Methodological sheet. Client loans

Methodological sheet Client loans I. Definition and content Newly drawn loans: the amounts actually drawn from client loan accounts in the given period, i.e. economic turnovers on the debit side of these accounts. Newly drawn loans do not express the increase in loans in the given period (the difference between the final balance and the initial balance), i.e. they are not adjusted for loan repayments and writeoffs. However, they do represent drawings arising not only from previously negotiated transactions, but also from previously concluded loan agreements. The overall amount of these loans is also affected by drawings on funds with short maturities (even of just a few days), which means the same funds (money) can be provided several times in the given period and are also then recorded in this manner in the statistics. The data do not include funds drawn from overdraft accounts and current accounts. Loan balances: the closing balances of client loan accounts, i.e. the initial balances plus the drawing of new loans minus the instalments of any loans granted earlier. They include non-categorized, standard and classified loans and other receivables from the clients and loans extended to government institutions (for budgetary and non - budgetary funds). II. Sources and methodology of ascertainment A) Newly drawn loans DATA FILE V (CNB) 9-12: Survey of the drawing of loans, broken down by currency and interest rate Characterization: A survey of the drawing of overall (non-categorized, standard and classified) loans in the respective month which the bank provided to its clients (including general government), broken down by the individual currency, the agreed-upon interest rate, the agreed-upon maturity of the credit and by the economic subsector of the client (debtor). B) Loan balances DATA FILES VST (CNB) 1-12 Monthly statement of loans to and receivables from clients Characterization: A survey of the balances and structure of the loans granted to clients and the bank s receivables from clients (including the debit balances in client current accounts), broken down according to the principles of the categorization of receivables (into non-categorized, standard, watch, sub-standard, doubtful and loss ones), by contractual maturity period (into demand, short-term, medium-term and long-term ones), by currency (CZK and foreign currencies in total), by appurtenance of the clients - debtors to the individual economic subsectors, by classification of the clients - debtors into the individual industries according to OKEČ (Industry Classification of the Economic Activities) and by purpose of the loan (in the case of classified loans by the original purpose). The values of the loans (both newly-drawn and continuously drawn ones) - are not compensated for adjustments, - are reported with monthly periodicity, - are submitted on behalf of banks and branches of foreign banks on the territory of the Czech Republic, - the loan balances are given inclusive of the CNB, the newly-drawn loans exclusive of the CNB 1

III. Break-down A) of newly-drawn loans 1. By economic sector Classification of the Economic Sectors and Subsectors according to the ESA95 (European System of Accounts) Methodology and the Measure of the Czech Statistical Office of 20 October 1997 to Introduce a Code-list of the Institutional Sectors and Subsectors. Residents A resident in the CR is an economic entity or, as the case may be, an institutional unit which has the focus of its economic interest, i.e. which has its registered office and operates (manufactures, provides services, is engaged in financing, insuring, redistribution of funds or acts as a consumer) on the economic territory of the Czech Republic. This unit may, yet need not have the nationality of the given country, may, yet need not be, a legal entity and may, yet need not be, present on the economic territory of the country at the time when it carries out the respective transaction. Foreign legal entities and natural persons, except for branches of foreign banks and foreign owners of buildings and land on the territory of the CR are considered as residents, provided they have economically operated on the territory of the CR at least one year or longer. As residents are also considered the following: - an entity which operates outside the CR, but according to an international treaty is located on a territory, over which the CR has an exclusive right (especially representations and other government bodies of the CR); - citizens who for a short period ( for less than 1 year) have travelled abroad to work there or for other business or personal reasons (cross-border or seasonal workers, businessmen, sportsmen, artists, and like); students are always considered as residents, even though they study abroad for a longer period than one year; - an entity which is the owner of buildings or land on the territory of the CR (such an entity is a resident when carrying out transactions with such land or buildings; - a branch of a foreign bank operating in the CR. In the case that an institutional unit with its registered office in the CR has branches (affiliates, agencies, representative offices and similar units) which operate in some other country, then each of these entities (under the conditions mentioned above) is a resident in the country in which it operates. This at the same time means that all units under foreign control in the CR or, as the case may be, foreign entities which have their registered offices in the CR and have operated here at least for one year or longer (except for branches of foreign banks and foreign owners of buildings and land on the territory of the CR) are considered as residents, including the entities who do not have the legal status of independence, yet meet the criteria for an institutional unit. Non-financial companies Sector S.11 contains corporations and quasi corporations (or, as the case may be, companies, quasi companies, institutions and like), which are market manufacturers and the basic activity of which rests in the manufacture of goods and in the provision of non-financial services (i.e. services outside the banking and insurance industries). 2

