Make it simple. It’s easy with UniCredit.
2009 Annual Report
Vision of Zagrebačka banka
To be the best local bank within the UniCredit Group with
above-market growth!
By strengthening our leading position in Croatia and
leveraging on synergies and strength of our Group we
generate distinctive added value for our clients, employees
and local communities.
Mission of Zagrebačka banka
We, the employees of Zagrebačka banka being part of the
UniCredit Group, are committed to generating sustainable
value for our customers.
As the leading Croatian bank and European group, we are
dedicated to developing the communities in which we live
and to being a great place to work.
We aim for excellence and consistently strive to be easyto-deal-with.
Times change, but commitments do not. We emerged from 2009 with a renewed sense of purpose and
direction. What was important to us before is even more important today. Namely, our customers.
Accordingly, we developed a new mission statement in 2009 to reinforce those principles and practices that
we believe to be drivers of greater customer centricity. Emphasized in this mission is the desire to make
banking as easy as possible for our customers by offering the kind of simple, straightforward solutions that
can assist them in achieving their financial goals reliably and efficiently.
This is what we call “real-life banking”. It means providing our clients with more than just financial services
by giving them the right support at the right time and in the right way. It is about looking our customers in the
eye, working closely with them to assess their real-life needs, and then using our expertise to deliver effective
solutions through smooth and easy interactions.
We believe that our rigorous dedication to simplicity and transparency will continue to advance excellence
in all that we do. It will also maintain and grow the trust of our customers - a trust that is exemplified in the
following pages.
This year’s report features photographs and personal stories from UniCredit Group customers across Europe,
highlighting the concrete role that our company has played in their lives. Each of these individuals,
who represent the foundation upon which we are structuring our shared future, has told us about a time
we made their life easier.
2009 Annual Report
Tomislav Lučić,
AGROKOR dd
Corporate Banking Client - Croatia
Zagrebačka banka has actively
«supported
the development of our
company and has assisted us in
achieving our operational plans and
strategic objectives with innovative,
well-structured financial products
and services in the corporate and
retail segments alike. Thanks to the
high level of cooperation we have
achieved to date and the bank’s
overall capabilities in the local and
regional markets, Agrokor has been
able to accomplish even its most
ambitious projects and goals.»
It’s easy with
UniCredit.
Contents
I Introduction
6
II Management Board Report of Condition
8
III Business description
19
IV Overview of the Croatian economy in 2009
23
V Operating and financial review
29
VI Management and corporate governance
37
VII Responsibilities of the Management and Supervisory Boards for the preparation and approval of the annual
financial statements
54
VIII Independent auditors’ report to the shareholders of
Zagrebačka banka dd
56
IX Financial statements
Group financial statements
Bank financial statements
Significant accounting policies
Notes to the financial statements
59
60
66
72
86
X Supplementary schedules for CNB
179
XI Supplementary EUR financial statements unaudited
195
XII Shareholders’ information
204
Zagrebačka banka UniCredit Group · 2009 Annual Report
5
Introduction
Introduction
“
The Management Board
of Zagrebačka banka dd
has pleasure in presenting
its Annual Report to the
shareholders of the Bank.
”
The Management Board of Zagrebačka banka dd has pleasure in
presenting its Annual Report to the shareholders of the Bank. This
comprises summary financial information, management reviews, the
audited financial statements, supplementary reports for the CNB and
unaudited supplementary statements for the Group and the Bank in
EUR. Audited financial statements are presented for the Group and
the Bank.
Croatian and English language versions
This document comprises the Annual Report of Zagrebačka banka
dd for the year ended 31 December 2009 expressed in English. This
report is also published in Croatian for presentation to shareholders
at the Annual General Meeting.
Legal status
The annual financial statements and the Report of Condition are
hereby submitted to the Annual General Meeting, as required under
the provisions of Article 276, paragraph 3 of the Companies Act,
while the Report of the Supervisory Board is submitted to the Annual
General Meeting as a separate document.
The annual financial statements have been prepared in accordance
with statutory accounting requirements for banks in Croatia and
audited in conformity with International Standards on Auditing.
Abbreviations
In this Annual Report, Zagrebačka banka dd is referred to as “the
Bank” or “Zagrebačka banka”, and Zagrebačka banka dd together
with its subsidiaries and associates are referred to collectively as “the
Group” or “the Zagrebačka banka Group”.
The Bank’s main subsidiaries and associates are referred to as
follows:
Subsidiaries
UniCredit Bank dd, Mostar
Prva stambena štedionica dd, Zagreb
ZB Invest doo, Zagreb
Centar Kaptol doo, Zagreb
UPI poslovni sistem doo, Sarajevo
Pominvest dd, Split
ZABA TURIZAM doo, Zagreb
Marketing Zagrebačke banke doo, Zagreb
Zagreb nekretnine doo, Zagreb
Zane BH doo, Sarajevo
Istraturist dd, Umag
Istra D.M.C. doo
associates
Allianz ZB doo, Zagreb Allianz ZB doo, Zagreb
6
2009 Annual Report · Zagrebačka banka UniCredit Group
abbreviations
UniCredit Bank BH
Štedionica
ZB Invest
Centar Kaptol
UPI poslovni sistem
Pominvest
ZABA TURIZAM
MZB
ZANE
Zane BH
Istraturist
Istra D.M.C.
abbreviations
Allianz ZB - obligatory pension fund management company
Allianz ZB - voluntary pension funds management company
The central bank, the Croatian National Bank, is referred to as “the
CNB”.
In this report, the abbreviations “HRK thousand”, “HRK million” or
“HRK m”, and “HRK billion” or “HRK bn”, “EUR thousand”, “EUR
million” or “EUR m”, and “EUR billion” or “EUR bn”, and “USD
thousand”, “USD million” or “USD m” and “USD billion” or “USD bn”
represent thousands, millions and thousands of millions (billions) of
Croatian kuna, Euro currency and US dollars respectively.
Exchange rates
The following exchange rates ruling at 31 December 2009 have
been used to translate balances in foreign currency at that date:
1
1
EUR
USD
=
=
HRK 7.306
HRK 5.089
(31 December 2008: HRK 7.324)
(31 December 2008: HRK 5.156)
Zagrebačka banka UniCredit Group · 2009 Annual Report
7
Management Board Report of Condition
Management Board Report of Condition of the Bank
“
While the business
environment remained very
demanding and challenging
throughout 2009, the
Zagrebačka banka Group
performed well, preserved
the confidence of its
customers and maintained
its market position, thus
reaffirming its strong
foundations:
”
Ladies and Gentlemen, dear Customers, Partners and Shareholders,
During 2009, Croatia witnessed a strong contraction of economic
activity induced by a pronounced illiquidity and the escalation of
the confidence crisis which hit the global financial market in late
2008 and early 2009. The resulting slowdown of credit activity due
to scarce and expensive sources of funds and the negative risk
perception, particularly with regard to countries in transition and
businesses operating there, caused the crisis to spill over from the
financial into the real sector and resulted in a fast decline in demand,
especially in export-oriented segments of the economy. Due to
growing unemployment, reduced consumption, falling investment
activity and lack of confidence, the recession quickly spilled over and
affected all other economic sectors. So, after almost a decade of
strong and uninterrupted growth, Croatia was faced with a real-life
stress test whose consequences are still difficult to ascertain.
Notwithstanding such adverse circumstances, the Croatian banking
sector has remained stable and made a significant contribution
to preserving the general economic stability. Nevertheless, the
Croatian banks also shouldered the burden of an unfavourable
macroeconomic environment in that provisioning costs grew
substantially and profitability dropped during last year.
While the business environment remained very demanding and
challenging throughout 2009, the Zagrebačka banka Group
performed well, preserved the confidence of its customers
and maintained its market position, thus reaffirming its strong
foundations:
- we have remained market leaders and expanded our extensive
distribution network
- we have preserved our income generating capacity as a result of
applying a universal, well-diversified business model
- we have retained excellent access to primary sources of funding
thanks to our strong capital base and the reputation of a leading
and stable financial institution
- we have maintained above-average portfolio quality compared to
the rest of the banking sector, which is a result of our focus on
proactive risk monitoring and management.
The Zagrebačka banka Group occupies the leading market position
in terms of capital, total assets, loans, deposits and assets under
management, it serves over 1.5 million customers and stands out
among its competitors as an innovative, strong and modern financial
institution committed to its role as a partner and advisor, and to
generating high customer satisfaction.
Group and Bank operating results in 2009
In the year ended 31 December 2009, the Zagrebačka banka Group
8
2009 Annual Report · Zagrebačka banka UniCredit Group
made net profit of HRK 1,394 million, which is HRK 142 million, or
9.2%, less than the year before due to higher impairment charges.
The growth of impairment charges is a result of slower economic
activity, scarce liquidity in the real sector, growing unemployment
and, consequently, lower disposable personal income.
Operating profit before impairment and loss provisions amounted to
HRK 2,349 million, which is 8.2% more than the year before and a
result of efficient cost management.
Particular attention was paid to increasing operational efficiency,
while at the same time raising the level of service quality. Total
operating costs amounted to HRK 2,662 million, which is HRK 205
million, or 7.2%, less than the previous year.
Total Group assets grew by 3.8% reaching HRK 108 billion at the
end of the year. Net loans to customers amounted to HRK 68.6
billion, which is HRK 2.3 billion or 3.5% more than the year before.
The Group continued its lending activities in all business segments.
Net loans to corporate customers, including the Government, rose by
HRK 3.1 billion, or 9.8%, whereas net loans to individuals decreased
HRK 0.8 billion or 2.3% compared to the previous year. Customer
deposits went up by HRK 1.3 billion, or 2%, reaching HRK 64.1
billion by the end of the year.
Zagrebačka banka made profit after taxation of HRK 1,216 million
in the year ended 31 December 2009, which is HRK 178 million, or
12.8%, less than in 2008. Such decrease in the Bank’s net profit is
a result of impairment charges being HRK 358 million higher than
the year before.
Operating profit before impairment and loss provisions was HRK
2,074 million, which is 6.9% more than the year before. This is a
result, on the one hand, of higher trading income which off-set the
fall in net interest and fee and commission income, and much lower
operating expenses (-8.6%), on the other hand.
On 31 December 2009, Bank total assets amounted to HRK 92.8
billion, up 3.8% from 2008. Net loans to customers reached HRK
59.7 billion, which is HRK 2.7 billion, or 4.8%, more than the year
before. Customer deposits totalled HRK 53.9 billion, which is an
increase of HRK 0.6 billion, or 1.2%, over the previous year.
Bank capital and reserves amounted to HRK 14.1 billion, the capital
adequacy ratio being 19.09%, well above the minimum prescribed
capital adequacy ratio of 10%.
Zagrebačka banka UniCredit Group · 2009 Annual Report
9
Management Board Report of Condition
Management Board Report of Condition of the Bank (Continued)
Results by key business segments
Retail
Zagrebačka banka offers an array of products and services aimed at
meeting the needs and changing life styles of its customers, and it
sets high standards with regard to the quality of service provided to
all customer segments (Mass Market, Affluent and Small Business)
throughout Croatia.
Innovation is one of the Bank’s key qualities. Full implementation
of the Customer Relationship Management (CRM) tool in 2009
has enabled further major improvements in the field of customer
relationship management and higher sales efficiency. This new
tool allows relationship managers to view all relevant data about
customers and their business relationship with the Bank on a single
screen and so enables an individualised customer approach.
The Internet banking and mobile banking facilities, as well as the
Bank website, have been upgraded and redesigned with the goal of
increasing customer satisfaction.
Despite adverse circumstances prevailing in the economic
environment, increased credit risks and general uncertainty, the Bank
has continued its lending activities. In 2009, it offered possibilities
of debt rescheduling and debt restructuring to those customers
who had temporary difficulties with regular debt servicing or where
potential difficulties in that regard were anticipated. In addition, it has
offered a loan insurance product covering the risk of unemployment
and temporary inability to work due to illness.
In its efforts to make its services more accessible to its customers,
the Bank opened seven new branch offices and outlets and a private
banking office in 2009.
The Bank has the largest and most accessible ATM network in
Croatia, and there are 24-hour zones with self-service machines
available to customers where they can execute transactions or get
information at any time.
During 2009, deposits from retail customers including individuals and
unincorporated businesses grew by 2.2% reaching HRK 37.3 billion
at the year end, thus demonstrating their strong confidence in the
Bank. Total gross loans to retail customers amounted to HRK 29.8
billion, with housing loans accounting for more than a half of the total
loan portfolio.
Small Business banking
Particular attention is paid to the small business segment, so there
are 47 Small Business centres offering modern banking services
tailored to suit the specific needs of those customers.
In addition to a wide range of cash management and financing
10
2009 Annual Report · Zagrebačka banka UniCredit Group
products and services, the Bank has continued its successful
cooperation with HBOR in providing credit lines to support viable
entrepreneurial projects and models.
By launching new products, such as the MC go! business credit card,
the „Start up“ account package designed for entrepreneurs starting
up a new business and the USB key which allows Internet banking
users to access the facility from different locations, the Bank has
improved its service quality and increased customer satisfaction. In
particular, various options to make banking transactions within the
24-hour service zones and the unique benefits offered by account
packages have helped our customers to improve their efficiency. By
applying a proactive and innovative approach to designing banking
products and services, the Bank has ensured more flexibility,
better accessibility, greater variety and higher service quality to its
customers.
Corporate banking
As described earlier, the general business environment in Croatia
in 2009 was marked by a strong decline in economic activity
and a liquidity squeeze. Therefore, we have paid special attention
and allocated additional resources in order to help our customers
overcome those difficult and complex circumstances by providing
them with individualised advisory support and bespoke financial
solutions.
Total net loans to corporate customers, including the Government,
amounted to HRK 31.4 billion on 31 December 2009, which is HRK
3.5 billion or 12.7% more than at the end of 2008. Deposits from
corporate customers reached HRK 16.6 billion by the end of the
year. The Bank’s market share in corporate loans and deposits grew
by 25.6% and 24.3%, respectively. Such a strong increase clearly
shows not only the customers’ confidence in the Bank, but also our
commitment to serve their needs and our solid credit activity in spite
of difficult operating conditions.
We have achieved a balanced growth by increasing the volume of
loans and deposits, and services provided to the public and private
sectors likewise. With regard to dealings with the Government and
large corporates, the Bank provided strong financial support to
this customer segment throughout the year, and particularly in the
first half in order to protect the liquidity and stability of the system.
The Bank continued to support the private sector as well and has
intensified its business activity in the segment of medium-sized
companies in all regions of Croatia.
Corporate customers of Zagrebačka banka again expressed the
highest levels of satisfaction with the Bank and its services.
Financial markets and investment banking
In the Financial Markets and Investment Banking (MIB) segment,
Zagrebačka banka has consolidated its position as the leading
investment bank in Croatia. This was acknowledged also by the
Euromoney magazine, which proclaimed Zagrebačka banka the best
investment bank in Croatia in 2009.
With regard to Capital Markets, the Bank arranged some major
transactions last year, including the EUR 750 million Eurobond issue
for the Croatian Government, the Eurobond issue for the Agrokor
Group worth EUR 400 million, and the issue of commercial bills
of Hospitalija, Zagreb-Montaža, Konstruktor-Inženjering, IGH and
ŽITO. It should be noted that the Eurobond issue for the Croatian
Government, in which the UniCredit Group/Zagrebačka banka
participated as the issue co-leader, is the first example of a domestic
bank being given a leading role in the transaction of such size and
importance outside the domestic market.
In the Corporate Finance segment, the Bank advised the owner in the
transaction involving the sale of the Getro retail chain. During 2009
the Bank participated in a number of other major transactions and
assumed the leading position in the region in this business segment.
Particularly important in this segment are advisory services provided
to the Government of Montenegro in the process of privatisation of a
minority interest in the state owned electricity company (EUR 192.5
million) and advisory services provided to the Government of Albania
in the process of privatisation of a minority interest in AMC, the
country’s leading mobile operator (EUR 48.2 million). Furthermore,
the Bank successfully completed a number of smaller-scale
transactions in this business domain.
stagnant investment activity will continue to have a negative impact
on the creditworthiness of individuals and of the real sector.
In order to boost economic growth, the Bank will focus on
encouraging credit activity and gradually reducing both lending and
deposit interest rates, while applying adequate risk assessment
mechanisms and ensuring further profitability growth. We will remain
committed to addressing the needs our customers, delivering
excellent service quality and applying sustainable and stable
business models which provide solid foundations on which to build
trust and long-term relations with our customers.
I wish to extend my sincere thanks to all our clients, business
partners and shareholders for the confidence they have placed in
us. Also, let me thank the members of the Management Boards
and the Supervisory Boards of the Bank and the Group entities for
their commitment, professionalism and valued contribution to the
last year’s successful performance of Zagrebačka banka and the
Zagrebačka banka Group.
Franjo Luković
Chairman of the Management Board
While the conditions in the domestic market remained very
challenging throughout the year, including growing competition and
significantly reduced economic activity in the corporate sector, MIB
has been able to consolidate its leading market position by focusing
its efforts on strengthening business relations with institutional and
corporate clients. As a result, the revenues of Customer Treasury
Desk rose by 35% compared to 2008. Also, Customer Treasury Desk
advises corporate customers on hedging against market risks, so the
sales of derivative instruments, and particularly the ones intended for
hedging against interest rate risk, grew considerably in the reporting
year.
In 2009, the Bank launched an e-trading platform for individuals.
It is a user-friendly application which gives users direct access to
the Zagreb Stock Exchange. As a result, the Bank has significantly
increased its business capacity and made its position in the
brokerage market even stronger.
Expectations for 2010
The year 2010 will be another challenging and difficult year for the
banking sector and the economy as a whole. Market conditions will
remain harsh, and the Croatian economy is expected to recover only
gradually and slowly. GDP growth is not expected to begin before
the fourth quarter, while rising unemployment, higher tax burden and
Zagrebačka banka UniCredit Group · 2009 Annual Report
11
Management Board Report of Condition
Management Board Report of Condition of the Bank’s subsidiaries
UniCredit Bank dd, Mostar
over 930,000 customers through a network comprising 96 branches
and outlets nationwide.
Business review
Risk exposure
Throughout 2009, the UniCredit Bank dd. Mostar continued to
strengthen its position of a reliable partner for individual and
corporate customers, and the Government. The Bank has managed
to maintain positive financial results despite the global economic and
financial crisis and constrained economic opportunities in the country
and has succeeded in preserving a sound equity base and strong
liquidity levels, offering its customers more favourable business
conditions.
Risk management is carried out by implementing a system
which includes risk management policies, programmes, work
procedures and limits. They are continuously up-dated and adjusted
in accordance with changes in legal regulations and changes
in business activities dictated by market developments and
emergence of new products. The UniCredit Group standards in risk
management are consistently adopted and applied. At the Group
level, a comprehensive risk management system is in place based on
policies, procedures and risk limits acceptable to the Group.
In 2009 the Bank made profit before taxation in the amount of BAM
34.5 million, which is 15.0% less than the year before. Profit after
taxation went down by 10.1% to BAM 29.4 million.
Total operating income amounts to BAM 180,7 million, which is BAM
9,9 million less compared to 2008 and is mainly due to a decrease
in net interest income and a fall in income from sale of investment
securities. Net interest income totalled BAM 121.8 million, which is
2% less than in 2008. A decrease in net interest income is primarily
due to a fall in credit volume and an increase in finance expenses
which could not be reassigned to interest rates on approved loans.
Net fee and commission income amounted to BAM 46.9 million,
which is 1.5% less than the year before. Operating expenses were
reduced 4.6%, to BAM 127.2 million as a result of efficiant cost
control.
Impairment losses on loans to and receivables from customers
amounted to BAM 22,8 million which is 30.3% higher compared
to 2008 as a result of the prevailing economic environment which
caused deterioration of credit portfolio.
On 31 December 2009, total assets amounted to BAM 3.4
billion, which is 4.6% more than in the previous year. Net loans
to customers amounted to BAM 2,026 billion, which is 5.5% less
than in the end of previous year with loans to individuals accounting
for BAM 1.187 million and loans to corporate clients to BAM 893
million. Deposits from customers increased by BAM 217.4 million
or 10.5% by the end of the year reaching BAM 2,294 million, out
of which BAM 1,204 million refers to deposits from individuals and
BAM 1,090 million on deposits from corporate clients. An increase in
deposits from individuals and corporate clients shows that customer
confidence in the banking sector has been restored.
The ATM and POS networks were further expanded in 2009 and by
the end of the year there were 199 ATMs and 5,000 POS terminal
installed. UniCredit Bank has the most extensive ATM network in
Bosnia and Herzegovina, and its customers have free and easy
access to their accounts 24 hours a day. UniCredit Bank today serves
12
2009 Annual Report · Zagrebačka banka UniCredit Group
The main risks to which the bank is exposed to include: credit risk,
liquidity risk, market risk and operational risk.
The bank is exposed to credit risk as a result of its credit operations.
Credit risk is managed according to the bank’s applicable
programmes and policies as well as other internal regulations
enacted by the Supervisory Board, Management Board and Credit
Committee. The exposure to individual customers, groups of
associated entities and industries is checked against the prescribed
limits set in relation to the Bank’s regulatory capital.
Credit risk management also involves regular analysis of borrowers’
abilities to discharge their liabilities, timely identification of potentially
risky customers and structured relationship management, along
with maximisation of recovery of the bank’s receivables from the
borrowers/debtors, quality legal support in those cases where
litigation is in progress, and cost-efficient management of foreclosed
properties.
In order to minimise credit risks, the bank applies Collateral Policy. It
defines how individual collateral instruments should be treated in the
credit risk underwriting process.
Liquidity risk arises in the process of funding the bank’s business
activities and managing its liquidity positions. Liquidity risk
management is ensured through compliance with the applicable legal
regulations, internal regulations aimed to maintain necessary levels
of liquidity reserves and asset-liability matching. Liquidity limits are
defined in accordance with the policies compliant with the relevant
legal regulations and those enacted by the UniCredit Group. Liquidity
limits are subject to daily monitoring.
Currency risk exposure is a result of the bank’s lending and deposit
operations, as well as trading activities. It is monitored on a daily
basis according to the legally prescribed limits as well as those set
by the UniCredit Group for individual currencies and in absolute
amounts for all sources of funds and liabilities denominated in
foreign currencies or indexed to them.
The bank is exposed to interest rate risk to the extent to which
interest-earning assets and interest-bearing liabilities become
due, or their respective interest rates change at various times or in
different amounts. Value-at-Risk method is applied for the purpose
of day-to-day monitoring of overall market risk exposure, basis point
movements and loss warnings, which limits the maximum position of
interest rate risk by currency and period. Compliance with the limits
set by the UniCredit Group is monitored on a daily basis.
In order to ensure an optimum degree of operational risk
management, the bank has established its own system based on the
standards and principles defined by the local regulator, the UniCredit
Group, the Basel Committee and the EU Directives.
Prva stambena štedionica
Business review
Prva stambena štedionica is a financial institution which accepts
deposits from domestic individual clients under housing savings
agreements and grants housing loans with government subsidies.
Štedionica was established in 1998 as the first such institution in
Croatia, and by the end of 2009 it remained the market leader with
an average share in total assets of over 31% (November 2009). On
31 December 2009, the company’s total assets amounted to HRK
2.0 billion or 3% less than the year before.
About 26 thousand savings deposits matured in 2009, and some
of those were withdrawn as the customers chose not to take out
a housing loan. However, Štedionica has offered its customers a
number of benefits and expanded its product range, so it was able
to conclude 34 thousand new housing savings agreements. Despite
deposit disbursements and deferred payment of the Government
subsidies, deposit market share of Štedionica has increased to 30%.
Compared to 2008, demand for housing loans has significantly
diminished due to the anticipated strong fall in housing prices,
reluctance on the part of individuals to take out new loans and the
uncertainty with regard to their ability to keep their jobs and receive
salaries, which was caused by the recession. In spite of all that, loans
to customers totalled HRK 948 million at the end of the year, which
represents a 7% rise compared to 2008, with the corresponding loan
market share increasing to 31,8%.
In the year ended 31 December 2009, Štedionica made profit after
taxation of HRK 23.4 million, which is the best result achieved since
the establishment.
Development plan
The company’s business activities in 2010 will be carried out in
unfavourable conditions and they will be focused on stabilising the
deposit base and maintaining the existing profitability levels. The
company is committed to preserving its leading market share in
housing deposits by developing and implementing a segmentationbased approach to those clients whose savings contracts expire and
by attracting new clients.
Risk exposure
In performing its business operations, Štedionica is exposed to credit,
liquidity and market risks. The market risk involves currency and
interest rate risks. The company has a risk management system
incorporated in its business policies and procedures, and it has
adopted appropriate risk limits.
Štedionica is exposed to credit risk through its lending and
investment activities. Counterparty risk is monitored on a continuous
basis. The company’s policy is to do business with customers of
good credit standing, and appropriate collateral is required where
necessary. While exposure to individual customers has increased, the
largest credit risk exposure is towards the Croatian Government.
Liquidity risk arises in funding the business activities and managing
the liquidity positions. The main sources of funds are deposits from
individuals and shareholders’ funds. Štedionica tries to ensure
uninterrupted funding from deposits with various maturities.
The exposure to exchange rate risk is a result of the company’s
foreign currency transactions or transactions indexed to a foreign
currency. It performs its business activities in such a way as to
minimise mis-matching between assets and liabilities denominated in
or indexed to a foreign currency.
Štedionica is exposed to interest rate risk to the extent to which
interest-earning assets and interest-bearing liabilities become due, or
their respective interest rates change at various times or in different
amounts. A majority of interest-earning assets and all interestbearing liabilities have a fixed interest rate.
ZB Invest
Total assets under management (AuM) of public investment funds
managed by ZB Invest stood at HRK 4.24 billion at the end of 2009,
which is HRK 840.8 million more than the year before. AuM of ZB
Invest grew at a rate of 24.7%, whereas the overall sector measured
a growth of AuM of 22.4%. As a result, the market share of ZB Invest
has increased 0.69 percentage points to 37.3% by the end of 2009.
Zagrebačka banka UniCredit Group · 2009 Annual Report
13
Management Board Report of Condition
Management Board Report of Condition of the Bank’s subsidiaries
The strong decline in capital markets, which began in 2008 caused
by the global economic crisis, continued into the first quarter of
2009. However, the market situation and, consequently, AuM
stabilised in the subsequent quarters. The investors shifted from
more risky forms of investment (such as equity and balanced funds)
to more conservative ones (such as money-market and fixed-income
funds). In such circumstances, ZB Invest was able to retain and even
strengthen its dominant market position. Money-market funds grew
by HRK 826.5 million during the year, reaching HRK 2.54 billion at
the year end, so they contributed most strongly to the growth of AuM
measured in 2009. ZB Invest holds a 42.1% market share in the
segment of money-market funds.
Regarding the investor structure of ZB Invest public investment
funds, individual investors still prevail and account for about 76% of
total AuM. Total number of investors grew to over 72,000 investors at
the end of the year.
Last year ZB Invest received a prestigious award for its successful
business operations. The professional association of investment
fund management companies of the Croatian Chamber of Economy
proclaimed it the best management company and ZB Bond the best
fixed-income fund in 2009.
In addition to public investment funds, ZB Invest also offers the
services of managing individual securities portfolios after having met
demanding legal and regulatory requirements with regard to the
alignment with the Capital Market Act last year.
In spite of a major decrease in assets relative to the pre-crisis times,
ZB Invest has been able to preserve high profitability levels thanks
to its strong focus on cost management. Thus, ZB Invest made net
income in the amount of HRK 32.9 million in 2009, with net profit
amounting to HRK 15.3 million.
Istraturist
Business review
Istraturist is the leading tourist company in terms of accommodation
and service quality provided at hotels, tourist resorts and camping
sites. The improvements accomplished by Istraturist have
transformed the image of the town of Umag, which is perceived
today as a high-quality tourist destination. The international tennis
tour ATP Croatia Open Umag, which Istraturist has successfully
organised for twenty successive years, strongly contributes to the
attractive image of the destination.
Last year, the eight-year investment cycle worth HRK 880 million
was completed, so that 72% of all facilities now have a four-star or
five-star ranking. The accommodation capacities of Istraturist include
14
2009 Annual Report · Zagrebačka banka UniCredit Group
1,444 units at four-star and five-star hotels and apartment sites,
3,373 accommodation units at four-star camping sites and 1,848
units at other facilities. In Croatia, the Istraturist properties stand out
as unique and innovative, so for the second successive year the Sol
Garden Istra hotel and the Park Umag camping site were proclaimed
the best facilities in Croatia in their respective categories.
Also, ADAC awarded the Park Umag camping site the “Superplatz”
title for the second time in succession, thus ranking the Umag
camping among the best ones in Europe. In 2009, Istraturist
categorised the Coral Hotel, its first five-star hotel, thus adding to the
quality of its offer.
Operating results
In the year ended 31 December 2009, Istraturist made net profits in
the amount or HRK 37.6 million, as a result of sustainable operating
profit and reduced financial expenditures.
In the reporting year, Istraturist registered 1.8 million overnights,
which is 3% less than the year before. Given the slower economic
activity, lower disposable income and higher unemployment in
all major tourist-generating markets, the results are considered
satisfactory. Operating revenues amounted to HRK 375.3 million, 2%
down from the same period last year. The distribution channels have
been restructured and the share of direct channels has increased.
As a result, prices of all have been increased, which had a positive
impact on total revenues. Operating expenses totalled HRK 314.6
million and they remained at the previous year’s level. Costs of
materials and personnel expenses have been reduced. Throughout
the year, the company improved its business efficiency, while at the
same time retaining high service quality.
Net financial revenues and expenses have had a positive impact on
the overall result. Financial revenues amounted to HRK 9.3 million
as a result of foreign exchange gains of HRK 6.5 million and other
revenues totalling HRK 2.8 million.
Compared to the previous year, financial expenses were significantly
reduced and amounted to HRK 22 million as a result of lower interest
expenses and foreign exchange losses on borrowings.
Assets
On 31 December 2009, the company’s assets totalled HRK 1,286
million. Equity amounted to HRK 733 million, which is more than the
year before as a result of net profit.
The company’s total liabilities were HRK 550 million, which is HRK
70.3 million, or 11.2%, less than the year before as a result of
reduced liabilities under borrowings.
(Continued)
Risk exposure
The most significant risk to which the company is exposed to is
currency risk since 74% of total income is generated in foreign
markets. Currency risk is also associated with long-term borrowings
denominated in or linked to foreign currencies. Istraturist occasionally
uses derivatives in order to hedge against these risks.
ZANE
Business review
ZANE is a real estate company. The company provides property
valuation and real estate agency services, along with consultancy
services in property development.
In the challenging environment marked by the economic crisis, in
the year ended 31 December 2009, the company made profit after
taxation in the amount of HRK 693 thousand. Nevertheless, ZANE
was able to preserve its leading market position and good business
relationships with its clients.
Throughout the year, the company paid special attention to cost
management in order to minimise negative effects of the business
environment.
At the end of 2009, the company’s total assets amounted to HRK
20.6 million. Cash in hand and investments in money-market funds
and fixed assets account for a majority of total assets, whereas
equity (i.e. share capital and reserves) accounts for a major part of
its liabilities.
Development plan
In 2010, the company will continue its activities aimed at
implementing the adopted development strategy in order to position
itself as a competence centre for all real-estate related activities
within the Zagrebacka banka Group.
Centar Kaptol
Centar Kaptol is the majority owner of the Centar Kaptol shopping/
business complex in the Zagreb city centre. The company is
responsible for managing and renting the properties in its ownership,
and the largest portion of its revenues is generated by letting
shopping and office facilities, and the cinema.
put to a commercial use. In the changed business environment
characterised by lower rents, the turnover rent has been introduced
so in addition to a minimum rent, the company also charges a
percentage of total turnover.
The company successfully closed the financial 2009 and made
profits of HRK 4.5 million.
In 2009, Centar Kaptol again received the “Superbrand” award as
one of the best Croatian brands.
In 2010, the company will try to improve its competitiveness among
the growing number of shopping centres by launching new marketing
actions and campaigns and by attracting new popular brands to
Centar Kaptol.
Pominvest
Business review
Pominvest owns business premises of 5,440.00 sqm located in Split
and elsewhere in Dalmatia. It rents its business premises to other
Group entities as well as other clients, and provides maintenance
services for those properties.
As at 31 December 2009, the assets of Pominvest amounted to HRK
26.8 million, comprising mostly long-term tangible assets (HRK 21.8
million). Equity (capital and reserves) amounted to HRK 25.9 million.
The company made profits after taxation of HRK 1.6 million in 2009.
A majority of rental income of Pominvest is generated through its
business relationship with Zagrebačka banka and Zagrebačka banka
Group entities.
Rental income and income from maintenance services totalled HRK
6.1 million and accounted for the largest portion of total income
(92%).
Risk exposure
The company’s business operations can be described as stable, and
it is not exposed to any major risks, as noted also in the auditor’s
report.
Despite negative impacts of the global financial crisis and reduced
consumption in 2009, 96% of all facilities in the shopping mall were
Zagrebačka banka UniCredit Group · 2009 Annual Report
15
Management Board Report of Condition
Management Board Report of Condition of the Bank’s subsidiaries
Marketing Zagrebačke banke
Business review
The primary business activity of MZB is publishing, e-newsletters
and web along with pre-production and production of promotional
materials.
MZB closed the financial 2009 with a loss in amount of HRK 572
thousand.
As at 31 December 2009, the company’s assets amounted to HRK
3.8 million, with cash in hand and receivables from customers
accounting for a majority of that amount. Equity (capital and reserves)
amounted to HRK 2.6 million.
Risk exposure
The company’s business operations can be described as stable, as
the company is not exposed to any major risks.
Franjo Luković
Chairman of the Management Board
16
2009 Annual Report · Zagrebačka banka UniCredit Group
(Continued)
Zagrebačka banka UniCredit Group · 2009 Annual Report
17
Christian Hagn,
Hagn & Dr. Ruebesamen Rechtsanwälte
Retail Client - Germany
I’ve been a customer of
«HypoVereinsbank
- UniCredit
Group for many years.
I especially value their trust
and reliability as well as the
quality of their consultation
services and I have always
counted on these values.
I am more than satisfied,
and I would highly
recommend them to any
new customers.»
It’s easy with
UniCredit.
18
2009 Annual Report · Zagrebačka banka UniCredit Group
Business description
Zagrebačka banka UniCredit Group · 2009 Annual Report
19
Business description
Business description
Zagrebačka banka is a licensed bank operating in Croatia and the
holding company for the Zagrebačka banka Group.
The Zagrebačka banka Group is a Croatian based financial services
group which provides a full range of corporate and retail banking
services for customers in Croatia. The Group serves around 66,000
active corporate clients, and around 2.0 million active retail clients.
Subsidiary and associated companies
operations
The Bank’s subsidiaries and associated companies as at 31
December 2009 are shown below:
The Bank provides a full range of banking services, comprising
corporate and retail banking, international financing, investment
banking and corporate finance services.
Fully consolidated subsidiaries
CompanyAddress
Country of Industry
domicile
UniCredit Bank dd, Mostar
Prva stambena štedionica dd
ZB Invest doo
Centar Kaptol doo
UPI poslovni sistem doo, Sarajevo
Pominvest dd
ZABA TURIZAM doo
Marketing Zagrebačke banke doo
Zagreb nekretnine doo
Zane BH doo
Istraturist dd
Istra D.M.C. doo
Kardinala Stepinca bb
Bosnia and
88000 Mostar
Herzegovina
Savska 62
Croatia
10000 Zagreb
Ivana Lučića 2a
Croatia
10000 Zagreb
Nova Ves 17
Croatia
10000 Zagreb
Branilaca Sarajeva 20
Bosnia and
71000 Sarajevo
Herzegovina
Gundulićeva 26a
Croatia
21000 Split
Paromlinska 2
Croatia
10000 Zagreb
Savska cesta 28
Croatia
10000 Zagreb
Nova Ves 17
Croatia
10000 Zagreb
Branilaca Sarajeva 20
Bosnia and
71000 Sarajevo
Herzegovina
Jadranska 66
Croatia
52470 Umag
Jadranska 66
Croatia
52470 Umag
Group
ownership
%
Banking
65.6
Banking
100.0
Fund management
100.0
Property investment
100.0
Property management
52.6
Property management
88.7
Investment 100.0
Publishing
100.0
Real estate agency
100.0
Real estate agency
100.0
Tourism
71.8
Organisation of the
ATP tournament
71.8
Equity accounted associated companies
CompanyAddress
Country of Industry
domicile
Allianz ZB doo, Zagreb
Allianz ZB doo, Zagreb
20
Nike Grškovića 31
Croatia
10000 Zagreb
Ivana Lučića 2a
Croatia
10000 Zagreb
2009 Annual Report · Zagrebačka banka UniCredit Group
Obligatory pension
fund management
Voluntary pension
fund management
Group
ownership
%
49.0
49.0
Branch network map
Zagrebačka banka Group number of branches
2009
2008
Croatia
Bosnia and Herzegovina
Total
136
96
232
130
95
225
Number of branches
Slovenia
24
Zagrebačka banka UniCredit Group · 2009 Annual Report
21
Dace Markeviča
Uralchem Trading Sia
Corporate Banking Client - Latvia
Uralchem Trading has the
«assurance
that every time,
even when it comes to fairly
simple banking transactions
like payments, UniCredit
Bank will look for and find
mutually beneficial solutions.
The bank’s professional staff
always offers helpful advice
on successful business
operations, thereby laying the
foundation for mutual trust
and a long-term partnership.»
It’s easy with
UniCredit.
22
2009 Annual Report · Zagrebačka banka UniCredit Group
Overview of the Croatian economy in 2009
Zagrebačka banka UniCredit Group · 2009 Annual Report
23
Overview of the Croatian economy in 2009
Overview of the Croatian economy in 2009
Macroeconomic indicators for Croatia
Gross Domestic Product, % change
GDP per capita, in EUR
Private Consumption, % change
Public Consumption, % change
Fixed Investment, % change
Exports of Goods and Services, % change
Imports of Goods and Services, % change
Industrial Production, % change
Construction Industry, % change
Tourism (nightstays), % change
Unemployment Rate (ILO), % change
Consumer Prices, % change
General Government Balance (% GDP)
Current Account Balance, (% GDP)
External Debt, (% GDP) Money Supply (M1), % change, end of period
Exchange Rate HRK: EUR, average
Exchange Rate HRK: EUR, end of period 2009
2008
2007
(6.0)*
10,200*
(8.5)*
1.8*
(11.0)*
(15.5)*
(18.6)*
(9.2)
(6.2)*
(1.4)
9.4*
2.4
(3.9)*
(5.6)*
96.7*
(14.6)
7.34
7.31
2.4
10,814
0.8
1.9
8.2
1.7
3.6
1.6
11.8
2.0
8.4
6.1
(0.8)
(9.4)
84.9
(4.6)
7.22
7.34
5.6
9,769
6.2
3.4
6.5
5.7
5.8
5.6
2.4
5.6
9.6
2.9
(2.3)
(8.6)
79.3
19.3
7.34
7.33
Sources: Central Bureau of Statistics, Croatian National Bank, Ministry of Finance
* Estimates of the Chief Economist of Zagrebačka banka
Full impact of the global financial
crisis on the Croatian economy seen
in 2009
the construction activity index was in negative territory for most of
2009 and is expected to have contracted over 6% for the full year.
Infrastructure investment slowed down in 2H 2009 as projects were
completed and others scaled back as the government sought to rein
in the fiscal deficit. Industrial production contracted 9.2% in 2009.
The full impact of the global financial crisis was felt in Croatia
in 2009, when economic growth contracted an estimated 6% in
real terms. The economy shrank by 6.5% yoy in 1H 2009, but in
seasonally adjusted terms on a qoq basis returned to mild growth
during 2Q 2009. That said, both private consumption and gross fixed
capital spending remained negative in the first three quarters on a
seasonally adjusted qoq basis, suggesting continued weak domestic
demand heading into 2010.
Inflationary pressures waned as
domestic demand remained weak
Indeed private consumption which fell almost 10% yoy in 1H 2009
is expected to have contracted 8.5% in 2009 as credit growth
to household fell in response to generally tight external financing
conditions and generally tight monetary policy settings at home.
In addition, increased uncertainty as unemployment rose and the
imposition in August 2009 of a 1 percentage point increase in
valued added tax and a solidarity tax for net income above HRK
3,000 per month dented demand for loans. The administrative
employment data suggest over 50,000 mainly private sector job
losses in 2009, while the internationally comparable unemployment
data also revealed a drop in the participation rate and employment
rate. We expect the unemployment rate on this measure to average
9.4% in 2009, up from 8.4% a year earlier. Retail trade turnover in
real terms contracted by over 15% yoy in 2009. Investment activity
which turned negative in 4Q 2008 continued to contract in 2009,
falling 11.9% yoy in the first three quarters of 2009. Meanwhile
24
2009 Annual Report · Zagrebačka banka UniCredit Group
While base effects associated with fuel and energy prices along with
falling food prices in 2H 2009 helped keep the headline consumer
price index down, data on core inflation revealed a continuous fall
since April 2009 until the end of the year. This clearly suggests
the combination of weak domestic demand and a stable currency
(especially after 1Q 2009) influenced the moderation in inflation to
only 1.9% yoy in December and 2.4% for the whole year. This was
notwithstanding an average increase of over 17% in tobacco prices,
4.6% in alcohol prices and almost 7% in other regulated prices.
Given expected weak domestic demand in 1H 2010, the outlook for
inflation in 2010 is for a further moderation in inflationary pressures
despite a 15% increase in gas prices at the beginning of the year.
Real gross wages fell slightly in 2009. This was in part because
the government rescinded its decision to increase public sector
salaries by 6% in April. This decision as well as rising unemployment
eliminated any risk that wage dynamics could add to inflationary
pressures. The currency was exposed to depreciation pressures,
especially in 1Q 2009, but as Easter heralded the onset of the main
tourist season and concerns about the ability of various sectors of
the economy to rollover their external obligations eased, the EUR/HRK
ended the year below end 2008 levels at 7.306.
final three quarters of 2009. By the end of 2009 gross public debt
increased to over 40% of GDP according to our estimates.
Current account deficit narrows as
imports head sharply lower
Monetary conditions remained tight
for most of 2009 to ensure currency
stability
Apart from lower capital inflows, the global recession also impacted
heavily on the Croatian economy via the trade channel in 2009.
Exports of goods fell 21.5% in 2009 to EUR7.5bn while imports of
goods fell 26.9% to EUR15.2bn. This saw the merchandise trade
deficit narrow by over EUR3.5bn to EUR7.7bn, with imports of
motor vehicles for example almost halving to EUR910mn in 2009.
Meanwhile tourism revenues are expected to fall by over EUR1bn,
with the net revenues in 3Q 2009 the lowest since 2004, a clear
reflection of the impact of the global recession on Croatia’s main
export industry. Overall, we estimate the current account deficit
narrowed from 9.4% of GDP in 2008 to 5.6% of GDP in 2009 and
expect it to narrow further in 2010 on account of weak domestic
demand which will reduce the deficit of goods and services further.
Over this period foreign direct investment inflows covered less
than half of the current account deficit, amounting to an estimated
EUR1.2bn, or 2.7% of GDP. Although the net inflow of medium and
long-term loans was unsurprisingly sharply down on previous years,
fears that especially some private sector borrowers would not be
able to roll over their external obligations proved unfounded. In the
end gross foreign indebtedness rose an estimated EUR3bn in 2009
with the government issuing a EUR750mn Eurobond in May and a
USD1.5bn bond in October. Thus, foreign debt rose to an estimated
96.7% of GDP or EUR43.5 billion at the end of 2009.
Fiscal adjustment still required
Slowing growth unsurprisingly adversely affected the government’s
revenue projections and led to numerous supplementary budgets,
tax increases and the abolition in April of a previously granted 6%
increase in public sector salaries. As a result we expect a widening
of the budget deficit to an estimated 3.9% of GDP in 2009. The
government has managed to agree a freezing of public sector salaries
in 2010 and an air of cooperation between the ruling coalition and
main opposition parties became apparent as we entered the new
year. The hope is that this new found desire for cooperation yields
concrete reform initiatives which are key to reducing the public
spending in the medium term and generating productivity gains.
The government accessed international markets twice in 2009 as well
as benefiting from the loosening of domestic monetary conditions in
order to finance its obligations. A new development was the issuance
of over EUR1bn in 12-month euro-linked treasury bills during the
In early 2009 the central bank continued to provide FX liquidity to
banks by reducing the foreign assets to foreign liabilities ratio from
28.5% in two steps to 20% during February and also abolished
the special reserve requirement. Previously, it had tightened kuna
liquidity conditions on 2 January by increasing the share of FX
mandatory reserves deposited in kuna from 50% to 75%. The reason
for this was that the currency was exposed to noticeable depreciation
pressures during 1Q 2009. In late November the central bank also
abolished the 1% monthly credit growth limit to the private sector
and households.
In January and February the central bank intervened once each
time selling Euros to the market in the total amount of EUR513mn.
In late February the central bank purchased EUR331mn from the
market and in 4Q in three further interventions purchased a further
EUR505mn, thus releasing HRK3.7bn in liquidity into the market in
the final quarter of the year. FX reserves rose by EUR1.3bn in 2009.
