1/4 JANUARY TO MARCH 2012 MAY 2012

Transcription

1 1/4 JANUARY TO MARCH 2012 MAY 2012

2 Corporate governance bodies Aleš Hauc Andrej Plos Management Board of the Bank President Member Executive Directors of the Bank Aleksander Batič Ksenija Mrevlje Nataša Fesel Peter Kupljen Simon Hvalec Slavko Jarc Vlasta Brečko Supervisory Board of the Bank Dušan Jovanovič Franc Škufca Aleš Krisper Andrej Svetina Anton Guzej Darjan Petrič Janez Košak Vida Lebar Chairman Deputy Chairman Member Member Member Member Member Member Name of the parent bank: Nova Kreditna banka Maribor d.d. Short name of the parent bank: Nova KBM d.d. Registered office: Ulica Vita Kraigherja 4, 2505 Maribor BIC (SWIFT): KBMASI2X Reuters: KBMS IBAN: SI Account No.: Registration No.: Entry No. in the register of companies of the Maribor District Court: 062/ VAT ID No.: SI Share capital: 40,814,

3 NOVA KBM GROUP Total assets: 5,787.1 million Net profit: 1.4 million Number of employees: 2,994 ROAE: 1.31%; ROAA: 0.10% BANKING Number of employees: 2,011 Share of Group assets: 81.6% ROAE: 2.14%; ROAA: 0.17% INSURANCE Number of employees: 876 Share of Group assets: 11.1% ROAE: 8.85%; ROAA: 0.99% MANAGEMENT OF FUNDS AND PENSION SAVINGS Number of employees: 49 Share of Group assets: 2.1% ROAE: 10.61%; ROAA: 1.37% LEASING, REAL ESTATE AND OTHER SERVICES Number of employees: 58 Share of Group assets: 5.2% ROAE: (41.58%); ROAA: (2.21%) Nova KBM d.d. Total assets: 4,778.7 million Net profit: 0.5 million ROAE: 0.56%; ROAA: 0.05% PBS d.d % ownership Total assets: million Net profit: 1.3 million ROAE: 11.72%; ROAA: 0.63% ADRIA BANK AG 50.54% 1 ownership Total assets: million Net profit: 0.7 million ROAE: 8.12%; ROAA: 1.28% CREDY BANKA a.d % 2 ownership Total assets: million Net profit: 35,000 ROAE: 0.57%; ROAA: 0.11% Zavarovalnica Maribor d.d.* 51.00% 4 ownership Total assets: million Net profit: 1.9 million ROAE: 8.85%; ROAA: 0.99% KBM Infond d.o.o % 3 ownership Total assets: 17.8 million Net profit: 273,000 Assets under management: 280 million ROAE: 8.22%; ROAA: 6.35% Moja naložba d.d.* 45% ownership Total assets: million Net profit: 246,000 ROAE: 16.02%; ROAA: 0.74% KBM Leasing d.o.o. 100% ownership Total assets: million Net profit: 76,000 ROAE: %; ROAA: 0.21% Gorica Leasing d.o.o. 100% ownership Total assets: 87.7 million Net loss: 1.8 million ROAE: (100.00%); ROAA: (7.76%) KBM Leasing Hrvatska d.o.o. 100% ownership Total assets: 45.8 million Net loss: 406,000 ROAE: negative average capital ROAA: (3.45%) M-PAY d.o.o. 50% ownership Total assets: million Net profit: 3,000 ROAE: 6.65%; ROAA: 6.59% KBM Fineko d.o.o. 100% ownership Total assets: 4.1 million Net profit: 199,000 ROAE: 36.91%; ROAA: 21.25% KBM Invest d.o.o. 100% ownership Total assets: 46.8 million Net loss: 0.5 million ROAE: (43.77%); ROAA: (4.09%) KBM Projekt d.o.o. 76% ownership Total assets: 11.8 million Net profit: 76,000 ROAE: negative average capital ROAA: 2.62% * Associated company. 1 The Group's share in voting rights and share capital of Adria Bank AG accounts for 50.54%, while its share in the paid-up capital of Adria Bank AG equals 46.65%. Paid-up capital is made up of share capital and participating interests without voting rights held by non-controlling interest. 2 The shareholders' agreement entered into between the Bank and the Republic of Serbia includes a provision under which a 12.89% stake of the Republic of Serbia in Credy banka a.d. is subject to a call option available to the Bank and a put option available to the Republic of Serbia. Following the exercise of the option, the shareholding of the Bank in Credy banka a.d. will increase to 89.53%, while the shareholding of the Republic of Serbia will fall to 0%. 3 The Group's share in the share capital of KBM Infond d.o.o. accounts for 72.00%. Due to KBM Infond d.o.o. holding a certain percentage of its own shares, the Group's share in the capital and voting rights of KBM Infond d.o.o. equals 72.73%. 4 Zavarovalnica Maribor d.d. is not regarded as a subsidiary company because not all the requirements have been met to exercise control over the company. 3

