2 About Credit Europe Bank Credit Europe Bank N.V. is headquartered in the Netherlands and operates 184 branches, 957 ATMs, 21,870 sales points and more than 22,600 point of sale terminals. The bank has about 6,200 employees in 11 countries. More than 4.2 million customers around the world entrust their financial affairs to Credit Europe Bank. We offer to our corporate customers a wide range of banking products, including international trade and commodity finance, project finance and working capital loans. Represented in key trading hubs such as the Netherlands, Switzerland and the United Arab Emirates, as well as in raw material exporting and importing countries including, Russia, Turkey and Ukraine, we are well positioned to finance our customers transaction flows across the globe. We offer simple, transparent and competitive products to our clients. Accordingly, when developing a new product we ensure that it is easy to understand, easy to compare, easy to manage and should provide a fair deal and value for our customers. To our retail and SME customers we offer non-complex and transparent products in seven Western and Eastern European countries: Belgium, Germany, the Netherlands, Malta, Ukraine, Romania and Russia. Our mission is providing financial services that create value for customers. Our vision is being the preferred bank in our core markets.
3 Contents Strategy 3 Five-year key figures 4 Report of the Managing Board From the CEO 5 Our Network 6 Retail Banking 8 Corporate Banking 10 Funding 12 Human Resources 14 Corporate Social Responsibility 15 Risk Management and Control 16 Outlook 18 Profile of the Managing Board 20 Corporate Governance 24 Profile of the Supervisory Board 30 Report of the Supervisory Board 32 Consolidated Financial Statements Consolidated Statement of Financial Position 37 Consolidated Statement of Income 38 Consolidated Statement of Comprehensive Income 39 Consolidated Statement of Changes in Equity 40 Consolidated Statement of Cash Flows 41 Notes to Consolidated Financial Statements 42 Parent Company Financial Statements Statement of Financial Position 119 Statement of Income 120 Statement of Changes in Equity 121 Summary of Significant Accounting Policies 122 Notes to Financial Statements 123 Other Information 135 Independent Auditor s Report 136
5 Strategy Banking in its purest form is our business: easy-to-use loan and deposit products for retail customers and financing services that support our corporate clients in growing their businesses. Our strategy is to be close to our customers: we provide our services through a network of 184 branches, 957 ATMs, 21,870 sales points and more than 22,600 point of sale terminals in 11 countries and with a wealth of local knowledge. For more than two decades, we have focused on international trade and commodity finance. We have gained thorough experience and expertise to act as a bridge for our customers in key importing and exporting countries in Western Europe, the Black Sea region, the Gulf region, China and the Americas. We will continue to offer short-term, self-liquidating commodity financing, as well as balance sheet lending and project finance. In corporate banking, as a medium-sized bank with hands-on managers and short communication lines, we are fast to spot and react to our customers needs and to create innovative, tailor-made solutions. Our flexible approach supported our customers during turbulent times and positioned us to take advantage of improving market conditions. 3 Strategy In the Western European markets, we offer retail banking products via internet and telephone banking as well as through our broker and partner network. In addition to simple savings products, we continue to build up our retail loan business in Germany. Our services are facilitated by having a centralized, cross-border contact center applying high-quality information technology. In Russia and Romania, next to the above mentioned distribution channels, we also use our branch network to serve our retail customers and consolidate our retail position. In all areas of the bank, we invest in the professionalism, expertise and customer focus of our employees. In order to sustain our long-term growth ambitions, we combine prudent capital and liquidity management with sound risk management, high level of compliance and transparent corporate governance. We believe this strategy safeguards the interests of all our stakeholders.
6 Five-year key figures 4 4 Five-year key figures millions (*) Assets Cash and balances at central banks 501 1,238 1,771 1,235 1,596 Financial assets at fair value through profit or loss Financial investments 1, ,414 1,118 Loans and receivables banks Loans and receivables customers 6,653 5,954 6,556 5,854 5,219 Other assets Total assets 10,158 9,237 10,505 10,003 9,956 Liabilities Due to banks 1,632 1, ,114 1,317 Due to customers 6,002 5,932 7,520 7,185 7,223 Issued debt securities Other liabilities Subordinated liabilities Total liabilities 9,517 8,588 9,766 9,270 9,318 Total equity Total equity and liabilities 10,158 9,237 10,505 10,003 9,956 millions (*) Net interest income Net fee and commission income Operating income Credit loss charges (176) (140) (102) (105) (160) Net operating income Total operating expenses (301) (290) (269) (239) (238) Share of profit of associate Operating profit before tax Income tax expense (15) (27) (24) (25) (27) Profit for the year from continued operations Result for the year from discontinued operations - (1) Profit for the year (*) including effects of the spin-off of Fibabanka AS
7 Report of the Managing Board From the CEO In 2013, Credit Europe Bank N.V. again delivered a solid financial performance with growth of its revenues, evidencing strength of the underlying business model. We continued to focus on customer satisfaction, client acquisition, the increasing use of group-wide synergies, and the adherence to strict risk management principles. Particularly, our prudent credit policy and experience in the markets enhanced our ability to guard the quality of our asset portfolio during a period of market volatility. During the reporting year, the global economy has slowly moved into a less volatile phase. There are clearer indications that structural imbalances are subsiding, however the macroeconomic environment remains challenging. In 2013, we saw negative effects of the increase in the risk of default of certain European economies, the stresses on the financial system within the Eurozone and historical low interest rates. Also, we observed corporate customers being very conservative in their investment decisions. Despite the challenging environment, in 2013 both our corporate and retail lending activities showed a considerable growth. The corporate loan book grew more than 20% mainly led by our Amsterdam teams. Similarly, our trade finance teams in different countries performed well and increased the number of our trade finance customers. The overall retail loan portfolio increased by 5% mainly through the growth in Russia, where we were ranked the 16th bank in terms of retail loans. The major growth was derived from cash loans by crossselling to the existing customer base. The bank keeps its strong position in car loans, being the 6th biggest lender in the car loans market. In addition to existing brands, Honda also became one of the partners in our joint lending program. In line with our long lasting cooperation with Ikano Group, we have established a new joint venture bank in Russia