Following the second purchase of Euros during the month in the
amount of EUR80mn on 22 October, money market rates fell sharply
remaining at record low levels right up until the time of writing in late
January 2010. In part the improved liquidity conditions were also
the result of the government issuing a USD1.5bn bond in the US in
November and progressively converting a part of the proceeds at
the central bank to meet upcoming domestic obligations. Thus after
extremely high local currency interest rates since the beginning of
2009, 4Q 2009 saw very low interbank rates.
Overall, by maintaining very tight interbank market conditions in
place for most of 2009 the central bank managed to keep the EUR/
HRK stable, thus avoiding the occurrence of balance sheet effects
which would have complicated economic conditions even more. In
2010 as long as the EUR/HRK is not exposed to undue depreciation
pressures we expect monetary conditions to remain relatively loose;
the aim being to stimulate credit growth and thus output growth.
Asset growth slows in response to
tighter external financing conditions
The only major change in the structure of the Croatian banking
sector in 2009 was the nationalisation of Hypo Alpe-Adria-Bank
International AG by the Republic of Austria in mid-December, which
Zagrebačka banka UniCredit Group · 2009 Annual Report
25
Overview of the Croatian economy in 2009
Overview of the Croatian economy in 2009 (C
ontinued)
was also reflected on its Croatian subsidiary. Nonetheless, major
banks in private foreign ownership retained their dominant positions
in all business segments.
The growth in banking sector assets slowed further in 2009 as
tighter international financing conditions in 1H 2009 and tight
domestic monetary conditions until the end of October and increased
public sector borrowing activity combined to reduce lending to
households, while domestic credit to enterprises rose only 2%. A
further factor was a reduction in demand for credit as households
and enterprises adjusted their expectations and risk appetites in
response to the severe recession. This aversion to consumption was
reflected in an increase in household foreign exchange deposits in
response to depreciation pressures on the currency in 1H 2009. At
the same time corporate deposits fell 8.9% in 2009 as companies
ran down their deposits to fund working capital. The support of
foreign owners of domestic banks was a key feature in ensuring all
sectors of the economy could refinance their external obligations.
Nonetheless, competition for deposits, in the absence of cheap
external or domestic financing did see lending margins decline. As
expected non-performing loans also increased markedly in 2009
leading to a reduction in the profitability of the banking sector.
The Croatian banking sector entered the recession highly capitalised
and according to central bank data at the end of 3Q 2009 as a
whole the sector had a capital adequacy ratio of 15.9%. During
2010 we expect the quality of the banking sector’s credit portfolio
to gradually improve as general economic conditions improve in
2H. We remain convinced that in the context of Croatia entering the
final stages of the EU accession process the improved regulatory
framework, high banking sector capital levels and ongoing efforts to
enhance risk management methods, point to the continued stability
of the banking system.
26
2009 Annual Report · Zagrebačka banka UniCredit Group
Zagrebačka banka UniCredit Group · 2009 Annual Report
27
Dragan Škoro,
Automerc Škoro d.o.o. Kiseljak
Corporate Banking Client
Bosnia and Herzegovina
In my five years of doing
«business
with UniCredit,
I can say that my business
and, by extension, my private
life, have been made easier
from one year to the next.
By listening to and
understanding the true needs
of my company and offering
a quality service model,
UniCredit has provided me
assistance and delivered
straightforward solutions
every time - supporting our
growth and development from
a firm of two employees into a
successful company of
30 people.»
It’s easy with
UniCredit.
28
2009 Annual Report · Zagrebačka banka UniCredit Group
Operating and financial review
Zagrebačka banka UniCredit Group · 2009 Annual Report
29
Operating and financial review
Operating and financial review
Group results
In the year ended 31 December 2009, Group profit after taxation
amounted to HRK 1,394 million, which is HRK 142 million or 9.2%
less than the year before. Current-period profits attributable to the
Bank’s shareholders amount to HRK 1,345 million, which is HRK
149 million or 10.0% less than the previous year (2008: HRK 1,494
million).
During the reporting year, Group operating income reached HRK
5,011 million on a consolidated basis, which is 0.5% less than the
year before (2008: HRK 5,037 million).
Group net interest income amounted to HRK 2,830 million, which is
HRK 118 million less than in the previous year. Lower net interest
income is a result of increased financing costs, which the Group
entities were not able to transfer completely to the interest rates
charged on loans.
Net fee and commission income totalled HRK 1,084 million on a
consolidated basis, which is 5.4% less than in 2008 (2008: HRK
1,146 million). Such reduced fee and commission income can largely
be attributed to lower asset management, brokerage and consultancy
fees due to the prevailing market conditions in 2009.
With regard to transactions with securities and other financial
instruments, the Group achieved good results. Net trading profit and
other revenues reached HRK 1,097 million, 16.3% more than the
year before (2008: HRK 943 million).
Total operating expenses were reduced by 7.2% to HRK 2,662
million. Compared to 2008, personnel costs, administrative and
marketing expenses were lower, whereas depreciation and deposit
insurance charges were higher.
Group profit before value adjustment and provisioning charges stood
at HRK 2,349 million, which is HRK 179 million, or 8.2%, more than
in 2008.
Value adjustment and provisioning charges on the Group level
totalled HRK 643 million, which is HRK 377 million more than
the year before. The increased provisioning charges are a result
of deteriorated macroeconomic situation in the country, reduced
liquidity levels and higher unemployment.
Group assets and liabilities
Group assets grew 3.8% and totalled HRK 108.0 billion on a
consolidated basis.
Net loans to customers amounted to HRK 68.6 billion, which is HRK
2.3 billion more compared to the end of 2008. The Group continued
30
2009 Annual Report · Zagrebačka banka UniCredit Group
its lending activities in all business segments. Net loans to corporate
customers including the Government increased HRK 3.1 billion,
whereas net loans to individuals were somewhat lower than the year
before.
Deposits from banks and borrowings amounted to HRK 25 billion,
which is HRK 4.7 billion more than in 2008. The increase in
borrowings can be attributed to the payment of liabilities under the
own bonds.
Deposits from customers increased by HRK 1.3 billion reaching HRK
64.1 billion.
Group capital and reserve rose by 9.6% and reached HRK 15.7
billion.
Operating results of Zagrebačka
banka
In 2009, the Bank made profit after taxation of HRK 1,216 million,
which is HRK 178 million or 12.8% less than the year before.
This is a result of reduced income, efficient cost management and
higher costs of loan loss reserves. Operating profit before value
adjustments and provisioning charges amounted to HRK 2,074
million, which is HRK 134 million or 6.9% more than the previous
year’s corresponding figure.
Income and expenses
In the year under review, Bank operating income amounted to HRK
3,857 million, which is HRK 34 million or 0.9% less than the year
before. Net interest income accounts for 61.0% of total operating
income (2008: 63.6%), net fee and commission income for 22.3%
(2008: 23.0%), and net trading profit and other income for 16.6%
(2008: 13.4%).
Net interest income
In 2009, net interest income totalled HRK 2,354 million, which is
HRK 120 million or 4.9% less than in the preceding year. The Bank
paid higher interest on deposits and other sources of funds, but was
not able to transfer these costs completely to interest rates charged
on loans.
Interest income grew by 11.8%, while average interest-earning
assets increased by 5.65%. Interest expenses went up by 28.5%,
with interest-bearing liabilities increasing 6.81%. The average
lending interest rate rose by 0.34 pps, whereas the interest paid
by the Bank on interest-bearing liabilities was on average 0.74
pps higher than the year before. As a result, net interest margin
decreased to 2.53%, from 2.86% in 2008.
Net fee and commission income
The Bank made net fee and commission income in the amount of
HRK 862 million, which is HRK 33 million or 3.7% less than the year
before due to reduced volumes of trading in financial markets and
lower management and brokerage fees.
Fee and commission income totalled HRK 1,035 million, which is
HRK 29 million or 2.7% less than in 2008. Fees and commissions
in respect of domestic payments grew by HRK 47 million (11.5%),
whereas management, brokerage and consultancy fees fell by HRK
76 million or 47.5% compared to the previous year as a result of the
crisis in the domestic and international capital markets.
Fee and commission expenses amounted to HRK 173 million,
showing a marginal increase over the previous year.
Net trading profit and other income
In the reporting period, the Bank generated net trading profit and
other income in the amount of HRK 641 million, which is HRK
119 million or 22.8% more than the year before. While profit from
the Bank’s trading activities grew, net profit from revaluation of
replacement bonds and proceeds from disposal of equity securities
from the available for sale portfolio decreased.
Administrative expenses and marketing costs were recorded in the
amount of HRK 569 million, which is HRK 54 million, or 8.7%, less
than in 2008 as a result of good cost control and management.
Deposit insurance charges totalled HRK 110 million, which is HRK
15 million more than the previous year due to higher amounts of
deposits insured.
Operating expenses in 2009 accounted for 46.2% of operating
income, which is 3.9 pps less than the year before (2008: 50.1%).
Losses due to impairment and
provisioning
Total losses due to impairment and provisioning amounted to
HRK 559 million in 2009, which is HRK 358 million more than in
2008. Such increase can mainly be attributed to the recession in
the local economy, reduced liquidity levels, more expensive and
limited sources of funds, as well as higher unemployment. Value
adjustments in respect of loans to and placements with customers
account for HRK 527 million, of which HRK 317 million relate to
individuals and small business customers and HRK 210 million to
corporate customers.
Assets and liabilities
Net gains and losses from financial instruments designated at fair
value through profit and loss and from foreign exchange trading
amounted to HRK 524 million, which is HRK 272 million more than
the year before.
Net gains and losses from investment securities totalled HRK 29
million, which is HRK 122 million less than the previous year, mostly
as a result of reduced non-recurring income from the disposal of
equity securities from the available for sale portfolio and smaller net
profit from the revaluation of replacement bonds.
Operating expenses
The Bank’s operating expenses in 2009 totalled HRK 1,783 million
and were HRK 168 million, or 8.6%, lower than the previous year.
Compared to 2008, personnel costs, administrative and marketing
expenses went down, whereas depreciation and deposit insurance
charges went up.
Assets
On 31 December 2009, the Bank’s assets amounted to HRK 92.8
billion, which is an increase of HRK 3.4 billion, or 3.8%, from the
previous year. Loans to and receivables from customers enjoyed
the strongest growth of HRK 2.7 billion (4.8%), and reached HRK
59.7 billion at the year-end. The described increase in assets was
financed by the growth of current accounts and deposits from banks
and deposits from customers. Current accounts and deposits from
banks went up by HRK 5.4 billion reaching HRK 15.3 billion by the
end of the year. Deposits from customers increased by HRK 0.6
billion to HRK 53.9 billion at the end of the year.
For the purpose of analysis, the assets are broken down into six
categories; their importance and trends are demonstrated in the
following diagram:
At the end of the reporting year, personnel expenses amounted to
HRK 853 million, which is HRK 140 million, or 14.1%, less than the
year before due mainly to a reduced number of employees, reduced
remuneration funds and the absence of one-off provisions under IAS
19 (for unused holidays and jubilee awards) which the Bank made in
2008.
Zagrebačka banka UniCredit Group · 2009 Annual Report
31
Operating and financial review
Operating and financial review (C
ontinued)
During 2009, the strongest growth was measured in respect of loans
to and receivables from customers, and deposits with other banks.
Deposits with other banks
Compared to the year before, deposits with domestic and foreign
banks grew by HRK 1.2 billion, and they accounted for 22.9% of
total banking assets (2008: 22.4%). To the largest extent, this asset
category is under the direct impact of the CNB monetary policy
measures aimed at sterilisation of monetary assets, restriction of
credit expansion and reducing the level of foreign borrowing. These
assets can be broken down as follows:
Cash reserves
Obligatory reserve with the CNB
- in HRK
- in foreign currency
Obligatory CNB bills
Loans to and receivables from banks
Total
Throughout the year, the Bank maintained necessary liquidity levels
and complied with all monetary regulations imposed by the central
bank.
Loans to and receivables from banks decreased HRK 1,010 million
as a result of compliance with CNB monetary regulations.
32
2009 Annual Report · Zagrebačka banka UniCredit Group
2009
HRK
MILLION
2008
HRK MILLION
MILLION
5,260
3,311
5,939
1,379
-
8,678
21,256
4,567
2,074
420
9,688
20,060
Loans to and receivables from
customers
Loans to and receivables from customers continued to grow in 2009.
Compared to the year before, they increased by 4.8% reaching HRK
59.7 billion at the end of the year. Loans to and receivables from
customers account for 64.3% of total assets (2008: 63.7%).
Structure of loans to and receivables from customers:
2009
2009
2008
HRK
%HRK
million
million
Gross loans to
and receivables from
Impairment allowance
Net loans to and receivables from
Companies, similar organisations and Government
Individuals and unincorporated business
Total
Companies, similar organisations and Government
Individuals and unincorporated business
Total
Companies, similar organisations and Government
Individuals and unincorporated business
Total
32,583
29,846
62,429
(1,180)
(1,599)
(2,779)
31,403
28,247
59,650
52.2
47.8
100.0
42.5
57.5
100.0
52.6
47.4
100.0
28,835
30,351
59,186
(972)
(1,288)
(2,260)
27,863
29,063
56,926
2008
%
48.7
51.3
100.0
43.0
57.0
100.0
48.9
51.1
100.0
Gross loans to and receivables from companies, similar organisations
and the Government grew by HRK 3,748 million (or 13%) reaching
HRK 32,583 million by the year-end. The Bank provided strong
financial support to the Government and Government-owned
companies in 2009, particularly in the first part of the year.
Furthermore, the Bank provided funding for its clients in the private
sector in all business segments and assisted them in their efforts to
overcome the aftermath of the economic crisis.
Compared to the year before, there was a marginal decrease in
gross loans to and receivables from individuals and unincorporated
businesses, so that the end of the year they amounted to HRK
29,846 million. More than half of the loan portfolio relates to
housing loans. With a market share of 31.8% in 2009, the Bank has
remained the market leader in housing lending in Croatia.
Impairment allowances increased by HRK 519 million compared to
the year before, with provisions in respect of loans to individuals
and unincorporated businesses growing by HRK 311 million, and
provisions for loans to companies, similar organisations and the
Government by HRK 208 million.
Zagrebačka banka UniCredit Group · 2009 Annual Report
33
Operating and financial review
Operating and financial review (C
ontinued)
Liabilities and equity
The diagram below shows the changes in the Bank’s liabilities and
equity:
Deposits from banks, borrowings and
issued securities
On 31 December 2009, the Bank’s total liabilities under deposits
from banks, borrowings and own securities issued amounted to HRK
22,442 million, which is HRK 5,032 million, or 28.9% more than
the previous year. Deposits from banks increased HRK 5,434 million
and borrowings were reduced by HRK 402 million compared to the
previous year.
In 2009, long-term own bonds issued in the nominal amount of EUR
450 million fell due to payment. The Bank secured the necessary
funds to settle its liabilities under those bonds by borrowing within
the UniCredit Group, which caused total deposits from banks to
increase by HRK 5,434 million.
Equity
The Bank’s share capital is denominated in HRK and comprises
ordinary shares listed on the Zagreb Stock Exchange. In comparison
to the year before, equity increased by 9.1%, reaching HRK 14,130
million at the year-end, and accounting for 15.2% of total liabilities
(2008: 14.5%)
Current accounts and deposits from
customers
In comparison to the previous year, current accounts and deposits
from customers grew by HRK 619 million (or 1.2%) and amounted
to HRK 53,915 million at the year-end. The currency structure of
customers’ deposits changed during the year in that the share of
foreign currency deposits increased.
Current accounts and deposits from individuals and unincorporated
businesses rose by HRK 800 million (or 2.2%) reaching HRK 37,319
million at the end of the year. Foreign currency deposits grew by
HRK 3,706 million or 14.2% whereas kuna deposits went down by
HRK 2,906 million or 27.7%. Current accounts and deposits from
individuals account for 69.2% of total deposits from customers
(2008: 68.5%).
Current accounts and deposits from companies, similar organisations
and the Government decreased by HRK 181 million (or 1.1%) and
fell to HRK 16,596 million by the end of the year. HRK deposits went
down HRK 1,135 million (or 10.0%), while foreign currency deposits
rose by HRK 954 million (or 17.7%). Current accounts and deposits
from companies, similar organisations and the Government make up
30.8% of total deposits (2008: 31.5%).
34
2009 Annual Report · Zagrebačka banka UniCredit Group
With the aim of increasing its own sources of funds, which is
expected to bring about improved profitability levels in the existing
operating environment, the Bank Management Board has proposed
that no dividend payments be paid out for ordinary shares for the
year 2009.
Zagrebačka banka UniCredit Group · 2009 Annual Report
35
Martin Darbo,
Adolf Darbo Aktiengesellschaft
Corporate Banking Client - Austria
family business,
«weAdon’ts a think
in terms of
quarters or years. We think
in terms of generations.
When making forwardlooking decisions, you need
a partner who prepares
and offers long-term
solutions in a reasonably
short time. This is why we
work with Bank Austria UniCredit Group.»
It’s easy with
UniCredit.
36
2009 Annual Report · Zagrebačka banka UniCredit Group
Management and corporate governance
Zagrebačka banka UniCredit Group · 2009 Annual Report
37
Management and corporate governance
Management and corporate governance
Declaration of application of the Code of Corporate Governance
In accordance with the Rules of the Zagreb Stock Exchange, the
Management Board and the Supervisory Board of Zagrebačka banka
declare that Zagrebačka banka dd (the Bank) applies the Code of
Corporate Governance, as jointly prepared by the Croatian Agency for
the Supervision of Financial Services (HANFA) and the Zagreb Stock
Exchange (ZSE).
if reasons for such removal arise, as stipulated in the law and the
Articles of Association. At the same time, the Chairman will request
that a new member of the Management Board be appointed.
The completed Annual Questionnaire (the Questionnaire) is enclosed
and forms an integral part of the Declaration. It contains answers to
the questions asked along with necessary explanations.
The removal of the Chairman of the Management Board will be
decided upon by the Supervisory Board following a proposal by the
Chairman of the Supervisory Board.
Information regarding the internal control and risk management
mechanisms can be found in this Annual Report, under the heading:
Notes to the financial statements (Note 38 - Risk Management).
The procedure for making amendments to the Articles of Association
is defined in Articles 79 and 80 of the Articles of Association. A
proposal for amendment can be submitted by the Management
Board or the Supervisory Board or by a shareholder or shareholders
holding at least 10% of the Bank’s voting shares.
Information on the Bank’s shareholders can be found in this Annual
Report, under the heading: Notes to the financial statements (Note
32 - Share capital).
UniCredit Bank Austria AG being the single largest shareholder in
the Bank is a member of the international banking group UniCredit
S.p.A. and, consequently, the Bank is a member of the same banking
group.
The rules governing the appointment and removal of the members
of the Management Board are contained in the Bank’s Articles of
Association. In accordance with them, the Chairman and members of
the Management Board are appointed by the Supervisory Board, their
term of office being four years, subject to previous approval by the
Croatian National Bank.
When appointing the members of the Management Board, the
Supervisory Board first designates the Chairman and gives that
person the mandate to request the appointment of other members of
the Management Board.
The Chairman of the Management Board has the power and duty
to request the removal of any member of the Management Board
38
2009 Annual Report · Zagrebačka banka UniCredit Group
The Supervisory Board will resolve the removal of a member of the
Management Board.
Proposals for amendments to the Articles of Association are
submitted to the Supervisory Board which can adopt such proposals
and pass them on to the General Meeting for adoption.
The respective scopes of powers of the Supervisory Board and the
Management Board are defined in the Articles of Association, in
accordance with the relevant provisions of the Companies Act and
the Banking Act.
While the Management Board may not issue new shares of the Bank,
it is authorised to approve the Bank’s acquisition of its own ordinary
shares for the purpose of their allocation to the Bank’s employees.
The Bank’s shares can be allocated to employees in accordance with
agreement at the General Meeting concerning the employee’s shares
of the Bank’s profit for a particular year.
Information on the composition and activities of the Management
Board and the Supervisory Board and their sub-committees is
provided in the Questionnaire.
Code of Corporate Governance - Annual questionnaire
All questions contained in this Questionnaire pertain to the period of
one year for which the annual financial statements are prepared.
1. Does the Company have its website on the Internet?
6. Is data on securities issued by the Company and held
by the Supervisory Board members or Management Board
members presented in the annual financial statements?
Yes.
Yes, the Company’s website address is www.zaba.hr.
2. Are the semi-annual, annual and quarterly financial
statements available to the shareholders?
7. Is data on securities issued by the Company and held
by the Supervisory Board members or Management
Board members published on the Company’s website and
regularly updated (within 48 hours)?
• At the Company’s headquarters?
The annual financial statements are available, whereas the semiannual and quarterly financial statements, as well as the annual
financial statements, are made available to the public in the
prescribed manner, i.e. through the media, on the Bank’s website
and by delivering them to the Zagreb Stock Exchange and the
Croatian Financial Services Supervisory Agency (HANFA).
This data is published on the Zagreb Stock Exchange website within
the legally prescribed period and with prescribed contents, and
delivered to the Croatian regulatory agency, namely the Croatian
Financial Services Supervisory Agency (HANFA).
8. Does the Company identify and publicize the risk
factors?
• On the Company’s website?
Yes, they are contained in the financial statements.
Yes.
9. Has the Company established the mechanisms
ensuring:
• In English?
The financial statements are prepared and available in English.
3. Has the Company prepared the calendar of important
events?
The calendar is not published on the Company’s website, since there
is a well-established practice of convening the General Meeting and
releasing the annual financial results in mid-March, with the General
Meeting taking place in the legally prescribed period afterwards, and
the shareholders are familiar with such practice. The right to dividend
is regulated by the Articles of Association and a separate decision of
the General Meeting.
4. Does the Company publish a list of shareholders, and is
the list updated at least twice a month?
Pursuant to the applicable law, data on the ten largest shareholders
is publicly available, whereas personal data on minority shareholders
is considered protected, and in respect to such data there is a legal
interest of personal data protection.
5. Is there a cross shareholding relationship between the
Company and another Company/other companies?
• That clarifications in respect of privileged information, its nature
and importance, as well as the restrictions on its use, are supplied to
the persons to whom such information is made available?
Yes.
• Supervision over the flow of privileged information and its possible
misuse?
Yes.
10. Does each share of the Company carry the right to one
vote?
Yes.
• Are all relevant pieces of information on the content of the rights
arising from the preferred shares timely publicized?
See previous answer.
• How are the respective clarifications publicized?
See previous answer.
No.
Zagrebačka banka UniCredit Group · 2009 Annual Report
39
Management and corporate governance
Management and corporate governance (C
ontinued)
11. Are the nominations, including relevant CVs, for all
Supervisory Board candidate members to be elected or
appointed at the General Meeting made public on the
Company’s website? (If no, why not?)
18. Does the Decision on dividend payment or interim
dividend payment stipulate the date when the shareholder
acquires the right to dividend payment, and the dividend
payment date or period? (If no, why not?)
Yes.
In 2009, the General Meeting decided that no dividend would be
disbursed to the shareholders.
12. Does the Company ensure equal treatment to all its
shareholders?
Yes.
13. Did the Company issue new shares?
19. Is the date on which the shareholder acquires the
right to dividend payment or interim dividend payment
at least 10 days after the adoption date of the respective
Decision?
See under 18.
During 2009, the Company did not issue new shares.
14. Did the Company acquire or release its own (treasury)
shares? If yes, did the acquisition or release take place in
the open market?
In 2009, the Bank transferred a portion of its own shares to the
employees in accordance with the Decision of the General Meeting of
21 April 2009.
20. Is the date of dividend payment or interim dividend
payment no less than 12 days before and no more than 30
days after the adoption date of the Decision? (If no, why
not?)
See under 18.
21. Did the period of dividend payment or advance to
dividend payment last longer than ten days?
• In a way that cannot be described as privileged to certain
shareholders or investors, or groups of shareholders or investors?
See under 18.
See previous answer.
22. Did certain shareholders enjoy privileged treatment
during dividend payments or interim dividend payments?
15. Is the process of proxy issue for the General Meeting
simplified and free of strict formal requirements?
Yes.
16. Did the Company enable the shareholders who are for
any reason prevented from voting in person at the General
Meeting to vote at no extra cost through their proxies,
who are required to vote according to the shareholders’
instructions?
Yes.
17. When convening the General Meeting, did the
Company’s Management Board determine the date when
the status in the share register will be established for
the purpose of granting voting rights at the Company’s
General Meeting, such date falling no more than seven
days before the General Meeting? (If no, why not?)
Yes, it is prescribed by the Company’s Articles of Association and a
special Decision of the General Meeting.
40
2009 Annual Report · Zagrebačka banka UniCredit Group
See under 18.
23. Was the Decision on dividend payment or interim
dividend payment laying down the above mentioned dates
published and delivered to the Stock Exchange two days
after its adoption at the latest?
See under 18.
24. Were the Agenda of the General Meeting and
all relevant data and documents with explanations
relating to the Agenda published on the Company’s
website and made available to the shareholders at the
Company’s headquarters as of the date of the first public
announcement of the Agenda?
Yes.
25. Were the Agenda of the General Meeting and the
relevant information and documents published on the
Company’s website in English as well?
No, considering its relationship with the majority shareholder and the
structure of the minority shareholders, the Company received to such
requests.
26. Were any requirements set for participation at the
General Meeting and exercising voting rights (irrespective
of whether such requirements are prescribed by the law
or the Articles of Association), as e.g. announcing one’s
participation in advance, certifying letters of proxy, and
the like? (If yes, why?)
Yes, pursuant to the law, the Articles of Association prescribe that
anyone intending to participate in the General Meeting has to advise
the Company in advance of such his/her intention, which ensures
better management of technical aspects of the General Meeting.
27. Apart from the contents prescribed by the law, does
the report submitted by the Supervisory Board to the
General Meeting contain an assessment of the Company’s
overall business performance, work of its Management
Board and a separate commentary on its co-operation
with the Management Board?
32. Please list the names of the Supervisory Board
members.
Erich Hampel, Chairman
Jakša Barbić, Deputy Chairman
Franco Andreetta, Deputy Chairman
Klaus Junker, Member
Torsten Leue, Member
Robert Zadrazil, Member
Marco Iannaccone, Member - his membership ended on 21 April
2009
Carlo Marini, Member
Carlo Vivaldi, Member
Stephan Winkelmeier, Member
Graziano Cameli, Member
Fabrizio Onida, Member
33. For each Supervisory Board member, please give the
names of the companies in which he/she is a member of
the supervisory board or the management board. If any of
those companies is to be considered a competitor to your
Company, please indicate.
Yes.
There is no competition relationship.
28. Is it possible for the shareholders to participate and,
in particular, vote at the Company’s General Meeting by
means of modern communication technology? (If no, why
not?)
Erich Hampel
No, there was no need for such form of participation and voting.
29. Did the Company’s Management Board made public
the decisions of the General Meeting and the data on
possible law suits contesting such decisions?
Yes.
30. Did the Supervisory Board make the decision on
a tentative work plan which includes a schedule of
its regular meetings and data which should be made
available to the Supervisory Board members on a regular
and timely basis?
a) membership in the Supervisory Boards of the following companies:
- UniCredit CAIB AG - Vienna, Austria
- ZAO UniCredit Bank, Russia
- UniCredit Bank Serbia - Belgrade, Serbia
- Bausparkasse Wüstenrot AG - Salzburg, Austria
- ORAG Osterreichishe Realitaten - Aktiengesellschaft, Austria
- B & C Holding GmbH, Austria
- Österreichisches Verkehrsbüro AG - Vienna, Austria
- Österreichische Lotterien GmbH - Vienna, Austria
- Donau Chemie AG - Vienna, Austria
b) membership in the Management Boards of the following
companies:
- UniCredit Bank Austria AG - Vienna, Austria
- UniCredit S.p.A. - Milan, Italy
- JSC ATF Bank - Kazakhstan (KZ)
- KOC Finansal Hizmetler, Turkey
Yes.
31. Did the Supervisory Board adopt the Rules of
Procedure?
Yes.
Zagrebačka banka UniCredit Group · 2009 Annual Report
41
Management and corporate governance
Management and corporate governance (C
ontinued)
Jakša Barbić
a) membership in the Supervisory Boards of the following companies:
- VETROPACK STRAŽA, Hum na Sutli
- ELEKTROKONTAKT, Zagreb
- INGRA, Zagreb
- COCA COLA, Zagreb
- HOLCIM-HRVATSKA 100, Koromačno
Franco Andreetta
a) membership in the Supervisory Boards of the following companies:
- UniCredit Banka Slovenia
- Giorgio Fedon e Figli S.p.A. Domegge di Cadore (BL)
Klaus Junker
a) membership in the Supervisory Boards of the following companies:
- Allianz pojistovna a.s. Prague, Czech Republic
- Allianz Slovenska poist’ovna a.s., Bratislava, Slovakia
- Allianz Business Services, Bratislava,Slovakia
- Allianz Hungaria Biztositó Rt., Budapest, Hungary
- T.U. Allianz Polska S.A., Warsaw, Poland
- T.U. Allianz Zycie Polska, S.A, Warsaw, Poland
- Allianz Direct New Europe, Warsaw, Poland
- Allianz Bulgaria Holding, Sofia, Bulgaria
- Allianz Zagreb, Croatia
- Allianz Tiriac Asigurari S.A., Bucharest, Romania
- Allianz Insurance Company, Moscow, Russia
- OJSC ROSNO Insurance Company, Moscow, Russia
- OJSC Riskon, Moscow, Russia
- Allianz ROSNO Investment Strategies, SICAV, Luxemburg
b) membership in the Management Boards of the following Company:
- CEO, Allianz New Europe Holding GmbH, Vienna, Austria
Torsten Leue
- ZAO UniCredit Bank, Russia
- BKS Bank AG, Klagenfurt, Austria
b) membership in the Management Boards of the following Company:
- UniCredit Bank Austria AG, Vienna
Carlo Marini
a) membership in the Supervisory Boards of the following companies:
- AS UniCredit Bank, Riga, Latvia
- UniCredit Bank Czech Republic, a.s., Czech Republic
- ZAO UniCredit Bank, Russia
- UniCredit Bank Hungary Zrt., Budapest, Hungary
Carlo Vivaldi
a) membership in the Supervisory Boards of the following companies:
- JSC ATF BANK - Almaty, Kazakhstan
- Koc Finansal Hizmetler AS - Istanbul
- UniCredit Bank Czech Republic, a.s. - Prague
- UniCredit Global Information Services ScpA - Milan
- UniCredit Tiriac Bank S.A. - Bucharest
- Yapi ve Kredi Bankasi AS - Istanbul
b) membership in the Management Boards of the following Company:
- UniCredit Bank Austria AG - Vienna
Stephan Winkelmeier
a) membership in the Supervisory Boards of the following companies:
- Joint Stock Commercial Bank for Social Development Ukrsotsbank - Kiev
- JSC ATF BANK - Almaty
- Oesterreichische Kontrollbank Aktiengesellschaft - Vienna
- Yapi ve Kredi Bankasi AS - Istanbul
- ZAO UniCredit Bank - Moscow
a) membership in the Management Boards of the following
companies:
- Allianz-Slovenska poisťovňa, a.s.
- Slovak Bureau of Insurers
b) membership in the Management Boards of the following Company:
- UniCredit Bank Austria AG - Vienna
Robert Zadrazil
a) membership in the Supervisory Boards of the following companies:
- UniCredit Bank Czech Republic, a.s. - Prague
- UniCredit Bank Hungary Zrt. Budapest
- UniCredit Bulbank AD - Sofia
a) membership in the Supervisory Boards of the following companies:
- UniCredit Bulbank AD, Sofia , Bulgaria
- UniCredit Tiriac Bank S.A., Romania
- BA-CA Administration Services GmbH, Vienna, Austria
- Informations - Technologie Austria, Vienna, Austria
- WAVE Solutions Information Technology GmbH, Vienna, Austria
- Joint Stock Commercial Bank for Social Development Ukrsotsbank - UA
42
2009 Annual Report · Zagrebačka banka UniCredit Group
Graziano Cameli
Fabrizio Onida
a) membership in the Supervisory Boards of the following Company:
- UniCredit Leasing
34. Is the Supervisory Board composed mainly of
independent members? (If no, why not?)
38. Is the remuneration for the Supervisory Board
members:
No, in that respect, the Company follows the Corporate Governance
Rules of the banking and financial services group to which it belongs;
the Group exercises its own supervisory powers in accordance with
the legal regulations applicable to it.
• Established by a decision of the General Meeting?
35. Who are independent Supervisory Board members?
Jakša Barbić, Franco Andreetta and Fabrizio Onida.
36. Is there a long-term succession plan in place in the
Company?
Yes.
The purpose of succession planning is to ensure the continuity
of quality management of individual business areas within the
company. Management succession planning is carried out through
timely recognition of needs for successors, their identification and
preparation to assume the respective powers and duties through
systematic implementation of development activities and acquisition
of necessary experience.
Sound succession planning is based on:
a) permanent and structured management of performance and
development of future managers
b) employee segmentation and segmentation management in order
to ensure consistent application of the relevant criteria
c) on-going and structured management development planning
d) co-operation with top management of individual organisational
units to identify future business needs and potential successors at
all management levels
e) activities directly involving the employees with high performance
and potentials, i.e. Growing Resources, in order to directly indentify
potential successors.
The efficiency of such approach is shown by the fact that in 2009
the Bank satisfied 84% of its succession needs for mid and top
management levels from so defined internal resources.
37. Is the remuneration for the members of the
Supervisory Board entirely or partly determined by their
contribution to the Company’s performance? (If no, why
not?)
No, in most cases there is no remuneration for the Supervisory
Board members, because in line with the rules of the Group of
which the Company is a member, the representatives of the majority
shareholder on the Supervisory Board waive their right to any kind of
remuneration. Remuneration for other members is established in an
amount considered to be fair.
Yes.
39. Are detailed data on all types of remuneration and
other receipts paid by the Company and its related
persons to each member of the Company’s Supervisory
Board, including the structure of such remuneration,
publicised? (If no, why not?) (If yes, where?)
Information on cost reimbursement and remuneration paid by the
Company is contained in the respective separate decision of the
General Meeting.
40. Is each member of the Supervisory Board required to
report to the Company on all changes in respect of his/her
share ownership on the following working day after such
change has occurred at the latest?
The reporting obligation of the members of the Supervisory Board is
in line with the Capital Market Act.
41. Please list all the transactions involving members of
the Supervisory Board or their related/associated persons,
on the one hand, and the Company or its associated/
related persons, on the other hand.
There are no relevant transactions in this respect.
42. Were all the transactions involving members of the
Supervisory Board or their related/associated persons, on
the one hand, and the Company or its associated/related
persons, on the other hand:
• Concluded on an arm’s length basis (especially as regards
deadlines, interest rates, guarantees, and similar)?
• Clearly reported in the Company’s reports?
• Confirmed by the assessment of the experts independent in
respect of the participants in the respective transactions?
See under 41.
43. Are there contracts and agreements between the
Supervisory Board members and the Company?
No.
Zagrebačka banka UniCredit Group · 2009 Annual Report
43
Management and corporate governance
Management and corporate governance (C
ontinued)
44. Has the Supervisory Board established an appointment
committee? (If no, why not?)
No, at present the Company has the Audit Committee and the
Remuneration Committee, their respective scopes of competence
clearly defined, while other supervisory authorities are exercised
by the Supervisory Board itself without the assistance of any
subordinate committees.
45. Has the Supervisory Board established a remuneration
committee?
review the relevant information released in the annual report prior to
publication?
Yes.
46. Has the Supervisory Board established an Audit
Committee? (If no, why not?) If yes, are the majority of the
Audit Committee members independent members of the
Supervisory Board? (If no, why not?)
Yes.
• If yes, did the remuneration committee propose the Supervisory
Board a remuneration policy for the Management Board members
which has to include all types of remuneration, and in particular: the
fixed component, the variable component depending on business
performance, as well as the pension scheme and severance pay?
• Did the Audit Committee monitor the integrity of the Company’s
financial information, and in particular the correctness and
consistency of the accounting methods applied by the Company and
by the group of which it is part, including also the criteria for financial
consolidation of the companies within its group?
Yes.
To an appropriate extent and within its existing scope of authority.
• With regard to the variable remuneration component depending
on business performance, does the remuneration committee’s
proposal contain recommendations as to the objective performance
assessment criteria?
• Did the Audit Committee assess the quality of the internal control
and risk management systems in place with the aim of ensuring
that the main risks to which the Company is exposed (including
also compliance risks) are adequately identified and disclosed, and
properly managed?
Yes.
• Did the remuneration committee propose the Supervisory Board
remuneration for individual members of the Management Board in
accordance with the Company’s remuneration policy and assessment
of their individual performance?
Yes.
• Did the remuneration committee propose the Supervisory Board
an appropriate format and contents for contracts of service for the
Management Board members?
The Audit Committee regularly receives quarterly reports of Internal
Audit, presented by the Head of Internal Audit and containing also
an opinion about the quality of the internal control system, based on
audits performed during a given quarter.
• Did the Audit Committee undertake measures to ensure the
efficiency of the internal audit system, in particular by giving
recommendations concerning the selection, appointment,
re-appointment and removal of the Head of Internal Audit and
concerning also resources available to him/her, and by assessing
actions taken by the management following the findings and
recommendations of the internal audit?
Yes.
• Did the remuneration committee monitor the amount and structure
of remuneration for senior managers and give the Management
Board recommendations in that regard?
Each quarterly report of Internal Audit presented to the Audit
Committee contains a section on professional improvement and
training of Internal Audit employees. Potential restrictions and
difficulties in respect of the budget for those activities are also
discussed in this section of the report.
Yes.
• Did the remuneration committee review the general policy of
incentives for the Management Board members, when those include
share options or other arrangements based on share acquisition,
did it propose adequate solutions to the Supervisory Board and
44
2009 Annual Report · Zagrebačka banka UniCredit Group
• If there is no internal audit function within the Company, has the
Audit Committee assessed the need to establish such a function?
There is an internal audit function within the Company.
• Did the Audit Committee make recommendations to the
Supervisory Board regarding the selection, appointment,
re-appointment or replacement of external auditors and concerning
also the terms of external auditors’ engagement?
communication with the Management Board and Supervisory Board?
Yes.
• To whom is the Audit Committee accountable?
The process of selecting external auditors is monitored by Internal
Audit, which reports to the Audit Committee on the selection model
and main indicators taken into account at the time of the selection.
The proposal for the appointment of external auditors is presented to
the Supervisory Board by the Audit Committee.
• Did the Audit Committee oversee the independence and objectivity
of the external auditors, particularly as regards the rotation of
chartered auditors within the audit firm and the compensation paid
by the Company for external audit services?
Yes, as part of its activities within the selection process referred to
above.
It is accountable to the Supervisory Board.
• Does the Audit Committee have open and unrestricted
communication with the internal and external auditors?
Yes.
• Did the Management Board present to the Audit Committee:
- timely and periodical overview of financial statements and similar
documents before such information
was made publicly available
• Did the Audit Committee monitor the nature and amount of
services other than audit that the Company is provided by the
external auditor’s firm or its connected (related) persons?
- information on changes in accounting principles and criteria
Under the relevant banking regulations, the Company is prohibited
from being provided such services by its external auditors.
- information on any major difference between the book and actual
values of individual items
• Did the Audit Committee prepare rules regarding the services
which may not be provided by external auditors or their connected
(related) persons, services which may only be provided subject to
ex-ante approval of the Audit Committee, and services which may be
provided even without the committee’s ex-ante approval?
- all correspondence with Internal Audit and independent auditors?
Under the relevant banking regulations and the Group rules, such
services are not allowed.
• Did the Audit Committee consider the efficiency of external audit
and the actions undertaken by senior management following the
external auditor’s recommendations?
- accounting procedures accepted for a majority of transactions
Members of the Audit Committee have access to all documents and
they actively participate in Supervisory Board meetings, in which all
major issues are discussed. Members of the Audit Committee also
have access to all reports of Internal Audit.
• Did the Audit Committee discuss with an independent auditor the
following matters:
- changes to the existing accounting principles and criteria, or their
retention,
The Audit Committee gives instructions to Internal Audit with
regard to monitoring the implementation of the external auditors’
recommendations. Internal Audit then regularly reports on their
implementation.
- the application of relevant regulations,
• Did the Audit Committee look into the circumstances leading
to the dismissal of the external auditors and give adequate
recommendations to the Supervisory Board (If the external auditors
were dismissed)?
- risk assessment methods and results,
Such an event did not occur.
- important assessments and conclusions in preparing the financial
statements,
- high-risk areas of business,
- major deficiencies and weaknesses found in the internal control
system,
• Does the Audit Committee have open and unrestricted
Zagrebačka banka UniCredit Group · 2009 Annual Report
45
Management and corporate governance
Management and corporate governance (C
ontinued)
- impact of external factors (economic, legal and industrial) on the
financial statements and audit activities?
• scope of activity, and goals;
Yes.
Yes.
• rules of procedure;
• Did the Audit Committee ensure delivery of quality information
by subsidiaries and affiliated companies, and third parties (such as
professional advisors)?
Yes.
• rules to resolve conflicts of interest;
This was not within the competence of the Audit Committee in 2009.
Yes.
47. Was the documentation relevant for the work of the
Supervisory Board always delivered to all members in
time?
• Management Board secretariat;
Yes.
Yes.
48. Did minutes of the Supervisory Board meetings contain
all decisions adopted, along with the results of voting,
stating also how individual Supervisory Board members
voted?
• meetings, adoption of decisions, agenda, preparation and contents
of the minutes, and delivery of documents;
Yes.
• co-operation with the Supervisory Board?
Yes.
49. Did the Supervisory Board prepare an assessment of
its work in the preceding period including the assessment
of its contribution and competences of individual
Supervisory Board members, as well as common activities
of the Supervisory Board, the assessment of activities
of its committees and of achievements compared to the
Company’s set goals?
The Supervisory Board does not perform the above activities in such
a formalized way.
51. Are there rules of procedure for the Management
Board governing the following issues:
46
2009 Annual Report · Zagrebačka banka UniCredit Group
52. Did the Company issue a statement of remuneration
policy for the Management Board and Supervisory Board
as part of the annual report? (If no, why not?)
The Company’s remuneration policy is outlined below:
REMUNERATION POLICY FOR THE MANAGEMENT BOARD AND
SUPERVISORY BOARD
MANAGEMENT BOARD
50. Please list the names of the Management Board
members.
Franjo Luković, Chairman
Sanja Rendulić, Member
Milivoj Goldštajn, Member
Tomica Pustišek, Member - his membership on the Management
Board of Zagrebačka banka ended on 1 May 2009
Miljenko Živaljić, Member
Marko Remenar, Member
Daniela Roguljić Novak, Member
Mario Agostini, Member
Yes.
Key features of the Management Board remuneration
The Management Board remuneration policy is part of the overall
remuneration and reward system of Zagrebačka banka (the Bank), as
regulated in the relevant decisions of the Bank’s competent bodies.
The amount of overall remuneration of individual Management Board
members is determined by taking into account their respective areas
of competence, their track record in managing particular business
lines, as well as information on industry remuneration obtained
through market research conducted by independent consultants.
Taking into account market developments, the Bank’s financial
standing and individual performance of the Management Board
members, their remuneration is regularly reviewed on an annual
basis and, if necessary, overall remuneration is changed.
Components of remuneration of the Management Board
members
Regulation of remuneration of the Management Board
members
Remuneration of the Management Board members is made up
of a variable and a fixed component, and the variable component
related to the Bank and ZABA Group performance, the performance
of individual business lines within competence of the Management
Board members, and the members’ individual performance accounts
for a larger share of their overall remuneration than the fixed
component (fixed pay).
In order to ensure that the remuneration of the Management Board
members is defined in accordance with the uniform remuneration
policy and with the financial position of the Bank, the Remuneration
Committee has been set up within the Bank, and its members are
appointed from among the members of the Supervisory Board. Upon
the substantiated proposal of Human Resources, the Remuneration
Committee defines and submits to the Supervisory Board a proposal
of the remuneration principles for the Management Board members,
their performance targets for a given financial year, it defines the
amount and structure of remuneration of the Management Board
members, and submits to the Supervisory Board draft contracts
of service of the Management Board members stipulating their
individual rights and obligations during their term of office.
Remuneration is based on the level of achievement of specifically
defined business objectives which are clearly defined for a given
business year and based on the ZABA Group targets.
The variable component of the remuneration of the Management
Board members, i.e. the performance-based incentives, accounts for
a greater share whereas the monthly pay as the fixed remuneration
component accounts for a smaller share.
• Monthly pay
The monthly pay is agreed for the entire term of office of the
Management Board members.
In addition to the monthly pay, the Management Board members are
entitled to short-term and long-term incentives.
• Short-term (annual) incentive schemes
The Management Board members are entitled to short-term
incentives on certain conditions, like other employees of the Bank.
The short-term incentives for a given financial year depend on the
performance of ZABA Group and individual performance of the
Management Board members. The ZABA Group performance is
measured in terms of key financial indicators, while the individual
performance targets (standards) are set specifically for each member
of the Management Board taking into account their respective scope
of competence and business objectives. The individual objectives and
indicators used to measure individual performance and to determine
short-term incentives for the Management Board members for a
particular business year are defined in advance and agreed for
the next year, and they are subject to changes and adjustments
depending on the ZABA Group performance during that year.
