1 United in Trust A N N U A L R E P O R T Austria CZECH REPUBLIC Bosnia and Herzegovina Croatia France Hungary Italy Malta Romania Slovakia Slovenia Serbia
2 Petra Voglová Magic gnome
3 VOLKSBANK CZ Heršpická Brno Tel.: Fax:
4 2 Petra Voglová Tall standing man
5 CONTENT ANNUAL REPORT 1 Foreword from the Board of Directors 6 Key Figures in Summary 9 International Network 10 Governing Bodies 11 Organisation Chart 16 General Economic Background 18 Business Activities 20 Risk Management 29 Balance Sheet 34 Profit and Loss Account 37 Notes to the Financial Statements 40 Quantitative Indices 84 Report on Relations 85 Report of Independent Auditors 86 Report of the Supervisory Board 88 3 SERVICE 91 Our Network 92
6 ASSOCIATION SLEPÍŠI The non-profit Association Slepíši was created in 1995 and was active in Brno until It now operates the International Teaching Centre of the Axman Modelling Technique for the Handicapped, founded during 2001 in Tasov in the Czech-Moravian Highlands. Its main activity is to teach modelling to the sightless and mentally handicapped above 18 years of age. The Association s work also includes exhibits at renowned galleries in the Czech Republic and abroad, the arrangement of workshops, seminars and training programmes, and publication of handicapped artists catalogues. The Axman modelling technique is unique among handicrafts and artistic activities for the handicapped worldwide. Thanks to this technique, people who are blind from birth are capable of entirely independent artistic expression. A tactile database has been created at the Centre that surveys the sculpting of the human form without visual memory and is the only one of its kind in the Czech Republic and the world at large. 4
7 04 A N N U A L R E P O R T CZECH REPUBLIC Austria Bosnia and Herzegovina Croatia France Hungary Italy Malta Romania Slovakia Slovenia Serbia
8 Foreword from the Board of Directors (from left: Wolfgang Mayer, Johann Lurf, Václav Vitha) Dear Ladies and Gentlemen, Dear Clients and Shareholders, It is our honour to announce to you that Volksbank CZ has recorded another very successful year of operations. We attribute the outstanding result especially to a 16% year-to-year increase in client deposits, a development that testifies to the strong and enduring trust that clients place in Volksbank CZ and in its position on the Czech banking market. The number of satisfied clients grew by more than 7%, and the Bank s total assets reached CZK billion. bolstered in December 2004, when the general shareholders meeting made the decision to increase the Bank s share capital. Therefore, the share capital rose by more than CZK 185 million including premium. Another, no less significant event from the end of the previous year was the announcement of a planned strategic alliance between the Financial group of Österreichische Volksbanken-AG and Volksbank operations in Germany and France. Not only will this alliance add substantially to the Volksbank Group s capital strength, it will also enhance its growth potential in Central and Eastern Europe. The standing and stability that Volksbank has achieved in the Czech Republic were affirmed also by the European Bank for Reconstruction and Development, which provided Volksbank CZ with EUR 10 million as subordinated capital to support its further growth. Future growth was further The Bank s encouraging development allowed the opening of its fifth branch in Prague at the beginning of The main branch in Prague, which had been located on Spálená Street, moved to the newly reconstructed and modern premises in the regional headquarters on Lazarská Street during 2004 s fourth quarter.
