Notes to the unconsolidated financial statements - Raiffeisen Bank

Annual Report 

2011

Survey of key data 

Raiffeisen BANK d.d. Bosna i Hercegovina 

Monetary values in EUR million 

Income statement 

2011 2010 Change 

Net interest income after value adjustment and provisioning 51.3 33.6 52.7% 

Net commission income 28.6 27.1 5.4% 

Trading profit 6.8 7.5 -9.3% 

General administrative expenses 60.3 61.0 -1.2% 

Profit before tax 25.2 4.0 525.5% 

Profit after tax 22.4 3.0 646.8% 

Balance sheet 

Loans and advances to banks 115.5 128.0 -9.7% 

Loans and advances to customers 1,179.4 1,146.9 2.8% 

Deposits from banks 239.3 300.7 -20.4% 

Deposits from customers 1,505.5 1,341.0 12.3% 

Equity (incl. profit) 256.2 190.2 34.7% 

Balance sheet total 2,053.2 1,903.1 7.9% 

Regulatory information 

Risk weighted assets 1,500.5 1,590.5 -5.7% 

Capital adequacy ratio 16.0% 14.9% 1.1 PP 

Performance 

Return on equity before tax 11.3% 2.1% 9.2 PP 

Return on equity after tax 10.0% 1.6% 8.5 PP 

Cost/income ratio 59.9% 66.1% -6.2 PP 

Return on assets before tax 1.3% 0.2% 1.1 PP 

Resources 

Number of employees 1,576 1,634 -3.5% 

Business outlets 92 92 0.0%

Content 

Annual Report 2011 

Report by the Chairman of the Supervisory Board ........................................................................26 

Preface by the CEO ....................................................................................................................28 

Macroeconomic Overview...........................................................................................................29 

Raiffeisen Bank International at a glance .....................................................................................34 

Raiffeisen BANK d.d. Bosna i Hercegovina...................................................................................36 

The Management Board .............................................................................................................38 

Organisational Structure.............................................................................................................40 

Balance sheet.............................................................................................................................42 

Statement of Income ..................................................................................................................43 

Key financial indicators ...............................................................................................................44 

Corporate Banking.....................................................................................................................49 

SME – Small & Micro Clients .......................................................................................................50 

Retail Banking ............................................................................................................................55 

Treasury, Financial Markets and Investment Banking.....................................................................63 

Head Office and Branches..........................................................................................................70 

Addresses ..................................................................................................................................71 

Responsibility for the Financial Statements....................................................................................76 

Independent auditors’ report.......................................................................................................77 

Unconsolidated income statement ...............................................................................................78 

Unconsolidated statement of comprehensive income....................................................................79 

Unconsolidated balance sheet.....................................................................................................80 

Unconsolidated statement of cash flows.......................................................................................81 

Unconsolidated statement of changes in equity ............................................................................82 

Notes to the unconsolidated financial statements .........................................................................83 

www.raiffeisenbank.ba 3

Report by the Chairman of the Supervisory Board 

26 

Report by the Chairman 

of the Supervisory Board 

www.raiffeisenbank.ba 

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 Raiffeisen BANK d.d. Bosna i Hercegovina. 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 EUR 110 should be lent for every EUR 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 EUR 1.37 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! 

Economic trends in Bosnia and Herzegovina during the second half of 2010 saw slight improvement; 

the beginning of 2011 saw economic trends of similar intensity, bringing measured optimism to the local 

market – driving the economy into a positive direction. For the first time since the onset of the global 

economic crisis, Bosnia and Herzegovina saw a record increase in exports, a positive impact of private 

consumption, and investments on economic growth in the country. However, this positive trend came 

to a halt due to the escalation of the debt crisis in the second half of the year and economic recovery 

slowed down significantly. 

The debt crisis in the eurozone brought instability to both global and regional financial markets, including 

the market of Bosnia and Herzegovina, which is heavily dependant on the EU.

Report by the Chairman of the Supervisory Board 

Political instability and the suspension of reform processes had additional adverse effects on economic 

development which subsequently led to termination of the stand-by arrangement with the International 

Monetary Fund (IMF). A rapid decrease of foreign investments and the downgrade of Bosnia and Herzegovina’s 

credit rating ensued inevitable consequences of the before mentioned developments. 

However, despite this negative economic environment, the local banking sector has remained buoyant, 

succeeding in generating positive business results which were a marked improvement over those from 

the previous year. These improved results are mainly due to the implementation of cost consolidation 

and business optimization processes. Even with such results, we must not neglect the fact that the banking 

sector is part of the national economy, which is closely linked to all other sectors; the banking sector 

shares the fate of the country’s overall economy, both in the short-term and long-term. 

It is all the more gratifying that Raiffeisen BANK d.d. Bosna i Hercegovina had kept its market position 

in 2011. We achieved superior industry results in a hostile economic climate, the likes which have not 

been seen in decades, making Raiffeisen’s achievements even that more remarkable. Improvement in 

business efficiency, as well as support from our customers throughout the year, made Raiffeisen’s 

achievements possible. 

The achievement of our business goals would not have been made possible without the tireless efforts 

of Raiffeisen Bank’s management and employees, to whom I would like to express my most sincere appreciation 

and thanks. 

Peter Lennkh 

Chairman of the Supervisory Board 


Preface by the CEO 

28 

Preface by the CEO 


The review of a past year is not only an analysis of accomplishments, but 

of a reflection on where further improvements could have been made. For 

several years now, we have looked back on previous years’ accomplishments 

and challenges–2011 was an exceptional year shaped by unique 

circumstances that were highly challenging. 

Overall, 2011 was rather successful seeing market recovery and significant 

economic gains, especially in its first half. Given the fact that Bosnia and 

Herzegovina’s national economy is reliant on the European Union, the effects 

of the debt crisis in the eurozone at year’s end shook Bosnia and Herzegovina’s 

national economy almost immediately. This resulted in a considerable 

slow down in economic recovery. Unlike the year before, the entire banking 

sector enjoyed increased business success and regained profitability which 

contributed greatly to economic trends in the country as a whole. 

It is a pleasure to highlight the fact that our business ratios, such as returns on equity, exceeded the industry 

average which only encourages us to continue on with our business strategy. The fact that our 

total deposits recorded a stronger growth rate than total deposits in the entire banking sector is a reflection 

of the trust and confidence customers have in us, signifying the strength of the Raiffeisen brand. 

Measures aimed at cost optimisation in previous years have produced notable outcomes as seen in the 

business achievements of 2011. As in the preceding year, we will maintain our focus in 2012 on higher 

cost-awareness and an even more systematic approach to fund allocation in order to achieve higher 

business efficiency. 

We remain committed to our customers as we consider this a main duty and task. In 2011, as in previous 

years, we have done our utmost to find the best solutions and products for our customers. This is 

because our customers’ success is also our success. Customer satisfaction and support, as well as 

awards from the renowned local and international magazines, encourage us to continue on with our 

business strategy. 

We have extended our business activities to the brokerage business in the Federation of Bosnia and 

Herzegovina through the successful integration of Raiffeisen BROKERS into Raiffeisen Bank. This integration 

was particularly aimed at quality improvement and service availability. The integration of 

Raiffeisen BROKERS into Raiffeisen Bank has immediately manifested positive results that have yet to 

meet their full potential. The year-end was also marked by the successful establishment of a new Group 

member, namely Raiffeisen INVEST. 

According to macroeconomic forecasts, 2012 will bring even further challenges; however, this will not 

discourage us. On the contrary, it only serves to motivate us more to endeavour to be even better and 

more successful at what we do. As a leader of the local banking sector and important driver of national 

economic processes, we will keep developing the best possible solutions for our customers and ourselves 

to meet these business challenges. 

Moreover, we will strive to remain a reliable partner at all times, continuing to gain respect and recognition 

from our customers and the general public. 

Sincerely, 

Michael Müller, 

CEO

Macroeconomic Overview 


In global terms, 2011 was shaped by a new wave escalation of the debt crisis in the eurozone. European 

economies were presented with extremely challenging tasks, for example, finding an efficient way 

to stop its further expansion and the threat of another risk to its system. This task was intended to preserve 

the sustainability of the single European currency area and create conditions for a sustainable economic 

recovery following the global financial crisis. 

The strong pace of recovery of the eurozone’s largest economies in 2010 to the first half of 2011, came 

under pressure again when Portugal became the third country, after Ireland and Greece, to turn to the 

eurozone members and the International Monetary Fund (IMF) for a fiscal support package. Greece 

struggled for its second support package to escape threatening bankruptcy. Moreover, driven by fear 

and increasing mistrust, financial markets put pressure on the sustainability of the refinancing of Spain’s 

and Italy’s debt, which in turn threatens the sustainability of the eurozone. 

Mistrust and increased risk aversion led to new ill-liquidity in the inter-bank market. This is due to increasing 

refinancing costs, volatility on the global stock exchange, record-high gold prices and exchange 

rates of the Swiss franc against the Euro, therefore dampening the prospects for further recovery 

of the European economic area. Finally, the European Central Bank had to make decisive moves to calm 

financial markets while supporting the sustainability of the eurozone. This was done in the form of a 

program to purchase bonds of the debt-ridden countries, great volumes of liquidity assistance to banks 

by long-term refinancing measures in the market, and a further cut in the base interest rate down to 1 

per cent. Coordinated measures to mitigate the debt crisis, consolidation and coordination of the fiscal 

policy at the European level, as well as continuing the expansive monetary policy aimed at preventing 

a new wave of recession will be at the top of the agenda for European leaders in times ahead. 

The positive external environment revealed increased demand in EU countries for exports from Bosnia 

and Herzegovina, especially in the first half of the year. This made exports and export-oriented industrial 

production the main drivers of continued economic recovery in Bosnia and Herzegovina again in 

2011. There were, however, no significant investments or reforms in the local market, due to the continued 

political crisis after parliamentary elections in 2010. However, exports of goods showed a remarkable 

two-digit annual of 15.6 per cent, thanks to exports of metals and metal products, electricity, 

mineral products, and machinery. This led to a revival of 5 per cent growth in the domestic processing 

industry, 15.6 per cent growth in the mining industry, and finally, 5.6 per cent growth in overall industrial 

production compared with the previous year. 

Moreover, for the first time in almost two years of recessionary developments, private consumption and 

investments are expected to make positive contributions to economic growth, above all thanks to 

stronger credit growth and higher availability of financing in the banking sector. Nevertheless, the 

growth rate of private consumption and investment will remain at modest annual levels of 2.5 per cent 

and 6 per cent, respectively, this due to a further increase in unemployment rates and limited real 

growth of private income. Based on these speculations, total annual real economic growth was predicted 

at 1.9 per cent in 2011, due mainly to the strong pace of recovery seen in the first half of the year. While 

in the rest of the year, particularly in the final quarter, the first negative affects of the economic downturn 

from the eurozone were felt. The economic growth of 1.9 per cent in Bosnia and Herzegovina remains 

far below the average recorded in the years before the economic crisis. Additionally, it is far 

below the average level needed for visible improvement in the living standard and meeting average European 

development levels. 



30 


The considerably low economic growth rate in Bosnia and Herzegovina was primarily due to the stagnation 

in economic processes and European integrations, as well as the decline of credibility of the 

country’s state institutions. This was due to the 15-month political crisis, which resulted in termination 

of the stand-by arrangement with the International Monetary Fund (IMF), the downgrade of the country’s 

credit rating, and record-low foreign direct investments in the past two years. Bosnia and Herzegovina’s 

fiscal situation was additionally aggravated when it became clear that due to the failure to 

establish a state government, the planned IMF budget would not be disbursed and the entire IMF agreement 

would be suspended. The governments at entity level amended their budgets and for the first time 

financed their deficits by issuing securities (treasury bills and bonds), which opened up a new capital 

market segment in 2011. Due to the very low levels of liquidity, banks became the key investors with a 

share above 95 per cent, as the Finance Ministries at entity level successfully placed their total amounts 

of treasury bills at around BAM 150 million at very low average yields ranging from 2.35 per cent to 

3.5 per cent. 

Despite the fact that the processes of fiscal reforms and public finance consolidation were stopped due 

to the suspension of the IMF agreement, the fiscal deficits at entity-level and the consolidated deficit at 

state-level are likely to remain at an acceptable level of up to 3 per cent of GDP. The foreign debt level 

grew by BAM 357 million, which caused its relative share in GDP to fall to 25.5 per cent. The share of 

total public debt also declined to 37.4 per cent of GDP. In November, the political and institutional crisis, 

combined with the suspension of the stand-by arrangement with the IMF and fiscal uncertainty 

eventually resulted in the downgrade of Bosnia and Herzegovina’s sovereign rating by S&P to B with 

negative outlook. This downgrade in the sovereign rating by S&P, in turn, strongly reduced foreign direct 

investments (FDI) in Bosnia and Herzegovina. The FDI volume in 2011 was just EUR 290 million, 

or 2.2 per cent of GDP, which despite the fact that it presents nominal growth from the previous year, 

it is too low an amount for starting serious investments, increasing employment and the level of economic 

growth. It is therefore not surprising that unemployment continues to rise at a worrisome pace, 

reaching a rate of 27.6 per cent this year 1 . 

In addition to increasing unemployment and the low growth rate of salaries, inflationary pressure is another 

driving force behind the relatively low recovery of domestic demand and overall real economic 

growth this year. Once again, factors on the domestic supply side, combined with the phenomenon of 

import inflation, played a key role in increasing the overall level of consumer prices in 2011. Economic 

pressures coming from the energy sector caused erratic gas and electricity prices in the first half of the 

year. This was due to the strong effects of import inflation through price increases for gas imports from 

international markets. This led to an inflation level of 4.2 per cent at the end of the second quarter– 

the highest in the past five years. After that, the inflationary pressure flattened out gradually, due partly 

to the base effect and partly to dropping petrol prices in international markets later in the year, which 

brought inflation to an average annual level of 3.7 per cent in 2011. 

Despite these continuous strains, volatile external framework, and local economic environment, the 

banking sector recorded another successful business year, recording an improvement in the capitalization 

level, profitability and growth. This acted as a key driver to the real sector’s recovery and overall 

economic growth in 2011. Furthermore, almost every stability and performance indicator recorded 

growth trends. The capitalization level measured by the capital adequacy rate stood at 16.4 per cent, 

which is not only far above the regulatory minimum of 12 per cent but also one of the best banking 

sector capitalizations in the region. Most banks successfully restructured their loan portfolios this year, 

1 This unemployment rate is derived from the Labour Force Survey conducted by recommendation of the International 

Labour Organization and requirements of the EU Statistic Bureau (EUROSTAT). It is not comparable with the 

official/registered unemployment rate based on the number of unemployed persons registered with the Employment 

Agency of Bosnia and Herzegovina. The key reason for the difference between these two rates lies in the diverging 

definitions of unemployment. By definition of the Employment Agency, an unemployed person is any person 

who meets the legal requirements and is registered with any of the employment agencies. According to the Labour 

Force Survey, an unemployed person is a person aged 15 or over who was without work for pay or profit during the 

survey reference week and who was currently available for work and was actively seeking work in the past four 

weeks.


which aided in stopping the upward trend in non-performing loans after three years and reducing their 

share in total loans to 11.8 per cent. As a result, the banking sector returned to positive business results 

and generated a net profit of BAM 175.2 million in 2011. ROA and ROE reached 0.8 per cent and 

7.2 per cent, respectively, returning to their levels before the financial and economic crisis of 2008 to 

2010. Banking sector liquidity, measured by the share of cash and marketable cash funds in total banking 

assets, remained at a stable level of 27.3 per cent thanks to the stabilization of provisioning costs 

and portfolio restructuring. 

The recovery trend of total credit growth and total banking assets continued in 2011. This was due to 

more favorable funding to South-East Europe from the international banking market, which made banks 

one of the recovery drivers of the real sector and exports. It is therefore not surprising that the largest 

annual credit growth average of 7.3 per cent was recorded in the private and public companies sector, 

which is at the same time the leading segment in total lending with a 51.4 per cent share, or EUR 

4 billion. The private customers segment, due to the already mentioned slow recovery of the labor market 

and the level of available real income, combined with the high level of average debt in a SEE comparison, 

recorded a significantly slower average credit growth rate of 2.4 per cent. 

The total level of loans given in the banking sector increased by 5.3 per cent, which was an expectedly 

lower grow rate compared with the average credit growth recorded in the period before the financial 

crisis. As a result, the growth of total banking assets increased by 3.4 per cent, which is a lower growth 

rate compared with the nominal economic growth achieved in 2011–leading to a drop of their share 

in GDP to 84.5 per cent. On the other hand, the stable growth of deposits was almost identical to the 

annual growth rate of 3.8 per cent recorded in the previous year, driven mostly by the strong two-digit 

growth of deposits from private individuals. The loan/deposit ratio remained at a stable level of 117.8 

per cent. 

The year 2011 saw just one M&A 2 transaction, in which a bank was acquired by a strategic partner in 

the Federation of Bosnia and Herzegovina. As a result, the number of banks operating in the local 

banking market remained unchanged at 29. As there were no other significant changes in the consolidation 

of the banking sector, the concentration level of the five top banking groups (CR 5) in the market 

remained at almost 80 per cent of total banking assets. 

In summery, worsening economic outlooks already recorded at the end of 2011 and the new wave of 

recessionary developments emanating from the debt crisis and fiscal consolidation will affect the 

economies of the eurozone in 2012. Therefore, this will have a negative impact on the small and open 

economies of South-East Europe, in which Bosnia and Herzegovina is a part; as they are directly dependant 

on demand and funding from the eurozone. Due to the fact that the strength and duration of 

the new recession cycle will be much shorter and less intense than that in the period 2008-2009, we 

expect a deterioration of trends in the real sector and the overall level of consumption. As a result, 

lending in the local banking sector is likely to slow down compared with the above mentioned period. 

Given the expected stagnation trends in the local economy, the banking sector will face another challenging 

year. Difficulties in business operations and in the corporate sector’s liquidity, combined with 

pressure on the local labor market, will be the key obstacles to finding good lending opportunities and 

therefore the banking sector’s growth. 

Head of Research and Analysis/Chief Economist 

Ivona Kristi} 

2 Corporate actions of mergers and acquisitions 



32 

Key economic figure 


2007 2008 2009 2010e 2011f 2012f 2013f 

Nominal GDP (in EUR billion) 11.1 12.6 12.3 12.5 13.3 13.6 14.2 

Real GDP (% yoy) 6.2 5.7 -2.9 0.7 1.9 0.0 2.0 

GDP per capita (EUR) 2,898 3,290 3,195 3,254 3,449 3,541 3,697 

GDP per capita (EUR in PPP) 6,300 6,600 6,400 6,550 6,700 7,000 7,300 

Private consumption (real growth % yoy) 5.9 6.0 -3.9 -1.3 2.5 -0.5 2.5 

Gross investment (real growth % yoy) 40.9 16.0 -27.6 -8.1 6.0 -5.0 4.0 

Industrial output (% yoy) 6.6 7.3 -3.3 1.6 5.6 1.1 5.0 

Production prices (average % yoy) 1.1 8.6 -3.2 0.9 3.7 1.9 1.9 

Consumer prices – inflation (average % yoy) 1.5 7.4 -0.4 2.1 3.7 2.2 2.0 

Average gross salaries in industry (% yoy) 8.0 14.9 5.6 2.1 5.0 2.0 4.0 

Unemployment rate¹ (average %) 29.0 23.4 24.1 27.2 27.6 27.9 27.6 

Budget deficit (% GDP) 1.2 -2.2 -4.5 -2.2 -3.0 -3.0 -2.0 

Public debt (% GDP) 32.9 30.1 35.1 38.4 37.4 39.7 40.1 

Trade deficit (% GDP) -37.2 -38.2 -27.8 -26.0 -27.9 -24.8 -26.1 

Current account deficit (% GDP) -10.7 -14.2 -6.2 -5.3 -8.1 -6.6 -8.1 

Net foreign investments (% GDP) 13.7 5.0 1.4 1.4 2.2 1.4 3.2 

Foreign reserves (in EUR billion) 3.4 3.2 3.2 3.3 3.3 3.2 3.3 

Gross foreign debt (% GDP) 47.5 49.0 54.2 58.3 58.9 61.0 60.6 

EUR/KM (eop.) 1.96 1.96 1.96 1.96 1.96 1.96 1.96 

EUR/KM (average) 1.96 1.96 1.96 1.96 1.96 1.96 1.96 

USD/KM (eop.) 1.34 1.46 1.34 1.48 1.48 1.50 1.45 

USD/LCY (average) 1.43 1.34 1.41 1.48 1.41 1.42 1.48 

Source: Central Bank of B&H, Statistics Agency of B&H, Raiffeisen RESEARCH 

1 An explanation of the unemployment rate is given on page 30.

Overview of banking sector developments 

Balance sheet data 


2004 2005 2006 2007 2008 2009 2010 2011 

Total assets, EUR million 4,806.0 6,071.4 7,541.4 10,023.0 10,797.6 10,742.0 10,828.0 11,194.5 

growth in % yoy 22.3% 26.3% 24.2% 32.9% 7.7% -0.5% 0.8% 3.4% 

Total credits, EUR million 3,030.5 3,857.3 4,703.5 6,059.5 7,418.6 7,183.7 7,435.9 7,829.3 

growth in % yoy 15.7% 27.3% 21.9% 28.8% 22.4% -3.2% 3.5% 5.3% 

Total deposits, EUR million 2,852.2 3,515.8 4,480.6 6,180.1 6,071.6 6,182.6 6,406.5 6,646.8 

growth in % yoy 27.8% 23.3% 27.4% 37.9% -1.8% 1.8% 3.6% 3.8% 

Loan/deposit ratio 106.3% 109.7% 105.0% 98.0% 122.2% 116.2% 116.1% 117.8% 

Structural information 

Number of banks 33 33 32 32 30 30 29 29 

Market share of state-owned banks, 

in % 

Market share of foreign-owned 

banks, in % 

Profitability and efficiency 

80 90.8 94.0 93.7 95.0 94.6 92.8 92.2 

Return on assets (RoA) 0.7 0.7 0.9 0.9 0.4 0.1 -0.6 0.8 

Return on equity (RoE) 5.8 6.2 8.4 8.9 4.3 0.8 -5.5 7.2 

Non-performing loans 

(% of total loans) 

Source: Central Bank of B&H, Banking Agencies of FB&H and RS 

6.1 5.3 4.0 3.0 3.1 5.9 11.4 11.8 


Raiffeisen Bank International at a glance 

34 

Raiffeisen Bank International 

at a glance 


A leading bank in Central and Eastern Europe, including Austria 

Raiffeisen BANK d.d. Bosna i Hercegovina 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.

