Raport(Banca Sociala)

8/13/2019 Raport(Banca Sociala)

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CONTENT

CONTENT ..............................................................................................................1

INTRODUCTION: ................................................................................................ 4

Chapter 1

Bank equity

1.1. Shareholders .............................................................................................. 6

1.2. Dynamic of bank equity. ........................................................................... 8

1.3.Total regulatory capital(TRC) ................................................................ 15

1.4..Analysis of capital adequency ................................................................ 21

Chapter 2

Attracted resources

2.1. Banks deposits .......................................................................................... 27

2.2.Analysis of attracted resources ............................................................... 27

Chaper 3

The placement operations of the bank

3.1. Credits ...................................................................................................... 38

3.2. Investments .............................................................................................. 45

Chapter 4

Bank payment and settlement

4.1.Payment operation. Volumes and products ........................................... 49

CONCLUZI I ............................................................................................................................ 82

BIBL IOGRAFIE .......................................................................................................................84

ANEXE


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INTRODUCTION

In my report i analyzed the financial situation of Banca Sociala S.A.I have 4 chapter that

reflect the financial date about some years.Every chapter is just reflcting a general view of financial

activity of the bank.

As we know the bank is a financial institution which is attracting resources from the

economy in form of deposits and its placin them in form of credits to natural and legal persons on

its own account,responsibility and risk.The same activity is doing Banca Sociala.Its name comes

from its commercial activity:buy and sell resources.Buy ,,moneyby atrracting deposis and sell

,,moneyby according credits.According to the ,,Low of financial institutions commercial bank.

Banca Sociala execute next financial activities:

Accept deposits(with interest rate or without).

According credits,finance the commercial transactions.

Buy and sell-payment instruments(checks,bill of exchange,certificate of deposits).

Administrate payment instruments.

Administrate currency operation.

Administrate the investment portofoliu.

Intermediation of payment.

According to the property it have a private capital and is a universal bank.All 4 categories of

operations(liabilities,assets,payment and consultancy)are present in the bank activity.

Administrative bodies of the bank:

General meeting of shareholders. Shreholders who hold significant interest in the bank on

01.07.2012-BS Leasing Group SA-24.46%.

Council of directors, Cunev Valentin; Suetnov Vladimir; Crivcianschi Aglaia.

Executive Body.

Censor comition.

Departments: accounting, credit, consultancy, currency deposit operations, investment, audit,

coordinate, risk management treasure and cashiered, marketing, legal IT, security. Bank has 19

branches and 48 agencies located on the whole territory of the country. The license of the bank

activity was obtained from 26.06.2008 (from NBM) and in the 03.02.2010 it obtained the license

for commission operations such as: brokerage, dealer, underwriting, administration of

investment.(from NCFM).


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Chapter 1 Bank equity

1.1. Shareholders

Shreholders who hold significant interest in the bank on 01.07.2012-BS Leasing Group

SA-24.46%:

Approve the internal regulation.

Determine the activities direction.

Establish the eventual modification.

BS leasing company Leasing Group SA was founded in July 2003 as one of the companies

that gave rise to the development of leasing relations in our country. Today, BS-Leasing Group S.A.

is positioned on the leading places that practice it as one of the most successful leasing companies.

BS-Leasing Activity Group S.A. is aimed both at providing leasing of cars and trucks, as well as

equipment of any kind.BS-Leasing Group S.A. serves both corporate as well as individuals,

ensuring individual approach and professional attitude to customers, which makes leasing available

for everyone. BS-Leasing Group S.A. meet the high level of service and ensure timely and effective

resolution of complex requirements.

1.2. Dynamic of bank equity

Equity represent the value of an asset after all liabilities or debts have been paid. Bank aquity

of the bank represent bank resources and funds available to banks with which it operates in order

to exercise the function of finance, containing banks' own funds and attrated funds from financial

market. Thus bank capital structure is:

Equity (own resources)>are created from capital which is subscripted from

shareholders.Garantee the stability of the bank and have a stable character.

Borrowed capital (resources attracted).are temporary,are in the biggest part of the bank ,they

mainly generate the risk,are offered in form of aasets and mainly genrate profits.

Own

resources

belongs to under right of bankproperty

does not require repayment is extempural (no terms of

maturity)

is used to finance long-termprojects and the bank's ownneeds

does not generate costs asinterest

is a able b Dividend

Attracted

resources

belongs to No under right of

bank property, is only in its

custody

Does terms of matrity

Requires reimbursement

depending on the maturity

Short-term finance projects

Interest is payable

It is relatively less expensive


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Componets of bank equity:

Social capital-quantity of issued shares*nominal value of shares

Capital surplus-Equity which cannot otherwise be classified as capital stock or retained

earnings. It's usually created from a stock issued at a premium over par value.

