JSCB INDUSTRIALBANK Interim Financial Statements

Transcription

1 JSCB INDUSTRIALBANK Interim Financial Statements For the quarter ended 31 March

2 CONTENT Interim condensed statement of financial position 1 Interim condensed statement of profit and loss... 2 Interim condensed statement of comprehensive income... 3 Interim condensed statement of changes in equity capital... 4 Interim condensed statement of cash flows... 5 NOTES TO FINANCIAL STATEMENTS FOR I QUARTER 1. Principal activity... Ошибка! Закладка не определена. 2. Operation environment, risks and economic climate... Ошибка! Закладка не определена. 3. Basis for preparing interim condensed statements Segment information... Ошибка! Закладка не определена. 5. Cash and cash equivalents... Ошибка! Закладка не определена. 6. Amounts due from credit institutions... Ошибка! Закладка не определена. 7. Derivative financial instruments... Ошибка! Закладка не определена. 8. Loans to customers... Ошибка! Закладка не определена. 9. Securities available-for-sale... Ошибка! Закладка не определена. 10. Taxation Other impairment and provisions... Ошибка! Закладка не определена. 12. Other assets and liabilities... Ошибка! Закладка не определена. 13. Amounts due to credit institutions... Ошибка! Закладка не определена. 14. Other raised funds... Ошибка! Закладка не определена. 15. Commitments and contingencies... Ошибка! Закладка не определена. 16. Net commission income... Ошибка! Закладка не определена. 17. Other income... Ошибка! Закладка не определена. 18. Personnel and other administrative and operational expenses Net profit per share Transactions with related parties... 16

3 INTERIM CONDENSED STATEMENT OF FINANCIAL POSITION As at 31 March (UAH, thousand) Assets Cash and cash equivalents 292, ,601 Precious metals 6,213 6,265 Amounts due from credit institutions 39,106 80,175 Derivative financial assets 3,692 5,402 Loans to customers 2,027,009 2,083,633 Securities available-for-sale 113,607 84,696 Investment property 167, ,211 Fixed assets 109, ,201 Intangible assets 6,367 6,721 Deferred tax assets 6,944 6,944 Other assets 21,774 6,368 Total assets 2,794,487 2,788,217 Liabilities Amounts due to credit institutions 31,896 53,967 Derivative financial liabilities Amounts due to customers 1,878,456 1,857,791 Other raised funds 2,265 2,858 Current liabilities with regard to profits tax 643 2,437 Other liabilities 30,328 23,315 Total liabilities 1,943,825 1,940,368 Equity capital Authorized capital 607, ,798 Additional paid-in capital 8,022 8,022 Reserves and other funds of the bank 177, ,565 Retained profits 58,490 55,560 Revaluation reserve (1,213) (1,096) Total equity capital 850, ,849 Total liabilities and equity capital 2,794,487 2,788,217 Signed and authorized for release for and on behalf of the Board of the Bank by: [Official Seal] O.V. Markovskyi [Signature] Acting Chairman of the Board T.V.Grebeshkova [Signature] Chief Accountant 27 April (Prepared by V.E. Potapov, ) Notes in pages 6-17 are the integral part of these financial statements 1

