Annual Report 2012 - Coop Pank€¦ · Report 31.12.2012 Reporting period 01.01.2012 - 31.12.2012...

Annual Report 2012

ConsolidatedAnnualReport2012

Business name: Public Limited Company (AS) Eesti KrediidipankLegal address, location: Narva road 4, 15014 Tallinn, Republic of EstoniaRegistry code: 10237832Telephone: +372 669 0900Fax: +372 661 6037E-mail: [email protected]: www.krediidipank.eeAuditor: AS Deloitte Audit EestiBeginning and end of financial year: 01.01.2012-31.12.2012

Attached documents:Independent certified auditor´s reportProposal for profit allocation

Annual Report of Krediidipank Group 2012 2

Table of contents

Management Board declaration 3General information 4

Management Report 5Structure of the Krediidipank Group as at 31.12.2012 6Overview of activities and significant events 7Main financial ratios 11

Consolidated Financial Statements of the Krediidipank Group 12Balance sheet 13Income statement 14Statement of changes in equity 15Cash flow statement 16Notes to the financial statements 17

Attached documents: 55Independent certified auditor´s report 56Proposal for profit allocation 57


Management Board declaration

The Management Board of AS Eesti Krediidipank has prepared the Annual Report for the financial year ended on 31.12.2012 which consists of:• General information;• Management report;• Consolidated financial statements and notes to the financial statements

and accompanied by:• Independent certified auditor´s report;• Proposal for profit allocation approved by the Management.

Consolidated financial statements have been prepared in accordance with the Interna-tional Financial Reporting Standards (IFRS), as adopted by the European Commission, and give true and fair view of the financial position, performance and cash flows of AS Eesti Krediidipank. Information disclosed in the Annual Report is true and complete.

Material circumstances that have an effect on the valuation of assets and liabilities and became evident before the preparation of this report on 28.02.2013 are recorded in the financial statements.

This Annual Report will be presented to the shareholders for approval at the General Meeting of Shareholders in April 2013. Previous annual report, for the financial year 2011, was approved at the General Meeting of Shareholders on 30.03.2012.

Valmar MoritzChairman of the Board

Uku TammaruVice Chairman of the Board

Marina LaaneväliMember of the Board

Marju ArrasMember of the Board

Janek UiboupinMember of the Board


General information

Business name AS Eesti KrediidipankRegistered 15.03.1992 in TallinnAddress Narva road 4, Tallinn 15014Registry code 10237832 (Commercial Registry of Republic of Estonia)Entry date 19.08.1997Telephone + 372 669 0900Fax + 372 661 6037SWIFT/BIC EKRDEE22e-mail address [email protected] site www.krediidipank.ee

Auditor AS Deloitte Audit Eesti (activity licence no. 27)Registry code of the auditor 10687819 (Commercial Registry of Republic of Estonia)Address of the auditor Roosikrantsi 2, Tallinn 10119Balance sheet date of the Report

31.12.2012

Reporting period 01.01.2012 - 31.12.2012Reporting currency euro (EUR), in thousands

Members of the Council Andrus Kluge, Chairman of the Council, as of 14.04.2012Timur Dyakov, as of 14.04.2012Aleksandr Evnevich, as of 14.04.2012Boris Belyaev, as of 14.04.2012Ain SoidlaPavel Gorbatsevich, until 13.04.2012Alexey Sytnikov, until 13.04.2012Anton Naumlinsky, until 13.04.2012Nikita Monakhov, until 13.04.2012

Members of the Management Board

Valmar Moritz, Chairman of the BoardUku Tammaru, Vice Chairman of the BoardMarina LaaneväliMarju ArrasJanek UiboupinAndrus Kluge, until 13.04.2012Ruslan Dontsov, until 13.04.2012

Entities belonging to the Group

AS Eesti Krediidipank, parent companyKrediidipanga Liisingu ASAS MartinozaÄigrumäe Kinnisvara OÜOÜ Murru-Murikatsi Põllumajandussaadused

For the purposes of this report, the following definitions will be used:• “Parent company” - AS Eesti Krediidipank, hereinafter also referred to as “Eesti

Krediidipank”, “Krediidipank” and “bank”;• “AS Eesti Krediidipank Group” - parent company AS Eesti Krediidipank and its

subsidiaries AS Martinoza, Krediidipanga Liisingu AS, Äigrumäe Kinnisvara OÜ and OÜ Murru-Murikatsi Põllumajandussaadused, hereinafter also referred to as “the Group”, “the AS Eesti Krediidipank Group”, ”Eesti Krediidipank Group”, “Krediidipank Group” and “the Consolidation Group”.

Management Report2012


Structure of the Krediidipank Group as at 31.12.2012

The following subsidiaries are incorporated under the AS Eesti Krediidipank consolida-tion group:

Name of the Company

Address Field of activity Registry codeReg. date

Participation

AS Eesti Krediidipank

Narva road 4 Tallinn

banking 1023783219.08.1997

Parent com-pany

KrediidipangaLiisingu AS

Narva road 4 Tallinn

leasing 1007924427.08.1996

100%

AS Martinoza Narva road 4 Tallinn

real estate management

1007810928.10.1996

100%

Äigrumäe Kinnisvara OÜ

Narva road 4Tallinn

real estate activities

1138660010.05.2007

AS Martinoza participation 100%

OÜ Murru-Murikatsi Põllumajandus-saadused

Narva road 4Tallinn

agricultural production

1082878603.12.2001

AS Martinoza participation 100%

Pursuant to the Credit Institutions Act, the consolidation group of a credit institution comprises the parent company and its subsidiaries which are credit institutions, financial institutions or ancillary undertakings. In 2012, the Krediidipank Group comprised AS Eesti Krediidipank, Krediidipanga Liisingu AS, AS Martinoza, Äigrumäe Kinnisvara OÜ and OÜ Murru-Murikatsi Põllumajandussaadused.

All companies are registered in the Commercial Registry of Republic of Estonia, the parent company is AS Eesti Krediidipank.

AS Martinoza, a subsidiary of AS Eesti Krediidipank, acquired in March 2012 100% of the shares of OÜ Murru- Murikatsi Põllumajandussaadused, as a result of which OÜ Murru-Murikatsi Põllumajandussaadused became 100% subsidiary of AS Martinoza.

With an entry to the Commercial Registry on 26.07.12, AS Äigrumäe Kinnisvara was transformed into Äigrumäe Kinnisvara OÜ; transactions of the company being transformed were deemed to be concluded on the account of the transformed company as at 01.01.2012.The aforementioned group companies are fully consolidated using the „line by line“ method where all the intra-corporate receivables and liabilities, transaction between group companies and income and expenses were eliminated. Consolidation group in consolidation according to IFRS does not differ from the consolidation group definition for the purposes of Estonian Credit Institutions Act.

The Rein Otsason Foundation, established on 27.04.2006, was an institution outside the consolidation group with the purpose of conducting charity work and sponsor the studies and scientific research of young people. Based on the merger contract, The Rein Otsason´s Life´s Work Foundation (the acquiring foundation) and SA Rein Otsason Foundation (foundation to be acquired) were merged. Entry in the Commercial Registry took force on 12.12.2012 and the name of the merged foundation is The Rein Otsason Foundation (reg. Code 90010344). Purpose of the foundation is commemoration and support of the life´s work of Rein Otsason – one of the most renowned figure in Estonian banking and finance, scientist and politician.


Overview of activities and significant events

Main field of activity of Eesti Krediidipank Group is banking. Krediidipank offers banking products and services to both private persons and companies in 18 bank offices and branches all over Estonia, plus three offices in Latvia and offices in 15 Estonian Road Administration regional offices. The net of offices of Krediidipank covers 11 Estonian cities: Tallinn, Tartu, Pärnu, Narva, Viljandi, Võru, Jõhvi, Rakvere, Kuressaare, Maardu and Paldiski. Offices in Road Administration regional offices are partly situated alredy in the aforementioned cities, but offices in Saue, Rapla, Paide, Haapsalu, Põlva and Jõgeva will be added to that list.

Main focus of the activities in 2012 was activating loan and leasing activities. Thus issuance of housing loans was initiated with the interest rates from 1,35% plus 6-month Euribor. According to press, it was the most favourable housing loan interest in the Spring. Leasing was offered in cooperation with several car selling companies, both private and business clients were offered lease products with low down payments.

The purchase of the loan portfolio of AIB Estonian branch by Krediidipanga Liisingu AS played a significant role in increasing the group loan portfolio. As a result of the activities Group´s loan portfolio increased by almost 13% as compared to the previous year and amounted to 119.8 million euros by the end of 2012.

Significant decrease in the interest rate levels occurred during 2012 in the deposit market, mainly due to the interest policy of the European Central Bank. For example, in January 2012 Krediidipank offered interest rate of 2% for euro deposits with maturity in 12 months; in December, the interest rate of a contract concluded under the same terms had fallen to 1%.

As at the end of year 2012, volume of the Group´s deposit portfolio amounted to 254.4 million euros in total. Volume of deposits in Group´s portfolio decreased over 40% during the year, deposits were mostly decreased by private companies, decrease of the private persons deposits was not remarkable.

Usage of electronic means of payment and the total number of customers have increased during the year. By the end of the year, Krediidipank had concluded over 27 200 (26 500 in 2011) internet banking contracts, in addition over 8 200 (7 000 in 2011) customers use the SMS service and approximately 17 500 (17 000 in 2011) credit cards are in use. Total number of customers of the Group was approximately 83 200 ( 81 900 in 2011).

As at 31 December 2012, balance sheet of the Group amounted to 307.1 million euros. A year before, the Group´s consolidated balance sheet was 478.3 million euros. Decrease in the balance sheet total was mainly due to the increase in the volume of companies deposits.

As a result of the business activity of Krediidipanga Liisingu AS, lease portfolio increased from 9.2 million eurot to 25.6 million euros. Lease projects worth 3.6 million euros were financed during the year and 4.3 million euros were reimbursed ahead of time. Profit of the company for the financial year 2012 was approximately 0.5 million euros.

Main investments in 2012 were used for acquisition of real estate, private cars and machines. Investment portfolio was comprised of 79% real estate, 14% private cars and vans, 4% machines and other equipment, 2% rolling stock and 1% other objects.


The activity of AS Martinoza in 2012 can also be considered successful: revenue increased from 1.9 million euros to 2.3 million euros i.e. approximately 21%, balance sheet total increased from23.8 million euros to 28.6 million euros i.e.20% as compared with the previous year.

The average vacancy rate in the business real estate segment remained stable during the year and the office buildings located in the suburbs required the main attention. The occupancy rate of the object located on Narva road 4, Tallinn, was 100% assured at times. AS Martinoza started to realize several real estate objects which were acquired during previous years and a number of objects under renovation or development became ready for sale.

Significant events in 2012

17.01.2012Krediidipanga Liising acquired the Estonian loan portfolio of AIB bank. On January 13th, the employees of the Estonian branch of Allied Irish Bank, p.l.c. (AIB) transferred the loan portfolio of the Estonian branch of AIB together with all the related documents to the representatives of Krediidipanga Liisingu AS, a subsidiary of Krediidipank. The aforementioned transaction settled the purchase-sale transaction of the loan portfolio of AIB Estonian branch which was concluded between the parties a week earlier. Total volume of the credit agreements transferred to Krediidpanga Liising was approximately 25 million euros. 14.03.2012Bank teller of Krediidipan is the best customer service provider in Tartu. On March 14th, Velgi Jaansalu – bank teller and loan administrator in the bank´s Eden office was announced as the best customer service provider in Tartu. Velgi Jaansalu became third among 235 contestants in the nation-wide competition „Estonian best customer service provider 2012“.

27.03.2012Circle of shareholders of Krediidipank changed. The Cypriot companies owning approximately 44% of Krediidipank´s shares exited the circle of shareholders of Krediidipank at the end of March. Bank of Moscow is once again the biggest shareholder of the Bank.

30.03.2012Krediidipank has new Council. The General Meeting of shareholders of Krediidipank which took place on March 30th, elected new Council for the bank. From the current Council members, Ain Soodla was elected also to the new council. New members of the Council are Aleksandr Evnevich, Boris Belyaev, Timur Dyakov and the former bank´s Chairman of the Board Andrus Kluge.

16.04.2012New Chairman of the Board in duty. Council of Krediidipank authorized the new Chairman of the Management Board Valmar Moritz to office. Until now Mr. Moritz filled the position of the Vice Chairman of the Management Board of Krediidipank. Former Chairman of the Board Andrus Kluge started working in the Council of Krediidipank.

03.05.2012Krediidipank´s office in Magistral Centre was reopened. After substantial reconstruction Krediidipank opened its office in the Magistral Centre in Tallinn.