RBI's development 

RBI was established in October 2010 through the merger of Raiffeisen International with the principal 

business areas of Raiffeisen Zentralbank Österreich 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 Mühldorf, 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 EUR 83.8 billion 

in Austrian customer deposits (excluding building society savings), of which around EUR 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. 

Raiffeisen Bank International at a glance 



36 

Raiffeisen BANK d.d. 

Bosna i Hercegovina 


Raiffeisen BANK d.d. Bosna i Hercegovina is a subsidiary of Raiffeisen Bank International AG (RBI), a 

leading universal bank in Central and Eastern Europe (CEE) and one of the foremost providers of corporate 

and investment banking services in Austria. RBI originated from the merger of the spun-off business 

areas of Raiffeisen Zentralbank Österreich AG (RZB) with Raiffeisen International Bank-Holding AG. 

Our bank has been operating as a financial institution since November 1992 when it was first founded 

as Market Banka d.d. Sarajevo, backed predominantly with private capital of over 90 per cent. Thanks 

to its exceptional performance, our bank quickly stood out as a very successful and profitable player. 

Between 1996 and 2000 we were one of the leading partner banks to international financial institutions 

(World Bank, IFC, KfW, SOROS and EBRD) in implementing their credit lines. The British financial 

magazine Central European awarded Market Banka the title of the best banking institution in Bosnia 

and Herzegovina in 1999. On 21 July 2000 Raiffeisen Zentralbank Österreich AG-Vienna acquired Market 

Banka and successfully integrated it into the Raiffeisen network under the name Raiffeisen BANK d.d. 

Bosna i Hercegovina. 

In May 2001 RZB became the sole owner of Hrvatska Poštanska banka which was then renamed 

Raiffeisen BANK HPB. Since 1 January 2003, when Raiffeisen BANK HPB was successfully integrated with 

Raiffeisen BANK, we have been operating under a single name, Raiffeisen BANK d.d. Bosna i Hercegovina. 

This acquisition has further strengthened our position in the market in Bosnia and Hercegovina: 

our balance sheet has grown to over BAM one billion and our branch network has undergone 

significant expansion. 

Ownership Structure of Raiffeisen BANK d.d. Bosna i Hercegovina: 

Raiffeisen Bank International 96.99 % 

Millenia Beteiligungsverwaltungs GmbH 3.00 % 

Other shareholders 0.01 % 

As of 31 December 2011 our bank operated through a network of 92 offices and had 1,576 employees. 

The numerous national and international awards are testimony to our success. They include: “The Best 

Bank in BiH” and “The Best Internet Bank” from Global Finance; “The Best Bank in BiH” from Euromoney; 

“Bank of the Year” from The Banker; “The Most Active Trade Finance Bank in the Region” from 

EBRD; “The Best Bank in BiH” from EMEA Finance; and the national awards “Zlatni BAM” and “Kristalna 

prizma”. 

Our bank retains its competitive edge in the B&H market in part through investments in new technologies, 

our experienced and trained staff who undergo continual professional education, our focus on an 

individual approach to each customer and the introduction of new distribution channels and modern 

products and services. 

Once the Securities Market Law created the conditions for banks operating in the FB&H to offer brokerage 

and securities intermediation services, Raiffeisen Bank merged its subsidiary Raiffeisen 

BROKERS d.o.o. Sarajevo into Raiffeisen BANK d.d. Bosna i Hercegovina and brought its securities business 

under one roof. Raiffeisen now offers professional intermediary services and is able to meet the 

needs of a more extensive customer network. 

In addition to Raiffeisen BANK, the Raiffeisen Group is represented in Bosnia and Herzegovina by 

Raiffeisen INVEST, Raiffeisen LEASING, Raiffeisen CAPITAL and Raiffeisen Special Assets Company.

Vision 

• Raiffeisen is the leading financial services Group in Bosnia and Herzegovina. 

Client satisfaction is at the highest level. 

Mission 


• We achieve highest client satisfaction, offer excellent service quality and the full range of 

banking, leasing, insurance and brokerage products. We set standards in partnering 

and are committed to long-term relationships with our clients. 

• Our employees are the key contributors in achieving our vision and strategic goals. Their 

commitment, loyalty and motivation lead to a unique team-spirit and strong corporate 

culture. We strongly support the personal development of our employees. 

• We achieve the highest level of sustainable profitability in B&H banking market in order 

to fulfil shareholders expectations. 

• We see ourselves as a responsible part of society in supporting local developments and 

initiatives with the goal of creating value. 

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. 


Organisational Structure

Balance sheet 

42 

Balance sheet 

as at 31 December 2011 and 2010 

ASSETS 


2011 

(000 BAM) 

2011 

(000 EUR) 

2010 

(000 BAM) 

2010 

(000 EUR) 

Cash and cash equivalents 716,868 366,529 434,964 222,393 

Obligatory reserve at Central Bank of B&H 266,540 136,280 305,865 156,386 

Placements with other banks 225,917 115,510 250,282 127,967 

Loans and advances to customers 2,306,730 1,179,412 2,243,190 1,146,925 

Assets classified as held for sale 403 206 - - 

Financial assets available-for-sale 3,299 1,687 2,241 1,146 

Financial assets at FVTPL 158,897 81,243 164,784 84,253 

Financial assets held-to-maturity 138,090 70,604 137,408 70,255 

Investments in subsidiaries 2,436 1,245 2,288 1,170 

Investments in associate 8,173 4,179 8,173 4,179 

Deferred tax assets 846 432 469 240 

Other assets and receivables 31,597 16,155 16,971 8,677 

Tangible and intangible assets 155,893 79,707 155,598 79,556 

TOTAL ASSETS 4,015,689 2,053,189 3,722,233 1,903,147 

LIABILITIES 

Due to banks 468,004 239,287 588,150 300,716 

Due to customers 2,944,442 1,505,469 2,622,705 1,340,968 

Provisions 7,491 3,830 24,825 12,693 

Other liabilities and payables 29,167 14,913 32,613 16,675 

Subordinated debt 65,484 33,481 82,016 41,934 

TOTAL LIABILITIES 3,514,588 1,796,980 3,350,309 1,712,986 

EQUITY 

Share capital 237,388 121,374 237,388 121,374 

Share premium 4,473 2,287 4,473 2,287 

Investment revaluation reserves 3,201 1,637 2,191 1,120 

Regulatory reserves 89,035 45,523 - - 

Retained earnings 167,004 85,388 127,872 65,381 

TOTAL EQUITY 501,101 256,209 371,924 190,162 

TOTAL LIABILITIES AND EQUITY 4,015,689 2,053,189 3,722,233 1,903,148 

COMMITMENTS AND CONTINGENCIES 871,216 445,446 898,766 459,532

Statement of Income 

for the years ended 31 December 2011 and 2010 

2011 

(000 BAM) 

2011 

(000 EUR) 

2010 

(000 BAM) 

Statement of Income 

2010 

(000 EUR) 

Interest and similar income 208,215 106,459 210,296 107,523 

Interest and similar expenses (71,705) (36,662) (86,540) (44,247) 

Net interest income 136,510 69,797 123,756 63,276 

Fee and commission income 65,008 33,238 61,099 31,239 

Fee and commission expenses (9,143) (4,675) (8,090) (4,136) 

Net fee and commission income 55,865 28,563 53,009 27,103 

Net financial income 13,347 6,824 14,714 7,523 

Other operating income 7,226 3,694 2,999 1,533 

Operating income 212,948 108,878 194,478 99,435 

Administrative expenses (117,879) (60,270) (119,356) (61,026) 

Depreciation and amortization (9,655) (4,937) (9,235) (4,722) 

Operating expenses (127,534) (65,207) (128,591) (65,748) 

PROFIT BEFORE IMPAIRMENT LOSSES, 

PROVISIONS AND INCOME TAX 

85,414 43,671 65,887 33,687 

Impairment losses and provisions (40,513) (20,714) (69,497) (35,533) 

Recoveries 4,373 2,236 11,487 5,873 

PROFIT BEFORE INCOME TAX 49,274 25,193 7,877 4,027 

Income tax (5,421) (2,772) (2,005) (1,025) 

NET PROFIT FOR THE YEAR 43,853 22,421 5,872 3,002 

Earnings per share (in BAM) 46.18 23.61 6.18 3.16 


Key financial indicators 

44 


At year-end 


The figures shown below are either extracted or recomputed from the Bank's audited financial statements. 

2011 

(000 BAM) 

2010 

(000 BAM) 

2009 

(000 BAM) 

2008 

(000 BAM) 

Total assets 4,015,689 3,722,233 4,196,962 4,270,413 

Deposits from customers 2,944,442 2,622,705 2,723,531 2,483,277 

Loans to customers 2,306,730 2,243,190 2,315,721 2,819,874 

Share capital 241,861 241,861 241,861 241,861 

Share capital and reserves 501,101 371,924 367,006 357,610 

Result for the year 

Total income 226,464 214,055 193,008 215,398 

Total operating expenses 177,190 206,178 183,428 180,073 

Profit before tax 49,274 7,877 9,580 35,325 

Profit after tax 43,853 5,872 8,364 27,583 

Ratios 

Return on assets 1.3% 0.2% 0.2% 0.7% 

Return on equity 10.0% 1.6% 2.3% 9.5% 

Cost/income ratio 59.9% 66.1% 69.1% 64.6% 

At year-end 

2011 

(000 EUR) 

2010 

(000 EUR) 

2009 

(000 EUR) 

2008 

(000 EUR) 

Total assets 2,053,189 1,903,148 2,145,873 2,183,427 

Deposits from customers 1,505,469 1,340,968 1,392,519 1,269,679 

Loans to customers 1,179,412 1,146,925 1,184,009 1,441,779 

Share capital 123,662 123,662 123,662 123,662 

Share capital and reserves 256,209 190,162 187,647 182,843 

Result for the year 

Total income 115,789 109,445 98,683 110,131 

Total operating expenses 90,596 105,417 93,785 92,070 

Profit before tax 25,193 4,027 4,898 18,061 

Profit after tax 22,422 3,002 4,276 14,103 

Ratios 

Return on assets 1.3% 0.2% 0.2% 0.7% 

Return on equity 10.0% 1.6% 2.3% 9.5% 

Cost/income ratio 59.9% 66.1% 69.1% 64.6%

Total assets with loan data 

2011 

(000 BAM) 

2010 

(000 BAM) 

2009 

(000 BAM) 

2008 

(000 BAM) 


2007 

(000 BAM) 

Total assets 4,015,689 3,722,233 4,196,962 4,270,413 3,799,313 

Loans to customers 2,306,730 2,243,190 2,315,721 2,819,874 2,405,697 

2011 

(000 EUR) 

2010 

(000 EUR) 

2009 

(000 EUR) 

2008 

(000 EUR) 

2007 

(000 EUR) 

Total assets 2,053,189 1,903,148 2,145,873 2,183,427 1,942,558 

Loans to customers 1,179,412 1,146,925 1,184,009 1,441,779 1,230,013 



46 

Lending 


2011 

(000 BAM) 

2011 

(000 EUR) 

2010 

(000 BAM) 

2010 

(000 EUR) 

Change 

% 

Corporate loans 1,300,668 665,021 1,216,580 622,027 6.9% 

Retail loans 1,280,927 654,928 1,153,610 589,831 11.0% 

Gross loans 2,581,595 1,319,949 2,370,190 1,211,859 8.9% 

Provisioning for impairment losses 274,865 140,536 127,000 64,934 116.4% 

Net loans 2,306,730 1,179,412 2,243,190 1,146,925 2.8% 

Deposits from customers 

2011 

(000 BAM) 

2011 

(000 EUR) 

2010 

(000 BAM) 

2010 

(000 EUR) 

2009 

(000 BAM) 

2009 

(000 EUR) 

2008 

(000 BAM) 

2008 

(000 EUR) 

Corporate deposits 1,172,076 599,273 958,899 490,277 1,197,151 612,094 1,113,403 569,274 

Retail deposits 1,772,366 906,196 1,663,806 850,690 1,526,380 780,426 1,369,874 700,405

Total income (with structure) 

2011 

(000 BAM) 

2010 

(000 BAM) 

2009 

(000 BAM) 

2008 

(000 BAM) 


2007 

(000 BAM) 

Total income 226,464 214,055 193,008 215,398 199,707 

Net interest income 136,510 123,756 117,702 137,858 122,997 

Commission income 65,008 61,099 55,107 57,353 51,194 

Other operating income 24,946 29,200 20,199 20,187 25,516 

2011 

(000 EUR) 

2010 

(000 EUR) 

2009 

(000 EUR) 

2008 

(000 EUR) 

2007 

(000 EUR) 

Total income 115,789 109,445 98,683 110,131 102,109 

Net interest income 69,796 63,275 60,180 70,486 62,887 

Commission income 33,238 31,239 28,176 29,324 26,175 

Other operating income 12,755 14,930 10,328 10,321 13,046 



48 

Comparison of operating expenses and total income 


2011 

(000 BAM) 

2010 

(000 BAM) 

2009 

(000 BAM) 

2008 

(000 BAM) 

2007 

(000 BAM) 

Total operating expenses 177,190 206,178 183,428 180,073 169,206 

Total income 226,464 214,055 193,008 215,398 199,707 

2011 

(000 EUR) 

2010 

(000 EUR) 

2009 

(000 EUR) 

2008 

(000 EUR) 

2007 

(000 EUR) 

Total operating expenses 90,596 105,417 93,785 92,070 86,514 

Total income 115,789 109,445 98,683 110,131 102,109

Corporate Banking 

Corporate Banking 

Although 2011 was generally described as a difficult year with many challenges and uncertainties, the 

Corporate Division of Raiffeisen Bank achieved satisfactory results again this year. 

Total assets remained at the same level as in the previous year and non-performing loans were maintained 

at a satisfactory level. Despite the liquidity squeeze in the market, the deposits base increased 

by 6.5 per cent. 

Thanks to sound management and ongoing control of costs, Raiffeisen Bank managed to improve its 

Cost/Income Ratio by 2 per cent compared with that of 2010. 

Recognizing the development objective of the EAF World Bank and the RS Investment Bank’s Project 

aimed at facilitating access to SME financing in Bosnia and Herzegovina, Raiffeisen BANK d.d. Bosna 

i Hercegovina has enhanced its product offer with another product from this project. From this credit 

line, Raiffeisen Bank has financed loans for projects implemented by SMEs and other companies that 

stimulate growth in the regional economy, create jobs and raise exports. Additionally, SMEs and other 

companies that are also engaged in agro-processing, food production, general industrial production, 

and provide services that create added value are also financed loans by Raiffeisen Bank. 

In the Cash Management, the focus in 2011 was on the following products: 

• RBBHnet – Corporate Online Banking – improvement of Corporate Online Banking products in 

order to achieve STP (straight to process) order processing 

• Swift MT 940 – new functionalities: multiple message; swift MT 940 SEPA standard, automatic 

processing of Swift MT 940 

• SWIFT SCORE (The Standardized Corporate Environment) – this service enables Raiffeisen Bank 

to exchange SWIFT messages with customers via the SWIFT network. The customer can forward 

SWIFT messages to Raiffeisen Bank via SWIFT and also use SWIFT messages at the SCORE level. 

With this service Raiffeisen Bank offers its customers to send payment orders through the MT 101 

message send reports on changes and account balances in the form of the MT 940 message 

and exchange non-financial MT 199 messages 

The CRM project (Customer Relationship Management) for corporate customers was successfully implemented 

in 2011, which helped in the improvement of sales quality. A special focus in 2011 was on 

X-sale activities. 

By dealing fairly with our customers and providing them with financial support, Raiffeisen Bank not only 

managed to retain existing customers but acquired new customers, thus ending 2011 with more than 

a total of 5,500 customers in our base. 


SME – Small & Micro Clients 

50 



The Small & Micro Clients segment or SME of Raiffeisen Bank includes legal entities or groups of connected 

customers (GCC), whose annual revenues are less than EUR 2.5 million (BAM 5 million) and 

where exposure is lower than EUR 1 million (BAM 2 million). 

The SME Excellence project was finalized in 2011, by which a customer sub-segmentation was established 

in the SME segment. Raiffeisen Bank in Bosnia and Herzegovina is the first bank in the RBI network 

that has successfully realized this project. 

The SME customer sub-segmentation was carried out with the following goals: 

• Building lasting relations with affluent customers 

• Improving and strengthening customer relations 

• Identifying existing customers and potential customers from other banks with whom we intend 

to build long-term business relations 

• Developing new tools for creating target groups and for customer communication 

The SME customer’s sub-segmentation was based on the following criteria: 

• Total annual revenues generated by Raiffeisen Bank per customer 

• Total annual turnover of the customer accounts at Raiffeisen Bank 

• Total risk exposure at Raiffeisen Bank 

• Total amount of term deposits 

Based on these criteria, Raiffeisen Bank’s SME customers were sub-segmented into Premium, Standard 

and Marginal. 

We have defined and established a strategy for each individual sub-segment, through product and service 

offers, pricing policies, and customer communication channels. 

For the individual sub-segments, a series of CRM campaigns were carried out in 2011, as well as a marketing 

campaign to promote Refinancing Loans. 

In order to meet the demands of our customers, we have focused on continued service quality improvement, 

development of new products while making improvements to existing products for legal entities, 

the SME segments, as well as tailoring our products to the needs of the market and optimizing 

processes. 

By providing high-quality staff services and granting financing to our customers, we managed not only 

to retain existing customers, but also to acquire new ones, thus ending 2011 with more than 9,000 customers 

in our base.

Loans 

(000 BAM) 2010 

Development of the loan and deposit portfolios (Micro segment): 


The focus in the SME business in 2011 was on retaining portfolio quality while closely monitoring customer 

relationships. 

Jan 

2011 

Feb 

2011 

Mar 

2011 

Apr 

2011 

May 

2011 

Short-term loans 42,911 43,721 44,395 44,162 44,145 44,093 44,032 43,402 43,012 43,072 42,762 43,415 43,025 

Long-term loans 52,363 51,820 51,713 52,695 52,918 52,191 51,803 51,445 51,054 51,151 52,031 51,811 51,886 

Total 95,274 95,541 96,108 96,857 97,063 96,284 95,835 94,847 94,066 94,223 94,793 95,226 94,911 

Jun 

2011 

Jul 

2011 

Aug 

2011 

Sep 

2011 

Oct 

2011 

Nov 

2011 

Dec 

2011 



52 

Portfolio structure 2011 – MICRO segment 

Deposits 

(000 BAM) 2010 


Jan 

2011 

Feb 

2011 

Mar 

2011 

Apr 

2011 

May 

2011 

Sight deposits 64,878 62,191 59,842 57,332 55,761 57,414 59,991 62,505 61,052 61,414 63,413 61,641 65,520 

Term deposits 5,490 5,445 5,117 4,978 4,880 4,450 4,431 4,210 4,292 4,260 4,178 4,048 4,030 

Total 70,368 67,636 64,959 62,310 60,641 61,864 64,422 66,715 65,344 65,674 67,591 65,689 69,550 

Jun 

2011 

Jul 

2011 

Aug 

2011 

Sep 

2011 

Oct 

2011 

Nov 

2011 

Dec 

2011

Loans 

(000 BAM) 2010 

Development of the loan and deposit portfolios (SE segment): 


In the SE segment, the beginning of the year 2011 was marked by a re-segmentation into Corporate 

– CMM, placing the focus on affluent SE customers and maintaining the portfolio quality by monitoring 

customer relationships. 

