Deloitte Consulting S.p.A.

Agriculture and Agro-Industry in Slovak RepublicBanks’ role in supporting agriculture and food industry

Bratislava, November 16th, 2010

Loc

atio

n/F

ilena

me

/Uni

t/Aut

hor/

Ass

ista

nt (

Ch

ange

via

'Vie

w -

Hea

der

and

Fo

oter

')

- 2 -

ForewordsEfficient use of capital is a Bank strategic goal

Support agriculture and food firms able to attract EU funds means mainly to

comply with regulation

successfully manage consensus

generate more value for the bank and for the client

Basel 2/3

Liquidity and Capital

shortage

Pressure from stockholders,

stakeholders and communities

Value creation driver

Loc

atio

n/F

ilena

me

/Uni

t/Aut

hor/

Ass

ista

nt (

Ch

ange

via

'Vie

w -

Hea

der

and

Fo

oter

')

- 3 -

A (very) simplified exercise

YE P/L Statement YE P/L Statement

Sales 5,000 Sales 5,000 1st Pillar contribution 0 1st Pillar contribution 3,000

Production cost (monetary) (4,100) Production cost (monetary) (4,100)Production cost (non monetary) (400) Production cost (non monetary) (400)

Net interest income (loss) (50) Net interest income (loss) (20)

Other items and tax (450) Other items and tax (830)

Net income 0 Net income 2,650

Pillar 2

Pillar 1

YE Financial Statement

Assets Liabilities and NAV 

Cash & Sight deposits 0 Providers 1,000Client receivables 1,500Banks (sight accounts) 2,000Warehouse 2,000Banks (mid/long term loans) 5,000Investments 6,000

  Other shareholders funds 0  Equity and ret. earnings 1,500  Net income 0 

Total 9,500 Total 9,500

YE Financial Statement

Assets Liabilities and NAV 

Cash & Sight deposits 2,650Providers 1,000Client receivables 1,500Banks (sight accounts) 2,000Warehouse 2,000Banks (mid/long term loans) 2,000Investments 6,000

  Other shareholders funds 3,000  Equity and ret. earnings 1,500  Net income 2,650 

12,150 12,150

Loc

atio

n/F

ilena

me

/Uni

t/Aut

hor/

Ass

ista

nt (

Ch

ange

via

'Vie

w -

Hea

der

and

Fo

oter

')

- 4 -

A (very) simplified exercise

Score calculation

a Financial P/L (50) (20)b Sales 5,000 8,000 c Operating P/L 500 3,500 d Cash flow 400 3,050 e Working capital 500 3,150 f Other shareholders funds 0 3,000 g Current liabilities 3,000 3,000

  index 1 (a/b) -1.00% -0.25%  index 2 (a/d) -12.50% -0.66%  index 3 (d/c) 80.00% 87.14%  index 4 (f/e) 0.00% 95.24%  index 5 (g/b) 60.00% 37.50%

  Score 4.45144 6.13719

  PD 1.15274% 0.21563%  LGD 45% 45%  EL 0.51873% 0.09703%  Capital at Risk (1.000) 55.15 18.94

  Basis point delta   42   Marginal value creation (CoC = 7.5%) 2.72

Better rating – Lower expected loss

Additional value to share