“SUBSIDIARY BANK SBERBANK OF RUSSIA”
PUBLIC JOINT-STOCK COMPANY
Condensed Interim Consolidated Financial
Statements and Report on Review
31 March 2013
Translation from original in Ukrainian
Condensed Interim Consolidated Financial Statements and Report on Review
CONTENTS
Report on Review
Condensed Interim Consolidated Financial Statements
Condensed Interim Consolidated Statement of Financial Position .............................................................................................. 1
Condensed Interim Consolidated Income Statement ................................................................................................................. 2
Condensed Interim Consolidated Statement of Comprehensive Income..................................................................................... 3
Condensed Interim Consolidated Statement of Changes in Equity.............................................................................................. 4
Condensed Interim Consolidated Statement of Cash Flows ....................................................................................................... 5
Selected Notes to the Condensed Interim Consolidated Financial Statements
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
Introduction ................................................................................................................................................................. 6
Operating Environment of the Group ............................................................................................................................ 7
Basis of Preparation ...................................................................................................................................................... 7
Accounting Policies, Critical Accounting Estimates and Judgements, Adoption of New or Revised Standards
and Interpretations, and Changes in Presentation ......................................................................................................... 7
Trading Securities ....................................................................................................................................................... 10
Loans and Advances to Customers .............................................................................................................................. 11
Investment Securities Available for sale....................................................................................................................... 23
Other Assets ............................................................................................................................................................... 24
Due to Banks .............................................................................................................................................................. 24
Due to Individuals and Corporate Customers ............................................................................................................... 25
Other Liabilities .......................................................................................................................................................... 26
Interest Income and Expense ...................................................................................................................................... 27
Fee and Commission Income and Expense................................................................................................................... 28
Net Gains Arising from Trading in Foreign Currencies, Operations with Foreign Currency Derivatives and
Foreign Exchange Translation Gains ............................................................................................................................ 28
Operating Expenses .................................................................................................................................................... 29
Segment Analysis ........................................................................................................................................................ 29
Financial Risk Management......................................................................................................................................... 33
Credit Related Commitments ...................................................................................................................................... 39
Fair Value of Financial Instruments.............................................................................................................................. 40
Related Party Transactions .......................................................................................................................................... 44
Principal Subsidiaries .................................................................................................................................................. 45
Capital Adequacy Ratio ............................................................................................................................................... 46
Translation from original in Ukrainian
Ernst & Young Audit Services LLC
Khreschatyk Street, 19A
Kyiv, 01001, Ukraine
Tel:
+380 (44) 490 3000
Fax: +380 (44) 490 3030
Ukrainian Chamber of Auditors
Certificate: 3516
www.ey.com/ukraine
ТОВ «Ернст енд Янг
Аудиторськi Послуги»
Украïна, 01001, Киïв
вул. Хрещатик, 19А
Тел.:
+380 (44) 490 3000
Факс: +380 (44) 490 3030
Свiдоцтво Аудиторськоï
Палати Украïни: 3516
REPORT (OPINION) ON REVIEW OF CONDENSED INTERIM CONSOLIDATED FINANCIAL
STATEMENTS
To the Shareholder and Management Board of ”SUBSIDIARY BANK SBERBANK OF RUSSIA” PUBLIC
JOINT-STOCK COMPANY
Introduction
We have reviewed the condensed interim consolidated financial statements of “SUBSIDIARY BANK
SBERBANK OF RUSSIA” PUBLIC JOINT-STOCK COMPANY (the “Bank”), comprising of the condensed
interim consolidated statement of financial position as at 31 March 2013 and the related condensed
interim consolidated statements of income, comprehensive income, of changes in equity and of cash flows
for the three months then ended, and selected explanatory notes. Management of the Bank is responsible
for the preparation and presentation of these condensed interim consolidated financial statements in
accordance with International Financial Reporting Standard IAS 34, “Interim Financial Reporting” (“IAS
34”). Our responsibility is to express a conclusion on these condensed interim consolidated financial
statements based on our review.
Scope of Review
We conducted our review in accordance with International Standard on Review Engagements 2410,
“Review of Interim Financial Information Performed by the Independent Auditor of the Entity.” A review of
condensed interim consolidated financial statements consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and other review procedures. A
review is substantially less in scope than an audit conducted in accordance with International Standards on
Auditing and consequently does not enable us to obtain assurance that we would become aware of all
significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying
condensed interim consolidated financial statements are not prepared, in all material respects, in
accordance with IAS 34.
22 May 2013
Kyiv, Ukraine
A member firm of Ernst & Young Global Limited
Translation from original in Ukrainian
Condensed Interim Consolidated Statement of Financial Position
In thousands of Ukrainian hryvnia
ASSETS
Cash and cash equivalents
Mandatory reserves with the National Bank of Ukraine
Trading securities
Securities designated at fair value through profit or loss
Due from banks
Loans and advances to customers
Securities pledged under repurchase agreements
Investment securities available for sale
Premises, equipment and intangible assets
Investment property
Other financial assets
Other non-financial assets
Note
5
6
7
8
8
TOTAL ASSETS
LIABILITIES
Due to the National Bank of Ukraine
Due to banks
Due to individuals
Due to corporate customers
Debt securities in issue
Other borrowed funds
Current income tax liability
Deferred income tax liability
Other financial liabilities
Other non-financial liabilities
Subordinated debt
9
10
10
11
11
TOTAL LIABILITIES
31 March 2013
(unaudited)
31 December
2012
1 725 719
638 950
2 929 153
51 150
20 591 613
1 375 481
743 177
46 855
5 328
59 151
2 012 400
514 807
1 717 126
50 621
183 351
20 617 688
10 482
398 520
762 353
46 855
3 575
47 047
28 166 577
26 364 825
7 444 799
10 755 773
5 042 626
636 455
996
67 783
52 866
87 006
415 424
3 509
7 614 819
8 984 949
4 234 328
692 386
650 231
32 958
79 403
35 232
73 085
415 428
24 503 728
22 816 328
EQUITY
Share capital
Share premium
Revaluation reserve for office premises
Fair value reserve for investment securities available for sale
Accumulated deficit
3 392 461
270 558
129 800
2 239
(132 308)
3 392 461
270 558
130 530
3 232
(248 383)
TOTAL EQUITY ATTRIBUTABLE TO THE SHAREHOLDER OF THE BANK
3 662 750
3 548 398
99
99
3 662 849
3 548 497
Non-controlling interest
TOTAL EQUITY
The notes are an integral part of these condenced consolidated financial statements.
1
Translation from original in Ukrainian
Condensed Interim Consolidated Income Statement
In thousands of Ukrainian hryvnia
Note
Three months ended
31 March (unaudited)
2013
2012
Interest income
Interest expense
Expenses directly attributable to deposit insurance
12
12
12
763 975
(390 681)
(18 415)
519 688
(246 083)
(5 390)
Net interest income
Net allowance charge for loan impairment
6
354 879
(131 266)
268 215
(56 242)
223 613
211 973
76 557
(19 206)
15 059
42 608
(6 484)
18 894
(488)
(7)
(6 361)
77 716
(12 510)
(13 988)
(4 072)
3 460
47 061
(146)
557
346 134
(241 087)
308 102
(192 329)
Profit before tax
Income tax benefit/(expense)
105 047
10 298
115 773
(8 542)
Profit for the reporting period
115 345
107 231
Attributable to:
- shareholder of the Bank
- non-controlling interest
115 345
-
107 232
(1)
Net interest income after allowance charge for loan impairment
Fee and commission income
Fee and commission expense
Net gains arising from trading securities
Net losses arising from securities designated at fair value through profit
or loss
Net losses arising from investment securities available for sale
Net gains arising from trading in foreign currencies, operations with
foreign currency derivatives and foreign exchange translation gains
Net losses arising from operations with other derivatives
Loss on initial recognition of financial instruments
Charge to allowances for other assets impairment and provisions
Other operating income
Operating income
Operating expenses
13
13
14
15
The notes are an integral part of these condenced consolidated financial statements.
2
Translation from original in Ukrainian
Condensed Interim Consolidated Statement of Comprehensive Income
In thousands of Ukrainian hryvnia
Note
Profit for the reporting period recognised in the income statement
Three months ended
31 March
(unaudited)
2013
2012
115 345
107 231
(1 313)
(27 739)
7
6 361
313
4 564
Net other comprehensive income to be reclassified to income
statement in subsequent periods
(993)
(16 814)
Total components of other comprehensive income for the reporting
period, net of tax
(993)
(16 814)
Total comprehensive income for the reporting period
114 352
90 417
Attributable to:
- shareholder of the Bank
- non-controlling interest
114 352
-
90 418
(1)
Components of other comprehensive income:
Other comprehensive income to be reclassified to income statement in
subsequent periods:
Investment securities available for sale:
- Net losses on revaluation of investment securities available for sale
- Accumulated losses transferred to Income statement upon disposal of
securities available for sale
Deferred income tax relating to components of other comprehensive
income:
- Investment securities available for sale
The notes are an integral part of these condenced consolidated financial statements.
3
Translation from original in Ukrainian
Condensed Interim Consolidated Statement of Changes in Equity
In thousands of Ukrainian hryvnia
Balance as at 1 January 2012
Attributable to the shareholder of the Bank
Fair value reserve
for investment
Revaluation
Accumulated
reserve for securities available
Share capital Share premium office premises
for sale
deficit
Total
Non-controlling
interest
Total equity
2 992 461
170 558
134 181
20 747
(659 161)
2 658 786
109
2 658 895
-
-
-
(16 814)
107 232
90 418
(1)
90 417
-
-
(678)
-
678
-
-
-
Balance as at 31 March 2012 (unaudited)
2 992 461
170 558
133 503
3 933
(551 251)
2 749 204
108
2 749 312
Balance as at 1 January 2013
3 392 461
270 558
130 530
3 232
(248 383)
3 548 398
99
3 548 497
-
-
-
(993)
115 345
114 352
-
114 352
-
-
(730)
-
730
-
-
-
3 392 461
270 558
129 800
2 239
3 662 750
99
3 662 849
Changes in equity for the three months ended
31 March 2012 (unaudited)
Total comprehensive income recognised for the
three months ended 31 March 2012
Amortisation of revaluation reserve for office
premises
Changes in equity for the three months ended 31
March 2013 (unaudited)
Total comprehensive income recognised for the
three months ended 31 March 2013
Amortisation of revaluation reserve for office
premises
Balance as at 31 March 2013 (unaudited)
The notes are an integral part of these condenced consolidated financial statements.