Retained profit-Current earnings may be credited to the undivided profits account and

will eventually either be distributed to shareholder in the form of dividends or will be

held within the company in the form of retained earnings.

Reserve funds-the fund is simply a savings account or another highly liquid asset, as it is impossible

to predict when an unexpected cost may arise

0

500000000

1E+09

1.5E+09

2E+09

2.5E+09

3E+09

3.5E+09

4E+09

Capital propriu

Total resurse


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For my bank as indicators i analyse 3 years :2008,2009,2010.The date about the bank equity of this

bank i has incuded in the following table:

(thousand.lei) 2008 2009 2010

Bank aquity

376947344 409583451 480680252

Social capital65000000 65000000 100006700

Capitalsurplus 177700 177700 177700

Non-distributed

profit

2457855043 2776023777 310418585

Reserve fund65984601 66803374 70077267

TRC328000000 360000000 428000000

Capitaladequency =


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I taer cap=(ordinary shares+pref.shares with non fixed divedent+pref.shares with fixed

divident non cumulative+cap.surplus+retained profit)-non compledt risk fund-net non material

assets.

IItaer cap=(cumulated and part cumulated ref shares with non fixed maturity+capital

surplus+subordonated debts with non fixed maturity+subordinated debts with fixed maturity- Cap

II-Cap I.

Fig. 1 Evolution of total regulatory capital to the banking system of Moldova (million)

Based on the same date included in my table we observe that in 2008 TRC was 328 mil.lei,in

2009 increase with 10% at 360 mil but in 2010 increase with 19% and was 428 mil.This result

demonstrate that bank has a stable financial position.During thsese years bank resisted stalemate

maintaining its market position and has ensured all regulations established by National Bank.

The contribution of bank capitalization to shareholders in the entire banking system of RM

593.52735.71

918.90

1400.40

1640.74 1695.72

2029.24

2441.92

0

500

1000

1500

2000

2500

3000

1997 1998 1999 2000 2001 2002 2003 2004

Capital Normativ Total

0

500000000

1E+09

1.5E+09

2E+09

2.5E+09

3E+09

1997 1998 1999 2000 2001 2002 2003 2004Capital acionar Capital de gr. I CNT


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The share of bank capitalization various commercial banks

1.4.Analysis of capital adequency

Capital adequacy is, in fact, establishing conventional capital value certain criteria

that have been proposed and accepted by the partners.The sufficiency of its capital under the Basel

Agreement, "Cooke standard"=TRC / assets weighted to risk. Acording to Basel agreement assets

weighted to risk : 0%(cash,T-bonds up to 1 y) 20%(Tbond more than 1 y,cash to incash)50%(sate

bonds,credits with primary garanties)100%(buildings,equipment,non reimbursed credit,non-

guaranted credits).

According to my results he capital adequency has a stable character2008


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Chapter 2 Attracted resources

2.1 Bank deposits

Attracted resources allowed the bank to get profits.Attracted resources of the bank are:

- Depositary- they appear as a result of cooperation with clients- Resources arising from the issue of securities(bank certificates, bills, bonds)

- Resources purchased from other banks(bank loans centralized from National Bank of

Moldova, and decentralized to other commercial banks).>nondepositary Bank deposit-

sum of money which is deposit in certain period of time and can be withdraw at maturity +interest.

According to the term we have:

a) Sight deposit(are deposed in the bank with a high degree if liquidity and can be withdraw at any

time without interest rate.b) Saving or deposit at term(should include 3 term:short-up to 1 year,middle-1-5y and long term

more than 5 years. Could be with capitalazation or without.

According to the category of deposits

a) Natural.

b) Legal.

c) Other financial institutions.

According to the currency:

a) National.

b) Foreign.

According to the methods of calculated interest rate

a) Simple interest rate.

b) Composed interest rate.


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The importance of bank deposits

Individual bank deposits provide the least expensive cost of new money for the bank to loan

out. The large amounts of people and deposits help the banks make lots of profit since the banks

charge at prime rate (set indirectly by the country's bank) and the banks pay a low nominal interest

on the deposits.Money is needed to add new infrastructure (road, bridges, sewers, factories, etc) and

capital equipment (machinery, assembly robots, etc) in order to grow the economy.

The banks are reluctant to borrow from other banks or other sources (such as rich persons)

since the interest rate charges is much higher than the banks would pay inidividual deposits.Since

the amount of deposits are very high in some countries, such as Japan and China, this new capital

(or money) has fueled growth over the past few years. As a consequence, economists always

consider bank deposits as part of the overall money supply for the economy.