Their distributive and financial transactions are separate from the transactions of their owners. Sector S. 11 includes the following: a) state enterprises, business companies, cooperatives, b) allowance organizations and companies of general, or public utility (Czech Television, Czech Broadcasting Corporation) which are market manufacturers, c) market regulation authorities, the only, or the prevailing, activity of which is the purchase, holding and sale of agricultural and other food products (the Market Regulation Fund or, as the case may be, its successor); it also includes the Support and Guarantee Fund for Agriculture and Forestry (a joint-stock company), d) associations of businessmen (interest associations of legal entities and natural persons incorporated in the Commercial Register), which are not-for-profit institutions, but are market producers and provide services to non-financial companies. Including the institutions which are financed by voluntary contributions of quasi-fiscal character. These contributions are considered as purchases of market services. e) holding companies controlling a group of non-financial companies (provided that their predominating activity - expressed as the value added - is the manufacture of goods and provision of non-financial services), f) private companies in the holding of natural persons incorporated (at their own request) in the Commercial Register - private quasi companies (national ones), g) foreign persons - residents. A foreign person means a natural person having its domicile and a legal entity having its registered office outside the territory of the CR, which has a company or its organizational unit located on the territory of the CR - see the Commercial Code, 3, Part I, Introductory Provision and 21, Part I, Chapter II. The sector of non-financial companies is divided into three sub-sectors: - public non-financial companies (S. 11001) - private non-financial companies (national ones) (S.11002) - non-financial companies under foreign control (S.11003). 1100100 Non-financial companies - public Subsector S.11001 includes all non-financial corporations and quasi corporations which are controlled by government institutions. These are in particular state enterprises and enterprises with predominating state participation (business companies) and allowance organizations, companies of general utility and companies having a standing under public law which are market manufacturers. 1100200 Non-financial enterprises - private, national Subsector S. 11002 includes all non-financial corporations and quasi corporations which are not controlled by government institutions or non-resident units, i.e. all corporations in private ownership with predominating participation of national units. These are business companies, companies of general utility or not-for-profit institutions providing services to non-financial companies (associations of businessmen and like). 1100300 Non-financial companies private, under foreign control Subsector S. 11003, non-financial companies under foreign control, contains all corporations and quasi corporations which are controlled by non-resident institutional units. The companies involved are foreign persons (legal entities and natural persons) incorporated in the Commercial Register of the CR, for example subsidiaries of nonresident companies, foreign companies with predominating participation of nonresident units. They are also not incorporated agencies, for example foreign cultural or information centres or broadcasting, press and television agencies controlled by a non-resident unit (i.e. even those controlled by a foreign government). 3

Financial institutions (excluding the CNB and commercial banks) The sector of financial institutions S. 12 includes all financial corporations and quasi corporations (except for the CNB and commercial banks) which are involved predominantly in financial mediation (financial mediators) or in ancillary financial activities (ancillary financial institutions); also insuring activities are considered as financial mediation. Financial mediation is an activity in which an institutional unit acquires liabilities for its own account with the aim to create financial assets; it concentrates resources (funds) from other units (accepts deposits or issues bonds or other securities), acquires assets which it provides to those who have a financial need (grants loans, purchases bonds and other securities or receivables from other units). It carries out these activities for its own account, i.e. it bears the risks connected with these activities). In the client area, the sector of financial institutions is divided into four basic subsectors: - Other monetary financial institutions (S.122, or as the case may be, 12200) - excluding banks - Other financial mediators, except for insurance companies and pension funds (S.124 or, as the case may be,12300) - Ancillary financial institutions (S.124 or, as the case may be, 12300) - Insurance companies and pension funds (S.125 or, as the case may be, 12500) Each subsector is further divided into: - public financial institutions - private financial institutions (national ones) - financial institutions under foreign control. The criteria for this division are the same as those for the division of non-financial companies. 1220000 Other monetary financial institutions - excluding banks 1221000 Other monetary financial institutions - public Other monetary financial institutions other than banks, which are controlled by government institutions. 1222200 Savings and credit cooperatives - private, national Other monetary financial institutions which operate under Act No. 87/1995 Coll. on Consumer and Credit Cooperatives and Certain Related Measures, as amended, which are controlled predominantly by national (resident) units. This subsector does not include savings and credit cooperatives to which a permit was granted for the establishment and activities pursuant to 2a of the Act and which are in process of bankruptcy or liquidation. 1222300 Savings and credit cooperatives private, under foreign control Other monetary financial institutions which operate under Act No. 87/1995 Coll. on Consumer and Credit Cooperatives and Certain Related Measures, as amended, which are controlled by predominantly non-resident units. This subsector does not include savings and credit cooperations to which a permit was granted for the establishment and activities pursuant to 2a of the Act and which are in process of bankruptcy or liquidation. 1223200 Money market funds private, national Other monetary financial institutions which operate under Act No. 248/1992 Coll. on Investment Companies and Investment Funds, as amended. Participation certificates 4