4 Contents INTERIM REPORT OF THE NOVA KBM GROUP: JANUARY MARCH 2012 KEY PERFORMANCE INDICATORS OF THE NOVA KBM GROUP...5 PERFORMANCE HIGHLIGHTS FOR THE PERIOD JANUARY MARCH OTHER IMPORTANT EVENTS...7 EVENTS AFTER THE END OF THE REPORTING PERIOD...7 CHANGES IN THE SUPERVISORY BOARD OF THE BANK...7 LETTER TO SHAREHOLDERS...8 PROFILE OF NOVA KBM D.D. AND THE NOVA KBM GROUP...10 SHAREHOLDER STRUCTURE AND INFORMATION ON SHARES...12 OPERATING RESULTS OF THE NOVA KBM GROUP...16 FINANCIAL POSITION OF THE NOVA KBM GROUP...18 PLANS TILL THE END OF KEY PERFORMANCE INDICATORS OF NOVA KBM D.D INTERIM FINANCIAL REPORT OF THE NOVA KBM GROUP...23 Interim Statement of Income Nova KBM Group...24 Interim Statement of Comprehensive Income Nova KBM Group...26 Interim Statement of Financial Position Nova KBM Group...28 Interim Statement of Cash Flows Nova KBM Group...29 Interim Statement of Changes in Equity Nova KBM Group...31 Notes to the financial statements of the Nova KBM Group...33 INTERIM FINANCIAL REPORT OF NOVA KBM d.d Interim Statement of Income Nova KBM d.d...55 Interim Statement of Comprehensive Income Nova KBM d.d Interim Statement of Financial Position Nova KBM d.d Interim Statement of Cash Flows Nova KBM d.d Interim Statement of Changes in Equity Nova KBM d.d...62 Notes to the financial statements of Nova KBM d.d FINANCIAL CALENDAR OF NOVA KBM d.d. FOR THE REST OF

5 Unaudited results of operations of the Nova KBM Group for the period January March 2012 Key performance indicators of the Nova KBM Group Index Statement of financial position ( 000) Total assets 5,787,069 5,816, Total deposits from the non-banking sector 3,736,508 3,764, Total loans to the non-banking sector 3,803,799 3,844, Total equity 453, , Statement of income ( 000) Q1 Q1 Net interest income 33,058 35, Net fee and commission income 14,899 15, Net gains/(losses) from trading in securities and foreign exchange (396) (158) Other income/expense 2,545 2,976 Operating costs (28,543) (28,293) 101 Impairment losses and provisions (18,992) (20,383) 93 Profit from continuing operations 2,571 4, Net profit for the reporting period 1,445 5, Ratios Net profit/(loss) per share 1 ( ) 0.04 (2.38) Share price ( ) Book value per share 2 ( ) Total capital adequacy (%) Capital adequacy (original own funds) (%) ROAA before tax (%) 0.18 (1.75) ROAE before tax (%) 2.35 (21.51) Operating costs/average total assets (%) Cost/Income (%) Net profit/loss per share is calculated as the ratio between the annualised net profit/loss attributable to owners of the parent and the weighted average number of Bank shares in the reporting period. 2 Book value per share on the last day of the reporting period is calculated as the ratio between the equity attributable to owners of the parent and the total number of Bank shares outstanding on the last day of the reporting period. 5

6 Unaudited results of operations of the Nova KBM Group for the period January March 2012 Performance highlights for the period January March 2012 The operating results for the first three months of 2012 are relatively good. The profit from continuing operations of the Nova KBM Group (hereafter also referred to as the»group«) before provisions and impairment losses totalled 21,563,000, which was 22.2% of the annual projection. Operations of the Group are still affected by adverse market conditions and the stagnation of economic activities. Consequently, fairly high impairment losses and provisions were incurred as a result of a continued increase in credit risk. In the period from January through March 2012, net provisions and impairment losses reached 18,992,000, which was 21.3% of the annual projection. For the period from January through March 2012, the Group reported a pre-tax profit from continuing operations of 2,571,000, which was nearly 2 million below the figure reported for the same period last year, and 32.3% of the annual projection. Compared to the same period last year, the following items contributed the most to a decline in profit: lower interest income, somewhat higher operating costs, and a lower share of profits from investments in the equity of associates and joint ventures. Net provisions and impairment losses reported by the Group declined compared to the same period last year. The Group's total assets as of 31 March 2012 were 5,787,069,000, down 29,128,000, or 0.5%, from the end of In the period from January through March 2012, the Group generated net interest income of 33,058,000, which was 24.0% of the annual projection. Net fee and commission income of the Group was 14,899,000, or 22.8% of the annual projection. Administration costs, including depreciation and amortisation, totalled 28,543,000, which was 23.0% of the annual projection. The ratio of operating costs to the average total assets stood at 1.96%, down 0.17 percentage points on Profit from investments in the equity of associates amounted to 1,087,000 in the first quarter of 2012, which was 24% of the annual projection. The Group's return on average equity before tax (ROAE) was 2.35%, while its return on average assets before tax (ROAA) stood at 0.18%. As of 31 March 2012, the total equity of the Nova KBM Group amounted to 453,343,000, up 17,780,000, or 4.1%, from the end of The Group's total capital adequacy ratio at the end of March 2012 was 11.27%, a decrease of 0.20 percentage points from the end of

7 Unaudited results of operations of the Nova KBM Group for the period January March 2012 Other important events January The Supervisory Board of Nova KBM d.d. (in this report also referred to as»nova KBM«or the»bank«) adopted the 2012 Business Policy and Financial Plan of Nova KBM at its regular meeting held on 30 January. At the same meeting of the Supervisory Board, Ivan Simič irrevocably resigned as a Supervisory Board member. February March Andrej Plos, President of the Bank s Management Board, submitted his resignation notice to the Bank's Supervisory Board. On 9 March, the Supervisory Board appointed Aleš Hauc as the President of the Bank's Management Board. Events after the end of the reporting period April May On 20 April, Nova KBM released the 2011 Annual Report of the Nova KBM Group and Nova KBM. The preliminary information on Q results of Nova KBM was published on the same day. On 24 April, Aleš Hauc started his term of office as the President of the Bank's Management Board. Andrej Plos, who was until then acting as the President, was appointed as a member of the Management Board, while Manja Skernišak ended her term of office as a Management Board member. The Management Board of Nova KBM has since then consisted of two members. On 25 April, Moody's Investors Service downgraded Nova KBM from Ba1/Non- Prime/D- to Ba2/Non-Prime/E+. The outlook was set at 'negative'. On 8 May, Nova KBM published the notice of the 21 st regular Shareholders' Meeting, which will take place on 8 June Changes in the Supervisory Board of the Bank Ivan Simič irrevocably resigned as a member of Nova KBM's Supervisory Board. 7

