Audited financial statements of Zagrebačka banka Group for the period from 1 January 2017 to 31 December 2017 Content:

Transcription

1 Audited financial statements of Zagrebačka banka Group for the period from 1 January 2017 to 31 December 2017 Content: 1. Management report for the period from 1 January 2017 to 31 December Statement of the persons responsible for the preparation of the financial statements 3. Financial statements (TFI-KI statements) 3.1. Balance sheet as at 31 December Income statement for the period from 1 January 2017 to 31 December Cash flow statement for the period from 1 January 2017 to 31 December Statement of changes in equity for the period from 31 December 2016 to 31 December Notes to the financial statements

2 Management report for the period from 1 January to 31 December 2017 According to the audited financial statements, Zagrebačka banka Group recorded operating result of HRK 2,749 million in The profit after tax is HRK 1,044 million, impacted by the increase in impairment losses on placements to companies. Zagrebačka banka Group realised solid financial result in 2017, given the stable operating result and efficient cost management. The capital adequacy ratio is at the level of 22.4% thus the Group has solid potential to support the loan activity in the upcoming periods as well. Following positive environment trends we have achieved increase in loan activity in retail and private sector, while the total volume of loans decreased due to the sale of part of non-performing portfolio and deleveraging in public sector. By introducing digital technologies we have increased the number of clients and users of mobile and internet banking. The Group realised solid business results in majority of its members, the major contributors were Zagrebačka banka dd, UniCredit Bank dd Mostar, UniCredit Leasing Croatia doo and Prva stambena štedionica dd. Members of the Group offer integrated financial services to our clients in the markets of the Republic of Croatia and the Federation of Bosnia and Herzegovina. In the upcoming period the Group will be focused on stimulating loan activity, transformation of business aiming at the introduction of new products and services based on digital technologies, as well as on further increase in efficiency. Key performance indicators in 2017: Zagrebačka banka Group operating income totals HRK 5,351 million Total operating expenses amount to HRK 2,602 million Profit before impairment and other provisions amounts to HRK 2,749 million Impairment and other provisions amount to HRK 1,505 million Net loans to customers amount to HRK 77,626 million Deposits from customers amount to HRK 95,249 million

3 Management report for the period from 1 January to 31December 2017 (continued) Operating income amounted to HRK 5,351 million, decreased by HRK 237 million (-4.2%): Net interest income amounted to HRK 3,471 million, as result of stable average volume of loans during the period as well as lower funding costs. Net fee and commission income amounted to HRK 1,341 million which is HRK 72 million (+5.7%) higher, due to the increase in payment transaction and credit card fees. Net trading and other income amounted to HRK 539 million, decreased by HRK 301 million (-35.8%). The prior year result has been positively impacted by net gain from sale of share of Visa Europe Limited and higher trading result. Operating expenses amounted to HRK 2,602 million, increased by HRK 68 million (+2.7%). The Group s cost to income ratio ( C/I ratio ) equals 48.6%. Profit before impairment and other provisions amounted to HRK 2,749 million. The decrease of HRK 305 million (-10.0%) is a result of the previously described movements in Operating income and Operating expenses. Impairment and other provisions amounted to HRK 1,505 million, they have increased by HRK 590 million, mainly due to the increase in impairment losses on placements to companies. Total assets of the Group amounted to HRK 126,893 million and have decreased by HRK 1,435 million (-1.1%), mainly under the influence of optimisation of funding sources. Net loans to customers amounted to HRK 77,626 million, decreased by HRK 3,120 million (-3.9%). The total volume of loans is lower due to the sale of part of non-performing portfolio and deleveraging in public sector. Positive trends were realised in loans to retail segment. Deposits from customers represent primary source of funding. At the end of the year they amounted to HRK million and have increased by HRK 3,021 million (+3.3%). Loans to deposits ratio amounts to 81.5%. Deposits from banks and borrowings amounted to HRK 8,822 million. The decrease of HRK 4,043 million (-31.4%) is a result of lower funding needs. Capital and reserves of the Group - at HRK 18,111 million. The capital adequacy ratio - at 22.4% (31 December 2016: 21.1%).