with a paid up capital of RUR 300 million. This new entity, Ikano Bank LLC was registered in April This establishment will enable us to further develop our partnership with Ikano Group by providing services for targeted clients in Russia such as IKEA, Mega Malls and Marks&Spencer. In Romania, the plastic cards business continued to be the main driver of new retail business generation with our CardAvantaj, one of the most popular credit card brands in the country for the last 10 years with 17% market share. In Germany, processes have been further refined to improve customer focus and service. To further promote the product portfolio and to find new opportunities, we strengthened and enhanced some web-based intermediary partnerships and made investments in our strategic technology initiatives. During 2013, total customer deposits remained stable at EUR 6 billion with an increasing share of our customer deposits in Russia and Romania. In line with our strategy, we succeeded to increase the share of corporate deposits from 22% to 27%. On the wholesale funding side, we attracted new investors from international capital markets and the Russian domestic market by issuing senior and subordinated debt securities. In January 2013, Credit Europe Bank NV successfully issued a 10 year subordinated debt of US$ 400 million for the purpose of strengthening the capital base as well as the long term funding mix of the bank. As of 31 December 2013, our net profit reached a satisfactory level of EUR 94 million, while the solvency ratio stood at a solid 13.47%. Looking ahead, interest rate decisions in the near future will continue to impact the emerging markets. In major developed economies several new policy initiatives have reduced systemic risks and helped stabilize consumer, business and investor confidence; however these measures had a very limited impact on growth. Credit Europe Bank is not invulnerable to the macroeconomic forces, yet we mitigate the effects of this challenging and fast changing environment with our strong risk management and in-depth knowledge about our markets and products. The bank s solid footing and strong position in the markets provide a good foundation for the future. We are confident in our ability to continue our profitable growth in 2014 and beyond. To conclude, I would like to express our gratitude to our customers, business partners and employees all of whom worked together intensively last year to continue generating long-term value for all our stakeholders. Amsterdam, March 7, 2014 E. Murat Başbay 5 Report of the Managing Board
8 Our Network 6 Our Network Western Europe Corporate Banking and trade finance services from the Netherlands, Switzerland and Malta Private banking services from Switzerland Strong focus on direct banking services Retail Banking services to almost half a million customers in Germany, the Netherlands, Belgium and Malta, mainly through the multilingual contact center in Frankfurt Russia Active in Retail, Corporate, Commercial and SME Banking 114 branches in more than 50 cities covering seven time zones 14,200 sales points and 13,960 point of sale terminals Ranked 17th in retail loans, 5th in car loans, 6th in instant loans, 16th in credit cards 802 ATMs Romania Active in Retail and Commercial Banking 65 branches in 31 cities Dominant market player with more than 280,000 active credit cards and 17% market share Strong partner merchant network with 7,670 sales points and 8,685 point of sale terminals Ukraine Active in Corporate, Commercial and SME Banking Turkey Representative office in Istanbul Outside Europe Trade finance services from the Dubai International Financial Centre in the United Arab Emirates Representative office in Shanghai, China
9 Customer Focus The success of our customers is our own success. All of our decisions are therefore taken with the customer in focus.
10 Retail Banking 8 Retail Banking In 2013, Credit Europe Bank served over 4 million retail customers in Western and Eastern Europe by offering a broad range of competitive, transparent and non-complex products. Retail Banking offers deposits, cash loans, car loans and credit cards as well as a number of insurance products in cooperation with external insurance providers via online banking and an extensive broker and partner network. In Russia and Romania, in addition to telephone and web-based banking, we serve our customers through a wide-spread network of branches and points of sale. The implementation of a new product is always according to the bank s New Product Approval Policy. In 2013, uncertainty in the markets, regulatory changes and historically low interest rates in Western Europe remained challenging and put pressure on volumes and margins. Despite this difficult environment, we continued to grow our business and generate healthy revenues. Russia - strengthening the network Retail Banking in Russia focused on customer service process optimization, branch network efficiency and further development of our sales channels. We achieved a strong performance, through 114 branches in 53 cities and 14,200 (2012: 12,430) points of sale in retail outlets. We strengthened our positions in retail lending and became the 17th Russian bank in terms of retail loans, the fifth in terms of issued car loans, and the sixth in point of sale loans 1. Compared to the previous year, our retail deposit base in Russia grew by 7%. Within the car loans business, we further reinforced our partner network by adding HONDA to our existing 9 brands and participated in a government subsidy program on car loans. We also continued with lending services for travel and education. With respect to the credit cards, we launched new co-branded cards such as Pegas Touristik Shop & Travel Card and Card Credit Laplandia. In 2013, while increasing our number of ATMs to 802, we joined a domestic ATM network called ORS (United Payment System) and started a co-operation with the domestic Golden Crown Money Transfer in addition to the already existing liaison with Western Union. (1) Frank Research Group
11 Retail Banking Germany - at the service of our customers Our Western Europe retail operations are centralized in Frankfurt, Germany, where we have our multilingual customer contact center, sales & marketing and back offices, serving our customers in the Netherlands, Germany, Belgium and Malta. Our top priority is to assist our customers to meet more of their financial needs. In 2013, Retail Banking in Western Europe reaffirmed the commitment for client-centricity and undertook a new program to improve service levels and convenience. On the deposit side, new web-based product features have been initiated in order to provide customers with enhanced service quality and efficiency. The initiatives are also part of a package of measures to extend the high security level in the online banking environment. Overall, we kept our Western Europe retail deposit and retail loan portfolios stable during A special attention was paid to further diversify the banc assurance business. Our insurance penetration ratios have been better than the market average. We continued to focus on our strategic partnerships and gained important partners such as Barmenia, one of the major independent insurance groups in Germany. The collaboration with Fidelity Worldwide Investments proved to be efficient as well. Romania - 10 years CardAvantaj Even though in 2013 the economy has given the first signs of recovery, the Romanian business environment remained