(132 308)
4
Translation from original in Ukrainian
Condensed Interim Consolidated Statement of Cash Flows
In thousands of Ukrainian hryvnia
Cash flows from operating activities
Interest received
Interest paid
Expenses directly attributable to deposit insurance paid
Fees and commissions received
Fees and commissions paid
Net gains from trading securities
Net gains from trading in foreign currencies and from operations with foreign currency
derivatives
Other operating income received
Operating expenses paid
Income tax paid
Three months ended 31 March
(unaudited)
2013
2012
721 792
(286 308)
(15 679)
76 772
(19 240)
4 500
481 823
(174 245)
(4 457)
44 084
(5 862)
2 234
78 905
3 242
(183 466)
(41 164)
46 261
557
(173 316)
-
339 354
217 079
(123 982)
(1 182 149)
183 350
(202 135)
10 468
(32 555)
(3 509)
(166 927)
1 819 277
814 603
5 624
(59 032)
(490 788)
(147 832)
(1 955 074)
(93 176)
5 511
(478 414)
1 154 752
795 969
275 900
2 488
1 461 419
(772 617)
Cash flows from investing activities
Purchase of investment securities available for sale
Proceeds from disposal and redemption of investment securities available for sale
Acquisition of premises, equipment and intangible assets
(5 156 837)
4 151 630
(24 988)
(75 865)
489 102
(27 927)
Net cash (used in)/ from investing activities
(1 030 195)
385 310
Cash flows from financing activities
Redemption of debt securities
Repayment of interest on debt securities
Redemption of other borrowed funds
Repayment of interest on other borrowed funds
Repayment of interest on subordinated debt
(674 813)
(21 452)
(3 777)
(4 393)
(7 961)
(23 848)
(9 126)
Net cash used in financing activities
(712 396)
(32 974)
Effect of exchange rate changes on cash and cash equivalents
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the reporting period
(5 509)
(286 681)
2 012 400
11 427
(408 854)
1 449 275
Cash and cash equivalents as at the end of the reporting period
1 725 719
1 040 421
Cash flows from operating activities before changes in operating assets and liabilities
Changes in operating assets and liabilities
Net increase in mandatory cash balances with the National Bank of Ukraine
Net increase in trading securities
Net decrease/(increase) in due from banks
Net increase in loans and advances to customers
Net decrease /(increase) in securities pledged under repurchase agreements
Net (increase)/decrease in other assets
Net decrease in loans from the National Bank of Ukraine
Net (decrease)/ increase in due to banks
Net increase in due to individuals
Net increase in due to corporate customers
Net increase in other liabilities
Net cash from/ (used in) operating activities
The notes are an integral part of these condenced consolidated financial statements.
5
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
1
Introduction
These condensed interim consolidated financial statements of “SUBSIDIARY BANK SBERBANK OF RUSSIA” PUBLIC
JOINT-STOCK COMPANY (“the Bank”) and its subsidiary (together referred to as “the Group”) have been prepared in
accordance with IAS 34 “Interim Financial Reporting” for the three months ended 31 March 2013.
Organisation and operations. The Bank was established as CLOSED JOINT-STOCK COMPANY COMMERCIAL BANK
NRB-UKRAINE according to Ukrainian legislation and was registered by the National Bank of Ukraine (the “NBU”) on
15 June 2001. In May 2008, the Bank was acquired by the Open Joint-Stock Company Sberbank of the Russia and
changed its name to Closed Joint-Stock Company Subsidiary Bank Sberbank of Russia. In August 2009, the Bank was
reorganised to a public joint-stock company.
The Bank specialises in providing banking services to companies operating in various industries and individuals.
These services include taking deposits and granting loans and advances, investing in securities, transferring
payments in Ukraine and abroad, exchanging of currencies and other services.
The Bank is 100% owned by Open Joint Stock Commercial Bank Sberbank of Russia (the “Shareholder”).
As at 31 March 2013, the Group had 170 branches throughout Ukraine (31 December 2012: 160). The actual number
of the Group’s employees as at 31 March 2013 was 2 436 (31 December 2012: 2 314).
Registered address and place of business. The Bank’s head office is located at 46 Volodymyrska Str., Kyiv, Ukraine.
Presentation currency. These consolidated financial statements are presented in thousands of Ukrainian hryvnia
(“UAH thousands”) unless otherwise stated. It is also the functional currency of the Group.
UAH exchange rates established by the NBU and used in the preparation of the consolidated financial statements
are as follows:
31 March 2013 31 December 2012
US Dollar
Euro
Russian Ruble
7.993000
10.235037
0.257870
7.993000
10.537172
0.263160
6
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
2
Operating Environment of the Group
The Ukrainian economy while deemed to be of market status continues to display certain characteristics consistent
with that of an economy in transition. These characteristics include, but are not limited to, low levels of liquidity in
the capital markets, high inflation and the existence of currency controls that cause the national currency to be
illiquid outside of Ukraine. The stability of the Ukrainian economy will be significantly impacted by the Government’s
policies and actions with regard to administrative, legal, and economic reforms. As a result, operations in Ukraine
involve risks that are not typical for developed markets.
The Ukrainian economy is vulnerable to market downturns and economic slowdowns elsewhere in the world. The
global financial crisis has resulted in a decline in the gross domestic product, instability in the capital markets, a
significant deterioration in the liquidity of the banking sector, and tighter credit conditions within Ukraine. Whilst
the Ukrainian Government continues to introduce various stabilisation measures aimed at supporting the banking
sector and providing liquidity to Ukrainian banks and companies, there continues to be uncertainty regarding access
to capital and its cost for the Group and its counterparties, which could affect the Group’s financial position, results
of operations and business prospects.
In addition, factors including increased unemployment in Ukraine, reduced corporate liquidity and profitability, and
increased corporate and personal insolvencies, have affected the ability of the Group’s borrowers to repay the
amounts due to the Group. In addition, changes in economic conditions have resulted in deterioration in the value of
collateral held against loans and other obligations. To the extent that information is available, the Group has
reflected revised estimates of expected future cash flows in its impairment assessment.
Whilst the Management believes it is acting appropriately to support the sustainability of the Group business in the
current circumstances, any unexpected further deterioration in the areas described above could negatively affect
the Group’s results and financial position in a manner not currently determinable.
3
Basis of Preparation
These condensed interim consolidated financial statements have been prepared in accordance with IAS 34 “Interim
Financial Reporting” and should be read in conjunction with the annual consolidated financial statements of the
Bank for the year ended 31 December 2012 prepared in accordance with IFRS.
These condensed interim consolidated financial statements do not contain all the explanatory notes as required for
a full set of financial statements.
4
Accounting Policies, Critical Accounting Estimates and Judgements, Adoption of New or Revised Standards
and Interpretations, and Changes in Presentation
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are
consistent with those followed in the preparation of the Group’s annual financial statements for the year ended
31 December 2012, except for the adoption of new standards and interpretations as of 1 January 2013, noted
below:
IFRS 10 Consolidated Financial Statements and IAS 27 Separate Financial Statements. IFRS 10 establishes a single
control model that applies to all entities including special purpose entities. IFRS 10 replaces the parts of previously
existing IAS 27 Consolidated and Separate Financial Statements that dealt with consolidated financial statements
and SIC-12 Consolidation – Special Purpose Entities. IFRS 10 changes the definition of control such that an investor
controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and
has the ability to affect those returns through its power over the investee. To meet the definition of control in IFRS
10, all three criteria must be met, including: (a) an investor has power over an investee; (b) the investor has
exposure, or rights, to variable returns from its involvement with the investee; and (c) the investor has the ability to
use its power over the investee to affect the amount of the investor’s returns. IFRS 10 had no impact on the
consolidation of investments held by the Group.
7
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
4
Accounting Policies, Critical Accounting Estimates and Judgements, Adoption of New or Revised Standards
and Interpretations, and Changes in Presentation (Continued)
IFRS 13 Fair Value Measurement. IFRS 13 establishes a single source of guidance under IFRS for all fair value
measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance
on how to measure fair value under IFRS when fair value is required or permitted. The application of IFRS 13 has not
materially impacted the fair value measurements carried out by the Group.
IFRS 13 also requires specific disclosures on fair values, some of which replace existing disclosure requirements in
other standards, including IFRS 7 Financial Instruments: Disclosures. Some of these disclosures are specifically
required for financial instruments by IAS 34.16A(j), thereby affecting the interim condensed consolidated financial
statements. The Group provides these disclosures in Note 19.
Amendments to IAS 19 Employee Benefits.The IASB has published amendments to IAS 19 Employee Benefits,
effective for annual periods beginning on or after 1 January 2013, which involve major changes to the accounting for
employee benefits, including the removal of the option for deferred recognition of changes in pension plan assets
and liabilities (known as the "corridor approach"). In addition, these amendments limit the changes in the net
pension asset (liability) recognised in profit or loss to net interest income (expense) and service costs. These
amendments had no impact on the Group’s financial position.
Amendments to IAS 1 Changes to the Presentation of Other Comprehensive Income.The amendments to IAS 1
change the grouping of items presented in other comprehensive income. Items that could be reclassified (or
recycled) to profit or loss at a future point in time (for example, net losses or gains on available-for-sale financial
assets) would be presented separately from items that will never be reclassified (for example, revaluation of
buildings). The amendment affects presentation only and has no impact on the Group’s financial position or
performance.
Amendments to IFRS 7 Disclosures – Offsetting Financial assets and Financial Liabilities. These amendments
require an entity to disclose information about rights to set-off and related arrangements (e.g., collateral
agreements). The disclosures would provide users with information that is useful in evaluating the effect of netting
arrangements on an entity’s financial position. The new disclosures are required for all recognized financial
instruments that are set off in accordance with IAS 32 Financial Instruments: Presentation. The disclosures also apply
to recognised financial instruments that are subject to an enforceable master netting arrangement or similar
agreements, irrespective of whether they are set off in accordance with IAS 32. These amendments had no impact
on the Group’s financial position or performance.
Amendment to IAS 32 Financial Instruments, Presentation: This amendment clarifies that income taxes arising from
distributions to equity holders are accounted for in accordance with IAS 12 Income Taxes. The amendment removes
existing income tax requirements from IAS 32 and requires entities to apply the requirements in IAS 12 to any
income tax arising from distributions to equity holders. The amendment did not have an impact on the interim
condensed consolidated financial statements for the Group, as there is no tax consequences attached to cash or
non-cash distribution.
Management’s estimates and judgements. Judgements and critical estimates made by the Management in the
process of applying the accounting policies were consistent with those disclosed in the annual financial statements
for the year ended 31 December 2012. The Management has not identified new areas of judgement or critical
estimates.
Income tax expense is recognised in these condensed interim consolidated financial statements based on the
Management’s best estimates of the effective annual income tax rate expected for the full financial year. Costs that
occur unevenly during the financial year are anticipated or deferred in the interim report only if it would also be
appropriate to anticipate or defer such costs at the end of the financial year.
