OTP Banka Slovensko, a.s.

Transcription

1 OTP Banka Slovensko, a.s. Separate Financial Statements prepared in accordance with International Accounting Standard IAS 34 Interim financial reporting

2 Contents Page Separate Financial Statements: Separate Statement of Financial Position 1 Separate Statement of Comprehensive Income 2 3 Separate Statement of Changes in Equity 4 Separate Statement of Cash Flows 5 Notes to the Separate Financial Statements 6 49

3 The accompanying notes on pages 6 to 49 are an integral part of these separate financial statements. 1

4 Separate Statement of Comprehensive Income for the period ended 30 September 2014 Note Period Ended Period Ended 30 Sept 2013 Interest income Interest expense (13 778) (16 285) Net interest income Provisions for impairment losses on loans and off-balance sheet, net 24 (9 527) (5 732) Net interest income after provisions for impairment losses on loans and off-balance sheet Fee and commission income Fee and commission expense (2 165) (2 023) Net fee and commission income Gains/(losses) on financial transactions, net 26 (312) (1 899) Gains/(losses) on financial assets, net General administrative expenses 28 (31 663) (30 162) Other operating revenues/(expenses), net Profit/(loss) before income tax Income tax 19 (81) (22) Net profit/(loss) after tax Items of other comprehensive income that will be reclassified subsequently to profit or loss, net of tax Revaluation of available-for-sale financial assets 30 (5) (372) Total comprehensive income for the reporting period Profit/(loss) per share in face value of EUR 3.98 (in EUR) Profit/(loss) per share in face value of EUR (in EUR) Profit/(loss) per share in face value of EUR 1.00 (in EUR) The accompanying notes on pages 6 to 49 are an integral part of these separate financial statements. 2

5 Separate Statement of Comprehensive Income for the period ended 30 September 2014 Note 3Q Q 2013 Interest income Interest expense (4 378) (5 165) Net interest income Provisions for impairment losses on loans and off-balance sheet, net 24 (3 503) (2 335) Net interest income after provisions for impairment losses on loans and off-balance sheet Fee and commission income Fee and commission expense (730) (777) Net fee and commission income Gains/(losses) on financial transactions, net 26 (190) (395) Gains/(losses) on financial assets, net General administrative expenses 28 (10 373) (9 925) Other operating revenues/(expenses), net 29 (9) 2 Profit/(loss) before income tax Income tax 19 (37) (16) Net profit/(loss) after tax Items of other comprehensive income that will be reclassified subsequently to profit or loss, net of tax Revaluation of available-for-sale financial assets 30 (559) 6 Total comprehensive income for the reporting period (410) 111 Profit/(loss) per share in face value of EUR 3.98 (in EUR) Profit/(loss) per share in face value of EUR (in EUR) Profit/(loss) per share in face value of EUR 1.00 (in EUR) The accompanying notes on pages 6 to 49 are an integral part of these separate financial statements. 3

6 Separate Statement of Changes in Equity as at 30 September 2014 Share Capital Reserve Funds Retained Earnings Revaluation of Availablefor-Sale Financial Assets Profit/ (Loss) for the reporting period Total Equity as at 1 Jan Share-based payments Total comprehensive income (355) Equity as at 31 Dec Share Capital Reserve Funds Retained Earnings Revaluation of Availablefor-Sale Financial Assets Profit/ (Loss) for the reporting period Total Equity as at 1 Jan Share-based payments Total comprehensive income (372) Equity as at 30 Sept Share Capital Reserve Funds Retained Earnings Revaluation of Availablefor-Sale Financial Assets Profit/ (Loss) for the reporting period Total Equity as at 1 Jan Transfers (101) Share-based payments Total comprehensive income (5) Equity as at The accompanying notes on pages 6 to 49 are an integral part of these separate financial statements. 4

7 Separate Statement of Cash Flows for the period ended 30 September 2014 Note Period Ended Period Ended 30 Sept 2013 CASH FLOW FROM OPERATING ACTIVITIES Net profit/(loss) after tax Adjustments to reconcile net income/(loss) to net cash provided by operating activities: Provisions for loans and off-balance sheet Provisions for other assets Provisions for contingent liabilities 13 (109) Provisions for investments in subsidiaries - - Depreciation and amortisation Net effect of assets sold - - Net effect of income tax Share-based payments Changes in operating assets and liabilities: Net decrease in statutory minimum reserves stipulated by the National Bank of Slovakia Net decrease in placements with other banks - - Net (increase)/decrease in financial assets at fair value through profit or loss (71) 457 Net decrease/(increase) in available-for-sale financial assets (23 302) Net increase in loans and receivables before provisions for possible losses (22 981) (92 876) Net decrease in amounts due to banks and deposits from the National Bank of Slovakia and other banks (40 197) (290) Net increase in amounts due to customers Net decrease/(increase) in other assets before provisions for possible losses 517 (1 079) Net increase in other liabilities Net cash flows from operating activities (26 334) CASH FLOW FROM INVESTMENT ACTIVITIES Net cash flows from held-to-maturity investments (1 868) Net additions to non-current tangible and intangible assets (933) (2 418) Net cash flows from/(used in) investment activities (4 286) CASH FLOW FROM FINANCING ACTIVITIES Net cash flows from securities redeemed (24 449) (4 758) Net increase in subordinated debt Net cash flows used in financial activities (6 438) (4 757) Net increase in cash and cash equivalents (35 377) Cash and cash equivalents at the beginning of the reporting period Cash and cash equivalents at the end of the reporting period The accompanying notes on pages 6 to 49 are an integral part of these separate financial statements. 5

