Annual Report 2011...2018/08/10 · Company Percentage of participation Raiffeisenbank (Bulgaria)...

B u l g a r i a

Annual Report 2011

Financial Highlights

Monetary values in BGN Thousand 2011 Change 2010 2009

Income StatementNet interest income after provisioning for possibleloan losses

Net commission income 57,318 8% 52,896 57,533

147,767 5% 141,072 141,662

Trading profit (loss) 24,504 6% 23,130 23,020

Administrative expenses (185,183) 1% (183,095) (192,321)

Profit before tax 55,659 16% 48,175 55,254

Profit after tax 50,800 16% 43,949 50,995

Balance Sheet

Loans and advances to banks 454,285 (50%) 907,439 815,102

Loans and advances to customers 4,693,952 8% 4,342,671 4,529,761

Deposits from banks 160,899 (66%) 471,144 45,709

Deposits from customers 4,361,724 6% 4,125,204 4,323,653

Equity 947,435 2% 925,973 907,450

Balance-sheet total 6,448,269 (2%) 6,562,537 6,642,200

Regulatory own funds

Total own funds 856,550 (3%) 884,906 919,739

Own funds requirement/According to Local Regulations 585,530 4% 563,123 631,468

Excess cover 271,020 (16%) 321,783 288,271

Core capital ratio (Tier 1) 15.98% (5%) 16.74% 15.03%

Own funds ratio 17.55% (7%) 18.86% 17.48%

Performance

Return on equity (ROE) before tax 6.2% 13% 5.5% 6.6%

Cost/income ratio 49.7% 4% 47.6% 52.9%

Return on assets (ROA) before tax 0.9% 15% 0.8% 0.8%

Provisions for possible loan losses/risk-weighted assets/ According to Local Regulations 363,677 23% 296,315 172,505

Resources

Number of staff on balance-sheet date 3,474 0% 3,487 3,478

Banking outlets on balance-sheet date 185 (2%) 188 197

Official Exchange Rate (BNB)

1 EUR 1.95583BGN

1.95583BGN

1.95583BGN

Source: Audited Unconsolidated Financial Statements of Raiffeisenbank (Bulgaria) EAD as of 31 December 2011

Financial Highlights

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General Information

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General Information

Establishment of the BankRaiffeisenbank (Bulgaria) EAD is the first greenfield foreign investment in the Bulgarian banking sector made in 1994.

Main ShareholderRaiffeisenbank (Bulgaria) EAD is a 100 per cent subsidiary of Raiffeisen Bank International AG, Vienna.

Banking LicenseRaiffeisenbank (Bulgaria) EAD has a full banking license for domestic and overseas banking and financial operations.

ProfileRaiffeisenbank (Bulgaria) EAD is a universal commercial bank, providing services to large corporate customers, small and medium-sized enterprises, retail clients, financial institutions and institutional clients. The bank also performs bonds and securities trading on the local and the international money and capital markets, asset management, etc.

The rating of Raiffeisenbank (Bulgaria) EAD:• Moody’s Bank Financial Strength D+/Negative

In foreign currency:

• Moody’s Short-Term Foreign Currency Deposit P-3

• Moody’s Long-Term Foreign Currency Deposit Baa3

• Moody’s Outlook Stable

In local currency:

• Moody’s Short-Term Local Currency Deposit P-3

• Moody’s Long-Term Local Currency Deposit Baa3

• Moody’s Outlook Stable

Correspondent RelationsRaiffeisenbank (Bulgaria) EAD has established correspondent banking relations with over 1000 banks world-wide and maintains accounts in major currencies with first-class foreign banks.

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Branch NetworkAs of 31 December 2011 the bank operates through 185 offices, 44 outlets are located in Sofia. Raiffeisenbank (Bulgaria) EAD has a mobile network of 130 consultants, operating in 11 towns in the country.

Raiffeisen Group in Bulgaria includes the following companies:

Company Percentage of participation

Raiffeisenbank (Bulgaria) EAD 100% ownership of Raiffeisen Bank International AG,Vienna, Austria

Raiffeisenbank Services EAD 100% ownership of Raiffeisenbank (Bulgaria) EAD

Raiffeisenbank Leasing Bulgaria OOD24.5% ownership of Raiffeisenbank (Bulgaria) EAD; 75.5% ownership of Raiffeisenbank Leasing InternationalGmbH, Austria

Raiffeisenbank Auto Leasing Bulgaria EOOD

Raiffeisenbank Asset Management (Bulgaria) EAD 100% ownership of Raiffeisenbank (Bulgaria) EAD

100% ownership of Raiffeisenbank Leasing Bulgaria OOD

100% ownership of Raiffeisenbank (Bulgaria) EADRaiffeisenbank Insurance Broker EOOD

Raiffeisenbank Real Estate EOOD 100% ownership of Raiffeisenbank (Bulgaria) EAD

Raiffeisen Factoring EOOD 100% ownership of Raiffeisenbank (Bulgaria) EAD

General Information

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Market Shares

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Market Shares

11,906,37715.50%

8,563,28111.62%

8,559,03011.14%

31.12.201131.12.201031.12.2011 31.12.2010

UnicreditBulbank

DSK Bank CorporateCommercial

Bank

Raiffeisenbank(Bulgaria)

Eurobank EFGUnitedBulgarian

Bank

PiraeusBank

Bulgaria

CentralCooperative

Bank

FirstInvestment

Bank

SocieteGenerale

Expressbank

In BGN Thousand

The percentages indicate the market share of the respective banks.Source: Bulgarian National Bank

11,275,64015.29%

7,460,91710.12%

6,715,4648.74% 6,448,320

8.40%

6,562,1358.90% 6,101,669

7.94%6,309,255

8.56%

4,043,0605.26%

3,288,6534.28%

4,077,0935.53%

3,003,3543.91%

4,943,9736.71%

5,998,4837.81%

2,699,4273.66%

2,922,0763.96%

3,209,7474.18%

2,285,0833.10%

Total Assets

Total Deposits

Market shares of the 10 biggest Bulgarian banks

31.12.201131.12.201031.12.2011 31.12.2010

1,283,9682.74%

1,393,0872.64%

6,539,29813.93%

5,994,02212.77%

6,441,46612.20%

7,288,42013.80%

UnicreditBulbank


Bank


Eurobank EFG AllianzBank

Bulgaria

Central Cooperative

Bank

SocieteGenerale

Expressbank

In BGN Thousand

UnitedBulgarian

Bank

FirstInvestment

Bank


5,286,89110.01%

4,205,0208.96%

4,717,7488.93%

4,355,1998.25%

4,400,7049.38%

4,116,1168.77%

4,641,5119.89%

4,310,5758.16%

3,377,3446.40%

2,260,4834.82% 1,924,786

4.10%

2,576,8304.88%

2,045,9943.87%

1,697,4493.62%

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Market Shares

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31.12.201131.12.201031.12.2011 31.12.2010

8,480,32215.13% 7,682,866

13.71%

6,248,98411.60%

5,057,8699.02%

4,639,0348.61%

4,351,9078.08%

4,399,5147.85% 4,272,405

7.62%

3,479,1706.46%

2,872,6925.13%

3,164,0945.88%

1,712,0133.18%

2,684,8184.79% 2,649,224

4.73%

2,454,9794.56%

1,847,6743.43%

1,642,3532.93%

7,543,64214.01%

8,054,33714.96%

UnicreditBulbank

DSK Bank Raiffeisenbank(Bulgaria)

Eurobank EFG PiraeusBank

Bulgaria

Alpha Bank S.A.Sofia

Branch

SocieteGenerale

Expressbank

CorporateCommercial

Bank

In BGN Thousand

UnitedBulgarian

Bank

FirstInvestment

Bank


5,417,1219.67%

Total Loans

31.12.201131.12.201031.12.2011 31.12.2010

158,74421.77%

232,04133.60%

30,000

0

60,000

90,000

120,000

210,000

180,000

150,000

85,31812.35%

130,57917.91%

60,9518.83%

74,36710.20%

30,0644.12%

47,2626.84%

44,2146.06%

51,0367.39%

44,0536.04%

52,9337.66%

21,2372.91%

30,3374.39%

73,64710.10%

30,8384.23%

36,5035.29%

15,0172.17%

34,9424.79%

UnicreditBulbank


Bank


EurobankEFG

Bulgaria

PiraeusBank

Bulgaria

CitiBank N.A.

- Sofia Branch

SocieteGenerale

Expressbank

In BGN Thousand

UnitedBulgarian

Bank

FirstInvestment

Bank


13,9042.01%

Net Profit

9

Contents

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Contents

9

Statement by the Chairman of the Management Board 10

Vision and Mission 11

Statement by the Chairman of the Supervisory Board 12

Management Report 14Bulgarian Economy in 2011 14Key Figures 17Operations 19Human Resources 20

Segment Reports 21Corporate Banking 21Retail Banking 22Treasury and Investment Banking 24Financial Institutions 26

Independent Auditors’ Report 27Notes to the Financial Statements 34

Awards 90

Corporate Social Responsibility 92

The Bank’s Management 94

Raiffeisen Bank International at a Glance 95

Raiffeisen Leasing Bulgaria OOD 97

Raiffeisen Insurance Broker EOOD 98

Raiffeisen Asset Management (Bulgaria) EAD 99

Raiffeisen Factoring EOOD 102

Raiffeisen Real Estate EOOD 103

Raiffeisen Glossary 104

Addresses 106

1010

Statement by the Chairman of the Management Board

Statement by the Chairman of the Management Board

Dear Ladies and Gentlemen,

In 2011, Raiffeisenbank (Bulgaria) improved its results despite the tough economic situation caused by the financial crisis. Profit after tax reached BGN 50.8 million, compared to BGN 43.9 million as at 2010-end. The bank’s net allocations to provisions for impairment losses amounted to BGN 131.9 million, the total amount of provisioning reaching BGN 363.7 million at year-end. Total assets amounted to BGN 6.45 billion, the loan portfolio increased by 9 per cent to BGN 5.06 billion, and the deposit base stood at to BGN 4.36 billion.

In 2011 we again focused our efforts on the quality of service, efficiency and the offering of state of the art products and services. Our customer base grew by nearly 40,000 clients, which is another proof of our successful business model.

At the end of 2011 the bank's total capital adequacy ratio (CAR) stood at 17.6 per cent, significantly above the required minimum of 12 per cent established by the Bulgarian National Bank and significantly over the European levels. Raiffeisenbank reported a growth of 8.74 per cent in income from transaction services compared to the previous year, while also the share of electronic transactions continued to grow reaching 70 per cent of all transactions processed through the year. Our customers were facilitated by the financing we negotiated with the European Bank for Reconstruction and Development, the Council of Europe Development Bank, the European Investment Fund, Kreditanstalt fuer Wiederaufbau (KfW) and the European Fund for Southeast Europe.

Momtchil AndreevChairman of the Management Board

Momtchil AndreevChairman of the Management Board and Executive Director

At year-end Raiffeisenbank carried out the third campaign for its donation initiative ”Choose to Help”, whose success reinforced the bank’s position as a socially responsible company. The initiative, raising funds for sustainable projects in the spheres of healthcare, social services, culture and education, and environmental protection, was joined by almost 2,900 employees of the Raiffeisen Group in Bulgaria, by Raiffeisenbank and by external donors, whose total donations exceeded BGN 387,000.

In 2011, the companies of the Raiffeisen Group in Bulgaria again ranked among the leaders in their respective markets with the good results they reported.

On behalf of the Management Board, I would like to thank our customers and business partners for their trust in us. I also thank the employees of Raiffeisenbank and its subsidiaries for their work and their contribution to our successful development.

Statement by theChairman of the MB

Corporate SocialResponsibility

Vision andMission

Statement by theChairman of the SB

ManagementReport

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Auditors'Report

Awardswww.rbb.bg

11

Vision and Mission

11

Vision and Mission

Raiffeisenbank (Bulgaria) EAD is one of the leading universal banks in the country, offering bank services in all customer segments – corporate and investment banking, small and middle sized enterprises and retail banking.

• We seek long-term customer relationships.

• We provide contemporary financial services to our customers meeting the highest professional standards and effectively satisfying the customers’ needs. We seek to be seen as a friendly and constructive partner for our customers and we are pro-active and quick in delivering our services.

• As a member of the RZB Group, we cooperate closely with Raiffeisen Zentralbank, Raiffeisen Bank International and its Network banks. We empower our employees to be entrepreneurial, to show initiative and we foster their development.

• We conduct our business with integrity and are committed to create a positive and stimulating working atmosphere. We want to attract and keep the best people whom we offer first class training and help to develop long term careers within our institution. We encourage initiative and reward concrete performance and success.

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AddressesRBI www.rbb.bg

Statement by the Chairman of the Suervisory Board

12

Herbert StepicChairman of the Management Board of Raiffeisen Bank International AG and Chairman of Supervisory Board of

Raiffeisenbank (Bulgaria) EAD

Statement by the Chairmanof the Supervisory Board

Ladies and Gentlemen,

2011 was once again a fairly eventful year. The developments in Europe, and particularly in the peripheral states of the Eurozone, left their mark on the group headed by Raiffeisen Bank International AG (RBI), the parent company of Raiffeisenbank (Bulgaria) EAD. While our exposure to these states was traditionally low and we were not directly affected, we too were unable to escape the effects of the market environment following the sovereign debt crisis.

RBI and banks in general are facing a lot of new rules. From our point of view, however, they are introduced at an unfortunate time and in too much haste. The regulations published by the European Banking Authority (EBA) at the end of October which call for a core tier 1 capital ratio of 9 per cent by the end of June 2012 put pressure on many banks in Europe. However, we – to be more exact, the RZB Group – are well-equipped to handle this. We have put together a comprehensive bundle of measures, consisting of numerous individual measures. We are also in the fortunate position of making profits which are strengthening our equity. As a result, we can meet the new requirements from our own resources.

By meeting the EBA ratio, RBI is also reaching the Basel III ratio of 7 per cent, which the Austrian regulators have set as mandatory earlier than previously planned, namely from the start of 2013. Moreover, the Austrian regulators implemented a ratio system for banks operating in Central and Eastern Europe to bring funding from other sources than the shareholder and loans into balance. We do not regard the guideline that only €110 should be lent for every €100 of deposits (including certain other forms of funding) as a major restriction. As growth in lending is tied to economic growth, it is likely to be moderate in the next few years. Looking at growth rates, we have to distinguish between markets. While in the Eurozone we are facing a real systemic and political crisis, in Central and Eastern Europe the economic uptrend is largely continuing. This region is and will continue to be the growth driver for Europe. Even if economic growth in the CEE region slows from 3.7 per cent in 2011 to 2.6 per cent in 2012, this is still higher than in the Eurozone. This is not a bad outlook for us.

In this difficult environment, the RBI Group generated a profit before tax of €1.4 billion, which is a solid result we can rightly be proud of. One thing that made this possible is that the markets in Central and Eastern Europe continued to show comparatively high economic growth, which also resulted in a significant improvement in our risk situation. Our result confirms our sustainable business model, which will continue to keep us very competitive!



Vision andMission


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Statement by the Chairman of the Supervisory Board

I am pleased to point out that 2011 was again successful for Raiffeisenbank (Bulgaria) EAD despite the challenging situation. During the year, the Supervisory Board met four times. It fully agrees with the Management Board’s reports for the 2011 financial year.

I would like to note that with its strong capital base, high liquidity level and wide and innovative product portfolio the bank continues to be a reliable partner for its clients.

On behalf of the Supervisory Board, I thank all the bank's employees and its management for the business results achieved in 2011. I also extend my thanks to our clients for choosing Raiffeisenbank and the other Raiffeisen Group members in Bulgaria as their partners.

Herbert StepicChairman of the Supervisory Board

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Management Report

The Bulgarian Economy in 2011

The Management Board of Raiffeisenbank (Bulgaria) EAD. From left to right: Evelina Miltenova – Member of the MB and Executive Director, Monika Fuernsinn - Member of the MB and Executive Director, Tzenka Petkova – Member of the MB and Executive Director, Momtchil Andreev – Chairman of the MB and Executive Director, Nadezhda Mihailova – Member of the MB and Procurator, Ani Angelova – Member of the MB and Executive Director.

14

Management Report

GDP

In 2011 the Bulgarian economy continued recovering from the recession, registering a real growth rate of 1.7 per cent. The largest contribution to GDP growth was brought by exports whose volume stepped up by 12.8 per cent compared to 2010. Consumption posted a marginal decrease in real terms (0.3 per cent), mainly due to the lack of labor market recovery. Under the influence of the uncertain external environment in 2011, investment continued shrinking, albeit at a significantly lower rate

compared to the previous two years (1.6 per cent decrease). Due to the rapid export growth and the demand for raw materials from the export industries, import augmented by 8.5 per cent.

Labor market

The economic growth reported for 2011 did not affect positively the labor market. Moreover, the annual average unemployment rate increased to 11.1 per cent, while in 2010 it was 10.2 per cent. The negative development of this indicator was a consequence of the existing domestic demand weaknesses and the resulting difficulties for the companies producing predominantly for the local market, as well as of the continuing process of cost and employment optimization undertaken by the businesses. The youth unemployment rate reached a very high value at the end of 2011: almost 29 per cent; the share of persons unemployed for more than 1 year also increased reaching about 57 per cent of all unemployed.

Inflation

The easing dynamics of international food and oil markets since mid-2011 led to the moderation of the inflation rate in Bulgaria, too. For the whole past year the cumulative increase of the price level was 2.8 per cent, and the annual average inflation rate stood at 4.2 per cent. The absence of domestic inflationary pressures also contributed to price stability, as consumption and investments were low, and a considerably larger portion of income compared to the pre-crisis period was channeled to savings.

Fiscal sector

The fiscal year 2011 ended with a budget deficit amounting to 2.1 per cent of GDP. Considering the legally established deficit target for 2.5 per cent of GDP, the government achieved a better-than-planned outcome. Thus the budget deficit was brought down to a level which does not exceed the reference value prescribed by the so-called Maastricht fiscal criterion for Eurozone membership.



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Management Report

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The fiscal reserve totaled about BGN 5 bln at the end of 2011, which was by about BGN 500 mln above the legally established minimum of BGN 4.5 bln. Compared to the end fo 2010 it decreased by approximately BGN 1 bln (16.9 per cent), as a result of using it to finance the budget deficit.

Following the good public finance management and the low level of public debt, in May Fitch Ratings upgraded the outlook on Bulgaria’s credit rating (BBB- in FCY and BBB in LCY) from ‘negative’ to ‘positive’. In December, however, mainly due to the deterioration of the Eurozone economic outlook which implied limited opportunities for economic growth of Bulgaria, the outlook was changed to ‘stable’. In July 2011 Moody’s upgraded the rating of the country to Baa2 with a stable outlook. In December 2011 Standard&Poor’s affirmed the sovereign rating at BBB, maintaining the stable outlook.

Balance of payments

After the current account deficit shrank at extremely high rates following the start of the economic crisis and reached the mere 1.0 per cent of GDP in 2010, at the end of 2011 a surplus at the amount of 0.9 per cent of GDP was reported.

The trade balance of the country improved by 28.6 per cent during the last year, and its deficit totaled to EUR 2.0 bln, vs. EUR 2.8 bln at the end of 2010. Export of goods stepped up by 30.0 per cent, while import augmented by 21.2 per cent. The trade balance was the most important factor contributing to the current account improvement.

In 2011 the financial account realized a negative flow of EUR 1.4 bln, which was mainly driven by currency and deposits. The amount of net foreign direct investment in the country amounted to EUR 1.2 bln, vs. EUR 1.0 bln in 2010.

Change2011/2010

Trade balance, FOB (EUR mln)

2010 2009 20082011

38,483 6.7% 36,052 34,932 35,430

1.7% 1.3 p.p. 0.4% (5.5%) 6.2%

5,261 9.5% 4,804 4,618 4,658

11.2% 1.0 p.p. 10.2% 6.8% 6.3%

2.8% (1.7) p.p. 4.5% 0.6% 7.8%

4.2% 1.8 p.p. 2.4% 2.8% 12.3%

0.9% 1.9 p.p. (1.0%) (8.9%) (23.1%)

(1,974.7) (28.6%) (2,763.8) (4,174) (8,597.7)

1,204.7 16.4% 1,035.4 2,505.2 6,205.7

333.4% 57.9 p.p. (275.5%) (80.4%) (75.8%)

12,981 0.0% 12,977 12,919 12,713

Selected macroeconomic indicators

Nominal GDP (EUR mln)

Real GDP Growth (%)

GDP per capita (EUR)

Unemployment rate (avg, %)

Inflation (eop, %)

Inflation (avg, %)

Average inflation (%)

Foreign Direct Investments (EUR mln)

FDI/Current account (%)

BNB FX Reserves (EUR mln)

Source: NSI, BNB, Raiffeisen RESEARCH

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2011 Bulgarian Banking Sector Overview

The banking system continued to adjust its activity in line with the slow economic recovery from the recession throughout the whole 2011. The credit activity remained low given banks’ cautious lending policy while at the same time the ongoing trend of non-performing loans’ slow down (90 days past due) continued. The cautious credit activity and the sustainable deposit growth, mainly from residents, boosted banking system’s liquidity. The sector ended 2011 maintaining high capital adequacy and good profitability levels.

As of end 2011 the total number of banks increased to 31 (24 commercial and 7 branches of foreign banks) from 30 in end 2010 due to the entry of the German – registered Turkish ISBANK GmbH. Local credit institutions’ market share considerably grew to 24.5 per cent from 19.3 per cent at end-2010 due to the total asset growth registered by eight out of nine Bulgarian banks and the change in the ownership of Bulgarian-American Credit Bank. More than 96 per cent of sector’s total assets were controlled by private entities, while almost 75.5 per cent of the system was owned by foreign financial institutions, mainly European banking groups.

Banking systems’ total assets grew given the sustainable growth of the funds attracted from households, whereas as of end 2011 the balance sheet assets reached BGN 76.81 bln moving up by 4.2 per cent year-on-year (2010: BGN 73.73 bln).

For the whole 2011, banks’ loan portfolio grew by 4.07 per cent to BGN 56.04 bln, representing 73 per cent of total assets. The increased credit demand by corporate clients, mostly in trade, processing industries and professional services, prompted by the economic recovery resulted in a 6.39 per cent YoY growth (BGN 2.26 bln up) of banks’ corporate loan portfolio to BGN 37.53 bln. At the same time retail loans insignificantly dropped by 0.35 per cent versus end-2010 to BGN 18.51 mln mainly due to the decline in the consumer lending driven by households’ preferences to pay debts in the conditions of an uncertain economic environment, high unemployment level and the increased savings of households.

The weak domestic demand and households’ high propensity to save in the last two years contributed largely to the deposit base growth, moving up by 12.53 per cent YoY to BGN 52.81 bln as of end 2011. Throughout the year the sector registered a significant growth both in the funds attracted from corporate clients (plus10.67 per cent, reaching BGN 20.91 bln), as well as those from retail customers (plus13.78 per cent, reaching BGN 31.90 bln).

For a third year in a row since the beginning of the crisis, the system registered a YoY decline in the net profit to BGN 586 mln from BGN 617 mln a year earlier, albeit at a four times lower pace (4.95 per cent YoY) compared to end 2010 (20.96 per cent YoY). The weaker financial result was due to the increasing provision expenses set aside driven by the boost in the classified loans, as well as the lower amount of new credits.

In 2011 the system registered a slight slow down of classified and non-performing loan’s growth in banks’ portfolio. The share of classified loans in gross loans stood at 23.21 per cent thereof: 8.29 per cent watch exposures (above 30 up to 90 days past due), 3.18 per cent non-performing loans (over 90 to 180 days past due) and 11.75 per cent loss (above 180 days past due).

At the end of the year the profitability indicators – Return on average assets (ROA: 0.78 per cent) and Return on average equity (ROE: 6.10 per cent) declined due to the banking sector lower financial result. The liquidity ratio, showing the ability of banks to repay their debts, significantly improved to 25.57 per cent from 24.37 per cent in 2010.

Management Report

16 Statement by theChairman of the MB


Vision andMission


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17

Management Report

4,124,701

3,234,585

1,610,385

6,882,171

5,996,382

3,907,957

20092006 2007 20082006 2007 2008 2010 2011

4,702,266 4,638,985

5,057,629

2009 2010 2011

6,642,200

In BGN Thousand In BGN Thousand

Source: Audited Unconsolidated Financial Statements of Raiffeisenbank (Bulgaria) EAD

6,562,537 6,448,269

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

As of end-December 2011, the total assets of the bank reached BGN 6.5 bln decreasing by 1 per cent year-on-year, driven by the general asset growth slow-down in the sector.

In 2011, the total amount of loans of Raiffesienbank (Bulgaria) EAD marked a significant growth, up by 9 per cent, on a yearly basis to BGN 5.1 bln, increasing in market share as well to 9.02 per cent from 8.61 per cent in end-2010. The main factor for the loan portfolio expansion was the growth of loans to corporate clients which led to a rise in their market share to 9.71 per cent and ranked the bank one position up, to second place among the banks in the sector.

Total Assets Loan portfolio

Key Figures Throughout 2011 Raiffeisenbank (Bulgaria) EAD’s continued to operate in the conditions of a difficult economic environment whilst reaffirming its position among the leading banking institutions in the country and maintaining good levels of profitability, liquidity and overall capital adequacy.