8
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
4
Accounting Policies, Critical Accounting Estimates and Judgements, Adoption of New or Revised Standards
and Interpretations, and Changes in Presentation (Continued)
Changes in presentation.
The Group has changed disclosure of expenses directly attributable to deposit insurance to be consistent with the
Parent’s presentation of such expenses. The presentation of the comparative figures has been adjusted to be
consistent with the new presentation. The effect of changes on the condensed interim consolidated income
statement for three months ended 31 march 2012 is as follows:
In thousands of Ukrainian hryvnia
Operating expenses
State deposit insurance system membership fee
Consolidated Income Statement
Expenses directly attributable to deposit insurance
As previously
reported
Change in
presentation
As changed
(5 390)
5 390
-
-
(5 390)
(5 390)
9
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
5
Trading Securities
As at 31 March 2013 and 31 December 2012, trading securities are presented by interest-bearing Government
bonds issued by the Ministry of Finance of Ukraine denominated in UAH and USD (Note 17). These bonds have
maturity dates from April 2013 to February 2018 (31 December 2012: from February 2013 to August 2015), coupon
rate from 0.0% p.a. to 14.3% p.a. (31 December 2012: from 0.0% p.a. to 20.0% p.a.) and yield to maturity from 2.9%
p.a. to 14.9% p.a. (31 December 2012: from 8.0% p.a. to 23.6% p.a.), depending on the type of bond issue.
As at 31 March 2013, included in trading securities are Government bonds issued by the Ministry of Finance of Ukraine
with nominal value of UAH 1 414 633 thousands (31 December 2012: UAH 1 085 417 thousand) and fair value of UAH
1 491 212 thousand (31 December 2012: UAH 1 131 347 thousand) were used to cover the Bank’s NBU mandatory
reserve requirements.
10
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
6
Loans and Advances to Customers
The tables below show credit quality of the Group’s loan portfolio by loan classes as at 31 March 2013 and
31 December 2012.
For the purposes of these condensed interim consolidated financial statements a loan is considered past due when
the borrower fails to make any payment due under the loan agreement at the reporting date. In this case the
aggregate amount of all amounts due from borrower under the respective loan agreement including accrued
interest and commissions is recognised as past due.
31 March 2013 (unaudited):
In thousands of Ukrainian hryvnia
Not past due loans
Past due loans
Total
Commercial loans to legal entities
Specialised loans to legal entities
Consumer and other loans to individuals
Mortgage loans to individuals
Credit cards and overdrafts
Car loans to individuals
17 017 710
2 076 397
415 184
98 497
61 429
10 388
1 951 465
325 506
299 677
700 506
5 986
4 993
18 969 175
2 401 903
714 861
799 003
67 415
15 381
Total loans and advances to customers before allowance for
loan impairment
19 679 605
3 288 133
22 967 738
(441 761)
(1 934 364)
(2 376 125)
19 237 844
1 353 769
20 591 613
Not past due loans
Past due loans
Total
Commercial loans to legal entities
Specialised loans to legal entities
Consumer and other loans to individuals
Mortgage loans to individuals
Credit cards and overdrafts
Car loans to individuals
17 719 139
2 088 655
342 126
121 200
27 980
13 582
1 277 665
321 672
212 623
730 702
2 771
4 432
18 996 804
2 410 327
554 749
851 902
30 751
18 014
Total loans and advances to customers before allowance for
loan impairment
20 312 682
2 549 865
22 862 547
(457 952)
(1 786 907)
(2 244 859)
19 854 730
762 958
20 617 688
Less: Allowance for loan impairment
Total loans and advances to customers net of allowance for
loan impairment
31 December 2012:
In thousands of Ukrainian hryvnia
Less: Allowance for loan impairment
Total loans and advances to customers net of allowance for
loan impairment
11
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
6
Loans and Advances to Customers (Continued)
Commercial lending to legal entities comprises corporate loans and loans to individual entrepreneurs. Loans are
granted for current needs (working capital financing, acquisition of movable and immovable property, portfolio
investments, expansion and consolidation of business, etc.). Majority of commercial loans are provided for periods
of up to 5 years depending on the borrowers’ risk assessment. Commercial lending also includes overdraft lending
and lending for export-import transactions. The repayment source is cash flow from current production and financial
activities of the borrower.
Specialised lending to legal entities includes investment and construction project financing and also developers’
financing. As a rule, loan terms are linked to payback periods of investment and construction projects, contract
execution periods and exceed the terms of commercial loans to legal entities. The principal and interest may be
repaid from cash flows generated by the investment project at the stage of its commercial operation.
Consumer and other individual loans comprise loans to individuals other than housing acquisition, construction and
repair of real estate as well as car loans and credit cards and overdrafts. These loans include loans for current needs.
Mortgage loans to individuals include loans for acquisition, construction and reconstruction of real estate. These
loans are mostly long-term and are collateralized by real estate.
Credit cards and overdrafts are provided to individuals for periods of up to 2 years on average.
Car loans to individuals include loans for purchasing a car or other vehicle. Car loans are provided for periods of up
to 5 years.
12
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
6
Loans and Advances to Customers (Continued)
The table below shows the analysis of loans and allowance for loan impairment as at 31 March 2013 (unaudited):
Gross loans
Allowance for
impairment
Net loans
Allowance for
impairment to
gross loans
Collectively assessed
Not past due
Loans up to 30 days overdue
Loans 31 to 60 days overdue
Loans 61 to 90 days overdue
Loans 91 to 180 days overdue
Loans over 180 days overdue
Total collectively assessed loans
16 439 641
73 961
68 547
262 262
14 951
261 109
17 120 471
(321 366)
(3 476)
(8 965)
(55 587)
(14 951)
(261 109)
(665 454)
16 118 275
70 485
59 582
206 675
16 455 017
2.0%
4.7%
13.1%
21.2%
100.0%
100.0%
3.9%
Individually impaired
Not past due
Loans up to 30 days overdue
Loans 31 to 60 days overdue
Loans 61 to 90 days overdue
Loans 91 to 180 days overdue
Loans over 180 days overdue
Total individually impaired loans
578 069
395 947
90 663
136 132
106 570
541 323
1 848 704
(78 643)
(75 134)
(848)
(7 032)
(37 754)
(467 398)
(666 809)
499 426
320 813
89 815
129 100
68 816
73 925
1 181 895
13.6%
19.0%
0.9%
5.2%
35.4%
86.3%
36.1%
18 969 175
(1 332 263)
17 636 912
7.0%
Collectively assessed
Not past due
Loans up to 30 days overdue
Loans 31 to 60 days overdue
Loans 61 to 90 days overdue
Loans 91 to 180 days overdue
Loans over 180 days overdue
Total collectively assessed loans
2 060 248
1 978
50 999
2 113 225
(37 695)
(91)
(50 999)
(88 785)
2 022 553
1 887
2 024 440
1.8%
4.6%
100.0%
4.2%
Individually impaired
Not past due
Loans up to 30 days overdue
Loans 31 to 60 days overdue
Loans 61 to 90 days overdue
Loans 91 to 180 days overdue
Loans over 180 days overdue
Total individually impaired loans
16 149
23 741
248 788
288 678
(803)
(11 398)
(151 103)
(163 304)
15 346
12 343
97 685
125 374
5.0%
48.0%
60.7%
56.6%
2 401 903
(252 089)
2 149 814
10.5%
21 371 078
(1 584 352)
19 786 726
7.4%
In thousands of Ukrainian hryvnia
Commercial loans to legal entities
Total commercial loans to legal entities
Specialised loans to legal entities
Total specialised loans to legal entities
Total loans to legal entities
13
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
6
Loans and Advances to Customers (Continued)
Gross loans
Allowance for
impairment
Net loans
Allowance for
impairment to
gross loans
Collectively assessed
Not past due
Loans up to 30 days overdue
Loans 31 to 60 days overdue
Loans 61 to 90 days overdue
Loans 91 to 180 days overdue
Loans over 180 days overdue
Total collectively assessed loans
415 184
41 190
4 565
2 892
2 739
182 568
649 138
(1 863)
(4 452)
(1 198)
(1 326)
(1 641)
(182 568)
(193 048)
413 321
36 738
3 367
1 566
1 098
456 090
0.4%
10.8%
26.2%
45.9%
59.9%
100.0%
29.7%
Individually impaired
Not past due
Loans up to 30 days overdue
Loans 31 to 60 days overdue
Loans 61 to 90 days overdue
Loans 91 to 180 days overdue
Loans over 180 days overdue
Total individually impaired loans
65 723
65 723
(45 981)
(45 981)
19 742
19 742
70.0%
70.0%
714 861
(239 029)
475 832
33.4%
Collectively assessed
Not past due
Loans up to 30 days overdue
Loans 31 to 60 days overdue
Loans 61 to 90 days overdue
Loans 91 to 180 days overdue
Loans over 180 days overdue
Total collectively assessed loans
97 793
9 966
4 480
294
203
126 090
238 826
(157)
(1 955)
(482)
(74)
(102)
(126 090)
(128 860)
97 636
8 011
3 998
220
101
109 966
0.2%
19.6%
10.8%
25.2%
50.2%
100.0%
54.0%
Individually impaired
Not past due
Loans up to 30 days overdue
Loans 31 to 60 days overdue
Loans 61 to 90 days overdue
Loans 91 to 180 days overdue
Loans over 180 days overdue
Total individually impaired loans
704
559 473
560 177
(703)
(416 063)
(416 766)
1
143 410
143 411
99.9%
74.4%
74.4%
Total mortgage loans to individuals
799 003
(545 626)
253 377
68.3%
In thousands of Ukrainian hryvnia
Consumer and other loans to individuals
Total consumer and other loans to individuals
Mortgage loans to individuals
14
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
6
Loans and Advances to Customers (Continued)
Gross loans
Allowance for