4 INTERIM CONDENSED STATEMENT OF PROFIT AND LOSS For І quarter ended 31 March (UAH, thousand) Interest income for 3 months year to date year to date Loans to customers 104, ,246 83,649 83,649 Amounts due from credit institutions 1,744 1,744 2,256 2,256 Securities available-for-sale ,282 1, , ,932 87,187 87,187 Interest expense Amounts due to customers (40,487) (40,487) (44,417) (44,417) Amounts due to credit institutions (1,329) (1,329) (470) (470) Other raised funds (68) (68) (721) (721) (41,884) (41,884) (45,608) (45,608) Net interest income 65,048 65,048 41,579 41,579 Allowance for impairment of financial assets (30,618) (30,618) (47,671) (47,671) Net interest income after deducting allowance for impairment of loans 34,430 34,430 (6,092) (6,092) Net commission income 5,806 5,806 4,754 4,754 Net profits from derivative financial instruments 5,200 5, Net profits / (loss) from foreign currency transactions: - trade income ,884 8,884 - currency translation (4,213) (4,213) Other income 5,312 5,312 3,939 3,939 Non-interest income 13,093 13,093 18,015 18,015 Personnel expense (19,395) (19,395) (17,407) (17,407) Depreciation and amortization (2,723) (2,723) (2,938) (2,938) Other administrative and operational expense (19,056) (19,056) (19,129) (19,129) Accrual of provision for impairment of other assets and for liabilities (2,776) (2,776) (1,029) (1,029) Non-interest expense (43,950) (43,950) (40,503) (40,503) Profit / (loss) before taxation 3,573 3,573 (28,580) (28,580) Profit tax relief / (expense) (643) (643) (518) (518) Profit / (loss) 2,930 2,930 (29,098) (29,098) Profit / (loss) per share (UAH) (0.16) (0.16) Signed and authorized for release for and on behalf of the Board of the Bank by: [Official Seal] O.V. Markovskyi [Signature] Acting Chairman of the Board T.V.Grebeshkova [Signature] Chief Accountant 27 April (Prepared by V.E. Potapov, ) Notes in pages 6-17 are the integral part of these financial statements 2

5 INTERIM CONDENSED STATEMENT OF CHANGES IN EQUITY CAPITAL For І quarter ended 31 March (UAH, thousand) for 3 months year to date for 3 months year to date Profit / (loss) 2,930 2,930 (29,098) (29,098) Other comprehensive income: Other comprehensive income subject to reclassification to profit or loss in subsequent periods: Retained loss from securities available-for-sale (117) (117) - - Realized gain from transactions with securities availablefor-sale, reclassified to statement on profits or losses Profits tax Net comprehensive income subject to reclassification to profit or loss in subsequent periods (117) (117) - - Other comprehensive income not subject to reclassification to profit or loss in subsequent periods: Tax on profits relating to components of other comprehensive income Other net comprehensive income not subject to reclassification to profit or loss in subsequent periods Other comprehensive income less taxes (117) (117) - - Total comprehensive income 2,813 2,813 (29,098) (29,098) Signed and authorized for release for and on behalf of the Board of the Bank by: [Official Seal] O.V. Markovskyi [Signature] Acting Chairman of the Board T.V.Grebeshkova [Signature] Chief Accountant 27 April (Prepared by V.E. Potapov, ) Notes in pages 6-17 are the integral part of these financial statements 3

6 INTERIM CONDENSED STATEMENT OF CHANGES IN EQUITY CAPITAL For І quarter ended 31 March (UAH, thousand) Reserve and Authorized Additional Revaluation Retained Total equity other funds of capital paid-in capital reserve profits capital the Bank 31 December ,798 8, ,968 54, ,090 Loss for a quarter (29,098) (29,098) Other comprehensive income for a quarter Total comprehensive income for a quarter (29,098) (29,098) 31 March 607,798 8, ,968 25, , December року 607,798 8,022 (1,096) 177,565 55, ,849 Profits for a quarter 2,930 2,930 Other comprehensive income for a quarter (117) (117) Total comprehensive income for a quarter (117) 2,930 2, March 607,798 8,022 (1,213) 177,565 58, ,662 Signed and authorized for release for and on behalf of the Board of the Bank by: [Official Seal] O.V. Markovskyi [Signature] Acting Chairman of the Board T.V.Grebeshkova [Signature] Chief Accountant 27 April (Prepared by V.E. Potapov, ) Notes in pages 6-17 are the integral part of these financial statements 4