8 Unaudited results of operations of the Nova KBM Group for the period January March 2012 Letter to Shareholders Dear Business Partners, Customers, Shareholders, and the Nova KBM Group employees, The first quarter of 2012 saw the beginning of stabilisation of the global capital market, due to the adoption of a new rescue package for Greece and the refinancing programme of the European Central Bank aimed at supporting the European banking system. Share prices recovered and loan margins narrowed. However, according to the projections, a higher level of certainty in the financial markets will not be achieved soon. In Slovenia, the loan portfolios of banks continue to deteriorate as a result of the difficult operating environment and an increased number of companies filing for bankruptcy and receivership. The results of economic performance indicate a decline in GDP in the first quarter of the year. Weak activity in the Eurozone has had an adverse effect on the manufacturing industry, while certain segments of the service industry have registered lower revenues due to a drop in purchasing power, and the consumers becoming more cautious with their spending. The operations of Nova KBM and the performance of Bank shares were negatively affected by these factors. KBMR shares recovered by 9% in the first quarter of the year, yet their price still accounts for only about 30% of their book value. The macroeconomic projections for Slovenia for 2012 point to a decline in economic growth, which suggests that the bank loan portfolios will deteriorate further, causing the banking sector to remain under pressure. The economic outlook is still highly uncertain and there is a strong risk of negative growth. Developments in the labour market are favourable for the time being, but the risk of an increase in the number of unemployed remains high, as suggested also by projections for 2012 and The 2012 forecasts for the Eurozone are strongly related to its capability of solving the debt crisis, and to movements in budget deficits of the socalled PIIGS countries as well as of other countries in the euro area. In spite of negative projections, we will endeavour to meet the performance targets of the Nova KBM Group by the end of the year. The results of the Nova KBM Group for the first quarter of 2012 were affected by an increased number of bankruptcy proceedings and, consequently, high provisions and impairment losses. The total amount of provisioning in the first quarter of 2012 was 6.8% below the figure reported for the same period last year, and accounted for 21.3% of the annual projection. The Nova KBM Group's profit before provisions and impairment losses was 21.6 million, while the pre-tax profit from continuing operations reached 2.6 million, or 32.3% of the annual projection. For 2012 as a whole, the Nova KBM Group projects a pre-tax profit of 8.0 million. As of 31 March 2012, the total capital adequacy of the Nova KBM Group stood at 11.27%, while the total shareholders' equity at the end of March 2012 amounted to million, up 4.0% on the figure reported for the end of March Nova KBM delivered a pre-tax profit of 0.8 million from continuing operations in the first quarter of 2012, while the Bank s net profit totalled 0.5 million. Due to pressure on the interest rate margin, and especially due to high provisioning expenses, the Bank focused particularly on cost reduction; the Nova KBM Group s average headcount decreased from 3,008 to 2,993 in the first quarter of the year. Administration costs for 2012 are projected to be 1.5% below the figure reported for last year. Administration costs generated by the Nova KBM Group in the first quarter of 2012 accounted for 23% of the annual projection. 8

9 Unaudited results of operations of the Nova KBM Group for the period January March 2012 In the first quarter of 2012, changes were made to the Bank's Management Board. The Supervisory Board appointed Aleš Hauc as the new President. Andrej Plos, the previous President, was appointed as a member of the Management Board, while Manja Skernišak ended her term of office as a Management Board member. The Management Board of Nova KBM now consists of two members. We wish to express our sincere gratitude to all our colleagues who, through their work and commitment, help us achieve challenging business objectives, and we thank all shareholders and business partners for their support and confidence. We assure you that we will make every effort to improve the performance of the Nova KBM Group. Maribor, May 2012 Management Board of Nova KBM d.d. Andrej Plos Member Aleš Hauc President 9

10 Unaudited results of operations of the Nova KBM Group for the period January March 2012 Profile of Nova KBM d.d. and the Nova KBM Group Nova KBM d.d. is the parent company of the Nova KBM Group, which is composed of the parent company and 11 subsidiaries. In addition, the Bank has equity investments in two associates. The names of the companies and the Bank s shareholding in them are presented in the table below. Nova KBM is a commercial bank with a tradition of understanding and supporting its retail and corporate customers to whom it provides standard banking products. The Bank's registered office is at Ulica Vita Kraigherja 4, 2505 Maribor, Slovenia. The Bank is obliged to prepare consolidated financial statements. Composition of the Nova KBM Group, including associated companies, as of 31 March 2012: Company Position in the Group Shareholding of Nova KBM (%) Nova KBM d.d. parent bank Poštna banka Slovenije d.d. subsidiary bank Adria Bank AG subsidiary bank Credy banka a.d. subsidiary bank KBM Fineko d.o.o. subsidiary company KBM Infond d.o.o. subsidiary company KBM Leasing d.o.o. subsidiary company KBM Invest d.o.o. subsidiary company Gorica Leasing d.o.o. subsidiary company M-Pay d.o.o. subsidiary company KBM Projekt d.o.o. subsidiary company KBM Leasing Hrvatska d.o.o. subsidiary company Zavarovalnica Maribor d.d. associated company Moja naložba d.d. associated company There were no changes in the shareholding of Group companies in the first quarter of