• Long-term incentive schemes
Payments under the long-term incentive scheme account for a major
part of overall remuneration of the Management Board members so
as to ensure their motivation to achieve the long-term strategic key
indicators of the Group financial performance, in particular the Group
profit after taxes as the key performance indicator, and to encourage
loyalty and retention of the Management Board members.
The remuneration principles are defined in separate decisions of
the Supervisory Board for each type of remuneration and incentives
being an integral part of the Bank’s overall remuneration system.
The rights and obligations of individual members of the Management
Board are defined in detail in their respective contracts of service. In
accordance with the Bank’s Articles of Association, the Management
Board members are appointed to a four-year term.
The contracts of service of the Management Board members
stipulate on an individual basis the amount of their monthly pays,
incentives and other benefits, along with severance pay and
notice period. The monthly pays and incentives are defined in
fixed amounts, the notice period is six months and the amount of
severance pay is determined according to how the contract of service
is terminated.
SUPERVISORY BOARD
The Supervisory Board members are entitled to a compensation paid
for their attendance and participation in the physical meetings and
video-conferences.
Besides, the Supervisory Board members are entitled to the
reimbursement of their travel and related expenses in connection
with Supervisory Board meetings they actually attend.
Moreover, the Supervisory Board members are entitled to a one-off
annual remuneration in accordance with the Decision of the General
Meeting for each financial year.
The proposal of the annual remuneration is submitted to the General
Meeting for decision and it may vary depending on the Bank’s
performance in the financial year concerned.
Zagrebačka banka UniCredit Group · 2009 Annual Report
47
Management and corporate governance
Management and corporate governance (C
ontinued)
In principle, equal portions of the aggregate remuneration amount as
proposed to the General Meeting are paid to all Supervisory Board
members.
However, the amounts paid to the Chair and Deputy Chair of the
Supervisory Board are higher 25% and 12.5%, respectively, than the
amount paid to other Supervisory Board members.
In the proposal of the aggregate amount of the annual remuneration
for the Supervisory Board submitted to the General Meeting, it
can also be proposed that the Supervisory Board members be
compensated for their extra work on the Supervisory Board subcommittees (i.e. Audit Committee and Remuneration Committee). So,
the remuneration for the Supervisory Board members being at the
same time members or Chairs of either of the sub-committee may be
increased by no more than 7.5% compared to the remuneration paid
to the Supervisory Board members who are not the Chair or Deputy
Chair of the Supervisory Board, or member or the Chair of either of
the sub-committees.
In accordance with the rules of the banking group of which the
Bank is a member, one-off annual remuneration is not paid to those
Supervisory Board members who represent the Bank’s majority
shareholder and those members of the Supervisory Board who
cannot be considered independent members.
53. If there is a statement of remuneration policy, does it
contain the following elements:
• major changes in the remuneration policy compared to the
previous year,
• explanation of the relative share and importance of fixed and
variable remuneration components,
• sufficient information on the performance criteria, whose fulfilment
gives the right to share options, shares or another form of the
variable remuneration component,
• sufficient information on the correlation between the remuneration
amount and individual performance,
• the main indicators and reasons for awarding annual bonus
payments or benefits other than cash,
• a brief summary of contracts of service for the members of the
Management Board including information on the term of contracts,
notice periods and severance pays. Any form of remuneration for the
members of the management and Supervisory Boards involving share
options or other rights to share acquisition, or if their remuneration is
otherwise based on the Company’s share price, has to be approved
48
2009 Annual Report · Zagrebačka banka UniCredit Group
by the General Meeting before it becomes effective. The approval
refers to the remuneration principles in general, and not to individual
remuneration for the members of the management and Supervisory
Boards.
Further to answer under 52. above, the following can be said:
The remuneration systems are defined under long-term perspective
and taking into account the Company’s long-term business
objectives.
For many years, the bank has differentiated between the variable
and fixed remuneration components: the variable performance-based
component accounts for a larger share of overall remuneration
package than the fixed monthly pay of the Management Board
members. The basis for establishing the variable component is
successful achievement of the business objectives specifically
defined at all levels for a given business year.
The remuneration principles are stipulated in special decisions
governing each type of remuneration which are considered an
integral part of the overall remuneration system in the Bank.
54. Is the statement of remuneration policy permanently
available on the Company’s website? (If no, why not?)
The above statement will be made available on the Company’s
website as integral part of the Annual Report.
55. Is detailed information on all types of remuneration
and compensation paid to each member of the
Management Board published in the Company’s annual
report?
In the annual report, information is disclosed on the Company’s
aggregate costs in respect of the overall remuneration for
Management Board members.
56. Are all types of remuneration for the members of
the Management and Supervisory Boards, including
share options and other benefits, clearly disclosed in the
Company’s annual report broken down by individual items
and persons? (If no, why not?)
Receipts under share awards, life insurance premiums, monthly and
bonus pays are reported on an aggregate basis for all members
of the Management Board in the section of the annual financial
statements concerning transactions with connected (related) persons.
57. Does the statement of remuneration for the
Management Board members contain the following
elements for each member of the Management Board
who performed the office during the year to which the
statement refers:
• total amount of the monthly pay, irrespective of whether it has
been actually paid or not,
The right to a monthly pay is regulated in the contract of service
for the entire term of office, and the aggregate amount of monthly
pays is included as the summary figure in the section of the annual
financial statements concerning transactions with connected (related)
persons.
of options or shares awarded by the Company in the year to which
the statement refers and requirements that need to be met in order
to benefit from such schemes,
The bank does not apply a share option scheme, and the share
award scheme is regulated under the long-term incentive plan
subject to special decisions of the Supervisory Board and the General
Meeting.
• the number of share options executed in the year to which the
statement refers and, for each option, the number of shares and
the execution price, or the price of shares to be awarded to the
Management Board members at the year-end (If no, why not?),
The Group does not apply a share option scheme.
• compensation or benefits received from associated companies,
Members of the Management Board receive no compensation from
the associated companies.
• Any loan (including outstanding debt and interest), advance
payments or guarantees granted to the Management Board members
by subsidiaries/affiliated companies subject to consolidation.
• remuneration in the form of profit-sharing or bonus schemes, and
reasons why it was paid,
The members of the Management Board have no such arrangements
with the subsidiaries/affiliated companies.
For the Management Board members, such rights are regulated in
special decisions of the Supervisory Board and General Meeting (in
the section concerning profit sharing schemes).
• any other additional compensation paid to members of the
Management Board for the services performed by them beyond their
scope of duties as Management Board members,
The members of the Management Board do not receive such
compensation.
• any compensation that was paid or should have been paid to a
former member of the Management Board upon termination of his/
her term of office during the year to which the statement refers,
In the case of termination of office of the Management Board
members, the terms of such termination and the members’ future
employment with the bank are regulated in a special decision of the
Supervisory Board in accordance with the contract of service and the
applicable regulations.
• total estimated value of non-cash benefits considered as
remuneration, and not included under the above points,
Non-cash benefits are regulated at the Bank level in special
decisions and in the contract of service.
58. Did each member of the Management Board advise
the Supervisory Board of all changes in regard to his/
her ownership of the Company’s shares no later than the
next working day after such change occurred, with the
Company being required to publicize the change as soon
as possible?
The reporting obligation of the members of the Supervisory Board is
in line with the Capital Market Act.
59. Please list all transactions which involved the
members of the Management Board or their related
persons, on the one hand, and the Company or its related
persons/entities on the other hand.
There are no such transactions.
60. Were the transactions involving the members of the
Management Board or their related persons, on the one
hand, and the Company or its related persons, on the other
hand:
• Entered into on an arm’s length basis (particularly as regards
repayment periods, interest rates, guarantees, etc.)?
• Clearly stated in the Company’s statements (If not, which and
why)?
• when remuneration is paid in the form of shares or share options
or other remuneration forms based on share ownership: the number
Zagrebačka banka UniCredit Group · 2009 Annual Report
49
Management and corporate governance
Management and corporate governance (C
ontinued)
• Approved in an independent assessment of experts who are
independent in relation to the parties in the transaction concerned (If
not, which and why)?
• Provides other services to the Company, either by itself or through
its associated companies?
No. That is prohibited under the laws governing banking operations.
Those could involve only standard day-to-day transactions performed
on terms and conditions generally applicable to the bank’s clients;
the transactions were not specifically referred to in the Company’s
reports, nor would their character require an independent
assessment.
61. Do the members of the Management Board hold
significant shareholdings in other companies that could
be considered as being the Company’s competition (If yes,
what percentage, in what Company and what amount)?
65. Did the external auditors directly inform the Audit
Committee about the following:
• discussion on the main accounting policy,
• major weaknesses and deficiencies of the internal control system,
• alternative accounting procedures,
• disagreements with the Management Board, risk assessment, and
No.
62. Are the members of the Management Board also
members of Supervisory Boards in other companies?
(If yes, please provide the names of those Management
Board members, the companies where they are members
of the Supervisory Board, and their positions on those
Supervisory Boards)
MB membersupervisory board membership
Franjo Luković
Sanja Rendulić
Milivoj Goldštajn
Miljenko Živaljić
Marko Remenar
Daniela Roguljić Novak
LOCATLEASING CROATIA, Zagreb - Deputy Chairman
UNICREDIT BANK, Mostar - Chairman
UNICREDIT BANK AD, Banja Luka - Chairman
UNICREDIT BANK, Mostar - Deputy Chairman
UNICREDIT BANK AD, Banja Luka - Deputy Chairman
ZAGREB NEKRETNINE, Zagreb - Chairman
UNICREDIT BANK, Mostar - Member
ISTRATURIST, Umag - Chairman
ZAGREB NEKRETNINE, Zagreb - Member
UNICREDIT BANK AD, Banja Luka - Member
UNICREDIT BANK, Mostar - Member
PRVA STAMBENA ŠTEDIONICA - Chairman
ZAGREB NEKRETNINE - Member
MZB - Chairman
CENTAR KAPTOL - Deputy Chairman
SREDIŠNJE KLIRINŠKO DEPOZITARNO DRUŠTVO - Member
UNICREDIT LEASING CROATIA - Member
63. Does the Company have an external auditor (If no, why
not?)
• potential analyses of fraud and/or misuse.
No such events occurred in 2009. However, the Rules of Procedure
for the Audit Committee include provisions according to which the
Audit Committee may gather such information in regular meetings
with the external auditors or the Management Letter.
66. Did the Company release the information on the fees
paid to the external auditors for audit and other services
performed (If no, why not)?
The external auditors carried out only the audit of annual financial
statements at a price prescribed in their General Terms and
Conditions.
67. Does the Company have an internal audit function and
an internal control system (If no, why not)?
Yes.
68. Can investors request in writing and timely obtain all
relevant information from the Management Board or from
a person within the Company responsible for investor
relations (If no, why not)?
Yes.
69. How many times did the Management Board meet with
investors?
Yes.
64. Is the Company’s external auditor:
Since the Company is a member of a banking group, such meetings
no longer take place on a regular basis.
• Connected with the Company in terms of ownership or interest?
70. Did anybody suffer negative consequences because
they reported to the competent bodies within or outside
No.
50
2009 Annual Report · Zagrebačka banka UniCredit Group
the Company deficiencies in applying relevant regulations
or ethical norms within the Company (If yes, why)?
No.
71. Do all the members of the Management Board and
the Supervisory Board agree that, to the best of their
knowledge, the answers given in this questionnaire
are completely true (If not, which members of the
Management Board and the Supervisory Board disagree,
and why)?
Management Board
The Management Board is responsible for managing the business of
the Bank and each member of the Management Board is responsible
for a portfolio of operational and support functions. Pursuant to
the Bank’s Articles of Association, the Management Board may
consist of five to nine members, the final number to be approved
by the Supervisory Board upon the proposal of the Chairman of the
Management Board. Prior approval of the CNB must be obtained with
respect to candidates for the post of the Chairman and members of
the Management Board.
The members of the Management Board who served during 2009
were as follows:
Yes.
In accordance with the Companies Act and its Articles of Association,
the Bank has a Supervisory Board and Management Board. The two
boards are separate and no individual may be a member of both
boards. Under Croatian Law, individual members of the Supervisory
Board and Management Board must exercise the standard of care of
a diligent and prudent businessman in carrying out their duties. They
must take into account a broad range of considerations, including
the interests of the Bank, its shareholders, employees, creditors, and
customers.
Franjo Luković
Chairman
Milivoj Goldštajn
Member
Sanja Rendulić
Member
Miljenko Živaljić
Member
Marko Remenar Member
Daniela Roguljić Novak
Member
Mario Agostini
Member
Tomica Pustišek
Member
Supervisory Board
None of the above directors performs any significant business
activities outside the Group.
(Appointed on 6 May 2009)
(Appointed on 27 April 2009)
(Cessation of term of office on
1 May 2009)
The principle function of the Supervisory Board is to supervise
the Management Board. It is also responsible for appointing and
removing members of the Management Board. The Supervisory
Board has nine to eleven members, depending on the decision of the
Shareholders’ Meeting, elected by shareholders at the Shareholder’s
meeting for a period of four years.
The members of the Supervisory Board during 2009 were as follows:
Erich Hampel Prof Jakša Barbić, PhD
Franco Andreetta
Robert Zadrazil
Carlo Marini
Klaus Junker, PhD
Torsten Leue
Carlo Vivaldi
Stephan Winkelmeier
Graziano Cameli
Fabrizio Onida
Marco Iannaccone Chairman
Deputy Chairman
Deputy Chairman
Member
Member
Member
Member
Member
Member
Member
Member
Member
UniCredit Bank Austria AG
Independent member
Independent member
UniCredit Bank Austria AG
UniCredit Bank Austria AG
Allianz SE, München
Allianz SE, München
UniCredit Bank Austria AG
UniCredit Bank Austria AG
UniCredit Bank Austria AG
Independent member
UniCredit Bank Austria AG
(Appointed on 21 April 2009)
(Appointed on 21 April 2009)
(Appointed on 21 April 2009)
(Appointed on 21 April 2009)
(Cessation of term of office on 21 April 2009)
Zagrebačka banka UniCredit Group · 2009 Annual Report
51
Management and corporate governance
Management and corporate governance (C
ontinued)
Organisation chart
New organisation chart of the Bank was set up on 1 January 2010
by which the Bank is organised through seven Divisions as shown
below:
Management Board
Risk Management and Control
(CRO)
Business Area (CEO)
Audit Committee
Credit Risk Control
Credit Risk Strategic Management
Workout
Market Risk Management and Control
Operational Risk Management and Control
Internal Audit
Human Resources
Legal
Management Board Office
Corporate Identity & Communications
Compliance
Finance (CFO)
Global Banking services (GBS)
Accounting & Reporting
Planning & Controling
ALM
Macro-economic Analysis & Forecasts
Shareholdings
Operation Support
Information Technology
Organisation
Procurement & Facility Management
Security
Cost Management
Corporate and Private Banking
Retail Banking
Mass Market
Segment
Affluent Banking
Segment
SB Segment
Consumer Finance
Cluster
Housing Cluster
B2C Cluster
Retail Planning &
Controlling
CRM/RMS
Marketing &
Positioning
Mid Corporate
Segment
Large Corporate
Segment
International desk
Global transaction
banking
Private Banking
Segment
Financial Asset
Management Products
Multichannel
Regional Offices
52
Regional / Business
Centre
2009 Annual Report · Zagrebačka banka UniCredit Group
Corporate Banking
Head Office
Financing Products
Marketing Corporate
Banking
Markets and Investment
Banking (MIB)
Investment Banking
Financial Markets
Corporate Analysis
Trade Suppoert, Control &
Planning
Shareholdings of the Supervisory and
Management Board members
The table below details shares in the Bank held by members of the
Management Board and Supervisory Board and by companies whose
interests are represented by members of the Supervisory Board as at
31 December 2009.
NUMBER OF
ORDINARY
SHARES
Companies represented on the Supervisory Board
UniCredit Bank Austria AG
Allianz SE
Members of the Supervisory Board
Erich Hampel
prof. Jakša Barbić
Franco Andreetta
Klaus Junker
Torsten Leue
Robert Zadrazil
Carlo Marini
Carlo Vivaldi
Stephan Winkelmeier
Graziano Cameli
Fabrizio Onida
Members of the Management Board
Franjo Luković
Milivoj Goldštajn
Sanja Rendulić
Marko Remenar
Miljenko Živaljić
Daniela Roguljić Novak Mario Agostini
53,933,857
7,504,639
22,154
11,095
4,432
11,656
231
1,400
4,022
-
Corporate governance
The duties, responsibilities and authority of the members of
the Management and Supervisory Boards are contained in the
Companies Act, and clarified within the Bank’s Articles of Association.
The Management Board meets weekly, and the Supervisory Board
meets as required but at least once every quarter.
Employees
to develop their abilities to their full potential. At the end of 2009
the Bank employs some 4,550 staff and has a policy of retaining
and rehabilitating employees who become disabled during their
employment.
Bonuses
As part of the Bank’s strategy to encourage and reward performance,
a management incentive scheme was introduced in 1995, and from
2003 key front office employees and additional participants are also
included. Total of 577 participants were eligible for consideration
for bonuses under this scheme, which represents remuneration for
individually achieved results in 2009.
Employees working on sales positions, who do not participate in the
bonus scheme, are included in the Sales team rewarding scheme.
All employees who are not participants of the previously mentioned
schemes may participate in the other reward schemes of the Bank.
For the year ended 31 December 2009 the Management Board and
senior management and certain key employees were also rewarded
under a long-term incentive scheme. Total of 67 beneficiaries
participated in this long-term incentive scheme.
Substantial shareholdings
The following enterprises held in excess of 1.5% of the share capital
of the Bank at 31 December 2009:
UniCredit Bank Austria AG
Allianz SE (Njemačka)
84.21%
11.72%
Dividends
The Management Board does not propose a dividend for the year
2009.
Annual General Meeting
At the Annual General Meeting the audited financial statements will
be presented to shareholders.
The Group employs some 6,668 people throughout head office,
the branch network and in subsidiaries (of which 5,263 in Croatia).
Policy of retraining and relocating existing employees is performed
in order to meet the changing requirements of the Bank and the
Group. By this method the Group aims to encourage all employees
Zagrebačka banka UniCredit Group · 2009 Annual Report
53
Responsibilities of the Management and Supervisory Boards
Responsibilities of the Management and Supervisory Boards for the
preparation and approval of the annual financial statements
The Management Board of the Bank is required to prepare
unconsolidated and consolidated financial statements for each
financial year which give a true and fair view of the financial position
of the Bank and Group and of the results of their operations and cash
flows, in accordance with applicable accounting standards, and is
responsible for maintaining proper accounting records to enable the
preparation of such financial statements at any time. It has a general
responsibility for taking such steps as are reasonably available to it to
safeguard the assets of the Bank and the Group and to prevent and
detect fraud and other irregularities.
The Management Board is responsible for selecting suitable
accounting policies to conform with applicable accounting standards
and then apply them consistently; making judgements and estimates
that are reasonable and prudent; and preparing the financial
statements on a going concern basis unless it is inappropriate to
presume that the Bank and the Group will continue in business.
The Management Board is responsible for the submission to the
Supervisory Board of its annual report on the Bank and the Group
together with the annual financial statements for acceptance. If the
Supervisory Board approves the annual financial statements they
are deemed confirmed by the Management Board and Supervisory
Board.
The unconsolidated and consolidated financial statements set out on
pages 60 to 176 were authorised by the Management Board on 2
March 2010 for issue to the Supervisory Board and are signed below
to signify this.
For and on behalf of Zagrebačka banka dd
Franjo Luković
Chairman of the Management Board
Miljenko Živaljić
Member of the Management Board
54
2009 Annual Report · Zagrebačka banka UniCredit Group
Zagrebačka banka UniCredit Group · 2009 Annual Report
55
Independent auditors’ report to the shareholders of Zagrebačka banka dd
Independent auditors’ report to the shareholders of Zagrebačka banka dd
We have audited the accompanying unconsolidated financial statements of Zagrebačka banka dd (“the Bank”), which comprise the
unconsolidated balance sheet as at 31 December 2009, and the unconsolidated income statement, unconsolidated statement of changes
in equity and unconsolidated cash flow statement for the year then ended, and a summary of significant accounting policies and other
explanatory notes. We have also audited the accompanying consolidated financial statements of Zagrebačka banka Group (“the Group”),
which comprise the consolidated balance sheet as at 31 December 2009, and the consolidated income statement, consolidated statement of
changes in equity and consolidated cash flow statement for the year then ended, and a summary of significant accounting policies and other
explanatory notes.
The corresponding figures presented are based on the unconsolidated financial statements of the Bank and the consolidated financial
statements of the Group as at and for the year ended 31 December 2008 which were audited by another auditor whose report dated 5 March
2009 expressed an unqualified opinion on both the unconsolidated and consolidated financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these unconsolidated and consolidated financial statements in
accordance with statutory accounting requirements for banks in Croatia. This responsibility includes: designing, implementing and maintaining
internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatements, whether
due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the
circumstances.
Auditors’ Responsibility
Our responsibility is to express an opinion on these unconsolidated and consolidated financial statements based on our audit. We conducted
our audit in accordance with International Standards on Auditing. Those standards require that we comply with relevant ethical requirements
and plan and perform the audit to obtain reasonable assurance whether the unconsolidated and consolidated financial statements are free of
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the unconsolidated and consolidated
financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the
unconsolidated and consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal
control relevant to the Bank’s and Group’s preparation and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Bank’s and Group’s internal
control. An audit also includes evaluating the appropriateness of accounting principles used and the reasonableness of accounting estimates
made by management, as well as evaluating the overall presentation of the unconsolidated and consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
56
2009 Annual Report · Zagrebačka banka UniCredit Group
Opinion
The Bank
In our opinion, the unconsolidated financial statements give a true and fair view of the unconsolidated financial position of Zagrebačka banka
dd as at 31 December 2009, and of its unconsolidated financial performance and its unconsolidated cash flows for the year then ended in
accordance with statutory accounting requirements for banks in Croatia.
The Group
In our opinion, the consolidated financial statements give a true and fair view of the consolidated financial position of Zagrebačka banka Group
as at 31 December 2009, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance
with statutory accounting requirements for banks in Croatia.
Other legal and regulatory requirements
Pursuant to the Decision of the Croatian National Bank on the Structure and Content of the Annual Financial Statements of Banks, dated
30 May 2008 (Official Gazette 62/08), the Management Board of the Bank has prepared the schedules set out on pages 179 to 185
(“the Schedules”), which comprise an alternative presentation of the unconsolidated balance sheet as of 31 December 2009, and of the
unconsolidated income statement, unconsolidated statement of changes in equity and unconsolidated cash flow statement for the year then
ended, and a reconciliation (“the Reconciliation”) of the Schedules with the financial statements as presented on pages 186 to 193. The
Management Board of the Bank is responsible for the Schedules and the Reconciliation. The financial information in the Schedules is derived
from the financial statements of the Bank set out on pages 60 to 176 on which we have expressed an opinion as set out above.
KPMG Croatia doo za reviziju Croatian Certified Auditors
Eurotower, 17th floor
Ivana Lučića 2a
10000 Zagreb
Croatia
Zagreb, 2 March 2010
For and on behalf of KPMG Croatia doo za reviziju:
Ismet KamalLjubica Oreščanin
DirectorCroatian Certified Auditor
Zagrebačka banka UniCredit Group · 2009 Annual Report
57
Radoslav Bardún,
Medirex
Corporate Banking Client - Slovakia
n our business,
«weIcount
on the synergies
that come from our financial
partnership and friendship
with UniCredit Bank.
We are always forward
looking and have plenty
of ideas for further
development and growth.
With UniCredit Bank, we can
find new solutions and then
put our ideas into practice.»
It’s easy with
UniCredit.
Financial statements
Group financial statements
60
Bank financial statements
66
Significant accounting policies 72
Notes to the financial statements
86
Zagrebačka banka UniCredit Group · 2009 Annual Report
59
Financial
statements I Group financial statements
Group financial statements
Group income statement for the year ended 31 December
NOTES
2009
HRK
MILLION
2008
HRK
MILLION
Interest and similar income
1a
Interest expense and similar charges 1c
Net interest income
Fee and commission income
2a
Fee and commission expense
2b
Net fee and commission income
Dividend income
3
Net gains and losses on financial instruments at fair value
through profit or loss and result from foreign exchange
trading and translation of monetary assets and liabilities
4
Net gains and losses from investment securities
5
Other operating income
6
Net trading and other income
Operating income
Operating expenses 7
Profit before impairment
and other provisions
Impairment losses on loans to
and receivables from customers
15c
(Other impairment losses and provisions)/
reversal of other impairment losses and provisions 8
Total impairment losses and provisions
Profit from operations
Share of profit from associates
19d
Profit before tax
Income tax expense
9a
Profit for the period
Attributable to:
Equity holders of the Bank
Minority interest
Profit for the period
Basic and diluted earnings per share
45
6,317
(3,487)
2,830
1,267
(183)
1,084
3
5,783
(2,835)
2,948
1,326
(180)
1,146
3
565
31
498
1,097
5,011
(2,662)
252
175
513
943
5,037
(2,867)
2,349
2,170
(612)
(269)
(31)
(643)
1,706
29
1,735
(341)
1,394
3
(266)
1,904
25
1,929
(393)
1,536
1,345
49
1,394
HRK
21.0
1,494
42
1,536
HRK
23.4
The accounting policies and other notes on pages 72 to 178 form an integral part of these financial statements.
60
2009 Annual Report · Zagrebačka banka UniCredit Group
Statement of changes in Group’s equity
Attributable to equity holders of the Bank
Issued Share Treasury
OtherFair value
Retained
Total Minority
Total
share premiumsharesreservesreserveearningsinterest
capital
HRK
HRK
HRK
HRK
HRK
HRK
HRK
HRK
HRK
millionmillionmillionmillionmillionmillionmillionmillionmillion
Balance as at 1 January 2009 Changes in equity in 2009
Acquisition of treasury shares
Distribution of management bonus in shares
Currency translation difference
on consolidation of foreign subsidiaries
Disposal of AFS portfolio (Note 5)
Deferred tax on disposal of AFS portfolio (Note 9e)
Change in fair value of AFS portfolio
Foreign exchange differences
on non-monetary AFS portfolio
Deferred tax on change in fair value
of AFS portfolio and foreign exchange differences
on non-monetary AFS portfolio (Note 9c)
Net expense recognised directly in equity
Profit for the period
Total recognised income and expense for 2009
Balance as at 31 December 2009
1,281
3,370
(14)
785
9
8,313
13,744
643
14,387
-
-
-
-
(1)
1
-
-
-
-
-
-
(1)
1
-
-
(1)
1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(11)
2
(2)
-
-
-
-
-
(11)
2
(2)
-
-
-
1
(11)
2
(1)
-
-
-
-
(4)
-
(4)
(1)
(5)
-
-
-
-
1,281
-
-
-
-
3,370
-
-
-
-
(14)
-
-
-
-
785
1
(14)
-
(14)
(5)
-
-
1,345
1,345
9,658
1
(14)
1,345
1,331
15,075
-
-
49
49
692
1
(14)
1,394
1,380
15,767
Attributable to equity holders of the Bank
Issued Share Treasury
OtherFair value
Retained
Total Minority
Total
share premiumsharesreservesreserveearningsinterest
capital
HRK
HRK
HRK
HRK
HRK
HRK
HRK
HRK
HRK
millionmillionmillionmillionmillionmillionmillionmillionmillion
Balance as at 1 January 2008 Changes in equity in 2008
Acquisition of treasury shares
Distribution of management bonus in shares
Currency translation difference
on consolidation of foreign subsidiaries
Disposal of AFS portfolio (Note 5)
Deferred tax on disposal of AFS portfolio (Note 9e)
Change in fair value of AFS portfolio
Foreign exchange differences
on non-monetary AFS portfolio
Deferred tax on change in fair value
of AFS portfolio and foreign exchange differences
on non-monetary AFS portfolio (Note 9e)
Net income recognised directly in equity
Profit for the period
Total recognised income and expense for 2008
Balance as at 31 December 2008
1,281
3,370
-
785
(37)
6,819
12,218
601
12,819
-
-
-
-
(45)
31
-
-
-
-
(1)
-
(46)
31
-
-
(46)
31
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(67)
12
119
1
-
-
-
1
(67)
12
119
-
-
-
-
1
(67)
12
119
-
-
-
-
5
-
5
-
5
-
-
-
-
1,281
-
-
-
-
3,370
-
-
-
-
(14)
-
-
-
-
785
(23)
46
-
46
9
-
1
1,494
1,495
8,313
(23)
47
1,494
1,541
13,744
-
-
42
42
643
(23)
47
1,536
1,583
14,387
“AFS” stands for financial assets available for sale.
The accounting policies and other notes on pages 72 to 178 form an integral part of these financial statements.
Zagrebačka banka UniCredit Group · 2009 Annual Report
61
Financial
statementsI Group financial statement
Group financial statements (Continued)
Group balance sheet as at 31 December
Assets
Notes
2009
2008
HRK
HRK
millionmillion
Cash reserves
11
Obligatory reserve with the Croatian National Bank
12
Loans to and receivables from banks
13a
Financial assets at fair value through profit or loss
14
Replacement bonds 15a
Loans to and receivables from customers
15b
Available-for-sale financial assets
16
Held-to-maturity investments
17
Investments in associates
19c
Investment property
20
Property and equipment
21
Intangible assets
22
Deferred tax asset
9c
Current tax asset
9d
Other assets
23
Total assets
62
2009 Annual Report · Zagrebačka banka UniCredit Group
7,043
7,318
11,640
545
1,442
68,629
5,445
772
78
231
2,561
285
113
117
1,829
108,048
4,402
7,061
12,421
1,171
1,422
66,324
5,293
867
72
239
2,568
287
164
5
1,745
104,041
Group balance sheet as at 31 December (continued)
Liabilities and equity
Notes
2009
2008
HRK
HRK
millionmillion
Liabilities
Current accounts and deposits from banks
24
Current accounts and deposits from customers
25
Financial liabilities at fair value through profit or loss
26
Borrowings
27
Issued debt securities
28
Provisions for liabilities and charges
29
Other liabilities
30
Subordinated debt
31
Current tax liability
9f
Deferred tax liability
9e
Total liabilities
Equity
Issued share capital
32
Share premium 32
Treasury shares
Other reserves
33a
Fair value reserve
Retained earnings
Total equity attributable to
equity holders of the Bank
Minority interest
Total equity
Total liabilities and equity
16,541
64,133
74
8,510
-
443
2,460
117
-
3
92,281
11,127
62,869
279
9,225
3,293
453
2,096
147
159
6
89,654
1,281
3,370
(14)
785
(5)
9,658
1,281
3,370
(14)
785
9
8,313
15,075
692
15,767
108,048
13,744
643
14,387
104,041
The accounting policies and other notes on pages 72 to 178 form an integral part of these financial statements.
Zagrebačka banka UniCredit Group · 2009 Annual Report
63
Financial
statementsI Group financial statement
Group financial statements (Continued)
Group cash flow statement for the year ended 31 December
Note
2009
2008
HRK
HRK
millionmillion
Operating activities
Interest and similar receipts
Fee and commission receipts
Interest and similar payments
Fee and commission payments
Operating expenses paid
Net receipts from derivatives and foreign exchange trading Realised gains on AFS financial assets 5
Other net receipts
Net cash inflow from operating activities
before changes in operating assets and liabilities
(Increase)/decrease in operating assets
Obligatory reserve with the Croatian National Bank
Loans to and receivables from banks
Loans to and receivables from customers
Securities at fair value through profit or loss
Available-for-sale financial assets
Other assets
Net increase in operating assets (Decrease)/increase in operating liabilities
Demand deposits
Savings and time deposits Financial liabilities at fair value through profit or loss
Other liabilities
Net increase in operating liabilities
Net cash inflow from operating activities
before income taxes paid
Income taxes paid
Net cash inflow from operating activities
64
2009 Annual Report · Zagrebačka banka UniCredit Group
6,072
1,267
(3,198)
(180)
(2,278)
342
11
490
5,432
1,344
(2,698)
(181)
(2,317)
114
114
508
2,526
2,316
(264)
894
(3,149)
(211)
682
(71)
(2,119)
672
(1,138)
(8,999)
310
636
(111)
(8,630)
(2,296) 9,100
-
257
7,061
(2,900)
9,724
38
71
6,933
7,468
(560)
6,908
619
(366)
253
Group cash flow statement for the year ended 31 December (continued)
Notes
2009
2008
HRK
HRK
millionmillion
Investing activities
Dividend receipts from investments in other equity securities
3
Dividend receipts from associates
3
Additional investment in investment property
Net purchase of property and equipment
and intangible assets
Acquisition of subsidiary net of cash acquired
Net redemption of held-to-maturity investments
Net cash (outflow)/inflow from investing activities
Financing activities
Redemption of issued debt securities
Net decrease in borrowings
Repayment of subordinated debt Dividends paid to equity holders of the Bank
Net cash outflow from financing activities
Net cash inflow/(outflow)
Effect of foreign exchange rate changes on
cash and cash equivalents
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
34
3
23
(3)
3
30
(8)
(327)
-
94
(210)
(455)
(13)
547
104
(3,303)
(738)
(29)
-
(4,070)
2,628
(990)
(1)
(991)
(634)
13
2,641
4,402
7,043
10
(624)
5,026
4,402
The accounting policies and other notes on pages 72 to 178 form an integral part of these financial statements.
Zagrebačka banka UniCredit Group · 2009 Annual Report
65
Financial
statements I Bank financial statements
Bank financial statements
Bank income statement for the year ended 31 December
Notes
2009
2008
HRK
HRK
millionmillion
Interest and similar income
1a
Interest expense and similar charges
1c
Net interest income
Fee and commission income
2a
Fee and commission expense
2b
Net fee and commission income
Dividend income
3
Net gains and losses on financial instruments at fair value
through profit or loss and result from foreign exchange
trading and translation of monetary assets and liabilities
4
Net gains and losses from investment securities
5
Other operating income 6
Net trading and other income
Operating income
Operating expenses
7
Profit before impairment
and other provisions
Impairment losses on loans to
and receivables from customers
15c
(Other impairment losses and provisions)/
reversal of other impairment losses and provisions 8
Total impairment losses and provisions
Profit before tax
Income tax expense
9a
Profit for the period
Basic and diluted earnings per share
The accounting policies and other notes on pages 72 to 178 form an integral part of these financial statements.
66
2009 Annual Report · Zagrebačka banka UniCredit Group
45
5,518
(3,164)
2,354
1,035
(173)
862
47
4,935
(2,461)
2,474
1,064
(169)
895
75
524
29
41
641
3,857
(1,783)
252
151
44
522
3,891
(1,951)
2,074
1,940
(527)
(202)
(32)
(559)
1,515
(299)
1,216
1
(201)
1,739
(345)
1,394
HRK
HRK
19.0
21.8
Statement of changes in Bank’s equity
Issued Share Treasury
OtherFair value
Retained
Total
share premiumsharesreservesreserveearnings
capital
HRK
HRK
HRK
HRK
HRK
HRK
HRK
millionmillionmillionmillionmillionmillionmillion
Balance as at 1 January 2009
Changes in equity in 2009
Acquisition of treasury shares
Distribution of management bonus in shares
Disposal of AFS portfolio (Note 5)
Deferred tax on disposal of AFS portfolio (Note 9e)
Change in fair value of AFS portfolio
Foreign exchange differences on
non-monetary AFS portfolio
Deferred tax on change in fair value
of AFS portfolio and foreign exchange
differences on non-monetary AFS portfolio (Note 9c)
Net expense recognised directly in equity
Profit for the period
Total recognised income and expense for 2009
Balance as at 31 December 2009
1,281
3,370
(14)
785
11
7,523
12,956
-
-
-
-
-
-
-
-
-
-
(1)
1
-
-
-
-
-
-
-
-
-
-
(9)
2
(41)
-
-
-
-
-
(1)
1
(9)
2
(41)
-
-
-
-
(2)
-
(2)
-
-
-
-
1,281
-
-
-
-
3,370
-
-
-
-
(14)
-
-
-
-
785
8
(42)
-
(42)
(31)
-
-
1,216
1,216
8,739
8
(42)
1,216
1,174
14,130
Issued Share Treasury
OtherFair value
Retained
Total
share premiumsharesreservesreserveearnings
capital
HRK
HRK
HRK
HRK
HRK
HRK
HRK
millionmillionmillionmillionmillionmillionmillion
Balance as at 1 January 2008 Changes in equity in 2008
Acquisition of treasury shares
Distribution of management bonus in shares
Disposal of AFS portfolio (Note 5)
Deferred tax on disposal of AFS portfolio (Note 9e)
Change in fair value of AFS portfolio
Foreign exchange differences on
non-monetary AFS portfolio
Deferred tax on change in fair value
of AFS portfolio and foreign exchange
differences on non-monetary AFS portfolio (Note 9e)
Net income recognised directly in equity
Profit for the period
Total recognised income and expense for 2008
Balance as at 31 December 2008
1,281
3,370
-
785
(36)
6,129
11,529
-
-
-
-
-
-
-
-
-
-
(45)
31
-
-
-
-
-
-
-
-
-
-
(60)
12
112
-
-
-
-
-
(45)
31
(60)
12
112
-
-
-
-
5
-
5
-
-
-
-
1,281
-
-
-
-
3,370
-
-
-
-
(14)
-
-
-
-
785
(22)
47
-
47
11
-
-
1,394
1,394
7,523
(22)
47
1,394
1,441
12,956
“AFS” stands for financial assets available for sale.
The accounting policies and other notes on pages 72 to 178 form an integral part of these financial statements.
Zagrebačka banka UniCredit Group · 2009 Annual Report
67
Financial statements I Bank financial statements
Bank financial statements (Continued)
Bank balance sheet as at 31 December
Assets
Notes
2009
2008
HRK
HRK
millionmillion
Cash reserves
11
Obligatory reserve with the Croatian National Bank 12
Loans to and receivables from banks
13a
Financial assets at fair value through profit or loss
14
Replacement bonds 15a
Loans to and receivables from customers
15b
Available-for-sale financial assets
16
Held-to-maturity investments
17
Investments in subsidiaries and associates
19c
Investment property
20
Property and equipment
21
Intangible assets
22
Deferred tax asset
9c
Current tax asset
9d
Other assets
23
Total assets
68
2009 Annual Report · Zagrebačka banka UniCredit Group
5,260
7,318
8,678
519
1,442
59,650
5,542
579
918
33
1,076
134
101
102
1,460
92,812
3,311
7,061
9,688
1,153
1,422
56,926
5,374
669
918
33
1,125
125
131
5
1,445
89,386
Bank balance sheet as at 31 December (continued)
Liabilities and equity
Notes
2009
2008
HRK
HRK
millionmillion
Liabilities
Current accounts and deposits from banks
24
Current accounts and deposits from customers
25
Financial liabilities at fair value through profit or loss
26
Borrowings
27
Issued debt securities
28
Provisions for liabilities and charges
29
Other liabilities
30
Current tax liability
9f
Deferred tax liability
9e
Total liabilities
Equity
Issued share capital
32
Share premium 32
Treasury shares
Other reserves 33a
Fair value reserve
Retained earnings
Total equity
Total liabilities and equity
15,324
53,915
74
7,118
-
361
1,887
-
3
78,682
9,890
53,296
278
7,520
3,293
351
1,632
166
4
76,430
1,281
3,370
(14)
785
(31)
8,739
14,130
92,812
1,281
3,370
(14)
785
11
7,523
12,956
89,386
The accounting policies and other notes on pages 72 to 178 form an integral part of these financial statements.
Zagrebačka banka UniCredit Group · 2009 Annual Report
69
Financial statements I Bank financial statements
Bank financial statements (Continued)
Bank cash flow statement for the year ended 31 December
Note
2009
2008
HRK
HRK
millionmillion
Operating activities
Interest and similar receipts
Fee and commission receipts
Interest and similar payments
Fee and commission payments
Operating expenses paid
Net receipts from derivatives and foreign exchange trading
Realised gains on AFS financial assets
5
Net cash inflow from operating activities
before changes in operating assets and liabilities
(Increase)/decrease in operating assets
Obligatory reserve with the Croatian National Bank
Loans to and receivables from banks
Loans to and receivables from customers
Securities at fair value through profit or loss
Available-for-sale financial assets
Other assets
Net increase in operating assets (Decrease)/increase in operating liabilities
Demand deposits
Savings and time deposits Financial liabilities at fair value through profit or loss
Other liabilities
Net increase in operating liabilities
Net cash inflow from operating activities
before income taxes paid
Income taxes paid
Net cash inflow from operating activities
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2009 Annual Report · Zagrebačka banka UniCredit Group
5,272
1,040
(2,887)
(170)
(1,566)
302
9
33
4,578
1,083
(2,329)
(169)
(1,566)
77
90
39
2,033
1,803
(264)
1,137
(3,459)
(203)
625
7
(2,157)
672
(2,356)
(7,543)
103
411
(96)
(8,809)
(2,703)
8,855
-
195
6,347
(2,138)
10,394
39
150
8,445
6,223
(522)
5,701
1,439
(338)
1,101
Bank cash flow statement for the year ended 31 December (continued)
Notes
2009
2008
HRK
HRK
millionmillion
Investing activities
Dividend receipts
3
Net purchase of property and equipment and intangible assets
Increase of investment in subsidiary
19d
Acquisition of subsidiary
19d
Net redemption of held-to-maturity investments
Net cash (outflow)/inflow from investing activities
Financing activities
Net decrease in borrowings
Dividends paid to equity holders of the Bank
Redemption of issued debt securities
Net cash outflow from financing activities
Net cash inflow
Effect of foreign exchange rate changes on
cash and cash equivalents
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
34
47
(173)
-
-
90
(36)
75
(233)
(20)
(14)
248
56
(429)
-
(3,303)
(3,732)
1,933
(1,112)
(1)
(1,113)
44
16
1,949
3,311
5,260
9
53
3,258
3,311
The accounting policies and other notes on pages 72 to 178 form an integral part of these financial statements.
Zagrebačka banka UniCredit Group · 2009 Annual Report
71
Financial statements I Significant accounting policies
Significant accounting policies
Zagrebačka banka dd Zagreb (“the Bank”) is a joint stock company incorporated and domiciled in the Republic of Croatia. The registered office is at
Paromlinska 2, Zagreb. The Bank is the parent of the Zagrebačka banka Group (“the Group”), which has operations in the Republic of Croatia and in
Bosnia and Herzegovina. The Group is involved in retail, corporate, treasury and investment banking operations as well as investment property, tourism
and asset management. These financial statements comprise both the separate and the consolidated financial statements of the Bank as defined in
International Accounting Standard 27 “Consolidated and Separate Financial Statements”.
I Basis of preparation
a) Accounting framework
The principal accounting policies applied in the preparation of these financial statements are summarised below. Where specific accounting policies
are aligned with accounting principles set out in International Financial Reporting Standards (“IFRS”), reference may be made to certain Standards in
describing the accounting policies of the Group; unless otherwise stated, these references are to Standards applicable at 31 December 2009.
The financial statements have been prepared in accordance with statutory accounting requirements for banks in Croatia. The Group’s banking
operations in Croatia are subject to the Credit Institutions Law, in accordance with which the Group’s financial reporting is regulated by the Croatian
National Bank (“the CNB”) which is the central monitoring institution of the banking system in Croatia. These financial statements have been prepared
in accordance with these banking regulations.
The accounting regulations based on which these financial statements have been prepared differ from IFRS both in terms of presentation and in terms
of recognition and measurement.
We draw attention to the following differences between the accounting regulations of the CNB and recognition and measurement requirements of IFRS:
• The CNB requires banks to recognise impairment losses, in income statement, on exposures not specifically identified as impaired (including
sovereign risk assets) at prescribed rates (excluding assets at fair value through profit or loss). The Group has made portfolio based provisions of
HRK 1,114 million (2008: HRK 1,123 million) carried in the balance sheet in compliance with these regulations and those of the Banking Agency
of the Federation of Bosnia and Herzegovina (“the FBA”) - see below (HRK 911 million and HRK 900 million respectively in the Bank’s balance
sheet at 31 December 2009 and 2008), and has recognised a credit to income of HRK 9 million in relation to these provisions within the charge
for impairment losses for the year (2008: charge of HRK 79 million) (charges of HRK 11 million and HRK 56 million in the Bank’s income statement
for 2009 and 2008 respectively). Although, in accordance with IFRS, such provisions should more properly be presented as an appropriation within
equity, in accordance with CNB rules the Group continues to recognise such provisions as a substitute for existing but unidentified impairment losses
calculated in accordance with the requirements of IFRS.
• The financial statements of the Group include the consolidation of its banking operations in Bosnia and Herzegovina, which are regulated by the
FBA. The accounting regulations of the FBA similarly require the Group’s banking subsidiary in Bosnia and Herzegovina to recognise, in the income
statement, collective impairment provisions on otherwise unimpaired risk positions at a prescribed rate of 2%, as disclosed in that bank’s separate
financial statements. No adjustment has been made to these provisions upon consolidation into the Group.