impairment
Net loans
Allowance for
impairment to
gross loans
Collectively assessed
Not past due
Loans up to 30 days overdue
Loans 31 to 60 days overdue
Loans 61 to 90 days overdue
Loans 91 to 180 days overdue
Loans over 180 days overdue
61 429
3 318
398
235
651
1 384
(504)
(480)
(220)
(175)
(604)
(1 384)
60 925
2 838
178
60
47
-
0.8%
14.5%
55.3%
74.5%
92.8%
100.0%
Total credit cards and overdrafts
67 415
(3 367)
64 048
5.0%
Collectively assessed
Not past due
Loans up to 30 days overdue
Loans 31 to 60 days overdue
Loans 61 to 90 days overdue
Loans 91 to 180 days overdue
Loans over 180 days overdue
10 388
843
262
195
460
3 233
(27)
(49)
(65)
(61)
(316)
(3 233)
10 361
794
197
134
144
-
0.3%
5.8%
24.8%
31.3%
68.7%
100.0%
Total car loans to individuals
15 381
(3 751)
11 630
24.4%
1 596 660
(791 773)
804 887
49.6%
22 967 738
(2 376 125)
20 591 613
10.3%
In thousands of Ukrainian hryvnia
Credit cards and overdrafts
Car loans to individuals
Total loans to individuals
Total loans and advances to customers as at 31
March 2013
15
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
6
Loans and Advances to Customers (Continued)
The table below shows the analysis of loans and allowances for loan impairment as at 31 December 2012:
Gross loans
Allowance for
impairment
Net loans
Allowance for
impairment to
gross loans
Collectively assessed
Not past due
Loans up to 30 days overdue
Loans 31 to 60 days overdue
Loans 61 to 90 days overdue
Loans 91 to 180 days overdue
Loans over 180 days overdue
Total collectively assessed loans
16 916 200
296 441
413
21 681
3 737
218 356
17 456 828
(292 381)
(12 794)
(413)
(15 165)
(1 502)
(218 356)
(540 611)
16 623 819
283 647
6 516
2 235
16 916 217
1.7%
4.3%
100.0%
69.9%
40.2%
100.0%
3.1%
Individually impaired
Not past due
Loans up to 30 days overdue
Loans 31 to 60 days overdue
Loans 61 to 90 days overdue
Loans 91 to 180 days overdue
Loans over 180 days overdue
Total individually impaired loans
802 939
147 991
40 214
548 832
1 539 976
(117 723)
(53 845)
(4 582)
(490 026)
(666 176)
685 216
94 146
35 632
58 806
873 800
14.7%
36.4%
11.4%
89.3%
43.3%
18 996 804
(1 206 787)
17 790 017
6.4%
Collectively assessed
Not past due
Loans up to 30 days overdue
Loans 31 to 60 days overdue
Loans 61 to 90 days overdue
Loans 91 to 180 days overdue
Loans over 180 days overdue
Total collectively assessed loans
2 088 655
50 999
2 139 654
(39 553)
(50 999)
(90 552)
2 049 102
2 049 102
1.9%
100.0%
4.2%
Individually impaired
Not past due
Loans up to 30 days overdue
Loans 31 to 60 days overdue
Loans 61 to 90 days overdue
Loans 91 to 180 days overdue
Loans over 180 days overdue
Total individually impaired loans
23 680
133 178
113 815
270 673
(11 337)
(60 867)
(97 772)
(169 976)
12 343
72 311
16 043
100 697
47.9%
45.7%
85.9%
62.8%
2 410 327
(260 528)
2 149 799
10.8%
21 407 131
(1 467 315)
19 939 816
6.9%
In thousands of Ukrainian hryvnia
Commercial loans to legal entities
Total commercial loans to legal entities
Specialised loans to legal entities
Total specialised loans to legal entities
Total loans to legal entities
16
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
6
Loans and Advances to Customers (Continued)
Gross loans
Allowance for
impairment
Net loans
Allowance for
impairment to
gross loans
Collectively assessed
Not past due
Loans up to 30 days overdue
Loans 31 to 60 days overdue
Loans 61 to 90 days overdue
Loans 91 to 180 days overdue
Loans over 180 days overdue
Total collectively assessed loans
342 126
7 228
1 924
1 045
2 409
185 918
540 650
(7 385)
(689)
(677)
(519)
(1 591)
(185 918)
(196 779)
334 741
6 539
1 247
526
818
343 871
2.2%
9.5%
35.2%
49.7%
66.0%
100.0%
36.4%
Individually impaired
Not past due
Loans up to 30 days overdue
Loans 31 to 60 days overdue
Loans 61 to 90 days overdue
Loans 91 to 180 days overdue
Loans over 180 days overdue
Total individually impaired loans
14 099
14 099
(6 993)
(6 993)
7 106
7 106
49.6%
49.6%
554 749
(203 772)
350 977
36.7%
Collectively assessed
Not past due
Loans up to 30 days overdue
Loans 31 to 60 days overdue
Loans 61 to 90 days overdue
Loans 91 to 180 days overdue
Loans over 180 days overdue
Total collectively assessed loans
120 488
211
314
121 986
242 999
(32)
(19)
(314)
(121 986)
(122 351)
120 456
192
120 648
0.0%
9.0%
100.0%
100.0%
50.4%
Individually impaired
Not past due
Loans up to 30 days overdue
Loans 31 to 60 days overdue
Loans 61 to 90 days overdue
Loans 91 to 180 days overdue
Loans over 180 days overdue
Total individually impaired loans
712
608 191
608 903
(712)
(445 128)
(445 840)
163 063
163 063
100.0%
73.2%
73.2%
Total mortgage loans to individuals
851 902
(568 191)
283 711
66.7%
In thousands of Ukrainian hryvnia
Consumer and other loans to individuals
Total consumer and other loans to individuals
Mortgage loans to individuals
17
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
6
Loans and Advances to Customers (Continued)
Gross loans
Allowance for
impairment
Net loans
Allowance for
impairment to
gross loans
Collectively assessed
Not past due
Loans up to 30 days overdue
Loans 31 to 60 days overdue
Loans 61 to 90 days overdue
Loans 91 to 180 days overdue
Loans over 180 days overdue
27 980
224
848
573
158
968
(99)
(21)
(292)
(288)
(97)
(968)
27 881
203
556
285
61
-
0.4%
9.4%
34.4%
50.3%
61.4%
100.0%
Total credit cards and overdrafts
30 751
(1 765)
28 986
5.7%
Collectively assessed
Not past due
Loans up to 30 days overdue
Loans 31 to 60 days overdue
Loans 61 to 90 days overdue
Loans 91 to 180 days overdue
Loans over 180 days overdue
13 582
283
247
75
536
3 291
(68)
(17)
(57)
(24)
(359)
(3 291)
13 514
266
190
51
177
-
0.5%
6.0%
23.1%
32.0%
67.0%
100.0%
Total car loans to individuals
18 014
(3 816)
14 198
21.2%
1 455 416
(777 544)
677 872
53.4%
22 862 547
(2 244 859)
20 617 688
9.8%
In thousands of Ukrainian hryvnia
Credit cards and overdrafts
Car loans to individuals
Total loans to individuals
Total loans and advances to customers as at 31
December 2012
18
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
6
Loans and Advances to Customers (Continued)
As defined by the Group for the purposes of internal credit risk assessment, loans fall into the “non-performing”
category when a principal and/or interest payment becomes more than 90 days overdue.
As at 31 March 2013, the outstanding non-performing loans were as follows (unaudited):
In thousands of Ukrainian hryvnia
Commercial loans to legal entities
Specialised loans to legal entities
Сonsumer and other loans to individuals
Mortgage loans to individuals
Credit cards and overdrafts
Car loans to individuals
Total non-performing loans and advances to
customers as at 31 March 2013
Gross loans
Allowance for
impairment
Net loans
Allowance for
impairment to
gross loans
923 953
323 528
251 030
685 766
2 035
3 693
(781 212)
(213 500)
(230 190)
(542 255)
(1 988)
(3 549)
142 741
110 028
20 840
143 511
47
144
84.6%
66.0%
91.7%
79.1%
97.7%
96.1%
2 190 005
(1 772 694)
417 311
80.9%
Gross loans
Allowance for
impairment
Net loans
Allowance for
impairment to
gross loans
811 139
297 992
202 426
730 177
1 126
3 827
(714 466)
(209 638)
(194 502)
(567 114)
(1 065)
(3 650)
96 673
88 354
7 924
163 063
61
177
88.1%
70.4%
96.1%
77.7%
94.6%
95.4%
2 046 687
(1 690 435)
356 252
82.6%
As at 31 December 2012, the outstanding non-performing loans were as follows:
In thousands of Ukrainian hryvnia
Commercial loans to legal entities
Specialised loans to legal entities
Сonsumer and other loans to individuals
Mortgage loans to individuals
Credit cards and overdrafts
Car loans to individuals
Total non-performing loans and advances to
customers as at 31 December 2012
19
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
6
Loans and Advances to Customers (Continued)
Allowances for Loan Impairment. The analysis of changes in allowances for loan impairment for the three months
ended 31 March 2013 is presented in the table below (unaudited):
In thousands of Ukrainian hryvnia
Allowance for loan impairment as
at 1 January 2013
(Net allowance charge) / net
recovery of allowance for loan
impairment during the reporting
period
Loans and advances written off
during the reporting period
Allowance for loan impairment as
at 31 March 2013
Commercial
loans to legal
entities
Specialised
loans to legal
entities
(1 206 787)
(260 528)
(125 476)
-
(1 332 263)
Сonsumer
and other
loans to
individuals
Mortgage
Credit
loans to cards and
individuals overdrafts
Car loans to
individuals
(203 772)
(568 191)
(1 765)
8 439
(35 257)
22 565
(1 602)
65
-
-
-
-
-
(252 089)
(239 029)
(545 626)
(3 367)
(3 816)
(3 751)
Total
(2 244 859)
(131 266)
-
(2 376 125)
The analysis of changes in allowances for loan impairment for the three months ended 31 March 2012 is presented
in the table below (unaudited):
In thousands of Ukrainian hryvnia
Allowance for loan impairment as
at 1 January 2012
(Net allowance charge) / net
recovery of allowance for loan
impairment during the reporting
period
Loans and advances written off
during the reporting period
Allowance for loan impairment as
at 31 March 2012
Commercial
loans to legal
entities
Specialised
loans to legal
entities
Сonsumer
and other
loans to
individuals
(1 031 629)
(172 141)
(205 543)
(55 697)
(6 459)
187
5 542
88
97
-
1 441
90
-
4 535
1 170
(1 086 156)
(178 600)
(203 915)
Credit
Mortgage
loans to cards and
individuals overdrafts
(524 897)
(519 265)
(240)
(152)
Car loans to
individuals
(8 608)
(3 976)
Total
(1 943 058)
(56 242)
7 236
(1 992 064)
20
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
6
Loans and Advances to Customers (Continued)
Renegotiated loans. Information on loans whose terms have been renegotiated, as at 31 March 2013 (unaudited)
and 31 December 2012 is presented in the table below. It shows the carrying amount for renegotiated loans by class.