4 Zagrebačka banka Group Income Statement (HRK mln) Zagrebačka banka Group Balance Sheet (HRK mln) Financial results for the period from 1 January to 31 December 2017 Δ 2017 vs Dec Dec 2017 % HRK mln (4/1) 4 (2-1) Cash and deposits with the CNB 15,164 18, % 3,667 Loans to and receivables from financial institutions 16,116 13,577 (15.8 %) (2,539) Securities 9,802 11, % 1,415 Net loans to customers 80,746 77,626 (3.9 %) (3,120) Tangible and intangible assets 2,472 2, % 62 Other assets 4,028 3,108 (22.8 %) (920) Total assets 128, (1.1 %) (1,435) Deposits from customers 92,228 95, % 3,021 Deposits from banks and borrowings 12,865 8,822 (31.4 %) (4,043) Other liabilities 4,541 4, % 170 Capital and reserves 18,694 18,111 (3.1 %) (583) Total liabilities and equity 128, ,893 (1.1 %) (1,435) Equity attributable to equity holders of the Bank 18,672 18,088 (3.1 %) (584) Equity attributable to non-controlling interests % 1 Zagreb, 6 March 2018 Δ 2017 vs % HRK mln (4/1) 4 (2-1) Interest income 6,140 5,420 (11.7 %) (720) Interest expense (2,661) (1,949) (26.8 %) 712 Net interest income 3,479 3,471 (0.2 %) (8) Fee and commission income 1,430 1, % 99 Fee and commission expense (161) (188) 16.8 % (27) Net fee and commission income 1,269 1, % 72 Net trading and other income (35.8 %) (301) Operating income 5,588 5,351 (4.2 %) (237) Operating expenses (2,534) (2,602) 2.7 % (68) Profit before impairment and other provisions 3,054 2,749 (10.0 %) (305) Impairment and other provisions (915) (1,505) 64.5 % (590) Profit from operations 2,139 1,244 (41.8 %) (895) Share of profit from associates % 2 Profit before tax 2,179 1,286 (41.0 %) (893) Income tax (491) (242) (50.7 %) 249 Net profit 1,688 1,044 (38.2 %) (644) Attributable to equity holders of the Bank 1,686 1,042 (38.2 %) (644) Attributable to non-controlling interests Net profit 1,688 1,044 (38.2 %) (644) Chairman of the Management Board Miljenko Živaljić

5 Statement of the persons responsible for the preparation of financial statements Pursuant to the provisions of the Capital Market Act, to the best of our knowledge: 1. the set of summary financial statements of Zagrebačka banka Group prepared in accordance with the applicable standards for financial reporting for banks in the Republic of Croatia gives a true and complete view of the assets and liabilities, profit and loss, the financial position and business operations of Zagrebačka banka Group; 2. the Management Report gives a true view of business developments, operating results and the position of Zagrebačka banka Group Head of Accounting and Regulatory Reporting Marijana Brcko Member of the Management Board Lorenzo Ramajola Additional info: Public Relations Tel: 00385(1) PR@unicreditgroup.zaba.hr

6 Appendix 3. Reporting period: to Identification number (MB): Subjects identification number Audited annual financial report for credit institutions-gfi-ki Personal identification number (OIB): Issuer company: Zagrebačka banka d.d. Post office number and city: Zagreb Street and number: Trg bana Josipa Jelačića 10 address: Internet address: Code and name of municipality/city: 133 Zagreb Code and name of county: Consolidated report: 21 GRAD ZAGREB Number of employees: 5,426 (as at the quarter-end) DA Code in NKD: 6419 Companies included in consolidation (according to IFRS): Headquarters: MB: Prva stambena štedionica d.d. Samoborska cesta 145, Zagreb ZB Invest d.o.o. Samoborska cesta 145, Zagreb Centar Kaptol d.o.o. Nova Ves 17, Zagreb Pominvest d.d. Gundulićeva 26a, Split Zagreb nekretnine d.o.o. Nova Ves 17, Zagreb UniCredit Leasing Croatia d.o.o. Heinzelova 33, Zagreb Locat Croatia d.o.o.amira Tomljanovića Gavrana 17, Zagreb UniCredit Partner d.o.o.amira Tomljanovića Gavrana 17, Zagreb ALLIB NEKRETNINE d.o.o.amira Tomljanovića Gavrana 17, Zagreb BACAL ALPHA d.o.o.amira Tomljanovića Gavrana 17, Zagreb ZABA Partner d.o.o. Augusta Cesarca 2, Zagreb UniCredit Bank d.d. Kardinala Stepinca bb, Mostar Zane BH d.o.o. Branilaca Sarajeva 20, Sarajevo UniCredit Broker d.o.o. Obala Kulina bana 15, Sarajevo Multiplus card d.o.o., Zagreb Ivana Lučića 2a, Zagreb Allianz ZB d.o.o., Zagreb Nike Grškovića 31, Zagreb Allianz ZB d.o.o., Zagreb Ivana Lučića 2a, Zagreb Accounting: Contact person: Ana Jurič (only name and surname of contact person is included) Phone: 01/ Fax: address: Surname and name: Živaljić Miljenko (person representing the company) Documentation to be published: 1. Unaudited Annual financial reports 2. Management Report on the condition of the company 3. Statement of person responsible for preparation of financial reports (signature of the President of the Management Board) M.P.