8 1. Introduction OTP Banka Slovensko, a.s. (hereinafter the Bank or OTP Slovensko ) was established on 24 February 1992 and incorporated on 27 February The Bank s seat is at Štúrova 5, Bratislava. The Bank s identification number (IČO) is and its tax identification number (DIČ) is Members of Statutory and Supervisory Boards as at 30 September 2014 Board of Directors: Ing. Zita Zemková (Chairman) Ing. Rastislav Matejsko Mgr. Peter Leško Dr. Sándor Patyi Supervisory Board: József Németh (Chairman) Ágnes Rudas Gábor Kovács Atanáz Popov Ing. Katarína Mihók Ing. Jozef Brhel Changes in the Bank in 2014: Board of Directors: Supervisory Board: Ing. Rastislav Matejsko, office terminated with effect from 21 May 2014 and reelected to the office with effect from 22 May 2014 Ing. Zita Zemková, office terminated with effect from 15 August 2014 and reelected to the office with effect from 16 August 2014 Péter Bese, resignation with effect from 9 April 2014 JUDr. Gábor Zászlós, resignation with effect from 9 April 2014 József Németh, office terminated with effect from 12 April 2014 and re-elected to the office with effect from 13 April 2014 Shareholders Structure The majority shareholder of the Bank is OTP Bank Nyrt. Hungary ( OTP Bank Nyrt. ) with 99.21% share of the Bank s share capital. OTP Bank Nyrt. is the direct parent company of the Bank. The shareholders structure (with respective shares exceeding 1%) and their share on the share capital are as follows: Name/Business Name Share in Subscribed Share Capital as at Share in Subscribed Share Capital as at 31 Dec 2013 OTP Bank Nyrt. Hungary 99.21% 99.21% Other minority owners 0.79% 0.79% The shareholders shares of voting rights are equal to their shares of the share capital. 6

9 2. Principal Accounting Policies The separate financial statements of the Bank for the period ended 30 September 2014 have been prepared in accordance with the International Accounting Standard IAS 34 Interim Financial Reporting as adopted by the European Union ( EU ). Accounting principles and accounting methods applied in these financial statements do not differ from those, that have been applied in separate financial statements for the year ended 31 December 2013, unless stipulated otherwise. The separate financial statements of the Bank for the period ended 30 September 2014 should be considered together with the separate financial statements of the Bank for the year ended 31 December 2013, as not all information and disclosures required in the annual financial statements are included. Purpose of Preparation These separate financial statements were prepared in Slovakia so as to comply with the article 17a) of Act on Accounting No. 431/2002 Coll. as amended, under special regulations - Regulation (EC) 1606/2002 of the European Parliament and of the Council on the Application of International Accounting Standards (IFRS). Basis for the Financial Statements Preparation Separate financial statements were prepared under the historical cost basis, except for certain financial instruments, which have been recognised at fair value. The financial statements were prepared under the accrual principle of accounting: transactions and recognised events are recorded in the period to which they are related in time. Separate financial statements were prepared under the assumption that the Bank will continue as a going concern in the foreseeable future. The reporting currency used for disclosure in these separate financial statements is the Euro, which is rounded to thousands of euros, unless stipulated otherwise. The amounts in brackets refer to negative values. 7

10 3. Fair Value of the Bank s Financial Assets and Liabilities The following tables present an analysis of financial instruments that are measured after their initial recognition at fair value. Financial instruments are classified into three levels/categories based on the level of the fair value determination: 30 September 2014 (EUR 000) Level 1 Level 2 Level 3 TOTAL Assets Financial assets at fair value through profit or loss Derivative financial instruments for trading Available-for-sale financial assets Available-for-sale securities - government bonds Available-for-sale securities treasury bills of foreign central banks Available-for-sale securities bonds issued by foreign banks Liabilities Liabilities from derivative transactions December 2013 (EUR 000) Level 1 Level 2 Level 3 TOTAL Assets Financial assets at fair value through profit or loss Derivative financial instruments for trading Available-for-sale financial assets Available-for-sale securities - government bonds Available-for-sale securities treasury bills of foreign central banks Available-for-sale securities bonds issued by foreign banks Liabilities Liabilities from derivative transactions The following table includes reconciliation between the fair value of selected financial assets and liabilities and their net book value with carrying amount different from their fair value: Fair Value Net Book Value Difference Assets Loans and receivables Held-to-maturity financial investments Liabilities Amounts due to customers Liabilities from issued securities (650) Subordinated debt In the item Amounts due to customers, the Bank changed the valuation method of Term deposits at fixed interest rates as at 30 September 2014 in order to comply deeper with the Standards Measurement required by IFRS 13. The fair value of deposits at fixed interest rates is estimated by discounting their future cash flows using interest rates of Term deposits provided by the Bank. Till 30 September 2014 interbank interest rates (EURIBOR, LIBOR) were used for discounting deposits within one year, and for deposits over one year, the yield curve of government bonds was used. Fair Value 31 Dec 2013 Net Book Value 31 Dec 2013 Difference 31 Dec 2013 Assets Loans and receivables Held-to-maturity financial investments Liabilities Amounts due to customers Liabilities from issued securities (1 375) Subordinated debt

