dsk bank presentation 2007

7/30/2019 DSK BANK Presentation 2007

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DSK Bank

in the Bulgarian Banking System


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Bulgarian Banking SystemIn 2007 the Bulgarian banking system enjoyed considerable growth:

Assets increased by 40% compared to year-end 2006 and reached EUR 30,211 million

Profit accounted to EUR 584 million constituting 41.6% growth

Deposits increased by 36.9% totaling EUR 20,927 million

Loans raised by 63.9% yoy and amounted to EUR 19,207 million

1.Asset growth of the Bulgarian banking system is mainly financed by the steadily increasing depositbase with prevailing share of the open-ended deposits from non-financial institutions and other clients.

2. Loans to non-financial institutions and other clients constitute the main share in the banks assetsat 62.74%. Mortgages represent 44%, whereas consumer loans account for 56% of loans toindividuals.

3. Credit expansion is deemed to be constrained by the

additional restrictive measures imposed by Bulgarian

National Bank with regards to the minimum reserve

Requirements of 12% of the deposit base.

4. Rate of banking penetration is shown

on the chart.

86%

77%

64%

50%

47%43%

36%

27%

61%53%

46%

35%

0%

20%

40%

60%

80%

100%

2003 2004 2005 2006

/ / /

Banking Penetration

Assets/

GDP

Loans/

GDP

Deposits/

GDP


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Bulgarian Banking SystemThe Bulgarian banking market is highly concentrated:The combined share of the top 5 Bulgarian banks, i.e. Unicredit Bulbank, DSK Bank, UBB,Raiffeisenbank, Eurobank EFG in the total banking system amounts to:

57% of the Assets

56% of Deposits

59% of Loans

The interest rates of loans are expected to follow the levels observed in the EUcountries, with a slight increase due to:

- higher risk profile of Bulgarian clients- higher price of global liquidity

- the sub-prime mortgage crisis in the USA, making investors more cautious

The credit portfolio of the banking system is of high quality as of December 2007: Standard - 95.94%

Watch - 0.89%

Doubtful - 0.36%

Loss - 2.81%


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Bulgarian Banking System 2007

3

1

3

1

R

AN

K

857

2,141

666

1,914

DSK Bank

1,3161,767

Corporate Loans

296900Retail Loans

1,2391,826

Corporate Deposits

6331,415Deposits from households

and individuals

RaiffeisenbankBulgaria

UnicreditBulbank

Products

Figures are in EUR million


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Bulgarian Banking System 2007

LoansDepositsProfitAssetsBG Banks /EUR million/

1,6121,873493,057Raiffeisenbank Bulgaria

2,6673,2411304,635Unicredit Bulbank

2,9982,580954,013DSK Bank

Figures are in EUR millionMethodology: Bulgarian National Bank


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Performance IndicatorsEUR million 2007 2006 2005 Growth

(IFRS, unconsolidated) Y/Y%

Total Assets 4,013 3,098 2,320 29.5%

Deposit Portfolio 2,567 2,076 1,711 23.7%

Loan Portfolio 2,902 1,800 1,479 61.2%

Profit after tax 95 89 67 6.7%

Shareholders equity 496 374 288 32.6%

Market share 2007 2006 2005

Total assets % 13.3 14.4 13.6

Total deposits % 12.3 13.5 14.8

Total loans % 15.6 16.5 16.2

Methodology: IFRS


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Key Ratios

3.33.32.22.8ROAA

29.127.922.8ROAE

45.238.36735.4C/I

20052006Banking

System2007%


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Key Points of Activity In 2007 DSK Bank remained a leader in the retail sector with a 41% share of the total retailcustomers in Bulgaria

This sector receives DSKs special attention due to its great potential and thetraditionally strong presence of DSK

The provision of traditional services represents the core of DSKs business, the sharesof the various services are as follows:

retail banking 64%

corporate banking 17%

treasury 19%

Strong emphasis is given to Corporate Banking, in order to further widen DSKs presencein the sector. Services include:

package programs comprising traditional banking services and products provided bysubsidiary companies, to better meet customers specific needs

DSK is a servicing bank for 1/3 of Bulgarian municipalities. It acts as a partner and

mediator in utilization and management of the EU structure and cohesion funds

DSKs priority is the provision of consultancy services to municipalities, includingselection of appropriate programs, preparation of project quotations and financial planning.


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Key Points of Activity The bank is actively financing Small and Medium Enterprises (SMEs), as evidenced by its

participation in:

global loan of EUR 30 million from EIB intended to finance mid- and long-term investmentprojects of SMEs

credit line from EBRD to finance energy efficiency projects and production of energy fromrenewable sources

The issuance of bank cards is on an increase:

the number of newly issued cards in 2007 increased by 15%

the total number of issued cards is 1.51 million

DSKs share in card issuance is 9%

The international operations is a dynamically developing area, which amounted to EUR

693 million at the end of June 2007, compared to EUR 1.14 billion at the end of 2006.

Strong emphasis is given to trade financing: at the end of June 2007 trade financing amounted to EUR 22 million

target areas are the EU and Asia, in accordance with the national trade relationsdirectives


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Main Business LinesDEPOSIT PORTFOLIO: EUR 2,567 million as of year-end 2007 :

Retail deposits: EUR 1,905 million, representing 20.3% market shareGrowth 2007 vs 2006: 20.5%

Company deposits: EUR 487 million, representing 6% market share

Growth 2007 vs 2006: 33%

Budget & FI deposits: EUR 173 million

Growth 2007 vs 2006: 34%

Deposits portfolio (in EUR million)

Retail

Deposits, 1905

Budget&FI

deposits, 173Company

Deposits, 487

Retail Deposits

Company Deposits

Budget&FI deposits


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Main Business LinesLOAN PORTFOLIO: EUR 2,902 million as of year-end 2007:

Retail loans: EUR 2,133 million, representing 32.9% market share

Growth 2007 vs 2006: 67%

Consumer loans: EUR 1,281 million

Market share: 36%

Mortgage loans: EUR 858 million

Market share: 29%

Company loans: EUR 875 million

Market share 7%

Growth 2007 vs 2006: 67%

Loans portfolio (in EUR million)

Consumer

Loans, 1281

Mortgage

Loans, 858

Company

Loans, 875

Consumer Loans

Mortgage Loans

Company Loans


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Innovative Banking Services

DSK Direct: e-Banking live from 2005

Combining various electronic channels and providing first class service as well ashigh level of security:

Call Center

Internet

SMS notification

Multi Cash: banking application for corporate clients active from 2005

Offering remote bank account management and local/international payments

execution

Private Banking: operating from 2005

Special services and individual approach to selected customers


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ResourcesOwn Authorization Card Center: active from 2005

Issuance of new debit/credit cards and online transaction processing

Total number of issued electronic cards as of 2007 year-end 1,510 thousand

POS and ATMs

As of year-end 2007 there were 789 ATMs and 2,397 POS terminals

Branch Network: the largest in Bulgaria

366 branches and offices

917 representative offices

Number of customers: circa 3.63 million; 3.56 million of them individuals

Headcount 3,719 employees

dsk bank presentation 2007

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