of these funds may be considered as near substitutes for deposits. The funds invest in the instruments of the money market and are predominantly under direct control of national (resident) units. For the purposes of monetary and banking statistics the following funds are considered as money market funds controlled by national units: - IKS peněžní trh (IKS Money market), open-end unit fund of IKS KB, a.s. (IČO /Company ID No./: PF 90014269) - ČSOB český peněžní trh (ČSOB Czech Money Market), O.B. INVEST, investiční společnost, a.s. - OPF - open-end unit fund (IČO: PF 60165316) - První investiční společnost, a.s. (First Investment Company, a.s.), IPB s open-end unit fund of the money market (IČO: PF 90028499) - Spořitelní investiční společnost, a.s. (Savings Investment Company, a.s.), SPOROINVEST - open-end unit fund (IČO: PF 90011367) - Union peněžní trh (Union Money market), Investiční společnost Union, a.s., openend unit fund (IČO: PF 49593838) - Živnobanka - Sporokonto, Investiční společnost ŽB-TRUST, a.s., open-end unit fund (IČO: PF 90020072) - Otevřený podílový fond AKRO OBLIGACE (Open-end Unit Fund AKRO BONDS), AKRO investiční společnost, a.s. (IČO: PF 90023578) - Růstový otevřený podílový fond peněžního trhu (Growth Open-end Unit Fund of the Money Market ), CITICORP investiční spolčnost, a.s., (IČO: PF 90020587) - Spořitelní investiční společnost a.s. (Savings Investment Company, a.s.), MERKUR - open-end unit fund (IČO: PF 90033425) 1223300 Money market funds under foreign control Other monetary financial institutions - residents which operate under Act No. 248/1992 Coll., on Investment Companies and Investment Funds, as amended. Participation certificates of these funds can be considered as near substitutes for deposits. The funds invest in the instruments of the money market and are under direct control of non-resident units. 12244200 Other monetary financial institutions private, national Other monetary financial institutions, other than banks, savings and credit cooperatives and money market funds, which are controlled by national (resident) units. 1224300 Other monetary financial institutions under foreign control Other monetary financial institutions, other than banks, savings and credit cooperatives and money market funds, which are controlled by non-resident units. 123000 Other financial mediators (excluding insurance companies and pension funds) 5

Subsector S. 123 Other financial mediators (excluding insurance companies and pension funds) includes all financial corporations and quasi corporations which are predominantly involved in financial mediation. These mediators create liabilities other than deposits, or instruments very similar to deposits; they accept maturing funds from other institutional units (for example in the form of uninterrupted issues of bonds and other comparable securities, and like). They are primarily financial institutions which are involved in long-term financing; this distinguishes them from the previous monetary financial institutions, while what distinguishes them from insurance companies is the non-existence of liabilities in the form of technical insurance reserves. Subsector S. 123 comprises especially: a) investment funds and companies, including unit funds, which are involved in collective investment, for example in negotiable securities, Restituční fond (Restitution Fund), Nadační fond (Endowment Fund), b) units which are involved in financial leasing, c) units which are involved in factoring and forfaiting (purchasing of short-term and long-term receivables, taking over of the risks connected with such purchases for their own account), d) units which are involved in instalment sale, e) traders in securities or financial derivatives (trading on their own accounts), f) specialized financial institutions (for example development capital companies or companies financing export/import), g) holding companies which only control and manage a group of subsidiaries involved predominantly in financial mediation and/or ancillary financial activities but which are not financial institutions in themselves. Subsector S.123 does not include not-for-profit institutions which provide services to Other financial mediators ; such units are included in Subsector S.124. 1230100 Other financial mediators - public Subsector S. 12301 includes other financial mediators which are controlled by government institutions. 1230200 Other financial mediators - private, national Subsector S. 12302 includes other financial mediators which are controlled by national (resident) units other than government institutions. 1230300 Other financial mediators - private, under foreign control Subsector S. 12303 includes other financial mediators which are controlled by nonresident institutional units. 1231200 Investment funds - private, national Other financial mediators which operate under Act No. 248/1992 Coll., on Investment Companies and Investment Funds, as amended and are under control of national (non-resident) units. 1231300 Investment funds under foreign control. Other financial mediators which operate under Act No. 248/1992 Coll., on Investment Companies and Investment Funds, as amended and are predominantly under control of non-resident units. 1232200 Investment companies - private, national Other financial mediators which operate under Act No. 248/1992 Coll., on Investment Companies and Investment Funds, as amended and are predominantly under control 6