9 During March 2005 Volksbank CZ opened another branch in the brand new retail complex in the Vaňkovka Gallery at the centre of Brno. Going forward, the Bank will continue to expand its branch network. With regard to its product portfolio, the Bank placed strong emphasis on broadening and perfecting the services it offers across all client segments. A highly modern Internet banking application was launched for retail clients, as well as new savings and investment products, new types of mortgage and consumer loans. A number of loan products were tailored to the requirements of corporate clients and complemented by a wide range of services in the areas of trade finance and documentary payments. Standard loan transactions were adapted to the specific needs of property development companies in the area of housing construction. Volksbank CZ also received a further credit line from the European Investment Bank to support the investment projects of small and medium enterprises. In connection with the country s accession to the European Union, the Bank prepared its comprehensive EU Programme, which aims to make it easier for companies and public sector entities to draw on EU funds. Alongside the successful cooperation with Victoria- Volksbanken pojišťovna, a.s. and VB Leasing CZ, spol. s r.o., the Bank launched sales of supplemental pension insurance from Credit Suisse Life & Pensions penzijní fond, a. s. After the sudden passing of Board of Directors member Mr. Dieter Fennel in August 2004, the Bank s management team was returned to its full three-member strength by the appointment of Mr. Wolfgang Mayer in December Mr. Mayer brings to Volksbank CZ a wealth of professional work experience from the Österreichische Volksbanken-AG Group, as he has worked in similar positions at other Volksbank operations in Central and Eastern Europe. The year 2004 was a very important one for the Czech Republic, marked as it was by the successful conclusion of a long period of preparing for entrance into the European Union along with nine other countries on 1 May. Without a doubt, this step impacted the entire economy, and the bank sector was no exception. As of 1 May 2004, banking houses from other EU countries were able to enter the Czech market on the basis of the Single Banking License regime. This development will undeniably create a more competitive environment, drive an expansion in the number of products being offered, and lead to an overall increase in the level of bank services provided. In keeping with the motto United in Trust, Volksbank CZ will continue to build a long-lasting and successful relationship founded on mutual trust and a high degree of professionalism in the provision of banking services. In this respect, the Bank can completely rely on the support of all its highly qualified employees. To our valued clients, business partners and shareholders, we would hereby like to thank you for your present patronage and at the same time express faith in a mutually successful future. 7 Wolfgang Mayer Johann Lurf Václav Vitha
11 KEY FIGURES IN SUMMARY CZK million Total assets 19,013 19,016 Liabilities to clients, including deposit certificates 10,842 12,550 Receivables from clients 15,986 14,411 Income on financial transactions before general and specific provisions Operating expenses Profit on ordinary activities before tax Number of employees 422* 455* Number of branches * including employees on maternity leave
12 International Network 10 Volksbank CZ has been active successfully on the Czech market since The Bank s main shareholder is Volksbank International AG (a subsidiary of Österreichische Volksbanken-AG). Österreichische Volksbanken-AG (ÖVAG) was founded in 1922 by commercial lending cooperatives and is majority-owned by more than 60 independent Austrian Volksbanken (co-operative banks). The bank is the central institute of one of the most important banking groups in Austria and an international commercial bank. Already in 1991 ÖVAG was one of the first banks to begin its expansion into the challenging markets of Central and Eastern Europe. Volksbank International AG (VBI), located in Vienna, Austria, now heads a successful and expanding network in Central and Eastern Europe. By the end of 2004 Volksbank International AG s network consisted of 150 branches in eight Central and Eastern European countries. VBI s subsidiaries are located in the Slovak Republic, the Czech Republic, Hungary, Slovenia, Croatia, Bosnia-Herzegovina, Serbia and Romania. Their total assets have grown by 52%, from EUR 2.3 billion in 2002 to EUR 3.5 billion in Around 2,500 employees offer private and corporate clients a full range of modern bank products and services. Via highly specialised companies, personalised services in the fields of leasing, real estate, fund management, insurance and investment banking are provided. In addition, Österreichische Volksbanken-AG has a subsidiary in Malta as well as representative offices in Italy and France. Minority stakes of 24.5% each are held by DZ BANK/ WGZ-Bank and the French Banque Fédérale des Banques Populaires. In accordance with VBI s motto Extending borders, this fresh capital will enable us to further enlarge our network and improve the range of services for our clients. Via its cooperation with the Confédération Internationale des Banques