Jan 

2011 

Feb 

2011 

Mar 

2011 

Apr 

2011 

May 

2011 

Short-term loans 65,818 66,133 69,465 65,731 66,070 66,562 69,202 67,614 65,422 66,642 65,488 64,119 66,195 

Long-term loans 113,641 111,916 108,522 100,281 99,320 98,366 97,510 96,238 98,337 98,545 97,361 96,317 93,874 

Total 179,459 178,049 177,987 166,012 165,390 164,928 166,712 163,852 163,759 165,187 162,849 160,436 160,069 

Jun 

2011 

Jul 

2011 

Aug 

2011 

Sep 

2011 

Oct 

2011 

Nov 

2011 

Dec 

2011 



54 

Portfolio structure 2011 – SE segment 

Deposits 

(000 BAM) 2010 


Jan 

2011 

Feb 

2011 

Mar 

2011 

Apr 

2011 

May 

2011 

Sight deposits 52,682 48,452 45,581 52,697 45,694 45,550 45,439 48,209 46,636 46,446 49,456 51,969 54,402 

Term deposits 5,153 5,054 4,923 3,860 3,845 4,529 4,172 3,938 3,959 3,941 4,003 3,944 4,719 

Total 57,835 53,506 50,504 56,557 49,539 50,079 49,611 52,147 50,595 50,387 53,459 55,913 59,121 

Jun 

2011 

Jul 

2011 

Aug 

2011 

Sep 

2011 

Oct 

2011 

Nov 

2011 

Dec 

2011

Retail Banking 

PI deposit portfolio 

In the Retail Segment, Raiffeisen Bank is constantly working to further improve service quality, introduce 

new products and tailor existing products to its customers’ needs. The focus is on state-of-the-art technology 

solutions in modern banking, specifically for the deposit, credit, and card business areas. 

To address the needs of our most distinguished customers, we have created Raiffeisen Premium Banking, 

which is based on a proactive approach to the needs of our Premium customers. 

Deposits from private individuals 

In the deposit business area, total savings of private individuals grew in 2011 by 6.5 per cent compared 

with that of 2010. 

This growth was the result of our ongoing efforts to preserve our customers’ trust in the safety of their 

deposits. The following activities are particularly noteworthy: 

• Establishing the Loyalty Program – a strategy to keep existing term deposits in the Bank 

• Quarterly CRM actions aimed at routing free funds from a-vista accounts to term deposit accounts 

• Launching the promotional savings product Bonus Savings, which was covered by the marketing 

campaign, Save and earn more! 

These activities not only increased the volume of term deposits, but also improved their maturity structure, 

as attractive prices for longer terms were offered. As a result, long-term savings rose by 7.6 per 

cent compared with that of the previous year. 

(000 BAM) 2008 2009 growth in % 2010 growth in % 2011 growth in % 

Short-term savings 89,979 152,664 69.7% 89,424 -41.4% 67,830 -24.2% 

Long-term savings 827,426 933,983 12.9% 976,968 4.6% 1,051,432 7.6% 

Sight deposits 450,901 438,248 -2.8% 595,892 36.0% 651,229 9.3% 

Purpose deposits 1,909 1,516 -20.6% 1,577 4.0% 2,085 32.2% 

Total 1,370,215 1,526,411 11.4% 1,663,861 9.0% 1,772,576 6.5% 




56 

Structure of deposits by private individuals 


Private lending 

In the course of 2011, Raiffeisen Bank increased the overall loan portfolio by 4.1 per cent and the new 

lending volume by 77 per cent. This was mainly due to the launch of new loan products, marketing campaigns 

for new and existing products and ongoing CRM approach to existing customers. 

The following new loan products were introduced in 2011: 

• Raiffeisen Integral Refinancing Loan 

Intended to refinance existing debt with other banks and with Raiffeisen Bank 

• “Flexi” Housing Loan 

Provides flexible financing to purchase a home, with special customer benefits 

• “XS” Non-Purpose Loan 

Without guarantors, a loan combined with the “MasterCard Shopping Card” credit card 

The total volume of loan products was slightly above BAM 462 million. The loan portfolio was dominated 

by non-purpose loans with a 76.7 per cent share, followed by mortgage loans, Lombard loans 

and purpose loans with shares of 11.1 per cent, 4.7 per cent and 7.3 per cent, respectively. The best 

selling products from the non-purpose loan offer were the “XXL non-purpose loan without guarantors” 

and the “Consolidation loan”, which made the main contribution to total lending in 2011, with 40 per 

cent or BAM 185 million, and 21.7 per cent or BAM 100 million, respectively.

PI loan portfolio 

(000 BAM) 2008 2009 growth in % 2010 growth in % 2011 growth in % 

Short-term loans 17,106 9,111 -46.7% 8,262 -9.3% 9,194 11.3% 

Long-term loans 1,385,920 1,150,351 -17.0% 1,055,916 -8.2% 1,100,699 4.2% 

Card products 73,711 90,683 23.0% 90,442 -0.3% 92,330 2.1% 

Total 1,476,737 1,250,145 -15.3% 1,154,620 -7.6% 1,202,223 4.1% 

Structure of the PI loan portfolio 

Neutral Business 

In the neutral business area, significant results were achieved in 2011, in particular in the exchange office 

business. Exchange transactions increased by 10.2 per cent compared to 2010, which was primarily 

due to contract signing with the allocation of new authorized exchange offices in 2011. This drove 

up the commission income from the money-exchange business by 38.6 per cent compared to 2010. 

Fast money transfer and receipt via the Western Union system plays a key role in the neutral business 

segment. Despite the recession and the negative market development across the world, Western Union 

continues its upward trend in transactions with the Bank and its sub-agents. Transactions increased in 

2011 by 8.6 per cent compared with the previous year. These outstanding results were driven by the 

newly introduced Loyalty Program, an incentive system rewarding customer loyalty in the use of Western 

Union’s fast money transfer and receipt services. 

In addition to that, there was huge customer demand for the Bank’s Account Sets, which drove up the 

number of account sets by 24.8 per cent compared to 2010. 




58 


Over the past two years, Raiffeisen Bank worked on updating its base of active customers, that is, customers 

using at least one of our products. In this regard, a new application was implemented in 2011, 

which allows monitoring the number of customers according to their status. This is a new tool in the customer 

relationship management area. 

Raiffeisen BANK d.d. Bosna i Hercegovina serviced nearly 600,000 private individuals as per year-end 

2011. 

Card Business 

The card portfolio continued to grow throughout 2011. The year ended with a total of 504,864 cards 

(in cumulative numbers), with 57,688 cards issued in 2011 alone. This translates into a growth of 10.9 

per cent compared to 2010. 

The strongest growth drivers were credit cards (Revolving and Charge cards) and business cards, which 

grew by 14.4 per cent and 12.9 per cent, respectively. 

The card business area registered an annual growth of newly issued cards of 10.9 per cent, with credit 

cards growing by 64.2 per cent. 

The increase in the number of credit cards issued was driven by the new product MasterCard Shopping 

Card. With its many features and benefits, the card proved to be an attractive product as it enables customers 

to pay in installments without any fees and interest; in addition, get extended warranties for the 

goods purchased with the card. 

A significant contributory factor to the number of debit cards issued was an action for acquisition of public 

sector entities and corporate entities to pay staff salaries into accounts linked to debit cards. 

From the vast range of new products/services presented during 2011, the following products/services 

should be noted: 

• MasterCard Business Revolving Card 

The first business revolving card in the local market 

• E–Statement Service 

A new service allowing private customers to view statements on all active card accounts online; 

it comes with an archive with the last six statements, and the option to receive statements by email 

Distribution Channels 

While the period from 2002 to 2008 was characterised by an extensive expansion of the business outlet 

network, the years 2009, 2010 and 2011, in the light of the market environment, were shaped by 

consolidation through which the Bank achieved an optimum number of business outlets. 

As of 31 December 2011, the Bank had a business outlet network of 92 branches offering products and 

services to customers, and six regional branches acting as hubs of the Bank’s business network. 

Regional branches were established in the country’s large administration and political centres to provide 

the branch network with administrative and professional support. 

Over the course of the year, the Bank also worked on expanding its network of POS, ATMs, info terminals 

and alternative sales channels by adding new retailers and car dealers to its agent sales network.

Development of the business outlet network from 2006 to 2011 

Geographical distribution of business outlets 




60 

Structure of business outlets across the years 


Quality Management 

Services and Data Quality 

Introduced in 2009, in line with expectations, the quality indicator served as a good starting point for 

identifying weaknesses in Raiffeisen Bank’s network of business outlets and its continued development. 

Based on quality indicator reports and reports on mystery shopping–carried out twice a year, plans 

were prepared for bank branches that had failed to meet the set threshold. For the first time, mystery 

calls were carried out this year to bank branches, Call Centers, SE account managers, and virtual managers. 

Towards the end of 2011, actions were taken to improve the quality indicator, such as introducing new 

parameters and applying the quality indicator to each employee where feasible. Additionally, Call Centers 

and Electronic Sales Channels are both about to be included into this new quality index calculation 

methodology. 

The activities in the area of data quality improvement continued in 2011. Beside the regular activities 

of updating customer data, a new application was implemented in August 2011 with the aim at additionally 

improving the quality of data entries. 

We would like to stress the fact that improvement in customer service quality is ongoing, e.g., staff training 

and awareness of the significance of data quality and its impact on business results.

Alternative Sales Channels 

Card Acquiring at Point of Sale (POS) and Automated Teller Machines (ATMs) 

In 2011 the Card Acquiring Unit at Raiffeisen Bank continued its activities in the area of service quality 

improvement. The implementation of additional reforms enabled the acquiring of Credit Card Services 

Diner’s and American Express, respectfully. Additionally, prepaid charge-up was made possible at 

Automated Teller Machines (ATMs) for all telecommunication operators in Bosnia and Herzegovina. 

These purchases and reforms, together with the replacement of Point of Sale (POS) terminals by stateof-the-art 

Hypercom terminals, helped us not only to increase our competitive advantage in the market 

but also to create ideal fiscal preconditions to further increase Raiffeisen Bank’s market share. At 

the end of 2011, turnover grew by 36.9 per cent, fees by 29.2 per cent and the number of transactions 

at merchants’ POS terminals by 44.3 per cent, this as compared to 2010. 

As of 31 December 2011, Raiffeisen Bank had a network of 1,859 merchants, 4,684 POS terminals 

and 3,971 Sales Points. Additionally, the number of Automated Teller Machines (ATMs) was reported at 

201. 

These results allowed Raiffeisen Bank to further strengthen its leading position in the local market with 

a market share of 36 per cent (source: VISA). 

While continually improving its customer relations, the Card Acquiring Unit at Raiffeisen Bank launched 

a new service, the first of its kind, called Raiffeisen E-Pay. Introduced in the local market, Raiffeisen 

E-Pay allows card acquisition at internet points of sale. Raiffeisen E-Pay was implemented towards the 

end of the 2011, adhering to the strictest world security standards. In doing so, Raiffeisen Bank has set 

emphasis on its long term goals for its banking customers, market demands, and global trends. 

Moreover, the Card Acquiring Unit has been working to reach an optimum network of Card Acquiring 

Merchants since the roll-out of the MasterCard Shopping Card program. As a result, the coverage of 

the POS merchants’ network, with this additional functionality, was at 45 per cent as of 31 December 

2011. 

Beside the development in the area of card acquiring at POS terminals, the ATM network is constantly 

expanded and renewed, e.g., redesigned monitors were installed as part of the new ATM configuration 

project. The prepaid functionality at ATMs manifested positive results in 2011, by totaling 61,872 

transactions in the amount of BAM 417,360.2. 

Electronic Sales Channels 

In addition to the development of electronic services in 2011, the redesign of RBBHnet – Corporate Online 

Banking, brought significant progress to existing services compared with previous years, in terms 

of the number of users, electronic orders and SMS inquiries. 

Online Banking 

Raiffeisen Bank offers online banking to both corporate and personal customers. Additionally, personal 

customers can choose between Raiffeisen Direct NET, with authorization via mini token; and Raiffeisen 

NET via SMS, with authorization via a SMS password. 




62 


Compared to 2010, at the close of 2011 the number of Corporate Online Banking customers grew by 

approximately 11 per cent and the number of Personal Online Banking customers grew by 23,767. 

Special attention in 2011 was paid to the analysis of the number of orders carried out through these 

channels. Electronic orders accounted for 40.4 per cent of all domestic payment orders carried out in 

2011. 

This remarkable result was due, above all, to the continuous increase in customer orders. Compared 

with 2010, domestic payment orders by corporate customers grew by 10 per cent and 23 per cent for 

private individuals. 

Raiffeisen Direct SMS Service 

The number of Raiffeisen Direct SMS customers, which stood at 60,729 at the end of 2011, clearly 

shows that our customers have recognized the benefits of this service. The number of generated SMS 

inquiries on account balances and the year-by-year increase of 47 per cent in this service illustrates that 

this is vitally utilized service. 

Agents and Co-operations 

The Agents and Co-operations Unit enacted reforms again in 2011 to make banking with Raiffeisen 

Bank easier for banking customers. 

In 2011 the number of direct sales agents (mobile bankers), whose task it is to make lending services 

available for customers “24/7 at their doorstep” increased by 290 per cent. This enabled customers to 

apply for loans not only at the Raiffeisen Bank branches but also by using the services of 186 mobile 

bankers who are evenly distributed across Bosnia and Herzegovina. 

After the Foreign Exchange Law was passed in the Federation of Bosnia and Herzegovina in the last 

quarter of 2010, prohibiting payments in Euro and other foreign currencies in retail shops, the Agents 

and Co-operations Unit was quick to establish relations with trade centers, post offices and various 

travel agencies, to act as authorized exchange offices. The efforts engaged in building a network of authorized 

exchange offices resulted in business relations with 13 new partners. In doing so, Raiffeisen 

Bank has enabled tourists and non-residents to easily make currency conversions in all of Bosnia and 

Herzegovina at hundreds of locations. 

Call Centers 

Raiffeisen Bank Call Center operators answered a total of 596,758 calls and 15,736 emails during 

2011. 

Although the service level indicator of 70 per cent and the abandon rate of 7 per cent suggest a satisfactory 

quality service level, quality improvement remains ongoing. 

By continuing the Call Center Sales Excellence project, during which a new sales approach through the 

Outbound Team had been implemented in 2010, this sales approach was also introduced for the Inbound 

Team, which means moving from the service-oriented approach to the “Service to Sale – S2S” 

approach, thereby exploiting the potential of the huge number of inbound calls for achieving significant 

sales results.

Treasury, Financial Markets 

and Investment Banking 

Treasury Sales and Dealing 

Treasury, Financial Markets and Investment Banking 

As in previous years, the foreign exchange business in 2011 was marked by high volatility caused by 

strong daily oscillations in the value of global currencies. 

One of the main activities of the Trading Department in 2011 was efficient FX risk management, while 

keeping its profit-orientation in the present environment. 

Special attention was paid to encouraging customers to use the Customer Desk service, which enables 

them to trade with currencies at an exchange rate offer that is not only realistic but also reflects the current 

situation in the global financial markets. 

In the money markets area, we were successful in placing funds with other banks, by fully utilizing the 

approved limits and making sure that the liquidity principle was always preserved. 

Global money markets in 2011 were shaped by strong oscillations in the development of reference interest 

rates. After a strong rise in the reference interest rates recorded at the beginning of the year, later 

in the year interest rates returned to the lower levels of the previous two years. 

The Trading Department continued to play an active role in the FX and cash trading areas, striving to 

intensify cash purchases from local banks, in order to remain a leader in this business area. 

Funding and Financial Institutions 

In 2011 Funding and Financial Institutions focused its funding activities on using special-purpose credit 

lines with an energy efficiency component made available by the European Bank for Reconstruction and 

Development (EBRD) and KfW (Kreditanstalt für Wiederaufbau). Another key activity was concluding 

loan facility agreements with the Foundation for Sustainable Development (ODRAZ) from a World Bank 

credit line, based on a Framework Agreement signed earlier. 

The funding portfolio was expanded in 2011, by signing two credit line agreements with the European 

Fund for South-East Europe (EFSE) in June 2011. Both facilities are long-term in nature, one is intended 

for housing loans in the amount of EUR 15 million and the other for micro and small enterprises in the 

amount of EUR 5 million. In addition to that, we finalized our negotiations with the OPEC Fund for International 

Development (OFID) on new funding for privately owned companies and signed a loan 

agreement worth EUR 10 million toward the end of the year. 

At the end of the year, our funding portfolio was structured as follows: 

• Development banks and institutions with a share of 30.1 per cent 

• Supranational financial institutions with a share of 30.3 per cent 

• Our mother bank and Group members with a share of 39.6 per cent 

In the correspondent banking area, the focus in 2011 was on optimizing our network of intermediary 

banks and improving the international payment terms for our customers and Raiffeisen Bank, by good 

business relations and intense negotiations with the key intermediary banks. 

In addition to that, we expanded our base of correspondent banks and banks with whom we perform 

trade finance business. 



64 


Investment Banking 

Again in 2011, Bosnia & Herzegovina’s capital market was shaped by negative trends, marked by a 

drop of the blue-chip index along with extremely low liquidity in the secondary market. Although total 

turnover on the local stock exchanges recorded significant growth, reaching BAM 244 million (by 125 

per cent) on the Sarajevo Stock Exchange (SASE) and BAM 425.5 million (by 141.5 per cent) on the 

Banja Luka Stock Exchange (BLSE), this growth resulted merely from the development of the primary 

market for debt instruments issued by the Finance Ministries of both entities, which generated high 50 

per cent of the total turnover. 

Regular bond trading on SASE and BLSE 

In 2011, SASE successfully carried out two auctions for six-month treasury bills of the FB&H Ministry of 

Finance in the amount of BAM 90 million, while BLSE held three auctions for treasury bills in the amount 

of BAM 121.8 million and seven-year bonds in the amount of BAM 120 million. The average yields at 

which the Finance Ministries of the two entities collected these amounts were extremely low and far 

below the average market values in the region, with an average yield to maturity between 2.3 per cent 

and 3.4 per cent for treasury bills and 6.8 per cent for long-term seven-year bonds. 

Additionally, due to the continuously high risk aversion on the part of foreign investors and weak demand, 

regular share trading was shaped by extremely poor liquidity. SASE achieved a turnover of just 

BAM 83.6 million and BLSE of BAM 83.6 million, which caused both blue-chip indices to decline. The 

blue chip indices SASX-10 and BIRS recorded much higher losses than in the previous year, of 16.3 per 

cent and 8.3 per cent, respectively.

Indices: SASX-10, BIFX, BIRS, FIRS 


Despite the negative trends in the local capital market, 2011 was another successful year for the Investment 

Banking Department, as both income and the number of customers increased in almost every 

business area. 

The merger of Raiffeisen BROKERS d.o.o. into Raiffeisen BANK d.d. Bosna i Hercegovina, aimed at improving 

the quality and efficiency of brokerage services, was successfully completed in May 2011. With 

this merger, Raiffeisen Bank brings under one roof all the brokerage services in domestic and foreign 

capital markets. Customers will benefit from being able to access our bundled and optimized products 

and services from a single competent source–the Investment Banking Department. Within the next step, 

treasury, financial markets, and investment banking activities were joined into a single division in October 

2011 and security intermediation activities are now organized within the following teams of the 

Investment Banking Department: 

• Capital Markets (custody, depository operations, underwriting, M&A) 

• Brokerage and Investment Consulting 

• Proprietary Business and Research and Analysis 

2011 was a very successful year for Capital Markets, as it managed to increase the number of its customers 

in all business areas and increase total assets under custody. The renowned magazine “The 

Global Custodian” recognized Raiffeisen Bank’s success in the custody business, as a bank “recommended 

by its customers” (Award for Excellence 2011). Raiffeisen Bank’s prime status was confirmed 



66 


as it was again TOP RATED for custody services. The total number of custody accounts grew by 30 per 

cent and total assets under custody by a high of 35 per cent which is strong proof of the confidence customers 

place in Raiffeisen Bank and illustrates the increase in the number of customers. 

In the depository business area, Raiffeisen Bank successfully performed depository deals for its existing 

customers, as well as depository deals in the securities issue and trading area. In the fund administration 

area, Raiffeisen Bank focused its activities on including closed-ended investment funds into the 

RBBHnet service and on implementing the Chart of Account Rules. Upon the Ruling of the FB&H Securities 

Commission, Raiffeisen Bank ended its provisional management of the ZIF Bosfin fund on September 

30, 2011 and the management tasks were transferred to DUF Euro-investment d.d. Tuzla. 

The Brokerage team continued its activities related to the purchase and sale of securities for Raiffeisen 

Bank’s account, thus continuing to make a significantly contribution to the Bank’s overall profitability 

and liquidity in 2011. After the merger of Raiffeisen BROKERS into Raiffeisen Bank and obtaining a 

dealing license, the Brokerage team continued its trading activities through direct access to the Sarajevo 

Stock Exchange, without intermediaries. Raiffeisen Bank participated actively in the primary and secondary 

securities markets, especially in the local market. 

With the merger of Raiffeisen BROKERS into Raiffeisen Bank, all brokerage and investment consulting 

activities are now performed within Raiffeisen Bank. 2011 was a successful business year, marked by 

an increase in the number of customers, especially in the area of forwarding brokerage orders to foreign 

markets. Our success was recognized by the Sarajevo Stock Exchange, which honored our brokerage 

business with top awards in three categories: 

• Bond trading volume 

• Share trading volume 

• Number of transactions 

In the category of total turnover Raiffeisen won second rank. 