7 INTERIM CONDENSED STATEMENT OF CASH FLOWS Direct method For І quarter ended 31 March (UAH, thousand) Cash flow from operating activities Interest received 138,019 68,206 Interest paid (36,540) (44,202) Fees and commissions received 8,286 6,950 Fees and commissions paid (4,639) (3,068) Net profit /(loss) from foreign currency transactions (realized) 988 8,884 Other income received 12,721 3,998 Personnel and other administrative and operational expense (38,449) (36,536) Cash received from /(paid in) operating activities before changes in 80,386 4,232 operating assets and liabilities Net (increase) / decrease in operating assets Amounts due from credit institutions 35,475 7,914 Loans to customers (5,563) 18,945 Other assets (16,514) (9,654) Net (increase) / decrease in operating liabilities Amounts due to credit institutions (21,950) (125,689) Amounts due to customers 17,579 (108,026) Other liabilities 6,595 9,649 Net cash used in operating activities, before taxation 96,008 (202,629) Profits tax paid (2,437) (15) Net cash used in operating activities 93,571 (202,644) Cash flow from investing activities Proceeds from sale and redemption of securities available-for-sale 126, ,000 Securities available-for-sale purchased (158,000) - Fixed assets and intangible assets purchased (720) (387) Proceeds from sale of fixed assets and investment property Net amounts from investing activities (32,119) 114,115 Cash flow from financing activities Other raised funds received - - Other raised funds paid (579) (921) Amounts (paid) / received in financing activities (579) (921) Effects of currency translation on cash and cash equivalents 3,052 17,248 Net increase / (decrease) of cash and cash equivalents 63,925 (72,202) Cash and cash equivalents, 1 January 228, ,678 Cash and cash equivalents, 31 March 292, ,476 Signed and authorized for release for and on behalf of the Board of the Bank by: [Official Seal] O.V. Markovskyi [Signature] Acting Chairman of the Board T.V.Grebeshkova [Signature] Chief Accountant 27 April (Prepared by V.E. Potapov, ) Notes in pages 6-17 are the integral part of these financial statements 5

8 1. Principal activity PUBLIC JOINT-STOCK COMPANY JOINT-STOCK COMMERCIAL BANK INDUSTRIALBANK (the Bank ) was established as a Joint Stock Bank through the reorganization of Commercial Bank Spivdruzhnist which had been registered by the State Bank of the USSR under No. 744 on 6 November 1990 and registered by the National Bank of Ukraine under No. 36 on 16 October The Bank operates under the general banking license No. 126 issued by the National Bank of Ukraine (the NBU ) on 12 October The Bank also possesses the licensies issued by the State Commission for Securities and Stock Market of Ukraine to perform professional activities in the stock market securities trading activity: series АЕ No dated 17 October 2012 (brokerage), series AЕ No dated 17 October 2012 (dealing). The Bank accepts deposits from natural persons and legal entities and extends credits, transfers payments in Ukraine and abroad, trades with securities, issues payment cards, exchanges currencies and provides banking services to its corporate and retail customers. The Bank s Head Office is located in Zaporizhzhia. As at the end of the reporting period, the Bank had 34 operating outlets (: 34 operating outlets) throughout Ukraine covering districts and major industrial centres in various regions of Ukraine and the representative office in Kyiv. The Bank s registered address is 39 D, Nezalezhnoi Ukrainy Street, Zaporizhzhia, Ukraine. The Bank is a member of the Individuals Deposit Insurance Fund. The fund is state owned and operates under the Ukrainian laws and regulations. The individuals deposit insurance payment amounts to UAH 200 thousand (: up to UAH 200 thousand) for each natural person in case of the Bank s bankruptcy and revocation of the Bank s banking license. In the Bank will develop the business lines as follows: - - focus on retention of customers and resource base of the Bank; - improvement in customers service; - non-performing loan management; - development of the Bank s card business; - internal process improvement, including through automation thereof - lending development and services to SME; As at the close of business on 31 March the following shareholders owned more than 5% in the Authorized Capital of the Bank (direct holding): Shareholders DVORETSKYY ROZA Insurance company with additional liability Zakhid-Rezerv Ukrtransnafta, Public Joint-Stock Company Other Total As at the close of business on 31 March, the members of the Bank s Supervisory Council and Management Board controlled % (: %) of the Bank s Authorized Capital (taking into consideration that a member of Supervisory Council R. Nemyrovskyi is a representative of the Bank shareholder H.M. Dvoretska, who directly holds shares of the Bank making % in the Authorized Capital of the Bank). According to Decision of Committee on banking supervision and regulation, payment system supervision (oversight) of the National Bank of Ukraine on approval of acquiring qualifying holding in bank dd No. 62, acquiring of joint (direct and indirect) qualifying holding by a group of associated persons was approved: DVORETSKYY ROZA as on 31 March, direct holding makes %, indirect holding makes %; Dvoretskyi Igor Volodymyrovych as at the close of business on 31 March, direct holding makes %; Dvoretska Hanna Mykolaivna as at the close of business on 31 March, direct holding makes %. As at the close of business on 31 March, total holding by the group of associated persons in the Authorized Capital made % (31.12.: %). 6