In thousands of Ukrainian hryvnia
31 March 2013:
Not past due collectively assessed
loans
Renegotiated loans up to 90 days
overdue
Renegotiated loans more than 90 days
overdue
Total renegotiated loans before
allowance for loan impairment
31 December 2012:
Not past due collectively assessed
loans
Renegotiated loans up to 90 days
overdue
Renegotiated loans more than 90 days
overdue
Total renegotiated loans before
allowance for loan impairment
Commercial
Specialised
loans to
loans to
legal entities legal entities
Consumer
and other
loans to
individuals
Mortgage
loans to
individuals
Credit cards
and
overdrafts
Car loans to
individuals
Total
476 066
35 204
22 174
29 486
-
2 015
564 945
77 798
1 978
18 920
9 409
-
600
108 705
248 227
82 427
148 827
417 121
-
2 581
899 183
802 091
119 609
189 921
456 016
-
5 196
1 572 833
544 616
38 950
43 507
39 865
-
2 668
669 606
88 588
23 679
73
-
-
252
112 592
226 558
58 560
103 664
460 478
-
2 783
852 043
859 762
121 189
147 244
500 343
-
5 703
1 634 241
21
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
6
Loans and Advances to Customers (Continued)
Economic sector risk concentration. Economic sector risk concentrations within the customer loan portfolio as at 31
March 2013 and as at 31 December 2012 are as follows:
In thousands of Ukrainian hryvnia
31 March 2013
(unaudited)
Amount
Transport, aviation, space industry
Energy
Food and agriculture
Machine building
Services
Chemical industry
Trade
Oil and gas
Individuals
Metallurgy
Telecommunications
Construction
Timber industry
Other
3 681 231
3 447 285
2 780 458
1 930 906
1 733 728
1 730 605
1 707 069
1 609 754
1 596 660
1 548 645
638 573
438 801
46 775
77 248
16.0%
15.0%
12.1%
8.4%
7.5%
7.5%
7.4%
7.0%
7.0%
6.7%
2.8%
1.9%
0.2%
0.3%
3 895 564
3 232 212
2 801 516
2 061 438
1 757 408
1 728 284
1 811 669
1 526 909
1 455 416
1 470 789
513 333
483 304
57 327
67 378
17.0%
14.1%
12.3%
9.0%
7.7%
7.6%
7.9%
6.7%
6.4%
6.4%
2.2%
2.1%
0.3%
0.3%
22 967 738
100.0%
22 862 547
100.0%
Total loans and advances to customers before allowance for loan
impairment
%
31 December
2012
Amount
%
As at 31 March 2013, the Group had 20 largest corporate borrowers with aggregated loan amounts due from each of
these borrowers exceeding UAH 383 187 thousand (31 December 2012: 20 largest borrowers with loan amounts due
from each of these borrowers exceeding UAH 370 517 thousand). The total aggregate amount of these loans was
UAH 9 765 541 thousand or 42.5% of the total gross loan portfolio of the Group (31 December 2012:
UAH 9 776 002 thousand or 42.8%).
22
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
7
Investment Securities Available for sale
31 March 2013
(unaudited)
31 December
2012
Corporate bonds
Government bonds issued by the Ministry of Finance of Ukraine
Deposit certificates issued by the National Bank of Ukraine
1 137 207
138 142
100 022
140
198 485
199 785
Total debt investment securities available for sale
1 375 371
398 410
110
110
1 375 481
398 520
In thousands of Ukrainian hryvnia
Corporate shares
Total investment securities available for sale
Government bonds issued by the Ministry of Finance of Ukraine are interest-bearing securities denominated in UAH.
These bonds have maturity dates from July 2013 to September 2013 (31 December 2012: from March 2013 to
September 2013), coupon rate 12.5% p.a. (31 December 2012: 12.5% p.a. to 15.0% p.a.) and yield to maturity from
7.1% p.a. to 7.3% p.a. (31 December 2012: 6.3% p.a. to 12.8% p.a.), depending on the series of the bond issued.
Deposit certificates are interest-bearing certificates denominated in UAH and issued by the National Bank of
Ukraine. These certificates have maturity dates April 2013, coupon rates 2.5% p.a. and yield to maturity
1.9% p.a.
Investment securities available for sale are carried at fair value which also reflects credit risk related write downs.
Fair value of investment securities available for sale is based on their market quotations and valuation models with
use of data both observable and not observable on the open market. The unrealised gains/(losses) on revaluation of
investment securities available for sale other than impairment loss are recognised in other comprehensive income
and presented in equity as fair value reserve for investment securities available for sale as at 31 March 2013 in the
cumulative gain of UAH 2 239 thousand (31 December 2012: gain of UAH 3 232 thousand).
As at 31 March 2013, included in investment securities available for sale are Government bonds issued by the Ministry
of Finance of Ukraine with a nominal value of UAH 133 800 thousands and a fair value of UAH 138 142 thousand
(31 December 2012: nominal value of UAH 183 800 thousand and a fair value of UAH 198 485 thousand) were used to
cover the Bank’s NBU mandatory reserve requirements.
As at 31 March 2013, included in investment securities available for sale are past due fully impaired corporate bonds
with a nominal value of UAH 18 893 thousand (31 December 2012: UAH 18 893 thousand).
None of the investment securities available for sale were renegotiated.
23
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
8
Other Assets
31 March 2013
(unaudited)
31 December
2012
Other financial assets
Derivative financial instruments
Funds in settlement
Allowance for impairment of other financial assets
5 000
331
(3)
3 347
232
(4)
Total other financial assets
5 328
3 575
28 424
20 845
8 484
4 013
2 547
791
43
5 129
(11 125)
25 554
19 906
292
615
1 966
791
16
4 959
(7 052)
Total other non-financial assets
59 151
47 047
Total other assets
64 479
50 622
31 March 2013
(unaudited)
31 December
2012
Term placements of banks
Correspondent accounts and overnight placements of banks
Sale and repurchase agreements with banks
6 546 642
898 157
-
7 026 409
527 050
61 360
Total due to banks
7 444 799
7 614 819
In thousands of Ukrainian hryvnia
Other non-financial assets
Prepaid expenses
Precious metals
Prepayment on income tax
Prepayments for premises and other assets
Inventory
Non-current assets held for sale
Tax settlements (other than on income tax)
Other non-financial assets
Allowance for impairment of other non-financial assets
9
Due to Banks
In thousands of Ukrainian hryvnia
24
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
10
Due to Individuals and Corporate Customers
31 March 2013
(unaudited)
31 December
2012
1 427 588
9 328 185
1 164 357
7 820 592
10 755 773
8 984 949
Corporate customers:
- Current and settlement accounts
- Term deposits
2 676 598
2 366 028
1 910 652
2 323 676
Total due to corporate customers
5 042 626
4 234 328
15 798 399
13 219 277
In thousands of Ukrainian hryvnia
Individuals:
- Current accounts/demand deposits
- Term deposits
Total due to individuals
Total due to individuals and corporate customers
Economic sector concentrations within customer accounts are as follows:
In thousands of Ukrainian hryvnia
31 March 2013
(unaudited)
Amount
%
31 December2012
Amount
%
Individuals
Services
Energy
Telecommunication
Trade
Food and agriculture
Metallurgy
Construction
Machine building
Chemical
Transport
Municipal bodies
Other
10 755 773
1 589 810
787 517
785 280
656 046
299 958
296 818
173 035
102 184
66 468
30 675
86 710
168 125
68.1%
10.1%
5.0%
5.0%
4.2%
1.9%
1.9%
1.1%
0.6%
0.4%
0.2%
0.5%
1.1%
8 984 949
1 287 274
350 823
649 032
891 592
301 937
202 972
232 697
185 105
34 683
41 567
5 422
51 224
68.0%
9.7%
2.7%
4.9%
6.7%
2.3%
1.5%
1.8%
1.4%
0.3%
0.3%
0.1%
0.4%
Total due to individuals and corporate customers
15 798 399
100.0%
13 219 277
100.0%
As at 31 March 2013, included in Due to corporate customers are deposits of UAH 52 264 thousand
(31 December 2012: UAH 61 518 thousand) held as collateral for credit related commitments issued to customers.
Refer to Note 18.
As at 31 March 2013, the Group had 20 largest customers with balances above UAH 60 300 thousand
(31 December 2012: 20 customers with balances above UAH 58 579 thousand). The aggregate balance of these
customers was UAH 3 569 724 thousand or 22.6% (31 December 2012: UAH 2 664 203 thousand or 20.2%) of total
due to individuals and corporate customers.
25
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
11
Other Liabilities
31 March 2013
(unaudited)
31 December
2012
Other financial liabilities
Deposit insurance system fees payable
Derivative financial instruments
Trade payables
Funds in settlement
Deferred commissions received on guarantees issued
Payables on plastic card settlements
Other
18 415
14 440
6 036
3 876
2 932
473
6 694
15 679
12
7 173
2 106
2 734
377
7 151
Total other financial liabilities
52 866
35 232
Other non-financial liabilities
Accrued employee benefit costs
Taxes payable other than income tax
Other
84 908
955
1 143
71 196
1 384
505
Total other non-financial liabilities
87 006
73 085
139 872
108 317
In thousands of Ukrainian hryvnia
Total other liabilities
26
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
12
Interest Income and Expense
In thousands of Ukrainian hryvnia
Interest income
Interest income on financial assets carried at amortised cost and on financial assets
available for sale:
- Loans and advances to customers
- Debt investment securities available for sale
- Correspondent accounts with banks
- Due from banks
Interest income on financial assets carried at fair value through profit or loss:
- Debt trading securities
- Debt securities designated at fair value through profit or loss
Total interest income
Three months ended 31 March
(Unaudited)
2013
2012
702 352
12 355
1 432
262
716 401
456 970
40 244
3 222
3 587
504 023
46 558
1 016
47 574
14 627
1 038
15 665
763 975
519 688
(180 026)
(109 839)
(45 819)
(24 086)
(8 378)
(8 354)
(7 957)
(3 880)
(2 342)
(390 681)
(72 785)
(83 090)
(38 341)
(12 750)
(5 638)
(318)
(9 203)
(22 887)
(1 071)
(246 083)
(18 415)
(5 390)
(409 096)
(251 473)
354 879
268 215
Interest expense
Term deposits of individuals
Term placements of banks
Term deposits of legal entities
Current/settlement accounts of legal entities
Current/demand accounts of individuals
Other borrowed funds
Subordinated debt
Debt securities in issue
Correspondent accounts of banks
Total interest expense
Expenses directly attributable to deposit insurance
Total interest expense including deposit insurance expenses
Net interest income
27
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
13
Fee and Commission Income and Expense
In thousands of Ukrainian hryvnia
Three months ended
31 March
(unaudited)
2013
2012
Fee and commission income
Cash and settlements transactions with individuals
Cash and settlements transactions with legal entities
Guarantees issued
Plastic cards operation
Credit fees
Transactions with securities
Other
23 913
19 708
18 839
9 941
1 669
478
2 009
15 801
11 627
9 391
2 857
876
870
1 186
Total fee and commission income
76 557
42 608
Fee and commission expense
Settlement transactions
Guarantees received
Other
(12 353)
(6 853)
-
(4 968)
(1 466)
(50)
Total fee and commission expense
(19 206)
(6 484)
57 351
36 124
Net fee and commission income
14
Net Gains Arising from Trading in Foreign Currencies, Operations with Foreign Currency Derivatives and
Foreign Exchange Translation Gains
In thousands of Ukrainian hryvnia
Three months ended 31 March
(unaudited)
2013
2012
Net gains arising from trading in foreign currencies
Net foreign exchange translation (losses)/gains
Net gains from operations with foreign currency derivatives
71 838
(4 829)
10 707
41 263
266
5 532
Total net gains arising from trading in foreign currencies. operations with foreign
currency derivatives and foreign exchange translation gains
77 716
47 061
Trading in foreign currencies and foreign currency derivatives operations include both operations with clients and
the Group’s own operations for liquidity management.