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At end 2011 the attracted funds from customers registered 6 per cent rise whereas the deposit base reached to BGN 4.4 bln from 4.1 bln a year ago. This was as a result of the shift in resources both from corporate as well as retail clients. At the same time the bank maintained second position in the sector in terms of corporate deposits with a 10.42 per cent market share.

The bank’s equity significantly rose to BGN 947 mln from BGN 926 mln a year ago driven by the current year’s net profit and the capitalized profit from previous year (after payment of dividend). In 2011 the overall capital adequacy ratio slightly dropped to 17.55 per cent from 18.86 per cent in 2010 mainly due to the increase in the specific provisions, although it remained above the average sector level (17.53 per cent), exceeding the regulatory minimum as well (12 per cent).

66,970

108,612

132,597

20092006 2007 2008

50,995

2010

43,949

2011

50,800

In BGN Thousand


Driven by the negative effects of the global economic crisis, as of end-2009 Raiffeisenbank (Bulgaria) EAD accounted for a lower net profit due to the two times higher amount of provisions for loan losses set aside by the bank in 2009, to BGN 172.5 mln compared to BGN 80.5 mln, a year earlier. At the same time, the operating income grew by 2 per cent to BGN 363.8 mln from BGN 357.2 mln in 2008. Despite the 62 per cent lower profit driven by the more conservative provisioning policy, the 2009 net result is a confirmation of the stable operating activity and the business model of Raiffeisenbank in a difficult market situation.

As of end-2009 the cost/income ratio grew to 52.9 per cent from 50.9 per cent in 2008 due to the higher growth of the operating expenses compared to the increase of operating income.

Management Report

18

4,457,459

3,650,538

2,379,419

2006 2007 2008 2006 2007 20082009

4,323,653

2010

4,125,204

2011

2,000,000

3,000,000

4,000,000

5,000,000

1,000,000 200,000

400,000

600,000

800,0004,361,724

2009

907,450

248,025

547,679

856,455

2010

925,973

2011

947,435

1,000,000 In BGN Thousand In BGN Thousand


Deposits from Customers Total Equity

Net Profit



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OperationsThe year 2011 was marked by an increase of 8.74 per cent of operational income compared to the preceding year. The share of electronic payment orders kept increasing, reaching 70 per cent of the total number of payments for 2011, supported by an increase of 36.94 per cent of Raiffeisen Online and Multicash users compared to 2010.

6,466,386

5,125,317

8,400,000

7,200,000

6,000,000

4,800,000

3,600,000

2,400,000

1,200,000

0

165,813

135,909

2007

Out Out

2009 20082010 2011 2009 2010 2011

6,207,745

5,757,552 5,919,133

143,272

157,603

123,163

30,000

60,000

90,000

120,000

150,000

180,000

210,000

163,607 186,548

216,280

324,845*287,941*

In Out In Out

*reported figure includes intrabank transactions

Local Currency Payments Foreign Currency Payments

2009200820072006

6.6

43.438.2

23.6

2010

5.5

2011

6.2

In %


200820072006 2009

0.8 0.9

2.6

0

0.5

2.7

2.3

2010 2011

In %

1.0

1.5

2.0

2.5

0.8

ROA before tax ROE before tax

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Human ResourcesAs of the end of 2011 the staff of Raiffeisenbank (Bulgaria) EAD amounted to 3,474 employees; 67 per cent (2,336) of staff were employed in the branch network; 81 per cent of the staff were university graduates and the average age was 35 years.

In 2011 the main focus was further enhancement of key competencies of the bank’s employees. The managerial staff was trained to improve managerial skills, while the front office staff was trained for Superior Customer Service Quality, Sales Skills, Negotiation Skills, Team work.

1,342

823

3,004

3,703

2004 2005 2006 2007 2008 2009 2010 2011

Number

1,921

3,478 3,487 3,474

Staff

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Management Report

Local Currency Payments

Local currency customer payments (outbound and intrabank) increased by 3 per cent compared to 2010, contributing to the respective growth in the commissions income. Raiffeisenbank’s ranking on the local market improved compared to 2010 – the bank’s share in the outbound payments increased to 7.10 per cent for 2011. The number of real-time local currency payments also ensured an increase of the bank’s market share up to 13.45 per cent in 2011.

Foreign Currency Payments

The total number of clean payments in foreign currencies grew in 2011, which in turn reflected in an increase of the relevant commissions income by 14 per cent. Payments in euro (both inbound and outbound) continued to predominate in the total number of foreign currencies payments, following the structure of the trade pattern of the country. During the past year the share of the EUR inbound payments reached 91 per cent of the total volume of the inbound payments, while the EUR outbound payments had a 84.36 per cent share.

The bank is an active participant in the European payment infrastructures thanks to its membership in Target 2, Bisera 7 and SEPA. Apart from such direct clearing and settlement channels, the bank maintains an extensive network of correspondent banks aiming at offering flexible payment conditions to its customers. Furthermore, following its continuous efforts to improve the quality of payment instructions, the bank has been awarded several times by its main counterparts for the highest level of straight through processing (STP – over 99 per cent) of its payments.

Documentary transactions

In 2011 the number of documentary transactions increased by 16 per cent compared to 2010, as the number of the issued bank guarantees increased significantly.



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Segment Reports

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Corporate Banking

Corporate Banking

In 2011 Raiffeisenbank (Bulgaria) EAD was focused on keeping good relationship with its corporate clients and attracted new ones.

As a universal bank, Raiffeisenbank (Bulgaria) EAD offers to small, medium and large companies the full range of banking products including lending, cash management, documentary operations, deposits, foreign exchange, structuring and placement of bond issues, etc.

Raiffeisenbank (Bulgaria) EAD ranked second in terms of lending to corporate clients with a market share of 9.7 per cent. The new loans in 2011 to corporate clients increased two times compared to 2010.

Raiffeisenbank (Bulgaria) EAD managed to keep the second place in terms of attracted funds with market share of 10.4 per cent.

Public Sector and Institutional Clients

In 2011, Raiffeisenbank (Bulgaria) EAD retained the already achieved results in the Public Sector, with a focus on maintaining good corporate relationships with its current clients and attracting new ones, such as state

and municipal companies, municipalities etc. As of the end of the year, the dynamics of the Institutional Client’s Base showed an increase of 11 per cent compared to end-2010.

The bank offers a full range of bank products, including municipal lending to all budget and other organizations from the Public Sector. As of the end of the year the credit portfolio of the bank in this segment amounted to EUR 38.1 mln (Investment loans and bonds issues). Raiffeisenbank (Bulgaria) EAD supports municipal projects and projects of companies performing activities in favour of Local Communities with an important social impact. The credit line from the European Investment Bank on lending to municipalities and companies performing municipal services, offers flexible lending schemes with a grant element. The bank was also active in attracting deposits from municipalities and other clients from the Public Sector. By the end of 2011 the attracted funds from these clients amounted to EUR 115 mln.

Nadezhda MihailovaMember of the MB and Procurator

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Retail Banking In 2011 Raiffeisenbank (Bulgaria) EAD continued to expand its market position in the Retail banking segment.

At the end of 2011 the total amount of loans in the Retail banking segment reached BGN 1,374 mln. At the same time the total retail attracted funds reached BGN 2,132 mln. Deposits accounted for 71 per cent of the total attracted funds from private individuals as of the year-end. The number of retail customers increased by 4.88 per cent in comparison to 2010.

In 2011 the users of the bank’s electronic banking service, Raiffeisen Online, continued to increase and more than 50,000 new customers registered for the service. Bank kept improving its electronic banking service for customers and as a result they can now perform active transactions from any device with internet access and browser, since Digital certificates became unnecessary.

In July 2011 the bank renewed the Residential Energy Efficiency Credit Line with the European Bank for Reconstruction and Development and launched energy efficiency loans for private individuals and group projects. In 2011 Raiffeisenbank (Bulgaria) EAD launched a new consumer loan with fixed interest rate for the first year, as well as started offering Endowment insurance through all its distribution channels.

At the end of 2011 the total number of debit and credit cards issued by Raiffeisenbank reached 480,000. The number of POS terminals totaled more than 7,500, marking an increase of 10 per cent compared to end of 2010. Raiffeisenbank’s ATMs reached 613.

In 2011 Raiffeisenbank Bulgaria’s service for affluent customers – Premium Banking – continued to offer the highest service level in 15 bank offices located in 7 cities.

At the end of the year Premium Banking serviced more than 7,400 Premium customers with savings exceeding BGN 50,000 or regular income over BGN 3,000.

SME

In 2011 Raiffeisenbank (Bulgaria) EAD retained its position as one of the leading banks in Micro segment and provided attractive products and services to its micro customers.

Ani AngelovaMember of the MB and Executive Director

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Segment Reports

In 2011, Raiffeisenbank:

• expanded its customer base with micro clients by 5 per cent;

• introduced transactional packages for improved cash management;

• provided micro customers with access to local and EU guarantee and credit lines at beneficial conditions.

Throughout 2011 Raiffeisenbank continued to provide diversified lending and non-lending products as well as high-quality services to its customers.

Another important focus during 2011 was optimization and centralization of the processes aiming at enhancing efficiency and improving customer services, as well as developing self-service remote service channels..

Branch Network and Alternative Distribution Channels

As at the end of 2011 the network of Raiffeisenbank (Bulgaria) EAD totaled 185 branches.

The bank has also established the information center Raiffeisen Direct, which is an alternative channel for client servicing, launched with the aim to facilitate both existing and potential customers in their day-to-day communication with the bank. At the call center, clients can obtain detailed information and consultation on issues arrising in connection with the use of the bank’s products.

The bank also offers online banking to its customers. Raiffeisen ONLINE provides access to personal and corporate bank accounts, conveniently giving access at any time and place for obtaining reference information about the bank products, for ordering transfers in local and foreign currencies, for opening and terminating term deposits and other services.

The corporate and retail customers of the bank increased by 2 per cent compared to the end of 2010.

In 2011 the Agent Network of Raiffeisenbank (Bulgaria) EAD retained its position as a key distribution channel for retail products and services contributing approximately 20 per cent of key retail product sales. The service is provided by 130 mobile bankers in 11 Bulgarian cities.

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Treasury and Investment Banking

Foreign Exchange Trading

In 2011 Raiffeisenbank (Bulgaria) EAD retained its position among the leading market-makers on the local inter-bank and customer FX market. The global financial crisis reduced the traded FX volumes. The Treasury department concentrated its efforts on maintaining a good level of co-operation with its business counterparties, as well as its long-standing customer relationships. In terms of the tough bank competition and unfavourable market conditions, the currency spreads continued to tighten and the FX turnover significantly reduced. Raiffeisenbank (Bulgaria) EAD managed to generate a good FX income as a result of customer oriented services and diversified Treasury products – derivative products (FX forwards and swaps, option forwards, FX options, IRS).

Being an integral part of an international banking group, Raiffeisenbank (Bulgaria) EAD successfully exploits the experience of the other network banks and proposes alternative solutions based on the wide range of the traded market products, thus providing comprehensive services and treasury products to its corporate and institutional clients.

Capital Market Operations Raiffeisenbank (Bulgaria) EAD is a respected and preferred primary dealer and supports the Ministry of Finance, bidding regularly on the government debt auctions. The bank maintains a substantial market share on the primary market and is an active market-maker on the secondary market. Raiffeisenbank (Bulgaria) EAD offers to its customers a wide scope of government debt instruments for trading and investment and aims at a professional and affordable service. In 2011 the market policy of Raiffeisenbank (Bulgaria) EAD was widely recognized and the bank was once again appointed a primary dealer for the next calendar year.

In 2011 Raiffeisenbank (Bulgaria) EAD confirmed its leading position on the local market of debt instruments – corporate and mortgage bonds with a market share of 28.50 per cent in the segment of structured and placed bond issues with a total nominal value of EUR 38 mln.

The number of newly launched debt securities managed by Raiffeisenbank (Bulgaria) EAD on the local market reached 4 out of 22.

Evelina MiltenovaMember of the MB and Executive Director

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Segment Reports

In 2011 Raiffeisenbank (Bulgaria) total volume of brokerage services traded on international capital markets reached BGN 500 mln, thus strengthening our position as leading investment intermediary in Bulgaria.

Custody Services

At the end of 2011 the market value of assets under custody amounted to BGN 1.8 bln, which strengthened the position of Raiffeisenbank (Bulgaria) EAD among the leading institutions in Bulgaria, providing Custody services related to investments in domestic and foreign financial instruments.

According to the annual survey conducted by the renowned Global Custodian Magazine, for 2011 Raiffeisenbank was again awarded a TOP RATED status by our cross-border clients. This status outlines the overall consistency of our achievements, the quality leadership in the custody services and our commitments as a local player.

Among Raiffeisenbank (Bulgaria) EAD custody clients are 17 REITs, 9 mutual funds, one pension company, many insurance companies, as well as a range of large companies.

(71.5%)

(28.5%)

(81.8%)

(18.2%)


Other Investment Intermediaries Other Investment Intermediaries


2011 – Share of Total Volume Newly Issued Corporate/Mortgage Bonds 2011 – Share of Total Number Newly Issued Corporate/Mortgage Bonds

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Segment Reports

Financial Institutions

Correspondent Banking

Raiffeisenbank (Bulgaria) EAD constantly develops and optimizes its relations with numerous first-class international and local financial institutions. As of the end of 2011 the number of banks, which Raiffeisenbank (Bulgaria) EAD established correspondent relations with, exceeded 1000, while the number of the accounts in different currencies maintained by the bank was over 20.

The network of nostro accounts is subject to continuous improvement and top ranked banks are preferred, such as Raiffeisen Bank International AG – Vienna, Deutsche Bank AG – Frankfurt, Commerzbank AG – Frankfurt, Standard Chartered Bank – New York, Wells Fargo Bank N. A. – New York, The Bank of Tokyo-Mitsubishi – Tokyo, UBS AG – Zurich, Danske Bank – Copenhagen; HSBC Bank – London, etc.

Raiffeisenbank (Bulgaria) EAD is a direct particpant in the Trans-European Automated Real Time Gross Settlement Express Transfer system (TARGET) – TARGET2 and BISERA 7 EUR – an ancillary system of TARGET 2 which processes SEPA payments and settles the resulting monetary obligations in TARGET2.

Based on the excellent quality of tailor-made services provided to financial institutions and the confidence of the international financial community in Raiffeisenbank (Bulgaria) EAD, almost 40 foreign – mainly from Europe, North America – and domestic banks, as well as foreign nonbanking financial institutions maintain accounts with Raiffeisenbank (Bulgaria) EAD in local and foreign currencies.

Funding

During 2011, Raiffeisenbank negotiated three new Guarantee Agreements for the total amount of EUR 87 mln, two of them with the National Guarantee Fund (NGF), part of the Bulgarian Development Bank Group, the third with the European Investment Fund, under the Joint European Resources for Micro to Medium Enterprises (JEREMIE). The purpose of these agreements is to support the development of small and medium enterprises in Bulgaria, through flexible guarantee schemes. In addition, after the successful implementation of the first credit line for financing energy efficiency home improvements, Raiffeisenbank signed a second loan agreement with the European Bank for Reconstruction and Development (EBRD) under the Residential Energy Efficiency Credit Line (REECL) programme.

As of 31 December 2011, Raiffeisenbank had attracted long-term financing totalling EUR 611 mln, of which EUR 321 mln in credit lines and guarantee agreements with international financial institutions such as the European Bank for Reconstruction and Development, the European Investment Bank, the European Investment Fund, KfW, the European Fund for Southeast Europe, etc.

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Income Statement

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Balance Sheet



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Statements of Cash Flows

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Statements of Cash Flows



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Statements of Changes in Shareholders’ Equity

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Notes to the Financial Statements

1. Basis of Preparation

(а) Reporting entity

Raiffeisenbank (Bulgaria) EAD is the first green field foreign direct investment in the Bulgarian banking sector. The bank has been entered in the company register of Sofia City Court on 01.08.1994.

The bank is fully owned by Raiffesien Bank International, Austria.

The bank has a general banking license issued by the Bulgarian National Bank (BNB) according to which it is allowed to conduct all banking transactions permitted by the Bulgarian legislation in the country and abroad, as well as to conduct all deals and services in its capacity of investment intermediary according to the Public offering of securities Act.

The consolidated financial statements of the bank for 2011 represent the financial statements of the bank and its subsidiaries and associated companies as described in note 33, referred to as the Group.

(b) Statement of compliance

These consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS), as adopted by the European union.

(c) Basis of measurement

These financial statements have been prepared on the historical cost basis except for the following:

– derivative financial instruments measured at fair value;

– trading instruments and other instruments designated at fair value through profit or loss measured at fair value, where such can be reliably determined;

– available for sale financial instruments measured at fair value, where such can be reliably determined;

– defined benefit retirement obligations to employees, which are accounted at their net present value, adjusted for any actuarial gains/losses.

(d) Functional and presentation currency

These consolidated financial statements are presented in Bulgarian leva (BGN), rounded to the nearest thousand, which is the Group’s functional currency.

(e) Use of estimates and judgments

The preparation of these consolidated financial statements requires management to exercise its judgment in the process of applying the Group’s accounting policies and the reported value of assets, liabilities, income and expense. Actual results may differ from these estimates and judgments.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised and in any future periods affected. The areas involving a

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higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 4.

2. Significant accounting policies

These consolidated financial statements are prepared by applying one and the same accounting policy by the bank and its subsidiaries.

(a) Basis of consolidation

These consolidated financial statements are prepared in accordance with IAS 27 “Consolidated and Sepаrate Financial Statements” and IAS 28 “Investments in associates”, whereby participations with more than 50 per cent of the voting rights are fully consolidated and all participations with more than 20 per cent of the voting rights are consolidated using the equity method

(b) Income recognition

• Interest income and expense

Interest income and expense are recognized in the statement of comprehensive income for all interest bearing instruments on an accrual basis using the effective interest method.

Interest income and expense presented in the statement of comprehensive income include:

– interest on financial assets and liabilities at amortized cost

– interest on investment securities carried at fair value through profit or loss

Interest income and expense on all trading assets and liabilities are considered to be incidental to the bank’s trading operations and are presented together with all other changes in the fair value of trading assets and liabilities in net trading income.

• Fair value changes

Fair value changes on derivatives are presented in net result from derivatives in the statement of comprehensive income. Fair value changes of investment securities carried at fair value through profit or loss, are presented in net income from investment securities carried at fair value through profit and loss in the statement of comprehensive income.

• Fees and commission

Fees and commission are generally recognized on an accrual basis when the service has been provided.

Fees and commission income and expenses that are integral to the effective interest income on a financial asset or liability are included in the measurement of the effective interest income. Loan commitment fees for credit lines that are likely to be drawn down, are deferred and are recognized as an adjustment to the effective interest income on the loan. Loan syndication fees are recognized as revenue when the syndication has been completed and the Group has recognized on its statement of financial position the respective part of the syndication. Commission and fees arising from negotiating, or participating in the negotiation of, a transaction for a third party – such as the arrangement of the acquisition of shares or other securities or the purchase or sale of businesses – are recognized on completion of the underlying transaction. Portfolio and other management advisory and service fees are recognized based on the applicable service contracts, usually on a time apportionate basis.

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Other fees and commission income, including account servicing fees, sales commission, payments transfer fees, etc., is recognized as the related services are performed.

Commission income from insurance brokerage and other consulting and intermediary services is recognized in the income statement on an accrual basis upon origination notwithstanding the time of cash flow.

Other fees and commission expense, which is not part of the effective interest expense, represents mainly transaction and service fees, which is expensed as the services are received.

• Dividends

Dividends are recognized in the statement of comprehensive income when the Group’s right to receive payment is established.

• Net trading income

Net trading income comprises gains less losses related to trading assets and liabilities, and includes all realized and unrealized fair value changes, interest, dividends and foreign exchange differences.

(c) Foreign currency transactions

All transactions in foreign currencies are translated to the functional currency of the Group at exchange rates fixed by the Bulgarian Central Bank at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate fixed by the Bulgarian Central Bank at that date. Non-monetary assets and liabilities that are carried at historical cost denominated in foreign currency, are retranslated to the functional currency at the exchange rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined.

(d) Financial instruments

The Group presents its financial assets in the following categories: trading assets, derivatives, loans and receivables, financial assets at fair value through profit or loss, held-to-maturity investments and available-for-sale financial assets. The Group determines the classification of its investments at initial recognition.

(i) Trading assets and liabilities

Trading assets and liabilities are those assets and liabilities that the Group acquires or incurs principally for the purpose of selling or repurchasing in the near term, or holds as part of a portfolio that is managed together for short-term profit or position taking. Trading assets and liabilities are initially recognized and subsequently measured at fair value in the statement of financial position with transaction costs taken directly to profit or loss. All changes in fair value are recognized as part of net trading income in profit or loss. Trading assets and liabilities are not reclassified subsequent to their initial recognition.

(ii) Derivatives

Derivatives are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at their fair value. Fair values are obtained from quoted market prices in active markets, including recent market transactions, and valuation techniques, including discounted cash flow models, as appropriate. All derivatives are carried as assets when fair value is positive and as liabilities when fair value is negative.



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(iii) Loans and receivables

Loans originated by the Group by providing money directly to the borrower or to a sub-participation agent at draw down, other than those that are originated with the intent of being sold immediately or in the short term which are recorded as trading assets, are categorized as loans originated by the Group. They are carried at amortized cost, which is defined as the fair value of cash consideration given to originate those loans as is determinable by reference to market prices at origination date. Transaction related expenses, like legal fees connected to loan collaterals, are treated as part of the deal value. All loans are recognized upon utilization.

(iv) Financial assets at fair value through profit or loss

The Group has designated financial assets and liabilities at fair value through profit or loss when either:

– the assets or liabilities are managed, evaluated and reported internally on a fair value basis;

– the designation eliminates or significantly reduces an accounting mismatch which would otherwise arise; or

– the asset or liability contains an embedded derivative that significantly modifies the cash flows that would otherwise be required under the contract.

(v) Held-to-maturity

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Group’s management has the positive intention and ability to hold to maturity. These financial assets are recognized in the statement of financial position at settlement date and are carried at amortized cost with a subsequent test for impairment. If the Group sells other than an insignificant amount of held-to-maturity assets, the entire category would be tainted and reclassified as available for sale.

(vi) Available-for-sale

Available-for-sale investments are those intended to be held for an indefinite period of time, which may be sold in response to needs for liquidity or changes in interest rates, exchange rates or equity prices.

(e) Measurement

Purchases and sales of financial assets at fair value through profit or loss, held to maturity and available for sale are recognized on the date of the actual delivery of the assets. Loans are recognized when cash is advanced to the borrowers. All financial assets except for trading assets are initially recognized at fair value plus transaction costs. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or when the Group has transferred substantially all risks and rewards of ownership. Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables and held-to-maturity investments are carried at amortized cost. Gains and losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are included in the statement of comprehensive income in the period in which they arise. Gains and losses arising from changes in the fair value of available-for-sale financial assets are recognized directly in equity, until the financial asset is derecognized or impaired at which time the cumulative gain or loss previously recognized in equity should be recognized in profit or loss. Interest income is recognized in the statement of comprehensive income. Dividends on available-for-sale equity instruments are recognized in the statement of comprehensive income when the entity’s right to receive payment is established.

The fair values of quoted investments in active markets are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Group establishes fair value by using valuation models and discounted cash flow analysis.

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(f) Fair values of financial assets and liabilities

The determination of fair values of financial assets and financial liabilities is based on quoted market prices. For financial instruments, for which market prices are not quoted, fair value is determined by using valuation techniques. Valuation techniques include net present value techniques, the discounted cash flow method, comparison to similar instruments for which market observable prices exist, and valuation models. The Group uses widely recognized valuation models for determining the fair value of financial instruments like options and interest rate and currency swaps. For these financial instruments, inputs into models are market observable.

For more complex instruments, the Group uses proprietary models, which usually are developed from recognized valuation models. Some or all of the inputs into these models may not be market observable, and are derived from market prices or rates or are estimated based on assumptions. When entering into a transaction, the financial instrument is recognized initially at the transaction price, which is the best indicator of fair value, although the value obtained from the valuation model may differ from the transaction price. At subsequent measurement this initial difference in fair value indicated by valuation techniques is recognized in income depending upon the individual facts and circumstances of each transaction and not later than when the market data becomes observable.

The value produced by a model or other valuation technique is adjusted by a number of factors as appropriate, to allow the valuation techniques to appropriately reflect all factors market participants take into account when entering into a transaction. Valuation adjustments are recorded to allow for credit risks, bid-ask spreads, liquidity risks, as well as other factors. Management believes that these valuation adjustments are necessary and appropriate to fairly state financial instruments carried at fair value in the statement of financial position.

(g) Derecognition

The Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognized as a separate asset or liability.

The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled or expire.

The Group enters into transactions whereby it transfers assets recognized on its statement of financial position, but retains either all risks and rewards of the transferred assets or a portion of them. If all or substantially all risks and rewards are retained, then the transferred assets are not derecognized from the statement of financial position. Transfers of assets with retention of all or substantially all risks and rewards include, for example, securities lending and repurchase transactions.

In certain transactions the Group retains rights to service a transferred financial asset for a fee. The transferred asset is derecognized in its entirety if it meets the derecognition criteria. An asset or liability is recognized for the servicing rights, depending on whether the servicing fee is more than adequate to cover servicing expenses (asset) or is less than adequate for performing the servicing (liability).