9 2. Operation environment, risks and economic climate Ukrainian political and economic situation has been significantly deteriorated since Due to political and social disturbances commenced in November 2013, the Republic of Crimea was annexed to the Russian Federation in March 2014 through a chain of events in Crimea, such annexation was not recognized by Ukraine and many other countries. This event caused significant deterioration of relations between Ukraine and the Russian Federation. Following the instability in Crimea, the regional conflict was extended to the eastern territories of Ukraine, mainly, to Donetsk and Lugansk regions. In May 2014 protests in Donetsk and Lugansk regions dissolved into military collisions and armed conflict between supporters of self-proclaimed republics in Donetsk and Lugansk regions and Ukrainian forces proceeded as at the date if these financial statements. As a result of such conflict, a part of Donetsk and Lugansk regions remained under control of self-proclaimed republics, and Ukrainian government has no possibility to implement full compliance with Ukrainian laws in this territory. Political and social disturbances alongside with military conflict in Donetsk and Lugansk regions aggravated the existing economic crisis and caused decline in gross domestic product and volumes of foreign trade, deterioration of financial position of the state finances, exchange losses of the National Bank of Ukraine, significant depreciation of the national currency and further downgrade of credit rating of Ukrainian sovereign debt. As a result of depreciation of the national currency, the National Bank of Ukraine introduced a number of administrative restrictions to currency exchange transactions, which, inter alia, included restrictions to purchase foreign currency by natural persons and legal entities, prohibition to withdraw currency abroad in order to pay dividends, moratorium to repay loans received from non-residents before maturity, and restriction to draw cash from banking accounts. Such events adversely affected Ukrainian companies and banks, which significantly limited their ability to obtain financing in internal and international markets. During І quarter, no significant changes in Ukrainian political and economic situation occurred. One of the constraining factors for economic development was the suspended transport link in the east of the country and takeover of enterprises in the territory of individual areas of Donetsk and Lugansk regions. At the same time, active loosening of monetary policy by NBU in furthered trends for decrease in value of resources in interbank credit market and domestic government bonds rates. However, the retail bank interest rates still remained at rather high level. Generally speaking, lending activity in 1 quarter remained minor in the context of the retained significant credit risks and high leverage of corporate borrowers. The final outcome of development and consequences of political and economic crisis can be hardly predicted, nevertheless, they may further adversely affect Ukrainian economy. Although management assumes it takes appropriate measures to support stability of the Bank s activities required under the existing circumstances, continuance of the current instability in business environment may adversely affect performance and financial position of the Bank in a manner not currently determinable. These financial statements reflect the current assessment made by management regarding impact of business environment in Ukraine to operation activities and financial standing of the Bank. Future business environment may differ from assessment made by management. In the current quarter, the Bank fulfilled its obligations to depositors and other customers in full. General 3. Basis for preparing condensed financial statements These interim financial statements have been prepared in accordance with International Financial Reporting Standards ( IFRS ). Accounting principles accepted for condensed financial statements comply with principles used in preparing annual financial statements of the Bank for the year ended Notes to Interim condensed statement of financial position (Balance sheet), Interim condensed statement of profit and loss (Income statement) and Interim condensed statement of comprehensive income have been prepared by items of interim condensed statements that significantly changed as compared to data of the same items in annual financial statements. These financial statements are presented in thousands of Ukrainian hryvnia ( UAH thousand ), unless otherwise indicated. Discontinued operations Bank management assessed the Bank s ability to continue its operations for the nearest future, and deems that the Bank has resources to continue its operations for the foreseeable future. In addition, the management is not aware of any significant uncertainty that may cause a material doubt in the Bank s ability to continue its operations for the foreseeable future. As at 31 March, exchange rate of the Ukrainian hryvnia fixed by NBU made UAH per USD 1 (31.12.: UAH ) and UAH per EUR 1 (31.12.: UAH ). Average exchange rate of the Ukrainian hryvnia for І quarter made UAH per USD 1 (31.12.: UAH ) and UAH per EUR 1 (31.12.: UAH ). 7