7 BALANCE SHEET balance as at Position name ASSETS 1. Cash and Deposits with the CNB ( ) 1.1.Cash 1.2.Deposits with the CNB 2. Deposits with banking institutions 3. Treasury bills and CNB bills 4. Securities and other financial instruments held for trading 1 AOP code Previous period Amounts in HRK Current period ,164,240,489 18,831,188, ,868,720,100 2,942,147, ,295,520,389 15,889,040, ,070,578,371 11,223,065, ,439,697,564 4,351,394, ,275,609 95,282, Securities and other financial instruments available for sale 007 5,214,397,980 6,643,539, Securities and other financial instruments held to maturity 7. Securities and other financial instruments which are not actively traded, but are designated to fair value in income statement 8. Derivative financial assets 9. Loans to financial institutions 10. Loans to other clients 11. Investments in subsidiaries, associates and joint ventures 12. Foreclosed assets 13. Property, plant and equipment (minus amortisation) 14. Interest, fees and other assets A) TOTAL ASSETS ( do 016) LIABILITIES 1. Borrowings from financial institutions ( ) 1.1. Short-term borrowings 1.2. Long-term borrowings 2. Deposits (AOP 022 to 024) 2.1. Giro and current accounts 2.2. Savings deposits 2.3. Term deposits 3. Other borrowings ( ) 3.1. Short-term borrowings 3.2. Long-term borrowings 4. Liabilities arising from derivatives and other liabilities held for trading 5. Issued debt securities ( ) 5.1. Short-term issued debt securities 5.2. Long-term issued debt securities 6. Issued subordinate instruments 7. Issued hybrid instruments issued 8. Interest, fees and other liabilities B) TOTAL LIABILITIES ( ) EQUITY 1. Share capital 2. Current year profit/(loss) 3. Retained earnings/(loss) 4. Legal reserves 5. Statutory and other capital reserves 6. Unrealised gain/(loss) on value adjustment of available-for-sale financial assets ,433 69, ,801, ,256, ,420,407, ,134, ,044,548,567 2,354,252, ,746,020,782 77,626,053, ,551,953 94,252, ,922, ,565, ,391,766,170 2,424,375, ,381,473,511 2,036,366, ,327,787, ,892,798, ,516,409,787 3,854,452, ,266,299,151 1,944,231, ,250,110,636 1,910,220, ,730,312,360 97,635,623, ,195,503,754 31,937,343, ,291,330,292 20,231,437, ,243,478,314 45,466,842, ,845,640,093 2,581,215, ,202, ,982, ,506,437,588 2,261,232, ,068,340, ,367, ,653,841 54,140, ,653,841 54,140, ,419,447,861 3,843,505, ,633,804, ,781,304, ,404,839,100 6,404,839, ,688,334,860 1,043,626, ,413,042,354 6,390,206, ,048,522 64,048, ,910,540,693 3,914,395, ,177, ,376, Hedge accounting reserves C) TOTAL EQUITY (036 to 042) ,693,983,467 18,111,494,069 D) TOTAL LIABILITIES AND EQUITY ( ) ,327,787, ,892,798,872 BALANCE SHEET SUPPLEMENT (to be inputed by issuer preparing consolidated financial reports) 1. TOTAL EQUITY 2. Attributable to equity holders of the Bank 3. Attributable to minority interests ( ) ,693,983,467 18,111,494, ,671,985,811 18,088,393, ,997,656 23,100,744