28
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
15
Operating Expenses
In thousands of Ukrainian hryvnia
Three months ended
31 March
(unaudited)
2013
2012
Staff costs
Depreciation and amortisation
Operating lease expense for premises and equipment
Telecommunication and administrative expenses
Other costs of premises and equipment
Taxes other than on income
Consulting and assurance services
Advertising and marketing services
Other
115 822
43 601
34 068
25 061
9 496
1 538
1 316
1 068
9 117
99 912
32 133
29 626
19 198
4 517
1 628
935
1 051
3 329
Total operating expenses
241 087
192 329
16
Segment Analysis
The Chief Executive Officer - Head of the Management Board assesses the operating segment performance and
makes decision about resources to be allocated to the following business segments identified by the Group:
·
Retail banking – individuals’ current accounts, deposits, credit and debit cards, loans and mortgages.
·
Corporate banking – legal entities’ current accounts, deposits, overdrafts, loans and other credit facilities,
securities, foreign currency and trade finance products.
·
Treasury – includes debt and equity capital markets, securities, foreign exchange and banknote trading and
corporate finance.
Interest on inter-segments balances is charged to the segments at an internal borrowing/placement rate.
29
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
16
Segment Analysis (Continued)
Segment breakdown of assets and liabilities is as follows:
In thousands of Ukrainian hryvnia
31 March 2013
(unaudited) 31 December 2012
Assets
Commercial banking
Retail banking
Treasury
Unallocated
19 786 726
805 028
6 095 461
1 479 362
19 939 817
677 967
4 229 410
1 517 631
Total assets
28 166 577
26 364 825
Liabilities
Commercial banking
Retail banking
Treasury
Unallocated
5 043 179
10 774 662
8 517 040
168 847
4 235 389
9 001 004
9 382 582
197 353
Total liabilities
24 503 728
22 816 328
30
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
16
Segment Analysis (Continued)
Segment information on income and expenses for the three months ended 31 March 2013 (unaudited) is as follows:
Corporate
banking
Retail
banking
Treasury
Unallocated
Eliminations
Total
External revenues
Revenues from other segments
746 310
-
94 609
205 133
95 848
172 728
-
(377 861)
936 767
-
Revenue
746 310
299 742
268 576
-
(377 861)
936 767
(63 059)
(377 861)
(188 404)
-
(139 218)
-
-
377 861
(390 681)
-
(1 626)
(18 415)
(9 654)
(7 926)
-
-
(18 415)
(19 206)
-
-
(12 510)
-
-
(12 510)
-
-
(7)
-
-
(7)
-
-
(488)
-
-
(488)
(13 988)
-
-
-
(43 601)
-
(13 988)
(43 601)
(89 271)
(100 221)
(7 994)
-
-
(197 486)
200 505
(16 952)
100 433
(43 601)
-
240 385
(117 039)
(14 227)
-
(4 072)
-
(135 338)
83 466
(31 179)
100 433
(47 673)
-
105 047
In thousands of Ukrainian hryvnia
Interest expense
Interest expense from other segments
Expenses directly attributable to deposit
insurance
Fee and commission expense
Net losses arising from operations with
other derivatives
Net losses arising from investment
securities available for sale
Net losses arising from securities designated
at fair value through profit or loss
Loss on initial recognition of financial
instruments
Depreciation and amortization
Operating expenses excluding depreciation
and amortization
Operating income/(loss) before allowance
for impairment
Impairment of loans to customers, other
assets and provisions
Profit/ (loss) before tax
Income tax benefit
10 298
Profit for the reporting period
Other information
Capital expenditures incurred
115 345
-
-
-
29 928
-
29 928
31
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
16
Segment Analysis (Continued)
Segment information on income and expenses for the three months ended 31 March 2012 (unaudited) is as follows:
Corporate
banking
Retail
banking
Treasury
External revenues
Revenues from other segments
490 556
-
47 206
82 588
91 046
140 030
Revenue
490 556
129 794
(39 234)
(222 618)
Eliminations
Total
-
(222 618)
628 808
-
231 076
-
(222 618)
628 808
(78 423)
-
(128 426)
-
-
222 618
(246 083)
-
(1 667)
-
(5 390)
(1 674)
-
(3 143)
-
-
-
(5 390)
(6 484)
-
-
-
(6 361)
-
(32 133)
-
(6 361)
(32 133)
(34 260)
(122 823)
(3 113)
-
-
(160 196)
Operating income/(loss) before allowance
for impairment
192 777
(78 516)
90 033
(32 133)
-
172 161
Impairment of loans to customers, other
assets and provisions
(62 196)
5 954
(146)
-
(56 388)
Profit/ (loss) before tax
130 581
(72 562)
(32 279)
-
115 773
In thousands of Ukrainian hryvnia
Interest expense
Interest expense from other segments
Expenses directly attributable to deposit
insurance
Fee and commission expense
Net losses arising from trading securities
Net losses arising from investment
securities available for sale
Depreciation and amortization
Operating expenses excluding depreciation
and amortization
Unallocated
90 033
Income tax expense
(8 542)
Profit for the reporting period
107 231
Other information
Capital expenditures incurred
-
-
-
45 402
-
45 402
32
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
17
Financial Risk Management
The risk management function within the Group is carried out in respect of major types of risks: credit, market,
liquidity and operational risks. Market risk includes interest rate risk, equity risk and currency risk. The Group's risk
management policies are designed to identify and analyse these risks, to set appropriate risk limits and controls, and
to monitor the risks and limits. The operational risk management functions are intended to ensure proper
functioning of internal policies and procedures to minimise operational risk.
The risk management functions are divided among the Supervisory Council, the Management Board, the Assets and
Liabilities Management Committee (ALCO), Risk Management Department, Credit Committee and Small Credit
Committee.
The Group’s risk management policies and procedures are consistent with those disclosed in the annual financial
statements of the Group for the year ended 31 December 2012.
Currency Risk. Currency risk results from fluctuations in the prevailing foreign currency exchange rates. The Group is
exposed to foreign exchange risk on open positions.
The Management establishes limits and constantly monitors foreign currency positions in accordance with the
regulations of the NBU and internally developed methodology.
The policy with regard to open foreign currency positions is restricted to certain thresholds under Ukrainian law
and is strictly monitored by the NBU on a daily basis.
33
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
17
Financial Risk Management (Continued)
The table below summarises the Group’s exposure to foreign exchange risk in respect of monetary assets, liabilities
and notional positions on currency derivatives as at 31 March 2013 (unaudited). Foreign exchange risk on forward
and future contracts is represented by their notional positions.
In thousands of Ukrainian hryvnia
UAH
USD
Euro
RUB
Other
Total
983 039
395 352
284 690
59 107
3 531
1 725 719
178 831
819 136
418 461
2 110 017
41 658
-
-
-
638 950
2 929 153
51 150
3 612 774
13 248 235
2 114 073
1 616 531
-
51 150
20 591 613
1 375 371
-
-
-
-
1 375 371
188
1
139
-
-
328
7 020 489
16 172 066
2 440 560
1 675 638
3 531
27 312 284
(143 281)
(1 835 459)
(2 784 438)
-
(5 738 621)
(7 088 900)
(1 729 534)
(160 839)
(531 254)
(1 388 629)
(181 998)
(475 616)
(1 031 643)
(356 373)
(331 034)
-
(86 412)
(15 622)
-
(7 444799)
(10 755 773)
(5 042 626)
(636 455)
(33 011)
-
(3 828)
(415 424)
(1 553)
-
(33)
-
(1)
-
(38 426)
(415 424)
(4 796 189)
(15 137 146)
(2 579 050)
(1 719 083)
(102 035)
(24 333 503)
Net monetary assets/ (liabilities)
2 224 300
1 034 920
(138 490)
(43 445)
(98 504)
2 978 781
Foreign exchange derivatives
1 216 801
(1 372 198)
75 576
Foreign currency position
3 441 101
(337 278)
(62 914)
(43 961)
(749 474)
(204 134)
(36 418)
Assets
Cash and cash equivalents
Mandatory reserves with the National Bank of
Ukraine
Trading securities
Securities designated at fair value through
profit or loss
Due from banks
Loans and advances to customers
Securities pledged under repurchase
agreements
Debt investment securities available for sale
Other financial assets (less fair value of
derivatives)
Total monetary assets
Liabilities
Due to the National Bank of Ukraine
Due to banks
Due to individuals
Due to corporate customers
Debt securities in issue
Other borrowed funds
Other financial liabilities (less fair value of
derivatives)
Subordinated debt
Total monetary liabilities
Credit related commitments (Note 18)
(580 633)
(516)
78 134
(20 370)
-
(2 203)
2 976 578
(1 570 659)
34
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
17
Financial Risk Management (Continued)
The table below summarises the Group’s exposure to foreign exchange risk in respect of monetary assets, liabilities
and notional positions on currency and precious metals derivatives as at 31 December 2012. Foreign exchange risk
on forward and future contracts is represented by their notional positions.
In thousands of Ukrainian hryvnia
Assets
Cash and cash equivalents
Mandatory reserves with the National Bank of
Ukraine
Trading securities
Securities designated at fair value through
profit or loss
Due from banks
Loans and advances to customers
Securities pledged under repurchase
agreements
Debt investment securities available for sale
Other financial assets (less fair value of
derivatives)
Total monetary assets
Liabilities
Due to the National Bank of Ukraine
Due to banks
Due to individuals
Due to corporate customers
Debt securities in issue
Other borrowed funds
Other financial liabilities (less fair value of
derivatives)
Subordinated debt
Total monetary liabilities
Net monetary assets/ (liabilities)
Foreign exchange derivatives
Foreign currency position
Credit related commitments (Note 18)
UAH
USD
Euro
RUB
Other
Total
1 021 050
635 698
264 898
79 673
11 081
2 012 400
152 277
585 779
273 939
1 131 347
88 591
-
-
-
514 807
1 717 126
50 621
183 351
4 424 062
12 534 560
2 175 469
1 483 597
-
50 621
183 351
20 617 688
10 482
398 410
-
-
-
-
10 482
398 410
130
-
98
-
-
228
6 826 162
14 575 544
2 529 056
1 563 270
11 081
25 505 113
(3 509)
(243 555)
(1 242 372)
(2 384 948)
(692 386)
-
(5 669 327)
(6 026 051)
(1 432 297)
(159 932)
(653 903)
(1 270 539)
(202 910)
(490 299)
(1 048 034)
(362 089)
(188 059)
-
(83 898)
(26 114)
-
(3 509)
(7 614 819)
(8 984 949)
(4 234 328)
(692 386)
(650 231)
(29 875)
-
(3 506)
(415 428)
(1 836)
-
-
(3)
-
(35 220)
(415 428)
(4 596 645)
(13 706 541)
(2 619 487)
(1 598 182)
(110 015)
(22 630 870)
(90 431)
(34 912)
(98 934)
2 874 243
2 229 517
869 003
938 298
(1 024 972)
3 167 815
(155 969)
(86 216)
(34 912)
(664 618)
(364 482)
(25 125)
(915 710)
4 215
-
85 794
(13 140)
-
3 335
2 877 578
(1 969 935)
35
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
17
Financial Risk Management (Continued)
Liquidity Risk. Liquidity risk arises in the general funding of 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 period.