11 Supplementary Data to the Financial Statements Separate Financial Statements 4. Cash, Due from Banks and Balances with the National Bank of Slovakia 31 Dec 2013 Cash on hand: In EUR In foreign currency Due from banks and balances with NBS: Residual maturity within one year: In EUR In foreign currency Total Placements with Other Banks, Net of Provisions for Possible Placement Losses 31 Dec 2013 Residual maturity within one year: In EUR In foreign currency Total During the 3Q 2014, the Bank made Reverse REPO transactions with the parent company, OTP Bank Nyrt. As at 30 September 2014, the Bank recognised loans in the amount of EUR thousand (31 December 2013: EUR 0) secured by securities from parent company, as at 30 September 2014 in the amount of EUR thousand. Revenues from these deals are reported in Statement of Comprehensive Income in the line Interest income. 6. Financial Assets at Fair Value through Profit or Loss 31 Dec 2013 Derivative financial instruments held for trading (Note 22) Total financial instruments held for trading Available-for-sale financial assets 31 Dec 2013 Available-for-sale securities government bonds Available-for-sale securities treasury bills of foreign central banks Available-for-sale securities bonds issued by foreign banks Investments in corporate entities Total financial instruments available-for-sale The structure as per interest rates and residual maturities is provided below: 31 Dec 2013 Less than five years, fixed interest rates More than five years, fixed interest rates - - Zero-coupon Total

12 As at 30 September 2014, the Bank did not recorded pledged securities within financial assets available for sale (31 December 2013: EUR thousand). During the 1H 2014 the Bank continuously purchased short-term treasury bonds of a foreign emission bank into its portfolio of financial assets available for sale. Revenues from this trades are reported in Statement of Comprehensive Income in the line Interest income. An analysis of investments in corporate entities as at 30 September 2014 and 31 December 2013 (unless otherwise indicated, the companies are incorporated in Slovakia) is as follows: Company Name Business Activity Share Cost Provision Net OTP Buildings, s.r.o. Real estate 19.00% S.W.I.F.T (Belgium) International clearing 0.005% 6-6 RVS, a.s. Wellness 12.65% Total Loans and Receivables, Net of Provisions for Possible Losses Loans and Receivables by Type of Product Carrying Amount Before Provisions Specific Provision Portfolio Provision Carrying Amount After Provisions Corporate loans Corporate clients Overdrafts Mass loans* Mortgage loans Other Retail loans Mortgage loans Consumer loans Other Total Dec 2013 Carrying Amount Before Provisions Specific Provision Portfolio Provision Carrying Amount After Provisions Corporate loans Corporate clients Overdrafts Mass loans* Mortgage loans Other Retail loans Mortgage loans Consumer loans Other Total *Mass loans include fast corporate loans and solvent business card product for corporate clients. 10

13 The Summary of Provisions for Possible Loan Losses 31 Dec 2013 Balance at the beginning of reporting period Provisions for impairment losses on loans, net Loan write-offs and assignments (Note 24) (2 351) (3 649) Foreign exchange differences - (1) Balance at the end of reporting period Held-to-Maturity Financial Investments As at 30 September 2014 and 31 December 2013, the Bank recognised the following held-to-maturity investments: 31 Dec 2013 Government bonds Bonds issued by banks Total held-to-maturity securities The following table includes a summary of held-to-maturity securities pledged as a security for the Bank s liabilities (data in the table represent the total face value of pledged securities): 31 Dec 2013 Security for liabilities from financial transactions: Slovak government bonds Bonds issued by banks - - Security for liabilities from financial transactions with the NBS: Slovak government bonds Bonds issued by banks Total pledged securities Investments in Subsidiaries As at 30 September 2014 and 31 December 2013, the Bank recognised the following investments in subsidiaries and associates: 31 Dec 2013 Subsidiaries Total gross value Provision for investments in subsidiaries (1 051) (1 051) Total net value An analysis of investments in subsidiaries, as at 30 September 2014 and 31 December 2013 (all companies incorporated in Slovakia), is as follows: Company Company Seat Business Activity Ownership Interest/ Voting Power Held Faktoring SK, a.s. v likvidácii Tallerova 10, Bratislava Factoring % 11

14 In 2010, as part of the strategic decisions made at the OTP Group level, a decision was adopted to terminate OTP Faktoring Slovensko, a.s. s activities. On 1 April 2011, OTP Faktoring Slovensko, a.s. entered into liquidation and also its business name was changed from the original OTP Faktoring Slovensko, a.s. to Faktoring SK, a.s. v likvidácii. As at the issue date of the financial statements, the company s liquidation was not completed. 12