In my report analysing this chapter i included the date in following table:

As we observe the volume of deposits in 2007 increase with14% and was 156 mil.lei.The

number of deposits for natural person indicates 938 mii.and share exceed 64%.In 2008 the total

amount of deposits increase with 5% and was 1372 mii.lei.The important value was register at

deposits for natural deposits with 62%.In 2009 the value of all deposits was 1514078 mii.lei and

Thousand Moldovian lei 2008 2009 2010 2011

Deposits without interest

rate 247237 293922 344348534376

Deposits for natural

person 7365 7181 106908023

Deposits for legal person

239872 286740 7181526353

Deposits wi th interest rate

1125362 1220156 14468921635716

Deposits for natural

person 849787 907640 10237701107693

Deposits for legal person

259332 309630 423122528023

Deposits fr om other

banks 16243 2887 25231475

Total 1372599 15140780 1791240 2170092


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also has a increasing character.In 2010 the value of liabilities increase up to 2,3 mil with 14%

including 76% the value of deposits, 32% for legal person and 44% for natural person.

Also the information about the conditions and terms,interest and amount about deposits according

to the quaters of each year are attached to the end of report.

2.2Attracted resources

Thousand lei 2008 2009 2010 2011

Cash from

BNM

347448 121337 213109 377761

Credits from

BNM

17931 35901 12439 9962

BERD 168780 162125 148994 185965

Banca Mondiala 10672 4343 - -

EFSE 206371 246753 193254 102501

Ministry of

finance(FIDA)

25309 26285 43896 34010

Ministry of

finance(RISP)

13859 18837 25307 25316

The average level of the amounts in MDL held at the National Bank of Moldova for theperiod ended December 31, 2011 was of 171,655 thousand MDL (2010: 100,690 thousand MDL),

while the minimum reserve calculated for the period was of 159,231 thousand MDL (2010: 96,764

thousand MDL).

The average level of the reserves in currency held in the special account with National Bank

of Moldova for the period ended at December 31, 2011 amounted to the equivalent of 116,848

thousand MDL (2010: 85,670 thousand MDL). As at December 31, 2011 and December 31, 2010,

the balance with National Bank of Moldova is held as collateral for long-term loan received from

National Bank of Moldova.

0

500000

1000000

1500000

2000000

2500000

Deposits without interest rate

Deposits with interest rate

Total


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0

50000

100000150000

200000

250000

300000

350000

400000

2008 2009 2010 2011

Cash from BNM

Credits from BNM

BERD

Banca Mondiala

EFSE

(FIDA)

(RISP)

In 2008 bank continued colaboration with international financial organisation.EBRD ofer

the line of credit in the sum of 3 mil of Euro.Also RISP ofer credits in value of 40 mil lei for

development.MMN release credits in value of 32 mil.The total volume of credits increase with

5%.In 2009 EBRA offer a new line of credits in amount of 5 mil.Euro.EFSE operate with 4 lines of

credits in amount of 14 mil.RISP and FIDA credits the total volume of 44 mil lei.In 2010 the level

of attracted resources increse in the higher level with 25%,were grented the amount over 1 bilion.

Borrowings from the Ministry of Finance have been granted for financing the small and

medium enterprises operating in agricultural sector and rural area, except for those located in the

cities of Chisinau and Balti, through resources borrowed by Republic of Moldova from

International Fund for Agricultural Development (IFAD) and from the Association for International

Development (AID). Borrowings from the European Bank for Reconstruction and Development

(EBRD) were granted for financing medium and small size private enterprises.

Borrowings from the National Bank of Moldova are long-term borrowings focused on

development of buildings construction. Borrowings from the European Fund for Southeast Europe

(EFSE) were granted for financing medium and small size private enterprises, as well as for

granting mortgage loans to population.Borrowings from the Black Sea Trade and Development

Bank (BSTDB) were granted for financing all projects within applicable law, with exception of

interbank loans and activities prohibited by International Conventions.

(thousand) 2008 2009 2010 2011

Up to 1 year 54923 149694 201893 462469

From 1 to 5 year 274388 253859 243641 261942

Over 5 year 113691 110691 75587 15990

Total 442922 514244 521121 462469


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0

100000

200000

300000

400000

500000

2008 2009 2010 2011

Up to 1 year

From 1 to 5 year

Over 5 year

In accordance with National Bank of Moldova, the average reserve held at the National Bank

of Moldova, calculated for minimum reserve period, has to be at least equal to the level of

minimum reserve calculated for the observation period. As at December 31, 2011 the level of

minimum mandatory reserve in MDL held at the National Bank of Moldova was established at

14% for current accounts and deposits in MDL and currency (December 31, 2010: 8%)

On 27 December 2007 the Bank filed a request with the Main State Fiscal Authority with

respect to exemption from payment of 50% of corporate income tax due for 5 fiscal periods starting

from 2007.

