reflected as a component of interest income.
(i) Loans and advances and held-to-maturity loans
The recoverable amount of originated loans and advances is calculated as the present value of the expected future cash flows, discounted at the instrument’s original effective interest rate. Short-term balances are not discounted.
Loans and advances are presented net of specific and general allowances for impairment. Specific allowances are made against the carrying amount of loans and advances that are identified as being impaired based on regular reviews of outstanding balances to reduce these loans and advances to their recoverable amounts. General allowances are maintained to reduce the carrying amount of portfolios of similar loans and advances to their estimated recoverable amounts at the balance sheet date. The expected cash flows for portfolios of similar assets are estimated based on previous experience and considering the credit rating of the underlying customers and late payments of interest or penalties. Increases in the allowance account are recognized in the income statement. When a loan is identified to be not recoverable, all the necessary legal procedures have been completed, and the final loss has been determined, the loan is written off directly.
If in a subsequent period the amount of an impairment loss decreases and the decrease can be linked objectively to an event occurring after the write-down, the write-down or allowance is reversed through the income statement.
(ii) Financial assets re-measured to fair value directly through equity
The recoverable amount of an equity instrument is its fair value. The recoverable amount of debt instruments and purchased loans re-measured to fair value is calculated as the present value of expected future cash flows discounted at the current market rate of interest.
Where an asset re-measured to fair value directly through equity is impaired, and a write down of the asset was previously recognized directly in equity, the write down is transferred to the income statement and recognized as part of the impairment loss. Where an asset measured to fair value directly through equity is impaired, and an increase in the fair value of the asset was previously recognized in equity, the increase in fair value of the asset recognized in equity is reversed to the extent the asset is impaired. Any additional impairment loss is recognized in the income statement.
If in a subsequent period the amount of an impairment loss decreases and the decrease can be linked objectively to an event occurring after the write-down, the write-down is reversed through the income statement.
36 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Notes to the Financial Statements
(j) Property, plant and equipment
Items of property, plant and equipment are stated in the balance sheet at their acquisition cost less accumulated depreciation restated for the effects of hyperinflation.
Depreciation is calculated on a straight-line basis at prescribed rates designed to decrease the cost or valuation of fixed assets over their expected useful lives. The following are approximations of the annual rates used:
Assets % Buildings 4 Equipment 15 – 30 Fixtures and fittings 15 Vehicles 25
Assets are not depreciated until they are brought into use and transferred from assets in the course of construction into the relevant asset category.
(k) Intangible assets
Intangible assets, which are acquired by the Bank, are stated at cost less accumulated amortization and any impairment losses.
Amortization is calculated on a straight-line basis over the expected useful life of the asset. The annual rates of amortization are as follows:
Assets % Licences 15 – 30 Computer software 30
(l) Provisions
A provision is recognized in the balance sheet when the Bank has a legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
In accordance with IAS 19 „Employee benefits” the bank has accrued expenses for unused annual leave. Taking into consideration the age stricture of the employees, the bank does not provide for post-employment benefits.
(m) Acceptances
An acceptance is created when the Bank agrees to pay, at a stipulated future date, a draft drawn on it for a specified amount. The Bank’s acceptances primarily arise from documentary credits stipulating payment for the goods to be made a certain number of days after receipt of required documents. The Bank negotiates most acceptances to be settled at a later date following the reimbursement from the customers. Acceptances are accounted for as liabilities evidenced by paper.
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(n) Taxation
Tax on the profit for the year comprises current tax and the change in deferred tax. Current tax comprises tax payable calculated on the basis of the expected taxable income for the year, using the tax rates enacted by the balance sheet date, and any adjustment of tax payable for previous years.
Deferred tax is provided using the balance sheet liability method on all temporary differences between the carrying amounts for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is calculated on the basis of the tax rates that are expected to apply to the period when the asset is realized or the liability is settled. The effect on deferred tax of any changes in tax rates is charged to the income statement, except to the extent that it relates to items previously charged or credited directly to equity. The tax rate applicable for 2007 applied in the calculation of deferred income tax amount is 10% (2006 – 15%).
A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available, against which the unused tax losses and credits can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
(o) Critical accounting estimates and judgements in applying accounting policies
The Bank makes estimates and assumptions that affect the reported amounts of assets and liabilities within the next financial year. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
(i) Impairment losses on loans and advances
The Bank reviews its loan portfolios to assess impairment on a monthly basis. In determining whether an impairment loss should be recorded in the income statement, the Bank makes judgements as to whether there is any observable data indicating that there is a measurable decrease in the estimated future cash flows from a portfolio of loans before the decrease can be identified with an individual loan in that portfolio. This evidence may include observable data indicating that there has been an adverse change in the payment status of borrowers in a group, or national or local economic conditions that correlate with defaults on assets in the group. Management uses estimates based on historical loss experience for assets with credit risk characteristics and objective evidence of impairment similar to those in the portfolio when scheduling its future cash flows. The methodology and assumptions used for estimating both the amount and timing of future cash flows are reviewed regularly to reduce any differences between loss estimates and actual loss experience.
(p) Application of published IFRS that are not yet effective, have not been applied in preparing these financial statements and are relevant to the operating activities of the Bank
IFRS 7 (effective from 1 January 2007) – Financial Instruments: Disclosure
The standard will require increased disclosure in respect to the Company’s financial instruments. It supersedes IAS 30 – Disclosures in the Financial Statements of Banks and Similar Financial Institutions and is applicable to all entities that prepare financial statements in accordance with IFRSs.
Amendments to IAS 1 (effective from 1 January 2007) – Presentation of Financial Statements – Capital Disclosures.
As a complementary amendment arising from IFRS 7 the standard will require increased disclosure in respect to the Bank’s capital.
38 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Notes to the Financial Statements
IFRIC 9 Reassessment of Embedded Derivatives (effective for annual periods beginning on or after 1 June 2006)
The Interpretation requires that a reassessment of whether an embedded derivative should be separated from the underlying host contract should be made only when there are changes in the terms of the contract that significantly modify the cash flows that otherwise would be required under the contract.
(q) Capital adequacy
In BGN Thousand 2006 2005 Total risk weighted assets 2,512,867 1,788,189 Total capital base 335,812 237,017 Hereof TIER I capital 170,256 141,010 TIER I capital adequacy 6,78% 7,89% Total capital adequacy 13,36% 13,25%
3. Financial Risk Management
Introduction and overview
The Bank has exposure to the following risks from its use of financial instruments:
credit risk
liquidity risk
market risks
currency risks
Risk management framework
The Management Board has overall responsibility for the establishment and oversight of the Bank’s risk management framework. The Board has established the Bank’s Asset and Liability (ALCO) and Operational Risk committees, which are responsible for developing and monitoring the Banks risk management policies in their specified areas. All Board committees have both executive and non-executive members and report regularly to the Board of Directors on their activities.
The Bank’s risk management policies are established to identify and analyze the risks faced by the Bank, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions, products and services offered. The Bank, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment, in which all employees understand their roles and obligations.
By its nature the Bank’s activities are principally related to the use of financial instruments. The Bank accepts deposits from customers at both fixed and floating rates and for various periods and seeks to earn above average interest margins by investing these funds in high quality assets.
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The Bank also seeks to raise its interest margins by obtaining above average margins, net of provisions, through lending to commercial borrowers with a range of credit standing. Such exposures involve not just on-balance sheet loans and advances but the Bank also enters into guarantees and other commitments such as letters of credit.
The Management places trading limits on the level of exposure that can be taken in relation to both overnight and intra- day market positions.
A. Credit risk
The Bank is permanently exposed to credit risk, arising from the probability that counterparties might default on their contractual obligation under loans and advances when due or in full. The Bank has a set of policies and procedures in relation to credit approval and credit exposures management. In addition, the Bank is exposed to off-balance sheet credit risk through commitments under unutilized extended credit lines and issued guarantees.
Concentrations of credit risk (whether on- or off-balance sheet) might arise from risk exposures to one borrower or group of borrowers, with similar economic characteristics, that might be affected in equal terms by changes in economic or other circumstances in meeting their contractual obligations.
The Bank is exposed to credit risk also in result of its trading and investment activities, as well as in result of its activities as an investment broker for its customers or for third parties. For risk management purposes, credit risk arising from trading securities is managed independently, but reported as a component of market risk exposure.
The risk that counterparts to financial instruments might default on their obligations is monitored on an ongoing basis. In monitoring credit risk exposures related to trading instruments, consideration is given to instruments with a positive fair value and to the volatility of the fair value of trading instruments.
Management of credit risk
The Supervisory Board has delegated responsibility for the management of credit risk to the Bank’s Management Board. The Management Board defines the credit policy based on analysis of the business situation and the assessment of the risk associated with credit business. The scope of the Corporate Lending Policy is to present a clear picture in which direction the corporate credit & leasing portfolio in Bulgaria shall develop within the next year. The approval of the Corporate Lending Policy by Supervisory Board ensures, that the steps proposed by the Bank with regards to targeted industries, products, etc. and the subsequent impacts of those steps on the corporate credit portfolio are in line with the plans of the Supervisory Board and therefore in line with the basic strategy of RI Group.
A separate Risk Management Division, reporting to the Bank’s Management Board and RI Credit Risk Management is responsible for:
Recommending and managing portfolio concentration limits
Providing independent review of limit applications
Performing proactive risk management of transactional and portfolio activities
Ensuring that risk management standards, policies, practices and tools are adhered to by all business units in the credit process
40 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Notes to the Financial Statements
Assisting the Risk Originating Units/Account Managers in establishing business-specific risk management practices (not contradicting standard tools introduced by RI Risk Management) for the approval, measurement, reporting, monitoring, limiting and analysis of credit risk of corporate customers
Assisting in the identification, classification and management of problematic exposures
Ensuring that „early warning signs” reported by the Risk Originating Units are considered properly and internal actions (e.g. downgrading of Customer Rating, Review) are initiated quickly
Cooperating with the Risk Originating Unit in establishing the Credit Policy, reviewing the final Credit Policy paper and recommending amendments whenever necessary, as well as monitoring the compliance of the Bank with the approved Credit Policy.
(i) Market risk
All marked-to-market instruments are subject to market risk, the risk that future changes in market conditions may make an instrument less valuable or more onerous. The instruments are recognized at fair value based on quoted bid prices, and all changes in market conditions directly affect net trading income (through trading instruments) or equity value (through available for sale instruments).
Exposure to market risk is formally managed in accordance with risk limits set by senior management by buying or selling instruments.
Management of Market risk
Overall authority for market risk is vested in ALCO. The Risk Management Division is responsible for the development of detailed risk management policies (subject to review and approval by ALCO) and for the day-to-day review of their implementation.
B. Non-trading activities
Below is a discussion of the various risks the Bank is exposed to as a result of its non-trading activities and the approach taken to manage those risks.
(i) Liquidity risk
The Bank is exposed to daily calls on its available cash resources from overnight deposits, current accounts, maturing term deposits, loan drawdown and guarantees. The Bank does not maintain cash resources required to meet all possible outgoing cash flows as experience has shown that there is a minimum level of reinvestment of maturing funds that can be predicted with a high level of certainty. The correlation between assets and liabilities, as well as the outgoing and incoming cash flows are managed to guarantee the regular and timely fulfillment of current obligations for the „going concern” scenario, as well as for „liquidity shortage”.
The maturity of assets and liabilities and the ability to replace, at an acceptable cost, interest-bearing liabilities as they mature, are important factors in assessing the liquidity of the Bank and its exposure to changes in interest rates and exchange rates.
The diversification of deposits by type and customer segment, and the past experience of the Bank give reason management to believe that deposits are a long-term and stable source of funding for the Bank.
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The following table provides an analysis of the financial assets and liabilities of the Bank into relevant maturity groupings based on the remaining periods to repayment.