Populaires, which has a network of 30,000 banking outlets in the member states in Europe, North Africa, Argentina, Canada and Japan, Volksbank CZ is able to offer its clients a presence in all major financial centres worldwide. However, size isn t everything! Our commitment to being a special partner for our clients has proved very successful. Personal contact with our clients, mutual trust and reliability are of primary importance to us. The professional quality of our services and the long-term relationship we build with our clients in order to ensure business success are the most important criteria for us. Thus, our international clients are supported in their mother tongue in each of our international sister banks by International Desks so that they feel at home doing business abroad. Shareholders Share in % Volksbank International AG, Vienna 81,50 Banque Fédérale des Banques Populaires, Paris 10,00 Banca Popolare di Vicenza, Vicenza 2,50 Banca Monte dei Paschi di Siena, Siena 2,50 Banca Popolare dell Emilia Romagna, Modena 2,50 Niederösterreichische Landesbank-Hypothekenbank AG, St. Pölten 1,00 In 2004 Volksbank International AG intensified cooperation with its German and French partners. Situation according to the share capital registered at 31 December 2004
13 Governing Bodies SUPERVISORY BOARD CHAIRMAN Wolfgang PERDICH Chairman of the Supervisory Board Appointed on: 25 May 2004 Experience: 23 years of banking experience, 21 years of management experience Membership of other companies bodies: Österreichische Volksbanken-AG, Austria: Member of the Board of Directors; Victoria-Volksbanken Életbiztosító Rt., Budapest: Vice-Chairman of the Supervisory Board; Victoria-Volksbanken pojišťovna, a.s., Prague: Member of the Supervisory Board; Victoria-Volksbanken Poisťovňa, a.s., Bratislava: Vice-Chairman of the Supervisory Board; Volksbank International AG, Austria: Chairman of the Supervisory Board, Member of the Balance Committee; Volksbank d.d., Croatia: Chairman of the Supervisory Board; Volksbank-Ljudska banka d.d., Slovenia: Chairman of the Supervisory Board; Ľudová Banka, a.s., Slovakia: Chairman of the Supervisory Board; Volksbank BH d.d., Bosnia and Herzegovina: Chairman of the Supervisory Board; Volksbank Leasing Romania s.r.l., Romania: Member of the Advisory Board; Magyarországi Volksbank Rt., Hungary: Chairman of the Supervisory Board; GVA-IMMOCONSULT Immobilientreuhand GmbH, Vienna: Statutory Representative; Immoconsult Leasinggesellschaft m.b.h., Vienna: Statutory Representative, Chairman of the Advisory Board; IMMO-CONTRACT Immobilienentwicklungs- und Vermarktungs Rt.: Member of the Supervisory Board; Kis Buda Center Kft., Hungary: Member of the Supervisory Board; VB Factoring Bank Aktiengesellschaft, Austria: Chairman of the Supervisory Board; VB Jármü Pénzügyi Lízing Rt., Hungary: Member of the Supervisory Board; VB Lízing Kft., Hungary: Member of the Supervisory Board; VB Pénzügyi Lízing Rt., Hungary: Member of the Supervisory Board; VB-Holding AG, Austria: Chairman of the Supervisory Board; VB-Leasing International Holding GmbH, Austria: Chairman of the Supervisory Board 11 VICE-CHAIRMAN Friedhelm BOSCHERT Vice-Chairman of the Supervisory Board Appointed on: 6 December 2004 Experience: 17 years of banking experience, 10 years of management experience Membership of other companies bodies: Ľudová Banka, a.s., Slovakia: Member of the Supervisory Board; ALB EDV-Service GmbH, Austria: Chairman of the Advisory Board; VB-Holding AG, Austria: Member of the Supervisory Board
14 SUPERVISORY BOARD MEMBERS Hans JANESCHITZ Member of the Supervisory Board Appointed on: 22 September 1997 Experience: 24 years of banking experience, 18 years of management experience 12 Membership of other companies bodies: Volksbank Linz-Mühlviertel registrierte Genossenschaft mit beschränkter Haftung, Austria: Vice-Chairman of the Supervisory Board; VB Factoring Bank AG, Austria: Chairman of the Board of Directors; VB Gewerbe- und Handelsbank Kärnten AG, Austria: Member of the Supervisory Board; Volksbank Wien AG, Austria: Member of the Board of Directors; Ľudová banka, a.s., Slovakia: Member of the Supervisory Board; Magyarországi Volksbank Rt., Hungary: Vice-Chairman of the Supervisory Board; Volksbank BH d.d., Bosnia and Herzegovina: Member of the Supervisory Board; VB-Holding AG, Austria: Vice-Chairman of the Supervisory Board, Volksbank International AG, Austria: Member of the Supervisory Board; Volksbank Romania S.A., Romania: Member of the Managing Board; VB-Unternehmensholding GmbH, Austria: Statutory Representative; Unternehmensbeteiligungs Gesellschaft mit beschränkter Haftung, Austria: Statutory Representative; VB Management Beratung GmbH, Austria: Statutory Representative; Volksbank a.d., Serbia: Vice-Chairman of the Supervisory Board; Volksbank d.d., Croatia: Member of the Supervisory Board; Volksbank-Ljudska banka d.d., Slovenia: Member of the Supervisory Board; VB Investment Bank, Austria: Member of the Supervisory Board Gabriele UGOLINI Member of the Supervisory Board Appointed on: 25 May 2004 Experience: 31 years of banking experience, 19 years of management experience Membership of other companies bodies: Volksbank BH d.d., Bosnia and Herzegovina: Member of the Supervisory Board Daniel DUQUESNE Member of the Supervisory Board Appointed on: 3 May 1999 Experience: 30 years of banking experience, 30 years of management experience Membership of other companies bodies: Banque Populaire Loire et Lyonnais, France: General Manager; Banque Fédérale des Banques Populaires, France: Member of the Managing Board; Natexis Banques Populaires, France: Member of the Managing Board; Sepel, France: Member of the Managing Board; Natexis Asset Management, France: Member of the Managing Board; I.N.S.A., France: Member of the Managing Board in Lyon; Honorary Consulate of the Czech Republic in Lyon: Honorary Consul; Garibaldi Capital Développement, France: Chairman of the Managing Board; I-BP, France: Member of the Managing Board
