ATE BANK ROMANIA S.A.                                               Section no.1

                                                                                                on the Agenda of the

                                                                                                General Assembly

                                                                                                on the date of  23.04.2010

 

 

 

 

 

 

 

REPORT

on the bank's activity during 2009

 

 

 

            Introduction

 

            The financial statements for the end of 2009 (the accounting balance sheet, the profit and loss account, the statement for changes to the own equity, statement of treasury flows, the other notes) used for the preparation of this report were drawn up according to the national standards and have been audited by the external auditor approved during the meeting of the General Ordinary Assembly of the Shareholders of 27.04.2009, ERNST & YOUNG respectively.

           

            For a correct and complete assessment of the information detailed in this report, having regard to the fact that the bank is member of ATE Bank Greece, we consider useful to mention the foreign exchange rates established by the Central Bank, as follows:

 

 

Currency

31.12.2008

31.12.2009

%

EUR

3,9852 RON

4,2282 RON

106,09

USD

2,8342 RON

2,9361 RON

103,59

 

 

            This shows that the process of the domestic currency depreciation in relation to EUR and USD has continued in 2009.

 

            During 2009, Romania was affected by the world economic and financial crisis. Thus, the inflation rate reached 4,7%, the national budget deficit was 7,3% and the unemployment rate was 7,8%. The effects of the crisis were also felt at the level of the financial-banking system, having regard to the fact that the loans granted in the non-governmental system decreased by 9% for the loans denominated in RON and by 1% for the loans denominated in EUR. In addition, the total overdue loans of the Romanian banks had the value of 2 billion EUR in 2009, which is an increase of 2.8 times in comparison to 31.12.2008.

 

 

            The Members of the Board of Director during 2009 were the following:

 

            Mr. Dimitrios Miliakos – Chairman until 07.12.2009;

            Mr. Panayotis Varangis – Member until 27.04.2009;

            Mr. Epameinondas Papanikolaou - Member

            Mr. Konstantinos Christou - Member

            Mr. Anastasios Papanikolaou – Member since 27.04.2009

            Mr. Sergiu  Manea - Member

            Mrs. Alina Pascu – Member

            Mr. Teodor Dragan – Member

 

            The Executive Management of the Bank during 2009 was ensured by the following persons:

 

            Mr. Sergiu Manea                - General Manager

            Mr. Epameinondas Papanikolaou – Deputy General Manager

            Mrs. Alina Pascu - Deputy General Manager

 

            The main financial statement of the Bank on 31.12.2009 (Annex 1)

 

            The total of the main financial statement of the bank (accounting balance sheet) on 31.12.2009 was 1.453.441.753 RON in comparison to 993.508.047 RON on 31.12.2008. During 2009, the total value of the main financial statement of the bank (accounting balance sheet) increased by 459.933.706 RON, and this represents an increase by 46,29%.

 

            The registered equity of the bank, subscribed and paid-up, at the end of 2009, was 136.470.588 RON, the same as at the end of 2008.

 

            The structure of the shareholding of the bank on 31.12.2009, in comparison to 31.12.2008, is represented as follows:

 

                                                                                                                                    RON

Shareholders

31.12.2008

%

31.12.2009

%

ATE BANK Greece

101.165.346,80

74,13

101.165.346,80

74,13

I.F.C.

20.470.588,20

15,00

20.470.588,20

15,00

UCECOM

10.050.710,60

7,36

10.050.710,60

7,36

Legal persons

1.845.424,00

1,35

1.845.424,00

1,35

Natural persons

2.938.518,60

2,16

2.938.518,60

2,16

       Total

136.470.588,20

100,00

136.470.588,20

100,00

 

            This shows there were no modifications of the bank's shareholding structure during 2009. The Bank's equity is divided into 682.352.941 shares with a nominal value of 0,2 RON.

 

            The structure of the other funds of the bank is as follows:

                                                                                                                                    RON

Other funds

31.12.2008

%

31.12.2009

%

%

Share premium

36.324.522

27,10

36.324.522

26,44

100,00

Legal reserves

8.753.142

6,53

8.955.711

6,53

102,60

Reserves for risks

2.660.682

1,98

2.660.682

1,93

100,00

Re-evaluation reserves

78.101.172

58,20

78.101.172

56,85

100,00

Other reserves, of which:

8.159.704

6,11

11.330.618

8,25

138,86

   - Tax facilities

3.648.882

2,49

6.409.515

4,66

175,65

   - Exchange rate differences related to foreign currency equity

     