10 Significant judgments and estimates In the process of applying the Bank s accounting policies, the management has used its judgments and made estimates in determining the amounts recognized in the financial statements. The most significant judgments and estimates are as follows: Allowance for loan and receivables impairment The Bank regularly reviews its loans and receivables to assess impairment. The Bank uses its experienced judgment to estimate the amount of any impairment loss in cases where a borrower is in financial difficulties and there are few available sources of historical data relating to similar borrowers. Similarly, the Bank estimates changes in future cash flows based on the observable data indicating that there has been an adverse change in the payment status of borrowers in a group, or national or local economic conditions that correlate with defaults on assets in the group. The management uses estimates based on historical loss experience for assets with credit risk characteristics and objective evidence of impairment similar to those in the group of loans and receivables. The Bank uses its experienced judgment to adjust the observable data for a group of loans or receivables to reflect the current circumstances. Related parties determination and initial recognition of transactions with related parties In its ordinary course of business, the Bank carries out transactions with related parties. The Bank uses its experienced judgment to ascertain the fact, whether the counterparty is the related party, including transactions with those companies, in which authorized capital the major Bank shareholders separately hold, directly or otherwise, a share. 4. Segment information For management purposes, the Bank is organized into four operating segments as follows: Retail banking Corporate banking Financial institutions and Investments Other/ Unallocated Principally handling individual customers deposits, and providing consumer loans to individuals, credit cards facilities and funds transfer facilities. Principally handling loans and deposits and current accounts for corporate customers. Principally include products for securities transactions or for rendering services to financial and investments market participants (interbank operations, stock market, etc.). Other not directly allocated operations. The management monitors the operating results of its business units separately for the purpose of making decisions about the resource allocation and performance assessment. Segment performance, as explained in the table below, is measured differently from the financial statements. Income taxes are managed on a group basis and are not allocated to operating segments. The following tables present income and expense and certain asset and liability information regarding the Bank s operating segments: Third party Corporate banking Retail banking Financial institutions and investments Other/ Unallocated Interest income 102,680 1,566 2, ,933 Commission income 3,217 6, ,507 Total Non-interest income, except for commission income 39 1,221 1,254 4,773 7,287 Total revenue 105,936 8,990 4,028 4, ,727 Interest expense (11,167) (29,271) (1,397) (49) (41,884) Commission expense 0 (2,779) (849) (73) (3,701) 8

11 Charge for impairment of assets and provisions (17,719) (4,466) (8,433) (2,776) (33,394) Non-interest expense (2,560) (10,435) (707) (27,473) (41,175) Segment results 74,490 (37,961) (7,358) (25,598) 3,573 Income tax expense Profit 74,490 (37,961) (7,358) (25,598) 2,930 Segment assets 2,095, , ,006 88,201 2,794,488 Segment liabilities 545,137 1,338,854 37,029 22,806 1,943,826 Other segment information Capital expenditure Corporate banking Financial institutions and investments Other/ Unallocated Retail banking Third party Interest income 82,055 1,594 3, ,187 Commission income 2,216 5, ,589 Non-interest income, except for commission income 115 1,475 7,869 3,802 13,261 Total revenue 84,386 8,353 11,496 3, ,037 Interest expense (8,862) (35,555) (1,191) 0 (45,608) Commission expense 0 (2,327) ( 448) ( 60) (2,835) Total (643) Charge for impairment of assets (46,733) ( 919) ( 20) (1,028) (48,700) and provisions Non-interest expense (2,365) (10,481) ( 688) (25,940) (39,474) Segment results 26,426 (40,929) 9,149 (23,226) (28,580) Income tax expense Profit / (loss) for a quarter 26,426 (40,929) 9,149 (23,226) (29,098) Segment assets 2,111, , , ,898 2,692,962 Segment liabilities 498,772 1,285,630 66,661 24,907 1,875,970 Other segment information Capital expenditure ( 518) 5. Cash and cash equivalents Cash and cash equivalents comprise: Cash on hand 69,948 64,055 Current accounts with the National Bank of Ukraine 31,642 54,173 Current accounts with other credit institutions 203, ,644 Less Allowance for impairment (12,478) (1,271) Cash and cash equivalents 292, ,601 As at the close of business on 31 March, UAH 64,853 thousand (: UAH 92,425 thousand) was placed on current accounts with three (: three) internationally recognized OECD banks, which are the main counterparties of the Bank in performing international settlements. 9