8 1. Interest income 2. Interest expense 3. Net interest income ( ) 4. Fee and commission income 5. Fee and commission expense 6. Net fee and commission income ( ) INCOME STATEMENT for the period to Amounts in HRK AOP Previous Current Position name code period period ,140,130,876 5,420,176, ,661,004,602 1,948,635, ,479,126,274 3,471,541, ,430,347,149 1,528,672, ,367, ,320, ,268,979,265 1,340,352, Gains/(losses) from investment in subsidiaries, associates and joint ventures 8. Gains/(losses) from trading activities 9. Gains/(losses) from embedded derivatives 10. Gains/(losses) from assets which are not traded, but are designated at fair value through profit or loss 11. Gains/(losses) from activities related to available-for-sale assets 12. Gains/(losses) from activities related to held-to-maturity investments 13. Gains/(losses) from hedging transactions 14. Income from investments in subsidiaries, associates and joint ventures 15. Income from other equity investments 16. Gains/(losses) from foreign exchange differences 17. Other income 18. Other expenses 19. General administrative expenses and depreciation 20. Net income from operations before impairment and other provisions ,553,169 41,772, ,856, ,798, ,039,667 2,111, ,312,328 24,984, ,121,162 11,698, ,352, ,928, ,099, ,594, ,905, ,257, ,241,617,309 2,302,168, ,093,917,298 2,790,759, Impairment and provisions for losses 22. Income (loss) before tax ( ) 23. Income tax 24. Profit/(loss) for the period ( ) 25. Earnings per share INCOME STATEMENT SUPPLEMENT (to be inputed by issuer preparing consolidated financial statements) 1. Profit/(loss) for the period 2. Attributable to shareholders of the Bank 3. Attributable to minority interests ( ) ,691,545 1,505,423, ,179,225,753 1,285,336, ,890, ,710, ,688,334,860 1,043,626, ,688,334,860 1,043,626, ,686,124,275 1,041,182, ,210,585 2,444,370

9 Position name in the period from AOP code STATEMENT OF CHANGES IN EQUITY to Attributable to shareholders of the Bank Share capital Treasury shares Legal, statutory, capital and other reserves Retained earnings/ loss Profit/loss for the year Unrealised gain/loss from revaluation on AFS financial assets Minority interests Amounts in HRK Total equity and reserves Balance as at 1 January of the current period Changes in accounting policies and errors Restated balance as at 1 January of the current period ( ) Disposal of available-for-sale financial assets Change in fair value of available-for-sale financial assets Deferred tax on change in fair value of available-for-sale financial assets Other gains/losses recognised directly in equity Net gains/losses recognised directly in equity ( ) Profit/loss for the period Total recognised income and expense for the current period ( ) Increase/decrease of share capital Acquisition /disposal of treasury shares Other movements Transfer to reserves Dividends paid Distribution of profit ( ) Balance as at 31 December of the current period ( ) Banks w hich prepare consolidated annual financial statements separately disclose changes in minority interests in the relevant sections of equity ,404,839, ,974,589,215 6,393,255,283 1,686,124, ,177,938 21,997,656 18,693,983, ,404,839, ,974,589,215 6,393,255,283 1,686,124, ,177,938 21,997,656 18,693,983, ,053, ,053, ,338,956 45, ,384, , ,088, ,138, ,677-13,537, ,006-95,351-13,504, ,453-13,537, ,198,954-49,388 67,688, ,041,182, ,444,370 1,043,626, ,453-13,537,434 1,041,182,218 81,198,954 2,394,982 1,111,315, ,018, ,018, ,797, ,797, ,686,124,275-1,686,124, ,696,291, ,291,894-1,697,583, ,167,238-1,686,124, ,291,894-1,697,583, ,404,839, ,978,444,504 6,369,550,611 1,041,182, ,376,892 23,100,744 18,111,494,069