Maturity table as at 31 December 2006
In BGN Thousand Less than 1-3 months 3 months 1-5 years More than Without Total 1 month to 1 year 5 years maturity inflow/ outflow
Assets
Cash and cash equivalents 454,142 – – – – – 454,142
Trading assets – 3,783 33,097 252,583 332,817 1,809 624,089
Derivative assets held – 3,490 – – – – 3,490 for risk management
Loans and advances to banks 552,202 230,012 44,552 29,701 – – 856,467
Loans and advances to customers 1,255 272,692 476,510 521,177 282,421 – 1,554,055
Receivables under 2,200 – – – – – 2,200 repurchase agreements
Investment securities – 2,956 2,867 317,361 33,549 9,335 366,068
Property and equipment – – – – – 23,024 23,024
Intangible assets – – – – – 10,798 10,798
Other assets – 3,613 1,138 – – 8,873 13,624
Total assets 1,009,799 516,546 558,164 1,120,822 648,787 53,839 3,907,957
Liabilities
Trading liabilities – 7 – – – – 7
Derivative liabilities held – 3,256 – – – – 3,256 for risk management
Deposits from banks 288,803 39,383 – 151,320 – – 479,506
Deposits from customers 160,836 1,596,731 325,451 296,378 23 – 2,379,419
Debt securities issued – – – 100,754 – – 100,754
Long term borrowings – 13,497 12,076 372,694 58,209 – 456,476
Subordinated liabilities – – – – 179,304 – 179,304
Provisions – 6,201 1,600 – – – 7,801
Current tax liabilities – 3,911 – – – – 3,911
Deferred tax liabilities – – – 192 – – 192
Other liabilities – 49,306 – – – – 49,306
Total liabilities 449,639 1,712,292 339,127 921,338 237,537 – 3,659,933
Total inflow/(outflow) 560,161 – 1,195,746 219,037 199,484 411,251 53,839 248,024
42 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Notes to the Financial Statements
Maturity table as at 31 December 2005
In BGN Thousand Less than 1-3 months 3 months 1-5 years More than Without Total 1 month to 1 year 5 years maturity inflow/ outflow
Assets
Cash and cash equivalents 230,310 – – – – – 230,310
Trading assets – 204 1,022 137,483 199,816 610 339,135
Derivative assets held – – – – – – – for risk management
Loans and advances to banks 154,137 395,690 – – – – 549,827
Loans and advances to customers – 212,038 377,193 575,780 197,866 – 1,362,877
Receivables under – 11,942 – – – – 11,942 repurchase agreements
Investment securities – – – 247,240 34,630 382 282,252
Property and equipment – – – – – 12,222 12,222
Intangible assets – – – – – 10,789 10,789
Other assets – 9,408 – – – – 9,408
Total assets 384,447 629,282 378,215 960,503 432,312 24,003 2,808,762
Liabilities
Trading liabilities – 13,008 – – – – 13,008
Derivative liabilities – held for risk management
Deposits from banks 14,560 367,442 4,000 – – – 386,002
Deposits from customers 115,549 1,075,059 216,476 190,227 – – 1,597,311
Debt securities issued – – 53,808 – – – 53,808
Long term borrowings – 5,018 7,173 373,905 36,165 – 422,261
Subordinated liabilities – – – – 100,403 – 100,403
Provisions – 4,891 – – – – 4,891
Current tax liabilities – 3,557 – – – – 3,557
Deferred tax liabilities – – – 297 – – 297
Other liabilities – 34,173 – – – – 34,173
Total liabilities 130,109 1,503,147 281,457 564,429 136,568 – 2,615,710
Total inflow/(outflow) 254,338 –873,865 96,758 396,074 295,744 24,003 193,052
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(ii) Market risk
Interest rate risk
The Bank’s operations are subject to the risk of interest rate fluctuations to the extent that interest-earning assets and interest-bearing liabilities mature or re-price at different times or in differing amounts. In comparison to the other risks the interest rate risk could be minimized trough the mutual management of assets and liabilities.
The EU accession and the expectations for stable development of the Bulgarian economy will lead to conversion of interest rates to the current levels in the Euro zone.
The policy of the Bank to minimize interest rate risk is to grant floating rate loans against the received floating rate external financings. Interest rate risk is also managed through the balanced use of different funding sources (borrowings from other local banks, long-term borrowings from foreign banks, customer deposits, etc.), as well as through purposeful credit policy, providing for increasing return.
It is of crucial importance for the Management of the Bank to control the interest rate sensitivity of assets and liabilities. Due to the nature of banking, an absolute mismatching in maturities or in periods of re-pricing of contracted interests on financial assets and liabilities is not possible. An unmatched position potentially enhances profitability, but may also increase the risk of losses.
The Bank’s interest rate exposures are monitored and managed by generating interest rate sensitivity reports. The majority of the Bank’s interest-bearing assets and liabilities are structured to match either short-term assets and short-term liabilities, or long-term assets and liabilities with re-pricing opportunities within one year, or long-term assets and corresponding liabilities whereby re-pricing is performed simultaneously.
For most interest-bearing assets and liabilities exists a possibility of re-pricing at a relatively short notice and any interest rate sensitivity gaps are considered immaterial.
44 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Notes to the Financial Statements
The following table indicates the periods, in which financial liabilities and assets re-price as at 31 December 2006.
In BGN Thousand Up to 3 From 3 From 1 More Total months months year to than 5 to 1 year 5 years years
Assets
Trading assets 129,954 98,056 105,228 288,451 621,689
Loans and advances to banks 781,628 74,254 – – 855,882
Loans and advances to customers 1,554,055 – – – 1,554,055
Receivables under repurchase agreements 2,200 – – – 2,200
Investment securities 109,081 35,199 175,241 37,212 356,733
Total assets 2,576,918 207,509 280,469 325,663 3,390,559
Liabilities
Deposits from banks 478,156 – – – 478,156
Deposits from customers 2,236,158 105,668 37,563 29 2,379,418
Debt securities issued – 100,754 – – 100,754
Long term borrowings 440,829 – 15,647 – 456,476
Subordinated liabilities 179,304 – – – 179,304
Total liabilities 3,334,447 206,422 53,210 29 3,594,109
The following table indicates the periods, in which financial liabilities and assets re-price as at 31 December 2005.
In BGN Thousand Up to 3 From 3 From 1 More Total months months year to than 5 to 1 year 5 years years
Assets
Trading assets 37,170 23,047 114,171 164,747 339,135
Loans and advances to banks 549,827 – – – 549,827
Loans and advances to customers 1,362,877 – – – 1,362,877
Receivables under repurchase agreements 11,942 – – – 11,942
Investment securities 1,995 – 244,462 35,413 281,870
Total assets 1,963,811 23,047 358,633 200,160 2,545,651
Liabilities
Deposits from banks 382,002 4,000 – – 386,002
Deposits from customers 1,501,393 72,204 23,714 – 1,597,311
Debt securities issued – 53,808 – – 53,808
Long term borrowings 402,703 – 19,558 – 422,261
Subordinated liabilities 100,403 – – – 100,403
Total liabilities 2,386,501 130,012 43,272 – 2,559,537
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The table below summarizes the effective interest rate for monetary financial instruments for 2005 and 2006:
2006 2005 Assets Trading assets 5.9% 4.2% Loans and advances to banks 3.7% 2.5% Loans and advances to customers 10.4% 8.9% Receivables under repurchase agreements 2.6% 2.5% Investment securities 5.1% 5.5% Liabilities Deposits from banks 3.6% 2.5% Term deposits from customers 3.3% 2.6% Current accounts from customers 0.8% 0.9% Debt securities issued 4.6% 4.7% Long term borrowings 3.6% 2.9% Subordinated liabilities 4.5% 4.0%
Currency risk
The Bank is exposed to currency risk through transactions in foreign currencies.
As a result of the Currency Board in place in Bulgaria, the Bulgarian currency is pegged to the Euro. As the currency, in which the Bank presents its financial statements, is the Bulgarian lev, the Bank’s financial statements are affected by movements in the exchange rates between the Bulgarian lev and currencies other than the Euro.
The Bank’s transactional exposures give rise to foreign currency gains and losses that are recognized in the income statement. These exposures comprise the monetary assets and monetary liabilities of the Bank that are not denominated in the measurement currency of the Bank.
The foreign currency position of the bank as of December 31, 2006, respectively December 31, 2005 is represented below:
46 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Notes to the Financial Statements
December 31, 2006 In Bulgarian EUR Other foreign Total In BGN Thousand Levs currency
Assets
Cash and cash equivalents 188,037 260,325 5,780 454,142
Trading assets 217,042 310,009 97,038 624,089
Derivative assets held for risk management 3,490 – – 3,490
Loans and advances to banks 69,122 579,782 207,562 856,467
Loans and advances to customers 605,851 932,084 16,120 1,554,055
Receivables under repurchase agreements 654 1,546 – 2,200
Investment securities 210,625 146,972 8,471 366,068
Property and equipment 23,024 – – 23,024
Intangible assets 10,798 – – 10,798
Other assets 7,904 4,239 1,482 13,624
Total assets 1,336,547 2,234,957 336,453 3,907,957
Liabilities
Trading liabilities 7 – – 7
Derivative liabilities held for risk management – 3,256 – 3,256
Deposits from banks 249,975 185,584 43,947 479,506
Deposits from customers 1,043,511 1,061,143 274,765 2,379,419
Debt securities issued 100,754 – – 100,754
Long term borrowings – 456,476 – 456,476
Subordinated liabilities – 179,304 – 179,304
Provisions 7,801 – – 7,801
Current tax liabilities 3,911 – – 3,911
Deferred tax liabilities 192 – – 192
Other liabilities 7,949 33,541 7,816 49,306
Total liabilities 1,414,101 1,919,304 326,528 3,659,933
Net position – 77,554 315,653 9,925 248,024
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December 31, 2006 In Bulgarian EUR Other foreign Total In BGN Thousand Levs currency
Assets
Cash and cash equivalents 134,506 91,090 4,714 230,310
Trading assets 76,673 174,020 88,442 339,135
Derivative assets held for risk management – – – 0
Loans and advances to banks 35,571 366,145 148,111 549,827
Loans and advances to customers 486,600 825,629 50,648 1,362,877
Receivables under repurchase agreements 301 11,641 – 11,942
Investment securities 124,381 148,306 9,565 282,252
Property and equipment 12,222 – – 12,222
Intangible assets 10,789 – – 10,789
Other assets 6,127 2,809 472 9,408
Total assets 887,170 1,619,640 301,952 2,808,762
Liabilities
Trading liabilities 2,204 10,804 – 13,008
Derivative liabilities held for risk management – – – –
Deposits from banks 27,234 257,106 101,662 386,002
Deposits from customers 659,069 746,863 191,379 1,597,311
Debt securities issued – – 53,808 53,808
Long term borrowings – 422,261 – 422,261
Subordinated liabilities – 100,403 – 100,403
Provisions 4,891 – – 4,891
Current tax liabilities 3,557 – – 3,557
Deferred tax liabilities 297 – – 297
Other liabilities 4,070 25,094 5,009 34,173
Total liabilities 701,322 1,562,530 351,858 2,615,710
Net position 185,848 57,110 – 49,906 193,052
In respect to monetary assets and liabilities in foreign currencies that are not economically hedged, the Bank manages foreign currency risk in line with a policy that sets limits on currency positions and dealer limits.
(iii) Credit risk
The Bank is subject to credit risk through its lending activities and in cases where it acts as an intermediary on behalf of customers or other third parties or issues guarantees. In this respect, the credit risk for the Bank stems from the possibility that different counterparties might default on their contractual obligations. The management of the credit risk exposures to borrowers is conducted through regular analysis of the borrowers’ credit worthiness and the assignment of a rating grade. Exposure to credit risk is also managed in part by obtaining collateral and guarantees.
The Bank’s primary exposure to credit risk arises through its loans and advances. The amount of credit exposure in this regard is represented by the carrying amounts of the assets on the balance sheet. In addition, the Bank is exposed to off- balance sheet credit risk through commitments to extend credit and guarantees issued.
48 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Notes to the Financial Statements
Concentrations of credit risk (whether on- or off- balance sheet) that arise from financial instruments exist for counterparties when they have similar economic characteristics that would cause their ability to meet contractual obligations to be similarly affected by changes in economic or other conditions.
The major concentrations of credit risk arise by location and type of customer in relation to the Bank’s investments, loans and advances, commitments to extend credit and guarantees issued.
Collateral for loans, guarantees, and letters of credit is usually in the form of cash, mortgage inventory, listed investments, or other property.
Fair values of financial instruments
According to IAS 32 the Bank discloses fair value information on assets or liabilities, for which published market information is readily available and where the fair value is materially different from their recorded amounts.
The fair value of cash and cash equivalents, deposits and other current receivables and liabilities is approximately equal to the book value given, because of their short-term maturity.
According to the management, given the existing circumstances, the fair value of loans should not significantly differ from the reported carrying amounts.