• A further difference between IFRS and the accounting regulations of both the CNB and the FBA relates to the determination of impairment losses
by discounting the estimated cash flows of the impaired asset at the instrument’s original effective interest rate. The Group calculates impairment
losses on individually significant items by estimating the future cash flows and discounting these estimated amounts at the instrument’s original
effective interest rate. The Group generally recognises the amortisation of such discounts as interest income. In certain cases, however collections
are recognised as interest income once impairment losses are fully reversed.
• Additionally the CNB and FBA prescribe minimum levels of impairment losses against certain specifically identified impaired exposures, which may
be different from the impairment loss required to be recognised in accordance with IFRS.
These financial statements were authorised for issue by the Management Board on 2 March 2010 for approval by the Supervisory Board.
b) Basis of measurement
The financial statements are prepared on the fair value basis for financial assets and liabilities at fair value through profit or loss and financial assets
available for sale, 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 or historical cost.
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2009 Annual Report · Zagrebačka banka UniCredit Group
c) Use of estimates and judgements
The accounting policies have been consistently applied to all periods presented in these financial statements.
In preparing the financial statements, management has made judgements, estimates and assumptions that affect the application of policies and
reported amounts of assets and liabilities and disclosure of commitments and contingencies at the balance sheet date, as well as amounts of income
and expense for the period. The estimates and associated assumptions are based on historical experience and various other factors that are believed
to be reasonable under the circumstances and information available at the date of the preparation of the financial statements, the result of which form
the basis for making the judgements about carrying amounts of assets and liabilities that are not readily apparent from other sources. Actual results
may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which
the estimate is revised if the revision affects only that period, or in the period of revision and future periods if the revision affects both current and
future periods.
Judgements made by management in the application of applicable standards that have significant effects on the financial statements and estimates
with a significant risk of a possible material adjustment in the next year are discussed in Note 43.
d) Financial crisis impact
Recent volatility in global financial markets
While international markets stabilised to a degree in the second half of 2009 and access to capital market funding has improved, episodes such as
the Dubai crisis in November/December 2009 and the current uncertainty surrounding Greece underline that the situation has not yet fully returned to
normal. This is being reflected in higher spreads than in the pre-crisis period. Domestic interbank conditions improved sharply at the end of October
2009 and remain favourable. However, the potential for currency volatility in the remainder of 2010 means that this favourable state cannot be taken
for granted. While the current situation appears more favourable than during most of 2009, extensive uncertainty remains a characteristic of the
Group’s business environment with the impact being reflected in aenemic demand for credit and little activity on the domestic bond market apart from
intermittent government borrowing.
Impact on liquidity
In order to manage liquidity on a daily basis, the Group has established daily monitoring and reporting of all changes that have an impact on the
liquidity position and daily monitoring of internal short-term liquidity ratios while structural indicators of liquidity are monitored monthly.
Based on regulatory requirements the Bank reports on a weekly basis on liquidity gap based on remaining maturities. The Bank also prepares sixmonth liquidity plans, on a monthly basis and if needed more frequently.
Despite the crisis, the Group had satisfactory liquidity throughout 2009. In this respect, the Group is also supported by the Bank’s parent, UniCredit
Bank Austria.
Impact on customers
The Group pays significant attention to the credit function and in its operation applies a careful policy for funds placement so as to minimise the risk of
credit portfolio impairment.
The impairment allowance and losses are carefully monitored by customer, according to the type of receivable, and the combined exposure to all
mutually related persons is also monitored. The portion of potential losses in the total portfolio is also monitored, as well as their relation to regulatory
capital.
The adequacy of every item of collateral provided by clients is estimated for each individual case. The Bank accepts valuations of collateral by ZANE,
a subsidiary of the Bank, specialized in real estate business. Notwithstanding these procedures, the fair market value of real estate collateral in the
current difficult and comparatively inactive market is difficult to estimate with any reasonable certainty, as explained in Note 38.1.
Although the impact of the financial crisis cannot be foreseen or protected against, the Group has taken a series of increased activities in the direction
Zagrebačka banka UniCredit Group · 2009 Annual Report
73
Financial statements I Significant accounting policies
Significant accounting policies (Continued)
of monitoring the quality of the existing portfolio of clients, making the management and monitoring of risks a part of the daily task of business
relationship managers, with continued active involvement from experts for restructuring and credit quality.
e) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in
which the entity operates (“the functional currency”). The consolidated and separate financial statements are presented in Croatian kuna (“HRK”) which
is the Bank’s functional and presentation currency. Amounts are rounded to the nearest million (unless otherwise stated).
The exchange rates used for translation at 31 December 2009 and 31 December 2008 include the following rates for the most significant currencies
in which the Group and the Bank held assets and liabilities: EUR 1 = HRK 7.306 (2008: EUR 1 = HRK 7.324) and USD 1 = HRK 5.089 (2008: USD 1
= HRK 5.156). During 2009 and 2008 the Bosnian Mark was pegged to the Euro at the rate of EUR 1 = BAM 1.955.
f) Consolidation
The consolidated financial statements comprise the Bank and its subsidiaries (together “the Group”), together with the Group’s share in associates.
Subsidiaries
Subsidiaries are all entities over which the Group has the power to govern their financial and operating policies, generally accompanying a
shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible
are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are de-consolidated from the date that control ceases.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured at the
fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to
the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their
fair value at the acquisition date, irrespective of the extent of any minority interest.
The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired including intangible assets, is
recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised
directly in the income statement.
Inter-company transactions, balances and unrealised gains on transactions between Group companies, including those representing discontinued
operations, are eliminated on consolidation. Unrealised losses are also eliminated but are considered an impairment indicator for the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
Transactions with minority interest
The Group applies a policy of treating transactions with minority interests as transactions with parties external to the Group. Disposals to minority
interests result in gains and losses for the Group that are recorded in the income statement. Purchases from minority interests may result in goodwill,
being the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary.
Acquisition of entities under common control
Business combinations arising from transfers of interests in entities that are under the control of the shareholder that controls the Group are accounted
for as if the acquisition had occurred at the beginning of the earliest comparative period presented or, if later, at the date that common control
was established; for this purpose comparatives are restated. The assets and liabilities acquired are recognised at the carrying amounts recognised
previously in the Group’s controlling shareholder’s consolidated financial statements. The components of equity of the acquired entities are added to
the same components within Group equity except that any issued capital of the acquired entities is recognised as part of share premium. Any cash
paid for the acquisition is recognised directly in equity.
Associates
Associates are all entities over which the Group has significant influence but no control, generally accompanying a shareholding of between 20% and
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2009 Annual Report · Zagrebačka banka UniCredit Group
50% of the voting rights. Investments in associates are accounted for using the equity method of accounting and are initially recognised at cost. The
Group’s investments in associates include goodwill (net of any accumulated impairment loss) identified on acquisition.
The Group’s share of its associates’ post-acquisition gains or losses is recognised in the income statement and its share of their post-acquisition
movements in reserves is recognised in reserves. The cumulative post-acquisition movements are adjusted against the carrying amount of the
investment. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured
receivables, the Group does not recognise any further losses, unless it has incurred obligations or made payments on behalf of the associate.
Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associate. Unrealised
losses are also eliminated unless the transaction provides evidence of an impairment of the assets transferred. The accounting policies of associates
are adjusted where necessary to ensure consistency with the policies adopted by the Group.
g) Foreign currency translation
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognised in the income statement. Non-monetary assets (other than non-monetary financial
assets) and items that are measured in terms of historical cost in foreign currency are translated using the exchange rate at the date of the transaction
and are not retranslated at the balance sheet date. The Group does not have qualifying cash flow hedges and qualifying net investment hedges as
defined in International Accounting Standard 39 “Financial Instruments: Measurement and Recognition” (“IAS 39”).
Changes in the fair value of securities denominated in foreign currency classified as available for sale are analysed between translation differences
resulting from changes in the amortised cost of the security and other changes in the carrying amount of the security. Translation differences on
monetary securities available for sale are recognised in profit or loss, and other changes in carrying amount are recognised in equity. Translation
differences on non-monetary securities denominated in foreign currency classified as available for sale are recognised directly in equity along with
other changes, net of deferred tax.
Group companies
The results and financial position of the Group entities in Bosnia and Herzegovina, where the Bosnian Mark (“BAM”) is the functional currency, are
translated into the presentation currency as follows:
(i) assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet;
(ii) income and expenses for each income statement presented are translated at exchange rates prevailing on the transaction dates; and
(iii) all exchange differences resulting on consolidation of foreign subsidiaries are recognised as a translation reserve within retained earnings.
h) Discontinued operations
A discontinued operation is a component of the Group’s business that represents a separate major line of business or geographical area of operations
that has been disposed of or is held for sale, or is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier.
When an operation is classified as a discontinued operation, the comparative income statement is restated as if the operation had been discontinued
from the start of the comparative period.
When the criteria for presentation as a discontinued operation are no longer met, the Group reclassifies it and restates the comparative financial
information in the income statement accordingly.
Zagrebačka banka UniCredit Group · 2009 Annual Report
75
Financial statements I Significant accounting policies
Significant accounting policies (Continued)
II Specific accounting policies
1 Interest income and expense
Interest income and expense are recognised in the income statement as they occur for all interest bearing financial instruments, including those
measured at amortised cost, at fair value through profit or loss and available for sale, using the effective interest rate method, i.e. at the rate that
discounts estimated future cash flows to net present value over the life of the underlying contract, or an applicable floating rate. Such income and
expense is presented as interest and similar income or interest expense and similar charges in the income statement. Interest income and expense
also includes fee and commission income and expense in respect of loans to and receivables from customers and banks, borrowings from other
banks, subordinated debt and issued debt securities, premium or discount amortisation as well as other differences between the initial carrying amount
of an interest bearing financial instrument and its value at maturity, recognised on an effective interest basis.
The effective interest method is a method of calculating the amortised cost of a financial asset or a financial liability and of allocating the interest
income or interest expense over the relevant period. The effective interest rate is the rate that discounts estimated future cash payments or receipts
over the expected life of the financial instrument or, when appropriate, a shorter period, to the net carrying amount of the financial asset or financial
liability. When calculating the effective interest rate, the Group does not consider future credit losses. The calculation includes all fees and percentage
points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums
or discounts.
2 Fee and commission income and expense
Fee and commission income and expense mainly comprise fees and commissions related to domestic and foreign payments, the issue of guarantees
and letters of credit, credit card business and asset management, and are recognised in the income statement upon performance of the relevant
service, unless they have been included in the effective interest calculation.
Loan commitment fees for loans that are likely to be drawn down are deferred and recognised as an adjustment to the effective interest rate on the
loan. Commitment fees in relation to facilities where draw down is not probable are recognised over the term of the commitment. Loan syndication
fees are recognised as revenue when the syndication has been completed and the Group has retained no part for itself, or has retained a part at
the same effective interest rate as the other participants. Portfolio and other management advisory and service fees are recognised based on the
applicable service contracts. Asset management fees related to investment fund management are recognised on an accruals basis over the period in
which the service is provided. The same principle is applied for custody services that are continuously provided over an extended period of time.
3 Net gains and losses on financial instruments at fair value through profit or loss and result
from foreign exchange trading and translation of monetary assets and liabilities
This category includes spreads earned from foreign exchange trading, and realised and unrealised gains and losses from trading debt and equity
securities and other financial instruments designated at fair value through profit or loss, and from derivative financial instruments. Net gains and losses
from the translation of monetary assets and liabilities denominated in foreign currency are also classified in this category.
4 Net gains and losses from investment securities
This category includes gains and losses realised on disposal of available-for-sale debt and equity securities as well as indexation of replacement
bonds.
5 Employee benefits
a) Pension obligations
For defined contribution plans, the Group pays contributions to state-owned institutions and obligatory pension funds managed by privately owned
management companies, in accordance with legal requirements or individual choice. The Group has no further payment obligations once the
contributions have been paid. The contributions are recognised as employee benefits in the income statement as they accrue.
b) Long-term employee rewards
Participants and amounts for each cycle of the Zagrebačka banka scheme for long-term employee rewards are defined based on clear criteria of
contribution to long-term sustainable and increasing Group profitability.
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2009 Annual Report · Zagrebačka banka UniCredit Group
The scheme cycle encompasses four years with a one-year performance review period and payout of the reward in the fourth year of cycle. Liabilities
for long-term employee rewards in the balance sheet are discounted using an appropriate discount rate.
c) Other employee benefits
Liabilities based on other long-term employee benefits, such as jubilee awards and statutory termination benefits, are recorded as the net present
value of the liability for defined benefits at the balance sheet date. The projected credit unit method is used for the calculation of the present value
of the liability. Market yield on government bonds on the balance sheet date, in currency and in terms that correspond to the currency and terms of
liabilities under these benefits, is used as a discount rate.
6 Direct acquisition costs related to housing savings
Direct acquisition expenses related to housing savings contracts are deferred, to the extent that they are estimated to be recoverable, and amortised to
the income statement on a straight-line basis over the life of the related contracts.
7 Dividend income
Dividend income on equity securities is credited to the income statement when the right to receive the dividend is established.
8 Revenue from goods sold and non-financial services rendered
Revenue from the sale of goods and from services rendered relating to the Group’s tourism and investment property operations is recognised in the
income statement when the goods are sold or the service is performed. Rental income is recognised on a straight-line basis over the term of the lease.
9 Lease payments
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease.
10 Financial instruments
Classification
The Group financial instruments are classified in categories depending on the purpose for which the Group initially acquired the financial instrument
or upon reclassification (see below) and in accordance with the Group’s investment strategy. Financial assets and financial liabilities are classified in
the following portfolios: “at fair value through profit or loss”; “held-to-maturity”; “available for sale”; or “loans and receivables” and “other financial
liabilities”.
a) Financial assets and financial liabilities at fair value through profit or loss
This category has two sub-categories: financial instruments held for trading (including derivatives), and those designated by management as at fair
value through profit or loss at inception. A financial instrument is classified in this category if it is acquired or incurred principally for the purpose of
selling or repurchasing it in the short term, for the purpose of short-term profit-taking, or designated as such by management.
The Group designates financial assets and liabilities at fair value through profit or loss when:
• 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.
Financial instruments at fair value through profit or loss include debt securities and units in investment funds, as well as derivatives.
b) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and
receivable arise when the Group provides money to a debtor with no intention of trading with the receivable and include loans to and receivables from
banks, loans to and receivables from customers, replacement bonds and the obligatory reserve with the Croatian National Bank.
Zagrebačka banka UniCredit Group · 2009 Annual Report
77
Financial statements I Significant accounting policies
Significant accounting policies (Continued)
c) Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturity that the Group has the positive
intention and ability to hold to maturity. These include certain debt securities.
d) Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories.
Financial assets designated as available for sale are intended to be held for an indefinite period of time, but may be sold in response to needs for
liquidity or changes in interest rates, foreign exchange rates, or equity prices. Available-for-sale financial assets include debt and equity securities.
e) Other financial liabilities
Other financial liabilities comprise all financial liabilities which are not held for trading or designated at fair value through profit or loss.
Recognition and derecognition
The Group initially recognises loans and advances and other financial liabilities on the date at which they are originated, i.e. advanced to borrowers or
received from lenders.
Regular way purchases and sales of financial assets are recognised on settlement date. The settlement date is the date that an asset is delivered
to or by the Group. All other financial assets and liabilities (derivatives) are recognised on the trade date at which the Group becomes a party to the
contractual provisions of the instrument.
Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial
assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are immediately charged to the income
statement.
The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or when it transfers the
financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred or in which the Group
neither transfers nor retains substantially all the risks and rewards of ownership and it does not retain control of the financial asset. Any interest in
transferred financial assets that qualify for derecognition that is created or retained by the Group is recognised as a separate asset or liability in the
balance sheet.
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire. If the terms of a financial liability
are significantly modified, the Group will cease recognising that liability and will instantaneously recognise a new financial liability, with new terms and
conditions.
Realised gains and losses from the disposal of financial instruments are calculated by using the weighted average cost method.
Reclassification
No transfers are allowed to other portfolios of derivatives and financial instruments initially designated as at fair value through profit and loss. Financial
assets held for trading may be reclassified from this category in the case when both of the following two conditions are met: a change in the intended
purpose of the assets and an extraordinary event. In such case, the fair value at the reclassification date becomes the new cost/amortised cost.
Reclassification is possible to the available-for-sale portfolio, the held-to-maturity portfolio and the loans and receivables portfolio. Transfers from
other portfolios to the portfolio of securities at fair value through profit and loss are not possible. During the year, the Group reclassified certain debt
securities from at fair value through profit or loss to the available-for-sale portfolio, as disclosed in Note 16c.
Initial and subsequent measurement
After initial recognition, the Group measures financial instruments at fair value through profit or loss and available for sale at their fair value, without
any deduction for selling costs. Equity instruments classified as available for sale that do not have a quoted market price in an active market and
whose fair value cannot be reliably measured are stated at cost less impairment.
Loans and receivables and held-to-maturity investments and other financial liabilities are measured at amortised cost (less any impairment for the
assets) using the effective interest method.
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2009 Annual Report · Zagrebačka banka UniCredit Group
Gains and losses
Gains and losses arising from a change in the fair value of financial assets or financial liabilities at fair value through profit or loss are recognised in
the income statement.
Gains and losses from a change in the fair value of available-for-sale assets are recognised directly in a fair value reserve within equity and are
disclosed in the statement of changes in equity. Impairment losses, foreign exchange gains and losses, interest income and amortisation of premium
or discount using the effective interest method on available-for-sale monetary assets are recognised in the income statement. Foreign exchange
differences on non-monetary financial assets available for sale are recognised in equity. Dividend income is recognised in the income statement. Upon
sale or other derecognition of available-for-sale financial assets, any cumulative gains or losses are transferred to the income statement.
Gains and losses on financial instruments carried at amortised cost may also arise, and are recognised in the income statement, when a financial
instrument is derecognised or when its value is impaired.
Fair value measurement principles
The fair values of quoted investments are based on current closing bid prices. Except for unquoted equity securities, if the market for a financial asset
is not active (and for unlisted securities), or if, for any other reason, the fair value cannot be reliably measured by market price, the Group establishes
fair value by using valuation techniques. These include the use of prices achieved in recent arm’s length transactions, reference to other instruments
that are substantially the same, discounted cash flow analysis, and option pricing models, making maximum use of market inputs and relying as little
as possible on entity-specific inputs.
Where discounted cash flow techniques are used, estimated future cash flows are based on management’s best estimate and the discount rate is the
market rate.
The fair value of non-exchange-traded derivatives is estimated at the amount that the Group would receive or pay to terminate the contract at the
balance sheet date taking into account current market conditions and the current creditworthiness of the counterparties.
Impairment of financial assets
Impairment of financial assets identified as impaired
(a) Financial assets carried at amortised cost
The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or group of financial assets is impaired. A
financial asset or a group of financial assets is impaired and impairment losses are incurred if there is objective evidence of impairment as a result
of one or more events that occurred after the initial recognition of the asset (a “loss event”) and that loss event (or events) has an impact on the
estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. Objective evidence that a financial asset
or group of assets is impaired includes observable data that comes to the attention of the Group about the following loss events:
i) significant financial difficulty of the borrower;
ii) a breach of contract, such as a default or delinquency in interest or principal payments;
iii)the Group granting to the borrower, for economic or legal reasons relating to the borrower’s financial difficulty, a concession that it would not
otherwise consider;
iv)it becoming probable that the borrower will enter bankruptcy or other financial reorganisation;
v) the disappearance of an active market for the financial asset because of financial difficulties;
vi)observable data indicating that there is a measurable decrease in the estimated future cash flows from a group of financial assets since the initial
recognition of those assets, although the decrease cannot yet be identified for the individual financial assets in the group.
If there is objective evidence that an impairment loss on loans and receivables or held-to-maturity investments carried at amortised cost has been
incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash
flows discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance
account and the amount of the loss is recognised in the income statement. If a loan and receivable or held-to-maturity investment has a variable
interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively. Those
individually significant assets which are not identified as impaired are subsequently included in the basis for collective impairment assessment.
For the purposes of a collective evaluation of impairment, financial assets are grouped on the basis of similar credit risk characteristics (i.e. on the
basis of the Group’s grading process that considers asset type, industry, geographical location, collateral type, past-due status and other relevant
Zagrebačka banka UniCredit Group · 2009 Annual Report
79
Financial statements I Significant accounting policies
Significant accounting policies (Continued)
factors). Those characteristics are relevant to the estimation of future cash flows for groups of such assets by being indicative of the debtors’ ability to
pay all amounts due according to the contractual terms of the assets being evaluated.
If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the
impairment was recognised (such as an improvement in the debtor’s credit rating), the previously recognised impairment loss is reversed by adjusting
the allowance account. The amount of the reversal is recognised in the income statement.
When a loan is uncollectible, it is written off against the related impairment allowance account. Such loans are written off after all the necessary
procedures have been completed and the amount of the loss has been determined. Subsequent recoveries of amounts previously written off are
recognised as a reversal of impairment losses in the income statement.
(b) Financial assets carried at fair value
The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired.
In the case of equity investments classified as available for sale, a significant or prolonged decline in the fair value of the investment below its cost
is considered in determining whether the assets are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative
loss, measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously
recognised in profit or loss, is removed from equity and recognised in the income statement. If, in a subsequent period, the fair value of a debt
instrument classified as available for sale increases and the increase can be objectively related to an event occurring after the impairment loss was
recognised in profit or loss, the impairment loss is reversed through the income statement. However, any subsequent recovery in the fair value of an
impaired available-for-sale equity security is subsequently recognised in equity.
(c) Financial assets carried at cost
These include equity securities classified as available for sale for which there is no reliable fair value. The Group assesses at each balance sheet date
whether there is objective evidence that a financial asset or a group of financial assets is impaired.
An impairment loss is calculated as the difference between the carrying amount of the financial asset and the present value of expected future cash
receipts discounted by the current market interest rate for similar financial assets. Impairment losses on such instruments, recognised in the income
statement, are not subsequently reversed through the income statement.
(d) Impairment of financial assets not identified as impaired
In addition to the above described impairment losses on financial assets identified as impaired, the Group recognises impairment losses (general
provision), in income, on on- and off-balance-sheet credit risk exposures not identified as impaired, at rates from 0.85% - 1.20% and 2.00%, in
accordance with the accounting regulations of the CNB and the FBA respectively.
Debt securities measured at fair value and classified as available for sale are included in the basis of such calculation. However, debt securities at fair
value through profit or loss were excluded from the basis of such calculation at the balance sheet date.
Specific instruments
(a) Replacement bonds
Replacement bonds are classified as loans and receivables and measured at cost indexed with reference to the industrial price coefficient, less any
impairment. The gain or loss on revaluation of replacement bonds is included in net gains and losses from investment securities.
The feature of indexation represents an embedded derivative. However, given that it is not possible to measure the value of this embedded derivative
reliably, it is not separated from the host contract.
(b) Sale and repurchase agreements
The Group enters into purchases and sales of securities under agreements to resell or repurchase substantially identical securities at a certain date
in the future at a fixed price. Investments purchased subject to such commitments to resell them at future dates are not recognised in the balance
sheet. The amounts paid are recognised in loans and receivables to either banks or customers. The receivables are presented as collateralised by the
underlying security. Securities sold under repurchase agreements continue to be recognised in the balance sheet and are measured in accordance
with the accounting policy for the relevant financial asset at amortised cost or at fair value as appropriate. The proceeds from the sale of the securities
are reported as liabilities to either banks or customers.
80
2009 Annual Report · Zagrebačka banka UniCredit Group
The difference between the sale and repurchase consideration is recognised on an accrual basis over the period of the transaction and is included in
interest income or expense.
(c) Derivative financial instruments
The Group uses derivative financial instruments to hedge economically its exposure to foreign exchange and interest rate risks arising from operating,
financing and investing activities.
In accordance with its treasury policy, the Group does not hold or issue derivative financial instruments for speculative trading purposes. No derivatives
are accounted for as hedging instruments. All derivatives are classified as financial instruments at fair value through profit or loss - trading instruments.
Derivative financial instruments, including foreign exchange, forward rate agreements, foreign exchange swaps, cross currency interest rate swaps and
interest rate swaps, are initially recognised in the balance sheet and subsequently remeasured at their fair value. Fair values are obtained from quoted
market prices or discounted cash flow models as appropriate. All derivatives are carried as assets when their fair value is positive and as liabilities
when negative.
Changes in the fair value of derivatives are included in the income statement under “Net gains and losses on financial instruments at fair value through
profit or loss and result from foreign exchange trading and translation of monetary assets and liabilities”.
Some hybrid contracts contain both a derivative and a non-derivative component. In such cases, the derivative component is termed an embedded
derivative. When the economic characteristics and risks of embedded derivatives are not closely related to those of the host contract and when the
hybrid contract is not itself carried at fair value through profit or loss, the embedded derivative is treated as a separate derivative and classified at fair
value through profit or loss with all unrealised gains and losses recognised in the income statement, unless there is no reliable measure of their fair
value.
(d) Debt securities
Debt securities are classified as financial assets at fair value through profit or loss, held to maturity, or available for sale, or as loans and receivables
depending on the purpose for which the debt security was acquired.
(e) Loans to and receivables from banks
Placements with banks are classified as loans and receivables and are carried at amortised cost less impairment losses.
(f) Loans to and receivables from customers
Loans to and receivables from customers are presented net of impairment allowances to reflect the estimated recoverable amounts.
(g) Equity securities
Equity securities are mainly classified as available for sale and carried at fair value, unless there is no reliable measure of the fair value, in which case
equity securities are stated at cost, less impairment. Other equity securities are classified as financial assets at fair value through profit or loss.
(h) Investments in funds
Investments in funds are classified as financial assets designated at fair value through profit or loss.
(i) Investments in subsidiaries and associates
Investments in subsidiaries and associates are accounted at cost less impairment in the unconsolidated financial statements of the Bank. Investments
in subsidiaries are fully consolidated in the consolidated financial statements whilst investments in associates are accounted for under the equity
method.
(j) Cash and cash equivalents
For the purpose of the cash flow statement, cash and cash equivalents comprise cash in hand, items in the course of collection and current accounts.
Zagrebačka banka UniCredit Group · 2009 Annual Report
81
Radoslav Bardún,
Medirex
Corporate Banking Client - Slovakia
n our business,
«weIcount
on the synergies
that come from our financial
partnership and friendship
with UniCredit Bank.
We are always forward
looking and have plenty
of ideas for further
development and growth.
With UniCredit Bank, we can
find new solutions and then
put our ideas into practice.»
It’s easy with
UniCredit.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated
recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the income statement.
12 Intangible assets
(a) Goodwill
Goodwill arising on acquisition represents the excess of the cost of acquisition over the fair value of the Group’s share of the underlying net identifiable
assets including intangible assets, at the date of acquisition. Upon the legal merger of the Bank’s former subsidiaries, goodwill formerly arising on
consolidation is transformed into purchased goodwill recognised in the Bank’s separate balance sheet. Goodwill on acquisition of subsidiaries and
purchased goodwill is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates.
Goodwill is tested for impairment at least annually. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity
include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units or groups of cash-generating units that are expected to benefit from the business combination in which
the goodwill arose.
Once when it becomes impracticable to test purchased goodwill on impairment as it is too difficult to distinguish cash flows from operations to which
purchased goodwill relates from other cash flows, purchased goodwill is reclassified to other intangible assets, and amortised.
(b) Other intangible assets
Other intangible assets acquired by the Group are stated at cost less accumulated amortisation and impairment losses. Expenditure on development
activities is capitalised if all of the features required by International Accounting Standard 38: “Intangible Assets” are satisfied.
These intangible assets are amortised on a straight-line basis over their estimated useful lives as follows:
Software
Leasehold improvements
Other intangible assets
2009
2008
5 years
over the period of the lease
10 years
5 years
over the period of the lease
10 years
The assets’ useful lives and residual values are reviewed, and adjusted if appropriate, at each balance sheet date.
13 Investment property
Investment property is carried at cost less accumulated depreciation and any impairment losses. Investment property is property held by the Group to
earn rentals or for capital appreciation.
Depreciation is provided on all investment property, except for investment property not yet brought into use, on a straight-line basis at prescribed rates
designed to write off the cost over the estimated useful life of the asset as follows:
Car parks
Other buildings
2009
2008
33.3 years
33.3 - 50 years
33.3 years
33.3 - 50 years
The assets’ useful lives and residual values are reviewed, and adjusted if appropriate, at each balance sheet date.
14 Leased assets
Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. At the balance sheet
date, the Group did not have any finance leases either as a lessor or as a lessee. Other leases are operating leases.
Zagrebačka banka UniCredit Group · 2009 Annual Report
83
Financial statements I Significant accounting policies
Significant accounting policies (Continued)
15 Non-current assets and disposal groups classified as held for sale
Non-current assets (or disposal groups comprising assets and liabilities) that are expected to be recovered primarily through sale rather than through
continuing use are classified as held for sale.
Immediately before classification as held for sale, the assets (or components of a disposal group) are remeasured in accordance with the Group’s
accounting policies. Thereafter, the assets (or disposal group of assets and liabilities) are measured at the lower of their carrying amount and fair
value less cost to sell.
Any impairment loss on a disposal group first is allocated to goodwill, and then to remaining assets and liabilities on a pro-rata basis, except that no
loss is allocated to financial assets and deferred tax assets, which are continued to be measured in accordance with the Group’s accounting policies.
Impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement are recognised in profit or loss. Gains are
not recognised in excess of any cumulative impairment loss.
16 Income tax
The income tax charge is based on taxable profit for the year and comprises current and deferred tax. Income tax is recognised in the income
statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected
tax payable on the taxable income for the year, using the tax rates enacted or substantially enacted at the balance sheet date, and any adjustments to
tax payable in respect of previous years.
Deferred taxes are calculated by using the balance sheet liability method. Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The
measurement of deferred tax assets and liabilities reflects the tax consequences that would follow from the manner in which the enterprise expects, at
the balance sheet date, to recover or settle the carrying amount of its assets and liabilities, based on tax rates enacted or substantially enacted at the
balance sheet date.
Deferred tax assets and liabilities are not discounted and are classified as non-current in the balance sheet. Deferred tax assets are recognised only to
the extent that it is probable that sufficient taxable profits will be available against which the deferred tax assets can be utilised. At each balance sheet
date, the Group reassesses unrecognised potential deferred tax assets and the carrying amount of recognised deferred tax assets.
Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend.
17 Impairment of property and equipment, investment property and intangible assets
Assets that have an indefinite useful life, such as goodwill, are not subject to amortisation and are tested for impairment whenever there are
indications that these may be impaired or at least annually. Assets that are subject to amortisation are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable. Intangible assets that are not yet available for use are assessed
at each balance sheet date. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Impairment
losses are recognised in the income statement.
The recoverable amount of property and equipment, investment property and intangible assets is the higher of the asset’s fair value less costs to sell
and value in use. For the purpose of assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows
(cash-generating units). In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset or cash-generating unit.
An impairment loss in respect of goodwill is not reversed.
Other previously impaired non-financial assets other than goodwill are reviewed for possible reversal of the impairment at each reporting date. An
impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed
only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or
amortisation, if no impairment loss had been recognised.
84
2009 Annual Report · Zagrebačka banka UniCredit Group
18 Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of
resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made,
or as required by law in the case of provisions for unidentified losses on off-balance-sheet credit risk exposures.
Provisions for liabilities and charges are maintained at the level that the Group’s management considers sufficient for absorption of losses. The
management determines the sufficiency of provisions on the basis of insight into specific items, current economic circumstances, risk characteristics
of certain transaction categories, as well as other relevant factors.
Provisions are released only for such expenditure in respect of which provisions are recognised at inception. If the outflow of economic benefits to
settle the obligations is no longer probable, the provision is reversed.
19 Issued share capital
Issued share capital represents the nominal value of paid-in ordinary shares and is denominated in HRK.
Dividends are recognised as a liability in the period in which they are declared.
20 Treasury shares
When any Group company purchases the Bank’s equity share capital (treasury shares), the consideration paid is deducted from equity attributable to
the Bank’s equity holders until the shares are cancelled, reissued or disposed of and classified as treasury shares. When such shares are subsequently
sold or reissued, any consideration received, net of transaction costs, is included in equity attributable to the Bank’s equity holders.
21 Retained earnings
Any profit for the year retained after appropriations is transferred to retained earnings.
22 Off-balance-sheet commitments and contingent liabilities
In the ordinary course of business, the Group enters into credit related commitments which are recorded in off-balance-sheet accounts and primarily
comprise guarantees, letters of credit, undrawn loan commitments and credit card limits. Such financial commitments are recorded in the Group’s
balance sheet if and when they become payable (also refer to accounting policy 10 (n) above for specific financial instruments).
23 Managed funds for and on behalf of third parties
The Group manages funds for and on behalf of corporate and retail customers. These amounts do not represent the Group’s assets and are excluded
from the balance sheet. For the services rendered the Group charges a fee.
24 Segment reporting
A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segment), or in providing
products or services within a particular economic environment (geographical segment), which is subject to risks and rewards that are different from
those of other segments. The Group’s primary format for segment reporting is based on business segments.
The Group and the Bank have identified four primary segments: Retail, Corporate, Investment and Other. The primary segmental information is based
on the internal reporting structure of business segments. Segmental result is measured by applying internal transfer prices (Note 10).
25 Earnings per share
The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS are calculated by dividing the profit or loss
attributable to ordinary shareholders of the Bank by the weighted average number of ordinary shares outstanding during the period. Diluted EPS are
determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for
the effects of all dilutive potential ordinary shares.
Zagrebačka banka UniCredit Group · 2009 Annual Report
85
Financial statements I Notes to the financial statements
Notes to the financial statements
1 Net interest income
a) Interest and similar income - analysis by source
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Companies
Individuals
State and public sector
Banks and other financial institutions
Other organisations
1,933
2,992
1,017
308
67
6,317
1,754
2,737
676
554
62
5,783
1,696
2,477
979
299
67
5,518
1,520
2,290
616
447
62
4,935
2009
HRK million
GROUP
2008
HRK million
2009
HRK million
Bank
2008
HRK
million
5,688
332
51
246
6,317
4,898
358
83
444
5,783
4,920
322
51
225
5,518
4,216
303
83
333
4,935
b) Interest and similar income - analysis by product
Loans to and receivables from customers
Debt securities
Obligatory reserve with the Croatian National Bank
Loans to and receivables from banks
86
2009 Annual Report · Zagrebačka banka UniCredit Group
1 Net interest income (continued)
c) Interest expense and similar charges - analysis by recipient
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Companies
Individuals
State and public sector
Banks and other financial institutions
Other organisations
628
1,581
53
1,135
90
3,487
526
1,265
60
934
50
2,835
559
1,424
53
1,038
90
3,164
459
1,124
60
768
50
2,461
d) Interest expense and similar charges - analysis by product
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Current accounts and deposits from banks
Current accounts and deposits from companies and other organisations
Current accounts and deposits from individuals
Borrowings
Issued debt securities
570
769
1,581
491
76
3,487
238
632
1,269
552
144
2,835
534
701
1,424
429
76
3,164
178
566
1,124
449
144
2,461
Zagrebačka banka UniCredit Group · 2009 Annual Report
87
Financial statements I Notes to the financial statements
Notes to the financial statements (Continued)
2 Net fee and commission income
a) Fee and commission income
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Credit operations
Credit cards
Domestic payment transactions Foreign payment transactions Guarantees
Investment management, brokerage and consultancy Other
19
317
500
137
87
112
95
1,267
34
318
453
151
75
217
78
1,326
11
242
455
109
68
84
66
1,035
20
247
408
121
56
160
52
1,064
b) Fee and commission expense
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Credit cards
Domestic payment transactions Foreign payment transactions Other 88
2009 Annual Report · Zagrebačka banka UniCredit Group
99
57
9
18
183
86
68
11
15
180
98
55
6
14
173
85
67
6
11
169
3 Dividend income
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Dividends from associates (Note 19d)
Dividends from subsidiaries
Dividends from other equity securities -
-
3
3
-
-
3
3
23
21
3
47
30
42
3
75
4 Net gains and losses on financial instruments at fair value through profit or loss and result
from foreign exchange trading and translation of monetary assets and liabilities
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Foreign exchange
Foreign exchange spot trading
Net foreign exchange gains/(losses) from translation of monetary assets and liabilities
Net trading gains/(losses) from currency derivatives
Other derivative financial instruments
Net trading losses from interest rate swaps
Net trading gains from other derivatives
Trading debt securities
Financial assets designated at fair value through profit or loss
Trading equity securities 257
2
277
266
381
(326)
224
(1)
274
227
421
(324)
(8)
13
11
13
-
565
(5)
25
(20)
(52)
(17)
252
(7)
13
11
10
-
524
(5)
25
(20)
(55)
(17)
252
The Group enters into economic hedges of its open FX position via various derivative financial instruments, but does not apply hedge accounting. A
part of the effect on income, which the results of the informal economic hedges included in the table above are intended to mitigate, is presented
within net interest income.
5 Net gains and losses from investment securities
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Available-for-sale debt securities - realised loss
Available-for-sale equity securities - realised gain
Revaluation of replacement bonds
Endowment and disposal of equity securities
(15)
26
20
-
31
(13)
80
61
47
175
(15)
24
20
-
29
(13)
73
61
30
151
Zagrebačka banka UniCredit Group · 2009 Annual Report
89
Financial statements I Notes to the financial statements
Notes to the financial statements (Continued)
6 Other operating income
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Rental income from investment property
Gain on disposal of property and equipment
Receipts from receivables previously written off
Hotel operations
Retail trade
Gain on redemption of issued debt securities
Other 43
4
1
355
2
2
91
498
52
4
7
363
2
-
85
513
6
4
1
-
-
2
28
41
7
4
7
26
44
7 Operating expenses
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Personnel expenses
Salaries and other personnel expenses
Restructuring expenses (Note 29)
Administration and marketing expenses
Depreciation and amortisation
Savings deposit insurance expenses
Government contributions
Repair and maintenance of investment property
Hotel operations
Retail trade
Other
1,171
20
793
342
136
42
11
118
6
23
2,662
1,318
12
874
326
124
38
21
128
6
20
2,867
833
20
569
212
110
27
-
-
-
12
1,783
981
12
623
204
95
25
11
1,951
Personnel expenses include HRK 195 million (2008: HRK 201 million) and HRK 139 million (2008: HRK 149 million) of defined pension contributions
payable into obligatory pension plans for the Group and the Bank respectively. Contributions are calculated as a percentage of employees’ gross
salaries.
90
2009 Annual Report · Zagrebačka banka UniCredit Group
8 Other impairment losses and provisions
The charge/(credit) to the income statement in respect of non-loan impairment losses and other provisions is analysed as follows:
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Provisions for off-balance-sheet credit risk exposure (Note 29)
Provisions for court cases (Note 29)
Other provisions
Impairment loss on available-for-sale debt securities
Impairment loss on other assets
Impairment on investment in subsidiaries (Note 19d)
Impairment loss on other intangible assets (Note 22)
Impairment of property and equipment (Note 21)
Impairment of goodwill (Note 22)
13
(12)
2
8
17
-
2
1
-
31
(23)
3
3
-
-
-
2
-
12
(3)
18
(1)
-
8
5
-
2
-
-
32
(29)
4
9
13
2
(1)
9 Income tax
a) Income tax expense recognised in the income statement
Group
Notes
2009
2008
HRK
HRK
millionmillion
Current income tax charge
Utilisation of tax prepayment
9d
Net deferred tax charge/(credit)
9c, e
Total income tax expense recognised in the income statement
285
1
55
341
462
3
(72)
393
BANK
Notes
2009
2008
HRK
HRK
millionmillion
Current income tax charge
Utilisation of tax prepayment
9d
Net deferred tax charge/(credit)
9c, e
Total income tax expense recognised in the income statement
255
1
43
299
416
3
(74)
345
Zagrebačka banka UniCredit Group · 2009 Annual Report
91
Financial statements I Notes to the financial statements
Notes to the financial statements (Continued)
9 Income tax (continued)
b) Reconciliation of the accounting profit and income tax expense at 20%
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Accounting profit before tax
Tax calculated at rate of 20% (2008: 20%) Effect of different tax rates in Bosnia and Herzegovina
Income not subject to tax
Expenses not deductible for tax purposes
Tax allowances (double deductions of eligible expenses)
Consolidation adjustments
Total income tax expense Average effective income tax rate
1,735
347
(13)
(10)
15
(1)
3
341
19.7%
1,929
386
(15)
(15)
29
(1)
9
393
20.4%
1,515
303
-
(10)
6
-
-
299
19.7%
1,739
348
(15)
13
(1)
345
19.8%
c) Deferred tax asset
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Deferred tax asset
Timing differences
On deferred fees - from 2004 onwards
On depreciation
On unrealised losses on financial instruments
at fair value through profit or loss
On long term liabilities to employees
On available-for-sale financial assets
On other items
Tax losses
92
2009 Annual Report · Zagrebačka banka UniCredit Group
55
13
54
19
51
-
48
-
28
8
1
8
-
113
69
12
-
5
5
164
28
8
8
6
-
101
69
12
2
131
9 Income tax (continued)
c) Deferred tax asset (continued)
Group
TotalDeferred Tax lossesDepreciationFinancial Long term
Available-
Other
feesinstrumentsliabilities
for-saleitems
at fair to financial
value through employeesassets in
profit
fair value
or lossreserve
HRK
HRK
HRK
HRK
HRK
HRK
HRK
HRK
millionmillionmillionmillionmillionmillionmillionmillion
Balance as at 1 January 2009
Increase of deferred tax asset
credited to income statement
Utilisation charged to income statement
Transfer from deferred tax liability
Increase of deferred tax asset
recognised in equity
Other movements
Balance as at 31 December 2009
Balance as at 1 January 2008
Increase of deferred tax asset
credited to income statement
Utilisation charged to income statement
Transfer to deferred tax liability
Balance as at 31 December 2008
164
54
5
19
69
12
-
5
66
(121)
(1)
46
(44)
(1)
-
(5)
-
-
(6)
-
11
(52)
-
6
(12)
-
-
-
-
3
(2)
-
1
4
113
101
-
-
55
45
-
-
-
-
-
-
13
25
-
-
28
17
-
2
8
-
1
-
1
9
2
8
5
128
(56)
(9)
164
44
(35)
-
54
5
-
-
5
-
(6)
-
19
65
(13)
-
69
12
-
-
12
-
-
(9)
-
2
(2)
5
Bank
TotalDeferredFinancial Long term
Available-
Other
feesinstrumentsliabilities
for-saleitems
at fair to financial
value through employeesassets in
profit
fair value
or lossreserve
HRK
HRK
HRK
HRK
HRK HRK
millionmillionmillionmillionmillionmillion
Balance as at 1 January 2009
Increase of deferred tax asset
credited to income statement
Utilisation charged to income statement
Increase of deferred tax asset
recognised in equity
Other movements
Balance as at 31 December 2009
Balance as at 1 January 2008 Increase of deferred tax asset
credited to income statement
Utilisation charged to income statement
Transfer to deferred tax liabilit
Balance as at 31 December 2008
131
48
69
12
-
2
64
(106)
44
(41)
12
(53)
6
(12)
-
-
2
-
8
4
101
66
-
-
51
39
-
-
28
17
-
2
8
-
8
-
8
9
2
6
1
119
(45)
(9)
131
41
(32)
-
48
65
(13)
-
69
12
-
-
12
-
-
(9)
-
1
2
Zagrebačka banka UniCredit Group · 2009 Annual Report
93
Financial statements I Notes to the financial statements
Notes to the financial statements (Continued)
9 Income tax (continued)
d) Current tax asset
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Balance as at 1 January
Utilisation charged to income statement
Prepaid income tax in 2009
Balance as at 31 December
5
(1)
113
117
8
(3)
-
5
5
(1)
98
102
8
(3)
5
e) Deferred tax liability
Group
TotalDeferred Available-for
feessale financial
assets in fair
value reserve
HRK
HRK
HRK
millionmillionmillion
Balance as at 1 January 2009
Transfer to deferred tax assets
Deferred tax on disposal of AFS portfolio
Utilisation credited to income statement
Increase of deferred tax liability charged to income statement
Balance as at 31 December 2009
Balance as at 1 January 2008 Transfer from deferred tax assets
Increase of deferred tax liability recognised in equity
Deferred tax on disposal of AFS portfolio
Utilisation credited to income statement
Increase of deferred tax liability charged to income statement
Balance as at 31 December 2008
6
(1)
(2)
(1)
1
3
4
(9)
23
(12)
(2)
2
6
4
(1)
-
(1)
1
3
4
-
-
-
(2)
2
4
2
(2)
(9)
23
(12)
2
Bank
TotalDeferred Available-for
feessale financial
assets in fair
value reserve
HRK
HRK
HRK
millionmillionmillion
Balance as at 1 January 2009
Utilisation credited to income statement
Increase of deferred tax liability charged to income statement
Deferred tax on disposal of AFS portfolio Balance as at 31 December 2009
Balance as at 1 January 2008 Transfer from deferred tax assets
Increase of deferred tax liability recognised in equity
Deferred tax on disposal of AFS portfolio
Utilisation credited to income statement
Increase of deferred tax liability charged to income statement
Balance as at 31 December 2008
94
2009 Annual Report · Zagrebačka banka UniCredit Group
4
(1)
2
(2)
3
2
(8)
22
(12)
(1)
1
4
2
(1)
2
-
3
2
-
-
-
(1)
1
2
2
(2)
(8)
22
(12)
2
9 Income tax (continued)
f) Current tax liability
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Current tax liability
-
159
-
166
g) Tax losses
As at 31 December 2009, the subsidiaries of the Bank in Croatia have unused gross tax losses amounting to HRK 9 million (2008: HRK 32 million).