10 CASH FLOW STATEMENT - Indirect method in the period from to Amounts in HRK Position name AOP code Previous period Current period Operating activities 1. Cash flow from operating activities before changes in operating assets (002 do 007) 001 3,228,691,550 2,853,833, Profit/(loss) before tax 002 2,179,225,753 1,285,336, Impairment losses ,691,545 1,505,423, Depreciation and amortisation ,261, ,018, Unrealised (gains)/losses on securities at fair value through profit or loss 1.5. (Gains)/losses from sale of tangible assets 1.6. Other (gains)/losses 2. Net Increase/decrease in operating assets (009 do 016) 2.1. Deposits with the CNB 2.2. Ministry of Finance treasury bills and CNB bills 2.3. Deposits with banking institutions and loans to financial institutions 2.4. Loans to other clients ,492, ,954, ,873,651-47,929, ,878, ,971, ,223,288,007 2,862,395, ,458,672, ,493, ,639,803 79,256, ,872,093,466 3,741,564, ,978, ,460, Securities and other financial instruments held for trading 2.6. Securities and other financial instruments available for sale 2.7. Securities and other financial instruments at fair value through profit or loss which are not actively traded 2.8. Other operating assets 3. Net (increase)/decrease in operating liabilities (018 do 021) 3.1. Demand deposits 3.2. Savings and term deposits 3.3. Derivative financial liabilities and other liabilities held for trading 3.4. Other liabilities 4. Net cash flow from operating activities before income taxes paid ( ) 5. Paid income tax 6. Net inflow/(outflow) of cash from operating activities ( ) Investment activities 7. Net cash flow from investment activities (026 do 030) 7.1. Receipts from sale of / (payments to acquire) property, plant and equipment and intangible assets 7.2. Receipts from disposal of / (payments for purchase) investments in subsidiaries, associates and joint ventures 7.3. Receipts from sale of / (payments to acquire) securities and other investments held to maturity 7.4. Received dividends 7.5. Other receipts/(payments) from investment activities Financial activities 8. Net cash flow from financing activities (032 do 037) 8.1. Net increase/(decrease) in borrowings 8.2. Net increase /(decrease) of issued debt securities 8.3. Net increase /(decrease) of subordinated and hybrid instruments 8.4. Receipts from issue of capital 8.5. Payment of dividends 8.6. Other receipts/(payments) from financial activities 9. Net increase/(decrease) in cash and cash equivalents ( ) 10. Effects of foreign exchange differences on cash and cash equivalents 11. Net increase/(decrease) in cash and cash equivalents ( ) 12. Cash and cash equivalents at the beginning of the year 13. Cash and cash equivalents at the end of the year ( ) ,924-74,598, ,958,972-1,456,014, ,206 1,503, ,883, ,283, ,033,222,077 1,470,625, ,043,757,441 7,204,003, ,383,969,091-5,831,924, , ,433,727 98,506, ,485,201,634 7,186,853, ,575, ,463, ,286,626,004 6,675,389, ,621, ,228, ,471, ,693, ,616, ,860 34, ,404,682 48,430, ,813,547,580-1,193,126, ,864,200, ,537, ,422, , ,769, ,384, ,024,457,085 5,148,033, ,545, ,415, ,009,911,211 5,024,618, ,802,849,127 12,812,760, ,812,760,338 17,837,378,845

11 NOTES TO THE FINANCIAL STATEMENTS in HRK Net liquid assets Cash 2,868,720,100 2,942,147,850 Deposits w ith the CNB 12,295,520,389 15,889,040,455 Deposits w ith banking institutions 12,070,578,371 11,223,065,855 Treasury bills and CNB bills 4,439,697,564 4,351,394,625 Securities and other financial instruments held for trading 21,275,609 95,282,895 Secutiries and other financial instruments available for sale 5,214,397,980 6,643,539,574 Securities and other financial instruments w hich are not actively traded, but are designated to fair value in income statement 126,801, ,256,815 37,036,991,850 41,270,728,069 Loans to and receivables from customers Companies and similar organisations and government 54,657,455,841 49,261,588,112 Individuals and unincorporated businesses 35,991,652,625 35,445,676,829 Total gross loans 90,649,108,465 84,707,264,941 Companies and similar organisations and government (7,123,667,755) (5,584,488,219) Individuals and unincorporated businesses (2,779,419,928) (1,496,722,872) Impairment allow ance (9,903,087,683) (7,081,211,091) 80,746,020,782 77,626,053,850 Deposits and borrow ings Companies and similar organisations and government 31,715,293,702 33,869,062,223 Individuals and unincorporated businesses 60,512,513,792 61,380,113,313 Banks and other financial institutions 12,864,554,746 8,822,115, ,092,362, ,071,291,126