1.136.799

0,84

1.136.799

0,82

100,00

   - Retained earnings

3.374.023

2,78

3.784.304

2,77

100,00

      Total

133.999.222

100,00

137.372.705

100,00

102,51

 

            From the point of view of the capital adequacy to risks, the situation is as follows:

                                                                                                                               RON

Currency

31.12.2008

31.12.2009

%

Total funds

228.430.463

226.421.024

99,12

Tier I own funds

185.984.545

190.176.809

102,25

Tier II own funds

42.445.918

36.244.215

85,38

Capital requirements

60.729.119

89.170.259

146,83

    - credit risk

55.952.388

83.788.031

149,47

    - market risk

-

248.426

-

    - operational risk

4.776.731

5.133.802

107,47

Solvency

30,51%

20,31%

66,35%

 

            Out of the data presented, it can be seen that the increase of the capital requirements for covering the credit risk and the operational risk led to the decrease of the solvency indicator.

 

            The cash attracted from the wholesale market on 31.12.2009, in comparison to 31.12.2008 is structured as follows:

 

                                                                                                                                    RON

Indicator

31.12.2008

%

31.12.2009

%

%

Deposits on sight

3.941.351

0,77

65.031.953

10,39

1.649,99

   - lei/lei

2.248.179

0,44

16.083.132

2,57

715,38

   - lei/foreign currency

1.693.172

0,33

48.948.821

7,82

2.890.95

Term deposits

503.708.221

99,23

560.934.460

89,61

111,36

   - lei/lei

53.500.000

10,53

10.000.000

1,60

18,69

   - lei/foreign currency

450.208.221

88,70

550.934.460

88,02

122,37

Total, of which:

507.649.572

100,00

625.966.413

100,00

123,30

   - lei/lei

55.748.179

10,98

26.083.132

4,17

46,78

   - lei/foreign currency

451.901.393

89,02

599.883.281

95,83

132,74

            On 31.12.2009, the value of the cash attracted from the wholesale market was larger by 118.316.841 RON in comparison to 31.12.2008, which represents an increase by 23.30%. 

 

            The total value of the term deposits denominated in foreign currency at the end of 2009 includes the amount of 307.874.256 RON, representing the amount of 77 million EUR received from ATE Bank Greece. For that amount, during 2009, the Bank paid an interest of 14.833.761 RON to ATE Bank Greece, which is the equivalent of 3.515.722 EUR, as well as taxes of 1.648.196 RON to the state budget of Romania, which is the equivalent of 390.634 EUR.

 

            The cash attracted from customers listed in the Bank's balance sheet is as follows:

 

                                                                                                                                    RON

Indicator

31.12.2008

%

31.12.2009

%

%

Deposits, of which:

175.824.428

89,31

483.641.708

91,35

275,07

 - on sight

67.141.899

34,11

74.021.503

13,98

110,24

   · lei/lei

39.590.641

20,11

37.858.392

7,15

95,62

   · lei/foreign currency

27.551.258

14,00

36.163.111

6,83

131,25

 - term deposits

108.682.529

55,20

409.620.205

77,37

376,89

   · lei/lei

56.070.658

28,48

167.060.290

31,55

297,94

   · lei/foreign currency

52.611.871

26,72

242.559.915

45,82

461,03

Deposit certificates

21.036.129

10,69

4.308.162

0,81

20,47

   · lei/lei

9.748.050

4,95

2.366.150

0,44

24,27

   · lei/foreign currency

11.288,079

5,74

1.942.012

0,37

17,20

Lease back denominated in foreign currency

-

-

41.448.040

7,84

-

Total, of which:

196.860.557

100,00

529.397.910

100,00

268,92

   · lei/lei

105.409.349

53,55

207.284.832

39,15

196,64

   · lei/foreign currency

91.451.208

46,45

322.113.078

60,85

352,22

 

            During 2009, the Bank concluded a lease back agreement for the building of the headquarters in Bucharest, Calea Griviţei no. 24, with Alfa Leasing. Based on that agreement, the Bank collected the amount of 10 million EUR, owing to repay the real estate property over a period of 10 years.

 

            It can be noticed from the above data that, on 31.12.2009, the cash attracted from the customers was 332.537.353 RON larger than the amount on 31.12.2008.  The increase of 168.92% of the cash attracted from customers during 2009 represents the special focus of the Bank on financing its activity from local resources.

 

            For the Bank's corporate customers, the saving offer contains, for RON and EUR, deposits on sight, term deposits for 1, 3, 6, 9 and 12 months, deposit certificates for 6, 9, 12, 18 and 24 months.