On 29 December 2007 the Bank and the Main Fiscal Authority concluded Agreement # 59, in

accordance with which the Bank has been granted 50% exemption applicable to corporate income

tax calculated for 5 consecutive years starting from 1 January 2007 and ending 31 December 2011,

pursuant to provisions of article 49.2 par. 1 of the Moldavian Fiscal Code. In accordance with thisagreement the exemption is contingent upon the compliance of the Bank with the following

conditions during the fiscal periods for which the exemption has been granted:

a) to reinvest not less than 80% from income tax exempted amount into own production

development (services, works) or in state program of national economic development no

later than during the fiscal period in which the fiscal benefits term expires;

b) to maintain the contribution in its own social capital during the 5 years;

c) to present the Declaration regarding the corporate income tax and other reports


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Chapter 3 The placement operations of the bank

3.1. Credits

In a market economy, credit reports have sizeable and multiple varieties. In general, the credit

is monetary exchange value against for a future currency values. Credit as means of payment may

contribute substantially to economic growth by stimulating the development of new activities, small

and medium private enterprises, their early work, and recovery of vital areas of the economy.

Credit is amount of money wchich is allocated by bank to natural and legal person in the

conditions of reimbursment,maturity and guarantee. Principles of the credit are:the object, maturity,

participants, guarentee, interest, amount.

The importance of credit in the economy is marked by role and functions it performs.

Credit serves as mobilization of money resources available in the economy at a given time

and then distribute money via crediting the sectors that need cash.

Another function of thecredit is to create currency.

Credit contribute to the price stability by adjusting the size of the demand and supply of

goods by crediting consumption as stocks.

Credit is a factor of speed rotation of money by streamlining economic flows.

Another function of credit is to support the imports and exports.

The information about th crediting activity of Banca Sociala is related innext table

In our country the total balance of credits in the economy the end of 2010 reached 26 billion

value of 915.5 million, 12.7% above its level at December 31, 2009, according to National Bank.

The balance of medium and long-term loans increased by 15.0%, while the short-term loans by

4.8%.

Bank loans in national currency became cheaper in 2010 by 13.3%, while credits in foreign

currency by 12% amid economic recovery and improved loan portfolio of banks. Thus, if in

January the banks to give loans in lei at an average interest rate of 17.03%, and the last month of the

year - with 14.76%.NBM also points out that rates on New granted loansin MDL decreased from

Credits(thousandslei) 2008 2009 2010 2011

Cur rent credits 1394810 1511952 1751096 1985870

Overdue credits 21172 93093 124128 293693

Up to 1 year 684654 747513 910465 974000

From 1 to 5 year 465479 542750 679044 865964

Over 5 years 191913 204663 88664 279503

Total 1342046 1494926 1849139 2177919


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15.2% inJanuary to 14.1% in the first three weeks of February 2011. In January 2010 the rate for

loans in lei was 17.0%, and in three weeks of February 17.9%.Banks have granted at the beginning

of the year until 18 February 2011, new credits totaling 1 billion 248.7 million lei, by 31.9%

more than the same period last year.

As a result of promoting a weighted lending policies, during the reporting year the Bank's

loan portfolio increased by26% and reached 1322 million. Investment lending to individuals

showed 103mil.lei 29.12.2007 including 54 mln back loans in the new product - mortgage lending,

implemented in the second semester of 2007. As a result the share of credits to individuals in total

loans increased during the year from 4% to 8%. The implementation of the most populous type of

consumer loans without providing collateral - "Social" - increasing investment credit for the 12 mil

or 81%.Bank's loan portfolio increased by only 7% or 94 million and totaled at the end of the year

2008- 1416million. The number loan recipients increased and reached 4000.

According to prevailing credit terms medium-term loans - 66%, short-term

credit back 25%. ofn new account product implementation (mortgage lending) twice increased

(from 4% to 8%) long-term loans.Despite the global financial crisis in 2009 banking system in

Moldova has been a reduction in the loan portfolio (-5%), BC "BS" SA, following the principles set

out in policies promoted not only the loan portfolio increased by 1.6 billion lei (13%), but also

increased the Bank rate loans system.