The Research and Analysis Department continued to develop and expand its range of publications and 

specialized analyses for the needs of its investment banking customers, as well as other customers and 

the members of the public. The quality and reliability of publications prepared by Research and Analysis 

were not only recognized by the local media and the Bank’s customers across all business segments 

but also by numerous international financial institutions and organizations.

Addresses 

70 

Head Office and Branches 


Head Office Sarajevo 

Zmaja od Bosne bb 

Raiffeisen direkt info: + 387 33 75 50 10 

E–mail: info.rbbh@rbb-sarajevo.raiffeisen.at 

Internet: www.raiffeisenbank.ba 

Branches 

MB Sarajevo and 

Branch Centar 


71 000 Sarajevo 

Branch Novo Sarajevo 

Kolodvorska 12 

71 000 Sarajevo 

Branch Ilidža 

Rustempašina bb 

71 210 Ilidža 

Branch Pale 

Milana Simovića bb 

71 420 Pale 

Branch Goražde 

Titova bb 

73 000 Goražde 

MB Banja Luka and 

Branch Banja Luka 

Vase Pelagića 2 

78 000 Banja Luka 

Branch Banja Luka 2 

Vojvode S. Stepanovića bb 

78 000 Banja Luka 

Branch Prijedor 

Vožda Karađorđa 14 

79 101 Prijedor 

Branch Gradiška 

Vidovdanska bb 

78 400 Gradiška 

Branch Doboj 

Nemanjina bb 

74 000 Doboj 

MB Zenica and 

Branch Zenica 

Maršala Tita bb 

72 000 Zenica 

Branch Žepče 

Stjepana Tomaševića bb 

72 230 Žepče 

Branch Kakanj 

Zgošćanska P+4+M 

72 240 Kakanj 

Branch Vitez 

Poslovni centar PC 96-2 

72 250 Vitez 

Branch Visoko 

Alije Izetbegovića 1 

71 300 Visoko 

Branch Tešanj 

Kralja Tvrtka bb 

74 260 Tešanj 

Branch Travnik 

Konatur bb 

72 270 Travnik 

MB Tuzla and 

Branch Tuzla 

15 Maja bb 

75 000 Tuzla 

Branch Tuzla 2 

Univerzitetska 16 

75 000 Tuzla 

Branch Bijeljina 

Karađorđeva bb 

76 300 Bijeljina 

Branch Brčko 

Reisa Džemaludina 

Čauševića 10 

76 100 Brčko 

MB Bihać and 

Branch Bihać 

Pape Ivana Pavla II 4 

77 000 Bihać 

Branch Cazin 

Generala Izeta Nanića bb 

77 220 Cazin 

Branch Velika Kladuša 

Maršala Tita “Diletacija C” 

77 230 Velika Kladuša 

Branch Sanski Most 

Muse Ćazima Ćatića 24 

79 260 Sanski Most 

Branch Bosanska Krupa 

Trg Alije Izetbegovića bb 

77 240 Bosanska Krupa 

MB Mostar and 

Branch Mostar 

Kneza Domagoja bb 

88 000 Mostar 

Branch Konjic 

Suhi do bb 

88 400 Konjic 

Branch Čitluk 

Kralja Tomislava 120 

88 260 Čitluk 

Branch Široki Brijeg 

Zaobilaznica bb 

88 220 Široki Brijeg 

Branch Trebinje 

Vuka Mičunovića bb 

89 101 Trebinje 

Branch Livno 

Trg kralja Tomislava bb 

80 101 Livno

Addresses 

Raiffeisen Bank International AG 

Austria 

Am Stadtpark 9 

1030 Vienna 

Phone: +43-1-71707 0 

Fax: +43-1-71707 1715 

www.rbinternational.com 

ir@rbinternational.com 

rbi-pr@rbinternational.com 

Banking network 

Albania 

Raiffeisen Bank Sh.a. 

“European Trade Center” 

Bulevardi "Bajram Curri" 

Tirana 

Phone: +355-4-238 1000 

Fax: +355-4-227 5599 

SWIFT/BIC: SGSBALTX 

www.raiffeisen.al 

Belarus 

Priorbank JSC 

31-A, V. Khoruzhey Str. 

220002 Minsk 

Phone: +375-17-289 9090 

Fax: +375-17-289 9191 

SWIFT/BIC: PJCBBY2X 

www.priorbank.by 

Bosnia and Herzegovina 



71000 Sarajevo 

Phone: +387-33-287 101 

Fax: +387-33-213 851 

SWIFT/BIC: RZBABA2S 


Bulgaria 

Raiffeisenbank (Bulgaria) EAD 

18/20 Gogol Str. 

1504 Sofia 

Phone: +359-2-9198 5101 

Fax: +359-2-943 4528 

SWIFT/BIC: RZBBBGSF 

www.rbb.bg 

Croatia 

Raiffeisenbank Austria d.d. 

Petrinjska 59 

10000 Zagreb 

Phone: +385-1-456 6466 

Fax: +385-1-481 1624 

SWIFT/BIC: RZBHHR2X 

www.rba.hr 

Czech Republic 

Raiffeisenbank a.s. 

Hvezdova 1716/2b 

14078 Prague 4 

Phone: + 420-221-141 111 

Fax: +420-221-142 111 

SWIFT/BIC: RZBCCZPP 

www.rb.cz 

Hungary 

Raiffeisen Bank Zrt. 

Akadémia utca 6 

1054 Budapest 

Phone: +36-1-484 4400 

Fax: +36-1-484 4444 

SWIFT/BIC: UBRTHUHB 

www.raiffeisen.hu 

Kosovo 

Raiffeisen Bank Kosovo J.S.C. 

UÇK Str. No. 51 

10000 Pristina 

Phone: +381-38-222 222 

Fax: +381-38-203 01130 

SWIFT/BIC: RBKORS22 

www.raiffeisen-kosovo.com 

Addresses 


Addresses 

72 


Poland 

Raiffeisen Bank Polska S.A. 

Ul. Piękna 20 

00-549 Warsaw 

Phone: +48-22-585 2001 

Fax: +48-22-585 2585 

SWIFT/BIC: RCBWPLPW 

www.raiffeisen.pl 

Romania 

Raiffeisen Bank S.A. 

15 Charles de Gaulle Square 

011857 Bucharest 1 

Phone: +40-21-306 1000 

Fax: +40-21-230 0700 

SWIFT/BIC: RZBRROBU 

www.raiffeisen.ro 

Russia 

ZAO Raiffeisenbank 

Smolenskaya-Sennaya Sq. 28 

119020 Moscow 

Phone: +7-495-721 9900 

Fax: +7-495-721 9901 

SWIFT/BIC: RZBMRUMM 

www.raiffeisen.ru 

Serbia 

Raiffeisen banka a.d. 

Bulevar Zorana \in|ića 64a 

11070 Novi Beograd 

Phone: +381-11-320 2100 

Fax: +381-11-220 7080 

SWIFT/BIC: RZBSRSBG 

www.raiffeisenbank.rs 

Slovakia 

Tatra banka, a.s. 

Hodžovo námestie 3 

81106 Bratislava 

Phone: +421-2-5919 1111 

Fax: +421-2-5919 1110 

SWIFT/BIC: TATRSKBX 

www.tatrabanka.sk 

Slovenia 

Raiffeisen Banka d.d. 

Zagrebeška cesta 76 

2000 Maribor 

Phone: +386-2-229 3100 

Fax: +386-2-303 442 

SWIFT/BIC: KREKSI22 

www.raiffeisen.si 

Ukraine 

Raiffeisen Bank Aval JSC 

9, Leskova Street 

01011 Kiev 

Phone: +38-044-490 8888 

Fax: +38-044-285 3231 

SWIFT/BIC: AVALUAUK 

www.aval.ua 

Leasing companies 

Austria 

Raiffeisen-Leasing International GmbH 


1030 Vienna 

Phone: +43-1-71707 2966 

Fax: +43-1-71707 762966 

www.rli.co.at 

Albania 

Raiffeisen Leasing Sh.a. 

“European Trade Center” 

Bulevardi “Bajram Curri” 

Tirana 

Phone: +355-4-2274 920 

Fax: +355-4-2232 524 

www.raiffeisen.al 

Belarus 

JLLC “Raiffeisen-leasing” 

31-A, V. Khoruzhey Str. 

220002 Minsk 

Phone: +375-17-289 9394 

Fax: +375-17-289 9394 

www.priorbank.by 


Raiffeisen Leasing d.o.o. Sarajevo 

Zmaja od Bosne 11 


Phone: +387-33-254 354 

Fax: +387-33-212 273 

www.rlbh.ba 

Bulgaria 

Raiffeisen Leasing Bulgaria OOD 

Mladost 4, Business Park Sofia 

Building 7B, 4 th floor 

1504 Sofia 

Phone: +359-2-491 9191 

Fax: +359-2-974 2057 

www.rlbg.bg

Croatia 

Raiffeisen Leasing d.o.o. 

Radni~ka cesta 43 

10000 Zagreb 

Phone: +385-1-6595 000 

Fax: +385-1-6595 050 

www.rl-hr.hr 


Raiffeisen-Leasing s.r.o. 



Phone: +420-221-5116 11 

Fax: +420-221-5116 66 

www.rl.cz 

Hungary 

Raiffeisen Lízing Zrt. 

Hungaria krt. 40-44 

1087 Budapest 

Phone: +36-1-298 8000 

Fax: +36-1-298 8010 

www.raiffeisenlizing.hu 

Kazakhstan 

Raiffeisen Leasing Kazakhstan LLP 

Shevchenko St. 146, No. 12 

050008 Almaty 

Phone: +7-727-3785 430 

Fax: +7-727-3785 447 

www.rlkz.kz 

Kosovo 

Raiffeisen Leasing Kosovo 

Gazmend Zajmi n.n., Sunny Hill 

10000 Pristina 

Phone: +381-38-222 222 

Fax: +381-38-203 03011 

www.raiffeisen-leasing-ks.com 

Moldova 

I.C.S. Raiffeisen Leasing S.R.L. 

Alexandru cel Bun 51 

2012 Chisinau 

Phone: +373-22-2793 13 

Fax: +373-22-2283 81 

www.raiffeisen-leasing.md 

Poland 

Raiffeisen-Leasing Polska S.A. 

Ul. Prosta 51 

00-838 Warsaw 

Phone: +48-22-326 36 66 

Fax: +48-22-3263 601 

www.rl.com.pl 

Romania 

Raiffeisen Leasing IFN S.A. 

Nusco Tower 

Sos Pipera Nr. 42 

Etaj 1A 

020112 Bucharest 

Phone: +40-21-306 9696 

Fax: +40-37-287 9998 

www.raiffeisen-leasing.ro 

Russia 

OOO Raiffeisen-Leasing 

Stanislavskogo St. 21/1 

109004 Moscow 

Phone: +7-495-721 9980 

Fax: +7-495-721 9901 

www.raiffeisen-leasing.ru 

Serbia 


Milutina Milankovića 134a 

11000 Novi Beograd 

Phone: +381-11-20177 00 

Fax: +381-11-31300 81 

www.raiffeisen-leasing.rs 

Slovakia 

Tatra Leasing s.r.o. 

Hodžovo námestie 3 

81106 Bratislava 

Phone: +421-2-5919 3168 

Fax: +421-2-5919 3048 

www.tatraleasing.sk 

Slovenia 


Bleweisova cesta 30 

1000 Ljubljana 

Phone: +386-1-241 6250 

Fax: +386-1-241 6268 

www.rl-sl.si 

Addresses 


Addresses 

74 


Ukraine 

LLC Raiffeisen Leasing Aval 

9, Moskovskiy Av. 

Corp. 5 Office 101 

04073 Kiev 

Phone: +38-044-590 2490 

Fax: + 38-044-200 0408 

www.rla.com.ua 

Real estate leasing companies 


Raiffeisen Leasing Real Estate s.r.o. 



Phone: +420-221-5116 10 

Fax: +420-221-5116 41 

www.rlre.cz 

Branches and representative 

offices – Europe 

Germany 

RBI Representative Office Frankfurt 

Mainzer Landstraße 51 

60329 Frankfurt 

Phone: +49-69-2992 1918 

Fax: +49-69-2992 1922 

France 

RBI Representative Office Paris 

9-11 Avenue Franklin D. Roosevelt 

75008 Paris 

Phone: +33-1-4561 2700 

Fax: +33-1-4561 1606 

Malta 

Raiffeisen Malta Bank plc 

52 “Il Piazzetta” Tower Road 

Sliema SLM 1607 

Phone: +356-2260 0000 

Fax: +356-2132 0954 

UK 

RBI London Branch 

10, King William Street 

London EC4N 7TW 

Phone: +44-20-7929 2288 

Fax: +44-20-7933 8099 

Sweden 

RBI Representative Office Nordic Countries 

Drottninggatan 89 

P.O. Box 3294 

10365 Stockholm 

Phone: +46-8-440 5086 

Fax: +46-8-440 5089 

Branches and representative 

offices – Asia and America 

China 

RBI Beijing Branch 

Beijing International Club 200 

2nd floor 

Jianguomenwai Dajie 21 

100020 Beijing 

Phone: +86-10-653 23388 

Fax: +86-10-653 25926 

RBI Representative Office Hong Kong 

Unit 2106-08, 21st Floor, 

Tower One, Lippo Centre 

89 Queensway, Hong Kong 

Phone: +85-2-2730 2112 

Fax: +85-2-2730 6028 

RBI Representative Office Xiamen 

Unit 01-02, 32/F Zhongmin Building 

No 72 Hubin North Road 

Fujian Province 

301012 Xiamen 

Phone: +86-592-2623 988 

Fax: +86-592-2623 998 

India 

RBI Representative Office Mumbai 

803, Peninsula Heights 

C.D. Barfiwala Road, Andhere (W) 

400 058 Mumbai 

Phone: +91-22-2623 0657 

Fax: +91-22-2624 4529 

Korea 

RBI Representative Office Korea 

Leema Building, 8 th floor 

146-1 Soosong-dong 

Chongro-ku 

Seoul 110-755 

Phone: +82-2-398 5840 

Fax: +82-2-398 5807

Malaysia 

RBI Labuan Branch 

Suite No. 28.02, Level 28 

Johor Bahru City Square Office Tower 

106-108 Jalan Wong Ah Fook 

80000 Johor Bahru 

Phone: +607-291 3800 

Fax: +607-291 3801 

Singapore 

RBI Singapore Branch 

One Raffles Quay 

#38-01 North Tower 

Singapore 048583 

Phone: +65-6305 6000 

Fax: +65-6305 6001 

USA 

RB International Finance (USA) LLC 

1133 Avenue of the Americas, 16 th Floor 

10036 New York 

Phone: +01-212-845 4100 

Fax: +01-212-944 2093 

RBI Representative Office New York 

1133 Avenue of the Americas, 16 th Floor 

10036 New York 

Phone: +01-212-593 7593 

Fax: +01-212-593 9870 

Vietnam 

RBI Representative Office Ho Chi Minh City 

6 Phung Khac Khoan Street, 

Room G6 

District 1, Ho Chi Minh City 

Phone: +84-8-3829 7934 

Fax: +84-8-3822 1318 

Raiffeisen Zentralbank AG 

Austria 


1030 Vienna 

Phone: +43-1-71707 0 

Fax: +43-1-71707 1715 

www.rzb.at 

Selected Raiffeisen Specialist 

Companies 

F.J. Elsner Trading GmbH 

Am Heumarkt 10 

1030 Vienna 

Phone: +43-1-797 36 0 

Fax: +43-1-797 36 230 

www.elsner.at 

Kathrein Privatbank Aktiengesellschaft 

Wipplingerstraße 25 

1010 Vienna 

Phone: +43-1-53 451 239 

Fax: +43-1-53 451 233 

www.kathrein.at 

Raiffeisen Centro Bank AG 

Tegetthoffstraße 1 

1050 Vienna 

Phone: +43-1-515 20 0 

Fax: +43-1-513 43 96 

www.rcb.at 

Raiffeisen Investment Aktiengesellschaft 

Krugerstraße 13 

1015 Vienna 

Phone: +43-1-710 5400 0 

Fax: +43-1-710 5400 169 

www.raiffeisen-investment.com 

ZUNO BANK AG 


1030 Vienna 

Phone: +43-1-71707 2691 

Fax: +43-1-71707 762691 

www.zuno.eu 

Addresses 


Financial Statements 

76 

Responsibility for the Financial Statements 

Pursuant to the Law on Accounting and Audit of Federation of Bosnia and Herzegovina (Official Gazette No. 83/09), the 

Management Board is responsible for ensuring that financial statements are prepared for each financial year in accordance 

with International Financial Reporting Standards (IFRS) which give a true and fair view of the state of affairs and 

results of Raiffeisen BANK dd Bosna i Hercegovina (the “Bank”) for that period. IFRS are published by the International 

Accounting Standards Board (IASB). 

After making enquiries, the Management Board has a reasonable expectation that the Bank has adequate resources to 

continue in operational existence for the foreseeable future. For this reason, the Management Board continues to adopt 

the going concern basis in preparing the financial statements. 

In preparing those financial statements, the responsibilities of the Management Board include ensuring that: 

• suitable accounting policies are selected and then applied consistently; 

• judgements and estimates are reasonable and prudent; 

• applicable accounting standards are followed, subject to any material departures disclosed and explained in the 

financial statements; and 

• the financial statements are prepared on the going concern basis unless it is inappropriate to presume that the Bank 

will continue in business. 

The Management Board is responsible for keeping proper accounting records, which disclose with reasonable accuracy 

at any time the financial position of the Bank and must also ensure that the financial statements comply with the Accounting 

and Auditing Law of Federation of Bosnia and Herzegovina. The Management Board is also responsible for safeguarding 

the assets of the Bank and hence for taking reasonable steps for the prevention and detection of fraud and other 

irregularities. 

Signed on behalf of the Management Board 

Michael Georg Müller, Director 

Raiffeisen BANK dd Bosna i Hercegovina 




28 February 2012 

www.raiffeisenbank.ba

INDEPENDENT AUDITORS’ REPORT 


To the shareholders of Raiffeisen BANK dd Bosna i Hercegovina: 

We have audited the accompanying unconsolidated financial statements of Raiffeisen BANK dd Bosna i Hercegovina (the 

“Bank”), set out on pages 4 to 55, which comprise of the unconsolidated balance sheet as at 31 December 2011, and 

the unconsolidated income statement, statement of comprehensive income, statement of changes in equity and statement 

of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory 

notes. 

Management’s responsibility for the financial statements 

Management is responsible for the preparation and fair presentation of these financial statements in accordance with the 

International Financial Reporting standards and for such internal control as Management determines is necessary to enable 

the preparation of financial statements that are free from material misstatement, whether due to fraud or error. 

Auditor’s responsibility 

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in 

accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements 

and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material 

misstatement. 

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial 

statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material 

misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers 

internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design 

audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the 

effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies 

used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation 

of the financial statements. 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 

Opinion 

In our opinion, the unconsolidated financial statements present fairly, in all material respects, the financial position of the 

Bank as at 31 December 2011 and of its financial performance and cash flows for the year then ended, in accordance 

with International Financial Reporting Standards. 

Emphasis of Matter 

We draw attention to the fact that consolidated financial statements have not been published by the Bank at the date of 

this report. Note 3 to the unconsolidated financial statements describes that the Bank is the parent company of Raiffeisen 

Bank Group and that consolidated financial statements of the Group prepared in accordance with International Financial 

Reporting Standards will be issued separately. In accompanying unconsolidated financial statements investments in 

subsidiaries and associates are valued at cost. For a better understanding of the Group as a whole, users should read 

the consolidated financial statements. Our opinion is not modified in respect of this matter. 

Deloitte d.o.o. 

Se ad Ba hta no vi}, di re ctor Mirza Bihorac, licenced auditor 

Sa ra je vo, Bosnia and Herzegovina 

28 February 2012 



78 

Unconsolidated income statement 

for the year ended 31 December 2011 

(all amounts are expressed in thousands of KM, unless otherwise stated) 


Notes 2011 2010 

Interest and similar income 5 208,215 210,296 

Interest and similar expenses 6 (71,705) (86,540) 

Net interest income 136,510 123,756 

Fee and commission income 7 65,008 61,099 

Fee and commission expenses 8 (9,143) (8,090) 

Net fee and commission income 55,865 53,009 

Net financial income 9 13,347 14,714 

Other operating income 11 7,226 2,999 

Operating income 212,948 194,478 

Administrative expenses 12 (117,879) (119,356) 

Depreciation and amortization 25 (9,655) (9,235) 

Operating expenses (127,534) (128,591) 

PROFIT BEFORE IMPAIRMENT LOSSES, 

PROVISIONS AND INCOME TAX 

The accompanying notes form an integral part of these financial statements. 