11.05.2012One of three offices in Tartu was closed. The last work day of the Akadeemia office was on May 11th. The offices in Vana-Kaubamaja and Eeden Centre in Tartu continue servicing the clients.

26.05.2012The bank celebrated its 20th year of activity. Krediidipank celebrated its 20th jubilee with a formal reception in the recently opened Seaplane Harbour.

26.05.2012The Rein Otsason Foundation gave out scholarships. The Rein Otsason Foundation gave out the traditional 2000-euro scholarships for the best young scientist. This time the scholars were Priit Jeenas from Graduate School of Economics in Barcelona, Evelin Viilmann from Tallinn University of Technology and Kärt Rõigas from the University of Tartu.

03.09.2012Bank modernized the office in Maardu. On September 3rd, Krediidipank opened the fully renovated Maardu office.

20.09.2012Bank statements can be approved with digital stamps. As of 20th September, it is possible to obtain a digital stamp for the bank statements in the Krediidipank internet bank. Digital stamp approves that the statement has been obtained from the bank in the same form as the viewer sees it and it has not been modified or prepared by anybody else.

30.10.2012Housing loan without contract fee. 0 euros is the fee Krediidipank now bills for contract fees from its clients who have decided to take a housing loan. Thus, formalising a loan is now up to 640 euros cheaper than before. Housing loan interest starts from 1.5% plus 6-month Euribor.

11.12.2012Christmas presents for children. For the fourth consecutive year employees of Krediidipank in collaborations with Dharma Charity Foundation have prepared 100 Christmas presents for children, ageing from 1 to 17, from least privileged families.

Development Trends of Krediidipank Group in 2013

Developments in the European Union indicate that the debt crisis is not over yet and all necessary steps for solving the crisis have not been taken.

So far Estonia has demonstrated immense adaptability – decisive cutting of state expenditure and keeping government budget balance has saved us from getting into debt ourselves.

Krediidipank has survived the current low point of the crisis, has not needed the help of the state, tax payers nor the shareholders. We as well have narrowed down our activities in order to focus on the essential – financing business – as we believe business creates additional value, turns people´s work and natural resources into goods and services to consume. The fact that a bank is an enterprise´s partner allows it to obtain greater insurance for developing its product or service and designing its sales strategy.


True, a bank finances also private consumer – home buyers, repairers, car leasers as well as low volume consumption. But the fact that the price of state´s successful subsistence has been the decrease in people´s income and general stress of subsistence, is something also the bank has to take into consideration when issuing loans and evaluating them subsequently.

Therefore, in the started year we focus our attention to three main activities:• financing businesses;• effective use of resources;• organising product portfolio.

This is the only way we can fulfil our role of a bank as the heart of the economy – by creating actual added value to our clients, shareholders as well as employees.


Main financial indicators and financial ratios of Krediidipank Group

In thousands of eurosGroup Group

2012 2011As at the end of the period*Balance sheet total 307 149 478 344Shareholder´s equity 24 479 22 281Share capital 25 001 25 001Number of shares of AS Eesti Krediidipank (pcs) 39 117 600 39 117 600Contractual balance of loan and lease receivables 127 262 112 831Deposits 253 577 425 510For the periodProfit (-loss) 2 155 -2 340Total revenue 17 837 14 810Net interest income 6 647 3 740Interest income 10 695 9 228Interest expense 4 048 5 488

Financial ratios (year-on-year)Return on Equity ROENet profit/shareholder´s equity 9,2% -9,8%Return on Assets ROANet profit/assets 0,5% -0,6%Equity multiplier EMTotal assets/shareholder´s equity 16,8 17,2Profit margin PMprofit/total revenue 12,1% -15,8%Asset utilisation AUTotal revenue/assets 4,5 % 3,6%Earnings per share EPSNet profit per common share eligible for dividends 0,06 € -0,06 €

Number of account holders 83 172 82 027Number of service locations 36 35

* Ratios have been calculated based on average balance sheet indicators for the period

Dividend policy

Bank´s shareholders have determined that at least 20% of distributable net profit will be distributed as dividends during the period 2012-2014. Dividends shall not be paid if the retained earnings are less than 200 thousand euros.

Since there is no available shareholder´s equity as at 31.12.2012, the Management Board does not propose to distribute profit as dividends.

FinancialStatements 2012


Balance sheets of AS Eesti Krediidipank Group

In thousands of eurosAssets Note 31.12.2012 31.12.20111. Cash and receivables from credit institutions 109 628 286 201

incl. cash 3 2 434 2 129Deposits with the central banks 3,4,7,8 66 438 125 094Deposits with the credit institutions 3,5,7,8 40 756 158 978

2. Derivative instruments 7,8 0 1 4863. Financial assets measured at fair value through profit or loss

7,8,14 38 014 44 918

4. Available-for-sale financial assets 7,8,15 54 1 4935. Loans and other similar receivables 6,7,8,9 119 805 106 2466. Financial assets held to maturity 7,8,16 8 086 8 5897. Tangible fixed assets 18 6 548 6 6538. Goodwill 17 4 09. Investment property 19 15 187 6 46510. Other assets 20 9 823 16 293Total assets 307 149 478 344

Liabilities 1. Liabilities to Central Bank 21 10 073 02. Derivative instruments 71 13. Deposits and other financial liabilities 270 573 452 288

incl. deposits of credit institutions 22 1 976 10 558deposits of customers 23 254 386 427 176subordinated loans 24 13 390 13 391other financial liabilities 821 1 163

4. Other liabilities 25 1 953 3 774Total liabilities 282 670 456 063

Shareholders´ equity 1. Share capital 25 001 25 0012. Share premium 174 1743. Mandatory reserve 1 908 1 9054. Reserves for Changes in Foreign Exchange rates -130 -1725. Retained earnings/accumulated loss -4 629 -2 2876. Profit/loss for the financial year (+/-) 2 155 -2 340Total shareholders´ equity 24 479 22 281Total liabilities and shareholders´ equity 307 149 478 344


Income statements of AS Eesti Krediidipank Group

In thousands of euros Note 2012 20111. Financial and operating income and expenses 9 338 5 5631.1. Interest income 27 10 695 9 2281.2. Interest expense (-) 28 -4 048 -5 488 Net interest income 6 647 3 7401.3. Income from dividends 1 01.4. Fee and commission income 29 3 519 3 3681.5. Fee and commission expense (-) 30 -942 -907 Net fee and commission income 2 577 2 461

1.5.Realised profit/loss from financial assets and liabilities, not recorded in fair value, net (+/-)

0 210

1.6.Net profit/loss from financial assets and liabilities heldfor trading (+/-)

31 11 -28

1.7. Net foreign exchange gains/losses (+/-) -4 -11.8. Net profit/loss from disposal of non-current assets (+/-) 1 -41.9. Other operating income 32 3 237 2 0041.10. Other operating expenses (-) 33 -3 132 -2 8192. Administrative expenses -7 010 -6 3522.1. Wages and salaries (-) 34 -5 377 -4 7432.2. Administrative and general expenses (-) 34 -1 633 -1 6093. Depreciation of non-current assets (-) 18 -509 -4574. Impairment of assets (+/-) 336 -1 0864.1. Loans 12 373 -1 0424.2. Available-for-sale financial assets 0 -264.3. Tangible fixed assets 18 -29 -124.4. Other assets -8 -65. Profit/loss from continued operations, before income tax 2 155 -2 3326. Income tax expense on continued operations (-) 0 -87. Net profit/loss from continued operations (+/-) 2 155 -2 3408. Net profit/loss from discontinued operations (+/-) 0 0

9.Net profit/loss from continued and discontinued operations (+/-)

2 155 -2 340

Comprehensive income statement of the Group1. Net profit/loss of the group (+/-) 2 155 -2 3402. Other comprehensive income/expense 2.1. Unrealized foreign currency effects arising from the translation of

foreign business units´ financial data65 -165

2.2. Revaluation of available-for-sale financial assets -23 -7Total comprehensive income/expense of the bank 2 197 -2 512

On March 15, 2011, Latvian branch was added to Eesti Krediidipank through a merger (balance sheet total of the Latvian branch upon merger was 83 277 thousand euros).When analysing the comparative data of the income statement, it has to be taken into account that the annual report of 2011 contains income and expenses generated by the Latvian branch as of March 15 and for the whole calendar year in the income statement for the financial year 2012.


Statement of changes in shareholders´ equity of AS Eesti Krediidipank Group

In thousands of eurosShare capital

Share premium

Reserves Revaluation reserve

Retained earnings,

accumulated loss (+/-)

Totalshareholders

’equity

Shareholders´ equity 31.12.2010

25 001 174 1 860 0 -1 699 25 336

Acquisition loss from previous periods

0 0 0 0 -543 -543

Formation of reserves 0 0 45 0 -45 0Unrealized foreign exchange differences from the revaluation of foreign entities´ financial data

0 0 0 -165 0 -165

Revaluation of financial assets available-for-sale

0 0 0 -7 0 -7

Profit/loss for the year (+/-)

0 0 0 0 -2 340 -2 340

Shareholders´ equity 31.12.2011

25 001 174 1 905 -172 -4 627 22 281

Formation of reserves 0 0 3 0 -3 0Unrealized foreign exchange differences from the revaluation of foreign entities´ financial data

0 0 0 65 0 65


0 0 0 -23 0 -23

Rounding 0 0 0 0 1 1Profit for the year 0 0 0 0 2 155 2 155Shareholders´ equity 31.12.2012

25 001 174 1 908 -130 -2 474 24 479


Cash flow statement of AS Eesti Krediidipank GroupIn thousands of euros Cash flow from operating activities (indirect method) Note 2012 2011Net profit/loss (+/-) 2 155 -2 340Adjustments

Provisions for loans and receivables 12 -365 1 042Depreciation, amortisation and impairments 18 538 469Revaluation of investment property 19 -967 -216Revaluation of available-for-sale financial assets 0 26Net profit from disposal of non-current assets -1 4Effect of changes in currency exchange rates 4 1Net interest income 27,28 -6 647 -3 740

Received interests 11 317 9 358Paid interests -4 837 -5 761Change in receivables from customers of credit institutions and leasing companies

-14 757 7 024

Change in long-term deposits in credit institutions 985 44Change in receivables from credit institutions 22 -8 577 8 831Change in deposits 23 -171 933 41 608Change in assets and liabilities related to operating activities 9 026 -23 189Total cash flow from operating activities -184 059 33 161

Cash flow from investing activities (direct method) Disposal of non-current assets 11 31Acquisition of non-current assets and investment property -2 481 -949Sale of subsidiaries 0 3Purchase/increase in the share capital of subsidiaries -7 -25Total cash flow from investing activities -2 477 -940

Cash flow from financing activities (direct method) Loans received from credit institutions 21 10 000 0Repayment of loans received from credit institutions 0 -2 500Subordinated loans received 24 0 4 000Total cash flow from financing activities 10 000 1 500

Cash from business combinations: 0 83 227Cash in hand 0 174Demand deposits and short-term deposits with credit institutions

0 83 053

Total cash flow -176 536 116 948Change in cash and cash equivalents -176 536 116 948Cash and cash equivalents at the beginning of the year 3,4 286 163 169 215Cash and cash equivalents at the end of the year 3,4 109 627 286 163

Balance of cash and cash equivalents 109 627 286 163Cash in hand 3 2 433 2 129Demand deposits with Central Bank 3,4 66 438 10 088Demand deposits and short-term deposits with credit institutions 3 40 756 273 946


Notes to the Financial Statements

Note 1. Accounting policies used

Statement of complianceThese consolidated financial statements of Krediidipank Group have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union.

1.1 Basis of preparationThe Financial Statements are prepared according to Estonian Accounting Act and in accordance with the International Financial Reporting Standards, as adopted by the European Commission.The financial statements have been prepared on the basis of accounting data, together with the required adjustments and reclassifications which guarantee that the statements are true and fair.

The consolidated financial statements include AS Eesti Krediidipank and its subsidiaries, over which parent company has control as of the balance sheet date. If parent company gained or lost control over subsidiary during the year, then the result of that company is reflected as of acquisition or until resignation date.Financial statements of Group companies are prepared in accordance with the parent company’s accounting policies in important aspects. In line-by-line consolidation all intra-corporate sales, unrealised profits and losses and balances between them are eliminated.

Financial statements are presented in thousands of euros, if not referred to another currency. Assets and liabilities are recognised at cost, except for investment property, trading securities, other financial assets and derivatives, which are recognised at fair value; loans are recognised at amortised cost.