11 Unaudited results of operations of the Nova KBM Group for the period January March 2012 Key performance indicators of individual Group members for the period ending 31 March 2012 COMPANY Number of employees Net profit or loss ( 000) Total assets ( 000) ROAE after tax (%) ROAA after tax (%) Nova KBM d.d. 1, ,778, Poštna banka Slovenije d.d , , Adria Bank AG , Credy banka a.d , KBM Fineko d.o.o , KBM Infond d.o.o , KBM Leasing d.o.o , KBM Invest d.o.o. 10 (493) 46,757 (43.77) (4.09) Gorica Leasing d.o.o. 14 (1,766) 87,743 (100.00) (7.76) M-Pay d.o.o KBM Projekt d.o.o ,790 - * 2.62 KBM Leasing Hrvatska d.o.o. 8 (406) 45,833 - * (3.45) Zavarovalnica Maribor d.d , , Moja naložba d.d , * Not calculated due to negative average capital. 11

12 Unaudited results of operations of the Nova KBM Group for the period January March 2012 Shareholder structure and information on shares The shareholder structure of the Bank as of 31 March 2012 was as follows: the Republic of Slovenia held 27.7% of shares; Pošta Slovenije d.o.o. 6.6%; Gen d.o.o. 6.4%; Kapitalska družba d.d. 4.8%; Slovenska odškodninska družba d.d. 3.2%; ELES d.o.o. 2.4%: the total shareholding of the state was 51.1%, of which 35.7% was a direct and 15.4% an indirect shareholding of the state in the Bank; households held 16.6% (up 0.2 percentage points from the beginning of the year); other financial organisations held 6.5% (the same as at the beginning of the year); foreign investors held 22.0% (the same as at the beginning of the year); non-financial companies held 2.5% (the same as at the beginning of the year); and banks held 1.4% (down 0.1 percentage point from the beginning of the year). 10 largest shareholders on 31 March 2012 Number of shares % of ownership 1 Shareholder 10,822, REPUBLIC OF SLOVENIA 4,639, KDPW TRUST ACCOUNT 2,599, POŠTA SLOVENIJE d.o.o. 2,500, GEN d.o.o. 1,875, KAPITALSKA DRUŽBA d.d. 1,250, SLOVENSKA ODŠKODNINSKA DRUŽBA d.d. 937, ELES d.o.o. 855, NFD 1 DELNIŠKI INVESTICIJSKI SKLAD d.d. 666, EAST CAPITAL BALKAN FUND 476, SALINK LIMITED Number of Nova KBM shares held by members of the Bank s Management and Supervisory Boards on 31 March 2012 Number of shares % of ownership Shareholder 1, Andrej Plos Manja Skernišak Dušan Jovanovič Shareholder structure of Nova KBM on 31 March 2012 Foreign investors 22.0% Anton Guzej Aleš Krisper Andrej Svetina Franc Škufca Domestic legal entities 10.3% Domestic individuals 16.6% Republic of Slovenia 51.1% 1 Voting rights equal ownership share. 12

13 Unaudited results of operations of the Nova KBM Group for the period January March 2012 Information on shares As of 31 March 2012, the Bank s share capital amounted to 40,814, and was split into 39,122,968 ordinary no-par value shares. Nova KBM has issued only one class of shares which are all freely transferable and bear the same rights. Each ordinary share entitles its holder to one vote at the Shareholders Meeting. Holders of ordinary shares have the following rights: participation in the management of the Bank participation in profits (dividend) pro-rata distribution of residual assets in case of bankruptcy or liquidation of the Bank. The Bank is bound to pay a dividend to shareholders, and shall enable shareholders to participate and to vote at Shareholders Meetings. Information on shares Number of shareholders 97,948 98, , ,514 Number of ordinary shares 39,122,968 39,122,968 26,081,979 26,081,979 Share price on the last trading date ( ) Market capitalisation ( 000) 136, , , ,378 Book value per share 1 ( ) Net earnings per share 2 ( ) Nova KBM Nova KBM Group (2.42) (2.38) P/E ratio (1.31) (1.33) P/B ratio Book value per share on the last day of the reporting period is calculated as the ratio between the total shareholders equity of the Bank (for the Group: equity attributable to owners of the parent) and the weighted average number of shares in the period. 2 Net earnings per share is calculated as the ratio between the Bank s annualized net profit (for the Group: net profit attributable to owners of the parent) and the weighted average number of shares in the period. 3 P/E ratio is calculated as the ratio between the share price on the last trading date and the Bank s net profit (for the Group: net profit attributable to owners of the parent) per share. 4 P/B ratio is calculated as the ratio between the share price on the last trading date and the share book value. 13

14 Unaudited results of operations of the Nova KBM Group for the period January March 2012 Nova KBM's per-share book value increased by 0.40 in the first quarter of Nova KBM s per-share book value from 2006 to (Q1) Dividend payment policy Dividend for the year Gross dividend per share ( ) Dividend yield 3 (%) Projected share of dividend in net profit of the Bank (%) Share of dividend in net profit of the Bank 4 (%) The dividend policy envisages an annual dividend payment equalling about one-third of the Bank s net profit for the financial years from 2012 to 2015, under the condition that the capital adequacy of the Bank and the Group is not jeopardised. According to the Bank's dividend policy, the largest proportion of annual profits will be allocated to the Bank's reserves. 2 Measured by the book value of Nova KBM. 3 Gross dividend per share/share price on the last day of the financial year. 4 Gross dividend/net profit of the Bank. 14