Such tax losses may only be used by the company that incurred the loss to reduce taxable profits for the following 5 years. The expiry dates for
unused tax losses are as follows:
2009
2008
HRK
HRK
millionmillion
31 December 2009
31 December 2010
31 December 2011
31 December 2012
31 December 2013
31 December 2014
Tax losses not recognised as deferred tax asset
at 20% in Croatia Tax losses recognised as deferred tax asset
at 20% in Croatia -
-
-
5
4
-
9
1
5
26
32
1
1
-
5
Zagrebačka banka UniCredit Group · 2009 Annual Report
95
Financial statements I Notes to the financial statements
Notes to the financial statements (Continued)
10 Financial information by segment
Customers are classified in separate segments and subsegments according to their size, with the goal of providing services of appropriate quality to
clients. In measurement of segment business results internal prices are applied that are based on specific prices in appropriate currency and maturity
with embedded additional adjustments. The Group and the Bank changed the methodology for presentation of segment reporting in 2009, hence it is
not practicable to disclose comparative financial information.
Retail segment includes: individuals, unincorporated businesses and small corporate clients.
Corporate segment includes: medium and large corporate clients and similar organisations, Government and private clients.
This segmentation differs from the classifications used elsewhere in these financial statements in the analysis of the balance sheet captions. For the
purpose of classification in the financial statements individuals and unincorporated businesses (or retail customers) also include private clients; while
companies and similar organisations and Government (or corporate entities as classified in the financial statements) also include small corporate
clients.
Investment segment comprises trading activities.
Segment “Other” includes equity, investment in subsidiaries and associates and other assets not assigned to other segments as well as asset and
liability management activities. The “Other” segment for the Group includes all subsidiaries other than UniCredit Bank dd, Mostar, as they are not
allocated to primary segments.
The analysis by segment is based on information used by the Bank for management purposes.
96
2009 Annual Report · Zagrebačka banka UniCredit Group
10 Financial information by segment (continued)
a) Segmental income statement for 2009 - business segments
Group
Retail
Corporate Investment
Other
Total Reconciliation Financial
managerialto financial statements
reportingstatements
2009
2009
2009
2009
2009
2009
2009
HRK
HRK
HRK
HRK
HRK
HRK
HRK
millionmillionmillionmillionmillionmillionmillion
Net interest and similar income
Net fee and commission income Dividend income
Net gains and losses on financial
instruments at fair value through profit
or loss and result from foreign
exchange trading and translation
of monetary assets and liabilities
Net gains and losses from
investment securities
Other operating income
Operating income
Operating expenses
Impairment losses and provisions
Segment result
Share of profit from associates
Income tax expense
Profit after taxation
Attributable to:
Equity holders of the Bank
Minority interest
Profit for the period
2,300
648
-
1,065
392
-
(1)
2
-
(516)
42
3
2,848
1,084
3
(18)
-
-
2,830
1,084
3
161
113
52
241
567
(2)
565
-
18
3,127
(1,781)
(311)
1,035
-
-
1,035
-
8
1,578
(412)
(339)
827
-
-
827
-
-
53
(27)
-
26
-
-
26
11
439
220
(419)
(3)
(202)
29
(341)
(514)
11
465
4,978
(2,639)
(653)
1,686
29
(341)
1,374
20
33
33
(23)
10
20
-
-
20
31
498
5,011
(2,662)
(643)
1,706
29
(341)
1,394
1,035
-
1,035
827
-
827
26
-
26
(563)
49
(514)
1,325
49
1,374
20
-
20
1,345
49
1,394
Zagrebačka banka UniCredit Group · 2009 Annual Report
97
Financial statements I Notes to the financial statements
Notes to the financial statements (Continued)
10 Financial information by segment (continued)
a) Segmental income statement for 2009 - business segments (continued)
Bank
Retail Corporate Investment
Other
Total ReconciliationFinancial
managerialto financialstatements
reportingstatements
2009
2009
2009
2009
2009
2009
2009
HRK
HRK
HRK
HRK
HRK
HRK
HRK
millionmillionmillionmillionmillionmillionmillion
Net interest and similar income
Net fee and commission income Dividend income
Net gains and losses on financial
instruments at fair value through profit
or loss and result from foreign
exchange trading and translation of
monetary assets and liabilities
Net gains and losses from
investment securities
Other operating income
Operating income
Operating expenses
Impairment losses and provisions
Segment result
Income tax expense
Profit for the period
98
1,946
527
-
968
334
-
(1)
2
-
(541)
(1)
47
2,372
862
47
(18)
-
-
2,354
862
47
143
107
52
224
526
(2)
524
-
13
2,629
(1,439)
(283)
907
-
907
-
2
1,411
(314)
(286)
811
-
811
-
-
53
(26)
-
27
-
27
9
(7)
(269)
19
-
(250)
(294)
(544)
9
8
3,824
(1,760)
(569)
1,495
(294)
1,201
20
33
33
(23)
10
20
(5)
15
29
41
3,857
(1,783)
(559)
1,515
(299)
1,216
2009 Annual Report · Zagrebačka banka UniCredit Group
10 Financial information by segment (continued)
b) Segmental balance sheet for 2009 - business segments
Group
Retail
Corporate
Investment Other
Total
managerial
reporting and
financial
statements
2009
2009
2009
2009
2009
HRK
HRK
HRK
HRK
HRK
millionmillionmillionmillionmillion
Segment assets
Investments in associates
Current tax asset
Deferred tax asset
Total assets
Segment liabilities
Deferred tax liability
Total liabilities
Capital expenditure
34,743
-
-
-
34,743
39,086
-
39,086
-
29,332
-
-
-
29,332
23,882
-
23,882
-
773
-
-
-
773
-
-
-
-
42,892
78
117
113
43,200
29,310
3
29,313
327
107,740
78
117
113
108,048
92,278
3
92,281
327
bank
Retail
Corporate
Investment Other
Total
managerial
reporting and
financial
statements
2009
2009
2009
2009
2009
HRK
HRK
HRK
HRK
HRK
millionmillionmillionmillionmillion
Segment assets
Investments in subsidiaries
and associates Current tax asset
Deferred tax asset
Total assets
Segment liabilities
Deferred tax liability
Total liabilities
Capital expenditure
29,659
26,873
773
34,386
91,691
-
-
-
-
-
-
29,659
26,873
33,967
20,538
-
-
33,967
20,538
-
-
-
-
773
-
-
-
-
918
102
101
35,507
24,174
3
24,177
175
918
102
101
92,812
78,679
3
78,682
175
Zagrebačka banka UniCredit Group · 2009 Annual Report
99
Financial statements I Notes to the financial statements
Notes to the financial statements (Continued)
10 Financial information by segment (continued)
c) Geographical segment information for 2009
Group
Croatia
Bosnia and Total
Herzegovina
2009
2009
2009
HRK
HRK
HRK
millionmillionmillion
External revenue
Segment assets
Capital expenditure
4,315
95,166
204
696
12,882
123
5,011
108,048
327
The majority of the Bank’s operations and customers is in the Republic of Croatia, hence geographical segment information for the Bank is not
presented.
100 2009 Annual Report · Zagrebačka banka UniCredit Group
11 Cash reserves
Group
2009
2009
2009
2008
2008
2008
Total
KunaForeign
Total
KunaForeign
currencycurrency
HRK
HRK
HRK
HRK
HRK
HRK
millionmillionmillionmillionmillionmillion
Cash in hand
Items in course of collection
Current accounts
with other banks
Current account with the CNB
2,227
2
1,228
-
999
2
1,690
2
955
-
735
2
1,569
3,245
7,043
2
3,245
4,475
1,567
-
2,568
789
1,921
4,402
2
1,921
2,878
787
1,524
bank
2009
2009
2009
2008
2008
2008
Total
KunaForeign
Total
KunaForeign
currencycurrency
HRK
HRK
HRK
HRK
HRK
HRK
millionmillionmillionmillionmillionmillion
Cash in hand
Items in course of collection
Current accounts
with other banks
Current account with the CNB
1,809
1
1,217
-
592
1
1,321
2
939
-
382
2
205
3,245
5,260
-
3,245
4,462
205
-
798
67
1,921
3,311
-
1,921
2,860
67
451
Zagrebačka banka UniCredit Group · 2009 Annual Report 101
Financial statements I Notes to the financial statements
Notes to the financial statements (Continued)
12 Obligatory reserve with the Croatian National Bank
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Obligatory reserve
- in kuna
5,939
4,567
5,939
- in foreign currency
1,379
2,074
1,379
Mandatory CNB treasury bills
-
420
-
7,318
7,061
7,318
4,567
2,074
420
7,061
The CNB determines the requirement for banks to calculate an obligatory reserve, which is required to be deposited with the CNB and held in the form
of other liquid receivables.
The obligatory reserve requirement as at 31 December 2009 amounted to 14% (until 10 December 2008: 17%) of kuna and foreign currency
deposits, borrowings and issued debt securities.
As at 31 December 2009, the required rate for the kuna part of the obligatory reserve to be deposited with the CNB amounted to 70% (2008: 70%),
while the remaining 30% (2008: 30%) had to be held in the form of other liquid receivables. This includes the part of foreign currency obligatory
reserve required to be held in HRK (see below).
60% of the foreign currency part of the obligatory reserve (2008: 60%) is deposited with the CNB, while the remaining 40% (2008: 40%) must be held
in the form of other liquid receivables, after adjusting for the obligatory reserve requirement arising from foreign currency funds from non-residents
and related parties (which is required to be held in full with the CNB). From 14 January 2009 75% (2008: 50%) of the foreign currency obligatory
reserve is required to be held in HRK and is added to the kuna part of the obligatory reserve (see above).
Compulsory CNB bills had to be subscribed if growth of eligible assets and off-balance-sheet items was in excess of thresholds determined by the
CNB. This measure was introduced in 2007. The rate of purchase of compulsory CNB bills was 75% with maturity of 360 days from the date of
subscription. The interest rate was 0.25%. The decision requiring purchase of CNB bills was abolished on 23 November 2009.
102 2009 Annual Report · Zagrebačka banka UniCredit Group
13 a) Loans to and receivables from banks
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Placements with banks
9,971
11,824
7,007
9,089
Loans to banks
1,746
674
1,746
674
11,717
12,498
8,753
9,763
Impairment allowance
- Placements
(24)
(24)
(22)
(22)
- Loans
(53)
(53)
(53)
(53)
(77)
(77)
(75)
(75)
Net placements and loans to banks
11,640
12,421
8,678
9,688
L oans to and receivables from banks include obligatory reserve amounts, of HRK 1,127 million (2008: HRK 1,463 million), held with the Central Bank
of Bosnia and Herzegovina.
13 b) Movement in impairment allowance for loans to and receivables from banks
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Balance as at 1 January 77
75
75
73
Effect of foreign exchange differences
-
2
-
2
Balance as at 31 December
77
77
75
75
There were no changes in impairment allowance for loans to and receivables from banks which would have an effect on the income statement of the
Group and the Bank for 2009, whilst for 2008 the only movements related to effects of foreign exchange losses.
Zagrebačka banka UniCredit Group · 2009 Annual Report 103
Financial statements I Notes to the financial statements
Notes to the financial statements (Continued)
14 Financial assets at fair value through profit or loss
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Debt securities held for trading
Equity securities held for trading
Derivative financial instruments - positive fair value
Units in investment funds
designated at fair value through profit or loss
Equity securities designated at fair value
through profit or loss
401
1
42
1,035
16
36
401
1
43
1,035
16
37
98
81
74
65
3
545
3
1,171
-
519
1,153
a) Debt securities held for trading
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Republic of Croatia bonds
Other securities issued by domestic issuers
Local government bonds
Listed
Unlisted 127
264
10
401
400
1
401
800
225
10
1,035
1,034
1
1,035
127
264
10
401
400
1
401
800
225
10
1,035
1,034
1
1,035
b) Equity securities held for trading
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Equity securities of domestic issuers - listed
104 2009 Annual Report · Zagrebačka banka UniCredit Group
1
16
1
16
14 Financial assets at fair value through profit or loss (continued)
c) Derivative financial instruments
Group
2009
2009
2008
2008
NotionalFair value
NotionalFair value
amountamount
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Derivatives classified as held for trading - OTC products
Currency derivatives
Forward foreign exchange contracts Cross currency interest rate swaps Other derivatives classified as trading
2,412
2,484
691
5,587
25
14
3
42
2,271
-
320
2,591
27
9
36
BANK
2009
2009
2008
2008
NotionalFair value
NotionalFair value
amountamount
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Derivatives classified as held for trading - OTC products
Currency derivatives
Forward foreign exchange contracts
Cross currency interest rate swaps
Other derivatives classified as trading
1,639
2,484
1,072
5,195
25
14
4
43
1,348
-
320
1,668
28
9
37
The Group uses cross currency interest rate swaps, foreign exchange swaps and forward foreign exchange contracts to hedge and reduce currency
exposure that is inherent in the banking business. Other derivative contracts are customer driven and include mainly purchased options which are
indexed to investment funds managed by the Bank’s subsidiary. The counterparties in the Bank’s derivative transactions are financial institutions
(including related parties) and corporate clients with good credit rating.
d) Units in investment funds designated at fair value through profit or loss
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Units in investment funds managed by related party (quoted)
98
81
74
65
98
81
74
65
Zagrebačka banka UniCredit Group · 2009 Annual Report 105
Financial statements I Notes to the financial statements
Notes to the financial statements (Continued)
14 Financial assets at fair value through profit or loss (continued)
e) Equity securities designated at fair value through profit or loss
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Equity securities of domestic issuers - listed
3
3
-
15 Loans to and receivables from customers and debt securities (replacement bonds)
classified as loans and receivables
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Replacement bonds 1,442
1,422
1,442
1,422
Loans to and receivables from customers
68,629
66,324
59,650
56,926
70,071
67,746
61,092
58,348
a) Replacement bonds
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Replacement bonds
1,442
1,422
1,442
1,422
Replacement bonds were issued by the Croatian Government to replace the restructuring bonds of the Republic of Croatia. Replacement bonds are
index-linked (with reference to the Industrial Price Coefficient) kuna denominated bonds earning interest at 5% per annum, payable semi-annually.
The principal amount fully matures in 2011. The unrealised gain or loss from the indexation of these bonds is included in net gains and losses from
investment securities.
106 2009 Annual Report · Zagrebačka banka UniCredit Group
15 Loans to and receivables from customers and debt securities (replacement bonds)
classified as loans and receivables (continued)
b) Loans to and receivables from customers - analysis by product
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Companies and similar organisations and Government (corporate entities)
- in kuna
21,030
20,854
21,029
20,853
- in foreign currency
15,762
12,566
11,554
7,982
Total companies and similar organisations and Government
36,792
33,420
32,583
28,835
Impairment allowance
(1,782)
(1,522)
(1,180)
(972)
Net loans to companies and similar organisations and Government
35,010
31,898
31,403
27,863
Individuals and unincorporated businesses (retail customers)
- in kuna
29,944
30,439
29,841
30,346
- in foreign currency
5,552
5,534
5
5
Total individuals and unincorporated businesses
35,496
35,973
29,846
30,351
Impairment allowance
(1,877)
(1,547)
(1,599)
(1,288)
Net loans to individuals and unincorporated businesses
33,619
34,426
28,247
29,063
Total gross loans
72,288
69,393
62,429
59,186
Impairment allowance
(3,659)
(3,069)
(2,779)
(2,260)
68,629
66,324
59,650
56,926
Total impairment allowance as a percentage of
gross loans to and receivables from customers
5.1%
4.4%
4.5%
3.8%
Included within the Group’s kuna loans are amounts linked to foreign currency, in the amount of HRK 29,130 million (2008: HRK 24,556 million) which
have a EUR or USD countervalue. Included within the Bank’s kuna loans are amounts linked to foreign currency, in the amount of HRK 27,823 million
(2008: HRK 23,248 million) which have a EUR or USD countervalue. Repayments of the principal and interest payments are determined in foreign
currency and receivable in the kuna equivalent using the foreign exchange rate applicable on the date of payment.
Zagrebačka banka UniCredit Group · 2009 Annual Report 107
Financial statements I Notes to the financial statements
Notes to the financial statements (Continued)
15 Loans to and receivables from customers and debt securities (replacement bonds)
classified as loans and receivables (continued)
c) Movement in impairment allowance for loans to and receivables from customers
The impairment loss on loans to and receivables from customers disclosed in the income statement arises from the following movements in
impairment allowance for uncollectability of loans to and receivables from customers.
Group
Retail Corporate
Total
customersentities
2009
2009
2009
HRK
HRK
HRK
millionmillionmillion
Balance as at 1 January
Increase in impairment losses
Reversal of impairment losses on upgraded exposures
Collection of amounts previously provided
Impairment losses recognised in the income statement
Unwinding of discount to interest income
Amounts written off
Effect of foreign exchange Balance as at 31 December
1,547
670
(118)
(213)
339
(1)
(6)
(2)
1,877
1,522
558
(117)
(168)
273
(1)
(11)
(1)
1,782
3,069
1,228
(235)
(381)
612
(2)
(17)
(3)
3,659
Group
Retail Corporate
Total
customersentities
2008
2008
2008
HRK
HRK
HRK
millionmillionmillion
Balance as at 1 January Increase in impairment losses
Reversal of impairment losses on upgraded exposures
Collection of amounts previously provided
Impairment losses recognised in the income statement
Unwinding of discount to interest income
Amounts written off
Effect of foreign exchange Balance as at 31 December
108 2009 Annual Report · Zagrebačka banka UniCredit Group
1,367
587
(175)
(224)
188
(2)
(10)
4
1,547
1,487
288
(55)
(152)
81
(3)
(42)
(1)
1,522
2,854
875
(230)
(376)
269
(5)
(52)
3
3,069
15 Loans to and receivables from customers and debt securities (replacement bonds)
classified as loans and receivables (continued)
c) Movement in impairment allowance for loans to and receivables from customers (continued)
Bank
Retail Corporate
Total
customersentities
2009
2009
2009
HRK
HRK
HRK
millionmillionmillion
Balance as at 1 January
Increase in impairment losses
Reversal of impairment losses on upgraded exposures
Collection of amounts previously provided
Impairment losses recognised in the income statement
Unwinding of discount to interest income
Amounts written off
Effect of foreign exchange Balance as at 31 December
1,288
459
(45)
(97)
317
(1)
(4)
(1)
1,599
972
369
(68)
(91)
210
(1)
(1)
-
1,180
2,260
828
(113)
(188)
527
(2)
(5)
(1)
2,779
Bank
Retail Corporate
Total
customersentities
2008
2008
2008
HRK
HRK
HRK
millionmillionmillion
Balance as at 1 January 1,150
945
2,095
Increase in impairment losses
453
168
621
Reversal of impairment losses on upgraded exposures
(124)
(6)
(130)
Collection of amounts previously provided
(181)
(108)
(289)
Impairment losses recognised in the income statement
148
54
202
Unwinding of discount to interest income
(2)
(3)
(5)
Amounts written off
(10)
(23)
(33)
Effect of foreign exchange 2
(1)
1
Balance as at 31 December
1,288
972
2,260
Zagrebačka banka UniCredit Group · 2009 Annual Report 109
Financial statements I Notes to the financial statements
Notes to the financial statements (Continued)
15 Loans to and receivables from customers and debt securities (replacement bonds)
classified as loans and receivables (continued)
d) Concentration of credit risk by industry
Commercial lending is concentrated on companies domiciled in Croatia, and on the Government. The Bank and the Group have a diversified loan
portfolio within Croatia and Bosnia and Herzegovina covering all sectors of the economy.
The loan portfolio of the Group and the Bank, net of impairment allowance, is analysed by industry sector in the table below:
Group Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Loans to companies and similar organisations and Government
Agriculture, forestry and fishing products
Chemical products
Commercial services
Communications services
Construction and public works
Electrical materials and supplies
Energy products
Farm and industrial machinery
Ferrous and non-ferrous minerals and metals
Financial Companies
Food, beverages and tobacco
Hotels and restaurants
Internal transport services
Means of transportation
Metal products
Non-metallic minerals and products
Office machines
Other industrial products
Other sales-oriented services
Paper, printed material and publishing
Public administration
Real estate
Rubber and plastic products
Textile, leather and clothing
Transport services by sea and air
Transport-related services
Other
Total loans to companies and similar
organisations and Government Loans to individuals and unincorporated businesses
Housing loans
Other loans Total loans to individuals
and unincorporated businesses
Total loans to and receivables from customers
110 2009 Annual Report · Zagrebačka banka UniCredit Group
1,078
305
4,836
87
6,414
302
569
122
78
318
952
605
363
3,938
235
527
216
160
3,664
441
5,943
2,628
119
244
26
275
565
881
135
5,311
43
4,501
349
762
144
92
316
1,186
567
426
3,871
306
506
230
193
3,525
466
4,540
2,092
139
204
20
281
812
1,049
272
3,668
53
6,049
258
474
120
68
159
745
488
255
3,900
191
352
216
160
3,611
159
5,429
2,626
80
220
26
253
522
824
109
4,026
32
4,100
272
676
128
61
131
919
446
284
3,840
223
400
229
194
3,456
198
3,995
2,025
89
157
20
253
776
35,010
31,898
31,403
27,863
18,592
15,027
18,836
15,590
16,453
11,794
16,707
12,356
33,619
68,629
34,426
66,324
28,247
59,650
29,063
56,926
16 Available-for-sale financial assets
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Debt securities available for sale
5,379
5,213
5,487
5,303
Equity securities available for sale
66
80
55
71
5,445
5,293
5,542
5,374
a) Debt securities available for sale
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Bonds of foreign issuers Other securities issued by foreign issuers
Ministry of Finance - Treasury bills and Euro notes
Republic of Croatia bonds
Other securities issued by domestic issuers
Listed
Unlisted 2,617
511
1,218
790
243
5,379
4,159
1,220
5,379
2,274
-
2,433
449
57
5,213
2,780
2,433
5,213
2,960
511
1,020
753
243
5,487
4,465
1,022
5,487
2,648
2,185
413
57
5,303
3,118
2,185
5,303
During 2008 the Bank purchased bonds issued by its subsidiary UniCredit Bank dd, Mostar in an amount of EUR 50 million, at par.
b) Equity securities available for sale
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Listed securities
26
40
15
31
Unlisted securities
40
40
40
40
66
80
55
71
Unlisted equity securities comprise a certain number of small individual investments presented at cost less impairment. There is no market for these
investments. In addition, discounted cash flow techniques provide insufficiently reliable valuations due to a number of uncertainties related to the
estimation of future cash flows. Management believes that there is no indication for impairment of these securities.
Zagrebačka banka UniCredit Group · 2009 Annual Report 111
Financial statements I Notes to the financial statements
Notes to the financial statements (Continued)
16 Available-for-sale financial assets (continued)
b) Equity securities available-for-sale (continued)
The principal unlisted investments held by the Group as at 31 December 2009 are:
IndustryDomicile
Effective holding
at 31 December 2009
Allianz Zagreb dd, Zagreb
Insurance
Croatia
16.84%
c) Reclassified financial assets
Based on the Management Board’s decision, and pursuant to paragraph 50 of International Accounting Standard 39 “Financial Instruments:
Recognition and Measurement”, effective from 13 January 2009, the Group and the Bank reclassified financial assets from the category at fair value
through profit or loss (trading financial assets) into financial assets available for sale, in an amount of HRK 849 million, representing their fair value on
13 January 2009. Following this reclassification, any further changes in fair value of these securities which would previously have been recognised in
income were recognised in a fair value reserve directly in equity, prior to any impairment effects and effects recognised on disposal. Had the assets
not been reclassified, the Group’s and the Bank’s profit before tax for 2009 would have been lower by HRK 12 thousand (before impairment effects).
There is no effect on equity. Subsequently the Bank recognised HRK 2 million of impairment on one of the reclassified corporate bonds. A significant
part of the reclassified portfolio was disposed during the year. Additionally the Bank has also recognised HRK 2 million of general provision (net effect)
in the income statement as financial assets available for sale are eligible assets for calculation of general provision.
The Group and the Bank had made the reclassifications to reduce yield volatility on funds invested and protect itself from the direct influence of
changes in prices of debt securities during the financial crisis.
Group and Bank
1 January 2009 13 January 200931 December 2009
Carrying Fair Carrying Fair Carrying Fair
value
value
value
value
value
value
HRK
HRK
HRK
HRK
HRK
HRK
millionmillionmillionmillionmillionmillion
Financial assets at fair value through profit or loss
reclassified into available-for-sale
financial assets
840
840
849
849
246
246
840
840
849
849
246
246
112 2009 Annual Report · Zagrebačka banka UniCredit Group
16 Available-for-sale financial assets (continued)
c) Reclassified financial assets (continued)
The following table shows the amounts recognised in the income statement and in equity during 2009 related to the reclassified financial assets. The
effects of foreign exchange have not been presented as their treatment has not changed due to reclassification.
Group and Bank
Income statement
Equity
2009
2009
HRK
HRK
millionmillion
Period before reclassification
Net gains and losses on financial instruments at fair value
through profit or loss and result from foreign exchange
trading and translation of monetary assets and liabilities
Period after reclassification
Net gains and losses from investment securities
Fair value reserve
Other impairment losses and provisions - impairment Other impairment losses and provisions - general provision
1
1
-
(13)
-
-
(2)
(2)
(17)
-
17 Held-to-maturity investments
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Debt securities held to maturity
Republic of Croatia bonds
Local government bonds
Other securities issued by domestic issuers
Listed
Unlisted 193
50
529
772
243
529
772
198
50
619
867
306
561
867
-
50
529
579
50
529
579
50
619
669
108
561
669
Zagrebačka banka UniCredit Group · 2009 Annual Report 113
Financial statements I Notes to the financial statements
Notes to the financial statements (Continued)
18 Concentration of assets and liabilities
The assets and liabilities of the Group and the Bank are significantly concentrated on amounts due from and to the Republic of Croatia, as follows:
Group
Notes
2009
2008
HRK
HRK
millionmillion
Current account with the Croatian National Bank
11
3,245
1,921
Obligatory reserve with the Croatian National Bank
12
7,318
7,061
Ministry of Finance - Treasury bills
1,121
2,287
Ministry of Finance - Euro notes
97
146
Republic of Croatia bonds
1,111
1,447
Loans
4,679
3,150
Replacement bonds
15a
1,442
1,422
Prepaid income tax relating to the Bank and the Bank’s subsidiaries in Croatia
103
Receivables from State for state subsidies for housing savings
23
137
71
Accrued interest and other assets
118
97
Liabilities to the Ministry of Finance in respect of
rescheduled foreign borrowings
27
(21)
(42)
Short-term deposits from the Republic of Croatia
(14)
(54)
Long-term deposits from the Republic of Croatia
(3)
(3)
Current tax liability relating to the Bank and the Bank’s subsidiaries in the Republic of Croatia
-
(166)
Other liabilities
(9)
(4)
19,324
17,333
In addition, the Group had indirect exposure to the Croatian state in respect of loans and other financing granted to state funds as follows:
Group
2009
2008
HRK
HRK
millionmillion
Loans
5,017
3,046
Accrued interest and other assets
51
12
Short-term deposits
(82)
(130)
Other liabilities
(37)
(26)
4,949
2,902
Net direct and indirect exposure to Croatian state, excluding corporate exposures guaranteed by the State, which are not included in the above tables,
represents 22% of the total assets of the Group (2008: 19%).
114 2009 Annual Report · Zagrebačka banka UniCredit Group
18 Concentration of assets and liabilities (continued)
Bank
Notes
2009
2008
HRK
HRK
millionmillion
Current account with the Croatian National Bank
11
Obligatory reserve with the Croatian National Bank
12
Ministry of Finance - Treasury bills Republic of Croatia bonds
Loans
Replacement bonds
15a
Prepaid income tax
9d
Accrued interest and other assets
Liabilities to the Ministry of Finance in respect of
rescheduled foreign borrowings
27
Short-term deposits from the Republic of Croatia
Long-term deposits from the Republic of Croatia
Current tax liability
9f
Other liabilities
3,245
7,318
1,020
880
4,679
1,442
98
116
1,921
7,061
2,185
1,213
3,150
1,422
93
(21)
(13)
(3)
-
(9)
18,752
(42)
(53)
(3)
(166)
(5)
16,776
In addition, the Bank had indirect exposure to the Croatian state in respect of loans and other financing granted to state funds as follows:
Bank
2009
2008
HRK
HRK
millionmillion
Loans
Accrued interest and other assets
Short-term deposits
Other liabilities
5,017
51
(82)
(37)
4,949
3,046
12
(130)
(26)
2,902
Net direct and indirect exposure to Croatian state, excluding corporate exposures guaranteed by the State, which are not included in the above tables,
represents 26% of the total assets of the Bank (2008: 21%).
Zagrebačka banka UniCredit Group · 2009 Annual Report 115
Financial statements I Notes to the financial statements
Notes to the financial statements (Continued)
19 Investments in subsidiaries and associates
a) The Group’s subsidiaries:
IndustryDomicileGroup ownership
as at 31 December 2009
UniCredit Bank dd, Mostar
Banking
Prva stambena štedionica dd, Zagreb
Banking
ZB Invest doo, Zagreb
Fund management
Centar Kaptol doo, Zagreb
Property investment
UPI poslovni sistem doo, Sarajevo
Property management
Pominvest dd, Split
Property management
ZABA TURIZAM doo, Zagreb
Investment
Marketing Zagrebačke banke doo, Zagreb
Publishing
Zagreb nekretnine doo, Zagreb
Real estate agency
ZANE BH doo, Sarajevo
Real estate agency
Istraturist dd, Umag
Tourism
Istra D.M.C. doo
ATP tournament
organisation
Bosnia and
Herzegovina
Croatia
Croatia
Croatia
Bosnia and
Herzegovina
Croatia
Croatia
Croatia
Croatia
Bosnia and Herzegovina
Croatia
Croatia
65.6%
100.0%
100.0%
100.0%
52.6%
88.7%
100.0%
100.0%
100.0%
100.0%
71.8%
71.8%
b) The Bank’s associates:
IndustryDomicile
Effective holding
as at 31 December 2009
Allianz ZB doo Obligatory Pension Fund
Management Company, Zagreb
Allianz ZB doo Voluntary Pension Funds
Management Company, Zagreb
Pension fund management
Croatia
49.0%
Pension fund management
Croatia
49.0%
c) Investments in subsidiaries and associates:
Group
Bank
2009
2008
2009
2008
HRK
HRK
HRK
HRK
millionmillionmillionmillion
Subsidiaries
Associates
116 2009 Annual Report · Zagrebačka banka UniCredit Group
-
78
78
-
72
72
866
52
918
866
52
918
19 Investments in subsidiaries and associates (continued)
d) Movements in investment in subsidiaries and associates:
Group
2009
2008
HRK
HRK
millionmillion
Balance as at 1 January Share of profit from associates
Dividends paid from associates (Note 3)
Balance as at 31 December
72
29
(23)
78
77
25
(30)
72
bank
2009
2008
HRK
HRK
millionmillion
Balance as at 1 January
Acquisition of subsidiary Impairment on investment in subsidiary
Increase of investment in subsidiary Balance as at 31 December
918
-
-
-
918
897
14
(13)
20
918
In 2008 the Bank acquired CAIB dd from CAIB AG. This was an intra-group transaction and was accounted for at book values. The investment was
fully provided for, upon acquisition along with all the resulting goodwill. CAIB dd was renamed ZABA ulaganja in 2009 and was merged into ZABA
TURIZAM as at 1 October 2009.
The Bank prepares discounted cash flow valuations of its major subsidiaries. In opinion of the management and in accordance with the result of
valuations at the balance sheet date, there are no indication for impairment for any of the Bank’s investments in subsidiaries.
Zagrebačka banka UniCredit Group · 2009 Annual Report 117
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
20 Investment property
Group
Total
InvestmentAssets acquired, property
but not brought
into use
HRKHRKHRK
million million million
Cost
Cost as at 1 January 2009
387
387
Additions
3
-
Transfers from property and equipment during the year
1
1
Brought into use
-
1
Disposal
(1)
(1)
Cost as at 31 December 2009 390
388
Accumulated depreciation
Accumulated depreciation as at 1 January 2009 148
148
Charge for the year
11
11
Accumulated depreciation as at 31 December 2009
159
159
Carrying value as at 1 January 2009 239
239
Carrying value as at 31 December 2009
231
229
3
(1)
2
2
During the year the Group reclassified property with cost and carrying value of HRK 1 million, from property and equipment (Note 21) to investment
property, given that its use was changed during the year.
The estimated fair value of investment property held by the Group at a carrying amount of HRK 231 million amounted to HRK 252 million at the
balance sheet date. The fair value is estimated by discounting expected future cash flows at discount rates that reflect current market assessment of
the uncertainty in the amount and timing of the cash flows. No independent valuation was used.
118 2009 Annual Report · Zagrebačka banka UniCredit Group
20 Investment property (continued)
Group
Total
InvestmentAssets acquired, property
but not brought
into use
HRKHRKHRK
million million million
Cost
Cost as at 1 January 2008 378
378
Additions
8
-
Transfers from property and equipment during the year
2
2
Brought into use
-
8
Disposal
(1)
(1)
Cost as at 31 December 2008 387
387
Accumulated depreciation
Accumulated depreciation as at 1 January 2008 137
137
Charge for the year
11
11
Accumulated depreciation as at 31 December 2008
148
148
Carrying value as at 1 January 2008 241
241
Carrying value as at 31 December 2008
239
239
8
(8)
-
During 2008 the Group reclassified property with cost and carrying value of HRK 2 million, from property and equipment (Note 21) to investment
property, given that its use was changed during the year.
The estimated fair value of investment property held by the Group with carrying value HRK 239 million amounted to HRK 276 million at 31 December
2008. The fair value is estimated by discounting expected future cash flows at discount rates that reflect current market assessment of the uncertainty
in the amount and timing of the cash flows. No independent valuation was used.
Zagrebačka banka UniCredit Group · 2009 Annual Report 119
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
20 Investment property (continued)
Bank
Investment
property
HRK
million
Cost
Cost as at 1 January 2009
Transfer from property and equipment during the year
Cost as at 31 December 2009
Accumulated depreciation
Accumulated depreciation as at 1 January 2009
Charge for the year
Accumulated depreciation as at 31 December 2009
Carrying value as at 1 January 2009
Carrying value as at 31 December 2009
46
1
47
13
1
14
33
33
During the year the Bank reclassified property, with cost and carrying value of HRK 1 million, from property and equipment (Note 21) to investment
property, given that its use was changed during the year.
The estimated fair value of investment property held by the Bank with carrying value HRK 33 million amounted to HRK 33 million at the balance sheet
date. The fair value is estimated by discounting expected future cash flows at discount rates that reflect current market assessment of the uncertainty
in the amount and timing of the cash flows. No independent valuation was used.
Bank
Investment
property
HRK
million
Cost
Cost as at 1 January 2008 Transfer from property and equipment during the year
Cost as at 31 December 2008
Accumulated depreciation
Accumulated depreciation as at 1 January 2008 Charge for the year
Accumulated depreciation as at 31 December 2008
Carrying value as at 1 January 2008 Carrying value as at 31 December 2008
44
2
46
12
1
13
32
33
During 2008 the Bank reclassified property, with cost and carrying value of HRK 2 million, from property and equipment (Note 21) to investment
property, given that its use was changed during the year.
The estimated fair value of investment property held by the Bank with carrying value HRK 33 million amounted to HRK 33 million at 31 December
2008. The fair value is estimated by discounting expected future cash flows at discount rates that reflect current market assessment of the uncertainty
in the amount and timing of the cash flows. No independent valuation was used.
120 2009 Annual Report · Zagrebačka banka UniCredit Group
21 Property and equipment
GRoUP
TotalLand and Computers,Assets acquired, buildings vehicles and but not brought
equipmentinto use
HRKHRKHRKHRK
million million million million
Cost
Cost as at 1 January 2009 4,410
2,622
1,645
143
Additions
250
-
-
250
Disposals (2)
(2)
-
Brought into use
-
142
164
(306)
Written-off
(39)
-
(39)
Transfers to investment property during the year
(1)
(1)
-
Transfers to intangible assets during the year
(6)
-
(6)
Cost as at 31 December 2009
4,612
2,761
1,764
87
Accumulated depreciation and impairment
Accumulated depreciation and impairment as at
1 January 2009 1,842
706
1,132
4
Charge for the year
252
61
191
Impairment loss (Note 8)
1
-
1
Written-off
(39)
-
(39)
Transfers to intangible assets during the year
(5)
-
(5)
Accumulated depreciation and impairment
as at 31 December 2009
2,051
767
1,280
4
Carrying value as at 1 January 2009 2,568
1,916
513
139
Carrying value as at 31 December 2009
2,561
1,994
484
83
Software is classified as either property and equipment and included in this position or as intangible assets (Note 22).
During the year, property with cost and carrying value of HRK 1 million, was transferred to investment property (Note 20) in accordance with the
change in the use of the underlying assets.
During the year software with cost and accumulated depreciation of HRK 6 and HRK 5 million respectively, was transferred to intangible assets (Note
22).
The Group wrote off certain assets from property and equipment with cost and accumulated depreciation of HRK 39 million.
The carrying amount of non-depreciable land within land and buildings is HRK 104 million (2008: HRK 104 million).
Certain properties of the Group are pledged as collateral for borrowings.
Zagrebačka banka UniCredit Group · 2009 Annual Report 121
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
21 Property and equipment (continued)
GRoUP
TotalLand and Computers,Assets acquired, buildings vehicles and but not brought
equipmentinto use
HRKHRKHRKHRK
million million million million
Cost
Cost as at 1 January 2008
4,168
2,463
1,546
Acquisition of CAIB
1
-
1
Additions
361
-
-
Disposals
(9)
(2)
(7)
Transfers to investment property during the year
(2)
(2)
-
Brought into use
-
163
214
Written-off
(109)
-
(109)
Cost as at 31 December 2008
4,410
2,622
1,645
Accumulated depreciation and impairment
Accumulated depreciation and impairment as at 1 January 2008
1,707
649
1,054
Acquisition of CAIB
1
-
1
Charge for the year
247
57
190
Disposal
(6)
-
(6)
Written-off
(107)
-
(107)
Accumulated depreciation and impairment
as at 31 December 2008
1,842
706
1,132
Carrying value as at 1 January 2008
2,461
1,814
492
Carrying value as at 31 December 2008
2,568
1,916
513
159
361
(377)
143
4
4
155
139
Software is classified as either property and equipment and included in this position or as intangible assets (Note 22).
During 2008, property with cost and carrying value of HRK 2 million, was transferred to investment property (Note 20) in accordance with the change
in use of the underlying assets.
The Group wrote off certain assets from property and equipment, with a cost of HRK 109 million and accumulated depreciation of HRK 107 million
during 2008. The expense of HRK 2 million is recognised within depreciation and amortisation in operating expenses (Note 7).
The carrying amount of non-depreciable land within land and buildings is HRK 104 million (2007: HRK 104 million).
Certain properties of the Group are pledged as collateral for borrowings.
122 2009 Annual Report · Zagrebačka banka UniCredit Group
21 Property and equipment (continued)
Bank
TotalLand and Computers,Assets acquired, buildings vehicles and but not brought
equipmentinto use
HRKHRKHRKHRK
million million million million
Cost
Cost as at 1 January 2009
2,310
1,055
1,148
107
Additions
122
-
-
122
Transfers to investment property during the year (1)
(1)
-
Brought into use
-
33
129
(162)
Written-off
(27)
-
(27)
Transfers to intangible assets during the year
(6)
-
(6)
Cost as at 31 December 2009
2,398
1,087
1,244
67
Accumulated depreciation and impairment
Accumulated depreciation and impairment
as at 1 January 2009
1,185
354
826
5
Charge for the year
168
22
146
Written-off
(26)
-
(26)
Transfers to intangible assets during the year
(5)
-
(5)
Accumulated depreciation and impairment
as at 31 December 2009
1,322
376
941
5
Carrying value as at 1 January 2009
1,125
701
322
102
Carrying value as at 31 December 2009
1,076
711
303
62
Software is classified as either property and equipment and included in this position or as intangible assets (Note 22).
During the year, property with cost and carrying value of HRK 1 million, was transferred to investment property (Note 20) in accordance with the
change in the use of the underlying assets.
During the year software with cost and accumulated depreciation of HRK 6 and HRK 5 million respectively was transferred to intangible assets (Note
22).
The Bank wrote off certain assets from property and equipment with cost and accumulated depreciation of HRK 27 and HRK 26 million, respectively.
The expense of HRK 1 million is recognised within depreciation and amortisation in operating expenses (Note 7).
The carrying amount of non-depreciable land within land and buildings is HRK 6 million (2008: HRK 6 million).
Zagrebačka banka UniCredit Group · 2009 Annual Report 123
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
21 Property and equipment (continued)
BANK
TotalLand and Computers,Assets acquired, buildings vehicles and but not brought
equipmentinto use
HRKHRKHRKHRK
million million million million
Cost
Cost as at 1 January 2008 2,231
992
1,091
148
Additions
180
-
-
180
Disposals (2)
(2)
-
Transfers to investment property during the year (2)
(2)
-
Brought into use
-
67
154
(221)
Written-off
(97)
-
(97)
Cost as at 31 December 2008
2,310
1,055
1,148
107
Accumulated depreciation and impairment
Accumulated depreciation and impairment
as at 1 January 2008
1,117
333
779
5
Charge for the year
165
21
144
Written-off
(97)
-
(97)
Accumulated depreciation and impairment
as at 31 December 2008
1,185
354
826
5
Carrying value as at 1 January 2008 1,114
659
312
143
Carrying value as at 31 December 2008
1,125
701
322
102
Software is classified as either property and equipment and included within this position or as intangible assets (Note 22).
During 2008, property with a cost and carrying value of HRK 2 million, was transferred to investment property (Note 20) in accordance with the change
in use of the underlying assets.
The Bank wrote off certain assets from property and equipment, with a cost of HRK 97 million and accumulated depreciation of HRK 97 million during
2008.
The carrying amount of non-depreciable land within land and buildings is HRK 6 million (2007: HRK 6 million).
124 2009 Annual Report · Zagrebačka banka UniCredit Group
22 Intangible assets
TotalSoftwareGoodwillLeasehold Other Assets GRoUP
improvementsintangible acquired, but assets not brought into use
HRKHRKHRKHRKHRKHRK
million million million million million million
Cost
Cost as at 1 January 2009
647
355
61
166
17
48
Additions
78
-
-
-
-
78
Written-off
(8)
(3)
-
(5)
-
Brought into use
-
42
-
41
-
(83)
Transfers from property and equipment
during the year
6
6
-
-
-
Cost as at 31 December 2009
723
400
61
202
17
43
Accumulated amortisation and impairment
Accumulated amortisation and impairment as at 1 January 2009
360
225
12
119
4
Charge for the year
79
55
-
24
-
Written-off
(8)
(3)
-
(5)
-
Impairment loss (Note 8)
2
-
-
-
2
Transfers from property and equipment
during the year
5
5
-
-
-
Accumulated amortisation and
impairment as at 31 December 2009
438
282
12
138
6
Carrying value as at 1 January 2009 287
130
49
47
13
48
Carrying value as at 31 December 2009
285
118
49
64
11
43
Software is classified as either intangible assets and included above or as property and equipment (Note 21).
During the year, software with cost and accumulated depreciation of HRK 6 million and HRK 5 million respectively, was reclassified from property and
equipment (Note 21).
The Group wrote off certain assets from intangible assets with a cost of HRK 8 million and accumulated depreciation of HRK 8 million during the year.
Goodwill represents goodwill arising on the acquisition of UniCredit Bank dd, Mostar (previously Zagrebačka banka BH dd and Universal banka dd,
Sarajevo).
Zagrebačka banka UniCredit Group · 2009 Annual Report 125
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
22 Intangible assets (continued)
GRoUP
TotalSoftwareGoodwillLeasehold Other Assets improvementsintangible acquired, but assets not brought into use
HRKHRKHRKHRKHRKHRK
million million million million million million
Cost
Cost as at 1 January 2008 539
286
49
140
17
47
Additions
111
-
12
-
-
99
Written-off
(3)
(3)
-
-
-
Brought into use
-
72
-
26
-
(98)
Cost as at 31 December 2008
647
355
61
166
17
48
Accumulated amortisation
and impairment
Accumulated amortisation and impairment as at 1 January 2008 280
184
-
94
2
Charge for the year
68
43
-
25
-
Written-off
(2)
(2)
-
-
-
Impairment loss (Note 8)
14
-
12
-
2
Accumulated amortisation and impairment as at 31 December 2008
360
225
12
119
4
Carrying value as at 1 January 2008 259
102
49
46
15
47
Carrying value as at 31 December 2008
287
130
49
47
13
48
Software is classified as either intangible assets and included above or as property and equipment (Note 21).