challenging. As in previous years Romania has been confronted with economic vulnerabilities such as external financing concerns and the contraction in lending activities. Under these circumstances, Retail Banking in Romania concentrated mainly on the credit card business, while keeping the other activities at reduced levels. The credit card CardAvantaj maintained its strong position in the Romanian market with its 17% market share was the year that CardAvantaj marked its 10 years anniversary in the local market. It also received an accolade from the business publication Business Arena, awarding the credit card with Best banking products CardAvantaj 10 years. During 2013, the network of merchants was supported by new partnerships with important local players such as Groupon, Christian Tour, Sabon, Pau, Mobil Pay, Stefanel, Rombiz and Baumax. The number of POS s further increased with a special focus to our presence in the health sector. As of December 2013, Credit Europe Bank had approximately 80,000 CardAvantaj PayPass cards issued, extending significantly also its network of corresponding POS. As for the Internet Banking, a new interface was designed and introduced in 2013 to make it easier for our clients to access information and execute banking transactions online. Retail Banking 9
12 Corporate Banking 10 Retail Banking Corporate Banking is one of the main business lines of Credit Europe Bank. The Bank offers a full range of corporate banking services and products to a large customer base spread in a large geography. Our strength lies in our local presence and expertise. With physical presence in six different geographies, we are well capable to monitor local markets, understand the needs of our customers and act promptly. Our local teams operate in close co-operation with each other in providing cross border solutions to our international clientele. We create added value for our customers through tailormade solutions to their needs in an increasingly competitive marketplace. Since its inception, Credit Europe Bank has been a niche player in structured trade and commodity finance. The bank has accumulated a valuable expertise in servicing the needs of large and medium sized international commodity traders, importers and exporters. Through our presence in key trading hubs such as Amsterdam, Geneva and Dubai as well as in raw material exporting and importing countries, we are perfectly positioned to handle our customers trade finance transactions across the globe. Our services are diversified across geographies and commodities from minerals, metals, energy and petrochemicals to soft commodities such as grains, paper and pulp. In addition to international trade finance, the Corporate Banking Division offers a whole range of corporate banking products in different countries. In line with the Corporate Banking strategy, our teams target industries with high growth potential. The project finance loans are mostly undertaken for the commercial real estate sector in different countries. In 2013, the bank continued its low risk appetite in marine finance and concentrated mostly in monitoring the existing portfolio. Prudence and Agility 2013 was a challenging year for the banking industry. Stagnant economies in the western markets were accompanied with the regional conflicts and political uncertainties in the emerging markets. Most of the emerging powerhouses experienced diminished growth rates. On top of the macroeconomic concerns, there were additional challenges for the banks. As a result of the quantitative easing, the margins continued to be under pressure; the excess liquidity and decreasing financing requirements resulted in lower yields. Meanwhile, the banking sector faced headwind through a rapidly changing regulatory environment and ever increasing compliance requirements. Given this challenging environment, prudence was the strategy for our Corporate Banking division. Balancing prudence with agility when required was the most important challenge for While maintaining our agility in providing financial solutions to our customers, we had to be more selective in accepting new transactions and to ask for additional collaterals when necessary. Despite the challenges, Corporate Banking managed to perform well in 2013 and grew both its asset size and revenues. As a result of our regional expertise and our large customer base, we successfully grew our loan book by 20% without jeopardizing the asset quality. During the year, our strategy was to focus on project finance and balance sheet lending to blue-chip companies within target markets and geographies. Also, our close relationships with market leaders of the tourism sector in Russia enabled us to be the first port of call when tourism flows between Russia and Turkey were concerned. Corporate Banking: main products and services PRODUCTS & SERVICES CEB NL CEB RU CEB RO CEB UAE CEB CH CEB UA Structured Trade and Commodity Finance Balance Sheet Lending and Syndicated Loans Current Accounts and FX Services Project Finance Factoring Marine Finance
13 Corporate Banking Loans to Corporate Customers ( million) Trade Finance Volume ( million) 3, , , , , , In red (upper part): Non-cash loans In blue (lower part): Cash-loans 3, , , , (*) 2011 and 2012 figures exclude Fibabanka TF volume In 2013, we increased the number of our structured trade and commodity finance customers. Accordingly, the 2013 trade finance volume was Euro 8.7 billion, being 17% higher than , , , , , Corporate Banking 11
14 Funding 12 Corporate Banking Credit Europe Bank has a stable, granular and geographically diversified deposit base which is the core funding source of the bank. We offer easy-to-use and transparent deposit products to our clients in all our branches and subsidiaries. The customer deposits size of the bank remained stable around Euro 6 billion during 2013, while the cost of deposits have further come down. The bank remained to be active in international and local capital markets throughout the year. In January 2013, Credit Europe Bank NV successfully issued 10 year term Basel III compliant, subordinated Tier II securities for US$ 400 million. Credit Europe Bank Ltd. tapped the Russian Ruble bond market during 2013 with three successful issues for a total amount of Ruble 15 billion: February 2013; RUB 5 billion for 3 years, with 1 year put option April 2013; RUB 5 billion for 3 years, with 2 years put option September 2013; RUB 5 billion for 3 years with 1 year put option Credit Europe Bank Ltd in Russia also obtained Euro 30 million medium-term financing from the Black Sea Trade and Development Bank in July 2013 to finance its residential mortgage loans. In December 2013, Credit Europe Bank Ltd and Credit Europe Bank (Suisse) concluded two international club loans for RUB 5.5 billion and around US$ 100 million, respectively. Credit ratings The bank and its Russian subsidiary have the following credit ratings as of end-2013: Credit Europe Bank NV, the Netherlands Moody s Global Local Currency Deposit Rating Ba2 / outlook negative Fitch Long Term Issuer Default Rating BB - / outlook stable Credit Europe Bank Ltd, Russia Moody s Global Local Currency Deposit Rating Ba3 / outlook negative Fitch Long Term Issuer Default Rating BB - / outlook stable
15 Professionalism Our professionalism embraces and stimulates the necessary skills, qualifications, knowledge and diversity. Our colleagues undertake their tasks in a competent and integer manner. Through teamwork we achieve our goals.