85,414 65,887 

Impairment losses and provisions 13 (40,513) (69,497) 

Recoveries 10 4,373 11,487 

PROFIT BEFORE INCOME TAX 49,274 7,877 

Income tax 14 (5,421) (2,005) 

NET PROFIT FOR THE YEAR 43,853 5,872 

Earnings per share (in KM) 32 46.18 6.18

Unconsolidated statement of comprehensive income 





Notes 2011 2010 

Net profit for the year 43,853 5,872 

Other comprehensive income: 

Fair value gain / (loss) on financial assets available-for-sale 

19 1,010 (317) 

Total comprehensive income for the year 44,863 5,555 



80 

Unconsolidated balance sheet 

as at 31 December 2011 


ASSETS 


Notes 


Signed on behalf of the Bank on 28 February 2012: 

31 December 

2011 

President of the Management Board Head of Finance division 

Michael Georg Müller Mar ko Jur je vi} 

31 December 

2010 

Cash and cash equivalents 15 716,868 434,964 

Obligatory reserve at Central Bank of B&H 16 266,540 305,865 

Placements with other banks 17 225,917 250,282 

Loans and advances to customers 18 2,306,730 2,243,190 

Assets classified as held for sale 25 403 - 

Financial assets available-for-sale 19 3,299 2,241 

Financial assets at FVTPL 20 158,897 164,784 

Financial assets held-to-maturity 21 138,090 137,408 

Investments in subsidiaries 22 2,436 2,288 

Investments in associate 23 8,173 8,173 

Deferred tax assets 14 846 469 

Other assets and receivables 24 31,597 16,971 

Tangible and intangible assets 25 155,893 155,598 

TOTAL ASSETS 4,015,689 3,722,233 

LIABILITIES 

Due to banks 26 468,004 588,150 

Due to customers 27 2,944,442 2,622,705 

Provisions 28 7,491 28,959 

Other liabilities and payables 29 29,167 28,479 

Subordinated debt 30 65,484 82,016 

TOTAL LIABILITIES 3,514,588 3,350,309 

EQUITY 

Share capital 31 237,388 237,388 

Share premium 4,473 4,473 

Investment revaluation reserves 3,201 2,191 

Regulatory reserves 89,035 - 

Retained earnings 167,004 127,872 

TOTAL EQUITY 501,101 371,924 

TOTAL LIABILITIES AND EQUITY 4,015,689 3,722,233 

COMMITMENTS AND CONTINGENCIES 28 871,216 898,766

Unconsolidated statement of cash flows 



OPERATING ACTIVITIES 



2011 2010 

Profit before taxation 49,274 7,877 

Adjustments: 

Depreciation and amortization 9,655 9,235 

Impairment losses and provisions 40,832 70,931 

(Gain) / loss on disposal of tangible and intangible assets (2,567) 455 

Realized losses and FV adjustments on financial assets at FVTPL 3,415 2,372 

Release of accrued expenses in previous year (509) (561) 

Net loss on disposal of financial assets held-to maturity 920 - 

Written-off liabilities (443) (400) 

Effect of change of accounting policy on commitments and contingencies 115 - 

Dividend income recognized in the income statement (55) (79) 

Changes in operating assets and liabilities: 

Net decrease in obligatory reserve at Central Bank of B&H 39,325 37,142 

Net decrease in placements with other banks 24,442 455,901 

Net (increase) / decrease in loans to customers, before impairment losses (44,640) 6,750 

Net (increase) / decrease in other assets and receivables, 

before impairment losses 

(12,583) 4,707 

Net decrease in due to banks – deposits (2,738) (2,817) 

Net increase / (decrease) in due to customers 321,737 (100,826) 

Net (decrease) / increase in other liabilities and payables (765) 4,576 

425,415 495,263 

Income tax paid (2,939) (1,447) 

NET CASH USED IN OPERATING ACTIVITIES 422,476 493,816 

INVESTING ACTIVITIES 

Net proceeds from / (purchases of) financial assets at FVTPL 2,472 (46,523) 

Net increase in financial assets held-to-maturity (9,327) (32,443) 

Proceeds from bonds held-to maturity sold 8,859 - 

Investments in subsidiaries (400) - 

Investments in associates - (4,793) 

Cash acquired from business combination 49 - 

Dividends received 55 79 

Purchases of tangible and intangible assets (9,015) (25,075) 

Proceeds from tangible assets sold 3,763 130 

NET CASH USED IN INVESTING ACTIVITIES (3,544) (108,625) 

FINANCING ACTIVITIES 

Repayments of borrowings, net (117,408) (367,840) 

Repayments of subordinated debt, net (16,532) (14,647) 

Dividends paid (3,088) - 

NET CASH USED IN FINANCING ACTIVITIES (137,028) (382,487) 

NET INCREASE IN CASH AND CASH EQUIVALENTS 281,904 2,704 

CASH AND CASH EQUIVALENTS AT 1 JANUARY 434,964 432,260 

CASH AND CASH EQUIVALENTS AT 31 DECEMBER 716,868 434,964 



82 

Unconsolidated statement of changes in equity 




Share 

capital 

Share 

premium 

Investments 

revaluation 

reserves 

Regulatory 

reserves 


Retained 

earnings 

Balance as of 31 December 2009 237,388 4,473 2,508 - 122,637 367,006 

Tax adjustment - - - - (637) (637) 

Net profit for the year - - - - 5,872 5,872 

Other comprehensive loss for the 

year 

Total comprehensive income for 

the year 

Total 

- - (317) - - (317) 

- - (317) - 5,872 5,555 

Balance as of 31 December 2010 237,388 4,473 2,191 - 127,872 371,924 

Adjustments of the accounting 

policy (Note 3) 

Transfer to Regulatory reserves 

(Note 3) 

Effects of merger of Raiffeisen Brokers 

d.o.o. Sarajevo into the Bank 

(Note 34) 

- - - - 89,035 89,035 

- - - 89,035 (89,035) - 

- - - - (1,633) (1,633) 

Dividend paid - - - - (3,088) (3,088) 

Net profit for the year - - - - 43,853 43,853 

Other comprehensive gain for the 

year 

Total comprehensive income for 


- - 1,010 - - 1,010 

- - 1,010 - 43,853 44,863 

Balance as of 31 December 2011 237,388 4,473 3,201 89,035 167,004 501,101

Notes to the unconsolidated financial statements 



1. GENERAL 

History and incorporation 


Raiffeisen BANK dd Bosna i Hercegovina, Sarajevo (the “Bank”) is a joint stock company incorporated in Bosnia and 

Herze govina and it commenced operations in 1993. Principal activities of the Bank are: 

1. accepting deposits from the public and placing of deposits; 

2. providing current and term deposit accounts; 

3. granting short- and long-term loans and guarantees to the local municipalities, corporate customers, private individuals 

and other credit institutions dealing with finance lease and foreign exchange transactions; 

4. money market activities; 

5. performing local and international payments; 

6. foreign currency exchange and other banking-related activities; 

7. providing banking services through an extensive branch network in Bosnia and Herzegovina. 

The Bank considers that it operates in a single business segment, and a single geographical segment, that is the provision 

of banking services in Bosnia and Herzegovina. 

The registered address of the Bank is Zmaja od Bosne bb, Sarajevo. As at 31 December 2011, the Bank had 1,576 employees 

(2010: 1,630 employees). 

Supervisory Board 

Pe ter Len nkh President since 19 February 2011 

Fe renc Ber szan Member since 19 February 2011 

Kle mens Hal ler Member since 19 February 2011 

Fran ti sek Je zek Member since 19 February 2011 

Jo han nes Kel lner Member since 19 February 2011 

Her bert Ste pic President until 19 February 2011 

Zden ko Adro vi} Member until 19 February 2011 

Ho edl He inz Member until 19 February 2011 

Pe ter Len nkh Member until 19 February 2011 

Mar tin Gru ell Member until 19 February 2011 

Management Board 

Mic ha el Ge org Mül ler Director 

Da mir Ka ra me hme do vi} Executive Director since 15 March 2011 

Kar lhe inz Do bnigg Executive Director since 15 March 2011 

Sa ne la Pa {i} Executive Director since 15 March 2011 

Di no Osman be go vi} Executive Director until 14 March 2011 

Zden ko Mi haj lo vi} Executive Director until 14 March 2011 

Audit Committee 

Wolfgang Trost President 

Boris Tihi Member 

Izudin Kešetović Member 

Miloš Trifković Member 

Ma hir D`a fi} Member from 15 March 2011 

Wol fgang Ket tner Member until 14 March 2011 



84 




2. ADOPTION OF NEW AND REVISED STANDARDS 

2.1. Standards and Interpretations effective in current period 

The following amendments to the existing standards issued by the International Accounting Standards Board and interpretations 

issued by the International Financial Reporting Interpretations Committee are effective for the current period: 

• Amendments to IFRS 1 “First-time Adoption of IFRS”- Limited Exemption from Comparative IFRS 7 Disclosures for 

First-time Adopters (effective for annual periods beginning on or after 1 July 2010), 

• Amendments to IAS 24 “Related Party Disclosures” – Simplifying the disclosure requirements for government-related 

entities and clarifying the definition of a related party (effective for annual periods beginning on or after 1 

January 2011), 

• Amendments to IAS 32 “Financial Instruments: Presentation”– Accounting for rights issues (effective for annual periods 

beginning on or after 1 February 2010), 

• Amendments to various standards and interpretations “Improvements to IFRSs (2010)” resulting from the annual 

improvement project of IFRS published on 6 May 2010 (IFRS 1, IFRS 3, IFRS 7, IAS 1, IAS 27, IAS 34, IFRIC 13) 

primarily with a view to removing inconsistencies and clarifying wording (amendments are to be applied for annual 

periods beginning on or after 1 July 2010 or 1 January 2011 depending on standard/interpretation), 

• Amendments to IFRIC 14 “IAS 19– The Limit on a defined benefit Asset, Minimum Funding Requirements and their 

Interaction” – Prepayments of a Minimum Funding Requirement (effective for annual periods beginning on or after 

1 January 2011), 

• IFRIC 19 “Extinguishing Financial Liabilities with Equity Instruments” (effective for annual periods beginning on or 

after 1 July 2010). 

The adoption of these amendments to the existing standards and interpretations has not led to any changes in the Bank’s 

accounting policies. 





2.2. Standards and Interpretations in issue not yet adopted 


At the date of authorization of these financial statements the following standards, revisions and interpretations were in issue 

but not yet effective: 

• IFRS 9 “Financial Instruments” (effective for annual periods beginning on or after 1 January 2013), 

• IFRS 10 “Consolidated Financial Statements” (effective for annual periods beginning on or after 1 January 2013), 

• IFRS 11 “Joint Arrangements” (effective for annual periods beginning on or after 1 January 2013), 

• IFRS 12 “Disclosures of Involvement with Other Entities” (effective for annual periods beginning on or after 1 January 

2013), 

• IFRS 13 “Fair Value Measurement” (effective for annual periods beginning on or after 1 January 2013), 

• IAS 27 (revised in 2011) “Separate Financial Statements”(effective for annual periods beginning onorafter 1 January 

2013), 

• IAS 28 (revised in 2011) “Investments in Associates and Joint Ventures” (effective for annual periods beginning 

on or after 1 January 2013), 

• Amendments to IFRS 1 “First-time Adoption of IFRS”- Severe Hyperinflation and Removal of Fixed Dates for Firsttime 

Adopters (effective for annual periods beginning on or after 1 July 2011), 

• Amendments to IFRS 7 “Financial Instruments: Disclosures”- Transfers of Financial Assets (effective for annual periods 

beginning on or after 1 July 2011), 

• Amendments to IAS 1 “Presentation of financial statements” – Presentation of Items of Other Comprehensive Income 

(effective for annual periods beginning on or after 1 July 2012), 

• Amendments to IAS 12 “Income Taxes” – Deferred Tax: Recovery of Underlying Assets (effective for annual periods 

beginning on or after 1 January 2012), 

• Amendments to IAS 19 “Employee Benefits” – Improvements to the Accounting for Post-employment Benefits (effective 

for annual periods beginning on or after 1 January 2013), 

• IFRIC 20 “Stripping Costs in the Production Phase of a Surface Mine” (effective for annual periods beginning on 

or after 1 January 2013). 

The Bank has elected not to adopt these standards, revisions and interpretations in advance of their effective dates. The 

Bank anticipates that the adoption of these standards, revisions and interpretations will have no material impact on the 

financial statements of the Bank in the period of initial application. 



86 




3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

Statement of compliance 

These unconsolidated financial statements have been prepared in accordance with International Financial Reporting Standards 

(“IFRS”) as published by the International Accounting Standards Board. 

Change of accounting policy 

Up to 31 December 2010, as it was required by local legislation and decisions of Banking Agency of the Federation of 

Bosnia and Herzegovina (“FBA”), the Bank was preparing the unconsolidated financial statements in accordance with 

IFRS as modified by the regulatory requirements prescribed by FBA with respect to the calculation of provision for impairment 

of financial instruments. These rules required banks to calculate the allowance for impairment of financial assets 

and provision for commitments and contingencies using the matrix system based on number of overdue days. The 

matrix system applied on outstanding loan receivables, as well as on commitments and contingencies, was as follows: 

• 0 – 30 overdue days – 2%, 

• 31 – 50 overdue days – 5%, 

• 51 – 70 overdue days – 10%, 

• 71 – 90 overdue days – 15%, 

• 91 – 120 overdue days – 16%, 

• 121 – 140 overdue days – 20%, 

• 141 – 160 overdue days – 30%, 

• 161 – 180 overdue days – 40%, 

• 181 – 210 overdue days – 41%, 

• 211 – 230 overdue days – 45%, 

• 231 – 250 overdue days – 50%, 

• 251 – 270 overdue days – 60%, 

• Above 270 overdue days – 100%. 

This was not in accordance with International Accounting Standard (“IAS”) 39: ’Financial Instruments: Recognition and 

Measurement’, which requires assessment at each reporting period date as to whether there is any objective evidence that 

a financial asset or group of financial assets is impaired. If there is objective evidence that an impairment loss on loans 

and receivables carried at amortised cost has been incurred, the amount of the loss should be measured as the difference 

between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit 

losses that have not been incurred) discounted at the financial asset’s original effective interest rate. 

Additionally, the banks had to recognize the general provision of 2% for some other items of assets (such as tangible assets, 

other assets and other receivables). 

Based on the Guidelines on the changes to the means for creating, recording and reporting forms for the loan loss reserves, 

issued by FBA in January 2011, the banks are obliged to introduce a new methodology for assessment of impairment 

losses on the financial assets (loans and receivables), in line with the requirements of IAS 39, and provisions for 

commitments and contingencies, in line with the requirements of IAS 37: “Provisions, Contingent Liabilities and Contingent 

Assets”, effective from 1 January 2011. These guidelines also eliminated the requirement for the general provisions 

of 2% for other items of assets. Also, the banks are required to recognize the difference between the allowance for impairment 

losses on financial assets and provisions according to new accounting policy and the level of allowance for impairment 

losses on financial assets and provisions that would have been determined if the matrix system was still applied, 

under Regulatory reserves within the equity. The total difference should be determined at the end of every year and kept 

at required level through the allocation of net result from Retained earnings to Regulatory reserves. 






Due to the fact that new accounting policy for impairment losses on financial assets and provisions by its nature is based 

on the approximations and the accounting estimates made by the Management, and it was issued in 2011, the Bank was 

not able to determine the effects of the change in the accounting balances to the individual balances in the income statements, 

statement of comprehensive income, statement of cash flows and changes in equity for the years ended 31 December 

2009 and 2010. 

Consequently, according to IAS 8: “Accounting Policies, Changes in Accounting Estimates and Errors” (paragraphs 50 – 

52), the new accounting policy was applied prospectively by making an adjustment to the opening balances of the equity 

in 2011. 

The adjustment may be presented as follows: 

As of 31 December 2011, the missing part of difference between the allowance for impairment losses on financial assets 

and provisions according to new accounting policy and the level of allowance for impairment losses on financial assets 

and provisions based on matrix system amounts KM 13,408 thousand. This amount will be transferred from Retained earnings 

to Regulatory reserves in 2012, based on decision of the Bank’s Assembly. 

Basis of preparation 

Effect on Regulatory reserves 

(within the equity) 

Adjustment on allowance for impairment losses on loans to customers (Note 18) 59,604 

Adjustment on provision for commitments and contingencies (Note 28) 20,772 

Adjustment on allowance for impairment losses on other assets and receivables (Note 24) 6,679 

Release of allowance for impairment losses on tangible assets (Note 25) 1,701 

Release of allowance for impairment losses on investments in subsidiaries (Note 22) 202 

Release of allowance for impairment losses on placements with other banks (Note 17) 77 

89,035 

The financial statements have been prepared on the historical cost basis except for the revaluation of certain non-current 

assets and financial instruments. 

The financial statements are prepared on an accrual basis of accounting, under the going concern assumption. 

The financial statements are presented in thousands of Convertible Mark (KM ’000) which is the functional currency of 

the Bank. 

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions 

that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of 

the financial statements and their reported amounts of revenues and expenses during the reporting period. These estimates 

are based on the information available as at the reporting period date and actual results could differ from those 

estimates. 

The Bank has issued these unconsolidated financial statements as required by the law in Federation of Bosnia and Herzegovina, 

and its investments in subsidiaries and associates are presented in these unconsolidated financial statements at 

cost. The Bank will also prepare consolidated financial statements in accordance with IFRS. For a better understanding of 

the Group as a whole, users should read the consolidated financial statements. 



88 




Interest income and expense 

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, 

which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial 

asset to that asset’s net carrying amount. 

Loan origination fees, after approval and drawdown of loans, are deferred (together with related direct costs) and recognized 

as an adjustment to the effective yield of the loan over its life. 

Interest charged on deposits is added to the principal where this is foreseen by the agreement. Interest income is suspended 

when it is considered that recovery of the income is unlikely. Suspended interest is recognized as income when collected. 

Fee and commission income and expense 

Fees and commissions consist mainly of fees earned on domestic and foreign payment transactions, and fees for loans 

and other credit instruments issued by the Bank. 

Fees for payment transactions are recognised in the period when services are rendered. 

Taxation 

Income tax expense represents the sum of the tax currently payable and deferred tax. 

The tax expense is based on taxable income for the year. Taxable income differs from net income as reported in the income 

statement because it excludes items of income or expense that are taxable or deductible in other years and it further 

excludes items that are never taxable or deductible. The Bank’s liability for current tax is calculated using tax rates 

that have been enacted or substantively enacted by the reporting period date. 

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and 

liabilities in the financial statements and the corresponding tax basis used in the computation of taxable profit, and is accounted 

for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary 

differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be 

available against which deductible temporary differences can be utilised. 

The carrying amount of deferred tax assets is reviewed at each reporting period date and reduced to the extent that it is 

no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered. Deferred 

tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. 

Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly 

to equity, in which case the deferred tax is also dealt with in equity. 

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and 

the Bank has the ability and intention to settle on a net basis. 

The Bank is subject to various indirect taxes which are included in administrative expenses. 

Investments in subsidiaries 

A subsidiary is an entity which is controlled by the Bank. Control is achieved where the Bank has the power to govern the 

financial and operating policies of an entity so as to obtain benefits from its activities. 

Investments in subsidiaries in these unconsolidated financial statements are stated at cost less any impairment in the value 

of individual investments if needed. 





Investments in associates 


An associate is an entity over which the Bank has significant influence and that is neither a subsidiary nor an interest in a 

joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee 

but is not control or joint control over those policies. 

Investments in associates in these unconsolidated financial statements are stated at cost less any impairment in the value 

of individual investments if needed. 

Cash and cash equivalents 

For the purpose of reporting cash flows, cash and cash equivalents are defined as cash, balances with the Central Bank 

of Bosnia and Herzegovina (the “CBBH”) and current accounts with other banks. 

Cash and cash equivalents excludes the obligatory minimum reserve with the CBBH as these funds are not available for 

the Bank’s day to day operations. The compulsory minimum reserve with the CBBH is a required reserve to be held by all 

commercial banks licensed in Bosnia and Herzegovina. 

Financial assets 

Financial assets are recognized and derecognized on a trade date where the purchase or sale of an investment is under 

a contract whose terms require delivery of the instrument within the timeframe established by the market concerned, and 

are initially measured at fair value, net of transaction costs, except for those financial assets classified as at fair value 

through profit or loss, which are initially measured at fair value. 

Financial assets are classified into the following specified categories: financial assets as “at fair value through profit or 

loss” (FVTPL), “available-for-sale” (AFS), “held-to-maturity investments”, and “loans and receivables”. The classification 

depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. 

Method of effective interest rate 

The effective interest method is a method of calculating the amortized cost of a financial asset and of allocating interest 

income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts 

(including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and 

other premiums or discounts) through the expected life of the financial asset, or, where appropriate, a shorter period. 

Income is recognized on an effective interest basis for financial instruments: “held-to-maturity investments”, “availablefor-sale” 

and “loans and receivables”. 

Loans and receivables 

Loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified 

as loans and receivables. Loans and receivables are measured at amortized cost using the effective interest method, 

less any impairment. Interest income is recognized by applying the effective interest rate, except for short-term receivables 

when the recognition of interest would be immaterial. 



90 




Financial assets at FVTPL 

The Bank classifies a financial asset as at FVTPL where the financial asset is either held for trading or it is designated as 

at FVTPL. 

A financial asset is classified as held for trading if: 

• it has been acquired principally for the purpose of selling in the near future; or 

• it is a part of an identified portfolio of financial instruments that the Bank manages together and has a recent actual 

pattern of short-term profit-taking; or 

• it is a derivative that is not designated and effective as a hedging instrument. 