15 Unaudited results of operations of the Nova KBM Group for the period January March 2012 Share performance In the period from 1 January to 31 March 2012, the price of KBMR 5 shares traded on the Ljubljana Stock Exchange, being the prime market for KBMR shares, ranged between 2.98 and 3.87 per share. The highest share price was achieved on 20 March 2012, while the lowest on 15 February 2012 when KBMR shares traded at 2.98 per share. The total trading turnover in KBMR shares on the Ljubljana Stock Exchange amounted to 1.8 million in the first quarter of 2012, so the average daily turnover was slightly over 28,000. As of 31 March 2012, Nova KBM had 97,948 shareholders in total. On the Warsaw Stock Exchange, the price of a KBM 6 share ranged between 2.90 and 3.73 during the reporting period. The highest share price was achieved on 20 March 2012, while the lowest on 10 January 2012 when KBM shares traded at 2.90 per share. The total trading turnover in KBM shares on the Warsaw Stock Exchange amounted to 378,000 in the first quarter of 2012, so the average daily turnover was slightly over 9,000. Nova KBM (trading symbol: KBMR; in ) share performance on the Ljubljana Stock Exchange and the SBITOP Index movement in the period from 1 January to 31 March , , SBITOP KBMR 3 2, Trading symbol of Nova KBM shares on the Ljubljana Stock Exchange. 6 Trading symbol of Nova KBM shares on the Warsaw Stock Exchange. 15

16 Unaudited results of operations of the Nova KBM Group for the period January March 2012 Operating results of the Nova KBM Group For the period from January through March 2012, the Nova KBM Group reported a pre-tax profit from continuing operations of 2,571,000. A profit of 7,955,000 was projected for the year as whole. Compared to the same period last year, the following items contributed to a drop in profit from continuing operations: lower net interest income (down 6.6% or 2.3 million), higher operating costs (up 0.9% or 0.3 million), and lower share of profits from investments in the equity of associates and joint ventures accounted for using the equity method (down 33.3% or 0.5 million). Net provisions and impairment losses decreased by 1.4 million relative to the same period last year. The Group's profit from continuing operations before provisions and impairment losses totalled 21,563,000, which was 22.2% of the annual projection, and 13.6% less than in the same period of The net profit of the Group from continuing operations totalled 1,445,000, of which 378,000 was attributable to owners of the parent and 1,067,000 was attributable to noncontrolling interest. The net profit of the Group exceeded the net profit of the Bank by 909,000, mainly as a result of net profit of associates. Apart from the Bank, which reported a net profit of 0.5 million, the following subsidiaries generated a net profit in the first quarter of the year: PBS ( 1.3 million), Adria Bank ( 0.7 million), KBM Infond ( 0.3 million), KBM Fineko ( 0.2 million), and KBM Leasing, KBM Projekt, Credy banka and M-Pay (each of them less than 0.1 million). A loss was reported for the first quarter of 2012 by the following subsidiaries: KBM Leasing Hrvatska ( 0.4 million), KBM Invest ( 0.5 million) and Gorica Leasing ( 1.8 million). Both associated companies delivered a profit: the Group's share in Q profit of Zavarovalnica Maribor totalled 979,000, while its share in the profit of Moja naložba amounted to 108,000 in the same period, providing the Group's profit from investments in the equity of associates of 1,087,000 in the period from January through March This figure accounted for 24% of the annual projection. In the period from January through March 2012, the Group generated net interest income of 33,058,000, which was 24.0% of the annual projection. Interest income reported for the period accounted for 23.8% of the annual projection and interest expense accounted for 23.6% of the annual projection. Impairment losses and a decrease in interest-bearing assets contributed the most to the reduction in interest income. Higher costs of all types of funding sources were the main drivers of the increase in interest expense relative to the same period last year. The Group's net fee and commission income totalled 14,899,000 (22.8% of the annual projection) in the first quarter of Lower-than-projected fee income was mainly due to a decrease in fees on loans earned by the Bank. In the same period last year, the fees related to a syndicated term loan facility, which was raised by the Bank, were still being deferred and shown within fees for other services. As the Bank prepaid this syndicated term loan facility last year, these fees were no longer included in fee expenses for the first quarter of

17 Unaudited results of operations of the Nova KBM Group for the period January March 2012 In the first quarter of the year, net loss on financial assets and liabilities held for trading totalled 3,171,000, mainly as a result of net loss on trading in derivatives, which was due to the valuation of currency forwards (the Bank uses currency forwards for the economic hedging of foreign currency exposure) and the valuation of other forward contracts. Net losses on exchange rate differences were 344,000. A gain of 1,062,000 was generated by the Group from other operations 7. Administration costs, including depreciation and amortisation, totalled 28,543,000, which was 23.0% of the annual projection, and 0.9% above the figure reported for the same period last year. The main reason for this increase was that the Bank included the costs incurred in the first month of the year in the accounts for the first quarter, while in previous years these costs were accounted for at the end of the year. Staff costs decreased by 1.3% relative to the same period last year. The ratio of operating costs as a percentage of the average total assets decreased from 2011 by 0.17 percentage points to 1.96%. Deterioration of the Group's loan portfolio is continuing, yet provisions and impairment losses decreased by 6.8% relative to the same period last year. In the period from January through March 2012, net provisions and impairment losses totalled 18,992,000, which was 21.3% of the annual projection. The Group's return on average assets (ROAA) stood at 0.18% in the first quarter of For 2012 as a whole, ROAA is projected at 0.14% (as a result of a loss reported for 2011, the Group's ROAA was negative last year and stood at minus 1.75%). The Group's return on average equity after tax (ROAE) was 1.31%. ROAE is projected at 1.54% (as a result of loss reported for 2011, the Group's ROAE was negative last year and stood at minus 17.01%). Margin of financial intermediation, calculated on the average total assets, was 3.52%, up 0.15 percentage points from the end of 2011, and 0.29 percentage points below the projection. The interest margin, calculated on the average total assets, was 2.31%, the same as at the end of 2011, and 0.07 percentage points below the margin projected for For the first quarter of 2012, the Group reported a total comprehensive income after tax of 17,780,000, 8.1% of which related to realised net profit for the financial year and 91.9% related to other comprehensive income after tax ( 16,335,000). Valuation gains taken to equity totalled 20,451,000, of which 18,832,000 related to the recovery of shares and investment coupons, and the recovery of bonds which the Bank holds in its portfolios, while 1,619,000 related to securities in the portfolios of subsidiary companies. Translation gains taken to equity, which amounted to 1,658,000, had a positive effect on the comprehensive income, while deferred taxes of 4,089,000 reduced it (a tax rate of 20%). 7 Other than net interest income, net fee and commission income, dividend income and profits from investments in the equity of associates. 17