Fees and commission income and expenses that are integral to the effective interest rate on a financial asset or liability are included in the measurement of the effective interest rate.
4. Net Interest Income
In BGN Thousand 2006 2005 Interest income Loans and advances to banks 18,546 9,603 Loans and advances to customers 158,827 110,703 Investment securities 13,947 4,359 Total interest income 191,320 124,665 Interest expense Deposits from banks – 5,026 – 2,887 Deposits from customers – 39,765 – 22,103 Debt securities issued – 2,608 – 2,399 Long-term borrowings – 15,467 – 9,797 Subordinated liabilities – 5,763 – 2,764 Total interest expense – 68,629 – 39,950 Net interest income 122,691 84,715
Net interest income includes interest income and expense for financial assets and financial liabilities that are not held for trading.
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5. Net Fee and Commission Income
In BGN Thousand 2006 2005 Fee and commission income Payment transactions 9,313 7,362 Card transactions 6,456 2,938 Cash transactions 4,469 3,451 Opening and maintenance of accounts 4,787 2,588 Other loan fees 2,398 1,831 Documentary transactions 1,785 1,337 Other 1,817 3,094 Total fee and commission income 31,025 22,601 Fee and commission expense Guarantees –1,033 –1,515 Card operations –1,883 –1,016 Maintenance of corresponding accounts –401 –310 Other –587 –443 Total fee and commission expense –3,904 –3,284 Net fee and commission income 27,121 19,317
Included above is fee and commission income and fee and commission expense other than fees included in determining the effective interest rate.
6. Net Trading Income
In BGN Thousand 2006 2005 Fixed income 14,307 13,170 Equities 991 119 Foreign exchange 8,161 7,171 Other –102 82 Net trading income 23,357 20,542
Fixed income trading comprises of realized and unrealized dealers margins from changing in market prices of Government treasury bills and corporate bonds.
Trading result from foreign exchange represents the net result arising from purchases and sales of foreign currencies, as well as translation gains arising from the translation of assets and liabilities, denominated in foreign currencies into Bulgarian Levs.
50 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Notes to the Financial Statements
7. General Administrative Expenses
In BGN Thousand 2006 2005 Personnel costs – 33,782 – 22,485 Materials and services – 36,025 – 31,749 Depreciation and amortization charge – 7,614 – 5,305 Deposit insurance instalments – 6,532 – 3,667 Total general administrative expenses – 83,952 – 63,206
Personnel costs include salaries, social and health security contributions under the provisions of the local legislation. For the year 2006, the average number of employees is 1,585 (2005:1,111).
8. Impairment Losses
In BGN Thousand 2006 2005 Balance as at January 1 43,858 33,085 Additional allowances for impairment losses 27,608 26,243 Reversals – 17,062 – 15,467 Written-off receivables – – 3 Balance as at December 31 54,404 43,858
In BGN Thousand 2006 2005 Additional allowances for impairment losses – 27,608 – 26,243 Reversal of write-downs 17,062 15,467 Recoveries from non-performing loans previously written off 257 367 Loss on impairment and uncollectability – 10,289 – 10,409
The following tables illustrate the breakdown of impairment losses into specific and collective allowances for impairment.
Specific allowances for impairment
In BGN Thousand 2006 2005 Balance as àt January 1 36,540 33,085 Additional allowances for impairment losses 26,087 18,925 Reversals – 14,213 – 15,467 Written-off receivables – – 3 Balance as at December 31 48,414 36,540
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Collective allowances for impairment
In BGN Thousand 2006 2005 Balance as at January 1 7,318 – Additional allowances for impairment losses 1,521 7,318 Reversals – 2,849 – Written-off receivables – – Balance as at December 31 5,990 7,318
9. Income Tax Expense
In BGN Thousand 2006 2005 Current tax expense – 11,667 – 7,916 Deferred tax (expense)/income related to origination 9 – 231 and reversal of temporary differences Deferred tax (expense)/income resulting from reduction in the tax rate 96 – Total tax (expense)/income – 11,562 – 8,147
Current income tax expense represents the amount of due corporate tax to be paid under Bulgarian law. Deferred tax income or expense results from the change in the carrying amounts of deferred tax assets and deferred tax liabilities.
The relationship between tax expense and accounting profit is as follows:
In BGN Thousand 2006 2005 Accounting profit 78,533 52,691 Tax at the applicable tax rate – 11,780 – 7,904 (15% for 2005, 15% for 2006, 10% for 2007) Tax effect on permanent differences 122 – 243 Tax effect from change in the tax rate 96 – Total tax expense – 11,562 – 8,147 Effective tax rate 14.72% 15.46%
Reported deferred tax liabilities at December 31, 2006 and 2005 comprise the following:
In BGN Thousand Assets Liabilities Net (Assets)/Liabilities 2006 2005 2006 2005 2006 2005 Fixed assets – – 352 330 352 330 Unused leave of personnel – 160 –33 – – – 160 – 33 Net (Assets)/Liabilities – 160 –33 352 330 192 297
Deferred income taxes are calculated on all temporary differences under the liability method using a principal tax rate of 10% effective January 1st 2007.
52 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Notes to the Financial Statements
Movements in temporary differences during the year are recognized in income statement on the following items:
Movements during the year
Deferred taxes 2005 Changes 2006 In BGN Thousand Income statement – loss/(profit) Fixed assets/net 330 22 352 Unused leave – 33 – 127 – 160 297 – 105 192
10. Cash and Balances with the Central Bank
In BGN Thousand 2006 2005 Cash on hand 42,630 32,475 ATM cash 20,410 10,646 Current account with BNB in Bulgarian Levs 142,712 108,956 Obligatory minimum reserve with BNB in foreign currency 248,390 78,233 Total 454,142 230,310
The current account with the Central Bank is used for direct participation in the money and treasury bills markets and for settlement purposes.
As of December 31, 2006, the Bank maintains minimum obligatory reserve in EUR with the Central Bank, calculated as a percentage on the deposits in foreign currency. The minimum reserve for deposits in Bulgarian Levs is covered by the current account with BNB.
11. Loans and Advances to Banks
In BGN Thousand 2006 2005 A. Analysis by currency Bulgarian Levs 68,541 35,177 Foreign currency 787,926 514,650 Total 856,467 549,827 B. Geographical analysis Domestic banks 27,884 82,330 Foreign banks 828,583 467,497 Total 856,467 549,827
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12. Receivables under Repurchase Agreement
Receivables under repurchase agreements represent securities purchased under agreements to sell them back to the counterparty on a future fixed date at a contracted fixed price. As of December 31, 2006 the fair value of received government securities as pledge on such agreements amounts to BGN 2,621 thousand, 12,069 thousand as of December 31, 2005 respectively.
13. Trading Assets
In BGN Thousand 2006 2005 Bulgarian government securities 347,104 280,693 Foreign government securities – 4,155 Bulgarian corporate bonds 187,510 51,043 Foreign corporate bonds 87,076 2,634 Equities 2,005 610 Positive fair value of derivatives 394 Total trading assest 624,089 339,135
14. Derivatives Held for Risk Management Purposes
Derivatives held for risk management purposes include all derivative assets and liabilities that are not classified as trading assets or liabilities. Derivatives held for risk management purposes are measured at fair value in the balance sheet. When a derivative is not held for trading, and is not designated in a qualifying hedge relationship, all changes in its fair value are recognized immediately in profit or loss as a component of net income on other financial instruments carried at fair value.
The following table indicates all derivative instruments held by the bank for trading, as well as for risk management purposes.
In BGN Thousand Contract /notional Fair values amount Assets Liabilities As at 31 December 2006 Currency forwards 569,512 3,489 3,241 Forex swaps 7,460 1 15 Derivatives held for risk management purposes 576,972 3,490 3,256 Interest rate swaps 56,007 178 – Future contracts 49,364 216 7 682,343 3,884 3,262 As at 31 December 2005 Currency forwards 75,060 232 69 Forex swaps 73,969 8 1,179 Interest rate swaps 49,737 – 956 198,766 240 2,204
54 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Notes to the Financial Statements
15. Investment Securities
A. Securities at fair value through profit and loss
In BGN Thousand 2006 2005 Bulgarian government securities 45,057 46,173 Bulgarian corporate bonds 197,026 195,243 Bulgarian corporate shares 382 382 Foreign corporate bonds 86,173 10,853 Other 8,954 – Total 337,592 252,651
In 2005 the Bank formed a security portfolio, neither held for trading not to maturity. The value of this portfolio is the market price of the securities. Gains or losses from changes in fair values of the securities in this portfolio are included in the net profit or loss for the reporting period, in which it occurred.
Bulgarian corporate bonds comprise issues of Bulgarian banks and large corporate bank clients.
The foreign corporate bonds represent a middle-term bonds issue of EIB in BGN.
B. Securities held to maturity
In BGN Thousand 2006 2005 Bulgarian government securities 21,493 22,618 Bulgarian corporate bonds 6,983 6,983 Total 28,476 29,601
Long-term securities held to maturity represent debt investments that the Bank has the intent and ability to hold to maturity.
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16. Loans and Advances to Customers
In BGN Thousand 2006 2005 Individuals Bulgarian Levs 273,192 291,370 Foreign currency 86,940 72,277 360,132 363,647 Private companies and sole traders Bulgarian Levs 349,480 207,528 Foreign currency 871,246 833,311 1,220,726 1,040,839 Budgetary organisations Bulgarian Levs 4,528 2,249 Foreign currency 23,073 – 27,601 2,249 1,608,459 1,406,735 Allowance for impairment – 54,404 – 43,858 Total 1,554,055 1,362,877
In 2006 the Bank transferred to a related company and derecognized from its balance sheet a total volume of loans to customers for the equivalent of BGN 833,000 thousand, whereof loans to individuals BGN 318,000 thousand and loans to corporate customers BGN 515,000 thousand.
Analysis of loans by industry
In BGN Thousand 2006 2005 Manufacturing 424,413 244,821 Construction 82,112 66,296 Transport 48,065 24,515 Trade 530,687 498,830 Other 163,050 208,626 Individuals 360,132 363,647 1,608,459 1,406,735 Allowance for impairment – 54,404 – 43,858 Total 1,554,055 1,362,877
56 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Notes to the Financial Statements
The next table summarizes the types of collaterals for loans to customers:
In BGN Thousand As at 31 December 2006 As at 31 December 2005 Mortgages 3,047,892 1,938,824 Pledged assets 644,098 622,019 Securities 200 395 Cash 32,900 25,075 Total Collateral 3,725,090 2,586,313
Interest sensitivity
Interest rates on most loans are calculated at the cost of funds plus a set margin. Cost of funds depends on the interest- fixing period and on the respective currency of the loan. Loan margins vary and are based on the loan term and on the credit risk associated with the borrower.
In case of overdue loan interest and principal penalty interest is applied.
17. Other Assets
In BGN Thousand 2006 2005 Prepayments and other deferrals 2,663 2,855 Confirmed letters of credit 1,925 1,692 Shares and participations 4,700 3,740 Other 4,336 1,121 Total 13,624 9,408
Other assets as of December 31, 2006 comprise cheque receivables, prepayments of expenses and other deferrals, as well as guarantee deposits, shares and participations.
Shares and participations comprise of investments of the Bank in the share capital of its subsidiaries.
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18. Fixed Assets
Total Computer Office Motor Software Other Assets Equipment Furniture Vehicles Intangible under fixed assets construction
Cost
January 1,2006 45,239 9,793 21,345 0 7,220 6,515 366
Additions 18,428 3,999 6,014 627 2,754 3,231 1,803
Disposals – 1,089 – 705 – 270 – – 114 – –
December 31,2006 62,578 13,087 27,089 627 9,860 9,746 2,169
Accumulated Depreciation
January 1,2006 22,228 6,269 9,721 – 4,177 2,061 –
Charge for the period 7,614 2,313 2,569 39 1,610 1,083 –
Depreciation of disposals – 1,087 – 705 – 268 – – 113 – –
December 31,2006 28,755 7,877 12,022 39 5,674 3,144 –
Net Book Value December 31,2005 23,011 3,524 11,624 – 3,043 4,454 366
Net Book Value December 31,2006 33,822 5,210 15,066 588 4,186 6,602 2,169
19. Deposits from Banks
In BGN Thousand 2006 2005 In Bulgarian Levs Domestic commercial banks 104,407 24,113 Foreign commercial banks 153,840 2,972 258,247 27,085 In foreign currency Domestic commercial banks 170,857 115,771 Foreign commercial banks 50,402 243,146 221,259 358,917 Total 479,506 386,002
As at December 31, 2006 deposits in foreign currency from banks include deposits of RZB, Vienna at the amount of BGN 153,985 thousand (2005: BGN 197,286 thousand).