1.2 Effect of accounting estimatesPreparation of the financial statements according to the International Financial Reporting Standards assumes the Management Board to make estimates on the assets and liabilities of the balance sheet date, and on income and expenses for the reporting period, and disclosure of contingent assets and liabilities. Although these estimates are based on the Management´s best estimates and experience, taking also into consideration the effect of presumed events, the ultimate outcome of the business transactions recorded may differ from those estimates. Main source of uncertainty of these estimations, accompanied by the risk of adjusting balance sheet values of assets and liabilities during the next financial year, are related to loan and leasing portfolio. The essence of that risk is described in Note 2 and the provision for loan loss allowances is described in Note 12.The preparation of the financial statements and disclosure of assets and liabilities is based on the going concern assumption. Main accounting principles used in the preparation of these financial statements are set out below.


1.3 New standards and interpretationsStandards, their amendments and interpretations, that have been issued, but were not implemented in this reporting period and have no significant impact on the Group’s financial statements:• IFRS 7 Financial Instruments: Disclosures (effective for annual periods beginning on or after 1 July 2011). Amendment aims to clarify the context in which qualitative notes should be composed. In addition new requirements for the transfer of financial assets have been validated.• Amendment for IAS 1 for the presentation of the other comprehensive income will be effective for annual periods beginning on or after 1 July 2012. Amendment will preserve the option to present profit or loss and other comprehensive income either in a single statement or in two separate sequential statements. Entries of other comprehensive income should be divided to taxable profit and loss on the same basis. The amendment is applicable retroactively.• IFRS 10 Consolidated Financial Statements – effective for annual periods beginning on or after 1 January 2013. Standard regulates, which investments should be consolidated and establishes unified control model. According to the standard control is the sum of power, risk of changes in income and correlation between power and income.

Standards, their amendments and interpretations that have been issued, but were not implemented in this reporting period and may have an impact on Group’s financial statements:• IFRS 9, Financial Instruments Part 1: Classification and Measurement, issued in November 2009 (effective for annual periods beginning on or after 1 July 2015, not yet adopted by the EU). IFRS 9 replaces those parts of IAS 39 relating to the classification and measurement of financial assets. Key features are as follows:Financial assets are required to be classified into one of the two measurement categories: those to be measured subsequently at fair value, and those to be measured subsequently at amortized cost. The decision is to be made at initial recognition. The classification depends on the entity‘s business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. An instrument is subsequently measured at amortized cost only if it is a debt instrument and both (i) the objective of the entity‘s business model is to hold the asset to collect the contractual cash flows, and (ii) the asset‘s contractual cash flows represent only payments of principal and interest (that is, it has only ―basic loan features). All other debt instruments are to be measured at fair value through profit or loss. All equity instruments are to be measured subsequently at fair value. Equity instruments that are held for trading will be measured at fair value through profit or loss. For all other equity investments, an irrevocable election can be made at initial recognition, to recognize unrealized and realized fair value gains and losses through other comprehensive income rather than profit or loss. There is to be no recycling of fair value gains and losses to profit or loss. This election may be made on an instrument-by-instrument basis. Dividends are to be presented in profit or loss, as long as they represent a return on investment. 1.4 Accounting of transactions, assets and liabilities in foreign currencyTransactions in foreign currency are recorded based on official exchange rates from European Central Bank on the transaction date. Monetary assets and liabilities in foreign currency and non-monetary assets and liabilities in foreign currency and recognised at fair value are converted to euros at the official exchange rates of balance sheet date.Those non-monetary assets and liabilities, not recognised at fair value (for example fixed assets and prepayments), are not converted at balance sheet date rate, rather on transaction date rate.


Gains and losses from foreign exchange are recognised in income statement on the line „Net foreign exchange gains/losses (+/-)” on a net basis.

Assets and liabilities of a foreign branch, whose functional currency is not euro, are converted to presentation currency based on the rates from European Central Bank. In income statement average exchange rate of the period is used for conversion.Unrealised differences from currency exchanges from conversion of foreign branch are recognised in equity as reserve for changes from foreign exchange.

1.5 Principles of consolidationIn consolidated financial statements parent company and its subsidiaries are considered as uniform entity.

Subsidiaries are entities that are controlled by the Group. Control is presumed, when Group owns more than 50% of subsidiary’s shares or is otherwise able to control subsidiary’s operational and financial policies. The subsidiary is presented in Group’s financial statements since acquisition until resignation.

In consolidation parent’s and subsidiaries’ balance sheets, income statements and cash flow statements are added together line-by-line and receivables, liabilities, internal sales and unrealised gains and losses from intra-group transactions are eliminated. If needed, the subsidiary’s accounts are matched to Group accounting policies.

Recognising subsidiary in parent company’s unconsolidated financial statementsInvestments to subsidiaries are recognised in parent company’s unconsolidated financial statements at cost. This means that investment is initially recognised at cost, which includes fair value at the acquisition and later is adjusted when needed with allowances from impairment. Impairment test to review, whether there is any indication that investment’s recoverable amount (higher of: fair value less costs to sell or value in use) has fallen below its carrying value, is used if there is any indication that an asset may be impaired. Impairment loss is recognised in the income statement as financial expense. If the situation changes and impairment is no longer reasonable, then impairment loss is reversed. Reversal is recognised in the period when impairment loss occurs, as financial income.

1.6 Cash and receivables from credit institutionsFor the purposes of the cash flow statement, cash and cash equivalents include short-term highly liquid investments which are readily convertible into known amounts of cash and which involve no risk of significant change in market value, such as cash in hand, current account balances in the Central banks and demand deposits as well as short-term (with a maturity of up to 3 months) deposits in other credit institutions.

Cash flow from operating activities has been recorded based on the indirect method, with cash flow from investing and financing activities recorded based on the direct method.

1.7 Financial assets and liabilitiesFinancial assets are considered to be cash, contractual rights to receive cash or other financial assets (i.e. trade receivables) from third parties, equity instruments of other entities and contractual rights to exchange financial assets with third parties under the conditions that are potentially favourable to the Company.


Krediidipank Group classifies financial assets into the following categories:• financial assets measured at fair value through profit or loss;• available-for-sale financial assets;• loans and other similar receivables;• financial assets held to maturity.

Financial liabilities are considered to be contractual obligations to deliver cash or other financial assets to third parties and contractual obligations to exchange financial assets with third parties under the conditions that are potentially unfavourable to the Company.Krediidipank Group classifies financial liabilities into the following categories:• financial liabilities measured at fair value through profit or loss;• financial liabilities measured at amortized cost.

Financial assets and liabilities are initially measured at cost, which is the fair value of consideration given or received to acquire the financial asset or liability. Initial cost of all financial assets and liabilities include direct transaction costs, except those financial assets and liabilities, which are acquired for trading purposes, and derivatives.

A regular way purchase or sale of financial assets is recognised at trade date, securities on at settlement date. Depending on their category, financial assets and liabilities are subsequently measured at fair value, cost or amortized cost. Financial instruments carried at fair value are revalued on each balance sheet date. Change in fair value of financial assets is recognised in the income statement for the period.

The amortized cost of a financial instrument is the amount at which it is measured at initial recognition minus principal repayments and any reduction for impairment or uncollectibility. Transaction fees are staggered on a straight-line basis over the term of the instrument, which does not significantly differ from the results achieved through implementation of the effective interest rate method.

1.7.1 Financial assets measured at fair value through profit and lossFinancial assets measured at fair value through profit and loss include:•securities and derivatives held for trading;•securities measured at fair value on the moment of acquisition, through profit and loss.

According to the fair value hierarchy of financial instruments disclosed in IFRS 7, financial instruments measured at fair value are classified in a three level hierarchy based on the level of market data used to derive the fair value. Market data from independent sources are considered as observable inputs and assumptions about the market are considered as unobservable inputs.

Level 1 – (unadjusted) quoted prices in active markets for assets or liabilities. This level includes securities and debt instruments related to quoted shares on stock markets, but also instruments noted by the market participants.Level 2 – inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)Sources for input parameters (for example interest curve of euro bonds or credit risk of the counterparties) are Bloomberg and Reuters. Level 3 – inputs for the asset or liability that are not based on observable market data.

Annual Report of Krediidpank Group 2012 21

Financial assets measured at fair value through profit or loss are assessed in fair value on the balance sheet – fair value for level 1 securities is the last quotation of transactions made on balance sheet date. Unlisted securities of level 2 are revalued to fair value on the last transaction price. If that price is not available, then securities are revalued to fair value based on the information that is available for the price of the investment.The derivative instrument (currency swap) contracts with a positive value are recorded under assets, and contracts with a negative value under liabilities on the balance sheet. The balance sheet assets and liabilities of derivative instruments are not offset. Hedging rules are not used for derivative instruments. The contractual values of derivative instruments are recorded under assets or liabilities off-balance sheet. The corresponding interest income is recorded under “Interest income” in the income statement.

The unrealised and realised profits/losses from trading securities are recorded under “Net profit/loss from financial assets and liabilities held for trading (+/-)” in the income statement, with dividend income recorded under “Dividend income”.Incomes, from securities which are measured at fair value through profit and loss, and similar to interest income and realized and unrealized profit from revaluation of bonds are recognized in income statement in line “Interest income”.

1.7.2 Available-for-sale financial assetsSecurities which are not included under securities measured at fair value through profit and loss are classified as available-for-sale financial assets.Available-for-sale financial assets are intended to be held indefinitely, and can either be sold or are held for long-term for strategic purposes. These securities are recognised at fair value on the value date. Following initial recognition, the securities are measured at fair value in the Group’s financial statements, if the fair value can be reliably determined. If the fair value cannot be reliably determined, the securities are measured at amortised cost (i.e. acquisition cost less impairment losses).Change in the fair value of available-for-sale financial assets is recorded under equity as revaluation reserve for financial assets, with impairment losses recorded under “Impairment losses (+/-)” in the income statement.

1.7.3 Loan and other similar receivables, lease accountingLoan and lease receivables from customers, together with the accrued interest, are recorded under “Loans and other similar receivables” on the balance sheet. In addition to loans, the particular balance sheet line includes Group’s deposits with banks and/or financing institutions with a maturity of over 3 months.

Loan and lease receivables are measured at cost on the value date of the transaction. Loan and lease receivables are subsequently carried at amortized cost, with transaction costs recorded on a straight-line basis over the term of the instrument, which does not significantly differ from the results achieved through implementation of the effective interest rate method. In case of overdraft and credit cards, the actual use of the credit limit by the borrower is recorded. Unused credit limit is recognised as an off-balance sheet liability.If the principal or interest receivable of the loan and lease receivable is deemed doubtful, the loan will be written down. The write-down is recorded with a “-“sign under “Loans and other similar receivables” on the balance sheet. If the value of the previously written-down loan or lease receivable increases, the previous write-down will be revalued according to the lower of the net present value of future payments or the amortised cost of the net book value (without the write-down).


The change in the value of loans and lease receivables is recorded under “Change in the value of assets” in the income statement.Written-down loans and lease receivables are written off from the balance sheet and are accounted for off balance sheet. Collection of loans written off the balance sheet is charged to income under “Change in the value of assets” in the income statement.Interest income from loans and lease receivables is recorded under “Interest income” in the income statement.

Factoring transactions are transactions where the leasing company finances its co-operation partners by purchasing their financial rights of claim. The leasing company purchases the claim from the buyer in the amount payable by the buyer under contracts of purchase and sale in the future. The claim to purchaser arises at the moment of invoice factoring or the moment of acquiring receivable.Factoring receivables are carried at amortized cost, less repayments of principal.

LeasesGroup as the lessorLeases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. Assets leased under the finance lease are recognized in the lessee’s balance sheet.The lessor recognizes the leased property under the finance lease in its balance sheet under „Loans and receivables“. Rental income is recognized as principal repayments and interest income. The leases, where all the risks and rewards of ownership remains to the lessor, are operating leases.Assets leased out under operating leases are recognized as standard procedure, similarly to other assets on the balance sheet. Operating lease payments are divided on the term of the lease period, regardless of when, and in which amount, the payments are actually made.

Group as the lesseeThe Group mainly leases buildings under the terms of operating lease. Assets leased under operating lease are not recorded on the balance sheet. Operating lease payments are divided over the term of the lease period, regardless of when, and in which amount, the payments are actually made.