Loan portfolio growth in 2010 has made over 284 million at the end of the year

reachedabout 2.0 billion of credit policy promoted during 2010 granting loans worth over 1 billion

USD.Loan portfolio growth in 2011 has made over 320 million at end exceeded 2.0 billion.

0

500000

1000000

1500000

2000000

2500000

Current credits Overdue

credits

Up to 1 year From 1 to 5

year

Over 5 years

2008

2009

2010

2011


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Growth tempo portfolio credit (17%) was higher than the banking system and bank group,

Bank would share the credit market remained at the level of 2010 - more than 7%.Bank gives its

clients a wide range of credit products: overdrafts, mortgages, consumer credit, bank guarantees,

letters of credit, lines of credit in local currency and foreign currency.

Credits(thousand) 2008 2009 2010 2011

Commerce 692098 854682 1081029

Development and

reconstruction

124726 126738 137870 1573941

Agriculture and

food industry

369192 440501 487577 102626

Other sectors 7684 8609 85315 414252

Energy and fuel 2333 2754 11055 92809

Consumer goods 114158 67769 29325 9219

Building 42705 29498 138700 21855

Governamental 58859 72262 1281 106936

Transpotation 4227 2232 2933 4974

Total 1415982 1605045 1975085 2326644

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1 2 3 4

2011

2010

2009

2008


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As we observe from the chart the highest position have the commerce credits (more than 50%)

and in the year 2010 it was in the bigest proportion.

In 2011 a semnificant quata has the credits for development (more than 80%). The 2008 year

has the bigest value of credits.

In 2009 the largest share has industrial-commercial credits - 53%, and credits extended to

food and agricultural purposes - 27%.

In 2011 more than half (57%) have got a commercial and industrial credits and

approximately one quarter (22%) - credits to food and agricultural purposes. The credits offer for

building are also widely used with a big share (more than 25.2%).

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

2008

2009

2010

2011

Companies

and

individualas

2008 2009 2010 2011

Short

term

Medium

and long

term

Short

term

Medium

and long

term

Short

term

Medium

and long

term

Short

term

Medium

and long

term

In MDL16%-28%

15,9%-30%

7,0%-28%

7,7%-30% 9,0%-28,0%

7%-28% 9%-25% 6,5%23%

In foreign

currency

10%-

17%

10%-17% 11,5%-

16%

10%-16% 1,5%-

13%

10,0%-

16,0%

6,8%-

12%

9,5%-13%

Cooperative

companies

- 05%-5% - 0,5%-5% - 0,5%-5% - 0.5%-5%


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I nvestment secur iti es are classif ied according to destination in the fol lowing categories:

Investment securities are values that bank management intends to hold to maturity and are

recorded at nominal value, corrected the prize or discount to maturity of their operations. Interest

investment values is reflected in interest income Bank in its portfolio has two types of investment

securities:

State securities investments are initially recognized at nominal value.

State securities (SS) can be purchased at a discount or premium that pays linear method.

VMS can be made if necessary. At the time of values Investment securities are recorded in

portfolio securities available for sale and carried Reviews.

The units are valued at purchase price. Marketable securities that intended to be held for a

period of time indefinite, and can besold for liquidity purposes are considered as investments.

Securities participation of the bank is holding in the capital of other companies. Securities available

for sale are purchased on a short term in order subsequent sale and are recorded at cost. All gains

and losses realized from transactions with these securities are reflected in net income trading.

Investment 2008 2009 2010 2011

State securities 143826 301008 382561 173854

Equity securities 6279 7282 7295 7388

Net securities 149980 307926 389491 180871

Up to 1 year 22091 93537 108539 69481

1-3 month 45470 103060 72705 453303-12 month 82643 110326 208016 62535

More than 1 year 492 70 201 120

Total(thousand lei) 150696 3069963 382561 177466

According to this results we can say that during 3 years 2008,2009,2010 investments in state

securities has a positive figure but in 2011 it decrease semnificant.In 2008 investment increased by

13% and exceeded 1.6 billion.lei. In 2009 there were 100 operations performed over the purchase of

values.

State securities on behalf of the Bank at their means in the amount exceeds 420 million. In

2010 the volume of investments in securities reached about 400 million and increased at 27%.

During the year 2011 the Bank made 112 investment transactions with values State securities from

own funds amounting to over 1.5 billion. Investment portfolio at the end of 2011 exceeded 177 mln

with weighted average return rate of 11.61%. In this activity the Bank has obtained an income

amounting to more than 21 million. They activeness work related to providing brokerage services.

in2011 were received about 160 requests for execution of sale /purchase of securities. Stock Exchange


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of Moldova office Brokerage Bank completed 154 transactions totaling pste 16 million. Revenues from

providing these services have made EUR 300 thousand, which practically 2 times more than in 2010 income.