(h) Cash and cash equivalents

Cash and cash equivalents comprise cash balances on hand and in ATM, cash deposited with the Central Bank and placements with banks with original maturity of less than 3 months.

(i) Deals with securities

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(i) Securities borrowing and lending

Investments lent under securities lending arrangements continue to be recognized in the statement of financial position and are measured in accordance with the accounting policy for assets held for trading or at fair value through profit or loss. Cash collateral received in respect of securities lent is recognized as liabilities to either banks or customers. Investments borrowed under securities borrowing agreements are not recognized as assets of the Group. Cash collateral placements in respect of securities borrowed are recognized under loans and advances to either banks or customers. Income and expenses arising from the securities borrowing and lending business are recognized on an accrual basis over the period of the transactions and are included in interest income or expense.

(ii) Repurchase agreements

The Group enters into purchases (sales) of investments under agreements to resell (repurchase) substantially identical investments at a certain date in the future at a fixed price. Investments purchased subject to commitments to resell them at future dates are not recognized.

The amounts paid are recognized in the statement of financial position as receivables under repurchase agreements. The receivables are shown as collateralized by the underlying security. Investments sold under repurchase agreements continue to be recognized in the statement of financial position and are measured in accordance with the accounting policy for either assets held for trading or at fair value through profit or loss as appropriate. The proceeds from the sale of the investments are reported in the statement of financial position as liabilities on repurchase agreements.

The difference between the sale and repurchase considerations is recognized on an accrual basis over the period of the transaction and is included in interest income.

(j) Borrowings

Borrowings are recognized initially at cost, being their issue proceeds (fair value of consideration received) net of transaction costs incurred. Borrowings are subsequently stated at amortized cost and any difference between net proceeds and the redemption value is recognized in the statement of comprehensive income over the period of the borrowings.

If the Group purchases its own debt, it is removed from the statement of financial position and the difference between the carrying amount of a liability and the consideration paid is included in net trading income.

(k) Offsetting

Financial assets and liabilities are offset and the net amount is reported in the statement of financial position when the Group has a legally enforceable right to set off the recognized amounts and the transactions are intended to be settled on a net basis.

(l) Impairment

At each date of preparation of statement of financial position the Group assesses whether there is objective evidence that financial assets not carried at fair value through profit or loss are impaired. In case such evidence exists, recoverable amount of the assets is defined.

Financial assets are impaired when objective evidence demonstrates that a loss event has occurred after the initial recognition of the asset, and that the loss event has an impact on the future cash flows on the asset that can be estimated reliably. Objective evidence that financial assets (including equity securities) are impaired can include default or delinquency by a borrower, restructuring of a loan or advance by the Group on terms that the Group would not otherwise consider, indications that a borrower or issuer will enter bankruptcy, the disappearance of

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an active market for a security, or other observable data relating to a Group of assets such as adverse changes in the payment status of borrowers or issuers in the Group, or economic conditions that correlate with defaults in the Group. Loans and advances are measured and classified based on their credit risk grade, delinquency, financial difficulty of the borrower and his cash flow generating ability. If the Group has more than one credit exposure against a Group of borrowers with common risk characteristics, all exposures are classified according to the grade of the borrower bearing the highest credit risk.

The Group considers evidence of impairment at both a specific asset and collective level. All individually significant financial assets are assessed for specific impairment. All significant assets found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Assets that are not individually significant are then collectively assessed for impairment by grouping together financial assets (carried at amortized cost) with similar risk characteristics.

In assessing collective impairment the Group uses statistical modeling of historical trends of the probability of default, timing of recoveries and the amount of loss incurred, adjusted for management’s judgments as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical modeling. Default rates, loss rates and the expected timing of future recoveries are regularly benchmarked against actual outcomes to ensure that they remain appropriate.

Impairment losses on individually impaired assets are measured as the difference between the carrying amount of the financial assets and the present value of estimated cash flows, considering the risk grade of the borrower, discounted at the assets’ original effective interest rate. Short-term balances are not discounted.

When a loan is uncollectible, it is written off against the related allowance for loan impairment. Such loans are written off after all the necessary procedures have been completed and the amount of the loss has been determined.

When a subsequent event causes the amount of impairment loss to decrease, the impairment loss is reversed through profit or loss.

Loans and advances are presented net of impairment losses. The increase of the impairment losses is recognized in the statement of comprehensive income. The Group reintegrates in its current year income impairment losses, which are released as a result of a partial or the total collection of the provisioned exposure, as well as in case of reclassifying the exposure into a lower credit risk group.

Allowances for impairment losses on portfolio basis are allocated against exposures to cover existing losses, which could not be identified for each individual loan according to the Group’s provisioning policy. The Group’s policy for allocation of portfolio based allowances for impairment losses determines the principles for reducing the statement of financial position amount of a portfolio of loans with similar credit risk characteristics to their recoverable amount as at the date of preparation of the statement of financial position.

The recoverable amount of debt instruments and purchased loans re-measured to fair value is calculated as the present value of expected future cash flows discounted at the current market interest rate.

(m) Property, plant and equipment

• Recognition and measurement

Items of property and equipment are measured at cost less accumulated depreciation. Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labor, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.



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When parts of an item of property or equipment have significant part in the total cost of the asset, they are accounted for as separate items (major components) of property and equipment.

• Subsequent costs

The cost of replacing part of an item of property or equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably.

• Depreciation

Long-term assets are depreciated on a straight-line basis over the estimated useful lives. Leased assets are depreciated over the shorter of the lease term and their useful lives. Land is not depreciated.

The estimated depreciation rates for the current and comparative periods are as follows:

Assets are not depreciated until they are brought into use and transferred from assets in the course of construction into the relevant asset category.

(n) Intangible assets

• Recognition and measurement

Intangible assets, which are acquired by the Group, are stated at cost less accumulated amortization and any impairment losses.

Software acquired by the Group is stated at cost less accumulated amortisation and accumulated impairment losses.

Expenditure on internally developed intangible asset is recognised as an asset when the Group is able to demonstrate its intention and ability to complete the development and use the intangible asset in a manner that will generate future economic benefits, and can reliably measure the costs to complete the development.

• Subsequent costs

Subsequent expenditure on intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred.

Assets %

Buildings 4

Equipment 15 - 20

Fixtures and fittings 15

Vehicles 25

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• Depreciation

Depreciation is calculated on a straight-line basis over the expected useful life of the asset. The annual rates of amortization are as follows:

Assets %

Licences 30

Computer software 20

(o) Reposessed assets

The repossessed assets are stated at the lower of carrying amount and the net realizable value. Carrying amount includes acquisition expenses, state fees for court executors, etc.

Net realizable value is the estimated selling price reduced by approximately evaluated costs for sale realization.

(p) Receivables under financial leases

The leasing activity of Group is basically financial lease of motor vehicles, industrial equipment, property and others. The financial lease is a contractual agreement, under which the lessor gives the lessee the usage right over an asset for a certain period of time and an agreed price. A finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of an asset. Title may or may not eventually be transferred. The typical indicators, which the Group considers to evaluate whether all substantial risks and rewards are transferred, include: present value of the minimum lease payments compared to the fair value of the leased asset at the beginning of the lease agreement; the term of the lease agreement compared to the useful life of the leased asset, as well as whether the lessee will gain the right of ownership over the leased asset upon maturity of the financial lease agreement. All other lease agreements, which do not substantially transfer all the risks and rewards incidental to ownership of an asset, are classified as operational leases.

• Minimum lease payments

Minimum lease payments are the payments over the lease term that the lessee is or can be required to make, excluding contingent rent, costs for services and taxes to be paid by and reimbursed to the lessor.

The minimum lease payments also include for a lessor, any residual value guaranteed to the lessor by a third party unrelated to the lessor that is financially capable of discharging the obligations under the guarantee.

However, if the lessee has an option to purchase the asset at a price that is expected to be sufficiently lower than fair value at the date the option becomes exercisable for it to be reasonably certain, at the inception of the lease, that the option will be exercised, the minimum lease payments comprise the minimum payments payable over the lease term to the expected date of exercise of this purchase option and the payment required to exercise it.

• Commencement of the lease agreement and commencement of the lease

It should be differentiated between the commencement of the lease agreement and the commencement of the lease term. The lease agreement commences on the earlier of the date of the lease agreement and the date on which the parties agree with the main conditions under the agreement. By that date:



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– The lease agreement is classified as financial or operational lease;

– In the case of financial lease the amounts, which should be recognized at the commencement of the lease agreement are determined.

The commencement of the lease term is the date from which the lessee is entitled to exercise its right to use the leased asset. It is the date of initial recognition of the lease (i.e. the recognition of the assets, liabilities, income or expenses resulting from the lease, as appropriate)

• Initial recognition and subsequent measurement

The Group recognizes assets held under a finance lease in its balance sheets and presents them as a receivable at an amount equal to the net investment in the lease.

Under a finance lease substantially all the risks and rewards incidental to legal ownership are transferred by the lessor, and thus the lease payment receivable is treated by the lessor as repayment of principal and finance income to reimburse and reward the lessor for its investment and services. The recognition of finance income is based on a pattern reflecting a constant periodic rate of return on the net investment in the finance lease.

Subsequently the investment under finance lease agreements is recognized net, after deducting allowances for individual and collective impairment.

(q) Provisions

A provision is recognized in the statement of financial position when the Group has a legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

• Employee benefits – defined benefit plans

In accordance with IAS 19 “Employee benefits” the Group provides for short- as well as long-term employees benefits. Short-term employees’ benefits include accrued, but not paid out amounts, related to performance and target achievements, as well as accruals for unused annual leaves. The provision for long-term employees’ benefits represent the present value of future retirement compensations according to the local labor legislation. The Group has obligation to pay certain amounts to each employee who retires with the Group in accordance with Art. 222, § 3 of the Labor Code in Bulgaria. According to these regulations in the LC, when a labor contract of a company’s employee, who has acquired a pension right, is ended, the employer is obliged to pay him compensations amounted to two gross monthly salaries. In case the employee’s length of service in the company equals to or is greater than 10 or more years, as at retirement date, then the compensation amounts to six gross monthly salaries. As at statement of financial position’s date, the Group’s Management estimates the approximate amount of the potential expenditures for every employee based on a calculation performed by a qualified actuary using the projected unit credit method. The Group recognises all actuarial gains and losses arising from defined benefit plans in profit or loss for the period and all expenses related to defined benefit plans in personnel expenses.

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(r) Deposits, borrowings from banks and subordinated liabilities

Deposits, borrowings from banks and subordinated liabilities are the Group’s sources of debt funding.

When the Group sells a financial asset and simultaneously enters into an agreement to repurchase the asset (or a similar asset) at a fixed price on a future date (“repo” or “stock lending”), the arrangement is accounted for as a deposit, and the underlying asset continues to be recognised in the Group’s financial statements.

Deposits, borrowings from banks and subordinated liabilities are carried at amortized cost.

(s) Acceptances

An acceptance is created when the Group agrees to pay, at a stipulated future date, a draft drawn on it for a specified amount. The Group’s acceptances primarily arise from documentary credits stipulating payment for the goods to be made a certain number of days after receipt of required documents. The Group negotiates most acceptances to be settled at a later date following the reimbursement from the customers. Acceptances are accounted for as other liabilities.

(t) Taxation

Tax on the profit for the year comprises current tax and the change in deferred tax. Current tax comprises tax payable calculated on the basis of the expected taxable income for the year, using the tax rates enacted by the date of preparation of the statement of financial position, and any adjustment of tax payable for previous years.

Deferred tax is provided using the balance sheet liability method on all temporary differences between the carrying amounts for financial reporting purposes and the amounts used for taxation purposes.

Deferred tax is calculated on the basis of the tax rates that are expected to apply to the period when the asset is realized or the liability is settled. The effect on deferred tax of any changes in tax rates is charged to the statement of comprehensive income, except to the extent that it relates to items previously charged or credited directly to equity. The tax rate applicable for 2012 applied in the calculation of deferred income tax amount is 10 per cent (2011 – 10 per cent).

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the unused tax losses and credits can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

(u) Segment reporting

The Group applies IFRS 8 “Operating segments” which requires the Group to present operating segments based on the information that is internally provided to the Management.

(v) New IFRS and interpretations (IFRIC) not yet adopted as at the reporting date

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after January 1, 2011, and have not been applied in preparing these financial statements. None of these is expected to have a significant effect on the financial statements of the Group.

Standards, Interpretations and amendments to published Standards that are not yet effective and have not been early adopted – endorsed by the EC



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– Amendments to IFRS 7 Disclosures – Transfers of Financial Assets (issued October 2010) – effective from the first financial year that starts after 1 July 2011.

– Improvements to IFRSs 2010 (issued May 2010), various effective dates, generally 1 January 2011

IASB/IFRIC documents not yet endorsed by EC:

Management believes that it is appropriate to disclose that the following revised standards, new interpretations and amendments to current standards, which are already issued by the International Accounting Standards Board (IASB), are not yet endorsed for adoption by the European commission, and therefore are not taken into account in preparing these financial statements. The actual effective dates for them will depend on the endorsement decision by the EC.

– IFRS 9 Financial Instruments (issued November 2009 and Additions to IFRS 9 issued October 2010) has an effective date 1 January 2015 and could change the classification and measurement of financial instruments.

– In May 2011 the IASB issued IFRS 10 Consolidated Financial Statements, IFRS 11 Joint arrangements, IFRS 12 Disclosures of Interests in Other Entities and IFRS 13 Fair Value Measurement, which all have an effective date of 1 January 2013. The IASB also issued IAS 27 Separate Financial Statements (2011) which supersedes IAS 27 (2008) and IAS 28 Investments in Associates and Joint Ventures (2011) which supersedes IAS 28 (2008). All of these standards have an effective date of 1 January 2013.

– Amendments to IAS 12 Deferred Tax: Recovery of Underlying Assets (issued December 2010) has an effective date 1 January 2012.

– Amendments to IFRS 1 Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters (issued December 2010) has an effective date 1 July 2012.

– In June 2011 the IASB issued Presentation of Items of Other Comprehensive Income (Amendments to IAS 1) with an effective date of 1 July 2012.

– In June 2011 the IASB issued an amended IAS 19 Employee Benefits with an effective date of 1 January 2013.

– In December 2011 the IASB issued amendments to IFRS 7 Disclosures – Offsetting Financial Assets and Financial Liabilities with an effective date of 1 January 2013.

– In December 2011 the IASB issued amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities with an effective date of 1 January 2014.

– IFRIC Interpretation 20: Stripping Costs in the Production Phase of a Surface Mine with an effective date of 1 January 2013.

3. Financial Risk Management

Introduction and overview

The Group has exposure to the following risks from its use of financial instruments:

– credit risk

– liquidity risk

– market risks

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– currency risks

– operational risk

Risk management framework

The Management Board has overall responsibility for the establishment and oversight of the Group’s risk management framework. The Board has established the Group’s Asset and Liability Committee (ALCO), Credit committee, Problem Loans Committee and Operational Risk committees, which are responsible for developing and monitoring Group risk management policies in their specified areas. All Board committees have both executive and non-executive members. The Group’s risk management policies are established to identify and analyze the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions, products and services offered. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment, in which all employees understand their roles and obligations.

By its nature the Group’s activities are principally related to the use of financial instruments. The Group accepts deposits from customers at both fixed and floating rates and for various periods and seeks to invest these funds in high quality assets.

The Management places trading limits on the level of exposure that can be taken in relation to both overnight and intra-day market positions.

A. Credit risk

The Group is permanently exposed to credit risk, arising from the probability that counterparties might default on their contractual obligation under loans and advances when due or in full. Credit risk is the most important risk for the Group’s business; management therefore carefully manages its exposure to credit risk. The Group has a set of policies and procedures in relation to credit approval and credit exposures management. In addition, the Group is exposed to off-balance sheet credit risk through commitments under unutilized extended credit lines and issued guarantees.

Concentrations of credit risk (whether on or off-balance sheet) might arise from risk exposures to one borrower or group of borrowers, with similar economic characteristics, that might be affected in equal terms by changes in economic or other circumstances in meeting their contractual obligations.

The Group is exposed to credit risk also in result of its trading and investment activities, as well as in result of its activities as an investment intermediary for its customers or for third parties. The credit risk arising on trading and investment activities is managed through the management of market risk.

The risk that counterparts to financial instruments might default on their obligations is monitored on an ongoing basis. In monitoring credit risk exposures related to trading instruments, consideration is given to instruments with a positive fair value and to the volatility of the fair value of trading instruments.

Credit risk measurement

In measuring credit risk of loans and advances to customers and to banks at a counterparty level, the Group reflects three components (i) the probability of default by the client or counterparty on its contractual obligations; (ii) current exposures to the counterparty and its likely future development, from which the Group derives the “exposure at default”; and (iii) the likely recovery ratio on the defaulted obligations (the loss given default).

These credit risk components, which reflect expected loss are compliant with the regulatory requirements of BNB and the European Directive for capital adequacy and are embedded in the Group’s daily operational management. However, when determining the impairment losses to reduce the carrying amount of the exposure, are applied



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the requirements of IAS 39, which are based on losses that have been incurred at the date of preparation of the statement of financial position.

The Group assesses the probability of default of individual counterparties using internal rating tools tailored to the various categories of exposures and counterparty. They have been developed internally and combine statistical analysis with judgment and are validated, where appropriate, by comparison with externally available data. Clients of the Group are segmented into rating classes, reflecting the range of default probabilities defined for each rating class. This means, that in principle, exposures migrate between classes as the assessment of their probability of default changes. The rating tools are kept under review and upgraded as necessary. The Group regularly validates the performance of the rating and their predictive power with regard to default events. The Group uses the assessments of recognized external credit assessment institutions where available to benchmark the internal credit risk assessment.

Exposure at default is based on the amounts the Group expects to be owed at the time of default. For example for a loan this is the outstanding principal. For a commitment, the Group includes any amount already drawn plus the further amount that may have been drawn by the time of default, should it occur.

Loss given default or loss severity represent the Group’s expectation of the extent of loss on a claim should default occur. It varies by type of counterparty, type of seniority of claim and availability of collateral or other credit mitigation.

For debt securities or other bills, both internal and external ratings are used for managing of the credit risk exposures. The investments in those securities and bills are viewed as a way to gain a better credit quality mapping and maintain a readily available source to meet the funding requirement at the same time.

Risk limit control and mitigation policies

The Group manages limits and controls concentrations of credit risk wherever they are identified – in particular, to individual counterparties and groups, and to industries and countries.

The Group structures the levels of credit risk it undertakes by placing limits on the amount of risk accepted in relation to one borrower, or group of borrowers, and to geographical and industry segments. Such risks are monitored on a revolving basis and subject to regular reviews, when considered necessary.

Exposure to credit risk is also managed through regular analysis of the ability of borrowers and potential borrowers to meet interest and capital repayment obligations.

Collateral

The Group employs a range of policies and practices to mitigate credit risk. The most traditional of these is taking security for funds advances. The Group implements guidelines on the acceptability of specific classes of collateral or credit risk mitigation. The principal collateral types for loans and advances are:

– mortgages over residential properties;

– cash deposits;

– pledge of business assets such as premises, inventory and accounts receivable;

– corporate or bank guarantees;

– portfolio guarantees issued by first-class international or national institutions;

– pledge of financial instruments such as debt securities and equities.

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Longer-term finance and lending to corporate entities are generally secured; consumer loans for individual persons are generally unsecured. In addition, in order to minimize the credit loss the Group might seek additional collateral from the counterparty when impairment indicators are noticed for the relevant individual loans and advances.

Derivatives

The Group maintains strict control limits on net open derivative positions (i.e. the difference between the purchase and sale contracts), by both amount and term. At any one time, the amount subject to credit risk is limited to the current fair value of instruments that are favorable to the Group (i.e. assets, where their fair value is positive), which in relation to derivatives is only a small fraction of the contract, or notional values used to express the volume of instruments outstanding. The credit risk exposure is managed as part of the overall lending limits with customers, together with potential exposures from market movements. Collateral or other security is not usually obtained for credit risk exposures on these instruments.

Settlement risk arises in any situation where a payment in cash, securities or equities is made in the expectation of a corresponding receipt in cash, securities or equities. Daily settlement limits are established for each counterparty to cover the aggregate of all settlement risk arising from the Group’s market transactions on any single day.

Credit-related commitments

The primary purpose of these instruments is to ensure that funds are available to a customer as required. Guarantees and standby letters of credit carry the same credit risk as loans. Documentary and commercial letters of credit – which are written undertakings by the Group on behalf of a customer authorizing a third party to draw drafts on the Group up to a stipulated amount under specific terms and conditions – are collateralized by the underlying shipments of goods to which they relate and therefore carry less risk than a direct loan.

Commitments to extend credit represent unused portions of authorizations to extend credit in the form of loans, guarantees or letters of credit. With respect to credit risk on commitments to extend credit, the Group is potentially exposed to loss in an amount equal to the total unused commitments. However, the likely amount of loss is less than the total unused commitments, as most commitments to extend credit are contingent upon customers maintaining specific credit standards. The Group monitors the term to maturity of credit commitments because longer-term commitments generally have a greater degree of credit risk than shorter-term commitments. However, any commitments that are unconditionally cancelable at any time by the Group without prior notice, or that effectively provide for automatic cancellation due to deterioration in the borrower’s creditworthiness, are considered by the Group to bear no risk.

Management of credit risk

The Supervisory Board has delegated responsibility for the management of credit risk to the Group’s Management Board. The Management Board defines the credit policy based on analysis of the business situation and the assessment of the risk associated with credit business. The scope of the Corporate Lending Policy is to present a clear picture in which direction the Group’s corporate credit portfolio shall develop within the next year. The approval of the Corporate Lending Policy by Supervisory Board ensures, that the steps proposed by the Group with regards to targeted industries, products, etc. and the subsequent impacts of those steps on the corporate credit portfolio are in line with the plans of the Supervisory Board and therefore in line with the basic strategy of RBI Group.

The credit risk management is performed by the Risk Management Division. The main responsibilities of the Division are:

– Recommend and manage portfolio concentration limits

– Provide independent review of limit applications

– Perform proactive risk management of transactional and portfolio activities



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– Ensure that risk management standards, policies, practices and tools of the RBI Group are adhered to by all business units in the credit process

– Assist the Risk Originating Units/Account Managers in establishing business-specific risk management practices (not contradicting standard tools introduced by RBI Group) for the approval, measurement, reporting, monitoring, limiting and analysis of credit risk of corporate customers

– Assist in the identification, classification and management of problematic exposures

– Ensure that “early warning signs” reported by the Risk Originating Units are considered properly and internal actions (e.g. downgrading of Customer Rating, Review and establishment of action plans for potential problematic exposures) are initiated quickly

– Cooperate with the Risk Originating Unit in establishing the Credit Policy, review the final Credit Policy paper and recommend amendments whenever necessary as well as monitor the compliance of the Group with the approved Credit Policy.

Policy for risk exposures assessment and allocation of provisions for credit risk

The internal and external rating systems focus more on credit quality mapping from the inception of the lending and investment activities. In contrast, impairment provisions are recognized for financial reporting purposes only for losses that have been incurred at the date of preparation of the statement of financial position based on objective evidence of impairment. Due to the different methodologies applied, the amount of incurred credit losses provided for in the financial statements are usually lower than the amount determined from the expected loss model that is used for internal operational management and banking regulation purposes.

The Group applies different approaches with regard to assessment of impairment and determination of the credit loss, depending on the customer segment and product type.

Allowances for impairment of 100 per cent of the exposure net from the value of the residential real estate mortgages for retail customers (including private individuals and micro SMEs) are recognized if:

– exposure is past due more than 180 days

– exposure is identified as uncollectible.

Impairment that cannot be identified for exposures to retail customers on an individual loan basis may still be identifiable on a portfolio basis. Hence, all accounts without objectively significant evidence of impairment are included in a group of similar financial assets for the collective assessment. Allowances for impairment are based on previous loss experience for assets with similar credit risk characteristics (product, customer type, collateral type, past-due status) with consideration of the current portfolio performance. Accounts that are individually assessed for impairment and identified as impaired are excluded from a collective assessment of impairment, but they may enter into the model, which determines loss factors used for collective allowances for impairment.

Exposures to corporate customers are evaluated and classified based on the credit risk level, the period of delay of amounts due, the assessment of the debtor’s financial state and the main sources for repayment of the debtor’s obligations.

The Group applies a policy for determining of provisions for collective impairment of exposures to corporate customers. Exposures to large, middle and small corporate customers, for which no individual impairment has been identified, are grouped together in pools according to their internal rating. The collective impairment of each pool is measured according to the historic default rate for the respective rating class. The historic default rate represents the number of defaulted customers by the end of the observation period as percentage from total number of customers in the respective pool. The observation period is 12 months and the average is calculated on minimum 3 but not more than 5 consequitve 12-month peripos and considers only customers with existing exposures at the

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beginning and by the end of the periods. The collective impairment is determined by multiplying the net exposure after deduction of the high liquid collateral by the historic default rate, which corresponds to the rating class of the customer and by the level of loss on the unsecured part of the exposure (Loss Given Default, LGD). Due to the limited historical data for recovered amounts on defaulted exposures, the Group applies the Group benchmark for LGD of 45 per cent.

