Throughout the year the Group has relentlessly pursued a policy of improving service levels and product offering to its retail customers across its branch network.

A personal banking approach

The Group's network of 242 branches throughout Slovenia (including Banka Celje) remains one of its key competitive advantages.

Nevertheless, a reorganisation was implemented in 2001 aimed at increasing efficiency and quality of service and securing cost reductions. The first results have been rationalisations in certain high branch density regions and the opening of new branches, where the branch network was weak. The branch network offers a range of banking and other financial products to different types of customers - individual, corporate and sole traders, with special emphasis on a personal approach and the provision of advice where required. The branch network also provides access to certain investment banking services such as buying or selling of securities.

During the year we created specific products and services for different segments of our market. At the top end we established the 'High Net Worth Individuals' segment with specially developed services tailored to their specific requirements. For the young people's segment we established 'Toli', 'First' and 'Student' accounts. We also designed special automatic teller machines (ATMs) called 'Tolimat' for our youngest customers, because we want to introduce them to banking in an educational manner. We have in-store-banking outlets in the largest shopping centres in Ljubljana, Maribor, Ptuj, Nova Gorica and Jesenice, where we actively market modern distribution channels and offer non-cash transaction and advisory services.

Constant core business growth

At the close of 2001 the Group had more than 630,000 current accounts, 8 per cent more than in 2000. Favourable growth of funds in national and foreign currency continued. We registered a larger inflow of new funds than the previous year, due to the exchange of national currencies for the euro. For the third time the Group successfully participated in the Government's National Saving Scheme where it achieved a 52 per cent market share in concluded contracts.

We promoted a number of different kinds of loans - personal, long-term home, mortgage and bridge. As a new product, we offered qualifying customers unsecured personal loans. The majority of investments for individuals are financed through long-term loans, both personal and mortgage/home loans.

We launched new cards, such as International BA/Maestro and new partnership cards - Renault Karanta Initiale, Kompas Eurocard. The number of new card issues during the year slowed to just over one million. BA/Maestro debit cards accounted for 78 per cent, with Karanta cards at 11 per cent, Eurocard at 10 per cent and Visa with 1 per cent. The Group has a 53 per cent market share in all banking debit cards. The value of card transactions grew during the year, the biggest growth (40 per cent) was recorded for BA/Maestro, which replaced banking cheques. The Group increased the number of Point Of Sale terminals by 23 per cent and at the end of 2001 had over 5,400 installations.

Modern distribution channels

The number of users, private and corporate, as well as the number and value of transactions through modern distribution channels, is growing year after year. The Group offers its customers a range of options:

• Proklik electronic banking is for corporate clients and sole traders who were also offered Proklik Plus, which provides internet access. Both allow domestic and foreign payments. Users of Proklik and Proklik Plus made over 3.3 million transactions.
• Klik, our internet banking service, is designed for individual users and recorded over one million transactions.
• Teledom, our telephone banking service, is designed for individual users and sole traders and has been operating for several years, providing automatic telephone response, mobile banking with SMS messages and WAP.
• The Group's 487 ATMs account for nearly half the ATMs in the Slovenian network system. ATMs support cash and non-cash transactions and other inquiries. The majority of ATMs allow cash withdrawals using foreign credit cards. In 2001 we installed our first 'drive-through' ATM in Slovenia.

The Group achieved a 52 per cent market share in electronic banking for private customers and 47 per cent share in electronic banking for corporate customers and sole traders. The telephone banking market share was 77 per cent and the use of Group's ATMs represents a 54 per cent share. The Group expects its market shares for ATMs and electronic banking to grow further.

Customer satisfaction

Research among private customers was carried out for the third successive year and for the first time was extended to corporate clients. The results show general customer satisfaction but also reveal opportunities for improving the quality of our customer relationship, range of services and products on offer and our pricing policy. The results show that both private and corporate segments are mainly satisfied with the personal approach of the Group's employees, including their discretion, reliability and accuracy.