Sustainability Report 2013 - Banca Intesa · that contributes not only to the long-term success of...
Transcript of Sustainability Report 2013 - Banca Intesa · that contributes not only to the long-term success of...
Sustainability Report 2013
Bank of
2
CONTENTS
FOREWORD BY PRESIDENT OF THE EXECUTIVE BOARD 3WHY DO WE REPORT 4HOW DO WE REPORT 4
1 IDENTITY 5
11 BANK PROFILE 6 Intesa Sanpaolo 6 Banca Intesa 6 Mission and Values 7 Strategic Approach to Sustainability and Strategy in Practice 7 Joint Initiatives 7 Sustainability Management 10
12 RELATIONS WITH STAKEHOLDERS 11 Dialogue with Stakeholders 11 Stakeholder Map 11 Materiality 11
2 SUSTAINABILITY 13
21 GENERATED ECONOMIC VALUE 14 Market Position 14 Direct and indirect economic value generated 14
22 GOVERNANCE IN BANCA INTESA 16 Corporate Governance 16 Risk Management 17 Customers 21 Employees 26 Community 31 Suppliers 35 Environment 37
3 GRI CONTENTS AND INDICATORS 40
3
FOREWORD BY PRESIDENT OF THE EXECUTIVE BOARD
Ladies and gentlemen
Integrating the concept of sustainability and the highest standards of professional ethics into all business process-es enabled us again to create in the past year a value that contributes not only to the long-term success of Banca Intesa but also to the economic development of the country and to the well-being of the whole society Respecting the needs of all stakeholders we strove to act in a manner that brings permanent benefits to our customers and suppliers shareholders employees as well as the broadest social community
We focus our sustainable business strategy on the ar-eas on which we can make the greatest positive impact Thus responsible financing of economic recovery and improvement of the citizensrsquo quality of life was our main priority in 2013 as well In accordance with this goal we supported companies and households with total placements of over RSD 275 billion and responding to the growing needs of our customers we developed new products while also improving the existing ones In the area of employee care in addition to respecting their opinions their development and advanced train-ing were our priority which is evidenced by the number of hours of training that was almost double compared to the year earlier At the same time we also achieved measurable progress in terms of rational resource utili-sation striving to reduce the environmental impact and promote environmental accountability
Support to the community remained one of the key de-terminants of our CSR activities in the previous year as well We allocated over RSD 60 million in total to sup-port the operation of health care and social care insti-tutions supported the development of art and culture and promoted sports and education On the other hand we also initiated new long-term projects convinced that we give a significant contribution to social inclusion in our country by providing assistance to vulnerable elderly persons In addition we worked on strengthening the culture of volunteering and developed our own corpo-rate volunteering programme Intesa from the Heart en-couraging our employees to invest their time skills and energy in the well-being of the community
Our ever-increasing efforts to identify the real needs and problems of all stakeholders resulted in the improvement of the reporting process itself This yearrsquos Sustainability
Report the second that we prepare in accordance with the standards of the international reporting methodol-ogy ndash Global Reporting Initiative (GRI) ndash thus includes even more indicators evidencing our determination continuously to improve sustainable business practices and measure our success not only in terms of financial and market results but also in terms of the way in which we achieve them
Yours sincerely
Draginja ĐurićPresident of Banca Intesa Executive Board
4
WHY DO WE REPORT
Sustainability reporting is an integral element of transparent communication of Banca Intesa with all its stakeholders who are thus provided full insight into all its activities including its economic socio-environmental performance The reporting enables the Bank to analyse and present in a quality and systematic manner the results of all its projects and initiatives relative to the set goals in order to improve the performance and its monitoring
In line with the global shift towards integrated reporting which includes mandatory nonfinancial parameters in addition to financial parameters the Bank strives to promote sustainability reporting as a standard business practice of responsible companies in accordance with the strategic commitment of its parent group Intesa Sanpaolo
HOW DO WE REPORT
Sustainability Report 2013 is Banca Intesarsquos fourth corporate social responsibility (CSR) report and the second designed according to the most relevant international reporting initiative Global Reporting Initiative (GRI) Relative to the previous year when GRI G31 guidelines were first introduced as a reporting framework in 2013 the Bank improved the level of the GRI methodology application by reporting on 24 GRI indicators which now also include the GRI Financial Services Sector Supplement (FSSS) indicators as indicators of advanced corporate social responsibility practices The Report also fully complies with the requirements of the United Nations Global Compact Communication on Progress (COP)
As in the previous year the Report is structured so as to present to the stakeholders the topics of the highest importance to them in a transparent and clear way taking into account the Bankrsquos strategic priorities and goals with an intention of pointing out joint areas of activity the greatest challenges as well as the solutions offered by the Bank At the same time revising the main parameters between two reporting cycles and checking the compliance with the fundamental GRI principles reflect the Bankrsquos constant efforts to improve further the quality of the Report
GRI Reporting Principles
In defining the content the Bank was guided by the principles of materiality stakeholder inclusiveness sustainability context and completeness An analysis of the materiality of relevant topics resulted in a set of priority areas that affect to the highest extent the Bank operation its stakeholders and the broader community The credibility of the information presented in the Report was ensured by consistently adhering to the principles of balance comparability accuracy timeliness clarity and reliability
Individual organisational units of the Bank contributed to the process of information gathering and processing through CSR ambassadors selected representatives of departments offices and units who closely cooperated with the Marketing and Communications Department in the preparation of the Report The indicators and the measurement system were developed in accordance with standard performance indicators obligations arising from international methodological frameworks for reporting and the Bankrsquos desire for each step on the sustainability path to be measurable
Most of the information was gathered directly and assessments measurement methods and information sources were specifically stated where needed The Report is published annually and refers to the activities of Banca Intesa ad Beograd in 2013 Comparisons with the previous years were provided where possible There were no significant changes regarding the main Report parameters relative to 2012
Previous Banca Intesa sustainability reports (for 2010 2011 and 2012) are available at http wwwbancaintesarscodenavigateaspxid=384
Contact person in charge of Sustainability Report 2013 Jelena Krsmanović Media Relations Manager jelenakrsmanovicbancaintesars
C C+ B B+ A A+
Req
uir
ed Independent level
determinationReport verified
by external source
Report verified by external
source
Report verified by external
source
Op
tio
nal
Verified by third party
Verified by GRI
5
1 Identity
6
11 BANK PROFILE
INTESA SANPAOLO
Intesa Sanpaolo is one of the leading banking groups in Europe and the largest in Italy Created in 2007 by the merger of the leading Italian banks Sanpaolo IMI and Banca Intesa the Group holds the leading position in Italy in terms of providing financial support to retail and corporate customers The Group is committed to improving its services to retail customers and providing significant support to the business of its customers as well as to the overall economic development of the countries where it operates
Intesa Sanpaolo serves around 111 million customers through its well-developed business network of more than 4700 branches The Group focuses its business operations on Central and Eastern Europe the Middle East and Northern Africa where it serves 84 million customers in 12 countries through a network comprising around 1400 branches it ranks first in Serbia second in Croatia and Slovakia third in Albania fifth in Bosnia and Herzegovina Egypt and Hungary and eighth in Slovenia Intesa Sanpaolo also supports corporate customers through its international network covering 29 countries with an emphasis on the Middle East Northern Africa the US Russia China and India
BANCA INTESA
Banca Intesa is the leading financial institution in the Serbian market measured by key performance indicators ndash total equity assets loans and deposits Banca Intesarsquos commitment to base its business on innovativeness and the highest level of professionalism was recognised by more than 167 million customers individuals entrepreneurs small and medium-sized enterprises large companies and local governments
The Bank operates through a business network comprising more than 190 branches in 111 cities throughout Serbia relying on the knowledge and expertise of its professional team of around 3000 employees Banca Intesa has the most developed network of POS terminals and ATMs in the market in addition it is the leader in the card business segment with more than 14 million debit and credit cards issued
Striving to complete its offer of financial services in 2006 Banca Intesa founded a leasing company Intesa Leasing doo Belgrade which is also a member of Intesa Sanpaolo Group The operation of the leasing company is not covered by this Report
In July 2013 Euromoney the leading global magazine in the area of financing and banking declared Banca Intesa the best bank in Serbia in 2012 granting it the Excellence Award For the fourth consecutive year the Bank received this renowned award which is given based on an analysis of a series of quantitative and qualitative criteria such as business parameters innovativeness as well as portfolio quality
At the same time Banca Intesa also received an award of the EMEA Finance magazine as the best bank in Serbia in 2012 in the category of banks operating as part of international groups The winners of European banking awards are selected based on an evaluation by a jury which is guided by bank achievements within the context of the macroeconomic environment in which it operates as well as relative to the situation in the entire banking sector The key elements in the juryrsquos work were sustainable growth and commitment to customers
1991 2005 2006 2007 2008
One of the first private banks in Serbia with the head office in Belgrade
Becomes a member of Banca Intesa Group now named Intesa Sanpaolo
Intesa Leasing foundedBecomes the leading
bank in Serbia by all key performance indicators
Panonska Banka acquired and the number of
employees increased to 3000 Novi Sad becomes
the second seat of the Bank
BANK HISTORY
7
MISSION
Banca Intesarsquos mission is to provide excellence in banking and financial services for its customers leveraging on developing its presence in all the areas in which it operates and a style of growth that focuses on sustainable results and on establishing a trust-based process that stems from customer and shareholder satisfaction from its employeesrsquo sense of belonging and listening to the needs of local communities
The Bankrsquos growth strategy strives to create stable and sustainable values from the economic financial socio-environmental points of view building upon the Bankrsquos fundamental corporate values in its relations with all stakeholders
CORPORATE VALUES
INTEGRITY EXCELLENCE TRANSPARENCY RESPECT
FOR EACH INDIVIDUAL
EQUALITYINDIVIDUAL
VALUES
RESPONSIBLE USE OF
RESOURCES
We pursue our goals with honesty
fairness and with a sense of
responsibility in full compliance with the rules and principles of ethics mandated by the profession in the spirit of signed
agreements
We set ourselves the goal of continuous
improvement planning future activities and anticipating
challenges along with fostering
extensive creativity aimed at innovations moreover we recognise and reward merits and quality
We are committed to make
transparency the basis for all our activities
communication and contracts with the aim of enabling our stakeholder to make independent informed decision
We intend to combine large-format business with deep local
roots and to be a bank with a broad vision while not
losing sight of the man as an individual
We are committed to eliminating any form of
discrimination in our conduct and to respecting gender
racial religious political linguistic and intellectual diversity trade
union preferences as well as the
diversity in terms of age and abilities
The value of each individual
guides our modus operandi we use listening and dialogue
techniques as tools for continually
improving relations with all
stakeholders
We strive to use carefully all resources and to promote the conduct based on the optimal
use of resources and avoidance of waste and losses
giving priority to the choices that consider sustainability
STRATEGIC APPROACH TO SUSTAINABILITY AND STRATEGY IN PRACTICE
Operating against the backdrop of modest economic recovery and complex business environment Banca Intesa opted for a responsible business strategy that is based on maintaining the system stability on the one hand and monitoring the needs of citizens and economic entities on the other Guided by clear goals in these areas the Bank continued to create value for its customers while contributing to the economic and social development of the broader community Constant care of customer satisfaction expressed through maximum professionalism in the work and a high level of innovativeness remained at the top of the priority list as did constant improvement of the products and services the Bank provides to its customers Owing to such approach Banca Intesa maintained its stable credit activity and increased its market share in lending although the domestic banking sector as a whole recorded a decrease in lending due to lower demand and a high share of non-performing loans In addition further growth was recorded in the Bankrsquos total deposits and its market share in this business segment as well reflecting a high level of customer confidence
In line with its strategic commitment to integrate fully the sustainability concept into its long-term business plans but also into its everyday activities and decisions in 2013 Banca Intesa also sought to meet the needs of all stakeholders its employees shareholders and customers as well as the entire social community By constantly improving its CSR practices during the previous year the Bank launched new projects aimed at providing support to the community and continued investing considerable funds in education culture health care and sports and the primary area of its activity was the strengthening of the culture of volunteering In addition special products were designed in response to the growing needs of customers and a stimulating work environment was provided to the employees
JOINT INITIATIVES
Promoting the international business standards Banca Intesa is particularly committed to the development and introduction of corporate social responsibility as an integral part of its business practice as well as to raising awareness of the business community and the broader community of the importance of this concept As the leading financial institution in the country the Bank has a responsibility for the broader social and economic progress as well and therefore advocates a better quality of life prosperity and development of economy and the entire society through its active participation in the work of business associations
8
UNITED NATIONS GLOBAL
COMPACT
BUSINESS LEADERS FORUM
SERBIAN ASSOCIATION OF MANAGERS
AMERICAN CHAMBER OF COMMERCE
FOREIGN INVESTORS COUNCIL
NATIONAL ALLIANCE FOR LOCAL ECONOMIC
DEVELOPMENT
CHAMBER OF ITALIAN
AND SERBIAN BUSINESSPEOPLE
The largest global CSR network
bringing together more than
10000 members throughout
the world and promoting the protection of human and
labour rights and the environment and fight against
corruption
The first business network for CSR in Serbia comprising
20 members
A business association founded
with the aim of becoming a credible social partner of the Serbian Government
in the process of improving the businessenvironment
and accelerating economic
development
An organisation promoting the improvement of business
environment in Serbia as well as partnership
between US and Serbian companies
for the purpose of economic development
A business association whose activities contribute to the improvement of the investment
and business climate in Serbia
A business association that brings together
representatives of all three sectors of
society ndash companies municipalities
and NGOs which work together
on improving the conditions for local economic
development and doing business
A non-profit organisation that fosters improves
and develops trade between Italy and Serbia
9
CROSS REFERENCE TABLE
UNITED NATIONS GLOBAL COMPACT PRINCIPLES (UNGC)CORRESPONDING GRI INDICATOR
HUMAN RIGHTS
PRINCIPLE 1 BUSINESSES SHOULD SUPPORT AND RESPECT THE PROTECTION OF INTERNATIONALLY PROCLAIMED HUMAN RIGHTS AND
LA 4
LA 13
LA 15
HR 11
PR 8
PRINCIPLE 2 MAKE SURE THAT THEY ARE NOT COMPLICIT IN HUMAN RIGHTS ABUSES HR 11
LABOUR
PRINCIPLE 3 BUSINESSES SHOULD UPHOLD THE FREEDOM OF ASSOCIATION AND THE EFFECTIVE RECOGNITION OF THE RIGHT TO COLLECTIVE BARGAINING
LA 4
PRINCIPLE 4 THE ELIMINATION OF ALL FORMS OF FORCED AND COMPULSORY LABOUR
PRINCIPLE 5 THE EFFECTIVE ABOLITION OF CHILD LABOUR AND
PRINCIPLE 6 THE ELIMINATION OF DISCRIMINATION IN RESPECT OF EMPLOYMENT AND OCCUPATION LA 2
LA 13
LA 15
HR 11
ENVIRONMENT
PRINCIPLE 7 BUSINESSES SHOULD SUPPORT A PRECAUTIONARY APPROACH TO ENVIRONMENTAL CHALLENGES EN 26
PRINCIPLE 8 UNDERTAKE INITIATIVES TO PROMOTE GREATER ENVIRONMENTAL RESPONSIBILITY AND EN 4
EN 5
EN 8
EN 26
PR 3
PRINCIPLE 9 ENCOURAGE THE DEVELOPMENT AND DIFFUSION OF ENVIRONMENTALLY FRIENDLY TECHNOLOGIES EN 5
EN 26
ANTI-CORRUPTION
PRINCIPLE 10 BUSINESSES SHOULD WORK AGAINST CORRUPTION IN ALL ITS FORMS INCLUDING EXTORTION AND BRIBERY SO 3
SO 4
SO 6
10
Given that they were added subsequently to the new GRI guidelines version G31 the LA 15 and HR 11 indicators are entered into the cross reference table according to the authorrsquos estimate
In accordance with the GRI principle of materiality based on which priority topics present in the report are defined the corresponding indicators are not covered by this report taking into account their relevance to the banking sector The bank as an active member supports the promotion of all 10 global compact principles in its partners suppliers customers and in the general business and social community
SUSTAINABILITY MANAGEMENT
In order to achieve its business goals as well as those relating to socio-environmental dimensions Banca Intesa introduced ethical responsibility as a criterion in the process of decision-making regarding all stakeholders which means that socio-environmental issues are integrated in the process of product and service development risk management as well as in loan granting and supplier selection
The adoption of the Code of Ethics with the defined values to which Banca Intesa is committed introduced a management model based on the principle of accountability that requires commitment to aligning everyday business activities with the declared values at the individual level as well as at the level of the Bankrsquos organisational units The Code of Ethics is an expression of the corporate culture and tradition from which Banca Intesa originates This document provides on the one hand a framework through which the Bank observes and interprets different situations and on the other hand the ultimate goal to which it strives
Procedure for Managing the Reports of Non-compliance with the Code of Ethics was adopted in 2011 and is implemented in all organisational units of the Bank in the process of delivering reports in cases of suspicion or knowledge of any activities or individual acts that are contrary to the Code of Ethics and other bylaws of the Bank The procedure for managing the reports of noncompliance with the Code of Ethics consists of the following steps non-compliance reporting report analysis translating and delivering the information to the parent Group establishing the status and verifying the facts involving the relevant department proposing corrective actions and delivering reports to relevant stakeholders as well as to the parent Group The Bank employee who noticed any behaviour of one of hisher colleagues that seems not to be in accordance with the moral and ethical principles prescribed by the Code of Ethics delivers a non-compliance report to the following e-mail address etickikodeksbancaintesars The report may also be delivered in hard copy to the following address Banca Intesa ad Beograd Marketing and Communications Department Bulevar dr Zorana Đinđića 2a 11070 Novi BeogradThrough the above mechanism during 2013 Banca Intesa recorded no cases of human rights violation as defined by the Code of Ethics
The Marketing and Communications Department independently as well as in close cooperation with CSR ambassadors delegated representatives of all organisational parts of the Bank implements and coordinates projects and activities in the area of corporate social responsibility The CSR ambassadors provide the Department with necessary information in connection with the implementation of projects and activities and participate in monitoring measuring and reporting to the parent Group and other stakeholders
The Marketing and Communications Department also takes steps to make the CSR criteria a recognisable element of the whole management system and to this end cooperates with the top management in the process of defining the CSR policies and strategies communicating to the highest representatives of the Bank the results of dialogue with the stakeholders their needs and key issues that should be a part of strategic guidelines
11
12 RELATION WITH STAKEHOLDERS
DIALOGUE WITH STAKEHOLDERS
Dialogue with stakeholders is the beginning of continuous progress achieved by carefully monitoring the demands and needs of stakeholders and harmonising them with the Bankrsquos strategy The dialogue is achieved by using different techniques as part of the Bankrsquos regular activities and is a precondition for preparing the materiality matrix and eventually the Sustainability Report
Stakeholder map is based on the international methodology for stakeholder engagement the AA1000 Standard (Institute of Social and Ethical Accountability)
MATERIALITY
Sustainability Report 2013 focuses on the topics that proved to be the most important ones for stakeholders and also for the business of Intesa Sanpaolo and hence of Banca Intesa following the GRI methodology and the AA1000 Standard In accordance with the needs analysis conducted two priority issues stood out which are presented in the table These issues are also present at the local level
STAKEHOLDER MAP
GROUP ENGAGEMENT MECHANISM
CUSTOMERS
Focus groupBenchmarking surveysMeetings workshops seminarsSatisfaction survey Handling and analysis of complaints applications and suggestions
EMPLOYEESEmployee satisfaction surveyTraining and evalution Meetings with trade union
COMMUNITYMeetings with CSosWorking groups working bodies
SUPPLIERSSupplier information form Csr questionnaireRegular communication in tender process
ENVIRONMENTMeetings CSosWorking groups working bodies
CUSTOMERS EMPLOYEES COMMUNITY SUPPLIERS ENVIRONMENT
INDIVIDUALSSMALL BUSINESS
SMESLARGE CORPORATES
LOCAL GOVERNMENTSCONSUMER ASSOCIATIONSBUSINESS ASSOCIATIONSPUBLIC ADMINISTRATION
MANAGERSOFFICERS
EMPLOYEES
LOCAL AND NATIONAL PUBLIC
INSTITUTIONS (REGULATORYBODIES LOCAL GOVERNMENT
ETC)CSOS
MEDIA
DOMESTICFOREIGN
ENVIRONMENTALORGANISATIONS
FUTURE GENERATIONS
12
CUSTOMERS EMPLOYEES SUPPLIERS COMMUNITY ENVIRONMENT
Development of service model and channel in accordance with the
customersrsquo needs
Employee training and professional development
Fair treatment of suppliers Promotion of culture and artsOptimisation of natural
resource utilisation
Product and service qualityMerit recognition
and rewardingCooperation and relations
with suppliersSupport to youth education
and developmentReduction of greenhouse
gas emission
Customer satisfaction Employee protectionPromotion and observance
of ethical and environmental standards in supply chain
Fight against poverty and social exclusion
Support to customers for energy efficiency
improvement
Access to loans for corporatesSafe and healthy
work environment
Strengthening the SME sectorInvolving employees
in company life
Financial inclusion of vulnerable social groups
Work-life balance
Support to customers having financial problems
13
2 Sustainability
14
21 GENERATED ECONOMIC VALUE
Generation of economic value an efficient governance system and careful management of business risks characterise Banca Intesarsquos business model based on transparency and integrity These elements as well as the care for employees environment and the quality of service it provides to its customers are of key importance for the progress for which the Bank strives as a responsible stakeholder in the community in which it operates
MARKET POSITION
According to the official data of the National Bank of Serbia as of December 31 2013 Banca Intesa is the leader in all business segments
DIRECT AND INDIRECT ECONOMIC VALUE GENERATED
2012 2013
Net assets 3635 3727
Customer loans 2363 2404
Customer deposits 2300 2388
Equity 792 863
in million euros
EmploymentStable partner of the government
Reliable support to the economy
Support to the communityTotal income and
expenditure
Banca Intesa employs 3039 people
As an active partner of the government Banca
Intesa supports economic development initiatives
of the Government
Banca Intesa cooperates with 406 suppliers
Banca Intesa participated in numerous community
support projects and implemented 106 donor activities
Total economic value generated by Banca Intesa was RSD 20695651000
The Bank directly provides 3039 jobs and it paid
RSD 193711289679 into the budget of Serbia as taxes and contributions on wages and pensions
The budget of Serbia received 80629605186 dinars in the form of regular tax payments
WithRSD 67069271910EUR 2056318466
USD 73719631GBP 1012544
allocated for procurement it indirectly affects the
stability of business and jobs in its supplier chain
The investment in the community amounted
to RSD 22381000 through donations to the
local community RSD 10000000 through
investment in infrastructure and RSD 299812329 through volunteering
The economic value distributed through operating
costs and personnel expenses and liabilities to the Government and the community amounted to RSD 1116382182660
Banca Intesa continued to post good business results in 2013 as well confirming its leading position in the banking sector of Serbia despite difficult business conditions The Bankrsquos total loans to corporate and retail customers reached 2365 million euros while deposits totalled 2387 million euros The business network consisted of 192 branches 3 mortgage loan centres and 5 mortgage loan offices In addition Banca Intesa had the most developed network of POS terminals and ATMs with 12751 active POS terminals and 255 ATMs
In the retail segment total loans amounted to 667 million euros while deposits increased to 1436 million euros at the end of 2013 Banca Intesa reaffirmed its leading position in e-banking and payment card business during 2013 as well with around 14 million debit and credit cards issued At the same time small business loans reached 126 million euros while loans granted to farmers amounted to 37 million euros
In the corporate segment at the end of 2013 Banca Intesa had a loan portfolio of 1728 million euros continuing the growth from the previous years Corporate deposits were at the level of 968 million euros while the bankrsquos market share in total corporate deposits of the banking sector was 206 at the end of December 2013
Owing to the increase in all key items a net income of 238 million euros was posted Net profit after tax was 76 million euros at the end of December 2013
15
1 ECONOMIC VALUE GENERATED 2012 2013
Interest income 31340971 29588778
Interest expenses -11790051 -9598939
Fee and commission income 7890743 8175478
Fee and commission expenses -2292104 -2648138
Net profit on sale of securities atfair value through profit and loss 1008 590
Net profit on sale of securitiesavailable for sale 49855 4332
Net profit on sale of equity investments 434 0
Net exchange rate loss -13263673 356204
Dividends and share income 2925 1527
Other operating income 554540 676132
Net expenses on indirectly written-off of placements and provisions 1 -5415518 -6935326
Operating and other expenses 2 -189518 -532659
Gains from changes in value of assets and liabilities 31390752 12172042
Losses from changes in value of assets and liabilities -16188419 -10564372
TOTAL ECONOMIC VALUE GENERATED 22091945 20695651
2 ECONOMIC VALUE DISTRIBUTED
21 Operating costs 3
Costs of material -487362 -475379
Building and equipment maintenance costs -753215 -798584
Office and equipment lease costs -934768 -930657
Costs of intellectual services -369026 -315092
Advertising -355296 -280923
Costs of business travel and training of employees 3 -93716 -92586
Other operating costs 3 -2098067 -2130715
TOTAL OPERATING COSTS -5091449 -5023936
22 Employee expenses 3
Wages and salaries -3312415 -3223372
Taxes and contributions on wages and wage benefits 3 -1997940 -1937113
Cost of employees transportation 3 -76490 -84139
Costs of remuneration for temporary and occasional work -5861 -4569
Costs of employees education not related to their job 3 -3157 -6094
Other personnel expenses -172859 -55922
TOTAL INCOME AND EXPENSES
TOTAL EMPLOYEE EXPENSES -5568723 -5311209
23 Expenses related to liabilities to the government
Income tax -830548 -623097
Indirect taxes and duties 3 -161352 -183199
TOTAL EXPENSES RELATED TO LIABILITES TO THE GOVERNMENT -991900 -806296
24 Community-related expenses
Donations and corporate social responsibility 3 -33204 -22381
TOTAL COMMUNITY-RELATED EXPENSES -33204 -22381
TOTAL ECONOMIC VALUE DISTRIBUTED -11685276 -11163822
3 ECONOMIC VALUE RETAINED 4 10406668 95318291 The item differs from the income statement in the annual report in that the Provisions for Employee Benefits Legal Disputes and Restructuring are excluded 2 The item differs from the income statement in the annual report in that the Operating Costs are presented in the section Economic Value Distributed in several segments stated while Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation is not presented within Other Operating Expenses3 The items differ from the income statement in the annual report in that a part of the Operating Costs is reclassified into the following segments Employee Expenses Expenses Related to Liabilities to the Government and Community-Related Expenses4 This represents BIBrsquos profit net of the Provisions for Employee Benefits Legal Disputes and Restructuring the Gains and Losses on Deferred Tax Assets and Liabilities the Depreciation Costs and the Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation
16
22 GOVERNANCE IN BANCA INTESA
CORPORATE GOVERNANCE
Shareholders of Banca Intesa ad Beograd ndash ownership structure Intesa Sanpaolo Holding International SA 7779 Intesa Sanpaolo SPA 1521 International Finance Institution (IFC) 700 The governance of the Banca Intesa joint stock company is organised as a two-tier system
The Bankrsquos Board of Directors consists of five members elected by the General Meeting of Shareholders upon the shareholdersrsquo proposal including the Board Chairman The term of office of Board members is three years with a possibility of re-election The Chairman of the Board of Directors of Banca Intesa is Massimo Malagoli and its members are Ivan Šramko Arthur Philippe Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Executive Board of Banca Intesa consists of six members including the President The term of office of Executive Board members is three years with a possibility of re-election The President of the Executive Board of Banca Intesa is Draginja Đurić the Deputy President of the Executive Board is Marco Capellini and Board members are Darko Popović Head of Retail and Small Business Division Slađana Jelić Head of the Corporate Banking Division Dragica Mihajlović Head of the Financial Management and Treasury Division and Marko Marković Head of the Operations Management Division
Women account for 20 of the members of the Board of Directors and 50 of the members of the Executive Board of Banca Intesa
The Bankrsquos Audit Committee consists of five members including the Chairman The term of office of Committee members is three years with a possibility of re-election The Committee Chairman is Giovanni Bergamini and its members are Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Chairman of the Board of Directors as a governance body does not have a direct executive role given that Banca Intesa organised as a joint stock company with a two-tier governance system delegates executive roles to the Executive Board as a management body that organises the Bankrsquos operations and performs daily monitoring of the activities of the Bank employees while the Board of Directors makes strategic decisions aimed at the Bankrsquos compliance takes care of and is responsible for the accuracy of all reports financial condition and operating results of the Bank addressed to the Bankrsquos shareholders the public and the National Bank of Serbia
In line with the Law on Banks and other regulations members of the Board of Directors are appointed and dismissed by the General Meeting of Shareholders while members of the Executive Board are appointed and dismissed by the Bankrsquos Board of Directors Domestic regulations list conditions that members of the Executive Board and the Board of Directors must meet in order to get prior approval of the regulatory body ie the National Bank of Serbia without which they cannot become members of these boards This includes among other things good business reputation and appropriate qualifications In addition appropriate experience in finance is also required for at least three members of the Board of Directors while at least one member of the Board of Directors must have active knowledge of Serbian and reside in the territory of the Republic of Serbia After obtaining the approval the appointed person is registered with the Business Registers Agency as well
Banca Intesa provided in its bylaws for the mechanisms and channels of direct e-mail communication with its parent group Intesa Sanpaolo with the aim of respecting the individual and dignity of each employee as well as the values proclaimed by the Code of Ethics The Bankrsquos shareholders ie the General Meeting of Shareholders participate in and directly impact the work of the Board of Directors as a governance body in the following ways
bull The General Meeting of Shareholders adopts the business policy and strategy of the Bankbull The General Meeting of Shareholders adopts the Articles of Association and the amendments to the Memorandum and Articles of Associationbull The General Meeting of Shareholders appoints and dismisses the Chairman and members of the Board of
17
Directorsbull The General Meeting of Shareholders appoints and dismisses the external auditorbull The General Meeting of Shareholders considers and adopts the annual report of the Board of Directors
The adopted remuneration policy for the entire human resources of the Group including the variable components is based on equality merit and sustainability of results The guidelines for defining the management remuneration policy are based on objective elements and parameters resulting from the assessment of organisational positions as well as performance and potential with the aim of creating an integrated system for the members of management thus helping their professional development The policy provides for remuneration in the form of benefits which is also based on financial instruments and linked to the results of the company ndash which corresponds to the level of assumed risk and is regulated so as to avoid giving benefits that in the long term are not in accordance with the Grouprsquos interests Based on the performance indicators closely linked with the long-term goals the benefit determination systems are based among other things on the principle of symmetry with the amounts of paid benefits being based on the results achieved at the Group business sector and individual levels and therefore being capable of decreasing significantly and even reaching zero if the minimum indicators that reflect the Group profitability are not achieved also taking into account the risks assumed and the capital used
When it comes to conflicts of interest Banca Intesa has prescribed in accordance with the provisions of the Law on Banks as well as with its bylaws and those of its parent Group an obligation for members of the Board of Directors and the Executive Board to submit a written statement of conflict of interest to the Bankrsquos Board of Directors within one month from the day of taking office The members of the Board of Directors and the Executive Board are obliged in accordance with the bylaws regulating transactions with related parties and the conflict of interest to submit once a year completed standard questionnaires whose content is designed by the parent Group and which contain information relevant for establishing any conflict of interest
One of the methods of sustainability control at Banca Intesa is the power of the Board of Directors as a governance body to set up an integrated risk management system at the Bank and the supervision of this system while the Executive Board identifies the risks to which Banca Intesa is exposed and controls these risks in accordance with the approved policies and procedures The Board of Directors gives approval to the Bankrsquos exposure to one or a group of related parties of over 10 or to an increase in the exposure to over 20 of Bank equity adopts internal audit plan and programme considers external and internal audit reports sets up the internal control system defines the internal organisation and organisational structure of the Bank that ensures the division of duties authority and responsibilities of its employees in a manner that prevents conflict of interest and ensures a transparent and documented process of decision making and implementation decides on disposing with the Bankrsquos fixed assets and the stakes and shares that the Bank has in other legal entities
The work of the Executive Board is evaluated through the MBO (Management by Objectives) system which is based on setting measurable objectives based on which the annual performance is monitored
RISK MANAGEMENT
Risk management is an integral part of the corporate governance of Banca Intesa based on which it is estimated whether the Bank can achieve its business targets in the way consistent not only with the law but also with the public interest safety of people as well as the factors of the natural and social environment Therefore the access to risk management also implies broader social consequences of Bank activity in the environment and in the market
Controlling Socio-environmental Risks in the Governance Process
By a decision of the Executive Board the Bank appointed the persons responsible for environmental protection with the aim of establishing an Environmental Management System ndash EMS and ensuring compliance with the rules of environmental protection and corporate social responsibility in lending operations so that the system would be fully applied until the final collection of all loan instalments A Senior Environmental Management Officer (Deputy President of the Executive Board) and an Environmental Management Coordinator (compliance risk management specialist) were appointedThe Environmental Management Coordinator with the approval of the Senior Environmental Management Officer informs the Executive Board the Asset Quality Committee and the Credit Committee of any significant increase in the level of socio-environmental risks in individual Bank customers particularly in customers with high credit exposure
18
and prepares reports on socio-environmental risks for international development banks towards which the Bank has such reporting obligation
The responsible organisational unit of the Bank monitors risks through the process of assessing loan applications taking into account the criteria related to lending to all customers engaged in production and service activities and the criteria related to environmental risk management
Management of Socio-environmental Risks in Lending
Adequate management and control of socio-environmental risks are essential preconditions for generating reliable and sustainable value and for protecting the Bankrsquos financial stability as well as its reputation
Socio-environmental Risk Management
The Socio-environmental Risk Management Procedure regulates the risk monitoring process in the area of environmental protection employee health and safety and the Bankrsquos social responsibility (protection of cultural heritage fundamental human rights and personal integrity) This Procedure regulates the credit process with regard to socio-environmental risks when approving a credit product to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1000000 euros or higher including the requested new product in case of a credit product from a credit line or other funds approved to the Bank by an international development bank and approval of a long-term credit product funded from other sources The Procedure regulates the rules classified by business lineprocess in the process of socio-environmental risk management
Equator Principles
The Implementation of the Equator Principles for Project Financing procedure applies when preparing and implementing project financing and advisory services in connection with project financing where the investment value of the project is 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes in these facilities can create significant environmental andor social impacts or significantly change the natural environment The goal of the Equator principles is to identify and assess risks and perform risk management based on the criteria defined by the principles with the aim of adhering to the principle of sustainability of natural resources human health human rights cultural heritage and biodiversity
Armaments
The sensitive sectors that the Bank monitors with special attention include armament production and trade In accordance with the relevant bylaw of its parent Group the Policy of Not Financing of Armaments in 2011 Banca Intesa adopted the Procedure for the Performance of Transactions Related to Armament Production and Trade which regulates the identification and preparation of the summary of the customers engaged in armament and military equipment production and trade the monitoring of transactions and loan applications of the customers engaged in armament and military equipment production and trade the approval of transactions and loan applications related to armament and military equipment production and trade in accordance with the Policy of Not Financing of Armaments as well as the preparation of reports on the transactions related to armament and military equipment production and trade
Reputational Risk Management
The Bank attaches great importance to reputational risks that are assessed as part of the compliance control system which is within the competence of the Compliance Office Banca Intesa believes that the standards in this area as well as the business ethics are the cornerstone of banking operations which by their nature are based on trust Bylaws such as the Code of Ethics policies and other define that any non-compliance with the bylaws the principles and values contained in them as well as with external regulations (laws and secondary legislation) exposes the Bank to a certain level of reputational risks
Fight Against Corruption and Compliance
The internal regulatory source that governs the system for control and mitigation of corruption risks comprises the Code of Ethics the Code of Conduct the Rulebook on Relations with Political Parties and the following Bank procedures the Procedure for the Prevention of Internal Fraud and Abuse at the Bank and the Employment Termination Procedure
19
The Code of Conduct prescribes in detail the rules in connection with receiving and giving gifts and the measures prescribed in the event of corruption are related to the violation of work duties so the measures stipulated by external regulations ie the Labour Law (eg compensation for damage employee suspension or termination) but also the Criminal Code may be pronounced against an employee Based on the Legal Department records no proceedings were initiated against Banca Intesa ad Beograd in connection with corruption since no complaints or notices prior to complaint were delivered during 2013
In the same period the Suspicious Transactions and Know Your Customer training courses were held in this segment by means of e-learning which were received by as many as 8663 of employees during 2013 The training courses were provided for by the current regulations and internal acts of the Bank and were aimed at informing the employees and refreshing their knowledge of the obligation of collecting information about each customer and completing appropriate questionnaires In addition the training informed the employees about the new processes that were implemented as well as about mandatory observance of all duties relating to knowing monitoring and reporting suspicious transactions of customers
The Rulebook on Relations with Political Parties prescribes the obligation of the Bank to refrain from granting donations and sponsorship tobull Political parties and any organisations related to thembull Political movements and their organisational unitsbull Trade union organisationsbull Competent authorities and institutions
The prohibition of granting donations and sponsorship to the above organisations aims at the protection against any grants that would result in a privileged position to the Bank or unfair decisions in favour of the Bank
The Compliance Office as well as the relevant organisational units of the Bank are committed to the regulation of processes and the definition of procedures and their operating rules as well as practice which efficiently prevent the violation of applicable regulations The Compliance Office also provides support to the highest bodies of the Bank in monitoring the compliance risk The compliance risk assessment process is constant Through semi-annual reporting these risks are identified and priority measures for their elimination or mitigation are determined ie the level of efficiency of the existing compliance controls is assessed
The Internal Audit provides direct support to the highest bodies of the Bank in monitoring the compliance with and adequacy of the rules contained in the Bankrsquos bylaws If it identifies critical issues during its activity the Internal Audit informs the relevant organisational units and the highest bodies of the Bank with the aim of determining adequate measures for risk mitigation and the method of their implementation
Protection of Health and Safety
Occupational health and safety at Banca Intesa are regulated in accordance with international directives recommendations and positive laws of the Republic of Serbia
During 2013 an assessment was made of the situation regarding occupational health and safety and the risk level for 207 facilities at which work is performed A schedule of elimination of recorded risks to the health of Bank employees was defined and implemented according to priorities and the budget planned In connection with this risk assessment documents were updated as well
When it comes to physical security three robberies were recorded in 2013 versus two a year earlier and investments in technical protection systems continued
Risk Management in Supply Chain
Supplier Check
The Procurement Unit and the organisational part in charge of procurement are obliged to evaluate the received supplier bids by applying the methods of qualitative and quantitative analysis as well as to align the bid evaluation criteria prior to inviting the bidders to submit offers by combining specific criteria one of which is the Compliance of Bidderrsquos Operations with the Corporate Social Responsibility Principles
20
Health and Safety Risk Assessment
In accordance with the Procurement Policy members of Intesa Sanpaolo Group are expected to include the parameters of assessment of environmental protection and occupational health protection in their procurement process giving priority to the use of recycled paper highly energy efficient products and environment-friendly technical equipment
Group members must include special provisions in the procurement contracts they conclude with their suppliers These provisions provide for the obligation of suppliers to comply with the principles specified in the Intesa Sanpaolo Rules for the Environmental and Energy Policy Constant checks are performed in the countries where legal measures regarding environmental protection were adopted in order to ensure compliance
In the area of personnel training and spreading the awareness of the importance of these issues the training of the employees who directly communicate with suppliers must include fields related to corporate social responsibility as well as to the responsibility for environmental protection
21
CUSTOMERS
Banca Intesa built its leading position in the market of Serbia and the status of stable and reliable partner by fostering trust in the relations with its customers The strengthening of relations with customers is based on constant improvement of the quality of products and services proceeding from specific needs of each segment as well as on full respect for the principles of equality and availability of products and services Key aspects of doing business with customers are the following
bull SUPPORT TO ECONOMY AND AGRICULTUREbull FINANCIAL INCLUSION AND EDUCATIONbull CUSTOMER SATISFACTION
SUPPORT TO ECONOMY AND AGRICULTURE
Banca Intesa continued to provide support to the economy and the agricultural sector in 2013 as well focusing on the development of entrepreneurship and self-employment particularly in the SME segment as well as on the improvement of public infrastructure
Support to the Public Sector
Banca Intesa offered loans from the credit line of the German Development Bank (KfW) to the public sector for financing infrastructure projects and the procurement of equipment in the following areas water management sewerage and wastewater management solid waste management environmental protection and pollution control transport infrastructure public transport and communication systems infrastructure facilities fostering economic development and other social and utility services During 2013 Banca Intesa granted 11 loans totalling 852 million euros while the total value of the project is 47 million euros
Development of Entrepreneurship
Banca Intesa supported the programme of measures of the Government of the Republic of Serbia for encouraging SMEs and entrepreneurs through subsidised loans for liquidity and working assets in 2013 as well The Bankrsquos commitment to provide continuously support to its customers in this segment is also demonstrated by the fact that the Government of the Republic of Serbia implements its programme of measures for the fifth consecutive time During 2013 the Bank granted 414 subsidised loans to SMEs totalling 562 billion dinars which accounted for 107 of the total loans to the SME sector The small business sector was granted 186 billion dinars and 1347 loans which accounted for 15 of the number of loans and 16 of the total loan disbursements to this segment
In cooperation with the National Bank of Serbia and the Kingdom of Denmark the Bank launched the Local Economic Development in the Balkans (LEDIB) programme intended for enterprises entrepreneurs and registered farms from the small business segment with the aim of improving local economic development creating new jobs strengthening organisational capacities introducing new eco-friendly technologies and other favourable impacts on the overall development The credit line was intended for the Nišava Pčinja Toplica Jablanica and Pirot Districts and in 2013 the Bank granted 39 loans totalling 505208 euros under this programme which accounted for 04 of the number of loans and 05 of the total loan disbursements to the small business segment At the same time from the credit line of the European Fund for Southeast Europe (EFSE) which supports enterprises and registered farms through investments and loans for working assets 227 million euros were granted in the small business segment which accounted for 22 of loan disbursements in the segment
With the aim of supporting the promotion and strengthening of womenrsquos entrepreneurship Banca Intesa helped the Association of Businesswomen in Serbia in the organisation of an international conference entitled New Age Woman Entrepreneur New Opportunities for Recovery of Economy in the Region The event contributed
22
to further positioning of Banca Intesa as a bank that actively supports entrepreneurship in the country as part of its efforts to contribute to economic recovery and growth For this purpose the Bank also has in its offer loans for women entrepreneurs in Vojvodina in the form of start-up loans for unemployed women and women who have had a business for up to three years The Bank granted 8 loans totalling 98 million dinars under this programme during 2013 which accounted for a 3 share in the number of loans and a 1 share in the total investment loan disbursements in the small business segment
Promotion of Agricultural Sector
Taking into account that the agricultural sector is very specific because it has a special social as well as environmental importance in addition to economic importance for many years Banca Intesa has been encouraging development and investing in projects and individuals that encourage with their activities further rural development and contribute to an increase in the competitiveness of domestic agriculture
Aware of the great economic potential of this industry as part of the LEDIB programme the Bank granted eight loans to registered farms in 2013 totalling 76219 euros which accounted for 02 of the number of loans and 03 of the total loan disbursements to this customer segment In addition in cooperation with the Guarantee Fund of the Autonomous Province of Vojvodina long-term loans for purchasing new agricultural machinery and equipment were available to customers During 2013 the Bank granted 82 loans of this type totalling 219 million euros which accounted for a 15 share in the number of loans and a 25 share in the total investment loan disbursements in the agricultural segment
In addition on the occasion of the 80th International Agricultural Fair in Novi Sad the Bank prepared a special credit offer intended for owners of registered farms which included the Intesa Farmer dinar loan for financing spring works as well as the Intesa Farmer loan for purchasing agricultural machinery During 2013 22 loans were granted for purchasing tractors and agricultural machinery totalling 341 million dinars which accounted for a 4 share in the number of loans and a 3 share in the total amount of agricultural investment loan disbursements
Banka Intesa launched the Intesa Farmer of the Year project to contribute in yet another way to the promotion of agricultural production in the country and to the strengthening of its competitiveness As part of the project the Bank awarded the most successful farmers in four categories ndash Intesa Crop Farmer Intesa Vegetable Grower Intesa Fruit Grower and Intesa Livestock Breeder and all winners won a trip to Germany to visit the international agricultural fair in Berlin The criteria based on which the Committee selected the winners of the title Intesa Farmer of the Year were the annual results achieved in agricultural production application of modern technologies in production activities the number of household members engaged in the production as well as the minimum three-year cooperation with the Bank which included a loan and regular settlement of their financial obligations
FINANCIAL INCLUSION AND LITERACY
Banka Intesa believes that the availability of financial products to all segments of society is an essential precondition for sustainable development In line with this position the Bank added to its offer specific products that promote financial inclusion and provide support during economic crisis to the most vulnerable social groups such as the elderly or youth as well as to solving broader social problems such as housing availability or health care services
Responding to the Needs of the Community
In 2013 Banca Intesa included in its offer the Intermezzo Cash Loan a new model of cash loan which offers to its users as a unique benefit in the domestic market a possibility of postponing the payment of monthly instalment up to five times during the repayment period Moreover as an additional functionality the Intermezzo loan includes insurance against job loss with no additional cost to the customer The Bank believes that the repayment flexibility provided by this loan model offers citizens unique support in the market at a time when they estimate that they need it most In 2013 Banca Intesa granted 11256 Intermezzo cash loans totalling 198 million euros which accounted for 235 of the total amount of cash loans disbursed during the year
Banca Intesa was the first in the Serbian market to offer loans to pensioners aged up to 74 years The Senior Cash Loans were designed specifically to fit the needs of senior citizens and they also include life insurance which is included in the cost of loan during the entire repayment period During the previous year 19774 loans were granted totalling 239 million euros which accounted for 284 of the total cash loans granted in 2013
23
In 2012 as support to citizens in financing medical services the Intesa Vita programme of consumer and cash loans was developed which includes loans for in vitro fertilisation harvesting and storage of stem cells DNA analysis dental services medical spa and wellness treatments as well as for purchasing baby supplies In 2013 the programme was extended to new purposes - laser vision correction vein operation and purchase of medical aids and 28 loans were granted totalling 126345 euros which accounted for 8 of the total cash loans granted during the year In this unique way the Bank provides the citizens with the possibility of taking care of their health in a responsible and timely manner without suddenly burdening their home budgets
Moreover the Bank continued to provide subsidised housing loans in 2013 as well in order to provide support to young married couples in solving their housing problems granting 224 loans totalling 864 million euros which was 205 of the total housing loans granted during the year At the same time 6544 refinancing loans with insurance against job loss or disability in case of an accident were granted totalling 146 million euros which enabled the customers to service their outstanding liabilities towards Banca Intesa and other banks and which accounted for 173 of the Bankrsquos total cash loans granted during the year
Banca Intesa introduced the Visa Classic Paralympic and Visa Electron Paralympic cards the first charity payment cards in the country in cooperation with the Paralympic Committee of Serbia This was the first initiative aimed at establishing a stable and independent mechanism for long-term assistance to athletes with disabilities and developing paralympic sport in the country During 2013 8345 Visa Classic Paralympic and Visa Electron Paralympic cards were issued which accounted for 14 of all cards issued during the year The Bank also provides debit cards for students which enable free account opening and maintenance for all students who opted for an Intesa Visa Electron Easy Travel Card (ETC) or a Maestro ISIC Card of Banca Intesa of which 4048 were issued in 2013 accounting for 18 of the debit cards issued during the year
Constantly striving to promote savings in 2013 the Bank introduced a new savings model the Month by Month Savings which provides customers with a possibility of reaching higher amounts of savings with lower monthly allocations The product enables saving in dinars and euros at a very attractive interest rate while the customers also have an opportunity to set the payment date and amount themselves
Financial Education
In 2013 as well Banca Intesa remained true to its commitment to support actively financial education by improving customer knowledge Thus in cooperation with Banca IMI SpA a member of Intesa Sanpaolo Group another Intesa Academia workshop was organised this time on the subject of advanced financing and risk management instruments so that Banca Intesarsquos customers could find out more about the possibilities of financing in the international and domestic bond markets and about hedging products for successful management of market risks The workshop brought together the leading world experts in the areas of financing and risk management as well as the most successful customers of the Bank In order to assist its customers in the SME segment in getting informed in more detail about the regulations relating to loan approval and collection Banca Intesa took part in the working breakfast on the subject Security Instruments and Their Collection as the Condition for Financing Company Growth held at the premises of the Serbian Association of Managers On this occasion the legal framework was presented about which enterprises should also get informed in order to know that documentation they will need if they opt for bank loans
At the same time the Factoring Department designed and launched an initiative of organising factoring workshops at the Bankrsquos regional centres Factoring workshops are an interactive form of cooperation and communication with customers with the focus on understanding the term and essence of factoring themselves With the support of regional centres a total of 27 factoring workshops were organised in 22 cities in two cycles in late 2012 and in early 2013 which were attended by nearly 300 corporate customers
As a member of the United Nations Global Compact and its Working Group on CSR in Banking and Finance Banca Intesa works together with the other members on the implementation of projects in the area of financial education which is the main goal of this Group One of the projects actively supported by the Bank is the cooperation with seven secondary schools of economics from six cities in Serbia where there is a ldquobank clerkrdquo educational profile in the area of thematic lectures for teachers and students The Bank representatives gave three lectures during 2013
24
CUSTOMER SATISFACTION
Banca Intesa believes that it is only through an open dialogue with its customers that it can truly understand their needs and expectations and build a long-term partner relationship with them
Meeting the Needs of Customers
Ever since 2008 Banca Intesa has been conducting surveys of its customersrsquo satisfaction with the Bankrsquos products and services in accordance with the methodology of the European Customer Satisfaction Index (ECSI) as part of its initiative named Listening 100 This is a continuous process analyses are made based on the results obtained in the survey and actions are proposed accordingly for improving the customer satisfaction The surveys are repeated at six-monthannual intervals in order to collect feedback from the customersrsquo perspective for the measures taken for the purpose of improving the satisfaction index as well as identifying the directions for further improvement
Looking at the results of the customer satisfaction survey at the end of 2013 a conclusion arises that among other things the basis of good results is a positively rated staff treatment of customers The ECSI as well as the Loyalty indices are stable with a high percentage of customers who stated they would remain Banca Intesa customers in the following 12 months Attempting to encourage its customers to express their opinions in the previous year the Bank clearly communicated the improvements implemented so far based on their suggestions
During 2013 as well Banca Intesa continued to increase the number of branches equipped with the Queue Management System (QMS) which covered approximately 40 per cent of active customers at the end of the year In addition to having a positive impact on customer satisfaction the QMS expansion made it possible to obtain the data necessary for better analysis and organisation of branch operation In addition free internet access via Wi-Fi and daily newspapers were made available to customers at the largest branches
As part of its efforts to improve further customer satisfaction in 2013 Banca Intesa implemented training of over 1500 employees both in its branch network and at its headquarters The training which was implemented as a continuation of the Education 100 programme initiated in 2011 was held on the subject of managing customer satisfaction but also their entire experience in each contact with the Bank
In addition to its efforts to improve its approach to customers and recognising the importance of two-way communication the Bank developed efficient mechanisms for collecting and recording customer feedback The Bank responds to all complaints sent to the Bank via formal complaints mechanisms and does so within the statutory time limit and in accordance with the decision of the National Bank of Serbia Each customer may also personally contact unit employees and if the customer is not satisfied with the answer received heshe can apply to the National Bank of Serbia as the second-instance body with the possibility of mediation The following are available to customers
bull Phone line +381 11 310 88 88bull E-mail kontaktbancaintesarsbull Fax +381 11 310 88 55bull Personal contact ie submitting a written complaint in personbull Contact form on the official website of the Bankbull Bank corporate accounts on social networks (Facebook and Twitter)bull Postal address of the Customer Satisfaction Management Unit Omladinskih brigada 90b 11070 New Belgrade
Transparent Advertising
Lasting relationships based on trust require communication that enables customers to understand clearly the characteristics and value of Banca Intesa products and services Therefore the Bank strives to contribute to the simplification of its products in communication
In its advertising the Bank clearly specifies all customer costs and all of them are included when calculating the effective interest rate which is always clearly and visibly shown as well as representative examples that contain all data in accordance with the Law on the Protection of Financial Service Consumers which demonstrates full transparency when it comes to Bank pricing policy
25
The Bank also strives to formulate the agreements so that they are simple to understand minimising possible misunderstandings and ambiguity by providing clear and exhaustive information It informs its customers in a timely manner of any changes in the agreements and their terms
Data Security
The protection of customer security as well as their assets and confidential information is not only Banca Intesarsquos primary duty but also the basis of the relationship of trust that the Bank wants to reinforce with its customers The protection of persons their assets and valuables as well as a multitude of data and internal organisational processes fully meets the criteria of reliability continuity and confidentiality In addition to its legal obligations Banca Intesa complies with the criteria of absolute transparency in informing its customers of their rights to privacy and the way it treats their personal information
In 2013 Banca Intesa did not find any founded complaint in connection with the violation of customer privacy or any disclosure leakage or theft of customer information
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
2
CONTENTS
FOREWORD BY PRESIDENT OF THE EXECUTIVE BOARD 3WHY DO WE REPORT 4HOW DO WE REPORT 4
1 IDENTITY 5
11 BANK PROFILE 6 Intesa Sanpaolo 6 Banca Intesa 6 Mission and Values 7 Strategic Approach to Sustainability and Strategy in Practice 7 Joint Initiatives 7 Sustainability Management 10
12 RELATIONS WITH STAKEHOLDERS 11 Dialogue with Stakeholders 11 Stakeholder Map 11 Materiality 11
2 SUSTAINABILITY 13
21 GENERATED ECONOMIC VALUE 14 Market Position 14 Direct and indirect economic value generated 14
22 GOVERNANCE IN BANCA INTESA 16 Corporate Governance 16 Risk Management 17 Customers 21 Employees 26 Community 31 Suppliers 35 Environment 37
3 GRI CONTENTS AND INDICATORS 40
3
FOREWORD BY PRESIDENT OF THE EXECUTIVE BOARD
Ladies and gentlemen
Integrating the concept of sustainability and the highest standards of professional ethics into all business process-es enabled us again to create in the past year a value that contributes not only to the long-term success of Banca Intesa but also to the economic development of the country and to the well-being of the whole society Respecting the needs of all stakeholders we strove to act in a manner that brings permanent benefits to our customers and suppliers shareholders employees as well as the broadest social community
We focus our sustainable business strategy on the ar-eas on which we can make the greatest positive impact Thus responsible financing of economic recovery and improvement of the citizensrsquo quality of life was our main priority in 2013 as well In accordance with this goal we supported companies and households with total placements of over RSD 275 billion and responding to the growing needs of our customers we developed new products while also improving the existing ones In the area of employee care in addition to respecting their opinions their development and advanced train-ing were our priority which is evidenced by the number of hours of training that was almost double compared to the year earlier At the same time we also achieved measurable progress in terms of rational resource utili-sation striving to reduce the environmental impact and promote environmental accountability
Support to the community remained one of the key de-terminants of our CSR activities in the previous year as well We allocated over RSD 60 million in total to sup-port the operation of health care and social care insti-tutions supported the development of art and culture and promoted sports and education On the other hand we also initiated new long-term projects convinced that we give a significant contribution to social inclusion in our country by providing assistance to vulnerable elderly persons In addition we worked on strengthening the culture of volunteering and developed our own corpo-rate volunteering programme Intesa from the Heart en-couraging our employees to invest their time skills and energy in the well-being of the community
Our ever-increasing efforts to identify the real needs and problems of all stakeholders resulted in the improvement of the reporting process itself This yearrsquos Sustainability
Report the second that we prepare in accordance with the standards of the international reporting methodol-ogy ndash Global Reporting Initiative (GRI) ndash thus includes even more indicators evidencing our determination continuously to improve sustainable business practices and measure our success not only in terms of financial and market results but also in terms of the way in which we achieve them
Yours sincerely
Draginja ĐurićPresident of Banca Intesa Executive Board
4
WHY DO WE REPORT