58 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Notes to the Financial Statements
20. Trading Liabilities
In BGN Thousand 2006 2005 Short selling liabilities – 10,804 Negative fair value of derivatives 7 2,204 Total trading liabilities 7 13,008
Trading liabilities comprise the short selling liabilities and the negative fair value of derivatives.
As at December 31, 2005 the negative fair value of the forward exchange deals amounts to BGN 69 thousand. The foreign exchange swap transactions are to the amount of BGN 2 135 thousand.
21. Deposits from Customers
In BGN Thousand 2006 2005 Individuals Bulgarian Levs 261,882 177,432 Foreign currency 519,763 348,273 781,645 525,705 Companies and sole traders Bulgarian Levs 727,582 446,366 Foreign currency 558,243 384,225 1,285,825 830,591 Budgetary organisations Bulgarian Levs 54,047 35,271 Foreign currency 257,902 205,744 311,949 241,015 Total 2,379,419 1,597,311
In July, 2005 the Bank took up the service of the National Fund of the Ministry of Finance under the ISPA programme. As at December, 2006 the attracted resource amounts to BGN 289 Mio, respectively BGN 240 Mio as at December, 2005.
22. Debt Securities Issued
The position as at December 31, 2005 represented a 3-year USD unsecured bond emission. The bond matured in October 2006 and was replaced by another 3-year issue in local currency for a nominal amount of BGN 100 Mio.
Debt securities issued are carried at amortized cost.
AwardsAwards Corporate Social Social Responsibility Responsibility The Bank’s Management Management RZB Group RZB RLBG Group RIBG RAM RLBG Raiffei sen Glossary RAM Addresses Addresses www.rbb.bg 59 Notes to the Financial Statements
23. Provisions
The bank recognizes a provision for unused holidays, which is the undiscounted amount of the expected short-term income of its employees for the work performed during the current period.
Provision is recognized also for other liabilities to its employees, such as bonus payments for the current year.
Taking into consideration the age stricture of the employees, the bank does not provide for post-employment benefits.
Based on the analysis of any potential litigation, no provisions for contingent liabilities have been allocated.
24. Other Liabilities
In BGN Thousand 2006 2005 Transfers in process 45,745 31,807 Other liabilities 3,561 2,366 Total 49,306 34,173
Transfers in process represent customers’ money transfer orders with value date after December 31, 2006.
25. Long-Term Borrowings
Long-term borrowings comprise loans attracted from international financial institutions for financing small- and medium- sized companies in the field of environmental protection, energy savings, industry, services and tourism, as well as municipalities and private individuals.
The purpose of the syndycated loan negotiated in 2005 is a general funding for on-lending to various core customers of the bank.
2006 2005 Credit lines from KfW 19,856 19,811 Credit lines from EIB 55,183 58,984 Credit lines from CEDB 78,703 39,273 Credit lines from EBRD 8,261 9,895 Syndicated loan 294,473 294,298 Total 456,476 422,261
26. Subordinated Liabilities
With the permission of the Bulgarian National Bank, in March 2001, the Bank entered into an agreement with Raiffeisen Zentralbank Oesterreich AG for a subordinated debt in the form of a debt-capital hybrid instrument. These funds are a supplementary capital reserve and increase the capital base of Raiffeisenbank (Bulgaria) EAD for regulatory purposes. As at December 31, 2006 the subordinated debt of the Bank amounts to EUR 91 Mio.
60 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Notes to the Financial Statements
The repayment of the debt is not bound by any maturity. Management believes that the use of this instrument will be for a term of over 5 years.
The treatment of these liabilities for capital adequacy purposes is in accordance with the requirements of local legislation. Any prepayment of subordinated debt prior to its final maturity is subject to written approval from the Bulgarian National Bank.
27. Equity
(a) Share capital
As of December 31, 2006 the registered and fully paid-in capital of the Bank comprised of 94,932,152 registered shares with a par value of BGN 1 each.
(b) Statutory reserve
Statutory reserves comprise amounts appropriated for purposes defined by the local legislation. Under the Bulgarian Commercial code, the Bank is required to set aside one tenth of its profit in a statutory reserve until it reaches 10% of its equity.
(c) Retained earnings
The Bank presents under a retained earnings section all distributable reserves in excess of the statutory reserves under (b).
28. Commitments and Contingent Liabilities
(a) Memorandum items
The Bank provides financial guarantees and letters of credit to guarantee the performance of customers to third parties.
The contractual amounts of commitments and contingent liabilities are set out in the following table by category. The amounts reflected in the table for guarantees and letters of credit represent the maximum accounting loss that would be recognized at the balance sheet date if counterparties failed completely to perform as contracted.
In BGN Thousand 2006 2005 Letters of guarantee and letters of credit issued 274,674 120,667 Unused credit lines 620,573 318,036 Total commitments and contingencies 895,247 438,703
These commitments and contingent liabilities have off- balance-sheet credit risk because only organization fees and accruals for probable losses are recognized in the balance sheet until the commitments are fulfilled or expire. Many of the contingent liabilities and commitments will expire without being advanced in whole or in part. Therefore, the amounts do not represent expected future cash flows.
AwardsAwards Corporate Social Social Responsibility Responsibility The Bank’s Management Management RZB Group RZB RLBG Group RIBG RAM RLBG Raiffei sen Glossary RAM Addresses Addresses www.rbb.bg 61 Notes to the Financial Statements
29. Cash and Cash Equivalents
For the purposes of the cash flow statement, cash and cash equivalents comprise the following balances with less than 90 days original maturity:
In BGN Thousand 2006 2005 Cash on hand and nostro accounts 69,036 45,720 Current account with the Central Bank 391,102 187,189 Placements with banks with original maturity of less than 3 months 773,171 546,834 Total 1,233,309 779,743
30. Related Party Transactions
Parties are considered to be related if one party has the ability to control or exercise significant influence over the other party on making financial or operational decisions, or the parties are under common control of the Bank.
A number of banking transactions are entered into with related parties in the normal course of business. These include loans, deposits and other transactions.
Related party Type of relation Type of transaction Balance as of December 31,2006 In BGN Thousand Raiffeisen Owner of Raiffeisen Nostro accounts 646 Zentral Bank AG International Bank Receivables from deposits 659,561 Holding AG Liabilities on deposits 153,985 Subordinated debt 179,304 Commissions for credit 1,229 lines and guarantees paid Interest income 14,023 Interest expense 6,988 Positive fair value of derivative 662 financial instruments Negative fair value of derivative 468 financial instruments Raiffeisen Leasing Asscosiated company Current accounts, term deposits, 11,818 Bulgaria OOD leasing liabilities RAISA Subsidiary of RZB Operating expenses 1,336 Pro Invest DaVinci Subsidiary of RZB Operating expenses 1,270 (Rent of the bank’s premises) Management and Loans and advances 11,366 employees of the Bank
31. Post Balance Sheet Events
There are no events after the balance sheet date that would require either adjustments or additional disclosures in the financial statements.
62 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Awards
Awards
In 2006 Raiffeisenbank (Bulgaria) EAD received numerous prestigious awards:
‘Bank of the Year 2006’ For the second consecutive year from The Banker
‘Best Bank’ in Bulgaria from Global Finance
‘Best Consumer Internet Bank’ from Global Finance
‘Best Debt House’ from Euromoney
‘Best Investment Intermediary with the largest contribution in investment banking’ from the Bulgarian Stock Exchange (BSE)
Awards Corporate Social Responsibility The Bank’s Management RZB Group RLBG RIBG RAM Raiffeisen Glossary Addresses www.rbb.bg 63 Corporate Social Responsibility
Corporate Social Responsibility
In 2006 Raiffeisenbank (Bulgaria) EAD supported several significant social, cultural and media projects, aimed at enhancing the corporate reputation and the value of the Raiffeisen brand in Bulgaria. The sponsor and donor initiatives of the Bank were focused on financing the value added sustainable projects: with importance for the local society; helpful for the integrity of disadvantaged adults or children; meaningful for the enhancing of the self-confidence of the Bulgarians, their entrepreneurial spirit; building of a better environment for living.
Raiffeisenbank (Bulgaria) EAD supported The Eternal Buildings of Bulgaria Initiative – the restoration of the frescoes of the Boyana Church, one of the cultural monuments with world importance, ¹ 42 from UNESCO’s List of monuments with world importance.
Raiffeisenbank (Bulgaria) EAD donated the Haskovo Municipality to build a better infrastructure and financed the construction of a new playground in the town.
Raiffeisenbank (Bulgaria) EAD traditionally was among the general sponsors of the charity Vienna Ball under the patronage of the Austrian ambassador Dr. Karl Diem and the Vice-premier and Minister of Foreign Affairs Ivaylo Kalfin. The attracted funds were donated to the student‘s projects from the Bulgarian Academies of Arts and to the Clinic of Spinal Surgery in Gorna Banya.
64 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report The Bank’s Management
The Bank’s Management
Shareholders
Raiffeisen International Bank-Holding AG – 100%
Supervisory Board
Chairman: Herbert Stepic Chairman of the Management Board of Raiffeisen International Bank-Holding AG and Deputy Chairman of Raiffeisen Zentralbank Österreich AG (RZB).
Members: Heinz Höedl
Peter Lenkh
Management Board
Chairman: Momtchil Andreev
Members: Evelina Miltenova
Nadezhda Mihaylova
Tzenka Petkova
Jan Majtan – till 12.04.2007
Ani Angelova – from 12.04.2007
Awards Corporate Social Responsibility The Bank’s Management RZB Group RLBG RIBG RAM Raiffeisen Glossary Addresses www.rbb.bg 65 RZB Group and Raiffeisen International at a Glance
RZB Group and Raiffeisen International at a glance
Raiffeisenbank (Bulgaria) EAD is a member of the RZB Group and subsidiary of Raiffeisen International Bank-Holding AG. Raiffeisen International in turn is a fully consolidated subsidiary of Vienna-based Raiffeisen Zentralbank Österreich AG (RZB). RZB is the parent company of the RZB Group and the central institution of the Austrian Raiffeisen Banking Group, the country’s largest banking group by total assets with the widest local distribution network.
Founded in 1927, RZB provides the full range of commercial and investment banking services in Austria and is regarded a pioneer in Central and Eastern Europe (CEE). It ranks among the region’s leading banks, offering commercial, investment and retail banking services in the following markets:
Albania Raiffeisen Bank Sh.a. Belarus Priorbank, OAO Bosnia and Herzegovina Raiffeisen Bank d.d. Bosna i Hercegovina Bulgaria Raiffeisenbank (Bulgaria) EAD Croatia Raiffeisenbank Austria d.d. Czech Republic Raiffeisenbank a.s. and eBanka, a.s. Hungary Raiffeisen Bank Zrt. Kosovo Raiffeisen Bank Kosovo S.A. Poland Raiffeisen Bank Polska S.A. Romania Raiffeisen Bank S.A. Russia ZAO Raiffeisenbank Austria and OAO Impexbank Serbia Raiffeisen banka a.d. Slovakia Tatra banka, a.s. Slovenia Raiffeisen Krekova banka d.d. Ukraine VAT Raiffeisen Bank Aval
Raiffeisen International Bank-Holding AG acts as these banks’ steering company, owning the majority of shares (in most cases 100 or almost 100%). Furthermore, many finance leasing companies (including one in Kazakhstan) are part of the Raiffeisen International Group. Raiffeisen International is a fully- consolidated subsidiary of RZB. Following the largest IPO in Austria’s history in April 2005, RZB remains Raiffeisen International’s majority shareholder owning 70% of the capital stock. The remaining 30% is free-float, owned by institutional and retail investors.
At year-end 2006, 2,848 banking and leasing outlets covered the CEE-region, and over 52,700 employees attended to more than 12 million customers.