1.7.4 Provisions for losses on loans and leasesGroup assesses each quarter, whether there is any indication for losses on loans. The value of the receivables is assessed, either individually or by groups of similar receivables, depending on the significance of the receivable. The provision is established if the circumstances cause doubts as to the probability of timely collection of future cash flows and it can be measured reliably. The receivables are assessed on the basis of the customer's financial position, term of fulfilment of the obligations set forth in the loan agreement, as well as the borrower's reliability and competence in the particular field of activity.The amount of the provision is the net present value of the difference between the carrying amount and the estimated recoverable amount of the loan or lease receivable (incl. guarantees and collateral amounts), discounted with the effective interest rate. Group-based assessment of receivables is based on the actual historic loss of a similar group.The provisions and subsequent recoveries for expensed amounts are recorded as net amount in the income statement line "Change in the value of assets".


1.7.5 Securities held to maturitySecurities held to maturity include non-derivative financial assets with a fixed maturity date which the company intends and is capable to hold until maturity. The aforementioned securities are initially recognised at cost on the value date and subsequently recorded at amortized cost. The Group has recorded different bonds as securities held to maturity. The corresponding interest income is recorded under “Interest income” in the income statement.

1.7.6 Loans takenLoans taken are recognised at cost on the value date, under “Loans from credit institutions”, together with the accrued interest. Subsequent to initial recognition, loans are carried at amortised cost. Interest expenses on loans taken are recorded under “Interest expenses” in the income statement.

1.7.8 DepositsDeposits are recognised at amortised cost, on the value date, under "Deposits of customers" on the balance sheet, together with the accrued deposit interest. Interest expenses on deposits are carried under “Interest expenses” in the income statement.

1.7.9 Subordinated loansSubordinated loan is a long-term liability which in the event of the bankruptcy or dissolution of the credit institution is satisfied after the claims of all other creditors have been satisfied. Subordinated loans are recorded at the value date at acquisition cost under “Subordinated loans” on the balance sheet, together with the accrued interest. Subsequent to initial recognition, subordinated loans are recorded at amortised cost. Interest expenses on subordinated loans are recorded under “Interest expenses” in the income statement.

1.7.10 Other financial assets and liabilitiesOther financial assets and liabilities are the remaining assets and liabilities which, based on IAS 39 principles, are not defined as trading and investment securities, futures, loans and other receivables. Other financial assets are recorded at fair value on trade date and other financial liabilities at amortised cost. Financial assets without market value, or cases where it proves impossible to determine the market value of the financial assets, are recorded in the balance sheet at acquisition cost.

1.8 Tangible and intangible fixed assets, except goodwillTangible assets include land, buildings, equipment and other assets with long-term use. Intangible fixed assets are separately identifiable non-physical property, in this report software.

Fixed assets are recognised at cost, which is purchase price and any directly attributable costs, including non-refundable taxes.Tangible and intangible fixed assets are subsequently carried at cost less accumulated depreciation and impairment charges, except for items with an indefinite useful life which are recorded at cost less impairment losses.Depreciation is applied on a straight-line basis over the asset's useful life, starting from the month following the month when the asset item was taken into use according to the estimated useful life of fixed assets:buildings 2% per annummachines 15% per annumequipment 12,5% per annumoffice equipment 25% per annumsoftware 10-25% per annum


Fixed assets with indefinite useful life (land) are not depreciated.Depreciation charge is recorded under “Depreciation of non-current assets (-)” in the income statement.Depreciation will no longer be calculated if the asset item is fully depreciated, reclassified into non-current assets held for sale or investment property, or removed from use.

The Group conducts regular market value tests on its non-current assets. If the value of the non-current asset drops, the asset item will be revalued to its recoverable amount. If the value of the non-current asset item increases, previous write-downs will be restated to the lower of recoverable amount or amortized cost. A drop or a reversal of a previous drop in the value of non-current assets is charged to “Change in the value of assets (+/-): tangible fixed assets" in the income statement.

Improvements cost to non-current assets are capitalized if the improvement brings the characteristics of the particular asset item to a new qualitative level, or if it proves possible to verify that a material part of the revenue which corresponds to the incurred expenses will be generated in future periods. Expenses related to repair and maintenance of assets are recorded in the income statement when they arise.

1.9 Impairment of assetsAt each balance sheet date, a review of whether there is any indication that financial assets recorded at cost or amortized cost, and tangible and intangible assets recorded at cost are impaired, is performed. If the management of the Group detects any indications that the value of an asset may have declined below its carrying amount, impairment test is carried out. At each balance sheet date, irrespective of whether there is any indication of impairment, the Group carries out impairment test for goodwill, intangible assets with indefinite useful lifetime and intangible assets unfinished as of the balance sheet date.Impairment of individually significant financial assets is assessed separately for each asset. Impairment of financial assets that are not individually significant and for which there are no objective evidence of impairment, is assessed in aggregate.Impairment of a financial asset is recognized as expense in the income statement for the financial year.The impairment losses of financial assets carried at cost are not reversed.If the value of financial assets carried at amortized cost increases in subsequent periods, the previously recognized impairment loss is reversed up to the amount which is lower of the following:- net present value of expected future cash inflows from the financial asset; and- carrying amount measured at amortized cost as if no impairment loss had been recognized.The amount of the reversal of impairment losses is recognized in the income statement for the financial year on the same expense account as a reverse entry.

1.10 Investment propertyThe land and buildings acquired with the purpose to earn from rent or increase in market value is defined as investment property. Investment property is initially recorded on the balance sheet at fair value which consists of purchase price and any directly attributable costs. Investment property is subsequently measured at fair value. Independent experts are used in the revaluation into fair value. The expert opinions are based on the market data comparison and/or discounted income methods. Gains and losses from the change of fair value of investment property are recorded in the income statement of the period on accounts


„Other operating income“ or “Other operating expense”.Office buildings leased out to third parties and the parent company are recorded at fair value under investment property in the separate financial statements of Krediidipank’s subsidiaries. In the financial statements of the Group, buildings where the parent company uses most of the leasable space have been recorded under non-current assets by eliminating any revaluation of investment property, and calculating depreciation using the depreciation rates assigned for fixed assets.Real estate object is reclassified on the balance sheet in case there is a change in its intended use. As of the moment of the change, the principles of investment property will be applied to the real estate object. If an object of fixed assets is reclassified to investment property, its acquisition cost will be the fair value on the day of the change in its intended use. Positive difference in the carrying value on the balance sheet and fair value on the reclassification day will be recorded in retained earnings and negative difference is recorded as expense in income statement.

1.11 Accounting for collateral assetsPledged assets of ceased lease agreements, which will be realized, are recognized as collateral assets. The collateral is recorded under “Other assets” in the balance sheet at the lower of the acquisition cost or net realisable value. Write-downs of collaterals are recorded under "Other operating expenses" in the income statement.

1.12 Start-up and development costsStart-up and development costs are not capitalised. Expenses on the advertising and launch of new products, services and processes are charged to expenses when incurred.

1.13 Mandatory reserveMandatory reserve is a reserve which is established under the Commercial Code of the Republic of Estonia, and which may be used, on the basis of the resolution of the General Meeting, for covering loss, if loss cannot be covered from available shareholders’ equity, or for increasing share capital.Mandatory reserve is set up of annual profit allocations, and cannot be paid out as dividends to shareholders.Under the requirements of the Commercial Code, every year at least 5% of the net profit must be transferred to mandatory reserve, until the reserve amounts to 10% of the share capital. Mandatory reserve is recorded under "Mandatory reserve" in the balance sheet.

1.14 Corporate income taxAccording to Estonian Income Tax Act the accrued profit of a resident legal entity is not subject to corporate income tax. Income tax is paid on fringe benefits, gifts, donations, costs of entertaining guests, dividends and from other payment not related to business. Thus there are no differences between assets´ tax bases and carrying values, which would generate deferred income tax liability. In consolidated balance sheet, the deferred income tax liability from the Latvian (as a permanent place of business) branch’s profit is reflected. Deferred income tax liability is calculated from all significant temporary differences between tax bases and financial accounting assets and liabilities values. Income tax assets are recognized when the future realization is probable.


1.15 Potential income tax on dividendsAccording to the Estonian Income Tax Act the accrued profit of a resident legal entity is not subject to corporate income tax, instead the tax is due on the distribution of dividends or distribution of profit in any other forms. Income tax should be calculated also on payments made from equity that are exceeding the monetary and non-monetary contributions made to the equity. According to the aforementioned Act the dividends and profit distributed in any other forms are subject to income tax with the tax rate 21/79 on the actual distribution.The contingent tax liability that may occur if all the Group´s distributable retained earnings should be distributed or in case the capital is decreased is not reported on the balance sheet. The income tax due to dividend distribution or any other distribution of equity is expensed in the income statement when respective disbursements are declared. During its activities the Group has not performed any fund emissions that would have an effect on contingent income tax calculations in case the Group decides to decrease its share capital.

1.16 Guarantees and other off-balance sheet transactionsGuarantees, contingent loan liabilities and contractual obligations related to unused credit lines are recognized as off-balance sheet transactions. Contractual receivables and payables related to derivative instruments are also recorded off-balance sheet

1.17 Income and expensesInterest income and expense are recorded in the income statement on accrual basis, based on the effective interest rate method. Interest income includes income from the price difference of discount bonds measured at fair value.Fee and commission income/expense are recorded on accrual basis of accounting. Commission fees for loans are taken into consideration upon establishing the effective interest rate.

1.18 Earnings per shareEarnings per share (EPS) are calculated by dividing the net profit for the period with the weighted average number of common shares.

1.19 Events after the balance sheet dateMaterial circumstances that have an effect on the valuation of assets and liabilities and became evident between the balance sheet date and the date of preparing the financial statements, but are related to transactions that took place in the reporting period or earlier periods, are recorded in the financial statements.Subsequent events that have not been taken into consideration when valuing the assets and liabilities but have a material effect on the result of the next financial year, are disclosed in the Note 42 to the financial statements.


Note 2. Risk management

2.1 Risk management principlesRisk management is based on the general risk management principles which have been approved by the Council and which establish the Group's risk strategy, as well as the risk policies and risk management regulations established by the Board. The risk management system of the Eesti Krediidipank Group is centralised, ensuring implementation of standardised risk management principles in Eesti Krediidipank, its foreign branch and subsidiaries, as well as quick and efficient response to market changes. In risk management, the Group shall:• evaluates the risks related to the main fields of activity and their possible effect on the Bank´s financial position;

• ensure the existence risk-sensitive methods for the evaluation and management of all major risks.

2.2 Risk management structures and responsibilityThe Management Board of Krediidipank is responsible for the management and control of the risks related to all activities of the Group, implementation of the risk management principles and methods, and results of the risk management. Risk management is the responsibility of the following structural units and commissions:

1. Assets and Liabilities Committee (ALCO)ALCO’s task is to manage liquidity risk, interest risk of the bank´s portfolio and security portfolio, design the structure of assets and liabilities and manage profitability.

2. Credit Committee and Credit Commission

Credit CommitteeThe Credit Committee is the Bank’s highest operational unit responsible for credit risk management for guaranteeing implementation of crediting policies. The Credit Committee is created in accordance with Credit Institutions Act and the Articles of Association of the Bank with the purpose of realizing the credit policy through approving crediting decisions and assessment of the compliance of requirement set for collaterals.

Credit CommissionCredit Commissions serve the functions of the Credit Committee, making small-risk credit decisions.

3. Risk Management DepartmentThe main functions of the Risk Management Department is the performance of regular stress tests with respect to liquidity, credit and main market risks, as well as the preparation of the corresponding risk reports to the Board, development of the risk management methods, evaluation of the credit risk of major credit projects, as well as monitoring and analysis of the credit portfolio

4. Internal Audit DepartmentThe Internal Audit Department forms a part of the internal oversight system of the Bank, and monitors the activities of the whole Eesti Krediidipank Group as well as its compliance with the legislation, legal acts of the Bank of Estonia and Good Banking Principles, as well as precepts of the Financial Supervision Authority. The Internal Audit Department also monitors the different structural units' adherence to the Statutes of the Bank.


Internal Audit also monitors how the Articles of Association of Krediidipank, decisions of the General Meeting of the Shareholders and the Bank's Council and Board as well as rules, limits and other standards established by the Council and the Board are followed by the structural units.

5. Compliance FunctionPurpose of the Compliance Function is to assure the compliance of the Group´s activity to legislation (incl. instructions of the supervisory body), generally accepted practices and standards, business ethics and internal rules. Task of the Compliance Function is to assure the application of necessary policies and actions and execution of the applicable rules and regulations by the employees. Compliance function is subordinate to the Chairman of the Board of the Bank.

6. Price CommissionPurpose of the Price Commission is the development of uniform and purposed pricing policy for the real estate portfolio belonging to the Krediidpank Grup, also the collaterals of the problematic credit portfolio of Krediidipank (both immovables and movables), and approval of the prices of specific objects in order to achieve the best financial result for the Krediidipank Group.