12 List of subsidiaries and associates Zagrebačka banka d.d. is a licensed bank operating in Croatia and the holding company for the Zagrebačka banka Group. The Bank's subsidiaries and associated companies are presented below : Fully consolidated subsidiaries: Company Group Group ownership in % UniCredit Bank d.d., Mostar Banking 99.3 Prva stambena štedionica d.d. Banking ZB Invest d.o.o. Fund management Centar Kaptol d.o.o. Property investment Pominvest d.d. Property management 88.7 Zagreb nekretnine d.o.o. Real estate agency Zane BH d.o.o. Real estate agency UniCredit Leasing Croatia d.o.o. Leasing Real estate Locat Croatia d.o.o. business UniCredit Partner d.o.o. Trading activities 80.0 ALLIB NEKRETNINE d.o.o. Real estate business BACAL ALPHA d.o.o. Real estate business ZABA Partner d.o.o. Insurance brokerage Equity accounted associated companies: Company Allianz ZB d.o.o., Zagreb Allianz ZB d.o.o., Zagreb Multiplus card d.o.o., Zagreb Group ownership Group in % Obligatory pension fund management 49.0 Voluntary pension fund management 49.0 Advertising and marketing services 25.0 UniCredit Broker d.o.o. Sarajevo brokersko društvo u osiguranju Insurance brokerage 48.7 Promjene u obuhvatu konsolidacije In June 2016 Locat Croatia d.o.o. disposed its 100% stake in the subsidiary BACAL BETA NEKRETNINE d.o.o. In January 2017 a full legal merger w as completed w hereby the company Suvremene poslovne komunikacije d.o.o. (100% ow ned by Zagrebačka banka d.d.) w as merged to Zagreb Nekretnine d.o.o. (also 100% ow ned by Zagrebačka banka d.d.). In July 2017, a full legal merger w as completed w hereby the company UniCredit Leasing d.o.o., Sarajevo (100% ow ned by UniCredit Bank d.d., Mostar) w as merged to UniCredit Bank d.d., Mostar (99.3% ow ned by Zagrebačka banka d.d.).

13 Net interest income Previous period Current period Interest and similar income 6,140,130,876 5,420,176,262 Loans to and receivables from customers 4,456,822,535 3,942,891,790 Debt securities 201,030, ,181,004 Loans to and receivables from banks 32,341,695 45,180,538 Derivative instruments 1,449,936,572 1,229,922,930 Interest expense and similar charges 2,661,004,602 1,948,635,011 Current accounts and deposits from banks 129,483,140 40,696,433 Current accounts and deposits from individuals 742,948, ,409,378 Current accounts and deposits from companies and other organisations 210,741, ,981,082 Borrow ings 172,707, ,047,647 Derivative instruments 1,405,123,864 1,189,705,876 Issued debt securities 0 794,595 3,479,126,274 3,471,541,251 Net fee and commission income Previous period Current period Fee and commission income 1,430,347,149 1,528,672,231 Domestic payment transaction related fees and commissions 528,105, ,955,921 Credit card related fees and commissions 348,171, ,269,296 Foreign payment transaction related fees and commissions 158,728,566 95,645,034 Investment management, brokerage and consultancy fees 222,843, ,013,767 Other fees and commissions 172,498, ,788,213 Fee and commission expense 161,367, ,320,006 Credit card related charges 101,682, ,733,312 Domestic payment transaction related charges 36,410,473 38,394,906 Foreign payment transaction related charges 7,028,975 6,464,174 Other fees and commissions 16,246,132 18,727,614 1,268,979,265 1,340,352,225 Impairment losses and provisions Previous period Current period Impairment losses on loans to and receivables from customers (520,602,329) (1,198,284,109) Other impairment losses and provisions (394,089,216) (307,138,898) (914,691,545) (1,505,423,007) Earnings per share Previous period Current period Profit attributable to equity holders of the Bank 1,686,124,275 1,041,182,218 Weighted average number of ordinary shares in issue 320,241, ,233,319 Basic and diluted earnings per share (expressed in HRK per share)