The Group wrote off certain assets from intangible assets with cost and accumulated depreciation of HRK 3 and HRK 2 million, respectively during
2008. The expense of HRK 1 million is recognised within depreciation and amortisation in operating expenses (Note 7).
Goodwill represents goodwill arising on the acquisition of UniCredit Bank dd, Mostar (previously Zagrebačka banka BH dd and Universal banka dd,
Sarajevo).
126 2009 Annual Report · Zagrebačka banka UniCredit Group
22 Intangible assets (continued)
BANK
TotalSoftwareLeasehold Other Assets improvementsintangible acquired, but assets not brought into use
HRKHRKHRKHRKHRK
million million million million million
Cost
Cost as at 1 January 2009
344
219
72
17
36
Additions
53
-
-
-
53
Written-off
(5)
(1)
(4)
-
Brought into use
-
37
27
-
(64)
Transfers from property and equipment
during the year
6
6
-
-
Cost as at 31 December 2009
398
261
95
17
25
Accumulated amortisation and impairment
Accumulated amortisation and impairment
as at 1 January 2009
219
156
59
4
Charge for the year
43
33
10
-
Impairment loss (Note 8)
2
-
-
2
Transfers from property and equipment
during the year
5
5
-
-
Written-off
(5)
(1)
(4)
-
Accumulated amortisation and impairment as at 31 December 2009
264
193
65
6
Carrying value as at 1 January 2009
125
63
13
13
36
Carrying value as at 31 December 2009
134
68
30
11
25
Software is classified as either intangible assets and included above or as property and equipment (Note 21).
During the year software with cost and accumulated depreciation of HRK 6 million and HRK 5 million was reclassified from property and equipment
(Note 21).
The Bank wrote off certain assets from intangible assets, with a cost of HRK 5 million and accumulated depreciation of HRK 5 million during 2009.
Zagrebačka banka UniCredit Group · 2009 Annual Report 127
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
22 Intangible assets (continued)
BANK
TotalSoftwareLeasehold Other Assets improvementsintangible acquired, but assets not brought into use
HRKHRKHRKHRKHRK
million million million million million
Cost
Cost as at 1 January 2008
292
194
60
17
21
Additions
56
-
-
-
56
Written-off
(4)
(4)
-
-
Brought into use
-
29
12
-
(41)
Cost as at 31 December 2008
344
219
72
17
36
Accumulated amortisation
and impairment
Accumulated amortisation and impairment
as at 1 January 2008
182
132
48
2
Charge for the year
38
27
11
-
Impairment loss (Note 8)
2
-
-
2
Written-off
(3)
(3)
-
-
Accumulated amortisation and impairment
as at 31 December 2008
219
156
59
4
Carrying value as at 1 January 2008
110
62
12
15
21
Carrying value as at 31 December 2008
125
63
13
13
36
Software is classified as either intangible assets and included above or as property and equipment (Note 21).
The Bank wrote off certain assets from intangible assets with cost and accumulated depreciation of HRK 4 and HRK 3 million, respectively. The
expense of HRK 1 million is recognised within depreciation and amortisation in operating expenses (Note 7).
128 2009 Annual Report · Zagrebačka banka UniCredit Group
23 Other assets
Group
Bank
2009
2008
2009
2008
HRKHRKHRKHRK
million
million
million
million
Receivables in respect of customers’ debit
and credit cards
474
466
378
Accrued interest - not yet due
498
398
450
Accrued interest - due
472
544
464
Accrued fees
33
34
29
Inventories
29
30
15
Receivables in course of collection
2
5
-
Deferred interest expense
30
24
17
Assets acquired in lieu of uncollected receivables
32
35
29
Receivables from State for State
subsidies for housing savings
137
71
-
Other assets
200
210
116
1,907
1,817
1,498
Impairment allowance against assets acquired in lieu of uncollected receivables
(4)
(11)
-
Impairment allowance against other items
(74)
(61)
(38)
(78)
(72)
(38)
1,829
1,745
1,460
393
357
526
33
12
3
13
24
116
1,477
(2)
(30)
(32)
1,445
Zagrebačka banka UniCredit Group · 2009 Annual Report 129
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
24 Current accounts and deposits from banks
Group
Bank
2009
2008
2009
2008
HRKHRKHRKHRK
million
million
million
million
Demand deposits
- in kuna
- in foreign currency
Time deposits
- in kuna
- in foreign currency
Amounts owed to subsidiaries
197
185
376
252
197
166
376
209
538
15,621
-
16,541
171
10,328
-
11,127
538
14,402
21
15,324
171
9,097
37
9,890
25 Current accounts and deposits from customers
Group
Bank
2009
2008
2009
2008
HRKHRKHRKHRK
million
million
million
million
Individuals and unincorporated businesses
Foreign currency savings accounts
and time deposits
35,869
30,175
29,728
Kuna savings accounts
and time deposits
7,630
12,346
7,591
43,499
42,521
37,319
Companies and similar organisations and Government
Demand deposits
- in kuna
5,147
5,865
5,126
- in foreign currency
4,587
4,221
1,752
Time deposits
- in kuna
5,084
5,521
5,083
- in foreign currency
5,816
4,741
4,605
Amounts owed to subsidiaries
-
-
30
20,634
20,348
16,596
64,133
62,869
53,915
130 2009 Annual Report · Zagrebačka banka UniCredit Group
26,022
10,497
36,519
5,824
1,806
5,520
3,597
30
16,777
53,296
26 Financial liabilities at fair value through profit or loss
GRoUP
2009
2009
2008
2008
NotionalFair valueNotionalFair value
amount
amount
HRKHRKHRKHRK
million
million
million
million
Derivatives classified as held for trading - OTC products
Currency derivatives
Forward foreign exchange contracts
6,210
42
8,684
Cross currency interest rate swaps
1,096
17
1,099
Embedded derivatives within structured savings products
328
-
580
Other derivatives classified as trading
806
15
817
8,440
74
11,180
230
21
13
15
279
Bank
2009
2009
2008
2008
NotionalFair valueNotionalFair value
amount
amount
HRKHRKHRKHRK
million
million
million
million
Derivatives classified as held for trading - OTC products
Currency derivatives
Forward foreign exchange contracts
Cross currency interest rate swaps
Embedded derivatives within structured savings products
Other derivatives classified as trading
6,194
1,096
328
806
8,424
42
17
-
15
74
8,660
1,099
580
817
11,156
229
21
13
15
278
The Bank uses cross currency interest rate swaps, foreign exchange swaps and forward foreign exchange contracts to hedge and reduce the currency
exposures that are inherent in any banking business. Other derivative contracts are customer driven and include mainly guaranteed deposits which
are indexed to investment funds managed by the Bank’s subsidiary (embedded derivatives). Counterparties of the Bank’s derivative transactions are
financial institutions (including related parties) and corporate clients with good credit rating, or in the case of the embedded derivatives described
above, the Bank’s retail deposit base.
Zagrebačka banka UniCredit Group · 2009 Annual Report 131
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
27 Borrowings
Group
Bank
2009
2008
2009
2008
HRKHRKHRKHRK
million
million
million
million
Liabilities to the Ministry of Finance in respect of
rescheduled foreign borrowings
21
42
21
Other domestic sources
2,753
2,584
2,626
Other foreign banks
5,736
6,599
4,433
Amounts owed to subsidiaries
-
-
38
8,510
9,225
7,118
42
2,431
4,910
137
7,520
Borrowings from domestic sources include repurchase agreements in the amount of HRK 877 million (2008: HRK 317 million) entered into by the
Group and the Bank.
28 Issued debt securities
The notes matured on 13 July 2009.
29 Provisions for liabilities and charges
Group
TotalProvisions for Provisions for Provisions for Provisions for off-balance- restructuring
court cases
other items
-sheet credit expenses
risk exposure
HRKHRKHRKHRKHRK
million
million
million
million
million
Balance as at 1 January 2009
Net charge/(credit) to income statement
Provisions used during the year
Balance as at 31 December 2009
Balance as at 1 January 2008
Net charge/(credit) to income statement
Provisions used during the year
Balance as at 31 December 2008
132 2009 Annual Report · Zagrebačka banka UniCredit Group
453
60
(70)
443
425
74
(46)
453
237
13
-
250
260
(23)
-
237
3
20
(20)
3
3
12
(12)
3
74
(12)
(2)
60
75
3
(4)
74
139
39
(48)
130
87
82
(30)
139
29 Provisions for liabilities and charges (continued)
BANK
TotalProvisions for Provisions for Provisions for Provisions for off-balance-
restructuring
court cases
other items
-sheet credit expenses
risk exposure
HRKHRKHRKHRKHRK
million
million
million
million
million
Balance as at 1 January 2009
Net charge/(credit) to income statement
Provisions used during the year
Balance as at 31 December 2009
Balance as at 1 January 2008
Net charge/(credit) to income statement Provisions used during the year
Balance as at 31 December 2008
351
74
(64)
361
323
65
(37)
351
185
18
-
203
214
(29)
-
185
3
20
(20)
3
3
12
(12)
3
30
(1)
(2)
27
30
4
(4)
30
133
37
(42)
128
76
78
(21)
133
Provisions for off-balance-sheet credit risk exposure and provisions for court cases are recognised in other impairment losses and provisions in the
income statement (Note 8).
Provisions for restructuring expenses are included in restructuring expenses within operating expenses in the income statement (Note 7). Provisions for
other items are recognised as personnel expenses within operating expenses (Note 7) and other impairment losses and provisions (Note 8), depending
on the nature of the item.
Provisions for other items of the Bank and the Group as at 31 December 2009 include HRK 96 million (2008: HRK 90 million) of provisions for longterm employee incentive schemes and HRK 32 million (2008: HRK 43 million) of provisions for jubilee awards and statutory severance payments
calculated in accordance with International Accounting Standard 19 “Employee Benefits”.
Zagrebačka banka UniCredit Group · 2009 Annual Report 133
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
30 Other liabilities
Group
Bank
2009
2008
2009
2008
HRKHRKHRKHRK
million
million
million
million
Interest payable - due
28
37
27
Interest payable - not yet due 985
695
914
Deferred interest income
356
356
276
Other deferred income
19
21
18
Salaries
208
229
161
Payables in course of settlement
205
200
101
Payables in respect of customers’ debit and
credit cards
240
184
224
Payables to suppliers
55
57
22
Accrued expenses
126
126
66
Liabilities to other banks - cash collections
22
20
22
Dividends
7
7
7
Fees payable
4
-
4
Liabilities to customers for State
subsidies for housing savings
137
72
-
Other liabilities
68
92
45
2,460
2,096
1,887
35
636
265
20
208
120
164
28
73
20
7
56
1,632
31 Subordinated debt
Subordinated debt in the amount of EUR 16 million relates to UniCredit Bank dd, Mostar with the following terms:
First part of subordinated debt (Bank Austria)
- approved on March 2004 in the amount of EUR 10 million, maturity of 7 years and interest rate based on six month EURIBOR + 0.59%
Second part of subordinated debt (Bank Polska, Opieki)
- approved on March 2005 in the amount of EUR 10 million, maturity of 10 years (at least 7 years) and a variable interest rate based on six-month
EURIBOR + 2.50%
The repayment of the debt is subordinated to all other liabilities of UniCredit Bank dd, Mostar.
134 2009 Annual Report · Zagrebačka banka UniCredit Group
32 Share capital
Group and Bank
Authorised and issued
2009
2008
OrdinaryOrdinary
shares
shares
Issued share capital (HRK million)
Number of shares as at 31 December
Nominal value per share (HRK) as at 31 December 2009
1,281
64,048,391
20.00
1,281
64,048,391
20.00
Ordinary shares carry voting rights at shareholders’ meetings, subject to a minimum shareholding of one share. The Bank does not have preference
shares.
The shareholder structure of the Bank was as follows:
2009
% ownership
UniCredit Bank Austria AG
Allianz SE
Other
2008
% ownership
84.21
11.72
4.07
100.00
84.21
11.72
4.07
100.00
The Bank’s shares are listed on Zagreb Stock Exchange. At 31 December 2009 the share price of the Bank’s ordinary shares quoted on the Zagreb
Stock Exchange was HRK 260.
Share premium
As a result of the share issue in March 2007, the Bank recognised share premium in an amount of HRK 3,370 million representing the excess of the
paid-in amount over the nominal value of the issued shares.
Dividends
The Management Board does not propose a dividend for 2009.
Treasury shares
At 31 December 2009, the Group and Bank held 51,372 treasury shares of the Bank (2008: 49,685) with purchase value of HRK 14 million.
Own shares held as collateral
The Bank holds 10,792 of its own shares as collateral for loans.
Zagrebačka banka UniCredit Group · 2009 Annual Report 135
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
32 Share capital (continued)
Regulatory capital
Regulatory capital according to CNB requirements, calculated for the Bank only, is as follows:
2009
2008
HRKHRK
million
million
Regulatory capital
Tier 1 capital
Issued share capital
1,281
Share premium
3,370
Retained earnings (at the beginning of the period)
7,523
Profit for the period
1,216
Legal, statutory and other reserves
785
Deductions in accordance with CNB regulations
(63)
Total qualifying Tier 1 capital
14,112
Tier 2 capital
-
Total qualifying Tier 2 capital
-
Deductions for investments in banks and financial institutions
(525)
Total regulatory capital
13,587
Capital adequacy ratio according to CNB requirements
Risk weighted assets
On-balance sheet
59,132
Off-balance sheet
10,985
Other off-balance sheet items
101
Foreign exchange risk
265
Position risk
697
Settlement and counterparty risk
-
Total risk-weighted assets
71,180
Capital adequacy ratio
19.09%
136 2009 Annual Report · Zagrebačka banka UniCredit Group
1,281
3,370
6,129
1,394
785
(30)
12,929
(525)
12,404
59,624
10,105
141
297
1,163
2
71,332
17.39%
33 Other reserves, fair value reserve and retained earnings
a) Other reserves
Group and Bank
2009
2008
HRKHRK
million
million
Legal reserve
Redenomination reserve
Treasury share reserve
Capital gains
Reserve for general banking risks
64
283
109
140
189
785
64
283
109
140
189
785
Legal reserve
A legal reserve has been created in accordance with Croatian law, which requires 5% of the profit for the year to be transferred to this reserve until it
reaches 5% of issued share capital. The legal reserve, in the amount of up to 5% of issued share capital, can be used for covering current and prior
years losses.
Redenomination reserve
The share capital of the Bank was originally denominated in DEM. In accordance with a shareholders’ decision reached at an Extraordinary General
Assembly in February 2002, it was converted into Euro.
At an Extraordinary General Assembly held in December 2004, the share capital of the Bank was converted into Kuna. The nominal value of Class I A,
II B, III D and III E shares was converted from EUR 51.13 to HRK 380 each, and the nominal value of Class II C shares was converted from EUR 73.04
to HRK 540.
The surplus of share capital arising on redenomination is recorded in the redenomination reserve.
Treasury share reserve
The reserve from treasury shares arose from previous holdings of treasury shares, subsequently sold at a net premium.
Capital gains
Capital gains result from transactions with treasury shares of the Bank.
Reserve for general banking risks
According to CNB regulations the Bank is obliged to provide reserves for general banking risks if the increase of on- and off-balance-sheet exposure
exceeds 15% of previous year on- and off-balance-sheet exposure. As the Bank exceeded this threshold in 2007, the Bank allocated the amount of
HRK 189 million of profit for 2007 into a reserve for general banking risk reserve.
The reserve for general banking risks cannot be transferred to retained earnings or other reserves or be otherwise distributed until the expiry of a
consecutive three year period in which the Bank has recorded annual growth not exceeding 15%.
Zagrebačka banka UniCredit Group · 2009 Annual Report 137
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
33 Other reserves, fair value reserve and retained earnings (continued)
b) Fair value reserve
Fair value reserve includes unrealised gains and losses on changes in the fair value of financial assets available for sale as well as translation
differences on non-monetary financial assets available for sale, net of income tax. As at 31 December 2009 the accumulated loss on fair value
reserve amounted to HRK 5 million (2008: gain of HRK 9 million) and loss of HRK 31 million (2008: gain of HRK 11 million) for the Group and the Bank
respectively.
c) Retained earnings
Retained earnings include accumulated profits from prior years and a translation reserve which is used to record differences arising from the
retranslation of assets and liabilities, and income and expense of foreign subsidiaries, on consolidation.
34 Cash and cash equivalents
GroupNote
2009
2008
HRKHRK
million
million
Cash in hand
11
Items in course of collection
11
Current accounts with other banks
11
Current account with the CNB
11
2,227
2
1,569
3,245
7,043
1,690
2
789
1,921
4,402
BankNote
2009
2008
HRKHRK
million
million
Cash in hand
11
Items in course of collection
11
Current accounts with other banks
11
Current account with the CNB
11
138 2009 Annual Report · Zagrebačka banka UniCredit Group
1,809
1
205
3,245
5,260
1,321
2
67
1,921
3,311
35 Managed funds for and on behalf of third parties and custody services
The Bank and the Group provide custody services to banks and customers, including investment and pension funds. The Group also manages
regulated open ended funds in Croatia, which are quoted over the counter. The Group and the Bank earn fee income related to these services. The
Bank and the Group also provide portfolio management services to private customers, and also manage a number of loans on behalf of third parties.
These assets are not assets of the Bank and the Group and are not recognised in the Bank’s and the Group’s balance sheets.
Group
2009
2008
HRKHRK
million
million
Assets under custody
Investment fund assets under management
Assets under portfolio management
Loans managed on behalf of third parties
37,176
4,370
133
452
42,131
26,064
3,525
147
475
30,211
Fees earned in relation to custody services, assets under management in investment funds managed by the Group, portfolio management and loans
managed on behalf of third parties amounted to HRK 91 million (2008: HRK 179 million). Custody fees are related to custodian activities provided
to companies, banks and individuals, and investment and pension funds. Portfolio management fees are related to portfolio management for and on
behalf of customers.
BANK
2009
2008
HRKHRK
million
million
Assets under custody
Loans managed on behalf of third parties
37,176
351
37,527
26,064
372
26,436
Fees earned in relation to custody services and loans managed on behalf of third parties for the Bank amounted to HRK 29 million (2008: HRK 42
million).
Zagrebačka banka UniCredit Group · 2009 Annual Report 139
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
36 Commitments and contingencies
a) Off-balance-sheet exposure
The aggregate amounts of outstanding guarantees, letters of credit, undrawn lending commitments and unused credit card limits at the year end were:
Group
2009
2008
HRKHRK
million
million
Foreign currency guarantees
Kuna guarantees
Foreign currency letters of credit
Undrawn lending commitments
Credit card limits and other items
3,655
3,128
643
9,095
5,234
21,755
3,479
3,009
977
11,277
4,717
23,459
BANK
2009
2008
HRKHRK
million
million
Foreign currency guarantees
Kuna guarantees
Foreign currency letters of credit
Undrawn lending commitments
Credit card limits and other items
2,759
3,128
618
8,727
4,301
19,533
2,490
3,009
928
10,653
3,862
20,942
b) Litigation
The Group and the Bank are subject to a number of legal actions taken against them. In the opinion of the Management Board the claims which are
likely to be lost are fully provided for and, including principal and accrued interest, amounted to HRK 60 million for the Group (2008: HRK 74 million)
and HRK 27 million for the Bank (2008: HRK 30 million).
140 2009 Annual Report · Zagrebačka banka UniCredit Group
37 Related party transactions
The Bank is the parent of the Zagrebačka banka Group. The ultimate controlling party of the Group is UniCredit S.p.A. The key shareholders of the
Bank and of the Group are UniCredit Bank Austria AG (a subsidiary of UniCredit S.p.A.) and Allianz SE with holdings of 84.21% (2008: 84.21%) and
11.72% (2008: 11.72%) of the Bank’s shares respectively at year end. The remaining 4.07% (2008: 4.07%) of the shares are publicly held. The
Bank considers that it has an immediate related party relationship with its key shareholders and their subsidiaries; its subsidiaries and associates;
the investment funds managed by one of its subsidiaries, ZB Invest; the pension funds managed by its associates; Supervisory Board members,
Management Board members and other executive management (together “key management personnel”); close family members of key management
personnel; and entities controlled, jointly controlled or significantly influenced by key management personnel and their close family members, in
accordance with the definitions contained in International Accounting Standard 24 “Related Party Disclosures” (“IAS 24”).
a) Key transactions with immediate related parties
The Bank had significant borrowings in the amount of HRK 3,468 million (2008: HRK 3,855 million) and deposits of HRK 14,476 million (2008: HRK
4,264 million) from UniCredit Bank Ireland and UniCredit Bank Austria AG as at 31 December 2009. As a result, the Bank recorded HRK 651 million
(2008: HRK 268 million) of interest expense in relation to UniCredit Bank Ireland and UniCredit Bank Austria AG.
The Bank recorded HRK 2.8 million (2008: HRK 2 million) in costs in respect of employees of UniCredit S.p.A. seconded to Zagrebačka banka in
managerial functions.
The Bank entered into structured derivative financial transactions related to structured investment products with UniCredit Bank AG (former HVB) which
resulted in the recognition of gains of HRK 416 thousand (2008: loss of HRK 35 million) in the Bank’s income statement.
In 2009 and 2008 the Bank entered into derivative financial transactions in the form of interest rate swaps, cross currency interest rate swaps and FX
swaps with UniCredit Bank AG resulting in the recognition of a gain of HRK 33 million (2008: loss of HRK 7 million) in the Bank’s income statement.
The Bank entered into derivative financial transactions related to interest rate swaps, cross currency interest rate swaps and FX swaps with UniCredit
CAIB AG, resulting in the recognition of a loss of HRK 9.6 million (2008: loss of HRK 3.4 million) in the Bank’s income statement.
The Bank entered into derivative financial transactions related to forward contracts with UniCredit CAIB AG, resulting in the recognition of a gain of HRK
215 million (2008: loss of HRK 301 million) in the Bank’s income statement.
Zagrebačka banka UniCredit Group · 2009 Annual Report 141
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
37 Related party transactions (continued)
a) Key transactions with immediate related parties (continued)
The Bank earned income from distribution services to related parties engaged in insurance, leasing and pension fund management as follows:
Income from distributionDividend income
2009
2008
2009
2008
HRKHRKHRKHRK
million
million
million
million
Allianz Zagreb (insurance)
Allianz ZB - obligatory pension fund management company
Allianz ZB - voluntary pension funds management company
UniCredit leasing
9
-
6
2
17
15
3
7
2
27
-
23
-
-
23
30
30
The above amounts are not eliminated on consolidation. The Bank also earns income and incurs expense on transactions with its subsidiaries, which
are eliminated on consolidation. These include distribution fee income earned from ZB Invest, which manages regulated investment funds in Croatia,
and fees payable to Zagreb nekretnine for property valuations. The Bank recognised dividend income from subsidiaries in the amount of HRK 21 million
(2008: HRK 42 million). The majority of other income and expense with subsidiaries represents interest income and expense.
The majority of exposure and liabilities with subsidiaries represents lending, and in the case of ZB Invest, includes investments into investment funds
managed by ZB Invest. Key management personnel held 60,455 shares in the Bank (2008: 91,379 shares) at year end. Included in loans to and
receivables from customers are HRK 39 million (2008: HRK 27 million) in respect of loans and receivables granted to key management personnel.
During 2009 the Bank recognised HRK 2 million (2008: HRK 1 million) of interest from loans to key management personnel granted at annual interest
rates from 4.9% to 13.99% (2008: from 4.66% to 11.40%). Included in current accounts and deposits from customers are HRK 45 million of deposits
from key management personnel (2008: HRK 42 million). During 2009 the Bank recognised interest of HRK 2 million (2008: HRK 1 million) on these
liabilities at annual interest rates from 0.05% to 6.25% (2008: from 0.06% to 5.81%).
142 2009 Annual Report · Zagrebačka banka UniCredit Group
37 Related party transactions (continued)
b) Amounts arising from transactions with immediate related parties
Assets and liabilities and off-balance-sheet exposure and income and expense as at and for the year ended 31 December 2009, arising from key
transactions with related parties, were as follows:
Exposure*Liabilities
IncomeExpense
HRK HRK HRK HRK million
million
million
million
Shareholders or fellow subsidiaries
UniCredit Bank Austria AG
3,298
15,557
UniCredit Bank Austria AG Group - other
87
799
UniCredit Bank AG 66
10
UniCredit Bank AG Group - other
-
1
UniCredit S.p.A.
130
-
UniCredit Group - other
5
2,679
Allianz SE Group - other
35
32
Total key shareholders
3,621
19,078
Subsidiaries
Prva stambena štedionica
6
40
UniCredit Bank dd, Mostar
379
19
Istraturist
32
2
ZB Invest
3
12
Zagreb nekretnine
-
1
Centar Kaptol
23
8
Marketing Zagrebačke banke
-
2
Pominvest
-
5
ZABA TURIZAM
-
1
Total subsidiaries
443
90
Key management personnel**
Supervisory Board
-
3
Other key management personnel
36
46
Total
4,100
19,217
32
236
73
1
2
-
38
382
582
121
4
3
5
87
802
4
14
7
30
1
-
-
-
-
56
2
1
4
1
4
3
15
-
2
440
2
819
*Exposure comprises loans, interest and other receivables and HRK 139 million (2008: HRK 128 million) of off-balance-sheet exposures, whereof HRK 4 million (2008: HRK 5 million) relates to key management
personnel.
**Expense amounts relating to key management personnel do not include remuneration. Information on management remuneration is disclosed in Note 37c.
In addition to the direct exposure to ZB Invest, at year end the Bank had an investment of HRK 74 million (Group: HRK 98 million) in investment funds
managed by ZB Invest.
In addition to direct exposure to subsidiaries, the Bank’s investment in subsidiaries at year end amounted to HRK 866 million (2008: HRK 866 million).
Zagrebačka banka UniCredit Group · 2009 Annual Report 143
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
37 Related party transactions (continued)
c) Remuneration paid during the year to Management Board and other key management personnel
2009
2008
HRK HRK million
million
Management Board
Short-term benefits
- salaries paid during current year in respect of current year
- bonuses paid during current year in respect of prior year
- paid during current year in respect of prior years
Long-term benefits
- insurance policies paid during current year
Distribution of management bonus in shares
- bonuses paid during current year in respect of prior year
- paid during current year in respect of prior years
Total
8
7
5
9
-
1
1
-
1
22
8
8
26
2009
2008
HRK HRK million
million
Other key management personnel
Short-term benefits
- salaries paid during current year in respect of current year
- bonuses paid during current year in respect of prior year
- paid during current year in respect of prior years
Long-term benefits
- insurance policies paid during current year
Distribution of management bonus in shares
- bonuses paid during current year in respect of prior year
- paid during current year in respect of prior years
Total
20
9
5
18
-
1
1
-
-
35
8
7
34
Included in other key management personnel are 45 key employees (2008: 43 key employees).
d) Shareholdings of the Supervisory and Management Board members
The table below details shares in the Bank held by members of the Management Board and Supervisory Board and by companies whose interests are
represented by members of the Supervisory Board at 31 December 2009.
Number of
ordinary
shares
Companies represented on the Supervisory Board
UniCredit Bank Austria AG
Allianz SE
53,933,857
7,504,639
Member of the Supervisory Board
Prof Jakša Barbić, PhD
22,154
Members of the Management Board
Franjo Luković
Milivoj Goldštajn
Sanja Rendulić
Marko Remenar
Miljenko Živaljić
Daniela Roguljić Novak
Mario Agostini
144 2009 Annual Report · Zagrebačka banka UniCredit Group
11,095
4,432
11,656
231
1,400
4,022
-
38 Risk management
This section provides details of the Group’s exposure to risk and describes the methods used by management to identify, measure and manage risk
in order to safeguard capital. The most important types of financial risk to which the Group is exposed are credit risk, liquidity risk, market risk, and
operating risk. Market risk includes currency risk, interest rate risk and price risk.
An integrated system of risk management is being established at the Group level by introducing a set of policies and procedures, determining the
limits of risk levels acceptable to the Group and monitoring its implementation. The limits are set according to the amount of regulatory capital and
apply to all types of risk. Additionally, the Group sets limits for annual potential loss measured by Value-at-Risk techniques for currency risk exposure
and securities price risk exposure. Methodologies and models for managing operational risk are being developed.
Accepted principles of risk management have been implemented in all subsidiaries.
38.1. Credit risk
The Group is subject to credit risk through its lending and investing activities and in cases where it acts as an intermediary on behalf of customers or
other third parties.
The risk that counterparties to financial instruments might default on their obligations is monitored on an ongoing basis. To manage the level of credit
risk, the Group evaluates debtors’ creditworthiness and in order to minimise credit risk, obtains collateral.
At the balance sheet date the Group credit risk exposure to financial instruments classified at fair value through profit or loss or as available for sale is
represented by the positive fair value of these instruments, as recorded on the balance sheet. Notional amounts disclosed in the notes to the financial
statements do not represent the amounts to be exchanged by the parties in derivative transactions and do not measure the Group’s exposure to credit
or market risks. The amounts to be exchanged are based on the terms of the derivatives.
The Group’s primary exposure to credit risk arises from loans to and receivables from customers. The amount of credit exposure in this regard, and in
respect of held-to-maturity debt securities recognised at amortised cost, is represented by the carrying amounts of the assets on the balance sheet.
In addition, the Group is exposed to the credit risk in respect of the off-balance-sheet items through commitments arising from unused facilities and
guarantees issued, as disclosed in Note 36a.
Exposure to credit risk is managed in accordance with the Group’s policies and with the regulatory requirements of the Croatian National Bank. Credit
exposures to portfolios and individual client/group exposures are reviewed on a regular basis taking into account limits set. Any proposed substantial
increase in credit exposure is reviewed by Risk Management Division prior to the granting and during the monitoring phase and are authorised at
an appropriate decision-making level. The Credit Committee is regularly informed of all significant changes in quantity and quality of the portfolio,
including proposed impairment losses. Credit risk assessment is continuously monitored and reported, thus enabling the early identification of
impairment in the credit portfolio. The Group continually applies prudent methods and models in the process of credit risk assessment.
The majority of credit risk exposures are secured with collateral in the form of cash, guarantees, mortgages and other forms of security.
Zagrebačka banka UniCredit Group · 2009 Annual Report 145
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
38 Risk management (continued)
38.1. Credit risk (continued)
Maximum exposure to credit risk
Credit risk exposure relating to on-balance sheet assets is as follows:
Notes
Group
Bank
2009
2008
2009
2008
HRKHRKHRKHRK
million
million
million
million
Current accounts with CNB and other banks
11
4,816
2,712
3,451
1,990
Obligatory reserve with the Croatian National Bank
12
7,318
7,061
7,318
7,061
Loans to and receivables from banks
13a
11,640
12,421
8,678
9,688
Financial assets at fair value through profit or loss
- Debt securities
14a
401
1,035
401
1,035
- Derivative financial instruments
14c
42
36
43
37
Replacement bonds 15a
1,442
1,422
1,442
1,422
Loans to and receivables from customers
15b
68,629
66,324
59,650
56,926
Available-for-sale debt securities
16a
5,379
5,213
5,487
5,303
Held-to-maturity investments
17
772
867
579
669
Other assets
1,768
1,680
1,416
1,409
Total credit risk exposure relating to on-balance sheet assets
102,207
98,771
88,465
85,540
Credit risk exposure relating to off-balance sheet items is as follows:
Guarantees
36a
6,783
6,488
5,887
5,499
Letters of credit
36a
643
977
618
928
Undrawn lending commitments and other credit related commitments
36a
14,329
15,994
13,028
14,515
Total credit risk exposure relating to
off-balance sheet items
21,755
23,459
19,533
20,942
Total credit risk exposure
123,962
122,230
107,998
106,482
The table above shows the maximum credit risk exposure for the Group and the Bank as at 31 December 2009 and 31 December 2008, without
taking into account collateral held. On-balance-sheet assets, shown above are based on net carrying amounts as reported in the balance sheet. The
exposure shown in the table above is presented net of impairment losses.
64.8% (2008: 64.4%) and 63.3% (2008: 62.6%) of the maximum exposure is derived from loans to and receivables from banks and customers for
the Group and the Bank, respectively. Undrawn lending commitments and other credit related commitments represent 11.6% (2008: 13.1%) and
12.1% (2008: 13.6%) of the maximum exposure for the Group and the Bank, respectively.
Management is confident in its ability to continue to control and maintain minimum exposure to credit risk for the Group resulting from both its loan
portfolio and undrawn lending commitments based on the following:
• 94.1% (2008: 95.3%) of loans to and receivables from customers for the Group and 94.5% (2008: 96.5%) for the Bank are classified into risk
category A (performing loans)
• 89.6% (2008: 87.9%) of loans to and receivables from customers for the Group and 89.6% (2008: 87.2%) for the Bank are considered to be
neither past due nor impaired
• 5.9% (2008: 4.7%) loans to and receivables from customers for the Group and 5.5% (2008: 3.5%) for the Bank are considered to be impaired
• loans to and receivables from customers are backed by various forms of collateral
146 2009 Annual Report · Zagrebačka banka UniCredit Group
38 Risk management (continued)
38.1. Credit risk (continued)
• management considers loans to and receivables from customers to be sufficiently covered by impairment allowance and collateral.
Impairment and provisioning policies
Group’s rating
2009
2008
HRK millionHRK million
Loans to and Impairment Loans to and Impairment receivables from
allowance receivables from
allowance
customers
customers
A
B1
B2
B3
C
Total
67,487
1,702
843
194
2,062
72,288
907
237
343
110
2,062
3,659
66,109
883
474
121
1,806
69,393
898
109
195
61
1,806
3,069
BANK’s rating
2009
2008
HRK millionHRK million
Loans to and Impairment Loans to and Impairment receivables from
allowance receivables from
allowance
customers
customers
A
B1
B2
B3
C
Total
59,018
945
790
193
1,483
62,429
746
127
313
110
1,483
2,779
57,094
290
406
121
1,275
59,186
722
45
157
61
1,275
2,260
• Impairment allowance for A graded loans relates to general provision.
• Impairment allowance as a percentage of gross loans and receivables from customers amounted to 5.1% (2008: 4.4%) for the Group and 4.5%
(2008: 3.8%) for the Bank.
• The increase in allowances on both the corporate and retail portfolio in 2009 reflects the effect of the global financial crisis.
• For the purpose of presentation in the above table, performing loans in the Bank’s banking subsidiary in Bosnia and Herzegovina, which are provided
for at 5% - 15% in accordance with the FBA requirements has been included in category A as interest still accrues on balance sheet for these loans.
Also, the general provision for the Group as recognised and disclosed in these financial statements includes the provision for these loans. For the
purpose of presentation of the remaining tables on credit risk in this note, these loans are treated as impaired loans.
Zagrebačka banka UniCredit Group · 2009 Annual Report 147
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
38 Risk management (continued)
38.1. Credit risk (continued)
Uncertainty related to valuation of real estate collateral
The majority of housing loans are secured by mortgages over residential property. A significant part of the corporate portfolio is secured by mortgages
over different types of property. The Croatian real estate market, commercial and residential alike, has been illiquid since the end of 2007 and there
are currently a limited number of transactions, despite significant decrease in prices in the second half of 2009. The decrease in prices and illiquidity
of the real estate market have an adverse effect on the recoverability of assets and the timing thereof in cases when the borrower experiences
financial difficulty and the Bank relies on collateral to collect the asset.
Loans to and receivables from customers
Loans to individuals and Group
Bank
unincorporated businesses
2009
2008
2009
2008
HRKHRKHRKHRK
million
million
million
million
Neither past due nor impaired
Past due but not impaired
Impaired
Gross
Less: impairment allowance
Net
32,043
1,717
1,736
35,496
(1,877)
33,619
31,680
2,854
1,439
35,973
(1,547)
34,426
26,618
1,704
1,524
29,846
(1,599)
28,247
26,290
2,817
1,244
30,351
(1,288)
29,063
Loans to COMPANIES and Group
Bank
organisations and Government
2009
2008
2009
2008
HRKHRKHRKHRK
million
million
million
million
Neither past due nor impaired
Past due but not impaired
Impaired
Gross
Less: impairment allowance
Net
32,751
1,509
2,532
36,792
(1,782)
35,010
29,372
2,729
1,319
33,420
(1,522)
31,898
29,306
1,390
1,887
32,583
(1,180)
31,403
25,323
2,664
848
28,835
(972)
27,863
The total impairment provision for loans and receivables from customers amounted to HRK 3,659 million (2008: HRK 3,069 million) for the Group, out
of which HRK 2,752 million (2008: HRK 2,171 million) represents specific provision for impairment loses and the remaining amount of HRK 907 million
represents the general provision (2008: HRK 898 million) calculated in accordance with regulatory requirements.
The total impairment provision for loans to and receivables from customers amounted to HRK 2,779 million (2008: HRK 2,260 million) for the Bank of
which HRK 2,033 million (2008: HRK 1,538 million) represents specific provision and the remaining amount of HRK 746 million represents the general
provision (2008: HRK 722 million).
Further information and movement in the impairment allowance for loans to and receivables form customers is shown in Note 15c.
148 2009 Annual Report · Zagrebačka banka UniCredit Group
38 Risk management (continued)
38. 1. Credit risk (continued)
a) Loans to and receivables from customers neither past due nor impaired
The credit quality of the loans and receivables from customers portfolio that was neither past due nor impaired can be assessed by the internal rating
system adopted by the Group as follows:
Group’s ratingGradeDescription of the grade 1
2
Standard monitoring
Special monitoring
Clients with regular repayment and below average ratio of income and exposure
Clients with occasional defaults in repayment of loan
All loans and receivables from customers neither past due nor impaired are regularly monitored and systematically reviewed in order to identify any
anomaly or warning signals and to react accordingly. The analysis of gross exposures which are neither due nor impaired by type of loan or borrower is
as follows:
Loans to retail customers
Group
Bank
2009
2008
2009
2008
HRKHRKHRKHRK
million
million
million
million
Cash and consumer loans
Credit cards and overdrafts
Housing loans
Unincorporated businesses
Other loans
Total
8,395
2,900
17,779
870
2,099
32,043
8,532
2,645
17,308
964
2,231
31,680
5,443
2,524
15,689
863
2,099
26,618
5,560
2,381
15,162
956
2,231
26,290
Loans to corporate entities
Group
Bank
2009
2008
2009
2008
HRKHRKHRKHRK
million
million
million
million
Large
Medium
Small
Total
20,788
9,438
2,525
32,751
16,151
10,232
2,989
29,372
19,067
8,356
1,883
29,306
13,934
9,088
2,301
25,323
Rescheduled loans and receivables
The Group and the Bank rescheduled certain loans to customers during the year, with the aim of improving their ultimate recoverability. This is
generally in response to the deterioration of the borrowers’ financial position or to prevent it. Following the restructuring the loans remain graded as
performing loans until there are clear signs of default. Whenever possible, the Group’s position was improved by obtaining additional instruments of
collateral.
Zagrebačka banka UniCredit Group · 2009 Annual Report 149
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
38 Risk management (continued)
38.1. Credit risk (continued)
a) Loans to and receivables from customers neither past due nor impaired (continued)
Group
Retail customers
Corporate entities
As at 31Cash andCredit HousingUnincorpo-Other
TotalLargeMediumSmall
Total
December 2009
consumer cards and loans
rated
loans
loans overdrafts businesses
HRKHRKHRKHRKHRKHRKHRKHRKHRKHRK
million
million
million
million
million
million
million
million
million
million
Standard monitoring
Special monitoring
Total
8,315
81
8,396
2,528
371
2,899
17,746
34
17,780
830
39
869
2,099
-
2,099
31,518
525
32,043
20,251
537
20,788
8,805
633
9,438
2,390
135
2,525
31,446
1,305
32,751
BANK
Retail customers
Corporate entities
As at 31Cash andCredit HousingUnincorpo-Other
TotalLargeMediumSmall
Total
December 2009
consumer cards and loans
rated
loans
loans overdrafts businesses
HRKHRKHRKHRKHRKHRKHRKHRKHRKHRK
million
million
million
million
million
million
million
million
million
million
Standard monitoring
Special monitoring
Total
5,443
-
5,443
2,174
350
2,524
15,689
-
15,689
824
39
863
2,099
-
2,099
26,229
389
26,618
18,636
431
19,067
7,862
494
8,356
1,807
76
1,883
28,305
1,001
29,306
Group
Retail customers
Corporate entities
As at 31Cash andCredit HousingUnincorpo-Other
TotalLargeMediumSmall
Total
December 2008
consumer cards and loans
rated
loans
loans overdrafts businesses
HRKHRKHRKHRKHRKHRKHRKHRKHRKHRK
million
million
million
million
million
million
million
million
million
million
Standard monitoring
Special monitoring
Total
8,441
91
8,532
1,503
1,142
2,645
17,252
56
17,308
934
30
964
2,231
-
2,231
30,361
1,319
31,680
15,631
520
16,151
10,128
104
10,232
2,899
90
2,989
28,658
714
29,372
BANK
Retail customers
Corporate entities
As at 31Cash andCredit HousingUnincorpo-Other
TotalLargeMediumSmall
Total
December 2008
consumer cards and loans
rated
loans
loans overdrafts businesses
HRKHRKHRKHRKHRKHRKHRKHRKHRKHRK
million
million
million
million
million
million
million
million
million
million
Standard monitoring
Special monitoring
Total
5,560
-
5,560
1,250
1,131
2,381
15,162
-
15,162
150 2009 Annual Report · Zagrebačka banka UniCredit Group
926
30
956
2,231
-
2,231
25,129
1,161
26,290
13,633
301
13,934
9,037
51
9,088
2,266
35
2,301
24,936
387
25,323
38 Risk management (continued)
38.1. Credit risk (continued)
b) Loans to and receivables from customers past due but not impaired
Loans and receivables from customers less than 90 days due are not considered impaired, unless other information confirms otherwise. The gross
amount of loans and receivables with customers that were past due but not impaired for the Group and the Bank were as follows:
Group
Retail customers
Corporate entities
As at 31Cash andCredit HousingUnincorpo-Other
TotalLargeMediumSmall
Total
December 2009
consumer cards and loans
rated
loans
loans overdrafts businesses
HRKHRKHRKHRKHRKHRKHRKHRKHRKHRK
million
million
million
million
million
million
million
million
million
million
Past due up to 30 days
Past due 30 - 60 days
Past due 60 - 90 days
Past due over 90 days
Total
293
88
4
1
386
171
30
16
3
220
582
193
5
54
834
38
27
7
20
92
134
39
1
11
185
1,218
377
33
89
1,717
56
191
83
146
476
133
186
58
328
705
73
64
14
177
328
262
441
155
651
1,509
BANK
Retail customers
Corporate entities
As at 31Cash andCredit HousingUnincorpo-Other
TotalLargeMediumSmall
Total
December 2009
consumer cards and loans
rated
loans
loans overdrafts businesses
HRKHRKHRKHRKHRKHRKHRKHRKHRKHRK
million
million
million
million
million
million
million
million
million
million
Past due up to 30 days Past due 30 - 60 days
Past due 60 - 90 days
Past due over 90 days
Total
292
86
3
1
382
171
30
16
3
220
581
189
2
53
825
38
27
7
20
92
134
39
1
11
185
1,216
371
29
88
1,704
55
191
82
84
412
119
184
57
313
673
69
57
13
166
305
243
432
152
563
1,390
Zagrebačka banka UniCredit Group · 2009 Annual Report 151
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
38 Risk management (continued)
38.1. Credit risk (continued)
b) Loans to and receivables from customers past due but not impaired (continued)
Group
Retail customers
Corporate entities
As at 31Cash andCredit HousingUnincorpo-Other
TotalLargeMediumSmall
Total
December 2008
consumer cards and loans
rated
loans
loans overdrafts businesses
HRKHRKHRKHRKHRKHRKHRKHRKHRKHRK
million
million
million
million
million
million
million
million
million
million
Past due up to 30 days
Past due 30 - 60 days
Past due 60 - 90 days
Past due over 90 days
Total
634
102
8
3
747
158
32
15
3
208
1,370
175
6
40
1,591
46
21
4
26
97
173
35
1
2
211
2,381
365
34
74
2,854
194
16
28
2,065
2,303
39
38
51
115
243
97
32
13
41
183
330
86
92
2,221
2,729
BANK
Retail customers
Corporate entities
As at 31Cash andCredit HousingUnincorpo-Other
TotalLargeMediumSmall
Total
December 2008
consumer cards and loans
rated
loans
loans overdrafts businesses
HRKHRKHRKHRKHRKHRKHRKHRKHRKHRK
million
million
million
million
million
million
million
million
million
million
Past due up to 30 days
Past due 30 - 60 days
Past due 60 - 90 days
Past due over 90 days
Total
628
98
3
1
730
155
29
13
1
198
1,362
175
5
39
1,581
152 2009 Annual Report · Zagrebačka banka UniCredit Group
46
21
4
26
97
173
35
1
2
211
2,364
358
26
69
2,817
194
-
26
2,033
2,253
38
36
48
113
235
97
29
12
38
176
329
65
86
2,184
2,664
38 Risk management (continued)
38.1. Credit risk (continued)
c) Loans to and receivables from customers past due and impaired
The breakdown of the individually impaired loans and receivables from customers shown net of impairment provision are as follows:
Group
Retail customers
Corporate entities
As at 31Cash andCredit HousingUnincorpo-Other
TotalLargeMediumSmall
Total
December 2009
consumer cards and loans
rated
loans
loans overdrafts businesses
HRKHRKHRKHRKHRKHRKHRKHRKHRKHRK
million
million
million
million
million
million
million
million
million
million
Impaired loans
72
34
137
56
55
354
734
332
152
1,218
Bank
Retail customers
Corporate entities
As at 31Cash andCredit HousingUnincorpo-Other
TotalLargeMediumSmall
Total
December 2009
consumer cards and loans
rated
loans
loans overdrafts businesses
HRKHRKHRKHRKHRKHRKHRKHRKHRKHRK
million
million
million
million
million
million
million
million
million
million
Impaired loans
50
29
122
56
55
312
617
320
130
1,067
Group
Retail customers
Corporate entities
As at 31Cash andCredit HousingUnincorpo-Other
TotalLargeMediumSmall
Total
December 2008
consumer cards and loans
rated
loans
loans overdrafts businesses
HRKHRKHRKHRKHRKHRKHRKHRKHRKHRK
million
million
million
million
million
million
million
million
million
million
Impaired loans
53
27
101
56
35
272
3
242
70
315
BANK
Retail customers
Corporate entities
As at 31Cash andCredit HousingUnincorpo-Other
TotalLargeMediumSmall
Total
December 2008
consumer cards and loans
rated
loans
loans overdrafts businesses
HRKHRKHRKHRKHRKHRKHRKHRKHRKHRK
million
million
million
million
million
million
million
million
million
million
Impaired loans
43
23
95
56
35
252
-
237
65
302
Impaired loans to and receivables from customers are in the opinion of the Management Board sufficiently covered with impairment allowance and
collateral.