2.3 Credit risk managementCredit risk is the risk of loss incurred by the Bank when the counterparty is incapable of fulfilling its obligations. The amount of the credit risk expresses a probable loss which occurs when the counterparty is incapable of fulfilling his obligations arising from loans, credit line, leasing, factoring, letter of credit, guarantees and different derivative transactions. In the management and control of the credit risk, concentration risk and collateral risk are treated as separate risk categories, with the corresponding rules of procedure established for the management of these risks. Krediidipank follows the standard method of calculating the credit risk capital requirement. In calculating the capital requirement, the bank uses the ratings of the rating agencies approved by the Financial Supervision Authority pursuant to the procedure established by the Financial Supervision Authority.

The credit policy of the Eesti Krediidipank Group forms the basis for the risk management. The main objective of the credit policy is to pursue sustainable credit activities in order ensure the productivity of the Group's assets, as demanded by the shareholders, and adhering to the principles of conservatism and risk diversification, and by taking modest risks that can be evaluated and controlled.

2.3.1 Counterpart credit risk managementALCO establishes limits to counterparties in order to hedge the credit risk related to transactions with counterparties. These limits include money market transactions, currency transactions and securities transactions. The counterparty’s country of residence as well as estimations on its financial position, management, legal status and market position are taken into consideration upon the evaluation of the creditworthiness of the counterparty.

2.3.2 Credit risk controlReal collaterals and collaterals under the law of obligations are accepted as a loan security. The accepted value of the collateral expresses the liquidity risk, market risk and legal risk of the collateral, and is established as a percentage of the market value. An overview of the division of the credit portfolio has been disclosed in Note 9. The balance sheet and off-balance sheet offsetting principles are not used for hedging the credit risk. The group


performs credit risk diversification by fields of activity, geographical areas and products. A summary of the division of receivables by economic sector and geographical areas has been disclosed out in Notes 7 and 8.

2.3.3 Classification and evaluation of receivablesCredit receivables are divided into five risk categories in accordance with the borrower’s payment discipline and the financial-economic position: A – OK, B – under monitoring, C - suspicious, D – doubtful, E – hopeless. Receivables under risk categories A, B and C are classified as operational loan portfolio and used for creating homogeneous groups (by risk categories and product types) for which group-based write-downs are made. Separate write-downs are made for loans under risk categories D and E, depending on the security to the particular receivable. Overview of bank’s loan portfolio risk classes are brought in table below with the distribution of individuals and corporates.

Distribution of credit portfolio into risk classes (in thousands of euros)31.12.2012 31.12.2011

A 74 705 61% 52 087 46%

B 23 496 19% 25 588 23%

C 14 676 12% 15 094 13%

D 2 070 2% 4 319 4%

E 7 780 6% 15 743 14%

Total 122 727 100% 112 831 100%

In 2012 the overall quality of loans have improved due to stabilization of economic environment, decrease in unemployment and increase of operating profit of companies which have improved the loan servicing ability of customer.

The volume of written-down loans, separate loan allowances and group-passed write-downs by private persons and corporate customers have been disclosed in Note 13.In 2012 the volume of write-downs of loans decreased by 11.3 million euros, mainly in corporate loan portfolio. The volume of write-downs of loans in individuals’ loan portfolio increased slightly. The total write-down in Group decreased by 5.3 million euros mainly due to the classification of the allowance for doubtful receivables in the amount of 5 million euros as off balance sheet items and improvement of the quality of credit portfolio.

2.4 Liquidity risk managementLiquidity risk is defined as the risk of insufficient solvency on behalf of Krediidipank to timely fulfil the contractual obligations - i.e. the Bank’s failure to timely and sustainably finance various assets, or to liquidate its positions and fulfil contractual obligations. Liquidity risk is managed based on the liquidity management policy. The objective of liquidity management in Krediidipank is to guarantee, at any given moment, the timely and complete fulfilment of the obligations assumed by Krediidipank, while optimising the credit risk in such a way as to secure maximum and stable profitability on the investments with various maturities.

The main liquidity management body in Krediidipank is ALCO. ALCO’s functions and areas of responsibility in liquidity management are:• to plan short-term and long-term liquidity of Krediidipank, and to design and implement the measures to be used;• to analyse and summarise the information concerning Krediidipank’s assets and liabilities, interest income and expenses, management of liquidity and investments, and, ifnecessary, to prepare the adoption of strategic decisions by the Board;


• to optimise the deadlines of Krediidipank's assets and liabilities, profitability and instrument liquidity in order to achieve the Bank’s strategic goals;• to regulate the Group’s required liquidity level as well the level of the risk of change in the acceptable interest rate risk and the acceptable value of assets and liabilities.

The Board, ALCO and Credit Committee are regularly informed of Krediidipank’s liquidity position. Krediidipank keeps sufficient liquidity reserves in order to ensure timely fulfilment of its obligations.The Board has established a model for the management of Krediidipank’s liquidity position. The model is based on the analysis of the difference between the maturities of assets and liabilities. This model is also used for fixing the main liquidity ratios and term proportions of assets and liabilities, as well as for conducting stress tests. Limits have been established for all major liquidity indicators. An overview of the division of assets and liabilities by maturities has been provided in Note 40. The liquidity policy of Krediidipnk is conservative and formed liquidity buffers are sufficient to cover great outflow of deposits. In 2012, the outflow of demand deposits in the amount of 161.4 million euros was covered from the liquidity buffers and the Bank’s liquidity position has remained stable. Krediidipank has established a business continuity and recovery plan for conduct in liquidity crisis, specifying the action to be taken for covering cash flow deficit in extraordinary circumstances.

2.5 Market risk managementMarket risk arises from the Bank's trading and investment activities in the interest, currency and equity markets. Financial products include market risk in securities and derivative instruments. Market risks arise from changes in interest rates, currency exchange rates and prices of financial assets. Market risk taking is controlled with risk limits. Different factors influencing market risks are monitored on a daily basis. Main market risk bearing assets in Krediidipank are investments in bonds. The volume of bonds portfolio decreased by 8.8 million euros in 2012 and the market risk has decreased. Also the capital requirement needed to cover the position risk of trading portfolio has decreased accordingly.

2.5.1 Currency riskCurrency risk is defined as a risk arising from the differences in the currency structure of the Bank's assets and liabilities. Changes in currency exchange rates cause changes in the value of assets and liabilities as well as the amount of revenue and expenses calculated in local currency. As a rule, Krediidipank maintains minimum foreign currency positions required for the provision of services to customers. All foreign currency positions are continually monitored and estimated at market value. The open foreign currency positions are covered by swap and forward transactions. Data on the structure of assets and liabilities by currency positions and according net currency positions have been presented in Note 39.

2.5.2 Interest riskInterest risk is defined as a risk of sudden unfavourable changes in interest rates that might affect the revenue generated by the Group. The risk arises because of the differences in the (payment) maturity terms of the Bank's assets and liabilities, or from differences in the currency structure of assets and liabilities, or because of the adjustment of the interest rates thereof on a regular basis. The division of Krediidipank’s assets and liabilities by term of interest change has been disclosed in Note 38.

Interest risk management includes analysis and management of the interest risk of all of the Group's assets and liabilities. Krediidipank’s portfolio interest risk is measured on a quarterly basis by using the market interest rate change scenario analysis. The parallel


shift of market interest rates above or below 100 base points is used for the standard scenario. The below table provides the annual effect of the parallel shift of the interest curve on interest income and interest expense by currency as of 31.12.2012. The shift in the interest curve and Krediidipank’s net interest income are in positive correlation, so if interest rates fall then also net interest income will fall. The total effect of the shift of the 100bp interest curve amounts to -214 thousand euros in a one year perspective. The calculation of the sensitivity of net interest income considers the base interest of Krediidipank and also minimal interest rates established to some credit contracts.Effect of an interest curve -100 bp shift to Group´s net interest income

In thousands of euros

31.12.2012 EUR USD Other Total

Change in interest income -622 -101 -24 -747

Change in interest expense -450 -26 -57 -533

Change in net interest -172 -75 33 -214

31.12.2011 EUR USD Other Total

Change in interest income -1 352,5 -630,9 -27,4 -2 010,7

Change in interest expense -436,8 -225,7 -140,8 -803,9

Change in net interest -915,7 -405,2 113,5 -1 207,5

The interest risk is hedged by limiting the differences of the term of interest-sensitive assets and liabilities, standardising the structure of the term structure of assets and liabilities and, if necessary, through the use of interest rate derivative instruments. The evaluation of the Krediidipank's portfolio interest risk is carried out on a monthly basis, with interest policies executed by ALCO.

2.6 Operational risk managementOperational risk arises from malfunctions or deficiencies in the Group’s information systems, errors in personnel policy, negligence or wrongful behaviour of staff members, insufficient rules of procedure or external factors that cause damage to or disturb the bank’s daily business activity. Operational risk involves IT risk, procedural risk, personnel risk, legal risk, safety system risk and discovery risk. The Group manages operational risk on the basis of the operational risk policy.

Operational risk is handled and managed as a separate risk management area within the Group, with the required funds and resources allocated for covering contingent losses. The management of operational risk is integrated within the Group’s daily activities. The essence of, impact of and the need to control the operational risk must be acknowledged by all employees within the Group.

The evaluation of operational risk will, above all, be carried out for quality purposes, as the organisation is relatively small and simple and seldom has actual loss events. The loss events are registered in the loss database, specifying the damage. The Group monitors the dynamics of operational risk by analysing the main risk indicators on a quarterly basis. Reports are submitted to the Board on the loss events related to operational risk and the main risk indicators on a regular basis, at least once a quarter. The Group has launched the implementation of the operational risk self-evaluation system. The Group uses the basic indicator approach to operational risk.


2.7 Capital adequacy

The capital adequacy indicator expresses sufficiency of the own funds of the credit institution for covering the credit risk, interest position and share position risk, transfer risk and currency risk. Capital adequacy calculation in Krediidipank Group does not differ from the calculation principles used in the compilation of the Group´s financial statements.

In thousands of euros 31.12.2012 31.12.20111. Tier I own funds 22 327 21 147

1.1 Share capital contributions 25 175 25 1751.2 Reserves 1 908 1 9051.3 Retained earnings/accumulated loss -4 629 -2 2871.4 Intangible assets -804 -8041.5 Profit/loss for the reporting period (+/-) 2 155 -2 3401.6 Unrealised profit of investment property -1 478 -502

2. Tier II own funds 10 515 10 8002.1 Subordinated liabilities 9 850 11 6502.2 Subordinated liabilities over limitations 0 -1 0762.3 Unrealised profit of investment property 665 226

3. Deductions 0 04. Tier III own funds 0 05. Own funds for capital adequacy assessment 32 842 31 9476. Total credit risk and counterpart credit risk (in standard method) 15 921 16 094

6.1 Central governments and central banks 567 4956.2 Credit institutions, investment associations and localgovernments

2 772 5 083

6.3 Companies 1 620 1 5366.4 Receivables secured by movables and immovables 7 961 6 5576.5 Other assets 3 001 2 423

7. Capital requirement for covering trading portfolio risk (in the maturity method)

794 1 014

8. Capital requirement for covering currency risk 0 2789. Capital requirement for covering operation risk (in base method) 1 165 1 398Capital adequacy 18,37% 17,01%

Tier I 12,49% 11,26%Tier II 5,88% 5,75%

In 2012, the Group´s capital adequacy has improved. The Group´s total capital requirements to manage risks have decreased by 904 thousand euros as compared to year 2011, at the same time own funds used in the calculation of capital adequacy have increased by 939 thousand euros.

2.8 Internal capital adequacy assessment processThe internal capital adequacy assessment is a continual process aiming at evaluating the Krediidipank's risk profile and the corresponding capital needs. Krediidipank ensures capital coverage of aggregated risks at all times.

Within the framework of the internal capital adequacy assessment process (ICAAP), the Bank shall control the adequacy of standard capital requirements and additional capital requirements for covering risks are determined using stress testing and scenario analysis. The Group risk profile is foremost evaluated using the following risks: credit risk, concentration risk, liquidity risk, market risks, incl. risk arising from security portfolio, interest risk of bank portfolio, operational risk, strategic risk and reputation risk.


Capital planning is the responsibility of the Management Board of Krediidipank. ICAAP is the basis for regular capital planning in the Group.

The Group exploits risk-based capital planning, ensuring that all risks are covered by own funds at any given moment in time. Capital planning is based on the balance sheet and profit forecasts that consider the Group’s strategy, future expectations and risk profile, as well as willingness to take risks. Capital requirement planning and forecast is based on the regulatory capital adequacy calculation, plus the capital requirement for additional risks not considered within the framework of regulatory capital requirements.