Credit risk exposures

In BGN Thousand 2011 2010

Individually impaired:

Weak credit standing 1 1

Very weàk credit standing 4 2

High probability of default 1 1,412

Default 563,417 269,092

Unrated 33 14

Retail 170,736 137,190

Gross amount 734,192 407,711

Allowance for impairment (327,577) (231,256)

Carrying amount 406,615 176,455

Collectively impaired:

Excellent credit standing 2,423 787

Very good credit standing 14,936 11,747

Good credit standing 175,832 118,447

Average credit standing 287,137 221,871

Mediocre credit standing 301,638 310,548

Weak credit standing 351,012 289,167

Very weàk credit standing 277,495 448,028

High probability of default 174,127 322,030

Unrated 2,296 8,271

Retail 1,615,521 1,522,755

Gross amount 3,202,417 3,253,651

Allowance for impairment (36,100) (65,059)

Carrying amount 3,166,317 3,188,592

Past due but not impaired:

Average credit standing 12 -



Default 5,673 2,487



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Retail 17,050 8,808

Gross amount 29,248 15,847

Past due comprises:

30-60 days 9,087 2,976

60-90 days 2,908 2,693

90-180 days 5,537 2,947

180 days + 11,716 7,231

Carrying amount 29,248 15,847

Neither past due nor impaired:

Excellent credit standing 45,163 2,294

Very good credit standing 90,436 27,917

Good credit standing 67,436 52,116

Average credit standing 97,505 142,023

Mediocre credit standing 174,785 146,258

Weak credit standing 154,795 155,637



Default 412 2,612

Unrated 7,151 1,979

Retail 102,881 108,087

Gross amount 1,003,701 900,958

TOTAL PORTFOLIO 4,969,558 4,578,167

TOTAL PROVISION FOR IMPAIRMENT (363,677) (296,315)

NET AMOUNT 4,605,881 4,281,852

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In BGN Thousand Gross amount Net amount

31 December 2011

Weak credit standing 1 -

Very weàk credit standing 4 -

High probability of default 1 -

Default 563,417 350,352

Unrated 33 -

Retail 170,736 56,263

Total 734,192 406,615

31 December 2010

Weak credit standing 1 -

Very weàk credit standing 2 -


Default 269,092 131,962

Unrated 14 -

Retail 137,190 43,153

Total 407,711 176,455

Set out below is an analysis of the gross and net (of allowances for impairment) amounts of individually impaired assets by risk grade:

The following table illustrates the collateral by type of impairment:


Against individually impaired:

Cash deposit 2,167 104

Guarantees 289 6

Mortgages 626,726 326,386

Inventory 3,776 5,073

Other 289 166

Unsecured 100,945 75,976

Against collectively impaired:

Cash deposit 9,985 20,219

Guarantees 38,806 21,699

Mortgages 2,172,440 2,295,501

Inventory 158,441 132,071

Other 3,303 5,993

Unsecured 819,442 778,168



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Past due but not impaired:

Cash deposit - -

Guarantees 47 135

Mortgages 28,818 14,964

Inventory - -

Other 2 1

Unsecured 381 747

Neither past due nor impaired:

Cash deposit 42,530 38,218

Guarantees 19,393 1,778

Mortgages 719,561 795,327

Inventory 9,557 5,702

Other 8,683 7

Unsecured 203,977 59,926

Total 4,969,558 4,578,167

Upon initial recognition of loans and advances, the fair value of collateral is based on valuation techniques commonly used for the corresponding assets. In subsequent periods, the fair value is updated by reference to market price or indexes of similar assets where the update frequency depends on the asset type and the market conditions.

Concentration of risks of loans and advances by industry sector

The following table breaks down the Group’s main credit exposures at their carrying amounts, as categorized by the industry sectors of our counterparties:

In BGN Thousand 2011 % 2010 %

Manufacturing 1,201,715 24% 984,997 22%

Construction and real estate 726,745 15% 879,455 19%

Transport 75,467 2% 83,035 2%

Trade 1,114,678 22% 1,032,070 23%

Other 458,446 9% 330,910 7%

Individuals 1,392,507 28% 1,267,700 27%

hereof mortgages 728,860 15% 704,903 15%

Total 4,969,558 4,578,167

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Trading assets

An analysis of the credit quality of the maximum credit exposure for trading assets, based on Standard & Poor’s, Fitch and Moody’s ratings where applicable, is as follows:

In BGN Thousand Rating agency 2011 2010

Bulgarian government securities

BBB- Fitch 127,312 153,650

Bulgarian corporate bonds

BBB- Fitch 5,352 8,608

Caà3 Moody’s 2,587 3,232

Unrated 27,702 20,332

Foreign government securities

AAA Fitch 588 6,709

Foreign corporate bonds

AAA S&P 26,326 32,517

Total 189,867 225,048

B. Liquidity risk

Liquidity risk is the risk that the Group is unable to meet its payment obligations associated with its financial liabilities when they fall due.

• Liquidity risk management process

The Group does not maintain cash resources required to meet all possible outgoing cash flows as experience has shown that there is a minimum level of reinvestment of maturing funds that can be predicted with a high level of certainty. The correlation between assets and liabilities, as well as the outgoing and incoming cash flows are managed to guarantee the regular and timely fulfillment of current obligations for the “going concern” scenario as well as for “liquidity shortage”.

The maturity of assets and liabilities and the ability to replace, at an acceptable cost, interest bearing liabilities as they mature, are important factors in assessing the liquidity of the Group and its exposure to changes in interest rates and exchange rates.

The diversification of deposits by type and customer segment, and the past experience of the Group give reason management to believe that deposits are a long-term and stable source of funding for the Group.

• Liquidity Stress Tests

Treasury Risk Management Department performs various numbers of scenarios simulating Liquidity Crisis under which of them are also the regulatory required ones: idiosyncratic, market specific, and a combination of the two. The results are reviewed on on-going basis and also are reported to the Managing Board for further countermeasures, if needed.

The Group maintains a certain amount of Liquidity Buffers composed of cash and core liquid assets to ensure, to the maximum extent possible, that they will be available in times of stress. Therfore the Group constantly strives for improvement of the Net liquid assets to the total Group’s liabilities ratio.



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For this purpose net liquid assets are considered as including cash and cash equivalents, balances with the Central Bank, Bulgarian government bonds, nostro accounts and placements with banks with a remaining maturity up to 7 days, government treasury bills and investment grade debt securities for which there is an active and liquid market. Liquid assets do not include pledged assets. The amount of the pledged assets as at 31 December 2011 and 31 December 2010 is BGN 296 mln and BGN 223 mln. respectively.

The table below illustrates the ratio for the past two years:

Net liquid assets to total Group’s liabilities ratio

2011 2010

Average for the period 21.7% 19.7%

Maximum for the period 24.0% 27.4%

Minimum for the period 20.3% 14.4%

As at 31 December 21.5% 27.4%

Monitoring and reporting take the form of cash flow measurement and projections for the next day, week and month respectively, as these are key periods for liquidity management. The starting point for those projections is an analysis of the contractual maturity of the financial liabilities and the expected collection date of the financial assets.

The Group’s Treasury also monitors unmatched medium term assets, the level and type of undrawn lending commitments, the usage of overdraft facilities and the impact of contingent liabilities such as standby letters of credit and guarantees.

• Funding approach

Sources of liquidity are regularly reviewed by Treasury to maintain a wide diversification by currency, geography, provider, product and term.

• Cash flows from non-derivative liabilities

The maturity of non-derivative liabilities is expressed as the cash flows payable by the Group under financial liabilities by remaining contractual maturities at the date of preparation of the statement of financial position. The amounts disclosed in the table are the contractual undiscounted cash flows, whereas the Group manages the inherent liquidity risk based on expected undiscounted cash inflows.

• Cash flows from derivative liabilities

The Group’s derivatives will be settled on a gross basis and include:

– Foreign exchange derivatives – currency forwards, currency swaps

– Interest rate derivatives – single currency interest rate swaps, cross currency interest rate swaps.

The maturity table analyses the Group’s derivative financial instruments that will be settled on a gross basis into relevant maturity groupings based on the remaining period at the date of preparation of the statement of financial position to the contractual maturity date.

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Less than1 month

1-3months

3 monthsto 1 year

Total inflow/outflow

1-5 years More than5 years

Carryingamount

Non derivative liabilities

Deposits from banks (18,992) (141,936) - - - (160,928) 160,899

Deposits from customers (2,303,692) (698,259) (1,132,334) (279,810) - (4,414,095) 4,356,113

Borrowings from banks (100) (9,991) (451,944) (246,533) (63,682) (772,250) 748,517

Subordinated liabilities (1,445) - (4,242) (22,624) (179,395) (207,706) 178,955

Current tax liabilities - (676) - - - (676) 676

Deferred tsx liabilities - - - (824) - (824) 824

Other liabilities (29,795) (7,051) (10,984) - (1,218) (49,048) 49,048

Total non-derivativeinstruments

Derivative liabilities

Foreign exchange derivatives

Outflow (29,744) (9,492) (4,244) - - (43,480) -

Inflow 29,895 9,932 4,577 - - 44,404 -

Interest rate derivatives 61

Outflow (101) (203) (12,940) - - (13,244) -

Inflow 106 211 12,980 - - 13,297 -

Total derivative liabilities 156 448 373 - - 977 991

Loan commitments (15,774) (28,696) (350,435) (358,761) (140,043) (893,710)

Total financial liabilities(contractual maturity (2,369,642) (886,161) (1,949,566) (908,552) (384,338) (6,498,260) 5,496,023dates)

(2,354,025) (857,914) (1,599,504) (549,791) (244,295) (5,605,527) 5,495,032

As at 31 December 2011In BGN Thousand

930



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Less than1 month

1-3months

3 monthsto 1 year

Total inflow/outflow

1-5 years More than5 years

Carryingamount

As at 31 December 2010In BGN Thousand

Deposits from banks (471,167) - - - - (471,167) 471,144

Deposits from customers (2,349,103) (843,654) (908,187) (69,076) - (4,170,020) 4,120,952

Borrowings from banks (46) (22,717) (232,374) (534,119) (59,646) (848,902) 805,783

Subordinated liabilities (1,169) - (3,508) (18,709) (179,150) (202,536) 178,813

Deferred tax liabilities - - - (529) - (529) 529

Other liabilities (32,371) (11,267) (10,572) - (1,182) (55,392) 55,392

Total non-derivativeinstruments

Derivative liabilities

Foreign exchange derivatives 28

Outflow - (912) - - - (912)

Inflow - 856 - - - 856

Interest rate derivatives 382

Outflow (8,876) (251) - - - (9,127)

Inflow 8,524 249 - - - 8,773

Total derivative liabilities (352) (58) - - - (410) 410

Loan commitments - (61,413) (277,792) (261,927) (60,764) (661,896)

Total financial liabilities(contractual maturity (2,854,208) (939,109) (1,432,432) (884,360) (300,742) (6,410,851) 5,633,023 dates)

Non derivative liabilities

(2,853,856) (877,638) (1,154,640) (622,433) (239,978) (5,748,545) 5,632,613

C. Market risk

The Group takes on exposure to market risks, which is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risks arise from open positions in interest rate, currency and equity products, all of which are exposed to general or specific market movements and changes in the level of volatility of market rates or prices such as interest rates, credit spreads, foreign exchange rates and equity prices. The Group separates exposures to market risk into either trading or non-trading portfolios.

All marked-to-market instruments are subject to market risk. The instruments are recognized at fair value based on quoted bid prices, and all changes in market conditions directly affect net trading income (through trading instruments) or equity value (through available for sale instruments).

The Group manages its trading portfolios in accordance with the changes in market conditions, as well as through setting of respective limits for the relative instruments.

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Market risk measurement techniques

As part of the management of market risk, the Group undertakes various hedging strategies for market risk exposure’s minimization. The Group also enters into interest rate swaps to match the interest rate risk associated with the fixed-rate long-term debt securities and loans to which the fair value option has been applied. The major measurement techniques used to measure and control market risk are outlined below.

• Value at risk

The Group applies a “value at risk” methodology (VAR) to its trading and non-trading portfolios, to estimate the market risk of positions held and the potential losses expected, through appropriate analytical method, supported by empirical conditions and documented analyses. This method is applied consecutively and with a certain level of conservatism, which is usually higher if there is only limited data available. The Board sets limits on the value at risk that may be accepted for the Group, trading and non-trading separately, which are monitored on a regular basis by the Group’s “Treasury Risk management department”.

VAR is a statistically based estimate of the potential loss on the current portfolio from adverse market movements. It expresses the maximum amount the Group might lose, but only to a certain level of confidence (99 per cent). There is therefore a specified statistical probability (1 per cent) that actual loss could be greater that the VAR estimate. The VAR model assumes a certain “holding period” until positions can be closed (1 day). It also assumes that market moves occurring over this holding period will follow a similar pattern to those that have occurred in the past. The VAR approach used in the Group since the beginning of 2010 is a hybrid one, i.e. both aspects of historical simulation and of a parametric approach are combined and extreme events resulting from a period of stressed risk factors are added. Volatility regimes are taken into consideration via rescaling of historic returns (used volatility is a weighted average of 80 per cent of the recent 20 business days and 20 per cent of the past two years). Actual outcomes are monitored regularly to test the validity of the assumptions and parameters/factors used in the VAR calculation.

The use of this approach does not prevent losses outside of these limits, but to a certain extent the application of the hybrid model takes into consideration extreme events of significant market movements.

The quality of the VAR model is continuously monitored by back-testing the VAR results for trading books. All back-testing exceptions and any exceptional revenues on the profit side of the VAR distribution are investigated, and all back-testing results are reported to the Management board.

• VAR summary for 2011

2011 By risk type In BGN Thousand (1d, 99%)

Trading portfolio VAR 1,060 4,690 201 201

Non-trading portfolio VAR 1,781 6,860 772 998

Total Diversfied VaR 1,715 4,350 913 1,028

Average High Low 31 December

• VAR summary for 2010

2010By risk type In BGN Thousand (1d, 99%) Average High Low 31 December

Trading portfolio VAR 3,780 10,154 1,215 1,584

Non-trading portfolio VAR 2,587 5,852 1,124 3,184

Total Diversfied VaR 2,413 6,321 1,364 2,443



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• Stress tests

Stress tests provide an indication of the potential size of losses that could arise in extreme conditions. The stress tests include risk factor stress testing, where stress movements are applied to each risk category; emerging market stress testing, where emerging market portfolios are subject to stress movements; and ad hoc stress testing, which includes applying possible stress events to specific position or regions.

The results of the stress tests are reviewed by Management on an on-going basis. The stress testing is tailored to the business and typically uses scenario analysis.

Interest rate risk

The Group’s operations are subject to the risk of interest rate fluctuations to the extent that interest-earning assets and interest-bearing liabilities mature or re-price at different times or in differing amounts.

In comparison to the other risks the interest rate risk could be minimized trough the mutual management of assets and liabilities.

The policy of the Group to minimize interest rate risk is to grant floating rate loans against the received floating rate external financings. Interest rate risk is also managed through the balanced use of different funding sources (borrowings from other local banks, long-term borrowings from foreign banks, customer deposits etc.), as well as through purposeful credit policy, providing for increasing return.

It is of crucial importance for the Management of the Group to control the interest rate sensitivity of assets and liabilities. Due to the nature of banking an absolute matching in maturities or in periods of re-pricing of contracted interests on financial assets and liabilities is not possible.

The Group’s interest rate exposures are monitored and managed by generating interest rate sensitivity reports. The majority of the Group ‘s interest bearing assets and liabilities are structured to match either short-term assets and short-term liabilities, or long-term assets and liabilities with re-pricing opportunities within one year, or long-term assets and corresponding liabilities whereby re-pricing is performed simultaneously.

For most interest-bearing assets and liabilities exists a possibility of re-pricing at a relatively short notice and any interest rate sensitivity gaps are considered immaterial.

The following table indicates the periods in which interest bearing financial assets and liabilities re-price as at 31 December 2011:

In BGN Thousand Up to 3months

From 3months to

1 yearFrom 1 year

to 5 yearsMore than

5 years Total

Assets

Loans and advances to banks 487,487 54,920 - - 542,407

Loans and advances to customers 4,605,881 - - - 4,605,881

Investment securities 30,322 61,362 372,574 73,788 538,046

Total assets 5,123,690 116,282 372,574 73,788 5,686,334

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From 3months to

1 yearFrom 1 year

to 5 yearsMore than

5 years Total

Liabilities

Deposits from banks 160,899 - - - 160,899

Deposits from customers 3,427,125 785,537 143,451 - 4,356,113

Borrowings from banks 559,267 189,250 - - 748,517

Subordinated liabilities 178,955 - - - 178,955

Total liabilities 4,326,246 974,787 143,451 - 5,444,484

Net position 797,444 (858,505) 229,123 73,788 241,850

The following table indicates the periods in which interest bearing financial assets and liabilities re-price as at 31 December 2010:

The management of interest rate risk against interest rate gap limits is supplemented by monitoring the sensitivity of the Group’s financial assets and liabilities to various standard and non-standard interest rate scenarios. Standard scenarios that are considered on a monthly basis include a 100 basis point (bp) parallel fall or rise in all yield curves worldwide and a 50 bp rise or fall in the greater than 12-month portion of all yield curves. This analysis is presented in the table below for the year 2011, respectively 2010.


From 3months to

1 yearFrom 1 year

to 5 yearsMore than

5 years Total

Assets

Loans and advances to banks 966,331 - - - 966,331

Loans and advances to customers 4,281,852 - - - 4,281,852

Receivables under repurchase agreements 26,521 - - - 26,521

Investment securities 76,115 2,476 351,432 77,436 507,459

Total assets 5,350,819 2,476 351,432 77,436 5,782,163

Liabilities

Deposits from banks 471,144 - - - 471,144

Deposits from customers 2,352,901 1,146,185 621,866 - 4,120,952

Borrowings from banks 666,401 139,382 - - 805,783

Subordinated liabilities 178,813 - - - 178,813

Total liabilities 3,669,259 1,285,567 621,866 - 5,576,692

Net position 1,681,560 (1,283,091) (270,434) 77,436 205,471



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The potential loss will not materialize with its whole amount, as stop loss limits are effectively in place.

• Early warning limits

To support the operative steering of risk-based limits and structural limits, different boundary values for the limit utilization are defined. Such “early warning limits” serve as a warning signal when risk exposures approach the limit in certain business areas or risk types. A violation of these early warning limits leads to intensified monitoring and closer supervision of the respective exposure. Hence these limits are not considered as a separate and independent type of limit but rather serve the purpose of supporting operative limit management.

• Stop-loss limits

All Risks (including interest rate risk) are limited effectively through stop loss processes which lead to an automatic reduction in exposure if the portfolio loss exceeds a predefined amount. Such a stop loss limit figuratively truncates the loss distribution at the stop loss level (plus a small loss amount for transaction costs for closing open positions). Stop loss limits typically are used in trading book operations but can be employed for banking book positions as well if a fairly liquid market for these assets exists or if hedging instruments are available.

D. Currency risk

The Group is exposed to currency risk through transactions in foreign currencies. The Group operates in the main currencies: US dollars, Euro, GB pounds, Swiss franks and others. As a result of the currency Board in place in Bulgaria, the Bulgarian currency is pegged to the Euro, therefore currency risk arises from changes in the exchange rate Euro/US dollar. The Group is not exposed to substantial currency risk due to the fact that it monitors and maintains the proportion between amounts and terms of its US dollar assets and liabilities.

The Group’s transactional exposures give rise to foreign currency gains and losses that are recognized in the statement of comprehensive income. These exposures comprise the monetary assets and monetary liabilities of the Group that are not denominated in the functional currency of the Group.

2011 100 bpparallelincrease

(100 bp)parallel

decrease

50 bpparallel increase

after 1 year

(50 bp)parallel decrease

after 1 yearIn BGN Thousand

as at 31 December (11,214) 9,478 (5,210) 5,360

Average for the period (12,129) 11,426 (7,455) 7,678

Maximum for the period (11,214) 13,450 (5,210) 8,590

Minimum for the period (13,739) 9,478 (8,335) 5,360

2010 100 bpparallelincrease

(100 bp)parallel

decrease

50 bpparallel increase

after 1 year

(50 bp)parallel decrease

after 1 yearIn BGN Thousand

as at 31 December (13,164) 13,625 (8,556) 8,815

Average for the period (14,808) 15,504 (8,830) 9,111

Maximum for the period (11,956) 18,239 (6,968) 10,413

Minimum for the period (17,349) 12,432 (10,074) 7,191

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• Foreign currency position of the Group as of 31 December 2011

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In BulgarianLevs

Other foreigncurrency TotalEUR

Assets

Cash and balances with central banks 445,851 22,977 6,097 474,925

Trading assets 105,098 81,947 2,822 189,867

Derivatives 965 119 - 1,084

Loans and advances to banks 133,212 323,947 85,248 542,407

Loans and advances to customers 1,160,181 3,382,836 62,864 4,605,881

Investment securities 70,707 341,926 137,439 550,072

Investments in associates 5,915 - - 5,915

Tangible and intangible fixed assets 63,670 - - 63,670

Other assets 16,199 3,700 90 19,989

Total assets 2,001,798 4,157,452 294,560 6,453,810

Liabilities

Derivatives 930 61 - 991

Deposits from banks 33,433 116,123 11,343 160,899

Deposits from customers 2,287,041 1,790,698 278,374 4,356,113

Borrwings from banks - 748,517 - 748,517

Subordinated liabilities - 178,955 - 178,955

Current tax liabilities 676 - - 676

Deferred tax liabilities 824 - - 824

Other liabilities 17,467 25,997 5,584 49,048

Total liabilities 2,340,371 2,860,351 295,301 5,496,023

Net position (338,573) 1,297,101 (741) 957,787



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• Foreign currency position of the Group as of 31 December 2010

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In BulgarianLevs

Other foreigncurrency Total

Assets

Cash and balances with central banks 424,377 13,831 6,194 444,402

Trading assets 109,584 97,874 17,590 225,048


Loans and advances to banks 85,506 830,673 50,152 966,331

Loans and advances to customers 1,077,041 3,179,743 25,068 4,281,852

Receivables under repurchase agreements 13,560 - 12,961 26,521

Investment securities 63,560 335,519 122,355 521,434

Investments in associates 6,868 - - 6,868

Tangible and intangible fixed assets 77,603 - - 77,603

Current tax assets 174 - - 174

Other assets 16,066 2,781 72 18,919

Total assets 1,874,370 4,461,032 234,392 6,569,794

Liabilities


Deposits from banks 53,036 411,146 6,962 471,144

Deposits from customers 1,951,326 1,948,758 220,868 4,120,952

Borrwings from banks - 805,783 - 805,783

Subordinated liabilities - 178,813 - 178,813

Deferred tax liabilities 529 - - 529

Other liabilities 24,392 25,451 5,549 55,392

Total liabilities 2,029,315 3,370,329 233,379 5,633,023

Net position (154,945) 1,090,703 1,013 936,771

Management of Market risk

Exposure to market risk is formally managed in accordance with risk limits set by senior management by buying or selling instruments.

Overall authority for market risk is vested in ALCO. Risk Management Division is responsible for the development of detailed risk management policies (subject to review and approval by ALCO) and for the day-to-day review of their implementation.

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E. Operational risk

Operational risk is the risk of direct or indirect loss arising from inadequate or failed internal processes, personnel and systems or from external factors. Operational risk includes also those issues related to legal and regulatory requirements and generally accepted standards of corporate behaviour.

The Group’s objective is to manage operational risk so as to balance the avoidance of financial losses and damage to its reputation with overall cost effectiveness and to avoid control procedures that restrict initiative and creativity.

The Group operates a comprehensive internal operational risk control system with clearly defined objectives and responsibilities documented in the internal regulation framework of policies, principles and Group standards of Raiffeisen Bank International.

Senior Management of the Group, supported by the Operational Risk Committee and the Audit Committee, are responsible for the oversight of operational risks.

In 2011 the improvement and development of the overall operational risk management framework continued, emphasizing on the following:

– appropriate segregation of duties, including the independent authorization of transactions;

– observation of the requirements for the reconciliation, monitoring and control of transactions;

– compliance with regulatory, legal and internal requirements and standards;

– elaboration of operative controls mechanisms, process and procedure automation and improvement;

– periodic assessment of operational risks faced, and the adequacy of controls and procedures for the purpose of establishment of comprehensive internal control system (ICS);

– proposals on risk reduction mechanisms of all new projects, product and services;

– improvement of used risk control tools by implementation of new more sophisticated and integrated software solution (ORCA), which includes all components of Operational Risk Management framework;

– loss data collection and quality improvement by using new methods and various channels for obtaining information on operational events;

– early identification of potential risks and incidents by analyzing the trend of Key Risk Indicators (KRIs) and Scenario Analysis within the Group;

– assessment of operational risk exposure and determination of required economic capital;

– risk mitigation, including insurance where this is effective;

– improvement of risk awareness and corporate culture by training the staff, regularly submitting presentations, manuals (ORCA) and monthly newsletters.

Compliance with Raiffeisen Bank International Group standards is verified by regular reviews undertaken by Internal Audit. The results of Internal Audit reviews are discussed with the business units to which they relate, with summaries submitted to the Senior Management.

Since the beginning of 2011 the Group applies the Standardized Approach (TSA) for calculating Operational Risk regulatory capital requirements.