As of 31 December 2006, Raiffeisen International’s balance sheet total amounted to EUR 55.9 bln, up 37% compared with December 2005. Consolidated profit (after minorities) according to IFRS grew by 55% to EUR 594 mln (excluding one-off effects due to the sales of a minority participation in Kazakh Bank TuranAlem and the former Raiffeisenbank Ukraine). Including those effects, consolidated profit grew by 209% to EUR 1,182 mln. The return on equity before tax advanced by 5.5 percentage points to 27.3% (excluding one-off effects), and the cost/income ratio further improved to 59.1% (minus 2.5 percentage points).
As of year-end 2006, the RZB Group’s balance sheet total amounted to EUR 115.6 bln, up 23% compared with December 2005. IFRS-compliant profit before tax amounted to EUR 1,882 million, an
66 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report RZB Group and Raiffeisen International at a Glance
increase of 102%, including the above-mentioned one-off effects. Return on equity before tax improved by 2.8 percentage points to 26.7% without one-off effects, this is once more one of the best ratios reported by any major Austrian bank. The cost/income ratio improved again to 56.7% (minus 2.2 percentage points). At the reporting date, the Group employed a staff of more than 55,400 worldwide.
In addition to its banking operations – which are complemented by representative offices in Lithuania (Vilnius), Moldova (Chisinau) and Russia (Moscow) – RZB runs several specialist companies in CEE offering solutions, among others, in the areas of M&A, real estate development, fund management, leasing and mortgage banking.
In Western Europe and the USA, RZB operates a branch in London and representative offices in New York, Brussels, Frankfurt, Milan, Paris and Stockholm. A finance company in New York (with representative offices in Chicago and Houston) and a subsidiary bank in Malta complement the scope. In Asia, RZB runs branches in Beijing (with a representative office in Zhuhai) and Singapore, as well as representative offices in Ho Chi Minh City, Hong Kong, Mumbai, Tehran and Seoul. This international presence clearly underlines the bank’s emerging markets strategy.
RZB is rated as follows:
Standard & Poor’s Short-term A1 Standard & Poor’s Long-term A+ Moody’s Short-term P-1 Moody’s Long-term Aa1 Moody’s Financial Strength C
www.rzb.at, www.ri.co.at
Awards Corporate Social Responsibility The Bank’s Management RZB Group RLBG RIBG RAM Raiffeisen Glossary Addresses www.rbb.bg 67 Raiffeisen Leasing Bulgaria
Raiffeisen Leasing Bulgaria
Raiffeisen Leasing Bulgaria OOD was established in 2004 with shareholders Raiffeisenbank (Bulgaria) EAD, holding 24.5% of its shares, and Raiffeisen Leasing International GmbH, holding 75.5%. Raiffeisen Leasing Bulgaria OOD owns 100% of the shares of Raiffeisen Auto Leasing Bulgaria EOOD.
As of December 31, 2006 Raiffeisen Leasing Bulgaria OOD and Raiffeisen Auto Leasing Bulgaria EOOD have a market share of 8.06% as per the BNB statistics and data from the Bulgarian Association for Leasing. Raiffeisen Leasing Bulgaria OOD. From left to right: Ekaterina Hristova – Manager; Dobromir Dobrev – The new business represents 10.91% Manager; Vassil Koshnicharov – Manager. of the newly generated deals in the leasing sector at purchase price. The companies are the most dynamic developing leasing companies on the market, increasing their market share from 4.14% to 8.06% for one year.
As of 31 December 2006 the assets of both Raiffeisen Leasing Bulgaria OOD and Raiffeisen Leasing Bulgaria EOOD went up by 196% to BGN 204 mln, compared to 31 December 2005, while for the same period the leasing portfolio increased by 279% to BGN 183 mln.
In 2006, the companies attracted and utilized BGN 192 mln in medium- and long-term financing, of which BGN 39 mln. from international organizations. At the beginning of 2006, Raiffeisen Leasing Bulgaria OOD and the Council of Europe Development Bank signed a Framework Agreement for EUR 10 mln. The resources are earmarked for financing SMEs. Raiffeisen Leasing Bulgaria OOD signed and utilizated the first tranche of BGN 10 mln on a credit line from the European Bank for Reconstruction and Development.
Raiffeisen Leasing Bulgaria OOD and Raiffeisen Auto Leasing Bulgaria EOOD have registered 9 branches in the regional cities throughout the country.
68 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Raiffeisen Insurance Broker
Raiffeisen Insurance Broker
Raiffeisen Insurance Broker EOOD, a company founded in 2006, is 100% owned by Raiffeisenbank (Bulgaria) EAD. Raiffeisen Insurance Broker EOOD is listed in the register of the insurance brokers under Registration ¹250-3B by the Commission for Financial Supervision on 30.03.2006.
The company’s activities are related to intermediation in the process of conclusion of insurance contracts between the customers of the broker and the insurance companies.
Raiffeisen Insurance Broker prepares analysis and study of the insurance market, offers insurance products conformable with the individual needs of the customers, administers insurance contracts and offers assistance in case of a covered by the insurance policy accident.
Raiffeisen Insurance Broker EOOD clients are Raiffeisenbank’s borrowers, Raiffeisen Leasing Bulgaria OOD and Raiffeisen Auto Bulgaria OOD leasers, as well as new clients for the Raiffeisen Group.
As of 31.12.2006 Raiffeisen Insurance Broker EOOD has accumulated BGN 7,3 mln premium income for its partner insurance companies. In less than a year the company Raiffeisen Insurance Broker EOOD. From left to right: Emanuela Nikolova – Manager; Kremena Kisova – Manager. established itself among the leading insurance brokers on the market.
Awards Corporate Social Responsibility The Bank’s Management RZB Group RLBG RIBG RAM Raiffeisen Glossary Addresses www.rbb.bg 69 Raiffeisen Asset Management (Bulgaria)
Raiffeisen Asset Management (Bulgaria)
Raiffeisen Asset Management (Bulgaria) EAD (RAM) started public offering of 4 local mutual funds and launched distribution of 8 mutual funds of Raiffeisen Capital Management (RCM) on the March 16, 2006. Thus, RAM became the first Bulgarian asset management company to distribute both locally-managed and foreign funds, covering the whole risk spectrum of funds – conservative, balanced and aggressive schemes.
The active marketing, combined with the cooperation with Raiffeisenbank (Bulgaria) EAD – the sole owner of RAM, contributed to the growth of the asset management company. Achieving leading position in only 9 months Raiffeisen Asset Management proved to be the most dynamic asset management comoany in Bulgaria in 2006.
As of December 31, 2006 the combined market share of the four local funds stood at 15.95% with assets amounting to BGN 48,5 mln.
Along with the local funds, RAM distributed foreign funds (RCM) worth of EUR 4,4 mln.
Ivaylo Grigorov Executive Director By year-end the total number of RAM clients reached 414, out of which 18 institutional investors and 15 corporate clients. The volume of investments of these two types of investors accounts for more than 60% of the funds’ assets.
Along with the distribution and the management of the mutual funds, RAM successfully entered the segment of discretionary management, attracting mainly institutional investors. As of 31 December 2006 the assets of the trustees reached BGN 6.4 mln. The average return achieved on the portfolios of the trustees exceeded 7%.
As of 31 December 2006 the assets under the management of RAM reached BGN 54.9 mln.
Investment approach and performance
Raiffeisen Asset Management (Bulgaria) EAD benefits from the analytical, informational and professional expertise of the Raiffeisen Group when undertaking investment decisions.
70 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Raiffeisen Asset Management (Bulgaria)
As a result of the applied investment policy and strategy, consistent with the risk profile, the return of each of the funds was comparable to the average for the market realized by its peers.
Achievements
As of 31 December 2006 Raiffeisen (Bulgaria) Balanced Fund is the largest Balanced fund in Bulgaria with net asset value amounting to BGN 26,7 mln. and achieved annual return of 23.83%
As of 31 December 2006 the net asset value of Raiffeisen (Bulgaria) Equity Fund reached BGN 13,2 mln. The annual return reached 43.87%, preserving the high level of diversification in combination with reasonable investment and excellent liquidity.
Summarized financial results
In 2006, Raiffeisen Asset Management (Bulgaria) EAD realized total revenue amounting to BGN 786 thousand. For the same period the expenses from activity of Raiffeisen Asset Management (Bulgaria) EAD reached BGN 325 thousand.
The net profit after tax amounted to BGN 392,199.
Awards Corporate Social Responsibility The Bank’s Management RZB Group RLBG RIBG RAM Raiffeisen Glossary Addresses www.rbb.bg 71 Raiffeisen-Glossary
Raiffeisen-Glossary
Below are the definitions of some terms related to RBG, RZB, the RZB Group and Raiffeisen International.
Gable Cross The international Raiffeisen logo is the Gable Cross. It consists of two stylized crossed horses’ heads and can be traced back hundreds of years to European folk traditions. It is a symbol of defense against evil and life’s dangers and can still be found on rural houses in Central Europe. According to their founder’s objectives, Raiffeisen’s members have safeguarded themselves against economic hazards by uniting within the cooperative and therefore chose the Gable Cross as an emblem of protection under a shared roof. The logo has developed into an internationally well-known and very positively associated trademark and is in use around the world.
Raiffeisen The Raiffeisen Banking Group (RBG) is Austria’s largest banking group by total Banking assets. As per year-end 2006, RBG’s consolidated balance-sheet total amounted to Group EUR 205.4 bln. It represents about a quarter of all domestic banking business and comprises the country’s largest banking network with more than 2,250 offices (nearly 44% of all banking outlets in Austria) and some 22,000 employees. RBG consists of Raiffeisen Banks on the local level, Regional Raiffeisen Banks on the provincial level and RZB as central institution. RZB also acts as the ‘link’ between its international operations and RBG. Raiffeisen Banks are private cooperative credit institutions, operating as general service retail banks. Each province’s Raiffeisen Banks are owners of the respective Regional Raiffeisen Bank, which in their entirety own approximately 88% of RZB’s ordinary shares.
The Raiffeisen Banks go back to an initiative of the German social reformer Friedrich Wilhelm Raiffeisen (1818 – 1888), who, by founding the first cooperative banking association in 1862, has laid the cornerstone of the global organization of Raiffeisen cooperative societies. Only 10 years after the foundation of the first Austrian Raiffeisen banking cooperative in 1886, already 600 savings and loan banks were operating according to the Raiffeisen system throughout the country. According to Raiffeisen’s fundamental principle of self-help, the promotion of their members’ interests is a key objective of their business policies.
Raiffeisen Raiffeisen International Bank-Holding AG is a fully consolidated subsidiary of RZB. International It acts as the steering company for the RZB Group’s subsidiaries in Central and Eastern Europe, above all the Group’s banking and leasing units. RZB is Raiffeisen International’s majority shareholder owning 70% of the capital stock. The remaining 30% is free-float, owned by institutional and retail investors. Raiffeisen International’s shares are traded on the Vienna Stock Exchange.
RZB Raiffeisen Zentralbank Österreich AG (RZB) is the central institution of the Austrian Raiffeisen Banking Group. Founded in 1927 and domiciled in Vienna, RZB is the third-largest Austrian bank and a specialist in commercial and investment banking. As the parent company of the RZB Group, it ranks among Central and Eastern Europe’s leading banking groups, offering the full scope of commercial, investment and retail banking services practically throughout the region.
RZB Group The group owned and steered by RZB. Raiffeisen International forms one of the Group’s main units, acting as holding and steering company for the network of banks and leasing companies in Central and Eastern Europe.