Zagrebačka banka UniCredit Group · 2009 Annual Report 153
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
38 Risk management (continued)
38.2. Liquidity risk
Liquidity risk arises in the general funding of the Group’s activities and in the management of positions. It includes both the risk of being unable
to fund assets at appropriate maturities and rates and the risk of being unable to liquidate an asset at a reasonable price and in an appropriate
timeframe.
The Group has access to a diverse funding base. Funds are raised using a broad range of instruments including various types of retail and corporate
deposits, borrowings, issued debt securities, subordinated debt and share capital. This enhances funding flexibility, limits dependence on any one
source of funds and generally lowers the cost of funds.
The Group strives to maintain a balance between continuity of funding and flexibility through the use of liabilities with a range of maturities. The Group
continually assesses liquidity risk by identifying and monitoring changes in funding required to meet business goals and targets set in terms of the
overall Group strategy. In addition, the Group holds a portfolio of liquid assets as a part of its liquidity risk management strategy.
The Group adjusts its business activities in compliance with liquidity risk according to legislation and internal policies for maintenance of liquidity
reserves, matching of assets and liabilities, limits and preferred liquidity ratios. Needs for short-term liquidity are planned every month for a period of
six months and controlled and maintained daily. The Asset and Liability Management (“ALM”) Department manages liquidity reserves daily, ensuring
also the accomplishment of all customer needs. The expected outflows projected by the Bank and Group based on the financial liabilities as at 31
December 2009 and including expected interest thereon are as follows.
GroupUp to 1 1 month to 3 months 1 year to Over
Total
month
3 monthsto 1 year
5 years
5 years
2009
2009
2009
2009
2009
2009
HRKHRKHRKHRKHRKHRK
million million million million million million
Liabilities
Current accounts and deposits from banks
4,933
395
3,549
7,893
397
Current accounts and deposits from customers
28,210
7,458
21,360
7,859
834
Financial liabilities at fair value through profit or loss
-
-
74
-
-
Borrowings
1,209
509
823
4,448
2,271
Subordinated debt
-
14
16
15
87
Other liabilities
332
10
1,995
98
24
Total expected outflow
34,684
8,386
27,817
20,313
3,613
17,167
65,721
74
9,260
132
2,459
94,813
GroupUp to 1 1 month to 3 months 1 year to Over
Total
month
3 monthsto 1 year
5 years
5 years
2008
2008
2008
2008
2008
2008
HRKHRKHRKHRKHRKHRK
million million million million million million
Liabilities
Current accounts and deposits from banks
Current accounts and deposits from customers
Financial liabilities at fair value through profit or loss
Borrowings
Issued debt securities
Subordinated debt
Other liabilities
Total expected outflow
154 2009 Annual Report · Zagrebačka banka UniCredit Group
5,253
30,887
1
3,148
11
-
208
39,508
3,335
7,162
-
320
23
15
1,652
12,507
881
16,590
278
1,399
3,333
16
145
22,642
1,483
9,222
-
4,436
-
49
65
15,255
415
714
-
1,003
-
118
26
2,276
11,367
64,575
279
10,306
3,367
198
2,096
92,188
38 Risk management (continued)
38.2. Liquidity risk (continued)
BANKUp to 1 1 month to 3 months 1 year to Over
Total
month
3 monthsto 1 year
5 years
5 years
2009
2009
2009
2009
2009
2009
HRKHRKHRKHRKHRKHRK
million million million million million million
Liabilities
Current accounts and deposits from banks
Current accounts and deposits from customers
Financial liabilities at fair value through profit or loss
Borrowings
Other liabilities
Total expected outflow
4,935
22,695
-
1,239
-
28,869
395
7,031
-
451
-
7,877
2,340
19,511
74
621
1,887
24,433
7,871
5,400
-
3,551
-
16,822
397
444
-
1,827
-
2,668
15,938
55,081
74
7,689
1,887
80,669
BANKUp to 1 1 month to 3 months 1 year to Over
Total
month
3 monthsto 1 year
5 years
5 years
2008
2008
2008
2008
2008
2008
HRKHRKHRKHRKHRKHRK
million million million million million million
Liabilities
Current accounts and deposits from banks
Current accounts and deposits from customers
Financial liabilities at fair value through profit or loss
Borrowings
Issued debt securities
Other liabilities
Total expected outflow
5,246
25,506
-
3,279
11
-
34,042
3,335
6,534
-
260
23
1,632
11,784
71
14,810
278
791
3,333
-
19,283
1,011
7,325
-
3,548
-
-
11,884
415
530
-
393
-
-
1,338
10,078
54,705
278
8,271
3,367
1,632
78,331
Zagrebačka banka UniCredit Group · 2009 Annual Report 155
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
38 Risk management (continued)
38.3. Market risk
Market risk has a direct impact of fluctuations in market prices on the income and/or asset position of the Group or individual Group subsidiaries.
Effective from 31 March 2010 the new Basel II Credit Institutions Law comes in force. The Law will implement significant changes in terms of market
risk management and reporting, based on Basel II principles.
Market risk measurement techniques
a) Value at Risk
The Group applies a Value-at-Risk methodology (VaR) to its trading and non-trading portfolios, to estimate the market risk of position held and the
maximum losses expected. The Management Board, in cooperation with UniCredit Bank Austria AG, sets limits on the value of risk that may be
accepted for Group, trading and non-trading activities separately, which are monitored on a daily basis by Market Risk Management.
VaR is a statistically based estimate of the potential loss on the current portfolio from adverse market movements. It expresses the expected maximum
amount that the Group might lose, to a predefined level of confidence and for a certain ‘holding period’ until positions can be closed.
The Group uses a risk model which was developed internally by UniCredit Bank Austria AG. The model covers:
• general market risk for foreign currency positions
• general and specific market risk for debt instruments (excluding specific market risk for deposits)
• general and specific market risk for equities.
The risk model calculates the VaR for a one-day holding period and a confidence level of 99%. The model uses a mix of historical simulation (exchange
rates and interest rates) and Monte Carlo simulation (all other factors). The historical simulation employs 500 historical scenarios that are adapted
to the current volatility level (declustering). Correlations between the individual risk categories are taken into consideration by the simulation method.
This applies to the areas of foreign exchange, interest rate spread risk and equity positions. The quality of the VaR model is continuously monitored by
back-testing.
The VaR limit ensures that there is a uniform, comparable and risk/income-oriented risk measurement tool. It is supplemented by position and stressoriented limits across risk categories (Basis-Point-Value, FX volume, issuer limit, etc.).
VaR development
High overall VaR figures for the end of 2008 were influenced by increased market volatility caused by the financial markets crisis and tight HRK
liquidity. In 2009, global financial markets started their recovery which also positively influenced local market stabilisation. Also, the liquidity of fixed
income markets improved which enabled more effective management of fixed income positions.
Additionally, the Bank took measures aimed at reducing interest rate risk by reducing long-term fixed income positions in terms of their volume and
duration.
Respectively, overall VaR figures 2009/2008 year on year decreased substantially.
156 2009 Annual Report · Zagrebačka banka UniCredit Group
38 Risk management (continued)
38.3. Market risk (continued)
VaR by risk type
Group
Bank
31 December 31 December 31 December 31 December
2009 2009 Average 2008
2009 2009 Average 2008
HRKHRKHRKHRKHRKHRK
million
million
million
million
million
million
Foreign exchange risk
Interest rate risk
Equity risk
Total VaR
2
30
2
34
3
63
3
69
19
55
4
113
2
27
2
32
3
60
3
45
19
46
4
101
b) Stress tests
Stress-testing is used to evaluate the risk of potential and market risk related to the Bank’s portfolio and total positions and limits under extraordinary
circumstances (market shocks).
In the market-risk-related stress-testing process the Group currently covers following risk categories:
• foreign exchange risk (single currencies and currency groups vis-a-vis EUR)
• interest rate risk by currency for both the Bank’s total positions and portfolio positions, where the scenario used is a parallel shift of interest rates of
200 basis points.
Stress testing is performed on a monthly basis and the results are part of regular Asset and Liability Committee (“ALCO”) reports. The results are
discussed in ALCO meetings or at least among the board members responsible for trading and risk management.
38.3.1. Currency risk
The Group is exposed to currency risk through transactions in foreign currencies and through its investment in foreign operations.
Foreign currency exposure arises from credit, deposit-taking, investment and trading activities. It is monitored daily in accordance with legislation and
internally set limits, for each currency and for the total balance sheet denominated in or linked to foreign currency.
The Group’s main foreign operations are in Bosnia and Herzegovina. The functional currency of these operations is BAM, currently pegged to EUR.
As the presentational currency of the consolidated financial statements is HRK, the Group financial statements are affected by movements in the
exchange rates between HRK and BAM.
The Group manages its currency risk by setting principles and limits for foreign currency exposures and monitoring against these limits. The Group
directs its business activities simultaneously trying to optimize the gap between assets and liabilities denominated in or linked to foreign currency, and
maintaining daily business activities with information on daily potential loss limits measured by Value-at-Risk techniques. The parameters are regularly
reviewed in accordance with fluctuations in foreign currency rates and correlations between currencies.
The Group enters into economic hedges of its open position via derivative financial instruments as a part of its active asset and liability management
strategy. Such hedges in 2009 were mainly to close a long position in CHF as well as open positions in EUR. The Group uses foreign currency swaps,
cross currency interest rate swaps and foreign currency forward contracts. In 2009 the Group realised significant gains on these activities, which were,
however, partially offset by increased interest expenses.
Zagrebačka banka UniCredit Group · 2009 Annual Report 157
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
38 Risk management (continued)
38.3.2. Interest rate risk
The Group’s operations are subject to the risk of interest rate fluctuations to the extent that interest earning assets and interest bearing liabilities
mature or reprice at different times or in differing amounts.
In the case of floating rate assets and liabilities the Group is also exposed to basis risk to a limited extent, which is the difference in repricing
characteristics of the various floating rate indices. Risk management activities are aimed at optimising net interest income, given market interest rate
levels consistent with the Group’s business strategies.
Exposure to interest rate risk is monitored and measured using repricing maturity gap analysis (measured by Price Value of Basis Point) and Value at
Risk.
Due to longer maturities of its fixed rate loans compared to its fixed rate deposits the Bank’s subsidiary Prva stambena štedionica incurs a significant
interest rate gap which will have regulatory consequences once the new Credit Institutions Law comes into force. At present, such gap requires
additional tier 1 or tier 2 capital, unless it is eliminated by the application of hedge accounting. The application date for housing savings institutions
such as PSS has been postponed until 31 March 2011. The Bank and Prva stambena štedionica are currently considering the application of hedge
accounting to eliminate the gap and avoid the need for recapitalisation.
38.3.3. Price risk
Price risk is the possibility that prices will fluctuate, affecting the fair value of investments and other instruments that derive their value from a
particular investment.
The primary exposure to price risk arises from the Group’s holding of equity investments at fair value through profit or loss equity instruments available
for sale.
38.4. Operational risk
The Group is subject to operational risk in all its business activities. The Group seeks to manage its operational risk in accordance with defined
principles and policies at Bank and Group level, with the final purpose being to mitigate or avoid operational risk.
Group aligns its standards of operational risk management with Group guidelines and local regulatory requirements. This includes collection of data on
operational-risk-related loss events, monitoring of key operational risk indicators, performing scenario analyses, performing operational risk assessment
when making decisions on business changes and reporting to management on the results of operational risk management.
158 2009 Annual Report · Zagrebačka banka UniCredit Group
39 Maturity analysis
The table below analyses the assets and liabilities of the Group and the Bank as at 31 December 2009 and 31 December 2008 into relevant maturity
groupings based on the remaining period from the balance sheet date to the contractual maturity date, except as follows. Debt securities available for sale
and debt securities at fair value through profit or loss, which are graded at least AA or are eligible for European Central Bank / Croatian National Bank repo
operations have been classified in accordance with their secondary liquidity characteristics as maturing within one month. The obligatory reserve is classified
in accordance with the contractual maturity of the underlying liabilities based on which the obligatory reserve is calculated. Investments in subsidiaries and
associates, which do not have contractual maturity are classified into relevant maturity groupings in accordance with the Group’s plans. Other assets and
other liabilities, other than due interest, have been classified as maturing within 3 months to 1 year.
GroupUp to 1 1 month to 3 months 1 year to Over
Total
month
3 monthsto 1 year
5 years
5 years
2009
2009
2009
2009
2009
2009
HRKHRKHRKHRKHRKHRK
million million million million million million
Assets
Cash reserves
7,043
-
-
-
-
7,043
Obligatory reserve with the Croatian National Bank
2,805
700
1,958
1,620
235
7,318
Loans to and receivables from banks
11,083
400
150
7
-
11,640
Financial assets at fair value through profit or loss
26
25
43
101
350
545
Replacement bonds
-
-
-
1,442
-
1,442
Loans to and receivables from customers
8,460
4,840
13,366
23,148
18,815
68,629
Available-for-sale financial assets
4,248
86
168
263
680
5,445
Held-to-maturity investments
1
-
528
243
-
772
Investments in associates
-
-
-
-
78
78
Investment property
-
-
-
-
231
231
Property and equipment
-
-
-
-
2,561
2,561
Intangible assets -
-
-
-
285
285
Deferred tax asset
-
-
-
113
-
113
Current tax asset
-
-
117
-
-
117
Other assets 691
7
1,080
51
-
1,829
Total assets
34,357
6,058
17,410
26,988
23,235
108,048
Liabilities and equity
Current accounts and deposits from banks
4,892
321
3,224
7,708
396
16,541
Current accounts and deposits from customers
28,078
7,252
20,777
7,378
648
64,133
Financial liabilities at fair value through profit or loss
-
-
74
-
-
74
Borrowings
1,192
480
703
4,030
2,105
8,510
Provisions for liabilities and charges
198
7
186
34
18
443
Other liabilities
332
10
1,995
99
24
2,460
Subordinated debt
-
15
15
15
72
117
Deferred tax liability
-
-
-
3
-
3
Equity attributable to equity holders of the Bank
-
-
-
-
15,075
15,075
Minority interest
-
-
-
-
692
692
Total liabilities and equity
34,692
8,085
26,974
19,267
19,030
108,048
Maturity gap
(335)
(2,027)
(9,564)
7,721
4,205
-
The maturity gap if all financial assets at fair value and financial assets available for sale were presented in accordance with their remaining
contractual maturity would be as follows:
Maturity gap
(3,194)
(1,360)
(9,065)
9,412
4,207
-
Zagrebačka banka UniCredit Group · 2009 Annual Report 159
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
39 Maturity analysis (continued)
GroupUp to 1 1 month to 3 months 1 year to Over
Total
month
3 monthsto 1 year
5 years
5 years
2008
2008
2008
2008
2008
2008
HRKHRKHRKHRKHRKHRK
million million million million million million
Assets
Cash reserves
4,402
-
-
-
-
Obligatory reserve with the Croatian National Bank
2,954
906
2,054
1,036
111
Loans to and receivables from banks
12,285
60
75
1
-
Financial assets at fair value through profit or loss
911
-
260
-
-
Replacement bonds
-
-
-
1,422
-
Loans to and receivables from customers
5,023
4,316
13,627
24,017
19,341
Available-for-sale financial assets
4,845
-
367
10
71
Held-to-maturity investments
2
4
613
248
-
Investments in associates
-
-
-
-
72
Investment property
-
-
-
-
239
Property and equipment
-
-
-
-
2,568
Intangible assets -
-
-
-
287
Deferred tax asset
-
-
-
141
23
Current tax asset
-
-
5
-
-
Other assets 739
4
998
4
-
Total assets
31,161
5,290
17,999
26,879
22,712
Liabilities and equity
Current accounts and deposits from banks
5,227
3,308
822
1,374
396
Current accounts and deposits from customers
30,721
6,954
15,966
8,698
530
Financial liabilities at fair value through profit or loss
2
-
277
-
-
Borrowings
3,123
275
1,187
3,823
817
Issued debt securities
-
-
3,293
-
-
Provisions for liabilities and charges
180
8
185
62
18
Other liabilities
207
20
1,778
65
26
Subordinated debt
-
15
15
44
73
Current tax liability
-
-
159
-
-
Deferred tax liability
-
-
-
6
-
Equity attributable to equity holders of the Bank
-
-
-
-
13,744
Minority interest
-
-
-
-
643
Total liabilities and equity
39,460
10,580
23,682
14,072
16,247
Maturity gap
(8,299)
(5,290)
(5,683)
12,807
6,465
4,402
7,061
12,421
1,171
1,422
66,324
5,293
867
72
239
2,568
287
164
5
1,745
104,041
11,127
62,869
279
9,225
3,293
453
2,096
147
159
6
13,744
643
104,041
-
The maturity gap if all financial assets at fair value and financial assets available for sale were presented in accordance with their remaining
contractual maturity would be as follows:
Maturity gap
(13,339)
(4,914)
(2,728)
13,493
160 2009 Annual Report · Zagrebačka banka UniCredit Group
7,488
-
39 Maturity analysis (continued)
BANKUp to 1 1 month to 3 months 1 year to Over
Total
month
3 monthsto 1 year
5 years
5 years
2009
2009
2009
2009
2009
2009
HRKHRKHRKHRKHRKHRK
million million million million million million
Assets
Cash reserves
5,260
-
-
-
-
Obligatory reserve with the
Croatian National Bank
2,805
700
1,958
1,620
235
Loans to and receivables from banks
8,130
401
140
7
-
Financial assets at fair value through profit or loss
-
24
43
102
350
Replacement bonds
-
-
-
1,442
-
Loans to and receivables from customers
7,747
4,363
11,376
19,308
16,856
Available-for-sale financial assets
4,002
86
168
606
680
Held-to-maturity investments
1
-
528
50
-
Investments in subsidiaries and associates
-
-
-
-
918
Investment property
-
-
-
-
33
Property and equipment
-
-
-
-
1,076
Intangible assets
-
-
-
-
134
Deferred tax asset
-
-
-
101
-
Current tax asset
-
-
102
-
-
Other assets
464
-
996
-
-
Total assets
28,409
5,574
15,311
23,236
20,282
Liabilities and equity
Current accounts and deposits from banks
4,894
321
2,027
7,687
395
Current accounts and deposits from customers
22,564
6,826
18,991
5,167
367
Financial liabilities at fair value through profit or loss
-
-
74
-
-
Borrowings
1,225
426
519
3,231
1,717
Provisions for liabilities and charges
147
6
178
12
18
Other liabilities
-
-
1,887
-
-
Deferred tax liability
-
-
-
3
-
Total equity
-
-
-
-
14,130
Total liabilities and equity
28,830
7,579
23,676
16,100
16,627
Maturity gap
(421)
(2,005)
(8,365)
7,136
3,655
5,260
7,318
8,678
519
1,442
59,650
5,542
579
918
33
1,076
134
101
102
1,460
92,812
15,324
53,915
74
7,118
361
1,887
3
14,130
92,812
-
The maturity gap if all financial assets at fair value and financial assets available for sale were presented in accordance with their remaining
contractual maturity would be as follows:
Maturity gap
(3,280)
(1,338)
(7,866)
8,827
3,657
-
Zagrebačka banka UniCredit Group · 2009 Annual Report 161
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
39
Maturity analysis (continued)
BANKUp to 1 1 month to 3 months 1 year to Over
Total
month
3 monthsto 1 year
5 years
5 years
2008
2008
2008
2008
2008
2008
HRKHRKHRKHRKHRKHRK
million million million million million million
Assets
Cash reserves
3,311
-
-
-
-
Obligatory reserve with the
Croatian National Bank
2,954
906
2,054
1,035
112
Loans to and receivables from banks
9,567
60
60
1
-
Financial assets at fair value through profit or loss
893
-
260
-
-
Replacement bonds
-
-
-
1,422
-
Loans to and receivables from customers
4,506
3,773
11,509
19,881
17,257
Available-for-sale financial assets
4,560
-
367
376
71
Held-to-maturity investments
2
4
613
50
-
Investments in subsidiaries and associates
-
-
-
-
918
Investment property
-
-
-
-
33
Property and equipment
-
-
-
-
1,125
Intangible assets
-
-
-
-
125
Deferred tax asset
-
-
-
131
-
Current tax asset
-
-
5
-
-
Other assets
526
-
919
-
-
Total assets
26,319
4,743
15,787
22,896
19,641
Liabilities and equity
Current accounts and deposits from banks
5,221
3,308
31
935
395
Current accounts and deposits from customers
25,380
6,335
14,241
6,959
381
Financial liabilities at fair value through profit or loss
-
-
278
-
-
Borrowings
3,255
222
627
3,084
332
Issued debt securities
-
-
3,293
-
-
Provisions for liabilities and charges
124
7
179
23
18
Other liabilities
-
-
1,632
-
-
Current tax liability
-
-
166
-
-
Deferred tax liability
-
-
-
4
-
Total equity
-
-
-
-
12,956
Total liabilities and equity
33,980
9,872
20,447
11,005
14,082
Maturity gap
(7,661)
(5,129)
(4,660)
11,891
5,559
3,311
7,061
9,688
1,153
1,422
56,926
5,374
669
918
33
1,125
125
131
5
1,445
89,386
9,890
53,296
278
7,520
3,293
351
1,632
166
4
12,956
89,386
-
The maturity gap if all financial assets at fair value and financial assets available for sale were presented in accordance with their remaining
contractual maturity would be as follows:
Maturity gap
162 2009 Annual Report · Zagrebačka banka UniCredit Group
(12,701)
(4,753)
(1,705)
12,577
6,582
-
40 Interest rate gap analysis
The following tables present the Group’s and the Bank’s assets and liabilities and equity analysed according to repricing periods determined as the
earlier of the remaining contractual maturity (this is for all positions other than debt securities at fair value through profit or loss and debt securities
available for sale as defined in Note 39) and contractual repricing. Repricing of debt securities at fair value through profit or loss and debt securities
available for sale is presented as the earlier of contractual maturity and contractual repricing.
The tables are management’s estimate of the interest rate risk for the Group and the Bank as at 31 December 2009 and 31 December 2008 and
are not necessarily indicative of the positions at other times but provide some indication of the sensitivities of the Group’s and the Bank’s earnings to
movements in interest rates. Earnings will also be affected by the currency of the assets and liabilities and equity. As disclosed in Note 42, the Group
and the Bank have a significant proportion of interest-earning assets and interest-bearing liabilities in foreign currency.
GROUPUp to 1 1 month to 3 months 1 year to OverNON-
TotalAMOUNTS
month
3 monthsto 1 year
5 years
5 years
INTERESTSUBJECT
BEARINGto FIXED
RATES
2009
2009
2009
2009
2009
2009
2009
2009
HRKHRKHRKHRKHRKHRKHRKHRK
million million million million million million
million million
Assets
Cash reserves
1,569
-
-
-
-
5,474
7,043
Obligatory reserve with the Croatian National Bank
7,318
-
-
-
-
-
7,318
Loans to and receivables from banks
11,094
400
140
6
-
-
11,640
Financial assets at fair value through profit or loss
11
25
-
99
274
136
545
Replacement bonds
-
-
-
1,442
-
-
1,442
Loans to and receivables from customers
61,038
684
4,001
1,989
917
-
68,629
Available-for-sale financial assets
1,336
804
710
1,904
625
66
5,445
Held-to-maturity investments
1
-
528
243
-
-
772
Investments in associates
-
-
-
-
-
78
78
Investment property
-
-
-
-
-
231
231
Property and equipment
-
-
-
-
-
2,561
2,561
Intangible assets -
-
-
-
-
285
285
Deferred tax asset
-
-
-
-
-
113
113
Current tax asset
-
-
-
-
-
117
117
Other assets -
-
-
-
-
1,829
1,829
Total asset
82,367
1,913
5,379
5,683
1,816
10,890
108,048
Liabilities and equity
Current accounts and deposits from banks and customers
61,575
6,693
5,892
6,028
427
59
80,674
Financial liabilities at fair value through profit or loss
-
-
-
-
-
74
74
Borrowings
6,257
1,174
999
70
10
-
8,510
Provisions for liabilities and charges
-
-
-
-
-
443
443
Other liabilities
-
-
-
-
-
2,460
2,460
Subordinated debt
-
117
-
-
-
-
117
Deferred tax liability
-
-
-
-
-
3
3
Equity attributable to equity holders of the Bank
-
-
-
-
-
15,075
15,075
Minority interest
-
-
-
-
-
692
692
Total liabilities and equity
67,832
7,984
6,891
6,098
437
18,806
108,048
Interest rate gap
14,535
(6,071)
(1,512)
(415)
1,379
(7,916)
-
205
10,466
398
1,442
5,067
5,330
772
23,680
22,003
1,423
23,426
254
Zagrebačka banka UniCredit Group · 2009 Annual Report 163
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
40 Interest rate gap analysis (continued)
GROUPUp to 1 1 month to 3 months 1 year to OverNON-
TotalAMOUNTS
month
3 monthsto 1 year
5 years
5 years
INTERESTSUBJECT
BEARINGto FIXED
RATES
2008
2008
2008
2008
2008
2008
2008
2008
HRKHRKHRKHRKHRKHRKHRKHRK
million million million million million million
million million
Assets
Cash reserves
788
-
-
-
-
3,614
4,402
Obligatory reserve with the Croatian National Bank
7,061
-
-
-
-
-
7,061
Loans to and receivables from banks
12,263
101
57
-
-
-
12,421
Financial assets at fair value
through profit or loss
5
-
49
361
621
135
1,171
Replacement bonds
-
-
-
1,422
-
-
1,422
Loans to and receivables from customers
61,112
481
1,966
1,645
1,120
-
66,324
Available-for-sale financial assets
658
220
3,735
278
322
80
5,293
Held-to-maturity investments
2
4
613
248
-
-
867
Investments in associates
-
-
-
-
-
72
72
Investment property
-
-
-
-
-
239
239
Property and equipment
-
-
-
-
-
2,568
2,568
Intangible assets -
-
-
-
-
287
287
Deferred tax asset
-
-
-
-
-
164
164
Current tax asset
-
-
-
-
-
5
5
Other assets -
-
-
-
-
1,745
1,745
Total assets
81,889
806
6,420
3,954
2,063
8,909
104,041
Liabilities and equity
Current accounts and deposits from banks and customers
54,476
6,381
7,112
4,860
283
884
73,996
Financial liabilities at fair value through profit or loss
-
-
-
-
-
279
279
Borrowings
6,267
1,443
1,404
91
20
-
9,225
Issued debt securities
-
-
3,293
-
-
-
3,293
Provisions for liabilities and charges
-
-
-
-
-
453
453
Other liabilities
-
-
-
-
-
2,096
2,096
Subordinated debt
-
147
-
-
-
-
147
Current tax liability
-
-
-
-
-
159
159
Deferred tax liability
-
-
-
-
-
6
6
Equity attributable to equity holders of the Bank
-
-
-
-
-
13,744
13,744
Minority interest
-
-
-
-
-
643
643
Total liabilities and equity
60,743
7,971
11,809
4,951
303
18,264
104,041
Interest rate gap
21,146
(7,165)
(5,389)
(997)
1,760
(9,355)
-
164 2009 Annual Report · Zagrebačka banka UniCredit Group
67
11,765
1,036
1,422
2,955
5,142
867
23,254
26,055
3,173
3,293
32,521
(9,267)
40 Interest rate gap analysis (continued)
BANKUp to 1 1 month to 3 months 1 year to OverNON-
TotalAMOUNTS
month
3 monthsto 1 year
5 years
5 years
INTERESTSUBJECT
BEARINGto FIXED
RATES
2009
2009
2009
2009
2009
2009
2009
2009
HRKHRKHRKHRKHRKHRKHRKHRK
million million million million million million
million million
Assets
Cash reserves
205
-
-
-
-
5,055
5,260
Obligatory reserve with the Croatian National Bank
7,318
-
-
-
-
-
7,318
Loans to and receivables from banks
8,130
401
140
7
-
-
8,678
Financial assets at fair value through profit or loss
3
25
-
99
274
118
519
Replacement bonds
-
-
-
1,442
-
-
1,442
Loans to and receivables from customers
55,823
227
1,857
1,487
256
-
59,650
Available-for-sale financial assets
1,101
1,009
848
1,904
625
55
5,542
Held-to-maturity investments
1
-
528
50
-
-
579
Investments in subsidiaries and associates
-
-
-
-
-
918
918
Investment property
-
-
-
-
-
33
33
Property and equipment
-
-
-
-
-
1,076
1,076
Intangible assets
-
-
-
-
-
134
134
Deferred tax asset
-
-
-
-
-
101
101
Current tax asset
-
-
-
-
-
102
102
Other assets
-
-
-
-
-
1,460
1,460
Total assets
72,581
1,662
3,373
4,989
1,155
9,052
92,812
Liabilities and equity
Current accounts and deposits from banks and customers
53,596
6,518
4,731
4,250
144
-
69,239
Financial liabilities at fair value through profit or loss
-
-
-
-
-
74
74
Borrowings
5,947
248
890
33
-
-
7,118
Provisions for liabilities and charges
-
-
-
-
-
361
361
Other liabilities
-
-
-
-
-
1,887
1,887
Deferred tax liability
-
-
-
-
-
3
3
Total equity
-
-
-
-
-
14,130
14,130
Total liabilities and equity
59,543
6,766
5,621
4,283
144
16,455
92,812
Interest rate gap
13,038
(5,104)
(2,248)
706
1,011
(7,403)
-
205
8,678
398
1,442
3,221
5,094
579
19,617
18,306
1,398
19,704
(87)
Zagrebačka banka UniCredit Group · 2009 Annual Report 165
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
40 Interest rate gap analysis (continued)
BANKUp to 1 1 month to 3 months 1 year to OverNON-
TotalAMOUNTS
month
3 monthsto 1 year
5 years
5 years
INTERESTSUBJECT
BEARINGto FIXED
RATES
2008
2008
2008
2008
2008
2008
2008
2008
HRKHRKHRKHRKHRKHRKHRKHRK
million million million million million million
million million
Assets
Cash reserves
67
-
-
-
-
3,244
3,311
Obligatory reserve with the Croatian National Bank
7,061
-
-
-
-
-
7,061
Loans to and receivables from banks
9,570
60
58
-
-
-
9,688
Financial assets at fair value through profit or loss
4
-
49
361
621
118
1,153
Replacement bonds
-
-
-
1,422
-
-
1,422
Loans to and receivables from customers
55,226
126
245
1,033
296
-
56,926
Available-for-sale financial assets
374
445
3,884
278
322
71
5,374
Held-to-maturity investments
2
4
613
50
-
-
669
Investments in subsidiaries and associates
-
-
-
-
-
918
918
Investment property
-
-
-
-
-
33
33
Property and equipment
-
-
-
-
-
1,125
1,125
Intangible assets
-
-
-
-
-
125
125
Deferred tax asset
-
-
-
-
-
131
131
Current tax asset
-
-
-
-
-
5
5
Other assets
-
-
-
-
-
1,445
1,445
Total assets
72,304
635
4,849
3,144
1,239
7,215
89,386
Liabilities and equity
Current accounts and deposits from banks and customers
46,736
6,206
6,497
3,611
136
-
63,186
Financial liabilities at fair value through profit or loss
-
-
-
-
-
278
278
Borrowings
6,404
157
911
44
4
-
7,520
Issued debt securities
-
-
3,293
-
-
-
3,293
Provisions for liabilities and charges
-
-
-
-
-
351
351
Other liabilities
-
-
-
-
-
1,632
1,632
Current tax liability
-
-
-
-
-
166
166
Deferred tax liability
-
-
-
-
-
4
4
Total equity
-
-
-
-
-
12,956
12,956
Total liabilities and equity
53,140
6,363
10,701
3,655
140
15,387
89,386
Interest rate gap
19,164
(5,728)
(5,852)
(511)
1,099
(8,172)
-
166 2009 Annual Report · Zagrebačka banka UniCredit Group
67
9,646
1,032
1,422
1,099
4,858
669
18,793
23,472
3,231
3,293
29,996
(11,203)
41 Average effective interest rates
The average effective interest rates for interest-earning financial assets and interest-bearing financial liabilities during the year calculated on average
quarterly balances for the Group and average monthly balances for the Bank are as follows:
Group
Bank
2009
2008
2009
2008
EffectiveEffectiveEffectiveEffective
interestinterestinterestinterest
rate
rate
rate
rate
Cash reserves
Obligatory reserve with the Croatian National Bank*
Loans to and receivables from banks
Debt securities
Loans to and receivables from customers
Current accounts and deposits from banks
Current accounts and deposits from customers
Borrowings
Issued debt securities
0.07%
0.69%
2.38%
5.41%
7.82%
3.62%
3.81%
6.15%
4.47%
0.87%
1.01%
3.67%
4.79%
7.76%
3.72%
3.11%
5.44%
4.45%
0.04%
0.69%
2.82%
5.38%
7.89%
3.69%
4.02%
6.37%
4.72%
0.06%
1.01%
4.41%
4.83%
7.75%
3.65%
3.28%
5.51%
4.41%
* Calculated based on the average balance which also included the non-interest-earning marginal obligatory reserve until it was abolished in November 2008.
Zagrebačka banka UniCredit Group · 2009 Annual Report 167
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
42 Currency risk analysis
The Group and Bank had the following foreign exchange positions as at 31 December 2009 and 31 December 2008. The Group has a number of
contracts which are in domestic currency but are linked to foreign currencies. The domestic currency value of the principal balances and interest
payments are therefore determined by movements in foreign currencies. These balances, which have foreign exchange risk, are included as foreign
currency in the tables below. The most significant currency to which such contracts are linked to is EURO, which is separately disclosed below. In view
of the Bosnian mark being pegged to the EURO, all balances in this currency have also been classified as EURO linked.
Group
EUROEUROEUROUSDOtherHRK
Total
linked
and EURO and USD foreign linked
linked currencies
total
2009
2009
2009
2009
2009
2009
2009
HRKHRKHRKHRKHRKHRKHRK
million
million
million
million
million
million
million
Assets
Cash reserves
799
1,556
2,355
66
147
4,475
7,043
Obligatory reserve with the Croatian National Bank
956
-
956
423
-
5,939
7,318
Loans to and receivables from banks
7,758
1,127
8,885
833
549
1,373
11,640
Financial assets at fair value
through profit or loss
263
159
422
-
2
121
545
Replacement bonds
-
-
-
-
-
1,442
1,442
Loans to and receivables from customers
10,967
36,448
47,415
635
6,883
13,696
68,629
Available-for-sale financial assets
2,733
250
2,983
77
343
2,042
5,445
Held-to-maturity investments
-
243
243
-
-
529
772
Investments in associates
-
-
-
-
-
78
78
Investment property
-
12
12
-
-
219
231
Property and equipment
-
269
269
-
-
2,292
2,561
Intangible assets -
99
99
-
-
186
285
Deferred tax asset
-
(1)
(1)
-
-
114
113
Current tax asset
-
10
10
-
-
107
117
Other assets 254
473
727
15
46
1,041
1,829
Total assets
23,730
40,645
64,375
2,049
7,970
33,654
108,048
Liabilities and equity
Current accounts and deposits from banks and customers
51,722
6,419
58,141
2,101
2,449
17,983
80,674
Financial liabilities at fair value
through profit or loss
-
-
-
-
-
74
74
Borrowings
4,108
948
5,056
30
382
3,042
8,510
Provisions for liabilities and charges
19
112
131
12
1
299
443
Other liabilities
910
294
1,204
28
31
1,197
2,460
Subordinated debt
117
-
117
-
-
-
117
Deferred tax liability
-
-
-
-
-
3
3
Equity attributable to equity holders of the Bank
-
538
538
-
-
14,537
15,075
Minority interest
-
482
482
-
-
210
692
Total liabilities and equity
56,876
8,793
65,669
2,171
2,863
37,345
108,048
Net foreign exchange position
(33,146)
31,852
(1,294)
(122)
5,107
(3,691)
-
168 2009 Annual Report · Zagrebačka banka UniCredit Group
42
Currency risk analysis (continued)
Group
EUROEUROEUROUSDOtherHRK
Total
linked
and EURO and USD foreign linked
linked currencies
total
2008
2008
2008
2008
2008
2008
2008
HRKHRKHRKHRKHRKHRKHRK
million
million
million
million
million
million
million
Assets
Cash reserves
470
839
1,309
83
132
2,878
4,402
Obligatory reserve with the Croatian National Bank
1,495
-
1,495
579
-
4,987
7,061
Loans to and receivables from banks
8,893
1,464
10,357
809
549
706
12,421
Financial assets at fair value
through profit or loss
11
386
397
-
-
774
1,171
Replacement bonds
-
-
-
-
-
1,422
1,422
Loans to and receivables from customers
7,595
32,106
39,701
637
7,695
18,291
66,324
Available-for-sale financial assets
1,772
183
1,955
166
376
2,796
5,293
Held-to-maturity investments
-
249
249
-
-
618
867
Investments in associates
-
-
-
-
-
72
72
Investment property
-
11
11
-
-
228
239
Property and equipment
-
207
207
-
-
2,361
2,568
Intangible assets -
158
158
-
-
129
287
Deferred tax asset
-
-
-
-
-
164
164
Current tax asset
-
-
-
-
-
5
5
Other assets 163
395
558
11
54
1,122
1,745
Total assets
20,399
35,998
56,397
2,285
8,806
36,553
104,041
Liabilities and equity
Current accounts and deposits from banks and customers
40,049
6,832
46,881
2,196
3,488
21,431
73,996
Financial liabilities at fair value through profit or loss
27
2
29
-
-
250
279
Borrowings
3,844
926
4,770
58
740
3,657
9,225
Issued debt securities
3,293
-
3,293
-
-
-
3,293
Provisions for liabilities and charges
10
113
123
12
6
312
453
Other liabilities
600
301
901
30
38
1,127
2,096
Subordinated debt
147
-
147
-
-
-
147
Current tax liability
-
(6)
(6)
-
-
165
159
Deferred tax liability
-
-
-
-
-
6
6
Equity attributable to equity holders of the Bank
-
466
466
-
-
13,278
13,744
Minority interest
-
444
444
-
-
199
643
Total liabilities and equity
47,970
9,078
57,048
2,296
4,272
40,425
104,041
Net foreign exchange position
(27,571)
26,920
(651)
(11)
4,534
(3,872)
-
Zagrebačka banka UniCredit Group · 2009 Annual Report 169
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
42 Currency risk analysis (continued)
BANK
EUROEUROEUROUSDOtherHRK
Total
linked
and EURO and USD foreign linked
linked currencies
total
2009
2009
2009
2009
2009
2009
2009
HRKHRKHRKHRKHRKHRKHRK
million
million
million
million
million
million
million
Assets
Cash reserves
666
-
666
46
88
4,460
5,260
Obligatory reserve with the Croatian National Bank
957
-
957
423
-
5,938
7,318
Loans to and receivables from banks
6,477
-
6,477
300
544
1,357
8,678
Financial assets at fair value
through profit or loss
261
159
420
-
3
96
519
Replacement bonds
-
-
-
-
-
1,442
1,442
Loans to and receivables from customers
10,822
27,717
38,539
635
6,882
13,594
59,650
Available-for-sale financial assets
3,076
114
3,190
67
343
1,942
5,542
Held-to-maturity investments
-
50
50
-
-
529
579
Investments in subsidiaries and associates
-
-
-
-
-
918
918
Investment property
-
-
-
-
-
33
33
Property and equipment
-
-
-
-
-
1,076
1,076
Intangible assets
-
-
-
-
-
134
134
Deferred tax asset
-
-
-
-
-
101
101
Current tax asset
-
-
-
-
-
102
102
Other assets
236
306
542
14
46
858
1,460
Total assets
22,495
28,346
50,841
1,485
7,906
32,580
92,812
Liabilities and equity
Current accounts and
deposits from banks and customers
46,726
610
47,336
1,555
2,391
17,957
69,239
Financial liabilities at fair value through profit or loss
-
-
-
-
-
74
74
Borrowings
3,194
813
4,007
30
1
3,080
7,118
Provisions for liabilities and charges
13
44
57
9
1
294
361
Other liabilities
810
55
865
24
30
968
1,887
Deferred tax liability
-
-
-
-
-
3
3
Total equity
-
-
-
-
-
14,130
14,130
Total liabilities and equity
50,743
1,522
52,265
1,618
2,423
36,506
92,812
Net foreign exchange position
(28,248)
26,824
(1,424)
(133)
5,483
(3,926)
-
170 2009 Annual Report · Zagrebačka banka UniCredit Group
42 Currency risk analysis (continued)
BANK
EUROEUROEUROUSDOtherHRK
Total
linked
and EURO and USD foreign linked
linked currencies
total
2008
2008
2008
2008
2008
2008
2008
HRKHRKHRKHRKHRKHRKHRK
million
million
million
million
million
million
million
Assets
Cash reserves
335
-
335
48
68
2,860
3,311
Obligatory reserve with the
Croatian National Bank
1,495
-
1,495
579
-
4,987
7,061
Loans to and receivables from banks
8,191
1
8,192
287
549
660
9,688
Financial assets at fair value
through profit or loss
11
385
396
-
-
757
1,153
Replacement bonds
-
-
-
-
-
1,422
1,422
Loans to and receivables from customers
7,276
23,120
30,396
638
7,695
18,197
56,926
Available-for-sale financial assets
2,147
-
2,147
157
376
2,694
5,374
Held-to-maturity investments
-
52
52
-
-
617
669
Investments in subsidiaries and associates
-
-
-
-
-
918
918
Investment property
-
-
-
-
-
33
33
Property and equipment
-
-
-
-
-
1,125
1,125
Intangible assets
-
-
-
-
-
125
125
Deferred tax asset
-
-
-
-
-
131
131
Current tax asset
-
-
-
-
-
5
5
Other assets
163
220
383
9
54
999
1,445
Total assets
19,618
23,778
43,396
1,718
8,742
35,530
89,386
Liabilities and equity
Current accounts and deposits from banks and customers
35,679
1,035
36,714
1,647
3,424
21,401
63,186
Financial liabilities at fair value
through profit or loss
27
-
27
-
-
251
278
Borrowings
2,591
894
3,485
59
311
3,665
7,520
Issued debt securities
3,293
-
3,293
-
-
-
3,293
Provisions for liabilities and charges
-
31
31
10
6
304
351
Other liabilities
545
66
611
21
38
962
1,632
Current tax liability
-
-
-
-
-
166
166
Deferred tax liability
-
-
-
-
-
4
4
Total equity
-
-
-
-
-
12,956
12,956
Total liabilities and equity
42,135
2,026
44,161
1,737
3,779
39,709
89,386
Net foreign exchange position
(22,517)
21,752
(765)
(19)
4,963
(4,179)
-
Zagrebačka banka UniCredit Group · 2009 Annual Report 171
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
43 Accounting estimates and judgements in applying accounting policies
The Group makes estimates and assumptions about uncertain events, including estimates and assumptions about the future. Such accounting
assumptions and estimates are regularly evaluated, and are based on historical experience and other factors such as the expected flow of future
events that can be rationally assumed in existing circumstances, but nevertheless necessarily represent sources of estimation uncertainty. The
estimation of impairment losses in the Group’s credit risk portfolio and, as part of this, the estimation of the fair value of real estate collateral
represents the major source of estimation uncertainty. This and other key sources of estimation uncertainty, that have a significant risk of causing a
possible material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below.
a) Impairment losses on loans and receivables
The Group monitors the creditworthiness of its customers on an ongoing basis. The necessity for value adjustments is assessed on a continuous basis,
at least once a month. Impairment losses are made mainly against the carrying value of loans to and receivables from corporate and retail customers
(summarised in Note 15 c), and as provisions for liabilities and charges arising from off-balance-sheet risk exposure to customers, mainly in the form
of undrawn lending commitments, guarantees, letters of credit and unused credit card limits (summarised in Note 29). Impairment losses are also
considered for credit risk exposures to banks (summarised in Note 13 b), financial assets available for sale and for other assets not carried at fair
value, where the primary risk of impairment is not credit risk.