of national (resident) units. Also included are unit funds established by these companies, except for money market funds (which are contained in Subsector S.122) 1232300 Investment companies under foreign control Other financial mediators which operate under Act No. 248/1992 Coll., on Investment Companies and Investment Funds, as amended and are predominantly under control of non-resident units. Also included are unit funds established by these companies, except for money market funds (which are contained in Subsector S.122) 1233200 Other financial mediators - private, national, excluding investment companies and funds Other financial mediators, other than banks, savings and credit cooperatives and money market funds which are controlled by national (resident) units. 1233300 Other financial mediators under foreign control, excluding investment companies and funds Other financial mediators, other than banks, savings and credit cooperatives and money market funds which are controlled by non-resident units. 1240000 Ancillary financial institutions Subsector S. 124 contains all corporations and quasi corporations which are involved in activities closely related to financial mediation; they, however, do not carry out financial mediation by themselves. They are in particular: a) insurance brokers, claims adjusters, insurance and pension consultants, etc., b) brokers in loans, securities, investment consultants, etc., c) institutions providing for the exchange of securities and insurance - stock exchanges, d) institutions which organize derivative and hedging instruments - such as swaps, options and futures (without issuing them), e) not-for-profit institutions (for example associations) which provide services to financial institutions, but are not in themselves involved in financial mediation or ancillary financial activities, f) also included are companies, the banking licence of which became invalid (i.e. former banks, the licence of which was revoked due to bankruptcy or liquidation proceedings, and Banka Bohemia, a.s. in liquidation), unless they have changed the subject of their business and are included in some other Subsector; also included are savings and credit cooperatives with valid permit for the establishment and activities pursuant to 2a of Act No. 87/1995 Coll., as amended, which are in bankrupcy or in liquidation. Sector S.124 also includes institutions of the state supervision over financial mediation and financial markets, provided they are legally independent (institutional) units. Subsector S.124 does not include holding companies which control and manage units involved in ancillary financial activities, but are not ancillary financial institutions in themselves; these are included in Subsector S.123. 1240100 Ancillary financial institutions - public Subsector S. 12401 includes ancillary financial institutions which are controlled by government institutions. 1240200 Ancillary financial institutions - private, national Subsector S. 12402 includes ancillary financial institutions which are controlled by national (resident) units. 7

1240300 Ancillary financial institutions - private, under foreign control Subsector S. 12403 includes ancillary financial institutions which are controlled by non-resident units. 1250000 Insurance companies and pension funds Subsector S. 125, Insurance companies and pension funds, contains all financial corporations and quasi corporations which are predominantly involved in financial mediation in the form of taking-over of risks. These are: a) insurance companies which are involved in life and non-life insurance and reinsurance institutions, b) pension funds (autonomous) which insure a group of risks related to social risks and the needs of the persons insured; non-autonomous pension funds are part of the institutional unit which established them. 1250100 Insurance companies and pension funds - public Subsector S. 12501 includes insurance companies and pension funds which are controlled by government institutions. 1250200 Insurance companies and pension funds - private, national Subsector S. 12502 includes insurance companies and pension funds which are controlled by national (resident) units. 1250300 Insurance companies and pension funds - private, under foreign control Subsector S. 12503 includes insurance companies and pension funds which are controlled by non-resident units. Government institutions Sector S.13, Government institutions, includes all institutional units which are nonmarket manufacturers and the production of which is designed for individual and collective consumption, and which are financed by mandatory payments from units of other sectors. Included are units which are predominantly involved in the redistribution of national income and wealth and not-for-profit institutions controlled and financed by the Government. The sector of government institutions does not include units of market manufacturers classified in the sectors of non-financial companies and financial institutions. 1311600 Central government institutions, excluding public funds All central institutional units, the powers of which usually cover the entire economic territory of the CR, excluding state and public funds. 13111700 State funds Institutional units established and controlled by the central government institutions (or, as the case may be, constitutional institutions) as state funds with specificated mission. 1311800 Public funds Institutional units established and controlled by the central government institutions (or, as the case may be, constitutional institutions) as public funds (other than state funds and social security funds) with a stipulated mission and functions. 1311200 National government institutions 8