Capital adequacy management

The Group’s objective when managing capital, which is broader concept than the equity on the face of the statement of financial position are:

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– To comply with the capital requirements set by the local banking regulator;

– To safeguard the Group’s ability to continue as a going concern so that it can continue to provide returns for shareholders;

– To maintain a strong capital base to support the development of Group’s business

Capital adequacy and the use of regulatory capital are monitored on a regular basis by the Group’s management, employing techniques based on the requirements of European Directive for capital adequacy 2006/48/EC and implemented by the Bulgarian Central Bank (the Authority), for supervisory purposes. The required information is filed with the Authority on a quarterly basis.

The Authority requires each bank or banking group to (a) hold the minimum level of regulatory capital of BGN 10 Mio, and (b) maintain a ratio of total regulatory capital to the risk-weighted assets at or above 12 per cent.

The Group’s regulatory capital is divided into two tiers:

– Tier 1 capital: share capital and profit reserves

– Tier 2 capital: qualifying subordinated loan capital

The regulatory capital is deducted by the following items:

– Investments in associates

– Intangible assets

– Specific provisions for credit risk, which represent the excess of the exposure’s carrying amount determined according to the applicable accounting standards over its risk as defined in the special Regulation of the Bulgarian Central Bank.

As of December 31, 2011 the Capital base of the Group comprises as follows:

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In BGN Thousand 2011

Tier 1 capital

Ordinary share capital 603,448

Retained earnings 299,736

Total 903,184

Tier 2 capital

Qualifying subordinated liabilities 177,980

Total 177,980

Deductions

Less intangible assets (16,484)

Less investments in companies (7,555)

Specific provisions (193,096)

Total Capital base (Own funds) 864,029

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The risk-weighted assets are measured by means of groups of risk weights classified according to the nature of – and reflecting an estimate of credit, market and other risks associated with – each asset and counterparty, taking into account any eligible collateral or guarantees. A similar treatment is adopted for off-balance sheet exposures, with some adjustments to reflect the more contingent nature of the potential losses.

Capital requirements for credit risk cover credit risk and dilution risk in the banking book, counterparty risk in the overall business and settlement risk in the trading book.

Capital requirements for market risk cover market risk in the trading book, foreign-exchange and commodity risks in the overall business.

Since the beginning of 2011 the Group applies the Standardized Approach (TSA) for calculating Operational Risk regulatory capital requirements.

The additional capital requirements, presented in the table below, are subject to National Discretion of Bulgarian Central Bank. They are calculated as 50 per cent of the total capital requirements for credit risk, market risk and operational risk.

During the financial year the Group complied with all requirements of regulatory capital and maintained its adequacy ratios above the required regulatory minimum. As of December 31, 2011 the capital requirements for credit, market and operational risks are as follows:

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In BGN 'Thousand 31 December 2011

Capital requirements for credit risk

Exposures to:

Central Governments and Central Banks 5,442

Regional Governments or local authorities 5,974

Institutions 8,149

Corporates 209,885

Retail 59,505

Exposures secured on real estate property 21,780

Mutual funds 746

Other exposures 24,499

Total capital requirements for credit risk 335,980

Capital requirements for market risk 3,481

Capital requirements for operational risk 50,892

Total capital requirements for credit risk, market risk and operational risk 390,353

Additional capital requirements subject to National Discretions from the Regulator 195,177

Total regulatory capital requirements 585,530

Own funds ( Capital Base ) 864,029

there of Tier I 903,184

Free equity (own funds) 278,499

Own funds ratio 17.71%

Core capital ratio (TIER I ratio) 16.12%



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4. Use of Estimates and Judgments

Key sources of estimation uncertainty

Financial assets accounted for at amortised cost are evaluated for impairment on a basis described in accounting policy. At each date of preparation of the statement of financial position financial assets are reviewed for the presence of indications of impairment.

The specific counterparty component of the total allowances for impairment applies to financial assets evaluated individually for impairment and is based upon management’s best estimate of the present value of the cash flows that are expected to be received. In estimating these cash flows, management makes judgements about the counterparty’s financial situation and the net realisable value of any underlying collateral. Financial assets carried at amortized cost, are presented in the statement of financial position net of provisions for impairment losses.

Collectively assessed impairment allowances cover credit losses inherent in portfolios of loans and advances with similar credit risk characteristics when there is objective evidence to suggest that they contain impaired loans and advances, but the individual impaired items cannot yet be identified. The Group’s policy for allocation of portfolio based allowances for impairment losses determines the principles for reducing the statement of financial position amount of a portfolio of loans with similar credit risk characteristics to their recoverable amount as at the date of preparation of the statement of financial position. In assessing the need for collective loss allowances, management considers factors such as credit quality, portfolio size, concentrations and economic factors. In order to estimate the required allowance, assumptions are made to define the way inherent losses are modeled and to determine the required input parameters, based on historical experience and current economic conditions.

The accuracy of the allowances depends on the estimates of future cash flows for specific counterparty allowances and the model assumptions and parameters used in determining collective allowances.

Determining fair values

The determination of fair value for financial assets and liabilities for which there is no observable market price requires the use of valuation techniques as described in accounting policy, as for example determining the net present value, discounting of future cash flows or comparison with similar financial instruments, for which reliable market prices exist. For financial instruments that are traded infrequently and have little price transparency, fair value is less objective, and requires varying degrees of judgment depending on liquidity, concentration, uncertainty of market factors, pricing assumptions and other risks affecting the specific instrument.

Valuation of financial instruments

The Group’s accounting policy on fair value measurements is discussed under note 2 (e).

The Group measures fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the measurements:

– Level 1: Quoted market price (unadjusted) in an active market for an identical instrument.

– Level 2: Valuation techniques based on observable inputs, either directly (i.e., as prices) or indirectly (i.e., derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data.

– Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable inputs have a significant effect on the instrument’s valuation. This category includes instruments that are

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valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments.

Fair values of financial assets and financial liabilities that are traded in active markets are based on quoted market prices or dealer price quotations. For all other financial instruments the Group determines fair values using valuation techniques. Valuation techniques include net present value, discounted cash flow models and comparison to similar instruments for which market observable prices exist.

The Group uses widely recognized valuation models for determining the fair value of common and more simple financial instruments, like interest rate and currency swaps that use only observable market data. For these financial instruments market conditions enable the use of valuation models.

For more complex instruments, the Group uses proprietary valuation models, which usually are developed from recognized valuation models. Some or all of the significant inputs into these models may not be observable in the market, and are derived from market prices or rates or are estimated based on assumptions. When entering into a transaction, the financial instrument is recognized initially at the transaction price, which is the best indicator of fair value, although the value obtained from the valuation model may differ from the transaction price. This initial difference, usually an increase, in fair value indicated by valuation techniques is recognized in statement of comprehensive income depending upon the individual facts and circumstances of each transaction and not later than when the market data becomes observable.

The value produced by a model or other valuation technique is adjusted to allow for a number of factors as appropriate, because valuation techniques cannot appropriately reflect all factors market participants take into account when entering into a transaction. Valuation adjustments are recorded to allow for model risks, bid-ask spreads, liquidity risks, as well as other factors. Management believes that these valuation adjustments are necessary and appropriate to fairly state financial instruments carried at fair value on the Group’s statement of financial position, so that they are as close as possible to a market price, which would be determined on an arms length principle between not related parties.

The determination of fair values is monitored by the Group’s Treasury risk management department and is independent of trading and investment operations. Specific controls include: verification of observable pricing inputs and re-performance of model valuations; a review and approval process for new models and changes to models.

The table below analyses financial instruments measured at fair value at the end of the reporting period, by the level in the fair value hierarchy into which the fair value measurement is categorised:

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In BGN Thousand Level 1 Level 2 Total

Assets

Trading assets 189,867 - 189,867

Derivatives - 1,084 1,084

Investment securities 155,250 - 155,250

�Liabilities

Derivatives - 991 991

The Group holds investment securities in the amount of BGN 2,164 thsd, which are measured at cost of aquisition and represent the Group’s share participation in the local operator of cards and local currency payments (see note 21).



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5. Segment Analysis

The Group is divided into four main business segments:

– Retail customers – incorporating private banking services, private customer current accounts, savings, deposits, credit and debit cards, consumer loans and mortgages;

– Large corporates – incorporating current accounts, deposits, overdraft facilities, loan and other credit facilities, real estate financing, foreign currency and derivative products;

– SMEs - incorporating current accounts, deposits, overdraft facilities, loan and other credit facilities, micro lending, foreign currency and derivative products;

– Proprietary business – incorporating business transactions conducted on own account and risk of the Group that are originated from managing market risk positions like FX-dealing, securities and derivatives trading, money market trading, liquidity management and funding, strategic positioning (investment portfolio), interest rate gapping (maturity transformation).

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SMEs Proprietarybusiness

Other TotalLàrgecorporates and

budgetarycompanies

RetailcustomersAs at 31 December 2011

In BGN Thousand

Segment operating income 100,445 105,241 156,745 (12,289) 25,265 375,407

Segment net assets 1,282,829 1,737,823 1,585,229 1,658,523 189,406 6,453,810

Segment liabilities 2,151,388 1,583,978 620,746 910,408 229,503 5,496,023

Impairment charge (31,293) (44,741) (55,845) - - (131,879)

Operating expenses (88,371) (31,837) (59,990) (4,256) (3,181) (187,635)

Profit before tax (19,219) 28,664 40,910 (16,546) 22,084 55,893

SMEs Proprietarybusiness

Other TotalLàrgecorporates and

budgetarycompanies

RetailcustomersAs at 31 December 2010

In BGN Thousand

Segment operating income 54,292 89,480 181,175 54,539 8,793 388,279

Segment net assets 1,185,430 1,552,838 1,543,585 2,093,543 194,398 6,569,794

Segment liabilities 1,958,442 1,640,963 521,547 1,277,338 234,733 5,633,023

Impairment charge (43,066) (44,149) (66,393) - - (153,608)

Operating expenses (86,338) (33,076) (59,267) (4,000) (2,600) (185,281)

Profit before tax (75,113) 12,256 55,515 50,539 6,193 49,390

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6. Financial Assets and Liabilities – Accounting Classifications and Fair Values

The table below sets out the carrying amounts and fair values of the Group’s financial assets and financial liabilities.

The fair value of cash and cash equivalents, deposits and other current receivables and liabilities is approximately equal to the book value given, because of their short-term maturity. The Group changes interest rates applicable on customers’ deposits with floating interest rate in accordance with market conditions.

Given the fact that the majority of the Group’s financial assets and financial liabilities are contracted at floating rates, which reflect market fluctuations, their fair value should not significantly differ from the reported carrying amounts.

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As at 31 December 2011

In BGN Thousand

Held-to-maturity

Loansand

receivables

Availablefor sale

Otheramortised

cost

Totalcarryingamount

Fairvalue

Assets

Cash and balanceswith central banks

Trading assets

Derivatives

Loans and advancesto banks

Loans and advancesto customers

Investment securities

Investments in associates

Tangible and intangiblefixed assets

Fair valuethroughprofit or

loss

- - 474,925 - - 474,925 474,925

189,867 - - - - 189,867 189,867

1,084 - - - - 1,084 1,084

- - 542,407 - - 542,407 542,407

- - 4,605,881 - - 4,605,881 4,605,881

157,414 392,658 - - - 550,072 557,181

- - - - 5,915 5,915 5,915

- - - - 63,670 63,670 63,670

Other assets - - - - 19,989 19,989 19,989

Total 348,365 392,658 5,623,213 - 89,574 6,453,810 6,460,919

Liabilities

Derivatives 991 - - - - 991 991

Deposits from banks - - - - 160,899 160,899 160,899

Deposits from customers - - - - 4,356,113 4,356,113 4,356,113

Borrowings from banks - - - - 748,517 748,517 748,517

Subordinated liabilities - - - - 178,955 178,955 178,955

Current tax liabilities - - - - 676 676 676

Deferred tax liabilities - - - - 824 824 824

Other liabilities - - - - 49,048 49,048 49,048

Total 991 - - - 5,495,032 5,496,023 5,496,023



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In BGN Thousand

Held-to-maturity

Loansand

receivables

Availablefor sale

Otheramortised

cost

Totalcarryingamount

Fairvalue

Assets

Cash and balanceswith central banks

Trading assets

Derivatives

Loans and advancesto banks

Loans and advancesto customers

Investment securities

Investments in associates

Tangible and intangiblefixed assets

Fair valuethroughprofit or

loss

- - 444,402 - - 444,402 444,402

225,048 - - - - 225,048 225,048

642 - - - - 642 642

- - 966,331 - - 966,331 966,331

- - 4,281,852 - - 4,281,852 4,281,852

- - 26,521 - - 26,521 26,521

105,552 415,882 - - - 521,434 528,438

- - - - 6,868 6,868 6,868

- - - - 77,603 77,603 77,603

Other assets - - - - 18,919 18,919 18,919

Total 331,242 415,882 5,719,106 - 103,564 6,569,794 6,576,798

Liabilities

Derivatives 410 - - - - 410 410

Deposits from banks - - - - 471,144 471,144 471,144

Deposits from customers - - - - 4,120,952 4,120,952 4,120,952

Borrowings from banks - - - - 805,783 805,783 805,783

Subordinated liabilities - - - - 178,813 178,813 178,813

Deferred tax liabilities 529 529 529

Other liabilities - - - - 55,392 55,392 55,392

Total 410 - - - 5,632,613 5,633,023 5,633,023

Receivables underrepurchase agreements

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7. Net Interest Income

72



Interest income

Loans and advances to banks 9,928 10,458

Loans and advances to customers 399,079 430,290

Investment securities 22,947 23,664

Total interest income 431,954 464,412

Interest expense

Deposits from banks (2,120) (347)

Deposits from customers (119,437) (145,972)

Long-term borrowings (24,971) (18,792)

Subordinated liabilities (5,331) (4,292)

Total interest expense (151,859) (169,403)

Net interest income 280,095 295,009

Included within the net interest income for the year ended 31 December 2011 is a total of BGN 23,644 thousand accrued on impaired financial assets.

8. Net Fee and Commission Income

2011 2010In BGN Thousand

Fee and commission income

Payment transactions 22,477 20,609

Card transactions 19,222 18,255

Cash transactions 6,438 6,184

Opening and maintenance of accounts 10,066 10,956

Other loan fees 3,362 3,424

Documentary transactions 4,338 1,958

Securities business 1,582 2,325

Asset management 2,092 1,364

Other 851 1,274

Total fee and commission income 70,428 66,349



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Included above is fee and commission income and fee and commission expense other than fees included in determining the effective interest income.

9. Net Trading Income

2011 2010

Fee and commission expense

Payment transactions (2,096) (1,841)

Card operations (domestic and foreign card operators) (7,229) (6,937)

Guarantees (1,329) (1,019)

Securities business (386) (1,484)

Other - (4)

Total fee and commission expense (11,040) (11,285)

Net fee and commission income 59,388 55,064


Debt securities 11,751 10,038

Equities - 5

Foreign exchange 12,753 13,087

Net trading income 24,504 23,130

Fixed income trading comprises of realized and unrealized dealers margins from changes in market prices of Government treasury bills and corporate bonds.

Trading result from foreign exchange represents the net result arising from purchases and sales of foreign currencies, gains arising from the translation of assets and liabilities, denominated in foreign currencies into Bulgarian levs, as well as the revaluation result of precious metals held for sale.

10. Net Result from Derivatives


Foreign exchange instruments 42 -

Interest rate instruments 515 3,659

Net result from derivatives 557 3,659

Foreign exchange instruments represent fx forwards and cross currency swaps. Interest rate derivative instruments are basically interest rate swaps.

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11. Net Result from Investment Securities Carried at Fair Value Through Profit and Loss

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Net valuation result (855) (1,300)

Net proceeds from disposal 1,604 3,341

Net result 749 2,041

In 2010 the local currency payments operator BANKSERVICE AD and the local cards operator BORICA AD declared their merger. In result of the merger the Group exchanges its 130 shares in BORICA AD and its 14,972 shares in BANKSERVICE AD against 27,862 shares of the new company BANKSRVICE – BORICA AD. The effect in the Group’s statement of comprehensive income BGN 1,619 thousand.

12. General Administrative Expenses


Personnel expenses (78,415) (80,624)

Materials and services (68,861) (65,252)

Depreciation and amortization (22,205) (21,449)

Deposit insurance instalments (18,154) (17,956)

Total general administrative expenses (187,635) (185,281)

Personnel expenses include salaries, social and health security contributions under the requirements of the local legislation.

In 2011 the cost for audit, legal and advisory services amounts to BGN 536 thousand.

13. Allowances for Impairment


�Impairment Allowance

Balance as àt January 1 296,315 172,505

Additional allowances for impairment losses 185,367 172,560

Reversals (46,815) (16,169)

Written off receivables (71,190) (32,581)

Balance as at December 31 363,677 296,315



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The following tables illustrate the breakdown of impairment losses into individual and collective allowances for impairment:

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Additional allowances for impairment (185,367) (172,560)

Reversal of write downs 46,815 16,169

Recoveries from non performing loans previously written off 6,673 2,783

Impairment losses (131,879) (153,608)

2011 2010


Individual allowances for impairment



Reversals (15,318) (10,054)

Written off receivables (71,190) (32,581)


In BGN Thousand

Collective allowances for impairment



Reversals (31,497) (6,115)


Total 363,677 296,315

14. Income Tax Expense


Current tax expense

Deferred tax (expense)/income related to origination reversal of temporary differences

Total tax (expense)/income

(5,244) (4,705)

(295) (269)

(5,539) (4,974)

Current income tax expense represents the amount of due corporate tax due to be paid under Bulgarian law. Deferred tax income or expense results from the change in the carrying amounts of deferred tax assets and deferred tax liabilities.

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The relationship between tax expense and accounting profit is as follows:

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55,893 49,390

(5,589) (4,939)

50 (24)

(5,539) (4,963)

9.91% 10.05%

Accounting profit

Tax at the applicable tax rate(10% for 2010, 10% for 2011)

Tax effect on permanent differences

Total tax expense

Effective tax rate

Reported deferred tax liabilities at December 31, 2010 and 2009 comprise the following:

In BGN Thousand Assets Liabilities Net (Assets)/Liabilities

2011 2010 2011 2010 2011 2010

Fixed assets, net - - 1,947 2,125 1,947 2,125

Unused leave of personnel (440) (512) - - (440) (512)

Other provisions (811) (1,239) - - (811) (1,239)

Investments - - 128 155 128 155

Net (Assets)/Liabilities (1,251) (1,751) 2,075 2,280 824 529

Deferred taxes are calculated on all temporary differences using a principal tax rate of 10 per cent.

Movements in temporary differences during the year are recognized in statement of comprehensive income on the following items:

Movements during the year:

Deferred taxesIn BGN Thousand

2011 Changescomprehensive income

– loss/(profit)

2010

Fixed assets 1,947 (178) 2,125

Unused leave of personnel (440) 72 (512)

Other provisions (811) 428 (1,239)

Investments 128 (27) 155

824 295 529



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15. Cash and Balances with Central Bank

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Cash on hand 54,649 49,044

ATM cash 45,182 41,791

Balances with Central Banks 375,094 353,567

Total 474,925 444,402

Balances with Central Banks include the current account with the Bulgarian Central Bank, used for direct participation in the money and treasury bills markets and for settlement purposes, as well as the accounts for holding the obligatory minimum reserves. The current account balances also partially cover the required by the Central Bank minimum reserves.

Since February 2010 the bank is a direct participant in TARGET 2.

16. Trading Assets


Bulgarian government securities 127,312 153,650

hereof pledged securities 23,543 8,262

Bulgarian corporate bonds 35,641 32,172

Foreign government securities 588 6,709

Foreign corporate bonds 26,326 32,517

Total trading assest 189,867 225,048

17. Derivatives

The Group uses the following derivative instruments for both hedging and non-hedging purposes.

Currency forwards represent commitments to purchase-sale of foreign and domestic currency, including undelivered spot transactions.

Currency and interest rate swaps are commitments to exchange one set of cash flows for another. Swaps result in an economic exchange of currencies or interest rates (for example fixed interest for floating rate) or a combination of all these (i.e. cross currency interest rate swaps). No exchange of principal takes place, except for certain currency swaps. The Group’s credit risk represents the potential cost to replace the swap contracts if counterparties fail to fulfill their obligations. The risk is monitored on an ongoing basis with reference to the current fair value, a proportion of the notional amount of the contracts and the liquidity of the market. To control the level of credit risk taken, the Group assesses counterparties using the same techniques as for its lending activities.

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The following table indicates all derivative instruments held by the Group:

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In BGN Thousand Contract /notional amount Fair values

Assets Liabilities


Currency forwards 280,410 881 847

Forex swaps 127,268 84 82

Interest rate swaps 169,169 119 62

576,847 1,084 991


Currency forwards 209,649 31 28

Forex swaps 187,503 - -

Interest rate swaps 206,391 611 382

603,543 642 410

18. Loans and Advances to Banks


Money market deposits

Domestic commercial banks 131,104 115,069

Foreign commercial banks 402,228 796,512

533,332 911,581

Nostro accounts

Domestic commercial banks 1,033 23


9,075 54,750

Total 542,407 966,331



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19. Loans and Advances to Customers

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Individual (retail customers): � �

Overdrafts 6,709 5,555

Credit cards 95,939 102,256

Consumer loans 549,179 454,986

Mortgages 728,860 704,903

Corporate entities: � �

Large corporates 1,857,517 1,633,869

SMEs 1,731,354 1,676,598

Gross loans and advances 4,969,558 4,578,167

Less: allowance for impairment (363,677) (296,315)

Net 4,605,881 4,281,852

In BGN Thousand 2011 2010Bulgarian government securities 77,142 14,974

Bulgarian corporate bonds 45,281 32,031

Bulgarian corporate shares 2,272 2,199

Foreign corporate bonds 22,966 44,571

Foreign corporate shares 431 417

Other 9,322 11,360

157,414 105,552

Interest sensitivity

Interest rates on most loans are calculated at the cost of funds plus a set margin. Cost of funds depends on the interest-fixing period and of the respective currency of the loan. Loan margins vary and are based on the loan term and on the credit risk associated with the borrower.

In case of overdue loan interest and principal penalty interest is applied.

20. Receivables Under Repurchase AgreementReceivables under repurchase agreements represent securities purchased under agreements to sell them back to the counterparty on a future fixed date at a contracted fixed price. As of December 31, 2011 the Group has no receivables under repurchase agreements. As of December 31, 2010 the receivables under repurchase agreements amount to BGN 26,521 thousand, whereby the fair value of received securities as pledge on such agreements amounts to BGN 29,177 thousand).

21. Investment Securities

А. Securities at fair value through profit and loss

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B. Securities held to maturity

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In BGN Thousand 2011 2010Bulgarian government securities 346,978 340,125

Bulgarian corporate bonds - 25,501

Bulgarian municipal bonds 45,680 50,256

392,658 415,882

Total Investment securities 550,072 521,434

Bulgarian corporate shares at fair value through profit and loss represent the Group’s participation in the local operators of cards and local currency payments. Due to the merger of both companies in 2010 the participation in the new company is valued at the fair value per share as determined in the merger agreement.

Long-term securities held to maturity represent debt investments that the Group has the intent and ability to hold to maturity.

22. Tangible and Intangible Assets

Total Premises Computer Office Motor Software Office Equipment Furniture Vehicles and licenses reconstruc.In BGN Thousand

Cost

January 1, 2011 171,411 6,655 34,096 51,865 1,433 36,115 41,247

Additions/(disposals) 8,277 - 2,701 982 - 4,171 423

Write offs (1,121) - (144) (402) (86) (489)

December 31, 2011 178,567 6,655 36,653 52,445 1,347 40,286 41,181

Accumulated Depreciationand amortization

January 1, 2011 93,808 998 21,916 31,049 1,413 18,341 20,091

Charge for the period 22,205 267 4,643 6,090 16 5,448 5,741

Depreciation of write offs (1,116) - (143) (399) (86) - (488)

December 31, 2011 114,897 1,265 26,416 36,740 1,343 23,789 25,344

Net Book Value December 31, 2011 63,670 5,390 10,237 15,705 4 16,497 15,837



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Money market deposits

Domestic commercial banks 124,967 79,453


141,917 396,475

Current accounts

Domestic commercial banks 992 41,808


18,982 74,669

Total 160,899 471,144

23. Other Assets

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Total Premises Computer Office Motor Software Office Equipment Furniture Vehicles and licenses reconstruc.In BGN Thousand

Cost

January 1, 2010 164,217 6,360 33,535 50,992 2,187 30,003 41,140

Additions/(disposals) 9,865 441 742 2,078 - 6,112 492

Write offs (2,671) (146) (181) (1,205) (754) (385)

December 31, 2010 171,411 6,655 34,096 51,865 1,433 36,115 41,247

Accumulated Depreciationand amortization

January 1, 2010 74,682 738 17,663 26,063 1,889 13,663 14,666

Charge for the period 21,449 261 4,433 6,184 86 4,678 5,807

Depreciation of write offs (2,323) (1) (180) (1,198) (562) (382)

December 31, 2010 93,808 998 21,916 31,049 1,413 18,341 20,091



In BGN Thousand 2011 2010Prepayments and other deferrals 10,668 9,578

Repossessed collateral 4,448 5,079

Other 4,873 4,262

Total 19,989 18,919

24. Deposits from Banks

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25. Deposits from Customers

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Large corporate customers and budget entities

Current accounts 694,148 615,897

Term deposits 889,831 1,025,066

SMEs


Term deposits 129,852 140,355

Retail customers


Term deposits 1,536,446 1,506,273

Total 4,356,113 4,120,952

26. Borrowings from Banks

Borrowings from banks include long-term loans attracted from international financial institutions for financing small- and medium-sized companies in the field of environmental protection, energy savings, industry, services and tourism as well as municipalities and private individuals.