16 Human Resources Credit Europe Bank accustoms itself to generate the best value for its customers and is committed to the development and well-being of its employees. Our strategy is to recruit the best and brightest and to retain, develop and motivate them throughout their careers within our Bank. Our highly trained, long-tenured and motivated personnel remain our most important corporate asset. We recognize our leading capabilities and expertise which enable us to outdistance the competition and win in the marketplace. We strive to cultivate a high-performing workforce of innovative and engaged employees, responding rapidly to changing business conditions and customer needs, working in a supportive working community that values professionalism and best practices in the market. We offer our staff members, opportunities to grow professionally through training or new tasks within their own field of expertise. We support a continuous enrichment of our human assets by optimizing the capabilities of every employee, assign them where most appropriate and provide ongoing training where needed. The benefits of this development are twofold: the individual s job satisfaction increases while we better utilize our human resources. 14 Human Resources Next to it, we offer market conform employment benefits including appropriate insurances. We support our international oriented staff (and their family members) with all practical matters, tax issues and other (legal) obligations which are coming together with living abroad. Furthermore, Credit Europe Bank is focusing on areas such as performance management and talent development. We continued to organize (e-learning) trainings, team-building events and operational workshops to enhance competences. We have a wide variation of employees with different backgrounds. As an international bank serving customers in different geographies, we believe that in today's workplace, diversity is the key to new ways of thinking, reaching out to a wider range of customers and growing our business. We have clear objectives to maintain a positive climate of inclusion and engagement, and increase external recognition as a diverse organization. Guiding our employees originating from abroad in different fields is part of the services of our Human Resources department. Our total workforce is about 6,200 (end 2013). Workforce / gender Workforce / age group 4% 1% 31% 12% 36% (01) <25 male female (02) (03) % 47% (04) (05) >55
17 Corporate Social Responsibility Credit Europe Bank is committed to conducting its business in an ethical, socially responsible and environmentally sustainable manner. The Bank gives high importance to the impact of its activities on its stakeholders customers, investors, regulators and other authorities, and employees - as well as on society and the environment at large. The year 2013 was marked by high-level formalization of the bank s Social and Environmental Responsibility Policy and by taking the necessary actions to ensure adherence to the policy at all levels across the Bank, in order to establish genuine awareness. The policy is sponsored by the Managing Board and supplements other internal policies and procedures such as the Code of Conduct. Credit Europe Bank s Social and Environmental Responsibility Policy is based on four main principles: (i) Ethical business practices The Bank is diligent in ensuring compliance with applicable laws and regulations and using relevant local and international best practices. It conducts its business in an ethical manner, giving priority to observation of the basic ethical norms, i.e. the value of human life, the right to work, fair working conditions, civil responsibility, equal opportunities, occupational health and safety. (ii) Environmental commitment Credit Europe Bank avoids participating in activities that can potentially have a negative impact on the environment and the Bank s reputation. The Bank is conscious of its responsibility to conserve resources and continuously aims to use the resources required for its business practices more efficiently. (iii) Transparency and communication The Bank s social and environmental performance is regularly reported to the Managing Board through a system of established committees. The Bank s main activities in the field of social and environmental responsibility are also subject to disclosure in the annual report. (iv) Voluntary participation The Bank independently and voluntarily chooses its strategy in establishing a socially and environmentally responsible policy. This means that the policy is not the result of any regulatory requirement and that Credit Europe Bank is free to decide what concrete measures and activities are included in the policy. Corporate Social Responsibility 15 In the coming years, Credit Europe Bank aspires to further enhance its social and environmental responsibility activities, in order to establish a more robust sustainability framework within the Bank.
18 Risk Management and Control 16 Risk Management and Control Risk management and control is anchored strategically in the Banks organization, with active involvement at both the Managing Board and Supervisory Board level. A risk management and control framework has been implemented that fits the Bank s business activities and geographical organization. The Supervisory Board conducts oversight on the risk appetite and risk exposure of Credit Europe Bank s activities and portfolio. The Managing Board, and in particular the Chief Risk Officer (CRO) are responsible for implementing and monitoring the risk policies within the organization and are supported by the Risk Management Division and the Non-Financial Risk Management Division. The Bank distinguishes financial and non-financial risk management as follows: Financial risk management: credit risks, market risks, ALM and capital and liquidity management. Non-financial risk management: compliance risks, operational risks, IT security risks and information security risks. Each banking subsidiary has local risk management and compliance functions, which report both to local and Head Office management. Credit Europe Bank has adopted a three line of defense model for risk management and control. The business units form the first line of defense. The second line of defense consists of the risk management, compliance and control functions. The presence of the CRO within the Managing Board ensures that risk management-, complianceand control issues are addressed and discussed at the highest level of the organization. The third line of defense is the internal audit function, which assesses the functioning and effectiveness of business units, risk management and nonfinancial risk management activities. Credit Europe Bank s risk management and control framework enables the Managing Board to control the financial and non-financial risks of business activities. This framework is governed by a system of policies, procedures, committees, business lines, support and control functions. Limits and controls have been put in place to mitigate the financial and non-financial risks to an acceptable level within Credit Europe Bank s risk appetite. The risk appetite has been approved by the Supervisory Board and is designed to set Credit Europe Banks willingness to take risk and to set risk limits in order to protect the Bank s activities, not only in terms of profitability and maintaining sound capital adequacy and liquidity ratios, but also in terms of reputation and integrity risks. To maintain the quality of financial reports, the Bank has implemented internal financial reporting controls in order to increase the effectiveness of reporting. Paragraph 38 of the Notes to the Financial Statements elaborates in more detail on the risk management and control framework, the risks incurred and the main risk factors attached to the strategy of the Bank. Our corporate website also provides information on risk management and control. Key developments in 2013 In 2013, the following events required specific attention of the Managing Board: The Bank further strengthened its liquidity management activities by implementing a process for Internal Liquidity Adequacy Assessment (ILAAP) and related reporting standards. Late 2012, the Bank started to implement a tool streamlining the liquidity management process, which implementation continued in The Bank improved its systems and controls under the asset-liability management framework. Stronger capital composition at all levels plays a major role in CEB s Basel III migration plan and accordingly we anticipate a rising trend in CEB s our Core Tier 1 ratio ahead of the timeline announced by the Basel Committee. In line with the Bank s funding strategy, Credit Europe Bank has continued to diversify its funding mix by geography and product type. The Bank issued new debt instruments in 2013, both senior and sub-ordinated. In this respect the Bank elaborated on a recovery plan in The recovery plan of the Bank provides a menu of measures to address a range of severe financial stresses. The Bank s recovery plan can be readily implemented when necessary and is integrated within the Bank s risk management- and internal control framework. The Managing Board pays continuous attention to further improve the internal control environment in the Bank both in financial risk- and non-financial risk areas. The annual internal control framework evaluation performed at Bankand subsidiary level and follow-up of the improvement areas identified thereby contribute to a better standard of the internal control and risk management practices and facilitate benchmarking between Credit Europe Bank s entities. In compliance with the Dutch Banking Code, the Managing Board and Supervisory Board focused on the Bank s material risks and risk appetite. The updated risk appetite policy was further improved to better support the risk management activities of the Bank and to strengthen the monitoring of the products and services delivered to the clients. With the product approval process embedded in its practices, the Bank ensures that proposed new business activities are aligned with the Bank s risk appetite policy. During the lifecycle of a product, the results and developments are monitored against the risk appetite in force.
