AB SEB VILNIAUS BANKAS INTERIM FINANCIAL REPORT FOR THE THREE MONTH PERIOD ENDED 31 MARCH 2005

Transcription

1 AB SEB VILNIAUS BANKAS INTERIM FINANCIAL REPORT FOR THE THREE MONTH PERIOD ENDED 31 MARCH 2005

2 2 Profit and Loss Account for the three month period ended 31 March The Group The Bank ,315 81,650 Interest income 84,772 75,105 (35,503) (24,149) Interest expenses (28,221) (19,891) 68,812 57,501 Net interest income 56,551 55,214 2,927 (758) Provisions for loan impairment 3,366 (594) (108) (779) Provisions for lease portfolio and other doubtful leasing assets (1,139) Provisions for guarantees 44 (1,139) (6) (213) Other provisions (1) (212) 2,857 (2,889) 3,409 (1,945) 71,669 54,612 Net interest income after provisions 59,960 53,269 31,238 27,130 Net service charges and other income 25,445 22, Net gain on equity investments - 1,670 6,915 18,335 Net gain on operations with debt securities and financial instruments 6,395 17,153 5,319 (5,834) Net foreign exchange gain (loss) 3,867 (6,289) 43,871 40,600 35,707 34,912 (6,765) (5,322) Deposit insurance expenses (6,709) (5,321) (26,806) (26,105) Staff costs (21,559) (23,020) (30,784) (33,289) Other administrative expenses (25,984) (29,554) (64,355) (64,716) (54,252) (57,895) Result of life insurance operations ,397 30,697 Profit before income tax 41,415 30,286 (7,518) (4,954) Income tax (5,489) (4,543) 43,879 25,743 Net income 35,926 25,743 Attributable to: 43,871 25,743 Equity holders of the parent 35,926 25, Minority interest ,879 25,743 35,926 25, Earnings per share, attributable to equity holders of the parent (LTL) Diluted earnings per share, attributable to equity holders of the parent (LTL) J. Niedvaras V. Bučas Chairman of the Board Chief Financial Officer

3 3 Balance Sheet The Group The Bank 31 March December 2004 Assets 31 March December , ,907 Cash in hand 167, , , ,430 Balances with the Central Banks 417, , , ,624 Due from banks, net 869, ,617 1,038,879 1,108,193 Treasury bills available for sale 1,046,763 1,058, ,173 77,460 Financial assets designated at fair value through profit or loss 68,243 77,460 10,797 9,386 Derivative financial instruments 10,797 9,397 19,282 16,948 Loans to credit and financial institutions, net 794, ,543 6,059,900 5,827,750 Loans to customers, net 5,797,632 5,662,792 1,480,112 1,369,564 Finance lease receivable, net ,940 71,208 Investment securities available for sale 26,126 26,475 14,122 13,433 Investment securities held to maturity 14,122 13, Investments in subsidiaries 200, , , ,667 Intangible fixed assets 178, , , ,169 Tangible fixed assets 94,614 99,778 26,296 81,622 Assets under operating lease ,111 58,411 Investment property 22,382 22,516 2,052 2,524 Deferred tax asset , ,033 Other assets, net 101,919 92,418 11,004,414 10,524,329 Total assets 9,811,900 9,520,658 Liabilities Amounts owed to the Central Banks ,837,067 2,519,885 Amounts owed to credit and financial institutions 1,888,091 1,725,210 6,782 16,931 Derivative financial instruments 6,782 16,932 6,444,653 6,367,069 Deposits from the public 6,346,397 6,367,527 85,139 75,720 Liabilities in life insurance operations ,452 59,645 Accrued expenses and deferred income 41,303 46,779 23,286 17,654 Income tax payable 21,065 15,577 60,619 60,619 Subordinated loans 60,619 60, , ,300 Debt securities in issue 269, ,007 96,296 75,842 Other liabilities and provisions 62,978 42,938 9,866,232 9,461,733 Total liabilities 8,696,720 8,456,657 Equity Equity attributable to equity holders of the parent 154, ,414 Paid in 154, , , ,040 premium 189, , , ,482 Reserve 693, ,482 30,899 - Financial assets revaluation reserve 30,899-7,971 - Legal reserve 6,026-5,554 5,554 General and other reserves 5,554 5,554 12,462 - Retained earnings , ,106 Net income for the period 35, ,511 1,137,366 1,062,596 1,115,180 1,064, Minority interest - - 1,138,182 1,062,596 Total equity 1,115,180 1,064,001 11,004,414 10,524,329 Total liabilities and equity 9,811,900 9,520,658 Return on Average Equity attributable to equity 15.95% 11.90% holders of the parent 13.19% 12.00% 1.63% 1.27% Return on Average Total Assets 1.49% 1.41% Vilnius, 25 April 2005 J. Niedvaras V. Bučas Chairman of the Board Chief Financial Officer