15 Thorsten PAUL Member of the Supervisory Board Appointed on: 6 December 2004 Experience: 12 years of banking experience, 6 years of management experience Membership of other companies bodies: GEF Beteiligungs AG, Austria: Member of the Supervisory Board; Venture for Business Beteiligungs AG, Austria: Member of the Board of Directors; VB Partner-Kapital Beteiligungs AG, Austria: Member of the Board of Directors Jaroslava SCHAFFEROVÁ Member of the Supervisory Board Appointed on: 5 September 2001 Experience: 7 years of banking experience, 7 years of management experience No membership of other companies bodies 13 Luboš VLČEK Member of the Supervisory Board Appointed on: 5 September 2001 Experience: 7 years of banking experience, 12 years of management experience No membership of other companies bodies Renata FILIPOVÁ Member of the Supervisory Board Appointed on: 7 September 2004 Experience: 10 years of banking experience, 6 years of management experience No membership of other companies bodies
16 Changes in the composition of the Supervisory Board during 2004: Manfred KUNERT Chairman of the Supervisory Board until 25 May 2004 Appointed on: 1 December 2003 Christian KALTENBRUNNER Vice-Chairman of the Supervisory Board until 6 December 2004 Appointed on: 13 May 2002 Primo BRIONI Member of the Supervisory Board until 25 May 2004 Appointed on: 3 May Ralf WEINGARTNER Member of the Supervisory Board until 6 December 2004 Appointed on: 25 May 2004 Rainer SCHON Member of the Supervisory Board until 25 May 2004 Appointed on: 15 June 2001 Irena ŠTĚRBOVÁ Member of the Supervisory Board until 25 May 2004 Appointed on: 5 September 2001
17 BOARD OF DIRECTORS CHAIRMAN Johann LURF Chairman of the Board of Directors Appointed on: 10 December 1996 Experience: 29 years of banking experience, 18 years of management experience No membership of other companies bodies MEMBERS OF THE BOARD OF DIRECTORS Václav VITHA Member of the Board of Directors Appointed on: 1 March 2002 Experience: 13 years of banking experience, 7 years of management experience No membership of other companies bodies 15 Wolfgang MAYER Member of the Board of Directors Appointed on: 6 December 2004 Experience: 28 years of banking experience, 23 years of management experience No membership of other companies bodies Changes in the composition of the Board of Directors during 2004: Dieter FENNEL Member of the Board of Directors until 31 August 2004 Appointed on: 23 May 2003
18 16 Organisation Chart
19 17 Petra Voglová Gardener
20 General Economic Background The Czech economy grew significantly faster than the euro zone during 2004, expanding by 3.7% through the first three quarters. Growth was fuelled mainly by investments, whose volume increased during the first three quarters by 9.9%, and by household consumption, which increased by 2.6%. Meanwhile, the foreign trade balance continued in deficit, however this significantly decreased in With regard to inflation, 2004 marked a return to the traditional levels seen before While the average year-to-year inflation rate measured by the consumer price index was just 0.1% in 2003, in 2004 it was 2.8%. This substantial increase was driven by those tax increases already mentioned, but also by higher raw material prices. Oil and metals exhibited particularly steep price increases. The record-level prices of raw materials were 18 Although household consumption grew, the pace of that growth slowed in comparison with 2003 due to increased consumer anxiety about the future in connection with the many changes that took place in the year The country s accession to the EU brought with it, among other things, tax adjustments, which resulted in an increase in price levels. A consequence of the higher prices was a slowdown in real wages growth. This development was accompanied by apprehension over possible job losses, especially in as much as the unemployment rate reached a record-breaking level of almost 11% in February. All of this encouraged a large part of the population to be more frugal and to think about their savings. reflected even more strongly in industrial prices. While industrial prices had decreased on average by 0.3% in 2003, they grew by 5.7% in As noted, the unemployment rate climbed to record levels in Calculated using the old methodology, it averaged 10.2% for the year, marking a sobering precedent relative to the past several years. Despite rather brisk growth in the economy, unemployment has remained stubbornly high. The main reason underlying this is the discrepancy between demand and supply on the labour market, whilst low labour force mobility, resulting in deep regional differences, is another important factor.