A financial asset other than a financial asset held for trading may be designated as at FVTPL upon initial recognition if: 

• such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise 

arise; or 

• the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and 

its performance is evaluated on a fair value basis, in accordance with the Bank’s documented risk management 

or investment strategy, and information about the grouping is provided internally on that basis; or 

• it forms part of a contract containing one or more embedded derivatives, and IAS 39 permits the entire combined 

contract (asset or liability) to be designated as at FVTPL. 

Financial assets at FVTPL are stated at fair value, with any resultant gain or loss recognised in profit or loss. The net gain 

or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset. Fair value is determined 

in the manner described in Note 36.10. 

Held-to-maturity investments 

Bills of exchange, debentures and government bonds with fixed or determinable payments and fixed maturity dates that 

the Bank has the positive intent and ability to hold to maturity are classified as held-to-maturity investments. Held-tomaturity 

investments are recorded at amortized cost using the effective interest method less any impairment, with revenue 

recognized on an effective yield basis. 

AFS financial assets 

Listed shares and listed redeemable notes held by the Bank that are traded in an active market are classified as being 

AFS and are stated at fair value. Fair value is determined in the manner described in the Note 36.10. Gains and losses 

arising from changes in fair value are recognized directly in equity in the investments revaluation reserve with the exception 

of impairment losses, interest calculated using the effective interest rate method and foreign exchange gains and losses 

on monetary assets, which are recognized directly in profit or loss. Where the investment is disposed of or is determined 

to be impaired, the cumulative gain or loss previously recognized in the investments revaluation reserve is included in profit 

or loss for the period. 

Dividends on AFS equity instruments are recognized in profit or loss when the Bank’s right to receive payments is established. 

The fair value of AFS monetary assets denominated in a foreign currency is determined in that foreign currency and translated 

at the spot rate at the reporting period date. The change in fair value attributable to translation differences that result 

from a change in amortized cost of the asset is recognized in profit or loss, and other changes are recognized in equity. 





Impairment of financial assets 


Financial assets, other than those at FVTPL, are assessed for indicators of impairment at each reporting period date. Financial 

assets are impaired where there is objective evidence that, as a result of one or more events that occurred after 

the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted. 

Objective evidence of impairment could include: 

• significant financial difficulty of the counterparty; or 

• default or delinquency in interest or principal payments; or 

• it becoming probable that the borrower will enter bankruptcy or financial re-organisation. 

For financial assets carried at amortised cost, the amount of the impairment is the difference between the asset’s carrying 

amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest 

rate. 

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception 

of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade 

receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts 

previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account 

are recognized in profit or loss. 

With the exception of AFS equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and 

the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized 

impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date 

the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognized. 

In respect of AFS equity securities, any increase in fair value subsequent to an impairment loss is recognized directly in 

equity. 

Derecognition of financial assets 

The Bank derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire; or it transfers 

the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Bank 

neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred 

asset, the Bank continues to recognize the financial asset. 

Financial liabilities and equity instruments issued by the Bank 

Classification as debt or equity 

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of 

the contractual arrangement. 

Equity instruments 

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. 

Equity instruments issued by the Bank are recorded at the proceeds received, net of direct issue costs. 



92 




Financial guarantee contract liabilities 

Financial guarantee contract liabilities are measured initially at their fair values and are subsequently measured at the 

higher of: 

• the amount of the obligation under the contract, as determined in accordance with IAS 37 “Provisions, Contingent 

Liabilities and Contingent Assets”; or 

• the amount initially recognized less, where appropriate, cumulative amortization recognized in accordance with 

the revenue recognition policies set out at above. 

Financial liabilities 

Financial liabilities are classified either as “financial liabilities at FVTPL” or “other financial liabilities”. The Bank creates 

one category of financial liabilities, for which basis of accounting is disclosed below. 

Other financial liabilities 

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs. 

Other financial liabilities are subsequently measured at amortized cost using the effective interest method, with interest 

expense recognized on an effective yield basis. 

The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest 

expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments 

through the expected life of the financial liability, or, where appropriate, a shorter period. 

Derecognition of financial liabilities 

The Bank derecognizes financial liabilities when, and only when, the Bank’s obligations are discharged, cancelled or they 

expire. 

Tangible assets 

Property and equipment are stated at cost, less accumulated depreciation and any recognized accumulated impairment 

losses. The purchase cost includes the purchase price and all costs directly related to bringing the asset into operating condition 

for its intended use. The cost of ongoing maintenance and repairs, replacements and investment maintenance are 

recorded as a cost when incurred. 

Properties in the course of construction for supply or administrative purposes are carried at cost, less any recognised impairment 

loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with 

the Bank’s accounting policy. Such properties are classified to the appropriate categories of property and equipment 

when completed and ready for intended use. 

Depreciation is charged from the moment the fixed asset is ready for its intended use. It is calculated in the basis of the 

estimated useful life of the asset, using the straight-line method as follows. Estimated depreciation rates were as follows: 

Buildings 1.3% 

Furniture and vehicles 11%-15.5% 

Computers 33.3% 

Other equipment 7%-20% 

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds 

and the carrying amount of the asset and is recognized in the income statement in the period they occur. 





Impairment 

At each reporting period date, the Bank reviews the carrying amounts of its property and equipment to determine whether 

there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable 

amount of the asset is estimated in order to determine the extent of the impairment loss (if any). 

Recoverable amount is the greater of net selling price and value in use. In assessing value in use, the estimated future 

cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of 

the time value of money and the risks specific to the asset. 

If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset 

is reduced to its recoverable amount. Impairment losses are recognized as an expense immediately, unless the relevant 

asset is land or buildings other than investment property carried at a revalued amount, in which case the impairment loss 

is treated as a revaluation decrease. 

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of 

its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have 

been determined had no impairment loss been recognized for the asset in prior years. A reversal of an impairment loss 

is recognized as income immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal 

of the impairment loss is treated as a revaluation increase. 

Intangible assets 

Intangible assets are measured initially at purchase cost and are amortised on a straight-line basis over their estimated 

useful lives. 

Employee benefits 

On behalf of its employees, the Bank pays personal income tax and contributions for pension, disability, health and unemployment 

insurance, on and from salaries, which are calculated as per the set legal rates during the course of the year 

on the gross salary. The Bank pays those tax and contributions in the favour of the institutions of the Federation of Bosnia 

and Herzegovina (on federal and cantonal levels), Republika Srpska and Br~ko District. In addition, meal allowances, transport 

allowances and vacation bonuses are paid in accordance with the local legislation. These expenses are recognized 

in the income statement in the period in which the salary expense is incurred. 

Retirement severance payments 


The Bank makes provision for retirement severance payments in the amount of either three average net salaries of the 

employee disbursed by the Bank or three average salaries of the Federation of Bosnia and Herzegovina as in the most 

recent published report by the Federal Statistics Bureau, depending on what is more favourable to the employee. 

The cost of retirement severance payments are recognized when earned. 



94 




Foreign currency translation 

Transactions in currencies other than Bosnia and Herzegovina KM are initially recorded at the rates of exchange prevailing 

on the dates of the transactions. Monetary assets and liabilities are translated at the rates prevailing on the reporting 

period date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the 

rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical 

cost in a foreign currency are not retranslated. Profits and losses arising on translation are included in the income 

statement for the period. 

The Bank values its assets and liabilities by middle rate of the CBBH valid at the date of balance sheet. The principal rates 

of exchange set forth by the Central Bank and used in the preparation of the Bank’s balance sheet at the reporting dates 

were as follows: 

31 December 2011 EUR 1 = KM 1.95583 USD 1 = KM 1.511577 

31 December 2010 EUR 1 = KM 1.95583 USD 1 = KM 1.472764 

Provisions 

Provisions are recognized when the Bank has a present obligation (legal or constructive) as a result of a past event, it is 

probable that the Bank will be required to settle the obligation, and a reliable estimate can be made of the amount of 

the obligation. 

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation 

at the reporting period date, taking into account the risks and uncertainties surrounding the obligation. Where a provision 

is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value 

of those cash flows. 





4. CRITICAL ACCOUNTING JUDGMENTS AND ESTIMATIONS 


In the application of the Bank’s accounting policies, which are described in Note 3, the Management is required to make 

judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent 

from other sources. The estimates and associated assumptions are based on historical experience and other factors 

that are considered to be relevant. Actual results may differ from these estimates. 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are 

recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision 

and future periods if the revision affects both current and future periods. 

Key sources of estimation uncertainty 

The following are the key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting 

period date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and 

liabilities within the next financial year. 

Useful lives of property and equipment 

As described at Note 3 above, the Bank reviews the estimated useful lives of property and equipment at the end of each 

annual reporting period. 

Impairment losses on loans and receivables 

As described at Note 3 above, at each reporting period date, the Bank assessed indicators for impairment of loans and 

receivables and their impact on the estimated future cash flows from the loans and receivables. 

Fair value of financial instruments 

As described in Note 36.10, the Management use their judgement in selecting an appropriate valuation technique for financial 

instruments not quoted in an active market. Valuation techniques commonly used by market practitioners are applied. 

Financial instruments, other than loans and receivables, are valued using a discounted cash flow analysis based 

on assumptions supported, where possible, by observable market prices or rates. The estimation of fair value of unlisted 

shares includes some assumptions not supported by observable market prices or rates. 



96 




5. INTEREST AND SIMILAR INCOME 

6. INTEREST AND SIMILAR EXPENSES 

7. FEE AND COMMISSION INCOME 


2011 2010 

Citizens 113,085 117,284 

Companies 83,443 85,265 

Financial assets held-to-maturity – Government bonds (Note 21) 4,881 3,441 

Domestic banks 4,367 2,268 

Foreign banks 2,413 2,004 

Non-for-profit organizations 26 34 

208,215 210,296 

2011 2010 

Citizens 36,010 43,734 

Companies 24,664 30,543 

Foreign banks 10,405 12,171 

Non-for-profit organizations 594 28 

Domestic banks 32 64 

71,705 86,540 

2011 2010 

Payment transactions 26,771 26,810 

Transactions with citizens 22,758 19,656 

Loans and guarantees 10,540 10,772 

FX transactions 3,665 2,862 

Other 1,274 999 

65,008 61,099




8. FEE AND COMMISSION EXPENSES 

9. NET FINANCIAL INCOME 

10. RECOVERIES 

11. OTHER OPERATING INCOME 


2011 2010 

Borrowed funds and other bank services 7,001 5,485 

Correspondent accounts 1,498 1,970 

Domestic payment transactions 644 635 

9,143 8,090 

2011 2010 

Net gains on foreign exchange business transactions 10,969 9,443 

Interest income from bonds at FVTPL (Note 20) 8,695 9,107 

Net gain from sale of shares / securities at FVTPL (Note 20) 94 23 

Dividend income 55 79 

Net losses on reconciliations with CBBH’s exchange rates (2,031) (1,542) 

Fair value adjustment on bonds at FVTPL (Note 20) (1,852) (1,614) 

Net loss from sale of bonds at FVTPL (Note 20) (1,519) (374) 

Net loss from sale of bonds held-to-maturity (Note 21) (920) - 

Fair value adjustment on shares / securities at FVTPL (Note 20) (138) (407) 

Net loss from forward operations (6) (1) 

13,347 14,714 

2011 2010 

Interest 3,099 3,321 

Principal 1,271 8,160 

Fees 3 6 

4,373 11,487 

2011 2010 

Net gain on disposal of tangible assets 2,567 - 

Rent income 886 242 

Release of accrued expenses from previous year 509 561 

Written-off liabilities 443 400 

Other income 2,821 1,796 

7,226 2,999 



98 




12. ADMINISTRATIVE EXPENSES 

13. IMPAIRMENT LOSSES AND PROVISIONS 


2011 2010 

Gross salaries 47,948 47,168 

Other employee benefits 11,687 12,002 

Deposit insurance premiums 7,452 7,372 

Services 7,178 7,047 

Maintenance 7,073 5,607 

Consultancy expenses 5,616 6,163 

Telecommunication expense 5,309 5,514 

Rent 4,693 5,055 

Representation and marketing expense 4,158 3,882 

Other taxes and dues 2,753 1,731 

Material expenses 2,734 2,930 

Asset insurance premiums 2,400 2,599 

Energy 2,372 2,013 

Insurance expense for employees 1,224 1,534 

Education 493 742 

Provision for other employee benefits per IAS 19 (Note 28) 319 1,434 

Transportation 203 243 

Donations 149 124 

Settlement of court cases - 1,440 

Net loss on disposal of tangible assets - 455 

Other expenses 4,118 4,301 

117,879 119,356 

2011 2010 

Loans and advances to customers (Note 18) 39,164 65,781 

Commitments and contingencies (Note 28) 673 1,434 

Legal proceedings (Note 28) 585 - 

Other assets and receivables (Note 24) 91 1,391 

Tangible assets (Note 25) - 860 

Placements with other banks (Note 17) - 43 

Investments in subsidiaries (Note 22) - (12) 

40,513 69,497




14. INCOME TAX 


Tax liability is based on accounting income taking into the account non-deductible expenses and non-taxable income. Tax 

income rate for the year ended 31 December 2011 and 31 December 2010 was 10%. Total tax recognized in the income 

statement may be presented as follows: 

Adjustment between income tax presented in tax balance and accounting income tax is presented as follows: 

Changes in deferred tax asset can be presented as follows: 

2011 2010 

Current income tax 5,798 2,312 

Deferred income tax (377) (307) 

5,421 2,005 

2011 2010 

Profit before income tax 49,274 7,877 

Income tax expense at 10% 4,928 788 

Effects of non-deductible expenses 1,281 924 

Effects of non-taxable income (780) (249) 

Effects of unrecognized income 368 307 

Effects of transfer pricing 1 5 

Effects of different income tax legislation – Republika Srpska - 537 

Current income tax 5,798 2,312 

Effective tax rate 11.77% 29.35% 

2011 2010 

Balance as at 1 January 469 162 

Recognized deferred tax asset for the year 377 307 

Balance as at 31 December 846 469 

The Management of the Bank believes that the deferred asset will be recoverable and/or utilized in near future, and therefore, 

deferred tax assets have been recognized in the accompanying financial statements. 


100 





15. CASH AND CASH EQUIVALENTS 

16. OBLIGATORY RESERVE AT CENTRAL BANK OF BOSNIA AND HERZEGOVINA 

Minimum obligatory reserve was calculated as a percentage of the average amount of total deposits and borrowings for 

each working day during 10 calendar days following the period of maintaining the obligatory reserve. The rates of minimum 

obligatory reserve were as follows: 

• from 1 January 2010 to 31 January 2011 – 14% of total short-term deposits and borrowings and 7% of total 

long-term deposits and borrowings; 

• from 1 February to 31 December 2011 – 10% of total short-term deposits and borrowings and 7% of total longterm 

deposits and borrowings. 

Interest rate on funds kept up to minimum obligatory reserve amounts to 0.2%. Cash held at the obligatory reserve account 

with the CBBH is not available for daily operations without specific approval from the CBBH and FBA. 


31 December 2011 31 December 2010 

Account with the CBBH in domestic currency 572,763 323,321 

Correspondent accounts with banks in foreign currency 83,461 49,082 

Cash on hand in domestic currency 41,034 41,783 

Cash on hand in foreign currency 19,562 20,745 

Checks in foreign currency 48 33 

716,868 434,964 


Obligatory reserve 266,540 305,865 

266,540 305,865




17. PLACEMENTS WITH OTHER BANKS 

During 2011, the interest rates for placements in EUR were within the range from 0.12% p.a. to 1.62% p.a. (2010: from 

0.13% p.a. to 1.00% p.a.) and for placements in USD from 0.01% p.a. to 1.00% p.a. (2010: from 0.03% p.a. to 0.65% 

p.a.). Interest rates on placements in other currencies were from 0.02% p.a. to 5.10% p.a. (2010: from 0.01% p.a. to 

5.00% p.a.). 

The movements in the allowance for impairment losses are summarized as follows: 

18. LOANS AND ADVANCES TO CUSTOMERS 



OECD countries 225,917 250,313 

Bosnia and Herzegovina - 46 

225,917 250,359 

Less: Allowance for impairment losses on placements - (77) 

225,917 250,282 

2011 2010 


Effects of change of accounting policy – release of allowance 

(Note 3) 

(77) - 

Increase in allowances (Note 13) - 43 

Balance as at 31 December - 77 

Short-term loans: 


Short-term loans in domestic currency 733,802 635,771 

Short-term loans in foreign currency 4,696 224 

Current portion of long-term loans 584,308 472,647 

Long-term loans: 

1,322,806 1,108,642 

Long-term loans in domestic currency 1,817,636 1,701,490 

Long-term loans in foreign currency 25,461 32,705 

(Current portion of long-term loans) (584,308) (472,647) 

1,258,789 1,261,548 

Total loans before allowance 2,581,595 2,370,190 

Less: allowance for impairment losses (274,865) (127,000) 

2,306,730 2,243,190 

Short-term loans are granted for periods of 30 to 365 days. The majority of short-term loans in domestic currency are 

granted to clients for working capital financing. Long-term loans are mostly granted to individuals for housing and vehicle 

purchases. During 2011 the Bank decreased the level of new approved loans and concentrated more on collection 

of existing receivable balances. 


102 






Total amount of non-performing loans on which interest was suspended as at 31 December 2011 and 2010 was KM 

300,638 thousand and KM 111,578 thousand, respectively. 

Total loans before allowance for impairment losses per industry may be presented as follows: 

Interest rates for granted loans as at 31 December 2011 and 2010 are summarized as follows: 



Citizens 1,280,927 1,153,610 

Trade 619,948 607,455 

Agriculture, forestry, mining and energy 371,187 347,072 

Services, finance, sport, tourism 103,392 76,791 

Construction industry 86,092 81,420 

Transport and telecommunications 47,881 43,099 

Administrative and other public institutions 25,707 49,778 

Other 46,461 10,965 

Domestic currency 

2,581,595 2,370,190 


KM ’000 Annual interest rates KM ’000 Annual interest rates 

Companies 1,271,478 5.53% - 18.00% 1,185,247 5.53% - 18.00% 

Citizens 1,279,960 2.00% - 18.00% 1,152,014 2.00% - 18.00% 

Foreign currency 

Companies 29,190 0.00% - 16.00% 31,333 8.55% 

Citizens 967 5.31% - 12.00% 1,596 7.00% - 9.60% 

2,581,595 2,370,190 

2011 2010 

Balance as at 1 January 127,000 118,319 

Effects of change of accounting policy – re-recognition of 

receivables previously written-off in full amount according to 

superseded FBA’s decision (E category) 


(Note 3) 

168,305 - 

(59,604) - 

Increase in allowances (Note 13) 39,164 65,781 

Write-offs - (57,100) 

Balance as at 31 December 274,865 127,000




19. FINANCIAL ASSETS AVAILABLE-FOR-SALE 

Movements in the fair value of these assets were as follows: 

20. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT AND LOSS 

Government bonds 



Visa International Service Association 3,111 2,101 

S.W.I.F.T. Belgium 121 121 

Securities’ Register of the Federation of B&H 32 14 

Sarajevo Stock Exchange dd 30 - 

Bamcard dd Sarajevo 3 3 

Bosna Sunce Osiguranje dd Sarajevo 1 1 

Raiffeisen Training centar d.o.o. 1 1 

3,299 2,241 

2011 2010 


Effect of the merger of Raiffeisen BROKERS d.o.o. Sarajevo 

into the Bank (Note 34) 

48 - 

Fair value gain / (loss) 1,010 (317) 

Balance as at 31 December 3,299 2,241 


Government bonds 153,011 163,120 

Shares / securities 5,886 1,664 

158,897 164,784 


Romania 86,442 89,503 

France 14,787 9,742 

Germany 13,424 13,968 

Belgium 11,271 11,662 

Finland 10,771 11,072 

The Netherlands 10,634 10,679 

Italy 3,691 3,842 

Slovenia 1,991 2,111 

Spain - 6,483 

Portugal - 4,058 

153,011 163,120 


104 





The Bank continued with trading activities of above-mentioned bonds in 2011 with the purpose of selling them in the near 

future. Bonds are valued based on report obtained from Reuters showing the latest bids for the bonds as of 31 December 

2011. The Bank selects the six most active traders and takes the average of the latest bids to these contributors. 

Movements in the fair value of bonds at FVTPL were as follows: 

Interest income earned on the bonds portfolio in 2011 was KM 8,695 thousand (2010: KM 9,107 thousand) (Note 9). 

Shares / securities 

The Bank continued with trading activities of above-mentioned shares / securities in 2011 with the purpose of selling 

them in the near future. Securities are quoted at the Sarajevo Stock Exchange and Banja Luka Stock Exchange. 