To finance its credit activities, the Group also attracts syndicated and other loans from foreign credit institutions.

In BGN Thousand 2011 2010Credit lines from International financial institutions 251,270 232,420

Other borrowings from foreign banks 497,247 573,363

Total 748,517 805,783

27. Subordinated Liabilities

With the permission of the Bulgarian Central Bank, in March 2001, the bank received a subordinated debt in the form of debt-capital hybrid instrument. These funds are a supplementary capital reserve and increase the capital base of the bank for regulatory purposes. As at December 31, 2011 the nominal value of the subordinated debt amounts to EUR 91 Mio. Considering accrued interest the carrying amount in the statement of financial position as at December 31, 2011 is BGN 178,955 thousand.

The repayment of the debt is not bound by any maturity. Management believes that the use of this instrument will be for a term of over 5 years.

The treatment of these liabilities for capital adequacy purposes is in accordance with the requirements of local legislation. Any prepayment of subordinated debt prior to its final maturity is subject to written approval from the Bulgarian Central Bank.



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28. Other Liabilities

83


Transfers in process represent customers’ money transfer orders with value date after 31 December, 2011.

The Group recognizes a provision for unused paid leave, which is the undiscounted amount of the expected short-term income of its employees for the work performed during the current period.

Provision is recognized also for other liabilities to its employees, such as accrued but not paid remuneration related to performance, according to Managemnt’s assessment for the achieved results and goals during the financial year.

Obligations for defined benefit retirement obligations

The Group has obligation to pay certain amounts to each employee who retires with the Group in accordance with Art. 222, § 3 of the Labor Code in Bulgaria. According to the Labor Code regulations, when a labor contract of an employee, who has acquired a pension right, is ended, the employer is obliged to pay this employee compensation in the amount of two gross monthly salaries. In case the employee’s length of service in the company equals to or is greater than 10 or more years, as at retirement date, then the compensation is in the amount of six gross monthly salaries.

The provision for retirement compensation as at 31 December 2011 amounts to BGN 500 thousand. The estimated amount of the liability is based on an actuarial report, which was prepared based on the following actuarial assumptions:

– Discount rate: 5,7 per cent;

– Retirement date: in accordance with regulations on length of service and age.

Movement in the present value of the defined benefit obligations:


Transfers in process 23,641 20,460

Provisions for employees’ remuneration 7,003 12,129

Provisions for overdue vacations 4,382 4,854

Provisions for defined contributions to employees 500 529

Other provisions 13,522 17,420

Total 49,048 55,392


Defined benefit obligations at 1 January 529 451

Benefits paid by the plan 136 139

Current service cost and interest (15) (91)

Actuarial (gains) losses for the period (150) 30

Defined benefit obligations at 31 December 500 529

All movements in the defined benefit obligations are recognized in personnel expenses in the statement of comprehensive income.

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29. Equity

a) Share capital

As of December 31, 2011 the registered and fully paid-in capital of the Group comprised of 603,447,952 registered shares with a par value of BGN 1 each.

b) Statutory reserve

Statutory reserves comprise amounts appropriated for purposes defined by the local legislation. Under the Bulgarian Commercial code, the Group is required to set aside one tenth of its profit in a statutory reserve until it reaches 10 per cent of its equity.

c) Retained earnings

The Group presents under retained earnings section all distributable reserves in excess of the statutory reserves under (b).

30. Commitments and Contingent Liabilities

The Group provides financial guarantees and letters of credit to guarantee the performance of customers to third parties

The contractual amounts of commitments and contingent liabilities are set out in the following table by category. The amounts reflected in the table for guarantees and letters of credit represent the maximum accounting loss that would be recognized at the date of preparation of the statement of financial position if counterparts failed completely to perform as contracted.

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These commitments and contingent liabilities have off balance-sheet credit risk because only organization fees and accruals for probable losses are recognized in the statement of financial position until the commitments are fulfilled or expire. Many of the contingent liabilities and commitments will expire without being advanced in whole or in part and therefore do not represent expected future cash flows.

31. Cash and Cash Equivalents

For the purposes of the cash flow statement, cash and cash equivalents comprises the following balances with less than 3 months original maturity:

In BGN Thousand 2011 2010Letters of guarantee and letters of credit issued 277,714 181,280

Unused credit lines 893,710 661,896

Total commitments and contingencies 1,171,424 843,176



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32. Group Members

Subsidiaries

Subsidiaries are these entities, which are controlled by the Group.

Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

In preparing consolidated financial statements, an entity combines the financial statements of the parent and its subsidiaries line by line by adding together like items of assets, liabilities, equity, income and expenses. In order that the consolidated financial statements present financial information about the Group as that of a single economic entity. Income and expenses of a subsidiary are included in the consolidated statements from the date of acquisition until the Group ceises to exercise control over the entity.

Intragroup balances and transactions, including income, expenses and dividends, are eliminated in full. Profits and losses resulting from intragroup transactions that are recognised in assets, such as inventory and fixed assets, are eliminated in full.

The subsidiaries controlled by the bank as at December 31, 2011 and included in the consolidated financial statements are:

Raiffeisen Services EAD – 100 per cent ownership

Raiffeisen Services EAD is established in 2001 as Raiffeisen Services EOOD with a paid in capital of BGN 5 thousand, increased in 2003 to BGN 50 thousand.

Through a contribution in kind in 2005 the entity’s capital was increased to BGN 3,000 thousand. With court decision from November 23, 2005 Raiffeisen Services EOOD was discontinued without liquidation due to transfer of its assets and liabilities to the sole owned joint-stock company registered under Raiffeisen Services EAD.

The company’s scope of activity are financial, accounting and legal advisory services, accounting services, appraisal of property, equipment, financial assets and enterprises, electronic data processing and analysis, information services, cash collection, factoring, leasing and any other activity permitted by law.

Raiffeisen Asset Management (Bulgaria) EAD – 100 per cent ownership

Raifeisen Asset Management (Bulgaria) EAD has been entered in the company’s register of Sofia City Court in 2006. The paid in share capital amounts to BGN 250 thousand, comprised of 2,500 registered shares with a par value of BGN 100 each. The entity is controlled by Supervisory and Management board, each of them with a mandate of three years.

The scope of activity of asset management companies in Bulgaria is regulated by the Financial Supervision Commission. Raifeisen Asset Management (Bulgaria) EAD has been granted a permission for its activities by the

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Cash on hand and nostro accounts 106,781 144,796

Current account with the Central Bank 375,094 353,567

Placements with banks with original maturity of less than 3 months 440,063 912,370

Total 921,938 1,410,733

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Financial Supervision Commission in 2005. The entity is licensed to exercise the activities per art. 202, (1), pp. 1, 2, 3 of the Law on public offering of securities and treasury bonds, namely managing of mutual funds and investment companies, management of individual portfolios in its own name, advisory services on investments in securities.

Raiffeisen Insurance Broker EOOD – 100 per cent ownership

Raiffeisen Insurance Broker EOOD has been established in 2006 with 100 per cent ownership of Raiffeisenbank (Bulgaria) EAD. The company has been entered in the register of the insurance brokers on 30, March 2006 with decision №250-ЗБ of the Financial Supervision Commission.

The company’s activity is related to intermediation between its customers and the insurance companies.

Raiffeisen Insurance Broker EOOD analyses and researches the insurance market, offers insurance products, which meet the individual requirements of its customers, administers the insurance contracts and lends support in case of insurance events.

Customers of Raiffeisen Insurance Broker EOOD are the borrowers of Raiffeisenbank (Bulgaria) EAD, the lessees of е на Raiffeisen Leasing Bulgaria OOD and Raiffeisen Auto Leasing Bulgaria OOD, Raiffeisen Real Estate EOOD, as well as customers outside the Group.

Raiffeisen Real Estate EOOD – 100 per cent ownership

Raiffeisen Real Estate EOOD has been registered in 2007 as a real estate intermediary fully owned by Raiffeisenbank (Bulgaria) EAD. Raiffeisen Real Estate EOOD offers intermediary and consulting services to private individuals and companies for home, as well as business property – office and commercial building plots, land and terrains.

Besides its intermediary in sales, purchase and rent of property, the company also offers investment consultations, market researches and analyses, as well as marketing services for its strategic partners.

Raiffeisen Factoring EOOD – 100 per cent ownership

Raiffeisen Factoring EOOD is registered in 2007 with a paid in capital of BGN 1,000 thousand and scope of activity local and international factoring services with and without recourse. The company’s activities include transfers of commercial receipts, arising from the delivery of goods or rendering of services, settling of invoices with payment deferrals, managing and collection of commercial receipts, credit risk coverage, financial and business consulting.

Associates

An associate is an entity, including an unincorporated entity such as a partnership, over which the investor has significant influence, but not the control, and that is neither a subsidiary nor an interest in a joint venture.

The investments in associates are consolidated in the Group’s financial statements by using the equity method. Under the equity method, the investment in an associate is initially recognised at cost and the carrying amount is increased or decreased to recognise the investor's share of the profit or loss of the investee after the date of acquisition. The investor's share of the profit or loss of the investee is recognised in the investor's profit or loss. Distributions received from an investee reduce the carrying amount of the investment. Adjustments to the carrying amount may also be necessary for changes in the investor's proportionate interest in the investee arising from changes in the investee's equity that have not been recognised in the investee's profit or loss. Such changes include those arising from the revaluation of property, plant and equipment and from foreign exchange translation differences. The investor's share of those changes is recognised directly in equity of the investor.

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Raiffeisen Leasing Bulgaria OOD

Raiffeisen Leasing Bulgaria OOD has been entered in the companies’ register of Sofia City Court in 2004. The entity’s scope of activity is finance and operational lease, services and trade activity connected with acquisition, management and lease of property and equipment, construction, consultancy services.

Raiffeisen Leasing Bulgaria OOD is the sole owner of its subsidiary Raiffeisen Auto Leasing Bulgaria EOOD. With regards to these consolidated financial statements, Raiffeisen Auto Leasing Bulgaria EOOD is fully consolidated in the financial statements of Raiffeisen Leasing Bulgaria OOD.

The Group’s participation in the capital of Raiffeisen Leasing Bulgaria OOD is 24.5 per cent and it is consolidated by using the equity method

Raiffeisen Leasing Bulgaria OOD actively participates in the Bulgarian leasing business since five years and the main products offered to its customers are: leasing of new and used motor vehicles, building and agricultural machines, light and heavy-freight trucks, trailers and motor trucks, leasing of machines and equipment, property and yachts.

Cash collection company AD

In 2009 the bank became shareholder in the Cash collection company, with 20 per cent participation.

The table below illustrates the consolidation methods by entities:

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Participation asat December 31,

2011

Participation asat December 31,

2010

Consolidationmethod 2011

Consolidationmethod 2010

Fullconsolidation

Fullconsolidation

Fullconsolidation

Fullconsolidation

Fullconsolidation

Fullconsolidation

Fullconsolidation

Fullconsolidation

Fullconsolidation

Fullconsolidation

Raiffeisen Services EAD 100% 100%

Raifeisen Asset Management (Bulgaria) EAD 100% 100%

Raiffeisen Insurance broker EOOD 100% 100%

Raiffeisen Real Estate EOOD 100% 100%

Raiffeisen Factoring EOOD 100% 100%

Raiffeisen Leasing Bulgaria OOD 24.5% 24.5% Equity method Equity method

Cash collection company AD 20% 20% Equity method Equity method

33. Related Party Transactions

Parties are considered to be related if one party has the ability to control or exercise significant influence over the other party on making financial or operational decisions, or the parties are under common control with the Group.

A number of banking transactions are entered into with related parties in the normal course of business. These include loans, deposits and other transactions.

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Related party Type of transaction Balance as of 31.12.2011 in BGN ThousandSole owner ans other companies Loans and advances to banks 405,011within the GroupSole owner ans other companies Loans and advances to customers 22within the GroupSole owner ans other companies Positive fair value of derivatives 107within the GroupSole owner ans other companies Tangible and intangible assets 6,056within the GroupSole owner ans other companies Other assets 1,426within the GroupSole owner ans other companies Deposits from banks 18,379within the GroupSole owner ans other companies Borrowings from banks 431,845within the GroupSole owner ans other companies Deposits from customers 109,592within the GroupSole owner ans other companies Negative fair value of derivatives 79within the GroupSole owner ans other companies Subordinated liabilities 178,955within the GroupSole owner ans other companies Interest income 4,792within the GroupSole owner ans other companies Interest expense 23,852within the GroupSole owner ans other companies Fee and commission income 1,146within the GroupSole owner ans other companies Fee and commission expense 2,210within the GroupSole owner ans other companies Net result from derivatives 456within the GroupSole owner ans other companies Administrative expenses 9,013within the GroupAssociated companies Loans and advances to customers 15,949Associated companies Positive fair value of derivatives 78Associated companies Deposits from customers 3,108Associated companies Interest income 375Associated companies Interest expense 369Associated companies Fee and commission income 273Associated companies Net result from derivatives 65Associated companies Administrative expenses 615Associated companies Other operating income 600Associated companies Dividend income 534



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34. Subsequent Events

There are no events after the statement of financial position that would require either adjustments or additional disclosures in these consolidated financial statements.

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Awards

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Corporate Social Responsibility

In 2011 Raiffeisenbank (Bulgaria) EAD received several awards, among them prizes for the bank’s donation campaign “Choose to Help”.

“Mystery Shopper” award

Raiffeisenbank (Bulgaria) EAD was announced “Bank of the Year” in the “Mystery Shopper” category for 2010. The “Mystery Shopper” award was given for the first time after a research among 520 offices of banks in the country. The award granted by the Bank of the Year Association was an exclusive recognition of the quality of service at the bank and mostly of its employees, giving the highest opinion to the Raiffeisen Service Quality Project implemented by the bank in 2008.

The “Investor in Community” award

At its Annual Awards ceremony the Bulgarian Business Leaders Forum presented the “Investor in Community” award to Raiffeisenbank for the accomplishment of the “Choose to Help” donation campaign.

The ENGAGE award

At the Annual Awards ceremony of the Bulgarian Business Leaders Forum Raiffeisenbank (Bulgaria) EAD was decorated with the ENGAGE award granted by the International Business Leaders Forum for engaging the bank’s employees in the implementation of its social policy.

The “Donation Encouragement” prize

Again as a recognition of the realization and the achieved results of its “Choose to Help” initiative Raiffeisenbank (Bulgaria) EAD was awarded for “Stimulating of Donations” by the Human Resources in Bulgarian and the Eurointegration” Foundation within the “Social Services Manager – 2010” awards.



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The “Most Generous Donor” award

Raiffeisenbank (Bulgaria) EAD was distinguished with the “Most Generous Donor” award on the “Largest Corporate Donor 2011” awards ceremony traditionally held by the Bulgarian Donors Forum. The winner was determined on the basis of the volume of donations calculated as a percent of the profit before tax. For the “Choose to Help” campaign in 2010 Raiffeisenbank (Bulgaria) EAD donated 0.6 per cent of its profit before tax.

STP Excellence Award

For the seventh year in a rowRaiffeisenbank (Bulgaria) EAD was honoured by Deutsche Bank with the EUR Straight-Through Processing (STP) Excellence Award 2010 for excellence in the quality of euro payment orders in 2010. This award was given for the exclusively high quality of international payment orders and for the achieved remarkable STP rate of 99.9 per cent.


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In 2011 Raiffeisenbank (Bulgaria) EAD reinforced its position of a company, which makes business and supports socially oriented projects. In partnership with international financial institutions the bank finances environmental projects connected with energy efficiency, waste recycling and renewable energy, e.g. a biomass-burning heating power plant, hydro-power plants, wind-power parks and photovoltaic systems. With the credit lines and financial schemes Raiffeisenbank (Bulgaria) EAD negotiated the bank finances projects of energy efficiency of households, as well as mid- and long-term sustainable programmes of small and medium-sized enterprises.

Throughout the year, Raiffeisenbank (Bulgaria) EAD continued to help sustainable projects in the spheres of healthcare, social services, environmental protection and culture and education both in the form of donations within its donation initiative “Choose to Help” and as a sponsor backing various cultural and social initiatives.

“Choose to Help” – the initiative expands

In 2011 Raiffeisenbank (Bulgaria) EAD carried out the third campaign for the “Choose to Help” donation initiative. As in the year before, the campaign was very successful raising funds for all 22 healthcare, social, environmental, cultural and educational projects included in it. New media partners were attracted contributing for an even wider popularization of the projects.

With this success “Choose to Help” was confirmed as a sustainable, socially oriented campaign, in which the Raiffeisen Group employees take an active part in determining the projects. The initiative kept its format with the employees making personal donations for projects of their choice and the bank adding BGN 100 to each donation.

Donations were made by 2,897 employees, which, together with the bank’s contribution, came at BGN 361,385. In 2011 the number of donation SMS messages increased considerably raising BGN 6,476. External donations totaled BGN 19,241. Thus the donations raised during the whole active campaign from November 2011 to January 2012 came at BGN 387,102.

The Internet portal Dir.bg was again the main partner to “Choose to Help”. Its employees also made donations for projects of their choice. Media partners of the initiative, as in the 2010 campaign, were the Bulgarian National Radio, the Bulgarian National Television, the dailies Standart, Trud and 24 Chasa, Treta Vazrast weekly, Nova Televisia TV channel, Darik Radio, Blitz.bg news agency, Chuchkov brothers production studio and Ogilvy advertsing agency, and in 2011 they were joined by Spisanie 8 magazine and the iwoman.bg website.

The support of the Faces of the initiative – the TV hosts Gala, Niki Kanchev and Deo and the actor Deyan Donkov – was again gratuitous. Each one of them traditionally represented one of the spheres of support – social services, healthcare, environmental protection and culture and education – in their shows and at “Choose to Help” events organized by the bank.





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Sting’s concert in Bulgaria

Raiffeisenbank (Bulgaria) EAD was the main sponsor of Sting’s concert in Bulgaria organized by Sofia Music Enterprises. The sponsorship was extremely successful for the bank, which had its own branded space at the place of the concert where it invited partners and clients, as well as employees of the Raiffeisen Group in Bulgaria selected in a raffle drawing. Raiffeisenbank’s support was widely publicized in the media along with the concert.

Bulgarian-Austrian projects

In 2011 the Austrian Music Weeks in Bulgaria were again one of Raiffeisenbank’s biggest sponsorship projects. The event, organized by the Vienna Club Association – Sofia and behalf of the Austrian embassy in Bulgaria, presented 22 concerts in 9 cities in the country.

Through the year Raiffeisenbank (Bulgaria) EAD sponsored two events organized by the Austrian Trade Commission in Bulgaria. These were the Corporate Social Responsibility conference and the Austria Showcase “Energy Efficiency in the Construction Sector and Industry”.

Traditionally the forums were attended by governmental officials. At the Corporate Social Responsibility conference welcoming speeches were delivered by the Ambassador of Austria to Bulgaria – H.E. Gerhard Reiweger, Dr. Michael Angerer – Commercial Counsellor at the Austrian Embassy and Austrian Chancellor Werner Feymann.

Partnership with the Bulgarian National Television

Raiffeisenbank (Bulgaria) EAD was the general sponsor of two of the biggest shows on the Bulgarian National Television – “The Little Big Read” and “One Night in the Opera”.

“The Little Big Read”, broadcast in the period of February-June 2011, selected Bulgaria’s most favourite children’s book – “Pippi Longstocking” by Swedish author Astrid Lindgren.

“One Night in the Opera” is a traditional concert of the TV channel, broadcast at Christmas Eve. In 2011 it involved popular Bulgarian performers.

The book „Modern History of Bulgarian Banking“

The support for the book „Modern History of Bulgarian Banking“, published by the bank of the Year Association, was among Raiffeisenbank’s donation initiatives in 2011. The book reviews the development of the banking system in Bulgaria in its 150-year history.

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ShareholdersRaiffeisen Bank International AG – 100%

Supervisory BoardChairman: Herbert Stepic

Chairman of the Managing Board of Raiffeisen Bank International AG

SB Members: Peter Lenkh Paul Alan Kocher Hubert Figl Klemens Haller Ferenc Berszan

Management BoardChairman: Momtchil Andreev

Members of the Board: Tzenka Petkova Evelina Miltenova Ani Angelova Monika Fuernsinn, since 29.07.2011 Nadezhda Mihaylova



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Raiffeisen Bank International


A leading bank in Central and Eastern Europe, including Austria

Raiffeisenbank (Bulgaria) EAD is a subsidiary of Raiffeisen Bank International AG (RBI), which regards Central and Eastern Europe (including Austria), as its home market. For nearly 25 years, RBI has been operating in the Central and Eastern Europe (CEE) region, where today it maintains a closely knit network of subsidiary banks, leasing companies and numerous specialized financial service providers in 17 markets. As a universal bank, RBI ranks among the leading banks in the region. The powerful role played by the bank is supported by the Raiffeisen brand, which is one of the most widely recognized brands in the region. Following its strategic realignment in 2010, RBI has positioned itself as a fully integrated corporate and retail banking group in CEE. The bank not only has good access to retail and corporate customers, but also a comprehensive product offering. At the end of 2011 around 56,000 staff served approximately 13.8 million customers in around 2,915 business outlets in CEE.

In Austria, RBI is one of the top corporate and investment banks. It primarily serves Austrian customers but also international as well as major multinational clients operating in CEE. Moreover, RBI is represented in the world’s financial centers and operates branches and representative offices in Asia. All in all, RBI employs about 59,000 staff and has total assets of approximately EUR 147 billion.

RBI operates subsidiary banks in the following CEE markets:

• Albania Raiffeisen Bank Sh.a.

• Belarus Priorbank, OAO

• Bosnia and Herzegovina Raiffeisen Bank d.d. Bosna i Hercegovina

• Bulgaria Raiffeisenbank (Bulgaria) EAD

• Croatia Raiffeisenbank Austria d.d.

• Czech Republic Raiffeisenbank a.s.

• Hungary Raiffeisen Bank Zrt.

• Kosovo Raiffeisen Bank Kosovo J.S.C.

• Poland Raiffeisen Bank Polska S.A.

• Romania Raiffeisen Bank S.A.

• Russia ZAO Raiffeisenbank

• Serbia Raiffeisen banka a.d.

• Slovakia Tatra banka, a.s.

• Slovenia Raiffeisen Banka d.d.

• Ukraine VAT Raiffeisen Bank Aval

As the parent company of these banks, RBI's shareholding in them is at or near to 100 per cent in most cases.

at a glance

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RBI's development

RBI was established in October 2010 through the merger of Raiffeisen International with the principal business areas of Raiffeisen Zentralbank Osterreich AG (RZB). RBI's position as one of the leading banks in CEE (including Austria) was further reinforced by the merger. RBI has been listed on the Vienna stock exchange since 25 April 2005 (until 12 October 2010 as Raiffeisen International). It is represented in several leading national and international indices, including the ATX and EURO STOXX Banks. RZB remained the majority shareholder following the merger, holding approximately 78.5 per cent of the shares. The remaining 21.5 per cent of RBI's shares are in free float.

RZB was formed in 1927 as “Genossenschaftliche Zentralbank” (GZB). Raiffeisen gained its first foothold in Central and Eastern Europe back in 1987, when it established its first subsidiary bank in Hungary. Other own subsidiaries have since been established; from 2000 onwards, Raiffeisen's expansion in the CEE countries has mainly been achieved by acquiring existing banks, which were combined into a holding company that from 2003 until October 2010 operated under the name Raiffeisen International. Raiffeisen International was listed on the stock exchange in April 2005 in order to finance its future growth as efficiently as possible. RBI was subsequently established in 2010 through the merger of Raiffeisen International with the principal business areas of RZB.

125 years of Raiffeisen in Austria

Raiffeisen's strong roots in Austria date back more than 125 years. Raiffeisen's first Austrian credit cooperative was founded in Muhldorf, a village in Lower Austria, in 1886. Local cooperatives soon started working together and, in turn, founded regional cooperatives marking the beginning of the multi-tiered structure of the Raiffeisen organization. This not only helped to strengthen their position in the market, but also enabled better management and risk control. Numerous product and service cooperatives were founded on the back of increasing specialization and market integration. In mid-2011, the Raiffeisen Banking Group Austria (RBG), the country's largest banking group, managed €83.8 billion in Austrian customer deposits (excluding building society savings), of which around €50.3 billion was held in savings deposits; with a market share of 32.2 per cent, RBG has continued to expand its role as market leader among Austria's banks. RBG has achieved its strong market position through healthy organic growth.

For more information please refer to www.rbinternational.com and www.rzb.at.



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Raiffeisen Leasing Bulgaria OOD was established in 2004 with shareholders Raiffeisenbank (Bulgaria) EAD, holding 24.5 per cent of its shares, and Raiffeisen Leasing International GmbH, holding 75.5 per cent. Raiffeisen Leasing Bulgaria owns 100 per cent of the shares of Raiffeisen Auto Leasing Bulgaria EOOD.

