HVB Bank Czech Republic

In 2006 profit before tax rose by 29%; ROE grew to 15% and the cost/income ratio improved significantly. The bank’s net interest income increased by 19% to CZK 3.48 bn and administrative expenses were reduced by 6% to CZK 2.42 bn. Loans and receivables with banks fell by 40% while financial assets increased by 18%. Loans and receivables with customers rose by 14% compared with 2005, deposits from customers were up 9% and debt certificates including bonds by 37%.

Retail customers:

A significant increase of CZK 250 m in the profit before tax was achieved by continued strong growth in customer numbers and the introduction of several innovative products. In the credit card business the bank and its partner Winterthur successfully introduced the “Winterthur Club Card” which is linked to a pension insurance scheme.

The number of business customers rose by 10%.

Corporate customers:

Operating profit in this segment increased by 8%; average lending volume rose by 12% and the deposit base grew by 6%.

2006 was a record year for Trade Finance. Factoring transactions reached a volume of CZK 1.78 bn, up 103% on 2005. The commercial real estate financing portfolio increased by 27% to a total volume of CZK 40 bn. The structured financing and syndicated loans segment also maintained its leading position.

International Markets:

In 2006, the long-term strategy of offering a wide range of customised treasury products to corporate customers and to sophisticated institutional investors strengthened the market position.