Movements in the fair value of shares / securities at FVTPL were as follows: 


2011 2010 


(Sales) / purchases during the year, net (6,738) 46,327 

Realised loss on disposal (Note 9) (1,519) (374) 

Fair value loss (Note 9) (1,852) (1,614) 

Balance as at 31 December 153,011 163,120 


Raiffeisen CASH – Open Investment Fund 4,890 - 

Intesa Sanpaolo Banka dd Bosna i Hercegovina 483 485 

Fabrika duhana Sarajevo dd Sarajevo 256 428 

BH Telecom dd Sarajevo 95 284 

Telecom Srpske a.d. Banja Luka 79 145 

Vakufska banka dd Sarajevo 40 53 

Klas dd Sarajevo 29 30 

Sarajevo osiguranje dd Sarajevo 13 113 

Velprom dd Sanski Most 1 1 

Nova banka a.d. Banja Luka - 91 

Metal a.d. Gradi{ka - 29 

Union banka dd Sarajevo - 5 

5,886 1,664 

2011 2010 


Purchases during the year, net 4,266 196 

Realised gain on disposal (Note 9) 94 23 

Fair value loss (Note 9) (138) (407) 





21. FINANCIAL ASSETS HELD-TO-MATURITY 

(GOVERNMENT BONDS & TREASURY BILLS) 



Austria 40,900 40,766 

Republika Srpska 29,500 - 

Belgium 20,585 21,024 

The Federation of Bosnia and Herzegovina 12,576 5,507 

Italy 12,471 12,615 

The Netherlands 10,132 10,191 

Slovenia 7,891 7,955 

Kommunalkredit Austria 4,035 4,034 

Albania - 25,206 

Portugal - 10,110 

138,090 137,408 

In 2010 the Bank purchased: 

• Bonds issued by the government of the Republic of Austria with the nominal value of EUR 6 million and USD 18 

million. The EUR bonds bear interest at the rates between 3.40% to 5.00% p.a. and mature between 15 July 2012 

and 20 October 2014. The USD bonds bear interest at the rates between 3.25% p.a. and 5.00% p.a. and mature 

between 25 June 2013 and 19 May 2014. 

• Bonds issued by the government of the Kingdom of Belgium in the total value EUR 5 million and USD 6.5 million. 

The EUR bonds bear interest at 8% p.a. and mature on 24 December 2012. The USD bonds bear interest at 4.25% 

p.a. and mature on 3 September 2013. 

• Bonds issued by the Federation of Bosnia and Herzegovina with the nominal value of KM 8,044 thousand. The 

bonds bear interest at 2.5% p.a. and mature between 30 September 2011 and 30 June 2020. 

• Bonds issued by the government of the Republic of Italy with the nominal value of EUR 2 million and USD 5.5 million. 

The EUR bonds bear interest at 4.25% p.a. and mature on 15 October 2012. The USD bonds bear interest 

at 5.625% p.a. and mature on 15 June 2012. 

• Bonds issued by Fortis Bank Nederland, the Netherlands with the nominal value of EUR 5 million. The bonds are 

under the guarantee of the government of the Netherlands. The bonds bear interest at 3.375% p.a. and mature 

on 19 May 2014. 

• Bonds issued by Nova Ljubljanska Banka, Slovenia with the nominal value of EUR 3,959 thousand. The bonds are 

under the guarantee of the government of Slovenia. The bonds bear interest at 3.25% p.a. and mature on 23 July 

2012. 

• Bonds issued by Komunalkredit, Austria with the nominal value of EUR 2 million. The bonds are under the guarantee 

of the government of the Republic of Austria. The bonds bear interest at 3.125% p.a. and mature on 8 July 

2013. 

• 7,000 bonds issued by the government of Albania (EUR 13,086 thousand). The bonds did not bear any interest 

and they matured on 29 March 2011 and 27 December 2011. 

• Bonds issued by Banif Banco International, Portugal with the nominal value of EUR 5 million. These bonds were 

under the guarantee of the government of Portugal. The bonds were bearing interest at 3.25% p.a. and should 

mature on 8 May 2012. However, due to significant deterioration in the creditworthiness of the government of Portugal, 

on 30 November 2011 the Bank reclassified these bonds to financial assets available-for-sale and sold 

them on 5 December 2011. Net loss from sale amounted to KM 920 thousand (Note 9). 


106 





In 2011 the Bank purchased: 

• Bonds issued by the Federation of Bosnia and Herzegovina with the nominal value of KM 31,252 thousand bonds. 

The bonds bear interest at 2.5% p.a. and mature between 30 September 2011 and 30 June 2020. 

• Treasury bills issued by the Republika Srpska with the nominal value of KM 20 million, with no interest. The amount 

of KM 10 million matured on November 2011 and the rest matures on 15 June 2012. 

In 2011, the Bank recognized KM 1,832 thousand (2010: KM 1,833 thousand) of premium amortization expense and 

interest income earned on the bonds purchased from abroad amounting to KM 4,264 thousand (2010: KM 4,396 thousand). 

The Bank also recognized the amortized discount amounting to KM 1,998 thousand (2010: KM 834 thousand) and 

interest income amounting to KM 451 thousand (2010: KM 44 thousand) on bonds purchased from the Government of 

Federation of BiH. Therefore, total net interest income on bonds held-to-maturity was KM 4,881 thousand (2010: KM 3,441 

thousand) – Note 5. 

22. INVESTMENTS IN SUBSIDIARIES 

Subsidiary Industry 

Raiffeisen Special Assets Company d.o.o. 

Sarajevo 

Raiffeisen INVEST dru{tvo za upravljanje 

fondovima d.o.o. Sarajevo 

Investment in subsidiary Raiffeisen CAPITAL a.d. Banja Luka has been obtained through the merger of Raiffeisen 

BROKERS d.o.o. Sarajevo into the Bank (Note 34). 



2011 2010 



(Note 3) 

% of 

share 

31 December 

2011 

31 December 

2010 

Financial advisory services 100% 1,983 1,983 

Fund management 100% 400 - 

Raiffeisen CAPITAL a.d. Banja Luka Agent for shares /securities 100% 53 - 

Raiffeisen BROKERS d.o.o. Sarajevo Agent for shares /securities 100% - 507 

2,436 2,490 

Less: allowance for impairment losses - (202) 

2,436 2,288 

(202) - 

Decrease in allowances (Note 13) - (12) 

Balance as at 31 December - 202




Financial information about the Bank’s subsidiaries as of 31 December 2011 was as follows: 

Raiffeisen Special Assets Company d.o.o. 

Sarajevo 

Raiffeisen INVEST dru{tvo za upravljanje 

fondovima d.o.o. Sarajevo 

23. INVESTMENTS IN ASSOCIATE 

Total 

assets 

Owner’s 

equity / registered 

capital 

Financial information about the Bank’s associate as of 31 December 2011 was as follows: 

Total equity Revenue 


Profit / 

(loss) for 


3,420 1,983 2,271 559 78 

362 400 325 - (75) 

Raiffeisen CAPITAL a.d. Banja Luka 557 355 53 131 (9) 

Associate Industry 

% of 

share 

31 December 

2011 

31 December 

2010 

Raiffeisen LEASING d.o.o. Sarajevo Leasing 49.00% 8,173 8,173 

8,173 8,173 

31 December 2011 

Total assets 237,847 

Owners’ equity 17,191 

Total equity 17,774 

Revenue 14,136 

Net profit for the year 583 


108 





24. OTHER ASSETS AND RECEIVABLES 

* These bonds were bought on 30 December 2010 with the settlement date on 5 January 2011. As of 5 January 2011 the 

Bank transferred this amount to the held-to-maturity portfolio. 

The movements in allowance for impairment losses are summarized as follows: 



Receivable from spot FX transactions 9,295 2,524 

Receivables from credit cards operations 8,660 6,759 

Prepaid income tax 3,385 6,242 

Prepaid expenses 2,334 1,095 

Receivables from the tax authorities 2,070 1,830 

Fee receivables 1,460 620 

Advances paid 133 437 

Payments for purchase of bonds of the Federation of Bosnia 

and Herzegovina * 

- 1,134 

Other assets 4,794 3,060 

32,131 23,701 

Less: allowance for impairment losses (534) (6,730) 

31,597 16,971 

2011 2010 



receivables previously written-off in full amount according to 

superseded FBA’s decision (E category) 


(Note 3) 

392 - 

(6,679) - 

Increase in allowances (Note 13) 91 1,391 

Write-offs - (24) 

Balance as at 31 December 534 6,730




25. TANGIBLE AND INTANGIBLE ASSETS 

Land and 

buildings 

Vehicles 

Office 

equipment 

Work in 

progress 

Intangible 

assets 


COST 

Balance at 31 December 2010 100,247 1,617 44,191 36,310 13,580 195,945 

Additions - - - 9,015 - 9,015 

Increase due to merger of Raiffeisen Brokers 

d.o.o. Sarajevo (Note 34) 

150 30 164 - 158 502 

Transfer from small tools and consumables in use - - 701 - - 701 

Transfers (from) / to 34,814 246 3,611 (42,199) 3,528 - 

Transfer to assets held for sale (403) - - - - (403) 

Disposals (770) (195) (2,443) (241) (43) (3,692) 

Balance at 31 December 2011 

ACCUMULATED DEPRECIATION 

134,038 1,698 46,224 2,885 17,223 202,068 

Balance at 31 December 2010 3,624 929 25,552 - 8,541 38,646 

Depreciation 1,464 234 5,849 - 2,108 9,655 

Increase due to merger of Raiffeisen Brokers 

d.o.o. Sarajevo (Note 34) 

- 7 127 - 90 224 

Transfer from small tools and consumables in use - - 146 - - 146 

Disposals (20) (90) (2,343) - (43) (2,496) 

Balance at 31 December 2011 5,068 1,080 29,331 - 10,696 46,175 

Net book value at 31 December 2011, before 

allowance for impairment losses 

128,970 618 16,893 2,885 6,527 155,893 

Allowance for impairment losses at 


- - 1,701 - - 1,701 

Effects of change of accounting policy – release 

of allowance (Note 3) 

- - (1,701) - - (1,701) 



- - - - - - 

NET BOOK VALUE AT 31 DECEMBER 2011 

COST 

128,970 618 16,893 2,885 6,527 155,893 

Balance at 31 December 2009 100,174 1,993 44,861 17,318 13,042 177,388 

Additions - - - 25,075 - 25,075 

Transfers (from) / to 73 91 4,530 (6,066) 1,372 - 

Disposals - (467) (5,200) (17) (834) (6,518) 

Balance at 31 December 2010 

ACCUMULATED DEPRECIATION 

100,247 1,617 44,191 36,310 13,580 195,945 

Balance at 31 December 2009 2,417 1,060 24,101 - 7,766 35,344 

Depreciation 1,207 273 6,146 - 1,609 9,235 

Disposals - (404) (4,695) - (834) (5,933) 

Balance at 31 December 2010 3,624 929 25,552 - 8,541 38,646 

Net book value at 31 December 2010, before 

allowance for impairment losses 

96,623 688 18,639 36,310 5,039 157,299 



- - 841 - - 841 

Increase in allowance (Note 13) - - 860 - - 860 

Allowance for impairment losses at 31 December 

2010 

- - 1,701 - - 1,701 

NET BOOK VALUE AT 31 DECEMBER 2010 96,623 688 16,938 36,310 5,039 155,598 

Total 


110 





26. DUE TO BANKS 

Short-term borrowings: 

Long-term borrowings from foreign banks and non-banking financial institutions as at 31 December 2011 and 2010 were 

as follows: 

During 2011, interest rates on new long-term borrowings, obtained during the year, were in the range from 6M EURI- 

BOR+1% p.a. to 6M EURIBOR+2.5%, while interest rates on total borrowings were in the range from 1.00% to 4.95% 

p.a. (fixed), and from EURIBOR+0.09% to EURIBOR+5.75% (variable). During 2010, interest rates on total borrowings 

were in the range from 1.00% to 4.95% p.a. (fixed) and from EURIBOR+0.095% p.a. to EURIBOR+5.75% p.a. (variable). 



Add: Current portion of long-term borrowings 143,181 148,587 

Long-term borrowings: 

Long-term borrowings from foreign banks and non-banking 

financial institutions 

Long-term borrowings from domestic banks and non-banking 

financial institutions 

458,823 576,270 

4,094 4,055 

Less: Current portion of long-term borrowings (143,181) (148,587) 

Current accounts: 

319,736 431,738 

Current accounts in domestic currency 499 195 

Current accounts in foreign currency 106 105 

Short-term deposits: 

605 300 

Short-term deposits in domestic currency 259 1,188 

Short-term deposits in foreign currency 1,854 1,967 

2,113 3,155 

Long-term deposits 2,369 4,370 

468,004 588,150 


Supranational and development banks 275,953 321,502 

Commercial banks – related parties 41,714 66,766 

Other financial institutions 141,156 188,002 

458,823 576,270




27. DUE TO CUSTOMERS 

A vista deposits: 

Citizens: 

During 2011, interest rates were as follows: 

• a vista deposits in KM – from 0.00% to 0.10% p.a. (2010: from 0.10% p.a. to 0.30% p.a.), 

• a vista deposits in foreign currency – from 0.00% to 1.75% p.a. (2010: from 0.00% to 2.72% p.a.), 

• short-term deposits – from 0.00% to 3.60% p.a. (2010: from 0.00% to 3.60% p.a.), 

• long-term deposits – from 0.00% to 4.50% p.a. (2010: from 1.50% p.a. to 5.00% p.a.). 



In KM 333,187 298,791 

In foreign currencies 318,049 297,105 

Legal entities: 

651,236 595,896 

In KM 720,886 667,791 


Term deposits: 

Citizens: 

840,697 774,005 

1,491,933 1,369,901 

In KM 159,959 129,530 


Legal entities: 

1,121,130 1,067,910 

In KM 150,829 64,311 


331,379 184,894 

1,452,509 1,252,804 

2,944,442 2,622,705 


112 





28. PROVISIONS 

Commitments and contingencies 

In the ordinary course of business, the Bank enters into credit related commitments which are recorded in off-balance sheet 

accounts and primarily include guarantees, letters of credit and undrawn loan commitments. 

Movements in provision for commitments and contingencies were as follows: 



Provisions for commitments and contingencies 4,841 24,825 

Provisions for other employee benefits 2,065 4,134 

Provisions for legal proceedings (Note 13) 585 - 

Commitments 

7,491 28,959 


Framework agreements 325,665 337,995 

Unused portion of overdraft loans 176,413 220,392 

Contingent liabilities 

502,078 558,387 

Performance bonds 207,460 182,594 

Payment guarantees 140,969 123,031 

Letters of credit 20,709 34,687 

Advances - 67 

369,138 340,379 

Total commitments and contingencies 871,216 898,766 

2011 2010 



written-off items, previously classified under E category 

Effects of change of accounting policy – release of provision 

(Note 3) 

115 - 

(20,772) - 

Increase in allowances (Note 13) 673 1,434 

Write-offs - - 





Other employee benefits 

Changes in provisions for other employee benefits are as follows: 

29. OTHER LIABILITIES AND PAYABLES 

30. SUBORDINATED DEBT 

Retirement 

severance payments 

Unused 

vacation days 

Jubilee 

awards 


Balance as at 1 January 2010 1,157 1,604 157 2,918 

Additional provisions recognized (Note 12) 1,696 1,499 1,499 3,195 

Reductions resulting from re-measurement or 

settlement without cost (Note 12) 


Unallocated principal and interest paid upfront 8,084 8,677 

Deferred income 5,209 5,176 

Liabilities from credit card operations 4,264 3,057 

Liabilities toward suppliers 4,076 3,207 

Employee payables 3,877 4,206 

Other tax liabilities 56 164 

Liabilities towards shareholders 11 11 

Other liabilities 3,590 3,981 

29,167 28,479 


Commercial banks – related parties 45,858 62,532 

Supranational and development banks 19,626 19,484 

65,484 82,016 

Commercial banks – related parties: there are 6 active loans, received in period from 27 May 2003 to 12 September 2007, 

in total amount of KM 75,691 thousand. Those loans mature in period from 20 March 2012 to 12 September 2014, with 

semi-annual repayments. 

As of 18 May 2008, one loan was received from supranational and development banks in total amount of 19,558 thousands 

KM with maturity on 18 May 2015, repaid semi-annually. 

Interest rates of subordinated loans are in range from EURIBOR+2% to EURIBOR+2.8%. 

The amount of total subordinated debt as of 31 December 2011 and 2010 includes accrued interest liabilities in amount 

of KM 615 thousand and KM 634 thousand, respectively, decreased for prepaid expenses related to fees for borrowed funds. 

Subject to the approval of FBA, subordinated debt may be used as additional capital for regulatory purposes. 

Total 

- (1,604) (157) (1,761) 

Reductions arising from payments (218) - - (218) 

Balance as at 31 December 2010 2,635 1,499 - 4,134 

Additional provisions recognized (Note 12) 389 1,429 - 1,818 

Reductions resulting from re-measurement or 

settlement without cost (Note 12) 

- (1,499) - (1,499) 

Reductions arising from payments (2,388) - - (2,388) 

Balance as at 31 December 2011 636 1,429 - 2,065 


114 





31. SHARE CAPITAL 

The global ultimate parent of the Bank is Raiffeisen International Bank Holding AG Vienna, Austria. The shareholding structure 

as of 31 December 2011 and 2010 was as follows: 

Shareholders No. of shares Amount KM ’000 % 

Raiffeisen International Bank Holding AG, Vienna, Austria 921,016 230,254 96.99 

Millenia Beteiligungsverwaltungs GmbH, Graz, Austria 28,488 7,122 3.00 

Other shareholders 48 12 0.01 

Total 949,552 237,388 100.00 

Capital is made up of 949,552 ordinary shares at nominal value of KM 250. Equity instruments of the Bank are not 

traded in a public market and these financial statements are not under the regulative of the Security Commission for the 

purpose of issuing any class of instruments in a public market. 

32. BASIC EARNINGS PER SHARE 

Basic earnings per share is calculated by dividing the net profit attributable to ordinary shareholders by weighted average 

number of ordinary shares in issue during the year. 

Diluted earnings per share are not presented, as the Bank has not issued dilutive equity instruments. 

33. MANAGED FUNDS 

The Bank manages assets on behalf of third parties. These assets are recorded separately from the Bank’s assets. For its 

services, the Bank charges a fee amounting to 1% of the total amount contributed. 

The Bank has not issued any guarantees related to managed funds. 


2011 2010 

Income attributable to ordinary shareholders (KM ’000) 43,853 5,872 

Weighted average number of regular shares outstanding 949,552 949,552 

Basic earnings per share (KM) 46.18 6.18 

Liabilities 


Citizens 362 2,041 

Government 5,953 5,852 

Companies 4,636 4,892 

Other 82 122 

Assets 

11,033 12,907 

Loans to companies 3,912 5,613 

Loans to citizens 7,121 7,294 

11,033 12,907




34. BUSINESS COMBINATION WITH RAIFFEISEN BROKERS D.O.O. SARAJEVO 


Based on decision of the Supervisory Board of the Bank dated 4 April 2011, the wholly-owned subsidiary – Raiffeisen BRO- 

KERS d.o.o. Sarajevo has been merged into the Bank starting from 1 May 2011. As of that date, the Bank has introduced 

assets and liabilities from the merged subsidiary in its accounting records. 

Balance sheet of Raiffeisen BROKERS d.o.o. Sarajevo as of 30 April can be presented as follows: 

30 April 2011 

Tangible and intangible assets 278 

Investments in subsidiary 53 

Financial assets available-for-sale 48 

Trade and other receivables 3 

Cash and cash equivalents 49 

TOTAL ASSETS 431 

Owner’s equity 1,000 

Accumulated losses (2,126) 

Borrowings 1,540 

Trade and other payables 17 

TOTAL EQUITY AND LIABILITIES 431 

Primarily registered amount of the owner’s equity of Raiffeisen BROKERS d.o.o. Sarajevo was KM 507 thousand (equal 

to the Bank’s investment – Note 22). However, during 2006, Raiffeisen BROKERS d.o.o. Sarajevo has increased the registered 

owner’s equity to KM 1 million through the capitalization of part of retained earnings (KM 493 thousand). 

On 1 May 2011, the Bank has recognized the effect of merger of Raiffeisen BROKERS d.o.o. Sarajevo on its retained earnings 

in the amount of KM 1,633 thousand as result of the following: 

Elimination of the owner’s equity of Raiffeisen BROKERS d.o.o. Sarajevo 1,000 

Elimination of investment in subsidiary in the Bank (507) 

Booking of accumulated losses of Raiffeisen BROKERS d.o.o. Sarajevo (2,126) 

(1,633) 


116 





35. RELATED PARTY TRANSACTIONS 

Balances with related parties as of 31 December 2011 are summarized as follows: 

Receivables 

Placements with other banks: 



Raiffeisenlandesbank Oberösterreich AG, Linz 52,807 19,558 

Raiffeisenlandesbank Niederösterreich-Wien AG, Vienna 19,558 19,558 

Raiffeisen Bank International AG, Vienna 2,350 678 

Cash and cash equivalents: 

Raiffeisen Bank International AG, Vienna 25,929 6,826 

Raiffeisenbank Austria dd Zagreb 6,532 2,187 

Loans and advances to customers: 

Raiffeisen SAC d.o.o. Sarajevo 1,119 1,119 

Raiffeisen INVEST d.o.o. Sarajevo 1 - 

Raiffeisen BROKERS d.o.o. Sarajevo - 1,476 

Other receivables: 


Raiffeisen LEASING d.o.o. Sarajevo 32 3 

Raiffeisenbank Austria dd Zagreb 5 4 

Raiffeisen Banka dd Maribor 1 1 

Payables 

Borrowings: 

117,411 53,409 



Subordinated debt: 



Raiffeisen-Landesbank Steiermark AG, Graz 12,757 12,755 

Due to banks – deposits: 

Raiffeisen LEASING d.o.o. Sarajevo 6,846 2,069 

Raiffeisen SAC d.o.o. Sarajevo 1,135 899 

Raiffeisen INVEST d.o.o. Sarajevo 286 - 

Raiffeisen Banka dd Maribor 19 - 

Raiffeisenbank Austria dd Zagreb 13 - 

Raiffeisen BROKERS d.o.o. Sarajevo - 50 

Other liabilities 

Centralised Raiffeisen International Services & Payments 50 - 


Raiffeisen SAC d.o.o. Sarajevo 12 52 

Raiffeisen Treningcentar d.o.o. Zagreb 10 - 

96,004 132,368





A number of banking transactions are entered into with related parties in the normal course of business. These transactions 

were carried out on commercial terms and conditions and at market rates. 

