KB prezent. angl - Komerční banka

078 ➔079
Unconsolidated Financial Statements
under CAS
9. Reserves and provisions
Set out below is a summary of provisions and reserves:
CZK million Balance at Charge Use Foreign Balance at
1 January 2003 and release exchange effect 31 December 2003
Provisions
– Loans 11,583 3,351 9,213 (322) 5,399
– Tangible fixed assets 917 11 273 0 655
– Intangible fixed assets 121 2 69 0 54
– Equity investments 1,172 92 24 0 1,240
– Other receivables 290 49 47 5 297
Total provisions 14,083 3,505 9,626 (317) 7,645
Reserves
– Taxes 0 3,639 2,187 0 1,452
– Loans and guarantees 8,861 1,109 4,758 11 5,223
– Other 1,752 1,305 1,553 (11) 1,493
Other reserves 10,613 6,053 8,498 0 8,168
Set out below is an analysis of reserves and provisions for loans and guarantees:
CZK million Balance at Creation Use Foreign Balance at
1 January 2003 and release exchange effect 31 December 2003
Provisions for classified loans 10,650 3,298 8,587 (322) 5,039
of which: banks 11 8 4 0 15
of which: customers 10,639 3,290 8,583 (322) 5,024
Provisions for debtors in bankruptcy 933 53 626 0360
of which: banks 0 0 0 0 0
of which: customers 933 53 626 0 360
Total provisions 11,583 3,351 9,213 (322) 5,399
of which: banks 11 8 4 0 15
of which: customers 11,572 3,343 9,209 (322) 5,384
Total reserves 8,861 1,109 4,758 11 5,223
Reserves and provisions 20,444 4,460 13,971 (311) 10,622
With effect from 1 January 2002, the Bank has ceased to create reserves for standard on balance sheet loans and off balance sheet
exposures. The Bank records non-tax deductible reserves for off balance sheet exposures rated as watch to loss. Reserves for off
balance sheet exposures that meet the criteria set out in the Provisioning Act (guarantees issued by the Bank for loans advanced by
other banks) are allowable for tax purposes. Pursuant to the requirement in the Provisioning Act, the Bank gradually releases a tax
deductible reserve established prior to the 2001 year-end such that the balance of this reserve is reduced at no less than 25 percent
each year to ensure its full release in the accounting period ending 31 December 2005. As of 31 December 2003, the balance of the
general provision for loan losses is CZK 4,010 million.
General provisions for loan losses
The Bank’s loan portfolio includes a number of risks that cannot be specifically identified as such.
As of 31 December 2003, the Bank maintains the loan loss general provision of CZK 4,010 million (2002: CZK 6,546 million) to cover
risks which may be present in the loan portfolio as of that date but which cannot be allocated to individual exposures. These are
principally risks associated with the portfolio of loans advanced to corporate customers with a significant concentration of industry risk
and the portfolio of consumer, mortgage and overdraft loans advanced to retail customers. This general provision also covers
management’s assessment of the estimated risk of losses in connection with a potential impairment of the portfolio of non-performing
loans due to economic cycles and existing weaknesses in the legal framework regarding the enforcement of creditor rights.