Statement by the President of the Management Board of the NLB

Dear business partners, shareholders and employees of the NLB Group,

The NLB performed exceedingly well in 2007. We even surpassed the expectations set by the most important and ambitious objectives in our business plan. The growth in business volume and profit before tax was more than €143 million at the NLB level, and €183 million at the Group level. Despite difficult conditions, the NLB is in excellent shape. We proved that we could find the right path, even in tough times.

We successfully achieved our key strategic objectives. Solid growth and consolidation of the NLB Group continued; we penetrated new markets, especially in Kosovo; began the substantive and formal procedures for bank consolidation in Serbia and Bosnia and Herzegovina; and expect to complete the critically important merger of the three banks with NLB on May 1, 2008. We provide our clients and other business partners in 16 countries with a comprehensive and diversified portfolio of banking and financial services. The operations of the Group, functioning as an integrated conglomerate of banks, financial institutions and insurance companies, reflect the specific needs of these markets. We use the knowledge and experiences we acquire in these markets to further expansion in the markets of the EU, SE Europe, the Russian Federation, as well as various neighboring countries. We are proud that the NLB Group is not just operating “nominally” and in a formal capacity, but is judged in several of these markets to be among the leading “players”.

These excellent financial results of 2007 are even more outstanding if we consider that most of our efforts, as well as our capital investments, focused on consolidating and harmonizing operations. That is why, despite the current troubles in international markets, NLB’s plans for the coming year are ambitious: we look forward to further development of the NLB Group, business growth and strong financial performance.

Strong, solid, uniform and highly integrated organization is the key precondition for planning, efficient management and the future development of the entire NLB Group. Our operations in banking and bank related activities (leasing, factoring and forfaiting), remain the traditional core of our business, and together with the increasing importance of insurance and asset management are essential. Of course, we will not rest and be satisfied with our past success but will redouble our efforts to boost consolidation, optimize management and improve administration to attain across-the-board business excellence. Please allow me, on behalf of the whole Management Board, to thank all of you for your hard work and the positive attitude that made the year 2007 the most successful in the history of the NLB Group. Together we can continue these trends and remarkable progress, even when faced with the mounting challenges that confront international markets. In addition to our intimate familiarity and understanding of local markets, the principal advantages of the NLB Group, as it confronts stiff competition and the increasingly troubled global financial market, is our broad understanding and knowledge of how to suitably respond to the threats and problems posed by current conditions in global banking.

We enjoy confidence and respect as a stable banking company, and in recent years have partnered with many esteemed and well-known financial institutions. One of our most important priorities in 2008 is to preserve and enhance our reputation for stability and sustained growth and prosperity.

 

Marjan Kramar,
President of the Management Board and CEO

NLB Group
Annual Report 2007