Investments in share capital of other companies

Unquoted

equity

securities

Amounts

2011

% share

capital

Amounts

2010

% share

capital

Amounts

2009

%

share

capital

Amounts

2008

%

share

capital

Moldmedia

Card SRL

2,890 31.70 2,890 31.70 2.781 98,99% 2718 98.99

Ceproserving

SA

- - 2,781 98.99 2.890 31,70% 2890 31.70

Depozitarul

Mobiliare

19 4.69 19 4.69 6 3 13% 6 3.13

Victoria

Asigurri

232 1.55 139 1.55 139 1,55% 62 1.55

Garantinvest 440 9.92 440 9.92 440 9,92% 440 9.92

Biroul de

credit SRL

1,019 6.70 1,019 9.27 1.019 10,22% 100 9.51

Bursa de

valori a

Moldovei

7 2.56 7 2.56 7 2 ,56% - -

Total 4,290 6,930 6.918 6154

2008

2009

2010

2011

0

50000

100000

150000

200000

250000

300000

350000

400000

State

securities Equity

securities Net

securities

2008

2009

2010

2011


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As at December 31, 2011 and December 31, 2010, the Bank held investments in the share

Capital of four commercial companies that exceeded 5% of the share capital of those companies.

The investments were approved by the National Bank of Moldova. As at December 31, 2011 and

2010, the equity investments include investments in Ceproserving SA, a subsidiary, and

Moldmedia Card SRL, an associate.

Ceproserving SA has been consolidated in the financial statements of the Bank beginning

with 1 January 2011. At December 31, 2010 and December 31, 2009, the Bank had equity

investments in four companies, which exceeded the limit of 5% of the share capital of these

companies. these investments were approved by the National Bank.

In accordance with legislation, a company is considered to be associated enterprise if a bank

has a significant influence on its significant influence is given by a shareholding worth more than

25% to 50% in capital of the company If the company is controlled by the bank, by holding a share

participation of more than 50% of the share capital of the company, then that company is

considered to be the daughter company.

At 31 December 2010 and 31 December 2009, the Bank held a company equity securities

beyond 50% of the share capital of the company. value investment has not diminished so

significantly affect the financial statements. Since companies in which the Bank holds shares are

publicly traded bank could not determine the exact value of the shares. Bank's management

estimated that the The accounting does not differ substantially from their fair value. All companies

listed above are established in Moldova.


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Chapter 4 Bank payment and settlement

4.1.Payment operation. Volumes and products

What is Interbank Payment And Settlement Mechanisms

Interbank funds transfer systems are arrangements through which funds transfers are made

between banks for their own account or on behalf of their customers. Of such systems, largevalue

funds transfer systems are usually distinguished from retail funds transfer systems that handle a

large volume of payments of relatively low value in such forms as cheques, giro credit transfers,

automated clearing house transactions and electronic funds transfers at the point of sale. The

average size of transfers through largevalue funds transfer systems is substantial and the transfers

are typically more timecritical, not least because many of the payments are in settlement of financial

market transactions. The report focuses on these largevalue systems.

The processing of funds transfers involves two key elements. The first of these is the transfer

ofinformationbetween the payer and payee banks. A funds transfer is initiated by

the transmissionof apayment order ormessage requesting the transfer of funds to the payeeThe

second key element issettlement- that is, the actual transfer of funds between the payer's bank and

the payee's bank.Settlement discharges the obligation of the payer bank to the payee bank in

respect of the transfer. Settlement that is irrevocableand unconditionalis described asfinal

settlement. In general, the settlement of interbank funds transfers can be based on the transfer of

balances on the books of a central bank (i.e. central bank money) or commercial banks (i.e.

commercial bank money). Interbank settlement is fighting a mutual payment obligation between

two banks. There are several types of settlements. After relatively stable:

Settlements with direct relationship between banks, called correspondence relationship

(decentralized settlements).

Settlements through a settlement agent (in centralized form).

Transcribed correspondence relationships are contractual relationships between two banks

that contain an agreement on the mutual enforcement of financial obligations.

After operations affected interchange:

Operations on behalf of clients in the settlement process.

Operations own involving interbank borrowing, placing deposits, payment services, etc..

After the account type used:

Operations that require opening mail account.

Operations without opening the mail account.


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After the relationship between bank:

Relations binding correspondence involving accounts at the central bank settlement center.

Relations soft, when one seeks partner bank that wants to establish relationships.

Distinguish accounts: NOSTRO - our bank account to another commercial bank. Vostro -

internationally.

