Profile of NLB Group and NLB
NLB Group and NLB financial highlights
Supervisory Board Members
Statement of the President and Chief Executive Officer
Financial Review of NLB Group and NLB in 2002
Volume of operations of NLB Group and NLB
Key trends in NLB Group and NLB profit performance
Key financial data according to International Financial Reporting Standards (IFRS)
NLB Group and NLB risk management
Human Resources Management
Audited Consolidated Financial Statements for NLB Group under Slovenian Accounting Standards
Financial data and figures of NLB according to Bank of Slovenia Methodology
Audited Financial Statements for NLB d.d. under Slovenian Accounting Standards
Audited Consolidated Financial Statements for the NLB Group according to International Financial Reporting Standards
Audited Financial Statements for the NLB d.d. according to International Financial Reporting Standards
VOLUME OF OPERATIONS OF NLB GROUP AND NLB
The Group's total assets as at 31 December 2002 were 1,981.0 billion tolars, which represented a 249.1 billion tolars or 14.4 per cent increase on 2001.
Table 5: Main asset items in the Group's and NLB's balance sheet
The NLB Parent Bank remains the dominant part of the Group with a share in total assets of 76 per cent. The shares of other major affiliates are shown in the following chart:
As at 31 December 2002, NLB total assets amounted to 1,619.2 billion tolars up 17.6 per cent on the previous year. The key factor of increase in the Bank's total assets was the increase in customer loans and securities, while liability growth was influenced by the growth in customer deposits.
NLB and other affiliated banks within the Group experienced
similar levels of growth. NLB Group's balance sheet in 2002
comprises of 45.6 per cent in loans and 36.6 per cent investments
Loans to non-bank customers
The customer lending activity of NLB Group totalling 902.4 billion tolars showed a 10 percent increase in the year. The parent bank accounts for 78 per cent of the loan portfolio. Affiliated banks continue to contribute to growth where LHB Bank has the biggest volume of customer loans after the Bank.
Table 6: The Bank's Balance sheet structure by geographic areas in 2002
The volume of customer loans of Commercebank and
Tutunska banka grew by more than 50 per cent. NLB loans
grew by 10.8 per cent with all business client segments
The volume of public sector lending is the smallest part of the customer loan portfolio however it recorded the highest growth rate of 18.1 per cent. We however see a shift of the public sector from borrowing based on conventional banking products to sources of finance through issuing securities. NLB's balance sheet reflects this with the purchase of securities issued mainly by the Ministry of Finance and the Bank of Slovenia.
The currency structure of loans at the end of 2002 shows a growing trend in demand for foreign currency loans with more favourable financing costs.
Investments in securities and other investments
The structure of the balance sheet by asset type changed as the share of investments in securities has increased whereas the percentage of loans and equity investments has decreased.
The Group's investment in securities rose by more than 30
per cent and at the end of the last year and totalled 724.2
billion tolars. Investments in securities of NLB showed a significant
increase to 601.2 billion tolars, a 37.7 percentage
increase. The increase mainly reflects the increase in investments
in Bank of Slovenia's treasury bills.
Sources of funds
In 2002, the NLB Group had a successful performance in financing its investment activity through good growth in deposits, issuing debt securities and maintaining capital.
Customer deposits and borrowings making up 67 per cent of
funding remain the primary source of funds. With 1,319.8
billion tolars at year end this is a 12.8 per cent increase primarily
due to two reasons: a wide range of deposit products
and the impact from the sale the Lek pharmaceutical company
to Novartis that provided additional savings to the market.
By the year-end, the Group's customer deposits increased by
13.5 per cent and totalled 1,260.3 billion tolars. This included:
The currency structure of deposits shows that the share of foreign currency deposits is decreasing, with the higher Slovene tolar interest rate environment triggering the demand for tolar deposits.
Other sources of funds
The highest increase among other sources of funds was debt
securities, which showed a twofold increase and totalled
76.8 billion tolars. Their share in the structure of sources of
funds increased from 1.3 per cent to 3.9 per cent. The Bank's
debt securities increased by 54.3 billion tolars and more than
tripled on the year-end 2001 and now make up 4.7 per cent
of funding. Following the sale of Lek to Novartis, NLB issued
three series of tolar-denominated bonds and 15-month certificate
In the structure of the NLB sources of financing, the increase in securities and borrowings was offset by a decline in deposits by banks and capital.
Table 7: The Group's balance sheet maturity structure
The balance sheet maturity structure reflects efficient liquidity management with adaquate investment financing, based primarily on short - term sources of funds.
Off-balance sheet transactions
The NLB Group's volume of risk off-balance sheet transactions
rose by more than twofold as a result of an increase in
all major off-balance items. The biggest increase was in
transactions in derivative financial instruments.
Capital and capital adequacy
The Group's total capital reached 107,3 billion tolars at 2002
year-end, up by 3.1 per cent, mainly due to growth in revenue
reserves from profit. The supervisory board confirmed
the appropriation of net profit to reserves in the amount of
2.65 billion tolars. Dividend pay-out is described on page 20.
Table 8: Capital adequacy ratio of the NLB Group and NLB according to the Bank of Slovenia's methodology and BIS guidelines
As at 31 December 2002, the Bank's risk capital totalled
136.4 billion tolars, representing an almost 13 per cent
increase on 2001. This had the effect of increasing the capital
adequacy ratio and demonstrates effective capital management,
ensuring more than adequate provision with
regard to the risk level in the Bank's operations considering
credit, currency and market risks.
At the year-end the Bank's nominal capital amounted to 15,364,030 thousand tolars, which represents 7,682,015 ordinary shares with a nominal price of 2,000 tolars. They were held by 959 shareholders of which 92.2 per cent was held by the 10 largest shareholders.
Table 9: The largest NLB Shareholders as at 31 December 2002