6th Interbalkan Forum of Banking Associations UBBiH UDRUŽENJE BANAKA BOSNE I HERCEGOVINE UDRUGA BANAKA BOSNE I HERCEGOVINE УДРУЖЕЊЕ БАНАКА БОСНE И ХЕРЦЕГОВИНE BANKS ASSOCIATION OF BOSNIA AND HERZEGOVINA Branilaca Sarajeva 20/III, 71000 Sarajevo, Bosna i Hercegovina, Tel: (387 33) 714 630, Fax: (387 33) 714 631 www.ubbih.ba BOSNIA AND HERZEGOVINA AND BANKING SECTOR OF B&H in 2005 Mr. Ranko Labović, Managing Board Member Nicosia, October 6th, 2006 6th Interbalkan Forum of Banking Associations

Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations CONTENT OF THE PRESENTATION I. B&H in brief II. Presenting UBBiH III. Priorities of the UBBiH in 2006 IV. Performance Results of the Banking Sector in 2005

Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations I. B&H in brief BOSNIA AND HERZEGOVINA Flag

Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations I.B&H in brief Bosnia and Herzegovina-Geographic Position in Europe -Bosnia is located in the western Balkans, bordering Croatia, Serbia Montenegro The country has 20 kilometres of coastline

Map of Bosnia and Herzegovina: Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations I. B&H in brief Map of Bosnia and Herzegovina: Population: 4,498,976 Capital: Sarajevo Area: 51,197 km²

Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations I. B&H in brief The national currency is the Bosnia and Herzegovina convertible mark (BAM-KM), which is fixed to the Euro (€1 = KM1.95583)

Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations I. B&H in brief Economy -Bosnia currently faces the dual problem of rebuilding a war-torn country and introducing market reforms to the formerly centrally planned economy

Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations I. B&H in brief The largest foreign investors (1996 - 2006) in the country have been*: Croatia (308.444.000 €) Austria (279.533.000 €) Lithuania (252.395.000 €) Slovenia (236.532.000 €) Netherlands (204.889.000 €) Germany (130.984.000 €) *Source: www.fipa.gov.ba

Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations I. B&H in brief Foreign investments by sector (1996-2006)*: →55.5% Manufacturing → 16.5% Banking → 8.6% Services → 6.2% Trade → 0.9% Transport → 0,7% Tourism *Source: www.fipa.gov.ba

Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations II. Presenting UBBiH (1/5) CONSTITUENT ASSEMBLY – June 24, 2004 The Association members are all banks of BiH

Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations II. Presenting UBBiH (2/5) BODIES OF THE ASSOCIATION: ASSEMBLY MANAGING BOARD Mr. Petar Jurčić, Chairman (Hypo-Alpe-Adria Bank Mostar) Mr. Mirsad Letić, Member (UPI Bank Sarajevo) Mr. Dino Osmanbegović, Member (Raiffeisen Bank BH Sarajevo) Mr. Berislav Kutle, Member (UniCredit Zagrebačka Bank Mostar) Mr. Ranko Labović, Member (ZEPTERBANK Banja Luka) EXECUTIVE SECRETARY, Mr. Mijo Mišić

Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations II. Presenting UBBiH (3/5) OUR MISSION: -Relationships among the members; -Relationships with institutions; -Relationships with media; -Education; -Establishment of cooperation with similar institutions in the environment and abroad

Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations II. Presenting UBBiH (4/5) COMMISSIONS OF THE BANKS ASSOCIATION OF BIH 1. Commission for Electronic Banking 2. Commission for Old FC Savings 3. Commission for Card based Operations 4. Legislation Commission 5. Audit and Supervision Commission 6. Commission for Safety Issues 7. Commission for Prevention of Money Laundering 8. Money and Capital Market Commission

Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations II. Presenting UBBiH (5/5) PUBLIC RELATIONS Cooperation with Media Website BH Banker Annual Media Conference Targeted Media Conferences (as needed) Media Contact Person (PR), Ms. Julijana Jurković, Tel: 036 444 444

Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations III. Priorities of the UBBiH in 2006 (1/1) PRIORITIES (GOALS) OF THE BANKS ASSOCIATION OF BIH IN 2006: 1. Adoption of Law on Banks on the BiH Level, 2. Establishment of Unified Supervision on the BiH Level, 3. Foundation of Auction Center, 4. Adoption of Law on Electronic Operations, 5. Improvement of an Enforcement Collection Process, 6. Credit Bureau, 7. Adoption of Law which would regulate minimum standards in the area of bank protection.

Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations IV. Performance Results of the Banking Sector in 2005

NUMBER OF BANKS 33 banks Federation of BiH, 24 banks Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations IV. Performance Results of the Banking Sector in 2005 1/9 NUMBER OF BANKS 33 banks Federation of BiH, 24 banks Republic of Srpska, 9 banks Out of total number of banks, there are 5 banks under Provisional Administration

GENERAL DATA FROM THE BALANCE SHEET OF BANKS IN BIH (in 000 KM) Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations IV. Performance Results of the Banking Sector in 2005 2/9 GENERAL DATA FROM THE BALANCE SHEET OF BANKS IN BIH (in 000 KM) Description 2004 2005 Index Total Capital 1.101.920 1.320.132 120 Total Assets 9.264.642 11.761.550 127

Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations IV Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations IV. Performance Results of the Banking Sector in 2005 3/9 CAPITAL STRUCTURE OF THE BANKS IN BIH

Citizens 2.547.220 3.257.969 128 Legal Entities 4.364.886 5.529.971 Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations IV. Performance Results of the Banking Sector in 2005 4/9 DEPOSITS OF THE BANKS IN BIH (in 000 KM) Description 2004 2005 Index Citizens 2.547.220 3.257.969 128 Legal Entities 4.364.886 5.529.971 127 Total 6.912.106 8.787.940

Description 2004 2005 Indeks Citizens 2.578.785 3.389.375 131 Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations IV. Performance Results of the Banking Sector in 2005 5/9 LOANS OF THE BANKS IN BIH (in 000 KM) Description 2004 2005 Indeks Citizens 2.578.785 3.389.375 131 Legal Entities 2.876.494 3.666.295 127 Total 5.455.279 7.055.670 129

Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations IV Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations IV. Performance Results of the Banking Sector in 2005 6/9 Interest Rates (%) Data Source: Central Bank of BiH Date December S T Loans L T Demand Deposits L T Deposits 2002 12,07 10,59 1,44 4,38 2003 10,54 9,18 0,69 3,40 2004 9,92 8,23 0,77 4,02 2005 9,03 7,70 0,63 3,63

Description 2004 2005 Index Total Income 659.598 778.649 118 Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations IV. Performance Results of the Banking Sector in 2005 7/9 GENERAL DATA FROM THE INCOME STATEMENT (in 000 KM) Description 2004 2005 Index Total Income 659.598 778.649 118 Total Expenses 602.474 679.979 113 Profit before Tax 57.124 98.670 177

Description 2004 2005 Index Number of Employees 7.840 8.392 107 Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations IV. Performance Results of the Banking Sector in 2005 8/9 EMPLOYEES OF THE BIH BANKING SECTOR University Qualifications 35%, Secondary School Qualifications 52% and Others 13% Description 2004 2005 Index Number of Employees 7.840 8.392 107

COMPARED TO OTHER ECONOMY SECTORS IN BIH Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations IV. Performance Results of the Banking Sector in 2005 9/9 COMPARED TO OTHER ECONOMY SECTORS IN BIH -more developed -regulated better -organized better -positive influence to integration and development of the B&H economy

Nicosia-Cyprus, 6th Interbalkan Forum of Banking Associations THANK YOU FOR YOUR ATTENTION!