Letno poročilo 2007 - UniCredit Banka Slovenija dd

and receivables to banks were lowered by230.50 million euros because of limitedrisk/return profile. Consequently, total assetsdecreased in 2007 by 54.60 million eurosto 2,132.69 million euros.In line with international practice, the localInternational Markets unit takes interestrate positions via interest rate swaps (IRS).The interest rate swap market normallypays higher interest rates than the bondmarket and additionally consumes minimalliquidity. Bonds are primarily bought forcomplying with the liquidity regulation ofthe Bank of Slovenia or with the intentionto run a credit risk position, which involvesthe reduction of the interest rate riskembedded in the bond via payer IRS. Foraccounting reasons, it is preferable to runsuch positions in the trading portfolio.Consequently, also in 2007, the financialassets held for trading significantlyincreased by 71.84 million euros to 189.26million euros. The position includes, inaddition to debt instruments, the positivemarket value of financial derivatives, whichaccounted for 54.26 million euros (2006:24.13 million euros) by the end of the year.This increased market value is the result ofan increase in derivatives business, whichmainly is customer driven, along with astrong increase in the euro yield curve in2007.Available for sale financial assets werereduced in 2007 from 157.86 million eurosto 115.38 million euros. The positionconsists of the Bank’s equity model bookinvestment as well as convergence positionsthe bank entered into ahead of the eurointroduction in Slovenia.Loans and receivables to non banks roseby 328.60 million euros (2006: 258.76million euros) and reached 1,595.23 millioneuros by the end of the year. Out of this,1.084 million euros relates to the corporate10090807060504030201003% 3%17%58%7%5%9%Assetssegment, the remaining 511 million eurosto the retail segment. The high growth in theretail segment is the result of the increasedfocus of the Bank on the retail business.Loans and receivables to banks decreasedfrom 378.78 million euros in 2006 to148.16 million euros in 2007.Within the held to maturity investments,UniCredit Banka Slovenija d.d. reported in2006 its holdings in depository receiptsissued by the Bank of Slovenia. With theabolishment of this instrument after theeuro introduction, the Bank did not allocateassets to the held to maturity portfolio.The increase on the asset side was mainlyfinanced by financial liabilities measured7%75%5%9%0%1% 1%Share 2006 Share 2007OTHERLOANS TO BANKSLOANS TO CUSTOMERSHELD TO MATURITYAVAILABLE FOR SALEHELD FOR TRADINGCASH AND OTH. BAL. WITH CBat amortized cost, which decreased from1,999.90 million euros in 2006 to 1,904.25million euros by the end of 2007. Loans anddeposits from customers increased from594.16 million euros to 721.54 millioneuros whereas the loans and deposits frombanks decreased at the same time from1,405.74 million euros to 1,182.71 millioneuros or by 16.2 %.Financial liabilities held for trading morethan doubled in 2007 to 50.45 millioneuros. The position comprises solely ofthe negative market value of derivativeswhich is a consequence of customer drivenbusiness.The shareholder’s equity increased inUniCredit Bank · 2007 Annual Report 123