Sustainability reporting is an integral element of transparent communication of Banca Intesa with all its stakeholders who are thus provided full insight into all its activities including its economic socio-environmental performance The reporting enables the Bank to analyse and present in a quality and systematic manner the results of all its projects and initiatives relative to the set goals in order to improve the performance and its monitoring
In line with the global shift towards integrated reporting which includes mandatory nonfinancial parameters in addition to financial parameters the Bank strives to promote sustainability reporting as a standard business practice of responsible companies in accordance with the strategic commitment of its parent group Intesa Sanpaolo
HOW DO WE REPORT
Sustainability Report 2013 is Banca Intesarsquos fourth corporate social responsibility (CSR) report and the second designed according to the most relevant international reporting initiative Global Reporting Initiative (GRI) Relative to the previous year when GRI G31 guidelines were first introduced as a reporting framework in 2013 the Bank improved the level of the GRI methodology application by reporting on 24 GRI indicators which now also include the GRI Financial Services Sector Supplement (FSSS) indicators as indicators of advanced corporate social responsibility practices The Report also fully complies with the requirements of the United Nations Global Compact Communication on Progress (COP)
As in the previous year the Report is structured so as to present to the stakeholders the topics of the highest importance to them in a transparent and clear way taking into account the Bankrsquos strategic priorities and goals with an intention of pointing out joint areas of activity the greatest challenges as well as the solutions offered by the Bank At the same time revising the main parameters between two reporting cycles and checking the compliance with the fundamental GRI principles reflect the Bankrsquos constant efforts to improve further the quality of the Report
GRI Reporting Principles
In defining the content the Bank was guided by the principles of materiality stakeholder inclusiveness sustainability context and completeness An analysis of the materiality of relevant topics resulted in a set of priority areas that affect to the highest extent the Bank operation its stakeholders and the broader community The credibility of the information presented in the Report was ensured by consistently adhering to the principles of balance comparability accuracy timeliness clarity and reliability
Individual organisational units of the Bank contributed to the process of information gathering and processing through CSR ambassadors selected representatives of departments offices and units who closely cooperated with the Marketing and Communications Department in the preparation of the Report The indicators and the measurement system were developed in accordance with standard performance indicators obligations arising from international methodological frameworks for reporting and the Bankrsquos desire for each step on the sustainability path to be measurable
Most of the information was gathered directly and assessments measurement methods and information sources were specifically stated where needed The Report is published annually and refers to the activities of Banca Intesa ad Beograd in 2013 Comparisons with the previous years were provided where possible There were no significant changes regarding the main Report parameters relative to 2012
Previous Banca Intesa sustainability reports (for 2010 2011 and 2012) are available at http wwwbancaintesarscodenavigateaspxid=384
Contact person in charge of Sustainability Report 2013 Jelena Krsmanović Media Relations Manager jelenakrsmanovicbancaintesars
C C+ B B+ A A+
Req
uir
ed Independent level
determinationReport verified
by external source
Report verified by external
source
Report verified by external
source
Op
tio
nal
Verified by third party
Verified by GRI
5
1 Identity
6
11 BANK PROFILE
INTESA SANPAOLO
Intesa Sanpaolo is one of the leading banking groups in Europe and the largest in Italy Created in 2007 by the merger of the leading Italian banks Sanpaolo IMI and Banca Intesa the Group holds the leading position in Italy in terms of providing financial support to retail and corporate customers The Group is committed to improving its services to retail customers and providing significant support to the business of its customers as well as to the overall economic development of the countries where it operates
Intesa Sanpaolo serves around 111 million customers through its well-developed business network of more than 4700 branches The Group focuses its business operations on Central and Eastern Europe the Middle East and Northern Africa where it serves 84 million customers in 12 countries through a network comprising around 1400 branches it ranks first in Serbia second in Croatia and Slovakia third in Albania fifth in Bosnia and Herzegovina Egypt and Hungary and eighth in Slovenia Intesa Sanpaolo also supports corporate customers through its international network covering 29 countries with an emphasis on the Middle East Northern Africa the US Russia China and India
BANCA INTESA
Banca Intesa is the leading financial institution in the Serbian market measured by key performance indicators ndash total equity assets loans and deposits Banca Intesarsquos commitment to base its business on innovativeness and the highest level of professionalism was recognised by more than 167 million customers individuals entrepreneurs small and medium-sized enterprises large companies and local governments
The Bank operates through a business network comprising more than 190 branches in 111 cities throughout Serbia relying on the knowledge and expertise of its professional team of around 3000 employees Banca Intesa has the most developed network of POS terminals and ATMs in the market in addition it is the leader in the card business segment with more than 14 million debit and credit cards issued
Striving to complete its offer of financial services in 2006 Banca Intesa founded a leasing company Intesa Leasing doo Belgrade which is also a member of Intesa Sanpaolo Group The operation of the leasing company is not covered by this Report
In July 2013 Euromoney the leading global magazine in the area of financing and banking declared Banca Intesa the best bank in Serbia in 2012 granting it the Excellence Award For the fourth consecutive year the Bank received this renowned award which is given based on an analysis of a series of quantitative and qualitative criteria such as business parameters innovativeness as well as portfolio quality
At the same time Banca Intesa also received an award of the EMEA Finance magazine as the best bank in Serbia in 2012 in the category of banks operating as part of international groups The winners of European banking awards are selected based on an evaluation by a jury which is guided by bank achievements within the context of the macroeconomic environment in which it operates as well as relative to the situation in the entire banking sector The key elements in the juryrsquos work were sustainable growth and commitment to customers
1991 2005 2006 2007 2008
One of the first private banks in Serbia with the head office in Belgrade
Becomes a member of Banca Intesa Group now named Intesa Sanpaolo
Intesa Leasing foundedBecomes the leading
bank in Serbia by all key performance indicators
Panonska Banka acquired and the number of
employees increased to 3000 Novi Sad becomes
the second seat of the Bank
BANK HISTORY
7
MISSION
Banca Intesarsquos mission is to provide excellence in banking and financial services for its customers leveraging on developing its presence in all the areas in which it operates and a style of growth that focuses on sustainable results and on establishing a trust-based process that stems from customer and shareholder satisfaction from its employeesrsquo sense of belonging and listening to the needs of local communities
The Bankrsquos growth strategy strives to create stable and sustainable values from the economic financial socio-environmental points of view building upon the Bankrsquos fundamental corporate values in its relations with all stakeholders
CORPORATE VALUES
INTEGRITY EXCELLENCE TRANSPARENCY RESPECT
FOR EACH INDIVIDUAL
EQUALITYINDIVIDUAL
VALUES
RESPONSIBLE USE OF
RESOURCES
We pursue our goals with honesty
fairness and with a sense of
responsibility in full compliance with the rules and principles of ethics mandated by the profession in the spirit of signed
agreements
We set ourselves the goal of continuous
improvement planning future activities and anticipating
challenges along with fostering
extensive creativity aimed at innovations moreover we recognise and reward merits and quality
We are committed to make
transparency the basis for all our activities
communication and contracts with the aim of enabling our stakeholder to make independent informed decision
We intend to combine large-format business with deep local
roots and to be a bank with a broad vision while not
losing sight of the man as an individual
We are committed to eliminating any form of
discrimination in our conduct and to respecting gender
racial religious political linguistic and intellectual diversity trade
union preferences as well as the
diversity in terms of age and abilities
The value of each individual
guides our modus operandi we use listening and dialogue
techniques as tools for continually
improving relations with all
stakeholders
We strive to use carefully all resources and to promote the conduct based on the optimal
use of resources and avoidance of waste and losses
giving priority to the choices that consider sustainability
STRATEGIC APPROACH TO SUSTAINABILITY AND STRATEGY IN PRACTICE
Operating against the backdrop of modest economic recovery and complex business environment Banca Intesa opted for a responsible business strategy that is based on maintaining the system stability on the one hand and monitoring the needs of citizens and economic entities on the other Guided by clear goals in these areas the Bank continued to create value for its customers while contributing to the economic and social development of the broader community Constant care of customer satisfaction expressed through maximum professionalism in the work and a high level of innovativeness remained at the top of the priority list as did constant improvement of the products and services the Bank provides to its customers Owing to such approach Banca Intesa maintained its stable credit activity and increased its market share in lending although the domestic banking sector as a whole recorded a decrease in lending due to lower demand and a high share of non-performing loans In addition further growth was recorded in the Bankrsquos total deposits and its market share in this business segment as well reflecting a high level of customer confidence
In line with its strategic commitment to integrate fully the sustainability concept into its long-term business plans but also into its everyday activities and decisions in 2013 Banca Intesa also sought to meet the needs of all stakeholders its employees shareholders and customers as well as the entire social community By constantly improving its CSR practices during the previous year the Bank launched new projects aimed at providing support to the community and continued investing considerable funds in education culture health care and sports and the primary area of its activity was the strengthening of the culture of volunteering In addition special products were designed in response to the growing needs of customers and a stimulating work environment was provided to the employees
JOINT INITIATIVES
Promoting the international business standards Banca Intesa is particularly committed to the development and introduction of corporate social responsibility as an integral part of its business practice as well as to raising awareness of the business community and the broader community of the importance of this concept As the leading financial institution in the country the Bank has a responsibility for the broader social and economic progress as well and therefore advocates a better quality of life prosperity and development of economy and the entire society through its active participation in the work of business associations
8
UNITED NATIONS GLOBAL
COMPACT
BUSINESS LEADERS FORUM
SERBIAN ASSOCIATION OF MANAGERS
AMERICAN CHAMBER OF COMMERCE
FOREIGN INVESTORS COUNCIL
NATIONAL ALLIANCE FOR LOCAL ECONOMIC
DEVELOPMENT
CHAMBER OF ITALIAN
AND SERBIAN BUSINESSPEOPLE
The largest global CSR network
bringing together more than
10000 members throughout
the world and promoting the protection of human and
labour rights and the environment and fight against
corruption
The first business network for CSR in Serbia comprising
20 members
A business association founded
with the aim of becoming a credible social partner of the Serbian Government
in the process of improving the businessenvironment
and accelerating economic
development
An organisation promoting the improvement of business
environment in Serbia as well as partnership
between US and Serbian companies
for the purpose of economic development
A business association whose activities contribute to the improvement of the investment
and business climate in Serbia
A business association that brings together
representatives of all three sectors of
society ndash companies municipalities
and NGOs which work together
on improving the conditions for local economic
development and doing business
A non-profit organisation that fosters improves
and develops trade between Italy and Serbia
9
CROSS REFERENCE TABLE
UNITED NATIONS GLOBAL COMPACT PRINCIPLES (UNGC)CORRESPONDING GRI INDICATOR
HUMAN RIGHTS
PRINCIPLE 1 BUSINESSES SHOULD SUPPORT AND RESPECT THE PROTECTION OF INTERNATIONALLY PROCLAIMED HUMAN RIGHTS AND
LA 4
LA 13
LA 15
HR 11
PR 8
PRINCIPLE 2 MAKE SURE THAT THEY ARE NOT COMPLICIT IN HUMAN RIGHTS ABUSES HR 11
LABOUR
PRINCIPLE 3 BUSINESSES SHOULD UPHOLD THE FREEDOM OF ASSOCIATION AND THE EFFECTIVE RECOGNITION OF THE RIGHT TO COLLECTIVE BARGAINING
LA 4
PRINCIPLE 4 THE ELIMINATION OF ALL FORMS OF FORCED AND COMPULSORY LABOUR
PRINCIPLE 5 THE EFFECTIVE ABOLITION OF CHILD LABOUR AND
PRINCIPLE 6 THE ELIMINATION OF DISCRIMINATION IN RESPECT OF EMPLOYMENT AND OCCUPATION LA 2
LA 13
LA 15
HR 11
ENVIRONMENT
PRINCIPLE 7 BUSINESSES SHOULD SUPPORT A PRECAUTIONARY APPROACH TO ENVIRONMENTAL CHALLENGES EN 26
PRINCIPLE 8 UNDERTAKE INITIATIVES TO PROMOTE GREATER ENVIRONMENTAL RESPONSIBILITY AND EN 4
EN 5
EN 8
EN 26
PR 3
PRINCIPLE 9 ENCOURAGE THE DEVELOPMENT AND DIFFUSION OF ENVIRONMENTALLY FRIENDLY TECHNOLOGIES EN 5
EN 26
ANTI-CORRUPTION
PRINCIPLE 10 BUSINESSES SHOULD WORK AGAINST CORRUPTION IN ALL ITS FORMS INCLUDING EXTORTION AND BRIBERY SO 3
SO 4
SO 6
10
Given that they were added subsequently to the new GRI guidelines version G31 the LA 15 and HR 11 indicators are entered into the cross reference table according to the authorrsquos estimate
In accordance with the GRI principle of materiality based on which priority topics present in the report are defined the corresponding indicators are not covered by this report taking into account their relevance to the banking sector The bank as an active member supports the promotion of all 10 global compact principles in its partners suppliers customers and in the general business and social community
SUSTAINABILITY MANAGEMENT
In order to achieve its business goals as well as those relating to socio-environmental dimensions Banca Intesa introduced ethical responsibility as a criterion in the process of decision-making regarding all stakeholders which means that socio-environmental issues are integrated in the process of product and service development risk management as well as in loan granting and supplier selection
The adoption of the Code of Ethics with the defined values to which Banca Intesa is committed introduced a management model based on the principle of accountability that requires commitment to aligning everyday business activities with the declared values at the individual level as well as at the level of the Bankrsquos organisational units The Code of Ethics is an expression of the corporate culture and tradition from which Banca Intesa originates This document provides on the one hand a framework through which the Bank observes and interprets different situations and on the other hand the ultimate goal to which it strives
Procedure for Managing the Reports of Non-compliance with the Code of Ethics was adopted in 2011 and is implemented in all organisational units of the Bank in the process of delivering reports in cases of suspicion or knowledge of any activities or individual acts that are contrary to the Code of Ethics and other bylaws of the Bank The procedure for managing the reports of noncompliance with the Code of Ethics consists of the following steps non-compliance reporting report analysis translating and delivering the information to the parent Group establishing the status and verifying the facts involving the relevant department proposing corrective actions and delivering reports to relevant stakeholders as well as to the parent Group The Bank employee who noticed any behaviour of one of hisher colleagues that seems not to be in accordance with the moral and ethical principles prescribed by the Code of Ethics delivers a non-compliance report to the following e-mail address etickikodeksbancaintesars The report may also be delivered in hard copy to the following address Banca Intesa ad Beograd Marketing and Communications Department Bulevar dr Zorana Đinđića 2a 11070 Novi BeogradThrough the above mechanism during 2013 Banca Intesa recorded no cases of human rights violation as defined by the Code of Ethics
The Marketing and Communications Department independently as well as in close cooperation with CSR ambassadors delegated representatives of all organisational parts of the Bank implements and coordinates projects and activities in the area of corporate social responsibility The CSR ambassadors provide the Department with necessary information in connection with the implementation of projects and activities and participate in monitoring measuring and reporting to the parent Group and other stakeholders
The Marketing and Communications Department also takes steps to make the CSR criteria a recognisable element of the whole management system and to this end cooperates with the top management in the process of defining the CSR policies and strategies communicating to the highest representatives of the Bank the results of dialogue with the stakeholders their needs and key issues that should be a part of strategic guidelines
11
12 RELATION WITH STAKEHOLDERS
DIALOGUE WITH STAKEHOLDERS
Dialogue with stakeholders is the beginning of continuous progress achieved by carefully monitoring the demands and needs of stakeholders and harmonising them with the Bankrsquos strategy The dialogue is achieved by using different techniques as part of the Bankrsquos regular activities and is a precondition for preparing the materiality matrix and eventually the Sustainability Report
Stakeholder map is based on the international methodology for stakeholder engagement the AA1000 Standard (Institute of Social and Ethical Accountability)
MATERIALITY
Sustainability Report 2013 focuses on the topics that proved to be the most important ones for stakeholders and also for the business of Intesa Sanpaolo and hence of Banca Intesa following the GRI methodology and the AA1000 Standard In accordance with the needs analysis conducted two priority issues stood out which are presented in the table These issues are also present at the local level
STAKEHOLDER MAP
GROUP ENGAGEMENT MECHANISM
CUSTOMERS
Focus groupBenchmarking surveysMeetings workshops seminarsSatisfaction survey Handling and analysis of complaints applications and suggestions
EMPLOYEESEmployee satisfaction surveyTraining and evalution Meetings with trade union
COMMUNITYMeetings with CSosWorking groups working bodies
SUPPLIERSSupplier information form Csr questionnaireRegular communication in tender process
ENVIRONMENTMeetings CSosWorking groups working bodies
CUSTOMERS EMPLOYEES COMMUNITY SUPPLIERS ENVIRONMENT
INDIVIDUALSSMALL BUSINESS
SMESLARGE CORPORATES
LOCAL GOVERNMENTSCONSUMER ASSOCIATIONSBUSINESS ASSOCIATIONSPUBLIC ADMINISTRATION
MANAGERSOFFICERS
EMPLOYEES
LOCAL AND NATIONAL PUBLIC
INSTITUTIONS (REGULATORYBODIES LOCAL GOVERNMENT
ETC)CSOS
MEDIA
DOMESTICFOREIGN
ENVIRONMENTALORGANISATIONS
FUTURE GENERATIONS
12
CUSTOMERS EMPLOYEES SUPPLIERS COMMUNITY ENVIRONMENT
Development of service model and channel in accordance with the
customersrsquo needs
Employee training and professional development
Fair treatment of suppliers Promotion of culture and artsOptimisation of natural
resource utilisation
Product and service qualityMerit recognition
and rewardingCooperation and relations
with suppliersSupport to youth education
and developmentReduction of greenhouse
gas emission
Customer satisfaction Employee protectionPromotion and observance
of ethical and environmental standards in supply chain
Fight against poverty and social exclusion
Support to customers for energy efficiency
improvement
Access to loans for corporatesSafe and healthy
work environment
Strengthening the SME sectorInvolving employees
in company life
Financial inclusion of vulnerable social groups
Work-life balance
Support to customers having financial problems
13
2 Sustainability
14
21 GENERATED ECONOMIC VALUE
Generation of economic value an efficient governance system and careful management of business risks characterise Banca Intesarsquos business model based on transparency and integrity These elements as well as the care for employees environment and the quality of service it provides to its customers are of key importance for the progress for which the Bank strives as a responsible stakeholder in the community in which it operates
MARKET POSITION
According to the official data of the National Bank of Serbia as of December 31 2013 Banca Intesa is the leader in all business segments
DIRECT AND INDIRECT ECONOMIC VALUE GENERATED
2012 2013
Net assets 3635 3727
Customer loans 2363 2404
Customer deposits 2300 2388
Equity 792 863
in million euros
EmploymentStable partner of the government
Reliable support to the economy
Support to the communityTotal income and
expenditure
Banca Intesa employs 3039 people
As an active partner of the government Banca
Intesa supports economic development initiatives
of the Government
Banca Intesa cooperates with 406 suppliers
Banca Intesa participated in numerous community
support projects and implemented 106 donor activities
Total economic value generated by Banca Intesa was RSD 20695651000
The Bank directly provides 3039 jobs and it paid
RSD 193711289679 into the budget of Serbia as taxes and contributions on wages and pensions
The budget of Serbia received 80629605186 dinars in the form of regular tax payments
WithRSD 67069271910EUR 2056318466
USD 73719631GBP 1012544
allocated for procurement it indirectly affects the
stability of business and jobs in its supplier chain
The investment in the community amounted
to RSD 22381000 through donations to the
local community RSD 10000000 through
investment in infrastructure and RSD 299812329 through volunteering
The economic value distributed through operating
costs and personnel expenses and liabilities to the Government and the community amounted to RSD 1116382182660
Banca Intesa continued to post good business results in 2013 as well confirming its leading position in the banking sector of Serbia despite difficult business conditions The Bankrsquos total loans to corporate and retail customers reached 2365 million euros while deposits totalled 2387 million euros The business network consisted of 192 branches 3 mortgage loan centres and 5 mortgage loan offices In addition Banca Intesa had the most developed network of POS terminals and ATMs with 12751 active POS terminals and 255 ATMs
In the retail segment total loans amounted to 667 million euros while deposits increased to 1436 million euros at the end of 2013 Banca Intesa reaffirmed its leading position in e-banking and payment card business during 2013 as well with around 14 million debit and credit cards issued At the same time small business loans reached 126 million euros while loans granted to farmers amounted to 37 million euros
In the corporate segment at the end of 2013 Banca Intesa had a loan portfolio of 1728 million euros continuing the growth from the previous years Corporate deposits were at the level of 968 million euros while the bankrsquos market share in total corporate deposits of the banking sector was 206 at the end of December 2013
Owing to the increase in all key items a net income of 238 million euros was posted Net profit after tax was 76 million euros at the end of December 2013
15
1 ECONOMIC VALUE GENERATED 2012 2013
Interest income 31340971 29588778
Interest expenses -11790051 -9598939
Fee and commission income 7890743 8175478
Fee and commission expenses -2292104 -2648138
Net profit on sale of securities atfair value through profit and loss 1008 590
Net profit on sale of securitiesavailable for sale 49855 4332
Net profit on sale of equity investments 434 0
Net exchange rate loss -13263673 356204
Dividends and share income 2925 1527
Other operating income 554540 676132
Net expenses on indirectly written-off of placements and provisions 1 -5415518 -6935326
Operating and other expenses 2 -189518 -532659
Gains from changes in value of assets and liabilities 31390752 12172042
Losses from changes in value of assets and liabilities -16188419 -10564372
TOTAL ECONOMIC VALUE GENERATED 22091945 20695651
2 ECONOMIC VALUE DISTRIBUTED
21 Operating costs 3
Costs of material -487362 -475379
Building and equipment maintenance costs -753215 -798584
Office and equipment lease costs -934768 -930657
Costs of intellectual services -369026 -315092
Advertising -355296 -280923
Costs of business travel and training of employees 3 -93716 -92586
Other operating costs 3 -2098067 -2130715
TOTAL OPERATING COSTS -5091449 -5023936
22 Employee expenses 3
Wages and salaries -3312415 -3223372
Taxes and contributions on wages and wage benefits 3 -1997940 -1937113
Cost of employees transportation 3 -76490 -84139
Costs of remuneration for temporary and occasional work -5861 -4569
Costs of employees education not related to their job 3 -3157 -6094
Other personnel expenses -172859 -55922
TOTAL INCOME AND EXPENSES
TOTAL EMPLOYEE EXPENSES -5568723 -5311209
23 Expenses related to liabilities to the government
Income tax -830548 -623097
Indirect taxes and duties 3 -161352 -183199
TOTAL EXPENSES RELATED TO LIABILITES TO THE GOVERNMENT -991900 -806296
24 Community-related expenses
Donations and corporate social responsibility 3 -33204 -22381
TOTAL COMMUNITY-RELATED EXPENSES -33204 -22381
TOTAL ECONOMIC VALUE DISTRIBUTED -11685276 -11163822
3 ECONOMIC VALUE RETAINED 4 10406668 95318291 The item differs from the income statement in the annual report in that the Provisions for Employee Benefits Legal Disputes and Restructuring are excluded 2 The item differs from the income statement in the annual report in that the Operating Costs are presented in the section Economic Value Distributed in several segments stated while Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation is not presented within Other Operating Expenses3 The items differ from the income statement in the annual report in that a part of the Operating Costs is reclassified into the following segments Employee Expenses Expenses Related to Liabilities to the Government and Community-Related Expenses4 This represents BIBrsquos profit net of the Provisions for Employee Benefits Legal Disputes and Restructuring the Gains and Losses on Deferred Tax Assets and Liabilities the Depreciation Costs and the Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation
16
22 GOVERNANCE IN BANCA INTESA
CORPORATE GOVERNANCE
Shareholders of Banca Intesa ad Beograd ndash ownership structure Intesa Sanpaolo Holding International SA 7779 Intesa Sanpaolo SPA 1521 International Finance Institution (IFC) 700 The governance of the Banca Intesa joint stock company is organised as a two-tier system
The Bankrsquos Board of Directors consists of five members elected by the General Meeting of Shareholders upon the shareholdersrsquo proposal including the Board Chairman The term of office of Board members is three years with a possibility of re-election The Chairman of the Board of Directors of Banca Intesa is Massimo Malagoli and its members are Ivan Šramko Arthur Philippe Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Executive Board of Banca Intesa consists of six members including the President The term of office of Executive Board members is three years with a possibility of re-election The President of the Executive Board of Banca Intesa is Draginja Đurić the Deputy President of the Executive Board is Marco Capellini and Board members are Darko Popović Head of Retail and Small Business Division Slađana Jelić Head of the Corporate Banking Division Dragica Mihajlović Head of the Financial Management and Treasury Division and Marko Marković Head of the Operations Management Division
Women account for 20 of the members of the Board of Directors and 50 of the members of the Executive Board of Banca Intesa
The Bankrsquos Audit Committee consists of five members including the Chairman The term of office of Committee members is three years with a possibility of re-election The Committee Chairman is Giovanni Bergamini and its members are Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Chairman of the Board of Directors as a governance body does not have a direct executive role given that Banca Intesa organised as a joint stock company with a two-tier governance system delegates executive roles to the Executive Board as a management body that organises the Bankrsquos operations and performs daily monitoring of the activities of the Bank employees while the Board of Directors makes strategic decisions aimed at the Bankrsquos compliance takes care of and is responsible for the accuracy of all reports financial condition and operating results of the Bank addressed to the Bankrsquos shareholders the public and the National Bank of Serbia
In line with the Law on Banks and other regulations members of the Board of Directors are appointed and dismissed by the General Meeting of Shareholders while members of the Executive Board are appointed and dismissed by the Bankrsquos Board of Directors Domestic regulations list conditions that members of the Executive Board and the Board of Directors must meet in order to get prior approval of the regulatory body ie the National Bank of Serbia without which they cannot become members of these boards This includes among other things good business reputation and appropriate qualifications In addition appropriate experience in finance is also required for at least three members of the Board of Directors while at least one member of the Board of Directors must have active knowledge of Serbian and reside in the territory of the Republic of Serbia After obtaining the approval the appointed person is registered with the Business Registers Agency as well
Banca Intesa provided in its bylaws for the mechanisms and channels of direct e-mail communication with its parent group Intesa Sanpaolo with the aim of respecting the individual and dignity of each employee as well as the values proclaimed by the Code of Ethics The Bankrsquos shareholders ie the General Meeting of Shareholders participate in and directly impact the work of the Board of Directors as a governance body in the following ways
bull The General Meeting of Shareholders adopts the business policy and strategy of the Bankbull The General Meeting of Shareholders adopts the Articles of Association and the amendments to the Memorandum and Articles of Associationbull The General Meeting of Shareholders appoints and dismisses the Chairman and members of the Board of
17
Directorsbull The General Meeting of Shareholders appoints and dismisses the external auditorbull The General Meeting of Shareholders considers and adopts the annual report of the Board of Directors
The adopted remuneration policy for the entire human resources of the Group including the variable components is based on equality merit and sustainability of results The guidelines for defining the management remuneration policy are based on objective elements and parameters resulting from the assessment of organisational positions as well as performance and potential with the aim of creating an integrated system for the members of management thus helping their professional development The policy provides for remuneration in the form of benefits which is also based on financial instruments and linked to the results of the company ndash which corresponds to the level of assumed risk and is regulated so as to avoid giving benefits that in the long term are not in accordance with the Grouprsquos interests Based on the performance indicators closely linked with the long-term goals the benefit determination systems are based among other things on the principle of symmetry with the amounts of paid benefits being based on the results achieved at the Group business sector and individual levels and therefore being capable of decreasing significantly and even reaching zero if the minimum indicators that reflect the Group profitability are not achieved also taking into account the risks assumed and the capital used
When it comes to conflicts of interest Banca Intesa has prescribed in accordance with the provisions of the Law on Banks as well as with its bylaws and those of its parent Group an obligation for members of the Board of Directors and the Executive Board to submit a written statement of conflict of interest to the Bankrsquos Board of Directors within one month from the day of taking office The members of the Board of Directors and the Executive Board are obliged in accordance with the bylaws regulating transactions with related parties and the conflict of interest to submit once a year completed standard questionnaires whose content is designed by the parent Group and which contain information relevant for establishing any conflict of interest
One of the methods of sustainability control at Banca Intesa is the power of the Board of Directors as a governance body to set up an integrated risk management system at the Bank and the supervision of this system while the Executive Board identifies the risks to which Banca Intesa is exposed and controls these risks in accordance with the approved policies and procedures The Board of Directors gives approval to the Bankrsquos exposure to one or a group of related parties of over 10 or to an increase in the exposure to over 20 of Bank equity adopts internal audit plan and programme considers external and internal audit reports sets up the internal control system defines the internal organisation and organisational structure of the Bank that ensures the division of duties authority and responsibilities of its employees in a manner that prevents conflict of interest and ensures a transparent and documented process of decision making and implementation decides on disposing with the Bankrsquos fixed assets and the stakes and shares that the Bank has in other legal entities
The work of the Executive Board is evaluated through the MBO (Management by Objectives) system which is based on setting measurable objectives based on which the annual performance is monitored
RISK MANAGEMENT
Risk management is an integral part of the corporate governance of Banca Intesa based on which it is estimated whether the Bank can achieve its business targets in the way consistent not only with the law but also with the public interest safety of people as well as the factors of the natural and social environment Therefore the access to risk management also implies broader social consequences of Bank activity in the environment and in the market
Controlling Socio-environmental Risks in the Governance Process
By a decision of the Executive Board the Bank appointed the persons responsible for environmental protection with the aim of establishing an Environmental Management System ndash EMS and ensuring compliance with the rules of environmental protection and corporate social responsibility in lending operations so that the system would be fully applied until the final collection of all loan instalments A Senior Environmental Management Officer (Deputy President of the Executive Board) and an Environmental Management Coordinator (compliance risk management specialist) were appointedThe Environmental Management Coordinator with the approval of the Senior Environmental Management Officer informs the Executive Board the Asset Quality Committee and the Credit Committee of any significant increase in the level of socio-environmental risks in individual Bank customers particularly in customers with high credit exposure
18
and prepares reports on socio-environmental risks for international development banks towards which the Bank has such reporting obligation
The responsible organisational unit of the Bank monitors risks through the process of assessing loan applications taking into account the criteria related to lending to all customers engaged in production and service activities and the criteria related to environmental risk management
Management of Socio-environmental Risks in Lending
Adequate management and control of socio-environmental risks are essential preconditions for generating reliable and sustainable value and for protecting the Bankrsquos financial stability as well as its reputation
Socio-environmental Risk Management
The Socio-environmental Risk Management Procedure regulates the risk monitoring process in the area of environmental protection employee health and safety and the Bankrsquos social responsibility (protection of cultural heritage fundamental human rights and personal integrity) This Procedure regulates the credit process with regard to socio-environmental risks when approving a credit product to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1000000 euros or higher including the requested new product in case of a credit product from a credit line or other funds approved to the Bank by an international development bank and approval of a long-term credit product funded from other sources The Procedure regulates the rules classified by business lineprocess in the process of socio-environmental risk management
Equator Principles
The Implementation of the Equator Principles for Project Financing procedure applies when preparing and implementing project financing and advisory services in connection with project financing where the investment value of the project is 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes in these facilities can create significant environmental andor social impacts or significantly change the natural environment The goal of the Equator principles is to identify and assess risks and perform risk management based on the criteria defined by the principles with the aim of adhering to the principle of sustainability of natural resources human health human rights cultural heritage and biodiversity
Armaments
The sensitive sectors that the Bank monitors with special attention include armament production and trade In accordance with the relevant bylaw of its parent Group the Policy of Not Financing of Armaments in 2011 Banca Intesa adopted the Procedure for the Performance of Transactions Related to Armament Production and Trade which regulates the identification and preparation of the summary of the customers engaged in armament and military equipment production and trade the monitoring of transactions and loan applications of the customers engaged in armament and military equipment production and trade the approval of transactions and loan applications related to armament and military equipment production and trade in accordance with the Policy of Not Financing of Armaments as well as the preparation of reports on the transactions related to armament and military equipment production and trade
Reputational Risk Management
The Bank attaches great importance to reputational risks that are assessed as part of the compliance control system which is within the competence of the Compliance Office Banca Intesa believes that the standards in this area as well as the business ethics are the cornerstone of banking operations which by their nature are based on trust Bylaws such as the Code of Ethics policies and other define that any non-compliance with the bylaws the principles and values contained in them as well as with external regulations (laws and secondary legislation) exposes the Bank to a certain level of reputational risks
Fight Against Corruption and Compliance
The internal regulatory source that governs the system for control and mitigation of corruption risks comprises the Code of Ethics the Code of Conduct the Rulebook on Relations with Political Parties and the following Bank procedures the Procedure for the Prevention of Internal Fraud and Abuse at the Bank and the Employment Termination Procedure
19
The Code of Conduct prescribes in detail the rules in connection with receiving and giving gifts and the measures prescribed in the event of corruption are related to the violation of work duties so the measures stipulated by external regulations ie the Labour Law (eg compensation for damage employee suspension or termination) but also the Criminal Code may be pronounced against an employee Based on the Legal Department records no proceedings were initiated against Banca Intesa ad Beograd in connection with corruption since no complaints or notices prior to complaint were delivered during 2013
In the same period the Suspicious Transactions and Know Your Customer training courses were held in this segment by means of e-learning which were received by as many as 8663 of employees during 2013 The training courses were provided for by the current regulations and internal acts of the Bank and were aimed at informing the employees and refreshing their knowledge of the obligation of collecting information about each customer and completing appropriate questionnaires In addition the training informed the employees about the new processes that were implemented as well as about mandatory observance of all duties relating to knowing monitoring and reporting suspicious transactions of customers
The Rulebook on Relations with Political Parties prescribes the obligation of the Bank to refrain from granting donations and sponsorship tobull Political parties and any organisations related to thembull Political movements and their organisational unitsbull Trade union organisationsbull Competent authorities and institutions
The prohibition of granting donations and sponsorship to the above organisations aims at the protection against any grants that would result in a privileged position to the Bank or unfair decisions in favour of the Bank
The Compliance Office as well as the relevant organisational units of the Bank are committed to the regulation of processes and the definition of procedures and their operating rules as well as practice which efficiently prevent the violation of applicable regulations The Compliance Office also provides support to the highest bodies of the Bank in monitoring the compliance risk The compliance risk assessment process is constant Through semi-annual reporting these risks are identified and priority measures for their elimination or mitigation are determined ie the level of efficiency of the existing compliance controls is assessed
The Internal Audit provides direct support to the highest bodies of the Bank in monitoring the compliance with and adequacy of the rules contained in the Bankrsquos bylaws If it identifies critical issues during its activity the Internal Audit informs the relevant organisational units and the highest bodies of the Bank with the aim of determining adequate measures for risk mitigation and the method of their implementation
Protection of Health and Safety
Occupational health and safety at Banca Intesa are regulated in accordance with international directives recommendations and positive laws of the Republic of Serbia
During 2013 an assessment was made of the situation regarding occupational health and safety and the risk level for 207 facilities at which work is performed A schedule of elimination of recorded risks to the health of Bank employees was defined and implemented according to priorities and the budget planned In connection with this risk assessment documents were updated as well
When it comes to physical security three robberies were recorded in 2013 versus two a year earlier and investments in technical protection systems continued
Risk Management in Supply Chain
Supplier Check
The Procurement Unit and the organisational part in charge of procurement are obliged to evaluate the received supplier bids by applying the methods of qualitative and quantitative analysis as well as to align the bid evaluation criteria prior to inviting the bidders to submit offers by combining specific criteria one of which is the Compliance of Bidderrsquos Operations with the Corporate Social Responsibility Principles
20
Health and Safety Risk Assessment
In accordance with the Procurement Policy members of Intesa Sanpaolo Group are expected to include the parameters of assessment of environmental protection and occupational health protection in their procurement process giving priority to the use of recycled paper highly energy efficient products and environment-friendly technical equipment
Group members must include special provisions in the procurement contracts they conclude with their suppliers These provisions provide for the obligation of suppliers to comply with the principles specified in the Intesa Sanpaolo Rules for the Environmental and Energy Policy Constant checks are performed in the countries where legal measures regarding environmental protection were adopted in order to ensure compliance
In the area of personnel training and spreading the awareness of the importance of these issues the training of the employees who directly communicate with suppliers must include fields related to corporate social responsibility as well as to the responsibility for environmental protection
21
CUSTOMERS
Banca Intesa built its leading position in the market of Serbia and the status of stable and reliable partner by fostering trust in the relations with its customers The strengthening of relations with customers is based on constant improvement of the quality of products and services proceeding from specific needs of each segment as well as on full respect for the principles of equality and availability of products and services Key aspects of doing business with customers are the following
bull SUPPORT TO ECONOMY AND AGRICULTUREbull FINANCIAL INCLUSION AND EDUCATIONbull CUSTOMER SATISFACTION
SUPPORT TO ECONOMY AND AGRICULTURE
Banca Intesa continued to provide support to the economy and the agricultural sector in 2013 as well focusing on the development of entrepreneurship and self-employment particularly in the SME segment as well as on the improvement of public infrastructure
Support to the Public Sector
Banca Intesa offered loans from the credit line of the German Development Bank (KfW) to the public sector for financing infrastructure projects and the procurement of equipment in the following areas water management sewerage and wastewater management solid waste management environmental protection and pollution control transport infrastructure public transport and communication systems infrastructure facilities fostering economic development and other social and utility services During 2013 Banca Intesa granted 11 loans totalling 852 million euros while the total value of the project is 47 million euros
Development of Entrepreneurship
Banca Intesa supported the programme of measures of the Government of the Republic of Serbia for encouraging SMEs and entrepreneurs through subsidised loans for liquidity and working assets in 2013 as well The Bankrsquos commitment to provide continuously support to its customers in this segment is also demonstrated by the fact that the Government of the Republic of Serbia implements its programme of measures for the fifth consecutive time During 2013 the Bank granted 414 subsidised loans to SMEs totalling 562 billion dinars which accounted for 107 of the total loans to the SME sector The small business sector was granted 186 billion dinars and 1347 loans which accounted for 15 of the number of loans and 16 of the total loan disbursements to this segment
In cooperation with the National Bank of Serbia and the Kingdom of Denmark the Bank launched the Local Economic Development in the Balkans (LEDIB) programme intended for enterprises entrepreneurs and registered farms from the small business segment with the aim of improving local economic development creating new jobs strengthening organisational capacities introducing new eco-friendly technologies and other favourable impacts on the overall development The credit line was intended for the Nišava Pčinja Toplica Jablanica and Pirot Districts and in 2013 the Bank granted 39 loans totalling 505208 euros under this programme which accounted for 04 of the number of loans and 05 of the total loan disbursements to the small business segment At the same time from the credit line of the European Fund for Southeast Europe (EFSE) which supports enterprises and registered farms through investments and loans for working assets 227 million euros were granted in the small business segment which accounted for 22 of loan disbursements in the segment
With the aim of supporting the promotion and strengthening of womenrsquos entrepreneurship Banca Intesa helped the Association of Businesswomen in Serbia in the organisation of an international conference entitled New Age Woman Entrepreneur New Opportunities for Recovery of Economy in the Region The event contributed
22
to further positioning of Banca Intesa as a bank that actively supports entrepreneurship in the country as part of its efforts to contribute to economic recovery and growth For this purpose the Bank also has in its offer loans for women entrepreneurs in Vojvodina in the form of start-up loans for unemployed women and women who have had a business for up to three years The Bank granted 8 loans totalling 98 million dinars under this programme during 2013 which accounted for a 3 share in the number of loans and a 1 share in the total investment loan disbursements in the small business segment
Promotion of Agricultural Sector
Taking into account that the agricultural sector is very specific because it has a special social as well as environmental importance in addition to economic importance for many years Banca Intesa has been encouraging development and investing in projects and individuals that encourage with their activities further rural development and contribute to an increase in the competitiveness of domestic agriculture
Aware of the great economic potential of this industry as part of the LEDIB programme the Bank granted eight loans to registered farms in 2013 totalling 76219 euros which accounted for 02 of the number of loans and 03 of the total loan disbursements to this customer segment In addition in cooperation with the Guarantee Fund of the Autonomous Province of Vojvodina long-term loans for purchasing new agricultural machinery and equipment were available to customers During 2013 the Bank granted 82 loans of this type totalling 219 million euros which accounted for a 15 share in the number of loans and a 25 share in the total investment loan disbursements in the agricultural segment
In addition on the occasion of the 80th International Agricultural Fair in Novi Sad the Bank prepared a special credit offer intended for owners of registered farms which included the Intesa Farmer dinar loan for financing spring works as well as the Intesa Farmer loan for purchasing agricultural machinery During 2013 22 loans were granted for purchasing tractors and agricultural machinery totalling 341 million dinars which accounted for a 4 share in the number of loans and a 3 share in the total amount of agricultural investment loan disbursements
Banka Intesa launched the Intesa Farmer of the Year project to contribute in yet another way to the promotion of agricultural production in the country and to the strengthening of its competitiveness As part of the project the Bank awarded the most successful farmers in four categories ndash Intesa Crop Farmer Intesa Vegetable Grower Intesa Fruit Grower and Intesa Livestock Breeder and all winners won a trip to Germany to visit the international agricultural fair in Berlin The criteria based on which the Committee selected the winners of the title Intesa Farmer of the Year were the annual results achieved in agricultural production application of modern technologies in production activities the number of household members engaged in the production as well as the minimum three-year cooperation with the Bank which included a loan and regular settlement of their financial obligations
FINANCIAL INCLUSION AND LITERACY
Banka Intesa believes that the availability of financial products to all segments of society is an essential precondition for sustainable development In line with this position the Bank added to its offer specific products that promote financial inclusion and provide support during economic crisis to the most vulnerable social groups such as the elderly or youth as well as to solving broader social problems such as housing availability or health care services
Responding to the Needs of the Community
In 2013 Banca Intesa included in its offer the Intermezzo Cash Loan a new model of cash loan which offers to its users as a unique benefit in the domestic market a possibility of postponing the payment of monthly instalment up to five times during the repayment period Moreover as an additional functionality the Intermezzo loan includes insurance against job loss with no additional cost to the customer The Bank believes that the repayment flexibility provided by this loan model offers citizens unique support in the market at a time when they estimate that they need it most In 2013 Banca Intesa granted 11256 Intermezzo cash loans totalling 198 million euros which accounted for 235 of the total amount of cash loans disbursed during the year
Banca Intesa was the first in the Serbian market to offer loans to pensioners aged up to 74 years The Senior Cash Loans were designed specifically to fit the needs of senior citizens and they also include life insurance which is included in the cost of loan during the entire repayment period During the previous year 19774 loans were granted totalling 239 million euros which accounted for 284 of the total cash loans granted in 2013
23
In 2012 as support to citizens in financing medical services the Intesa Vita programme of consumer and cash loans was developed which includes loans for in vitro fertilisation harvesting and storage of stem cells DNA analysis dental services medical spa and wellness treatments as well as for purchasing baby supplies In 2013 the programme was extended to new purposes - laser vision correction vein operation and purchase of medical aids and 28 loans were granted totalling 126345 euros which accounted for 8 of the total cash loans granted during the year In this unique way the Bank provides the citizens with the possibility of taking care of their health in a responsible and timely manner without suddenly burdening their home budgets
Moreover the Bank continued to provide subsidised housing loans in 2013 as well in order to provide support to young married couples in solving their housing problems granting 224 loans totalling 864 million euros which was 205 of the total housing loans granted during the year At the same time 6544 refinancing loans with insurance against job loss or disability in case of an accident were granted totalling 146 million euros which enabled the customers to service their outstanding liabilities towards Banca Intesa and other banks and which accounted for 173 of the Bankrsquos total cash loans granted during the year
Banca Intesa introduced the Visa Classic Paralympic and Visa Electron Paralympic cards the first charity payment cards in the country in cooperation with the Paralympic Committee of Serbia This was the first initiative aimed at establishing a stable and independent mechanism for long-term assistance to athletes with disabilities and developing paralympic sport in the country During 2013 8345 Visa Classic Paralympic and Visa Electron Paralympic cards were issued which accounted for 14 of all cards issued during the year The Bank also provides debit cards for students which enable free account opening and maintenance for all students who opted for an Intesa Visa Electron Easy Travel Card (ETC) or a Maestro ISIC Card of Banca Intesa of which 4048 were issued in 2013 accounting for 18 of the debit cards issued during the year
Constantly striving to promote savings in 2013 the Bank introduced a new savings model the Month by Month Savings which provides customers with a possibility of reaching higher amounts of savings with lower monthly allocations The product enables saving in dinars and euros at a very attractive interest rate while the customers also have an opportunity to set the payment date and amount themselves
Financial Education
In 2013 as well Banca Intesa remained true to its commitment to support actively financial education by improving customer knowledge Thus in cooperation with Banca IMI SpA a member of Intesa Sanpaolo Group another Intesa Academia workshop was organised this time on the subject of advanced financing and risk management instruments so that Banca Intesarsquos customers could find out more about the possibilities of financing in the international and domestic bond markets and about hedging products for successful management of market risks The workshop brought together the leading world experts in the areas of financing and risk management as well as the most successful customers of the Bank In order to assist its customers in the SME segment in getting informed in more detail about the regulations relating to loan approval and collection Banca Intesa took part in the working breakfast on the subject Security Instruments and Their Collection as the Condition for Financing Company Growth held at the premises of the Serbian Association of Managers On this occasion the legal framework was presented about which enterprises should also get informed in order to know that documentation they will need if they opt for bank loans
At the same time the Factoring Department designed and launched an initiative of organising factoring workshops at the Bankrsquos regional centres Factoring workshops are an interactive form of cooperation and communication with customers with the focus on understanding the term and essence of factoring themselves With the support of regional centres a total of 27 factoring workshops were organised in 22 cities in two cycles in late 2012 and in early 2013 which were attended by nearly 300 corporate customers
As a member of the United Nations Global Compact and its Working Group on CSR in Banking and Finance Banca Intesa works together with the other members on the implementation of projects in the area of financial education which is the main goal of this Group One of the projects actively supported by the Bank is the cooperation with seven secondary schools of economics from six cities in Serbia where there is a ldquobank clerkrdquo educational profile in the area of thematic lectures for teachers and students The Bank representatives gave three lectures during 2013
24
CUSTOMER SATISFACTION
Banca Intesa believes that it is only through an open dialogue with its customers that it can truly understand their needs and expectations and build a long-term partner relationship with them
Meeting the Needs of Customers
Ever since 2008 Banca Intesa has been conducting surveys of its customersrsquo satisfaction with the Bankrsquos products and services in accordance with the methodology of the European Customer Satisfaction Index (ECSI) as part of its initiative named Listening 100 This is a continuous process analyses are made based on the results obtained in the survey and actions are proposed accordingly for improving the customer satisfaction The surveys are repeated at six-monthannual intervals in order to collect feedback from the customersrsquo perspective for the measures taken for the purpose of improving the satisfaction index as well as identifying the directions for further improvement
Looking at the results of the customer satisfaction survey at the end of 2013 a conclusion arises that among other things the basis of good results is a positively rated staff treatment of customers The ECSI as well as the Loyalty indices are stable with a high percentage of customers who stated they would remain Banca Intesa customers in the following 12 months Attempting to encourage its customers to express their opinions in the previous year the Bank clearly communicated the improvements implemented so far based on their suggestions
During 2013 as well Banca Intesa continued to increase the number of branches equipped with the Queue Management System (QMS) which covered approximately 40 per cent of active customers at the end of the year In addition to having a positive impact on customer satisfaction the QMS expansion made it possible to obtain the data necessary for better analysis and organisation of branch operation In addition free internet access via Wi-Fi and daily newspapers were made available to customers at the largest branches
As part of its efforts to improve further customer satisfaction in 2013 Banca Intesa implemented training of over 1500 employees both in its branch network and at its headquarters The training which was implemented as a continuation of the Education 100 programme initiated in 2011 was held on the subject of managing customer satisfaction but also their entire experience in each contact with the Bank
In addition to its efforts to improve its approach to customers and recognising the importance of two-way communication the Bank developed efficient mechanisms for collecting and recording customer feedback The Bank responds to all complaints sent to the Bank via formal complaints mechanisms and does so within the statutory time limit and in accordance with the decision of the National Bank of Serbia Each customer may also personally contact unit employees and if the customer is not satisfied with the answer received heshe can apply to the National Bank of Serbia as the second-instance body with the possibility of mediation The following are available to customers
bull Phone line +381 11 310 88 88bull E-mail kontaktbancaintesarsbull Fax +381 11 310 88 55bull Personal contact ie submitting a written complaint in personbull Contact form on the official website of the Bankbull Bank corporate accounts on social networks (Facebook and Twitter)bull Postal address of the Customer Satisfaction Management Unit Omladinskih brigada 90b 11070 New Belgrade
Transparent Advertising
Lasting relationships based on trust require communication that enables customers to understand clearly the characteristics and value of Banca Intesa products and services Therefore the Bank strives to contribute to the simplification of its products in communication
In its advertising the Bank clearly specifies all customer costs and all of them are included when calculating the effective interest rate which is always clearly and visibly shown as well as representative examples that contain all data in accordance with the Law on the Protection of Financial Service Consumers which demonstrates full transparency when it comes to Bank pricing policy
25
The Bank also strives to formulate the agreements so that they are simple to understand minimising possible misunderstandings and ambiguity by providing clear and exhaustive information It informs its customers in a timely manner of any changes in the agreements and their terms
Data Security
The protection of customer security as well as their assets and confidential information is not only Banca Intesarsquos primary duty but also the basis of the relationship of trust that the Bank wants to reinforce with its customers The protection of persons their assets and valuables as well as a multitude of data and internal organisational processes fully meets the criteria of reliability continuity and confidentiality In addition to its legal obligations Banca Intesa complies with the criteria of absolute transparency in informing its customers of their rights to privacy and the way it treats their personal information
In 2013 Banca Intesa did not find any founded complaint in connection with the violation of customer privacy or any disclosure leakage or theft of customer information
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
3
FOREWORD BY PRESIDENT OF THE EXECUTIVE BOARD
Ladies and gentlemen
Integrating the concept of sustainability and the highest standards of professional ethics into all business process-es enabled us again to create in the past year a value that contributes not only to the long-term success of Banca Intesa but also to the economic development of the country and to the well-being of the whole society Respecting the needs of all stakeholders we strove to act in a manner that brings permanent benefits to our customers and suppliers shareholders employees as well as the broadest social community
We focus our sustainable business strategy on the ar-eas on which we can make the greatest positive impact Thus responsible financing of economic recovery and improvement of the citizensrsquo quality of life was our main priority in 2013 as well In accordance with this goal we supported companies and households with total placements of over RSD 275 billion and responding to the growing needs of our customers we developed new products while also improving the existing ones In the area of employee care in addition to respecting their opinions their development and advanced train-ing were our priority which is evidenced by the number of hours of training that was almost double compared to the year earlier At the same time we also achieved measurable progress in terms of rational resource utili-sation striving to reduce the environmental impact and promote environmental accountability
Support to the community remained one of the key de-terminants of our CSR activities in the previous year as well We allocated over RSD 60 million in total to sup-port the operation of health care and social care insti-tutions supported the development of art and culture and promoted sports and education On the other hand we also initiated new long-term projects convinced that we give a significant contribution to social inclusion in our country by providing assistance to vulnerable elderly persons In addition we worked on strengthening the culture of volunteering and developed our own corpo-rate volunteering programme Intesa from the Heart en-couraging our employees to invest their time skills and energy in the well-being of the community
Our ever-increasing efforts to identify the real needs and problems of all stakeholders resulted in the improvement of the reporting process itself This yearrsquos Sustainability
Report the second that we prepare in accordance with the standards of the international reporting methodol-ogy ndash Global Reporting Initiative (GRI) ndash thus includes even more indicators evidencing our determination continuously to improve sustainable business practices and measure our success not only in terms of financial and market results but also in terms of the way in which we achieve them
Yours sincerely
Draginja ĐurićPresident of Banca Intesa Executive Board
4
WHY DO WE REPORT
Sustainability reporting is an integral element of transparent communication of Banca Intesa with all its stakeholders who are thus provided full insight into all its activities including its economic socio-environmental performance The reporting enables the Bank to analyse and present in a quality and systematic manner the results of all its projects and initiatives relative to the set goals in order to improve the performance and its monitoring
In line with the global shift towards integrated reporting which includes mandatory nonfinancial parameters in addition to financial parameters the Bank strives to promote sustainability reporting as a standard business practice of responsible companies in accordance with the strategic commitment of its parent group Intesa Sanpaolo
HOW DO WE REPORT
Sustainability Report 2013 is Banca Intesarsquos fourth corporate social responsibility (CSR) report and the second designed according to the most relevant international reporting initiative Global Reporting Initiative (GRI) Relative to the previous year when GRI G31 guidelines were first introduced as a reporting framework in 2013 the Bank improved the level of the GRI methodology application by reporting on 24 GRI indicators which now also include the GRI Financial Services Sector Supplement (FSSS) indicators as indicators of advanced corporate social responsibility practices The Report also fully complies with the requirements of the United Nations Global Compact Communication on Progress (COP)
As in the previous year the Report is structured so as to present to the stakeholders the topics of the highest importance to them in a transparent and clear way taking into account the Bankrsquos strategic priorities and goals with an intention of pointing out joint areas of activity the greatest challenges as well as the solutions offered by the Bank At the same time revising the main parameters between two reporting cycles and checking the compliance with the fundamental GRI principles reflect the Bankrsquos constant efforts to improve further the quality of the Report
GRI Reporting Principles
In defining the content the Bank was guided by the principles of materiality stakeholder inclusiveness sustainability context and completeness An analysis of the materiality of relevant topics resulted in a set of priority areas that affect to the highest extent the Bank operation its stakeholders and the broader community The credibility of the information presented in the Report was ensured by consistently adhering to the principles of balance comparability accuracy timeliness clarity and reliability
Individual organisational units of the Bank contributed to the process of information gathering and processing through CSR ambassadors selected representatives of departments offices and units who closely cooperated with the Marketing and Communications Department in the preparation of the Report The indicators and the measurement system were developed in accordance with standard performance indicators obligations arising from international methodological frameworks for reporting and the Bankrsquos desire for each step on the sustainability path to be measurable
Most of the information was gathered directly and assessments measurement methods and information sources were specifically stated where needed The Report is published annually and refers to the activities of Banca Intesa ad Beograd in 2013 Comparisons with the previous years were provided where possible There were no significant changes regarding the main Report parameters relative to 2012
Previous Banca Intesa sustainability reports (for 2010 2011 and 2012) are available at http wwwbancaintesarscodenavigateaspxid=384
Contact person in charge of Sustainability Report 2013 Jelena Krsmanović Media Relations Manager jelenakrsmanovicbancaintesars
C C+ B B+ A A+
Req
uir
ed Independent level
determinationReport verified
by external source
Report verified by external
source
Report verified by external
source
Op
tio
nal
Verified by third party
Verified by GRI
5
1 Identity
6
11 BANK PROFILE
INTESA SANPAOLO
Intesa Sanpaolo is one of the leading banking groups in Europe and the largest in Italy Created in 2007 by the merger of the leading Italian banks Sanpaolo IMI and Banca Intesa the Group holds the leading position in Italy in terms of providing financial support to retail and corporate customers The Group is committed to improving its services to retail customers and providing significant support to the business of its customers as well as to the overall economic development of the countries where it operates
