ROMANIA GROWS WITH US! 2018 ANNUAL REPORT ROMANIA GROWS WITH US! PRESIDENT’S MESSAGE Every year, EximBank has evolved to become an increasingly better version of itself. Is EximBank currently has 25 representation points, compared to 12 at the end of 2012. We has adapted, has improved, has learned, has changed style, mentalities and perceptions. thus manage to cover the most important economic centers in the country, facilitating the access of the business environment to our financial products. 2018 was a new stage in EximBank's development, marking the sixth consecutive year of growth: we managed to increase sales, the total exposure doubled compared to During the past year, EximBank, as an export credit agency, strengthened its trust and 2012, we accelerated the sale of complementary products; overall, we strengthened our expertise capital that allows it to finance the Romanian exporters' projects by constantly position on the banking market by increasing our market share. participating in the work of the Council of the EU Working Group on Export Credits and through involvement in the project to set up the Investment Fund of the Three Seas Initi- At year end, the Bank managed total exposures in the amount of RON 7.9 billion, up ative - which aims to increase the level of investment, connectivity and cooperation in the by 30% compared to 2017 year end. In the period 2012-2018, on the background of an region. The Bank also contributed substantially to the official preparations made in order ambitious business strategy, the total managed exposures had an annual growth rate of for Romania to take over the EU presidency in the first half of 2019. 14% and a stronger dynamic curve over the past two years. Last but not least, this past year we have continued to pay particular attention to the The efforts we have made to convince the business environment that we are able consolidation of the employer brand so that the entire EximBank team can identify itself to propose complex and attractive financial solutions for all types of companies have with organizational values and consider EximBank as the most preferred workplace. materialized in doubling the number of clients compared to 2012. Our portfolio includes new partners in various fields, the Bank succeeding in concluding agreements with both As far as the 2019 objectives are concerned, they are pursuing business consolida- companies in the Romanian business elite and small and medium-sized companies. Of tion, following a natural pace after previous aggressive expansion and we are confident the increase in the number of clients, 68% are small clients, confirming EximBank’s orien- that its development so far will give us all the premises to conclude a new year of growth. tation of resources to support companies with growth needs and growth potential, in line ROMANIA GROWS WITH US! with its assumed mission. 2018 also marked a peak in terms of representation capacity by continuing the pro- cess of expanding the commercial network. We have focused on the balanced develop- ment of the territorial network, the process started in 2013 leading to twice as many units: Traian Halalai, Executive President EximBank EXIMBANK | 2018 ANNUAL REPORT p. 7/152 EXECUTIVE BOARD TRAIAN HALALAI FLORIN KUBINSCHI PAUL ICHIM Executive President of EximBank since Novem- The Executive Vice President of EximBank Executive Vice President of EximBank since ber 2012, he has a large experience in the banking has embraced the new challenge since 2016 as a March 2009, he ran the Bucur Obor Corporate sector, as a Deputy CEO and Member of the Board follow-up of his activity in banking: Tiriac Bank – Fi- Branch of ING Bank NV Amsterdam between of Directors of Banca Românească SA, part of the nancial Director and Vice president until 2005, con- September 2007 and March 2009. From 2005 National Bank of Greece Group, as well as CFO sequently HVB Tiriac and Unicredit Tiriac - Financial to 2007 he managed the Financial Institutions of ING Romania and Member of various Boards of Director and Vice president, member of the Board of Department of ING Bank NV Amsterdam, Bucha- ING Group Romania entities. Mr. Halalai was part of Directors and President of the Audit Committee up rest branch, after having managed the Financial the team which set up ING Securities in Romania in to 2009. He has also hold the positions of Deputy Institutions and Custodial Services Department 1998. He holds an MBA degree from the Bucharest Executive Director of MKB Romexterra Bank – up for the two previous years. Prior to this, Mr. Ichim Finance and Banking PhD School and conducted to 2013 and Financial Director, Vice president of worked in the Ministry of Public Finances as an PhD research with the Erasmus University of Rotter- Volksbank, up to 2015. He has graduated the Acad- advisor for the Secretary of State and the Minister, dam, the Netherlands. emy of Economic Studies, Bucharest. and then as Secretary of State himself. He is a graduate of the Bucharest University of Economic Studies’ Finance, Banking, Insurance and Stock Exchange Department. CONTENTS I. GENERAL OVERVIEW OF THE BANK AND THE GROUP ...... 