18 Unaudited results of operations of the Nova KBM Group for the period January March 2012 Financial position of the Nova KBM Group As of 31 March 2012, the Group's total assets amounted to 5,787,069,000, a decrease of 29,128,000, or 0.5%, from the 2011 year-end. The assets side of the statement of financial position saw the largest decline in available-for-sale financial assets and in loans and advances to customers. The largest nominal decrease on the funding side of the business was recorded in loans and deposits from customers and banks, offset by an increase in debt securities and in liabilities due to the central bank. As regards the structure of Group assets, the most notable changes in the period from January through March 2012 were as follows: available-for-sale financial assets decreased by 99,997,000 (bonds falling due) net loans and advances to customers decreased by 40,286,000 (a drop in demand and the effect of net expenses for impairment losses on loans) held-to-maturity financial assets increased by 62,715,000 (purchase of treasury bills and bonds) loans and advances to banks went up by 46,406,000 (placement of liquid funds). Structure of assets as of (inner ring) and (outer ring) 66% 66% 4% 3% 12% 10% 11% 8% 9% 11% Loans and advances to customers Available-for-sale financial assets Other Loans and advances to banks Held-to-maturity financial assets 18

19 Unaudited results of operations of the Nova KBM Group for the period January March 2012 As regards the structure of Group liabilities and equity, the most notable changes in the period from January through March 2012 were as follows: loans received from banks fell by 101,246,000 (the Bank prepaid a syndicated term loan facility in the first quarter of the year) deposits and loans from customers decreased by 28,456,000 (maturity of deposits from the state) debt securities in issue increased by 19,849,000 (issue of certificates of deposit) financial liabilities due to the central bank increased by 74,624,000 total equity increased by 17,780,000. The increase in equity is mainly due to a surplus on revaluation of available-for-sale financial assets recognised by Nova KBM, PBS and KBM Infond. Structure of liabilities and equity as of (inner ring) and (outer ring) 65% 65% 13% 15% 7% 8% 9% 10% Deposits and loans from customers Equity Subordinated liabilities Deposits and loans from banks Debt securities Other 19

20 Unaudited results of operations of the Nova KBM Group for the period January March 2012 Plans till the end of 2012 The planning of the business policy and financial plan of the Nova KBM Group for the year 2012 was based on the strategy and starting-points that were supported mainly by the autumn forecasts of the Institute of Macroeconomic Analysis and Development, the Bank of Slovenia, EUROSTAT and ECB. The Slovene economy showed some signs of gradual recovery in the first half of 2011, while in the second half of the year we saw negative macroeconomic trends emerging once again. At the end of 2011, when the planning for 2012 was carried out, a number of institutions involved in forecasting macroeconomic movements revised their economic growth predictions downwards. The Nova KBM Group remains true to its vision, yet the speed of implementing its strategic activities will depend upon the performance it delivers during the period of the crisis and economic recovery. Both the Group and the Bank will in accomplishing their 2012 business objectives focus particularly on the stability of their operations. The projections for 2012 remain uncertain both in terms of dynamics and economic growth. The Bank s Supervisory Board adopted the business plan of the Bank and was informed of the business plan of the Nova KBM Group at its regular meeting in January Nova KBM Group. The total assets of the Nova KBM Group are projected to reach 5,768.3 million by the end of 2012, down 0.8% on Total deposits from the non-banking sector will amount to 3,771.6 million at the end of 2012, up 0.2% on Loans and advances to customers are projected at 3,764.6 million, down 2.1% on Interest income is forecast to be million, while interest expense is projected to be million, providing net interest income of million, an increase of 1.8% relative to According to the projection, net fee and commission income will amount to 65.5 million. Administration costs, including depreciation and amortisation, are projected at million, which is about 1% less than in Net impairment losses and provisions are expected to reach 89.3 million, a decrease of 49.1% relative to The Group's 2012 pre-tax profit from continuing operations is projected at 8.0 million; the net profit is projected at 7.8 million, of which 4.8 million will be attributable to owners of the parent. Nova KBM d.d. The management forecasts that the Bank s total assets will reach 4,683.5 million by the end of 2012, a decrease of 2.7% relative to the 2011 year-end. Deposits and loans from customers will amount to 3,043.1 million, down 0.8% on Deposits and loans from banks are projected at million, a decrease of 56.6% relative to Loans and advances to customers are projected at 3,167.7 million, a decrease of 5.2% from the 2011 year-end. Interest income is forecast to be million, while interest expense is expected to be million, providing net interest income of million (an increase of 1.3% relative to 2011). The projected interest margin, calculated as the ratio between net interest income and the average total assets, is forecast at 2.12%. According to the projection, net fee and commission income will amount to 47.8 million. Administration costs, including depreciation and amortisation, are expected to be 83.5 million, down 5.9% on The number of Bank staff is forecast to decrease to the target number of 1,300 employees by the end of Net impairment losses and provisions are expected to reach approximately 72.0 million, a decrease of 54.5% relative to For 2012, Nova KBM projects a pre-tax profit from continuing operations of 7.2 million, while the net profit is forecast at 9.0 million. With the aim of restoring confidence in the banking sector, the European Council adopted in October 2011 a decision requiring banks to maintain the Core Tier 1 capital ratio of at least 9% from the second half of this year onwards. The Group's Core Tier 1 ratio as of 31 March 2012 was 7.91%. To comply with this capital requirement, the Group will undertake measures to reduce its risk-adjusted assets or capital requirements. This will be achieved by disposing of assets that are not deemed necessary for the operations of the Group. In addition, when granting new loans, the Group will pursue the strategy of achieving a broader portfolio diversification. 20