The table below shows assets and liabilities at 31 March 2013 by their remaining expected maturity. Following
principles underlying gap analysis presentation and the Group liquidity risk management are based on the mix of
NBU initiatives and the Group’s practice:
·
Cash and cash equivalents represent highly liquid assets and are classified as “On demand and less than 1
month”
·
Trading securities, securities pledged under repurchase agreements and highly liquid portion of investment
securities available for sale are considered to be liquid assets as these securities could be easily converted into
cash within short period of time. Such financial instruments are disclosed in gap analysis table as
“On demand and less than 1 month”
·
Investment securities available for sale which are less liquid are disclosed according to remaining contractual
maturities (for debt instruments) or as “No stated maturity” (for equities)
·
Loans and advances to customers, amounts due from banks, other assets, debt securities in issue, amounts due
to banks, other borrowed funds and other liabilities are included into gap analysis table based on remaining
contractual maturities
·
The Management believes that a majority of individual deposits will not be withdrawn prior to the stated
maturity date and customer deposits are included into gap analysis table based on remaining contractual
maturities.
36
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
17
Financial Risk Management (Continued)
The liquidity position of the Group’s assets and liabilities as at 31 March 2013 is set out below:
On demand
and less
than
1 month
From 1 to
6 months
From 6 to
12 months
From 1 to
3 years
More than
3 years
No stated
maturity
Total
1 725 719
-
-
-
-
-
1 725 719
244 155
2 929 153
173 139
-
107 224
-
110 613
-
3 819
-
-
638 950
2 929 153
51 150
1 587 266
4 982 920
3 301 127
6 734 844
3 985 456
-
51 150
20 591 613
-
-
-
-
-
-
-
238 164
1 131 623
-
5 584
-
110
1 375 481
44 203
9 585
4 502
4 539
859
743 177
46 855
791
743 177
46 855
64 479
Total assets
6 819 810
6 297 267
3 412 853
6 855 580
3 990 134
790 933
28 166 577
Liabilities
Due to the National Bank of Ukraine
Due to banks
Due to individuals
Due to corporate customers
Debt securities in issue
Other borrowed funds
Current income tax liability
Deferred income tax liability
Other liabilities
Subordinated debt
1 552 123
2 555 427
3 481 443
471 093
849
52 864
354
4 366 860
3 219 455
1 061 505
4 754
996
4 245
75 770
-
673 531
2 266 119
385 058
160 608
5 094
11 136
-
852 285
2 714 772
20 200
22 151
102
95 945
94 420
33 224
319 125
2 220
-
7 444 799
10 755 773
5 042 626
636 455
996
67 783
139 872
415 424
Total liabilities
8 114 153
8 733 585
3 501 546
3 705 455
446 769
2 220
24 503 728
Net liquidity surplus/(gap)
(1 294 343)
(2 436 318)
(88 693)
3 150 125
3 543 365
788 713
3 662 849
Cumulative liquidity surplus/(gap)
at 31 March 2013
(1 294 343)
(3 730 661)
(3 819 354)
2 874 136
3 662 849
In thousands of Ukrainian hryvnia
Assets
Cash and cash equivalents
Mandatory reserves with the
National Bank of Ukraine
Trading securities
Securities designated at fair value
through profit or loss
Due from banks
Loans and advances to customers
Securities pledged under
repurchase agreements
Investment securities available for
sale
Premises, equipment and intangible
assets
Investment property
Other assets
(669 229)
37
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
17
Financial Risk Management (Continued)
The liquidity position of the Group’s assets and liabilities as at 31 December 2012 is set out below:
On demand
and less
than
1 month
From 1 to
6 months
From 6 to
12 months
From 1 to
3 years
More than
3 years
No stated
maturity
Total
2 012 400
-
-
-
-
-
2 012 400
81 736
1 717 126
116 667
-
169 236
-
119 478
-
27 690
-
-
514 807
1 717 126
50 621
183 351
1 413 123
4 433 786
4 248 864
6 164 361
4 357 554
-
50 621
183 351
20 617 688
10 482
-
-
-
-
-
10 482
398 270
-
140
-
-
110
398 520
39 297
4 357
3 029
3 148
-
762 353
46 855
791
762 353
46 855
50 622
Total assets
5 906 406
4 554 810
4 421 269
6 286 987
4 385 244
810 109
26 364 825
Liabilities
Due to the National Bank of Ukraine
Due to banks
Due to individuals
Due to corporate customers
Debt securities in issue
Other borrowed funds
Current income tax liability
Deferred income tax liability
Other liabilities
Subordinated debt
3 509
720 509
1 902 385
3 073 609
692 386
1 533
28 910
353
2 553 483
3 046 504
847 519
484 542
32 958
7 665
64 848
-
3 240 814
1 737 210
191 048
165 689
9 199
14 559
-
1 100 013
2 298 850
21 804
38 458
95 951
100 348
20 328
319 124
2 220
-
3 509
7 614 819
8 984 949
4 234 328
692 386
650 231
32 958
79 403
108 317
415 428
Total liabilities
6 423 194
7 037 519
5 358 519
3 555 076
439 800
2 220
22 816 328
2 731 911
3 945 444
807 889
3 548 497
(1 204 836)
2 740 608
3 548 497
In thousands of Ukrainian hryvnia
Assets
Cash and cash equivalents
Mandatory reserves with the
National Bank of Ukraine
Trading securities
Securities designated at fair value
through profit or loss
Due from banks
Loans and advances to customers
Securities pledged under
repurchase agreements
Investment securities available for
sale
Premises, equipment and intangible
assets
Investment property
Other assets
Net liquidity surplus/(gap)
(516 788)
(2 482 709)
(937 250)
Cumulative liquidity surplus/(gap)
at 31 December 2012
(516 788)
(2 999 497)
(3 936 747)
38
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
18
Credit Related Commitments
The primary purpose of credit related commitments instruments is to ensure that funds are available to a customer
when required. Guarantees and standby letters of credit, which represent irrevocable assurances that the Group will
make payments in the event that a customer cannot meet the obligations to third parties, carry the same credit risk
as loans.
The total outstanding contractual amount of undrawn credit lines, letters of credit and guarantees does not
necessarily represent future cash payments, as these financial instruments may expire or terminate without any
payments being made.
Commitments to extend credit represent unused portions of authorisations to extend credit. With respect to credit
risk on commitments to extend credit, the Group is potentially exposed to a loss equal to the total amount of
unused commitments. However, the likely amount of loss is less than the total unused commitments since most
commitments to extend credit are contingent upon customers maintaining specific credit standards. The Group
monitors the maturities of credit related commitments because longer-term commitments generally have a greater
degree of credit risk than shorter-term commitments.
Outstanding credit related commitments are as follows:
In thousands of Ukrainian hryvnia
Export letters of credit
Guarantees issued
Avals granted
Other credit commitments
Total credit related commitments
31 March 2013
(unaudited)
31 December
2012
356 547
741 430
546
472 136
404 922
886 418
546
678 049
1 570 659
1 969 935
As at 31 March 2013, included in Due to corporate customers are deposits of UAH 52 264 thousand
(31 December 2012: UAH 61 518 thousand) held as collateral for credit related commitments issued to customers.
Refer to Note 10.
39
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
19
Fair Value of Financial Instruments
Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable,
willing parties in an arm’s length transaction.
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by
valuation technique:
·
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;
·
Level 2: techniques for which all inputs which have a significant effect on the recorded fair value are
observable, either directly or indirectly; and
·
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not
based on observable market data.
The following tables show an analysis of financial instruments recorded at fair value by level of the fair value
hierarchy:
At 31 March 2013 (unaudited)
Level 1
Recurring fair value measurement
Level 2
Level 3
Total
Financial assets
Trading securities
Securities designated at fair value through profit or loss
Securities pledged under repurchase agreements
Investment securities available for sale
Derivative financial instruments
2 709 600
139 101
-
219 553
51 150
1 236 380
5 000
-
2 929 153
51 150
1 375 481
5 000
Total financial assets at fair value
2 848 701
1 512 083
-
4 360 784
Financial liabilities
Derivative financial instruments
-
(14 440)
-
(14 440)
Total financial liabilities at fair value
-
(14 440)
-
(14 440)
At 31 December 2012
Level 1
Recurring fair value measurement
Level 2
Level 3
Total
Financial assets
Trading securities
Securities designated at fair value through profit or loss
Securities pledged under repurchase agreements
Investment securities available for sale
Derivative financial instruments
1 696 353
10 482
376 512
-
20 773
50 621
22 008
3 347
-
1 717 126
50 621
10 482
398 520
3 347
Total financial assets at fair value
2 083 347
96 749
-
2 180 096
Financial liabilities
Derivative financial instruments
-
(12)
-
(12)
Total financial liabilities at fair value
-
(12)
-
(12)
40
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
19
Fair Value of Financial Instruments (Continued)
Level 2 includes debt securities of first-class borrowers that are not actively traded on the market. Fair value of the
securities was calculated using techniques for which all inputs which have a significant effect on the recorded fair
value are observable. Financial characteristics of comparable financial instruments actively traded on the market
were used as inputs for the fair valuation models.