To ascertain the capital requirement, balance sheet positions are forecasted on the basis of the changes in the risk-weighted assets and own capital entries. The company also established an equity buffer required for ensuring the desired capital adequacy in alternative and risk scenarios. The capital requirement forecasts consider the potential impact of the strategic and reputation risk on the Group’s activities.


Note 3. Cash and deposits with credit institutions

In thousands of euros 31.12.2012 31.12.2011Cash in hand 2 434 2 129Deposits with central banks and accrued interest 66 438 125 094Deposits with credit institutions and accrued interest 40 756 158 978incl. demand deposits 20 389 10 253

overdrafts 11 369 65 075time deposits 8 997 83 618accrued interest 1 32

Total 109 628 286 201

Note 4. Deposits with central banks

In thousands of euros 31.12.2012 31.12.2011Demand deposits 62 998 10 088Overdrafts 3 440 25 000Time deposits 0 90 000Accrued interest 0 6Total 66 438 125 094

Note 5. Deposits with credit institutions

In thousands of euros 31.12.2012 31.12.2011Credit institutions of OECD area 34 069 152 582Credit institutions of non-OECD area 6 686 6 364Accrued interest 1 32Total 40 756 158 978

Note 6. Loans and other similar receivables, by customer ownership

In thousands of euros 31.12.2012 31.12.2011Deposits with credit and financial institutions 450 1 435Loans to financial institutions 2 6Loans to other companies 30 077 41 544Loans to non-profit associations 693 808Loans to individuals 91 955 70 473Effect of the effective interest rate -667 -629Accrued interest 824 1 410Total loans to customers 123 334 115 047Loan loss allowances (Note 12) -3 529 -8 801Total 119 805 106 246


Note 7. Deposits with credit institutions, securities, loans and other similar receivables, by economic sector

31.12.2012In thousands of euros Balance sheet receivables Off-balance

sheetliabilities

Share ofthe sector

Depositswith creditinstitutions

Loans Securities

before

write-downwrite-down

after write down

Finance and financial intermediation

107 193 542 -13 529 20 997 80 45,8%

Individuals 0 91 955 -1 520 90 435 0 411 32,3%Supply of electricity, gas, steam and conditioned air

0 855 0 855 13 116 6 5,0%

Wholesale and retail 0 7 325 -199 7 126 800 1 022 3,2%State government and defence

0 0 0 0 8 521 0 3,0%

Construction 0 502 -86 416 1 932 4 796 2,5%User industry 0 4 690 -431 4 259 0 830 1,8%Real estate services 0 5 466 -620 4 846 0 70 1,7%Other service activities 0 3 769 -70 3 699 0 26 1,3%Hotels and restaurants 0 3 595 -19 3 576 0 26 1,3%Transport 0 2 645 0 2 645 285 67 1,1%Other business activities 0 1 833 -128 1 705 503 752 1,0%General write-down 0 0 -443 -443 0 0 0Effect of the effective interest rate

0 -667 0 -667 0 0 0

Accrued interest 1 824 0 824 0 0 0Total 107 194 123 334 -3 529 119 805 46 154 8 086 100,0%


sheetliabilities

Share ofthe sector


Loans Securities

before


after write down

Finance and financial intermediation

284 034 1 529 -13 1 516 23 801 70 68,3%

Individuals 0 70 473 -1 995 68 478 0 661 15,3%State government and defence

0 0 0 0 20 434 0 4,5%

Real estate services 0 14 835 -3 314 11 521 0 193 2,6%Supply of electricity, gas, steam and conditioned air

0 229 0 229 10 844 0 2,4%

Wholesale and retail 0 9 906 -460 9 446 0 990 2,3%Hotels and restaurants 0 4 346 -24 4 322 0 1 138 1,2%Transport 0 2 847 -24 2 823 0 1 556 1,0%Other business activities 0 10 101 -959 9 142 1 407 331 2,4%General write-down 0 0 -2 012 -2 012 0 0 0Effect of the effective interest rate

0 -629 0 -629 0 0 0

Accrued interest 38 1 410 0 1 410 0 0 0Total 284 072 115 047 -8 801 106 246 56 486 4 939 100,0%


Note 8. Deposits with credit institutions, securities, loans and other similar receivables, by geographic sector


sheetliabilities

Share ofthe sector


Loans Securities

before


after write down

Estonia 65 989 117 534 -3 072 114 462 12 613 2 762 69,6%Latvia 8 643 1 736 -13 1 723 823 4 803 5,7%USA 14 198 404 0 404 0 5 5,2%Finland 11 506 157 0 157 0 4 4,1%Netherlands 0 20 0 20 6 576 1 2,3%Germany 3 234 1 0 1 2 142 8 1,9%Great Britain 306 124 0 124 3 337 4 1,3%Ireland 0 0 0 0 3 536 0 1,3%Luxembourg 0 0 0 0 3 029 0 1,1%Spain 0 0 0 0 3 107 0 1,1%Turkey 0 0 0 0 2 795 0 1,0%Romania 0 0 0 0 2 755 0 1,0%Russia 2 593 92 0 92 23 74 1,0%Other 724 3 109 -1 3 108 5 418 425 3,4%General write-down 0 0 -443 -443 0 0 0Effect of the effective interest rate

0 -667 0 -667 0 0 0

Accrued interest 1 824 0 824 0 0 0Total 107 194 123 334 -3 529 119 805 46 154 8 086 100,0%


sheetliabilities

Share ofthe sector


Loans Securities

before


after write down

Estonia 150 179 105 729 -6 759 98 970 12 320 3 222 58,4%Germany 44 249 0 0 0 1 669 7 10,1%Sweden 19 629 0 0 0 12 0 4,3%Austria 7 729 0 0 0 10 264 0 4,0%Finland 15 476 151 0 151 0 4 3,5%Latvia 4 131 4 711 -13 4 698 2 249 152 2,5%Great Britain 7 991 31 0 31 3 007 5 2,4%Netherlands 9 000 0 0 0 1 040 0 2,2%USA 7 676 350 0 350 0 35 1,8%Norway 7 729 85 0 85 0 0 1,7%Switzerland 7 729 29 0 29 0 0 1,7%Other 2 516 3 180 -17 3 163 25 925 1 514 7,3%General write-down 0 0 -2 012 -2 012 0 0 0Effect of the effective interest rate

0 -629 0 -629 0 0 0

Accrued interest 38 1 410 0 1 410 0 0 0Total 284 072 115 047 -8 801 106 246 56 486 4 939 100,0%


Note 9. Loans and other similar receivables, by types of collateral

In thousands of euros 31.12.2012 31.12.2011Loans secured by mortgage 113 159 102 422Unsecured loans 1 691 3 902Loans secured by deposit pledge 1 473 1 728Loans secured by building pledge 19 246Other 6 835 5 968Effect of the effective interest rate -667 -629Accrued interest 824 1 410Total 123 334 115 047Loan loss allowances -3 529 -8 801Total 119 805 106 246

Note 10. Finance lease receivables

In thousands of euros 31.12.2012 31.12.2011Gross investment 6 753 10 959Rental payments receivable, incl.

within 1 year 2 373 2 6941 -5 years 3 867 4 045over 5 years 513 4 220

Deferred rental payments 501 1 714within 1 year 173 3661 -5 years 269 941over 5 years 59 407

Net investment 6 252 9 245Rental payments receivable, incl.

within 1 year 2 200 2 3291 -5 years 3 598 3 104over 5 years 454 3 812

Estimated losses -119 -212Non-guaranteed salvage value 638 552

Note 11. Receivables due for payment

31.12.2012In thousands of eurosOverdue up to 30 days 31 to 60 days 61 to 90 days over 90 days TotalLoans 5 488 1 747 1 104 8 441 16 780Interest receivable 19 22 11 362 414Total 5 507 1 769 1 115 8 803 17 194

31.12.2011In thousands of eurosOverdue up to 30 days 31 to 60 days 61 to 90 days over 90 days TotalLoans 5 234 2 597 2 101 15 241 25 173Interest receivable 30 26 36 830 922Total 5 264 2 623 2 137 16 071 26 095


Note 12. Provision for loan loss allowances

In thousands of eurosProvision for loan loss allowances 2012 2011Balance at the beginning of the period -8 801 -7 667Write-downs -3 154 -3 960Restatement of previous write-downs 3 526 2 918Repayment of off-balance sheet loans -91 -96Loans written off from the balance sheet during the period 4 989 5Change in currency exchange rates 2 -1Balance at the end of the period -3 529 -8 801

Note 13. Loan quality

In thousands of euros 31.12.2012 31.12.2011Written-down loans 18 814 30 076

Incl. private persons 8 337 6 690Incl. corporate customers 10 477 23 386

Individual write-downs 3 086 6 789Incl. private persons 1 520 1 995Incl. corporate customers 1 566 4 794

Group-based write-downs 443 2 012Incl. private persons 390 1 947Incl. corporate customers 53 65

Total write-downs 3 529 8 801

Note 14. Financial assets at fair value through profit or loss

In thousands of euros 31.12.2012 31.12.2011

Bonds of financial institutions 14 509 10 676Government bonds 7 697 18 184Bonds of credit institutions 3 010 9 098Bonds of other companies 12 798 6 960Total 38 014 44 918 Incl. tier 1 instruments 29 812 41 057 Tier 2 instruments 8 202 3 861

No intra-tier movements of securities occurred during the reporting period.

Note 15. Available-for-sale financial assets

In thousands of euros 31.12.2012 31.12.2011Equity instruments 46 58Debt instruments 8 1 435Total 54 1 493 Incl. tier 2 instruments 28 1 467 Tier 3 instruments 26 26

No intra-tier movements of securities occurred during the reporting period.

Note 16. Financial investments held to maturity


Amortized cost Fair value

2012 2011 2012 2011Bonds of financial institutions 3 376 3 898 3 436 3 845Government bonds 823 822 828 855Bonds of other companies 3 887 3 869 4 380 3 862Total 8 086 8 589 8 644 8 562


Note 17. Shares in subsidiaries

In thousands of eurosCompany Country Number of

sharesNet book value Cost value Share

Krediidipanga Liisingu AS Estonia 192 511 511 100%AS Martinoza Estonia 2 240 2 237 2 237 100%Äigrumäe Kinnisvara OÜ Estonia 705 510 620 100%*Murru-Murikatsi Põllumajandussaadused OÜ

Estonia 1 7 7 100%*

At the report date, the Group has no investments in unconsolidated subsidiaries.On 26 April 2011, AS Martinoza acquired 100% of the shares of Äigrumäe Kinnsivara AS which as of 01.01.2012 as a result of a transformation is Äigrumäe Kinnisvara OÜ.On 29.02.2012 AS Martinoza acquired 100% of the shares of Murru-Murikatsi Põllumajandussaadused OÜ.The entity is consolidated using cost method, goodwill in the amount of 4 183 euros arose on consolidation. Financial data of Murru-Murikatsi Põllumajandussaadused OÜ was consolidated with the group data line by line as of 01.03.2012. As at 31.12.2012, assets of Murru-Murikatsi Põllumajandussaadused OÜ amounted to 193 thousand eurosand liabilities 187 thousand euros. The company ended the financial year 2012 with loss in the amount of 4 thousand euros.