In addition to losses on an individual basis, the Group continuously monitors and recognises impairments which are known to exist at the balance
sheet date, but which have not yet been specifically identified. In estimating unidentified impairment losses existing in collectively assessed portfolios,
the Group seeks to collect reliable data on appropriate loss rates based on historical experience related to and adjusted for current conditions, and
the emergence period for the identification of these impairment losses. The Group also has regard to the range of impairment loss rates of 0.85% to
1.20% prescribed by the CNB, and 2.00% prescribed by the Banking Agency of the Federation of Bosnia and Herzegovina to be calculated on all credit
risk exposures except those carried at fair value, including off-balance-sheet amounts and Croatian sovereign risk.
The general provision at 31 December 2009 amounted to HRK 1,114 million (2008: HRK 1,123 million) for the Group and HRK 911 million (2008: HRK
900 million) for the Bank, of the relevant on- and off-balance-sheet exposure, in accordance with the applicable regulatory requirements.
Financial assets carried at amortised cost
The Group first assesses whether objective evidence of impairment exists individually for assets that are individually significant (mainly corporate
exposures) and collectively for assets that are not individually significant (mainly retail exposures). However, assets assessed individually as unimpaired
are then included in groups of assets with similar credit risk characteristics. These portfolios are then assessed collectively for impairment.
The Group estimates impairment losses in cases where it judges that the observable data indicates the likelihood of a measurable decrease in the
estimated future cash flows of the asset or portfolio of assets. Such evidence includes delinquency in payments or other indications of financial
difficulty of borrowers and adverse changes in the economic conditions in which borrowers operate or in the value or enforceability of security, where
these changes can be correlated with defaults.
The Group takes into consideration the combined effect of several events when assessing impairment and uses its experienced judgement in cases
where the observable data required to estimate impairment is limited. In estimating impairment losses on items individually or collectively assessed as
impaired, the Group also has regard to the ranges of specific impairment loss rates prescribed by the CNB and the Banking Agency of the Federation
of Bosnia and Herzegovina.
The uncertainty related to the estimation of the fair value of real estate collateral is described in Note 38.1.
172 2009 Annual Report · Zagrebačka banka UniCredit Group
43 Accounting estimates and judgements in applying accounting policies (continued)
b) Fair value of derivatives
The fair value of OTC derivatives is determined by using valuation techniques. Where valuation techniques (for example, models) are used to determine
fair values, they are validated and periodically reviewed by qualified personnel independent of the area that created them. All models are certified
before they are used.
c) Impairment of available-for-sale equity investments
The Group determines that available-for-sale equity investments are impaired when there has been a significant or prolonged decline in the fair value
below its cost. This determination of what is significant or prolonged requires judgement. In making this judgement, the Group evaluates among other
factors, the nominal volatility in share price. In addition, impairment may be appropriate when there is evidence of a deterioration in the financial health
of the investee, industry and sector performance, changes in technology, and operational and financing cash flows.
d) Held-to-maturity investments
The Group follows the guidance of International Accounting Standard 39 “Financial Instruments: Recognition and Measurement” on classifying nonderivative financial assets with fixed or determinable payments and fixed maturity as held to maturity. This classification requires significant judgement.
In making this judgement, the Group evaluates its intention and ability to hold such investments to maturity.
e) Taxation
The Group provides for tax liabilities in accordance with the tax laws of the Republic of Croatia and Federation of Bosnia and Herzegovina. Tax returns
are subject to the approval of the tax authorities who are entitled to carry out subsequent inspections of taxpayers’ records.
f) Regulatory requirements
Both the CNB and the Banking Agency of the Federation of Bosnia and Herzegovina are entitled to carry out regulatory inspections of the Group’s
operations and to request changes to the carrying values of assets and liabilities, in accordance with the underlying regulations. As of the date of issue
of these financial statements, the CNB is in the process of carrying out a regular on-site inspection at the Bank.
g) Litigation and claims
The Group makes individual assessment of all court cases for which the value of the case is above HRK 100 thousand. All court cases below HRK 100
thousand are monitored and provided for on a portfolio basis. The initial assessment is made by the Legal Department of the Bank or of its relevant
subsidiaries and its adequacy is independently monitored by Risk Management Division.
As stated in Notes 29 and 36b the Group and the Bank provided HRK 60 million (2008: HRK 74 million) and HRK 27 million (2008: HRK 30 million)
respectively for principal and interest in respect of liabilities for court cases, which the management estimates as sufficient. It is not practicable for
management to estimate the financial impact of changes to the assumptions based on which management assesses the need for provisions.
Zagrebačka banka UniCredit Group · 2009 Annual Report 173
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
44 Fair value of financial instruments
Fair value represents the amount at which an asset could be exchanged or a liability settled between knowledgeable and willing parties on an arm’s
length basis. Financial instruments available for sale and at fair value through profit or loss are measured at fair value.
Financial instruments not measured at fair value
The table below summarises the estimated fair values at year end, whilst the main methods and assumptions used in assessment of fair values of
financial assets and liabilities are further analysed below:
Group
NotesBook valueFair value
HRK millionHRK million
2009
2008
2009
2008
Financial assets
Loans to and receivables from banks
Loans to and receivables from customers
Held-to-maturity investments
Financial liabilities
Current accounts and deposits from banks
Current accounts and deposits from customers
Borrowings
Issued debt securities
13a
11,640
12,421
15b
68,629
66,324
17
772
867
24
16,541
11,127
25
64,133
62,869
27
8,510
9,225
28
-
3,293
11,640
68,454
784
12,421
66,101
871
16,541
63,699
8,513
-
11,127
62,456
9,216
3,293
BANK
NotesBook valueFair value
HRK millionHRK million
2009
2008
2009
2008
Financial assets
Loans to and receivables from banks
Loans to and receivables from customers
Held-to-maturity investments
Financial liabilities
Current accounts and deposits from banks
Current accounts and deposits from customers
Borrowings
Issued debt securities
174 2009 Annual Report · Zagrebačka banka UniCredit Group
13a
8,678
9,688
15b
59,650
56,926
17
579
669
24
15,324
9,890
25
53,915
53,296
27
7,118
7,520
28
-
3,293
8,678
59,556
593
9,688
56,768
682
15,324
53,503
7,118
-
9,890
52,893
7,520
3,293
44 Fair value of financial instruments (continued)
Loans to and receivables from banks
Loans and receivables are net of provisions for impairment. The estimated fair value of loans and receivables represents the discounted amount of
estimated future cash flows expected to be received. Expected cash flows are discounted at current market rates to determine their fair values.
Loans to and receivables from customers
Loans and receivables are net of provisions for impairment. The estimated fair value of loans and receivables represents the discounted amount of
estimated future cash flows expected to be received. Expected cash flows are discounted at current market rates to determine their fair values. The
amount includes provisions for unidentified risks calculated in accordance with regulatory requirements. Expected future losses are not taken into
account nor is any adjustment made for uncertainties as to the collectability (including timing) of past due and rescheduled exposures or for loans
which are not past due but require special monitoring as described in Note 38.1.
Held-to-maturity investments
Fair value for held-to-maturity assets is based on market prices or broker/dealer price quotations.
Current accounts and deposits from banks
The estimated fair value of fixed-maturity deposits is based on expected cash flows discounted using rates currently offered for deposits of similar
remaining maturities.
Current accounts and deposits from customers
The estimated fair value of fixed-maturity deposits is based on expected cash flows discounted using rates currently offered for deposits of similar
remaining maturities. No value is ascribed to the benefit of the customer base.
Issued debt securities
As at 31 December 2008 the fair value was based on the price quoted on the Luxembourg Stock Exchange in which they were listed.
Zagrebačka banka UniCredit Group · 2009 Annual Report 175
Financial statements I Notes to financial statements
Notes to financial statements (Continued)
45 Basic and diluted earnings per share
For the purposes of calculating earnings per share, earnings are calculated as the profit for the period attributable to equity holders of the Bank. The
number of ordinary shares is the weighted average number of ordinary shares outstanding during the year after deducting the number of ordinary
treasury shares. The weighted average number of ordinary shares used for basic earnings per share was 63,997,272 (2008: 63,906,240). Given that
there is no effect of options, convertible bonds or similar effect, the weighted average number of ordinary shares used for diluted earnings per share
was the same as used to calculate basic earnings per share: 63,997,272 (2008: 63,906,240).
Group
2009
2008
HRKHRK
million
million
Profit attributable to equity holders of the Bank
Weighted average number of ordinary shares in issue
1,345
63,997,272
1,494
63,906,240
Basic and diluted earnings per share
21.0
23.4
(expressed in HRK per share)
BANK
2009
2008
HRKHRK
million
million
Profit attributable to equity holders of the Bank
Weighted average number of ordinary shares in issue
1,216
63,997,272
1,394
63,906,240
Basic and diluted earnings per share
(expressed in HRK per share)
19.0
21.8
176 2009 Annual Report · Zagrebačka banka UniCredit Group
Zagrebačka banka UniCredit Group · 2009 Annual Report 177
Rein Kilk,
AS Pere
Corporate Banking Client - Estonia
As an entrepreneur,
«I appreciate
that, despite the
difficult economic situation,
UniCredit Bank is able to act
in a cool and calm way when
financing an enterprise.
The professional behavior of
the bank in a time of crisis
makes entrepreneurs more
confident, which then helps
stabilize the whole economic
environment. In every crisis,
there are always losers and
winners. The companies that
are lucky enough to have a
highly experienced financial
partner like UniCredit have a
clear advantage during
rough times.»
It’s easy with
UniCredit.
Supplementary schedules for CNB
Zagrebačka banka UniCredit Group · 2009 Annual Report 179
Supplementary schedules for CNB
Supplementary schedules for CNB
Financial statements of the Bank prepared in accordance with the framework for reporting and statutory financial statements prescribed by the CNB
Decision on Structure and Contents of the Annual Financial Statements of Banks are presented below:
a) Balance sheet
2009
2008
HRKHRK
million
million
Assets
Cash and deposits with the CNB
12,373
10,305
- cash
1,810
1,323
- deposits with the CNB
10,563
8,982
Deposits with banking institutions 7,190
9,134
Treasury bills and CNB bills
1,019
2,185
Securities and other financial instruments held for trading
402
1,051
Securities and other financial instruments available for sale
4,522
3,189
Securities and other financial instruments held to maturity
579
669
Securities and other financial instruments which are not actively traded, but are designated at fair value through profit or loss
74
65
Derivative financial assets
43
37
Loans to financial institutions
1,693
621
Loans to other clients
61,092
58,348
Investments in subsidiaries, associates and joint ventures
918
918
Foreclosed assets
29
22
Tangible assets (less amortisation)
1,243
1,283
Interest, fees and other assets
1,635
1,559
Total assets
92,812
89,386
180 2009 Annual Report · Zagrebačka banka UniCredit Group
a) Balance sheet (continued)
2009
2008
HRKHRK
million
million
Liabilities and equity
Borrowings from financial institutions
7,097
- short-term borrowings 1,747
- long-term borrowings
5,350
Deposits
69,239
- giro and current accounts
9,396
- savings deposits
6,078
- term deposits
53,765
Other borrowings
21
- short-term borrowings -
- long-term borrowings
21
Liabilities arising from derivatives and other liabilities held for trading
74
Issued debt securities -
- short-term issued debt securities -
- long-term issued debt securities -
Issued subordinate instruments -
Issued hybrid instruments -
Interest, fees and other liabilities
2,251
Total liabilities
78,682
Equity
Share capital
1,281
Current year profit/(loss)
1,216
Retained earnings/(loss)
7,523
Legal reserves
64
Statutory and other capital reserves
4,077
Unrealised gain/(loss) on value adjustment
of available for sale financial assets
(31)
Total equity
14,130
Total liabilities and equity
92,812
7,478
3,531
3,947
63,186
11,481
6,677
45,028
42
42
278
3,293
3,293
2,153
76,430
1,281
1,394
6,129
64
4,077
11
12,956
89,386
Zagrebačka banka UniCredit Group · 2009 Annual Report 181
Supplementary schedules for CNB
Supplementary schedules for CNB (Continued)
b) Income statement
2009
2008
HRKHRK
million
million
Interest income
5,518
4,935
(Interest expense)
(3,164)
(2,461)
Net interest income
2,354
2,474
Income from commissions and fees
1,035
1,064
(Expenses on commissions and fees)
(173)
(169)
Net income from commissions and fees
862
895
Gains/(losses) from investment in subsidiaries, associates and joint ventures -
Gains/(losses) from trading activities 57
(120)
Gains/(losses) from embedded derivatives
(9)
96
Gains/(losses) from assets which are not traded, but are designated at fair value through profit or loss
10
(55)
Gains/(losses) from activities related to available for sale financial assets 8
85
Gains/(losses) from activities related to
held to maturity investments
-
Gains/(losses) from hedging transactions -
Income from investments in subsidiaries,
associates and joint ventures
44
72
Income from other equity investments
3
3
Gains/(losses) from foreign exchange differences
466
331
Other income 62
110
Other expenses
(149)
(131)
General administrative expenses and depreciation
(1,634)
(1,820)
Net income from operations before impairment and other provisions
2,074
1,940
Impairment and provisions for losses
(559)
(201)
Income/(loss) before tax
1,515
1,739
Income tax expense
(299)
(345)
Profit/(loss) for the period
1,216
1,394
Earnings per share 19.0
21.8
182 2009 Annual Report · Zagrebačka banka UniCredit Group
c) Cash flow statement
2009
2008
HRKHRK
million
million
Operating activities
Interest and similar receipts
5,272
Fee and commission receipts
1,040
(Interest and similar payments)
(2,887)
(Fee and commission payments)
(170)
(Operating expenses paid)
(1,566)
Net gains/(losses) from financial instruments at fair value through profit or loss
302
Other receipts
42
(Other payments)
-
Cash flow from operating activities 2,033
Deposits with CNB
(264)
Treasury bills from Ministry of Finance and CNB bills 1,165
Deposits with financial institutions and loans to financial institutions
1,137
Loans to other customers
(3,459)
Securities and other held for trading financial assets (203)
Securities and other available for sale financial assets (540)
Securities and other financial assets which are not actively traded, but are designated at fair value through profit or loss
-
Other assets
7
Net (increase)/decrease of operating assets (2,157)
Demand deposits
(2,703)
Savings and time deposits
8,855
Derivative financial liabilities and other trading liabilities
-
Other liabilities
195
Net increase/(decrease) of operating liabilities 6,347
Net cash inflow/(outflow) from operating activities
6,223
Paid income tax
(522)
Net cash inflow/(outflow) from operating activities 5,701
4,578
1,083
(2,329)
(169)
(1,566)
77
129
1,803
672
163
(2,356)
(7,543)
103
248
(96)
(8,809)
(2,138)
10,394
39
150
8,445
1,439
(338)
1,101
Zagrebačka banka UniCredit Group · 2009 Annual Report 183
Supplementary schedules for CNB
Supplementary schedules for CNB (Continued)
c) Cash flow statement (continued)
2009
2008
HRKHRK
million
million
Investment activities
Receipts from sale/(payments for purchase) of tangible and intangible assets
(173)
(233)
Receipts from sale/(payments for purchase) of investments in subsidiaries, associates and joint ventures
-
(34)
Receipts from sale/(payments for purchase) of securities and other investments held to maturity
90
248
Received dividends
47
75
Other receipts/(payments) from investment activities
-
Net cash inflow/(outflow) from investment activities (36)
56
Financial activities
Net increase/(decrease) in borrowings
(429)
(1,112)
Net increase/(decrease) of issued debt securities
(3,303)
Net increase/(decrease) of subordinated and hybrid instruments
-
Receipts from issue of capital
-
(Payment of dividends)
-
(1)
Other receipts/(payments) from financial activities
-
Net cash inflow/(outflow) from financial activities (3,732)
(1,113)
Net cash inflow/(outflow) 1,933
44
Effects of change in foreign currency rates on cash and cash equivalents
16
9
Net increase/(decrease) in cash and cash equivalents 1,949
53
Cash and cash equivalents at the beginning of the year
3,311
3,258
Cash and cash equivalents at the year end
5,260
3,311
184 2009 Annual Report · Zagrebačka banka UniCredit Group
d) Statement of changes in equity
Share Treasury Legal, Retained Profit/(loss)Unrealised Total
capital
shares
statutory, earnings/
for the gain/loss
and other (loss)
year
from reserves
revaluation
of AFS
financial assets
HRKHRKHRKHRKHRKHRKHRK
million
million
million
million
million
million million
Balance at 1 January 2009
1,281
(14)
4,155
6,129
1,394
11 12,956
Changes in accounting policies and errors
-
-
-
-
-
-
Restated balance at 1 January 2009
1,281
(14)
4,155
6,129
1,394
11 12,956
Disposal of available-for-sale portfolio
-
-
-
-
-
(9)
(9)
Change in fair value of available-for-sale portfolio
-
-
-
-
-
(41)
(41)
Deferred tax on change in fair value of available-for-sale portfolio
-
-
-
-
-
2
2
Other gains/losses directly recognised in equity
-
-
-
-
-
6
6
Net gains/losses directly recognised in equity
-
-
-
-
-
(42)
(42)
Profit/(loss) for the period
-
-
-
-
1,216
- 1,216
Total recognised income and expense for 2009
-
-
-
-
1,216
(42) 1,174
Increase/decrease of share capital
-
-
-
-
-
-
Acquisition /disposal of
treasury shares
-
-
-
-
-
-
Other movements
-
-
-
-
-
-
Transfer to reserves
-
-
-
1,394
(1,394)
-
Dividends paid
-
-
-
-
-
-
Distribution of profit
-
-
-
1,394
(1,394)
-
Balance at 31 December 2009
1,281
(14)
4,155
7,523
1,216
(31) 14,130
Balance at 1 January 2008
1,281
-
3,958
5,217
1,109
(36) 11,529
Changes in accounting policies and errors
-
-
-
-
-
-
Restated balance at 1 January 2008
1,281
3,958
5,217
1,109
(36) 11,529
Disposal of available-for-sale portfolio
-
-
-
-
-
(60)
(60)
Change in fair value of available-for-sale portfolio
-
-
-
-
-
112
112
Deferred tax on change in fair value of available-for sale portfolio
-
-
-
-
-
12
12
Other gains/losses directly recognised in equity
-
-
-
-
-
(17)
(17)
Net gains/losses directly recognised
in equity
-
-
-
-
-
47
47
Profit/(loss) for the period
-
-
-
-
1,394
- 1,394
Total recognised income
and expense for 2008
-
-
-
-
1,394
47 1,441
Increase/decrease of share capital
-
-
-
-
-
-
Acquisition /disposal of treasury shares
-
(14)
-
-
-
-
(14)
Other movements
-
-
-
-
-
-
Transfer to reserves
-
-
197
912
(1,109)
-
Dividends paid
-
-
-
-
-
-
Distribution of profit
-
-
197
912
(1,109)
-
Balance at 31 December 2008
1,281
(14)
4,155
6,129
1,394
11 12,956
Zagrebačka banka UniCredit Group · 2009 Annual Report 185
Supplementary schedules for CNB
Supplementary schedules for CNB (Continued)
Reconciliation of financial statements is prepared in accordance with the framework for reporting and statutory financial statements prescribed by the
CNB Decision on Structure and Contents of the Annual Financial Statements of Banks
a) Reconciliation of the balance sheet as at 31 December 2009
CNB SchedulesFinancial Difference
statements
HRKHRKHRK
million
million
million
Assets
Cash and deposits with the CNB
12,373
-
12,373
- cash
1,810
-
1,810
- deposits with the CNB
10,563
-
10,563
Deposits with banking institutions 7,190
-
7,190
Cash reserves
-
5,260
(5,260)
Obligatory reserve with the CNB
-
7,318
(7,318)
Loans to and receivables from banks
-
8,678
(8,678)
Treasury bills and CNB bills
1,019
-
1,019
Securities and other financial instruments
held for trading
402
-
402
Securities and other financial instruments available for sale
4,522
5,542
(1,020)
Securities and other financial instruments held to maturity
579
579
Securities and other financial instruments which are not actively traded, but are designated
at fair value through profit or loss
74
-
74
Derivative financial assets
43
-
43
Financial assets at fair value through profit or loss
-
519
(519)
Loans to financial institutions
1,693
-
1,693
Loans to other clients
61,092
59,650
1,442
Replacement bonds
-
1,442
(1,442)
Investments in subsidiaries, associates
and joint ventures
918
918
Foreclosed assets*
29
-
29
Tangible assets (less amortisation)
1,243
1,210
33
Investment property
-
33
(33)
Interest, fees and other assets
1,635
1,460
175
Deferred tax asset
-
101
(101)
Current tax asset
-
102
(102)
Total assets
92,812
92,812
-
*Relates to Asset acquired in lieu of uncollected receivables from Note 23 - Other assets
186 2009 Annual Report · Zagrebačka banka UniCredit Group
a) Reconciliation of the balance sheet as at 31 December 2009 (continued)
CNB SchedulesFinancialDifference
statements
HRKHRKHRK
million
million
million
Liabilities and equity
Borrowings from financial institutions
7,097
-
7,097
- short-term borrowings 1,747
-
1,747
- long-term borrowings
5,350
-
5,350
Borrowings
-
7,118
(7,118)
Deposits
69,239
-
69,239
- giro and current accounts
9,396
-
9,396
- savings deposits
6,078
-
6,078
- term deposits
53,765
-
53,765
Current accounts and deposits from banks
-
15,324
(15,324)
Current accounts and deposits from customers
-
53,915
(53,915)
Other borrowings
21
-
21
- short-term borrowings -
-
- long-term borrowings
21
-
21
Liabilities arising from derivatives and
other liabilities held for trading
74
74
Issued debt securities -
-
- short-term issued debt securities -
-
- long-term issued debt securities -
-
Issued subordinate instruments -
-
Issued hybrid instruments -
-
Interest, fees and other liabilities
2,251
1,887
364
Provisions for liabilities and charges
-
361
(361)
Deferred tax liability
-
3
(3)
Total liabilities
78,682
78,682
Equity
Share capital
1,281
1,281
Share premium -
3,370
(3,370)
Treasury shares
-
(14)
14
Current year profit/(loss)
1,216
-
1,216
Retained earnings/(loss)
7,523
8,739
(1,216)
Legal reserves
64
785
(721)
Statutory and other capital reserves
4,077
-
4,077
Unrealised gain/(loss) on value adjustment of available for sale financial assets
(31)
(31)
Total equity
14,130
14,130
Total liabilities and equity
92,812
92,812
-
Zagrebačka banka UniCredit Group · 2009 Annual Report 187
Supplementary schedules for CNB
Supplementary schedules for CNB (Continued)
a) Reconciliation of the balance sheet as at 31 December 2009 (continued)
Differences between the balance sheet positions disclosed in the financial statements and the structure and contents prescribed by the Decision of the
CNB relate to the following categories:
Assets
Cash and deposits with the CNB, Deposits with banking institutions and Loans to financial institutions are presented separately in the CNB schedule,
while in the financial statements they are included within Cash reserves, Obligatory reserves with the CNB and Loans to and receivables from banks.
Treasury bills and CNB bills are presented separately in the CNB schedule, while in the financial statements they are included in Available-for-sale
financial assets.
Securities and other financial instruments held for trading, Securities and other financial instruments which are not actively traded, but are designated
at fair value in income statement and Derivative financial assets are presented separately in the CNB schedule, while in the financial statements they
are included in Financial assets at fair value through profit or loss.
Replacement bonds are included in Loans to other clients in the CNB schedule, while in the financial statements they are presented as a separate line
Replacement bonds.
Tangible assets in the CNB schedule includes Investment property and Intangible assets while in the financial statements these items are presented
separately.
Assets acquired in lieu of uncollected receivables are presented separately in the CNB schedule, while in the financial statements they are presented
within Other assets.
Interest, fees and other assets in the CNB schedule includes Deferred tax asset and Tax prepayments while in the financial statements these items are
presented separately on the face of the balance sheet.
Liabilities and equity
Borrowings from financial institutions (short-term and long-term) and Other long-term borrowings are presented separately in the CNB schedule while
in the financial statements they are included in Borrowings.
Deposits on giro and current accounts, Savings deposits and Term deposits are presented separately in the CNB schedule while in the financial
statements they are presented in Current accounts and deposits from banks and Current accounts and deposits from customers. Deposits on giro and
current accounts in the amount of HRK 9,396 million are shown in the CNB schedule, while in the financial statements they are shown within Current
accounts and deposits from banks in the amount of HRK 309 million and Current accounts and deposits from customers in the amount of HRK 9,087
million.
Savings deposits in the amount of HRK 6,078 million are presented collectively in the CNB schedule, while in the financial statements they are shown
within Current accounts and deposits from banks in the amount of HRK 72 million and Current accounts and deposits from customers in the amount of
HRK 6,006 million.
Term deposits in the amount of HRK 53,765 million are presented collectively in the CNB schedule, while in the financial statements they are
presented within Current accounts and deposits from banks in the amount of HRK 14,943 million and Current accounts and deposits from customers
in the amount of HRK 38,822 million.
Interest, fees and other liabilities in the CNB schedule include Provisions for liabilities and charges, Current tax liability and Deferred tax liability, while
these items are presented separately in the financial statements.
Current year profit or loss is presented separately in the CNB schedule, while in the financial statements it is included in Retained earnings. Other
reserves from the financial statements in the amount of HRK 785 million include Legal reserves in the amount of HRK 64 million and Other reserves in
the amount of HRK 721 million. In the CNB schedule Legal reserves are shown separately, while the remaining amount of HRK 721 million is included
within Statutory and other capital reserves. In addition, Statutory and other capital reserves in the CNB schedule include Share premium and Treasury
shares which are shown separately in the financial statements.
188 2009 Annual Report · Zagrebačka banka UniCredit Group
b) Reconciliation of the income statement for the year ended 31 December 2009
CNB Schedules FinancialDifference
statements
HRKHRKHRK
million
million
million
Interest income
5,518
5,518
(Interest expense)
(3,164)
(3,164)
Net interest income
2,354
2,354
Income from commissions and fees
1,035
1,035
(Expenses on commissions and fees)
(173)
(173)
Net income from commissions and fees
862
862
Gains/(losses) from investment in subsidiaries, associates and joint ventures
-
-
Gains/(losses) from trading activities 57
-
Net gains and losses on financial instruments at fair value
through profit or loss and result from foreign exchange trading and translation of monetary assets and liabilities
-
524
Gains/(losses) from embedded derivatives
(9)
-
Gains/(losses) from assets which are not traded, but are designated at fair value through profit or loss
10
-
Gains/(losses) from activities related to available for sale financial assets 8
-
Net gains and losses from investment securities
-
29
Gains/(losses) from activities related to held to maturity investments
-
-
Gains/(losses) from hedging transactions -
-
Income from investments in subsidiaries, associates and joint ventures
44
-
Income from other equity investments
3
-
Dividend income
-
47
Gains/(losses) from foreign exchange differences
466
-
Other income 62
41
Other expenses
(149)
-
General administrative expenses and depreciation
(1,634)
-
Operating expenses
-
(1,783)
Net income from operations before impairment and other provisions
2,074
2,074
Impairment and provisions for losses
(559)
-
Impairment losses on loans to and receivables from customers
-
(527)
Other impairment losses and provisions
-
(32)
Income/(loss) before tax
1,515
1,515
Income tax expense
(299)
(299)
Profit/(loss) for the period
1,216
1,216
Earnings per share 19.0
19.0
57
(524)
(9)
10
8
(29)
44
3
(47)
466
21
(149)
(1,634)
1,783
(559)
527
32
-
Zagrebačka banka UniCredit Group · 2009 Annual Report 189
Supplementary schedules for CNB
Supplementary schedules for CNB (Continued)
b) Reconciliation of the income statement for the year ended 31 December 2009 (continued)
Differences between the income statement positions disclosed in the financial statements and the structure and contents prescribed by the Decision of
the CNB relate to the following categories:
Gains/(losses) from trading activities, Gains/(losses) from embedded derivatives, Gains/(losses) from assets which are not traded, but are designated
at fair value in income statement and Gains/(losses) from calculated exchange rate differentials are presented separately in the CNB schedule and in
the financial statements they are included in Net gains and losses on financial instruments at fair value through profit or loss and result from foreign
exchange trading and translation of monetary assets and liabilities.
Gains/(losses) from activities related to assets available for sale in CNB schedule are presented separately while in the financial statements they are
included within Net gains and losses from investment securities. Net gains and losses from investment securities in the financial statements also
include gains on revaluation of replacement bonds in the amount of HRK 21 million, while in accordance with the CNB’s Decisions they are included
within Other income.
Income from investments in subsidiaries, associates and joint ventures and Income from other equity investments are presented separately in the CNB
schedule are included within Dividend income in the financial statements.
Other expenses and General administrative expenses and depreciation are presented separately in the CNB schedule while in the financial statements
they are included within Operating expenses.
Impairment and provisions for losses in the CNB schedule include Impairment losses on loans to and receivables from customers and Other
impairment losses and provisions while in the financial statements these items are presented separately.
190 2009 Annual Report · Zagrebačka banka UniCredit Group
c) Reconciliation of the cash flow statement for the year ended 31 December 2009
CNB SchedulesFinancialDifference
statements
HRKHRKHRK
million
million
million
Operating activities
Interest and similar receipts
5,272
5,272
Fee and commission receipts
1,040
1,040
(Interest and similar payments)
(2,887)
(2,887)
(Fee and commission payments)
(170)
(170)
(Operating expenses paid)
(1,566)
(1,566)
Net gains/(losses) from financial instruments at fair value through profit or loss 302
302
Realised gains/(loss) from financial instruments
available for sale
-
9
(9)
Other receipts
42
33
9
(Other payments)
-
-
Cash flow from operating activities 2,033
2,033
Deposits with CNB
(264)
(264)
Treasury bills from Ministry of Finance and CNB bills 1,165
-
1,165
Deposits with financial institutions and loans to financial institutions
1,137
1,137
Loans to other customers
(3,459)
(3,459)
Securities and other financial instruments held for trading
(203)
(203)
Securities and other financial instruments available for sale
(540)
625
(1,165)
Securities and other financial instruments which are not actively traded, but are designated at fair value through profit or loss
-
-
Other assets
7
7
Net (increase)/decrease of operating assets (2,157)
(2,157)
Demand deposits
(2,703)
(2,703)
Savings and time deposits
8,855
8,855
Derivative financial liabilities and other trading liabilities
-
-
Other liabilities
195
195
Net increase/(decrease) of operating liabilities
6,347
6,347
Net cash inflow/(outflow) from operating activities 6,223
6,223
Paid income tax
(522)
(522)
Net cash inflow/(outflow) from operating activities 5,701
5,701
-
Zagrebačka banka UniCredit Group · 2009 Annual Report 191
Supplementary schedules for CNB
Supplementary schedules for CNB (Continued)
c) Reconciliation of the cash flow statement for the year ended 31 December 2009 (continued)
CNB SchedulesFinancialDifference
statements
HRKHRKHRK
million
million
million
Investment activities
Receipts from sale/(payments for purchase) of tangible and intangible assets
(173)
(173)
Receipts from sale/(payments for purchase) of investments in subsidiaries, associates and joint ventures
-
-
Receipts from sale/(payments for purchase) of securities and other investments held to maturity
90
90
Received dividends
47
47
Other receipts/(payments) from investment activities
-
-
Net cash inflow/(outflow) from investment activities (36)
(36)
Financial activities
Net increase/(decrease) in borrowings
(429)
(429)
Net increase/(decrease) of issued debt securities
(3,303)
(3,303)
Net increase/(decrease) of subordinated and hybrid instruments
-
-
Receipts from issue of capital
-
-
(Payment of dividends)
-
-
Other receipts/(payments) from financial activities
-
-
Net cash inflow/(outflow) from financial activities (3,732)
(3,732)
Net cash inflow/(outflow) 1,933
1,933
Effects of change in foreign currency rates on cash and cash equivalents
16
16
Net increase/(decrease) in cash and cash equivalents 1,949
1,949
Cash and cash equivalents at the beginning of the year
3,311
3,311
Cash and cash equivalents at the year end
5,260
5,260
-
Differences between the positions of Cash flow statements in the financial statements and the CNB Schedule are as follows:
Realised gains from AFS financial assets and other receipts are shown collectively in the CNB Cash flow statement, as opposed to being shown
separately in the financial statements.
In the financial statements Treasury bills with the Ministry of finance and Treasury bills with the CNB are shown within Securities and other financial
instruments available-for-sale while within the CNB Schedule they are disclosed separately.
192 2009 Annual Report · Zagrebačka banka UniCredit Group
d) Reconciliation of statement of changes in equity for the year ended 31 December 2009
Retained earnings in 2008 and 2009 in the financial statements includes current year profit which is presented in a separate position in the
CNB Schedule. Item Share premium in the financial statements is included in Legal, statutory and other reserves in CNB Schedule. Additionally,
appropriations from profit to legal reserves for 2007 were presented in the statutory financial statements for 2007, whilst in the CNB Schedules
these were presented in 2008. Also certain movements on AFS securities are presented net of deferred tax while in the financial statements they are
presented on a gross basis, with tax being shown as a separate line.
Zagrebačka banka UniCredit Group · 2009 Annual Report 193
Secondino Lamparelli,
ReviPlant
Retail Client - Italy
1999, my partners
«andInI started
a garden
center in the hills above
Moncalieri, Turin.
Our innovative,
customer-oriented
approach enabled us to
become a major player
in this business and an
important part of our
local community. Thanks
to our relationship
with UniCredit and its
guidance, we have
expanded and are still
growing.»
It’s easy with
UniCredit.
Supplementary EUR financial statements - unaudited
Zagrebačka banka UniCredit Group · 2009 Annual Report 195
Supplementary financial statements
Supplementary EUR financial statements - unaudited
Basis of preparation of supplementary EUR financial statements
The supplementary information is provided for illustrative purposes only and does not form part of the audited financial statements.
The income statements for the Group and the Bank for 2009 and comparative information for 2008, as reported in the audited financial statements,
have been translated into EUR at average foreign exchange rates for 2009 (EUR 1 = HRK 7.340) and 2008 (EUR 1 = HRK 7.223), respectively.
The balance sheets for the Group and the Bank as at 31 December 2009 and comparative information as at 31 December 2008, as reported in the
audited financial statements, have been translated into EUR at respective foreign exchange rates ruling at 31 December 2009 and 31 December
2008.
196 2009 Annual Report · Zagrebačka banka UniCredit Group
Group income statement for the year ended 31 December 2009
2009
2008
EUREUR
million
million
Interest and similar income
860
800
Interest expense and similar charges (475)
(392)
Net interest income
385
408
Fee and commission income
173
183
Fee and commission expense
(25)
(25)
Net fee and commission income
148
158
Dividend income
1
1
Net gains and losses on financial instruments at fair value
through profit or loss and result from foreign exchange trading and translation of monetary assets and liabilities
77
35
Net gains and losses from investment securities
4
24
Other operating income
68
71
Net trading and other income
150
131
Operating income
683
697
Operating expenses (363)
(397)
Profit before impairment
and other provisions
320
300
Impairment losses on loans to
and receivables from customers
(84)
(37)
(Other impairment losses and provisions)/
reversal of other impairment losses and provisions
(4)
1
Total impairment losses and provisions
(88)
(36)
Profit from operations
232
264
Share of profit from associates
4
3
Profit before tax
236
267
Income tax expense
(46)
(54)
Profit for the period
190
213
Attributable to:
Equity holders of the Bank
183
207
Minority interest
7
6
Profit for the period
190
213
Zagrebačka banka UniCredit Group · 2009 Annual Report 197
Supplementary financial statements
Supplementary EUR financial statements - unaudited (Continued)
Group balance sheet as at 31 December 2009
Assets
2009
2008
EUREUR
million
million
Cash reserves
964
Obligatory reserve with the Croatian National Bank
1,002
Loans to and receivables from banks
1,593
Financial assets at fair value through profit or loss
75
Replacement bonds
197
Loans to and receivables from customers
9,393
Available-for-sale financial assets
745
Held-to-maturity investments
106
Investments in associates
11
Investment property
32
Property and equipment
351
Intangible assets
39
Deferred tax asset
15
Current tax asset
16
Other assets
250
Total assets
14,789
198 2009 Annual Report · Zagrebačka banka UniCredit Group
601
964
1,696
160
194
9,055
723
118
10
33
351
39
22
1
238
14,205
Group balance sheet as at 31 December 2009 (continued)
Liabilities and equity
2009
2008
EUREUR
million
million
Liabilities
Current accounts and deposits from banks
2,264
1,519
Current accounts and deposits from customers
8,778
8,584
Financial liabilities at fair value through profit or loss
10
38
Borrowings
1,165
1,259
Issued debt securities
-
450
Provisions for liabilities and charges
61
62
Other liabilities
337
286
Subordinated debt
16
20
Current tax liability
-
22
Deferred tax liability
-
1
Total liabilities
12,631
12,241
Equity
Issued share capital
175
175
Share premium
461
485
Treasury shares
(2)
(2)
Other reserves
107
107
Fair value reserve
1
1
Retained earnings
1,321
1,110
Total equity attributable to
equity holders of the Bank
2,063
1,876
Minority interest
95
88
Total equity
2,158
1,964
Total liabilities and equity
14,789
14,205
Zagrebačka banka UniCredit Group · 2009 Annual Report 199
Supplementary financial statements
Supplementary EUR financial statements - unaudited (Continued)
Bank income statement for the year ended 31 December 2009
2009
2008
EUREUR
million
million
Interest and similar income
752
683
Interest expense and similar charges
(431)
(340)
Net interest income
321
343
Fee and commission income
141
147
Fee and commission expense
(24)
(23)
Net fee and commission income
117
124
Dividend income
6
10
Net gains and losses on financial instruments at fair value
through profit or loss and result from foreign exchange trading and translation of monetary assets and liabilities
71
35
Net gains and losses from investment securities
4
21
Other operating income 6
6
Net trading and other income
87
72
Operating income
525
539
Operating expenses
(242)
(270)
Profit before impairment
and other provisions
283
269
Impairment losses on loans to
and receivables from customers
(72)
(28)
(Other impairment losses and provisions)/
reversal of other impairment losses and provisions
(4)
Total impairment losses and provisions
(76)
(28)
Profit before tax
207
241
Income tax expense
(41)
(48)
Profit for the period
166
193
200 2009 Annual Report · Zagrebačka banka UniCredit Group
Bank balance sheet as at 31 December 2009
Assets
2009
2008
EUREUR
million
million
Cash reserves
Obligatory reserve with the Croatian National Bank Loans to and receivables from banks
Financial assets at fair value through profit or loss
Replacement bonds
Loans to and receivables from customers
Available-for-sale financial assets
Held-to-maturity investments
Investments in subsidiaries and associates
Investment property
Property and equipment
Intangible assets
Deferred tax asset
Current tax asset
Other assets
Total assets
720
452
1,001
1,188
71
197
8,164
759
79
126
5
147
18
14
14
200
12,703
964
1,323
157
194
7,772
734
91
125
5
154
17
18
1
197
12,204
Zagrebačka banka UniCredit Group · 2009 Annual Report 201
Supplementary financial statements
Supplementary EUR financial statements - unaudited (Continued)
Bank balance sheet as at 31 December 2009 (continued)
Liabilities and equity
2009
2008
EUREUR
million
million
Liabilities
Current accounts and deposits from banks
Current accounts and deposits from customers
Financial liabilities at fair value through profit or loss
Borrowings
Issued debt securities
Provisions for liabilities and charges
Other liabilities
Current tax liability
Deferred tax liability
Total liabilities
Equity
Issued share capital
Share premium Treasury shares
Other reserves
Fair value reserve
Retained earnings
Total equity
Total liabilities and equity
202 2009 Annual Report · Zagrebačka banka UniCredit Group
2,097
7,379
10
974
-
50
258
-
1
10,769
1,350
7,276
38
1,027
449
48
223
23
1
10,435
175
461
(2)
107
(4)
1,197
1,934
12,703
175
460
(2)
107
2
1,027
1,769
12,204
Zagrebačka banka UniCredit Group · 2009 Annual Report 203
Shareholders’information
Shareholders’ information
Share information
The security code for the ordinary shares are as follows:
Shares (Class)
Ordinary Shares
Symbol
ZABA-R-A
ISIN Code
HRZABARA0009
Shares performance in 2009 on the Zagreb Stock Exchange:*
High (HRK)
Low (HRK)
Last (HRK)
Trading Volume / No. of Shares
ZABA-R-A
310.00
119.00
260.00
377,448
Bank shareholders’ structure 31 December 2009
International investors
- UniCredit Bank Austria AG
- Allianz SE
- Other
Companies in private ownership
Individuals
Public sector
Treasury shares
96.45%
84.21%
11.72%
0.52%
1.67%
1.33%
0.47%
0.08%
Ratings
Standard & Poor’s
Moody’s Investors Service
Fitch Ratings Ltd.
204 2009 Annual Report · Zagrebačka banka UniCredit Group
Counterparty Credit Rating
Bank Financial Strength Rating
Long-term Global Local Currency Deposit Ratings
Foreign Currency Deposit Rating
Long Term Issuer Default Rating
Short Term Rating
Individual
Support
Outlook BBB/Negative/-D+/Stable
Baa1 / P2 / Negative
Ba1 / NP / Stable
BBB+
F2
C/D
2
Negative
Contacts
CONTACTS
Zagrebačka banka dd
HEADQUARTERS
Paromlinska 2
10000 Zagreb
Croatia
Telephone: (+385 1) 6104 000
Fax: (+385 1) 6110 533
www.zaba.hr
CORPORATE IDENTITY AND COMMUNICATIONS
SWIFT: ZABA HR 2X
REPRESENTATIVE OFFICE
Paromlinska 2
10000 Zagreb
Croatia
Telephone: (+385 1) 6104 153
Fax: (+385 1) 6104 601
Public Relations: PR@unicreditgroup.zaba.hr
D-60313 FRANKFURT/M
Brönnerstrasse 17
Telephone: (+49 69) 28 47 42
Telephone: (+49 69) 28 47 43
Fax: (+49 69) 29 34 89
Zagrebačka banka UniCredit Group · 2009 Annual Report 205
Contacts
Contacts (Continued)
SUBSIDARIES
CROATIA
Prva stambena štedionica dd
ZB Invest doo
Zagreb nekretnine doo
Istraturist dd
Centar Kaptol doo
MZB doo
BOSNIA AND HERZEGOVINA
UniCredit bank dd
Savska 60-62
10000 Zagreb
Telephone: (+385 1) 6065 111
Fax: (+385 1) 6065 120
www.prva-stambena.hr
Ivana Lučića 2A
10000 Zagreb
Telephone: (+385 1) 4803 399
Fax: (+385 1) 4803 349
www.zbi.hr
Nova Ves 17
10000 Zagreb
Telephone: (+385 1) 4860 111
Fax: (+385 1) 4860 222
www.zane.hr
Jadranska 66
52470 Umag
Telephone: (+385 52) 719 000
Fax: (+385 52) 719 271
www.istraturist.hr
Nova Ves 17
10000 Zagreb
Telephone: (+385 1) 4860 241
Fax: (+385 1) 4860 240
www.centarkaptol.hr
Savska cesta 28
10000 Zagreb
Telephone: (+385 1) 4882 600
Fax: (+385 1) 4843 083
www.banka.hr
Kardinala Stepinca bb
88000 Mostar
Telephone: (+387 36) 312 112
Fax: (+387 36) 312 123
www.unicreditbank.ba
206 2009 Annual Report · Zagrebačka banka UniCredit Group
The 2009 Zagrebačka Banka Annual Report was published within the period
stipulated by law and its official text in Croatian can be found at the Zagreb
Stock Exchange Internet site - www.zse.hr, as well as at the Internet site
of Zagrebačka banka - www.zaba.hr. Compared to the text published, this
edition has been translated into English, designed and illustrated.
Zagrebačka banka dd
UniCredit Group
Paromlinska 2, 10000 Zagreb, Croatia, www.zaba.hr
Registered in the Register of Companies with the Zagreb Commercial Court, based on the Decision No.Tt-95/1-2, as of 17 March
1995, company’s registration number 080000014, amount of the share capital: 1,280,967,820 kuna, fully paid.
Equity capital is allocated as 64,048,391 ordinary shares, each with a nominal value of 20 kuna, kept in the computer system of the
Central Depository Agency under the code ZABA-R-A as dematerialized securities in the name of the holder.
The Bank’s account with the Croatian National Bank, Trg hrvatskih velikana 3, 10000 Zagreb, account No.: 2360000-1000000013.
Publisher:
Zagrebačka banka dd
Production:
MZB doo
Print: Printera
Croatia 2010