19 Risk Management and Control The safety and security of the online banking systems are becoming more and more important. Activities and necessary trainings in the area of cyber security were performed both at parent bank and banking subsidiaries to improve the current prevention and detection measures, and also to be aligned with the current regulations and industry best practices. Ongoing services availability and continuous operation in the event of a disaster is a priority for the Bank. In this respect, the Bank performed a comprehensive operational business continuity test with relocation of the staff to the alternate site, covering disaster recovery capabilities and resumption of the vital business processes. The test was successful and proved the business continuity and disaster recovery planning of the Bank. Areas of improvement for 2014 The Bank continues to focus on the operational efficiency of its business activities by using its core IT system. Further improvements of risk assessments and control activities to be undertaken by business units, will be implemented in The results of these assessments will be used for further strengthening of the internal control framework and the Bank s risk and control measures. Furthermore, the Bank continues to make all necessary preparations to become compliant with the due diligence rules for new accounts under FATCA which will become effective in These preparations require adjustments to the Bank s core IT system and related procedures. These initiatives will, however, enable us to meet increasing client expectations and to process transactions more efficiently and effectively. Responsibility Statement Credit Europe Bank s internal control framework is based on the framework developed by COSO (Committee of Sponsoring Organizations of the Treadway Commission). Our risk management and control framework is compliant with the basic requirements II.1.4 and II.1.5 of the Dutch Corporate Governance Code. Internal controls ensure that transactions are recorded as necessary for reporting in accordance with International Financial Reporting Standards as adapted by the European Union. The Managing Board has concluded that the risk management and control framework is adequate and effective and provides reasonable assurance that the financial reporting is free of material misstatement. Pursuant to article 5:25c section 2 part c of the Financial Supervision Act, the members of the Managing Board state that, to the best of their knowledge: the financial statements give a true and fair view of the assets, liabilities, financial position and profit or loss of Credit Europe Bank and the companies included in the consolidation; the annual report gives a true and fair view of the state of affairs on the balance sheet date and the course of affairs during the financial year 2013 of Credit Europe Bank and its affiliated entities whose information is included in its financial statements; the annual report describes the material risks which Credit Europe Bank faces. Risk Management and Control 17
20 Outlook Outlook Looking into 2014, there is a broad-based gradual acceleration in global growth in developed markets. Among the developed markets particularly US economy is on a path to better economic outlook with 2.2%-2.5% growth expectations in Improving labor data, stronger consumer confidence, and investment build-up are signaling positive trend for the coming year. FED remains on path to policy normalization leaving investors only with the question of timing. FED tapering started in December 2013 and investors are currently pricing the beginning of rate hikes in around mid In the Euro area, after six quarters of contraction, economies are turning the corner slowly with some positive growth figures. It seems that the inflation outlook will be staying below ECB target during 2014 with continued fear of downside risks. In 2014, ECB will stay dovish where policy options include further rate cuts, longer term financing operations, asset purchases, and stronger forward rate guidance. However, strong US macro-economic environment and rising interest rates can drag the Euro rates to the upside. In the periphery economies, the main concerns are the prolonged low growth & possible deflationary environment which can create unsustainable debt levels for the future. As a linked subject, Asset Quality Review stress tests are going to be crucial in understanding the knock-on impact of the sovereign related problems on the banking industry. The results will be critical to see the recapitalization requirements of EU banks as well as their liquidity needs. Dutch economy is expected to grow again in 2014 around 1%, first annual increase since 2011 but still lagging the euro area aggregate. Stabilization in the housing market and the correction on inflation rates from 3% to 1.5% are positive factors to motivate consumer confidence. On the other hand, ongoing fiscal consolidation, rising unemployment and longstanding key labor and pension market reforms are downside risks which could hinder the economic recovery in In Asia, Japan was the only exceptional market where rates did not increase during the second half of 2013 due to central bank s efforts for stepped up purchase operations. Bank of Japan is most likely to use a similar strategy for 2014 and expand the monetary base to support inflation expectations. Chinese authorities came up with a comprehensive reform plan for the next 5-10 years on various aspects of both political and economic strategies. The priority reform areas have been financial, fiscal, land and resource pricing which will be dealing with overcapacity and imbalances. Going forward, policy actions and implementations will be the main driver of putting economy back to a more sustainable growth path in 2014 and beyond. Chinese inflation seems to continue at manageable levels around 2.7% which will be moving towards the official target of 3.5% for next year. Emerging markets are expected to have a difficult year with slowing growth and increasing financing needs. After a challenging summer, Turkish economy proved more resilient with higher capacity utilization rates and improving sentiment towards the year end is