LORO account is opened by banks in the country to Bank current account is required and

used for the following operations:

Interbank funds transfer operations on behalf of clients.

Operations of payment and transfer of funds between banks or between banks and NBM that

pertaining to the grant and of credits repayment interbank placement and withdrawal of

interbank deposits, etc.

To make current payments in favor of interbank agent (State taxes, service lease).

2008

Bank strives to meet customer requirements at the maximum expense of providing new

competitive banking products and services.In these purposes in 2008 were 3 types implementing

this new fast transfers. So at the end of the year bank customers could transfer and receive money

through your already fast transfers of 11 systems: Western Union, Anelik, Unistrut, ,

Interexpress, Migom, Contact, Blizko, Moneygram, Smith & Smith and Allure. A large attention is

given retail and business development. Range of services to individuals in foreign currency is quite

large - exchange rate, nominal checks and travel sales, international transfers, especially through

international money transfer systems, etc.. Bank retail market tends to satisfy customer needs by

offering maximum new products and services competitive.

For these purposes, and for the expansion of geography transfers and attracting new

customers to bank online still a 3 speed transfer systems. Increasing the number and volume of

remittances and increasing the number of systems and points of granting services received / sent the

Bank a condition significantly increasing the volume of shipments: in EUR - 34 million in Russian

rubles - 0.5 billion U.S. dollars - about 90 million. In 2008 the Bank made 220 trades in securities

of statdin own and their means in the amount exceeds 2120 mil. lei, including about 200 primary

market operations.

To end the total amount of the investment portfolio indicated cifrade 150 million. Weighted

average profitability growth (around 3 percentage points), the revenue growth condition of this

activity compared to 2007 with 4 million or 12%.


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2009

At the end of 2009 servicemen Bank numbered 86 000 , including legal - 11 thousand

individuals - 75 000. Open and maintain bank accounts over 200,000 customers' personal Clergy.

Average daily number of transactions performed by one experienced worker over 500 operations.

Advanced means of communication used by the Bank, provides payments to a high quality

level within one working day. More and more followers attracted remote maintenance system

"Bank-Client". Number of clients receiving services that system is about400. Convenience, comfort

and service remotely view are obvious.

Thanks to "Va-Bank", all payments, both cash inflows as and transfers through correspondent

accounts can be pursued under the Real 4timp. In the reporting year the Bank has further optimized

its network corresponding to the maximum in order to satisfy the requirements of its customers. the

situation of 31.12.2009 correspondent bank network consisted of 47 accounts19 correspondent

correspondent banks and 4 banks of 5 LORO account corresponding through which settlements

were made in foreign currency. In 2009 while working were 30 and 10 guarantee letters

International also have received 11 incasouri documentation.

In 2009 the Bank implemented 2 new products systemsLeader and

international transfers. T hus, at the end of 2009 in Bank already operated 13 international transfer

systems faster. He continued work to implement card as a financial instrument settlement for

individuals and businesses. During the year 7000 were issued Handy card number of active cards

reached 37 000, were also signed 15 new contracts for service projects payroll, number which by

the end reached 265. Completed the implementation of VISA cards.

2010

Despite the financial situation created by international and domestic market, 2010 was noted

by an increase in the volume of foreign payments of customers. The volume of payments for Bank

clients increased on average by one third compared to 2009 (33%), and payments on behalf of

clients - approximately in half (48%). Also substantially increased the volume of trade operations,

both through internal auction and CSV Bank through the network.

Exchange for serving customers within the Bank operates 61 CSV, through which in 2010

was purchased U.S. $ 50 million, over 30 million euros and 360 million Russian rubles, were also

sold 4 million . dollars, by 7 million euros and Russian rubles. To internal auction from businesses

of the Bank was purchased / sold foreign currency in cash in an amount equivalent to 300 million

U.S. dollars (93.5 million U.S. dollars / 194.9 million), from individuals - U.S. $ 150 million (128.8

million USD / U.S. $ 16.6 million), exceeding by about one third the volume of 2009.


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Bank efforts to develop retail business, especially international transfers, trade in nominal

checks and travel exchange operations of individuals occupying a substantial part of the market in

bank. BC quota "BS" JSC systems among local operators of international transfers of individuals

recorded 12.3% in 2010, which shows a good result in that sphere. Bank acted in 14 operating

systems, including 2 systems were opened in 2010 - "PrivatMoney" and "Coinstar". Total transfers

to individuals shown in U.S. dollars equivalent approximately U.S. $ 150 million during the year,

exceeding 1.3 times the level of 2009. The highest demand is enjoying the "Unistrut", "

", "Contact". Segment remains a priority international shipments and territorial subdivisions,

which is a positive factor in the development of retail business in all branches of the Bank.