 

            For the Bank's retail customers, the saving offer contains, for RON and EUR, deposits on sight, current accounts with saving facilities (Demetra); term deposits for 1, 3, 6, 9 and 12 months; term deposits for 4, 8, 12 and 16 months, with bonuses granted for family events (Sparta); term deposits for 3, 6 and 12 months, with anticipated payment of interest (Acropole) and deposit certificates for 6, 9, 12, 18 and 24 months.

 

            The retail and corporate customers can also create USD deposits on sight and term deposits for 1, 3, 6, 9 and 12 months, as well as GBP deposits on sight and term deposits for 1 month.

 

            Depending on the deposited amount and on the deposit maturity, the Bank promoted, for the retail and corporate customers, a series of non-standard deposits, different from the standard one by the attractive yearly interest rates and commissions discounts.

 

            In order to assess correctly the evolution of the cash attracted from customers, we consider opportune to detail them by depositors, as follows:

 

                                                                                                                                    RON

Indicator

31.12.2008

%

31.12.2009

%

%

Deposits of legal persons

90.657.914

46,05

155.683.291

31,91

171,72

  - on sight

40.077.733

20,36

41.051.956

8,41

102,43

  - term deposits

39.067.335

19,84

113.692.235

23,30

291,01

  - certificates

11.512.846

5,85

939.100

0,19

8,15

Deposits of natural persons

106.202.643

53,95

332.266.579

68,09

312,86

  - on sight

27.064.166

13.75

32.969.547

6,76

121,81

  - term deposits

69.615.194

35,36

295.927.970

60,65

425,09

  - certificates

9.523.283

4,84

3.369.062

0,69

35,37

Total deposits, of which:

196.860.557

100,00

487.949.870

100,00

247,86

  - on sight

67.141.899

34,10

74.021.503

15,17

110,24

  - term deposits

108.682.529

52,20

409.620.205

83,95

376,89

  - certificates

21.036.129

13,70

4.308.162

0,88

20,47

 

            The above data show an increase of the deposits both for the retail customers and for the corporate customers, but the deposits of the natural persons at the end of 2009 represent 68% of the total deposits attracted by the bank.

 

            We mention that the bank is involved in the guaranteeing scheme of the Deposit Guarantee Fund in the Banking System in Romania. Under those circumstances, the Bank's customers have been informed that the guarantee ceiling is established for the amount of 50.000 EUR. The bank's contribution to the deposits guarantee fund is a share of 0,2% of the total deposits included in the guaranteeing scheme, on a yearly basis.

 

            The value of the Bank's cash in the cashier's office, at the Central Bank and at correspondent banks, on 31.12.2009 was 282.047.821 RON, increasing with 40.091.476 RON in comparison to 31.12.2008. This increase represents 16,56%, as follows:

 

 

 

 

 

                                                                                                                                    RON

Indicator

31.12.2008

%

31.12.2009

%

%

Cash in the cashier's office

10.038.672

4,14

18.561.674

6,58

184,90

   - lei/lei

8.646.842

3,57

12.095.401

4,29

139,88

   - lei/foreign currency

1.391.830

0,57

6.466.273

2,29

464,58

Cash at the Central Bank

189.189.760

78,19

115.093.183

40,81

60,83

   - lei/lei

20.561.335

8,49

32.871.162

11,65

159,86

   - lei/foreign currency

168.628.425

69,70

82.222.021

29,15

48,75

Cash at correspondent banks

42.727.913

17.67

148.392.964

52,61

347,29

   - lei/lei

24.000.725

9,91

95.000.000

33,68

395,82

   - lei/foreign currency

18.727.188

7,76

53.392.964

18,93

285,10

Total, of which:

241.956.345

100,00

282.047.821

100,00

116,56

   - lei/lei

53.208.902

21,99

139.966.563

49,63

263,05

   - lei/foreign currency

188.747.443

78,01

142.081.258

50,37

75,27

 

            Even if, during 2009, the Bank had a significant increase of the volume of granted loans, however, on 31.12.2009 it had an increase by 16.56% of its total cash.

 

            We mention that the cash at the Central Bank includes the amounts related to the minimum reserve requirement, as follows:

 

                                                                                                                                    RON

Indicator

31.12.2008

%

31.12.2009

%

%

MRR lei/lei

20.561.335

10,86

29.332.233

26.12

142,65

MRR lei/foreign currency

168.628.425

89,14

82.956.190

73,88

49,19

     Total MRR

189.189.760

100,00

112.288.423

100,00

59,35

 

            The reduction in the amount of the minimum reserve requirement at the Central Bank is explicable by the NBR decision to decrease the setting up percentage from 18% to 15% for the deposits denominated in lei and from 40% to 25% for the deposits denominated in EUR.