Purchase analysis (in euros) 29.02.2012

Total assets 2 573

Total liabilities 0

Acquired net assets 2 573

Cost 6 756

Goodwill 4 183


Note 18. Fixed assets

In thousands of eurosLand andbuildings

Machinery andequipment

Otherequipmentand fittings

Intangible fixed assets

Prepayments

Total

Net book value 31.12.2010 5 160 202 504 244 25 6 135incl. acquisition cost 6 077 349 1 766 867 25 9 084incl. depreciation 917 147 1 262 623 0 2 949

Acquired in business combinations

0 43 46 107 13 209

Purchase 2011 0 133 220 508 56 917Disposal at net book value 2011 0 31 0 0 0 31

incl. acquisition cost 0 49 0 0 0 49incl. depreciation 0 18 0 0 0 18

Write-off at net book value 2011 0 5 7 0 0 12incl. acquisition cost 0 5 161 0 0 166incl. depreciation 0 0 154 0 0 154

Reclassification 2011 0 -17 -31 0 -60 -108incl. acquisition cost 0 -27 -31 0 -60 -118incl. depreciation 0 -10 0 0 0 -10

Depreciation charge 2011 106 69 216 66 0 457Net book value 31.12.2011 5 054 256 516 793 34 6 653

incl. acquisition cost 6 077 444 1 840 1 482 34 9 877incl. depreciation 1 023 188 1 324 689 0 3 224

Purchase 2012 331 22 259 104 39 775Disposal at net book value 2012 0 10 0 0 0 10

incl. acquisition cost 0 24 0 0 0 24incl. depreciation 0 14 0 0 0 14

Write-off at net book value 2012 27 0 2 0 0 29incl. acquisition cost 27 0 231 0 0 258incl. depreciation 0 0 229 0 0 229

Reclassification 2012 -406 0 123 0 -29 -312incl. acquisition cost -557 0 123 0 -29 -463incl. depreciation -151 0 0 0 0 -151

Depreciation charge 2012 100 76 192 141 0 509Net book value 31.12.2012 4 852 192 704 756 44 6 548

incl. acquisition cost 5 824 442 1 991 1 586 44 9 887incl. depreciation 972 250 1 287 830 0 3 339


Note 19. Investment property

In thousands of euros2012 2011

Remaining balance at the beginning of the period 6 465 5 074Acquired during the period 1 754 1 165Reclassification 5 999 0Adjustment to market value 967 216Capitalised costs 0 1Exchange difference 2 9Remaining balance at the end of the period 15 187 6 465

incl. investment property earning rental income 12 939 3 700Rent income 556 267Expenses occurred to generate rent income 273 58

Reclassification of real estate is related to the change of purpose of some of the real estate object belonging to the Group in the middle of the reporting period (cost 407 thousand euros). Some of the objects which had been so far recognised as fixed assets were rented out and some of the objects which were recognised as other assets were fully constructed or improved and were also rented out. Therefore, the aforementioned real estate objects were reclassified as investment property (cost 5 592 thousand euros).

Note 20. Other assets


The line „Assets for resale“ contains Group´s real estate, a part of which is under construction or improvement and upon completion in 2013 these objects will be reclassified as investment property.

Note 21. Pledged assets

In Feburary 2012, Krediidiapnk took part in the long-term refinancing operation organized by the European Central Bank, by involving 10 million euros with a 3-year maturity; its interest rate corresponds the interest rates of main refinancing operations (0.75% as at 31.12.12).

Krediidipank has pledged bonds with the balance sheet value of 15.4 million euros as the collateral of the aforementioned loan.

In addition, the Group has established cash deposits in the amount of 420 thousand euros to secure various card settlements.

Note 22. Payable to credit institutions

In thousands of euros31.12.2012 31.12.2011

Demand deposits 609 8 888Time deposits 1 364 1 663Accrued interest 3 7Total 1 976 10 558

incl EUR 341 8 094USD 1 528 1 767LVL 96 697other 11 0

31.12.2012 31.12.2011Assets for resale 7 525 11 061Miscellaneous currency transactions 338 1 431Payments in transit 259 142Prepayment for financial supervision 109 105Other current assets 1 592 3 554Total 9 823 16 293


Note 23. Customer deposits

In thousands of eurosDeposits by form of ownership 31.12.2012 31.12.2011Individuals 134 972 139 456Private companies 114 363 283 242Non-profit associations 1 894 1 737Financial institutions 1 624 1 061Insurance and pension funds 720 10State owned enterprises 4 4Accrued interest 809 1 666Total 254 386 427 176

Deposits by term 31.12.2012 31.12.2011Demand deposits 140 458 301 894Time deposits 101 017 112 184Savings deposits 12 102 11 432Accrued interest 809 1 666Total 254 386 427 176

Decrease in the number of customer deposits was caused by the decrease in interest rates. Decrease of deposits occurred mainly in business clients segment, incl. demand deposits 156.9 million euros and time deposits 10.6 million euros. Decrease in the deposits of individuals was not significant (-4.5 million euros) and the decrease occurred only in demand deposits. The balances of time deposits of individuals were on the same

level on 31.12.12 as the year before.

Note 24. Subordinated liabilities

In thousands of euros 31.12.2012 31.12.2011 Sum Term Sum TermSubordinated loan agreement 9 000 15.05.2016 9 000 15.05.2016Subordinated loan agreement 4 000 15.02.2021 4 000 15.02.2021Accrued interest 390 - 391 -

Total 13 390 13 391

Note 25. Other liabilities

In thousands of euros 31.12.2012 31.12.2011Taxes payable 352 390Miscellaneous currency transactions 338 1 432Payments in transit 319 664Wages reserve 308 158Payables to suppliers 232 281Prepayments received 197 402Prepaid income 19 18Other 188 429Total 1 953 3 774


Note 26. Off-balance sheet receivables and liabilities

In thousands of euros31.12.2012 Receivables Liabilities1. Uncancellable transactions 0 8 0861.1 Guarantees and other similar uncancellable transactions 0 639

incl. financial guarantees 0 6391.2 Credit lines and overdraft 0 7 4472. Derivative transactions 30 317 30 3882.1 Currency-related derivative transactions 30 317 30 388

31.12.2011 Receivables Liabilities1.1 Guarantees and other similar uncancellable transactions 0 4 939

incl. financial guarantees 0 1 5711.2 Credit lines and overdraft 0 1 5712. Derivative transactions 0 3 3682.1 Currency-related derivative transactions 39 296 37 8111.1 Guarantees and other similar uncancellable transactions 39 296 37 811

Note 27. Interest income

In thousands of euros 2012 2011From loans and leases 6 738 6 177From financial assets at fair value 2 999 1 307From cash and deposits with banks 506 1 394Financial assets held to maturity 438 338From available-for-sale financial assets 14 12Total 10 695 9 228

Note 28. Interest expense

In thousands of euros 2012 2011From time deposits 2 564 3 998From subordinated loans 867 828From derivative instruments 441 411From loans 110 98From demand deposits 66 153Total 4 048 5 488

Note 29. Fees and commissions income

In thousands of euros 2012 2011Operation fees 1 517 1 453Gains from foreign exchange 1 085 1 048Charges from card transactions 385 394Loan and lease agreement fees 130 118Securities transaction and custodial fees 58 47Other income 344 308Total 3 519 3 368


Note 30. Fees and commissions expense

In thousands of euros 2012 2011Charges from card transactions 583 539Operation fees 319 277Securities transaction and custodial fees 14 30Other expenses 26 61Total 942 907

Note 31. Net profit/loss from financial assets and liabilities held for trading (+/-)

In thousands of euros 2012 2011From other financial assets, net 11 -28Total 11 -28

Note 32. Other operating income

In thousands of euros 2012 2011Revaluation of investment property 1 162 228Income/profit from disposal of assets 1 135 964Rental income 722 523Insurance intermediation 103 53Fines 80 87Other operating income 35 149Total 3 237 2 004

Note 33. Other operating expenses

In thousands of euros 2012 2011Expense/loss from disposal of assets 902 891Contributions to Deposit Compensation Fund 633 720Expenses on rental space 475 324Information system management 384 363Loss from revaluation of investment property 195 12Legal services, state fees 191 238Financial Supervision Authority supervisory fee 114 92Other operating expenses 238 179Total 3 132 2 819


Note 34. Administrative expenses

In thousands of eurosPersonnel expenses 2012 2011Wages and salaries 4 064 3 581Social tax, unemployment insurance 1 313 1 162Total 5 377 4 743

Other administrative expensesRent 744 522Office expenses 353 551Advertising expenses 199 239Transportation expenses 88 81Training and business trips 59 47Property insurance 18 19Other administrative expenses 172 150Total 1 633 1 609

Note 35. Pending court cases

As at 31 December 2012, a total of 45 filed claims with the total amount of 1 740 thousand euros plus accrued interests were pending. From a legal point of view, these claims have good prospect, a majority of these claims are related to the obligations arising from loan agreements.

The County Court proceeds the claim of the Bank´s shareholder to dispute a decision of the General Meeting of shareholders. The outcome of this claim has good prospect for the Group.There are no monetary claims against the Group.

Note 36. Rental assets


within 1 year 419 2751-5 years 832 948over 5 years 162 212Total 1 413 1 435


Note 37. Related parties

For the purposes of this Note, the following shall be considered related parties:- credit institutions having a qualifying holding and credit institutions belonging to the same group;- members of the Management Board and the Council of the Group, the head of internal audit (hereinafter „the Management“) and entities controlled by them;- those who have the same economic interest as management and entities related to them.

The terms of the loans given to related parties do not differ significantly from the loans given to other customers.Transactions with related parties are based on the price list and/or are carried out at market value.


Credit institutions having a qualifying holding Deposits in credit institutions having a qualifying holding 31.12 92 446Deposits from credit institutions having a qualifying holding 31.12 1 493 10 235Subordinated loan 31.12 13 000 13 000Interest income calculated during the period 1 1Interest expenses calculated during the period 897 856 Members of the boards and councils, and persons and ventures associated with them

Loans 31.12 286 221Deposits 31.12 722 470Interest income calculated during the period 13 9Interest expenses calculated during the period 14 10Management and council remuneration 592 514Maximum compensation payable to Management Board members upon their removal 189 154

No compensations were paid in 2012.

Note 38. Interest-bearing assets and liabilities, by term of fixation of the interest

31.12.2012In thousands of euros

Assets On demandWithin 1

month1-3

months3-12

months1-2

years2-5

yearsOver 5

yearsTotal

Deposits with the Central Bank

62 998 3 440 0 0 0 0 0 66 438

Deposits with credit institutions

20 389 20 366 0 0 0 0 0 40 755

Financial assets at fair value

0 4 351 3 115 7 086 4 737 13 698 5 035 38 022

Financial assets held to maturity

0 0 2 398 0 397 0 5 291 8 086

Loans and other similarreceivables

5 172 20 802 43 004 51 586 532 1 664 417 123 177

Total assets 88 559 48 959 48 517 58 672 5 666 15 362 10 743 276 478

Liabilities Due to Central Bank 0 0 0 0 0 10 000 0 10 000Due to credit institutions 609 0 0 152 152 1 060 0 1 973Customer deposits and other financial liabilities

148 658 10 762 12 454 68 622 10 458 2 801 643 254 398

Subordinated liabilities 0 0 0 0 0 9 000 4 000 13 000Derivative instruments 0 71 0 0 0 0 0 71Credit lines and stand-by loans

6 622 0 100 518 0 207 0 7 447

Guarantees and otheruncancellable liabilities

0 0 23 263 187 166 0 639

Total liabilities 155 889 10 833 12 577 69 555 10 797 23 234 4 643 287 528Balance sheet net position

-67 330 38 126 35 940 -10 883 -5 131 -7 872 6 100 -11 050

Cumulative position -67 330 -29 204 6 736 -4 147 -9 278 -17 150 -11 050 0

31.12.2011Total assets 35 255 248 830 71 799 65 395 12 082 6 893 12 988 453 242Total liabilities 322 179 19 251 22 791 62 796 10 740 3 616 13 791 455 164Balance sheet net position

-286 924 229 579 49 008 2 599 1 342 3 277 -803 -1 922

Cumulative position -286 924 -57 345 -8 337 -5 738 -4 396 -1 119 -1 922 0



Note 39. Structure of assets and liabilities, by currency


EUR USD LVL Other

currenciesTotal

Assets Cash in hand 1 528 374 212 320 2 434Deposits with the Central Bank 62 022 0 4 416 0 66 438Deposits with credit institutions 3 903 33 218 223 3 412 40 756Financial assets at fair value 25 070 12 977 0 21 38 068Loans (net) and other similar receivables 115 958 3 466 381 0 119 805Financial assets held to maturity 3 887 3 376 823 0 8 086Fixed assets 6 388 0 160 0 6 548Goodwill 4 0 0 0 4Investment property 14 274 0 913 0 15 187Other assets 8 851 713 259 0 9 823Total assets 241 885 54 124 7 387 3 753 307 149

Liabilities Due to Central Bank 10 073 0 0 0 10 073Derivative instruments 71 0 0 0 71Due to credit institutions 341 1 528 96 11 1 976Deposits and other financial liabilities 161 448 82 462 7 522 3 775 255 207Other liabilities 1 475 372 44 62 1 953Subordinated loans 13 390 0 0 0 13 390Total liabilities 186 798 84 362 7 662 3 848 282 670

Total shareholders' equity 28 604 0 -4 125 0 24 479Total liabilities and shareholders' equity 215 402 84 362 3 537 3 848 307 149Balance sheet net position 26 483 -30 238 3 850 -95 0Off-balance sheet transaction net position

-30 388 30 317 0 0 -71

31.12.2011 Total assets 303 642 164 631 7 599 2 472 478 344Total liabilities and shareholders' equity 263 774 203 000 7 625 3 945 478 344Balance sheet net position 39 868 -38 369 -26 -1 473 0Off-balance sheet transaction net position