Intesa Sanpaolo serves around 111 million customers through its well-developed business network of more than 4700 branches The Group focuses its business operations on Central and Eastern Europe the Middle East and Northern Africa where it serves 84 million customers in 12 countries through a network comprising around 1400 branches it ranks first in Serbia second in Croatia and Slovakia third in Albania fifth in Bosnia and Herzegovina Egypt and Hungary and eighth in Slovenia Intesa Sanpaolo also supports corporate customers through its international network covering 29 countries with an emphasis on the Middle East Northern Africa the US Russia China and India
BANCA INTESA
Banca Intesa is the leading financial institution in the Serbian market measured by key performance indicators ndash total equity assets loans and deposits Banca Intesarsquos commitment to base its business on innovativeness and the highest level of professionalism was recognised by more than 167 million customers individuals entrepreneurs small and medium-sized enterprises large companies and local governments
The Bank operates through a business network comprising more than 190 branches in 111 cities throughout Serbia relying on the knowledge and expertise of its professional team of around 3000 employees Banca Intesa has the most developed network of POS terminals and ATMs in the market in addition it is the leader in the card business segment with more than 14 million debit and credit cards issued
Striving to complete its offer of financial services in 2006 Banca Intesa founded a leasing company Intesa Leasing doo Belgrade which is also a member of Intesa Sanpaolo Group The operation of the leasing company is not covered by this Report
In July 2013 Euromoney the leading global magazine in the area of financing and banking declared Banca Intesa the best bank in Serbia in 2012 granting it the Excellence Award For the fourth consecutive year the Bank received this renowned award which is given based on an analysis of a series of quantitative and qualitative criteria such as business parameters innovativeness as well as portfolio quality
At the same time Banca Intesa also received an award of the EMEA Finance magazine as the best bank in Serbia in 2012 in the category of banks operating as part of international groups The winners of European banking awards are selected based on an evaluation by a jury which is guided by bank achievements within the context of the macroeconomic environment in which it operates as well as relative to the situation in the entire banking sector The key elements in the juryrsquos work were sustainable growth and commitment to customers
1991 2005 2006 2007 2008
One of the first private banks in Serbia with the head office in Belgrade
Becomes a member of Banca Intesa Group now named Intesa Sanpaolo
Intesa Leasing foundedBecomes the leading
bank in Serbia by all key performance indicators
Panonska Banka acquired and the number of
employees increased to 3000 Novi Sad becomes
the second seat of the Bank
BANK HISTORY
7
MISSION
Banca Intesarsquos mission is to provide excellence in banking and financial services for its customers leveraging on developing its presence in all the areas in which it operates and a style of growth that focuses on sustainable results and on establishing a trust-based process that stems from customer and shareholder satisfaction from its employeesrsquo sense of belonging and listening to the needs of local communities
The Bankrsquos growth strategy strives to create stable and sustainable values from the economic financial socio-environmental points of view building upon the Bankrsquos fundamental corporate values in its relations with all stakeholders
CORPORATE VALUES
INTEGRITY EXCELLENCE TRANSPARENCY RESPECT
FOR EACH INDIVIDUAL
EQUALITYINDIVIDUAL
VALUES
RESPONSIBLE USE OF
RESOURCES
We pursue our goals with honesty
fairness and with a sense of
responsibility in full compliance with the rules and principles of ethics mandated by the profession in the spirit of signed
agreements
We set ourselves the goal of continuous
improvement planning future activities and anticipating
challenges along with fostering
extensive creativity aimed at innovations moreover we recognise and reward merits and quality
We are committed to make
transparency the basis for all our activities
communication and contracts with the aim of enabling our stakeholder to make independent informed decision
We intend to combine large-format business with deep local
roots and to be a bank with a broad vision while not
losing sight of the man as an individual
We are committed to eliminating any form of
discrimination in our conduct and to respecting gender
racial religious political linguistic and intellectual diversity trade
union preferences as well as the
diversity in terms of age and abilities
The value of each individual
guides our modus operandi we use listening and dialogue
techniques as tools for continually
improving relations with all
stakeholders
We strive to use carefully all resources and to promote the conduct based on the optimal
use of resources and avoidance of waste and losses
giving priority to the choices that consider sustainability
STRATEGIC APPROACH TO SUSTAINABILITY AND STRATEGY IN PRACTICE
Operating against the backdrop of modest economic recovery and complex business environment Banca Intesa opted for a responsible business strategy that is based on maintaining the system stability on the one hand and monitoring the needs of citizens and economic entities on the other Guided by clear goals in these areas the Bank continued to create value for its customers while contributing to the economic and social development of the broader community Constant care of customer satisfaction expressed through maximum professionalism in the work and a high level of innovativeness remained at the top of the priority list as did constant improvement of the products and services the Bank provides to its customers Owing to such approach Banca Intesa maintained its stable credit activity and increased its market share in lending although the domestic banking sector as a whole recorded a decrease in lending due to lower demand and a high share of non-performing loans In addition further growth was recorded in the Bankrsquos total deposits and its market share in this business segment as well reflecting a high level of customer confidence
In line with its strategic commitment to integrate fully the sustainability concept into its long-term business plans but also into its everyday activities and decisions in 2013 Banca Intesa also sought to meet the needs of all stakeholders its employees shareholders and customers as well as the entire social community By constantly improving its CSR practices during the previous year the Bank launched new projects aimed at providing support to the community and continued investing considerable funds in education culture health care and sports and the primary area of its activity was the strengthening of the culture of volunteering In addition special products were designed in response to the growing needs of customers and a stimulating work environment was provided to the employees
JOINT INITIATIVES
Promoting the international business standards Banca Intesa is particularly committed to the development and introduction of corporate social responsibility as an integral part of its business practice as well as to raising awareness of the business community and the broader community of the importance of this concept As the leading financial institution in the country the Bank has a responsibility for the broader social and economic progress as well and therefore advocates a better quality of life prosperity and development of economy and the entire society through its active participation in the work of business associations
8
UNITED NATIONS GLOBAL
COMPACT
BUSINESS LEADERS FORUM
SERBIAN ASSOCIATION OF MANAGERS
AMERICAN CHAMBER OF COMMERCE
FOREIGN INVESTORS COUNCIL
NATIONAL ALLIANCE FOR LOCAL ECONOMIC
DEVELOPMENT
CHAMBER OF ITALIAN
AND SERBIAN BUSINESSPEOPLE
The largest global CSR network
bringing together more than
10000 members throughout
the world and promoting the protection of human and
labour rights and the environment and fight against
corruption
The first business network for CSR in Serbia comprising
20 members
A business association founded
with the aim of becoming a credible social partner of the Serbian Government
in the process of improving the businessenvironment
and accelerating economic
development
An organisation promoting the improvement of business
environment in Serbia as well as partnership
between US and Serbian companies
for the purpose of economic development
A business association whose activities contribute to the improvement of the investment
and business climate in Serbia
A business association that brings together
representatives of all three sectors of
society ndash companies municipalities
and NGOs which work together
on improving the conditions for local economic
development and doing business
A non-profit organisation that fosters improves
and develops trade between Italy and Serbia
9
CROSS REFERENCE TABLE
UNITED NATIONS GLOBAL COMPACT PRINCIPLES (UNGC)CORRESPONDING GRI INDICATOR
HUMAN RIGHTS
PRINCIPLE 1 BUSINESSES SHOULD SUPPORT AND RESPECT THE PROTECTION OF INTERNATIONALLY PROCLAIMED HUMAN RIGHTS AND
LA 4
LA 13
LA 15
HR 11
PR 8
PRINCIPLE 2 MAKE SURE THAT THEY ARE NOT COMPLICIT IN HUMAN RIGHTS ABUSES HR 11
LABOUR
PRINCIPLE 3 BUSINESSES SHOULD UPHOLD THE FREEDOM OF ASSOCIATION AND THE EFFECTIVE RECOGNITION OF THE RIGHT TO COLLECTIVE BARGAINING
LA 4
PRINCIPLE 4 THE ELIMINATION OF ALL FORMS OF FORCED AND COMPULSORY LABOUR
PRINCIPLE 5 THE EFFECTIVE ABOLITION OF CHILD LABOUR AND
PRINCIPLE 6 THE ELIMINATION OF DISCRIMINATION IN RESPECT OF EMPLOYMENT AND OCCUPATION LA 2
LA 13
LA 15
HR 11
ENVIRONMENT
PRINCIPLE 7 BUSINESSES SHOULD SUPPORT A PRECAUTIONARY APPROACH TO ENVIRONMENTAL CHALLENGES EN 26
PRINCIPLE 8 UNDERTAKE INITIATIVES TO PROMOTE GREATER ENVIRONMENTAL RESPONSIBILITY AND EN 4
EN 5
EN 8
EN 26
PR 3
PRINCIPLE 9 ENCOURAGE THE DEVELOPMENT AND DIFFUSION OF ENVIRONMENTALLY FRIENDLY TECHNOLOGIES EN 5
EN 26
ANTI-CORRUPTION
PRINCIPLE 10 BUSINESSES SHOULD WORK AGAINST CORRUPTION IN ALL ITS FORMS INCLUDING EXTORTION AND BRIBERY SO 3
SO 4
SO 6
10
Given that they were added subsequently to the new GRI guidelines version G31 the LA 15 and HR 11 indicators are entered into the cross reference table according to the authorrsquos estimate
In accordance with the GRI principle of materiality based on which priority topics present in the report are defined the corresponding indicators are not covered by this report taking into account their relevance to the banking sector The bank as an active member supports the promotion of all 10 global compact principles in its partners suppliers customers and in the general business and social community
SUSTAINABILITY MANAGEMENT
In order to achieve its business goals as well as those relating to socio-environmental dimensions Banca Intesa introduced ethical responsibility as a criterion in the process of decision-making regarding all stakeholders which means that socio-environmental issues are integrated in the process of product and service development risk management as well as in loan granting and supplier selection
The adoption of the Code of Ethics with the defined values to which Banca Intesa is committed introduced a management model based on the principle of accountability that requires commitment to aligning everyday business activities with the declared values at the individual level as well as at the level of the Bankrsquos organisational units The Code of Ethics is an expression of the corporate culture and tradition from which Banca Intesa originates This document provides on the one hand a framework through which the Bank observes and interprets different situations and on the other hand the ultimate goal to which it strives
Procedure for Managing the Reports of Non-compliance with the Code of Ethics was adopted in 2011 and is implemented in all organisational units of the Bank in the process of delivering reports in cases of suspicion or knowledge of any activities or individual acts that are contrary to the Code of Ethics and other bylaws of the Bank The procedure for managing the reports of noncompliance with the Code of Ethics consists of the following steps non-compliance reporting report analysis translating and delivering the information to the parent Group establishing the status and verifying the facts involving the relevant department proposing corrective actions and delivering reports to relevant stakeholders as well as to the parent Group The Bank employee who noticed any behaviour of one of hisher colleagues that seems not to be in accordance with the moral and ethical principles prescribed by the Code of Ethics delivers a non-compliance report to the following e-mail address etickikodeksbancaintesars The report may also be delivered in hard copy to the following address Banca Intesa ad Beograd Marketing and Communications Department Bulevar dr Zorana Đinđića 2a 11070 Novi BeogradThrough the above mechanism during 2013 Banca Intesa recorded no cases of human rights violation as defined by the Code of Ethics
The Marketing and Communications Department independently as well as in close cooperation with CSR ambassadors delegated representatives of all organisational parts of the Bank implements and coordinates projects and activities in the area of corporate social responsibility The CSR ambassadors provide the Department with necessary information in connection with the implementation of projects and activities and participate in monitoring measuring and reporting to the parent Group and other stakeholders
The Marketing and Communications Department also takes steps to make the CSR criteria a recognisable element of the whole management system and to this end cooperates with the top management in the process of defining the CSR policies and strategies communicating to the highest representatives of the Bank the results of dialogue with the stakeholders their needs and key issues that should be a part of strategic guidelines
11
12 RELATION WITH STAKEHOLDERS
DIALOGUE WITH STAKEHOLDERS
Dialogue with stakeholders is the beginning of continuous progress achieved by carefully monitoring the demands and needs of stakeholders and harmonising them with the Bankrsquos strategy The dialogue is achieved by using different techniques as part of the Bankrsquos regular activities and is a precondition for preparing the materiality matrix and eventually the Sustainability Report
Stakeholder map is based on the international methodology for stakeholder engagement the AA1000 Standard (Institute of Social and Ethical Accountability)
MATERIALITY
Sustainability Report 2013 focuses on the topics that proved to be the most important ones for stakeholders and also for the business of Intesa Sanpaolo and hence of Banca Intesa following the GRI methodology and the AA1000 Standard In accordance with the needs analysis conducted two priority issues stood out which are presented in the table These issues are also present at the local level
STAKEHOLDER MAP
GROUP ENGAGEMENT MECHANISM
CUSTOMERS
Focus groupBenchmarking surveysMeetings workshops seminarsSatisfaction survey Handling and analysis of complaints applications and suggestions
EMPLOYEESEmployee satisfaction surveyTraining and evalution Meetings with trade union
COMMUNITYMeetings with CSosWorking groups working bodies
SUPPLIERSSupplier information form Csr questionnaireRegular communication in tender process
ENVIRONMENTMeetings CSosWorking groups working bodies
CUSTOMERS EMPLOYEES COMMUNITY SUPPLIERS ENVIRONMENT
INDIVIDUALSSMALL BUSINESS
SMESLARGE CORPORATES
LOCAL GOVERNMENTSCONSUMER ASSOCIATIONSBUSINESS ASSOCIATIONSPUBLIC ADMINISTRATION
MANAGERSOFFICERS
EMPLOYEES
LOCAL AND NATIONAL PUBLIC
INSTITUTIONS (REGULATORYBODIES LOCAL GOVERNMENT
ETC)CSOS
MEDIA
DOMESTICFOREIGN
ENVIRONMENTALORGANISATIONS
FUTURE GENERATIONS
12
CUSTOMERS EMPLOYEES SUPPLIERS COMMUNITY ENVIRONMENT
Development of service model and channel in accordance with the
customersrsquo needs
Employee training and professional development
Fair treatment of suppliers Promotion of culture and artsOptimisation of natural
resource utilisation
Product and service qualityMerit recognition
and rewardingCooperation and relations
with suppliersSupport to youth education
and developmentReduction of greenhouse
gas emission
Customer satisfaction Employee protectionPromotion and observance
of ethical and environmental standards in supply chain
Fight against poverty and social exclusion
Support to customers for energy efficiency
improvement
Access to loans for corporatesSafe and healthy
work environment
Strengthening the SME sectorInvolving employees
in company life
Financial inclusion of vulnerable social groups
Work-life balance
Support to customers having financial problems
13
2 Sustainability
14
21 GENERATED ECONOMIC VALUE
Generation of economic value an efficient governance system and careful management of business risks characterise Banca Intesarsquos business model based on transparency and integrity These elements as well as the care for employees environment and the quality of service it provides to its customers are of key importance for the progress for which the Bank strives as a responsible stakeholder in the community in which it operates
MARKET POSITION
According to the official data of the National Bank of Serbia as of December 31 2013 Banca Intesa is the leader in all business segments
DIRECT AND INDIRECT ECONOMIC VALUE GENERATED
2012 2013
Net assets 3635 3727
Customer loans 2363 2404
Customer deposits 2300 2388
Equity 792 863
in million euros
EmploymentStable partner of the government
Reliable support to the economy
Support to the communityTotal income and
expenditure
Banca Intesa employs 3039 people
As an active partner of the government Banca
Intesa supports economic development initiatives
of the Government
Banca Intesa cooperates with 406 suppliers
Banca Intesa participated in numerous community
support projects and implemented 106 donor activities
Total economic value generated by Banca Intesa was RSD 20695651000
The Bank directly provides 3039 jobs and it paid
RSD 193711289679 into the budget of Serbia as taxes and contributions on wages and pensions
The budget of Serbia received 80629605186 dinars in the form of regular tax payments
WithRSD 67069271910EUR 2056318466
USD 73719631GBP 1012544
allocated for procurement it indirectly affects the
stability of business and jobs in its supplier chain
The investment in the community amounted
to RSD 22381000 through donations to the
local community RSD 10000000 through
investment in infrastructure and RSD 299812329 through volunteering
The economic value distributed through operating
costs and personnel expenses and liabilities to the Government and the community amounted to RSD 1116382182660
Banca Intesa continued to post good business results in 2013 as well confirming its leading position in the banking sector of Serbia despite difficult business conditions The Bankrsquos total loans to corporate and retail customers reached 2365 million euros while deposits totalled 2387 million euros The business network consisted of 192 branches 3 mortgage loan centres and 5 mortgage loan offices In addition Banca Intesa had the most developed network of POS terminals and ATMs with 12751 active POS terminals and 255 ATMs
In the retail segment total loans amounted to 667 million euros while deposits increased to 1436 million euros at the end of 2013 Banca Intesa reaffirmed its leading position in e-banking and payment card business during 2013 as well with around 14 million debit and credit cards issued At the same time small business loans reached 126 million euros while loans granted to farmers amounted to 37 million euros
In the corporate segment at the end of 2013 Banca Intesa had a loan portfolio of 1728 million euros continuing the growth from the previous years Corporate deposits were at the level of 968 million euros while the bankrsquos market share in total corporate deposits of the banking sector was 206 at the end of December 2013
Owing to the increase in all key items a net income of 238 million euros was posted Net profit after tax was 76 million euros at the end of December 2013
15
1 ECONOMIC VALUE GENERATED 2012 2013
Interest income 31340971 29588778
Interest expenses -11790051 -9598939
Fee and commission income 7890743 8175478
Fee and commission expenses -2292104 -2648138
Net profit on sale of securities atfair value through profit and loss 1008 590
Net profit on sale of securitiesavailable for sale 49855 4332
Net profit on sale of equity investments 434 0
Net exchange rate loss -13263673 356204
Dividends and share income 2925 1527
Other operating income 554540 676132
Net expenses on indirectly written-off of placements and provisions 1 -5415518 -6935326
Operating and other expenses 2 -189518 -532659
Gains from changes in value of assets and liabilities 31390752 12172042
Losses from changes in value of assets and liabilities -16188419 -10564372
TOTAL ECONOMIC VALUE GENERATED 22091945 20695651
2 ECONOMIC VALUE DISTRIBUTED
21 Operating costs 3
Costs of material -487362 -475379
Building and equipment maintenance costs -753215 -798584
Office and equipment lease costs -934768 -930657
Costs of intellectual services -369026 -315092
Advertising -355296 -280923
Costs of business travel and training of employees 3 -93716 -92586
Other operating costs 3 -2098067 -2130715
TOTAL OPERATING COSTS -5091449 -5023936
22 Employee expenses 3
Wages and salaries -3312415 -3223372
Taxes and contributions on wages and wage benefits 3 -1997940 -1937113
Cost of employees transportation 3 -76490 -84139
Costs of remuneration for temporary and occasional work -5861 -4569
Costs of employees education not related to their job 3 -3157 -6094
Other personnel expenses -172859 -55922
TOTAL INCOME AND EXPENSES
TOTAL EMPLOYEE EXPENSES -5568723 -5311209
23 Expenses related to liabilities to the government
Income tax -830548 -623097
Indirect taxes and duties 3 -161352 -183199
TOTAL EXPENSES RELATED TO LIABILITES TO THE GOVERNMENT -991900 -806296
24 Community-related expenses
Donations and corporate social responsibility 3 -33204 -22381
TOTAL COMMUNITY-RELATED EXPENSES -33204 -22381
TOTAL ECONOMIC VALUE DISTRIBUTED -11685276 -11163822
3 ECONOMIC VALUE RETAINED 4 10406668 95318291 The item differs from the income statement in the annual report in that the Provisions for Employee Benefits Legal Disputes and Restructuring are excluded 2 The item differs from the income statement in the annual report in that the Operating Costs are presented in the section Economic Value Distributed in several segments stated while Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation is not presented within Other Operating Expenses3 The items differ from the income statement in the annual report in that a part of the Operating Costs is reclassified into the following segments Employee Expenses Expenses Related to Liabilities to the Government and Community-Related Expenses4 This represents BIBrsquos profit net of the Provisions for Employee Benefits Legal Disputes and Restructuring the Gains and Losses on Deferred Tax Assets and Liabilities the Depreciation Costs and the Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation
16
22 GOVERNANCE IN BANCA INTESA
CORPORATE GOVERNANCE
Shareholders of Banca Intesa ad Beograd ndash ownership structure Intesa Sanpaolo Holding International SA 7779 Intesa Sanpaolo SPA 1521 International Finance Institution (IFC) 700 The governance of the Banca Intesa joint stock company is organised as a two-tier system
The Bankrsquos Board of Directors consists of five members elected by the General Meeting of Shareholders upon the shareholdersrsquo proposal including the Board Chairman The term of office of Board members is three years with a possibility of re-election The Chairman of the Board of Directors of Banca Intesa is Massimo Malagoli and its members are Ivan Šramko Arthur Philippe Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Executive Board of Banca Intesa consists of six members including the President The term of office of Executive Board members is three years with a possibility of re-election The President of the Executive Board of Banca Intesa is Draginja Đurić the Deputy President of the Executive Board is Marco Capellini and Board members are Darko Popović Head of Retail and Small Business Division Slađana Jelić Head of the Corporate Banking Division Dragica Mihajlović Head of the Financial Management and Treasury Division and Marko Marković Head of the Operations Management Division
Women account for 20 of the members of the Board of Directors and 50 of the members of the Executive Board of Banca Intesa
The Bankrsquos Audit Committee consists of five members including the Chairman The term of office of Committee members is three years with a possibility of re-election The Committee Chairman is Giovanni Bergamini and its members are Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Chairman of the Board of Directors as a governance body does not have a direct executive role given that Banca Intesa organised as a joint stock company with a two-tier governance system delegates executive roles to the Executive Board as a management body that organises the Bankrsquos operations and performs daily monitoring of the activities of the Bank employees while the Board of Directors makes strategic decisions aimed at the Bankrsquos compliance takes care of and is responsible for the accuracy of all reports financial condition and operating results of the Bank addressed to the Bankrsquos shareholders the public and the National Bank of Serbia
In line with the Law on Banks and other regulations members of the Board of Directors are appointed and dismissed by the General Meeting of Shareholders while members of the Executive Board are appointed and dismissed by the Bankrsquos Board of Directors Domestic regulations list conditions that members of the Executive Board and the Board of Directors must meet in order to get prior approval of the regulatory body ie the National Bank of Serbia without which they cannot become members of these boards This includes among other things good business reputation and appropriate qualifications In addition appropriate experience in finance is also required for at least three members of the Board of Directors while at least one member of the Board of Directors must have active knowledge of Serbian and reside in the territory of the Republic of Serbia After obtaining the approval the appointed person is registered with the Business Registers Agency as well
Banca Intesa provided in its bylaws for the mechanisms and channels of direct e-mail communication with its parent group Intesa Sanpaolo with the aim of respecting the individual and dignity of each employee as well as the values proclaimed by the Code of Ethics The Bankrsquos shareholders ie the General Meeting of Shareholders participate in and directly impact the work of the Board of Directors as a governance body in the following ways
bull The General Meeting of Shareholders adopts the business policy and strategy of the Bankbull The General Meeting of Shareholders adopts the Articles of Association and the amendments to the Memorandum and Articles of Associationbull The General Meeting of Shareholders appoints and dismisses the Chairman and members of the Board of
17
Directorsbull The General Meeting of Shareholders appoints and dismisses the external auditorbull The General Meeting of Shareholders considers and adopts the annual report of the Board of Directors
The adopted remuneration policy for the entire human resources of the Group including the variable components is based on equality merit and sustainability of results The guidelines for defining the management remuneration policy are based on objective elements and parameters resulting from the assessment of organisational positions as well as performance and potential with the aim of creating an integrated system for the members of management thus helping their professional development The policy provides for remuneration in the form of benefits which is also based on financial instruments and linked to the results of the company ndash which corresponds to the level of assumed risk and is regulated so as to avoid giving benefits that in the long term are not in accordance with the Grouprsquos interests Based on the performance indicators closely linked with the long-term goals the benefit determination systems are based among other things on the principle of symmetry with the amounts of paid benefits being based on the results achieved at the Group business sector and individual levels and therefore being capable of decreasing significantly and even reaching zero if the minimum indicators that reflect the Group profitability are not achieved also taking into account the risks assumed and the capital used
When it comes to conflicts of interest Banca Intesa has prescribed in accordance with the provisions of the Law on Banks as well as with its bylaws and those of its parent Group an obligation for members of the Board of Directors and the Executive Board to submit a written statement of conflict of interest to the Bankrsquos Board of Directors within one month from the day of taking office The members of the Board of Directors and the Executive Board are obliged in accordance with the bylaws regulating transactions with related parties and the conflict of interest to submit once a year completed standard questionnaires whose content is designed by the parent Group and which contain information relevant for establishing any conflict of interest
One of the methods of sustainability control at Banca Intesa is the power of the Board of Directors as a governance body to set up an integrated risk management system at the Bank and the supervision of this system while the Executive Board identifies the risks to which Banca Intesa is exposed and controls these risks in accordance with the approved policies and procedures The Board of Directors gives approval to the Bankrsquos exposure to one or a group of related parties of over 10 or to an increase in the exposure to over 20 of Bank equity adopts internal audit plan and programme considers external and internal audit reports sets up the internal control system defines the internal organisation and organisational structure of the Bank that ensures the division of duties authority and responsibilities of its employees in a manner that prevents conflict of interest and ensures a transparent and documented process of decision making and implementation decides on disposing with the Bankrsquos fixed assets and the stakes and shares that the Bank has in other legal entities
The work of the Executive Board is evaluated through the MBO (Management by Objectives) system which is based on setting measurable objectives based on which the annual performance is monitored
RISK MANAGEMENT
Risk management is an integral part of the corporate governance of Banca Intesa based on which it is estimated whether the Bank can achieve its business targets in the way consistent not only with the law but also with the public interest safety of people as well as the factors of the natural and social environment Therefore the access to risk management also implies broader social consequences of Bank activity in the environment and in the market
Controlling Socio-environmental Risks in the Governance Process
By a decision of the Executive Board the Bank appointed the persons responsible for environmental protection with the aim of establishing an Environmental Management System ndash EMS and ensuring compliance with the rules of environmental protection and corporate social responsibility in lending operations so that the system would be fully applied until the final collection of all loan instalments A Senior Environmental Management Officer (Deputy President of the Executive Board) and an Environmental Management Coordinator (compliance risk management specialist) were appointedThe Environmental Management Coordinator with the approval of the Senior Environmental Management Officer informs the Executive Board the Asset Quality Committee and the Credit Committee of any significant increase in the level of socio-environmental risks in individual Bank customers particularly in customers with high credit exposure
18
and prepares reports on socio-environmental risks for international development banks towards which the Bank has such reporting obligation
The responsible organisational unit of the Bank monitors risks through the process of assessing loan applications taking into account the criteria related to lending to all customers engaged in production and service activities and the criteria related to environmental risk management
Management of Socio-environmental Risks in Lending
Adequate management and control of socio-environmental risks are essential preconditions for generating reliable and sustainable value and for protecting the Bankrsquos financial stability as well as its reputation
Socio-environmental Risk Management
The Socio-environmental Risk Management Procedure regulates the risk monitoring process in the area of environmental protection employee health and safety and the Bankrsquos social responsibility (protection of cultural heritage fundamental human rights and personal integrity) This Procedure regulates the credit process with regard to socio-environmental risks when approving a credit product to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1000000 euros or higher including the requested new product in case of a credit product from a credit line or other funds approved to the Bank by an international development bank and approval of a long-term credit product funded from other sources The Procedure regulates the rules classified by business lineprocess in the process of socio-environmental risk management
Equator Principles
The Implementation of the Equator Principles for Project Financing procedure applies when preparing and implementing project financing and advisory services in connection with project financing where the investment value of the project is 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes in these facilities can create significant environmental andor social impacts or significantly change the natural environment The goal of the Equator principles is to identify and assess risks and perform risk management based on the criteria defined by the principles with the aim of adhering to the principle of sustainability of natural resources human health human rights cultural heritage and biodiversity
Armaments
The sensitive sectors that the Bank monitors with special attention include armament production and trade In accordance with the relevant bylaw of its parent Group the Policy of Not Financing of Armaments in 2011 Banca Intesa adopted the Procedure for the Performance of Transactions Related to Armament Production and Trade which regulates the identification and preparation of the summary of the customers engaged in armament and military equipment production and trade the monitoring of transactions and loan applications of the customers engaged in armament and military equipment production and trade the approval of transactions and loan applications related to armament and military equipment production and trade in accordance with the Policy of Not Financing of Armaments as well as the preparation of reports on the transactions related to armament and military equipment production and trade
Reputational Risk Management
The Bank attaches great importance to reputational risks that are assessed as part of the compliance control system which is within the competence of the Compliance Office Banca Intesa believes that the standards in this area as well as the business ethics are the cornerstone of banking operations which by their nature are based on trust Bylaws such as the Code of Ethics policies and other define that any non-compliance with the bylaws the principles and values contained in them as well as with external regulations (laws and secondary legislation) exposes the Bank to a certain level of reputational risks
Fight Against Corruption and Compliance
The internal regulatory source that governs the system for control and mitigation of corruption risks comprises the Code of Ethics the Code of Conduct the Rulebook on Relations with Political Parties and the following Bank procedures the Procedure for the Prevention of Internal Fraud and Abuse at the Bank and the Employment Termination Procedure
19
The Code of Conduct prescribes in detail the rules in connection with receiving and giving gifts and the measures prescribed in the event of corruption are related to the violation of work duties so the measures stipulated by external regulations ie the Labour Law (eg compensation for damage employee suspension or termination) but also the Criminal Code may be pronounced against an employee Based on the Legal Department records no proceedings were initiated against Banca Intesa ad Beograd in connection with corruption since no complaints or notices prior to complaint were delivered during 2013
In the same period the Suspicious Transactions and Know Your Customer training courses were held in this segment by means of e-learning which were received by as many as 8663 of employees during 2013 The training courses were provided for by the current regulations and internal acts of the Bank and were aimed at informing the employees and refreshing their knowledge of the obligation of collecting information about each customer and completing appropriate questionnaires In addition the training informed the employees about the new processes that were implemented as well as about mandatory observance of all duties relating to knowing monitoring and reporting suspicious transactions of customers
The Rulebook on Relations with Political Parties prescribes the obligation of the Bank to refrain from granting donations and sponsorship tobull Political parties and any organisations related to thembull Political movements and their organisational unitsbull Trade union organisationsbull Competent authorities and institutions
The prohibition of granting donations and sponsorship to the above organisations aims at the protection against any grants that would result in a privileged position to the Bank or unfair decisions in favour of the Bank
The Compliance Office as well as the relevant organisational units of the Bank are committed to the regulation of processes and the definition of procedures and their operating rules as well as practice which efficiently prevent the violation of applicable regulations The Compliance Office also provides support to the highest bodies of the Bank in monitoring the compliance risk The compliance risk assessment process is constant Through semi-annual reporting these risks are identified and priority measures for their elimination or mitigation are determined ie the level of efficiency of the existing compliance controls is assessed
The Internal Audit provides direct support to the highest bodies of the Bank in monitoring the compliance with and adequacy of the rules contained in the Bankrsquos bylaws If it identifies critical issues during its activity the Internal Audit informs the relevant organisational units and the highest bodies of the Bank with the aim of determining adequate measures for risk mitigation and the method of their implementation
Protection of Health and Safety
Occupational health and safety at Banca Intesa are regulated in accordance with international directives recommendations and positive laws of the Republic of Serbia
During 2013 an assessment was made of the situation regarding occupational health and safety and the risk level for 207 facilities at which work is performed A schedule of elimination of recorded risks to the health of Bank employees was defined and implemented according to priorities and the budget planned In connection with this risk assessment documents were updated as well
When it comes to physical security three robberies were recorded in 2013 versus two a year earlier and investments in technical protection systems continued
Risk Management in Supply Chain
Supplier Check
The Procurement Unit and the organisational part in charge of procurement are obliged to evaluate the received supplier bids by applying the methods of qualitative and quantitative analysis as well as to align the bid evaluation criteria prior to inviting the bidders to submit offers by combining specific criteria one of which is the Compliance of Bidderrsquos Operations with the Corporate Social Responsibility Principles
20
Health and Safety Risk Assessment
In accordance with the Procurement Policy members of Intesa Sanpaolo Group are expected to include the parameters of assessment of environmental protection and occupational health protection in their procurement process giving priority to the use of recycled paper highly energy efficient products and environment-friendly technical equipment
Group members must include special provisions in the procurement contracts they conclude with their suppliers These provisions provide for the obligation of suppliers to comply with the principles specified in the Intesa Sanpaolo Rules for the Environmental and Energy Policy Constant checks are performed in the countries where legal measures regarding environmental protection were adopted in order to ensure compliance
In the area of personnel training and spreading the awareness of the importance of these issues the training of the employees who directly communicate with suppliers must include fields related to corporate social responsibility as well as to the responsibility for environmental protection
21
CUSTOMERS
Banca Intesa built its leading position in the market of Serbia and the status of stable and reliable partner by fostering trust in the relations with its customers The strengthening of relations with customers is based on constant improvement of the quality of products and services proceeding from specific needs of each segment as well as on full respect for the principles of equality and availability of products and services Key aspects of doing business with customers are the following
bull SUPPORT TO ECONOMY AND AGRICULTUREbull FINANCIAL INCLUSION AND EDUCATIONbull CUSTOMER SATISFACTION
SUPPORT TO ECONOMY AND AGRICULTURE
Banca Intesa continued to provide support to the economy and the agricultural sector in 2013 as well focusing on the development of entrepreneurship and self-employment particularly in the SME segment as well as on the improvement of public infrastructure
Support to the Public Sector
Banca Intesa offered loans from the credit line of the German Development Bank (KfW) to the public sector for financing infrastructure projects and the procurement of equipment in the following areas water management sewerage and wastewater management solid waste management environmental protection and pollution control transport infrastructure public transport and communication systems infrastructure facilities fostering economic development and other social and utility services During 2013 Banca Intesa granted 11 loans totalling 852 million euros while the total value of the project is 47 million euros
Development of Entrepreneurship
Banca Intesa supported the programme of measures of the Government of the Republic of Serbia for encouraging SMEs and entrepreneurs through subsidised loans for liquidity and working assets in 2013 as well The Bankrsquos commitment to provide continuously support to its customers in this segment is also demonstrated by the fact that the Government of the Republic of Serbia implements its programme of measures for the fifth consecutive time During 2013 the Bank granted 414 subsidised loans to SMEs totalling 562 billion dinars which accounted for 107 of the total loans to the SME sector The small business sector was granted 186 billion dinars and 1347 loans which accounted for 15 of the number of loans and 16 of the total loan disbursements to this segment
In cooperation with the National Bank of Serbia and the Kingdom of Denmark the Bank launched the Local Economic Development in the Balkans (LEDIB) programme intended for enterprises entrepreneurs and registered farms from the small business segment with the aim of improving local economic development creating new jobs strengthening organisational capacities introducing new eco-friendly technologies and other favourable impacts on the overall development The credit line was intended for the Nišava Pčinja Toplica Jablanica and Pirot Districts and in 2013 the Bank granted 39 loans totalling 505208 euros under this programme which accounted for 04 of the number of loans and 05 of the total loan disbursements to the small business segment At the same time from the credit line of the European Fund for Southeast Europe (EFSE) which supports enterprises and registered farms through investments and loans for working assets 227 million euros were granted in the small business segment which accounted for 22 of loan disbursements in the segment
With the aim of supporting the promotion and strengthening of womenrsquos entrepreneurship Banca Intesa helped the Association of Businesswomen in Serbia in the organisation of an international conference entitled New Age Woman Entrepreneur New Opportunities for Recovery of Economy in the Region The event contributed
22
to further positioning of Banca Intesa as a bank that actively supports entrepreneurship in the country as part of its efforts to contribute to economic recovery and growth For this purpose the Bank also has in its offer loans for women entrepreneurs in Vojvodina in the form of start-up loans for unemployed women and women who have had a business for up to three years The Bank granted 8 loans totalling 98 million dinars under this programme during 2013 which accounted for a 3 share in the number of loans and a 1 share in the total investment loan disbursements in the small business segment
Promotion of Agricultural Sector
Taking into account that the agricultural sector is very specific because it has a special social as well as environmental importance in addition to economic importance for many years Banca Intesa has been encouraging development and investing in projects and individuals that encourage with their activities further rural development and contribute to an increase in the competitiveness of domestic agriculture
Aware of the great economic potential of this industry as part of the LEDIB programme the Bank granted eight loans to registered farms in 2013 totalling 76219 euros which accounted for 02 of the number of loans and 03 of the total loan disbursements to this customer segment In addition in cooperation with the Guarantee Fund of the Autonomous Province of Vojvodina long-term loans for purchasing new agricultural machinery and equipment were available to customers During 2013 the Bank granted 82 loans of this type totalling 219 million euros which accounted for a 15 share in the number of loans and a 25 share in the total investment loan disbursements in the agricultural segment
In addition on the occasion of the 80th International Agricultural Fair in Novi Sad the Bank prepared a special credit offer intended for owners of registered farms which included the Intesa Farmer dinar loan for financing spring works as well as the Intesa Farmer loan for purchasing agricultural machinery During 2013 22 loans were granted for purchasing tractors and agricultural machinery totalling 341 million dinars which accounted for a 4 share in the number of loans and a 3 share in the total amount of agricultural investment loan disbursements
Banka Intesa launched the Intesa Farmer of the Year project to contribute in yet another way to the promotion of agricultural production in the country and to the strengthening of its competitiveness As part of the project the Bank awarded the most successful farmers in four categories ndash Intesa Crop Farmer Intesa Vegetable Grower Intesa Fruit Grower and Intesa Livestock Breeder and all winners won a trip to Germany to visit the international agricultural fair in Berlin The criteria based on which the Committee selected the winners of the title Intesa Farmer of the Year were the annual results achieved in agricultural production application of modern technologies in production activities the number of household members engaged in the production as well as the minimum three-year cooperation with the Bank which included a loan and regular settlement of their financial obligations
FINANCIAL INCLUSION AND LITERACY
Banka Intesa believes that the availability of financial products to all segments of society is an essential precondition for sustainable development In line with this position the Bank added to its offer specific products that promote financial inclusion and provide support during economic crisis to the most vulnerable social groups such as the elderly or youth as well as to solving broader social problems such as housing availability or health care services
Responding to the Needs of the Community
In 2013 Banca Intesa included in its offer the Intermezzo Cash Loan a new model of cash loan which offers to its users as a unique benefit in the domestic market a possibility of postponing the payment of monthly instalment up to five times during the repayment period Moreover as an additional functionality the Intermezzo loan includes insurance against job loss with no additional cost to the customer The Bank believes that the repayment flexibility provided by this loan model offers citizens unique support in the market at a time when they estimate that they need it most In 2013 Banca Intesa granted 11256 Intermezzo cash loans totalling 198 million euros which accounted for 235 of the total amount of cash loans disbursed during the year
Banca Intesa was the first in the Serbian market to offer loans to pensioners aged up to 74 years The Senior Cash Loans were designed specifically to fit the needs of senior citizens and they also include life insurance which is included in the cost of loan during the entire repayment period During the previous year 19774 loans were granted totalling 239 million euros which accounted for 284 of the total cash loans granted in 2013
23
In 2012 as support to citizens in financing medical services the Intesa Vita programme of consumer and cash loans was developed which includes loans for in vitro fertilisation harvesting and storage of stem cells DNA analysis dental services medical spa and wellness treatments as well as for purchasing baby supplies In 2013 the programme was extended to new purposes - laser vision correction vein operation and purchase of medical aids and 28 loans were granted totalling 126345 euros which accounted for 8 of the total cash loans granted during the year In this unique way the Bank provides the citizens with the possibility of taking care of their health in a responsible and timely manner without suddenly burdening their home budgets
Moreover the Bank continued to provide subsidised housing loans in 2013 as well in order to provide support to young married couples in solving their housing problems granting 224 loans totalling 864 million euros which was 205 of the total housing loans granted during the year At the same time 6544 refinancing loans with insurance against job loss or disability in case of an accident were granted totalling 146 million euros which enabled the customers to service their outstanding liabilities towards Banca Intesa and other banks and which accounted for 173 of the Bankrsquos total cash loans granted during the year
Banca Intesa introduced the Visa Classic Paralympic and Visa Electron Paralympic cards the first charity payment cards in the country in cooperation with the Paralympic Committee of Serbia This was the first initiative aimed at establishing a stable and independent mechanism for long-term assistance to athletes with disabilities and developing paralympic sport in the country During 2013 8345 Visa Classic Paralympic and Visa Electron Paralympic cards were issued which accounted for 14 of all cards issued during the year The Bank also provides debit cards for students which enable free account opening and maintenance for all students who opted for an Intesa Visa Electron Easy Travel Card (ETC) or a Maestro ISIC Card of Banca Intesa of which 4048 were issued in 2013 accounting for 18 of the debit cards issued during the year
Constantly striving to promote savings in 2013 the Bank introduced a new savings model the Month by Month Savings which provides customers with a possibility of reaching higher amounts of savings with lower monthly allocations The product enables saving in dinars and euros at a very attractive interest rate while the customers also have an opportunity to set the payment date and amount themselves
Financial Education
In 2013 as well Banca Intesa remained true to its commitment to support actively financial education by improving customer knowledge Thus in cooperation with Banca IMI SpA a member of Intesa Sanpaolo Group another Intesa Academia workshop was organised this time on the subject of advanced financing and risk management instruments so that Banca Intesarsquos customers could find out more about the possibilities of financing in the international and domestic bond markets and about hedging products for successful management of market risks The workshop brought together the leading world experts in the areas of financing and risk management as well as the most successful customers of the Bank In order to assist its customers in the SME segment in getting informed in more detail about the regulations relating to loan approval and collection Banca Intesa took part in the working breakfast on the subject Security Instruments and Their Collection as the Condition for Financing Company Growth held at the premises of the Serbian Association of Managers On this occasion the legal framework was presented about which enterprises should also get informed in order to know that documentation they will need if they opt for bank loans
At the same time the Factoring Department designed and launched an initiative of organising factoring workshops at the Bankrsquos regional centres Factoring workshops are an interactive form of cooperation and communication with customers with the focus on understanding the term and essence of factoring themselves With the support of regional centres a total of 27 factoring workshops were organised in 22 cities in two cycles in late 2012 and in early 2013 which were attended by nearly 300 corporate customers
As a member of the United Nations Global Compact and its Working Group on CSR in Banking and Finance Banca Intesa works together with the other members on the implementation of projects in the area of financial education which is the main goal of this Group One of the projects actively supported by the Bank is the cooperation with seven secondary schools of economics from six cities in Serbia where there is a ldquobank clerkrdquo educational profile in the area of thematic lectures for teachers and students The Bank representatives gave three lectures during 2013
24
CUSTOMER SATISFACTION
Banca Intesa believes that it is only through an open dialogue with its customers that it can truly understand their needs and expectations and build a long-term partner relationship with them
Meeting the Needs of Customers
Ever since 2008 Banca Intesa has been conducting surveys of its customersrsquo satisfaction with the Bankrsquos products and services in accordance with the methodology of the European Customer Satisfaction Index (ECSI) as part of its initiative named Listening 100 This is a continuous process analyses are made based on the results obtained in the survey and actions are proposed accordingly for improving the customer satisfaction The surveys are repeated at six-monthannual intervals in order to collect feedback from the customersrsquo perspective for the measures taken for the purpose of improving the satisfaction index as well as identifying the directions for further improvement
Looking at the results of the customer satisfaction survey at the end of 2013 a conclusion arises that among other things the basis of good results is a positively rated staff treatment of customers The ECSI as well as the Loyalty indices are stable with a high percentage of customers who stated they would remain Banca Intesa customers in the following 12 months Attempting to encourage its customers to express their opinions in the previous year the Bank clearly communicated the improvements implemented so far based on their suggestions
During 2013 as well Banca Intesa continued to increase the number of branches equipped with the Queue Management System (QMS) which covered approximately 40 per cent of active customers at the end of the year In addition to having a positive impact on customer satisfaction the QMS expansion made it possible to obtain the data necessary for better analysis and organisation of branch operation In addition free internet access via Wi-Fi and daily newspapers were made available to customers at the largest branches
As part of its efforts to improve further customer satisfaction in 2013 Banca Intesa implemented training of over 1500 employees both in its branch network and at its headquarters The training which was implemented as a continuation of the Education 100 programme initiated in 2011 was held on the subject of managing customer satisfaction but also their entire experience in each contact with the Bank
In addition to its efforts to improve its approach to customers and recognising the importance of two-way communication the Bank developed efficient mechanisms for collecting and recording customer feedback The Bank responds to all complaints sent to the Bank via formal complaints mechanisms and does so within the statutory time limit and in accordance with the decision of the National Bank of Serbia Each customer may also personally contact unit employees and if the customer is not satisfied with the answer received heshe can apply to the National Bank of Serbia as the second-instance body with the possibility of mediation The following are available to customers
bull Phone line +381 11 310 88 88bull E-mail kontaktbancaintesarsbull Fax +381 11 310 88 55bull Personal contact ie submitting a written complaint in personbull Contact form on the official website of the Bankbull Bank corporate accounts on social networks (Facebook and Twitter)bull Postal address of the Customer Satisfaction Management Unit Omladinskih brigada 90b 11070 New Belgrade
Transparent Advertising
Lasting relationships based on trust require communication that enables customers to understand clearly the characteristics and value of Banca Intesa products and services Therefore the Bank strives to contribute to the simplification of its products in communication
In its advertising the Bank clearly specifies all customer costs and all of them are included when calculating the effective interest rate which is always clearly and visibly shown as well as representative examples that contain all data in accordance with the Law on the Protection of Financial Service Consumers which demonstrates full transparency when it comes to Bank pricing policy
25
The Bank also strives to formulate the agreements so that they are simple to understand minimising possible misunderstandings and ambiguity by providing clear and exhaustive information It informs its customers in a timely manner of any changes in the agreements and their terms
Data Security
The protection of customer security as well as their assets and confidential information is not only Banca Intesarsquos primary duty but also the basis of the relationship of trust that the Bank wants to reinforce with its customers The protection of persons their assets and valuables as well as a multitude of data and internal organisational processes fully meets the criteria of reliability continuity and confidentiality In addition to its legal obligations Banca Intesa complies with the criteria of absolute transparency in informing its customers of their rights to privacy and the way it treats their personal information
In 2013 Banca Intesa did not find any founded complaint in connection with the violation of customer privacy or any disclosure leakage or theft of customer information
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
4
WHY DO WE REPORT
Sustainability reporting is an integral element of transparent communication of Banca Intesa with all its stakeholders who are thus provided full insight into all its activities including its economic socio-environmental performance The reporting enables the Bank to analyse and present in a quality and systematic manner the results of all its projects and initiatives relative to the set goals in order to improve the performance and its monitoring
In line with the global shift towards integrated reporting which includes mandatory nonfinancial parameters in addition to financial parameters the Bank strives to promote sustainability reporting as a standard business practice of responsible companies in accordance with the strategic commitment of its parent group Intesa Sanpaolo
HOW DO WE REPORT
Sustainability Report 2013 is Banca Intesarsquos fourth corporate social responsibility (CSR) report and the second designed according to the most relevant international reporting initiative Global Reporting Initiative (GRI) Relative to the previous year when GRI G31 guidelines were first introduced as a reporting framework in 2013 the Bank improved the level of the GRI methodology application by reporting on 24 GRI indicators which now also include the GRI Financial Services Sector Supplement (FSSS) indicators as indicators of advanced corporate social responsibility practices The Report also fully complies with the requirements of the United Nations Global Compact Communication on Progress (COP)
As in the previous year the Report is structured so as to present to the stakeholders the topics of the highest importance to them in a transparent and clear way taking into account the Bankrsquos strategic priorities and goals with an intention of pointing out joint areas of activity the greatest challenges as well as the solutions offered by the Bank At the same time revising the main parameters between two reporting cycles and checking the compliance with the fundamental GRI principles reflect the Bankrsquos constant efforts to improve further the quality of the Report
GRI Reporting Principles
In defining the content the Bank was guided by the principles of materiality stakeholder inclusiveness sustainability context and completeness An analysis of the materiality of relevant topics resulted in a set of priority areas that affect to the highest extent the Bank operation its stakeholders and the broader community The credibility of the information presented in the Report was ensured by consistently adhering to the principles of balance comparability accuracy timeliness clarity and reliability
Individual organisational units of the Bank contributed to the process of information gathering and processing through CSR ambassadors selected representatives of departments offices and units who closely cooperated with the Marketing and Communications Department in the preparation of the Report The indicators and the measurement system were developed in accordance with standard performance indicators obligations arising from international methodological frameworks for reporting and the Bankrsquos desire for each step on the sustainability path to be measurable
Most of the information was gathered directly and assessments measurement methods and information sources were specifically stated where needed The Report is published annually and refers to the activities of Banca Intesa ad Beograd in 2013 Comparisons with the previous years were provided where possible There were no significant changes regarding the main Report parameters relative to 2012
Previous Banca Intesa sustainability reports (for 2010 2011 and 2012) are available at http wwwbancaintesarscodenavigateaspxid=384
Contact person in charge of Sustainability Report 2013 Jelena Krsmanović Media Relations Manager jelenakrsmanovicbancaintesars
C C+ B B+ A A+
Req
uir
ed Independent level
determinationReport verified
by external source
Report verified by external
source
Report verified by external
source
Op
tio
nal
Verified by third party
Verified by GRI
5
1 Identity
6
11 BANK PROFILE
INTESA SANPAOLO
Intesa Sanpaolo is one of the leading banking groups in Europe and the largest in Italy Created in 2007 by the merger of the leading Italian banks Sanpaolo IMI and Banca Intesa the Group holds the leading position in Italy in terms of providing financial support to retail and corporate customers The Group is committed to improving its services to retail customers and providing significant support to the business of its customers as well as to the overall economic development of the countries where it operates
Intesa Sanpaolo serves around 111 million customers through its well-developed business network of more than 4700 branches The Group focuses its business operations on Central and Eastern Europe the Middle East and Northern Africa where it serves 84 million customers in 12 countries through a network comprising around 1400 branches it ranks first in Serbia second in Croatia and Slovakia third in Albania fifth in Bosnia and Herzegovina Egypt and Hungary and eighth in Slovenia Intesa Sanpaolo also supports corporate customers through its international network covering 29 countries with an emphasis on the Middle East Northern Africa the US Russia China and India
BANCA INTESA
Banca Intesa is the leading financial institution in the Serbian market measured by key performance indicators ndash total equity assets loans and deposits Banca Intesarsquos commitment to base its business on innovativeness and the highest level of professionalism was recognised by more than 167 million customers individuals entrepreneurs small and medium-sized enterprises large companies and local governments
The Bank operates through a business network comprising more than 190 branches in 111 cities throughout Serbia relying on the knowledge and expertise of its professional team of around 3000 employees Banca Intesa has the most developed network of POS terminals and ATMs in the market in addition it is the leader in the card business segment with more than 14 million debit and credit cards issued
Striving to complete its offer of financial services in 2006 Banca Intesa founded a leasing company Intesa Leasing doo Belgrade which is also a member of Intesa Sanpaolo Group The operation of the leasing company is not covered by this Report
In July 2013 Euromoney the leading global magazine in the area of financing and banking declared Banca Intesa the best bank in Serbia in 2012 granting it the Excellence Award For the fourth consecutive year the Bank received this renowned award which is given based on an analysis of a series of quantitative and qualitative criteria such as business parameters innovativeness as well as portfolio quality
At the same time Banca Intesa also received an award of the EMEA Finance magazine as the best bank in Serbia in 2012 in the category of banks operating as part of international groups The winners of European banking awards are selected based on an evaluation by a jury which is guided by bank achievements within the context of the macroeconomic environment in which it operates as well as relative to the situation in the entire banking sector The key elements in the juryrsquos work were sustainable growth and commitment to customers
1991 2005 2006 2007 2008
One of the first private banks in Serbia with the head office in Belgrade
Becomes a member of Banca Intesa Group now named Intesa Sanpaolo
Intesa Leasing foundedBecomes the leading
bank in Serbia by all key performance indicators
Panonska Banka acquired and the number of
employees increased to 3000 Novi Sad becomes
the second seat of the Bank
BANK HISTORY
7
MISSION
Banca Intesarsquos mission is to provide excellence in banking and financial services for its customers leveraging on developing its presence in all the areas in which it operates and a style of growth that focuses on sustainable results and on establishing a trust-based process that stems from customer and shareholder satisfaction from its employeesrsquo sense of belonging and listening to the needs of local communities
The Bankrsquos growth strategy strives to create stable and sustainable values from the economic financial socio-environmental points of view building upon the Bankrsquos fundamental corporate values in its relations with all stakeholders
CORPORATE VALUES
INTEGRITY EXCELLENCE TRANSPARENCY RESPECT
FOR EACH INDIVIDUAL
EQUALITYINDIVIDUAL
VALUES
RESPONSIBLE USE OF
RESOURCES
We pursue our goals with honesty
fairness and with a sense of
responsibility in full compliance with the rules and principles of ethics mandated by the profession in the spirit of signed
agreements
We set ourselves the goal of continuous
improvement planning future activities and anticipating
challenges along with fostering
extensive creativity aimed at innovations moreover we recognise and reward merits and quality
We are committed to make
transparency the basis for all our activities
communication and contracts with the aim of enabling our stakeholder to make independent informed decision
We intend to combine large-format business with deep local
roots and to be a bank with a broad vision while not
losing sight of the man as an individual
We are committed to eliminating any form of
discrimination in our conduct and to respecting gender
racial religious political linguistic and intellectual diversity trade
union preferences as well as the
diversity in terms of age and abilities
The value of each individual
guides our modus operandi we use listening and dialogue
techniques as tools for continually
improving relations with all
stakeholders
We strive to use carefully all resources and to promote the conduct based on the optimal
use of resources and avoidance of waste and losses
giving priority to the choices that consider sustainability
STRATEGIC APPROACH TO SUSTAINABILITY AND STRATEGY IN PRACTICE
Operating against the backdrop of modest economic recovery and complex business environment Banca Intesa opted for a responsible business strategy that is based on maintaining the system stability on the one hand and monitoring the needs of citizens and economic entities on the other Guided by clear goals in these areas the Bank continued to create value for its customers while contributing to the economic and social development of the broader community Constant care of customer satisfaction expressed through maximum professionalism in the work and a high level of innovativeness remained at the top of the priority list as did constant improvement of the products and services the Bank provides to its customers Owing to such approach Banca Intesa maintained its stable credit activity and increased its market share in lending although the domestic banking sector as a whole recorded a decrease in lending due to lower demand and a high share of non-performing loans In addition further growth was recorded in the Bankrsquos total deposits and its market share in this business segment as well reflecting a high level of customer confidence
In line with its strategic commitment to integrate fully the sustainability concept into its long-term business plans but also into its everyday activities and decisions in 2013 Banca Intesa also sought to meet the needs of all stakeholders its employees shareholders and customers as well as the entire social community By constantly improving its CSR practices during the previous year the Bank launched new projects aimed at providing support to the community and continued investing considerable funds in education culture health care and sports and the primary area of its activity was the strengthening of the culture of volunteering In addition special products were designed in response to the growing needs of customers and a stimulating work environment was provided to the employees
JOINT INITIATIVES
Promoting the international business standards Banca Intesa is particularly committed to the development and introduction of corporate social responsibility as an integral part of its business practice as well as to raising awareness of the business community and the broader community of the importance of this concept As the leading financial institution in the country the Bank has a responsibility for the broader social and economic progress as well and therefore advocates a better quality of life prosperity and development of economy and the entire society through its active participation in the work of business associations