12 6. Amounts due from credit institutions Amounts due from credit institutions comprise: Term deposits due from credit institutions with maturity of up to 90 days 43,150 73,396 Cash security deposit 4,586 21,458 Total amounts due from credit institutions 47,736 94,854 Less Allowance for impairment (8,630) (14,679) Amounts due from credit institutions 39,106 80, Derivative financial instruments The table below shows the fair values of derivative financial instruments recorded as assets or liabilities, together with their notional amounts. The notional amount, recorded gross, is the amount of a derivative s underlying asset, reference rate or index and is the basis upon which changes in the value of derivatives are measured. The notional amounts indicate the volume of transactions outstanding at the year end and are not indicative of the credit risk. Notional amount Fair value Notional Fair value Assets Liabilities amount Assets Forwards internal contracts 115,033 2,211 84,654 1,517 SWAPs 129,609 1,481 (237) 124,570 3,885 Total derivative assets/ (liabilities) 3,692 (237) 5,402 As at the close of business on 31 March and 31 December, the Bank had positions in the following types of derivatives: Forwards Forward contracts are contractual agreements to buy or sell a specified financial instrument at a specific price and date in the future. Forwards are customized contracts transacted in the over-the-counter market. SWAPs Swaps are contractual agreements between two parties to exchange movements in foreign currency rates. 8. Loans to customers Loans to customers comprise: Corporate lending 2,112,125 2,146,387 Residential mortgages 29,808 64,285 Consumer lending 62,215 28,796 Gross loans to customers 2,204,148 2,239,468 Less Allowance for impairment (177,139) (155,835) Loans to customers 2,027,009 2,083,633 10

13 Allowance for impairment of loans to customers A reconciliation of the allowance for impairment of loans to customers by class is as follows: Corporate lending Consumer lending Residential mortgages At 1 January 95,048 19,640 41, ,835 Charge/(release) for quarter 17, ,451 22,186 Amounts written-off during quarter as uncollectible - - (166) (166) Currency translation difference (261) (141) (314) (716) At 31 March 112,506 19,515 45, ,139 Individual impairment 112,453 18,340 45, ,805 Collective impairment 53 1, , ,506 19,515 45, ,139 Gross amount of loans, individually determined to be impaired, before deducting any individually assessed impairment allowance 533,076 19,684 52, ,962 Total Corporate lending Consumer lending Residential mortgages At 1 January 98,082 17,859 41, ,186 Charge/(release) for quarter 46, ,651 Amounts written-off during quarter as uncollectible Currency translation difference 2,478 1,484 3,378 7,340 At 31 March 147,292 19,305 45, ,177 Individual impairment 147,277 18,162 45, ,909 Collective impairment 15 1, , ,292 19,305 45, ,177 Gross amount of loans, individually determined to be impaired, before deducting any individually assessed impairment allowance 2,029,293 18,162 72,220 2,119,675 Total Concentration of loans to customers As at 31 March, the Bank had a concentration of loans represented by UAH 1,738,434 thousand, due from the ten largest third party borrowers (79% of gross loan portfolio) (: UAH 1,732,228 thousand or 77% of gross loan portfolio). As at 31 March, an allowance of UAH 99,661 thousand (: UAH 81,103 thousand) was recognized against these loans. 11