15 11. Non-Current Tangible and Intangible Assets Movements of Assets Buildings and Land Fittings and Fixtures Motor Vehicles Tangible Assets in Acquisition Intangible Assets Intangible Assets in Acquisition Total Cost at 1 Jan Additions (+) Disposals (-) (176) (5 550) (165) (3 778) (51) (2 051) (11 771) Cost at 31 Dec Accumulated depreciation and provisions at 1 Jan Depreciation (+) Disposal (-) (111) (5 538) (165) - (45) - (5 859) Cancellation of provisions (-) (299) (299) Accumulated depreciation and provisions at 31 Dec Net book value at 31 Dec Cost at 1 Jan Additions (+) Disposals (-) (97) (2 538) (15) (1 535) (9) (1 699) (5 893) Cost at Accumulated depreciation and provisions at 1 Jan Depreciation (+) Disposal (-) (64) (2 538) (12) - (9) - (2 623) Accumulated depreciation and provisions at Net book value at

16 Movements in accounts of provisions for non-current tangible and intangible assets: 31 Dec 2013 Balance at the beginning of reporting period Creation - - Cancellation - (299) Balance at the end of reporting period - - As at 31 December 2013, provisions recorded for plots of land were cancelled. The Bank cancelled the provisions based on the estimated mitigation of the temporary impairment of property supported by the valuation of real estate prepared by a sworn expert during A summary of insurance of non-current tangible and intangible assets as at 30 September 2014: Anticipated Annual Premium Actual Insurance Costs MTPL insurance 6 4 Motor hull insurance Insurance of assets Total Other Assets 31 Dec 2013 Loss receivables from various debtors Loss receivables from securities Operating advances made Inventories Deferred expenses Receivables from various debtors Receivables from shortages and damage Other receivables from clients Other receivables Other assets before provisions Provisions for possible losses from other assets (8 860) (8 825) Total other assets An analysis of movements in provisions for possible losses from other assets is as follows: 31 Dec 2013 Balance at the beginning of reporting period Provisions for impairment losses on other assets, net (Note 29) Other assets written-off and assigned (Note 29) 1 (1) Foreign exchange difference - (1) Balance at the end of reporting period

17 13. Due to Banks and Deposits from the National Bank of Slovakia and Other Banks 31 Dec 2013 Residual maturity within one year: In EUR In foreign currency Residual maturity over one year: In EUR 7 26 Total Amounts due to banks by type of product: 31 Dec 2013 Deposits Term accounts of other banks Loans received from other financial institutions Other liabilities to financial institutions 20 1 Total An analysis of received loans by individual types of banks (all loans are denominated in EUR, unless stated otherwise): Type of Loan According to Maturity Contractual Maturity as at 30 Sept Dec 2013 Loans received from issuing banks: Central banks Short-term 1 Oct Loans received from banks: Reconstruction and development banks Long-term Individual Total Amounts due to Customers Amounts due to customers by type: 31 Dec 2013 Current accounts and other short-term amounts due to customers Term deposits Pass books Municipality accounts Other liabilities 27 7 Total Amounts due to customers by sector: 31 Dec 2013 Non-financial organisations Individuals Financial institutions Trade licence holders Insurance companies Non-profit organisations Non-residents Government sector Not categorised in sectors 2 7 Total

18 Amounts due to customers by residual maturity: 31 Dec 2013 Residual maturity within one year: In EUR In foreign currency Residual maturity over one year: In EUR In foreign currency 9 - Total Liabilities from Issued Securities 31 Dec 2013 Residual maturity within one year: Liabilities from financial bills of exchange Liabilities from mortgage bonds Residual maturity over one year: Liabilities from mortgage bonds Total

19 Summary of mortgage bonds as at 30 September 2014 and 31 December 2013: Mortgage Bonds Issued Currency Quantity Face Value per Share in EUR Face Value of Issue Net Book Value Net Book Value 31 Dec 2013 Interest Income (coupon) 3M EURIBOR Frequency of Coupon Payout Issue Date Due Date Mortgage bonds Issue VII EUR % p. a. Quarterly 21 Dec Dec 2015 Mortgage bonds 3M EURIBOR Issue XX EUR % p. a. Quarterly 30 Mar Mar 2015 Mortgage bonds 3M EURIBOR Issue XXIII * EUR % p. a. Quarterly 29 Sep Sep 2014 Mortgage bonds Issue XXIV EUR % Annual 23 Nov Nov 2013 Mortgage bonds Issue XXV. EUR % Annual 28 Sep Sep 2016 Total * In 1Q 2014 the Bank repurchased 1500 Mortgage bonds, Issue XXIII., in the total face value of EUR thousand. The costs of repurchasement in the amount of EUR 113 thousand are recognised in the statement of comprehensive income in the line "Interest expense". 17