8
UNITED NATIONS GLOBAL
COMPACT
BUSINESS LEADERS FORUM
SERBIAN ASSOCIATION OF MANAGERS
AMERICAN CHAMBER OF COMMERCE
FOREIGN INVESTORS COUNCIL
NATIONAL ALLIANCE FOR LOCAL ECONOMIC
DEVELOPMENT
CHAMBER OF ITALIAN
AND SERBIAN BUSINESSPEOPLE
The largest global CSR network
bringing together more than
10000 members throughout
the world and promoting the protection of human and
labour rights and the environment and fight against
corruption
The first business network for CSR in Serbia comprising
20 members
A business association founded
with the aim of becoming a credible social partner of the Serbian Government
in the process of improving the businessenvironment
and accelerating economic
development
An organisation promoting the improvement of business
environment in Serbia as well as partnership
between US and Serbian companies
for the purpose of economic development
A business association whose activities contribute to the improvement of the investment
and business climate in Serbia
A business association that brings together
representatives of all three sectors of
society ndash companies municipalities
and NGOs which work together
on improving the conditions for local economic
development and doing business
A non-profit organisation that fosters improves
and develops trade between Italy and Serbia
9
CROSS REFERENCE TABLE
UNITED NATIONS GLOBAL COMPACT PRINCIPLES (UNGC)CORRESPONDING GRI INDICATOR
HUMAN RIGHTS
PRINCIPLE 1 BUSINESSES SHOULD SUPPORT AND RESPECT THE PROTECTION OF INTERNATIONALLY PROCLAIMED HUMAN RIGHTS AND
LA 4
LA 13
LA 15
HR 11
PR 8
PRINCIPLE 2 MAKE SURE THAT THEY ARE NOT COMPLICIT IN HUMAN RIGHTS ABUSES HR 11
LABOUR
PRINCIPLE 3 BUSINESSES SHOULD UPHOLD THE FREEDOM OF ASSOCIATION AND THE EFFECTIVE RECOGNITION OF THE RIGHT TO COLLECTIVE BARGAINING
LA 4
PRINCIPLE 4 THE ELIMINATION OF ALL FORMS OF FORCED AND COMPULSORY LABOUR
PRINCIPLE 5 THE EFFECTIVE ABOLITION OF CHILD LABOUR AND
PRINCIPLE 6 THE ELIMINATION OF DISCRIMINATION IN RESPECT OF EMPLOYMENT AND OCCUPATION LA 2
LA 13
LA 15
HR 11
ENVIRONMENT
PRINCIPLE 7 BUSINESSES SHOULD SUPPORT A PRECAUTIONARY APPROACH TO ENVIRONMENTAL CHALLENGES EN 26
PRINCIPLE 8 UNDERTAKE INITIATIVES TO PROMOTE GREATER ENVIRONMENTAL RESPONSIBILITY AND EN 4
EN 5
EN 8
EN 26
PR 3
PRINCIPLE 9 ENCOURAGE THE DEVELOPMENT AND DIFFUSION OF ENVIRONMENTALLY FRIENDLY TECHNOLOGIES EN 5
EN 26
ANTI-CORRUPTION
PRINCIPLE 10 BUSINESSES SHOULD WORK AGAINST CORRUPTION IN ALL ITS FORMS INCLUDING EXTORTION AND BRIBERY SO 3
SO 4
SO 6
10
Given that they were added subsequently to the new GRI guidelines version G31 the LA 15 and HR 11 indicators are entered into the cross reference table according to the authorrsquos estimate
In accordance with the GRI principle of materiality based on which priority topics present in the report are defined the corresponding indicators are not covered by this report taking into account their relevance to the banking sector The bank as an active member supports the promotion of all 10 global compact principles in its partners suppliers customers and in the general business and social community
SUSTAINABILITY MANAGEMENT
In order to achieve its business goals as well as those relating to socio-environmental dimensions Banca Intesa introduced ethical responsibility as a criterion in the process of decision-making regarding all stakeholders which means that socio-environmental issues are integrated in the process of product and service development risk management as well as in loan granting and supplier selection
The adoption of the Code of Ethics with the defined values to which Banca Intesa is committed introduced a management model based on the principle of accountability that requires commitment to aligning everyday business activities with the declared values at the individual level as well as at the level of the Bankrsquos organisational units The Code of Ethics is an expression of the corporate culture and tradition from which Banca Intesa originates This document provides on the one hand a framework through which the Bank observes and interprets different situations and on the other hand the ultimate goal to which it strives
Procedure for Managing the Reports of Non-compliance with the Code of Ethics was adopted in 2011 and is implemented in all organisational units of the Bank in the process of delivering reports in cases of suspicion or knowledge of any activities or individual acts that are contrary to the Code of Ethics and other bylaws of the Bank The procedure for managing the reports of noncompliance with the Code of Ethics consists of the following steps non-compliance reporting report analysis translating and delivering the information to the parent Group establishing the status and verifying the facts involving the relevant department proposing corrective actions and delivering reports to relevant stakeholders as well as to the parent Group The Bank employee who noticed any behaviour of one of hisher colleagues that seems not to be in accordance with the moral and ethical principles prescribed by the Code of Ethics delivers a non-compliance report to the following e-mail address etickikodeksbancaintesars The report may also be delivered in hard copy to the following address Banca Intesa ad Beograd Marketing and Communications Department Bulevar dr Zorana Đinđića 2a 11070 Novi BeogradThrough the above mechanism during 2013 Banca Intesa recorded no cases of human rights violation as defined by the Code of Ethics
The Marketing and Communications Department independently as well as in close cooperation with CSR ambassadors delegated representatives of all organisational parts of the Bank implements and coordinates projects and activities in the area of corporate social responsibility The CSR ambassadors provide the Department with necessary information in connection with the implementation of projects and activities and participate in monitoring measuring and reporting to the parent Group and other stakeholders
The Marketing and Communications Department also takes steps to make the CSR criteria a recognisable element of the whole management system and to this end cooperates with the top management in the process of defining the CSR policies and strategies communicating to the highest representatives of the Bank the results of dialogue with the stakeholders their needs and key issues that should be a part of strategic guidelines
11
12 RELATION WITH STAKEHOLDERS
DIALOGUE WITH STAKEHOLDERS
Dialogue with stakeholders is the beginning of continuous progress achieved by carefully monitoring the demands and needs of stakeholders and harmonising them with the Bankrsquos strategy The dialogue is achieved by using different techniques as part of the Bankrsquos regular activities and is a precondition for preparing the materiality matrix and eventually the Sustainability Report
Stakeholder map is based on the international methodology for stakeholder engagement the AA1000 Standard (Institute of Social and Ethical Accountability)
MATERIALITY
Sustainability Report 2013 focuses on the topics that proved to be the most important ones for stakeholders and also for the business of Intesa Sanpaolo and hence of Banca Intesa following the GRI methodology and the AA1000 Standard In accordance with the needs analysis conducted two priority issues stood out which are presented in the table These issues are also present at the local level
STAKEHOLDER MAP
GROUP ENGAGEMENT MECHANISM
CUSTOMERS
Focus groupBenchmarking surveysMeetings workshops seminarsSatisfaction survey Handling and analysis of complaints applications and suggestions
EMPLOYEESEmployee satisfaction surveyTraining and evalution Meetings with trade union
COMMUNITYMeetings with CSosWorking groups working bodies
SUPPLIERSSupplier information form Csr questionnaireRegular communication in tender process
ENVIRONMENTMeetings CSosWorking groups working bodies
CUSTOMERS EMPLOYEES COMMUNITY SUPPLIERS ENVIRONMENT
INDIVIDUALSSMALL BUSINESS
SMESLARGE CORPORATES
LOCAL GOVERNMENTSCONSUMER ASSOCIATIONSBUSINESS ASSOCIATIONSPUBLIC ADMINISTRATION
MANAGERSOFFICERS
EMPLOYEES
LOCAL AND NATIONAL PUBLIC
INSTITUTIONS (REGULATORYBODIES LOCAL GOVERNMENT
ETC)CSOS
MEDIA
DOMESTICFOREIGN
ENVIRONMENTALORGANISATIONS
FUTURE GENERATIONS
12
CUSTOMERS EMPLOYEES SUPPLIERS COMMUNITY ENVIRONMENT
Development of service model and channel in accordance with the
customersrsquo needs
Employee training and professional development
Fair treatment of suppliers Promotion of culture and artsOptimisation of natural
resource utilisation
Product and service qualityMerit recognition
and rewardingCooperation and relations
with suppliersSupport to youth education
and developmentReduction of greenhouse
gas emission
Customer satisfaction Employee protectionPromotion and observance
of ethical and environmental standards in supply chain
Fight against poverty and social exclusion
Support to customers for energy efficiency
improvement
Access to loans for corporatesSafe and healthy
work environment
Strengthening the SME sectorInvolving employees
in company life
Financial inclusion of vulnerable social groups
Work-life balance
Support to customers having financial problems
13
2 Sustainability
14
21 GENERATED ECONOMIC VALUE
Generation of economic value an efficient governance system and careful management of business risks characterise Banca Intesarsquos business model based on transparency and integrity These elements as well as the care for employees environment and the quality of service it provides to its customers are of key importance for the progress for which the Bank strives as a responsible stakeholder in the community in which it operates
MARKET POSITION
According to the official data of the National Bank of Serbia as of December 31 2013 Banca Intesa is the leader in all business segments
DIRECT AND INDIRECT ECONOMIC VALUE GENERATED
2012 2013
Net assets 3635 3727
Customer loans 2363 2404
Customer deposits 2300 2388
Equity 792 863
in million euros
EmploymentStable partner of the government
Reliable support to the economy
Support to the communityTotal income and
expenditure
Banca Intesa employs 3039 people
As an active partner of the government Banca
Intesa supports economic development initiatives
of the Government
Banca Intesa cooperates with 406 suppliers
Banca Intesa participated in numerous community
support projects and implemented 106 donor activities
Total economic value generated by Banca Intesa was RSD 20695651000
The Bank directly provides 3039 jobs and it paid
RSD 193711289679 into the budget of Serbia as taxes and contributions on wages and pensions
The budget of Serbia received 80629605186 dinars in the form of regular tax payments
WithRSD 67069271910EUR 2056318466
USD 73719631GBP 1012544
allocated for procurement it indirectly affects the
stability of business and jobs in its supplier chain
The investment in the community amounted
to RSD 22381000 through donations to the
local community RSD 10000000 through
investment in infrastructure and RSD 299812329 through volunteering
The economic value distributed through operating
costs and personnel expenses and liabilities to the Government and the community amounted to RSD 1116382182660
Banca Intesa continued to post good business results in 2013 as well confirming its leading position in the banking sector of Serbia despite difficult business conditions The Bankrsquos total loans to corporate and retail customers reached 2365 million euros while deposits totalled 2387 million euros The business network consisted of 192 branches 3 mortgage loan centres and 5 mortgage loan offices In addition Banca Intesa had the most developed network of POS terminals and ATMs with 12751 active POS terminals and 255 ATMs
In the retail segment total loans amounted to 667 million euros while deposits increased to 1436 million euros at the end of 2013 Banca Intesa reaffirmed its leading position in e-banking and payment card business during 2013 as well with around 14 million debit and credit cards issued At the same time small business loans reached 126 million euros while loans granted to farmers amounted to 37 million euros
In the corporate segment at the end of 2013 Banca Intesa had a loan portfolio of 1728 million euros continuing the growth from the previous years Corporate deposits were at the level of 968 million euros while the bankrsquos market share in total corporate deposits of the banking sector was 206 at the end of December 2013
Owing to the increase in all key items a net income of 238 million euros was posted Net profit after tax was 76 million euros at the end of December 2013
15
1 ECONOMIC VALUE GENERATED 2012 2013
Interest income 31340971 29588778
Interest expenses -11790051 -9598939
Fee and commission income 7890743 8175478
Fee and commission expenses -2292104 -2648138
Net profit on sale of securities atfair value through profit and loss 1008 590
Net profit on sale of securitiesavailable for sale 49855 4332
Net profit on sale of equity investments 434 0
Net exchange rate loss -13263673 356204
Dividends and share income 2925 1527
Other operating income 554540 676132
Net expenses on indirectly written-off of placements and provisions 1 -5415518 -6935326
Operating and other expenses 2 -189518 -532659
Gains from changes in value of assets and liabilities 31390752 12172042
Losses from changes in value of assets and liabilities -16188419 -10564372
TOTAL ECONOMIC VALUE GENERATED 22091945 20695651
2 ECONOMIC VALUE DISTRIBUTED
21 Operating costs 3
Costs of material -487362 -475379
Building and equipment maintenance costs -753215 -798584
Office and equipment lease costs -934768 -930657
Costs of intellectual services -369026 -315092
Advertising -355296 -280923
Costs of business travel and training of employees 3 -93716 -92586
Other operating costs 3 -2098067 -2130715
TOTAL OPERATING COSTS -5091449 -5023936
22 Employee expenses 3
Wages and salaries -3312415 -3223372
Taxes and contributions on wages and wage benefits 3 -1997940 -1937113
Cost of employees transportation 3 -76490 -84139
Costs of remuneration for temporary and occasional work -5861 -4569
Costs of employees education not related to their job 3 -3157 -6094
Other personnel expenses -172859 -55922
TOTAL INCOME AND EXPENSES
TOTAL EMPLOYEE EXPENSES -5568723 -5311209
23 Expenses related to liabilities to the government
Income tax -830548 -623097
Indirect taxes and duties 3 -161352 -183199
TOTAL EXPENSES RELATED TO LIABILITES TO THE GOVERNMENT -991900 -806296
24 Community-related expenses
Donations and corporate social responsibility 3 -33204 -22381
TOTAL COMMUNITY-RELATED EXPENSES -33204 -22381
TOTAL ECONOMIC VALUE DISTRIBUTED -11685276 -11163822
3 ECONOMIC VALUE RETAINED 4 10406668 95318291 The item differs from the income statement in the annual report in that the Provisions for Employee Benefits Legal Disputes and Restructuring are excluded 2 The item differs from the income statement in the annual report in that the Operating Costs are presented in the section Economic Value Distributed in several segments stated while Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation is not presented within Other Operating Expenses3 The items differ from the income statement in the annual report in that a part of the Operating Costs is reclassified into the following segments Employee Expenses Expenses Related to Liabilities to the Government and Community-Related Expenses4 This represents BIBrsquos profit net of the Provisions for Employee Benefits Legal Disputes and Restructuring the Gains and Losses on Deferred Tax Assets and Liabilities the Depreciation Costs and the Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation
16
22 GOVERNANCE IN BANCA INTESA
CORPORATE GOVERNANCE
Shareholders of Banca Intesa ad Beograd ndash ownership structure Intesa Sanpaolo Holding International SA 7779 Intesa Sanpaolo SPA 1521 International Finance Institution (IFC) 700 The governance of the Banca Intesa joint stock company is organised as a two-tier system
The Bankrsquos Board of Directors consists of five members elected by the General Meeting of Shareholders upon the shareholdersrsquo proposal including the Board Chairman The term of office of Board members is three years with a possibility of re-election The Chairman of the Board of Directors of Banca Intesa is Massimo Malagoli and its members are Ivan Šramko Arthur Philippe Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Executive Board of Banca Intesa consists of six members including the President The term of office of Executive Board members is three years with a possibility of re-election The President of the Executive Board of Banca Intesa is Draginja Đurić the Deputy President of the Executive Board is Marco Capellini and Board members are Darko Popović Head of Retail and Small Business Division Slađana Jelić Head of the Corporate Banking Division Dragica Mihajlović Head of the Financial Management and Treasury Division and Marko Marković Head of the Operations Management Division
Women account for 20 of the members of the Board of Directors and 50 of the members of the Executive Board of Banca Intesa
The Bankrsquos Audit Committee consists of five members including the Chairman The term of office of Committee members is three years with a possibility of re-election The Committee Chairman is Giovanni Bergamini and its members are Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Chairman of the Board of Directors as a governance body does not have a direct executive role given that Banca Intesa organised as a joint stock company with a two-tier governance system delegates executive roles to the Executive Board as a management body that organises the Bankrsquos operations and performs daily monitoring of the activities of the Bank employees while the Board of Directors makes strategic decisions aimed at the Bankrsquos compliance takes care of and is responsible for the accuracy of all reports financial condition and operating results of the Bank addressed to the Bankrsquos shareholders the public and the National Bank of Serbia
In line with the Law on Banks and other regulations members of the Board of Directors are appointed and dismissed by the General Meeting of Shareholders while members of the Executive Board are appointed and dismissed by the Bankrsquos Board of Directors Domestic regulations list conditions that members of the Executive Board and the Board of Directors must meet in order to get prior approval of the regulatory body ie the National Bank of Serbia without which they cannot become members of these boards This includes among other things good business reputation and appropriate qualifications In addition appropriate experience in finance is also required for at least three members of the Board of Directors while at least one member of the Board of Directors must have active knowledge of Serbian and reside in the territory of the Republic of Serbia After obtaining the approval the appointed person is registered with the Business Registers Agency as well
Banca Intesa provided in its bylaws for the mechanisms and channels of direct e-mail communication with its parent group Intesa Sanpaolo with the aim of respecting the individual and dignity of each employee as well as the values proclaimed by the Code of Ethics The Bankrsquos shareholders ie the General Meeting of Shareholders participate in and directly impact the work of the Board of Directors as a governance body in the following ways
bull The General Meeting of Shareholders adopts the business policy and strategy of the Bankbull The General Meeting of Shareholders adopts the Articles of Association and the amendments to the Memorandum and Articles of Associationbull The General Meeting of Shareholders appoints and dismisses the Chairman and members of the Board of
17
Directorsbull The General Meeting of Shareholders appoints and dismisses the external auditorbull The General Meeting of Shareholders considers and adopts the annual report of the Board of Directors
The adopted remuneration policy for the entire human resources of the Group including the variable components is based on equality merit and sustainability of results The guidelines for defining the management remuneration policy are based on objective elements and parameters resulting from the assessment of organisational positions as well as performance and potential with the aim of creating an integrated system for the members of management thus helping their professional development The policy provides for remuneration in the form of benefits which is also based on financial instruments and linked to the results of the company ndash which corresponds to the level of assumed risk and is regulated so as to avoid giving benefits that in the long term are not in accordance with the Grouprsquos interests Based on the performance indicators closely linked with the long-term goals the benefit determination systems are based among other things on the principle of symmetry with the amounts of paid benefits being based on the results achieved at the Group business sector and individual levels and therefore being capable of decreasing significantly and even reaching zero if the minimum indicators that reflect the Group profitability are not achieved also taking into account the risks assumed and the capital used
When it comes to conflicts of interest Banca Intesa has prescribed in accordance with the provisions of the Law on Banks as well as with its bylaws and those of its parent Group an obligation for members of the Board of Directors and the Executive Board to submit a written statement of conflict of interest to the Bankrsquos Board of Directors within one month from the day of taking office The members of the Board of Directors and the Executive Board are obliged in accordance with the bylaws regulating transactions with related parties and the conflict of interest to submit once a year completed standard questionnaires whose content is designed by the parent Group and which contain information relevant for establishing any conflict of interest
One of the methods of sustainability control at Banca Intesa is the power of the Board of Directors as a governance body to set up an integrated risk management system at the Bank and the supervision of this system while the Executive Board identifies the risks to which Banca Intesa is exposed and controls these risks in accordance with the approved policies and procedures The Board of Directors gives approval to the Bankrsquos exposure to one or a group of related parties of over 10 or to an increase in the exposure to over 20 of Bank equity adopts internal audit plan and programme considers external and internal audit reports sets up the internal control system defines the internal organisation and organisational structure of the Bank that ensures the division of duties authority and responsibilities of its employees in a manner that prevents conflict of interest and ensures a transparent and documented process of decision making and implementation decides on disposing with the Bankrsquos fixed assets and the stakes and shares that the Bank has in other legal entities
The work of the Executive Board is evaluated through the MBO (Management by Objectives) system which is based on setting measurable objectives based on which the annual performance is monitored
RISK MANAGEMENT
Risk management is an integral part of the corporate governance of Banca Intesa based on which it is estimated whether the Bank can achieve its business targets in the way consistent not only with the law but also with the public interest safety of people as well as the factors of the natural and social environment Therefore the access to risk management also implies broader social consequences of Bank activity in the environment and in the market
Controlling Socio-environmental Risks in the Governance Process
By a decision of the Executive Board the Bank appointed the persons responsible for environmental protection with the aim of establishing an Environmental Management System ndash EMS and ensuring compliance with the rules of environmental protection and corporate social responsibility in lending operations so that the system would be fully applied until the final collection of all loan instalments A Senior Environmental Management Officer (Deputy President of the Executive Board) and an Environmental Management Coordinator (compliance risk management specialist) were appointedThe Environmental Management Coordinator with the approval of the Senior Environmental Management Officer informs the Executive Board the Asset Quality Committee and the Credit Committee of any significant increase in the level of socio-environmental risks in individual Bank customers particularly in customers with high credit exposure
18
and prepares reports on socio-environmental risks for international development banks towards which the Bank has such reporting obligation
The responsible organisational unit of the Bank monitors risks through the process of assessing loan applications taking into account the criteria related to lending to all customers engaged in production and service activities and the criteria related to environmental risk management
Management of Socio-environmental Risks in Lending
Adequate management and control of socio-environmental risks are essential preconditions for generating reliable and sustainable value and for protecting the Bankrsquos financial stability as well as its reputation
Socio-environmental Risk Management
The Socio-environmental Risk Management Procedure regulates the risk monitoring process in the area of environmental protection employee health and safety and the Bankrsquos social responsibility (protection of cultural heritage fundamental human rights and personal integrity) This Procedure regulates the credit process with regard to socio-environmental risks when approving a credit product to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1000000 euros or higher including the requested new product in case of a credit product from a credit line or other funds approved to the Bank by an international development bank and approval of a long-term credit product funded from other sources The Procedure regulates the rules classified by business lineprocess in the process of socio-environmental risk management
Equator Principles
The Implementation of the Equator Principles for Project Financing procedure applies when preparing and implementing project financing and advisory services in connection with project financing where the investment value of the project is 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes in these facilities can create significant environmental andor social impacts or significantly change the natural environment The goal of the Equator principles is to identify and assess risks and perform risk management based on the criteria defined by the principles with the aim of adhering to the principle of sustainability of natural resources human health human rights cultural heritage and biodiversity
Armaments
The sensitive sectors that the Bank monitors with special attention include armament production and trade In accordance with the relevant bylaw of its parent Group the Policy of Not Financing of Armaments in 2011 Banca Intesa adopted the Procedure for the Performance of Transactions Related to Armament Production and Trade which regulates the identification and preparation of the summary of the customers engaged in armament and military equipment production and trade the monitoring of transactions and loan applications of the customers engaged in armament and military equipment production and trade the approval of transactions and loan applications related to armament and military equipment production and trade in accordance with the Policy of Not Financing of Armaments as well as the preparation of reports on the transactions related to armament and military equipment production and trade
Reputational Risk Management
The Bank attaches great importance to reputational risks that are assessed as part of the compliance control system which is within the competence of the Compliance Office Banca Intesa believes that the standards in this area as well as the business ethics are the cornerstone of banking operations which by their nature are based on trust Bylaws such as the Code of Ethics policies and other define that any non-compliance with the bylaws the principles and values contained in them as well as with external regulations (laws and secondary legislation) exposes the Bank to a certain level of reputational risks
Fight Against Corruption and Compliance
The internal regulatory source that governs the system for control and mitigation of corruption risks comprises the Code of Ethics the Code of Conduct the Rulebook on Relations with Political Parties and the following Bank procedures the Procedure for the Prevention of Internal Fraud and Abuse at the Bank and the Employment Termination Procedure
19
The Code of Conduct prescribes in detail the rules in connection with receiving and giving gifts and the measures prescribed in the event of corruption are related to the violation of work duties so the measures stipulated by external regulations ie the Labour Law (eg compensation for damage employee suspension or termination) but also the Criminal Code may be pronounced against an employee Based on the Legal Department records no proceedings were initiated against Banca Intesa ad Beograd in connection with corruption since no complaints or notices prior to complaint were delivered during 2013
In the same period the Suspicious Transactions and Know Your Customer training courses were held in this segment by means of e-learning which were received by as many as 8663 of employees during 2013 The training courses were provided for by the current regulations and internal acts of the Bank and were aimed at informing the employees and refreshing their knowledge of the obligation of collecting information about each customer and completing appropriate questionnaires In addition the training informed the employees about the new processes that were implemented as well as about mandatory observance of all duties relating to knowing monitoring and reporting suspicious transactions of customers
The Rulebook on Relations with Political Parties prescribes the obligation of the Bank to refrain from granting donations and sponsorship tobull Political parties and any organisations related to thembull Political movements and their organisational unitsbull Trade union organisationsbull Competent authorities and institutions
The prohibition of granting donations and sponsorship to the above organisations aims at the protection against any grants that would result in a privileged position to the Bank or unfair decisions in favour of the Bank
The Compliance Office as well as the relevant organisational units of the Bank are committed to the regulation of processes and the definition of procedures and their operating rules as well as practice which efficiently prevent the violation of applicable regulations The Compliance Office also provides support to the highest bodies of the Bank in monitoring the compliance risk The compliance risk assessment process is constant Through semi-annual reporting these risks are identified and priority measures for their elimination or mitigation are determined ie the level of efficiency of the existing compliance controls is assessed
The Internal Audit provides direct support to the highest bodies of the Bank in monitoring the compliance with and adequacy of the rules contained in the Bankrsquos bylaws If it identifies critical issues during its activity the Internal Audit informs the relevant organisational units and the highest bodies of the Bank with the aim of determining adequate measures for risk mitigation and the method of their implementation
Protection of Health and Safety
Occupational health and safety at Banca Intesa are regulated in accordance with international directives recommendations and positive laws of the Republic of Serbia
During 2013 an assessment was made of the situation regarding occupational health and safety and the risk level for 207 facilities at which work is performed A schedule of elimination of recorded risks to the health of Bank employees was defined and implemented according to priorities and the budget planned In connection with this risk assessment documents were updated as well
When it comes to physical security three robberies were recorded in 2013 versus two a year earlier and investments in technical protection systems continued
Risk Management in Supply Chain
Supplier Check
The Procurement Unit and the organisational part in charge of procurement are obliged to evaluate the received supplier bids by applying the methods of qualitative and quantitative analysis as well as to align the bid evaluation criteria prior to inviting the bidders to submit offers by combining specific criteria one of which is the Compliance of Bidderrsquos Operations with the Corporate Social Responsibility Principles
20
Health and Safety Risk Assessment
In accordance with the Procurement Policy members of Intesa Sanpaolo Group are expected to include the parameters of assessment of environmental protection and occupational health protection in their procurement process giving priority to the use of recycled paper highly energy efficient products and environment-friendly technical equipment
Group members must include special provisions in the procurement contracts they conclude with their suppliers These provisions provide for the obligation of suppliers to comply with the principles specified in the Intesa Sanpaolo Rules for the Environmental and Energy Policy Constant checks are performed in the countries where legal measures regarding environmental protection were adopted in order to ensure compliance
In the area of personnel training and spreading the awareness of the importance of these issues the training of the employees who directly communicate with suppliers must include fields related to corporate social responsibility as well as to the responsibility for environmental protection
21
CUSTOMERS
Banca Intesa built its leading position in the market of Serbia and the status of stable and reliable partner by fostering trust in the relations with its customers The strengthening of relations with customers is based on constant improvement of the quality of products and services proceeding from specific needs of each segment as well as on full respect for the principles of equality and availability of products and services Key aspects of doing business with customers are the following
bull SUPPORT TO ECONOMY AND AGRICULTUREbull FINANCIAL INCLUSION AND EDUCATIONbull CUSTOMER SATISFACTION
SUPPORT TO ECONOMY AND AGRICULTURE
Banca Intesa continued to provide support to the economy and the agricultural sector in 2013 as well focusing on the development of entrepreneurship and self-employment particularly in the SME segment as well as on the improvement of public infrastructure
Support to the Public Sector
Banca Intesa offered loans from the credit line of the German Development Bank (KfW) to the public sector for financing infrastructure projects and the procurement of equipment in the following areas water management sewerage and wastewater management solid waste management environmental protection and pollution control transport infrastructure public transport and communication systems infrastructure facilities fostering economic development and other social and utility services During 2013 Banca Intesa granted 11 loans totalling 852 million euros while the total value of the project is 47 million euros
Development of Entrepreneurship
Banca Intesa supported the programme of measures of the Government of the Republic of Serbia for encouraging SMEs and entrepreneurs through subsidised loans for liquidity and working assets in 2013 as well The Bankrsquos commitment to provide continuously support to its customers in this segment is also demonstrated by the fact that the Government of the Republic of Serbia implements its programme of measures for the fifth consecutive time During 2013 the Bank granted 414 subsidised loans to SMEs totalling 562 billion dinars which accounted for 107 of the total loans to the SME sector The small business sector was granted 186 billion dinars and 1347 loans which accounted for 15 of the number of loans and 16 of the total loan disbursements to this segment
In cooperation with the National Bank of Serbia and the Kingdom of Denmark the Bank launched the Local Economic Development in the Balkans (LEDIB) programme intended for enterprises entrepreneurs and registered farms from the small business segment with the aim of improving local economic development creating new jobs strengthening organisational capacities introducing new eco-friendly technologies and other favourable impacts on the overall development The credit line was intended for the Nišava Pčinja Toplica Jablanica and Pirot Districts and in 2013 the Bank granted 39 loans totalling 505208 euros under this programme which accounted for 04 of the number of loans and 05 of the total loan disbursements to the small business segment At the same time from the credit line of the European Fund for Southeast Europe (EFSE) which supports enterprises and registered farms through investments and loans for working assets 227 million euros were granted in the small business segment which accounted for 22 of loan disbursements in the segment
With the aim of supporting the promotion and strengthening of womenrsquos entrepreneurship Banca Intesa helped the Association of Businesswomen in Serbia in the organisation of an international conference entitled New Age Woman Entrepreneur New Opportunities for Recovery of Economy in the Region The event contributed
22
to further positioning of Banca Intesa as a bank that actively supports entrepreneurship in the country as part of its efforts to contribute to economic recovery and growth For this purpose the Bank also has in its offer loans for women entrepreneurs in Vojvodina in the form of start-up loans for unemployed women and women who have had a business for up to three years The Bank granted 8 loans totalling 98 million dinars under this programme during 2013 which accounted for a 3 share in the number of loans and a 1 share in the total investment loan disbursements in the small business segment
Promotion of Agricultural Sector
Taking into account that the agricultural sector is very specific because it has a special social as well as environmental importance in addition to economic importance for many years Banca Intesa has been encouraging development and investing in projects and individuals that encourage with their activities further rural development and contribute to an increase in the competitiveness of domestic agriculture
Aware of the great economic potential of this industry as part of the LEDIB programme the Bank granted eight loans to registered farms in 2013 totalling 76219 euros which accounted for 02 of the number of loans and 03 of the total loan disbursements to this customer segment In addition in cooperation with the Guarantee Fund of the Autonomous Province of Vojvodina long-term loans for purchasing new agricultural machinery and equipment were available to customers During 2013 the Bank granted 82 loans of this type totalling 219 million euros which accounted for a 15 share in the number of loans and a 25 share in the total investment loan disbursements in the agricultural segment
In addition on the occasion of the 80th International Agricultural Fair in Novi Sad the Bank prepared a special credit offer intended for owners of registered farms which included the Intesa Farmer dinar loan for financing spring works as well as the Intesa Farmer loan for purchasing agricultural machinery During 2013 22 loans were granted for purchasing tractors and agricultural machinery totalling 341 million dinars which accounted for a 4 share in the number of loans and a 3 share in the total amount of agricultural investment loan disbursements
Banka Intesa launched the Intesa Farmer of the Year project to contribute in yet another way to the promotion of agricultural production in the country and to the strengthening of its competitiveness As part of the project the Bank awarded the most successful farmers in four categories ndash Intesa Crop Farmer Intesa Vegetable Grower Intesa Fruit Grower and Intesa Livestock Breeder and all winners won a trip to Germany to visit the international agricultural fair in Berlin The criteria based on which the Committee selected the winners of the title Intesa Farmer of the Year were the annual results achieved in agricultural production application of modern technologies in production activities the number of household members engaged in the production as well as the minimum three-year cooperation with the Bank which included a loan and regular settlement of their financial obligations
FINANCIAL INCLUSION AND LITERACY
Banka Intesa believes that the availability of financial products to all segments of society is an essential precondition for sustainable development In line with this position the Bank added to its offer specific products that promote financial inclusion and provide support during economic crisis to the most vulnerable social groups such as the elderly or youth as well as to solving broader social problems such as housing availability or health care services
Responding to the Needs of the Community
In 2013 Banca Intesa included in its offer the Intermezzo Cash Loan a new model of cash loan which offers to its users as a unique benefit in the domestic market a possibility of postponing the payment of monthly instalment up to five times during the repayment period Moreover as an additional functionality the Intermezzo loan includes insurance against job loss with no additional cost to the customer The Bank believes that the repayment flexibility provided by this loan model offers citizens unique support in the market at a time when they estimate that they need it most In 2013 Banca Intesa granted 11256 Intermezzo cash loans totalling 198 million euros which accounted for 235 of the total amount of cash loans disbursed during the year
Banca Intesa was the first in the Serbian market to offer loans to pensioners aged up to 74 years The Senior Cash Loans were designed specifically to fit the needs of senior citizens and they also include life insurance which is included in the cost of loan during the entire repayment period During the previous year 19774 loans were granted totalling 239 million euros which accounted for 284 of the total cash loans granted in 2013
23
In 2012 as support to citizens in financing medical services the Intesa Vita programme of consumer and cash loans was developed which includes loans for in vitro fertilisation harvesting and storage of stem cells DNA analysis dental services medical spa and wellness treatments as well as for purchasing baby supplies In 2013 the programme was extended to new purposes - laser vision correction vein operation and purchase of medical aids and 28 loans were granted totalling 126345 euros which accounted for 8 of the total cash loans granted during the year In this unique way the Bank provides the citizens with the possibility of taking care of their health in a responsible and timely manner without suddenly burdening their home budgets
Moreover the Bank continued to provide subsidised housing loans in 2013 as well in order to provide support to young married couples in solving their housing problems granting 224 loans totalling 864 million euros which was 205 of the total housing loans granted during the year At the same time 6544 refinancing loans with insurance against job loss or disability in case of an accident were granted totalling 146 million euros which enabled the customers to service their outstanding liabilities towards Banca Intesa and other banks and which accounted for 173 of the Bankrsquos total cash loans granted during the year
Banca Intesa introduced the Visa Classic Paralympic and Visa Electron Paralympic cards the first charity payment cards in the country in cooperation with the Paralympic Committee of Serbia This was the first initiative aimed at establishing a stable and independent mechanism for long-term assistance to athletes with disabilities and developing paralympic sport in the country During 2013 8345 Visa Classic Paralympic and Visa Electron Paralympic cards were issued which accounted for 14 of all cards issued during the year The Bank also provides debit cards for students which enable free account opening and maintenance for all students who opted for an Intesa Visa Electron Easy Travel Card (ETC) or a Maestro ISIC Card of Banca Intesa of which 4048 were issued in 2013 accounting for 18 of the debit cards issued during the year
Constantly striving to promote savings in 2013 the Bank introduced a new savings model the Month by Month Savings which provides customers with a possibility of reaching higher amounts of savings with lower monthly allocations The product enables saving in dinars and euros at a very attractive interest rate while the customers also have an opportunity to set the payment date and amount themselves
Financial Education
In 2013 as well Banca Intesa remained true to its commitment to support actively financial education by improving customer knowledge Thus in cooperation with Banca IMI SpA a member of Intesa Sanpaolo Group another Intesa Academia workshop was organised this time on the subject of advanced financing and risk management instruments so that Banca Intesarsquos customers could find out more about the possibilities of financing in the international and domestic bond markets and about hedging products for successful management of market risks The workshop brought together the leading world experts in the areas of financing and risk management as well as the most successful customers of the Bank In order to assist its customers in the SME segment in getting informed in more detail about the regulations relating to loan approval and collection Banca Intesa took part in the working breakfast on the subject Security Instruments and Their Collection as the Condition for Financing Company Growth held at the premises of the Serbian Association of Managers On this occasion the legal framework was presented about which enterprises should also get informed in order to know that documentation they will need if they opt for bank loans
At the same time the Factoring Department designed and launched an initiative of organising factoring workshops at the Bankrsquos regional centres Factoring workshops are an interactive form of cooperation and communication with customers with the focus on understanding the term and essence of factoring themselves With the support of regional centres a total of 27 factoring workshops were organised in 22 cities in two cycles in late 2012 and in early 2013 which were attended by nearly 300 corporate customers
As a member of the United Nations Global Compact and its Working Group on CSR in Banking and Finance Banca Intesa works together with the other members on the implementation of projects in the area of financial education which is the main goal of this Group One of the projects actively supported by the Bank is the cooperation with seven secondary schools of economics from six cities in Serbia where there is a ldquobank clerkrdquo educational profile in the area of thematic lectures for teachers and students The Bank representatives gave three lectures during 2013
24
CUSTOMER SATISFACTION
Banca Intesa believes that it is only through an open dialogue with its customers that it can truly understand their needs and expectations and build a long-term partner relationship with them
Meeting the Needs of Customers
Ever since 2008 Banca Intesa has been conducting surveys of its customersrsquo satisfaction with the Bankrsquos products and services in accordance with the methodology of the European Customer Satisfaction Index (ECSI) as part of its initiative named Listening 100 This is a continuous process analyses are made based on the results obtained in the survey and actions are proposed accordingly for improving the customer satisfaction The surveys are repeated at six-monthannual intervals in order to collect feedback from the customersrsquo perspective for the measures taken for the purpose of improving the satisfaction index as well as identifying the directions for further improvement
Looking at the results of the customer satisfaction survey at the end of 2013 a conclusion arises that among other things the basis of good results is a positively rated staff treatment of customers The ECSI as well as the Loyalty indices are stable with a high percentage of customers who stated they would remain Banca Intesa customers in the following 12 months Attempting to encourage its customers to express their opinions in the previous year the Bank clearly communicated the improvements implemented so far based on their suggestions
During 2013 as well Banca Intesa continued to increase the number of branches equipped with the Queue Management System (QMS) which covered approximately 40 per cent of active customers at the end of the year In addition to having a positive impact on customer satisfaction the QMS expansion made it possible to obtain the data necessary for better analysis and organisation of branch operation In addition free internet access via Wi-Fi and daily newspapers were made available to customers at the largest branches
As part of its efforts to improve further customer satisfaction in 2013 Banca Intesa implemented training of over 1500 employees both in its branch network and at its headquarters The training which was implemented as a continuation of the Education 100 programme initiated in 2011 was held on the subject of managing customer satisfaction but also their entire experience in each contact with the Bank
In addition to its efforts to improve its approach to customers and recognising the importance of two-way communication the Bank developed efficient mechanisms for collecting and recording customer feedback The Bank responds to all complaints sent to the Bank via formal complaints mechanisms and does so within the statutory time limit and in accordance with the decision of the National Bank of Serbia Each customer may also personally contact unit employees and if the customer is not satisfied with the answer received heshe can apply to the National Bank of Serbia as the second-instance body with the possibility of mediation The following are available to customers
bull Phone line +381 11 310 88 88bull E-mail kontaktbancaintesarsbull Fax +381 11 310 88 55bull Personal contact ie submitting a written complaint in personbull Contact form on the official website of the Bankbull Bank corporate accounts on social networks (Facebook and Twitter)bull Postal address of the Customer Satisfaction Management Unit Omladinskih brigada 90b 11070 New Belgrade
Transparent Advertising
Lasting relationships based on trust require communication that enables customers to understand clearly the characteristics and value of Banca Intesa products and services Therefore the Bank strives to contribute to the simplification of its products in communication
In its advertising the Bank clearly specifies all customer costs and all of them are included when calculating the effective interest rate which is always clearly and visibly shown as well as representative examples that contain all data in accordance with the Law on the Protection of Financial Service Consumers which demonstrates full transparency when it comes to Bank pricing policy
25
The Bank also strives to formulate the agreements so that they are simple to understand minimising possible misunderstandings and ambiguity by providing clear and exhaustive information It informs its customers in a timely manner of any changes in the agreements and their terms
Data Security
The protection of customer security as well as their assets and confidential information is not only Banca Intesarsquos primary duty but also the basis of the relationship of trust that the Bank wants to reinforce with its customers The protection of persons their assets and valuables as well as a multitude of data and internal organisational processes fully meets the criteria of reliability continuity and confidentiality In addition to its legal obligations Banca Intesa complies with the criteria of absolute transparency in informing its customers of their rights to privacy and the way it treats their personal information
In 2013 Banca Intesa did not find any founded complaint in connection with the violation of customer privacy or any disclosure leakage or theft of customer information
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
5
1 Identity
6
11 BANK PROFILE
INTESA SANPAOLO
Intesa Sanpaolo is one of the leading banking groups in Europe and the largest in Italy Created in 2007 by the merger of the leading Italian banks Sanpaolo IMI and Banca Intesa the Group holds the leading position in Italy in terms of providing financial support to retail and corporate customers The Group is committed to improving its services to retail customers and providing significant support to the business of its customers as well as to the overall economic development of the countries where it operates
Intesa Sanpaolo serves around 111 million customers through its well-developed business network of more than 4700 branches The Group focuses its business operations on Central and Eastern Europe the Middle East and Northern Africa where it serves 84 million customers in 12 countries through a network comprising around 1400 branches it ranks first in Serbia second in Croatia and Slovakia third in Albania fifth in Bosnia and Herzegovina Egypt and Hungary and eighth in Slovenia Intesa Sanpaolo also supports corporate customers through its international network covering 29 countries with an emphasis on the Middle East Northern Africa the US Russia China and India
BANCA INTESA
Banca Intesa is the leading financial institution in the Serbian market measured by key performance indicators ndash total equity assets loans and deposits Banca Intesarsquos commitment to base its business on innovativeness and the highest level of professionalism was recognised by more than 167 million customers individuals entrepreneurs small and medium-sized enterprises large companies and local governments
The Bank operates through a business network comprising more than 190 branches in 111 cities throughout Serbia relying on the knowledge and expertise of its professional team of around 3000 employees Banca Intesa has the most developed network of POS terminals and ATMs in the market in addition it is the leader in the card business segment with more than 14 million debit and credit cards issued
Striving to complete its offer of financial services in 2006 Banca Intesa founded a leasing company Intesa Leasing doo Belgrade which is also a member of Intesa Sanpaolo Group The operation of the leasing company is not covered by this Report
In July 2013 Euromoney the leading global magazine in the area of financing and banking declared Banca Intesa the best bank in Serbia in 2012 granting it the Excellence Award For the fourth consecutive year the Bank received this renowned award which is given based on an analysis of a series of quantitative and qualitative criteria such as business parameters innovativeness as well as portfolio quality
At the same time Banca Intesa also received an award of the EMEA Finance magazine as the best bank in Serbia in 2012 in the category of banks operating as part of international groups The winners of European banking awards are selected based on an evaluation by a jury which is guided by bank achievements within the context of the macroeconomic environment in which it operates as well as relative to the situation in the entire banking sector The key elements in the juryrsquos work were sustainable growth and commitment to customers
1991 2005 2006 2007 2008
One of the first private banks in Serbia with the head office in Belgrade
Becomes a member of Banca Intesa Group now named Intesa Sanpaolo
Intesa Leasing foundedBecomes the leading
bank in Serbia by all key performance indicators
Panonska Banka acquired and the number of
employees increased to 3000 Novi Sad becomes
the second seat of the Bank
BANK HISTORY
7
MISSION
Banca Intesarsquos mission is to provide excellence in banking and financial services for its customers leveraging on developing its presence in all the areas in which it operates and a style of growth that focuses on sustainable results and on establishing a trust-based process that stems from customer and shareholder satisfaction from its employeesrsquo sense of belonging and listening to the needs of local communities
The Bankrsquos growth strategy strives to create stable and sustainable values from the economic financial socio-environmental points of view building upon the Bankrsquos fundamental corporate values in its relations with all stakeholders
CORPORATE VALUES
INTEGRITY EXCELLENCE TRANSPARENCY RESPECT
FOR EACH INDIVIDUAL
EQUALITYINDIVIDUAL
VALUES
RESPONSIBLE USE OF
RESOURCES
We pursue our goals with honesty
fairness and with a sense of
responsibility in full compliance with the rules and principles of ethics mandated by the profession in the spirit of signed
agreements
We set ourselves the goal of continuous
improvement planning future activities and anticipating
challenges along with fostering
extensive creativity aimed at innovations moreover we recognise and reward merits and quality
We are committed to make
transparency the basis for all our activities
communication and contracts with the aim of enabling our stakeholder to make independent informed decision
We intend to combine large-format business with deep local
roots and to be a bank with a broad vision while not
losing sight of the man as an individual
We are committed to eliminating any form of
discrimination in our conduct and to respecting gender
racial religious political linguistic and intellectual diversity trade
union preferences as well as the
diversity in terms of age and abilities
The value of each individual
guides our modus operandi we use listening and dialogue
techniques as tools for continually
improving relations with all
stakeholders
We strive to use carefully all resources and to promote the conduct based on the optimal
use of resources and avoidance of waste and losses
giving priority to the choices that consider sustainability
STRATEGIC APPROACH TO SUSTAINABILITY AND STRATEGY IN PRACTICE
Operating against the backdrop of modest economic recovery and complex business environment Banca Intesa opted for a responsible business strategy that is based on maintaining the system stability on the one hand and monitoring the needs of citizens and economic entities on the other Guided by clear goals in these areas the Bank continued to create value for its customers while contributing to the economic and social development of the broader community Constant care of customer satisfaction expressed through maximum professionalism in the work and a high level of innovativeness remained at the top of the priority list as did constant improvement of the products and services the Bank provides to its customers Owing to such approach Banca Intesa maintained its stable credit activity and increased its market share in lending although the domestic banking sector as a whole recorded a decrease in lending due to lower demand and a high share of non-performing loans In addition further growth was recorded in the Bankrsquos total deposits and its market share in this business segment as well reflecting a high level of customer confidence
In line with its strategic commitment to integrate fully the sustainability concept into its long-term business plans but also into its everyday activities and decisions in 2013 Banca Intesa also sought to meet the needs of all stakeholders its employees shareholders and customers as well as the entire social community By constantly improving its CSR practices during the previous year the Bank launched new projects aimed at providing support to the community and continued investing considerable funds in education culture health care and sports and the primary area of its activity was the strengthening of the culture of volunteering In addition special products were designed in response to the growing needs of customers and a stimulating work environment was provided to the employees
JOINT INITIATIVES
Promoting the international business standards Banca Intesa is particularly committed to the development and introduction of corporate social responsibility as an integral part of its business practice as well as to raising awareness of the business community and the broader community of the importance of this concept As the leading financial institution in the country the Bank has a responsibility for the broader social and economic progress as well and therefore advocates a better quality of life prosperity and development of economy and the entire society through its active participation in the work of business associations
8
UNITED NATIONS GLOBAL
COMPACT
BUSINESS LEADERS FORUM
SERBIAN ASSOCIATION OF MANAGERS
AMERICAN CHAMBER OF COMMERCE
FOREIGN INVESTORS COUNCIL
NATIONAL ALLIANCE FOR LOCAL ECONOMIC
DEVELOPMENT
CHAMBER OF ITALIAN
AND SERBIAN BUSINESSPEOPLE
The largest global CSR network
bringing together more than
10000 members throughout
the world and promoting the protection of human and
labour rights and the environment and fight against
corruption
The first business network for CSR in Serbia comprising
20 members
A business association founded
with the aim of becoming a credible social partner of the Serbian Government
in the process of improving the businessenvironment
and accelerating economic
development
An organisation promoting the improvement of business
environment in Serbia as well as partnership
between US and Serbian companies
for the purpose of economic development
A business association whose activities contribute to the improvement of the investment
and business climate in Serbia
A business association that brings together
representatives of all three sectors of
society ndash companies municipalities
and NGOs which work together
on improving the conditions for local economic
development and doing business
A non-profit organisation that fosters improves
and develops trade between Italy and Serbia
9
CROSS REFERENCE TABLE
UNITED NATIONS GLOBAL COMPACT PRINCIPLES (UNGC)CORRESPONDING GRI INDICATOR
HUMAN RIGHTS
PRINCIPLE 1 BUSINESSES SHOULD SUPPORT AND RESPECT THE PROTECTION OF INTERNATIONALLY PROCLAIMED HUMAN RIGHTS AND
LA 4
LA 13
LA 15
HR 11
PR 8
PRINCIPLE 2 MAKE SURE THAT THEY ARE NOT COMPLICIT IN HUMAN RIGHTS ABUSES HR 11
LABOUR
PRINCIPLE 3 BUSINESSES SHOULD UPHOLD THE FREEDOM OF ASSOCIATION AND THE EFFECTIVE RECOGNITION OF THE RIGHT TO COLLECTIVE BARGAINING
LA 4
PRINCIPLE 4 THE ELIMINATION OF ALL FORMS OF FORCED AND COMPULSORY LABOUR
PRINCIPLE 5 THE EFFECTIVE ABOLITION OF CHILD LABOUR AND
PRINCIPLE 6 THE ELIMINATION OF DISCRIMINATION IN RESPECT OF EMPLOYMENT AND OCCUPATION LA 2
LA 13
LA 15
HR 11
ENVIRONMENT
PRINCIPLE 7 BUSINESSES SHOULD SUPPORT A PRECAUTIONARY APPROACH TO ENVIRONMENTAL CHALLENGES EN 26
PRINCIPLE 8 UNDERTAKE INITIATIVES TO PROMOTE GREATER ENVIRONMENTAL RESPONSIBILITY AND EN 4
EN 5
EN 8
EN 26
PR 3
PRINCIPLE 9 ENCOURAGE THE DEVELOPMENT AND DIFFUSION OF ENVIRONMENTALLY FRIENDLY TECHNOLOGIES EN 5
EN 26
ANTI-CORRUPTION
PRINCIPLE 10 BUSINESSES SHOULD WORK AGAINST CORRUPTION IN ALL ITS FORMS INCLUDING EXTORTION AND BRIBERY SO 3
SO 4
SO 6
10
Given that they were added subsequently to the new GRI guidelines version G31 the LA 15 and HR 11 indicators are entered into the cross reference table according to the authorrsquos estimate
In accordance with the GRI principle of materiality based on which priority topics present in the report are defined the corresponding indicators are not covered by this report taking into account their relevance to the banking sector The bank as an active member supports the promotion of all 10 global compact principles in its partners suppliers customers and in the general business and social community
SUSTAINABILITY MANAGEMENT
In order to achieve its business goals as well as those relating to socio-environmental dimensions Banca Intesa introduced ethical responsibility as a criterion in the process of decision-making regarding all stakeholders which means that socio-environmental issues are integrated in the process of product and service development risk management as well as in loan granting and supplier selection
The adoption of the Code of Ethics with the defined values to which Banca Intesa is committed introduced a management model based on the principle of accountability that requires commitment to aligning everyday business activities with the declared values at the individual level as well as at the level of the Bankrsquos organisational units The Code of Ethics is an expression of the corporate culture and tradition from which Banca Intesa originates This document provides on the one hand a framework through which the Bank observes and interprets different situations and on the other hand the ultimate goal to which it strives
Procedure for Managing the Reports of Non-compliance with the Code of Ethics was adopted in 2011 and is implemented in all organisational units of the Bank in the process of delivering reports in cases of suspicion or knowledge of any activities or individual acts that are contrary to the Code of Ethics and other bylaws of the Bank The procedure for managing the reports of noncompliance with the Code of Ethics consists of the following steps non-compliance reporting report analysis translating and delivering the information to the parent Group establishing the status and verifying the facts involving the relevant department proposing corrective actions and delivering reports to relevant stakeholders as well as to the parent Group The Bank employee who noticed any behaviour of one of hisher colleagues that seems not to be in accordance with the moral and ethical principles prescribed by the Code of Ethics delivers a non-compliance report to the following e-mail address etickikodeksbancaintesars The report may also be delivered in hard copy to the following address Banca Intesa ad Beograd Marketing and Communications Department Bulevar dr Zorana Đinđića 2a 11070 Novi BeogradThrough the above mechanism during 2013 Banca Intesa recorded no cases of human rights violation as defined by the Code of Ethics
The Marketing and Communications Department independently as well as in close cooperation with CSR ambassadors delegated representatives of all organisational parts of the Bank implements and coordinates projects and activities in the area of corporate social responsibility The CSR ambassadors provide the Department with necessary information in connection with the implementation of projects and activities and participate in monitoring measuring and reporting to the parent Group and other stakeholders
The Marketing and Communications Department also takes steps to make the CSR criteria a recognisable element of the whole management system and to this end cooperates with the top management in the process of defining the CSR policies and strategies communicating to the highest representatives of the Bank the results of dialogue with the stakeholders their needs and key issues that should be a part of strategic guidelines
11
12 RELATION WITH STAKEHOLDERS
DIALOGUE WITH STAKEHOLDERS
Dialogue with stakeholders is the beginning of continuous progress achieved by carefully monitoring the demands and needs of stakeholders and harmonising them with the Bankrsquos strategy The dialogue is achieved by using different techniques as part of the Bankrsquos regular activities and is a precondition for preparing the materiality matrix and eventually the Sustainability Report
Stakeholder map is based on the international methodology for stakeholder engagement the AA1000 Standard (Institute of Social and Ethical Accountability)
MATERIALITY
Sustainability Report 2013 focuses on the topics that proved to be the most important ones for stakeholders and also for the business of Intesa Sanpaolo and hence of Banca Intesa following the GRI methodology and the AA1000 Standard In accordance with the needs analysis conducted two priority issues stood out which are presented in the table These issues are also present at the local level
STAKEHOLDER MAP
GROUP ENGAGEMENT MECHANISM
CUSTOMERS
Focus groupBenchmarking surveysMeetings workshops seminarsSatisfaction survey Handling and analysis of complaints applications and suggestions
EMPLOYEESEmployee satisfaction surveyTraining and evalution Meetings with trade union
COMMUNITYMeetings with CSosWorking groups working bodies
SUPPLIERSSupplier information form Csr questionnaireRegular communication in tender process
ENVIRONMENTMeetings CSosWorking groups working bodies
CUSTOMERS EMPLOYEES COMMUNITY SUPPLIERS ENVIRONMENT
INDIVIDUALSSMALL BUSINESS
SMESLARGE CORPORATES
LOCAL GOVERNMENTSCONSUMER ASSOCIATIONSBUSINESS ASSOCIATIONSPUBLIC ADMINISTRATION
MANAGERSOFFICERS
EMPLOYEES
LOCAL AND NATIONAL PUBLIC
INSTITUTIONS (REGULATORYBODIES LOCAL GOVERNMENT
ETC)CSOS
MEDIA
DOMESTICFOREIGN
ENVIRONMENTALORGANISATIONS
FUTURE GENERATIONS
12
CUSTOMERS EMPLOYEES SUPPLIERS COMMUNITY ENVIRONMENT
Development of service model and channel in accordance with the
customersrsquo needs
Employee training and professional development
Fair treatment of suppliers Promotion of culture and artsOptimisation of natural
resource utilisation
Product and service qualityMerit recognition
and rewardingCooperation and relations
with suppliersSupport to youth education
and developmentReduction of greenhouse
gas emission
Customer satisfaction Employee protectionPromotion and observance
of ethical and environmental standards in supply chain
Fight against poverty and social exclusion
Support to customers for energy efficiency
improvement
Access to loans for corporatesSafe and healthy
work environment
Strengthening the SME sectorInvolving employees
in company life
Financial inclusion of vulnerable social groups
Work-life balance
Support to customers having financial problems
13
2 Sustainability
14
21 GENERATED ECONOMIC VALUE
Generation of economic value an efficient governance system and careful management of business risks characterise Banca Intesarsquos business model based on transparency and integrity These elements as well as the care for employees environment and the quality of service it provides to its customers are of key importance for the progress for which the Bank strives as a responsible stakeholder in the community in which it operates
MARKET POSITION
According to the official data of the National Bank of Serbia as of December 31 2013 Banca Intesa is the leader in all business segments
DIRECT AND INDIRECT ECONOMIC VALUE GENERATED
2012 2013
Net assets 3635 3727
Customer loans 2363 2404
Customer deposits 2300 2388
Equity 792 863
in million euros
EmploymentStable partner of the government
Reliable support to the economy
Support to the communityTotal income and
expenditure
Banca Intesa employs 3039 people
As an active partner of the government Banca
Intesa supports economic development initiatives
of the Government
Banca Intesa cooperates with 406 suppliers
Banca Intesa participated in numerous community
support projects and implemented 106 donor activities
Total economic value generated by Banca Intesa was RSD 20695651000
The Bank directly provides 3039 jobs and it paid
RSD 193711289679 into the budget of Serbia as taxes and contributions on wages and pensions
The budget of Serbia received 80629605186 dinars in the form of regular tax payments
WithRSD 67069271910EUR 2056318466
USD 73719631GBP 1012544
allocated for procurement it indirectly affects the
stability of business and jobs in its supplier chain
The investment in the community amounted
to RSD 22381000 through donations to the
local community RSD 10000000 through
investment in infrastructure and RSD 299812329 through volunteering
The economic value distributed through operating
costs and personnel expenses and liabilities to the Government and the community amounted to RSD 1116382182660
Banca Intesa continued to post good business results in 2013 as well confirming its leading position in the banking sector of Serbia despite difficult business conditions The Bankrsquos total loans to corporate and retail customers reached 2365 million euros while deposits totalled 2387 million euros The business network consisted of 192 branches 3 mortgage loan centres and 5 mortgage loan offices In addition Banca Intesa had the most developed network of POS terminals and ATMs with 12751 active POS terminals and 255 ATMs