72 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Branch Network in Bulgaria
Addresses and Contacts Branch Network in Bulgaria
Head Office Sofia 7 Sofia 14 1504 Sofia 1336 Sofia Sofia 18-20, Gogol Str. 41, Dzhavaharlal Neru Blvd. 43, Shipchenski Prohod Blvd. Tel.: (+ 359 2) 919 85 101 Tel.: (+ 359 2) 921 69 11 Tel.: (+ 359 2) 817 18 63 Fax: (+ 359 2) 943 45 28 Fax: (+ 359 2) 925 23 71 Fax: (+ 359 2) 971 20 08
Sofia 8 Sofia 15 Raiffeisenbank (Bulgaria) 1715 Sofia 1407 Sofia EAD Offices in Sofia Business Park Sofia 55, Nikola Vaptzarov Blvd. Building 11A, Ground Floor EXPO 2000 Centre Sofia Main Branch Tel.: (+ 359 2) 970 57 11 Tel.: (+ 359 2) 819 00 61 1504 Sofia Fax: (+359 2) 974 20 19 Fax: (+ 359 2) 868 20 80 18-20, Gogol Str. Tel.: (+ 359 2) 919 85 714 Sofia 9 Sofia 16 Fax: (+359 2) 979 85 139 1330 Sofia 1303 Sofia Krasna Polyana 65, Maria Luiza Blvd. Sofia 2 331, Nikola Mushanov Blvd. Tel.: (+ 359 2) 813 80 61 1000 Sofia Tel.: (+ 359 2) 812 60 51 Fax: (+ 359 2) 931 10 38 5, Saborna Str. Fax: (+ 359 2) 920 11 34 Tel.: (+ 359 2) 980 04 74 Sofia 17 Fax: (+ 359 2) 980 30 42 Sofia 10 1000 Sofia 1220 Sofia 1, University Park Sofia 3 Nadezhda Tel.: (+ 359 2) 819 04 32 1750 Sofia 171, Lomsko Shose Blvd. Fax: (+ 359 2) 962 50 42 Mladost 1, Bl. 30, Entr. Â Tel.: (+ 359 2) 813 40 11 Tel.: (+ 359 2) 976 09 76 Fax: (+ 359 2) 936 11 93 Sofia 20 Fax: (+359 2) 975 31 58 1612 Sofia Sofia 11 7, Tzar Simeon Blvd. Sofia 4 1463 Sofia Tel.: (+ 359 2) 819 00 61 1303 Sofia 3, Hristo Stambolski Str. Fax: (+ 359 2) 952 38 78 87, Tzar Samuil Str. Tel.: (+ 359 2) 917 81 11 Tel.: (+ 359 2) 915 99 10 Fax: (+ 359 2) 954 93 86 Sofia M&M Fax: (+359 2) 981 19 21 1387 Sofia Sofia 12 Militzer & Munich Sofia 5 1202 Sofia 11, Obelsko Shose 1606 Sofia 65, Maria Luiza Blvd. Tel.: (+ 359 2) 984 57 75 5, Gen. Totleben Blvd. Tel.: (+ 359 2) 926 40 43 Fax: (+ 359 2) 925 05 83 Tel.: (+ 359 2) 915 79 11 Fax: (+359 2) 980 07 81 Fax: (+ 359 2) 953 28 80 Sofia Kantek Sofia 13 Sofia Sofia 6 1000 Sofia 5A, Nikola Petkov Blvd. 1404 Sofia 5, Dondukov Blvd. Tel.: (+ 359 2) 808 19 11 49, Bulgaria Blvd. Tel.: (+ 359 2) 981 45 89 Fax: (+ 359 2) 957 12 04 Vitosha Business Centre Fax: (+359 2) 981 47 05 Tel.: (+ 359 2) 818 19 20 Fax: (+359 2) 958 99 61
Awards Corporate Social Responsibility The Bank’s Management RZB Group RLBG RIBG RAM Raiffeisen Glossary Addresses www.rbb.bg 73 Branch Network in Bulgaria
Raiffeisenbank Burgas NRA Veliko Tarnovo Okr.sad (Bulgaria)EAD 8000 Burgas 5000 Veliko Tarnovo Offices in Bulgaria 26, Alexandrovska Str. 16, Vasil Levski Str. Tel.: (+ 359 56) 82 56 63 Tel.: (+ 359 62) 60 15 03
Asenovgrad Burgas Pikadili Velingrad 4230 Asenovgrad 8000 Burgas 4600 Velingrad Izlozhenie Str. „Izgrev“ 1, Al. Stamboliiski Str. Tel.: (+ 359 331) 60 060 Tel.: (+ 359 56) 85 94 74 Tel.: (+ 359 359) 5 69 21 Fax: (+ 359 331) 64 902 Fax: (+ 359 56) 86 03 63 Fax: (+ 359 359) 5 10 26
Blagoevgrad Byala Vidin 2700 Blagoevgrad 7100 Byala 3700 Vidin 5, Georgi Izmirliev Square 1, Ekzarh Iosif I Square 1, Tzar Ivan Asen II Str. Tel.: (+ 359 73) 88 945 26 Tel.: (+ 359 817) 713 12 Tel.: (+ 359 94) 60 91 13 Fax: (+ 359 73) 88 20 92 Fax: (+ 359 817) 720 56 Fax: (+ 359 94) 60 71 43
Botevgrad Varna Vidin NRA 2140 Botevgrad 9000 Varna 3700 Vidin 2, Ak.Stoyan Romanski Str. 32, Tzar Simeon I Str. 12, 6 September Str. Tel.: (+ 359 723) 68 711 Tel.: (+ 359 52) 68 80 28 Tel.: (+ 359 94) 60 18 04 Fax: (+ 359 723) 66 322 Fax: (+ 359 52) 63 30 07 Vratza Botevgrad NRA Varna 2 3000 Vratza 2140 Botevgrad 9000 Varna Hristo Botev Square 61, 3 Mart Blvd. 61, Preslav Str. Tel.:(+ 359 92) 66 88 11 Tel.: (+ 359 723) 600 67 Tel.: (+ 359 52) 68 56 53 Fax: (+ 359 92) 66 66 98 Fax: (+ 359 52) 62 06 80 Burgas 1 Vratza NRA 8000 Burgas Varna 3 3000 Vratza 5, Ferdinandova Str. 9000 Varna 86, Vasil Kanchov Str. Tel.: (+ 359 56) 85 14 43 80-82, 8-mi Primorski polk Blvd. Tel.: (+ 359 92) 66 16 10 Fax: (+ 359 56) 84 26 40 Tel.: (+ 359 52) 68 57 13 Fax: (+ 359 52) 60 37 44 Gabrovo Burgas 2 5300 Garbrovo 8000 Burgas 1 Varna Pikadili 5, P. Karavelov Str. 15, Alexandrovska Str. 9000 Varna Tel.: (+ 359 66) 80 13 00 Tel.: (+ 359 56) 87 59 22 Primorski park Fax: (+ 359 66) 80 13 45 Fax: (+ 359 56) 83 01 73 Tel.: (+ 359 52) 38 53 12 Gorna Oriahovica Burgas 3 Veliko Tarnovo 5100 G.Oriahovica 8000 Burgas 1 5000 Veliko Tarnovo 1, Mano Todorov Str. 17, Bratya Miladinovi 31, Tzar T.Svetoslav Str. Tel.: (+ 359 618) 6 17 13 Tel.: (+ 359 56) 85 94 87 Tel.: (+ 359 62) 61 64 22 Fax: (+ 359 618) 6 44 91 Fax: (+ 359 56) 83 18 25 Fax: (+ 359 62) 60 12 04
74 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Branch Network in Bulgaria
Gotse Delchev Zlatni Pyasatzi 2 Montana 2900 Gotse Delchev 9007 KK Zlatni Pyasatzi 3400 Montana 1, Byalo More Str. Information Centre 47, 3 Mart Blvd. Tel.: (+ 359 618)6 13 22 Tel.: (+ 359 52) 35 72 07 Tel.: (+359 96) 39 19 11 Fax: (+ 359 618) 6 00 24 Fax: (+ 359 52) 35 72 02 Fax: (+ 359 96) 30 30 36
Galabovo Ihtiman NRA Nessebar 6280 Galabovo 2050 Ihtiman 8230 Nessebar Brikel EAD 4, Polkovnik Drangov Str. 3, Priboina Str. Tel.: (+ 359 418) 680 81 Tel.: (+ 359 0724) 22 54 Tel.: (+ 359 554) 4 66 60 Fax: (+ 359 418) 24 87 Fax: (+ 359 554)4 35 16 Kazanlak Devin 6100 Kazanlak Panagurishe 4800 Devin 18, Skobelev Str. 4500 Panagurishe 2, Druzhba Str., Tel.: (+ 359 431) 621 23 3, G. Benkovski Str. Devin Spa Hotel Fax: (+ 359 431) 634 36 Tel.: (+359 357) 88 00 Tel.: (+ 359 3041) 26 86 Fax: (+ 359 357) 60 37 Fax: (+ 359 3041) 41 71 Karlovo 4300 Karlovo Pazardzhik Dimitrovgrad 1, Evstati Geshev Str. 4400 Pazardzhik 6400 Dimitrovgrad Tel.: (+ 359 431) 9 04 33 12, Konstantin Velichkov Str. 9, D. Blagoev Str. Fax: (+ 359 431) 9 22 95 Tel.: (+359 34)40 30 10 Tel.: (+ 359 391) 6 51 13 Fax: (+ 359 34) 40 30 20 Karnobat Dobrich 8400 Karnobat Pazardzhik NRA 9300 Dobrich 1, Karnobatska Komuna Str. 4400 Pazardzhik 25, 25 Septemvri Str. Tel.: (+ 359 559) 28 843 7, Asen Zlatarov Str. Tel.: (+ 359 58) 65 30 00 Fax: (+ 359 559) 22 908 Tel.: (+359 34)44 12 50 Fax: (+ 359 58) 60 17 83 Kostinbrod NRA Pazardzhik 2 Dupnitza 2230 Kostinbrod 4400 Pazardzhik 2600 Dupnitza 2, Slavianska Str. 22, General Gurko Str. 2, Solun Str. Tel.: (+ 359 721) 6 61 03 Tel.: (+359 34)40 67 11 Tel.: (+ 359 701)5 98 13 Fax: (+ 359 721) 6 61 23 Fax: (+ 359 34) 43 10 19
Elin Pelin Kardzhali Pernik 2100 Elin Pelin 6600 Kardzhali 2300 Pernik 4, Vitosha Blvd. 1, Hristo Botev Str. 15, Krakra Str. Tel.: (+ 359 725) 68 012 Tel.: (+ 359 361) 606 53 Tel.: (+ 359 76) 68 81 11 Fax: (+ 359 361) 613 66 Fax: (+ 359 76) 60 90 62 Zlatni Pyasatzi 1 9007 KK Zlatni Pyasatzi Lovech Petrich Admiral Hotel 5500 Lovech 2850 Petrich Tel.: (+ 359 52) 38 94 13 3, Bulgaria Blvd. 51/53, RokfelerStr. Fax: (+ 359 52) 35 57 13 Tel.: (+ 359 68) 68 90 1 1 Tel.: (+ 359 745) 69 613 Fax: (+ 359 68) 68 90 20 Fax: (+ 359 745) 61 461
Awards Corporate Social Responsibility The Bank’s Management RZB Group RLBG RIBG RAM Raiffeisen Glossary Addresses www.rbb.bg 75 Branch Network in Bulgaria
Peshera Primorsko Sandanski 4550 Peshera 8290 Primorsko 2800 Sandanski 19, Doiranska Epopeya Str. 50, 3 Mart Str. 4, General Todorov Str. Tel.: (+ 359 350) 63 71 Tel.: (+ 359 550) 3 10 40 Tel.: (+ 359 746) 3 46 33 Fax: (+ 359 350) 41 51 Fax: (+ 359 550) 3 22 86 Fax: (+ 359 746) 3 27 03
Pirdop NRA Radnevo Sevlievo 2070 Pirdop 6260 Radnevo 5400 Sevlievo 39, Tzar Osvoboditel Blvd. 6, G. Dimitrov Str. 1, Svoboda Square Tel.: (+ 359 7181) 55 51 Tel.: (+ 359 417) 8 24 36 Tel.: (+ 359 675) 3 12 13 Fax: (+359 417) 8 24 56 Fax: (+359 675) 3 30 91 Pleven 5800 Pleven Razgrad Svilengrad 1, Pirot Str. 7200 Razgrad 6500 Svilengrad Tel.: (+ 359 64) 89 44 11 2, Stefan Karadzha Str. 73, Bulgaria Blvd. Fax: (+ 359 64) 80 43 94 Tel.: (+ 359 84) 61 14 63 Tel.: (+ 359 379) 70 653 Fax: (+ 359 84) 66 02 89 Fax: (+359 379) 71 552 Pleven 2 5800 Pleven Razgrad NRA Svishov 2, Tzar Boris III, Str. 7200 Razgrad 5250 Svishov Tel.: (+ 359 64) 89 05 13 2, Nezavisimost Square 100, Tzar Osvoboditel Str. Fax: (+ 359 64) 80 34 70 Tel.: (+ 359 84) 66 03 13 Tel.: (+ 359 631) 6 13 11 Fax: (+359 631) 6 03 85 Plovdiv 1 Razlog 4000 Plovdiv 2760 Razlog Svoge NRA 5, Avksentii Veleshki Str. 6, Sheinovo Str. 2260 Svoge Tel.: (+359 32) 60 12 71 Tel.: (+ 359 747) 8 90 11 11, Tzar Simeon Blvd. Fax: (+ 359 32) 62 99 66 Fax: (+359 747) 8 06 47 Tel.: (+ 359 726) 52 47 Fax: (+ 359 726) 52 48 Plovdiv 2 Rousse 4000 Plovdiv 7000 Rousse Silistra 1, Konstantin Stoilov Str. 22, Slavyanska Str. 7500 Silistra Tel.: (+ 359 32) 60 66 30 Tel.: (+ 359 82) 82 32 00 20, Tzar Shishman Str. Fax: (+ 359 32) 60 66 88 Fax: (+359 82) 82 15 97 Tel.: (+ 359 86) 82 23 22 Fax: (+ 359 86) 82 28 77 Plovdiv 3 Rousse 2 4000 Plovdiv 7000 Rousse Sliven 1, Maria Luiza Blvd. 54, Lipnik Blvd. 8800 Sliven 1 Tel.: (+ 359 32) 64 65 66 Tel.: (+ 359 82) 81 43 54 1, Tzar Simeon Str. Fax: (+ 359 32) 66 29 00 Fax: (+359 82) 84 16 82 Tel.: (+ 359 44) 61 04 36 Fax: (+ 359 44) 66 21 23 Plovdiv 4 Samokov 4000 Plovdiv 2000 Samokov Sliven 2 125, 6 September Blvd. 33, Makedonia Blvd. 8800 Sliven 1 Tel.: (+ 359 32) 64 88 41 Tel.: (+ 359 722) 68 011 5, Tzar Osvoboditel Str. Fax: (+ 359 32) 64 95 31 Fax: (+359 722) 60 186 Tel.: (+ 359 44) 61 04 13 Fax: (+ 359 44) 63 05 55