20 16. Other Liabilities 31 Dec 2013 Various creditors Tax liabilities (except for income tax liabilities) Provisions for unbilled and other liabilities Social fund Settlement with employees Settlement with social institutions Negative fair value of financial derivatives (Note 22) Liabilities from payment transactions Other liabilities Total Summary of changes in the social fund: 31 Dec 2013 Balance at the beginning of reporting period Additions during the reporting period Drawings during the reporting period (166) (177) Balance at the end of reporting period Subordinated Debt Type of Loan Curr. Type of Loan by Maturity Start of Contractual Loan Maturity Drawdown Carrying Amount of Loan Interest rate 31 Dec 2013 Subordinated debt: OTP Financing Netherlands B.V. EUR Long-term Mar 2008 Mar M EURIBOR + 1.0% p. a OTP Financing Netherlands B.V. EUR Long-term Apr 2008 Apr M EURIBOR + 1.5% p. a OTP Financing Netherlands B.V. EUR Long-term Sept 2014 Sept M EURIBOR % p. a Total (EUR 000) Subordinated debt totalling EUR 47 million represents for the Bank Capital Tier 2 in the amount of EUR 20.9 million pursuant to Regulation of the European Parliament and of the Council No. 575/2013 (Note 33). 18

21 18. Equity The Bank s equity comprises: 31 Dec 2013 Share capital Reserve funds Retained earnings Revaluation of available-for-sale financial assets Gain/(loss) for the reporting period Total equity Share Capital The Bank s share capital as at 30 September 2014 and 31 December 2013 comprises: Face Amount ISIN Number of Shares Face Value of Shares Repaid and registered in the Commercial Register EUR 3.98 per share SK EUR 3.98 per share SK EUR per share SK EUR 1.00 per share SK Total share capital The type, form, nature and tradability of shares as at 30 September 2014 and 31 December 2013 was as follows: Face Amount ISIN Type Form Nature Tradability EUR 3.98 per share SK ordinary registered uncertified publicly tradable EUR 3.98 per share SK ordinary registered uncertified publicly tradable EUR per share SK ordinary registered uncertified publicly nontradable EUR 1.00 per share SK ordinary registered uncertified publicly tradable Reserve Funds As at 30 September 2014, reserve funds in the amount of EUR thousand (31 December 2013: EUR thousand) comprise the legal reserve fund in the amount of EUR thousand (31 December 2013: EUR thousand) and other capital reserves in the amount of EUR 742 thousand (31 December 2013: EUR 534 thousand). 19

22 19. Income Taxes 30 Sept 2013 Current tax expense/(revenue) - - Deferred tax expense/(revenue) Total The Bank s tax on pre-tax profit differs from the theoretical tax which would arise if the income tax rate was applied as follows: 30 Sept 2013 Pre-tax profit/(loss) Theoretical tax at 22% (2013: 23%) Non-taxable income (52) (21) Non-deductible expenses Provisions for assets and provisions for liabilities, net Adjustment of provisions for uncertain utilisation of deferred tax assets (370) (1 024) - Income tax expense/(revenue) for the current reporting period Effective tax for the reporting period 21.26% 4.66% 20. Deferred Income Taxes 31 Dec 2013 Deferred tax liability Difference between net book value and net tax value of tangible assets (725) (709) Revaluation reserves on available-for-sale securities (recognised through equity) (146) (148) Total deferred tax liability (871) (857) Deferred tax asset Loans (provisions for loan impairment losses) Provisions for liabilities Tax losses that can be carried forward Total deferred tax asset Adjustment for uncertain utilisation of deferred tax asset (3 892) (4 261) Net deferred tax asset/(liability) (299) (220) 31 Dec 2013 Net deferred tax asset/(liability) opening balance at 1 Jan (220) (249) (Debited)/credited to profit/loss for the reporting period (81) (85) (Debited)/credited to equity Net deferred tax asset/(liability) closing balance (299) (220) 20

23 21. Provisions for Liabilities, Contingent Liabilities and Other Off-Balance Sheet Items Nominal values of the off-balance sheet liabilities are as follows: 31 Dec 2013 Unused loan commitments Other guarantees provided to banks Other guarantees provided to clients Unused overdrafts and authorised overdraft facilities Total The Bank recognised the following provisions: 31 Dec 2013 Provisions for: Unused loan commitments Guarantees Litigations and other disputes Retirement payments Total An analysis of changes in provisions for guarantees and unused loan commitments is as follows: 31 Dec 2013 Balance at the beginning of reporting period Creation of provision Release of provision (244) (332) Balance at the end of reporting period An analysis of changes in the provision for litigations and other disputes: 31 Dec 2013 Balance at the beginning of reporting period Creation of provision 11 - Release of provision (3) (95) Balance at the end of reporting period An analysis of changes in the provision for retirement payments: 31 Dec 2013 Balance at the beginning of reporting period Creation of provision 9 22 Release of provision (4) (21) Balance at the end of reporting period

24 22. Derivative Financial Instruments Separate Financial Statements The Bank uses derivative financial instruments for trading purposes. The tables below represent the financial derivative instruments at face and fair values as at 30 September 2014 and 31 December 2013: Face Value of Assets Face Value of Liabilities 31 Dec Dec 2013 Currency and interest rate instruments Currency and interest rate swaps Total Positive Fair Value Negative Fair Value 31 Dec Dec 2013 Currency and interest rate instruments Currency and interest rate swaps Total Net Interest Income Period Ended Period Ended 30 Sept 2013 Interest income: Loans and other receivables Placements with other banks Financial assets for sale Held-to-maturity financial investments Total interest income Interest expense: Due to banks and deposits from the National Bank of Slovakia and other banks and other payables (839) (190) Amounts due to customers (11 199) (13 814) Liabilities from issued securities (1 378) (1 946) Subordinated debt (362) (335) Total interest expense (13 778) (16 285) Net interest income Q Q 2013 Interest income: Loans and other receivables Placements with other banks Financial assets for sale Held-to-maturity financial investments Total interest income Interest expense: Due to banks and deposits from the National Bank of Slovakia and other banks and other payables (252) (32) Amounts due to customers (3 625) (4 455) Liabilities from issued securities (374) (564) Subordinated debt (127) (114) Total interest expense (4 378) (5 165) Net interest income