4 4 Statement of Changes in Equity of the Group for the three month period ended 31 March 2005 premium Reserve Financial assets revaluation reserve Legal reserve General and other reserves Retained earnings Net income for the period Minority interest Total 31 December , , , , ,106-1,062,596 Transfers to reserves ,839-6,026-14,241 (119,106) December 2004 after appropriation of profit 154, , ,321-6,026 5,554 14, ,062,596 Reversal of subsidiaries, accounted under equity method, results - - (166) - 1,945 - (1,779) Initial charge to financial assets revaluation reserve , ,475 1 January 2005 after effects of IFRS changes 154, , ,155 31,475 7,971 5,554 12, ,094,071 Acquisition of Agio bank Net income for the period , ,879 Net charge to financial assets revaluation reserve for the period (576) (576) 31 March , , ,155 30,899 7,971 5,554 12,462 43, ,138,182 J. Niedvaras V. Bučas Chairman of the Board Chief Financial Officer

5 5 Statement of Changes in Equity of the Bank for the three month period ended 31 March 2005 premium Reserve Financial assets revaluation reserve Legal reserve General and other reserves Retained earnings Net income for the period Total 31 December , , , , ,511 1,064,001 Transfers to reserves ,839-6,026-15,646 (120,511) - 31 December 2004 after appropriation of profit 154, , ,321-6,026 5,554 15,646-1,064,001 Reversal of subsidiaries, accounted under equity method, results (15,646) - (15,646) Initial charge to financial assets revaluation reserve , ,475 1 January 2005 after effects of IFRS changes 154, , ,321 31,475 6,026 5, ,079,830 Net income for the period ,926 35,926 Net charge to financial assets revaluation reserve for the period (576) (576) 31 March , , ,321 30,899 6,026 5,554-35,926 1,115,180 Statement of Changes in Equity of the Bank and the Group for the three month period ended 31 March 2004 premium Reserve General and other reserves Retained earnings Total 31 December , , ,206 5, , ,490 Transfer to reserve ,276 - (132,276) - 31 December 2003 after appropriation of profit 154, , ,482 5, ,490 Net income for the period ,743 25, March , , ,482 5,554 25, ,233 J. Niedvaras V. Bučas Chairman of the Board Chief Financial Officer

6 5 Statement of Cash Flows for the three month period ended 31 March The Group The Bank Cash from operating activities: 103,415 82,056 Interest income received 84,034 75,050 (37,234) (30,141) Interest expenses paid (33,233) (24,401) 5,319 (5,834) Net foreign exchange gain (loss) 3,867 (6,289) 6,915 18,335 Net gain in securities trading and financial instruments 6,395 17,153 31,238 22,875 Net commission and service income 25,445 22,378 9,631 8,259 Life insurance operations - - (26,806) (26,105) Staff costs (21,559) (23,020) (25,211) (23,556) Other payments (24,286) (24,380) 67,267 45,889 Net cash from operating activities before change in operating assets 40,663 36,491 Changes in operating assets: 8,424 (35,879) Decrease (increase) in compulsory balances with the Central Banks 8,424 (35,879) (167,774) 50,150 (Increase) decrease in due from banks and loans to credit and financial institutions (218,015) 50,811 (148,395) (188,470) Increase in loans to customers (133,691) (141,106) (9,848) 15,169 (Increase) decrease in other current assets (8,764) 20,266 (317,593) (159,030) Net increase in operating assets (352,046) (105,908) Changes in operating liabilities: (5,951) (47,626) Decrease in deposits from the public (21,130) (47,998) 15,616 (567) Increase (decrease) in accrued expenses, deferred income and other liabilities 19, ,665 (48,193) Net increase (decrease) in operating liabilities (1,413) (47,655) (240,661) (161,334) Net cash to operating activities before income tax (312,796) (117,072) (248) - Income tax paid (98) - (240,909) (161,334) Net cash to operating activities after income tax (312,894) (117,072)