Income 

Interest and similar income: 

2011 2010 

Raiffeisen Bank International AG, Vienna 699 571 




Fee and commission income: 

Raiffeisen Bank International AG, Vienna 135 92 




Other operating income: 


Raiffeisen Bank International AG, Vienna 21 - 

Raiffeisen SAC d.o.o. Sarajevo 15 - 

Raiffeisen Treningcentar d.o.o. Zagreb 3 - 



Expenses 

Interest and similar expenses: 

1,627 1,026 


Raiffeisenlandesbank Oberösterreich AG, Linz 650 - 

Raiffeisen-Landesbank Steiermark AG, Graz 534 436 



Fee and commission expenses: 


Raiffeisen Bank International AG, Vienna - 1,291 

Consulting services: 


Other expenses: 


Centralised Raiffeisen International Services & Payments 1,048 - 


Raiffeisen Treningcentar d.o.o. Zagreb 200 253 


11,744 10,951 


118 





Director’s and executives’ remuneration 

The remuneration of directors and other members of key management during the year ended 31 December 2011 were 

as follows: 

36. FINANCIAL INSTRUMENTS 

36.1 Capital risk management 

The Bank’s objectives when managing capital, which is a broader concept than the ’equity’ on the face of balance sheets, are: 

• To comply with the capital requirements set by the regulators of the banking markets; 

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

and benefits for other stakeholders; and 

• To maintain a strong capital base to support the development of its business. 

The Bank expects to maintain its debt to capital ratio. Solvency indicators were as follows: 

Debt is defined as liabilities toward clients, other banks and financial institutions presented in detail in Notes 26, 27 and 

30. Capital includes share capital, share premium and retained earnings. 

Capital adequacy and the use of regulatory capital are monitored daily by the Bank’s management, employing techniques 

based on the guidelines developed by FBA for supervisory purposes. The required information is filed with the FBA on a 

quarterly basis. 

FBA requires each bank to: (a) hold the minimum level of the share capital and the lowest level of net capital (regulatory 

capital) of KM 15 million, and (b) maintain a ratio of total regulatory capital to the risk-weighted asset at or above the 

minimum of 12%. 

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

• Tier 1 capital or Core Capital: share capital (net of any book values of the treasury shares), share premium, retained 

earnings and reserves created by appropriations of retained earnings; and 

• Tier 2 capital or Supplementary Capital: qualifying subordinated loan capital, collective impairment allowances 

and unrealized gains arising on the fair valuation of equity instruments held as available for sale. 

The risk-weighted assets are measured by means of a hierarchy of four 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 exposure, with some adjustments 

to reflect the more contingent nature of the potential losses. 

During the years ended 31 December 2011 and 2010, the Bank complied with all of the externally imposed capital requirements. 

As of 31 December 2011 the adequacy of the Bank’s capital amounts to 14.7% (2010: 14.7%). 


2011 2010 

Net salaries 545 815 

Salary taxes and contributions 327 522 

Other benefits 1,562 433 

Taxes and contribution on other benefits 904 269 

3,338 2,039 


Debt 3,477,930 3,292,871 

Capital 395,457 369,733 

Net debt to capital ratio 8.79 8.91




36.2 Significant accounting policies 


Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of 

measurement and the basis on which income and expenses are recognized, in respect of each class of financial asset, financial 

liability and equity instruments are disclosed in Note 3 to these financial statements. 

36.3 Categories of financial instruments 


36.4 Financial risk management objectives 

The Bank’s Finance & Risk divisions provide services to the business, co-ordinates access to domestic and international 

financial markets, monitors and manages the financial risks relating to the operations of the Bank through internal risk 

reports which analyse exposures by degree and magnitude of risks. These risks include market risk (including currency 

risk and fair value interest rate risk), credit risk, liquidity risk and cash flow interest rate risk. 

36.5 Market risk 


Cash and cash equivalents 716,868 434,964 

Obligatory reserve at Central Bank of B&H 266,540 305,865 

Placements with other banks 225,917 250,282 

Loans and advances to customers 2,306,730 2,243,190 

Financial assets available-for-sale 3,299 2,241 

Financial assets at FVTPL 158,897 164,784 

Financial assets held-to-maturity 138,090 137,408 

Financial liabilities 

At amortized cost: 

3,816,341 3,538,734 

Due to banks 468,004 588,150 

Due to customers 2,944,442 2,622,705 

Subordinated debt 65,484 82,016 

3,477,930 3,292,871 

The Bank’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and interest 

rates. 

Market risk exposures are supplemented by sensitivity analysis. There has been no change to the Bank’s exposure to market 

risks or the manner in which it manages and measures the risk. 


120 





36.6 Foreign currency risk 

The Bank is exposed to foreign currency risk due to cash flows denominated in foreign currencies that differ from the base 

currency used by the Bank when there is no matching between assets and liabilities denominated in the foreign currency. 

Portfolio exposure to foreign currency risk arises from portfolio sensitivity to fluctuations in exchange rate levels. The degree 

of foreign currency risk depends on the amount of open positions and the degree of potential change in foreign currency 

rates. 

The carrying amounts of the Bank’s monetary assets and liabilities per currency at the reporting period date were as follows: 

ASSETS 

36.6.1 Foreign currency sensitivity analysis 

The Bank is not exposed to foreign currency risk related to EUR due to the fact that Convertible Mark is pegged to Euro 

(1 EUR = KM 1.955830). Exposure is more prominent for USD and some other currencies. The following table outlines 

the Value-at-Risk (VaR). VaR is a calculation based on 99% reliability under which the Bank’s portfolio denominated in foreign 

currencies can be changed in a 10-day period due to changes in foreign currency exchange rates, as well as daily 

changes over the last 250 days of trading. 


KM EUR USD 

Other 

currencies 

Cash and cash equivalents 613,796 75,329 3,524 24,219 716,868 

Obligatory reserve at CBBH 266,540 - - - 266,540 

Placements with other banks - 118,733 83,271 23,913 225,917 

Loans and advances to customers 2,276,573 15,452 1 14,704 2,306,730 

Financial assets available-for-sale 3,176 123 - - 3,299 

Financial assets at FVTPL 5,886 149,320 3,691 - 158,897 

Financial assets held-to-maturity 42,076 49,861 46,153 - 138,090 

LIABILITIES 

Total 

3,208,047 408,818 136,640 62,836 3,816,341 

Due to banks 7,205 447,367 - 13,432 468,004 

Due to customers 1,364,860 1,393,308 136,440 49,834 2,944,442 

Subordinated debt - 65,484 - - 65,484 

As of 31 December 2010: 

1,372,065 1,906,159 136,440 63,266 3,477,930 

Total assets 2,890,519 465,407 129,625 53,183 3,538,734 

Total liabilities 1,170,232 1,940,450 130,511 51,678 3,292,871 

(in KM '000) VaR 

Currency 31 December 2011 31 December 2010 

USD 7 7 

CHF 1 5 

HRK




The following table details the Bank’s sensitivity to a 10% increase or decrease in foreign currency rates against the relevant 

local currencies. The sensitivity rate of 10% is used when reporting foreign currency risk internally to key management 

personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. 

(in KM '000) USD Effect (KM '000) CHF Effect (KM '000) 

36.7 Interest rate risk 

Interest rate risk reflects the possibility of loss of profit and/or erosion of capital due to a change in interest rates. It relates 

to all products and balances that are sensitive to changes in interest rates. This risk comprises two components: income 

component and investment component. 

The income component arises from a lack of harmonization between the active and passive interest rates of the Bank (interest 

on placements is fixed, interest for liabilities is variable, and vice versa). 

The investment component is a consequence of the inverted relationship between price and interest rate fluctuations of 

securities. 

The Bank strives to protect itself from interest rate risk by harmonizing the type of interest rate (fixed and variable), currency, 

related interest rate and the date of interest rate change for all products for which it concludes contracts (which are 

sensitive to interest rate changes). Any incongruity among the abovementioned elements results in exposure of the Bank 

to interest rate risk. 

36.7.1 GAP interest rate sensitivity analysis 

The aforementioned analysis enables the calculation of the Basis Point Value (value of gain or loss on a particular portfolio 

arising from a change in interest rate values by +50 Basis Points with a parallel displacement of the curve). 

In the instance of a change (increase) of interest rates by 50 Basis Points, the Bank would realize: 

• for EUR – loss in the amount of KM 6,357 thousand (2010: loss – KM 3,576 thousand), 

• for KM – loss in the amount of KM 765 thousand (2010: gain – KM 490 thousand), 

• for USD – loss in the amount of KM 180 thousand (2010: gain – KM 510 thousand), 

For other currencies there are no significant amounts. 

36.8 Credit risk 


2011 2010 2011 2010 

Profit or loss 122 23 (25) (88) 

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Bank. 

The Bank has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where 

appropriate, as a means of mitigating the risk of financial loss from defaults. 

The Bank’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of 

transactions concluded is spread amongst approved counterparties. Credit exposure is controlled by counterparty limits 

that are reviewed and approved by the risk management committee annually. 

The Bank does not have any significant credit risk exposure to any single counterparty or any company of counterparties 

having similar characteristics. The Bank defines counterparties as having similar characteristics if they are related entities. 

For the particular loan exposures that are either past due or impaired, the Bank could renegotiate the contracted terms. 

The carrying amount of such financial assets as of 31 December 2011 amounted to KM 78,868 thousand (2010: KM 

100,211 thousand). 

The carrying amount of financial asset presented in financial statements, decreased for losses based on impairments, represents 

the Bank’s maximum exposure to credit risk without taking account of the value of any collateral obtained. 


122 








Total 

gross 

carrying 

amount 

Unimpaired 

assets 

Individually 

impaired assets 

(total carrying 

amount) 

Allowance 

for 

impairment 

losses 

Total net 

carrying 

amount 

Cash and cash equivalents 716,868 716,868 - - 716,868 

Obligatory reserve at CBBH 266,540 266,540 - - 266,540 

Placements with other banks 225,917 225,917 - - 225,917 


Public sector 27,284 27,284 - - 27,284 

Corporate – large clients 989,600 858,807 130,793 (99,921) 889,679 

Corporate – SMEs 205,522 138,541 66,981 (62,482) 143,041 

Retail – individuals 1,233,615 1,144,627 88,988 (103,840) 1,129,775 

Retail – micro enterprises 118,301 115,502 2,799 (8,623) 109,679 

Other 7,272 7,272 - - 7,272 

Financial assets available-for-sale 3,299 3,299 - - 3,299 

Financial assets at FVTPL 158,897 158,897 - - 158,897 

Financial assets held-to-maturity 138,090 138,090 - - 138,090 


4,091,206 3,801,645 289,561 (274,865) 3,816,341 

Cash and cash equivalents 434,964 434,964 - - 434,964 

Obligatory reserve at CBBH 305,865 305,865 - - 305,865 

Placements with other banks 250,359 250,359 - (77) 250,282 


Public sector 48,351 48,351 - - 48,351 

Corporate – large clients 922,392 816,450 105,942 (57,170) 865,222 

Corporate – SMEs 187,084 151,780 35,304 (14,202) 172,882 

Retail – individuals 1,096,384 1,083,251 13,133 (48,253) 1,048,131 

Retail – micro enterprises 115,978 112,207 3,772 (7,375) 108,603 

Financial assets available-for-sale 2,241 2,241 - - 2,241 

Financial assets at FVTPL 164,784 164,784 - - 164,784 

Financial assets held-to-maturity 137,408 137,408 - - 137,408 

3,665,811 3,507,660 158,151 (127,077) 3,538,734




Credit exposure and collateral 


The Bank estimates the fair value of collateral based on recoverable amount of collateral in case that collateral needs to 

be liquidated under the current market conditions. Different types of collateral bear different level of risks for the Bank. 


Maximal credit risk exposure 

Net exposure 

Commitments / 

guarantees 

issued 

Estimated fair 

value of 

collateral 

Cash and cash equivalents 716,868 - - 

Obligatory reserve at CBBH 266,540 - - 

Placements with other banks 225,917 29,835 - 


Public sector 27,284 7,533 1,246 

Corporate – large clients 889,679 574,064 932,901 

Corporate – SMEs 143,041 81,183 151,538 

Retail – individuals 1,129,775 137,175 399,345 

Retail – micro enterprises 109,679 40,963 64,072 

Other 7,272 462 44 

Financial assets available-for-sale 3,299 - - 

Financial assets at FVTPL 158,897 - - 

Financial assets held-to-maturity 138,090 - - 


3,816,341 871,215 1,549,146 

Cash and cash equivalents 434,964 - - 

Obligatory reserve at CBBH 305,865 - - 

Placements with other banks 250,282 23,851 - 


Public sector 48,351 52,991 1,557 

Corporate – large clients 865,222 542,740 1,048,325 

Corporate – SMEs 172,882 107,359 209,151 

Retail – individuals 1,048,131 130,552 157,671 

Retail – micro enterprises 108,603 41,272 43,692 

Financial assets available-for-sale 2,241 - - 

Financial assets at FVTPL 164,784 - - 

Financial assets held-to-maturity 137,408 - - 

3,538,734 898,765 1,460,396 


124 





Value impairment and collection delays (for loans and advances to customers) 

31 December 

2011 

Undue + in late 

up to 30 days 

Neither value impairment nor maturity delays were identified for other items of financial assets. 


In late 

31-90 days 

In late 

91-180 

days 

In late 

181-270 

days 

In late over 

270 days 

Total 

Allowance for 

Total net carrying 

impairment 

amount 

losses 

Collateral 

for 

individually 

impaired 

assets 

Interest 

income for 

individually 

impaired 

assets 

Public sector 27,272 12 - - - 27,284 - 27,284 - - 

Corporate 561,873 435,245 35,131 47,742 122,403 1,202,394 (162,402) 1,039,992 59,521 315 

Retail 1,100,874 113,948 20,633 23,167 93,295 1,351,917 (112,463) 1,239,454 1,075 68 

TOTAL 1,690,019 549,205 55,764 70,909 215,698 2,581,595 (274,865) 2,306,730 60,596 383 

31 December 

2010 

Public sector 45,608 2,743 - - - 48,351 (27) 48,324 - - 

Corporate 541,039 497,057 56,614 14,766 - 1,109,476 (71,345) 1,038,131 63,106 372,636 

Retail 1,067,580 105,987 20,604 18,192 - 1,212,363 (55,628) 1,156,735 662 172,712 

TOTAL 1,654,227 605,787 77,218 32,958 - 2,370,190 (127,000) 2,243,190 63,768 545,348




36.9 Liquidity risk 


The ultimate responsibility for liquidity risk management lies with the Supervisory Board, which has created an adequate 

framework for the management of liquidity risk to be used for the management of long-, mid- and short-term needs for 

the management of the Bank’s liquidity. The Bank manages this type of risk by maintaining adequate reserves, loans 

from other banks and other sources of financing, by constantly monitoring the projected and actual cash flows and by 

comparing maturity profiles of financial assets and liabilities. 

36.9.1 Liquidity and interest risk tables 

The following tables detail the Bank’s remaining contractual maturity for its non-derivative financial assets. The tables have 

been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be 

earned on those assets except where the Bank anticipates that the cash flow will occur in a different period. 

Maturity for non-derivative financial assets 


Weighted 

average 

effective 

interest rate 

Less than 

1 month 

2-3 

months 

4 months 

to 

1 year 

2-5 years 5+ years Total 

Non-interest bearing - 717,864 - - - - 717,864 

Variable interest rate 

instruments 

Fixed interest rate 

instruments 


11.27% 325,729 184,055 802,318 980,500 322,613 2,615,215 

0.55% 506,435 19,500 150,633 116,831 11,183 804,582 

1,550,028 203,555 952,951 1,097,331 333,795 4,137,661 

Non-interest bearing - 436,628 - - - - 436,628 


instruments 


instruments 

11.24% 115,541 224,116 787,094 1,221,546 312,605 2,660,902 

0.55% 561,514 5,990 73,380 317,716 527 959,127 

1,113,683 230,106 860,474 1,539,262 313,132 4,056,657 


126 





The following tables detail the Bank’s remaining contractual maturity for its non-derivative financial liabilities. The tables 

have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the 

Bank can be required to pay. The table includes both interest and principal cash flows. 

Maturity for non-derivative financial liabilities 


The Bank expects to meet its other obligations from operating cash flows and proceeds of maturing financial assets. 


Weighted 

average 

effective 

interest rate 

Less than 

1 month 

2-3 

months 

4 months 

to 

1 year 

2-5 years 5+ years Total 

Non-interest bearing - 1,564,809 164 12 4 - 1,564,989 


instruments 


instruments 


4.77% 6,899 55,548 110,581 366,423 38,644 578,095 

4.01% 879 88,516 445,646 844,917 85,700 1,465,658 

1,572,587 144,228 556,239 1,211,344 124,344 3,608,742 

Non-interest bearing - 1,429,434 - 10 17 67 1,429,528 


instruments 


instruments 

4.77% 5,120 18,338 165,999 485,773 54,791 730,021 

4.21% 64,039 110,046 442,188 622,105 34,437 1,272,815 

1,498,593 128,384 608,197 1,107,895 89,295 3,432,364




36.10 Estimated fair value of financial assets and liabilities 


Fair value of financial instruments is the amount for which an asset could be exchanged, or a liability settled, between 

knowledgeable, willing parties in an arm’s-length transaction. If available, the fair value is based on quoted market 

prices. However, no readily available market prices exist for a significant portion of the Bank’s financial instruments. In 

circumstances where the quoted market prices are not readily available, the fair value is estimated using discounted cash 

flow models or other pricing techniques as appropriate. Changes in underlying assumptions, including discount rates 

and estimated future cash flows, significantly affect the estimates. Therefore, the calculated fair market estimates may not 

be realisable in a current sale of the financial instrument. 

It is the opinion of the Management of the Bank that the fair value of the Bank’s financial assets and liabilities are not 

materially different from the amounts stated in the balance sheets as at 31 December 2011 and 31 December 2010. 

The fair values of financial assets and financial liabilities are determined as follows: 

• The fair values of financial assets and financial liabilities with standard terms and conditions and traded on active 

liquid markets are determined with reference to quoted market prices. 

• The fair values of other financial assets and financial liabilities are determined in accordance with generally accepted 

pricing models based on discounted cash flows analysis using prices from observable current market transactions 

and dealer quotes for similar instruments. 

Analyses of financial instruments that are measured subsequent to initial recognition at fair value are grouped into Levels 

1 to 3 as follows: 

• Level 1 – fair value measurements for those derived from quoted prices in active market; 

• Level 2 – fair value measurements for those derived from inputs other than quoted prices included in level 1; 

• Level 3 – fair value measurements for those derived from valuation techniques that are not based on observable 

market data. 

As of 31 December 2011 and 2010, respectively, the Bank’s financial instruments related to Level 1 such amounting to: 

Financial assets at FVTPL: 

The Bank had no Level 2 and 3 financial instruments as of 31 December 2011 and 2010, respectively. 

37. APPROVAL OF THE FINANCIAL STATEMENTS 

These unconsolidated financial statements were approved by the Management Board on 28 February 2012. 

Signed on behalf of the Management Board: 


– Bonds 153,011 163,120 

– Shares / securities 5,886 1,664 

Financial assets available-for-sale 3,299 2,241 

162,196 167,025 

President of the Management Board Head of Finance division 

Michael Georg Müller Mar ko Jur je vi} 


Editor: Raiffeisen BANK d.d. Bosna i Hercegovina 

Design & graphics: McCann-Erickson Sarajevo 

Photos: Irfan Red`ovi} 

Sources of the texts 

on the cultural and 

historical heritage: The FB&H Tourist Community 

http://bs.wikipedia.org 

http://www.nota.tavla.ba 

http://www.bhtourism.ba 

http://www.vinskacesta.ba 

www.hercegovina.ba 

http://www.turizam.mostar.ba 

http://jajcetourism.com 

http://jajceportal.com 

http://www.kostajnica.com 

http://www.bistrobih.ba 

www.panonika.ba 

www.zemuzej.ba 

www.sarajevo.ba 

http://www.turizamrs.org 

http://www.opstinavisegrad.com

Notes to the unconsolidated financial statements - Raiffeisen Bank

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