In the retail segment total loans amounted to 667 million euros while deposits increased to 1436 million euros at the end of 2013 Banca Intesa reaffirmed its leading position in e-banking and payment card business during 2013 as well with around 14 million debit and credit cards issued At the same time small business loans reached 126 million euros while loans granted to farmers amounted to 37 million euros
In the corporate segment at the end of 2013 Banca Intesa had a loan portfolio of 1728 million euros continuing the growth from the previous years Corporate deposits were at the level of 968 million euros while the bankrsquos market share in total corporate deposits of the banking sector was 206 at the end of December 2013
Owing to the increase in all key items a net income of 238 million euros was posted Net profit after tax was 76 million euros at the end of December 2013
15
1 ECONOMIC VALUE GENERATED 2012 2013
Interest income 31340971 29588778
Interest expenses -11790051 -9598939
Fee and commission income 7890743 8175478
Fee and commission expenses -2292104 -2648138
Net profit on sale of securities atfair value through profit and loss 1008 590
Net profit on sale of securitiesavailable for sale 49855 4332
Net profit on sale of equity investments 434 0
Net exchange rate loss -13263673 356204
Dividends and share income 2925 1527
Other operating income 554540 676132
Net expenses on indirectly written-off of placements and provisions 1 -5415518 -6935326
Operating and other expenses 2 -189518 -532659
Gains from changes in value of assets and liabilities 31390752 12172042
Losses from changes in value of assets and liabilities -16188419 -10564372
TOTAL ECONOMIC VALUE GENERATED 22091945 20695651
2 ECONOMIC VALUE DISTRIBUTED
21 Operating costs 3
Costs of material -487362 -475379
Building and equipment maintenance costs -753215 -798584
Office and equipment lease costs -934768 -930657
Costs of intellectual services -369026 -315092
Advertising -355296 -280923
Costs of business travel and training of employees 3 -93716 -92586
Other operating costs 3 -2098067 -2130715
TOTAL OPERATING COSTS -5091449 -5023936
22 Employee expenses 3
Wages and salaries -3312415 -3223372
Taxes and contributions on wages and wage benefits 3 -1997940 -1937113
Cost of employees transportation 3 -76490 -84139
Costs of remuneration for temporary and occasional work -5861 -4569
Costs of employees education not related to their job 3 -3157 -6094
Other personnel expenses -172859 -55922
TOTAL INCOME AND EXPENSES
TOTAL EMPLOYEE EXPENSES -5568723 -5311209
23 Expenses related to liabilities to the government
Income tax -830548 -623097
Indirect taxes and duties 3 -161352 -183199
TOTAL EXPENSES RELATED TO LIABILITES TO THE GOVERNMENT -991900 -806296
24 Community-related expenses
Donations and corporate social responsibility 3 -33204 -22381
TOTAL COMMUNITY-RELATED EXPENSES -33204 -22381
TOTAL ECONOMIC VALUE DISTRIBUTED -11685276 -11163822
3 ECONOMIC VALUE RETAINED 4 10406668 95318291 The item differs from the income statement in the annual report in that the Provisions for Employee Benefits Legal Disputes and Restructuring are excluded 2 The item differs from the income statement in the annual report in that the Operating Costs are presented in the section Economic Value Distributed in several segments stated while Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation is not presented within Other Operating Expenses3 The items differ from the income statement in the annual report in that a part of the Operating Costs is reclassified into the following segments Employee Expenses Expenses Related to Liabilities to the Government and Community-Related Expenses4 This represents BIBrsquos profit net of the Provisions for Employee Benefits Legal Disputes and Restructuring the Gains and Losses on Deferred Tax Assets and Liabilities the Depreciation Costs and the Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation
16
22 GOVERNANCE IN BANCA INTESA
CORPORATE GOVERNANCE
Shareholders of Banca Intesa ad Beograd ndash ownership structure Intesa Sanpaolo Holding International SA 7779 Intesa Sanpaolo SPA 1521 International Finance Institution (IFC) 700 The governance of the Banca Intesa joint stock company is organised as a two-tier system
The Bankrsquos Board of Directors consists of five members elected by the General Meeting of Shareholders upon the shareholdersrsquo proposal including the Board Chairman The term of office of Board members is three years with a possibility of re-election The Chairman of the Board of Directors of Banca Intesa is Massimo Malagoli and its members are Ivan Šramko Arthur Philippe Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Executive Board of Banca Intesa consists of six members including the President The term of office of Executive Board members is three years with a possibility of re-election The President of the Executive Board of Banca Intesa is Draginja Đurić the Deputy President of the Executive Board is Marco Capellini and Board members are Darko Popović Head of Retail and Small Business Division Slađana Jelić Head of the Corporate Banking Division Dragica Mihajlović Head of the Financial Management and Treasury Division and Marko Marković Head of the Operations Management Division
Women account for 20 of the members of the Board of Directors and 50 of the members of the Executive Board of Banca Intesa
The Bankrsquos Audit Committee consists of five members including the Chairman The term of office of Committee members is three years with a possibility of re-election The Committee Chairman is Giovanni Bergamini and its members are Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Chairman of the Board of Directors as a governance body does not have a direct executive role given that Banca Intesa organised as a joint stock company with a two-tier governance system delegates executive roles to the Executive Board as a management body that organises the Bankrsquos operations and performs daily monitoring of the activities of the Bank employees while the Board of Directors makes strategic decisions aimed at the Bankrsquos compliance takes care of and is responsible for the accuracy of all reports financial condition and operating results of the Bank addressed to the Bankrsquos shareholders the public and the National Bank of Serbia
In line with the Law on Banks and other regulations members of the Board of Directors are appointed and dismissed by the General Meeting of Shareholders while members of the Executive Board are appointed and dismissed by the Bankrsquos Board of Directors Domestic regulations list conditions that members of the Executive Board and the Board of Directors must meet in order to get prior approval of the regulatory body ie the National Bank of Serbia without which they cannot become members of these boards This includes among other things good business reputation and appropriate qualifications In addition appropriate experience in finance is also required for at least three members of the Board of Directors while at least one member of the Board of Directors must have active knowledge of Serbian and reside in the territory of the Republic of Serbia After obtaining the approval the appointed person is registered with the Business Registers Agency as well
Banca Intesa provided in its bylaws for the mechanisms and channels of direct e-mail communication with its parent group Intesa Sanpaolo with the aim of respecting the individual and dignity of each employee as well as the values proclaimed by the Code of Ethics The Bankrsquos shareholders ie the General Meeting of Shareholders participate in and directly impact the work of the Board of Directors as a governance body in the following ways
bull The General Meeting of Shareholders adopts the business policy and strategy of the Bankbull The General Meeting of Shareholders adopts the Articles of Association and the amendments to the Memorandum and Articles of Associationbull The General Meeting of Shareholders appoints and dismisses the Chairman and members of the Board of
17
Directorsbull The General Meeting of Shareholders appoints and dismisses the external auditorbull The General Meeting of Shareholders considers and adopts the annual report of the Board of Directors
The adopted remuneration policy for the entire human resources of the Group including the variable components is based on equality merit and sustainability of results The guidelines for defining the management remuneration policy are based on objective elements and parameters resulting from the assessment of organisational positions as well as performance and potential with the aim of creating an integrated system for the members of management thus helping their professional development The policy provides for remuneration in the form of benefits which is also based on financial instruments and linked to the results of the company ndash which corresponds to the level of assumed risk and is regulated so as to avoid giving benefits that in the long term are not in accordance with the Grouprsquos interests Based on the performance indicators closely linked with the long-term goals the benefit determination systems are based among other things on the principle of symmetry with the amounts of paid benefits being based on the results achieved at the Group business sector and individual levels and therefore being capable of decreasing significantly and even reaching zero if the minimum indicators that reflect the Group profitability are not achieved also taking into account the risks assumed and the capital used
When it comes to conflicts of interest Banca Intesa has prescribed in accordance with the provisions of the Law on Banks as well as with its bylaws and those of its parent Group an obligation for members of the Board of Directors and the Executive Board to submit a written statement of conflict of interest to the Bankrsquos Board of Directors within one month from the day of taking office The members of the Board of Directors and the Executive Board are obliged in accordance with the bylaws regulating transactions with related parties and the conflict of interest to submit once a year completed standard questionnaires whose content is designed by the parent Group and which contain information relevant for establishing any conflict of interest
One of the methods of sustainability control at Banca Intesa is the power of the Board of Directors as a governance body to set up an integrated risk management system at the Bank and the supervision of this system while the Executive Board identifies the risks to which Banca Intesa is exposed and controls these risks in accordance with the approved policies and procedures The Board of Directors gives approval to the Bankrsquos exposure to one or a group of related parties of over 10 or to an increase in the exposure to over 20 of Bank equity adopts internal audit plan and programme considers external and internal audit reports sets up the internal control system defines the internal organisation and organisational structure of the Bank that ensures the division of duties authority and responsibilities of its employees in a manner that prevents conflict of interest and ensures a transparent and documented process of decision making and implementation decides on disposing with the Bankrsquos fixed assets and the stakes and shares that the Bank has in other legal entities
The work of the Executive Board is evaluated through the MBO (Management by Objectives) system which is based on setting measurable objectives based on which the annual performance is monitored
RISK MANAGEMENT
Risk management is an integral part of the corporate governance of Banca Intesa based on which it is estimated whether the Bank can achieve its business targets in the way consistent not only with the law but also with the public interest safety of people as well as the factors of the natural and social environment Therefore the access to risk management also implies broader social consequences of Bank activity in the environment and in the market
Controlling Socio-environmental Risks in the Governance Process
By a decision of the Executive Board the Bank appointed the persons responsible for environmental protection with the aim of establishing an Environmental Management System ndash EMS and ensuring compliance with the rules of environmental protection and corporate social responsibility in lending operations so that the system would be fully applied until the final collection of all loan instalments A Senior Environmental Management Officer (Deputy President of the Executive Board) and an Environmental Management Coordinator (compliance risk management specialist) were appointedThe Environmental Management Coordinator with the approval of the Senior Environmental Management Officer informs the Executive Board the Asset Quality Committee and the Credit Committee of any significant increase in the level of socio-environmental risks in individual Bank customers particularly in customers with high credit exposure
18
and prepares reports on socio-environmental risks for international development banks towards which the Bank has such reporting obligation
The responsible organisational unit of the Bank monitors risks through the process of assessing loan applications taking into account the criteria related to lending to all customers engaged in production and service activities and the criteria related to environmental risk management
Management of Socio-environmental Risks in Lending
Adequate management and control of socio-environmental risks are essential preconditions for generating reliable and sustainable value and for protecting the Bankrsquos financial stability as well as its reputation
Socio-environmental Risk Management
The Socio-environmental Risk Management Procedure regulates the risk monitoring process in the area of environmental protection employee health and safety and the Bankrsquos social responsibility (protection of cultural heritage fundamental human rights and personal integrity) This Procedure regulates the credit process with regard to socio-environmental risks when approving a credit product to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1000000 euros or higher including the requested new product in case of a credit product from a credit line or other funds approved to the Bank by an international development bank and approval of a long-term credit product funded from other sources The Procedure regulates the rules classified by business lineprocess in the process of socio-environmental risk management
Equator Principles
The Implementation of the Equator Principles for Project Financing procedure applies when preparing and implementing project financing and advisory services in connection with project financing where the investment value of the project is 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes in these facilities can create significant environmental andor social impacts or significantly change the natural environment The goal of the Equator principles is to identify and assess risks and perform risk management based on the criteria defined by the principles with the aim of adhering to the principle of sustainability of natural resources human health human rights cultural heritage and biodiversity
Armaments
The sensitive sectors that the Bank monitors with special attention include armament production and trade In accordance with the relevant bylaw of its parent Group the Policy of Not Financing of Armaments in 2011 Banca Intesa adopted the Procedure for the Performance of Transactions Related to Armament Production and Trade which regulates the identification and preparation of the summary of the customers engaged in armament and military equipment production and trade the monitoring of transactions and loan applications of the customers engaged in armament and military equipment production and trade the approval of transactions and loan applications related to armament and military equipment production and trade in accordance with the Policy of Not Financing of Armaments as well as the preparation of reports on the transactions related to armament and military equipment production and trade
Reputational Risk Management
The Bank attaches great importance to reputational risks that are assessed as part of the compliance control system which is within the competence of the Compliance Office Banca Intesa believes that the standards in this area as well as the business ethics are the cornerstone of banking operations which by their nature are based on trust Bylaws such as the Code of Ethics policies and other define that any non-compliance with the bylaws the principles and values contained in them as well as with external regulations (laws and secondary legislation) exposes the Bank to a certain level of reputational risks
Fight Against Corruption and Compliance
The internal regulatory source that governs the system for control and mitigation of corruption risks comprises the Code of Ethics the Code of Conduct the Rulebook on Relations with Political Parties and the following Bank procedures the Procedure for the Prevention of Internal Fraud and Abuse at the Bank and the Employment Termination Procedure
19
The Code of Conduct prescribes in detail the rules in connection with receiving and giving gifts and the measures prescribed in the event of corruption are related to the violation of work duties so the measures stipulated by external regulations ie the Labour Law (eg compensation for damage employee suspension or termination) but also the Criminal Code may be pronounced against an employee Based on the Legal Department records no proceedings were initiated against Banca Intesa ad Beograd in connection with corruption since no complaints or notices prior to complaint were delivered during 2013
In the same period the Suspicious Transactions and Know Your Customer training courses were held in this segment by means of e-learning which were received by as many as 8663 of employees during 2013 The training courses were provided for by the current regulations and internal acts of the Bank and were aimed at informing the employees and refreshing their knowledge of the obligation of collecting information about each customer and completing appropriate questionnaires In addition the training informed the employees about the new processes that were implemented as well as about mandatory observance of all duties relating to knowing monitoring and reporting suspicious transactions of customers
The Rulebook on Relations with Political Parties prescribes the obligation of the Bank to refrain from granting donations and sponsorship tobull Political parties and any organisations related to thembull Political movements and their organisational unitsbull Trade union organisationsbull Competent authorities and institutions
The prohibition of granting donations and sponsorship to the above organisations aims at the protection against any grants that would result in a privileged position to the Bank or unfair decisions in favour of the Bank
The Compliance Office as well as the relevant organisational units of the Bank are committed to the regulation of processes and the definition of procedures and their operating rules as well as practice which efficiently prevent the violation of applicable regulations The Compliance Office also provides support to the highest bodies of the Bank in monitoring the compliance risk The compliance risk assessment process is constant Through semi-annual reporting these risks are identified and priority measures for their elimination or mitigation are determined ie the level of efficiency of the existing compliance controls is assessed
The Internal Audit provides direct support to the highest bodies of the Bank in monitoring the compliance with and adequacy of the rules contained in the Bankrsquos bylaws If it identifies critical issues during its activity the Internal Audit informs the relevant organisational units and the highest bodies of the Bank with the aim of determining adequate measures for risk mitigation and the method of their implementation
Protection of Health and Safety
Occupational health and safety at Banca Intesa are regulated in accordance with international directives recommendations and positive laws of the Republic of Serbia
During 2013 an assessment was made of the situation regarding occupational health and safety and the risk level for 207 facilities at which work is performed A schedule of elimination of recorded risks to the health of Bank employees was defined and implemented according to priorities and the budget planned In connection with this risk assessment documents were updated as well
When it comes to physical security three robberies were recorded in 2013 versus two a year earlier and investments in technical protection systems continued
Risk Management in Supply Chain
Supplier Check
The Procurement Unit and the organisational part in charge of procurement are obliged to evaluate the received supplier bids by applying the methods of qualitative and quantitative analysis as well as to align the bid evaluation criteria prior to inviting the bidders to submit offers by combining specific criteria one of which is the Compliance of Bidderrsquos Operations with the Corporate Social Responsibility Principles
20
Health and Safety Risk Assessment
In accordance with the Procurement Policy members of Intesa Sanpaolo Group are expected to include the parameters of assessment of environmental protection and occupational health protection in their procurement process giving priority to the use of recycled paper highly energy efficient products and environment-friendly technical equipment
Group members must include special provisions in the procurement contracts they conclude with their suppliers These provisions provide for the obligation of suppliers to comply with the principles specified in the Intesa Sanpaolo Rules for the Environmental and Energy Policy Constant checks are performed in the countries where legal measures regarding environmental protection were adopted in order to ensure compliance
In the area of personnel training and spreading the awareness of the importance of these issues the training of the employees who directly communicate with suppliers must include fields related to corporate social responsibility as well as to the responsibility for environmental protection
21
CUSTOMERS
Banca Intesa built its leading position in the market of Serbia and the status of stable and reliable partner by fostering trust in the relations with its customers The strengthening of relations with customers is based on constant improvement of the quality of products and services proceeding from specific needs of each segment as well as on full respect for the principles of equality and availability of products and services Key aspects of doing business with customers are the following
bull SUPPORT TO ECONOMY AND AGRICULTUREbull FINANCIAL INCLUSION AND EDUCATIONbull CUSTOMER SATISFACTION
SUPPORT TO ECONOMY AND AGRICULTURE
Banca Intesa continued to provide support to the economy and the agricultural sector in 2013 as well focusing on the development of entrepreneurship and self-employment particularly in the SME segment as well as on the improvement of public infrastructure
Support to the Public Sector
Banca Intesa offered loans from the credit line of the German Development Bank (KfW) to the public sector for financing infrastructure projects and the procurement of equipment in the following areas water management sewerage and wastewater management solid waste management environmental protection and pollution control transport infrastructure public transport and communication systems infrastructure facilities fostering economic development and other social and utility services During 2013 Banca Intesa granted 11 loans totalling 852 million euros while the total value of the project is 47 million euros
Development of Entrepreneurship
Banca Intesa supported the programme of measures of the Government of the Republic of Serbia for encouraging SMEs and entrepreneurs through subsidised loans for liquidity and working assets in 2013 as well The Bankrsquos commitment to provide continuously support to its customers in this segment is also demonstrated by the fact that the Government of the Republic of Serbia implements its programme of measures for the fifth consecutive time During 2013 the Bank granted 414 subsidised loans to SMEs totalling 562 billion dinars which accounted for 107 of the total loans to the SME sector The small business sector was granted 186 billion dinars and 1347 loans which accounted for 15 of the number of loans and 16 of the total loan disbursements to this segment
In cooperation with the National Bank of Serbia and the Kingdom of Denmark the Bank launched the Local Economic Development in the Balkans (LEDIB) programme intended for enterprises entrepreneurs and registered farms from the small business segment with the aim of improving local economic development creating new jobs strengthening organisational capacities introducing new eco-friendly technologies and other favourable impacts on the overall development The credit line was intended for the Nišava Pčinja Toplica Jablanica and Pirot Districts and in 2013 the Bank granted 39 loans totalling 505208 euros under this programme which accounted for 04 of the number of loans and 05 of the total loan disbursements to the small business segment At the same time from the credit line of the European Fund for Southeast Europe (EFSE) which supports enterprises and registered farms through investments and loans for working assets 227 million euros were granted in the small business segment which accounted for 22 of loan disbursements in the segment
With the aim of supporting the promotion and strengthening of womenrsquos entrepreneurship Banca Intesa helped the Association of Businesswomen in Serbia in the organisation of an international conference entitled New Age Woman Entrepreneur New Opportunities for Recovery of Economy in the Region The event contributed
22
to further positioning of Banca Intesa as a bank that actively supports entrepreneurship in the country as part of its efforts to contribute to economic recovery and growth For this purpose the Bank also has in its offer loans for women entrepreneurs in Vojvodina in the form of start-up loans for unemployed women and women who have had a business for up to three years The Bank granted 8 loans totalling 98 million dinars under this programme during 2013 which accounted for a 3 share in the number of loans and a 1 share in the total investment loan disbursements in the small business segment
Promotion of Agricultural Sector
Taking into account that the agricultural sector is very specific because it has a special social as well as environmental importance in addition to economic importance for many years Banca Intesa has been encouraging development and investing in projects and individuals that encourage with their activities further rural development and contribute to an increase in the competitiveness of domestic agriculture
Aware of the great economic potential of this industry as part of the LEDIB programme the Bank granted eight loans to registered farms in 2013 totalling 76219 euros which accounted for 02 of the number of loans and 03 of the total loan disbursements to this customer segment In addition in cooperation with the Guarantee Fund of the Autonomous Province of Vojvodina long-term loans for purchasing new agricultural machinery and equipment were available to customers During 2013 the Bank granted 82 loans of this type totalling 219 million euros which accounted for a 15 share in the number of loans and a 25 share in the total investment loan disbursements in the agricultural segment
In addition on the occasion of the 80th International Agricultural Fair in Novi Sad the Bank prepared a special credit offer intended for owners of registered farms which included the Intesa Farmer dinar loan for financing spring works as well as the Intesa Farmer loan for purchasing agricultural machinery During 2013 22 loans were granted for purchasing tractors and agricultural machinery totalling 341 million dinars which accounted for a 4 share in the number of loans and a 3 share in the total amount of agricultural investment loan disbursements
Banka Intesa launched the Intesa Farmer of the Year project to contribute in yet another way to the promotion of agricultural production in the country and to the strengthening of its competitiveness As part of the project the Bank awarded the most successful farmers in four categories ndash Intesa Crop Farmer Intesa Vegetable Grower Intesa Fruit Grower and Intesa Livestock Breeder and all winners won a trip to Germany to visit the international agricultural fair in Berlin The criteria based on which the Committee selected the winners of the title Intesa Farmer of the Year were the annual results achieved in agricultural production application of modern technologies in production activities the number of household members engaged in the production as well as the minimum three-year cooperation with the Bank which included a loan and regular settlement of their financial obligations
FINANCIAL INCLUSION AND LITERACY
Banka Intesa believes that the availability of financial products to all segments of society is an essential precondition for sustainable development In line with this position the Bank added to its offer specific products that promote financial inclusion and provide support during economic crisis to the most vulnerable social groups such as the elderly or youth as well as to solving broader social problems such as housing availability or health care services
Responding to the Needs of the Community
In 2013 Banca Intesa included in its offer the Intermezzo Cash Loan a new model of cash loan which offers to its users as a unique benefit in the domestic market a possibility of postponing the payment of monthly instalment up to five times during the repayment period Moreover as an additional functionality the Intermezzo loan includes insurance against job loss with no additional cost to the customer The Bank believes that the repayment flexibility provided by this loan model offers citizens unique support in the market at a time when they estimate that they need it most In 2013 Banca Intesa granted 11256 Intermezzo cash loans totalling 198 million euros which accounted for 235 of the total amount of cash loans disbursed during the year
Banca Intesa was the first in the Serbian market to offer loans to pensioners aged up to 74 years The Senior Cash Loans were designed specifically to fit the needs of senior citizens and they also include life insurance which is included in the cost of loan during the entire repayment period During the previous year 19774 loans were granted totalling 239 million euros which accounted for 284 of the total cash loans granted in 2013
23
In 2012 as support to citizens in financing medical services the Intesa Vita programme of consumer and cash loans was developed which includes loans for in vitro fertilisation harvesting and storage of stem cells DNA analysis dental services medical spa and wellness treatments as well as for purchasing baby supplies In 2013 the programme was extended to new purposes - laser vision correction vein operation and purchase of medical aids and 28 loans were granted totalling 126345 euros which accounted for 8 of the total cash loans granted during the year In this unique way the Bank provides the citizens with the possibility of taking care of their health in a responsible and timely manner without suddenly burdening their home budgets
Moreover the Bank continued to provide subsidised housing loans in 2013 as well in order to provide support to young married couples in solving their housing problems granting 224 loans totalling 864 million euros which was 205 of the total housing loans granted during the year At the same time 6544 refinancing loans with insurance against job loss or disability in case of an accident were granted totalling 146 million euros which enabled the customers to service their outstanding liabilities towards Banca Intesa and other banks and which accounted for 173 of the Bankrsquos total cash loans granted during the year
Banca Intesa introduced the Visa Classic Paralympic and Visa Electron Paralympic cards the first charity payment cards in the country in cooperation with the Paralympic Committee of Serbia This was the first initiative aimed at establishing a stable and independent mechanism for long-term assistance to athletes with disabilities and developing paralympic sport in the country During 2013 8345 Visa Classic Paralympic and Visa Electron Paralympic cards were issued which accounted for 14 of all cards issued during the year The Bank also provides debit cards for students which enable free account opening and maintenance for all students who opted for an Intesa Visa Electron Easy Travel Card (ETC) or a Maestro ISIC Card of Banca Intesa of which 4048 were issued in 2013 accounting for 18 of the debit cards issued during the year
Constantly striving to promote savings in 2013 the Bank introduced a new savings model the Month by Month Savings which provides customers with a possibility of reaching higher amounts of savings with lower monthly allocations The product enables saving in dinars and euros at a very attractive interest rate while the customers also have an opportunity to set the payment date and amount themselves
Financial Education
In 2013 as well Banca Intesa remained true to its commitment to support actively financial education by improving customer knowledge Thus in cooperation with Banca IMI SpA a member of Intesa Sanpaolo Group another Intesa Academia workshop was organised this time on the subject of advanced financing and risk management instruments so that Banca Intesarsquos customers could find out more about the possibilities of financing in the international and domestic bond markets and about hedging products for successful management of market risks The workshop brought together the leading world experts in the areas of financing and risk management as well as the most successful customers of the Bank In order to assist its customers in the SME segment in getting informed in more detail about the regulations relating to loan approval and collection Banca Intesa took part in the working breakfast on the subject Security Instruments and Their Collection as the Condition for Financing Company Growth held at the premises of the Serbian Association of Managers On this occasion the legal framework was presented about which enterprises should also get informed in order to know that documentation they will need if they opt for bank loans
At the same time the Factoring Department designed and launched an initiative of organising factoring workshops at the Bankrsquos regional centres Factoring workshops are an interactive form of cooperation and communication with customers with the focus on understanding the term and essence of factoring themselves With the support of regional centres a total of 27 factoring workshops were organised in 22 cities in two cycles in late 2012 and in early 2013 which were attended by nearly 300 corporate customers
As a member of the United Nations Global Compact and its Working Group on CSR in Banking and Finance Banca Intesa works together with the other members on the implementation of projects in the area of financial education which is the main goal of this Group One of the projects actively supported by the Bank is the cooperation with seven secondary schools of economics from six cities in Serbia where there is a ldquobank clerkrdquo educational profile in the area of thematic lectures for teachers and students The Bank representatives gave three lectures during 2013
24
CUSTOMER SATISFACTION
Banca Intesa believes that it is only through an open dialogue with its customers that it can truly understand their needs and expectations and build a long-term partner relationship with them
Meeting the Needs of Customers
Ever since 2008 Banca Intesa has been conducting surveys of its customersrsquo satisfaction with the Bankrsquos products and services in accordance with the methodology of the European Customer Satisfaction Index (ECSI) as part of its initiative named Listening 100 This is a continuous process analyses are made based on the results obtained in the survey and actions are proposed accordingly for improving the customer satisfaction The surveys are repeated at six-monthannual intervals in order to collect feedback from the customersrsquo perspective for the measures taken for the purpose of improving the satisfaction index as well as identifying the directions for further improvement
Looking at the results of the customer satisfaction survey at the end of 2013 a conclusion arises that among other things the basis of good results is a positively rated staff treatment of customers The ECSI as well as the Loyalty indices are stable with a high percentage of customers who stated they would remain Banca Intesa customers in the following 12 months Attempting to encourage its customers to express their opinions in the previous year the Bank clearly communicated the improvements implemented so far based on their suggestions
During 2013 as well Banca Intesa continued to increase the number of branches equipped with the Queue Management System (QMS) which covered approximately 40 per cent of active customers at the end of the year In addition to having a positive impact on customer satisfaction the QMS expansion made it possible to obtain the data necessary for better analysis and organisation of branch operation In addition free internet access via Wi-Fi and daily newspapers were made available to customers at the largest branches
As part of its efforts to improve further customer satisfaction in 2013 Banca Intesa implemented training of over 1500 employees both in its branch network and at its headquarters The training which was implemented as a continuation of the Education 100 programme initiated in 2011 was held on the subject of managing customer satisfaction but also their entire experience in each contact with the Bank
In addition to its efforts to improve its approach to customers and recognising the importance of two-way communication the Bank developed efficient mechanisms for collecting and recording customer feedback The Bank responds to all complaints sent to the Bank via formal complaints mechanisms and does so within the statutory time limit and in accordance with the decision of the National Bank of Serbia Each customer may also personally contact unit employees and if the customer is not satisfied with the answer received heshe can apply to the National Bank of Serbia as the second-instance body with the possibility of mediation The following are available to customers
bull Phone line +381 11 310 88 88bull E-mail kontaktbancaintesarsbull Fax +381 11 310 88 55bull Personal contact ie submitting a written complaint in personbull Contact form on the official website of the Bankbull Bank corporate accounts on social networks (Facebook and Twitter)bull Postal address of the Customer Satisfaction Management Unit Omladinskih brigada 90b 11070 New Belgrade
Transparent Advertising
Lasting relationships based on trust require communication that enables customers to understand clearly the characteristics and value of Banca Intesa products and services Therefore the Bank strives to contribute to the simplification of its products in communication
In its advertising the Bank clearly specifies all customer costs and all of them are included when calculating the effective interest rate which is always clearly and visibly shown as well as representative examples that contain all data in accordance with the Law on the Protection of Financial Service Consumers which demonstrates full transparency when it comes to Bank pricing policy
25
The Bank also strives to formulate the agreements so that they are simple to understand minimising possible misunderstandings and ambiguity by providing clear and exhaustive information It informs its customers in a timely manner of any changes in the agreements and their terms
Data Security
The protection of customer security as well as their assets and confidential information is not only Banca Intesarsquos primary duty but also the basis of the relationship of trust that the Bank wants to reinforce with its customers The protection of persons their assets and valuables as well as a multitude of data and internal organisational processes fully meets the criteria of reliability continuity and confidentiality In addition to its legal obligations Banca Intesa complies with the criteria of absolute transparency in informing its customers of their rights to privacy and the way it treats their personal information
In 2013 Banca Intesa did not find any founded complaint in connection with the violation of customer privacy or any disclosure leakage or theft of customer information
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
6
11 BANK PROFILE
INTESA SANPAOLO
Intesa Sanpaolo is one of the leading banking groups in Europe and the largest in Italy Created in 2007 by the merger of the leading Italian banks Sanpaolo IMI and Banca Intesa the Group holds the leading position in Italy in terms of providing financial support to retail and corporate customers The Group is committed to improving its services to retail customers and providing significant support to the business of its customers as well as to the overall economic development of the countries where it operates
Intesa Sanpaolo serves around 111 million customers through its well-developed business network of more than 4700 branches The Group focuses its business operations on Central and Eastern Europe the Middle East and Northern Africa where it serves 84 million customers in 12 countries through a network comprising around 1400 branches it ranks first in Serbia second in Croatia and Slovakia third in Albania fifth in Bosnia and Herzegovina Egypt and Hungary and eighth in Slovenia Intesa Sanpaolo also supports corporate customers through its international network covering 29 countries with an emphasis on the Middle East Northern Africa the US Russia China and India
BANCA INTESA
Banca Intesa is the leading financial institution in the Serbian market measured by key performance indicators ndash total equity assets loans and deposits Banca Intesarsquos commitment to base its business on innovativeness and the highest level of professionalism was recognised by more than 167 million customers individuals entrepreneurs small and medium-sized enterprises large companies and local governments
The Bank operates through a business network comprising more than 190 branches in 111 cities throughout Serbia relying on the knowledge and expertise of its professional team of around 3000 employees Banca Intesa has the most developed network of POS terminals and ATMs in the market in addition it is the leader in the card business segment with more than 14 million debit and credit cards issued
Striving to complete its offer of financial services in 2006 Banca Intesa founded a leasing company Intesa Leasing doo Belgrade which is also a member of Intesa Sanpaolo Group The operation of the leasing company is not covered by this Report
In July 2013 Euromoney the leading global magazine in the area of financing and banking declared Banca Intesa the best bank in Serbia in 2012 granting it the Excellence Award For the fourth consecutive year the Bank received this renowned award which is given based on an analysis of a series of quantitative and qualitative criteria such as business parameters innovativeness as well as portfolio quality
At the same time Banca Intesa also received an award of the EMEA Finance magazine as the best bank in Serbia in 2012 in the category of banks operating as part of international groups The winners of European banking awards are selected based on an evaluation by a jury which is guided by bank achievements within the context of the macroeconomic environment in which it operates as well as relative to the situation in the entire banking sector The key elements in the juryrsquos work were sustainable growth and commitment to customers
1991 2005 2006 2007 2008
One of the first private banks in Serbia with the head office in Belgrade
Becomes a member of Banca Intesa Group now named Intesa Sanpaolo
Intesa Leasing foundedBecomes the leading
bank in Serbia by all key performance indicators
Panonska Banka acquired and the number of
employees increased to 3000 Novi Sad becomes
the second seat of the Bank
BANK HISTORY
7
MISSION
Banca Intesarsquos mission is to provide excellence in banking and financial services for its customers leveraging on developing its presence in all the areas in which it operates and a style of growth that focuses on sustainable results and on establishing a trust-based process that stems from customer and shareholder satisfaction from its employeesrsquo sense of belonging and listening to the needs of local communities
The Bankrsquos growth strategy strives to create stable and sustainable values from the economic financial socio-environmental points of view building upon the Bankrsquos fundamental corporate values in its relations with all stakeholders
CORPORATE VALUES
INTEGRITY EXCELLENCE TRANSPARENCY RESPECT
FOR EACH INDIVIDUAL
EQUALITYINDIVIDUAL
VALUES
RESPONSIBLE USE OF
RESOURCES
We pursue our goals with honesty
fairness and with a sense of
responsibility in full compliance with the rules and principles of ethics mandated by the profession in the spirit of signed
agreements
We set ourselves the goal of continuous
improvement planning future activities and anticipating
challenges along with fostering
extensive creativity aimed at innovations moreover we recognise and reward merits and quality
We are committed to make
transparency the basis for all our activities
communication and contracts with the aim of enabling our stakeholder to make independent informed decision
We intend to combine large-format business with deep local
roots and to be a bank with a broad vision while not
losing sight of the man as an individual
We are committed to eliminating any form of
discrimination in our conduct and to respecting gender
racial religious political linguistic and intellectual diversity trade
union preferences as well as the
diversity in terms of age and abilities
The value of each individual
guides our modus operandi we use listening and dialogue
techniques as tools for continually
improving relations with all
stakeholders
We strive to use carefully all resources and to promote the conduct based on the optimal
use of resources and avoidance of waste and losses
giving priority to the choices that consider sustainability
STRATEGIC APPROACH TO SUSTAINABILITY AND STRATEGY IN PRACTICE
Operating against the backdrop of modest economic recovery and complex business environment Banca Intesa opted for a responsible business strategy that is based on maintaining the system stability on the one hand and monitoring the needs of citizens and economic entities on the other Guided by clear goals in these areas the Bank continued to create value for its customers while contributing to the economic and social development of the broader community Constant care of customer satisfaction expressed through maximum professionalism in the work and a high level of innovativeness remained at the top of the priority list as did constant improvement of the products and services the Bank provides to its customers Owing to such approach Banca Intesa maintained its stable credit activity and increased its market share in lending although the domestic banking sector as a whole recorded a decrease in lending due to lower demand and a high share of non-performing loans In addition further growth was recorded in the Bankrsquos total deposits and its market share in this business segment as well reflecting a high level of customer confidence
In line with its strategic commitment to integrate fully the sustainability concept into its long-term business plans but also into its everyday activities and decisions in 2013 Banca Intesa also sought to meet the needs of all stakeholders its employees shareholders and customers as well as the entire social community By constantly improving its CSR practices during the previous year the Bank launched new projects aimed at providing support to the community and continued investing considerable funds in education culture health care and sports and the primary area of its activity was the strengthening of the culture of volunteering In addition special products were designed in response to the growing needs of customers and a stimulating work environment was provided to the employees
JOINT INITIATIVES
Promoting the international business standards Banca Intesa is particularly committed to the development and introduction of corporate social responsibility as an integral part of its business practice as well as to raising awareness of the business community and the broader community of the importance of this concept As the leading financial institution in the country the Bank has a responsibility for the broader social and economic progress as well and therefore advocates a better quality of life prosperity and development of economy and the entire society through its active participation in the work of business associations
8
UNITED NATIONS GLOBAL
COMPACT
BUSINESS LEADERS FORUM
SERBIAN ASSOCIATION OF MANAGERS
AMERICAN CHAMBER OF COMMERCE
FOREIGN INVESTORS COUNCIL
NATIONAL ALLIANCE FOR LOCAL ECONOMIC
DEVELOPMENT
CHAMBER OF ITALIAN
AND SERBIAN BUSINESSPEOPLE
The largest global CSR network
bringing together more than
10000 members throughout
the world and promoting the protection of human and
labour rights and the environment and fight against
corruption
The first business network for CSR in Serbia comprising
20 members
A business association founded
with the aim of becoming a credible social partner of the Serbian Government
in the process of improving the businessenvironment
and accelerating economic
development
An organisation promoting the improvement of business
environment in Serbia as well as partnership
between US and Serbian companies
for the purpose of economic development
A business association whose activities contribute to the improvement of the investment
and business climate in Serbia
A business association that brings together
representatives of all three sectors of
society ndash companies municipalities
and NGOs which work together
on improving the conditions for local economic
development and doing business
A non-profit organisation that fosters improves
and develops trade between Italy and Serbia
9
CROSS REFERENCE TABLE
UNITED NATIONS GLOBAL COMPACT PRINCIPLES (UNGC)CORRESPONDING GRI INDICATOR
HUMAN RIGHTS
PRINCIPLE 1 BUSINESSES SHOULD SUPPORT AND RESPECT THE PROTECTION OF INTERNATIONALLY PROCLAIMED HUMAN RIGHTS AND
LA 4
LA 13
LA 15
HR 11
PR 8
PRINCIPLE 2 MAKE SURE THAT THEY ARE NOT COMPLICIT IN HUMAN RIGHTS ABUSES HR 11
LABOUR
PRINCIPLE 3 BUSINESSES SHOULD UPHOLD THE FREEDOM OF ASSOCIATION AND THE EFFECTIVE RECOGNITION OF THE RIGHT TO COLLECTIVE BARGAINING
LA 4
PRINCIPLE 4 THE ELIMINATION OF ALL FORMS OF FORCED AND COMPULSORY LABOUR
PRINCIPLE 5 THE EFFECTIVE ABOLITION OF CHILD LABOUR AND
PRINCIPLE 6 THE ELIMINATION OF DISCRIMINATION IN RESPECT OF EMPLOYMENT AND OCCUPATION LA 2
LA 13
LA 15
HR 11
ENVIRONMENT
PRINCIPLE 7 BUSINESSES SHOULD SUPPORT A PRECAUTIONARY APPROACH TO ENVIRONMENTAL CHALLENGES EN 26
PRINCIPLE 8 UNDERTAKE INITIATIVES TO PROMOTE GREATER ENVIRONMENTAL RESPONSIBILITY AND EN 4
EN 5
EN 8
EN 26
PR 3
PRINCIPLE 9 ENCOURAGE THE DEVELOPMENT AND DIFFUSION OF ENVIRONMENTALLY FRIENDLY TECHNOLOGIES EN 5
EN 26
ANTI-CORRUPTION
PRINCIPLE 10 BUSINESSES SHOULD WORK AGAINST CORRUPTION IN ALL ITS FORMS INCLUDING EXTORTION AND BRIBERY SO 3
SO 4
SO 6
10
Given that they were added subsequently to the new GRI guidelines version G31 the LA 15 and HR 11 indicators are entered into the cross reference table according to the authorrsquos estimate
In accordance with the GRI principle of materiality based on which priority topics present in the report are defined the corresponding indicators are not covered by this report taking into account their relevance to the banking sector The bank as an active member supports the promotion of all 10 global compact principles in its partners suppliers customers and in the general business and social community
SUSTAINABILITY MANAGEMENT
In order to achieve its business goals as well as those relating to socio-environmental dimensions Banca Intesa introduced ethical responsibility as a criterion in the process of decision-making regarding all stakeholders which means that socio-environmental issues are integrated in the process of product and service development risk management as well as in loan granting and supplier selection
The adoption of the Code of Ethics with the defined values to which Banca Intesa is committed introduced a management model based on the principle of accountability that requires commitment to aligning everyday business activities with the declared values at the individual level as well as at the level of the Bankrsquos organisational units The Code of Ethics is an expression of the corporate culture and tradition from which Banca Intesa originates This document provides on the one hand a framework through which the Bank observes and interprets different situations and on the other hand the ultimate goal to which it strives
Procedure for Managing the Reports of Non-compliance with the Code of Ethics was adopted in 2011 and is implemented in all organisational units of the Bank in the process of delivering reports in cases of suspicion or knowledge of any activities or individual acts that are contrary to the Code of Ethics and other bylaws of the Bank The procedure for managing the reports of noncompliance with the Code of Ethics consists of the following steps non-compliance reporting report analysis translating and delivering the information to the parent Group establishing the status and verifying the facts involving the relevant department proposing corrective actions and delivering reports to relevant stakeholders as well as to the parent Group The Bank employee who noticed any behaviour of one of hisher colleagues that seems not to be in accordance with the moral and ethical principles prescribed by the Code of Ethics delivers a non-compliance report to the following e-mail address etickikodeksbancaintesars The report may also be delivered in hard copy to the following address Banca Intesa ad Beograd Marketing and Communications Department Bulevar dr Zorana Đinđića 2a 11070 Novi BeogradThrough the above mechanism during 2013 Banca Intesa recorded no cases of human rights violation as defined by the Code of Ethics
The Marketing and Communications Department independently as well as in close cooperation with CSR ambassadors delegated representatives of all organisational parts of the Bank implements and coordinates projects and activities in the area of corporate social responsibility The CSR ambassadors provide the Department with necessary information in connection with the implementation of projects and activities and participate in monitoring measuring and reporting to the parent Group and other stakeholders
The Marketing and Communications Department also takes steps to make the CSR criteria a recognisable element of the whole management system and to this end cooperates with the top management in the process of defining the CSR policies and strategies communicating to the highest representatives of the Bank the results of dialogue with the stakeholders their needs and key issues that should be a part of strategic guidelines
11
12 RELATION WITH STAKEHOLDERS
DIALOGUE WITH STAKEHOLDERS
Dialogue with stakeholders is the beginning of continuous progress achieved by carefully monitoring the demands and needs of stakeholders and harmonising them with the Bankrsquos strategy The dialogue is achieved by using different techniques as part of the Bankrsquos regular activities and is a precondition for preparing the materiality matrix and eventually the Sustainability Report
Stakeholder map is based on the international methodology for stakeholder engagement the AA1000 Standard (Institute of Social and Ethical Accountability)
MATERIALITY
Sustainability Report 2013 focuses on the topics that proved to be the most important ones for stakeholders and also for the business of Intesa Sanpaolo and hence of Banca Intesa following the GRI methodology and the AA1000 Standard In accordance with the needs analysis conducted two priority issues stood out which are presented in the table These issues are also present at the local level
STAKEHOLDER MAP
GROUP ENGAGEMENT MECHANISM
CUSTOMERS
Focus groupBenchmarking surveysMeetings workshops seminarsSatisfaction survey Handling and analysis of complaints applications and suggestions
EMPLOYEESEmployee satisfaction surveyTraining and evalution Meetings with trade union
COMMUNITYMeetings with CSosWorking groups working bodies
SUPPLIERSSupplier information form Csr questionnaireRegular communication in tender process
ENVIRONMENTMeetings CSosWorking groups working bodies
CUSTOMERS EMPLOYEES COMMUNITY SUPPLIERS ENVIRONMENT
INDIVIDUALSSMALL BUSINESS
SMESLARGE CORPORATES
LOCAL GOVERNMENTSCONSUMER ASSOCIATIONSBUSINESS ASSOCIATIONSPUBLIC ADMINISTRATION
MANAGERSOFFICERS
EMPLOYEES
LOCAL AND NATIONAL PUBLIC
INSTITUTIONS (REGULATORYBODIES LOCAL GOVERNMENT
ETC)CSOS
MEDIA
DOMESTICFOREIGN
ENVIRONMENTALORGANISATIONS
FUTURE GENERATIONS
12
CUSTOMERS EMPLOYEES SUPPLIERS COMMUNITY ENVIRONMENT
Development of service model and channel in accordance with the
customersrsquo needs
Employee training and professional development
Fair treatment of suppliers Promotion of culture and artsOptimisation of natural
resource utilisation
Product and service qualityMerit recognition
and rewardingCooperation and relations
with suppliersSupport to youth education
and developmentReduction of greenhouse
gas emission
Customer satisfaction Employee protectionPromotion and observance
of ethical and environmental standards in supply chain
Fight against poverty and social exclusion
Support to customers for energy efficiency
improvement
Access to loans for corporatesSafe and healthy
work environment
Strengthening the SME sectorInvolving employees
in company life
Financial inclusion of vulnerable social groups
Work-life balance
Support to customers having financial problems
13
2 Sustainability
14
21 GENERATED ECONOMIC VALUE
Generation of economic value an efficient governance system and careful management of business risks characterise Banca Intesarsquos business model based on transparency and integrity These elements as well as the care for employees environment and the quality of service it provides to its customers are of key importance for the progress for which the Bank strives as a responsible stakeholder in the community in which it operates
MARKET POSITION
According to the official data of the National Bank of Serbia as of December 31 2013 Banca Intesa is the leader in all business segments
DIRECT AND INDIRECT ECONOMIC VALUE GENERATED
2012 2013
Net assets 3635 3727
Customer loans 2363 2404
Customer deposits 2300 2388
Equity 792 863
in million euros
EmploymentStable partner of the government
Reliable support to the economy
Support to the communityTotal income and
expenditure
Banca Intesa employs 3039 people
As an active partner of the government Banca
Intesa supports economic development initiatives
of the Government
Banca Intesa cooperates with 406 suppliers
Banca Intesa participated in numerous community
support projects and implemented 106 donor activities
Total economic value generated by Banca Intesa was RSD 20695651000
The Bank directly provides 3039 jobs and it paid
RSD 193711289679 into the budget of Serbia as taxes and contributions on wages and pensions
The budget of Serbia received 80629605186 dinars in the form of regular tax payments
WithRSD 67069271910EUR 2056318466
USD 73719631GBP 1012544
allocated for procurement it indirectly affects the
stability of business and jobs in its supplier chain
The investment in the community amounted
to RSD 22381000 through donations to the
local community RSD 10000000 through
investment in infrastructure and RSD 299812329 through volunteering
The economic value distributed through operating
costs and personnel expenses and liabilities to the Government and the community amounted to RSD 1116382182660
Banca Intesa continued to post good business results in 2013 as well confirming its leading position in the banking sector of Serbia despite difficult business conditions The Bankrsquos total loans to corporate and retail customers reached 2365 million euros while deposits totalled 2387 million euros The business network consisted of 192 branches 3 mortgage loan centres and 5 mortgage loan offices In addition Banca Intesa had the most developed network of POS terminals and ATMs with 12751 active POS terminals and 255 ATMs
In the retail segment total loans amounted to 667 million euros while deposits increased to 1436 million euros at the end of 2013 Banca Intesa reaffirmed its leading position in e-banking and payment card business during 2013 as well with around 14 million debit and credit cards issued At the same time small business loans reached 126 million euros while loans granted to farmers amounted to 37 million euros
In the corporate segment at the end of 2013 Banca Intesa had a loan portfolio of 1728 million euros continuing the growth from the previous years Corporate deposits were at the level of 968 million euros while the bankrsquos market share in total corporate deposits of the banking sector was 206 at the end of December 2013
Owing to the increase in all key items a net income of 238 million euros was posted Net profit after tax was 76 million euros at the end of December 2013
15
1 ECONOMIC VALUE GENERATED 2012 2013
Interest income 31340971 29588778
Interest expenses -11790051 -9598939
Fee and commission income 7890743 8175478
Fee and commission expenses -2292104 -2648138
Net profit on sale of securities atfair value through profit and loss 1008 590
Net profit on sale of securitiesavailable for sale 49855 4332
Net profit on sale of equity investments 434 0
Net exchange rate loss -13263673 356204
Dividends and share income 2925 1527
Other operating income 554540 676132
Net expenses on indirectly written-off of placements and provisions 1 -5415518 -6935326
Operating and other expenses 2 -189518 -532659
Gains from changes in value of assets and liabilities 31390752 12172042
Losses from changes in value of assets and liabilities -16188419 -10564372
TOTAL ECONOMIC VALUE GENERATED 22091945 20695651
2 ECONOMIC VALUE DISTRIBUTED
21 Operating costs 3
Costs of material -487362 -475379
Building and equipment maintenance costs -753215 -798584
Office and equipment lease costs -934768 -930657
Costs of intellectual services -369026 -315092
Advertising -355296 -280923
Costs of business travel and training of employees 3 -93716 -92586
Other operating costs 3 -2098067 -2130715
TOTAL OPERATING COSTS -5091449 -5023936
22 Employee expenses 3
Wages and salaries -3312415 -3223372
Taxes and contributions on wages and wage benefits 3 -1997940 -1937113
Cost of employees transportation 3 -76490 -84139
Costs of remuneration for temporary and occasional work -5861 -4569
Costs of employees education not related to their job 3 -3157 -6094
Other personnel expenses -172859 -55922
TOTAL INCOME AND EXPENSES
TOTAL EMPLOYEE EXPENSES -5568723 -5311209
23 Expenses related to liabilities to the government
Income tax -830548 -623097
Indirect taxes and duties 3 -161352 -183199
TOTAL EXPENSES RELATED TO LIABILITES TO THE GOVERNMENT -991900 -806296
24 Community-related expenses
Donations and corporate social responsibility 3 -33204 -22381
TOTAL COMMUNITY-RELATED EXPENSES -33204 -22381
TOTAL ECONOMIC VALUE DISTRIBUTED -11685276 -11163822
3 ECONOMIC VALUE RETAINED 4 10406668 95318291 The item differs from the income statement in the annual report in that the Provisions for Employee Benefits Legal Disputes and Restructuring are excluded 2 The item differs from the income statement in the annual report in that the Operating Costs are presented in the section Economic Value Distributed in several segments stated while Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation is not presented within Other Operating Expenses3 The items differ from the income statement in the annual report in that a part of the Operating Costs is reclassified into the following segments Employee Expenses Expenses Related to Liabilities to the Government and Community-Related Expenses4 This represents BIBrsquos profit net of the Provisions for Employee Benefits Legal Disputes and Restructuring the Gains and Losses on Deferred Tax Assets and Liabilities the Depreciation Costs and the Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation
16
22 GOVERNANCE IN BANCA INTESA
CORPORATE GOVERNANCE
Shareholders of Banca Intesa ad Beograd ndash ownership structure Intesa Sanpaolo Holding International SA 7779 Intesa Sanpaolo SPA 1521 International Finance Institution (IFC) 700 The governance of the Banca Intesa joint stock company is organised as a two-tier system
The Bankrsquos Board of Directors consists of five members elected by the General Meeting of Shareholders upon the shareholdersrsquo proposal including the Board Chairman The term of office of Board members is three years with a possibility of re-election The Chairman of the Board of Directors of Banca Intesa is Massimo Malagoli and its members are Ivan Šramko Arthur Philippe Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Executive Board of Banca Intesa consists of six members including the President The term of office of Executive Board members is three years with a possibility of re-election The President of the Executive Board of Banca Intesa is Draginja Đurić the Deputy President of the Executive Board is Marco Capellini and Board members are Darko Popović Head of Retail and Small Business Division Slađana Jelić Head of the Corporate Banking Division Dragica Mihajlović Head of the Financial Management and Treasury Division and Marko Marković Head of the Operations Management Division
Women account for 20 of the members of the Board of Directors and 50 of the members of the Executive Board of Banca Intesa
The Bankrsquos Audit Committee consists of five members including the Chairman The term of office of Committee members is three years with a possibility of re-election The Committee Chairman is Giovanni Bergamini and its members are Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Chairman of the Board of Directors as a governance body does not have a direct executive role given that Banca Intesa organised as a joint stock company with a two-tier governance system delegates executive roles to the Executive Board as a management body that organises the Bankrsquos operations and performs daily monitoring of the activities of the Bank employees while the Board of Directors makes strategic decisions aimed at the Bankrsquos compliance takes care of and is responsible for the accuracy of all reports financial condition and operating results of the Bank addressed to the Bankrsquos shareholders the public and the National Bank of Serbia
In line with the Law on Banks and other regulations members of the Board of Directors are appointed and dismissed by the General Meeting of Shareholders while members of the Executive Board are appointed and dismissed by the Bankrsquos Board of Directors Domestic regulations list conditions that members of the Executive Board and the Board of Directors must meet in order to get prior approval of the regulatory body ie the National Bank of Serbia without which they cannot become members of these boards This includes among other things good business reputation and appropriate qualifications In addition appropriate experience in finance is also required for at least three members of the Board of Directors while at least one member of the Board of Directors must have active knowledge of Serbian and reside in the territory of the Republic of Serbia After obtaining the approval the appointed person is registered with the Business Registers Agency as well
Banca Intesa provided in its bylaws for the mechanisms and channels of direct e-mail communication with its parent group Intesa Sanpaolo with the aim of respecting the individual and dignity of each employee as well as the values proclaimed by the Code of Ethics The Bankrsquos shareholders ie the General Meeting of Shareholders participate in and directly impact the work of the Board of Directors as a governance body in the following ways
bull The General Meeting of Shareholders adopts the business policy and strategy of the Bankbull The General Meeting of Shareholders adopts the Articles of Association and the amendments to the Memorandum and Articles of Associationbull The General Meeting of Shareholders appoints and dismisses the Chairman and members of the Board of
17
Directorsbull The General Meeting of Shareholders appoints and dismisses the external auditorbull The General Meeting of Shareholders considers and adopts the annual report of the Board of Directors
The adopted remuneration policy for the entire human resources of the Group including the variable components is based on equality merit and sustainability of results The guidelines for defining the management remuneration policy are based on objective elements and parameters resulting from the assessment of organisational positions as well as performance and potential with the aim of creating an integrated system for the members of management thus helping their professional development The policy provides for remuneration in the form of benefits which is also based on financial instruments and linked to the results of the company ndash which corresponds to the level of assumed risk and is regulated so as to avoid giving benefits that in the long term are not in accordance with the Grouprsquos interests Based on the performance indicators closely linked with the long-term goals the benefit determination systems are based among other things on the principle of symmetry with the amounts of paid benefits being based on the results achieved at the Group business sector and individual levels and therefore being capable of decreasing significantly and even reaching zero if the minimum indicators that reflect the Group profitability are not achieved also taking into account the risks assumed and the capital used
When it comes to conflicts of interest Banca Intesa has prescribed in accordance with the provisions of the Law on Banks as well as with its bylaws and those of its parent Group an obligation for members of the Board of Directors and the Executive Board to submit a written statement of conflict of interest to the Bankrsquos Board of Directors within one month from the day of taking office The members of the Board of Directors and the Executive Board are obliged in accordance with the bylaws regulating transactions with related parties and the conflict of interest to submit once a year completed standard questionnaires whose content is designed by the parent Group and which contain information relevant for establishing any conflict of interest
One of the methods of sustainability control at Banca Intesa is the power of the Board of Directors as a governance body to set up an integrated risk management system at the Bank and the supervision of this system while the Executive Board identifies the risks to which Banca Intesa is exposed and controls these risks in accordance with the approved policies and procedures The Board of Directors gives approval to the Bankrsquos exposure to one or a group of related parties of over 10 or to an increase in the exposure to over 20 of Bank equity adopts internal audit plan and programme considers external and internal audit reports sets up the internal control system defines the internal organisation and organisational structure of the Bank that ensures the division of duties authority and responsibilities of its employees in a manner that prevents conflict of interest and ensures a transparent and documented process of decision making and implementation decides on disposing with the Bankrsquos fixed assets and the stakes and shares that the Bank has in other legal entities
The work of the Executive Board is evaluated through the MBO (Management by Objectives) system which is based on setting measurable objectives based on which the annual performance is monitored