14 9. Securities available-for-sale Securities available-for-sale comprise: Domestic government loan bonds 73,763 46,670 Deposit certificates of the National bank of Ukraine 35,040 30,020 Corporate shares 10,951 10,951 Less Allowance for impairment (6,147) (2,945) Securities available-for-sale 113,607 84,696 As at 31 March, shares amounting to UAH 2,925 thousand and holdings amounting to UAH 8,026 thousand (: shares amounting to UAH 2,925 thousand and holdings amounting to UAH 8,026 thousand) were recorded in portfolio of securities available-for-sale. As at 31 March, the impairment provisions for securities available-for-sale were UAH 6,147 thousand (: UAH 2, 945 thousand). 10. Taxation Income tax expense comprises: Current income tax charge 643 2,438 Deferred tax (benefit) / charge origination and reversal of temporary differences Income tax benefit / (expense) 643 3,200 As at , income tax rate for banks was 18%. Effective tax rate differ from the statutory rate. Consistency of profit tax expense with actual expense is based on the statutory rate as follow: Profit before taxation 3,573 6,055 Statutory tax rate 18% 18% Theoretical income tax expense / (benefit) at the statutory rate Other impairment and provisions Other financial Other nonfinancial assets assets Total 31 December , ,354 Charge/(reversal), including translation differences Write-off during the year as uncollectible (199) (76) (275) 31 December 2, ,833 Charge/(reversal), including translation differences 1,394 1,401 2,795 Write-off during the quarter as uncollectible March 3,400 2,228 5,628 Translation differences in reversal line for QI comprise UAH 0 thousand (for : UAH 88 thousand). 12. Other assets and liabilities Other assets comprise: 12

15 Other financial assets Receivables for cash transactions 6,895 - Settlements with customers 10,262 2,449 Accrued income 2,447 1,225 19,604 3,674 Allowance for impairment of other assets (3,400) (2,006) Other non-financial assets Advance payments for assets and services 5,233 2,204 Materials Deferred expenses 1,854 2,320 Repossessed collateral Taxes other than income tax Other ,798 5,527 Allowance for impairment of other non-financial assets (2,228) (827) Other assets 21,774 6,368 The value of the land plot is recorded in Repossessed collateral line. Currently, the Bank seeks for a purchaser for the land plot. Other liabilities comprise: Other financial liabilities Dividends payable 4,656 4,656 Accrued expenses 1,022 1,962 Payables on transactions with other financial instruments ,694 6,626 Other non-financial liabilities Taxes payable other than income tax 7,464 6,720 Accrual for unused vacation 6,930 6,567 Deferred income 1,713 1,452 Other 8,527 1,950 24,634 16,689 Other liabilities 30,328 23, Amounts due to credit institutions Amounts due to credit institutions comprise: Current accounts 31,896 24,051 Term deposits and loans - 29,916 Amounts due to credit institutions 31,896 53,967 13

16 14. Other raised funds Other raised funds comprise loans received from the State Mortgage Institution amounting to UAH 2,265 thousand as at 31 March (: UAH 2,858 thousand). Such amounts were received for assignment of claims under mortgage loans extended to natural persons at the rate % p.a. matured in with repurchase commitment. 15. Commitments and contingencies The management believes that: - ultimate liability arisen out of law suits and claims won t have any material effect to financial position or results of future operations of the Bank; - the Bank has accrued and paid all payable taxes and dues. As at 31 March, contractual and contingent financial liabilities of the Bank comprised: Credit-related commitments Promissory note guarantee 14,283 6,031 Guarantees 9,807 42,723 Total 24,090 48,754 Operating lease commitments Less than 1 year 4,853 3,838 1 to 5 years 7,481 6,521 Over 5 years Total 12,761 10,837 Commitments and contingencies (before deducting collateral) 36,851 59,591 Less Cash held as security against letters of credit and guarantees (86) (23) Commitments and contingencies 36,765 59, Net commission income Net commission income comprises: р. р. year to date р. р. year to date Cash and settlement operations 8,317 8,317 7,048 7,048 Commission for currency market and precious metal transactions for customers Credit servicing commission Off-balance sheet transactions Other commissions Commission income 9,507 9,507 7,589 7,589 Transactions with International Payment Systems (2,170) (2,170) (1,834) (1,834) Cash and settlement operations (1,457) (1,457) (940) (940) Other commissions (74) (74) (61) (61) Commission expense (3,701) (3,701) (2,835) (2,835) Net commission income 5,806 5,806 4,754 4,754 14