Subsector S.1312 includes separate national (regional) institutional units which perform some of the functions of the Government on a level which is lower than that of the central government institutions, yet higher than that of local government institutions. The subsector does not include institutional units administering social security funds (health insurance companies and like). 1312600 National government institutions, excluding public funds National (regional) institutional units performing some of the functions of the Government on a stipulated territory in the CR, except for the public funds established by them. 1312700 Public funds Public funds established and controlled by national (regional) government institutional units and operating on a stipulated territory in the CR. 1313000 Local government institutions Subsector S.1313 includes institutional units, the powers of which usually cover a certain delimited territory in the CR. Included are: a) municipal and district authorities (or, as the case may be, authorities administering larger territorial wholes), b) allowance organizations linked to local budgets only through a contribution, as a rule with local competence, which are non-market manufacturers, c) small allowance organizations, which are non-market manufacturers (i.e. if less than a half of their expenses is covered from their sales). Institutional units administering social security funds (health insurance companies and like) are not included. 1313600 Local government institutions, excluding public funds Local government institutions with delimited territorial powers in the CR, as a rule except for the public funds established by them. 1313700 Public funds Public funds established and controlled by local government institutions and operating on a delimited territory in the CR. 1314000 Social security funds Subsector S.1314 comprises all central, national and local institutional units which provide social benefits and which meet both the following criteria: a) they collect contributions from certain groups of the population which are obliged under the law or under the regulations to take part in social and health insurance programmes and to pay contributions; b) government institutions are responsible for the management of these units - as regards assessment or approval of social contributions and benefits (and this applies irrespective of their role as bodies of the state supervision or as employers) - and for the control of these units. There is usually no direct link between the amount of the contributions paid and the risk to which the particular individual is exposed. This sector contains health insurance companies. 1314600 Social security funds, excluding health insurance companies 9

Separate institutional units under the control of government institutions which collect contributions and provide social benefits other than those stipulated by the regulations on health insurance. 1314700 Health insurance companies Institutional units operating pursuant to specific acts on health insurance companies in the area of general health insurance. Households Sector S.14 includes: a) Individuals or groups of individuals as end consumers. A household as a consumer can be defined as a small group of persons who live together, use together certain types of goods and services (especially foodstuffs and housing) and share some or all of their incomes. It is possible to add to this concept also the criterion of the existence of a family or emotional relationships, which connect such group. b) Individuals or groups of individuals as businessmen; these are natural persons conducting business under the Trades Licensing Act or under other legal regulations and are not incorporated in the Commercial Register (sole traders, farmers, private physicians, auditors, tax consultants, lawyers, artists and like). They are market manufacturers, they manufacture goods and provide financial or non-financial services and their firms are not included in the sectors of non-financial companies or financial institutions. These natural persons self-employed persons - conduct business and work either with or without paid employees, i.e. for their own accounts and derive from this activity so-called mixed incomes. c) Individuals or groups of individuals, whose main function is consumption, who, however, manufacture goods (for example vegetables, fruit, and like) and nonfinancial services for their own end use. d) Persons permanently living in institutions, who have little or no rights as regards the economic or other decision-taking, i.e. persons permanently living in old people s homes, patients lying in hospitals for long periods of time, members of religious orders living in monasteries and persons serving a long time sentence As far as these persons are concerned, it is presumed that they together form one household, i.e. one institutional unit. The households sector is broken down by the predominating source of income into the following subsectors: - employers and other self-employed persons (S. 141 + S.142 or, as the case may be, 14100 + 14200); - recipients of income from ownership (S. 1411 or, as the case may be, S.14410); - recipients of retirement pension benefits (S. 1442 or, as the case may be, 14420); - recipients of other transfer incomes (S. 1442 or, as the case may be, 14420) - other households (S. 145 or, as the case may be, 14500). The criterion for the break-down of households into subsectors is the largest source of income from the total of all types of income received by the household (which may be employer s income or remuneration to employees or retirement pension benefits and like). Households - trades Employers The employers subsector (S.141) includes a group of households for which mixed income is the largest source of the total income in the household, even in the case that it does not constitute more than one half of the incomes of such household. These persons gain the mixed income, in which profit and remuneration for work are combined, from their business activity. 10