25 24. Provisions for Impairment Losses on Loans and Off-Balance Sheet, Net Period Ended Period Ended 30 Sept 2013 Creation of provisions for loan receivables (19 917) (16 705) Release of provisions for loan receivables Loans written off and assigned (Note 8) (2 351) (3 362) (Creation)/release of provisions for guarantees and unused loan commitments, net (Note 21) (5) 41 Provisions for impairment losses on loans and off-balance sheet, net (9 527) (5 732) 3Q Q 2013 Creation of provisions for loan receivables (7 000) (5 135) Release of provisions for loan receivables Loans written off and assigned (Note 8) (1 683) (786) (Creation)/release of provisions for guarantees and unused loan commitments, net (Note 21) (46) 20 Provisions for impairment losses on loans and off-balance sheet, net (3 503) (2 335) 25. Net Fee and Commission Income Period Ended Period Ended 30 Sept 2013 Fee and commission income: Banks Public administration Individuals Other sectors Total fee and commission income Fee and commission expense: Banks (671) (665) Individuals (11) (19) Other sectors (1 483) (1 339) Total fee and commission expense (2 165) (2 023) Net fee and commission income Q Q 2013 Fee and commission income: Banks Public administration Individuals Other sectors Total fee and commission income Fee and commission expense: Banks (233) (242) Individuals (4) (3) Other sectors (493) (532) Total fee and commission expense (730) (777) Net fee and commission income

26 26. Gains/(Losses) on Financial Transactions, Net Period Ended Period Ended 30 Sept 2013 Gain/(loss) from foreign exchange transactions Gain/(loss) from futures and forwards (845) (2 409) Net gains/(losses) on financial operations (312) (1 899) 3Q Q 2013 Gain/(loss) from foreign exchange transactions Gain/(loss) from futures and forwards (383) (591) Net gains/(losses) on financial operations (190) (395) 27. Gains/(Losses) on Financial Assets, Net As at 30 September 2014 the Bank did not recognised any gains/(losses) on financial assets (30 September 2013: EUR 0). 24

27 28. General Administrative Expenses Separate Financial Statements Period Ended Period Ended 30 Sept 2013 Personnel expenses Wages and salaries (9 443) (8 959) Social security expenses (3 276) (3 104) Supplementary pension scheme contributions (134) (124) Other social expenses (135) (125) Expenses for provisions (Creation)/release of provisions for retirement payments, net (5) 14 Other administrative expenses Purchased services (4 922) (5 207) Expenses for IT administration and maintenance (1 674) (1 674) Entertainment expenses (1 305) (715) Other purchased supplies (1 145) (1 231) Local and other taxes other than income tax (901) (846) Contribution to Deposits Guarantee Fund (1 058) - Special levy on selected financial institutions (3 889) (3 565) Other expenses (188) (380) Depreciation, amortisation and write-downs of non-current tangible and intangible assets Non-current tangible assets (1 865) (1 749) Non-current intangible assets (1 723) (2 497) General administrative expenses - total (31 663) (30 162) 3Q Q 2013 Personnel expenses Wages and salaries (3 055) (2 785) Social security expenses (1 094) (1 008) Supplementary pension scheme contributions (41) (39) Other social expenses (43) (40) Expenses for provisions (Creation)/release of provisions for retirement payments, net - 14 Other administrative expenses Purchased services (1 657) (1 754) Expenses for IT administration and maintenance (608) (564) Entertainment expenses (487) (425) Other purchased supplies (377) (394) Local and other taxes other than income tax (326) (284) Contribution to Deposits Guarantee Fund (99) - Special levy on selected financial institutions (1 326) (1 178) Other expenses (44) (91) Depreciation, amortisation and write-downs of non-current tangible and intangible assets Non-current tangible assets (624) (591) Non-current intangible assets (592) (786) General administrative expenses - total (10 373) (9 925) 25

