On the assets side of the account, receivables from customers increased by €161.2 million or 3.4 per cent to €4.96 billion. The impairment allowance balance (whose deduction from receivables from custom- ers is required by IFRSs) was increased by €14.9 million to €168.1 million during the year. Financial assets totalled €1,514.4 million at 31 December 2012, compared with €1,463.4 at the end of 2011. This translates into a total increase of €51.0 million in the period under review. The biggest increases were in the line
GROuP MANAGEMENt REPORt
LOAN PORtFOLIO
Receivables from customers Receivables from other banks
€bn 2009 4.5 0.4 2010 4.6 0.2 2011 4.8 0.1 2008 4.3 0.4 5.0 0.1 2012
PRIMARY DEPOSIt BALANCES
Primary deposit balances Of which savings deposit balances
€bn 2010 3.9 1.8 2009 3.9 2008 2011 4.2 1.8 2012 4.3 1.8 4.4 1.8 1.7
KEY CORPORAtE PERFORMANCE INDICAtORS
2010 2011 2012
ROE before tax (profit for the year in % of average equity) 8.9% 6.1% 6.9%
ROE after tax 7.7% 5.7% 6.0%
ROA before tax (profit for the year in % of average assets) 0.9% 0.6% 0.7%
Cost:income ratio 48.8% 46.7% 56.3%
Risk:earnings ratio (credit risk in % of net interest income) 33.1% 22.1% 27.0%
Tier 1 ratio 9.6% 12.5% 13.1%
Own funds ratio 13.1% 15.4% 15.9%
IFRS earnings per share in issue, € 1.44 1.13 1.25
5.0 0 1.0 2.0 3.0 4.0 5.0 0 1.0 2.0 3.0 4.0
76 GROuP MANAGEMENt REPORt 77
items Financial assets designated as at fair value through profit or loss and Investments in entities accounted for using the equity method. Redemptions of securities in the available-for-sale and held-to-maturity portfolios reduced the values of those portfolios by 10.1 per cent and 4.9 per cent, respectively. While receivables from other banks were increased by 10.2 per cent to €0.13 billion, payables to other banks stood at €1.45 billion at the end of December.
After the elimination of intragroup customer receivables, BKS Bank AG accounted for €4.55 billion of the consolidated loan portfolio. Although most of the increase in receivables — which grew by €145 million to €1.09 billion — was generated by new business with corporate and business banking customers, there was also an increase of €16 million to €1.09 billion in the retail banking segment. We closely observed macro- economic and political developments in Slovenia and deliberately reduced the volume of new business to allow for the increasingly difficult macroeconomic conditions. New business in Slovenia averaged roughly €4 million a month until the end of July, but it fell to an average of roughly €2.9 million a month in the months that followed. Our Slovenian branches accounted for 12.2 per cent of our total cash loan portfolio at the end of 2012. The effectiveness of our business model is demonstrated by the pleasing fact that the worrying wave of insolvencies in Slovenia hardly affected us.
BKS Bank gained ground in Slovakia, but we did not want to incur any larger exposures in this development phase so our business growth was restrained. The volume of new business in the corporate and business banking segment was respectable, and we will be pressing ahead accordingly with the acquisition of new customers and loan sales in the retail banking segment in the current 2013 financial year.
The dominant feature of our foreign currency loan operations was the steady reduction of receivables denominated in Swiss francs carried out to further mitigate our customers’ currency induced credit risks. As a result, our Swiss franc loan portfolio shrank by about SFr 200 million during the year under review. This means that the proportion of foreign currency loans in relation to the total loan portfolio had fallen to just 13.0 per cent by the end of 2012.
The lease portfolios of our Austrian leasing companies BKS-Leasing GmbH and BKS-Immobilienleasing GmbH were worth slightly less than at 31 December 2011, coming to €152.6 million. This was mainly because of the fall-off in new business. In other words, they too were affected by the general trend. Although the Austrian leasing market showed some growth in the motor vehicle leasing segment, there were severe contractions in the movable property and real estate leasing segments. Our leasing companies abroad — BKS-Leasing a.s., Bratislava, BKS-leasing d.o.o., Ljubljana, and BKS-leasing Croatia d.o.o., Zagreb — ended the 2012 financial year with a total lease portfolio worth €154.3 million. BKS Bank d.d. in Croatia also developed satisfactorily, increasing its receivables by €6.7 million to €106.4 million. This financial year, one of our main focuses will be on rapidly developing its retail banking operations.
The line item Financial assets consists of the sub-items financial assets designated as at fair value through profit or loss, available-for-sale financial assets, held-to-maturity financial assets and investments in enti- ties accounted for using the equity method. It increased by €51.0 million to €1.51 billion between the end of 2011 and the reporting date. Financial assets designated as at fair value through profit or loss came to €205.7 million, which was 72.0 per cent or €86.1 million up on the end of 2011. Among other things, we hedged fixed-interest loans totalling €49.3 million against interest rate risk using the fair value option. The portfolio of held-to-maturity (HTM) financial assets totalled €702.3 million at the end of 2012. New invest- ments totalled €98.0 million, while redemptions came to €100.0 million and we sold investments worth €31.4 million. The majority of the new investments were in European government bonds. Investments in entities accounted for using the equity method, most of which comprised our interests in the equity of
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Oberbank AG and BTV AG, increased to €341.2 million. That was €31.2 million more than at the end of December 2011.
Cash and balances with the central bank came to €81.7 million at 31 December 2012, compared with €85.8 million at the end of 2011. This line item comprises the cash and cash equivalents presented in greater detail in the Cash Flow Statement in the Notes on page 101.