These persons conduct business and work with paid employees. An employer menans a self-employed person - a natural person not incorporated in the Commercial Register, conducting business under the Trades Licensing Act or other legal regulations and working with paid employees. The basic income of such person is mixed income. Other self-employed persons The subsector of self-employed persons (S. 142) includes a group of households for which mixed income is the largest source of the total incomes in the household, even in the case that it does not constitute more than one half of the incomes of such household. The self-employed persons, i.e. the natural persons not incorporated in the Commercial Register, gain mixed income in which profit from their business activities and remuneration for work are combined. This group includes other self-employed persons - natural persons not incorporated in the Commercial Register, conducting business under the Trades Licensing Act or other legal regulations and working without paid employees, i.e. for their own accounts. This subsector also includes recipients of income from leasing of flats, non-residential premises, buildings in the case that this income is the largest source of the total incomes of the household, even if it does not constitute more than one half of the incomes of such household. Households - population Employees Subsector S.143 includes a group of households for which income derived in the form of remuneration to employees is the largest source of incomes of the household as a whole. Recipients of income from ownership Subsector S.1441 includes a group of households for which income derived from ownership is the largest source of incomes of the household as a whole. These households are designated as rentiers households. Income from ownership arises from interest, dividends, shares of profit and income from rented land (rent from farm land and forest land, from rented fishponds and like); the subsector does not include rent from buildings and structures located on this land, nor rent from individually rented flats or non-residential premises. Recipients of pension benefits Subsector S.1442 includes a group of households for which pension benefits (retirement pension benefits, disability pensions, orphan s pensions) are the largest source of incomes of the household as a whole. Recipients of other transfer incomes Subsector S.1443 contains a group of households for which income gained from other transfers is the largest source of incomes of the household as a whole. Incomes from other transfers are in particular various types of existing social benefits (but with the exception of pension benefits), alimony, scholarships, pocket money and similar financial sources. In this subsector, therefore, belong such persons (households) which when assessed according to the largest source of income were not included in any of the previous groups, i.e. in the group of employers, employees or recipients of pension benefits, or in the group of other households. Other households Subsector S.145 comprises persons permanently living in certain institutions who have little or no right as regards the economic and other decision-taking. These are 11

persons living in children s homes, in old people s homes, members of religious orders living in monasteries and persons serving a long time sentence. Within the framework of households, such persons are included in a separate subsector for the reason that the criterion of the largest source of the incomes does not enable to include them in any of the previous subsectors. Conventionally it is assumed that these persons together form one household, i.e. one institutional unit. Not-for-profit institutions serving households Sector S.15 (NISD) comprises not-for-profit institutions which are independent entities (i.e. institutional units) and provide non-market goods and services to households - are non-market manufacturers. They are established, financed and controlled in particular by households or by not-for-profit institutions themselves. They provide goods and services in particular to their members, as a rule free of charge or at economically insignificant prices. Their basic sources derive above all from voluntary contributions (in cash or in kind) of households as consumers, from payments provided by government institutions and from income from ownership. Supplementary sources may derive from occasional sales of goods and services. They include in particular: a) political parties and political movements (including their organizational components), b) trade unions, c) church and religious societies (including those which are financed, but not controlled by the Government), church schools and church health or charity establishments, d) various types of charity (humanitarian) organizations which are financed on the basis of voluntary transfers (in cash or in kind) from other institutional units, e) consumers associations, f) professional (estate) organizations related to the performance of a profession, Sector S.15 also includes are further institutional units, provided they meet the criteria for a non-market manufacturer and serve households or other not-for-profit institutions which are included in this sector, specifically: g) social, cultural establishments, recreational and amateur sports clubs and educational societies, interest associations (for example union of allotment gardeners, of anglers - as individuals), h) private schools, pre-school establishments, i) generally beneficial societies, j) endowments. Sector 15 does not include: - non-market not-for-profit institutions controlled and in particular financed by government institutions which are included in the sector of government institutions (which are in particular all budgetary organizations, municipal and district authorities, associations of municipalities and allowance organizations, which are non-market manufacturers, and further health insurance companies - see S.13), - market not-for-profit institutions, which are included in the sector of non-financial companies; these are for example various associations of enterprises, unions of cooperatives, some generally beneficial societies or societies having standing under public law, or as the case may be, endowments and like- see S.11. - market not-for-profit institutions which are included in the sector of financial institutions (for example some allowance organizations, or perhaps an association of units which are involved predominantly in financial leasing, or an association of insurance companies, and like - see S.12). Other institutions 12