RISK MANAGEMENT
Risk management is an integral part of the corporate governance of Banca Intesa based on which it is estimated whether the Bank can achieve its business targets in the way consistent not only with the law but also with the public interest safety of people as well as the factors of the natural and social environment Therefore the access to risk management also implies broader social consequences of Bank activity in the environment and in the market
Controlling Socio-environmental Risks in the Governance Process
By a decision of the Executive Board the Bank appointed the persons responsible for environmental protection with the aim of establishing an Environmental Management System ndash EMS and ensuring compliance with the rules of environmental protection and corporate social responsibility in lending operations so that the system would be fully applied until the final collection of all loan instalments A Senior Environmental Management Officer (Deputy President of the Executive Board) and an Environmental Management Coordinator (compliance risk management specialist) were appointedThe Environmental Management Coordinator with the approval of the Senior Environmental Management Officer informs the Executive Board the Asset Quality Committee and the Credit Committee of any significant increase in the level of socio-environmental risks in individual Bank customers particularly in customers with high credit exposure
18
and prepares reports on socio-environmental risks for international development banks towards which the Bank has such reporting obligation
The responsible organisational unit of the Bank monitors risks through the process of assessing loan applications taking into account the criteria related to lending to all customers engaged in production and service activities and the criteria related to environmental risk management
Management of Socio-environmental Risks in Lending
Adequate management and control of socio-environmental risks are essential preconditions for generating reliable and sustainable value and for protecting the Bankrsquos financial stability as well as its reputation
Socio-environmental Risk Management
The Socio-environmental Risk Management Procedure regulates the risk monitoring process in the area of environmental protection employee health and safety and the Bankrsquos social responsibility (protection of cultural heritage fundamental human rights and personal integrity) This Procedure regulates the credit process with regard to socio-environmental risks when approving a credit product to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1000000 euros or higher including the requested new product in case of a credit product from a credit line or other funds approved to the Bank by an international development bank and approval of a long-term credit product funded from other sources The Procedure regulates the rules classified by business lineprocess in the process of socio-environmental risk management
Equator Principles
The Implementation of the Equator Principles for Project Financing procedure applies when preparing and implementing project financing and advisory services in connection with project financing where the investment value of the project is 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes in these facilities can create significant environmental andor social impacts or significantly change the natural environment The goal of the Equator principles is to identify and assess risks and perform risk management based on the criteria defined by the principles with the aim of adhering to the principle of sustainability of natural resources human health human rights cultural heritage and biodiversity
Armaments
The sensitive sectors that the Bank monitors with special attention include armament production and trade In accordance with the relevant bylaw of its parent Group the Policy of Not Financing of Armaments in 2011 Banca Intesa adopted the Procedure for the Performance of Transactions Related to Armament Production and Trade which regulates the identification and preparation of the summary of the customers engaged in armament and military equipment production and trade the monitoring of transactions and loan applications of the customers engaged in armament and military equipment production and trade the approval of transactions and loan applications related to armament and military equipment production and trade in accordance with the Policy of Not Financing of Armaments as well as the preparation of reports on the transactions related to armament and military equipment production and trade
Reputational Risk Management
The Bank attaches great importance to reputational risks that are assessed as part of the compliance control system which is within the competence of the Compliance Office Banca Intesa believes that the standards in this area as well as the business ethics are the cornerstone of banking operations which by their nature are based on trust Bylaws such as the Code of Ethics policies and other define that any non-compliance with the bylaws the principles and values contained in them as well as with external regulations (laws and secondary legislation) exposes the Bank to a certain level of reputational risks
Fight Against Corruption and Compliance
The internal regulatory source that governs the system for control and mitigation of corruption risks comprises the Code of Ethics the Code of Conduct the Rulebook on Relations with Political Parties and the following Bank procedures the Procedure for the Prevention of Internal Fraud and Abuse at the Bank and the Employment Termination Procedure
19
The Code of Conduct prescribes in detail the rules in connection with receiving and giving gifts and the measures prescribed in the event of corruption are related to the violation of work duties so the measures stipulated by external regulations ie the Labour Law (eg compensation for damage employee suspension or termination) but also the Criminal Code may be pronounced against an employee Based on the Legal Department records no proceedings were initiated against Banca Intesa ad Beograd in connection with corruption since no complaints or notices prior to complaint were delivered during 2013
In the same period the Suspicious Transactions and Know Your Customer training courses were held in this segment by means of e-learning which were received by as many as 8663 of employees during 2013 The training courses were provided for by the current regulations and internal acts of the Bank and were aimed at informing the employees and refreshing their knowledge of the obligation of collecting information about each customer and completing appropriate questionnaires In addition the training informed the employees about the new processes that were implemented as well as about mandatory observance of all duties relating to knowing monitoring and reporting suspicious transactions of customers
The Rulebook on Relations with Political Parties prescribes the obligation of the Bank to refrain from granting donations and sponsorship tobull Political parties and any organisations related to thembull Political movements and their organisational unitsbull Trade union organisationsbull Competent authorities and institutions
The prohibition of granting donations and sponsorship to the above organisations aims at the protection against any grants that would result in a privileged position to the Bank or unfair decisions in favour of the Bank
The Compliance Office as well as the relevant organisational units of the Bank are committed to the regulation of processes and the definition of procedures and their operating rules as well as practice which efficiently prevent the violation of applicable regulations The Compliance Office also provides support to the highest bodies of the Bank in monitoring the compliance risk The compliance risk assessment process is constant Through semi-annual reporting these risks are identified and priority measures for their elimination or mitigation are determined ie the level of efficiency of the existing compliance controls is assessed
The Internal Audit provides direct support to the highest bodies of the Bank in monitoring the compliance with and adequacy of the rules contained in the Bankrsquos bylaws If it identifies critical issues during its activity the Internal Audit informs the relevant organisational units and the highest bodies of the Bank with the aim of determining adequate measures for risk mitigation and the method of their implementation
Protection of Health and Safety
Occupational health and safety at Banca Intesa are regulated in accordance with international directives recommendations and positive laws of the Republic of Serbia
During 2013 an assessment was made of the situation regarding occupational health and safety and the risk level for 207 facilities at which work is performed A schedule of elimination of recorded risks to the health of Bank employees was defined and implemented according to priorities and the budget planned In connection with this risk assessment documents were updated as well
When it comes to physical security three robberies were recorded in 2013 versus two a year earlier and investments in technical protection systems continued
Risk Management in Supply Chain
Supplier Check
The Procurement Unit and the organisational part in charge of procurement are obliged to evaluate the received supplier bids by applying the methods of qualitative and quantitative analysis as well as to align the bid evaluation criteria prior to inviting the bidders to submit offers by combining specific criteria one of which is the Compliance of Bidderrsquos Operations with the Corporate Social Responsibility Principles
20
Health and Safety Risk Assessment
In accordance with the Procurement Policy members of Intesa Sanpaolo Group are expected to include the parameters of assessment of environmental protection and occupational health protection in their procurement process giving priority to the use of recycled paper highly energy efficient products and environment-friendly technical equipment
Group members must include special provisions in the procurement contracts they conclude with their suppliers These provisions provide for the obligation of suppliers to comply with the principles specified in the Intesa Sanpaolo Rules for the Environmental and Energy Policy Constant checks are performed in the countries where legal measures regarding environmental protection were adopted in order to ensure compliance
In the area of personnel training and spreading the awareness of the importance of these issues the training of the employees who directly communicate with suppliers must include fields related to corporate social responsibility as well as to the responsibility for environmental protection
21
CUSTOMERS
Banca Intesa built its leading position in the market of Serbia and the status of stable and reliable partner by fostering trust in the relations with its customers The strengthening of relations with customers is based on constant improvement of the quality of products and services proceeding from specific needs of each segment as well as on full respect for the principles of equality and availability of products and services Key aspects of doing business with customers are the following
bull SUPPORT TO ECONOMY AND AGRICULTUREbull FINANCIAL INCLUSION AND EDUCATIONbull CUSTOMER SATISFACTION
SUPPORT TO ECONOMY AND AGRICULTURE
Banca Intesa continued to provide support to the economy and the agricultural sector in 2013 as well focusing on the development of entrepreneurship and self-employment particularly in the SME segment as well as on the improvement of public infrastructure
Support to the Public Sector
Banca Intesa offered loans from the credit line of the German Development Bank (KfW) to the public sector for financing infrastructure projects and the procurement of equipment in the following areas water management sewerage and wastewater management solid waste management environmental protection and pollution control transport infrastructure public transport and communication systems infrastructure facilities fostering economic development and other social and utility services During 2013 Banca Intesa granted 11 loans totalling 852 million euros while the total value of the project is 47 million euros
Development of Entrepreneurship
Banca Intesa supported the programme of measures of the Government of the Republic of Serbia for encouraging SMEs and entrepreneurs through subsidised loans for liquidity and working assets in 2013 as well The Bankrsquos commitment to provide continuously support to its customers in this segment is also demonstrated by the fact that the Government of the Republic of Serbia implements its programme of measures for the fifth consecutive time During 2013 the Bank granted 414 subsidised loans to SMEs totalling 562 billion dinars which accounted for 107 of the total loans to the SME sector The small business sector was granted 186 billion dinars and 1347 loans which accounted for 15 of the number of loans and 16 of the total loan disbursements to this segment
In cooperation with the National Bank of Serbia and the Kingdom of Denmark the Bank launched the Local Economic Development in the Balkans (LEDIB) programme intended for enterprises entrepreneurs and registered farms from the small business segment with the aim of improving local economic development creating new jobs strengthening organisational capacities introducing new eco-friendly technologies and other favourable impacts on the overall development The credit line was intended for the Nišava Pčinja Toplica Jablanica and Pirot Districts and in 2013 the Bank granted 39 loans totalling 505208 euros under this programme which accounted for 04 of the number of loans and 05 of the total loan disbursements to the small business segment At the same time from the credit line of the European Fund for Southeast Europe (EFSE) which supports enterprises and registered farms through investments and loans for working assets 227 million euros were granted in the small business segment which accounted for 22 of loan disbursements in the segment
With the aim of supporting the promotion and strengthening of womenrsquos entrepreneurship Banca Intesa helped the Association of Businesswomen in Serbia in the organisation of an international conference entitled New Age Woman Entrepreneur New Opportunities for Recovery of Economy in the Region The event contributed
22
to further positioning of Banca Intesa as a bank that actively supports entrepreneurship in the country as part of its efforts to contribute to economic recovery and growth For this purpose the Bank also has in its offer loans for women entrepreneurs in Vojvodina in the form of start-up loans for unemployed women and women who have had a business for up to three years The Bank granted 8 loans totalling 98 million dinars under this programme during 2013 which accounted for a 3 share in the number of loans and a 1 share in the total investment loan disbursements in the small business segment
Promotion of Agricultural Sector
Taking into account that the agricultural sector is very specific because it has a special social as well as environmental importance in addition to economic importance for many years Banca Intesa has been encouraging development and investing in projects and individuals that encourage with their activities further rural development and contribute to an increase in the competitiveness of domestic agriculture
Aware of the great economic potential of this industry as part of the LEDIB programme the Bank granted eight loans to registered farms in 2013 totalling 76219 euros which accounted for 02 of the number of loans and 03 of the total loan disbursements to this customer segment In addition in cooperation with the Guarantee Fund of the Autonomous Province of Vojvodina long-term loans for purchasing new agricultural machinery and equipment were available to customers During 2013 the Bank granted 82 loans of this type totalling 219 million euros which accounted for a 15 share in the number of loans and a 25 share in the total investment loan disbursements in the agricultural segment
In addition on the occasion of the 80th International Agricultural Fair in Novi Sad the Bank prepared a special credit offer intended for owners of registered farms which included the Intesa Farmer dinar loan for financing spring works as well as the Intesa Farmer loan for purchasing agricultural machinery During 2013 22 loans were granted for purchasing tractors and agricultural machinery totalling 341 million dinars which accounted for a 4 share in the number of loans and a 3 share in the total amount of agricultural investment loan disbursements
Banka Intesa launched the Intesa Farmer of the Year project to contribute in yet another way to the promotion of agricultural production in the country and to the strengthening of its competitiveness As part of the project the Bank awarded the most successful farmers in four categories ndash Intesa Crop Farmer Intesa Vegetable Grower Intesa Fruit Grower and Intesa Livestock Breeder and all winners won a trip to Germany to visit the international agricultural fair in Berlin The criteria based on which the Committee selected the winners of the title Intesa Farmer of the Year were the annual results achieved in agricultural production application of modern technologies in production activities the number of household members engaged in the production as well as the minimum three-year cooperation with the Bank which included a loan and regular settlement of their financial obligations
FINANCIAL INCLUSION AND LITERACY
Banka Intesa believes that the availability of financial products to all segments of society is an essential precondition for sustainable development In line with this position the Bank added to its offer specific products that promote financial inclusion and provide support during economic crisis to the most vulnerable social groups such as the elderly or youth as well as to solving broader social problems such as housing availability or health care services
Responding to the Needs of the Community
In 2013 Banca Intesa included in its offer the Intermezzo Cash Loan a new model of cash loan which offers to its users as a unique benefit in the domestic market a possibility of postponing the payment of monthly instalment up to five times during the repayment period Moreover as an additional functionality the Intermezzo loan includes insurance against job loss with no additional cost to the customer The Bank believes that the repayment flexibility provided by this loan model offers citizens unique support in the market at a time when they estimate that they need it most In 2013 Banca Intesa granted 11256 Intermezzo cash loans totalling 198 million euros which accounted for 235 of the total amount of cash loans disbursed during the year
Banca Intesa was the first in the Serbian market to offer loans to pensioners aged up to 74 years The Senior Cash Loans were designed specifically to fit the needs of senior citizens and they also include life insurance which is included in the cost of loan during the entire repayment period During the previous year 19774 loans were granted totalling 239 million euros which accounted for 284 of the total cash loans granted in 2013
23
In 2012 as support to citizens in financing medical services the Intesa Vita programme of consumer and cash loans was developed which includes loans for in vitro fertilisation harvesting and storage of stem cells DNA analysis dental services medical spa and wellness treatments as well as for purchasing baby supplies In 2013 the programme was extended to new purposes - laser vision correction vein operation and purchase of medical aids and 28 loans were granted totalling 126345 euros which accounted for 8 of the total cash loans granted during the year In this unique way the Bank provides the citizens with the possibility of taking care of their health in a responsible and timely manner without suddenly burdening their home budgets
Moreover the Bank continued to provide subsidised housing loans in 2013 as well in order to provide support to young married couples in solving their housing problems granting 224 loans totalling 864 million euros which was 205 of the total housing loans granted during the year At the same time 6544 refinancing loans with insurance against job loss or disability in case of an accident were granted totalling 146 million euros which enabled the customers to service their outstanding liabilities towards Banca Intesa and other banks and which accounted for 173 of the Bankrsquos total cash loans granted during the year
Banca Intesa introduced the Visa Classic Paralympic and Visa Electron Paralympic cards the first charity payment cards in the country in cooperation with the Paralympic Committee of Serbia This was the first initiative aimed at establishing a stable and independent mechanism for long-term assistance to athletes with disabilities and developing paralympic sport in the country During 2013 8345 Visa Classic Paralympic and Visa Electron Paralympic cards were issued which accounted for 14 of all cards issued during the year The Bank also provides debit cards for students which enable free account opening and maintenance for all students who opted for an Intesa Visa Electron Easy Travel Card (ETC) or a Maestro ISIC Card of Banca Intesa of which 4048 were issued in 2013 accounting for 18 of the debit cards issued during the year
Constantly striving to promote savings in 2013 the Bank introduced a new savings model the Month by Month Savings which provides customers with a possibility of reaching higher amounts of savings with lower monthly allocations The product enables saving in dinars and euros at a very attractive interest rate while the customers also have an opportunity to set the payment date and amount themselves
Financial Education
In 2013 as well Banca Intesa remained true to its commitment to support actively financial education by improving customer knowledge Thus in cooperation with Banca IMI SpA a member of Intesa Sanpaolo Group another Intesa Academia workshop was organised this time on the subject of advanced financing and risk management instruments so that Banca Intesarsquos customers could find out more about the possibilities of financing in the international and domestic bond markets and about hedging products for successful management of market risks The workshop brought together the leading world experts in the areas of financing and risk management as well as the most successful customers of the Bank In order to assist its customers in the SME segment in getting informed in more detail about the regulations relating to loan approval and collection Banca Intesa took part in the working breakfast on the subject Security Instruments and Their Collection as the Condition for Financing Company Growth held at the premises of the Serbian Association of Managers On this occasion the legal framework was presented about which enterprises should also get informed in order to know that documentation they will need if they opt for bank loans
At the same time the Factoring Department designed and launched an initiative of organising factoring workshops at the Bankrsquos regional centres Factoring workshops are an interactive form of cooperation and communication with customers with the focus on understanding the term and essence of factoring themselves With the support of regional centres a total of 27 factoring workshops were organised in 22 cities in two cycles in late 2012 and in early 2013 which were attended by nearly 300 corporate customers
As a member of the United Nations Global Compact and its Working Group on CSR in Banking and Finance Banca Intesa works together with the other members on the implementation of projects in the area of financial education which is the main goal of this Group One of the projects actively supported by the Bank is the cooperation with seven secondary schools of economics from six cities in Serbia where there is a ldquobank clerkrdquo educational profile in the area of thematic lectures for teachers and students The Bank representatives gave three lectures during 2013
24
CUSTOMER SATISFACTION
Banca Intesa believes that it is only through an open dialogue with its customers that it can truly understand their needs and expectations and build a long-term partner relationship with them
Meeting the Needs of Customers
Ever since 2008 Banca Intesa has been conducting surveys of its customersrsquo satisfaction with the Bankrsquos products and services in accordance with the methodology of the European Customer Satisfaction Index (ECSI) as part of its initiative named Listening 100 This is a continuous process analyses are made based on the results obtained in the survey and actions are proposed accordingly for improving the customer satisfaction The surveys are repeated at six-monthannual intervals in order to collect feedback from the customersrsquo perspective for the measures taken for the purpose of improving the satisfaction index as well as identifying the directions for further improvement
Looking at the results of the customer satisfaction survey at the end of 2013 a conclusion arises that among other things the basis of good results is a positively rated staff treatment of customers The ECSI as well as the Loyalty indices are stable with a high percentage of customers who stated they would remain Banca Intesa customers in the following 12 months Attempting to encourage its customers to express their opinions in the previous year the Bank clearly communicated the improvements implemented so far based on their suggestions
During 2013 as well Banca Intesa continued to increase the number of branches equipped with the Queue Management System (QMS) which covered approximately 40 per cent of active customers at the end of the year In addition to having a positive impact on customer satisfaction the QMS expansion made it possible to obtain the data necessary for better analysis and organisation of branch operation In addition free internet access via Wi-Fi and daily newspapers were made available to customers at the largest branches
As part of its efforts to improve further customer satisfaction in 2013 Banca Intesa implemented training of over 1500 employees both in its branch network and at its headquarters The training which was implemented as a continuation of the Education 100 programme initiated in 2011 was held on the subject of managing customer satisfaction but also their entire experience in each contact with the Bank
In addition to its efforts to improve its approach to customers and recognising the importance of two-way communication the Bank developed efficient mechanisms for collecting and recording customer feedback The Bank responds to all complaints sent to the Bank via formal complaints mechanisms and does so within the statutory time limit and in accordance with the decision of the National Bank of Serbia Each customer may also personally contact unit employees and if the customer is not satisfied with the answer received heshe can apply to the National Bank of Serbia as the second-instance body with the possibility of mediation The following are available to customers
bull Phone line +381 11 310 88 88bull E-mail kontaktbancaintesarsbull Fax +381 11 310 88 55bull Personal contact ie submitting a written complaint in personbull Contact form on the official website of the Bankbull Bank corporate accounts on social networks (Facebook and Twitter)bull Postal address of the Customer Satisfaction Management Unit Omladinskih brigada 90b 11070 New Belgrade
Transparent Advertising
Lasting relationships based on trust require communication that enables customers to understand clearly the characteristics and value of Banca Intesa products and services Therefore the Bank strives to contribute to the simplification of its products in communication
In its advertising the Bank clearly specifies all customer costs and all of them are included when calculating the effective interest rate which is always clearly and visibly shown as well as representative examples that contain all data in accordance with the Law on the Protection of Financial Service Consumers which demonstrates full transparency when it comes to Bank pricing policy
25
The Bank also strives to formulate the agreements so that they are simple to understand minimising possible misunderstandings and ambiguity by providing clear and exhaustive information It informs its customers in a timely manner of any changes in the agreements and their terms
Data Security
The protection of customer security as well as their assets and confidential information is not only Banca Intesarsquos primary duty but also the basis of the relationship of trust that the Bank wants to reinforce with its customers The protection of persons their assets and valuables as well as a multitude of data and internal organisational processes fully meets the criteria of reliability continuity and confidentiality In addition to its legal obligations Banca Intesa complies with the criteria of absolute transparency in informing its customers of their rights to privacy and the way it treats their personal information
In 2013 Banca Intesa did not find any founded complaint in connection with the violation of customer privacy or any disclosure leakage or theft of customer information
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
7
MISSION
Banca Intesarsquos mission is to provide excellence in banking and financial services for its customers leveraging on developing its presence in all the areas in which it operates and a style of growth that focuses on sustainable results and on establishing a trust-based process that stems from customer and shareholder satisfaction from its employeesrsquo sense of belonging and listening to the needs of local communities
The Bankrsquos growth strategy strives to create stable and sustainable values from the economic financial socio-environmental points of view building upon the Bankrsquos fundamental corporate values in its relations with all stakeholders
CORPORATE VALUES
INTEGRITY EXCELLENCE TRANSPARENCY RESPECT
FOR EACH INDIVIDUAL
EQUALITYINDIVIDUAL
VALUES
RESPONSIBLE USE OF
RESOURCES
We pursue our goals with honesty
fairness and with a sense of
responsibility in full compliance with the rules and principles of ethics mandated by the profession in the spirit of signed
agreements
We set ourselves the goal of continuous
improvement planning future activities and anticipating
challenges along with fostering
extensive creativity aimed at innovations moreover we recognise and reward merits and quality
We are committed to make
transparency the basis for all our activities
communication and contracts with the aim of enabling our stakeholder to make independent informed decision
We intend to combine large-format business with deep local
roots and to be a bank with a broad vision while not
losing sight of the man as an individual
We are committed to eliminating any form of
discrimination in our conduct and to respecting gender
racial religious political linguistic and intellectual diversity trade
union preferences as well as the
diversity in terms of age and abilities
The value of each individual
guides our modus operandi we use listening and dialogue
techniques as tools for continually
improving relations with all
stakeholders
We strive to use carefully all resources and to promote the conduct based on the optimal
use of resources and avoidance of waste and losses
giving priority to the choices that consider sustainability
STRATEGIC APPROACH TO SUSTAINABILITY AND STRATEGY IN PRACTICE
Operating against the backdrop of modest economic recovery and complex business environment Banca Intesa opted for a responsible business strategy that is based on maintaining the system stability on the one hand and monitoring the needs of citizens and economic entities on the other Guided by clear goals in these areas the Bank continued to create value for its customers while contributing to the economic and social development of the broader community Constant care of customer satisfaction expressed through maximum professionalism in the work and a high level of innovativeness remained at the top of the priority list as did constant improvement of the products and services the Bank provides to its customers Owing to such approach Banca Intesa maintained its stable credit activity and increased its market share in lending although the domestic banking sector as a whole recorded a decrease in lending due to lower demand and a high share of non-performing loans In addition further growth was recorded in the Bankrsquos total deposits and its market share in this business segment as well reflecting a high level of customer confidence
In line with its strategic commitment to integrate fully the sustainability concept into its long-term business plans but also into its everyday activities and decisions in 2013 Banca Intesa also sought to meet the needs of all stakeholders its employees shareholders and customers as well as the entire social community By constantly improving its CSR practices during the previous year the Bank launched new projects aimed at providing support to the community and continued investing considerable funds in education culture health care and sports and the primary area of its activity was the strengthening of the culture of volunteering In addition special products were designed in response to the growing needs of customers and a stimulating work environment was provided to the employees
JOINT INITIATIVES
Promoting the international business standards Banca Intesa is particularly committed to the development and introduction of corporate social responsibility as an integral part of its business practice as well as to raising awareness of the business community and the broader community of the importance of this concept As the leading financial institution in the country the Bank has a responsibility for the broader social and economic progress as well and therefore advocates a better quality of life prosperity and development of economy and the entire society through its active participation in the work of business associations
8
UNITED NATIONS GLOBAL
COMPACT
BUSINESS LEADERS FORUM
SERBIAN ASSOCIATION OF MANAGERS
AMERICAN CHAMBER OF COMMERCE
FOREIGN INVESTORS COUNCIL
NATIONAL ALLIANCE FOR LOCAL ECONOMIC
DEVELOPMENT
CHAMBER OF ITALIAN
AND SERBIAN BUSINESSPEOPLE
The largest global CSR network
bringing together more than
10000 members throughout
the world and promoting the protection of human and
labour rights and the environment and fight against
corruption
The first business network for CSR in Serbia comprising
20 members
A business association founded
with the aim of becoming a credible social partner of the Serbian Government
in the process of improving the businessenvironment
and accelerating economic
development
An organisation promoting the improvement of business
environment in Serbia as well as partnership
between US and Serbian companies
for the purpose of economic development
A business association whose activities contribute to the improvement of the investment
and business climate in Serbia
A business association that brings together
representatives of all three sectors of
society ndash companies municipalities
and NGOs which work together
on improving the conditions for local economic
development and doing business
A non-profit organisation that fosters improves
and develops trade between Italy and Serbia
9
CROSS REFERENCE TABLE
UNITED NATIONS GLOBAL COMPACT PRINCIPLES (UNGC)CORRESPONDING GRI INDICATOR
HUMAN RIGHTS
PRINCIPLE 1 BUSINESSES SHOULD SUPPORT AND RESPECT THE PROTECTION OF INTERNATIONALLY PROCLAIMED HUMAN RIGHTS AND
LA 4
LA 13
LA 15
HR 11
PR 8
PRINCIPLE 2 MAKE SURE THAT THEY ARE NOT COMPLICIT IN HUMAN RIGHTS ABUSES HR 11
LABOUR
PRINCIPLE 3 BUSINESSES SHOULD UPHOLD THE FREEDOM OF ASSOCIATION AND THE EFFECTIVE RECOGNITION OF THE RIGHT TO COLLECTIVE BARGAINING
LA 4
PRINCIPLE 4 THE ELIMINATION OF ALL FORMS OF FORCED AND COMPULSORY LABOUR
PRINCIPLE 5 THE EFFECTIVE ABOLITION OF CHILD LABOUR AND
PRINCIPLE 6 THE ELIMINATION OF DISCRIMINATION IN RESPECT OF EMPLOYMENT AND OCCUPATION LA 2
LA 13
LA 15
HR 11
ENVIRONMENT
PRINCIPLE 7 BUSINESSES SHOULD SUPPORT A PRECAUTIONARY APPROACH TO ENVIRONMENTAL CHALLENGES EN 26
PRINCIPLE 8 UNDERTAKE INITIATIVES TO PROMOTE GREATER ENVIRONMENTAL RESPONSIBILITY AND EN 4
EN 5
EN 8
EN 26
PR 3
PRINCIPLE 9 ENCOURAGE THE DEVELOPMENT AND DIFFUSION OF ENVIRONMENTALLY FRIENDLY TECHNOLOGIES EN 5
EN 26
ANTI-CORRUPTION
PRINCIPLE 10 BUSINESSES SHOULD WORK AGAINST CORRUPTION IN ALL ITS FORMS INCLUDING EXTORTION AND BRIBERY SO 3
SO 4
SO 6
10
Given that they were added subsequently to the new GRI guidelines version G31 the LA 15 and HR 11 indicators are entered into the cross reference table according to the authorrsquos estimate
In accordance with the GRI principle of materiality based on which priority topics present in the report are defined the corresponding indicators are not covered by this report taking into account their relevance to the banking sector The bank as an active member supports the promotion of all 10 global compact principles in its partners suppliers customers and in the general business and social community
SUSTAINABILITY MANAGEMENT
In order to achieve its business goals as well as those relating to socio-environmental dimensions Banca Intesa introduced ethical responsibility as a criterion in the process of decision-making regarding all stakeholders which means that socio-environmental issues are integrated in the process of product and service development risk management as well as in loan granting and supplier selection
The adoption of the Code of Ethics with the defined values to which Banca Intesa is committed introduced a management model based on the principle of accountability that requires commitment to aligning everyday business activities with the declared values at the individual level as well as at the level of the Bankrsquos organisational units The Code of Ethics is an expression of the corporate culture and tradition from which Banca Intesa originates This document provides on the one hand a framework through which the Bank observes and interprets different situations and on the other hand the ultimate goal to which it strives
Procedure for Managing the Reports of Non-compliance with the Code of Ethics was adopted in 2011 and is implemented in all organisational units of the Bank in the process of delivering reports in cases of suspicion or knowledge of any activities or individual acts that are contrary to the Code of Ethics and other bylaws of the Bank The procedure for managing the reports of noncompliance with the Code of Ethics consists of the following steps non-compliance reporting report analysis translating and delivering the information to the parent Group establishing the status and verifying the facts involving the relevant department proposing corrective actions and delivering reports to relevant stakeholders as well as to the parent Group The Bank employee who noticed any behaviour of one of hisher colleagues that seems not to be in accordance with the moral and ethical principles prescribed by the Code of Ethics delivers a non-compliance report to the following e-mail address etickikodeksbancaintesars The report may also be delivered in hard copy to the following address Banca Intesa ad Beograd Marketing and Communications Department Bulevar dr Zorana Đinđića 2a 11070 Novi BeogradThrough the above mechanism during 2013 Banca Intesa recorded no cases of human rights violation as defined by the Code of Ethics
The Marketing and Communications Department independently as well as in close cooperation with CSR ambassadors delegated representatives of all organisational parts of the Bank implements and coordinates projects and activities in the area of corporate social responsibility The CSR ambassadors provide the Department with necessary information in connection with the implementation of projects and activities and participate in monitoring measuring and reporting to the parent Group and other stakeholders
The Marketing and Communications Department also takes steps to make the CSR criteria a recognisable element of the whole management system and to this end cooperates with the top management in the process of defining the CSR policies and strategies communicating to the highest representatives of the Bank the results of dialogue with the stakeholders their needs and key issues that should be a part of strategic guidelines
11
12 RELATION WITH STAKEHOLDERS
DIALOGUE WITH STAKEHOLDERS
Dialogue with stakeholders is the beginning of continuous progress achieved by carefully monitoring the demands and needs of stakeholders and harmonising them with the Bankrsquos strategy The dialogue is achieved by using different techniques as part of the Bankrsquos regular activities and is a precondition for preparing the materiality matrix and eventually the Sustainability Report
Stakeholder map is based on the international methodology for stakeholder engagement the AA1000 Standard (Institute of Social and Ethical Accountability)
MATERIALITY
Sustainability Report 2013 focuses on the topics that proved to be the most important ones for stakeholders and also for the business of Intesa Sanpaolo and hence of Banca Intesa following the GRI methodology and the AA1000 Standard In accordance with the needs analysis conducted two priority issues stood out which are presented in the table These issues are also present at the local level
STAKEHOLDER MAP
GROUP ENGAGEMENT MECHANISM
CUSTOMERS
Focus groupBenchmarking surveysMeetings workshops seminarsSatisfaction survey Handling and analysis of complaints applications and suggestions
EMPLOYEESEmployee satisfaction surveyTraining and evalution Meetings with trade union
COMMUNITYMeetings with CSosWorking groups working bodies
SUPPLIERSSupplier information form Csr questionnaireRegular communication in tender process
ENVIRONMENTMeetings CSosWorking groups working bodies
CUSTOMERS EMPLOYEES COMMUNITY SUPPLIERS ENVIRONMENT
INDIVIDUALSSMALL BUSINESS
SMESLARGE CORPORATES
LOCAL GOVERNMENTSCONSUMER ASSOCIATIONSBUSINESS ASSOCIATIONSPUBLIC ADMINISTRATION
MANAGERSOFFICERS
EMPLOYEES
LOCAL AND NATIONAL PUBLIC
INSTITUTIONS (REGULATORYBODIES LOCAL GOVERNMENT
ETC)CSOS
MEDIA
DOMESTICFOREIGN
ENVIRONMENTALORGANISATIONS
FUTURE GENERATIONS
12
CUSTOMERS EMPLOYEES SUPPLIERS COMMUNITY ENVIRONMENT
Development of service model and channel in accordance with the
customersrsquo needs
Employee training and professional development
Fair treatment of suppliers Promotion of culture and artsOptimisation of natural
resource utilisation
Product and service qualityMerit recognition
and rewardingCooperation and relations
with suppliersSupport to youth education
and developmentReduction of greenhouse
gas emission
Customer satisfaction Employee protectionPromotion and observance
of ethical and environmental standards in supply chain
Fight against poverty and social exclusion
Support to customers for energy efficiency
improvement
Access to loans for corporatesSafe and healthy
work environment
Strengthening the SME sectorInvolving employees
in company life
Financial inclusion of vulnerable social groups
Work-life balance
Support to customers having financial problems
13
2 Sustainability
14
21 GENERATED ECONOMIC VALUE
Generation of economic value an efficient governance system and careful management of business risks characterise Banca Intesarsquos business model based on transparency and integrity These elements as well as the care for employees environment and the quality of service it provides to its customers are of key importance for the progress for which the Bank strives as a responsible stakeholder in the community in which it operates
MARKET POSITION
According to the official data of the National Bank of Serbia as of December 31 2013 Banca Intesa is the leader in all business segments
DIRECT AND INDIRECT ECONOMIC VALUE GENERATED
2012 2013
Net assets 3635 3727
Customer loans 2363 2404
Customer deposits 2300 2388
Equity 792 863
in million euros
EmploymentStable partner of the government
Reliable support to the economy
Support to the communityTotal income and
expenditure
Banca Intesa employs 3039 people
As an active partner of the government Banca
Intesa supports economic development initiatives
of the Government
Banca Intesa cooperates with 406 suppliers
Banca Intesa participated in numerous community
support projects and implemented 106 donor activities
Total economic value generated by Banca Intesa was RSD 20695651000
The Bank directly provides 3039 jobs and it paid
RSD 193711289679 into the budget of Serbia as taxes and contributions on wages and pensions
The budget of Serbia received 80629605186 dinars in the form of regular tax payments
WithRSD 67069271910EUR 2056318466
USD 73719631GBP 1012544
allocated for procurement it indirectly affects the
stability of business and jobs in its supplier chain
The investment in the community amounted
to RSD 22381000 through donations to the
local community RSD 10000000 through
investment in infrastructure and RSD 299812329 through volunteering
The economic value distributed through operating
costs and personnel expenses and liabilities to the Government and the community amounted to RSD 1116382182660
Banca Intesa continued to post good business results in 2013 as well confirming its leading position in the banking sector of Serbia despite difficult business conditions The Bankrsquos total loans to corporate and retail customers reached 2365 million euros while deposits totalled 2387 million euros The business network consisted of 192 branches 3 mortgage loan centres and 5 mortgage loan offices In addition Banca Intesa had the most developed network of POS terminals and ATMs with 12751 active POS terminals and 255 ATMs
In the retail segment total loans amounted to 667 million euros while deposits increased to 1436 million euros at the end of 2013 Banca Intesa reaffirmed its leading position in e-banking and payment card business during 2013 as well with around 14 million debit and credit cards issued At the same time small business loans reached 126 million euros while loans granted to farmers amounted to 37 million euros
In the corporate segment at the end of 2013 Banca Intesa had a loan portfolio of 1728 million euros continuing the growth from the previous years Corporate deposits were at the level of 968 million euros while the bankrsquos market share in total corporate deposits of the banking sector was 206 at the end of December 2013
Owing to the increase in all key items a net income of 238 million euros was posted Net profit after tax was 76 million euros at the end of December 2013
15
1 ECONOMIC VALUE GENERATED 2012 2013
Interest income 31340971 29588778
Interest expenses -11790051 -9598939
Fee and commission income 7890743 8175478
Fee and commission expenses -2292104 -2648138
Net profit on sale of securities atfair value through profit and loss 1008 590
Net profit on sale of securitiesavailable for sale 49855 4332
Net profit on sale of equity investments 434 0
Net exchange rate loss -13263673 356204
Dividends and share income 2925 1527
Other operating income 554540 676132
Net expenses on indirectly written-off of placements and provisions 1 -5415518 -6935326
Operating and other expenses 2 -189518 -532659
Gains from changes in value of assets and liabilities 31390752 12172042
Losses from changes in value of assets and liabilities -16188419 -10564372
TOTAL ECONOMIC VALUE GENERATED 22091945 20695651
2 ECONOMIC VALUE DISTRIBUTED
21 Operating costs 3
Costs of material -487362 -475379
Building and equipment maintenance costs -753215 -798584
Office and equipment lease costs -934768 -930657
Costs of intellectual services -369026 -315092
Advertising -355296 -280923
Costs of business travel and training of employees 3 -93716 -92586
Other operating costs 3 -2098067 -2130715
TOTAL OPERATING COSTS -5091449 -5023936
22 Employee expenses 3
Wages and salaries -3312415 -3223372
Taxes and contributions on wages and wage benefits 3 -1997940 -1937113
Cost of employees transportation 3 -76490 -84139
Costs of remuneration for temporary and occasional work -5861 -4569
Costs of employees education not related to their job 3 -3157 -6094
Other personnel expenses -172859 -55922
TOTAL INCOME AND EXPENSES
TOTAL EMPLOYEE EXPENSES -5568723 -5311209
23 Expenses related to liabilities to the government
Income tax -830548 -623097
Indirect taxes and duties 3 -161352 -183199
TOTAL EXPENSES RELATED TO LIABILITES TO THE GOVERNMENT -991900 -806296
24 Community-related expenses
Donations and corporate social responsibility 3 -33204 -22381
TOTAL COMMUNITY-RELATED EXPENSES -33204 -22381
TOTAL ECONOMIC VALUE DISTRIBUTED -11685276 -11163822
3 ECONOMIC VALUE RETAINED 4 10406668 95318291 The item differs from the income statement in the annual report in that the Provisions for Employee Benefits Legal Disputes and Restructuring are excluded 2 The item differs from the income statement in the annual report in that the Operating Costs are presented in the section Economic Value Distributed in several segments stated while Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation is not presented within Other Operating Expenses3 The items differ from the income statement in the annual report in that a part of the Operating Costs is reclassified into the following segments Employee Expenses Expenses Related to Liabilities to the Government and Community-Related Expenses4 This represents BIBrsquos profit net of the Provisions for Employee Benefits Legal Disputes and Restructuring the Gains and Losses on Deferred Tax Assets and Liabilities the Depreciation Costs and the Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation
16
22 GOVERNANCE IN BANCA INTESA
CORPORATE GOVERNANCE
Shareholders of Banca Intesa ad Beograd ndash ownership structure Intesa Sanpaolo Holding International SA 7779 Intesa Sanpaolo SPA 1521 International Finance Institution (IFC) 700 The governance of the Banca Intesa joint stock company is organised as a two-tier system
The Bankrsquos Board of Directors consists of five members elected by the General Meeting of Shareholders upon the shareholdersrsquo proposal including the Board Chairman The term of office of Board members is three years with a possibility of re-election The Chairman of the Board of Directors of Banca Intesa is Massimo Malagoli and its members are Ivan Šramko Arthur Philippe Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Executive Board of Banca Intesa consists of six members including the President The term of office of Executive Board members is three years with a possibility of re-election The President of the Executive Board of Banca Intesa is Draginja Đurić the Deputy President of the Executive Board is Marco Capellini and Board members are Darko Popović Head of Retail and Small Business Division Slađana Jelić Head of the Corporate Banking Division Dragica Mihajlović Head of the Financial Management and Treasury Division and Marko Marković Head of the Operations Management Division
Women account for 20 of the members of the Board of Directors and 50 of the members of the Executive Board of Banca Intesa
The Bankrsquos Audit Committee consists of five members including the Chairman The term of office of Committee members is three years with a possibility of re-election The Committee Chairman is Giovanni Bergamini and its members are Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Chairman of the Board of Directors as a governance body does not have a direct executive role given that Banca Intesa organised as a joint stock company with a two-tier governance system delegates executive roles to the Executive Board as a management body that organises the Bankrsquos operations and performs daily monitoring of the activities of the Bank employees while the Board of Directors makes strategic decisions aimed at the Bankrsquos compliance takes care of and is responsible for the accuracy of all reports financial condition and operating results of the Bank addressed to the Bankrsquos shareholders the public and the National Bank of Serbia
In line with the Law on Banks and other regulations members of the Board of Directors are appointed and dismissed by the General Meeting of Shareholders while members of the Executive Board are appointed and dismissed by the Bankrsquos Board of Directors Domestic regulations list conditions that members of the Executive Board and the Board of Directors must meet in order to get prior approval of the regulatory body ie the National Bank of Serbia without which they cannot become members of these boards This includes among other things good business reputation and appropriate qualifications In addition appropriate experience in finance is also required for at least three members of the Board of Directors while at least one member of the Board of Directors must have active knowledge of Serbian and reside in the territory of the Republic of Serbia After obtaining the approval the appointed person is registered with the Business Registers Agency as well
Banca Intesa provided in its bylaws for the mechanisms and channels of direct e-mail communication with its parent group Intesa Sanpaolo with the aim of respecting the individual and dignity of each employee as well as the values proclaimed by the Code of Ethics The Bankrsquos shareholders ie the General Meeting of Shareholders participate in and directly impact the work of the Board of Directors as a governance body in the following ways
bull The General Meeting of Shareholders adopts the business policy and strategy of the Bankbull The General Meeting of Shareholders adopts the Articles of Association and the amendments to the Memorandum and Articles of Associationbull The General Meeting of Shareholders appoints and dismisses the Chairman and members of the Board of
17
Directorsbull The General Meeting of Shareholders appoints and dismisses the external auditorbull The General Meeting of Shareholders considers and adopts the annual report of the Board of Directors
The adopted remuneration policy for the entire human resources of the Group including the variable components is based on equality merit and sustainability of results The guidelines for defining the management remuneration policy are based on objective elements and parameters resulting from the assessment of organisational positions as well as performance and potential with the aim of creating an integrated system for the members of management thus helping their professional development The policy provides for remuneration in the form of benefits which is also based on financial instruments and linked to the results of the company ndash which corresponds to the level of assumed risk and is regulated so as to avoid giving benefits that in the long term are not in accordance with the Grouprsquos interests Based on the performance indicators closely linked with the long-term goals the benefit determination systems are based among other things on the principle of symmetry with the amounts of paid benefits being based on the results achieved at the Group business sector and individual levels and therefore being capable of decreasing significantly and even reaching zero if the minimum indicators that reflect the Group profitability are not achieved also taking into account the risks assumed and the capital used
When it comes to conflicts of interest Banca Intesa has prescribed in accordance with the provisions of the Law on Banks as well as with its bylaws and those of its parent Group an obligation for members of the Board of Directors and the Executive Board to submit a written statement of conflict of interest to the Bankrsquos Board of Directors within one month from the day of taking office The members of the Board of Directors and the Executive Board are obliged in accordance with the bylaws regulating transactions with related parties and the conflict of interest to submit once a year completed standard questionnaires whose content is designed by the parent Group and which contain information relevant for establishing any conflict of interest
One of the methods of sustainability control at Banca Intesa is the power of the Board of Directors as a governance body to set up an integrated risk management system at the Bank and the supervision of this system while the Executive Board identifies the risks to which Banca Intesa is exposed and controls these risks in accordance with the approved policies and procedures The Board of Directors gives approval to the Bankrsquos exposure to one or a group of related parties of over 10 or to an increase in the exposure to over 20 of Bank equity adopts internal audit plan and programme considers external and internal audit reports sets up the internal control system defines the internal organisation and organisational structure of the Bank that ensures the division of duties authority and responsibilities of its employees in a manner that prevents conflict of interest and ensures a transparent and documented process of decision making and implementation decides on disposing with the Bankrsquos fixed assets and the stakes and shares that the Bank has in other legal entities
The work of the Executive Board is evaluated through the MBO (Management by Objectives) system which is based on setting measurable objectives based on which the annual performance is monitored
RISK MANAGEMENT
Risk management is an integral part of the corporate governance of Banca Intesa based on which it is estimated whether the Bank can achieve its business targets in the way consistent not only with the law but also with the public interest safety of people as well as the factors of the natural and social environment Therefore the access to risk management also implies broader social consequences of Bank activity in the environment and in the market
Controlling Socio-environmental Risks in the Governance Process
By a decision of the Executive Board the Bank appointed the persons responsible for environmental protection with the aim of establishing an Environmental Management System ndash EMS and ensuring compliance with the rules of environmental protection and corporate social responsibility in lending operations so that the system would be fully applied until the final collection of all loan instalments A Senior Environmental Management Officer (Deputy President of the Executive Board) and an Environmental Management Coordinator (compliance risk management specialist) were appointedThe Environmental Management Coordinator with the approval of the Senior Environmental Management Officer informs the Executive Board the Asset Quality Committee and the Credit Committee of any significant increase in the level of socio-environmental risks in individual Bank customers particularly in customers with high credit exposure
18
and prepares reports on socio-environmental risks for international development banks towards which the Bank has such reporting obligation
The responsible organisational unit of the Bank monitors risks through the process of assessing loan applications taking into account the criteria related to lending to all customers engaged in production and service activities and the criteria related to environmental risk management
Management of Socio-environmental Risks in Lending
Adequate management and control of socio-environmental risks are essential preconditions for generating reliable and sustainable value and for protecting the Bankrsquos financial stability as well as its reputation
Socio-environmental Risk Management
The Socio-environmental Risk Management Procedure regulates the risk monitoring process in the area of environmental protection employee health and safety and the Bankrsquos social responsibility (protection of cultural heritage fundamental human rights and personal integrity) This Procedure regulates the credit process with regard to socio-environmental risks when approving a credit product to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1000000 euros or higher including the requested new product in case of a credit product from a credit line or other funds approved to the Bank by an international development bank and approval of a long-term credit product funded from other sources The Procedure regulates the rules classified by business lineprocess in the process of socio-environmental risk management
Equator Principles
The Implementation of the Equator Principles for Project Financing procedure applies when preparing and implementing project financing and advisory services in connection with project financing where the investment value of the project is 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes in these facilities can create significant environmental andor social impacts or significantly change the natural environment The goal of the Equator principles is to identify and assess risks and perform risk management based on the criteria defined by the principles with the aim of adhering to the principle of sustainability of natural resources human health human rights cultural heritage and biodiversity
Armaments
The sensitive sectors that the Bank monitors with special attention include armament production and trade In accordance with the relevant bylaw of its parent Group the Policy of Not Financing of Armaments in 2011 Banca Intesa adopted the Procedure for the Performance of Transactions Related to Armament Production and Trade which regulates the identification and preparation of the summary of the customers engaged in armament and military equipment production and trade the monitoring of transactions and loan applications of the customers engaged in armament and military equipment production and trade the approval of transactions and loan applications related to armament and military equipment production and trade in accordance with the Policy of Not Financing of Armaments as well as the preparation of reports on the transactions related to armament and military equipment production and trade
Reputational Risk Management
The Bank attaches great importance to reputational risks that are assessed as part of the compliance control system which is within the competence of the Compliance Office Banca Intesa believes that the standards in this area as well as the business ethics are the cornerstone of banking operations which by their nature are based on trust Bylaws such as the Code of Ethics policies and other define that any non-compliance with the bylaws the principles and values contained in them as well as with external regulations (laws and secondary legislation) exposes the Bank to a certain level of reputational risks
Fight Against Corruption and Compliance
The internal regulatory source that governs the system for control and mitigation of corruption risks comprises the Code of Ethics the Code of Conduct the Rulebook on Relations with Political Parties and the following Bank procedures the Procedure for the Prevention of Internal Fraud and Abuse at the Bank and the Employment Termination Procedure
19
The Code of Conduct prescribes in detail the rules in connection with receiving and giving gifts and the measures prescribed in the event of corruption are related to the violation of work duties so the measures stipulated by external regulations ie the Labour Law (eg compensation for damage employee suspension or termination) but also the Criminal Code may be pronounced against an employee Based on the Legal Department records no proceedings were initiated against Banca Intesa ad Beograd in connection with corruption since no complaints or notices prior to complaint were delivered during 2013
In the same period the Suspicious Transactions and Know Your Customer training courses were held in this segment by means of e-learning which were received by as many as 8663 of employees during 2013 The training courses were provided for by the current regulations and internal acts of the Bank and were aimed at informing the employees and refreshing their knowledge of the obligation of collecting information about each customer and completing appropriate questionnaires In addition the training informed the employees about the new processes that were implemented as well as about mandatory observance of all duties relating to knowing monitoring and reporting suspicious transactions of customers
The Rulebook on Relations with Political Parties prescribes the obligation of the Bank to refrain from granting donations and sponsorship tobull Political parties and any organisations related to thembull Political movements and their organisational unitsbull Trade union organisationsbull Competent authorities and institutions
The prohibition of granting donations and sponsorship to the above organisations aims at the protection against any grants that would result in a privileged position to the Bank or unfair decisions in favour of the Bank
The Compliance Office as well as the relevant organisational units of the Bank are committed to the regulation of processes and the definition of procedures and their operating rules as well as practice which efficiently prevent the violation of applicable regulations The Compliance Office also provides support to the highest bodies of the Bank in monitoring the compliance risk The compliance risk assessment process is constant Through semi-annual reporting these risks are identified and priority measures for their elimination or mitigation are determined ie the level of efficiency of the existing compliance controls is assessed
The Internal Audit provides direct support to the highest bodies of the Bank in monitoring the compliance with and adequacy of the rules contained in the Bankrsquos bylaws If it identifies critical issues during its activity the Internal Audit informs the relevant organisational units and the highest bodies of the Bank with the aim of determining adequate measures for risk mitigation and the method of their implementation
Protection of Health and Safety
Occupational health and safety at Banca Intesa are regulated in accordance with international directives recommendations and positive laws of the Republic of Serbia
During 2013 an assessment was made of the situation regarding occupational health and safety and the risk level for 207 facilities at which work is performed A schedule of elimination of recorded risks to the health of Bank employees was defined and implemented according to priorities and the budget planned In connection with this risk assessment documents were updated as well
When it comes to physical security three robberies were recorded in 2013 versus two a year earlier and investments in technical protection systems continued
Risk Management in Supply Chain
Supplier Check
The Procurement Unit and the organisational part in charge of procurement are obliged to evaluate the received supplier bids by applying the methods of qualitative and quantitative analysis as well as to align the bid evaluation criteria prior to inviting the bidders to submit offers by combining specific criteria one of which is the Compliance of Bidderrsquos Operations with the Corporate Social Responsibility Principles
20
Health and Safety Risk Assessment
In accordance with the Procurement Policy members of Intesa Sanpaolo Group are expected to include the parameters of assessment of environmental protection and occupational health protection in their procurement process giving priority to the use of recycled paper highly energy efficient products and environment-friendly technical equipment
Group members must include special provisions in the procurement contracts they conclude with their suppliers These provisions provide for the obligation of suppliers to comply with the principles specified in the Intesa Sanpaolo Rules for the Environmental and Energy Policy Constant checks are performed in the countries where legal measures regarding environmental protection were adopted in order to ensure compliance
In the area of personnel training and spreading the awareness of the importance of these issues the training of the employees who directly communicate with suppliers must include fields related to corporate social responsibility as well as to the responsibility for environmental protection
21
CUSTOMERS
Banca Intesa built its leading position in the market of Serbia and the status of stable and reliable partner by fostering trust in the relations with its customers The strengthening of relations with customers is based on constant improvement of the quality of products and services proceeding from specific needs of each segment as well as on full respect for the principles of equality and availability of products and services Key aspects of doing business with customers are the following
bull SUPPORT TO ECONOMY AND AGRICULTUREbull FINANCIAL INCLUSION AND EDUCATIONbull CUSTOMER SATISFACTION
SUPPORT TO ECONOMY AND AGRICULTURE
Banca Intesa continued to provide support to the economy and the agricultural sector in 2013 as well focusing on the development of entrepreneurship and self-employment particularly in the SME segment as well as on the improvement of public infrastructure
Support to the Public Sector
Banca Intesa offered loans from the credit line of the German Development Bank (KfW) to the public sector for financing infrastructure projects and the procurement of equipment in the following areas water management sewerage and wastewater management solid waste management environmental protection and pollution control transport infrastructure public transport and communication systems infrastructure facilities fostering economic development and other social and utility services During 2013 Banca Intesa granted 11 loans totalling 852 million euros while the total value of the project is 47 million euros
Development of Entrepreneurship
Banca Intesa supported the programme of measures of the Government of the Republic of Serbia for encouraging SMEs and entrepreneurs through subsidised loans for liquidity and working assets in 2013 as well The Bankrsquos commitment to provide continuously support to its customers in this segment is also demonstrated by the fact that the Government of the Republic of Serbia implements its programme of measures for the fifth consecutive time During 2013 the Bank granted 414 subsidised loans to SMEs totalling 562 billion dinars which accounted for 107 of the total loans to the SME sector The small business sector was granted 186 billion dinars and 1347 loans which accounted for 15 of the number of loans and 16 of the total loan disbursements to this segment
In cooperation with the National Bank of Serbia and the Kingdom of Denmark the Bank launched the Local Economic Development in the Balkans (LEDIB) programme intended for enterprises entrepreneurs and registered farms from the small business segment with the aim of improving local economic development creating new jobs strengthening organisational capacities introducing new eco-friendly technologies and other favourable impacts on the overall development The credit line was intended for the Nišava Pčinja Toplica Jablanica and Pirot Districts and in 2013 the Bank granted 39 loans totalling 505208 euros under this programme which accounted for 04 of the number of loans and 05 of the total loan disbursements to the small business segment At the same time from the credit line of the European Fund for Southeast Europe (EFSE) which supports enterprises and registered farms through investments and loans for working assets 227 million euros were granted in the small business segment which accounted for 22 of loan disbursements in the segment
With the aim of supporting the promotion and strengthening of womenrsquos entrepreneurship Banca Intesa helped the Association of Businesswomen in Serbia in the organisation of an international conference entitled New Age Woman Entrepreneur New Opportunities for Recovery of Economy in the Region The event contributed
22
to further positioning of Banca Intesa as a bank that actively supports entrepreneurship in the country as part of its efforts to contribute to economic recovery and growth For this purpose the Bank also has in its offer loans for women entrepreneurs in Vojvodina in the form of start-up loans for unemployed women and women who have had a business for up to three years The Bank granted 8 loans totalling 98 million dinars under this programme during 2013 which accounted for a 3 share in the number of loans and a 1 share in the total investment loan disbursements in the small business segment
Promotion of Agricultural Sector
