KB prezent. angl - Komerční banka

Certain derivative transactions, while providing economic hedges under the Bank’s risk management positions, do not qualify for
hedge accounting and are therefore treated as derivatives held for trading with fair value gains and losses reported in the profit and
loss statement line Net profit or loss on financial operations.
(o) Regulatory requirements
The Bank is subject to the regulatory requirements of the Czech National Bank. These regulations include limits and other restrictions
pertaining to minimum capital adequacy requirements, classification of loans and off balance sheet commitments and provisioning to
cover credit risk associated with the Bank’s clients, liquidity, interest rate and foreign currency position.
(p) Extraordinary income and expenses
Extraordinary income and expenses represent income or expense arising from extraordinary non-recurring events that do not relate
to the principal business of the enterprise.
(q) Share capital and treasury stock
Where the Bank purchases its own share capital or obtains rights to purchase its share capital, the consideration paid including any
attributable transaction costs net of income taxes is shown as a deduction from total shareholders’ equity. Gains and losses on sales
of own shares are recorded in equity.
4. Net interest income
Net interest income comprises:
CZK million 2003 2002 2001
Interest income
– Loans and advances to financial institutions 8,728 10,272 11,790
– Loans and advances to customers 9,625 13,263 14,092
– Bonds, treasury bills 1,732 1,922 2,805
Total interest income 20,085 25,457 28,687
Interest expense
– Amounts owed to financial institutions (1,854) (2,824) (3,427)
– Amounts owed to customers (4,534) (7,843) (9,234)
– Certificated debts (1,735) (2,176) (2,461)
Total interest expense (8,123) (12,843) (15,122)
Net interest income 11,962 12,614 13,565
Interest income also includes accrued interest income from hedging financial derivatives of CZK 3,346 million (2002: CZK 3,197 million,
2001: CZK 2,672 million) and interest expense from hedging financial derivatives of CZK 1,615 million (2002: CZK 2,198 million, 2001:
CZK 2,325 million). Net interest income arising from these derivatives amounts to CZK 1,731 million (2002: CZK 999 million, 2001:
CZK 347 million).