All resident institutional units with respect to which the reporting entity is unable to identify their classification in some of the sectors S.11, S.12, S.13, S.14 or S.15. All resident institutional units with respect to which the reporting entity is unable to carry out their sector classification for reasons other than not assignment of a company ID No. (IČO), including legal entities to which a company ID No. has been assigned, but which are not yet mentioned in the Index of Economic Entities (RES). Legal entities and other persons - residents (except for natural persons) to which with regard to their sphere of activities or nature a company ID No. was not assigned (including organizational components of foreign entities) and the reporting entity is unable to carry out their sector classification. Non-residents A non-resident is an economic entity or, as the case may be, an institutional unit which has its registered office and operates abroad, i.e. on the economic territory of another country, in the case of institutional units of other countries as a rule for one year or longer. The following entities are also considered as non-residents: --- a detached part of a national parent institutional unit which has its registered office and operates as a rule for a period longer than one year outside the economic territory of the CR, for example branches of other financial and insurance companies, representations, representative offices, agencies or detached parts of manufacturing enterprises (which have registered offices and operate for example on the territory of the Slovak Republic) and a branch of a Czech bank abroad (even in the case that it operates there for a period shorter than one year). --- a unit which, even though has its registered office and operates on the territory of the CR for a period longer than one year, does not have a sovereignty status (which was established and operates under international treaties); these are as a rule representations of foreign states and international institutions, the members of which come from various countries (for example the World Trade Federation, the UNO Information Centre and others); --- a unit which has its registered office and operates in the CR, but owns land or a building on the territory of another country; i.e. it operates there in the function of the owner of buildings and land (only when implementing transactions with these assets). 2001000 Non-financial companies This sector includes non-resident institutional units analogous to those included in sector 1100000 for residents. Financial institutions excluding banks, insurance companies and pension funds (non-residents) 2002221 Other monetary - financial institutions - public 1222100 for residents. 2002222 Savings and credit cooperatives - private, national - includes non-resident institutional units analogous to those included in Subsector 1222200 for residents. 2002223 Savings and credit cooperatives - private, under foreign control 1222300 for residents. 2002232 Money market funds - private, national Includes non-resident institutional units analogous to those included in subsector 1223200 for residents, registered and operating predominantly in the member states of the European Union. A list of money market funds - non-residents forms part of the list of monetary financial institutions which is issued by ECB (List of Monetary Financial Institutions and Institutions Subject to Minimum Reserves). 13

2002233 Money market funds under foreign control Includes non-resident institutional units analogous to those mentioned in subsector 1223300 for residents, registered and operating predominantly in the member states of the European Union. A list of money market funds - non-residents forms part of the list of monetary financial institutions which is issued by ECB (List of Monetary Financial Institutions and Institutions Subject to Minimum Reserves). 2002242 Other monetary financial institutions - private, national - includes non-resident institutional units analogous to those included in Subsector 1224200 for residents. 2002243 Other monetary financial institutions under foreign control 1224300 for residents. 2002300 Other financial mediators (excluding insurance companies and pension funds) 1230000 for residents. 2002400 Ancillary financial institutions 124002300 for residents. 2002500 Insurance companies and pension funds 12520000 for residents. 2003000 Government institutions 1300000 for residents. 2003110 Central government institutions 1311000 for residents. 2003120 National government institutions Includes non-resident institutional units similar to those included in Subsector 1312000 for residents. 2003130 Local government institutions 1313000 for residents. 2003140 Social security funds 1314000 for residents. 2004000 Households 1400000 for residents. Households (trades) 2004100 Employers Includes non-resident institutional units analogous to those 1410000 for residents. included in Subsector 14

2004200 Other self-employed persons 1420000 for residents. Households (population) 2004300 Employees 1430000 for residents. 2004300 Recipients of income from ownership 1441000 for residents. 2004420 Recipients of pension benefits 1442000 for residents. 2004430 Recipients of other transfer incomes 1443000 for residents. 2004500 Other households 1450000 for residents. 2005000 Not-for-profit institutions serving households 1500000 for residents. 2009000 Other institutions Includes non-resident institutional units similar to those included in Subsector 1900 and international institutions. 2. by time - short-term loans with maturities under 1 year inclusive, - medium-term loans with maturities under 5 years inclusive, - long-term loans with maturities over 5 years. B) of existing loans. 1. by economic sectors ( ad A) 1.) 2. by time ( ad A) 2.) 3. according to the Industry Classification of the Economic Activities (OKEČ) 15

The subject of the OKEČ classification is the sorting of all working activities performed both by collective and individual economic entities. The classification used is as follows: - agriculture, hunting and fishing, - forestry and logging, - mining and quarrying, - manufacturing industry in total, textile, clothing, and leather industries, wood-working, paper and printing industries, production of coke, refining of crude oil, production of nuclear fuels, manufacture of chemical products, manufacture of rubber and plastics products, manufacture of other non-metallic mineral products, manufacture of metals and metallic products, manufacture of machines and equipment, electrical and electronic industries, manufacture of means of transport, other industries, - production and distribution of electric energy, gas and water, - construction, building industry, - trade, sales, maintenance, repairs, - catering and accommodation, - transport and storage, - communications, - banking - insurance industry, - other commercial services, - other activities. The industry classification was elaborated on the basis of the European NACE Standard and links up with the 3rd revision of ISIC (UNO s Classification of Activities) 4. By type (by purpose) Overdraft facility and debit balances on current accounts An overdraft facility is a short-term bank credit which is provided into an overdraft account (a current account) in such a way that the account balance may pass into a debit. The Client can draw the credit quite automatically by paying from his account even in the case when he has not sufficient funds in it. The maximum level of an overdraft facility is given by the agreed-upon credit frame which determines the maximum permissible debit in the overdraft account. The Bank as a rule permits even a certain short-term exceeding of this framework, which may involve a subsequent (sanction) interest expense for the Client. And advantage of these credits for the Client is that he has a possibility to draw credits readily according to his momentary need (and on principle pays interest from the current position only). For circulating currency, export, import, TOZ This group consists of loans for circulating currency, loans for seasonal costs, preexport and export loans, non-investment import loans and other operational loans Investment loans These are loans from which the Client finances the purchase of tangible and intangible fixed assets (machinery, equipment, buildings) and the investment costs of their acquisition. The loan is agreed upon as a long-term one, medium term one, or short-term one. 16