Taking into account that the agricultural sector is very specific because it has a special social as well as environmental importance in addition to economic importance for many years Banca Intesa has been encouraging development and investing in projects and individuals that encourage with their activities further rural development and contribute to an increase in the competitiveness of domestic agriculture
Aware of the great economic potential of this industry as part of the LEDIB programme the Bank granted eight loans to registered farms in 2013 totalling 76219 euros which accounted for 02 of the number of loans and 03 of the total loan disbursements to this customer segment In addition in cooperation with the Guarantee Fund of the Autonomous Province of Vojvodina long-term loans for purchasing new agricultural machinery and equipment were available to customers During 2013 the Bank granted 82 loans of this type totalling 219 million euros which accounted for a 15 share in the number of loans and a 25 share in the total investment loan disbursements in the agricultural segment
In addition on the occasion of the 80th International Agricultural Fair in Novi Sad the Bank prepared a special credit offer intended for owners of registered farms which included the Intesa Farmer dinar loan for financing spring works as well as the Intesa Farmer loan for purchasing agricultural machinery During 2013 22 loans were granted for purchasing tractors and agricultural machinery totalling 341 million dinars which accounted for a 4 share in the number of loans and a 3 share in the total amount of agricultural investment loan disbursements
Banka Intesa launched the Intesa Farmer of the Year project to contribute in yet another way to the promotion of agricultural production in the country and to the strengthening of its competitiveness As part of the project the Bank awarded the most successful farmers in four categories ndash Intesa Crop Farmer Intesa Vegetable Grower Intesa Fruit Grower and Intesa Livestock Breeder and all winners won a trip to Germany to visit the international agricultural fair in Berlin The criteria based on which the Committee selected the winners of the title Intesa Farmer of the Year were the annual results achieved in agricultural production application of modern technologies in production activities the number of household members engaged in the production as well as the minimum three-year cooperation with the Bank which included a loan and regular settlement of their financial obligations
FINANCIAL INCLUSION AND LITERACY
Banka Intesa believes that the availability of financial products to all segments of society is an essential precondition for sustainable development In line with this position the Bank added to its offer specific products that promote financial inclusion and provide support during economic crisis to the most vulnerable social groups such as the elderly or youth as well as to solving broader social problems such as housing availability or health care services
Responding to the Needs of the Community
In 2013 Banca Intesa included in its offer the Intermezzo Cash Loan a new model of cash loan which offers to its users as a unique benefit in the domestic market a possibility of postponing the payment of monthly instalment up to five times during the repayment period Moreover as an additional functionality the Intermezzo loan includes insurance against job loss with no additional cost to the customer The Bank believes that the repayment flexibility provided by this loan model offers citizens unique support in the market at a time when they estimate that they need it most In 2013 Banca Intesa granted 11256 Intermezzo cash loans totalling 198 million euros which accounted for 235 of the total amount of cash loans disbursed during the year
Banca Intesa was the first in the Serbian market to offer loans to pensioners aged up to 74 years The Senior Cash Loans were designed specifically to fit the needs of senior citizens and they also include life insurance which is included in the cost of loan during the entire repayment period During the previous year 19774 loans were granted totalling 239 million euros which accounted for 284 of the total cash loans granted in 2013
23
In 2012 as support to citizens in financing medical services the Intesa Vita programme of consumer and cash loans was developed which includes loans for in vitro fertilisation harvesting and storage of stem cells DNA analysis dental services medical spa and wellness treatments as well as for purchasing baby supplies In 2013 the programme was extended to new purposes - laser vision correction vein operation and purchase of medical aids and 28 loans were granted totalling 126345 euros which accounted for 8 of the total cash loans granted during the year In this unique way the Bank provides the citizens with the possibility of taking care of their health in a responsible and timely manner without suddenly burdening their home budgets
Moreover the Bank continued to provide subsidised housing loans in 2013 as well in order to provide support to young married couples in solving their housing problems granting 224 loans totalling 864 million euros which was 205 of the total housing loans granted during the year At the same time 6544 refinancing loans with insurance against job loss or disability in case of an accident were granted totalling 146 million euros which enabled the customers to service their outstanding liabilities towards Banca Intesa and other banks and which accounted for 173 of the Bankrsquos total cash loans granted during the year
Banca Intesa introduced the Visa Classic Paralympic and Visa Electron Paralympic cards the first charity payment cards in the country in cooperation with the Paralympic Committee of Serbia This was the first initiative aimed at establishing a stable and independent mechanism for long-term assistance to athletes with disabilities and developing paralympic sport in the country During 2013 8345 Visa Classic Paralympic and Visa Electron Paralympic cards were issued which accounted for 14 of all cards issued during the year The Bank also provides debit cards for students which enable free account opening and maintenance for all students who opted for an Intesa Visa Electron Easy Travel Card (ETC) or a Maestro ISIC Card of Banca Intesa of which 4048 were issued in 2013 accounting for 18 of the debit cards issued during the year
Constantly striving to promote savings in 2013 the Bank introduced a new savings model the Month by Month Savings which provides customers with a possibility of reaching higher amounts of savings with lower monthly allocations The product enables saving in dinars and euros at a very attractive interest rate while the customers also have an opportunity to set the payment date and amount themselves
Financial Education
In 2013 as well Banca Intesa remained true to its commitment to support actively financial education by improving customer knowledge Thus in cooperation with Banca IMI SpA a member of Intesa Sanpaolo Group another Intesa Academia workshop was organised this time on the subject of advanced financing and risk management instruments so that Banca Intesarsquos customers could find out more about the possibilities of financing in the international and domestic bond markets and about hedging products for successful management of market risks The workshop brought together the leading world experts in the areas of financing and risk management as well as the most successful customers of the Bank In order to assist its customers in the SME segment in getting informed in more detail about the regulations relating to loan approval and collection Banca Intesa took part in the working breakfast on the subject Security Instruments and Their Collection as the Condition for Financing Company Growth held at the premises of the Serbian Association of Managers On this occasion the legal framework was presented about which enterprises should also get informed in order to know that documentation they will need if they opt for bank loans
At the same time the Factoring Department designed and launched an initiative of organising factoring workshops at the Bankrsquos regional centres Factoring workshops are an interactive form of cooperation and communication with customers with the focus on understanding the term and essence of factoring themselves With the support of regional centres a total of 27 factoring workshops were organised in 22 cities in two cycles in late 2012 and in early 2013 which were attended by nearly 300 corporate customers
As a member of the United Nations Global Compact and its Working Group on CSR in Banking and Finance Banca Intesa works together with the other members on the implementation of projects in the area of financial education which is the main goal of this Group One of the projects actively supported by the Bank is the cooperation with seven secondary schools of economics from six cities in Serbia where there is a ldquobank clerkrdquo educational profile in the area of thematic lectures for teachers and students The Bank representatives gave three lectures during 2013
24
CUSTOMER SATISFACTION
Banca Intesa believes that it is only through an open dialogue with its customers that it can truly understand their needs and expectations and build a long-term partner relationship with them
Meeting the Needs of Customers
Ever since 2008 Banca Intesa has been conducting surveys of its customersrsquo satisfaction with the Bankrsquos products and services in accordance with the methodology of the European Customer Satisfaction Index (ECSI) as part of its initiative named Listening 100 This is a continuous process analyses are made based on the results obtained in the survey and actions are proposed accordingly for improving the customer satisfaction The surveys are repeated at six-monthannual intervals in order to collect feedback from the customersrsquo perspective for the measures taken for the purpose of improving the satisfaction index as well as identifying the directions for further improvement
Looking at the results of the customer satisfaction survey at the end of 2013 a conclusion arises that among other things the basis of good results is a positively rated staff treatment of customers The ECSI as well as the Loyalty indices are stable with a high percentage of customers who stated they would remain Banca Intesa customers in the following 12 months Attempting to encourage its customers to express their opinions in the previous year the Bank clearly communicated the improvements implemented so far based on their suggestions
During 2013 as well Banca Intesa continued to increase the number of branches equipped with the Queue Management System (QMS) which covered approximately 40 per cent of active customers at the end of the year In addition to having a positive impact on customer satisfaction the QMS expansion made it possible to obtain the data necessary for better analysis and organisation of branch operation In addition free internet access via Wi-Fi and daily newspapers were made available to customers at the largest branches
As part of its efforts to improve further customer satisfaction in 2013 Banca Intesa implemented training of over 1500 employees both in its branch network and at its headquarters The training which was implemented as a continuation of the Education 100 programme initiated in 2011 was held on the subject of managing customer satisfaction but also their entire experience in each contact with the Bank
In addition to its efforts to improve its approach to customers and recognising the importance of two-way communication the Bank developed efficient mechanisms for collecting and recording customer feedback The Bank responds to all complaints sent to the Bank via formal complaints mechanisms and does so within the statutory time limit and in accordance with the decision of the National Bank of Serbia Each customer may also personally contact unit employees and if the customer is not satisfied with the answer received heshe can apply to the National Bank of Serbia as the second-instance body with the possibility of mediation The following are available to customers
bull Phone line +381 11 310 88 88bull E-mail kontaktbancaintesarsbull Fax +381 11 310 88 55bull Personal contact ie submitting a written complaint in personbull Contact form on the official website of the Bankbull Bank corporate accounts on social networks (Facebook and Twitter)bull Postal address of the Customer Satisfaction Management Unit Omladinskih brigada 90b 11070 New Belgrade
Transparent Advertising
Lasting relationships based on trust require communication that enables customers to understand clearly the characteristics and value of Banca Intesa products and services Therefore the Bank strives to contribute to the simplification of its products in communication
In its advertising the Bank clearly specifies all customer costs and all of them are included when calculating the effective interest rate which is always clearly and visibly shown as well as representative examples that contain all data in accordance with the Law on the Protection of Financial Service Consumers which demonstrates full transparency when it comes to Bank pricing policy
25
The Bank also strives to formulate the agreements so that they are simple to understand minimising possible misunderstandings and ambiguity by providing clear and exhaustive information It informs its customers in a timely manner of any changes in the agreements and their terms
Data Security
The protection of customer security as well as their assets and confidential information is not only Banca Intesarsquos primary duty but also the basis of the relationship of trust that the Bank wants to reinforce with its customers The protection of persons their assets and valuables as well as a multitude of data and internal organisational processes fully meets the criteria of reliability continuity and confidentiality In addition to its legal obligations Banca Intesa complies with the criteria of absolute transparency in informing its customers of their rights to privacy and the way it treats their personal information
In 2013 Banca Intesa did not find any founded complaint in connection with the violation of customer privacy or any disclosure leakage or theft of customer information
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
8
UNITED NATIONS GLOBAL
COMPACT
BUSINESS LEADERS FORUM
SERBIAN ASSOCIATION OF MANAGERS
AMERICAN CHAMBER OF COMMERCE
FOREIGN INVESTORS COUNCIL
NATIONAL ALLIANCE FOR LOCAL ECONOMIC
DEVELOPMENT
CHAMBER OF ITALIAN
AND SERBIAN BUSINESSPEOPLE
The largest global CSR network
bringing together more than
10000 members throughout
the world and promoting the protection of human and
labour rights and the environment and fight against
corruption
The first business network for CSR in Serbia comprising
20 members
A business association founded
with the aim of becoming a credible social partner of the Serbian Government
in the process of improving the businessenvironment
and accelerating economic
development
An organisation promoting the improvement of business
environment in Serbia as well as partnership
between US and Serbian companies
for the purpose of economic development
A business association whose activities contribute to the improvement of the investment
and business climate in Serbia
A business association that brings together
representatives of all three sectors of
society ndash companies municipalities
and NGOs which work together
on improving the conditions for local economic
development and doing business
A non-profit organisation that fosters improves
and develops trade between Italy and Serbia
9
CROSS REFERENCE TABLE
UNITED NATIONS GLOBAL COMPACT PRINCIPLES (UNGC)CORRESPONDING GRI INDICATOR
HUMAN RIGHTS
PRINCIPLE 1 BUSINESSES SHOULD SUPPORT AND RESPECT THE PROTECTION OF INTERNATIONALLY PROCLAIMED HUMAN RIGHTS AND
LA 4
LA 13
LA 15
HR 11
PR 8
PRINCIPLE 2 MAKE SURE THAT THEY ARE NOT COMPLICIT IN HUMAN RIGHTS ABUSES HR 11
LABOUR
PRINCIPLE 3 BUSINESSES SHOULD UPHOLD THE FREEDOM OF ASSOCIATION AND THE EFFECTIVE RECOGNITION OF THE RIGHT TO COLLECTIVE BARGAINING
LA 4
PRINCIPLE 4 THE ELIMINATION OF ALL FORMS OF FORCED AND COMPULSORY LABOUR
PRINCIPLE 5 THE EFFECTIVE ABOLITION OF CHILD LABOUR AND
PRINCIPLE 6 THE ELIMINATION OF DISCRIMINATION IN RESPECT OF EMPLOYMENT AND OCCUPATION LA 2
LA 13
LA 15
HR 11
ENVIRONMENT
PRINCIPLE 7 BUSINESSES SHOULD SUPPORT A PRECAUTIONARY APPROACH TO ENVIRONMENTAL CHALLENGES EN 26
PRINCIPLE 8 UNDERTAKE INITIATIVES TO PROMOTE GREATER ENVIRONMENTAL RESPONSIBILITY AND EN 4
EN 5
EN 8
EN 26
PR 3
PRINCIPLE 9 ENCOURAGE THE DEVELOPMENT AND DIFFUSION OF ENVIRONMENTALLY FRIENDLY TECHNOLOGIES EN 5
EN 26
ANTI-CORRUPTION
PRINCIPLE 10 BUSINESSES SHOULD WORK AGAINST CORRUPTION IN ALL ITS FORMS INCLUDING EXTORTION AND BRIBERY SO 3
SO 4
SO 6
10
Given that they were added subsequently to the new GRI guidelines version G31 the LA 15 and HR 11 indicators are entered into the cross reference table according to the authorrsquos estimate
In accordance with the GRI principle of materiality based on which priority topics present in the report are defined the corresponding indicators are not covered by this report taking into account their relevance to the banking sector The bank as an active member supports the promotion of all 10 global compact principles in its partners suppliers customers and in the general business and social community
SUSTAINABILITY MANAGEMENT
In order to achieve its business goals as well as those relating to socio-environmental dimensions Banca Intesa introduced ethical responsibility as a criterion in the process of decision-making regarding all stakeholders which means that socio-environmental issues are integrated in the process of product and service development risk management as well as in loan granting and supplier selection
The adoption of the Code of Ethics with the defined values to which Banca Intesa is committed introduced a management model based on the principle of accountability that requires commitment to aligning everyday business activities with the declared values at the individual level as well as at the level of the Bankrsquos organisational units The Code of Ethics is an expression of the corporate culture and tradition from which Banca Intesa originates This document provides on the one hand a framework through which the Bank observes and interprets different situations and on the other hand the ultimate goal to which it strives
Procedure for Managing the Reports of Non-compliance with the Code of Ethics was adopted in 2011 and is implemented in all organisational units of the Bank in the process of delivering reports in cases of suspicion or knowledge of any activities or individual acts that are contrary to the Code of Ethics and other bylaws of the Bank The procedure for managing the reports of noncompliance with the Code of Ethics consists of the following steps non-compliance reporting report analysis translating and delivering the information to the parent Group establishing the status and verifying the facts involving the relevant department proposing corrective actions and delivering reports to relevant stakeholders as well as to the parent Group The Bank employee who noticed any behaviour of one of hisher colleagues that seems not to be in accordance with the moral and ethical principles prescribed by the Code of Ethics delivers a non-compliance report to the following e-mail address etickikodeksbancaintesars The report may also be delivered in hard copy to the following address Banca Intesa ad Beograd Marketing and Communications Department Bulevar dr Zorana Đinđića 2a 11070 Novi BeogradThrough the above mechanism during 2013 Banca Intesa recorded no cases of human rights violation as defined by the Code of Ethics
The Marketing and Communications Department independently as well as in close cooperation with CSR ambassadors delegated representatives of all organisational parts of the Bank implements and coordinates projects and activities in the area of corporate social responsibility The CSR ambassadors provide the Department with necessary information in connection with the implementation of projects and activities and participate in monitoring measuring and reporting to the parent Group and other stakeholders
The Marketing and Communications Department also takes steps to make the CSR criteria a recognisable element of the whole management system and to this end cooperates with the top management in the process of defining the CSR policies and strategies communicating to the highest representatives of the Bank the results of dialogue with the stakeholders their needs and key issues that should be a part of strategic guidelines
11
12 RELATION WITH STAKEHOLDERS
DIALOGUE WITH STAKEHOLDERS
Dialogue with stakeholders is the beginning of continuous progress achieved by carefully monitoring the demands and needs of stakeholders and harmonising them with the Bankrsquos strategy The dialogue is achieved by using different techniques as part of the Bankrsquos regular activities and is a precondition for preparing the materiality matrix and eventually the Sustainability Report
Stakeholder map is based on the international methodology for stakeholder engagement the AA1000 Standard (Institute of Social and Ethical Accountability)
MATERIALITY
Sustainability Report 2013 focuses on the topics that proved to be the most important ones for stakeholders and also for the business of Intesa Sanpaolo and hence of Banca Intesa following the GRI methodology and the AA1000 Standard In accordance with the needs analysis conducted two priority issues stood out which are presented in the table These issues are also present at the local level
STAKEHOLDER MAP
GROUP ENGAGEMENT MECHANISM
CUSTOMERS
Focus groupBenchmarking surveysMeetings workshops seminarsSatisfaction survey Handling and analysis of complaints applications and suggestions
EMPLOYEESEmployee satisfaction surveyTraining and evalution Meetings with trade union
COMMUNITYMeetings with CSosWorking groups working bodies
SUPPLIERSSupplier information form Csr questionnaireRegular communication in tender process
ENVIRONMENTMeetings CSosWorking groups working bodies
CUSTOMERS EMPLOYEES COMMUNITY SUPPLIERS ENVIRONMENT
INDIVIDUALSSMALL BUSINESS
SMESLARGE CORPORATES
LOCAL GOVERNMENTSCONSUMER ASSOCIATIONSBUSINESS ASSOCIATIONSPUBLIC ADMINISTRATION
MANAGERSOFFICERS
EMPLOYEES
LOCAL AND NATIONAL PUBLIC
INSTITUTIONS (REGULATORYBODIES LOCAL GOVERNMENT
ETC)CSOS
MEDIA
DOMESTICFOREIGN
ENVIRONMENTALORGANISATIONS
FUTURE GENERATIONS
12
CUSTOMERS EMPLOYEES SUPPLIERS COMMUNITY ENVIRONMENT
Development of service model and channel in accordance with the
customersrsquo needs
Employee training and professional development
Fair treatment of suppliers Promotion of culture and artsOptimisation of natural
resource utilisation
Product and service qualityMerit recognition
and rewardingCooperation and relations
with suppliersSupport to youth education
and developmentReduction of greenhouse
gas emission
Customer satisfaction Employee protectionPromotion and observance
of ethical and environmental standards in supply chain
Fight against poverty and social exclusion
Support to customers for energy efficiency
improvement
Access to loans for corporatesSafe and healthy
work environment
Strengthening the SME sectorInvolving employees
in company life
Financial inclusion of vulnerable social groups
Work-life balance
Support to customers having financial problems
13
2 Sustainability
14
21 GENERATED ECONOMIC VALUE
Generation of economic value an efficient governance system and careful management of business risks characterise Banca Intesarsquos business model based on transparency and integrity These elements as well as the care for employees environment and the quality of service it provides to its customers are of key importance for the progress for which the Bank strives as a responsible stakeholder in the community in which it operates
MARKET POSITION
According to the official data of the National Bank of Serbia as of December 31 2013 Banca Intesa is the leader in all business segments
DIRECT AND INDIRECT ECONOMIC VALUE GENERATED
2012 2013
Net assets 3635 3727
Customer loans 2363 2404
Customer deposits 2300 2388
Equity 792 863
in million euros
EmploymentStable partner of the government
Reliable support to the economy
Support to the communityTotal income and
expenditure
Banca Intesa employs 3039 people
As an active partner of the government Banca
Intesa supports economic development initiatives
of the Government
Banca Intesa cooperates with 406 suppliers
Banca Intesa participated in numerous community
support projects and implemented 106 donor activities
Total economic value generated by Banca Intesa was RSD 20695651000
The Bank directly provides 3039 jobs and it paid
RSD 193711289679 into the budget of Serbia as taxes and contributions on wages and pensions
The budget of Serbia received 80629605186 dinars in the form of regular tax payments
WithRSD 67069271910EUR 2056318466
USD 73719631GBP 1012544
allocated for procurement it indirectly affects the
stability of business and jobs in its supplier chain
The investment in the community amounted
to RSD 22381000 through donations to the
local community RSD 10000000 through
investment in infrastructure and RSD 299812329 through volunteering
The economic value distributed through operating
costs and personnel expenses and liabilities to the Government and the community amounted to RSD 1116382182660
Banca Intesa continued to post good business results in 2013 as well confirming its leading position in the banking sector of Serbia despite difficult business conditions The Bankrsquos total loans to corporate and retail customers reached 2365 million euros while deposits totalled 2387 million euros The business network consisted of 192 branches 3 mortgage loan centres and 5 mortgage loan offices In addition Banca Intesa had the most developed network of POS terminals and ATMs with 12751 active POS terminals and 255 ATMs
In the retail segment total loans amounted to 667 million euros while deposits increased to 1436 million euros at the end of 2013 Banca Intesa reaffirmed its leading position in e-banking and payment card business during 2013 as well with around 14 million debit and credit cards issued At the same time small business loans reached 126 million euros while loans granted to farmers amounted to 37 million euros
In the corporate segment at the end of 2013 Banca Intesa had a loan portfolio of 1728 million euros continuing the growth from the previous years Corporate deposits were at the level of 968 million euros while the bankrsquos market share in total corporate deposits of the banking sector was 206 at the end of December 2013
Owing to the increase in all key items a net income of 238 million euros was posted Net profit after tax was 76 million euros at the end of December 2013
15
1 ECONOMIC VALUE GENERATED 2012 2013
Interest income 31340971 29588778
Interest expenses -11790051 -9598939
Fee and commission income 7890743 8175478
Fee and commission expenses -2292104 -2648138
Net profit on sale of securities atfair value through profit and loss 1008 590
Net profit on sale of securitiesavailable for sale 49855 4332
Net profit on sale of equity investments 434 0
Net exchange rate loss -13263673 356204
Dividends and share income 2925 1527
Other operating income 554540 676132
Net expenses on indirectly written-off of placements and provisions 1 -5415518 -6935326
Operating and other expenses 2 -189518 -532659
Gains from changes in value of assets and liabilities 31390752 12172042
Losses from changes in value of assets and liabilities -16188419 -10564372
TOTAL ECONOMIC VALUE GENERATED 22091945 20695651
2 ECONOMIC VALUE DISTRIBUTED
21 Operating costs 3
Costs of material -487362 -475379
Building and equipment maintenance costs -753215 -798584
Office and equipment lease costs -934768 -930657
Costs of intellectual services -369026 -315092
Advertising -355296 -280923
Costs of business travel and training of employees 3 -93716 -92586
Other operating costs 3 -2098067 -2130715
TOTAL OPERATING COSTS -5091449 -5023936
22 Employee expenses 3
Wages and salaries -3312415 -3223372
Taxes and contributions on wages and wage benefits 3 -1997940 -1937113
Cost of employees transportation 3 -76490 -84139
Costs of remuneration for temporary and occasional work -5861 -4569
Costs of employees education not related to their job 3 -3157 -6094
Other personnel expenses -172859 -55922
TOTAL INCOME AND EXPENSES
TOTAL EMPLOYEE EXPENSES -5568723 -5311209
23 Expenses related to liabilities to the government
Income tax -830548 -623097
Indirect taxes and duties 3 -161352 -183199
TOTAL EXPENSES RELATED TO LIABILITES TO THE GOVERNMENT -991900 -806296
24 Community-related expenses
Donations and corporate social responsibility 3 -33204 -22381
TOTAL COMMUNITY-RELATED EXPENSES -33204 -22381
TOTAL ECONOMIC VALUE DISTRIBUTED -11685276 -11163822
3 ECONOMIC VALUE RETAINED 4 10406668 95318291 The item differs from the income statement in the annual report in that the Provisions for Employee Benefits Legal Disputes and Restructuring are excluded 2 The item differs from the income statement in the annual report in that the Operating Costs are presented in the section Economic Value Distributed in several segments stated while Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation is not presented within Other Operating Expenses3 The items differ from the income statement in the annual report in that a part of the Operating Costs is reclassified into the following segments Employee Expenses Expenses Related to Liabilities to the Government and Community-Related Expenses4 This represents BIBrsquos profit net of the Provisions for Employee Benefits Legal Disputes and Restructuring the Gains and Losses on Deferred Tax Assets and Liabilities the Depreciation Costs and the Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation
16
22 GOVERNANCE IN BANCA INTESA
CORPORATE GOVERNANCE
Shareholders of Banca Intesa ad Beograd ndash ownership structure Intesa Sanpaolo Holding International SA 7779 Intesa Sanpaolo SPA 1521 International Finance Institution (IFC) 700 The governance of the Banca Intesa joint stock company is organised as a two-tier system
The Bankrsquos Board of Directors consists of five members elected by the General Meeting of Shareholders upon the shareholdersrsquo proposal including the Board Chairman The term of office of Board members is three years with a possibility of re-election The Chairman of the Board of Directors of Banca Intesa is Massimo Malagoli and its members are Ivan Šramko Arthur Philippe Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Executive Board of Banca Intesa consists of six members including the President The term of office of Executive Board members is three years with a possibility of re-election The President of the Executive Board of Banca Intesa is Draginja Đurić the Deputy President of the Executive Board is Marco Capellini and Board members are Darko Popović Head of Retail and Small Business Division Slađana Jelić Head of the Corporate Banking Division Dragica Mihajlović Head of the Financial Management and Treasury Division and Marko Marković Head of the Operations Management Division
Women account for 20 of the members of the Board of Directors and 50 of the members of the Executive Board of Banca Intesa
The Bankrsquos Audit Committee consists of five members including the Chairman The term of office of Committee members is three years with a possibility of re-election The Committee Chairman is Giovanni Bergamini and its members are Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Chairman of the Board of Directors as a governance body does not have a direct executive role given that Banca Intesa organised as a joint stock company with a two-tier governance system delegates executive roles to the Executive Board as a management body that organises the Bankrsquos operations and performs daily monitoring of the activities of the Bank employees while the Board of Directors makes strategic decisions aimed at the Bankrsquos compliance takes care of and is responsible for the accuracy of all reports financial condition and operating results of the Bank addressed to the Bankrsquos shareholders the public and the National Bank of Serbia
In line with the Law on Banks and other regulations members of the Board of Directors are appointed and dismissed by the General Meeting of Shareholders while members of the Executive Board are appointed and dismissed by the Bankrsquos Board of Directors Domestic regulations list conditions that members of the Executive Board and the Board of Directors must meet in order to get prior approval of the regulatory body ie the National Bank of Serbia without which they cannot become members of these boards This includes among other things good business reputation and appropriate qualifications In addition appropriate experience in finance is also required for at least three members of the Board of Directors while at least one member of the Board of Directors must have active knowledge of Serbian and reside in the territory of the Republic of Serbia After obtaining the approval the appointed person is registered with the Business Registers Agency as well
Banca Intesa provided in its bylaws for the mechanisms and channels of direct e-mail communication with its parent group Intesa Sanpaolo with the aim of respecting the individual and dignity of each employee as well as the values proclaimed by the Code of Ethics The Bankrsquos shareholders ie the General Meeting of Shareholders participate in and directly impact the work of the Board of Directors as a governance body in the following ways
bull The General Meeting of Shareholders adopts the business policy and strategy of the Bankbull The General Meeting of Shareholders adopts the Articles of Association and the amendments to the Memorandum and Articles of Associationbull The General Meeting of Shareholders appoints and dismisses the Chairman and members of the Board of
17
Directorsbull The General Meeting of Shareholders appoints and dismisses the external auditorbull The General Meeting of Shareholders considers and adopts the annual report of the Board of Directors
The adopted remuneration policy for the entire human resources of the Group including the variable components is based on equality merit and sustainability of results The guidelines for defining the management remuneration policy are based on objective elements and parameters resulting from the assessment of organisational positions as well as performance and potential with the aim of creating an integrated system for the members of management thus helping their professional development The policy provides for remuneration in the form of benefits which is also based on financial instruments and linked to the results of the company ndash which corresponds to the level of assumed risk and is regulated so as to avoid giving benefits that in the long term are not in accordance with the Grouprsquos interests Based on the performance indicators closely linked with the long-term goals the benefit determination systems are based among other things on the principle of symmetry with the amounts of paid benefits being based on the results achieved at the Group business sector and individual levels and therefore being capable of decreasing significantly and even reaching zero if the minimum indicators that reflect the Group profitability are not achieved also taking into account the risks assumed and the capital used
When it comes to conflicts of interest Banca Intesa has prescribed in accordance with the provisions of the Law on Banks as well as with its bylaws and those of its parent Group an obligation for members of the Board of Directors and the Executive Board to submit a written statement of conflict of interest to the Bankrsquos Board of Directors within one month from the day of taking office The members of the Board of Directors and the Executive Board are obliged in accordance with the bylaws regulating transactions with related parties and the conflict of interest to submit once a year completed standard questionnaires whose content is designed by the parent Group and which contain information relevant for establishing any conflict of interest
One of the methods of sustainability control at Banca Intesa is the power of the Board of Directors as a governance body to set up an integrated risk management system at the Bank and the supervision of this system while the Executive Board identifies the risks to which Banca Intesa is exposed and controls these risks in accordance with the approved policies and procedures The Board of Directors gives approval to the Bankrsquos exposure to one or a group of related parties of over 10 or to an increase in the exposure to over 20 of Bank equity adopts internal audit plan and programme considers external and internal audit reports sets up the internal control system defines the internal organisation and organisational structure of the Bank that ensures the division of duties authority and responsibilities of its employees in a manner that prevents conflict of interest and ensures a transparent and documented process of decision making and implementation decides on disposing with the Bankrsquos fixed assets and the stakes and shares that the Bank has in other legal entities
The work of the Executive Board is evaluated through the MBO (Management by Objectives) system which is based on setting measurable objectives based on which the annual performance is monitored
RISK MANAGEMENT
Risk management is an integral part of the corporate governance of Banca Intesa based on which it is estimated whether the Bank can achieve its business targets in the way consistent not only with the law but also with the public interest safety of people as well as the factors of the natural and social environment Therefore the access to risk management also implies broader social consequences of Bank activity in the environment and in the market
Controlling Socio-environmental Risks in the Governance Process
By a decision of the Executive Board the Bank appointed the persons responsible for environmental protection with the aim of establishing an Environmental Management System ndash EMS and ensuring compliance with the rules of environmental protection and corporate social responsibility in lending operations so that the system would be fully applied until the final collection of all loan instalments A Senior Environmental Management Officer (Deputy President of the Executive Board) and an Environmental Management Coordinator (compliance risk management specialist) were appointedThe Environmental Management Coordinator with the approval of the Senior Environmental Management Officer informs the Executive Board the Asset Quality Committee and the Credit Committee of any significant increase in the level of socio-environmental risks in individual Bank customers particularly in customers with high credit exposure
18
and prepares reports on socio-environmental risks for international development banks towards which the Bank has such reporting obligation
The responsible organisational unit of the Bank monitors risks through the process of assessing loan applications taking into account the criteria related to lending to all customers engaged in production and service activities and the criteria related to environmental risk management
Management of Socio-environmental Risks in Lending
Adequate management and control of socio-environmental risks are essential preconditions for generating reliable and sustainable value and for protecting the Bankrsquos financial stability as well as its reputation
Socio-environmental Risk Management
The Socio-environmental Risk Management Procedure regulates the risk monitoring process in the area of environmental protection employee health and safety and the Bankrsquos social responsibility (protection of cultural heritage fundamental human rights and personal integrity) This Procedure regulates the credit process with regard to socio-environmental risks when approving a credit product to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1000000 euros or higher including the requested new product in case of a credit product from a credit line or other funds approved to the Bank by an international development bank and approval of a long-term credit product funded from other sources The Procedure regulates the rules classified by business lineprocess in the process of socio-environmental risk management
Equator Principles
The Implementation of the Equator Principles for Project Financing procedure applies when preparing and implementing project financing and advisory services in connection with project financing where the investment value of the project is 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes in these facilities can create significant environmental andor social impacts or significantly change the natural environment The goal of the Equator principles is to identify and assess risks and perform risk management based on the criteria defined by the principles with the aim of adhering to the principle of sustainability of natural resources human health human rights cultural heritage and biodiversity
Armaments
The sensitive sectors that the Bank monitors with special attention include armament production and trade In accordance with the relevant bylaw of its parent Group the Policy of Not Financing of Armaments in 2011 Banca Intesa adopted the Procedure for the Performance of Transactions Related to Armament Production and Trade which regulates the identification and preparation of the summary of the customers engaged in armament and military equipment production and trade the monitoring of transactions and loan applications of the customers engaged in armament and military equipment production and trade the approval of transactions and loan applications related to armament and military equipment production and trade in accordance with the Policy of Not Financing of Armaments as well as the preparation of reports on the transactions related to armament and military equipment production and trade
Reputational Risk Management
The Bank attaches great importance to reputational risks that are assessed as part of the compliance control system which is within the competence of the Compliance Office Banca Intesa believes that the standards in this area as well as the business ethics are the cornerstone of banking operations which by their nature are based on trust Bylaws such as the Code of Ethics policies and other define that any non-compliance with the bylaws the principles and values contained in them as well as with external regulations (laws and secondary legislation) exposes the Bank to a certain level of reputational risks
Fight Against Corruption and Compliance
The internal regulatory source that governs the system for control and mitigation of corruption risks comprises the Code of Ethics the Code of Conduct the Rulebook on Relations with Political Parties and the following Bank procedures the Procedure for the Prevention of Internal Fraud and Abuse at the Bank and the Employment Termination Procedure
19
The Code of Conduct prescribes in detail the rules in connection with receiving and giving gifts and the measures prescribed in the event of corruption are related to the violation of work duties so the measures stipulated by external regulations ie the Labour Law (eg compensation for damage employee suspension or termination) but also the Criminal Code may be pronounced against an employee Based on the Legal Department records no proceedings were initiated against Banca Intesa ad Beograd in connection with corruption since no complaints or notices prior to complaint were delivered during 2013
In the same period the Suspicious Transactions and Know Your Customer training courses were held in this segment by means of e-learning which were received by as many as 8663 of employees during 2013 The training courses were provided for by the current regulations and internal acts of the Bank and were aimed at informing the employees and refreshing their knowledge of the obligation of collecting information about each customer and completing appropriate questionnaires In addition the training informed the employees about the new processes that were implemented as well as about mandatory observance of all duties relating to knowing monitoring and reporting suspicious transactions of customers
The Rulebook on Relations with Political Parties prescribes the obligation of the Bank to refrain from granting donations and sponsorship tobull Political parties and any organisations related to thembull Political movements and their organisational unitsbull Trade union organisationsbull Competent authorities and institutions
The prohibition of granting donations and sponsorship to the above organisations aims at the protection against any grants that would result in a privileged position to the Bank or unfair decisions in favour of the Bank
The Compliance Office as well as the relevant organisational units of the Bank are committed to the regulation of processes and the definition of procedures and their operating rules as well as practice which efficiently prevent the violation of applicable regulations The Compliance Office also provides support to the highest bodies of the Bank in monitoring the compliance risk The compliance risk assessment process is constant Through semi-annual reporting these risks are identified and priority measures for their elimination or mitigation are determined ie the level of efficiency of the existing compliance controls is assessed
The Internal Audit provides direct support to the highest bodies of the Bank in monitoring the compliance with and adequacy of the rules contained in the Bankrsquos bylaws If it identifies critical issues during its activity the Internal Audit informs the relevant organisational units and the highest bodies of the Bank with the aim of determining adequate measures for risk mitigation and the method of their implementation
Protection of Health and Safety
Occupational health and safety at Banca Intesa are regulated in accordance with international directives recommendations and positive laws of the Republic of Serbia
During 2013 an assessment was made of the situation regarding occupational health and safety and the risk level for 207 facilities at which work is performed A schedule of elimination of recorded risks to the health of Bank employees was defined and implemented according to priorities and the budget planned In connection with this risk assessment documents were updated as well
When it comes to physical security three robberies were recorded in 2013 versus two a year earlier and investments in technical protection systems continued
Risk Management in Supply Chain
Supplier Check
The Procurement Unit and the organisational part in charge of procurement are obliged to evaluate the received supplier bids by applying the methods of qualitative and quantitative analysis as well as to align the bid evaluation criteria prior to inviting the bidders to submit offers by combining specific criteria one of which is the Compliance of Bidderrsquos Operations with the Corporate Social Responsibility Principles
20
Health and Safety Risk Assessment
In accordance with the Procurement Policy members of Intesa Sanpaolo Group are expected to include the parameters of assessment of environmental protection and occupational health protection in their procurement process giving priority to the use of recycled paper highly energy efficient products and environment-friendly technical equipment
Group members must include special provisions in the procurement contracts they conclude with their suppliers These provisions provide for the obligation of suppliers to comply with the principles specified in the Intesa Sanpaolo Rules for the Environmental and Energy Policy Constant checks are performed in the countries where legal measures regarding environmental protection were adopted in order to ensure compliance
In the area of personnel training and spreading the awareness of the importance of these issues the training of the employees who directly communicate with suppliers must include fields related to corporate social responsibility as well as to the responsibility for environmental protection
21
CUSTOMERS
Banca Intesa built its leading position in the market of Serbia and the status of stable and reliable partner by fostering trust in the relations with its customers The strengthening of relations with customers is based on constant improvement of the quality of products and services proceeding from specific needs of each segment as well as on full respect for the principles of equality and availability of products and services Key aspects of doing business with customers are the following
bull SUPPORT TO ECONOMY AND AGRICULTUREbull FINANCIAL INCLUSION AND EDUCATIONbull CUSTOMER SATISFACTION
SUPPORT TO ECONOMY AND AGRICULTURE
Banca Intesa continued to provide support to the economy and the agricultural sector in 2013 as well focusing on the development of entrepreneurship and self-employment particularly in the SME segment as well as on the improvement of public infrastructure
Support to the Public Sector
Banca Intesa offered loans from the credit line of the German Development Bank (KfW) to the public sector for financing infrastructure projects and the procurement of equipment in the following areas water management sewerage and wastewater management solid waste management environmental protection and pollution control transport infrastructure public transport and communication systems infrastructure facilities fostering economic development and other social and utility services During 2013 Banca Intesa granted 11 loans totalling 852 million euros while the total value of the project is 47 million euros
Development of Entrepreneurship
Banca Intesa supported the programme of measures of the Government of the Republic of Serbia for encouraging SMEs and entrepreneurs through subsidised loans for liquidity and working assets in 2013 as well The Bankrsquos commitment to provide continuously support to its customers in this segment is also demonstrated by the fact that the Government of the Republic of Serbia implements its programme of measures for the fifth consecutive time During 2013 the Bank granted 414 subsidised loans to SMEs totalling 562 billion dinars which accounted for 107 of the total loans to the SME sector The small business sector was granted 186 billion dinars and 1347 loans which accounted for 15 of the number of loans and 16 of the total loan disbursements to this segment
In cooperation with the National Bank of Serbia and the Kingdom of Denmark the Bank launched the Local Economic Development in the Balkans (LEDIB) programme intended for enterprises entrepreneurs and registered farms from the small business segment with the aim of improving local economic development creating new jobs strengthening organisational capacities introducing new eco-friendly technologies and other favourable impacts on the overall development The credit line was intended for the Nišava Pčinja Toplica Jablanica and Pirot Districts and in 2013 the Bank granted 39 loans totalling 505208 euros under this programme which accounted for 04 of the number of loans and 05 of the total loan disbursements to the small business segment At the same time from the credit line of the European Fund for Southeast Europe (EFSE) which supports enterprises and registered farms through investments and loans for working assets 227 million euros were granted in the small business segment which accounted for 22 of loan disbursements in the segment
With the aim of supporting the promotion and strengthening of womenrsquos entrepreneurship Banca Intesa helped the Association of Businesswomen in Serbia in the organisation of an international conference entitled New Age Woman Entrepreneur New Opportunities for Recovery of Economy in the Region The event contributed
22
to further positioning of Banca Intesa as a bank that actively supports entrepreneurship in the country as part of its efforts to contribute to economic recovery and growth For this purpose the Bank also has in its offer loans for women entrepreneurs in Vojvodina in the form of start-up loans for unemployed women and women who have had a business for up to three years The Bank granted 8 loans totalling 98 million dinars under this programme during 2013 which accounted for a 3 share in the number of loans and a 1 share in the total investment loan disbursements in the small business segment
Promotion of Agricultural Sector
Taking into account that the agricultural sector is very specific because it has a special social as well as environmental importance in addition to economic importance for many years Banca Intesa has been encouraging development and investing in projects and individuals that encourage with their activities further rural development and contribute to an increase in the competitiveness of domestic agriculture
Aware of the great economic potential of this industry as part of the LEDIB programme the Bank granted eight loans to registered farms in 2013 totalling 76219 euros which accounted for 02 of the number of loans and 03 of the total loan disbursements to this customer segment In addition in cooperation with the Guarantee Fund of the Autonomous Province of Vojvodina long-term loans for purchasing new agricultural machinery and equipment were available to customers During 2013 the Bank granted 82 loans of this type totalling 219 million euros which accounted for a 15 share in the number of loans and a 25 share in the total investment loan disbursements in the agricultural segment
In addition on the occasion of the 80th International Agricultural Fair in Novi Sad the Bank prepared a special credit offer intended for owners of registered farms which included the Intesa Farmer dinar loan for financing spring works as well as the Intesa Farmer loan for purchasing agricultural machinery During 2013 22 loans were granted for purchasing tractors and agricultural machinery totalling 341 million dinars which accounted for a 4 share in the number of loans and a 3 share in the total amount of agricultural investment loan disbursements
Banka Intesa launched the Intesa Farmer of the Year project to contribute in yet another way to the promotion of agricultural production in the country and to the strengthening of its competitiveness As part of the project the Bank awarded the most successful farmers in four categories ndash Intesa Crop Farmer Intesa Vegetable Grower Intesa Fruit Grower and Intesa Livestock Breeder and all winners won a trip to Germany to visit the international agricultural fair in Berlin The criteria based on which the Committee selected the winners of the title Intesa Farmer of the Year were the annual results achieved in agricultural production application of modern technologies in production activities the number of household members engaged in the production as well as the minimum three-year cooperation with the Bank which included a loan and regular settlement of their financial obligations
FINANCIAL INCLUSION AND LITERACY
Banka Intesa believes that the availability of financial products to all segments of society is an essential precondition for sustainable development In line with this position the Bank added to its offer specific products that promote financial inclusion and provide support during economic crisis to the most vulnerable social groups such as the elderly or youth as well as to solving broader social problems such as housing availability or health care services
Responding to the Needs of the Community
In 2013 Banca Intesa included in its offer the Intermezzo Cash Loan a new model of cash loan which offers to its users as a unique benefit in the domestic market a possibility of postponing the payment of monthly instalment up to five times during the repayment period Moreover as an additional functionality the Intermezzo loan includes insurance against job loss with no additional cost to the customer The Bank believes that the repayment flexibility provided by this loan model offers citizens unique support in the market at a time when they estimate that they need it most In 2013 Banca Intesa granted 11256 Intermezzo cash loans totalling 198 million euros which accounted for 235 of the total amount of cash loans disbursed during the year
Banca Intesa was the first in the Serbian market to offer loans to pensioners aged up to 74 years The Senior Cash Loans were designed specifically to fit the needs of senior citizens and they also include life insurance which is included in the cost of loan during the entire repayment period During the previous year 19774 loans were granted totalling 239 million euros which accounted for 284 of the total cash loans granted in 2013
23
In 2012 as support to citizens in financing medical services the Intesa Vita programme of consumer and cash loans was developed which includes loans for in vitro fertilisation harvesting and storage of stem cells DNA analysis dental services medical spa and wellness treatments as well as for purchasing baby supplies In 2013 the programme was extended to new purposes - laser vision correction vein operation and purchase of medical aids and 28 loans were granted totalling 126345 euros which accounted for 8 of the total cash loans granted during the year In this unique way the Bank provides the citizens with the possibility of taking care of their health in a responsible and timely manner without suddenly burdening their home budgets
Moreover the Bank continued to provide subsidised housing loans in 2013 as well in order to provide support to young married couples in solving their housing problems granting 224 loans totalling 864 million euros which was 205 of the total housing loans granted during the year At the same time 6544 refinancing loans with insurance against job loss or disability in case of an accident were granted totalling 146 million euros which enabled the customers to service their outstanding liabilities towards Banca Intesa and other banks and which accounted for 173 of the Bankrsquos total cash loans granted during the year
Banca Intesa introduced the Visa Classic Paralympic and Visa Electron Paralympic cards the first charity payment cards in the country in cooperation with the Paralympic Committee of Serbia This was the first initiative aimed at establishing a stable and independent mechanism for long-term assistance to athletes with disabilities and developing paralympic sport in the country During 2013 8345 Visa Classic Paralympic and Visa Electron Paralympic cards were issued which accounted for 14 of all cards issued during the year The Bank also provides debit cards for students which enable free account opening and maintenance for all students who opted for an Intesa Visa Electron Easy Travel Card (ETC) or a Maestro ISIC Card of Banca Intesa of which 4048 were issued in 2013 accounting for 18 of the debit cards issued during the year
Constantly striving to promote savings in 2013 the Bank introduced a new savings model the Month by Month Savings which provides customers with a possibility of reaching higher amounts of savings with lower monthly allocations The product enables saving in dinars and euros at a very attractive interest rate while the customers also have an opportunity to set the payment date and amount themselves
Financial Education
In 2013 as well Banca Intesa remained true to its commitment to support actively financial education by improving customer knowledge Thus in cooperation with Banca IMI SpA a member of Intesa Sanpaolo Group another Intesa Academia workshop was organised this time on the subject of advanced financing and risk management instruments so that Banca Intesarsquos customers could find out more about the possibilities of financing in the international and domestic bond markets and about hedging products for successful management of market risks The workshop brought together the leading world experts in the areas of financing and risk management as well as the most successful customers of the Bank In order to assist its customers in the SME segment in getting informed in more detail about the regulations relating to loan approval and collection Banca Intesa took part in the working breakfast on the subject Security Instruments and Their Collection as the Condition for Financing Company Growth held at the premises of the Serbian Association of Managers On this occasion the legal framework was presented about which enterprises should also get informed in order to know that documentation they will need if they opt for bank loans
At the same time the Factoring Department designed and launched an initiative of organising factoring workshops at the Bankrsquos regional centres Factoring workshops are an interactive form of cooperation and communication with customers with the focus on understanding the term and essence of factoring themselves With the support of regional centres a total of 27 factoring workshops were organised in 22 cities in two cycles in late 2012 and in early 2013 which were attended by nearly 300 corporate customers
As a member of the United Nations Global Compact and its Working Group on CSR in Banking and Finance Banca Intesa works together with the other members on the implementation of projects in the area of financial education which is the main goal of this Group One of the projects actively supported by the Bank is the cooperation with seven secondary schools of economics from six cities in Serbia where there is a ldquobank clerkrdquo educational profile in the area of thematic lectures for teachers and students The Bank representatives gave three lectures during 2013
24
CUSTOMER SATISFACTION
Banca Intesa believes that it is only through an open dialogue with its customers that it can truly understand their needs and expectations and build a long-term partner relationship with them
Meeting the Needs of Customers
Ever since 2008 Banca Intesa has been conducting surveys of its customersrsquo satisfaction with the Bankrsquos products and services in accordance with the methodology of the European Customer Satisfaction Index (ECSI) as part of its initiative named Listening 100 This is a continuous process analyses are made based on the results obtained in the survey and actions are proposed accordingly for improving the customer satisfaction The surveys are repeated at six-monthannual intervals in order to collect feedback from the customersrsquo perspective for the measures taken for the purpose of improving the satisfaction index as well as identifying the directions for further improvement
Looking at the results of the customer satisfaction survey at the end of 2013 a conclusion arises that among other things the basis of good results is a positively rated staff treatment of customers The ECSI as well as the Loyalty indices are stable with a high percentage of customers who stated they would remain Banca Intesa customers in the following 12 months Attempting to encourage its customers to express their opinions in the previous year the Bank clearly communicated the improvements implemented so far based on their suggestions
During 2013 as well Banca Intesa continued to increase the number of branches equipped with the Queue Management System (QMS) which covered approximately 40 per cent of active customers at the end of the year In addition to having a positive impact on customer satisfaction the QMS expansion made it possible to obtain the data necessary for better analysis and organisation of branch operation In addition free internet access via Wi-Fi and daily newspapers were made available to customers at the largest branches
As part of its efforts to improve further customer satisfaction in 2013 Banca Intesa implemented training of over 1500 employees both in its branch network and at its headquarters The training which was implemented as a continuation of the Education 100 programme initiated in 2011 was held on the subject of managing customer satisfaction but also their entire experience in each contact with the Bank
In addition to its efforts to improve its approach to customers and recognising the importance of two-way communication the Bank developed efficient mechanisms for collecting and recording customer feedback The Bank responds to all complaints sent to the Bank via formal complaints mechanisms and does so within the statutory time limit and in accordance with the decision of the National Bank of Serbia Each customer may also personally contact unit employees and if the customer is not satisfied with the answer received heshe can apply to the National Bank of Serbia as the second-instance body with the possibility of mediation The following are available to customers
bull Phone line +381 11 310 88 88bull E-mail kontaktbancaintesarsbull Fax +381 11 310 88 55bull Personal contact ie submitting a written complaint in personbull Contact form on the official website of the Bankbull Bank corporate accounts on social networks (Facebook and Twitter)bull Postal address of the Customer Satisfaction Management Unit Omladinskih brigada 90b 11070 New Belgrade
Transparent Advertising
Lasting relationships based on trust require communication that enables customers to understand clearly the characteristics and value of Banca Intesa products and services Therefore the Bank strives to contribute to the simplification of its products in communication
In its advertising the Bank clearly specifies all customer costs and all of them are included when calculating the effective interest rate which is always clearly and visibly shown as well as representative examples that contain all data in accordance with the Law on the Protection of Financial Service Consumers which demonstrates full transparency when it comes to Bank pricing policy
25
The Bank also strives to formulate the agreements so that they are simple to understand minimising possible misunderstandings and ambiguity by providing clear and exhaustive information It informs its customers in a timely manner of any changes in the agreements and their terms
Data Security
The protection of customer security as well as their assets and confidential information is not only Banca Intesarsquos primary duty but also the basis of the relationship of trust that the Bank wants to reinforce with its customers The protection of persons their assets and valuables as well as a multitude of data and internal organisational processes fully meets the criteria of reliability continuity and confidentiality In addition to its legal obligations Banca Intesa complies with the criteria of absolute transparency in informing its customers of their rights to privacy and the way it treats their personal information
In 2013 Banca Intesa did not find any founded complaint in connection with the violation of customer privacy or any disclosure leakage or theft of customer information
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
9
CROSS REFERENCE TABLE
UNITED NATIONS GLOBAL COMPACT PRINCIPLES (UNGC)CORRESPONDING GRI INDICATOR
HUMAN RIGHTS
PRINCIPLE 1 BUSINESSES SHOULD SUPPORT AND RESPECT THE PROTECTION OF INTERNATIONALLY PROCLAIMED HUMAN RIGHTS AND
LA 4
LA 13
LA 15
HR 11
PR 8
PRINCIPLE 2 MAKE SURE THAT THEY ARE NOT COMPLICIT IN HUMAN RIGHTS ABUSES HR 11
LABOUR
PRINCIPLE 3 BUSINESSES SHOULD UPHOLD THE FREEDOM OF ASSOCIATION AND THE EFFECTIVE RECOGNITION OF THE RIGHT TO COLLECTIVE BARGAINING
LA 4
PRINCIPLE 4 THE ELIMINATION OF ALL FORMS OF FORCED AND COMPULSORY LABOUR
PRINCIPLE 5 THE EFFECTIVE ABOLITION OF CHILD LABOUR AND
PRINCIPLE 6 THE ELIMINATION OF DISCRIMINATION IN RESPECT OF EMPLOYMENT AND OCCUPATION LA 2
LA 13
LA 15
HR 11
ENVIRONMENT
PRINCIPLE 7 BUSINESSES SHOULD SUPPORT A PRECAUTIONARY APPROACH TO ENVIRONMENTAL CHALLENGES EN 26
PRINCIPLE 8 UNDERTAKE INITIATIVES TO PROMOTE GREATER ENVIRONMENTAL RESPONSIBILITY AND EN 4
EN 5
EN 8
EN 26
PR 3
PRINCIPLE 9 ENCOURAGE THE DEVELOPMENT AND DIFFUSION OF ENVIRONMENTALLY FRIENDLY TECHNOLOGIES EN 5
EN 26
ANTI-CORRUPTION
PRINCIPLE 10 BUSINESSES SHOULD WORK AGAINST CORRUPTION IN ALL ITS FORMS INCLUDING EXTORTION AND BRIBERY SO 3
SO 4
SO 6
10
Given that they were added subsequently to the new GRI guidelines version G31 the LA 15 and HR 11 indicators are entered into the cross reference table according to the authorrsquos estimate
In accordance with the GRI principle of materiality based on which priority topics present in the report are defined the corresponding indicators are not covered by this report taking into account their relevance to the banking sector The bank as an active member supports the promotion of all 10 global compact principles in its partners suppliers customers and in the general business and social community
SUSTAINABILITY MANAGEMENT
In order to achieve its business goals as well as those relating to socio-environmental dimensions Banca Intesa introduced ethical responsibility as a criterion in the process of decision-making regarding all stakeholders which means that socio-environmental issues are integrated in the process of product and service development risk management as well as in loan granting and supplier selection
The adoption of the Code of Ethics with the defined values to which Banca Intesa is committed introduced a management model based on the principle of accountability that requires commitment to aligning everyday business activities with the declared values at the individual level as well as at the level of the Bankrsquos organisational units The Code of Ethics is an expression of the corporate culture and tradition from which Banca Intesa originates This document provides on the one hand a framework through which the Bank observes and interprets different situations and on the other hand the ultimate goal to which it strives
Procedure for Managing the Reports of Non-compliance with the Code of Ethics was adopted in 2011 and is implemented in all organisational units of the Bank in the process of delivering reports in cases of suspicion or knowledge of any activities or individual acts that are contrary to the Code of Ethics and other bylaws of the Bank The procedure for managing the reports of noncompliance with the Code of Ethics consists of the following steps non-compliance reporting report analysis translating and delivering the information to the parent Group establishing the status and verifying the facts involving the relevant department proposing corrective actions and delivering reports to relevant stakeholders as well as to the parent Group The Bank employee who noticed any behaviour of one of hisher colleagues that seems not to be in accordance with the moral and ethical principles prescribed by the Code of Ethics delivers a non-compliance report to the following e-mail address etickikodeksbancaintesars The report may also be delivered in hard copy to the following address Banca Intesa ad Beograd Marketing and Communications Department Bulevar dr Zorana Đinđića 2a 11070 Novi BeogradThrough the above mechanism during 2013 Banca Intesa recorded no cases of human rights violation as defined by the Code of Ethics
The Marketing and Communications Department independently as well as in close cooperation with CSR ambassadors delegated representatives of all organisational parts of the Bank implements and coordinates projects and activities in the area of corporate social responsibility The CSR ambassadors provide the Department with necessary information in connection with the implementation of projects and activities and participate in monitoring measuring and reporting to the parent Group and other stakeholders
The Marketing and Communications Department also takes steps to make the CSR criteria a recognisable element of the whole management system and to this end cooperates with the top management in the process of defining the CSR policies and strategies communicating to the highest representatives of the Bank the results of dialogue with the stakeholders their needs and key issues that should be a part of strategic guidelines
11
12 RELATION WITH STAKEHOLDERS
DIALOGUE WITH STAKEHOLDERS
Dialogue with stakeholders is the beginning of continuous progress achieved by carefully monitoring the demands and needs of stakeholders and harmonising them with the Bankrsquos strategy The dialogue is achieved by using different techniques as part of the Bankrsquos regular activities and is a precondition for preparing the materiality matrix and eventually the Sustainability Report
Stakeholder map is based on the international methodology for stakeholder engagement the AA1000 Standard (Institute of Social and Ethical Accountability)
MATERIALITY