Fair values of financial assets are as follows:
In thousands of Ukrainian hryvnia
Financial assets carried at amortised cost
Cash and cash equivalents
Mandatory reserves with the National Bank of
Ukraine
Due from banks
Loans and advances to customers:
- Commercial loans to legal entities
- Specialized loans to legal entities
- Consumer and other loans to individuals
- Mortgage loans to individuals
- Credit cards and overdrafts
- Car loans to individuals
Other financial assets:
Total financial assets carried at amortised cost
Fair values of financial liabilities are as follows:
In thousands of Ukrainian hryvnia
Financial liabilities carried at amortised cost
Due to National bank of Ukraine
Due to banks:
- Correspondent accounts and overnight
placements of banks
- Term placements of banks
- Sale and repurchase agreements with banks
Due to Individuals:
- Current/demand accounts
- Term deposits
Due to corporate customers:
- Current/settlement accounts of corporate
customers
- Term deposits of corporate customers
Debt securities in issue
Other borrowed funds
Other financial liabilities
Subordinated debt
Total financial liabilities carried at amortised cost
31 March 2013 (Unaudited)
Carrying value
Fair value
31 December 2012
Carrying value
Fair value
1 725 719
1 725 719
2 012 400
2 012 400
638 950
-
638 950
-
514 807
183 351
514 807
183 351
17 636 912
2 149 814
475 832
253 377
64 048
11 630
328
17 331 963
2 131 001
455 666
234 602
64 143
10 148
328
17 790 017
2 149 799
350 977
283 711
28 986
14 198
3 575
17 627 833
2 051 511
340 375
271 013
27 859
13 128
3 575
22 956 610
22 592 520
23 331 821
23 045 852
31 March 2013 (Unaudited)
Carrying value
Fair value
31 December 2012
Carrying value
Fair value
-
-
3 509
3 499
898 157
6 546 642
-
898 157
6 612 405
-
527 050
7 026 409
61 360
527 050
7 049 417
61 390
1 427 588
9 328 185
1 427 588
9 528 263
1 164 357
7 820 592
1 164 357
7 803 816
2 676 598
2 366 028
636 455
38 426
415 424
2 676 598
2 389 540
622 346
38 426
424 069
1 910 652
2 323 676
692 386
650 231
35 232
415 428
1 910 652
2 328 919
692 378
645 599
35 232
410 843
24 333 503
24 617 392
22 630 882
22 633 152
41
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
19
Fair Value of Financial Instruments (Continued)
Transfers between level 1 and 2.
The following tables show transfers between level 1 and level 2 of the fair value hierarchy for financial assets measured
at fair value on a recurring basis during the three months periods ended:
In thousands of Ukrainian hryvnia
Financial assets
Investment securities available for sale
Three months ended 31 March
(Unaudited)
2013
2012
20 862
-
The above financial instruments were transferred from level 2 to level 1 as they became actively traded during the
reporting period and fair values were consequently determined using quoted prices in an active market.
In thousands of Ukrainian hryvnia
Financial assets
Investment securities available for sale
Three months ended 31 March
(Unaudited)
2013
2012
-
151 273
The above financial instruments were transferred from level 1 to level 2 as they ceased to be actively traded during the
period and fair values were consequently obtained using valuation techniques using observable market inputs.
Financial instruments carried at fair value. Trading securities, other assets at fair value through profit or loss,
financial derivatives, available for sale financial assets are carried in the consolidated statement of financial position
at fair value.
Cash and cash equivalents are carried at amortised cost which approximately equals their current fair value.
Loans and receivables carried at amortised cost. The fair value of floating rate instruments is normally their carrying
amount. Due to significant changes in market situation interest rates for loans and advances to customers and due
from banks issued at fixed interest rates can be revised. Therefore interest rates for loans issued just before
reporting date do not differ significantly from interest rates for new credit instruments with similar credit risk and
remaining maturity. If under the Group assessment interest rates for the loans issued before reporting date differ
significantly from current interest rates for similar credit instruments the fair value for these loans is estimated. The
estimation is based on estimated future cash flows expected to be received discounted at current interest rates for
new instruments with similar credit risk and remaining maturity. Discount rates used depend on currency, maturity
of the instrument and credit risk of the counterparty.
Contractual interest rates on loans and advances to customers and due from banks as at 31 March 2013 and
31 December 2012 were as follows:
Due from banks
Loans and advances to customers:
Corporate loans
Loans to individuals
31 March 2013
31 December 2012
-
2.3% to 18.0% p.a.-
9.1% to 17.5% p.a.
12.4% to 32.2% p.a.
7.6% to 24.2% p.a.
10.1% to 38.7% p.a.
Estimated fair value of other financial assets including trade debtors equals their carrying amount considering shortterm nature of these assets.
42
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
19
Fair Value of Financial Instruments (Continued)
Liabilities carried at amortised cost. The fair value is based on quoted market prices, if available. The estimated fair
value of fixed interest rate instruments with stated maturity, for which a quoted market price is not available, was
estimated based on expected cash flows discounted at current interest rates for new instruments with similar credit
risk and remaining maturity. The fair value of liabilities repayable on demand or after a notice period (“demandable
liabilities”) is estimated as the amount payable on demand, discounted from the first date that the amount could be
required to be paid. Discount rates used were consistent with the Group’s credit risk and also depend on currency
and maturity of the instrument and ranged from 0.9% p.a. to 17.1% p.a. (31 December 2012: from 1.6% p.a. to
19.4% p.a.).
Derivative financial instruments. All derivative financial instruments are carried at fair value as assets when the fair
value is positive and as liabilities when the fair value is negative.
43
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
20
Related Party Transactions
For the purposes of these condensed interim consolidated financial statements parties are considered to be related
if one party has the ability to control the other party is under common control or can exercise significant influence
over the other party in making financial or operational decisions. In considering each possible related party
relationship attention is directed to the substance of the relationship not merely the legal form.
Related parties comprise the Shareholder of the Bank, members of the Supervisory Board and the Management
Board, representing key management personnel of the Group, close family members of key management personnel,
companies that are under common control with the Group, companies that are controlled or significantly influenced
by the Shareholder, by key management personnel or by their close family members, companies controlled by the
Government of the Russian Federation.
As at 31 March 2013 and 31 December 2012, the Bank’s parent is Sberbank of Russia, which is ultimately controlled
by the Government of the Russian Federation.
Balances with related parties are as follows:
In thousands of Ukrainian hryvnia
Balances with the Shareholder
Cash and cash equivalents
Other assets
Due to banks
Other liabilities
Subordinated debt
Balances with key management personnel and its close family members
Loans and advances to customers
Due to individuals
Balances with other related parties
Cash and cash equivalents
Due to banks
Due to corporate customers
Debt securities in issue
31 March 2013
(unaudited)
31 December
2012
48 655
201
(7 012 708)
(3 441)
(415 424)
64 660
681
(7 166 267)
(2 059)
(415 428)
746
(157 699)
818
(150 064)
50 439
(75 358)
(16 283)
-
1 129
(23 596)
(136 807)
44
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
20
Related Party Transactions (Continued)
The income and expense with related parties are as follows:
Three months ended 31 March
(unaudited)
2013
2012
In thousands of Ukrainian hryvnia
Transactions with the parent
Interest income
Interest expense
Fee and commission income
Fee and commission expense
Volume of transactions with parent
Due to banks at 1 January
- Amounts due to banks received during the year
- Amounts due to banks repaid during the year
- Other movements in due to banks
Due to banks at 31 March
Transactions with key management personnel
Interest income
Interest expense
General administrative expenses
Transactions with other related parties
Interest income
Interest expense
Net gains arising from trading securities
Net gains arising from investment securities available for sale
324
(121 340)
3
(3 025)
224
(82 094)
3
(807)
(7 166 267)
396 186
(242 627)
(7 012 708)
(4 777 896)
(1 340 966)
705 638
(466 051)
(5 879 275)
52
(3 121)
(7 579)
224
(1 520)
(6 365)
3 211
(173)
2 401
-
808
(3 046)
1 160
(862)
For the three months ended 31 March 2013, remuneration of the members of the key management personnel
comprised salaries and bonuses paid totaling UAH 5 825 thousand (for the three months ended 31 March 2012: UAH
4 556 thousand).
21
Principal Subsidiaries
The table below provides details on principal subsidiary of the Bank as at 31 March 2013:
Name
LLC Kiparis-2
Nature of
business
operator of hotels
Percentage of
ownership
99.4%
Country of
registration
Ukraine
Hotels buildings owned by the LLC Kiparis-2 in statement of financial position are classified as investment property.
These buildings are held by the Group to earn rental income. This purchase was made with the purpose of leasing
it to the Shareholder and all rent cash receipts are expected to be from the Shareholder. The share of the subsidiary
of the Bank in the consolidated assets of the Group as at 31 March 2013 was 0.1%
(31 December 2012: 0.1%).
45
Translation from original in Ukrainian
Selected Notes to the Condensed Interim Consolidated Financial Statements –
31 March 2013
22
Capital Adequacy Ratio
The Group’s objectives when managing capital are (i) to comply with the regulatory capital requirements set by the
NBU and (ii) to safeguard the Group’s ability to continue as a going concern. The Group also monitors capital
adequacy ratio based on Basel Accord to make sure it maintains a level of at least 8%. Compliance with capital
adequacy ratios set by the NBU is monitored monthly, with the reports to the NBU presenting the appropriate
calculations.
The Group defines as capital those items defined by statutory regulation as capital for credit institutions. Under the
current capital requirements set by the NBU banks have to maintain a ratio of capital to risk weighted assets
(statutory capital ratio) above the prescribed minimum level. As at 31 March 2013, the minimum level required by
the NBU is 10.0% (31 December 2012: 10.0%). If it does not maintain or sufficiently increase its capital base in line
with the increase in its risk weighted assets, it risks non-compliance with the NBU capital adequacy regulations,
which could lead to the imposition of sanctions by the NBU. This could have a material adverse effect on results of
operations and financial condition.
The Group also monitors capital adequacy ratio based on Basel Accord to make sure it maintains a level of at least
8%. As at 31 March 2013 and 31 December 2012, Capital Adequacy Ratios calculated by the Group in accordance
with the International Convergence of Capital Measurement and Capital Standards (July 1988, updated to
November 2005) and Amendment to the Capital Accord to incorporate market risks (updated November 2005),
commonly known as Basel 1 requirements, were as follows:
In thousands of Ukrainian hryvnia
Tier 1 capital
Share capital
Share premium
Accumulated deficit
Total Tier 1 capital
Tier 2 capital
Revaluation reserve for office premises
Fair value reserve for investment securities available for sale
Subordinated debt
Total Tier 2 capital
Total capital
Risk weighted assets (RWA)
Credit risk
Market risk
Total risk weighted assets (RWA)
Core capital adequacy ratio (Total Tier 1 capital to Total RWA)
Total capital adequacy ratio (Total capital to Total RWA)
31 March
2013
(unaudited)
31 December
2012
3 392 461
270 558
(132 308)
3 530 711
3 392 461
270 558
(248 383)
3 414 636
129 800
2 239
211 198
343 237
130 530
3 232
210 847
344 609
3 873 948
3 759 245
22 690 270
2 128 418
24 818 688
22 917 610
609 280
23 526 890
14.2%
15.6%
14.5%
16.0%
46