21 International trade, on the contrary, has recorded excellent results. For 2004 as a whole, the trade deficit was a mere CZK 20.6 billion, while in the previous year it had totalled almost CZK 70 billion. The pace of exports accelerated quite dramatically in the course of the year. While in 2003 the average year-to-year export growth rate had been 9.6%, it was 25% in The heartening development in exporting during 2004 was supported especially by the faster growth of the global economy and by the EU accession, which eliminated the last trade barriers. With regard to the fact that both the economy and inflation were gathering speed, the central bank increased interest rates twice in Thus, within two months, the two-week repo interest rate rose from 2.00% to 2.50%. As the market had expected these moves, market interest rates grew apace during the year. The trend changed only in the fourth quarter. Based on a revision of GDP and the Czech crown s appreciation, the economic outlook changed and it became clear that the growth of interest rates would halt for several months. The Czech crown appreciated throughout 2004 against both the euro and the dollar. While the exchange rate had begun the year hovering near CZK/EUR, the Czech crown had already appreciated to about CZK/EUR by year s end. That brought the exchange rate to a two-year high. Improved macroeconomic fundamentals, an expected inflow of new foreign investments and also favourable development in neighbouring markets notably contributed to the Czech crown s appreciation. Mainly due to the depreciation of the dollar on global markets, the Czech crown ended the year at a historic high of CZK/USD. It is expected that the economy fuelled especially by the realization of foreign direct investments will grow faster in 2005 and that the growth rate of 4% will be exceeded. Inflation has already peaked compared to its previous moves and it ought to slow in the first half of Thanks to the continuing investments inflow, the Czech crown will continue to appreciate moderately. 19
22 Business Activities 20 CORPORATE CLIENTS It was another successful year for the Corporates Bohemia and Corporates Moravia departments during Thanks to its continuing acquisition efforts, the Bank brought in numerous new clients in its main target segment, which encompasses domestic and foreign companies engaged in manufacturing and trade having annual turnover of between CZK 100 million and CZK 1 billion. Moreover, the Bank succeeded in acquiring some very important clients from the ranks of corporations generating revenues well in excess of this range. Expansion continued in the areas of granting both short-term and long-term loans. Even as the overall loan portfolio grew by more than 20%, its high quality was maintained. Strong growth was achieved in the area of deposit operations, especially by focusing upon a select group of clients among corporations and financial institutions with larger amounts of temporarily available funds. This group was offered attractive deposit products in the forms of depository bills of exchange and deposits. There was also substantial growth in domestic and international payment operations, wherein almost all corporate clients are now taking advantage of the Homebanking and Multicash electronic banking services. Moreover, the Homebanking application was upgraded last year to a newer version of the Gemini software. Cooperation continued last year with the Real Estate Financing department in regard to financing residential and commercial real estate. Successful cooperation has been established, too, with the department of Trade Finance/Documentary Payments, especially in the areas of letter of credit financing of imports and in cession of bills of exchange. The year also brought increased activity in the area of syndicated loans, where the Bank participated in financing several prestigious transactions. It was possible to achieve this success especially because of the flexible and individual approach to clients, whereby the Bank strives to find optimal solutions to their needs. The goal continues to be to fully satisfy clients and to provide individually tailored services.