76 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Branch Network in Bulgaria
Slanchev Bryag Targovishte NRA Yambol 8240 KK Slanchev 7700 Targovishte 8600 Yambol Bryag Diamant Hotel 1, Svoboda Square 15, Vasil Karagyozov Str. Tel.: (+ 359 554) 2 45 65 Tel.: (+ 359 601) 6 20 59 Tel.: (+ 359 46) 68 34 65 Fax: (+ 359 554) 2 36 21 Fax: (+ 359 46) 66 41 75 Troyan Smolyan 5600 Troyan Yambol 2 4700 Smolyan 1, Rakovski Square 8600 Yambol 8, Bulgaria Blvd Tel.: (+ 359 670) 6 22 83 34, Targovska Str. Tel.: (+ 359 301) 6 20 94 Fax: (+ 359 670) 6 09 77 Tel.: (+ 359 46) 68 62 63 Fax: (+ 359 301) 6 20 96 Fax: (+ 359 46) 66 54 45 Haskovo Sozopol 6300 Haskovo Others: 8130 Sozopol 1-3, Pirin Str. 3, Industrialna Zona Str. Tel.: (+ 359 38) 60 47 22 Tel.: (+ 359 550) 2 45 50 Fax: (+ 359 38) 66 47 21 Raiffeisen Leasing Bulgaria OOD Fax: (+ 359550)2 23 13 1715 Sofia Haskovo 2 Business Park Sofia, 6300 Haskovo Stara Zagora Building 11A 6000 Stara Zagora 4, Svoboda Square Tel.: (+ 359 2) 970 79 79 79, Knyaz Boris Str. Tel.: (+ 359 38) 60 22 61 Fax: (+ 359 2) 974 20 57 Tel.: (+ 35942) 60 44 88 Fax: (+ 35942) 60 44 98 Haskovo NRA Raiffeisen Asset Management 6300 Haskovo 1504 Sofia 2, Svoboda Square Stara Zagora - Zagorka 18-20, Gogol Str. 6000 Stara Zagora Tel.: (+ 359 38) 62 40 93 Tel.: (+359 2) 919 85 452 Zagorka AD Fax: (+ 359 2) 943 33 65 41, Han Asparuh Str. Haskovo Raionen Sad Tel.: (+ 359 42) 60 55 18 6300 Haskovo Raiffeisen Direct -Call Centre Stara Zagora Bagira 144, Bulgaria Blvd. 1715 Sofia 6000 Stara Zagora Tel.: (+ 359 38) 62 26 81 Business Park Sofia, 39, P. Evtimii Blvd. Building 1 1A Tel.: (+ 359 42) 63 60 96 Shumen Tel.: 0 700 10 000 9700 Shumen Fax: (+359 2) 974 20 24 Stara Zagora 2 97, Tzar Osvoboditel Str. 6000 Stara Zagora Tel.: (+ 359 54) 83 20 60 67, Tzar Simeon Veliki Str. Fax: (+ 359 54) 83 07 57 Tel.: (+ 35942) 60 20 43 Fax: (+ 35942) 60 19 24 Shumen 2 9700 Shumen Targovishte Osvobozhdenie Square 7700 Targovishte Tel.: (+ 359 54) 85 81 81 2, Preslav Str. Tel.: (+ 359 601) 6 95 53 Shumen NRA Fax: (+ 359 670) 6 93 03 9700 Shumen 1, Ivan Mickevich Str. Tel.: (+ 359 54) 3 01 05
Awards Corporate Social Responsibility The Bank’s Management RZB Group RLBG RIBG RAM Raiffeisen Glossary Addresses www.rbb.bg 77 Selected RZB Group-members
Addresses and Contacts for the selected members of the Raiffeisen International Group
Raiffeisen International Bulgaria Kosovo Bank-Holding AG Raiffeisenbank (Bulgaria) EAD Raiffeisen Bank Kosovo J.S.C. 18/20 Ulica N. Gogol Rruga UCK, 51, Prishtina 1504 Sofia Phone: +381-38-222 222 Austria Phone: +359-2-9198 5101 Fax: +381-38-2030 1130 Am Stadtpark 9, 1030 Vienna Fax: +359-2-943 4528 SWIFT/BIC: RBKOCS22 Phone: +43-1-71 707-0 SWIFT/BIC: RZBBBGSF www.raiffeisen-kosovo.com Fax: +43-1-71 707-1715 www.rbb.bg Contact: Oliver Whittle www.ri.co.at Contact: Momtchil Andreev [email protected] [email protected] [email protected] [email protected] Poland Croatia Raiffeisen Bank Polska S.A. Raiffeisenbank Austria d.d. Ul. Piekna, 20 Banking Network in Petrinjska 59, 10000 Zagreb 00-549 Warszawa Phone: +385-1-456 6466 Phone: +48-22-585 2000 Central and Eastern Fax: +385-1-481 1624 Fax: +48-22-585 2585 Europe SWIFT/BIC: RZBHHR2X SWIFT/BIC: RCBWPLPW www.rba.hr www.raiffeisen.pl Albania Contact: Vesna Ciganek-Vukovic Contact: Piotr Czarnecki Raiffeisen Bank Sh.a. [email protected] [email protected] European Trade Center, Bulevardi “Bajram Curri”, Tirana Phone: +355-4-274 912 Czech Republic Romania Fax: +355-4-230 013 Raiffeisenbank a.s. Raiffeisen Bank S.A. SWIFT/BIC: SGSBALTX Olbrachtova 2006/9 Piata, Charles de Gaulle 15 www.raiffeisen.al 140 21 Praha 4 011857 Bucuresti, 3
Contact: Steven Grunerud Phone: +420-221-141 111 Phone: +40-21-306 1000 [email protected] Fax: +420-221-142 111 Fax: +40-21-230 0700 SWIFT/BIC: RZBCCZPP SWIFT/BIC: RZBRROBU www.rb.cz www.raiffeisen.ro Belarus Contact: Lubor Zalman Contact: Steven C. van Groningen Priorbank, JSC [email protected] [email protected] 31–A, V. Khoruzhey Str. Minsk, 220002 Phone: +375-17-289 9087 eBanka, a.s. Russia Fax: +375-17-289 9191 Na Prikope 19 ZAO Raiffeisenbank Austria SWIFT/BIC: PJCBBY2X 11719 Praha 1 Leninsky prospekt 15A www.priorbank.by Phone: +420-222-115 222 119071 Moskwa
Contact: Olga Gelakhova Fax: +420-222-115 500 Phone: +7-495-721 9900 [email protected] SWIFT/BIC: EBNKCZPP Fax: +7-495-721 9901 www.ebanka.cz SWIFT/BIC: RZBMRUMM www.raiffeisen.ru Bosnia and Herzegovina Contact: Pavla Pasekova [email protected] Contact: Johann Jonach Raiffeisen Bank d.d. [email protected] Bosna i Hercegovina Danijela Ozme 3 Hungary 71000 Sarajevo Raiffeisen Bank Zrt. OAO Impexbank Phone: +387-33-287 100 Akademia utca 6 Novopeschanaya Ul. 20/10 Fax: +387-33-213 851 1054 Budapest 125252 Moskwa SWIFT/BIC: RZBABA2S Phone: +36-1-484 4400 Phone: +7-495-258 3219 www.raiffeisenbank.ba Fax: +36-1-484 4444 Fax: +7-495-248 1370
Contact: Michael G. Mueller SWIFT/BIC: UBRTHUHB SWIFT/BIC: IMPERUMM [email protected] www.raiffeisen.hu www.impexbank.ru
Contact: Frank Daniel Contact: Pavel Lysenko [email protected] [email protected]
78 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Selected RZB Group-members
Serbia Albania Czech Republic Raiffeisen banka a.d. Raiffeisen Leasing Sh.A. Raiffeisen-Leasing s.r.o. Bulevar AVNOJ-a 64a Rruga Kavajes 44 Olbrachtova 2006/9 11070 Novi Beograd Tirana 14021 Praha 4 Tel: +381-11-320 2100 Phone: +355-4-274 920 Phone: +420-221-51 1611 Fax: -+381-11-220 7080 Fax: +355-4-232 524 Fax: +420-221-51 1666 SWIFT/BIC: RZBSRSBG Contact: Majlinda Hakani Contact: Rastislav Kereskeni www.raiffeisenbank.co.yu [email protected] [email protected] www.rl.cz .. Contact: Oliver Rogl [email protected] Belarus Hungary SOOO Raiffeisen Leasing Raiffeisen Lizing Zrt. Slovakia 31A, V. Khoruzhey, 3rd floor Vaci utca 81-85 220002 Minsk 1139 Budapest Tatra banka, a.s. Phone: +375-17 289 9396 Phone: +36-1-298 8200 Hodzovo namestie 3 Fax: +375-17 289 9394 Fax: +36-1-298 8010 811 06 Bratislava 1 Phone: +421-2-5919 1111 Contact: Maksim Lisicky www.raiffeisenlizing.hu [email protected] Fax: +421-2-5919 1110 Contact: Pál Antall SWIFT/BIC: TATRSKBX [email protected] www.tatrabanka.sk Bosnia and Herzegovina Contact: Rainer Franz Raiffeisen Leasing d.o.o. Kazakhstan Sarajevo [email protected] Raiffeisen Leasing St. Branilaca Sarajeva No. 20 Kazakhstan LLP 71000 Sarajevo Slovenia 146, Shevchenko str. Phone: +387-33-254 340 Office 12, 1st floor Raiffeisen Krekova banka d.d. Fax: +387-33-212 273 050008 Almaty 18 Slomskov trg, 2000 Maribor www.rlbh.ba Phone: +7-327-2709 836 Phone: +386-2.229 3100 Contact: Belma Sekavic-Bandic Fax: +7-327-2709 831 Fax: +386-2-252 4779 [email protected] SWIFT/BIC: KREKSI22 Contact: Uwe Fisker [email protected] www.r-kb.si Bulgaria Contact: Klemens Nowotny Poland [email protected] Raiffeisen Leasing Bulgaria OOD Raiffeisen-Leasing Polska S.A. Business Park Sofia Ul. Jana Pawla II 78 Ukraine Building 11, 2nd floor 00175 Warszawa VAT Raiffeisen Bank Aval 1715 Sofia Phone: +48-22-562 3700 9, Leskova vul., 01011 Kyiv Phone: +359-2-970 7979 Fax: +48-22-562 3701 Phone: +38-044-490 88 88 Fax: +359-2-974 2057 www.rl.com.pl Fax: +38-044-295 32 31 www.rlbg.bg SWIFT/BIC: AVAL UA UK Contact: Arkadiusz Etryk Contact: Ekaterina Hristova [email protected] www.aval.ua [email protected] Contact: Angela Prigozhina Romania [email protected] Croatia Raiffeisen Leasing IFN SA Raiffeisen Leasing d.o.o. Calea 13 Septembrie 90 Leasing Radnicka cesta 43 Grand Offices 10 000 Zagreb Marriott Grand Hotel Austria Phone: -+385-1-6595 000 Sector 5 Raiffeisen-Leasing Fax: +385-1-6595 050 76122 Bucuresti, International GmbH www.rl-hr.hr Phone: +40-21 403 3300 Am Stadtpark 9, 1030 Vienna Fax: +40-21-403 3298 Contact: Miljenko Tumpa Phone: +-43-1-71 707 2966 [email protected] www.raiffeisen-leasing.ro Fax: + 43-1-71 707 2059 Contact: Robert Pintelie Contact: Dieter Scheidl [email protected] [email protected]