 

            The use of the Bank's cash for expanding its business is limited by the requirement to ensure a level of the immediate liquidity of 30% and a level of minimum 1% for each maturity interval of the general liquidity. The immediate liquidity represents the ratio between the bank's cash and the cash attracted by the bank, irrespective of the maturity interval. The general liquidity represents the ratio between the bank's cash and the cash attracted by the bank, for each maturity interval. Having regard to the above information, the liquidity indicators are as follows:

 

Indicator

31.12.2008

31.12.2009

Immediate liquidity

36,39%

31,84%

General liquidity

            1,50%

            1,15%

 

           

 

The state securities bought by the Bank, registered in balance on 31.12.2009, had the value of 92.425.492 RON, increasing with 72.420.840 RON in comparison to 31.12.2008. They were purchase in order to cover the liquidity risk, having regard to the fact that the state securities represent a guarantee accepted by the Central Bank for granting the loans requested by the commercial banks in case of treasury difficulties.

 

            The loans in the main financial statement on 31.12.2009 had the value of 895.913.157 RON, increasing with 296.198.906 RON  in comparison to the end of 2008. This indicates an increase of 49,39%. We mention that the amount of the loans mentioned in the accounting balance sheet represent the net value resulted after deducting the specific provisions from the gross value, as follows:

 

                                                                                                                                    RON

Indicator

31.12.2008

%

31.12.2009

%

%

Short term loans

207.735.318

34,45

314.285.883

34,96

151,29

   - lei/lei

131.700.406

21,84

119.213.188

13,26

90,51

   - lei/foreign currency

76.034.912

12,61

195.072.695

21,70

256,55

Medium term loans

143.772.457

23,84

246.028.232

27,36

171,12

   - lei/lei

49.199.495

8,15

25.865.851

2,88

52,57

   - lei/foreign currency

94.572.962

15,69

220.162.381

24,48

232,79

Long term loans

251.432.495

41,71

338.756.546

37,68

134,73

   - lei/lei

99.733.623

16,54

53.085.813

5,90

53,22

   - lei/foreign currency

151.698.872

25,17

285.670.733

31,78

188,31

Total loans (gross)

602.940.270

100,00

899.070.661

100,00

149,11

   - lei/lei

280.633.524

46,54

198.164.852

22,04

70,61

   - lei/foreign currency

322.306.746

53,46

700.905.809

77,96

217,46

Provisions

3.226.019

100,00

3.661.790

100,00

97,87

   - lei/lei

2.673.321

82,86

2.197.879

69,61

82,21

   - lei/foreign currency

552.698

17,14

1.463.911

30,39

173,62

Total loans (net)

599.714.251

100,00

895.408.871

100,00

149,30

   - lei/lei

277.960.203

46,34

195.966.973

21,87

70,50

   - lei/foreign currency

321.754.048

53,66

699.441.898

78,13

217,54

 

            It should be noticed that, during 2009, the weight of the granted loans denominated in RON decreased and the weight of the granted loans denominated in EUR doubled in value.

 

            The value of the loans exported by ATE Bank Romania to ATE Bank Greece continued to increase during 2009, as well. ATE Bank Romania received the value of the exported loans, denominated in EUR, and ATE Bank Greece received the value of the related interest, denominated in EUR. At the same time, according to the agreement, ATE Bank Romania is entitled to a commission of 0,5% of the income from interest, for the management of the exported loans portfolio. The taxes related to the income from interest, owed to the state budget of Romania, were paid by ATE Bank Romania. The status of the loans exported is as follows:

 

 

                                                                                                                                    RON

Indicator

31.12.2008

%

31.12.2009

%

%

Corporate Credit Activity

 

 

 

 

 

   - RON

79.745.920

57,15

84.183.631

50,39

105,56

   - EUR equivalent

20.010.519

57,15

19.910.040

50,39

99,49

Retail Credit Activity

 

 

 

 

 

   - RON

59.792.171

42,85

82.879.101

49,61

138,61

   - EUR equivalent

15.003.556

42,85

19.601.509

49,61

130,64

Total

 

 

 

 

 

   - RON

139.538.091

100,00

167.062.732

100,00

119,72

   - EUR equivalent

35.014.075

100,00

39.511.549

100,00

112,84

Interest paid

 

 

 

 

 