28 29. Other Operating Revenues/(Expenses), Net Separate Financial Statements Period Ended Period Ended 30 Sept 2013 Provisions for impairment losses on other assets Creation of provisions for other assets (41) (22) Release of provisions for other assets 6 4 Other assets written-off and assigned (Note 12) 1 - Costs for the creation of provisions (Creation)/release of provisions for litigations and other disputes, net (8) 95 Other revenues Revenues from sale of real estate and other assets 1 - Lease revenues 6 7 Revenues from sale of commemorative coins 2 11 Other operating revenues Other operating revenues/(expense), net Q Q 2013 Provisions for impairment losses on other assets Creation of provisions for other assets (28) (12) Release of provisions for other assets 1 1 Other assets written-off and assigned 1 - Costs for the creation of provisions (Creation)/release of provisions for litigations and other disputes, net - - Other revenues Revenues from sale of real estate and other assets - - Lease revenues 2 2 Revenues from sale of commemorative coins 1 2 Other operating revenues 14 9 Other operating revenues/(expense), net (9) Items of Other Comprehensive Income The items of other comprehensive income will be reclassified to profit or loss as at the derecognition of available-for-sale financial assets. Period Ended Period Ended 30 Sept 2013 Net gain/(loss) on revaluation of available-for-sale financial assets (7) (483) Deferred tax liability/(deferred tax asset) on revaluation reserves on available-for-sale financial assets Items of other comprehensive income that will be reclassified subsequently to profit or loss, net of tax (5) (372) 3Q Q 2013 Net gain/(loss) on revaluation of available-for-sale financial assets (717) 7 Deferred tax liability/(deferred tax asset) on revaluation reserves on available-for-sale financial assets 158 (1) Items of other comprehensive income that will be reclassified subsequently to profit or loss, net of tax (559) 6 26

29 31. Segment Reporting The separate statement of comprehensive income and other indicators by segment as at 30 September 2014: Retail Corporate Treasury Not specified Total Interest income Interest expense (9 826) (1 373) (2 579) - (13 778) Net interest income Provisions for impairment losses on loans and offbalance sheet, net (6 130) (3 397) - - (9 527) Net interest income net of provisions for impairment losses on loans and off-balance sheet Fee and commission income Fee and commission expense (1 785) (33) (50) (297) (2 165) Net fee and commission income (38) Gains/(losses) on financial transactions, net - - (312) - (312) Gains/(losses) on financial assets, net General administrative expenses (31 663) (31 663) Other operating revenues/(expenses), net (21) 19 Profit/(loss) before income tax (31 246) 381 Income tax (81) (81) Net profit/(loss) after tax (31 327) 300 Items of other comprehensive income that will subsequently be reclassified to profit or loss, net of tax Revaluation of available-for-sale financial assets - - (5) - (5) Total comprehensive income for the reporting period (31 327) 295 Assets by segment Liabilities by segment

30 The separate statement of comprehensive income and other indicators by segment as at 30 September 2013: 30 Sept 2013 Retail Corporate Treasury Not specified Total Interest income Interest expense (12 023) (1 791) (2 471) - (16 285) Net interest income Provisions for impairment losses on loans and offbalance sheet, net (3 273) (2 459) - - (5 732) Net interest income net of provisions for impairment losses on loans and off-balance sheet Fee and commission income Fee and commission expense (1 663) (48) (59) (253) (2 023) Net fee and commission income (51) Gains/(losses) on financial transactions, net - - (1 899) - (1 899) Gains/(losses) on financial assets, net General administrative expenses (30 162) (30 162) Other operating revenues/(expenses), net Profit/(loss) before income tax (29 137) 472 Income tax (22) (22) Net profit/(loss) after tax (29 159) 450 Items of other comprehensive income that will subsequently be reclassified to profit or loss, net of tax Revaluation of available-for-sale financial assets - - (372) - (372) Total comprehensive income for the reporting period (29 159) 78 Assets by segment Liabilities by segment

31 Foreign Assets and Liabilities The structure of assets and liabilities related to counterparties outside the Slovak Republic: 31 Dec 2013 Assets Of which: Hungary Of which: Other EU countries Liabilities Of which: Hungary Of which: Other EU countries As at 30 September 2014 and 31 December 2013, the Bank s non-current tangible and intangible assets were localised only in the territory of the Slovak Republic. Revenues from Foreign Entities Period Ended Period Ended 30 Sept 2013 Interest income on: Treasury bills of the Hungarian National Bank Bonds issued by foreign Bank (Hungary) Term deposits provided to OTP Bank Nyrt, (Hungary) Subordinated bonds issued by OTP Bank Nyrt, (Hungary) Government bonds of the Hungarian Republic Reverse REPO transactions with OTP Bank Nyrt, (Hungary) 713-3Q Q 2013 Interest income on: Treasury bills of the Hungarian National Bank Bonds issued by foreign Bank (Hungary) Term deposits provided to OTP Bank Nyrt, (Hungary) Subordinated bonds issued by OTP Bank Nyrt, (Hungary) Government bonds of the Hungarian Republic Reverse REPO transactions with OTP Bank Nyrt, (Hungary) The amount of income from other foreign entities is not significant for the Bank. 29

32 32. Related Party Transactions In ordinary business, the Bank enters into transactions with related parties made on an arm s length basis. The following tables present an overview of assets and liabilities, and expenses and revenues in relation to the Bank s related parties. Overview of balances in the statement of financial position as at 30 September 2014: OTP Bank Nyrt. Subsidiaries Other Companies OTP Group Transactions with Key Management Personnel of the Bank Transactions with Key Management Personnel of OTP Bank Nyrt. Other Related Parties Total Assets Cash, due from banks and balances with the National Bank of Slovakia Placements with other banks, net of provisions for possible placement losses Financial assets at fair value through profit or loss Available-for-sale financial assets Loans and receivables, net of provisions for possible losses Held-to-maturity financial investments Investments in subsidiaries and associates Non-current tangible assets Non-current intangible assets Other assets Total Liabilities Due to banks and deposits from the National Bank of Slovakia and other banks Amounts due to customers Liabilities from issued securities Other liabilities Subordinated debt Total