7 6 Statement of Cash Flows for the three month period ended 31 March (continued) The Group The Bank Cash from (to) investing activities: (5,767) 1,531 (Purchase) sale of tangible and intangible fixed assets, net 846 (2,400) 31, ,139 Decrease in investment in short-term and long-term treasury bonds 20, ,184 (38,156) (19,452) Change of investment into subsidiaries (73,121) (54,907) 4,935 - Decrease of investment in securities and derivatives 19,009-1,300 3,232 Change in investment property (56,113) (136,561) Increase in financial lease receivable - - (62,200) (4,111) Cash (used in) from investing activities (32,515) 93,948 Cash from (to) financing activities: 221 (15) Increase (decrease) in amounts owed to the Central Banks (1) (15) 278, ,053 Increase in amounts owed to credit and financial institutions 162, ,466-59,738 Increase in subordinated loans - - (13,650) Debt securities (redeemed) issued, net 88, , ,776 Cash from financing activities 251, ,451 (37,708) 92,331 Net (decrease) increase in cash (94,118) 92, , ,907 Cash and cash equivalents 1 January 644, , , ,238 Cash and cash equivalents 31 March 550, ,231 Which could be specified as follows: 15,236 52,343 Balances available for withdrawal with the Central Banks - 52, , ,358 Overnight deposits 321, , , ,014 Cash on hand 167, ,014 85,551 49,523 Current accounts with other banks 60,766 49, , , , ,231

8 7 Basis of presentation This interim financial report is presented in national currency of Lithuania, Litas (LTL). The books and records of the Bank and the Group are maintained in accordance with International Financial Reporting Standards (IFRS). This interim financial report has been prepared in accordance with International Accounting Standard 34. This interim financial report is prepared applying the same accounting policies as those applied in annual financial statements of the Bank, except changes in IFRS, described in the below section. Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current year. The Group decided to account for income from assets leased under operating lease in other income caption and for these assets depreciation under other operating expense caption instead of netting these amounts in interest income caption. Accordingly, LTL 669 thousand net result was reclassified in Profit and Loss Account for the three month of 2004, increasing other income by LTL 4,255 and other administrative expenses by LTL 3,586. During the first quarter of 2005 the Group noted inaccurate classification of assets under lease and reclassified LTL 54,544 thousand from assets under operating lease to finance lease receivable, net caption. IFRS changes Changed policies are applied starting from 2005 without adjusting comparative figures for In 2005 the Bank started to account for investments into subsidiaries under cost method instead of equity method applied in Therefore, as of 1 January 2005 the Bank reversed subsidiaries results accrued since inception, amounting to LTL 15,645 thousand. In 2005 the Bank and the Group started to account for unrealised gains and losses of available for sale financial assets in revaluation reserve within equity. The reserve as of 1 January 2005 amounted to LTL 31,475 thousand. In 2005 the Bank and the Group stopped goodwill amortization, which amounted to LTL 2,811 thousand for one quarter. Debt securities issuances and redemption In the first quarter of 2005 the Bank successfully issued its three debt securities emissions: Three-year debt securities emission of LTL 100 million nominal value and 3.1% interest rate due February Three-year index linked debt securities emission of LTL 10 million nominal value due April Three-year index linked debt securities emission of LTL 5 million nominal value due April In January 2005 the Group (subsidiary Mortgage Bank) successfully redeemed its one-year debt securities emission of LTL 100 million nominal value, issued in January The redemption was financed by loan from. Significant events In January 2005 the Bank purchased percent of bank Agio shares. Therefore, consolidated Group interim financial report as of 31 March 2005 includes Agio balances. However, determination of fair values and goodwill amount related to the acquisition is still in process. On 31 January 2005 State Tax Authorities delivered to the Bank claim amounting to LTL 21.2 million regarding income tax payments in 2002 and Tax Authorities claim that in 2002 and 2003 the Bank breached Investment Agreement between the Ministry of Finance and Skandinaviska Enskilda Banken, according to which AB SEB Vilniaus Bankas was given a full income tax exemption for the five-year period No provision has been made for the claim amount, as the Bank management believes, that the Bank properly fulfilled all requirements of the Investment Agreement and it is unlikely that the claim will be enforced. In October 2004 Skandinaviska Enskilda Banken started Arbitration process against the Republic of Lithuania trying to solve the dispute regarding breach of the Investment Agreement.