In 2010 the Bank began offering its customers a new service - Issuance nominal Canadian

dollars and continue providing services buy / sell American Express traveler's checks.

1. Paying attention to the business in 2010 with cards, the Bank continued to actively work to

implement the settlement cards that contemporary financial tool for businesses and individuals.

During the year there are over 4000 cards. The total number of active cards reached 40 000. Were

concluded over 40 contracts for service salary and total salary projects reached 300.

There is a dynamic business operations cashless settlement growth, turnover which increased

on average by 50%. The biggest increase was recorded in Euro - 70%, average purchase amount is

370 Euro. While increasing turnover, the third increase in the number of cashless transactions in

national and foreign currency, surpassing the figure of over 5 million operations.

Taking into account the changes introduced by MasterCard since April 15, 2010, namelyauthorization to conduct transactions over the Internet with Maestro, is expected to increase the

number of cards and transactions, especially overseas. This innovation will obviously expand the

circle of users taking electronic payments via the Internet, which is contemporary and very

convenient.

2. Despite the increase in non-cash settlements through card transactions,

, cash settlements and still occupy

high. In 2010 the turnover of cash income reached about 5 billion and expenditure - 4 billion.

However, average daily revenue inflows from trade totaled 11 million and releases of funds - 15

million.

Along with the above directions with cash activity in 2010 was carried extra cash in Bank

amounting to 150 million and achieved commercial banks amounted to 526 million. Cash was

received from BNM amounted to 30 million, of commercial banks amounted to 112 million lei.

Timely and safe transportation and collection of cash from subsidiaries, economic subjects,

CSV, power bank cash machines and other customer service related obligations were secured by the

Bank's collection service has advanced means of protection.


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3.For an application before special banking products enjoy communal services accepting

payments and other payments from the population. This is a very lengthy processing arrangement in

brochures and sending bills to pay. During the year the Bank operators have processed about a

million tickets.

Currently, it takes measures to develop and implement an advanced software package for

accepting payments using payment method communal internet and ATMs.

4. In accordance with the licenses National Bank and National Commission of Financial

Market, along with traditional financial activities, the Bank pays its customers and operations and

specific services - operations with government securities and brokerage operations with corporate

securities.

5. Network subsidiary of BC "BS" SA includes 20 branches and 46 representative offices and

Central Bank - the largest subdivision that offers the full spectrum of banking services. Bank

subdivisions served through the end of 2010 about 84 000 customers, including businesses - 11

thousand individuals - 73 000. In 2010 they opened new accounts approximately 12 000 customers.

Clergy banking customers conducted by more than 207,000 actual analytical accounts opened with

banks.

6. With one of the best remote maintenance systems, the Bank actively promotes this service

among customers. During the year the Bank-Client system the number of participants increased by

161 customers and on 31.12.2010 reached 557 clients. The advantage of this system is that the main

operations can be performed on accounts without visiting branches through complex software"client-bank", which is one of the most advanced and affordable versions of remote banking.


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Conclusion

In 2011 the Bank has achieved positive results that allow us to look confidently into the

future. Bank assets increased by 13% (365.4 million lei) and at the end they exceeded 3.2 billion

USD. Deposits increased by 21% (378 million) recorded approximately 2.2 billion.

The loan portfolio increased by 17% (320 million), amounting to over 2 billion end. Total

regulatory capital increased net income of 10% (43 million), exceeding the amount of 472 million.

And prudent management of banking risks, effective internal control system and continuous

monitoring of asset quality permit compliance with all prudential requirements set by the National

Bank, as well as maintaining account profitability of assets additional reserves involvement, raising

quality, expanding range of services provided, branch network development and strengthening

customer base.

As proof of the relationship can be brought confidence expressed by international credit

institutions in attracting investment to the real sector of the economy, private enterprises small and

medium business.

To increase customer benefit underserved seek new solutions and working methods,

implement new technologies and ensure a high level of service in all sectors, enabling us to reach

and exceed the performance of competitors.

Bank's work was and is geared towards sustainable development, to achieve new standards of

corporate governance and providing a broader spectrum as servivii and modern banking products.

To this end in 2011 the Bank partially renovated and modernized technical and program the

machine for server, network and communications, ATMs and machines park collection, current and

capital repairs performed in branches and agencies of the Bank, has purchased property new

subdivisions bank location.

All these measures have allowed the Bank improve the quality and expand the volume and

range of banking services rendered, strengthening and enforcing its presence in the financial market

of Moldova, maintaining existing customer base and attract new customers to the service.

Raport(Banca Sociala)

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