going to be the elections year for both municipality and presidential elections which will be a challenge for the fiscal and monetary policy. Annual inflation figure is expected around 7.3% levels which will continue on a downward trend due to favorable base effect. The headline inflation is expected to converge to 7%-7.5% levels in Turkish economy is still among the most vulnerable with high current account deficit, corporates FX open positions and pressure on the currency. Russian economy is slowing down with weaker consumer credit growth and real income growth. Slowing inflation figures and moderate growth performance provides enough room for monetary policy easing. Meanwhile Russian current account surplus is deteriorating with rising deficit in services and investment income which is expected to continue in medium term. When the monetary easing is coupled with the narrowing current account surplus and rising net capital outflows with FED tapering expectations, there is an increasing depreciation pressure on RUB in After years of austerity measures Romania is trying to balance out its fiscal measures and an upgrade from the credit rating agencies is probable for Cooperating with the EU/IMF/ WB with new agreements, Romania aims exiting from external support. An expected current deficit at the end of 2013 year and mild surpluses in both 2014 and 2015 are broadly in line with the external creditors objectives. Political tensions are on the rise due to presidential elections in late On the growth side, a deceleration to 2.3% is expected in 2014 from 2.6% in 2013 at year end with some upside risks due to election linked increased public spending. Market expects further monetary easing with two more 25bps cuts in the first quarter and an inflation to be 1%-2% in first the half but higher in the second half of 2014 with lower yielding agricultural output. In Ukraine, the street protests demanding closer European integration that started in November 2013 turned violent and continued for several months severely affecting the already
Annual Report 2012 About Credit Europe Bank We offer to our corporate customers a wide range of banking products, including international trade and commodity finance, project finance and working capital
Trade and Commodity Finance Profile 2 Who is Credit Europe Bank? Founded in 1994, Credit Europe Bank NV (CEB NV) has grown into a solid, international financial services group, ranked in the top ten of
Moody s Investors Service Ltd CREDIT OPINION MORTGAGE AND LAND BANK OF LATVIA Summary Rating Rationale In accordance with Moody s rating methodology for government-related issuers (GRIs), we assign A2/Prime-1
Date: 27 August 2015 For information: mr. M.G.F.M.V. Janssen Secretary to the Managing Board T: +31 20 557 52 30 I: www.kasbank.com Growth of 20% in net result, excluding non-recurring items, to EUR 8.3
INTERNATIONAL MONETARY FUND Russian Federation Concluding Statement for the 2012 Article IV Consultation Mission Moscow, June 13, 2012 The Russian economy has recovered from the 2008-09 crisis and is now
JSC BANK FOR FOREIGN TRADE OF VIET NAM Address: 198 Tran Quang Khai St, Ha No Business Registration No. 0100112437 (8 th revision dated 1 st August, 2013) SOCIALIST REPUBLIC OF VIETNAM Independence - Freedom
Mario Draghi: Europe and the euro a family affair Keynote speech by Mr Mario Draghi, President of the European Central Bank, at the conference Europe and the euro a family affair, organised by the Bundesverband
Risk Management Risk Control The ORIX Group allocates management resources by taking into account Group-wide risk preference based on management strategies and the strategy of individual business units.
Introduction to mbank Group The most successful organic growth story in Poland August 2015 mbank Group in a snapshot General description Key financial data (PLN M) Set up in 1986, mbank (originally BRE
Mitsubishi UFJ Financial Group, Inc. Medium-term Business Plan Tokyo, May 15, 2015 --- Mitsubishi UFJ Financial Group, Inc. (MUFG) announced today that it has formulated its medium-term business plan for
List of legislative acts BRRd : d irective 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment
4 October 2011 Bank of America Merrill Lynch Banking & Insurance CEO Conference Bob Diamond Thank you and good morning. It s a pleasure to be here and I d like to thank our hosts for the opportunity to
We endeavor to maximize returns. Ayşegül Özel Yapı Kredi Bankası Private Banking Portfolio Manager Erdoğan Yücel Yapı Kredi Emeklilik Sales Manager FInance 4 th largest private bank (asset size) Leader
OUR HISTORY We were established in 1951 as an agricultural cooperative bank. In the 1950s, as a specialized subsidiary bank of the PBOC, we assumed the functions of organizing and promoting rural financial
PRESS RELEASE GENERAL SHAREHOLDERS MEETING Ana Botín: Santander is well positioned to face the challenges. We will lead change Banco Santander has room for growth within our customer base and in our ten
PUBLIC BANK BERHAD ECONOMICS DIVISION MENARA PUBLIC BANK 146 JALAN AMPANG 50450 KUALA LUMPUR TEL : 03 2176 6000/666 FAX : 03 2163 9929 Public Bank Economic Review is published bi monthly by Economics Division,
THE COUNTRY STRATEGY OF THE INTERNATIONAL INVESTMENT BANK for the Russian Federation (Main provisions) This country strategy for 2013-2015 has been drawn up as an elaboration of the Development Strategy
2015 Article IV Consultation with Sweden Concluding Statement of the IMF Mission Sweden s economy is performing well. But housing prices and household debt are elevated and rising and unemployment is high
FOURTH SUPPLEMENT DATED 9 MAY 2014 UNDER THE CERTIFICATES PROGRAMME ING Bank N.V. (Incorporated in The Netherlands with its statutory seat in Amsterdam) Certificates Programme This Supplement (the Supplement
The assessment of Getin Noble Bank S.A. situation including the assessment of the internal control system and the risk management system essential for the Company made by the Supervisory Board of Getin
China Merchants Bank Co., Ltd. 2013 Annual Results Announcement Forward-Looking Statement Disclaimer This presentation and subsequent discussions may contain forward-looking statements that involve risks