11 V. CAPITAL ADEQUACY AND MAIN FINANCIAL I.1. Export-Import Bank of Romania - EximBank SA . ............................................11 INDICATORS DYNAMICS .................................................................. 29 I.2. Exim Romania Insurance - Reinsurance Company SA ...................................11 VI. CORPORATE GOVERNANCE ......................................................... 31 VI.1. EximBank ...................................................................................................31 II. THE ROMANIAN MACROECONOMIC CONTEXT VI.2. EximAsig ....................................................................................................31 IN 2018 ....................................................................................................... 13 III. COMMERCIAL ACTIVITY IN 2018: OBJECTIVES VII. HUMAN RESOURCES ........................................................................ 33 AND ACHIEVEMENTS ......................................................................... 16 III.1. EximBank’s activity in 2018 ..........................................................................16 VIII. RISK MANAGEMENT ........................................................................... 35 III.1.1. Structure analysis .....................................................................................16 III.1.2. Business conducted on Behalf of and to the Benefit of the Bank ................18 IX. INTERNAL CONTROL SYSTEM ...................................................... 37 III.1.3. Business conducted on Behalf of and to the Benefit of State ......................21 III.2. Activity of EximAsig in 2018 .........................................................................23 X. STRATEGY AND PRIORITIES .......................................................... 39 IV. CONSOLIDATED AND SEPARATE FINANCIALS .................... 25 IV.1. Consolidated and Separate Statement of Financial Position ..........................25 IV.2. Consolidated and Separate Statement of Profit of Loss ................................26 EXIMBANK | 2018 ANNUAL REPORT p. 11/152 I. GENERAL OVERVIEW OF THE BANK AND THE GROUP The Export-Import Bank of Romania – EximBank S.A. EximBank has a specific business model that combi- Group („the Group”) includes the Export-Import Bank of nes two complementary ways of sustaining the economy: Romania – EximBank S.A. („The Bank” or „EximBank”) • As a State agent - Eximbank intermediates the pla- I.2. and Exim Romania S.A. Insurance - Reinsurance Com- cing of state funds in the economy, encouraging the pany („EximAsig”). EXIM ROMANIA INSURANCE - development of the Romanian business environ- The Bank, which is the parent company of the Group, ment through specific financing, guarantee and in- REINSURANCE COMPANY SA was set up in 1992 as a specialized institution which pro- surance products (generically this component is re- vides services to support the Romanian business envi- garded as an activity on behalf of and to the benefit Exim Romania S.A. Insurance - Reinsurance Company ronment and international transactions through specific of the State – „BBS"); (EximAsig) was established in 2009 as a specialized entity financial, banking and insurance tools. EximBank is a • As a commercial bank – EximBank has its own providing insurance against financial risks both for export private law entity, a joint stock company owned in pro- portfolio of banking products and services, opera- operations and domestic operations. The Company be- portion of 95.374% by the State, through the Ministry of ting under fair competition rules with other banks of came operational in August 2010 and was authorized to Public Finances. the banking system (generally, this activity is seen as provide insurance against risks related to loans and guar- being conducted on behalf of and to the benefit of antees. The Company has extended its activity by obtaining the Bank – “BBB”). authorization to practice 6 new insurance classes, namely: fire and natural calamities insurance, insurances for prop- Currently the portfolio, focused on three broad lines erty damage, civil liability insurance, accident insurance, of action - financing, guarantee, insurance - allows Exim- insurance of goods in transit and financial loss insurance. I.1. Bank to support both exports and international transacti- EXPORT-IMPORT BANK OF ons but also other activities