36 705 38 190 0 0 1 485


Note 40. Maturity of assets and liabilities


On demand

Up to 3months

3 months - 1 year

1-5 years Over 5years

Termless Total

Assets Cash in hand 2 434 0 0 0 0 0 2 434Deposits with the Central Bank 62 998 3 440 0 0 0 0 66 438Deposits with credit institutions 35 198 5 558 0 0 0 0 40 756Financial assets at fair value 0 7 466 7 086 13 610 9 860 46 38 068Loans (net) and other similar receivables

4 597 3 926 9 850 39 706 61 726 0 119 805

Financial assets held to maturity 0 2 398 0 1 801 3 887 0 8 086Fixed assets 0 0 0 0 0 6 548 6 548Goodwill 0 0 0 0 0 4 4Investment property 0 0 0 0 0 15 187 15 187Other assets 1 851 453 0 0 0 7 519 9 823Total assets 107 078 23 241 16 936 55 117 75 473 29 304 307 149 Liabilities Due to central banks 0 0 0 10 073 0 0 10 073Derivative instruments 0 71 0 0 0 0 71Due to credit institutions 609 37 152 1 178 0 0 1 976Deposits and other financial liabilities 141 267 30 006 69 333 13 342 1 259 0 255 207Other liabilities 1 024 905 16 8 0 0 1 953Subordinated liabilities 0 0 0 9 351 4 039 0 13 390Total liabilities 142 900 31 019 69 501 33 952 5 298 0 282 670Total shareholders' equity 0 0 0 0 0 24 479 24 479Total liabilities and shareholders' equity

142 900 31 019 69 501 33 952 5 298 24 479 307 149

Difference between maturity of balance sheet entries

-35 822 -7 778 -52 565 21 165 70 175 4 825 0

Difference between maturity of off-balance sheet instruments

-8 086 -71 0 0 0 0 -8 157

Total difference between maturity -43 908 -7 849 -52 565 21 165 70 175 4 825 -8 157

31.12.2011Total assets 61 632 251 682 29 715 50 682 60 508 24 125 478 344Total liabilities and shareholders' equity

320 607 44 217 62 615 23 675 4 949 22 281 478 344

Difference between maturity of balance sheet entries

-258 975 207 465 -32 900 27 007 55 559 1 844 0

Difference between maturity of off-balance sheet instruments

-4 939 1 485 0 0 0 0 -3 454

Total difference between maturity -263 914 208 950 -32 900 27 007 55 559 1 844 -3 454


Note 41. Separate financial statements of parent company

Balance sheets of AS Eesti Krediidipank

In thousands of eurosAssets 31.12.2012 31.12.20111. Cash and receivables from credit institutions 109 628 286 201

incl. cash 2 434 2 129Deposits with the Central Bank 66 438 125 094Deposits with credit institutions 40 756 158 978

2. Derivative instruments 0 1 4903. Financial assets measured at fair value through profit or loss 38 014 44 9184. Available-for-sale financial assets 54 1 4925. Loans and other similar receivables 143 613 125 9916. Financial assets held to maturity 8 086 8 5897. Financial investments in associated companies and subsidiaries 2 748 2 7488. Fixed assets 1 625 1 4279. Investment property 913 76210. Other assets 2 796 5 813Total assets 307 477 479 431 Liabilities 1. Liabilities to Central Bank 10 073 02. Derivative instruments 72 13. Deposits and other financial liabilities 270 761 452 569

incl. deposits of credit institutions 1 976 10 558deposits of customers 254 574 427 457subordinated loans 13 390 13 391other financial liabilities 821 1 163

4. Other liabilities 1 404 3 200Total liabilities 282 310 455 770

Shareholders’ equity 1. Share capital 25 001 25 0012. Share premium 174 1743. Mandatory reserve 1 718 1 7184. Reserve for changes from foreign exchange -130 -1725. Retained earnings/accumulated loss -3 060 -7796. Profit/loss for the financial year (+/-) 1 464 -2 281Total shareholders' equity 25 167 23 661Total liabilities and shareholders’ equity 307 477 479 431


Income statements of AS Eesti Krediidipank

In thousands of euros 2012 20111. Financial and operating income and expenses 8 608 5 8101.1. Interest income 11 154 10 0701.2. Interest expense (-) -4 049 -5 496

Net interest income 7 105 4 5741.3. Dividend income 1 01.4. Fee and commission income 3 457 3 3051.5. Fee and commission expense (-) -942 -907

Net fee and commission income 2 515 2 3981.6. Realised profit/loss from financial assets and liabilities, not recorded in fair value, net (+/-)

0 33

1.7. Net profit/loss from financial assets and liabilities heldfor trading (+/-)

11 -28

1.8. Net foreign exchange gains/losses (+/-) -4 01.9. Net profit/loss from disposal of non-current assets (+/-) 1 -41.10. Other operating income 456 3931.11. Other operating expenses (-) -1 477 -1 5562. Administrative expenses -7 094 -6 4462.1. Wages and salaries (-) -5 020 -4 4652.2. Administrative and general expenses (-) -2 074 -1 9813. Depreciation of non-current assets (-) -376 -3434. Impairment of assets (+/-) 326 -1 2944.1. Loans 336 -1 2504.2. Available-for-sale financial assets 0 -264.3. Tangible fixed assets -2 -124.4. Other assets -8 -65. Profit/loss from continued operations, before income tax 1 464 -2 2736. Income tax expense on continued operations (-) 0 -87. Net profit/loss from continued operations (+/-) 1 464 -2 2818. Net profit/loss from discontinued operations (+/-) 0 09. Net profit/loss from continued and discontinued operations (+/-) 1 464 -2 281

Comprehensive income statement of the bank 1. Net profit/loss of the bank (+/-) 1 464 -2 2812. Other comprehensive income/expense2.1. Unrealized foreign currency effects arising from foreign business unit 65 -1652.2. Revaluation of available-for-sale financial assets -23 -7Total comprehensive income/expense of the bank 1 506 -2 453

CommentOn March 15, 2011, Latvian branch was added to Eesti Krediidipank through a merger (balance sheet total of the Latvian branch during merger was 83 277 thousand euros).When analysing the comparative data of the income statement, it has to be taken into account that the annual report of 2011 contains income and expenses generated by the Latvian branch as of March 15 and for the whole calendar year in the income statement for the financial year 2012.


Statement of changes in shareholders’ equity of AS Eesti Krediidipank

In thousands of eurosShare capital

Sharepremium

Reserves Revaluation reserve

Retainedearnings/accumul-ated loss

(+/-)

Totalshare-

holders’equity

Shareholders’ equity 31.12.2010 25 001 174 1 687 0 -748 26 114Formation of reserves 0 0 31 0 -31 0Unrealized foreign exchange differences from the revaluation of foreign entities´ financial data

0 0 0 -165 0 -165


0 0 0 -7 0 -7

Profit/loss for the year (+/-) 0 0 0 -2 281 -2 281Shareholders’ equity 31.12.2011 25 001 174 1 718 -172 -3 060 23 661Unrealized foreign exchange differences from the revaluation of foreign entities´ financial data

0 0 0 65 0 65


0 0 0 -23 0 -23

Profit/loss for the year (+/-) 0 0 0 0 1 464 1 464Shareholders’ equity 31.12.2012 25 001 174 1 718 -130 -1 596 25 167

Book value of the holdings under significant influence

-2 748

Book value of the holdings under significant influence, calculated using equity method

2 428 320 189 0 452 3 389

Adjusted unconsolidated shareholders’ equity 31.12.2012

25 808


Cash flow statement of AS Eesti Krediidipank

In thousands of euros2012 2011

Cash flow from operating activities (indirect method)Net profit/loss (+/-) 1 464 -2 281Adjustments

Provisions for loans and receivables -344 1 256Depreciation, amortisation and impairments 379 356Revaluation of investment property -149 -97Revaluation of available-for-sale financial assets 0 26Net profit from disposal of non-current assets -1 4Effect of changes in currency exchange rates 4 1Net interest income -7 105 -4 574

Received interests 11 811 10 118Paid interests -4 839 -5 769Change in receivables from customers of credit institutions and leasing companies -18 889 6 090Change in long-term deposits in credit institutions 985 -256Change in receivables from credit institutions -8 577 8 831Change in deposits -172 027 39 738Change in assets and liabilities related to other operating activities 11 327 -20 440Total cash flow from operating activities -185 961 33 003

Cash flow from investing activities (direct method)Disposal of non-current assets 11 31Acquisition of non-current assets and investment property -586 -813Sale of subsidiaries 0 3Total cash flow from investing activities -575 -779

Cash flow from financing activities (direct method)Loans received from credit institutions 10 000 0Repayment of loans received from credit institutions 0 -2 500Subordinated loans received 0 4 000Total cash flow from financing activities 10 000 1 500

Cash from business combinations: 0 83 227Cash in hand 0 174Demand deposits and short-term deposits with credit institutions 0 83 053Total cash flow -176 536 116 951Change in cash and cash equivalents -176 536 116 951Cash and cash equivalents at the beginning of the year 286 163 169 212Cash and cash equivalents at the end of the year 109 627 286 163

Balance of cash and cash equivalents: 109 627 286 163Cash in hand 2 433 2 129Demand deposits with Central Bank 66 438 10 088Demand deposits and short-term deposits with credit institutions 40 756 273 946

Annual Report of Krediidpank Group 54

Note 42. Events after the balance sheet date

In January 2013, the Management Board of Eesti Krediidipank decided to change the strategy in the Latvian market. Instead of the former universal banking services, the Bank reduces its activities in the Republic of Latvia and will continue to offer time deposits for private customers and loans for business customers. The Bank will give up the offices in Riga and continues its activities with reduced personnel.AS Martinoza has made a binding offer to purchase real estate in the amount of approximately 5 million euros; response to the offer is expected to be announced in March 2013.

Note 43. Principles of remuneration

Krediidipank motivates its employees to keep long and loyal employment relationship.

Remuneration structure applicable in the Krediidipank Group consists of three parts:•basic salary (fixed and variable pay for very good performance);•performance pay according to the performance of the Group and•lump-sum bonus for outstanding achievement.Other non-monetary bonuses are added to the salary in the form of flexible working hours, different company events and additional paid vacation.Performance pay according to the Group´s performance will be paid in cash in the following period of the reporting period to those employees who have contributed in achieving results, have followed the Group targets and values and are still employed by the Group. Performance pay supports efficient risk management and does not encourage taking unnecessary risks.

The Bank has set up remuneration committee consisting of 4 members which evaluates yearly remuneration principles in a way which assures the motivation of the Management and employees in executing bank´s policies. Remuneration principles cannot promote taking unnecessary risks.

Responsibilities of the remuneration committee is to evaluate•the application of remuneration principles and their consistency with the targets of the bank´s activities;•the effect of the remuneration-related decisions on the risk management of the bank.

While executing its tasks, the remuneration committee has the right and obligation to:•perform surveillance over the remuneration of members of the Management Board and

employees;•prepare a list of positions that are subject to the surveillance of remuneration principles

and present it for approval;•obtain information on the agreements regarding remuneration, concluded with the holders of positions subject to surveillance, and control whether the agreement are fully executed;

•evaluate annually the application of remuneration principles and•make proposals to improve the remuneration principles if necessary.

In thousands of euros 2012 2011

Salaries and other remuneration 3 858 3 480Performance fees and bonuses 157 21 incl. bonuses calculated but not paid 138 0Redundancy and severance pay 20 28 incl. largest severance pay for one employee 4 8Fringe benefits 46 52Social tax, unemployment insurance tax 1 296 1 162Total 5 377 4 743Number of employees at the period end (in full time equivalent units) 270 266Average number of employees of the period (in full time equivalent units)

268 262

Contractual severance pay 237 191

All of the aforementioned fees are monetary, except fringe benefits.No benefits related to taking up positions were paid in the Group during the year.

Attached Documents2012

Proposal for profit allocation

The Management Board of AS Eesti Krediidipank approved the Annual Report 2012 of AS Eesti Krediidipank Group on 28.02.2013.

The profit of AS Krediidipank for the financial year 2012 was 1 463 841.91 euros. The profit of AS Krediidipank Group for the financial year 2012 was 2 155 261.32 euros.

The Management Board of AS Eesti Krediidipank proposes the General Meeting of the Shareholders to allocate the audited profit for 2012 in the amount of 1 463 841,91 euros as follows:1. allocate 73 193 euros of mandatory reserves to the balance sheet line „Mandatory reserve",2. allocate 1 390 648.91 euros on the balance sheet line „Retained earnings/accumulated loss“ to cover the loss of prior periods.


Annual Report 2012 - Coop Pank€¦ · Report 31.12.2012 Reporting period 01.01.2012 - 31.12.2012...

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