Raiffeisen Leasing Bulgaria has been an active player on the leasing market already for 8 years. The main leased assets offered to the customers are new and used vehicles, construction and agricultural machinery, light and heavy trucks, trailers and forklifts, machines and equipment as well as real estate leasing.

As of 31 December 2011 the market share of Raiffeisen Leasing Bulgaria and Raiffeisen Auto Leasing Bulgaria EOOD was 9.07 per cent, positioning the companies on the third place on the leasing market based on the leasing portfolio (BNB statistics and data from the Bulgarian Association for Leasing (BAL)). The total volume of the leasing market as of 31 December 2011 amounted to BGN 3,550 mln, which was a decrease of BGN 477 mln compared to 31 December 2010.

As of 31 December 2011 the total assets of both Raiffeisen Leasing Bulgaria and Raiffeisen Auto Leasing Bulgaria amounted to BGN 338 mln.

As of year end 2011 the net lease receivables of Raiffeisen Leasing Bulgaria and Raiffeisen Auto Leasing Bulgaria amounted to BGN 318 mln. The leased assets were allocated as follows: vehicles – 61.6 per cent, equipment – 16.9 per cent and real estate – 21.5 per cent.

The customers of Raiffeisen Leasing Bulgaria and Raiffeisen Auto Leasing Bulgaria were big Corporates representing 80.7 per cent of the total portfolio, followed by small and medium enterprises – 11.7 per cent, and private individuals – 7.6 per cent.

In 2011, the attracted and utilized medium- and long-term financing reached BGN 322 mln, out of which BGN 49 mln from international financial institutions.

Raiffeisen Leasing Bulgaria and Raiffeisen Auto Leasing Bulgaria have registered 17 branches in the regional cities throughout the country.

Raiffeisen Leasing Bulgaria

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Raiffeisen Insurance Broker EOOD, a company founded in 2006, is 100 per cent owned by Raiffeisenbank (Bulgaria) EAD. Raiffeisen Insurance Broker is listed in the register of the insurance brokers under Registration No 250-3B by the Financial Supervision Commission on 30 March 2006.

The company’s activities are related to intermediation in the process of conclusion of insurance contracts between the customers of the broker and the insurance companies.

Raiffeisen Insurance Broker prepares analysis and study of the insurance market, offers insurance products consistent with the individual needs of the customers, administers insurance contracts and offers assistance in case of an accident covered by the insurance policy accident.

Raiffeisen Insurance Broker clients are Raiffeisenbank’s borrowers, Raiffeisen Leasing Bulgaria OOD and Raiffeisen Auto Bulgaria ЕOOD leasers, clients of Raiffeisen Real Estate EOOD, as well as new clients for the Raiffeisen Group.

As of 31 December 2011 Raiffeisen Insurance Broker accumulated BGN 22.99 mln premium income for its partner insurance companies.

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Raiffeisen Insurance Broker



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Market Share/Asset under Management

In 2011 Raiffeisen Asset Management (Bulgaria) EAD (RAM) strengthened its leading position as an asset manager and distributor of collective investment schemes and asset under discretionary management. The company’s results stem from the implementation of a successful active market strategy, strong cooperation with Raiffeisenbank (Bulgaria) EAD, the sole owner of the company, and close collaboration with Raiffeisen Capital Management, Austria.

Raiffeisen Asset Management

Raiffeisen Asset Management (Bulgaria)

In BGN ThousandIn BGN Thousand

31.12.2008 31.12.2009 31.12.2010 30.06.2011 30.09.2011 31.12.2011 31.12.2008 31.12.2009 31.12.2010 30.06.2011 30.09.2011 31.12.2011

50,16055,150

140,700 143,700

151,600148,900

39,53037,000

56,700

53,300

56,200

41,300

Assets under Management in Mutual Funds Assets under Discretionary Management

in %

5.5

11

16.5

22

27.5

33

14.39%13.24%

12.99%

17.85%19.01%

31.0

3.20

10

23.32%

30.0

6.20

1025.48%

30.0

9.20

10

30.16%

31.1

2.20

10

31.14%30.77%

31.0

3.20

11

30.0

6.20

11

33.10% 32.14%

30.0

9.20

11

31.1

2.20

11

Market Share of RAM

RAM manages and distributes six Bulgarian funds, which cover the entire risk spectrum – low-risk, balanced and high-risk funds. As of December 31 2011, the total assets of the six local funds managed by the company exceeded BGN 148 mln, which corresponded to a market share of 32.14 per cent. Despite the deepening debt crisis in Greece and the others peripheral countries of the Eurozone, RAM increased its market share compared to the competitive AMC by means of more optimization of the managed conservative funds’ portfolios and an increase of the efficiency of the Marketing and Sales Department in order to preserve the existing client’s base.

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New products and initiatives/ Client base

On 23 February 2011 RAM registered for distribution four sector RCM Funds – RCM Energy Equities Fund, RCM Infrastructure Fund, RCM Active Commodities Fund and RCM Inflation Protected Fund.

At the end of 2011 the number of the company’s clients reached 1,473 in total. The share of the investments held by institutional and corporate clients was still more than 50 per cent of the assets, accumulated in the funds.

In parallel with the successful fund management and distribution activity, in 2011 RAM continued to have a leading position in the segment of discretionary management. As of 31 December 2011, the company managed assets amounting to BGN 53.3 mln which was an increase of over 44 per cent compared to 2010. The main part of the funds (over 80 per cent of the assets under discretionary management) belonged to institutional clients.

As of 31 December 2011, the total amount of net assets under management (AuM) of RAM exceeded BGN 202.2 mln and marked an increase of 14 per cent compared to 2010 /177 mln AuM/.

RCM Funds

In 2011 RAM registered negative net sales of RCM funds at the amount of EUR 0.651 mln.

The increased dynamic, unsatisfactory performance of developed capital markets and the growth of debt crisis had a negative impact on the propensity of investors to bear risk. The preferences for investing in mutual funds have declined and the investor’s preferences have turned to bank deposits and real estate.

Despite the difficult macroeconomic and market environment and regarding the new opportunities that the post-recessional period offers, RAM enriched its product mix with new product schemes related to these opportunities.

In the first quarter of 2011 RAM registered four new sector RCM Funds – Raiffeisen-Energy-Equities, Raiffeisen-Infrastructural-Equities, Raiffeisen-Active-Commodities and Raiffeisen-Inflation-Protected-Fund.

Investment approach and achieved profitability

Raiffeisen Asset Management (Bulgaria) EAD applies analytical, informative and professional expertise of the Raiffeisen Group in making investment decisions, constructing portfolios of local funds and their subsequent management.

2011 was the year in which the main macroeconomic indicators of the leading developed economies had mixed performance. US economy stabilized while EU economy slowed down.

In Europe from 31 December 2010 to 31 December 2011 the indexes DJ STOXX 600 and DJ STOXX 50 fell by 11.34 and 8.39 per cent, respectively. In U.S. S&P 500 index remained unchanged.

In Bulgaria, the leading index of BSE SOFIX ended 2011 with a decrease of 11.11 per cent compared to 2010. Investors’ activity had stabilized to relatively low levels. Market volatility




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returned to normal, but fundamentally the economy of Bulgaria lagged behind compared to most EU countries.

In this difficult business environment, during 2011 a policy of diversification of the portfolios of RAM conservative funds in the developed capital markets was followed. The conservative investment policy was kept also for the low risk funds managed by RAM.

The performance of funds managed by RAM in 2011 was as follows:

• Raiffeisen / Bulgaria / Money Market Fund is the largest mutual fund in Bulgaria with 33.86 per cent market share in the funds with a conservative risk profile.

• Raiffeisen / Bulgaria / Protected Investment Fund in EUR reached to EUR 27.46 mln amount of net asset value (NAV) and is now the second largest mutual fund in Bulgaria after Raiffeisen Money Market Fund.

The returns on the funds are as follows:

• Raiffeisen / Bulgaria / Money Market Fund – Annual yield (5.27 per cent)

• Raiffeisen / Bulgaria / Fund Bonds – Annual yield (4.18 per cent)

• Raiffeisen / Bulgaria / Protected Investment Fund in EUR (4.90 per cent)

• Raiffeisen / Bulgaria / Balanced Fund – Annual yield (-9.69 per cent)

• Raiffeisen / Bulgaria / Balanced Dollar Fund – Annual income (-11.66 per cent)

• Raiffeisen / Bulgaria / Equity Fund – Annual income (- 20.53 per cent)


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RaiffeisenFactoring



Raiffeisen Factoring EOOD, a company established in 2007, is 100 per cent owned by Raiffeisenbank (Bulgaria) EAD.

The company’s activities include purchase of commercial receivables, resulting from delivery of goods or services, financing against invoices issued on deferred payment basis, management and collection of receivables, credit risk coverage, finance and business consultancy.

Raiffeisen Factoring offers domestic and internаtional factoring on a recourse or non-recourse basis.

Тhe company is the first Bulgarian member of the International Factors Group, covering 58 countries and 134 members. As a result of this membership, Raiffeisen Factoring is in a position to offer export and import factoring.

Raiffeisen Factoring

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Raiffeisen Real Estate

Raiffeisen Real Estate

Raiffeisen Real Estate EOOD is a real estate company, 100 per cent owned by Raiffeisenbank (Bulgaria) EAD. The company was established in 2007 and since then steadily makes its way towards the leaders amongst professional real estate service providers in the country.

Raiffeisen Real Estate offers a spectrum of brokerage and consultancy services to its private and corporate clients for residential and commercial real estate properties. The Company offers constantly updated residential and commercial listings including new projects from local and international developers and listings from the secondary market.

Apart from the brokerage and agency for real estate sale and lease transactions, the Company offers advisory services, market research and consultancy and marketing communications support to its strategic partners.

At the end of 2011 Raiffeisen Real Estate operated on a national scale through its offices in Sofia, Plovdiv, Varna, Burgas and Rouse. Members of the team are experts with professional experience gained through their work on the biggest and most successful real estate investment projects in Bulgaria.

Raiffeisen Real Estate is a member of Bulgarian National Real Estate Association and actively contributes to the cooperation with the C.E.I. (European Confederation of Real Estate Agents), CEREAN (Central European Real Estate Associations Network), FIABCI (International Real Estate Federation and NAR (National Association of Realtors).

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Raiffeisen-Glossary

Raiffeisen-Glossary

The gable cross is part of the trademark used by almost every company in the Raiffeisen Banking Group and RZB Group in CEE. It represents two stylized horse’s heads, crossed and attached to the gable of a house. It is a symbol of protection rooted in old European folk tradition: a gable cross on the roof was believed to protect the house and its occupants from outside dangers and to ward off evil. It symbolizes the protection and security that the members of the Raiffeisen banks enjoy through their self-determined collaboration. Today, the gable cross is one of Austria’s best-known trademarks and a well recognized brand in CEE.

The Raiffeisen Banking Group (RBG) is Austria's largest banking group by total assets. As per year-end 2010, RBG's consolidated balance-sheet total amounted to more than €255 billion. It represents about a quarter of all banking business in Austria and comprises the country's largest banking network with more than 2,200 business outlets and 24,000 employees. RBG consists of Raiffeisen Banks on the local level, Regional Raiffeisen Banks on the provincial level and RZB as central institution. RZB also acts as the link between the international operations of its group and RBG. Raiffeisen Banks are private cooperative credit institutions, operating as general service retail banks. Each province's Raiffeisen Banks are owners of the respective Regional Raiffeisen Bank, which in their entirety own approximately 89 per cent of RZB's ordinary shares.

The Raiffeisen Banks go back to an initiative of the German social reformer Friedrich Wilhelm Raiffeisen (1818 – 1888), who, by founding the first cooperative banking association in 1862, has laid the cornerstone of the global organization of Raiffeisen cooperative societies. Only 10 years after the foundation of the first Austrian Raiffeisen banking cooperative in 1886, already 600 savings and loan banks were operating according to the Raiffeisen system throughout the country. According to Raiffeisen's fundamental principle of self-help, the promotion of their members' interests is a key objective of their business policies.

Raiffeisen Bank International AG (RBI) regards Central and Eastern Europe (CEE), including Austria, as its home market. In CEE, RBI operates as a universal bank through a closely knit network of subsidiary banks, leasing companies and numerous specialized financial service providers in 17 markets. At the end of 2011 around 56,000 staff served approximately 13.8 million customers in around 2,915 business outlets in CEE. In Austria, RBI is one of the top corporate and investment banks. Moreover, RBI is represented in the world's financial centers and operates branches and representative offices in Asia. All in all, RBI employs about 59,000 staff and has total assets of approximately EUR 147 billion.

RBI has been listed on the Vienna stock exchange since 25 April 2005 (until 12 October 2010 as Raiffeisen International). It is represented in several leading national and international indices, including the ATX and EURO STOXX Banks. RZB is the majority shareholder holding approximately 78.5 per cent of the shares. The remaining 21.5 per cent of RBI's shares are in free float. With its long-term "A" (S&P, Fitch) and "A1" (Moody's) ratings, RBI is also a regular issuer of debt securities.

Gable Cross

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Raiffeisen-Glossary

RZB Group

RZB Founded in 1927, Raiffeisen Zentralbank Österreich AG (RZB) is the central institution of the Austrian Raiffeisen Banking Group (RBG) and acts as group center for the entire RZB Group, including RBI. RZB functions as the key link between the Austrian Raiffeisen Banking Group and RBI, with its banking network in Central and Eastern Europe (CEE) and numerous other international operations.

The Group owned and steered by RZB. Raiffeisen Bank International is the Group’s largest unit.

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Branch Network in Bulgaria

Addresses and Contacts Branch Network in Bulgaria

Head Office1504 Sofia18/20 Gogol Str.Tel.: + 359 2 919 85 101Fax: + 359 2 943 45 28

Raiffeisenbank (Bulgaria) EAD Offices in Sofia:

Sofia Main Branch 1504 Sofia18/20 Gogol Str.Tel.: 02 919 85 715/716/ 717Fax: 02 919 85 139

Sofia 21000 Sofia5 Saborna Str.Tel.: 02 9 809 985Fax: 02 9 803 042

Sofia 31750 SofiaMladost 1, bl.30, entr. VTel.:02 976 09 60/67/68Fax: 02 975 31 58

Sofia 41303 Sofia132 Todor Alexandrov Blvd.Tel: 02 915 99 21/922Fax: 02 981 19 21

Sofia 51606 Sofia5 Gen. Totleben Blvd.Tel: 02 9 157 913/14/15Fax: 02 9 532 880

Sofia 61421 Sofia49 Bulgaria Blvd.Business Center VitoshaTel.: 02 8 181 914/915Fax: 02 9 589 961

Sofia 71324 SofiaLyulin 6 Compl.,41 Dzhavaharlal Neru Blvd.Tel.: 02 9 216 912Fax: 02 9 252 371

Sofia 81715 SofiaBusiness Park Sofia, bl. 11ATel.: 02 9 705 712Fax: 02 9 742 019

Sofia 91330 SofiaKrasna Polyana Compl.N. Mushanov Blvd., bl. 331Tel.: 02 8 126 053Fax: 02 9 201 134

Sofia 101220 SofiaNadezhda Compl.Lomsko Shose Blvd., bl. 171Tel.: 02 8 134 013Fax: 02 9 361 193

Sofia 111463 Sofia3 Hristo Stambolski Str.Tel.: 02 9 178 113/114Fax: 02 9 549 386

Sofia 121202 Sofia65 Maria Luiza Blvd.Tel.: 02 9 264 043Fax: 02 9 800 781

Sofia 141111 Sofia43 Shipchenski Prohod Blvd.Tel.: 02 8 171 863/864Fax: 02 9 712 008

Sofia 151407 Sofia55 N. Vaptsarov Blvd.Business Center EXPO 2000Tel.: 02 8 190 061/062Fax: 02 8 682 080

Sofia 161303 Sofia79 Hristo Botev Blvd.Tel.: 02 8 138 061/062Fax: 02 9 311 038

Sofia 171700 Sofia1 Universitetski Park Str.Tel.: 02 8 190 432Fax: 02 9 625 042

Sofia 181517 SofiaBotevgradsko Shose Blvd., bl. 4, entr. G-ETel.: 02 8 190 3 61/362Fax: 02 9 454 422

Sofia 191000 Sofia93A Vasil Levski Blvd.Tel.: 02 9 396 011/12Fax: 02 9 802 377

Sofia 201612 Sofia7 Tsar Boris III Blvd., entr. A-BTel.: 02 8 051 612/613Fax: 02 9 523 878

Sofia 211113 Sofia101 Tsarigradsko Shose Blvd.Tel.: 02 8 174 342/347Fax: 02 9 733 986



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Sofia 221750 SofiaMladost 1 Compl., Saharov MarketTel.: 02 9 764 911/912Fax. 02 9 745 030

Sofia 231712 SofiaMladost 3 Compl., bl. 304Tel.: 02 8 175 011/12Fax: 02 9 744 479

Sofia 241504 Sofia10 Yanko Sakazov Blvd.Tel.: 02 819 27 11/12/13Fax: (02) 9 434 074

Sofia 251202 Sofia92 Maria Luiza Blvd.Tel.: 02 9 231 951/952Fax: 02 9 310 319

Sofia 261612 Sofia124A Tsar Boris III Blvd.Tel.: 02 8 081 752Fax: 02 9 559 632

Sofia 271300 Sofia50 Al. Stamboliiski Blvd.Tel.: 02 8 004 811/812Fax: 02 9 201 738

Sofia 281421 Sofia9 Viskyar Planina Str.Tel.: 02 9 659 812/814Fax: 02 9 621 855

Sofia 291574 Sofia3 Temenuga Str.Tel.: 02 9 712 196Fax: (02) 8 701 086

Sofia 301000 Sofia111 G.S. Rakovski Blvd.Tel.: 02 9 234 411/412Fax: 02 9 802 372

Sofia 311421 Sofia11 Arsenalski Blvd.Tel.: 02 8 065 822Fax: 02 9 631 328

Sofia 321336 SofiaLyulin 3 Compl.Tsaritsa Yoana Blvd., bl.387Tel.: 02 8 144 312Fax: 02 8 263 534

Sofia 331000 Sofia5 Sveta Nedelya SquareTel.: 02 9 156 511Fax: 02 9 883 521

Sofia 341040 Sofia126 Vasil Levski Blvd.Tel.: 02 8 062 712Fax: 02 9 433 474

Sofia 351680 Sofia76 Gotse Delchev Blvd.Tel.: 02 8 157 552Fax: 02 8 586 589

Sofia 361618 Sofia13 Al. Pushkin Str.Tel.: 02 8 082 742Fax: 02 9 554 476

Sofia 371113 Sofia12 Tsarigradsko Shose Blvd.Tel.: 02 8 074 311Fax: 02 8 705 584

Sofia 381584 SofiaDruzhba 2 Compl., 120 Tsvetan Lazarov Blvd.Tel.: 02 8 079 512Fax: 02 9 790 627

Sofia 421113 Sofia18А F. J. Curie Str.Tel.: 02 8 077 972Fax: 02 9 711 308

Sofia 441606 Sofia8 Praga Blvd.Tel.: 02 8 953 912Fax: 02 9 523 441

Sofia 451606 Sofia53 Hristo Botev Blvd.Tel.: 02 8 951 712Fax: 02 9 549 481

Sofia 461404 Sofia2 Deyan Belishki Str.Tel.: 02 8 085 912Fax: 02 9 583 068

Sofia Cantek1619 Sofia5A Nikola Petkov Blvd.Tel.: 02 8 081 912Fax: 02 9 571 204

Sofia Militzer & Munch1360 Sofia11 Obelsko Shose Str.Tel.: 02 9 845 775Fax: 02 9 250 583


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Raiffeisenbank (Bulgaria) EAD Offices in Bulgaria:

Aytos 8500 Aytos17 Tsar Osvoboditel Str.Tel.: (0558) 29 120Fax: (0558) 23 530

Asenovgrad4230 AsenovgradIzlozhenie Str.Tel.: (0331) 60 060 / 062Fax: (0331) 64 902

Balchik9600 Balchik25 Primorska Str.Tel.: (0579) 78 112Fax: (0579) 72 799

Bankya1320 Bankya10 Tsar Boris I Str.Tel.: (02) 8 128 511 / 512Fax: (02) 9 976 452

Bansko2770 Bansko48 Tsar Simeon Str.Tel.: (0749) 81 021Fax: (0749) 84 093

Berkovitsa3500 BerkovitsaNikolaevska Str.bl. 16 apartmentsTel.: (0953) 89 21Fax: (0953) 88 134

Blagoevgrad 2700 Blagoevgrad47 Todor Aleksandrov Str.Tel.: (073) 829 161Fax: (073) 831 582

Blagoevgrad 22700 Blagoevgrad5 Georgi Izmirliev SquareTel.: (073) 882 091Fax: (073) 882 092

Botevgrad2140 Botevgrad2 Akad. Stoyan Romanski Str.Tel.: (0723) 68 711Fax: (0723) 66 322

Botevgrad NAP2140 Botevgrad61, Treti Mart Blvd.Tel. / Fax: (0723) 60 067

Burgas 8000 Burgas1 Adam Mitskevich Str.Tel.: (056) 897 845Fax: (056) 820 046

Burgas NAP8000 Burgas26 Aleksandrovska Str.Tel.: (056) 825 663

Burgas 28000 Burgas115 Aleksandrovska Str.Tel.: (056) 875 922Fax: (056) 830 173

Burgas 38000 BurgasBratya Miladinovi Compl., bl.117Tel.: (056) 859 487Fax: (056) 831 825

Burgas 48000 Burgas5 Ferdinandova Str.Tel.: (056) 851 422Fax: (056) 842 640

Burgas 58000 BurgasMeden Rudnik Compl., bl.187Tel.: (056) 857 911Fax: (056) 850 096

Burgas 68000 BurgasSlaveykov Compl., bl. 126Tel.: (056) 895 811Fax: (056) 586 057

Burgas 78000 Burgas131 Tsar Simeon I Str.Tel.: (056) 8956 12 /13Fax: (056) 530 287

Burgas Piccadilly8000 BurgasIzgrev Compl.Tel.: (056) 859 474Fax: (056) 860 363

Byala7100 Byala1 Ekzarh Yosif Parvi SquareTel.: (0817) 713 12 / 13Fax: (0817) 720 56

Cherven Bryag5980 Cherven Bryag1 Targovska Str.Tel.: (0659) 992 11/ 12Fax: (0659) 9 42 37

Devin4800 Devin2 Druzhba Str.,SPA Hotel DevinTel.: (0341) 26 86Fax: (0341) 41 71

Dzhebel6850 Dzhebel23 Edelvays Str.Tel.: (03632) 28 06Fax: (03632) 28 01




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Dimitrovgrad6400 Dimitrovgrad9 Dimitar Blagoev Str.Tel.: (0391) 65 113Fax: (0391) 67 684

Dobrich9300 Dobrich25, 25-ti Septemvri Str.Tel.: (058) 653 002/003Fax: (058) 601 783

Dobrich 29300 Dobrich20 Otets Paisiy Str.Tel.: (058) 655 032Fax: (058) 622 034

Dulovo7650 Dulovo11 Vasil Levski Str.Tel.: (0855) 21 112Fax: (0855) 22 799

Dupnitsa2600 Dupnitsa2 Solun Str.Tel.: (0701) 59 813Fax: (0701) 51 113

Elena5070 Elena36 Stoyan Mihaylovski Str.Tel.: (06151) 40 52Fax: (06151) 26 65

Elin Pelin2100 Elin PelinVitosha Blvd., bl.4, entr.BTel.: (0725) 68 012Fax: (0725) 66 966

Elhovo8700 Elhovo2 Dunav Str.Tel.: (0478) 81 512Fax: (0478) 81 135

Gabrovo5300 Gabrovo30 Skobelevska Str.Tel.: (066) 810 062Fax: (066) 801 345

Galabovo 6280 GalabovoBrikel EAD10 Republika Str.Tel.: (0418) 68 081/082Fax: (0418) 24 87

Gorna Oryahovitsa5100 Gorna Oryahovitsa1 Mano Todorov Str.Tel.: (0618) 61 712 Fax: (0618) 64 491

Golden Sands 9007 Golden SandsHotel AdmiralTel.: (052) 389 413Fax: (052) 357 713

Gotse Delchev2900 Gotse Delchev1 Byalo More Str.Tel.: (0751) 61 322Fax: (0751) 60 024

Harmanli 6450 Harmanli1 Bulgaria Blvd.Tel./Fax: (0373) 34 91

Haskovo 16300 Haskovo 1-3, Pirin Str.Tel.: (038) 604 722 / 711Fax: (038) 604 721

Haskovo 26300 Haskovo4 Svoboda SquareTel.: (038) 602 261/262Fax: (038) 620 106

Haskovo 36300 Haskovo6 San Stefano Str.Tel.: (038) 602 752Fax: (038) 620 668

Haskovo 46300 Haskovo146 Bulgaria Blvd.Tel.: (038) 650 312Fax: (038) 661 114

Haskovo NAP6300 Haskovo2 Svoboda SquareTel.: (038) 624 093

Hisarya4180 Hisarya19 Dimitar Blagoev Str.Tel.: (0337) 60 452Fax: (0337) 65 610

Ihtiman NAP2050 Ihtiman4 Polkovnik Drangov Str.Tel.: (0724) 22 54Fax: (0724) 23 77