Awards Corporate Social Responsibility The Bank’s Management RZB Group RLBG RIBG RAM Raiffeisen Glossary Addresses www.rbb.bg 79 Selected RZB Group-members
Russia Real-estate leasing Czech Republic OOO Raiffeisen Leasing Raiffeisenbank a.s. Nikoloyamskaya 13/2 Czech Republic Olbrachtova 2006/9 109240 Moskwa Raiffeisen Leasing 140 21 Praha 4 Phone: +7-495-721 9980 Real Estate s.r.o. Phone: +420-221-141 863 Fax: +7-495-721 9901 Olbrachtova 2006/9 Fax: +420-221-143 804 www.rlru.ru 14021 Praha 4 www.rb.cz Contact: Galina Kostyleva Phone: +420-221-511 608 Contact: Martin Blaha [email protected] Fax: +420-221-511 641 [email protected] www.rlre.cz Serbia Contact: Alois Lanegger Hungary [email protected] Raiffeisen Leasing d.o.o. Raiffeisen Bank Zrt. Bulevar AVNOJ-a 45a Akademia utca 6 11000 Beograd Hungary 1054 Budapest Phone: +381-11-201 77 00 Raiffeisen Inglatan Rt. Phone: +36-1-484 4400 Fax: +381-11-313 0081 Akademia utca 6 Fax: +36-1-484 4444 www.raiffeisen-leasing.co.yu 1054 Budapest www.raiffeisen.hu Contact: Ralph Zeitlberger Phone: +36-1-484 8400 Contact: Gabor Liener [email protected] Fax: +36-1-484 8404 [email protected] www.raiffeiseninglatan.hu Slovakia Contact: Laszlo Vancsko Poland [email protected] Tatra Leasing s.r.o. Raiffeisen Investment Polska Sp.z o.o. Tovarenska 10 Ul. Piekna, 20 81109 Bratislava Investment Banking 00-549 Warszawa Phone: +421-2-5919 3168 Phone: +48-22-585 2900 Fax: +421-2-5919 3048 Bosnia and Herzegovina Fax: +48-22-585 2901 www.tatraleasing.sk Raiffeisen Bank d.d. Contact: Marzena Bielecka [email protected] Contact: Igor Horvath Bosna i Hercegovina [email protected] Danijela Ozme 3 71000 Sarajevo Romania Slovenia Phone: +387-33-287 100 or 287 Raiffeisen Capital & Investment S.A. 121 Piata Charles de Gaulle 15 Raiffeisen Leasing d.o.o. Fax: +387-33-213 851 011857 Bucuresti, 1 Tivolska 30 (Center Tivoli) www.raiffeisenbank.ba Phone: +40-21-306 1233 1000 Ljubljana Fax: +40-21-230 0684 Phone: +386-1-241 6250 Contact: Dragomir Grgiœ Fax: +386-1-241 6268 [email protected] www.rciro.ro www.rl-sl.si Contact: Dana Mirela Ionescu [email protected] Contact: Borut Bozic Bulgaria [email protected] Raiffeisen Asset Management EAD 18/20 Ulica N. Gogol Russia Ukraine 1504 Sofia ZAO Raiffeisenbank Austria Phone: +359-2-919 85 451 Troitskaya Ul. 17/1 TOV Raiffeisen Leasing Aval Fax: +359-2-943 4528 129090 Moskwa Lesi Ukrainki Ave. 28-A www.rbb.bg Phone: +7-495-721 9900 01188 Kyiv Fax: +7-495-721 9901 Phone: +38-044-490 8842 Contact: Ivailo Grigorov Fax: +38-044-490 8700 [email protected] www.raiffeisen.ru Contact: Peter Oberauer Contact: Pavel Gourine [email protected] Croatia [email protected] Raiffeisenbank Austria d.d. Petrinjska 59, 10000 Zagreb Phone: +385-1-456 6466 Fax: +385-1-456 6490 www.rba.hr
Contact: Ivan Zizic [email protected]
80 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report Selected RZB Group-members
Serbia China Representative Raiffeisen Investment AG Beijing Branch offices in Europe Bulevar AVNOJ-a 64a Beijing International Club, 11070 Novi Beograd Suite 200 Phone: +381-11-212 9220 21, Jianguomenwai Dajie Belgium Fax: +381-11-212 9213 100020 Beijing Brussels Contact: Rados Ilincic Phone: +86-10-6532 3388 Rue du Commerce 20–22 [email protected] Fax: +86-10-6532 5926 1000 Bruxelles SWIFT/BIC: RZBACNBJ Phone: +32-2-549 0678 Slovakia Contact: Andreas Werner Fax: +32-2-502 6407 [email protected] Tatra banka, a.s. Contact: Helga Steinberger Hodzovo namestie 3 [email protected] 811 06 Bratislava 1 Malta Phone: +421-2-5919 1111 Raiffeisen Malta Bank plc Germany Fax: +421-2-5919 1110 52, Il-Piazzetta, Tower Road, Frankfurt am Main www.tatrabanka.sk Sliema SLM16, Malta Mainzer Landstrasse 51 Phone: +356-2260 0000 Contact: Igor Vida D-60329 Frankfurt am Main Fax: +356-2132 0954 [email protected] Phone: +49-69-29 92 19-18 Contact: Anthony C. Schembri Fax: +49-69-29 92 19-22 [email protected] Slovenia Contact: Dorothea Renninger [email protected] Raiffeisen Krekova banka d.d. Singapore Slomskov trg 18, 2000 Maribor Singapore Branch Phone: +386-2-229 3111 France One Raffles Quay Fax: +386-2-252 5518 Paris #38-01 North Tower www.r-kb.si 9–11, Avenue Franklin Phone: +65-6305 6000 Roosevelt Contact: Gvido Jemensek Fax +65-6305 6001 75008 Paris [email protected] Contact: Rainer Silhavy Phone: +33-1-4561 2700 [email protected] Fax: +33-1-4561 1606 Ukraine Contact: Harald Stoffaneller Raiffeisen Investment TOV United Kingdom [email protected] 43, Zhylyanska Str., 01033 Kyiv London Branch Phone: +38-044-490 6898 10, King William Street Italy Fax: +38-044-490 6899 London EC4N 7TW Milan Contact: Vyacheslav Yakymuk Phone: +44-20-7933 8000 Via Andrea Costa 2 [email protected] Fax: +44-20-7933 8099 20131 Milano SWIFT/BIC: RZBAGB2L Phone: +39-02-2804 0646 www.london.rzb.at Fax: +39-02-2804 0658 Contact: Ian Burns www.rzb.it Raiffeisen Zentralbank [email protected] .. Contact: Maurizio Uggeri Oesterreich AG [email protected] Austria (Head Office) U.S.A. Am Stadtpark 9, 1030 Vienna RZB Finance LLC Lithuania Phone: +43-1-71 707-0 1133, Avenue of the Americas Vilnius (Raiffeisen Bank th Fax: +43-1-71 707 1715 16 floor, New York Polska S.A.) SWIFT/BIC RZBAATWW N.Y. 10036 A. Jaksto Street 12, 01105 www.rzb.at Phone: +1-212-45 4100 Vilnius Fax: +1-212-944 2093 Phone: +370-5-266 6600 www.rzbfinance.com Fax: +370-5-266 6601 Contact: Dieter Beintrexler www.raiffeisen.lt [email protected] Contact: Vladislovas Jancis [email protected]
Awards Corporate Social Responsibility The Bank’s Management RZB Group RLBG RIBG RAM Raiffeisen Glossary Addresses www.rbb.bg 81 Selected RZB Group-members
Moldova New York Vietnam Chisinau (Raiffeisen Bank S.A.) 1133, Avenue of the Americas Ho Chi Minh City th 65 Stefan cel Mare blvd. 16 floor, New York, NY 10036 6, Phung Khac Khoan Str., Chisinau, MD-2001 Phone: +1-212-593 7593 District1, Room G6 Phone: +373-22-279 331 Fax: +1-212-593 9870 Ho Chi Minh City Fax: +373-22-279 343 Contact: Dieter Beintrexler Phone: +84-8-8297 934 [email protected] Contact: Victor Bodiu Fax: +84-8-8221 318 [email protected] [email protected]
China Contact: Ta Thi Kim Thanh Russia Hong Kong Moskwa Lippo Centre, 89 Queensway th 14, Pretchistensky Pereulok Unit 2001, 20 Floor, Tower 1 Building 1, 119034 Moskwa Hong Kong Investment Banking Phone: +7-495-721 9903 Phone: +85-2-2730 2112 Fax: +7-495-721 9907 Fax: +85-2-2730 6028 Austria Contact: Edmond Wong www.raiffeisen.ru [email protected] Contact: Evgheny Rabovsky Raiffeisen.. Zentralbank [email protected] Osterreich AG Zhuhai Global Markets Room 2404, Yue Cai Building Am Stadtpark 9, 1030 Vienna Sweden/ 188, Jingshan Road, Jida Phone: +43-1-71 707-1120 Nordic Countries 519015 Zhuhai Fax: +43-1-71 707-3813 Stockholm Tel: +86-756-323 3500 www.rzb.at Engelbrektsgatan 7 or 323 3055 11432 Stockholm Fax: +86-756-323 3321 Contact: Martin Czurda Phone: +46-8-4405086 Contact: Susanne Zhang-Pongratz [email protected] Fax: +46-8-4405089 [email protected] .. Contact: Lars Bergstrom Raiffeisen [email protected] India Centrobank AG Mumbai Equity 87, Maker Chamber VI Tegetthoffstraße 1, 1015 Nariman Point Vienna Representative offices Mumbai 400 021 SWIFT/BIC: CENBATWW in America and Asia Phone: +91-22-663 01700 Phone: +43-1-51 520-0 Fax: +91-22-663 21982 Fax: +43-1-513 4396 Contact: Anupam Johri www.rcb.at U.S.A. [email protected] Contact: Eva Marchart Chicago (RZB Finance LLC) [email protected] 10 N. Martingale Road Iran Suite 400 Schaumburg, IL 60173 Tehran (UNICO Banking Group) Raiffeisen Investment AG Phone: +1-847-466 1043 Vanak, North Shirazi Avenue Advisory Fax: +1-847-466 1295 16, Ladan Str., 19917 Tehran Tegetthoffstraße 1, 1015 Wien Contact: Charles T. Hiatt Phone: +98-21-804 6767-2 Phone: +43-1-710 5400-0 [email protected] Fax: +98-21-803 6788 Fax: +43-1-710 5400-39 Contact: Gerd Wolf www.raiffeisen-investment.com [email protected] Houston (RZB Finance LLC) Contact: Heinz Sernetz 10777, Westheimer, Suite 1100 [email protected] Houston, TX 77042 South Korea Phone: +1-713-260 9697 Seoul Subsidiaries and Fax: +1-713-260 9602 Leema Building, 8th floor representative offices in Contact: Stephen A. Plauche 146-1, Soosong-dong [email protected] Chongro-ku, 110-755 Seoul Banja Luka, Belgrade, Phone: +822-398 5840 Bucharest, Budapest, Fax: +822-398 5807 Istanbul, Kiev, Moscow, Contact: Kun II Chung [email protected] Podgorica, Prague, Sofia and Warsaw
82 www.rbb.bg Statement by the Chairman of the SB Vision and Mission Statement by the Chairman of the MB Management Report Segment Reports Auditor’s Report