17 17. Other income for 3 months year to date for 3 months year to date Operating lease 2,581 2,581 2,430 2,430 Gain on investment property retirement Safe deposit lease Gain on sale of property and equipment 1,707 1, Recovery of written-off bad loans Penalties received Gain on prescheduled maturity of customer s deposits Other Total other income 5,312 5,312 3, Personnel and other administrative and operational expenses Salaries and other employee benefits, as well as other administrative and operational expenses comprise: year to date year to date Salaries and other employee benefits 16,081 16,081 14,404 14,404 Social security costs 3,314 3,314 3,003 3,003 Personnel expenses 19,395 19,395 17,407 17,407 Payments to the Individuals Deposits Insurance Fund 3,456 3,456 4,111 4,111 Repair and maintenance 3,028 3,028 3,729 3,729 Occupancy and rent 3,497 3,497 2,949 2,949 Operating taxes 2,759 2,759 2,371 2,371 Legal, insurance and consultancy ,407 1,407 Security 1,275 1,275 1,306 1,306 Office supplies 1,054 1,054 1,075 1,075 Data processing 1,000 1, Communications Business travel and related expenses Charity Marketing and advertising Other 1,000 1, Other administrative and operational expenses 19,056 19,056 19,129 19, Net profit per share Net profit (loss) per ordinary share comprises: Profit/(loss), attributable to the Bank s ordinary share holders ,855 Average annual number of ordinary shares in issue (number of shares) 184,741, ,741,050 Net profit /(loss) per ordinary share (UAH)

18 20. Transactions with related parties In accordance with IAS 24 Related Party Disclosures, parties are considered to be related if one party has the ability to control the other party or 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 may enter into the transactions, which unrelated parties might not, and transactions between related parties may not be effected on the same terms, conditions and amounts as transactions between unrelated parties. The outstanding balances of related party transactions at the year-end and the related income and expense for the year are as follows: Shareholders Key Key Other related management Shareholders management parties personnel personnel Other related parties Loans outstanding at 31 December, gross 3, ,137 96,757 Loans issued during 3 months 8, ,905 3,434 31,327 Loan repaid during 3 months (152) (31) (547,565) (1,300) (29,426) Loans outstanding at 31 March, gross 12, ,477 2,134 98,658 Less allowance for impairment at 31 March Loans outstanding at 31 March, net (64,820) (7) 12, ,657 2,134 98,651 Deposits at 31 December 344,086 21,993 94, ,942 42, ,479 Deposits received during 3 months 153,063 2,409 32, ,701 26,323 68,115 Deposits repaid during 3 months (151,316) (2,825) (62,984) (479,613) (23,403) (125,761) Deposits at 31 March 345,833 21,577 63, ,030 45,165 62,833 Current accounts at 31 March 30,237 6,781 51,727 33,139 8,665 44,030 As at 31 March, the balance on current accounts with other credit institutions being related parties to the Bank was UAH 95,455 thousand (as at 31 December : UAH 6,015 thousand). The income and expense arising from related party transactions are as follows: Key Shareholders management personnel Associates Key Shareholders management personnel Associates Interest income from loans , ,910 Interest expense from deposits 4, ,633 6,990 1,205 2,223 Commission income Other income 1 1, Translation losses on revaluation of deposits in foreign currency (576) (139) ,650 4,071 (3,518) Other operational expenses 240 1, Transactions with related parties both with the key management personnel and other related parties are performed at arm s length terms. 16

19 Compensation of the key management personnel comprised: Salaries and other short-term benefits 2,024 1,752 Social security costs Total key management personnel compensation 2,352 2,025 17