21 Unaudited results of operations of the Nova KBM Group for the period January March 2012 Key performance indicators of Nova KBM d.d Index Statement of financial position ( 000) Total assets 4,778,747 4,811, Total deposits from the non-banking sector 3,034,888 3,066, Total loans to the non-banking sector 3,307,532 3,342, Total equity 389, , Total impairment losses and provisions 383, , Statement of income ( 000) Q1 Q1 Net interest income 22,457 26, Net fee and commission income 10,783 10, Net gains/(losses) from trading in securities and foreign exchange 801 (294) Other income/expense (144) 133 Operating costs (19,406) (19,371) 100 Impairment losses and provisions (13,714) (14,582) 94 Profit from continuing operations 777 3, Net profit for the reporting period 536 2, Ratios Net profit/(loss) per share 8 ( ) 0.05 (2.42) Share price ( ) Book value per share 9 ( ) Total capital adequacy (%) Capital adequacy (original own funds) (%) ROAA before tax (%) 0.07 (2.15) ROAE before tax (%) 0.82 (24.32) Operating costs/average total assets (%) Cost/Income (%) Ratings (long-term) Ba1 (Moody's) BBB (Fitch) Ba1 (Moody's) BBB (Fitch) 8 Annualised net profit or loss/weighted average number of shares in the period. 9 Bank's total equity at the end of the period/total number of ordinary no-par value shares. 21

22 Unaudited results of operations of the Nova KBM Group for the period January March 2012 The Bank's market share in terms of total assets decreased by 0.3 percentage points, from 9.9% at the end of 2011 to 9.6% at the end of March Its market share in deposits from the non-banking sector and in loans and advances to the non-banking sector fell by 0.1 percentage point in the same period. For the first three months of 2012, the Bank reported a pre-tax profit of 777,000 from continuing operations. The Slovene banking system as a whole generated a loss of almost 20 million in the same period. Net interest income totalled 22,457,000, which was one-seventh below the figure reported for the same period last year. The Bank managed to improve its ratio of operating costs to the average total assets from 1.84% at the end of 2011 to 1.64% at the end of March

23 INTERIM FINANCIAL REPORT OF THE NOVA KBM GROUP

24 Unaudited interim financial statements of the Nova KBM Group for the period January March 2012 Interim Statement of Income Nova KBM Group 000 ITEM DESCRIPTION Notes Three months ended Three months ended Interest income and similar income 1 64,603 64,857 Interest expense and similar expense 1 (31,545) (29,473) Net interest income 1 33,058 35,384 Fee and commission income 2 23,507 24,429 Fee and commission expense 2 (8,608) (9,390) Net fee and commission income 2 14,899 15,039 Realised gains on financial assets and liabilities not measured at fair value through profit or loss Net gains/(losses) on financial assets and liabilities held for trading 3 (3,171) 2,633 Net gains on financial assets (and liabilities) designated at fair value through profit or loss 4 2, Net exchange rate differences 5 (344) (3,842) Net gains on derecognition of assets excluding non-current assets held for sale 53 8 Other net operating income 1,378 1,270 Administration costs 6 (24,656) (24,284) Depreciation and amortisation (3,887) (4,009) Provisions 7 (607) (5,163) Impairment losses 8 (18,385) (15,220) Share of profits of associates and joint ventures accounted for using the equity method 9 1,087 1,630 Net gains from non-current assets held for sale and liabilities associated therewith PROFIT FROM CONTINUING OPERATIONS 2,571 4,565 Income tax expense related to profit from continuing operations (1,126) 527 NET PROFIT FROM CONTINUING OPERATIONS 1,445 5,092 NET PROFIT FOR THE PERIOD 1,445 5,092 a) Attributable to owners of the parent 378 3,349 b) Attributable to non-controlling interest 1,067 1,743 Basic earnings per share ( ) Diluted earnings per share ( ) The notes are an integral part of these financial statements. 24

25 Unaudited interim financial statements of the Nova KBM Group for the period January March 2012 Interim Statement of Income Nova KBM Group ITEM DESCRIPTION Q1 Q4 Q3 Q2 Q1 Interest income and similar income 64,603 66,317 66,592 65,039 64,857 Interest expense and similar expense (31,545) (32,574) (33,087) (32,078) (29,473) Net interest income 33,058 33,743 33,505 32,961 35,384 Dividend income ,720 0 Fee and commission income 23,507 24,315 24,602 25,086 24,429 Fee and commission expense (8,608) (13,001) (9,894) (9,719) (9,390) Net fee and commission income 14,899 11,314 14,708 15,367 15,039 Realised gains/(losses) on financial assets and liabilities not measured at fair value through profit or loss 290 3,894 (5,346) Net gains/(losses) on financial assets and liabilities held for trading (3,171) (2,782) 5,835 (2,004) 2,633 Net gains/(losses) on financial assets (and liabilities) designated at fair value through profit or loss 2,829 (774) (4,281) (2,481) 320 Net exchange rate differences (344) (650) (2,381) 7,357 (3,842) Net gains/(losses) on derecognition of assets excluding non-current assets held for sale 53 (41) Other net operating income 1,378 (3,094) 576 1,496 1,270 Administration costs (24,656) (30,874) (25,622) (27,675) (24,284) Depreciation and amortisation (3,887) (4,277) (4,182) (4,176) (4,009) Provisions (607) (5,054) (4,749) (1,973) (5,163) Impairment losses (18,385) (100,556) (16,122) (26,554) (15,220) Share of profits of associates and joint ventures accounted for using the equity method 1,087 2, ,171 1,630 Net gains from non-current assets held for sale and liabilities associated therewith PROFIT/(LOSS) FROM CONTINUING OPERATIONS 2,571 (96,491) (7,708) (2,931) 4,565 Income tax expense related to profit from continuing operations (1,126) 19, NET PROFIT/(LOSS) FROM CONTINUING OPERATIONS 1,445 (76,686) (7,261) (2,267) 5,092 NET PROFIT/(LOSS) FOR THE PERIOD 1,445 (76,686) (7,261) (2,267) 5,092 a) Attributable to owners of the parent 378 (77,378) (6,883) (1,528) 3,349 b) Attributable to non-controlling interest 1, (378) (739) 1,743 Basic earnings/(loss) per share ( ) 0.01 (2.23) (0.21) (0.07) 0.13 Diluted earnings/(loss) per share ( ) 0.01 (2.23) (0.21) (0.07) 0.13 The notes are an integral part of these financial statements. 25