Loans from construction savings Standard and bridging loans from construction saving extended to construction savings participants pursuant to the Construction Savings Act. Mortgage loans (with a state contribution and without a state contribution) These are long-term loans provided for investments in real estate or its construction or an acquisition and their repayment is secured by a lien on such or some other real estate. Banks acquire the sources for providing mortgage loans in particular by issues of mortgage bonds. The state usually supports mortgage loans in the form of contributions to natural persons which reduce the interest rate on the loan. Loans for transitory lack of funds This is a loan provided by the bank to the clients who sometimes unexpectedly get into payment difficulties which may be removed in the course a very short period. If the client can prove the short-term character of these difficulties and the efficiency of the measures by which his solvency will be restored, the Bank may exceptionally help him to bridge his difficulties by loan assistance. The difficulties involved may be the following: - transitory difficulties of initial character, for example a delay in invoicing,fluctuations in production, excessive purchase of inventories, - payment difficulties carried over from non-paying customers. Consumer loans Consumer loans are loans granted to natural person for personal purposes and receivables from payment cards (for example credit cards). Loans drawn for business purposes or mortgage loans are not consumer loans. This category includes all loans provided to private individuals and households which serve to finance purchases of articles of consumption or, as the case may be, to cover other consumption spending. Loans for trade receivables Specific-purpose business operational loans granted to clients for trade receivables. Loans for the purchase of securities (except for the Large Privatization) Specific-purpose investment loans granted to clients for e.g. purchases of shares, mutual fund units, debt securities for trading and participations in other institutions (except for loans for purchases of state-owned participations). Loans for the Small Privatization Specific-purpose investment loans granted to clients for Small Privatization after 1989 Loans for the Large Privatization Specific-purpose investment loans granted to clients for Large Privatization after 1989 Subordinated loans Subordinated loans granted to clients, that comply with the characteristics of subordinated asset as set forth in the charts of accounts and accounting procedures for banks. Loans from repo transactions Financial loans and other receivables from clients arising from repo operations. Other general - purpose business loans Other financial general-purpose loans granted to clients with relation to their business activities, including receivables from executed guarantees, receivables from financial 17

leasing, receivables from payment system and receivables from purchases of bills of exchange, which may be used by the holder for central bank refinancing. Subordinted deposits (deposited) Loans (deposits placed) for which it was contractually agreed that in case of liquidation, bankruptcy and compulsory settlement they will be paid out only after all other creditor's receivables have been fully met. Receviables s on unlicensed banks Starting from 1 January 1997 are included receivables from banks, the banking licence of which was revoked. IV. Method of calculation V. Change in methodology - From 1 January 1997 a uniform procedure in the accounting for operations towards banks the licence of which to act as a bank has been revoked. (The banks, the licence of which has been revoked by the CNB by agreement with the Ministry of Finance of the CR ceased to be banks as at the date of revocation of the licence, and therefore, in the accounting of banks their accounts were transferred to Account Class 2 - Client accounts. Financial Newsletter No. 12/1996) - New break-down of the sectors according to ESA 95 since 1 January 2001 - Splitting off of non-categorized consumer loans and recording them in SYU 213 and accounting for adjustments to these loans in SYU 219 since 1 January 2001 - Loan amount also include loans extended to government institutions (for budgetary and non - budgetary funds) since 1 January 2002 - Since 1 January 2002 the upper limit of medium-term maturity was fixed to 5 years inc. (formerly 4 years inc.) and long-term maturity was fixed to over 5 years (formerly over 4 years) VI. Reporting entities The reporting entities are banks and branches of foreign banks operating in the CR. The data with respect to the CNB are not included in the volumes of newly-drawn loans (only in the balances of the existing loans). A list of banks in dependence on time is enclosed. The time series are not retroactively adjusted for the extinct banks. 18