AXA INVESTMENT MANAGERS Entering a new phase of growth Investor Day November 20, 2014 Andrea ROSSI CEO AXA Investment Managers Member of the AXA Group Executive Committee Certain statements contained herein
Bank of America Merrill Lynch Banking and Insurance CEO Conference London, 29 September 2009 Good morning. I d like to thank Bank of America Merrill Lynch for letting us speak this morning. Before I talk
www.cudgc.sk.ca MISSION We instill public confidence in Saskatchewan credit unions by guaranteeing deposits. As the primary prudential and solvency regulator, we promote responsible governance by credit
Case Id: 6793f8c7-c6ef-45dd-8987-665fe5775337 Date: 13/05/2015 23:30:38 Public consultation on Building a Capital Markets Union Fields marked with * are mandatory. Introduction The purpose of the Green
Bangkok Bank Public Company Limited 044 RISK FACTORS AND RISK MANAGEMENT Bangkok Bank recognizes that effective risk management is fundamental to good banking practice. Accordingly, the Bank has established
For Immediate Release CHINA LIFE INSURANCE COMPANY LIMITED ANNOUNCES 2014 ANNUAL RESULTS (H SHARE) HONG KONG, 24 March 2015 China Life Insurance Company Limited (SSE: 601628, SEHK: 2628, NYSE: LFC) today
Table of contents Strategic Planning and Organizational Structure Standard 1. General provisions Grounds for application of the Standard Provisions of the Standard 2. Contents of the Standard 3. Corporate
MANAGEMENT DISCUSSION & ANALYSIS FOR THE QUARTER ENDING 31 MARCH 2016 Abu Dhabi Islamic Bank net profit for Q1 2016 increases 6.9% to AED 482.0 million Group Financial Highlights Income Statement: Q1 2016
Full Year 2011 Results Participation in PSI+ 1 leads to additional impairment of Euro 3.2 billion Core Tier I at Euro 1.3 billion 2 post PSI+ related impairment Balance sheet structure absorbed adverse
FITCH DOWNGRADES RABOBANK TO 'AA-'; OUTLOOK NEGATIVE Fitch Ratings-Paris/London-21 November 2013: Fitch Ratings has downgraded Rabobank Group's (Rabobank) Long-term Issuer Default Rating (IDR) to 'AA-'
5. Risk assessment This chapter assesses the risks that were identified in the first chapter and elaborated in the earlier chapters of this report. 5.1. Qualitative risk assessment Qualitative risk assessment
[Unofficial Translation] June 4, 2014 Koichiro Watanabe President and Representative Director The Dai-ichi Life Insurance Company, Limited Code: 8750 (TSE First section) Agreement to Acquire 100% Ownership
NATIONAL BANK OF GREECE NBG may file a registration statement (including a prospectus) with the SEC for the rights offering referred to in this report. Before you invest, you should read the prospectus
Pohjola Group 31 March 2008 Group business structure Strategy Interim report 31 March 2008 Pohjola Group Banking and Investment Services Non-life Insurance Acquisition synergies Prospects for 2008 Dividend
1 TIMOTHY LOH Financial Services & Law Review Setting Up In Hong Kong: A Guide for the Finance Industry Hong Kong is increasingly seen as a necessary operations center for the financial industry. It is
Financial Risk Management Courses The training was great, the materials were informative and the instructor was very knowledgeable. The course covered real scenarios that were well put together and delivered.
Bank Austria IR Release Günther Stromenger +43 (0) 50505 57232 Vienna, 12 February 2015 Preliminary results 1 for the 2014 financial year: Bank Austria posts net profit of about EUR 1.4 billion Sound operating
BANKING AND INSURANCE As the leading banking and insurance group in Turkey, we are the key thanks to our customer-oriented approach, strong financial structure, and millions of active customers. As Yapı
Basel II, Pillar 3 Disclosure for Sun Life Financial Trust Inc. Introduction Basel II is an international framework on capital that applies to deposit taking institutions in many countries, including Canada.
Saxo Capital Markets CY Limited DISCLOSURES IN ACCORDANCE WITH THE REGULATION FOR THE CAPITAL REQUIREMENTS OF INVESTMENT FIRMS FOR THE YEAR ENDED 31 DECEMBER 2014 MAY 2015 CONTENTS 1. GENERAL INFORMATION
Lecture 4: The Aftermath of the Crisis 2 The Fed s Efforts to Restore Financial Stability A financial panic in fall 2008 threatened the stability of the global financial system. In its lender-of-last-resort
Qatar - Qatar Investment Authority Implementing Santiago Principles - Introductory Remarks Qatar Investment Authority (QIA) started its operations in early 2006, after an Emiri Decision, clearly stating
10 June 2010 Goldman Sachs European Financials Conference 1. Good morning. 2. I d like to start by thanking our hosts, Goldman Sachs, for inviting me to speak today. 3. I will focus on three topics: Our
09.02.2016 An outlook on the Spanish economy Official Monetary and Financial Institutions Forum (OMFIF), London Luis M. Linde Governor I would like to thank OMFIF and Mr. David Marsh for the invitation
Management s Discussion and Analysis Personal and Commercial Client Group Canada Robert W. Pearce President and Chief Executive Officer, Personal and Commercial Client Group Canada Group Description Personal
FITCH UPGRADES ABN AMRO TO 'A+'; OUTLOOK STABLE Fitch Ratings-London-14 April 2016: Fitch Ratings has upgraded ABN AMRO N.V.'s Long-Term Issuer Default Rating (IDR) to 'A+' from 'A', and affirmed the bank's
74 KOÇ HOLDİNG ANNUAL REPORT 2014 if not us, then WHO WE WORK DAY AND NIGHT TO PROVIDE THE BEST PRODUCTS AND SERVICES TO OUR CUSTOMERS AND EXPAND OUR SERVICE NETWORK IN THE FINANCE SECTOR KOÇ HOLDİNG ANNUAL
EIOPA Risk Dashboard March 2015 Q4 2014 data PUBLIC EIOPA-FS-15/209 Frankfurt, 20th March 2015 Summary The release of this EIOPA Risk Dashboard is based on 2014- Q4 indicators submitted on a best effort
How to Choose a Life Insurance Company *YP½PPMRK 4VSQMWIW A 2014 GUIDE THROUGH RELEVANT INDUSTRY INFORMATION Because the most important people in your life will car, or computer, most people are completely
May 2015 A study into global investment trends and saver intentions in 2015 Global highlights Schroders at a glance Schroders at a glance At Schroders, asset management is our only business and our goals