   - RON

1.699.620

89,94

9.280.529

89,94

546,03

   - EUR equivalent

426.483

89,94

2.194.912

89,94

514,65

Taxes paid

 

 

 

 

 

   - RON

189.902

10,06

1.037.785

10,06

546,48

   - EUR equivalent

47.652

10,06

245.444

10,06

515,07

Total payments

 

 

 

 

 

   - RON

1.889.522

100,00

10.318.314

100,00

546,08

   - EUR equivalent

474.135

100,00

2.440.356

100,00

514,69

ATE Bank Romania commission

 

 

 

 

 

   - RON

8.498

-

46.403

-

546,04

   - EUR equivalent

2.132

-

10.975

-

514,77

 

            The amount of 40.000.000 EUR received by ATE Bank Romania from ATE Bank Greece for the exported loans was used by ATE Bank Romania to continue the development of its business.

            The request for loans, expressed by customer category and loan type, at the end of 2009, had the following features:

                                                                                                                                    RON

Indicator

31.12.2008

%

31.12.2009

%

%

Corporate Credit Activity

512.895.394

85,10

749.905.515

83,41

146,21

   - for treasury

194.870.061

32,31

379.510.857

42,21

194,75

   - for investments

318.025.334

52,79

370.394.658

41,20

116,47

Retail Credit Activity

90.044.876

14,90

149.165.146

16,59

165,66

   - consumer loans

75.048.783

12,44

105.823.166

11,77

141,01

   - real estate / mortgage loans

14.996.093

2,46

43.341.980

4,82

289,02

          Total

602.940.270

100,00

899.070.661

100,00

149,11

 

            The above data show that, during 2009, the value of the mortgage/real estate loans granted to retail customers had the largest increase. This was also due to the "FIRST HOME" programme promoted by the Romanian Government. The Bank joined this programme due to the fact that the Romanian Government guarantees all the loans granted under this scheme, for 100% of their value. Under these circumstances, the value of the mortgage loans granted up to 31.12.2009 in the "FIRST HOME" programme was 15.812.914 RON, which is the equivalent of 3.739.869 EUR.

            Regarding the trend of the non-performing loans ( loans with a debt services longer than 90 calendar days), we present the following: 

 

                                                                                                                           RON

Indicator

31.12.2008

31.12.2009

%

Total loans

602.940.270

899.070.661

149,11

Non-performing loans

2.145.003

2.648.296

123,46

%

0,36%

0,29%

80,55

 

            This shows that, during 2009, the Bank paid a special attention to the evolution of the non-performing loans (NPL).

 

            The letter of guarantees issued by the Bank, as part of the total exposure of the bank, had the following trend:

                                                                                                                                    RON

Letter of guarantee type

31.12.2008

%

31.12.2009

%

%

Payment of custom taxes

6.000

0,04

9.060

0,02

151,00

Participation in bids

269.401

1,75

975.758

2,27

362,19

Performance bonds

9.920.797

64,32

6.021.470

13,99

60,70

Repayment of advances

1.957.216

12,96

22.267.321

12,14

161,68

Payment for suppliers

3.231.227

20,95

5.224.094

51,74

1.137,70

Other

52.901

0,25

8.551.602

19,84

16.165,29

          Total

15.437.542

100,00

43.049.305

100,00

278,86

 

            The increase of the letters of guarantee operations followed the general trend of the Bank's activity during 2009.

 

            Guaranteeing the bank's exposures from loans and letters of guarantee issued represented one of the main activities of the bank. The evolution of the guarantees was as follows:

                                                                                                                                    RON

Guarantee type

31.12.2008

%

31.12.2009

%

%

Collateral deposits

3.755.630

0,24

4.094.244

0,18

109,02

Guarantees from insurance companies

11.418.353

0,74

20.354.812

0,91

178,26

Financial guarantees

3.927.420

0,25

3.593.970

0,16

91,51

Mortgages

1.202.206.353

77,88

1.666.943.364

74,15

138,66

PLEDGES

105.559.619

6,84

137.666.736

6,12

130,42

Other GUARANTEES

216.843.063

14,05

415.292.798

18,47

191,52

TOTAL guarantees

1.543.710.438

100,00

2.247.945.925

100,00

145,62

Exposures from loans

602.940.270

97,50

899.070.661

95,43

149,11

Exposures from letters of guarantee

15.437.542

2,50

43.049.305

4,57

278,86

Total exposures

618.377.812

100,00

942.119.966

100,00

152,35

Degree of coverage

249,63%

-

238,60%

-