33 Overview of balances in the statement of financial position as at 31 December 2013: 31 Dec 2013 OTP Bank Nyrt. Subsidiaries Other Companies OTP Group Transactions with Key Management Personnel of the Bank Transactions with Key Management Personnel of OTP Bank Nyrt. Other Related Parties Total Assets Cash, due from banks and balances with the National Bank of Slovakia Placements with other banks, net of provisions for possible placement losses Financial assets at fair value through profit or loss Available-for-sale financial assets Loans and receivables, net of provisions for possible losses Held-to-maturity financial investments Investments in subsidiaries and associates Non-current tangible assets Non-current intangible assets Other assets Total Liabilities Due to banks and deposits from the National Bank of Slovakia and other banks Amounts due to customers Liabilities from issued securities Other liabilities Subordinated debt Total

34 Overview of transactions in the statement of comprehensive income as at 30 September 2014: OTP Bank Nyrt. Subsidiaries Other Companies OTP Group Transactions with Key Management Personnel of the Bank Transactions with Key Management Personnel of OTP Bank Nyrt. Other Related Parties Total Interest income Interest expense (1 790) - (365) (28) - - (2 183) Provisions for impairment losses on loans and offbalance sheet, net - - (17) (17) Fee and commission income Fee and commission expense (217) - (148) (365) Gains/(losses) on financial transactions (FX), net (837) (837) Gains/(losses) on financial assets, net Other operating revenues/(expenses), net General administrative expenses (286) - (1 033) (1 319) Total (1 309) - (91) (21) - - (1 421) Overview of transactions in the statement of comprehensive income as at 30 September 2013: 30 Sept 2013 OTP Bank Nyrt. Subsidiaries Other Companies OTP Group Transactions with Key Management Personnel of the Bank Transactions with Key Management Personnel of OTP Bank Nyrt. Other Related Parties Total Interest income Interest expense (1 119) - (423) (24) (4) - (1 570) Provisions for impairment losses on loans and offbalance sheet, net Fee and commission income Fee and commission expense (215) - (164) (379) Gains/(losses) on financial transactions (FX), net (2 374) (2 374) Gains/(losses) on financial assets, net Other operating revenues/(expenses), net General administrative expenses (228) - (1 075) (1 303) Total (3 472) - 76 (17) (4) 23 (3 394) 32

35 Key Management Personnel Compensation Separate Financial Statements Compensations to members of the Board of Directors and the Supervisory board for the period from 1 January till 30 September 2014 were paid in the amount of EUR 643 thousand (30 September 2013: EUR 570 thousand), which represents short-term employee benefits. 33. Regulatory Capital With effect from 1 January 2014 entered into force Regulation of the European Parliament and of the Council No. 575/2013 on prudential requirements for credit institutions and investment firms that, inter alia, regulates the area of calculation Bank s own funds as well as calculation of the Bank s own funds requirements. In accordance with Regulation of the European Parliament and of the Council No. 575/2013 Bank s own funds consist of Tier 1 capital and Tier 2 capital. The Tier 1 capital consists of: - Common Equity Tier 1 capital: (Share capital, Legal reserve fund and Retained earnings from previous years. The Common Equity Tier 1 capital is reduced by the net carrying amount of intangible assets). - Additional Tier 1 capital at the end of the reporting period the Bank did not record. The Tier 2 capital consists of subordinated debt (Note 17). According to Regulation of the European Parliament and of the Council No. 575/2013 Banks have to at all times satisfy the following own funds requirements: a) a Common Equity Tier 1 capital ratio of 4.5%; b) a Tier 1 capital ratio of 6%; c) a total capital ratio of 8%; plus values of relevant capital buffers. For the Year 2014 the National Bank of Slovakia has determined, in accordance with the Banking Act No. 483/2001 as amended, the capital conservation buffer in the form of Tier 1 capital at the level of 1.50% from 1 January till 30 September 2014 and from 1 October 2014 at the level of 2.50% from total risk exposure. In the reporting period, the ratio of the Bank s total own funds exceeded the minimum required level of 8%. The Bank achieved the Common Equity Tier 1 capital ratio at 10.40%, Tier 1 Capital ratio at 10.40% and total capital ratio at 12.76%. The structure of the Bank s own funds is as follows: 31 Dec 2013 Tier 1 capital Common Equity Tier 1 capital Capital instruments eligible as Common Equity Tier 1 capital Paid up capital instruments Retained earnings Retained earnings from previous years Profit or loss eligible - - Other reserves (-) Intangible assets (5 767) (6 393) (-) Other instruments reducing the value of Common Equity Tier 1 capital - (1 249) Additional Tier 1 capital - - Tier 2 capital Paid up capital instruments and subordinated loans Positive revaluation reserves (-) Other instruments reducing the value of Tier 2 capital - (76) Total own funds Common Equity Tier 1 capital ratio 10.40% - Tier 1 capital ratio 10.40% 9.93% Total capital ratio (%) 12.76% 10.62% 33