DIRECTION EXPANDING HORIZONS 58 HANG SENG BANK ANNUAL REPORT 2011 MANAGEMENT DISCUSSION AND ANALYSIS BUSINESS ON THE MAINLAND Our mainland China business recorded encouraging growth in 2011 as we successfully
Forecasting Chinese Economy for the Years 2013-2014 Xuesong Li Professor of Economics Deputy Director of Institute of Quantitative & Technical Economics Chinese Academy of Social Sciences Email: email@example.com
Manuel Sánchez Santander Global Fixed Income Summit London, England, September 20, 2012 Contents 1 Structural features 2 Recent developments and outlook 3 Inflation and monetary policy 4 Economic challenges
NEWS RELEASE FOR FURTHER INFORMATION: WEBSITE: www.bnccorp.com TIMOTHY J. FRANZ, CEO TELEPHONE: (612) 305-2213 DANIEL COLLINS, CFO TELEPHONE: (612) 305-2210 BNCCORP, INC. REPORTS THIRD QUARTER NET INCOME
NEED OF FINANCIAL INSTITUTIONS SUPERVISION THROUGH AN SINGLE FRAMEWORK OF MACRO-PRUDENTIAL SUPERVISION MEDAR LUCIAN-ION, Professor PHD, CHIRTOC IRINA-ELENA, Assistant professor PHD, CONSTANTIN BRANCUSI
FOR IMMEDIATE RELEASE Standard Chartered Singapore posts 17% rise in operating profit Strong fundamentals and resilient platform continue to drive growth 2 August 2012, Singapore Standard Chartered Bank
BRSA Bank Only Macro Outlook Q1 GDP growth at 3.2%, mostly backed by net exports. Budget deficit was TRY 6.7 billion in H1 12, one third of Latest GDP figure is supportive of the soft landing the government
StrategY 2014-2016 Strategy for 2014-2016 laid down by the Executive Board on 4 December 2013 NORGES BANK TOWARDS 2016 plays an important role in society and manages substantial assets on behalf of the
MS&AD Insurance Group Holdings 2 nd Information Meeting of FY 2015 (Held on November 25, 2015) Q&A Session Summery Below is a summery of Q&A session from the Information Meeting held on November 25, 2015
Pentti Hakkarainen: Bank of Finland and its activities and the Finnish economic outlook Speech by Mr Pentti Hakkarainen, Deputy Governor of the Bank of Finland, at the Honorary Consulars meeting, Helsinki,
Strategic and Operational Overview May 11, 2016 Safe Harbor Statement This presentation contains several forward-looking statements. Forward-looking statements are those that use words such as believe,
Review of TD s businesses REVIEW OF TD S BUSINESSES PROFILES OF TD S BUSINESSES TODAY IN THIS REVIEW, WE HAVE ARRANGED OUR BUSINESSES AROUND OUR TWO DISTINCT CUSTOMER BASES RETAIL AND WHOLESALE TO SHOW
STANDARDS OF SOUND BUSINESS PRACTICES COUNTRY AND TRANSFER RISK 2005 The. All rights reserved 1 STANDARDS OF BEST PRACTICE ON COUNTRY AND TRANSFER RISK A. PURPOSE/OBJECTIVE This document sets out the minimum
Understanding Fixed Income 2014 AMP Capital Investors Limited ABN 59 001 777 591 AFSL 232497 Understanding Fixed Income About fixed income at AMP Capital Our global presence helps us deliver outstanding
Risks and uncertainties Our risk management approach We have a well-established risk management methodology which we use throughout the business to allow us to identify and manage the principal risks that
We only advise on our own life assurance, pensions and unit trusts The following is the text of an announcement made today by HSBC Bank Malta p.l.c., a 70.03 per cent indirectly held subsidiary of HSBC
Governance Guideline SEPTEMBER 2013 BC CREDIT UNIONS www.fic.gov.bc.ca INTRODUCTION The Financial Institutions Commission 1 (FICOM) holds the Board of Directors 2 (board) accountable for the stewardship
SECOND MEETING OF TURKISH-RUSSIAN WORKING GROUP ON BANKING AND FINANCIAL COOPERATION September 2011 TURKISH BANKING SECTOR WELL POSITIONED AGAINST GLOBAL HEADWINDS Volatility in Europe and US Global Imbalances
Postbank Group Interim Management Statement as of September 30, 2013 Preliminary Remarks Macroeconomic Development Business Performance Preliminary Remarks This document is an interim management statement
Regulatory Practice Letter November 2014 RPL 14-20 BCBS Issues Final Net Stable Funding Ratio Standard Executive Summary The Basel Committee on Banking Supervision ( BCBS or Basel Committee ) issued its
The Goldman Sachs Group, Inc. and Goldman Sachs Bank USA 2015 Annual Dodd-Frank Act Stress Test Disclosure March 2015 2015 Annual Dodd-Frank Act Stress Test Disclosure for The Goldman Sachs Group, Inc.
Statement of Principles Bank Registration and Supervision Prudential Supervision Department Document Issued: 2 TABLE OF CONTENTS Subject Page A. INTRODUCTION... 3 B. PURPOSES OF BANK REGISTRATION AND SUPERVISION...
No. 1 2015 FOREIGN EXCHANGE ASSET MANAGEMENT REPORT Moscow Bank of Russia Foreign Exchange Asset Management Report No. 1 (33) 2015 Reference to the Central Bank of the Russian Federation is mandatory in
EIOPA Risk Dashboard March 2013 EIOPAFS13022 Systemic risks and vulnerabilities On the basis of observed market conditions, data gathered from undertakings, and expert judgment, EIOPA assesses the main
RISK MANAGEMENt AND INtERNAL CONtROL Overview 02-09 Internal control the Board meets regularly throughout the year and has adopted a schedule of matters which are required to be brought to it for decision.
Strategy / Investment Financial Repression: A Driving Force for Mergers and Acquisitions? International capital markets have seen a growing number of corporate mergers and acquisitions (M&A) over the past
Montepaschi Vita Forum - 14 October 2005 Coming Regulatory Developments and Future Shape of the Insurance Industry Scenarios and Strategies from an International Player Viewpoint Gilles Benoist, CEO, CNP
Systems of the Resona Group RESONA HOLDINGS, INC. Systems of the Resona Group 24 Systems Basic Approach to The trends toward financial liberalization, globalization, and securitization, along with progress
Deutsche Bank UK Banks Conference 07 April 2011 Chris Lucas, Group Finance Director Slide: Name Slide Thanks very much, it s a great pleasure to be here today and I d like to thank our hosts Deutsche Bank
News Release January 28, 2016 Performance Review: Quarter ended December 31, 20% year-on-year growth in total domestic advances; 24% year-on-year growth in retail advances 18% year-on-year growth in current
Abstract Loan Capital Formation Strategy of Companies I.D. Anikina* Defines of principles, goals, objectives, stages and factors of loan capital companies. Analyzed the main methods of forming loan capital