23 RETAIL BANKING The Bank made several important steps in the retail banking area during 2004 that served to extend and improve its services and products for clients in this segment. A fifth Prague branch, on Kaprova Street in the centre of the Old Town, was opened in January 2004, bringing the total network to 19 branches. At the end of the year, the main Prague branch was moved from Spálená Street to the newly reconstructed premises within the regional head office on Lazarská Street, which meets all the requirements for comfortable, fast and discreet customer service. 21 Growth in the branch network will continue into 2005: a new point of sale, located in Brno s new Galerie Vaňkovka shopping centre, was opened in the first quarter of the year. The portfolio of banking products and services for the retail segment has been expanded by offering a comprehensive set of VISA cards. Together with the currently available Maestro, MasterCard and Diners Club cards, this line will fully satisfy the needs of both existing and potential clients. A brand new term deposit product called Volksbank Garant was introduced to clients. From its very introduction, this higher interest yield product has become a very interesting investment alternative to other existing deposit products.
24 Internet banking, one of the electronic banking options, saw its services significantly improved. Although targeted especially at retail clients, this service has keen users also in the small and medium enterprises (SMEs ) segment. A new Private Banking department was launched as a result of cooperation between the Retail Bohemia and Retail Moravia departments, and at the end of 2004 a specialised mortgage department was set up. Known as Private Client Real Estate Financing, this department focuses on mortgage lending. the department s founding, the International Desk s trade volume exceeded EUR 100 million. The ninemember team has thus demonstrated its professionalism and excellent work commitment. The number of Italian, French and Spanish clients grew by 20% and now exceeds 1,000. Cooperation with Italian and French partners has also proven beneficial, as has the support from representation in Verona and in Paris. The International Desk department is expecting similarly good results in REAL ESTATE FINANCING 22 All of these changes, in the branch network, in the products and services offered, and in processes, illustrate the Bank s strong emphasis on serving its retail clientele. PRIVATE BANKING The Bank s strategy in the area of Private Banking is to concentrate on high-quality services that meet the specific needs of those free professionals and private clients who invest or deposit funds exceeding one million crowns. Significant growth in the number of accounts and the total deposit volume in this segment validate the strategy of providing individual service to those clients by private account managers who draw on the experience of a whole team of the Bank s specialists. INTERNATIONAL DESK Building upon the efforts invested in past years, the International Desk department attained excellent results in For the first time since In the last year, the Real Estate Financing department was successful in acquiring financing for several property development transactions, particularly for residential projects. Increased loan exposure to this sector relates to solid economic development in the Czech Republic, where construction was unquestionably one of the most successful sectors, as it grew on average 10% faster than it had in The past year was particularly successful for the Bank as it managed to increase its status as a financial institution that provides financing for extensive real estate projects. The Bank is able to offer not only interesting commercial conditions, but also an individual approach to its clients and their projects. The majority of such projects are for the time being situated in the capital, Prague, but the Bank expects to see increasing volumes of domestic and foreign real estate investments targeted also on the other regional centres in the Czech Republic.
25 PUBLIC SECTOR TRADE FINANCE / DOCUMENTARY PAYMENTS Despite growth options that were limited by an intense competitive environment for providing financial services to municipalities, the Bank maintained its market position in the public sector during The Bank also began to establish itself in the financing of housing cooperatives. The Bank extended its product range for the public sector by offering forfaiting, and it has already realised the first transactions with some mediumsized municipalities. In connection with the Czech Republic s accession to the European Union, the Bank has prepared its so-called EU Programme, which is a comprehensive portfolio of banking products supporting the use of structural funds. Another success was in launching the Bank s participation in the PANEL Programme, which aims to finance complex reconstruction of blocks of prefabricated flats. The number of staff in this department has been increased, especially for the Prague region, both to serve local housing cooperatives and to offer clients financing options for privatisation of municipal flats. The Trade Finance / Documentary Payments department was established at the beginning of 2004 to extend the Bank s offer in the area of trade financing and to implement several new products. The department s activity is focused especially on off-balance sheet financing factoring and forfaiting as well as on asset-based lending. An integral part of the department s business activities is its co-securing of documentary payments and documentary collections. In cooperation with the Bank s sales team, the department has granted several pre-export loans and a syndicated loan for structured commodity financing. By means of its factoring/ forfaiting services, the Bank was able to participate in the financing of larger supplier credits and export loans. The year 2004 also marked the commencement of a special relationship with the Exportní garanční a pojišťovací společnost, a.s., which is the Bank s partner in the financing of selected export transactions. 23