Isperih7400 Isperih6 Stefan Karadzha Str.Tel.: (08431) 46 75Fax: (08431) 28 22

Kavarna9650 Kavarna30 Dobrotitsa Str.Tel.: (0570) 81 052Fax: (0570) 82 067

Kazanlak 16100 Kazanlak18 Skobelev Str.Tel.: (0431) 68 224/225Fax: (0431) 63 436


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Kazanlak 26100 Kazanlak2 Knyaz Mirski Str.Tel.: (0431) 68 912Fax: (0431) 70 066

Kardzhali 16600 Kardzhali1 Hristo Botev Str.Tel.: (0361) 60 653Fax: (0361) 61 366

Kardzhali 26600 Kardzhali14 Stefan Karadzha Str.Tel.: (0361) 21 042Fax: (0361) 61 153

Karlovo4300 Karlovo1 Evstati Geshev Str.Tel.: (0335) 90 433Fax: (0335) 92 295

Karnobat8400 Karnobat1 Karnobatska Komuna Str.Tel.: (0550) 28 843Fax: (0550) 22 908

Kostinbrod2230 Kostinbrod11 Ohrid Str.Tel.: (0721) 68 861/862Fax: (0721) 60 440

Kubrat7300 Kubrat11 Knyaz Boris I Str.Tel.: (0838) 72 799Fax: (0838) 72 696

Kyustendil2500 KyustendilDemokratsiya SquareTel.: (078) 556 312Fax: (078) 554 152

Levski5900 Levski40 Al. Stamboliyski Str.Tel.: (0650) 88 862Fax: (0650) 82 803

Lovech 5500 Lovech3 Bulgaria Blvd.Tel.: (068) 689 019Fax: (068) 689 020

Lukovit5770 Lukovit20 Zlatna Panega Str.Tel.: (0697) 20 68Fax: (0697) 21 03

Mezdra3100 Mezdra8 G. Dimitrov Str.Tel.: (0910) 91 711Fax: (0910) 92 288

Montana3400 Montana47, Treti Mart Blvd.Tel.: (096) 391 939Fax: (096) 303 036

Momchilgrad6800 Momchilgrad23 Gyumyurdzhinska Str.Tel.: (03631) 78 12Fax: (03631) 63 67

Nesebar8230 Nesebar3 Priboyna Str.Tel.: (0554) 46 660Fax: (0554) 43 516

Nova Zagora8900 Nova Zagora49 Vasil Levski Str.Tel.: (0457) 61 112Fax: (0457) 62 870

Panaguyrishte4500 Panaguyrishte3 G.Benkovski Str.Tel.: (0357) 88 00 Fax: (0357) 60 37

Parvomay4270 Parvomay6 Orfey Str.Tel.: (0336) 22 80Fax: (0336) 28 66

Pavlikeni5200 Pavlikeni8 Vasil Levski Str.Tel.: (0610) 51 014Fax: (0610) 52 102

Pazardzhik4400 Pazardzhik7 Tsar Shishman Str.Tel.: (034) 403 023/024Fax: (034) 403 020

Pazardzhik 24400 Pazardzhik22 General Gurko Str.Tel.: (034) 406 712 Fax: (034) 431 019

Pazardzhik 34400 Pazardzhik63B, Al. Stamboliyski Str.Tel.: (034) 403 552Fax: (034) 443 015

Pazardzhik NAP4400 Pazardzhik7 Asen Zlatarov Str.Tel.: (034) 441 250

Pernik2300 Pernik15 Krakra Str.Tel.: (076) 976 111Fax: (076) 609 062




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Peshtera4550 Peshtera19 Doyranska Epopeya Str.Tel.: (0350) 63 71Fax: (0350) 41 51

Petrich2850 Petrich51/53 Rokfeler Str.Tel.: (0745) 69 611Fax: (0745) 61 461

Pirdop 2070 Pirdop59 Tsar Osvoboditel Blvd.Tel.: (0728) 68 061Fax: (07181) 86 63

Pirdop NAP2070 Pirdop39 Tsar Osvoboditel Blvd.Tel.: (07181) 55 51Fax: (07181) 55 51

Pleven5800 Pleven1 Vardar Str.Tel.: (064) 894 423Fax: (064) 804 394

Pleven 25800 Pleven2 Tsar Boris III Str.Tel.: (064) 890 512Fax: (064) 803 470

Pleven 35800 Pleven9 Asen Halachev Str.Tel.: (064) 887 311/312Fax: (064) 801 518

Pleven 45800 Pleven74 Hristo Botev Blvd.Tel.: (064) 891 062Fax: (064) 800 363

Plovdiv 4000 Plovdiv20 Vasil Aprilov Str.Tel.: (032) 261 912Fax: (032) 629 966

Plovdiv 2 4000 Plovdiv2 Konstantin Stoilov Str.Tel.: (032) 606 681 / 682Fax: (032) 606 688

Plovdiv 3 4000 Plovdiv1 Maria Luiza Blvd.Tel.: (032) 646 562Fax: (032) 662 900

Plovdiv 4 4000 Plovdiv125 Shesti Septemvri Blvd.Tel.: (032) 648 841Fax: (032) 649 531

Plovdiv 54000 Plovdiv5 Avksentiy Veleshki Str.Tel.: (032) 601 287/270Fax: (032) 629 911

Plovdiv 64000 Plovdiv106 Bulgaria Blvd.Tel.: (032) 907 912 / 913Fax: (032) 940 076

Plovdiv 74023 PlovdivSaedinenie Blvd., Arimag Shopping CenterTel.: (032) 271 412Fax: (032) 682 053

Pomorie8200 Pomorie40 Prof. Stoyanov Str.Tel.: (0596) 28 912Fax: (0596) 28 096

Popovo7800 Popovo15-ti January Str.Tel.: (0608) 401 22 / 23 / 27Fax: (0608) 40 089

Primorsko8290 Primorsko50, Treti Mart Str.Tel.: (0550) 31 040Fax: (0550) 32 286

Radnevo 6260 Radnevo6 Georgi Dimitrov Str. Tel.: (0417) 81 122Fax: (0417) 82 456

Razgrad7200 Razgrad2 Stefan Karadzha Str.Tel.: (084) 611 463Fax: (084) 660 289

Razgrad NAP7200 Razgrad2 Nezavisimost SquareTel.: (084) 611 463Fax: (084) 660 289

Razlog2760 Razlog8 Sheynovo Str.Tel.: (0747) 89 011Fax: (0747) 80 647

Ruse7000 Ruse22 Slavyanska Str.Tel.: (082) 817 963Fax: (082) 821 597

Ruse 27000 Ruse54 Lipnik Blvd.Tel.: (082) 814 352/354Fax: (082) 841 682


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Ruse 37000 Ruse4 Borisova Str.Tel.: (082) 880 411/412Fax: (082) 820 177

Ruse 47000 Ruse6 Voden Str.Tel.: (082) 817 562Fax: (082) 825 199

Ruse 57000 Ruse124 Borisova Str.Tel.: (082) 815 412Fax: (082) 822 416

Samokov2000 Samokov33 Makedonia Blvd.Tel.: (0722) 68 011Fax: (0722) 60 186

Sandanski 2800 Sandanski1 Hristo Smirnenski Str.Tel.: (0746) 34 631Fax: (0746) 32 703

Sevlievo5400 Sevlievo1 Svoboda SquareTel.: (0675) 31 213Fax: (0675) 33 091

Silistra7500 Silistra20 Tsar Shishman Str.Tel.: (086) 818 213 Fax: (086) 822 877

Sliven8800 Sliven11 Tsar Simeon Str.Tel.: (044) 610 431/33Fax: (044) 662 123

Sliven 28800 Sliven5 Tsar Osvoboditel Str.Tel.: (044) 610 412/413Fax: (044) 630 555

Sliven 38800 SlivenBalgarka Compl., bl.72Tel.: (044) 622 838Fax: (044) 622 418

Smolyan 4700 Smolian73 Bulgaria Blvd.Tel.: (0301) 62 095 Fax: (0301) 92 096

Sozopol8130 Sozopol3 Industrialna Zona Str.Sozopol HotelTel.: (0550) 24 550Fax: (0550) 22 313

Stara Zagora 6000 Stara Zagora79 Knyaz Boris Str.Tel.: (042) 617 512Fax: (042) 604 498

Stara Zagora 26000 Stara Zagora67 Tsar Simeon Veliki Str.Tel.: (042) 602 043Fax: (042) 601 924

Stara Zagora 36000 Stara Zagora155 Tsar Simeon Veliki Str.Tel.: (042) 696 741/742Fax: (042) 260 019

Stara Zagora 46000 Stara Zagora2 Mitropolit M. Kusev Blvd.Tel.: (042) 693 512Fax: (042) 230 045

Sunny Beach 8240 Sunny BeachHotel DiamondTel: (0554) 24 565Fax: (0554) 23 621

Shumen9700 Shumen97 Tsar Osvoboditel Str.Tel: (054) 850 953Fax: (054) 830 757

Shumen 29700 Shumen9A Slavyanski Blvd.Tel.: (054) 851 061Fax: (054) 882 298

Shumen NAP9700 Shumen1 Adam Mitskevich Str.Tel: (054) 30 105Fax: (054) 820 135

Svilengrad6500 Svilengrad73 Bulgaria Blvd.Tel.: (0379) 706 52/53Fax: (0379) 71 552

Svishtov5250 Svishtov100 Tsar Osvoboditel Str.Tel.: (0631) 61 311Fax: (0631) 60 385

Svoge NAP2260 Svoge11 Tsar Simeon Str.Tel.: (0726) 52 47Fax.: (0726) 52 48

Targovishte7700 Targovishte2 Preslav Str.Tel: (0601) 69 553Fax: (0601) 69 303



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Targovishte NAP7700 Targovishte1 Svoboda SquareTel: (0601) 62 059

Teteven5700 Teteven80 Ivan Vazov Str.Tel.: (0678) 21 40Fax: (0678) 22 82

Troyan 5600 Troyan1 Rakovski SquareTel.: (0670) 66 612/613Fax: (0670) 60 977

Tryavna5350 Tryavna28 Angel Kanchev Str.Tel.: (0677) 67 29Fax: (0677) 801 346

Varna 9000 Varna32 Tsar Simeon Parvi Str.Tel.: (052) 688 023 Fax: (052) 633 007

Varna 29000 Varna61 Preslav Str.Tel.: (052) 685 653 Fax: (052) 620 680

Varna 39000 Varna80-82, Osmi PrimorskiPolk Blvd.Tel.: (052) 685 713 Fax: (052) 603 744

Varna 49000 Varna91 Slivnitsa Blvd.Tel.: (052) 952 711/712Fax: (052) 654 627

Varna 59000 Varna68 Vladislav Varnenchik Blvd.Tel.: (052) 662 412Fax: (052) 695 454

Varna 69000 VarnaVladislav Varnenchik Blvd., bl.28Tel.: (052) 553 912Fax: (052) 740 003

Varna 79000 Varna53 G. Benkovski Str.Tel.: (052) 679 942Fax: (052) 623 447

Varna Piccadilly9000 VarnaPrimorski Park II Blvd., Saltanat AreaTel.: (052) 385 312 Fax: (052) 308 033

Varna Mall9000 Varna186 Vl. Varnenchik Blvd.Tel.: (052) 575 832Fax: (052) 731 069

Veliko Tarnovo5000 Veliko Tarnovo31 Marno Pole Str.Tel.: (062) 616 411Fax: (062) 601 204

Veliko Tarnovo 25000 Veliko Tarnovo37B Nikola Gabrovski Str.Tel.: (062) 610 512Fax: (062) 671 114

Velingrad4600 VelingradАl. Stambolyiski Str., bl.1Tel.: (0359) 56 921Fax: (0359) 51 026

Vidin3700 Vidin1, Tsar Ivan Asen II Str.Tel.: (094) 609 112Fax: (094) 607 143

Vidin NAP3700 Vidin12, Shesti Septemvri Str.Tel.: (094) 601 804Fax.: (094) 601 434

Vratsa3000 VratsaHristo Botev SquareTel.: (092) 668 833Fax: (092) 666 698

Vratsa 23000 Vratsa23 Demokratsia Blvd.Tel.: (092) 687 412Fax: (092) 665 060

Vratsa NAP3000 Vratsa86 Vasil Kanchov Str.Tel: (092) 661 610

Yambol 8600 Yambol15 Vasil Karagyozov Str.Tel.: (046) 683 462/464Fax: (046) 664 175

Yambol 28600 Yambol34 Targovska Str.Tel.: (046) 686 261/262Fax: (046) 665 445


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Others:

Raiffeisen Leasing Bulgaria OOD 1766 SofiaBusiness Park Sofia,Building 7B, Fl.4Tel.: (+ 359 2) 491 91 91Fax: (+ 359 2) 974 20 57

Raiffeisen Asset Management EAD1504 Sofia18/20 Gogol Str.Tel.: (+359 2) 919 85 452Fax: (+ 359 2) 943 33 65

Raiffeisen Direct - Call Center1407 Sofia55 N. Vaptsarov Blvd.Business Center EXPO 2000, Building DTel.: 0 700 10 000Fax: (+359 2) 974 20 24

Raiffeisen Insurance Broker EOOD1113 Sofia101 Tzarigradsko Shose, Fl. 6Business Center ActiveTel.: (+359 2) 817 42 60, 817 43 39Fax: (+ 359 2) 973 30 94

Raiffeisen Factoring EOOD1504 Sofia18/20 Gogol Str.Tel.: (+359 2) 919 85 370/376/774Fax: (+ 359 2) 946 11 52

Raiffeisen Real Estate EOOD1113 Sofia101 Tzarigradsko Shose, Ground floorBusiness Center ActiveTel.: (+359 2) 817 42 90/95/99Fax: (+ 359 2) 971 24 04




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Selected RZB Group-members

Addresses and Contacts for the selected members of the Raiffeisen International Group

Raiffeisen Bank International AG

AustriaAm Stadtpark 91030 ViennaPhone: +43-1-71707 0Fax: +43-1-71707 [email protected]@rbinternational.com

Banking network

AlbaniaRaiffeisen Bank Sh.a. “European Trade Center”Bulevardi "Bajram Curri"Tiran Phone: +355-4-238 1000Fax: +355-4-227 5599SWIFT/BIC: SGSBALTX www.raiffeisen.al

BelarusPriorbank JSC31-A, V. Khoruzhey Str. 220002 MinskPhone: +375-17-289 9090Fax: +375-17-289 9191SWIFT/BIC: PJCBBY2Xwww.priorbank.by

Bosnia and Herzegovina Raiffeisen BANK d.d. Bosna i Hercegovina Zmaja od Bosne bb71000 Sarajevo Phone: +387-33-287 101 Fax: +387-33-213 851 SWIFT/BIC: RZBABA2S www.raiffeisenbank.ba

BulgariaRaiffeisenbank (Bulgaria) EAD 18/20 Gogol Str.1504 Sofia Phone: +359-2-9198 5101 Fax: +359-2-943 4528 SWIFT/BIC: RZBBBGSF www.rbb.bg

CroatiaRaiffeisenbank Austria d.d. Petrinjska 5910000 Zagreb Phone: +385-1-456 6466 Fax: +385-1-481 1624 SWIFT/BIC: RZBHHR2X www.rba.hr

Czech RepublicRaiffeisenbank a.s. Hvezdova 1716/2b14078 Prague 4Phone: + 420-221-141 111Fax: +420-221-142 111 SWIFT/BIC: RZBCCZPP www.rb.cz

HungaryRaiffeisen Bank Zrt.Akadémia utca 61054 BudapestPhone: +36-1-484 4400Fax: +36-1-484 4444SWIFT/BIC: UBRTHUHBwww.raiffeisen.hu

Kosovo Raiffeisen Bank Kosovo J.S.C.UÇK Str. No. 5110000 Pristina Phone: +381-38-222 222 Fax: +381-38-203 01130 SWIFT/BIC: RBKORS22 www.raiffeisen-kosovo.com

PolandRaiffeisen Bank Polska S.A. Ul. Piekna 2000-549 Warsaw Phone: +48-22-585 2001 Fax: +48-22-585 2585 SWIFT/BIC: RCBWPLPW www.raiffeisen.pl

RomaniaRaiffeisen Bank S.A. 15 Charles de Gaulle Square011857 Bucharest 1Phone: +40-21-306 1000Fax: +40-21-230 0700SWIFT/BIC: RZBRROBUwww.raiffeisen.ro

RussiaZAO Raiffeisenbank Smolenskaya-Sennaya Sq. 28119020 Moscow Phone: +7-495-721 9900 Fax: +7-495-721 9901 SWIFT/BIC: RZBMRUMM www.raiffeisen.ru

SerbiaRaiffeisen banka a.d. Bulevar Zorana Djindjica 64a11070 Novi Beograd Phone: +381-11-320 2100 Fax: +381-11-220 7080 SWIFT/BIC: RZBSRSBGwww.raiffeisenbank.rs

SlovakiaTatra banka, a.s. Hodzovo námestie 3 81106 Bratislava Phone: +421-2-5919 1111 Fax: +421-2-5919 1110 SWIFT/BIC: TATRSKBX www.tatrabanka.sk

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SloveniaRaiffeisen Banka d.d. Zagrebeska cesta 762000 Maribor Phone: +386-2-229 3100 Fax: +386-2-303 442 SWIFT/BIC: KREKSI22 www.raiffeisen.si

UkraineRaiffeisen Bank Aval JSC9, Leskova Street01011 KievPhone: +38-044-490 8888 Fax: +38-044-285 3231SWIFT/BIC: AVALUAUK www.aval.ua

Leasing companies

AustriaRaiffeisen-Leasing International GmbHAm Stadtpark 31030 ViennaPhone: +43-1-71707 2966Fax: +43-1-71707 762966www.rli.co.at

AlbaniaRaiffeisen Leasing Sh.a.“European Trade Center”Bulevardi “Bajram Curri”TiranaPhone: +355-4-2274 920Fax: +355-4-2232 524www.raiffeisen.al

BelarusJLLC “Raiffeisen-leasing”31-A, V. Khoruzhey Str. 220002 MinskPhone: +375-17-289 9394Fax: +375-17-289 9394www.priorbank.by

Bosnia and HerzegovinaRaiffeisen Leasing d.o.o. SarajevoZmaja od Bosne 1171000 SarajevoPhone: +387-33-254 354Fax: +387-33-212 273www.rlbh.ba

BulgariaRaiffeisen Leasing Bulgaria OODBusiness Park SofiaBuilding 7B, 4th floor 1504 SofiaPhone: +359-2-491 9191Fax: +359-2-974 2057www.rlbg.bg

CroatiaRaiffeisen Leasing d.o.o.Radnicka cesta 4310000 ZagrebPhone: +385-1-6595 000Fax: +385-1-6595 050www.rl-hr.hr

Czech RepublicRaiffeisen-Leasing s.r.o.Hvezdova 1716/2b14078 Prague 4Phone: +420-221-5116 11 Fax: +420-221-5116 66www.rl.cz

HungaryRaiffeisen Lízing Zrt. Hungaria krt. 40-441087 BudapestPhone: +36-1-298 8000Fax: +36-1-298 8010www.raiffeisenlizing.hu

KazakhstanRaiffeisen Leasing Kazakhstan LLP Shevchenko St. 146, No. 12050008 Almaty Phone: +7-727-3785 430Fax: +7-727-3785 447www.rlkz.kz

KosovoRaiffeisen Leasing KosovoGazmend Zajmi n.n., Sunny Hill10000 Pristina Phone: +381-38-222 222 Fax: +381-38-203 03011www.raiffeisen-leasing-ks.com

MoldovaI.C.S. Raiffeisen Leasing S.R.L. Alexandru cel Bun 512012 ChisinauPhone: +373-22-2793 13 Fax: +373-22-2283 81 www.raiffeisen-leasing.md

PolandRaiffeisen-Leasing Polska S.A.Ul. Prosta 5100-838 WarsawPhone: +48-22-326 36 66 Fax: +48-22-3263 601www.rl.com.pl

RomaniaRaiffeisen Leasing IFN S.A.Nusco Tower Sos Pipera Nr. 42Etaj 1A020112 BucharestPhone: +40-21-306 9696Fax: +40-37-287 9998www.raiffeisen-leasing.ro

RussiaOOO Raiffeisen-LeasingStanislavskogo St. 21/1109004 MoscowPhone: +7-495-721 9980Fax: +7-495-721 9901 www.raiffeisen-leasing.ru

SerbiaRaiffeisen Leasing d.o.o. Milutina Milankovica 134a 11000 Novi Beograd Phone: +381-11-20177 00 Fax: +381-11-31300 81 www.raiffeisen-leasing.rs



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SlovakiaTatra Leasing s.r.o.Hodzovo namestie 3 81106 Bratislava Phone: +421-2-5919 3168Fax: +421-2-5919 3048www.tatraleasing.sk

SloveniaRaiffeisen Leasing d.o.o.Bleweisova cesta 301000 LjubljanaPhone: +386-1-241 6250Fax: +386-1-241 6268www.rl-sl.si

UkraineLLC Raiffeisen Leasing Aval9, Moskovskiy Av. Corp. 5 Office 10104073 Kiev Phone: +38-044-590 2490Fax: + 38-044-200 0408www.rla.com.ua

Real estate leasing companies

Czech RepublicRaiffeisen Leasing Real Estate s.r.o. Hvezdova 1716/2b 14078 Prague 4 Phone: +420-221-5116 10 Fax: +420-221-5116 41 www.rlre.cz

Branches and representative offices - Europe

GermanyRBI Representative Office FrankfurtMainzerLandstra�e5160329 FrankfurtPhone: +49-69-2992 1918Fax: +49-69-2992 1922

FranceRBI Representative Office Paris9-11 Avenue Franklin D. Roosevelt75008 ParisPhone: +33-1-4561 2700Fax: +33-1-4561 1606

MaltaRaiffeisen Malta Bank plc52 “Il Piazzetta” Tower RoadSliema SLM 1607Phone: +356-2260 0000Fax: +356-2132 0954

UKRBI London Branch10, King William StreetLondon EC4N 7TWPhone: +44-20-7929 2288Fax: +44-20-7933 8099

SwedenRBI Representative Office Nordic CountriesDrottninggatan 89P.O. Box 329410365 StockholmPhone: +46-8-440 5086 Fax: +46-8-440 5089

Branches and representative offices – Asia and America

ChinaRBI Beijing BranchBeijing International Club 2002nd floorJianguomenwai Dajie 21100020 BeijingPhone: +86-10-653 23388Fax: +86-10-653 25926

RBI Representative Office Hong KongUnit 2106-08, 21st Floor, Tower One, Lippo Centre 89 Queensway, Hong KongPhone: +85-2-2730 2112Fax: +85-2-2730 6028

RBI Representative Office XiamenUnit 01-02, 32/F Zhongmin BuildingNo 72 Hubin North RoadFujian Province301012 XiamenPhone: +86-592-2623 988Fax: +86-592-2623 998

IndiaRBI Representative Office Mumbai803, Peninsula HeightsC.D. Barfiwala Road, Andhere (W)400 058 MumbaiPhone: +91-22-2623 0657Fax: +91-22-2624 4529

KoreaRBI Representative Office KoreaLeema Building, 8th floor146-1 Soosong-dongChongro-kuSeoul 110-755Phone: +82-2-398 5840Fax: +82-2-398 5807

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MalaysiaRBI Labuan BranchSuite No. 28.02, Level 28Johor Bahru City Square Office Tower106-108 Jalan Wong Ah Fook80000 Johor BahruPhone: +607-291 3800Fax: +607-291 3801

SingaporeRBI Singapore BranchOne Raffles Quay#38-01 North TowerSingapore 048583Phone: +65-6305 6000Fax: +65-6305 6001

USARB International Finance (USA) LLC1133 Avenue of the Americas, 16th Floor10036 New YorkPhone: +01-212-845 4100Fax: +01-212-944 2093

RBI Representative Office New York 1133 Avenue of the Americas, 16th Floor10036 New YorkPhone: +01-212-593 7593 Fax: +01-212-593 9870

VietnamRBI Representative Office Ho Chi Minh City6 Phung Khac Khoan Street, Room G6District 1, Ho Chi Minh CityPhone: +84-8-3829 7934Fax: +84-8-3822 1318

Raiffeisen Zentralbank AG

AustriaAm Stadtpark 91030 ViennaPhone: +43-1-71707 0Fax: +43-1-71707 1715www.rzb.at

Selected Raiffeisen Specialist Companies

F.J. Elsner Trading GmbHAm Heumarkt 101030 ViennaPhone: +43-1-797 36 0Fax: +43-1-797 36 230www.elsner.at

Kathrein Privatbank AktiengesellschaftWipplingerstra�e251010 ViennaPhone: +43-1-53 451 239Fax: +43-1-53 451 233www.kathrein.at

Raiffeisen Centro Bank AGTegetthoffstra�e11050 ViennaPhone: +43-1-515 20 0Fax: +43-1-513 43 96www.rcb.at

Raiffeisen Investment AktiengesellschaftKrugerstra�e131015 ViennaPhone: +43-1-710 5400 0Fax: +43-1-710 5400 169www.raiffeisen-investment.com

ZUNO BANK AGAm Stadtpark 31030 ViennaPhone: +43-1-71707 2691Fax: +43-1-71707 762691www.zuno.eu




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Annual Report 2011...2018/08/10 · Company Percentage of participation Raiffeisenbank (Bulgaria)...

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