26 Unaudited interim financial statements of the Nova KBM Group for the period January March 2012 Interim Statement of Comprehensive Income Nova KBM Group 000 ITEM DESCRIPTION Three months ended Three months ended NET PROFIT FOR THE PERIOD AFTER TAX 1,445 5,092 OTHER COMPREHENSIVE INCOME AFTER TAX 16,335 1,171 Foreign currency translation differences arising from consolidation (1,687) 927 Translation gains/(losses) taken to equity (1,687) 927 Available-for-sale financial assets 20,453 1,072 Valuation gains taken to equity 20,451 1,092 Transferred to profit or loss 2 (20) Share of other recognised comprehensive income/(loss) of associates and joint ventures accounted for using the equity method 1,658 (790) Income tax relating to components of other comprehensive income (4,089) (38) TOTAL COMPREHENSIVE INCOME FOR THE PERIOD AFTER TAX 17,780 6,263 a) Attributable to owners of the parent 16,329 4,869 b) Attributable to non-controlling interest 1,451 1,394 The notes are an integral part of these financial statements. 26

27 Unaudited interim financial statements of the Nova KBM Group for the period January March 2012 Interim Statement of Comprehensive Income Nova KBM Group ITEM DESCRIPTION Q1 Q4 Q3 Q2 Q1 NET PROFIT/(LOSS) FOR THE PERIOD AFTER TAX 1,445 (76,686) (7,261) (2,267) 5,092 OTHER COMPREHENSIVE INCOME/(LOSS) AFTER TAX 16,335 (12,960) (4,462) (3,396) 1,171 Foreign currency translation differences arising from consolidation (1,687) (540) (1,101) 1, Translation gains/(losses) taken to equity (1,687) (540) (1,101) 1, Available-for-sale financial assets 20,453 (12,859) (4,477) (6,191) 1,072 Valuation gains/(losses) taken to equity 20,451 (21,918) (4,283) (6,106) 1,092 Transferred to profit or loss 2 9,059 (194) (85) (20) Share of other recognised comprehensive income/(loss) of associates and joint ventures accounted for using the equity method 1,658 (2,670) 242 (39) (790) Income tax relating to components of other comprehensive income (4,089) 3, ,219 (38) TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE PERIOD AFTER TAX 17,780 (89,646) (11,723) (5,663) 6,263 a) Attributable to owners of the parent 16,329 (89,870) (10,867) (5,385) 4,869 b) Attributable to non-controlling interest 1, (856) (278) 1,394 The notes are an integral part of these financial statements. 27

28 Unaudited interim financial statements of the Nova KBM Group for the period January March 2012 Interim Statement of Financial Position Nova KBM Group ITEM DESCRIPTION Notes Cash and balances with the central bank , ,373 Financial assets held for trading 11 5,905 8,741 Financial assets designated at fair value through profit or loss 12 37,889 38,475 Available-for-sale financial assets , ,603 Loans and advances 4,027,625 4,021,505 - loans and advances to banks , ,420 - loans and advances to customers 15 3,803,799 3,844,085 Held-to-maturity financial assets , ,605 Non-current assets and disposal groups classified as held for sale and discontinued operations 6,376 6,405 Property, plant and equipment 93,486 94,376 Investment property 56,476 54,544 Intangible assets 39,202 33,451 Investments in associates and joint ventures accounted for using the equity method 50,285 47,539 Tax assets 33,932 37,157 - current tax assets 2,657 2,283 - deferred tax assets 31,275 34,874 Other assets 172, ,423 TOTAL ASSETS 5,787,069 5,816,197 Financial liabilities due to the central bank 490, ,478 Financial liabilities held for trading 4,057 2,486 Financial liabilities measured at amortised cost 4,737,992 4,857,565 - deposits from banks , ,660 - deposits from customers 17 3,736,345 3,764,808 - loans from banks , ,045 - loans from customers debt securities 17 68,822 48,973 - subordinated liabilities , ,923 Financial liabilities associated to transferred assets 10,710 8,022 Provisions 18 38,777 38,252 Tax liabilities 4,377 3,126 - current tax liabilities deferred tax liabilities 3,752 2,857 Other liabilities 47,711 55,705 TOTAL LIABILITIES 5,333,726 5,380,634 Share capital 40,815 40,815 Share premium 165, ,775 Revaluation reserves (7,638) (25,096) Translation reserves (1,634) (127) Reserves from profit 300, ,726 Treasury shares (1,412) (1,412) Retained (loss) (including net loss for the financial year) (86,255) (86,628) SHAREHOLDERS' EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT 410, ,053 Non-controlling interest 42,961 41,510 TOTAL SHAREHOLDERS EQUITY 453, ,563 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 5,787,069 5,816,197 The notes are an integral part of these financial statements