Sustainability Report 2013 focuses on the topics that proved to be the most important ones for stakeholders and also for the business of Intesa Sanpaolo and hence of Banca Intesa following the GRI methodology and the AA1000 Standard In accordance with the needs analysis conducted two priority issues stood out which are presented in the table These issues are also present at the local level
STAKEHOLDER MAP
GROUP ENGAGEMENT MECHANISM
CUSTOMERS
Focus groupBenchmarking surveysMeetings workshops seminarsSatisfaction survey Handling and analysis of complaints applications and suggestions
EMPLOYEESEmployee satisfaction surveyTraining and evalution Meetings with trade union
COMMUNITYMeetings with CSosWorking groups working bodies
SUPPLIERSSupplier information form Csr questionnaireRegular communication in tender process
ENVIRONMENTMeetings CSosWorking groups working bodies
CUSTOMERS EMPLOYEES COMMUNITY SUPPLIERS ENVIRONMENT
INDIVIDUALSSMALL BUSINESS
SMESLARGE CORPORATES
LOCAL GOVERNMENTSCONSUMER ASSOCIATIONSBUSINESS ASSOCIATIONSPUBLIC ADMINISTRATION
MANAGERSOFFICERS
EMPLOYEES
LOCAL AND NATIONAL PUBLIC
INSTITUTIONS (REGULATORYBODIES LOCAL GOVERNMENT
ETC)CSOS
MEDIA
DOMESTICFOREIGN
ENVIRONMENTALORGANISATIONS
FUTURE GENERATIONS
12
CUSTOMERS EMPLOYEES SUPPLIERS COMMUNITY ENVIRONMENT
Development of service model and channel in accordance with the
customersrsquo needs
Employee training and professional development
Fair treatment of suppliers Promotion of culture and artsOptimisation of natural
resource utilisation
Product and service qualityMerit recognition
and rewardingCooperation and relations
with suppliersSupport to youth education
and developmentReduction of greenhouse
gas emission
Customer satisfaction Employee protectionPromotion and observance
of ethical and environmental standards in supply chain
Fight against poverty and social exclusion
Support to customers for energy efficiency
improvement
Access to loans for corporatesSafe and healthy
work environment
Strengthening the SME sectorInvolving employees
in company life
Financial inclusion of vulnerable social groups
Work-life balance
Support to customers having financial problems
13
2 Sustainability
14
21 GENERATED ECONOMIC VALUE
Generation of economic value an efficient governance system and careful management of business risks characterise Banca Intesarsquos business model based on transparency and integrity These elements as well as the care for employees environment and the quality of service it provides to its customers are of key importance for the progress for which the Bank strives as a responsible stakeholder in the community in which it operates
MARKET POSITION
According to the official data of the National Bank of Serbia as of December 31 2013 Banca Intesa is the leader in all business segments
DIRECT AND INDIRECT ECONOMIC VALUE GENERATED
2012 2013
Net assets 3635 3727
Customer loans 2363 2404
Customer deposits 2300 2388
Equity 792 863
in million euros
EmploymentStable partner of the government
Reliable support to the economy
Support to the communityTotal income and
expenditure
Banca Intesa employs 3039 people
As an active partner of the government Banca
Intesa supports economic development initiatives
of the Government
Banca Intesa cooperates with 406 suppliers
Banca Intesa participated in numerous community
support projects and implemented 106 donor activities
Total economic value generated by Banca Intesa was RSD 20695651000
The Bank directly provides 3039 jobs and it paid
RSD 193711289679 into the budget of Serbia as taxes and contributions on wages and pensions
The budget of Serbia received 80629605186 dinars in the form of regular tax payments
WithRSD 67069271910EUR 2056318466
USD 73719631GBP 1012544
allocated for procurement it indirectly affects the
stability of business and jobs in its supplier chain
The investment in the community amounted
to RSD 22381000 through donations to the
local community RSD 10000000 through
investment in infrastructure and RSD 299812329 through volunteering
The economic value distributed through operating
costs and personnel expenses and liabilities to the Government and the community amounted to RSD 1116382182660
Banca Intesa continued to post good business results in 2013 as well confirming its leading position in the banking sector of Serbia despite difficult business conditions The Bankrsquos total loans to corporate and retail customers reached 2365 million euros while deposits totalled 2387 million euros The business network consisted of 192 branches 3 mortgage loan centres and 5 mortgage loan offices In addition Banca Intesa had the most developed network of POS terminals and ATMs with 12751 active POS terminals and 255 ATMs
In the retail segment total loans amounted to 667 million euros while deposits increased to 1436 million euros at the end of 2013 Banca Intesa reaffirmed its leading position in e-banking and payment card business during 2013 as well with around 14 million debit and credit cards issued At the same time small business loans reached 126 million euros while loans granted to farmers amounted to 37 million euros
In the corporate segment at the end of 2013 Banca Intesa had a loan portfolio of 1728 million euros continuing the growth from the previous years Corporate deposits were at the level of 968 million euros while the bankrsquos market share in total corporate deposits of the banking sector was 206 at the end of December 2013
Owing to the increase in all key items a net income of 238 million euros was posted Net profit after tax was 76 million euros at the end of December 2013
15
1 ECONOMIC VALUE GENERATED 2012 2013
Interest income 31340971 29588778
Interest expenses -11790051 -9598939
Fee and commission income 7890743 8175478
Fee and commission expenses -2292104 -2648138
Net profit on sale of securities atfair value through profit and loss 1008 590
Net profit on sale of securitiesavailable for sale 49855 4332
Net profit on sale of equity investments 434 0
Net exchange rate loss -13263673 356204
Dividends and share income 2925 1527
Other operating income 554540 676132
Net expenses on indirectly written-off of placements and provisions 1 -5415518 -6935326
Operating and other expenses 2 -189518 -532659
Gains from changes in value of assets and liabilities 31390752 12172042
Losses from changes in value of assets and liabilities -16188419 -10564372
TOTAL ECONOMIC VALUE GENERATED 22091945 20695651
2 ECONOMIC VALUE DISTRIBUTED
21 Operating costs 3
Costs of material -487362 -475379
Building and equipment maintenance costs -753215 -798584
Office and equipment lease costs -934768 -930657
Costs of intellectual services -369026 -315092
Advertising -355296 -280923
Costs of business travel and training of employees 3 -93716 -92586
Other operating costs 3 -2098067 -2130715
TOTAL OPERATING COSTS -5091449 -5023936
22 Employee expenses 3
Wages and salaries -3312415 -3223372
Taxes and contributions on wages and wage benefits 3 -1997940 -1937113
Cost of employees transportation 3 -76490 -84139
Costs of remuneration for temporary and occasional work -5861 -4569
Costs of employees education not related to their job 3 -3157 -6094
Other personnel expenses -172859 -55922
TOTAL INCOME AND EXPENSES
TOTAL EMPLOYEE EXPENSES -5568723 -5311209
23 Expenses related to liabilities to the government
Income tax -830548 -623097
Indirect taxes and duties 3 -161352 -183199
TOTAL EXPENSES RELATED TO LIABILITES TO THE GOVERNMENT -991900 -806296
24 Community-related expenses
Donations and corporate social responsibility 3 -33204 -22381
TOTAL COMMUNITY-RELATED EXPENSES -33204 -22381
TOTAL ECONOMIC VALUE DISTRIBUTED -11685276 -11163822
3 ECONOMIC VALUE RETAINED 4 10406668 95318291 The item differs from the income statement in the annual report in that the Provisions for Employee Benefits Legal Disputes and Restructuring are excluded 2 The item differs from the income statement in the annual report in that the Operating Costs are presented in the section Economic Value Distributed in several segments stated while Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation is not presented within Other Operating Expenses3 The items differ from the income statement in the annual report in that a part of the Operating Costs is reclassified into the following segments Employee Expenses Expenses Related to Liabilities to the Government and Community-Related Expenses4 This represents BIBrsquos profit net of the Provisions for Employee Benefits Legal Disputes and Restructuring the Gains and Losses on Deferred Tax Assets and Liabilities the Depreciation Costs and the Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation
16
22 GOVERNANCE IN BANCA INTESA
CORPORATE GOVERNANCE
Shareholders of Banca Intesa ad Beograd ndash ownership structure Intesa Sanpaolo Holding International SA 7779 Intesa Sanpaolo SPA 1521 International Finance Institution (IFC) 700 The governance of the Banca Intesa joint stock company is organised as a two-tier system
The Bankrsquos Board of Directors consists of five members elected by the General Meeting of Shareholders upon the shareholdersrsquo proposal including the Board Chairman The term of office of Board members is three years with a possibility of re-election The Chairman of the Board of Directors of Banca Intesa is Massimo Malagoli and its members are Ivan Šramko Arthur Philippe Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Executive Board of Banca Intesa consists of six members including the President The term of office of Executive Board members is three years with a possibility of re-election The President of the Executive Board of Banca Intesa is Draginja Đurić the Deputy President of the Executive Board is Marco Capellini and Board members are Darko Popović Head of Retail and Small Business Division Slađana Jelić Head of the Corporate Banking Division Dragica Mihajlović Head of the Financial Management and Treasury Division and Marko Marković Head of the Operations Management Division
Women account for 20 of the members of the Board of Directors and 50 of the members of the Executive Board of Banca Intesa
The Bankrsquos Audit Committee consists of five members including the Chairman The term of office of Committee members is three years with a possibility of re-election The Committee Chairman is Giovanni Bergamini and its members are Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Chairman of the Board of Directors as a governance body does not have a direct executive role given that Banca Intesa organised as a joint stock company with a two-tier governance system delegates executive roles to the Executive Board as a management body that organises the Bankrsquos operations and performs daily monitoring of the activities of the Bank employees while the Board of Directors makes strategic decisions aimed at the Bankrsquos compliance takes care of and is responsible for the accuracy of all reports financial condition and operating results of the Bank addressed to the Bankrsquos shareholders the public and the National Bank of Serbia
In line with the Law on Banks and other regulations members of the Board of Directors are appointed and dismissed by the General Meeting of Shareholders while members of the Executive Board are appointed and dismissed by the Bankrsquos Board of Directors Domestic regulations list conditions that members of the Executive Board and the Board of Directors must meet in order to get prior approval of the regulatory body ie the National Bank of Serbia without which they cannot become members of these boards This includes among other things good business reputation and appropriate qualifications In addition appropriate experience in finance is also required for at least three members of the Board of Directors while at least one member of the Board of Directors must have active knowledge of Serbian and reside in the territory of the Republic of Serbia After obtaining the approval the appointed person is registered with the Business Registers Agency as well
Banca Intesa provided in its bylaws for the mechanisms and channels of direct e-mail communication with its parent group Intesa Sanpaolo with the aim of respecting the individual and dignity of each employee as well as the values proclaimed by the Code of Ethics The Bankrsquos shareholders ie the General Meeting of Shareholders participate in and directly impact the work of the Board of Directors as a governance body in the following ways
bull The General Meeting of Shareholders adopts the business policy and strategy of the Bankbull The General Meeting of Shareholders adopts the Articles of Association and the amendments to the Memorandum and Articles of Associationbull The General Meeting of Shareholders appoints and dismisses the Chairman and members of the Board of
17
Directorsbull The General Meeting of Shareholders appoints and dismisses the external auditorbull The General Meeting of Shareholders considers and adopts the annual report of the Board of Directors
The adopted remuneration policy for the entire human resources of the Group including the variable components is based on equality merit and sustainability of results The guidelines for defining the management remuneration policy are based on objective elements and parameters resulting from the assessment of organisational positions as well as performance and potential with the aim of creating an integrated system for the members of management thus helping their professional development The policy provides for remuneration in the form of benefits which is also based on financial instruments and linked to the results of the company ndash which corresponds to the level of assumed risk and is regulated so as to avoid giving benefits that in the long term are not in accordance with the Grouprsquos interests Based on the performance indicators closely linked with the long-term goals the benefit determination systems are based among other things on the principle of symmetry with the amounts of paid benefits being based on the results achieved at the Group business sector and individual levels and therefore being capable of decreasing significantly and even reaching zero if the minimum indicators that reflect the Group profitability are not achieved also taking into account the risks assumed and the capital used
When it comes to conflicts of interest Banca Intesa has prescribed in accordance with the provisions of the Law on Banks as well as with its bylaws and those of its parent Group an obligation for members of the Board of Directors and the Executive Board to submit a written statement of conflict of interest to the Bankrsquos Board of Directors within one month from the day of taking office The members of the Board of Directors and the Executive Board are obliged in accordance with the bylaws regulating transactions with related parties and the conflict of interest to submit once a year completed standard questionnaires whose content is designed by the parent Group and which contain information relevant for establishing any conflict of interest
One of the methods of sustainability control at Banca Intesa is the power of the Board of Directors as a governance body to set up an integrated risk management system at the Bank and the supervision of this system while the Executive Board identifies the risks to which Banca Intesa is exposed and controls these risks in accordance with the approved policies and procedures The Board of Directors gives approval to the Bankrsquos exposure to one or a group of related parties of over 10 or to an increase in the exposure to over 20 of Bank equity adopts internal audit plan and programme considers external and internal audit reports sets up the internal control system defines the internal organisation and organisational structure of the Bank that ensures the division of duties authority and responsibilities of its employees in a manner that prevents conflict of interest and ensures a transparent and documented process of decision making and implementation decides on disposing with the Bankrsquos fixed assets and the stakes and shares that the Bank has in other legal entities
The work of the Executive Board is evaluated through the MBO (Management by Objectives) system which is based on setting measurable objectives based on which the annual performance is monitored
RISK MANAGEMENT
Risk management is an integral part of the corporate governance of Banca Intesa based on which it is estimated whether the Bank can achieve its business targets in the way consistent not only with the law but also with the public interest safety of people as well as the factors of the natural and social environment Therefore the access to risk management also implies broader social consequences of Bank activity in the environment and in the market
Controlling Socio-environmental Risks in the Governance Process
By a decision of the Executive Board the Bank appointed the persons responsible for environmental protection with the aim of establishing an Environmental Management System ndash EMS and ensuring compliance with the rules of environmental protection and corporate social responsibility in lending operations so that the system would be fully applied until the final collection of all loan instalments A Senior Environmental Management Officer (Deputy President of the Executive Board) and an Environmental Management Coordinator (compliance risk management specialist) were appointedThe Environmental Management Coordinator with the approval of the Senior Environmental Management Officer informs the Executive Board the Asset Quality Committee and the Credit Committee of any significant increase in the level of socio-environmental risks in individual Bank customers particularly in customers with high credit exposure
18
and prepares reports on socio-environmental risks for international development banks towards which the Bank has such reporting obligation
The responsible organisational unit of the Bank monitors risks through the process of assessing loan applications taking into account the criteria related to lending to all customers engaged in production and service activities and the criteria related to environmental risk management
Management of Socio-environmental Risks in Lending
Adequate management and control of socio-environmental risks are essential preconditions for generating reliable and sustainable value and for protecting the Bankrsquos financial stability as well as its reputation
Socio-environmental Risk Management
The Socio-environmental Risk Management Procedure regulates the risk monitoring process in the area of environmental protection employee health and safety and the Bankrsquos social responsibility (protection of cultural heritage fundamental human rights and personal integrity) This Procedure regulates the credit process with regard to socio-environmental risks when approving a credit product to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1000000 euros or higher including the requested new product in case of a credit product from a credit line or other funds approved to the Bank by an international development bank and approval of a long-term credit product funded from other sources The Procedure regulates the rules classified by business lineprocess in the process of socio-environmental risk management
Equator Principles
The Implementation of the Equator Principles for Project Financing procedure applies when preparing and implementing project financing and advisory services in connection with project financing where the investment value of the project is 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes in these facilities can create significant environmental andor social impacts or significantly change the natural environment The goal of the Equator principles is to identify and assess risks and perform risk management based on the criteria defined by the principles with the aim of adhering to the principle of sustainability of natural resources human health human rights cultural heritage and biodiversity
Armaments
The sensitive sectors that the Bank monitors with special attention include armament production and trade In accordance with the relevant bylaw of its parent Group the Policy of Not Financing of Armaments in 2011 Banca Intesa adopted the Procedure for the Performance of Transactions Related to Armament Production and Trade which regulates the identification and preparation of the summary of the customers engaged in armament and military equipment production and trade the monitoring of transactions and loan applications of the customers engaged in armament and military equipment production and trade the approval of transactions and loan applications related to armament and military equipment production and trade in accordance with the Policy of Not Financing of Armaments as well as the preparation of reports on the transactions related to armament and military equipment production and trade
Reputational Risk Management
The Bank attaches great importance to reputational risks that are assessed as part of the compliance control system which is within the competence of the Compliance Office Banca Intesa believes that the standards in this area as well as the business ethics are the cornerstone of banking operations which by their nature are based on trust Bylaws such as the Code of Ethics policies and other define that any non-compliance with the bylaws the principles and values contained in them as well as with external regulations (laws and secondary legislation) exposes the Bank to a certain level of reputational risks
Fight Against Corruption and Compliance
The internal regulatory source that governs the system for control and mitigation of corruption risks comprises the Code of Ethics the Code of Conduct the Rulebook on Relations with Political Parties and the following Bank procedures the Procedure for the Prevention of Internal Fraud and Abuse at the Bank and the Employment Termination Procedure
19
The Code of Conduct prescribes in detail the rules in connection with receiving and giving gifts and the measures prescribed in the event of corruption are related to the violation of work duties so the measures stipulated by external regulations ie the Labour Law (eg compensation for damage employee suspension or termination) but also the Criminal Code may be pronounced against an employee Based on the Legal Department records no proceedings were initiated against Banca Intesa ad Beograd in connection with corruption since no complaints or notices prior to complaint were delivered during 2013
In the same period the Suspicious Transactions and Know Your Customer training courses were held in this segment by means of e-learning which were received by as many as 8663 of employees during 2013 The training courses were provided for by the current regulations and internal acts of the Bank and were aimed at informing the employees and refreshing their knowledge of the obligation of collecting information about each customer and completing appropriate questionnaires In addition the training informed the employees about the new processes that were implemented as well as about mandatory observance of all duties relating to knowing monitoring and reporting suspicious transactions of customers
The Rulebook on Relations with Political Parties prescribes the obligation of the Bank to refrain from granting donations and sponsorship tobull Political parties and any organisations related to thembull Political movements and their organisational unitsbull Trade union organisationsbull Competent authorities and institutions
The prohibition of granting donations and sponsorship to the above organisations aims at the protection against any grants that would result in a privileged position to the Bank or unfair decisions in favour of the Bank
The Compliance Office as well as the relevant organisational units of the Bank are committed to the regulation of processes and the definition of procedures and their operating rules as well as practice which efficiently prevent the violation of applicable regulations The Compliance Office also provides support to the highest bodies of the Bank in monitoring the compliance risk The compliance risk assessment process is constant Through semi-annual reporting these risks are identified and priority measures for their elimination or mitigation are determined ie the level of efficiency of the existing compliance controls is assessed
The Internal Audit provides direct support to the highest bodies of the Bank in monitoring the compliance with and adequacy of the rules contained in the Bankrsquos bylaws If it identifies critical issues during its activity the Internal Audit informs the relevant organisational units and the highest bodies of the Bank with the aim of determining adequate measures for risk mitigation and the method of their implementation
Protection of Health and Safety
Occupational health and safety at Banca Intesa are regulated in accordance with international directives recommendations and positive laws of the Republic of Serbia
During 2013 an assessment was made of the situation regarding occupational health and safety and the risk level for 207 facilities at which work is performed A schedule of elimination of recorded risks to the health of Bank employees was defined and implemented according to priorities and the budget planned In connection with this risk assessment documents were updated as well
When it comes to physical security three robberies were recorded in 2013 versus two a year earlier and investments in technical protection systems continued
Risk Management in Supply Chain
Supplier Check
The Procurement Unit and the organisational part in charge of procurement are obliged to evaluate the received supplier bids by applying the methods of qualitative and quantitative analysis as well as to align the bid evaluation criteria prior to inviting the bidders to submit offers by combining specific criteria one of which is the Compliance of Bidderrsquos Operations with the Corporate Social Responsibility Principles
20
Health and Safety Risk Assessment
In accordance with the Procurement Policy members of Intesa Sanpaolo Group are expected to include the parameters of assessment of environmental protection and occupational health protection in their procurement process giving priority to the use of recycled paper highly energy efficient products and environment-friendly technical equipment
Group members must include special provisions in the procurement contracts they conclude with their suppliers These provisions provide for the obligation of suppliers to comply with the principles specified in the Intesa Sanpaolo Rules for the Environmental and Energy Policy Constant checks are performed in the countries where legal measures regarding environmental protection were adopted in order to ensure compliance
In the area of personnel training and spreading the awareness of the importance of these issues the training of the employees who directly communicate with suppliers must include fields related to corporate social responsibility as well as to the responsibility for environmental protection
21
CUSTOMERS
Banca Intesa built its leading position in the market of Serbia and the status of stable and reliable partner by fostering trust in the relations with its customers The strengthening of relations with customers is based on constant improvement of the quality of products and services proceeding from specific needs of each segment as well as on full respect for the principles of equality and availability of products and services Key aspects of doing business with customers are the following
bull SUPPORT TO ECONOMY AND AGRICULTUREbull FINANCIAL INCLUSION AND EDUCATIONbull CUSTOMER SATISFACTION
SUPPORT TO ECONOMY AND AGRICULTURE
Banca Intesa continued to provide support to the economy and the agricultural sector in 2013 as well focusing on the development of entrepreneurship and self-employment particularly in the SME segment as well as on the improvement of public infrastructure
Support to the Public Sector
Banca Intesa offered loans from the credit line of the German Development Bank (KfW) to the public sector for financing infrastructure projects and the procurement of equipment in the following areas water management sewerage and wastewater management solid waste management environmental protection and pollution control transport infrastructure public transport and communication systems infrastructure facilities fostering economic development and other social and utility services During 2013 Banca Intesa granted 11 loans totalling 852 million euros while the total value of the project is 47 million euros
Development of Entrepreneurship
Banca Intesa supported the programme of measures of the Government of the Republic of Serbia for encouraging SMEs and entrepreneurs through subsidised loans for liquidity and working assets in 2013 as well The Bankrsquos commitment to provide continuously support to its customers in this segment is also demonstrated by the fact that the Government of the Republic of Serbia implements its programme of measures for the fifth consecutive time During 2013 the Bank granted 414 subsidised loans to SMEs totalling 562 billion dinars which accounted for 107 of the total loans to the SME sector The small business sector was granted 186 billion dinars and 1347 loans which accounted for 15 of the number of loans and 16 of the total loan disbursements to this segment
In cooperation with the National Bank of Serbia and the Kingdom of Denmark the Bank launched the Local Economic Development in the Balkans (LEDIB) programme intended for enterprises entrepreneurs and registered farms from the small business segment with the aim of improving local economic development creating new jobs strengthening organisational capacities introducing new eco-friendly technologies and other favourable impacts on the overall development The credit line was intended for the Nišava Pčinja Toplica Jablanica and Pirot Districts and in 2013 the Bank granted 39 loans totalling 505208 euros under this programme which accounted for 04 of the number of loans and 05 of the total loan disbursements to the small business segment At the same time from the credit line of the European Fund for Southeast Europe (EFSE) which supports enterprises and registered farms through investments and loans for working assets 227 million euros were granted in the small business segment which accounted for 22 of loan disbursements in the segment
With the aim of supporting the promotion and strengthening of womenrsquos entrepreneurship Banca Intesa helped the Association of Businesswomen in Serbia in the organisation of an international conference entitled New Age Woman Entrepreneur New Opportunities for Recovery of Economy in the Region The event contributed
22
to further positioning of Banca Intesa as a bank that actively supports entrepreneurship in the country as part of its efforts to contribute to economic recovery and growth For this purpose the Bank also has in its offer loans for women entrepreneurs in Vojvodina in the form of start-up loans for unemployed women and women who have had a business for up to three years The Bank granted 8 loans totalling 98 million dinars under this programme during 2013 which accounted for a 3 share in the number of loans and a 1 share in the total investment loan disbursements in the small business segment
Promotion of Agricultural Sector
Taking into account that the agricultural sector is very specific because it has a special social as well as environmental importance in addition to economic importance for many years Banca Intesa has been encouraging development and investing in projects and individuals that encourage with their activities further rural development and contribute to an increase in the competitiveness of domestic agriculture
Aware of the great economic potential of this industry as part of the LEDIB programme the Bank granted eight loans to registered farms in 2013 totalling 76219 euros which accounted for 02 of the number of loans and 03 of the total loan disbursements to this customer segment In addition in cooperation with the Guarantee Fund of the Autonomous Province of Vojvodina long-term loans for purchasing new agricultural machinery and equipment were available to customers During 2013 the Bank granted 82 loans of this type totalling 219 million euros which accounted for a 15 share in the number of loans and a 25 share in the total investment loan disbursements in the agricultural segment
In addition on the occasion of the 80th International Agricultural Fair in Novi Sad the Bank prepared a special credit offer intended for owners of registered farms which included the Intesa Farmer dinar loan for financing spring works as well as the Intesa Farmer loan for purchasing agricultural machinery During 2013 22 loans were granted for purchasing tractors and agricultural machinery totalling 341 million dinars which accounted for a 4 share in the number of loans and a 3 share in the total amount of agricultural investment loan disbursements
Banka Intesa launched the Intesa Farmer of the Year project to contribute in yet another way to the promotion of agricultural production in the country and to the strengthening of its competitiveness As part of the project the Bank awarded the most successful farmers in four categories ndash Intesa Crop Farmer Intesa Vegetable Grower Intesa Fruit Grower and Intesa Livestock Breeder and all winners won a trip to Germany to visit the international agricultural fair in Berlin The criteria based on which the Committee selected the winners of the title Intesa Farmer of the Year were the annual results achieved in agricultural production application of modern technologies in production activities the number of household members engaged in the production as well as the minimum three-year cooperation with the Bank which included a loan and regular settlement of their financial obligations
FINANCIAL INCLUSION AND LITERACY
Banka Intesa believes that the availability of financial products to all segments of society is an essential precondition for sustainable development In line with this position the Bank added to its offer specific products that promote financial inclusion and provide support during economic crisis to the most vulnerable social groups such as the elderly or youth as well as to solving broader social problems such as housing availability or health care services
Responding to the Needs of the Community
In 2013 Banca Intesa included in its offer the Intermezzo Cash Loan a new model of cash loan which offers to its users as a unique benefit in the domestic market a possibility of postponing the payment of monthly instalment up to five times during the repayment period Moreover as an additional functionality the Intermezzo loan includes insurance against job loss with no additional cost to the customer The Bank believes that the repayment flexibility provided by this loan model offers citizens unique support in the market at a time when they estimate that they need it most In 2013 Banca Intesa granted 11256 Intermezzo cash loans totalling 198 million euros which accounted for 235 of the total amount of cash loans disbursed during the year
Banca Intesa was the first in the Serbian market to offer loans to pensioners aged up to 74 years The Senior Cash Loans were designed specifically to fit the needs of senior citizens and they also include life insurance which is included in the cost of loan during the entire repayment period During the previous year 19774 loans were granted totalling 239 million euros which accounted for 284 of the total cash loans granted in 2013
23
In 2012 as support to citizens in financing medical services the Intesa Vita programme of consumer and cash loans was developed which includes loans for in vitro fertilisation harvesting and storage of stem cells DNA analysis dental services medical spa and wellness treatments as well as for purchasing baby supplies In 2013 the programme was extended to new purposes - laser vision correction vein operation and purchase of medical aids and 28 loans were granted totalling 126345 euros which accounted for 8 of the total cash loans granted during the year In this unique way the Bank provides the citizens with the possibility of taking care of their health in a responsible and timely manner without suddenly burdening their home budgets
Moreover the Bank continued to provide subsidised housing loans in 2013 as well in order to provide support to young married couples in solving their housing problems granting 224 loans totalling 864 million euros which was 205 of the total housing loans granted during the year At the same time 6544 refinancing loans with insurance against job loss or disability in case of an accident were granted totalling 146 million euros which enabled the customers to service their outstanding liabilities towards Banca Intesa and other banks and which accounted for 173 of the Bankrsquos total cash loans granted during the year
Banca Intesa introduced the Visa Classic Paralympic and Visa Electron Paralympic cards the first charity payment cards in the country in cooperation with the Paralympic Committee of Serbia This was the first initiative aimed at establishing a stable and independent mechanism for long-term assistance to athletes with disabilities and developing paralympic sport in the country During 2013 8345 Visa Classic Paralympic and Visa Electron Paralympic cards were issued which accounted for 14 of all cards issued during the year The Bank also provides debit cards for students which enable free account opening and maintenance for all students who opted for an Intesa Visa Electron Easy Travel Card (ETC) or a Maestro ISIC Card of Banca Intesa of which 4048 were issued in 2013 accounting for 18 of the debit cards issued during the year
Constantly striving to promote savings in 2013 the Bank introduced a new savings model the Month by Month Savings which provides customers with a possibility of reaching higher amounts of savings with lower monthly allocations The product enables saving in dinars and euros at a very attractive interest rate while the customers also have an opportunity to set the payment date and amount themselves
Financial Education
In 2013 as well Banca Intesa remained true to its commitment to support actively financial education by improving customer knowledge Thus in cooperation with Banca IMI SpA a member of Intesa Sanpaolo Group another Intesa Academia workshop was organised this time on the subject of advanced financing and risk management instruments so that Banca Intesarsquos customers could find out more about the possibilities of financing in the international and domestic bond markets and about hedging products for successful management of market risks The workshop brought together the leading world experts in the areas of financing and risk management as well as the most successful customers of the Bank In order to assist its customers in the SME segment in getting informed in more detail about the regulations relating to loan approval and collection Banca Intesa took part in the working breakfast on the subject Security Instruments and Their Collection as the Condition for Financing Company Growth held at the premises of the Serbian Association of Managers On this occasion the legal framework was presented about which enterprises should also get informed in order to know that documentation they will need if they opt for bank loans
At the same time the Factoring Department designed and launched an initiative of organising factoring workshops at the Bankrsquos regional centres Factoring workshops are an interactive form of cooperation and communication with customers with the focus on understanding the term and essence of factoring themselves With the support of regional centres a total of 27 factoring workshops were organised in 22 cities in two cycles in late 2012 and in early 2013 which were attended by nearly 300 corporate customers
As a member of the United Nations Global Compact and its Working Group on CSR in Banking and Finance Banca Intesa works together with the other members on the implementation of projects in the area of financial education which is the main goal of this Group One of the projects actively supported by the Bank is the cooperation with seven secondary schools of economics from six cities in Serbia where there is a ldquobank clerkrdquo educational profile in the area of thematic lectures for teachers and students The Bank representatives gave three lectures during 2013
24
CUSTOMER SATISFACTION
Banca Intesa believes that it is only through an open dialogue with its customers that it can truly understand their needs and expectations and build a long-term partner relationship with them
Meeting the Needs of Customers
Ever since 2008 Banca Intesa has been conducting surveys of its customersrsquo satisfaction with the Bankrsquos products and services in accordance with the methodology of the European Customer Satisfaction Index (ECSI) as part of its initiative named Listening 100 This is a continuous process analyses are made based on the results obtained in the survey and actions are proposed accordingly for improving the customer satisfaction The surveys are repeated at six-monthannual intervals in order to collect feedback from the customersrsquo perspective for the measures taken for the purpose of improving the satisfaction index as well as identifying the directions for further improvement
Looking at the results of the customer satisfaction survey at the end of 2013 a conclusion arises that among other things the basis of good results is a positively rated staff treatment of customers The ECSI as well as the Loyalty indices are stable with a high percentage of customers who stated they would remain Banca Intesa customers in the following 12 months Attempting to encourage its customers to express their opinions in the previous year the Bank clearly communicated the improvements implemented so far based on their suggestions
During 2013 as well Banca Intesa continued to increase the number of branches equipped with the Queue Management System (QMS) which covered approximately 40 per cent of active customers at the end of the year In addition to having a positive impact on customer satisfaction the QMS expansion made it possible to obtain the data necessary for better analysis and organisation of branch operation In addition free internet access via Wi-Fi and daily newspapers were made available to customers at the largest branches
As part of its efforts to improve further customer satisfaction in 2013 Banca Intesa implemented training of over 1500 employees both in its branch network and at its headquarters The training which was implemented as a continuation of the Education 100 programme initiated in 2011 was held on the subject of managing customer satisfaction but also their entire experience in each contact with the Bank
In addition to its efforts to improve its approach to customers and recognising the importance of two-way communication the Bank developed efficient mechanisms for collecting and recording customer feedback The Bank responds to all complaints sent to the Bank via formal complaints mechanisms and does so within the statutory time limit and in accordance with the decision of the National Bank of Serbia Each customer may also personally contact unit employees and if the customer is not satisfied with the answer received heshe can apply to the National Bank of Serbia as the second-instance body with the possibility of mediation The following are available to customers
bull Phone line +381 11 310 88 88bull E-mail kontaktbancaintesarsbull Fax +381 11 310 88 55bull Personal contact ie submitting a written complaint in personbull Contact form on the official website of the Bankbull Bank corporate accounts on social networks (Facebook and Twitter)bull Postal address of the Customer Satisfaction Management Unit Omladinskih brigada 90b 11070 New Belgrade
Transparent Advertising
Lasting relationships based on trust require communication that enables customers to understand clearly the characteristics and value of Banca Intesa products and services Therefore the Bank strives to contribute to the simplification of its products in communication
In its advertising the Bank clearly specifies all customer costs and all of them are included when calculating the effective interest rate which is always clearly and visibly shown as well as representative examples that contain all data in accordance with the Law on the Protection of Financial Service Consumers which demonstrates full transparency when it comes to Bank pricing policy
25
The Bank also strives to formulate the agreements so that they are simple to understand minimising possible misunderstandings and ambiguity by providing clear and exhaustive information It informs its customers in a timely manner of any changes in the agreements and their terms
Data Security
The protection of customer security as well as their assets and confidential information is not only Banca Intesarsquos primary duty but also the basis of the relationship of trust that the Bank wants to reinforce with its customers The protection of persons their assets and valuables as well as a multitude of data and internal organisational processes fully meets the criteria of reliability continuity and confidentiality In addition to its legal obligations Banca Intesa complies with the criteria of absolute transparency in informing its customers of their rights to privacy and the way it treats their personal information
In 2013 Banca Intesa did not find any founded complaint in connection with the violation of customer privacy or any disclosure leakage or theft of customer information
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
10
Given that they were added subsequently to the new GRI guidelines version G31 the LA 15 and HR 11 indicators are entered into the cross reference table according to the authorrsquos estimate
In accordance with the GRI principle of materiality based on which priority topics present in the report are defined the corresponding indicators are not covered by this report taking into account their relevance to the banking sector The bank as an active member supports the promotion of all 10 global compact principles in its partners suppliers customers and in the general business and social community
SUSTAINABILITY MANAGEMENT
In order to achieve its business goals as well as those relating to socio-environmental dimensions Banca Intesa introduced ethical responsibility as a criterion in the process of decision-making regarding all stakeholders which means that socio-environmental issues are integrated in the process of product and service development risk management as well as in loan granting and supplier selection
The adoption of the Code of Ethics with the defined values to which Banca Intesa is committed introduced a management model based on the principle of accountability that requires commitment to aligning everyday business activities with the declared values at the individual level as well as at the level of the Bankrsquos organisational units The Code of Ethics is an expression of the corporate culture and tradition from which Banca Intesa originates This document provides on the one hand a framework through which the Bank observes and interprets different situations and on the other hand the ultimate goal to which it strives
Procedure for Managing the Reports of Non-compliance with the Code of Ethics was adopted in 2011 and is implemented in all organisational units of the Bank in the process of delivering reports in cases of suspicion or knowledge of any activities or individual acts that are contrary to the Code of Ethics and other bylaws of the Bank The procedure for managing the reports of noncompliance with the Code of Ethics consists of the following steps non-compliance reporting report analysis translating and delivering the information to the parent Group establishing the status and verifying the facts involving the relevant department proposing corrective actions and delivering reports to relevant stakeholders as well as to the parent Group The Bank employee who noticed any behaviour of one of hisher colleagues that seems not to be in accordance with the moral and ethical principles prescribed by the Code of Ethics delivers a non-compliance report to the following e-mail address etickikodeksbancaintesars The report may also be delivered in hard copy to the following address Banca Intesa ad Beograd Marketing and Communications Department Bulevar dr Zorana Đinđića 2a 11070 Novi BeogradThrough the above mechanism during 2013 Banca Intesa recorded no cases of human rights violation as defined by the Code of Ethics
The Marketing and Communications Department independently as well as in close cooperation with CSR ambassadors delegated representatives of all organisational parts of the Bank implements and coordinates projects and activities in the area of corporate social responsibility The CSR ambassadors provide the Department with necessary information in connection with the implementation of projects and activities and participate in monitoring measuring and reporting to the parent Group and other stakeholders
The Marketing and Communications Department also takes steps to make the CSR criteria a recognisable element of the whole management system and to this end cooperates with the top management in the process of defining the CSR policies and strategies communicating to the highest representatives of the Bank the results of dialogue with the stakeholders their needs and key issues that should be a part of strategic guidelines
11
12 RELATION WITH STAKEHOLDERS
DIALOGUE WITH STAKEHOLDERS
Dialogue with stakeholders is the beginning of continuous progress achieved by carefully monitoring the demands and needs of stakeholders and harmonising them with the Bankrsquos strategy The dialogue is achieved by using different techniques as part of the Bankrsquos regular activities and is a precondition for preparing the materiality matrix and eventually the Sustainability Report
Stakeholder map is based on the international methodology for stakeholder engagement the AA1000 Standard (Institute of Social and Ethical Accountability)
MATERIALITY
Sustainability Report 2013 focuses on the topics that proved to be the most important ones for stakeholders and also for the business of Intesa Sanpaolo and hence of Banca Intesa following the GRI methodology and the AA1000 Standard In accordance with the needs analysis conducted two priority issues stood out which are presented in the table These issues are also present at the local level
STAKEHOLDER MAP
GROUP ENGAGEMENT MECHANISM
CUSTOMERS
Focus groupBenchmarking surveysMeetings workshops seminarsSatisfaction survey Handling and analysis of complaints applications and suggestions
EMPLOYEESEmployee satisfaction surveyTraining and evalution Meetings with trade union
COMMUNITYMeetings with CSosWorking groups working bodies
SUPPLIERSSupplier information form Csr questionnaireRegular communication in tender process
ENVIRONMENTMeetings CSosWorking groups working bodies
CUSTOMERS EMPLOYEES COMMUNITY SUPPLIERS ENVIRONMENT
INDIVIDUALSSMALL BUSINESS
SMESLARGE CORPORATES
LOCAL GOVERNMENTSCONSUMER ASSOCIATIONSBUSINESS ASSOCIATIONSPUBLIC ADMINISTRATION
MANAGERSOFFICERS
EMPLOYEES
LOCAL AND NATIONAL PUBLIC
INSTITUTIONS (REGULATORYBODIES LOCAL GOVERNMENT
ETC)CSOS
MEDIA
DOMESTICFOREIGN
ENVIRONMENTALORGANISATIONS
FUTURE GENERATIONS
12
CUSTOMERS EMPLOYEES SUPPLIERS COMMUNITY ENVIRONMENT
Development of service model and channel in accordance with the
customersrsquo needs
Employee training and professional development
Fair treatment of suppliers Promotion of culture and artsOptimisation of natural
resource utilisation
Product and service qualityMerit recognition
and rewardingCooperation and relations
with suppliersSupport to youth education
and developmentReduction of greenhouse
gas emission
Customer satisfaction Employee protectionPromotion and observance
of ethical and environmental standards in supply chain
Fight against poverty and social exclusion
Support to customers for energy efficiency
improvement
Access to loans for corporatesSafe and healthy
work environment
Strengthening the SME sectorInvolving employees
in company life
Financial inclusion of vulnerable social groups
Work-life balance
Support to customers having financial problems
13
2 Sustainability
14
21 GENERATED ECONOMIC VALUE
Generation of economic value an efficient governance system and careful management of business risks characterise Banca Intesarsquos business model based on transparency and integrity These elements as well as the care for employees environment and the quality of service it provides to its customers are of key importance for the progress for which the Bank strives as a responsible stakeholder in the community in which it operates
MARKET POSITION
According to the official data of the National Bank of Serbia as of December 31 2013 Banca Intesa is the leader in all business segments
DIRECT AND INDIRECT ECONOMIC VALUE GENERATED
2012 2013
Net assets 3635 3727
Customer loans 2363 2404
Customer deposits 2300 2388
Equity 792 863
in million euros
EmploymentStable partner of the government
Reliable support to the economy
Support to the communityTotal income and
expenditure
Banca Intesa employs 3039 people
As an active partner of the government Banca
Intesa supports economic development initiatives
of the Government
Banca Intesa cooperates with 406 suppliers
Banca Intesa participated in numerous community
support projects and implemented 106 donor activities
Total economic value generated by Banca Intesa was RSD 20695651000
The Bank directly provides 3039 jobs and it paid
RSD 193711289679 into the budget of Serbia as taxes and contributions on wages and pensions
The budget of Serbia received 80629605186 dinars in the form of regular tax payments
WithRSD 67069271910EUR 2056318466
USD 73719631GBP 1012544
allocated for procurement it indirectly affects the
stability of business and jobs in its supplier chain
The investment in the community amounted
to RSD 22381000 through donations to the
local community RSD 10000000 through
investment in infrastructure and RSD 299812329 through volunteering
The economic value distributed through operating
costs and personnel expenses and liabilities to the Government and the community amounted to RSD 1116382182660
Banca Intesa continued to post good business results in 2013 as well confirming its leading position in the banking sector of Serbia despite difficult business conditions The Bankrsquos total loans to corporate and retail customers reached 2365 million euros while deposits totalled 2387 million euros The business network consisted of 192 branches 3 mortgage loan centres and 5 mortgage loan offices In addition Banca Intesa had the most developed network of POS terminals and ATMs with 12751 active POS terminals and 255 ATMs
In the retail segment total loans amounted to 667 million euros while deposits increased to 1436 million euros at the end of 2013 Banca Intesa reaffirmed its leading position in e-banking and payment card business during 2013 as well with around 14 million debit and credit cards issued At the same time small business loans reached 126 million euros while loans granted to farmers amounted to 37 million euros
In the corporate segment at the end of 2013 Banca Intesa had a loan portfolio of 1728 million euros continuing the growth from the previous years Corporate deposits were at the level of 968 million euros while the bankrsquos market share in total corporate deposits of the banking sector was 206 at the end of December 2013
Owing to the increase in all key items a net income of 238 million euros was posted Net profit after tax was 76 million euros at the end of December 2013
15
1 ECONOMIC VALUE GENERATED 2012 2013
Interest income 31340971 29588778
Interest expenses -11790051 -9598939
Fee and commission income 7890743 8175478
Fee and commission expenses -2292104 -2648138
Net profit on sale of securities atfair value through profit and loss 1008 590
Net profit on sale of securitiesavailable for sale 49855 4332
Net profit on sale of equity investments 434 0
Net exchange rate loss -13263673 356204
Dividends and share income 2925 1527
Other operating income 554540 676132
Net expenses on indirectly written-off of placements and provisions 1 -5415518 -6935326
Operating and other expenses 2 -189518 -532659
Gains from changes in value of assets and liabilities 31390752 12172042
Losses from changes in value of assets and liabilities -16188419 -10564372
TOTAL ECONOMIC VALUE GENERATED 22091945 20695651
2 ECONOMIC VALUE DISTRIBUTED
21 Operating costs 3
Costs of material -487362 -475379
Building and equipment maintenance costs -753215 -798584
Office and equipment lease costs -934768 -930657
Costs of intellectual services -369026 -315092
Advertising -355296 -280923
Costs of business travel and training of employees 3 -93716 -92586
Other operating costs 3 -2098067 -2130715
TOTAL OPERATING COSTS -5091449 -5023936
22 Employee expenses 3
Wages and salaries -3312415 -3223372
Taxes and contributions on wages and wage benefits 3 -1997940 -1937113
Cost of employees transportation 3 -76490 -84139
Costs of remuneration for temporary and occasional work -5861 -4569
Costs of employees education not related to their job 3 -3157 -6094
Other personnel expenses -172859 -55922
TOTAL INCOME AND EXPENSES
TOTAL EMPLOYEE EXPENSES -5568723 -5311209
23 Expenses related to liabilities to the government
Income tax -830548 -623097
Indirect taxes and duties 3 -161352 -183199
TOTAL EXPENSES RELATED TO LIABILITES TO THE GOVERNMENT -991900 -806296
24 Community-related expenses
Donations and corporate social responsibility 3 -33204 -22381
TOTAL COMMUNITY-RELATED EXPENSES -33204 -22381
TOTAL ECONOMIC VALUE DISTRIBUTED -11685276 -11163822
3 ECONOMIC VALUE RETAINED 4 10406668 95318291 The item differs from the income statement in the annual report in that the Provisions for Employee Benefits Legal Disputes and Restructuring are excluded 2 The item differs from the income statement in the annual report in that the Operating Costs are presented in the section Economic Value Distributed in several segments stated while Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation is not presented within Other Operating Expenses3 The items differ from the income statement in the annual report in that a part of the Operating Costs is reclassified into the following segments Employee Expenses Expenses Related to Liabilities to the Government and Community-Related Expenses4 This represents BIBrsquos profit net of the Provisions for Employee Benefits Legal Disputes and Restructuring the Gains and Losses on Deferred Tax Assets and Liabilities the Depreciation Costs and the Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation
16
22 GOVERNANCE IN BANCA INTESA
CORPORATE GOVERNANCE
Shareholders of Banca Intesa ad Beograd ndash ownership structure Intesa Sanpaolo Holding International SA 7779 Intesa Sanpaolo SPA 1521 International Finance Institution (IFC) 700 The governance of the Banca Intesa joint stock company is organised as a two-tier system
The Bankrsquos Board of Directors consists of five members elected by the General Meeting of Shareholders upon the shareholdersrsquo proposal including the Board Chairman The term of office of Board members is three years with a possibility of re-election The Chairman of the Board of Directors of Banca Intesa is Massimo Malagoli and its members are Ivan Šramko Arthur Philippe Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Executive Board of Banca Intesa consists of six members including the President The term of office of Executive Board members is three years with a possibility of re-election The President of the Executive Board of Banca Intesa is Draginja Đurić the Deputy President of the Executive Board is Marco Capellini and Board members are Darko Popović Head of Retail and Small Business Division Slađana Jelić Head of the Corporate Banking Division Dragica Mihajlović Head of the Financial Management and Treasury Division and Marko Marković Head of the Operations Management Division
Women account for 20 of the members of the Board of Directors and 50 of the members of the Executive Board of Banca Intesa
The Bankrsquos Audit Committee consists of five members including the Chairman The term of office of Committee members is three years with a possibility of re-election The Committee Chairman is Giovanni Bergamini and its members are Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Chairman of the Board of Directors as a governance body does not have a direct executive role given that Banca Intesa organised as a joint stock company with a two-tier governance system delegates executive roles to the Executive Board as a management body that organises the Bankrsquos operations and performs daily monitoring of the activities of the Bank employees while the Board of Directors makes strategic decisions aimed at the Bankrsquos compliance takes care of and is responsible for the accuracy of all reports financial condition and operating results of the Bank addressed to the Bankrsquos shareholders the public and the National Bank of Serbia
In line with the Law on Banks and other regulations members of the Board of Directors are appointed and dismissed by the General Meeting of Shareholders while members of the Executive Board are appointed and dismissed by the Bankrsquos Board of Directors Domestic regulations list conditions that members of the Executive Board and the Board of Directors must meet in order to get prior approval of the regulatory body ie the National Bank of Serbia without which they cannot become members of these boards This includes among other things good business reputation and appropriate qualifications In addition appropriate experience in finance is also required for at least three members of the Board of Directors while at least one member of the Board of Directors must have active knowledge of Serbian and reside in the territory of the Republic of Serbia After obtaining the approval the appointed person is registered with the Business Registers Agency as well
Banca Intesa provided in its bylaws for the mechanisms and channels of direct e-mail communication with its parent group Intesa Sanpaolo with the aim of respecting the individual and dignity of each employee as well as the values proclaimed by the Code of Ethics The Bankrsquos shareholders ie the General Meeting of Shareholders participate in and directly impact the work of the Board of Directors as a governance body in the following ways
bull The General Meeting of Shareholders adopts the business policy and strategy of the Bankbull The General Meeting of Shareholders adopts the Articles of Association and the amendments to the Memorandum and Articles of Associationbull The General Meeting of Shareholders appoints and dismisses the Chairman and members of the Board of
17
Directorsbull The General Meeting of Shareholders appoints and dismisses the external auditorbull The General Meeting of Shareholders considers and adopts the annual report of the Board of Directors
The adopted remuneration policy for the entire human resources of the Group including the variable components is based on equality merit and sustainability of results The guidelines for defining the management remuneration policy are based on objective elements and parameters resulting from the assessment of organisational positions as well as performance and potential with the aim of creating an integrated system for the members of management thus helping their professional development The policy provides for remuneration in the form of benefits which is also based on financial instruments and linked to the results of the company ndash which corresponds to the level of assumed risk and is regulated so as to avoid giving benefits that in the long term are not in accordance with the Grouprsquos interests Based on the performance indicators closely linked with the long-term goals the benefit determination systems are based among other things on the principle of symmetry with the amounts of paid benefits being based on the results achieved at the Group business sector and individual levels and therefore being capable of decreasing significantly and even reaching zero if the minimum indicators that reflect the Group profitability are not achieved also taking into account the risks assumed and the capital used
When it comes to conflicts of interest Banca Intesa has prescribed in accordance with the provisions of the Law on Banks as well as with its bylaws and those of its parent Group an obligation for members of the Board of Directors and the Executive Board to submit a written statement of conflict of interest to the Bankrsquos Board of Directors within one month from the day of taking office The members of the Board of Directors and the Executive Board are obliged in accordance with the bylaws regulating transactions with related parties and the conflict of interest to submit once a year completed standard questionnaires whose content is designed by the parent Group and which contain information relevant for establishing any conflict of interest
One of the methods of sustainability control at Banca Intesa is the power of the Board of Directors as a governance body to set up an integrated risk management system at the Bank and the supervision of this system while the Executive Board identifies the risks to which Banca Intesa is exposed and controls these risks in accordance with the approved policies and procedures The Board of Directors gives approval to the Bankrsquos exposure to one or a group of related parties of over 10 or to an increase in the exposure to over 20 of Bank equity adopts internal audit plan and programme considers external and internal audit reports sets up the internal control system defines the internal organisation and organisational structure of the Bank that ensures the division of duties authority and responsibilities of its employees in a manner that prevents conflict of interest and ensures a transparent and documented process of decision making and implementation decides on disposing with the Bankrsquos fixed assets and the stakes and shares that the Bank has in other legal entities
The work of the Executive Board is evaluated through the MBO (Management by Objectives) system which is based on setting measurable objectives based on which the annual performance is monitored
RISK MANAGEMENT
Risk management is an integral part of the corporate governance of Banca Intesa based on which it is estimated whether the Bank can achieve its business targets in the way consistent not only with the law but also with the public interest safety of people as well as the factors of the natural and social environment Therefore the access to risk management also implies broader social consequences of Bank activity in the environment and in the market
Controlling Socio-environmental Risks in the Governance Process
By a decision of the Executive Board the Bank appointed the persons responsible for environmental protection with the aim of establishing an Environmental Management System ndash EMS and ensuring compliance with the rules of environmental protection and corporate social responsibility in lending operations so that the system would be fully applied until the final collection of all loan instalments A Senior Environmental Management Officer (Deputy President of the Executive Board) and an Environmental Management Coordinator (compliance risk management specialist) were appointedThe Environmental Management Coordinator with the approval of the Senior Environmental Management Officer informs the Executive Board the Asset Quality Committee and the Credit Committee of any significant increase in the level of socio-environmental risks in individual Bank customers particularly in customers with high credit exposure
18
and prepares reports on socio-environmental risks for international development banks towards which the Bank has such reporting obligation
The responsible organisational unit of the Bank monitors risks through the process of assessing loan applications taking into account the criteria related to lending to all customers engaged in production and service activities and the criteria related to environmental risk management
Management of Socio-environmental Risks in Lending
Adequate management and control of socio-environmental risks are essential preconditions for generating reliable and sustainable value and for protecting the Bankrsquos financial stability as well as its reputation
Socio-environmental Risk Management
The Socio-environmental Risk Management Procedure regulates the risk monitoring process in the area of environmental protection employee health and safety and the Bankrsquos social responsibility (protection of cultural heritage fundamental human rights and personal integrity) This Procedure regulates the credit process with regard to socio-environmental risks when approving a credit product to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1000000 euros or higher including the requested new product in case of a credit product from a credit line or other funds approved to the Bank by an international development bank and approval of a long-term credit product funded from other sources The Procedure regulates the rules classified by business lineprocess in the process of socio-environmental risk management
Equator Principles
The Implementation of the Equator Principles for Project Financing procedure applies when preparing and implementing project financing and advisory services in connection with project financing where the investment value of the project is 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes in these facilities can create significant environmental andor social impacts or significantly change the natural environment The goal of the Equator principles is to identify and assess risks and perform risk management based on the criteria defined by the principles with the aim of adhering to the principle of sustainability of natural resources human health human rights cultural heritage and biodiversity
Armaments
The sensitive sectors that the Bank monitors with special attention include armament production and trade In accordance with the relevant bylaw of its parent Group the Policy of Not Financing of Armaments in 2011 Banca Intesa adopted the Procedure for the Performance of Transactions Related to Armament Production and Trade which regulates the identification and preparation of the summary of the customers engaged in armament and military equipment production and trade the monitoring of transactions and loan applications of the customers engaged in armament and military equipment production and trade the approval of transactions and loan applications related to armament and military equipment production and trade in accordance with the Policy of Not Financing of Armaments as well as the preparation of reports on the transactions related to armament and military equipment production and trade
Reputational Risk Management
The Bank attaches great importance to reputational risks that are assessed as part of the compliance control system which is within the competence of the Compliance Office Banca Intesa believes that the standards in this area as well as the business ethics are the cornerstone of banking operations which by their nature are based on trust Bylaws such as the Code of Ethics policies and other define that any non-compliance with the bylaws the principles and values contained in them as well as with external regulations (laws and secondary legislation) exposes the Bank to a certain level of reputational risks
Fight Against Corruption and Compliance
The internal regulatory source that governs the system for control and mitigation of corruption risks comprises the Code of Ethics the Code of Conduct the Rulebook on Relations with Political Parties and the following Bank procedures the Procedure for the Prevention of Internal Fraud and Abuse at the Bank and the Employment Termination Procedure
19
The Code of Conduct prescribes in detail the rules in connection with receiving and giving gifts and the measures prescribed in the event of corruption are related to the violation of work duties so the measures stipulated by external regulations ie the Labour Law (eg compensation for damage employee suspension or termination) but also the Criminal Code may be pronounced against an employee Based on the Legal Department records no proceedings were initiated against Banca Intesa ad Beograd in connection with corruption since no complaints or notices prior to complaint were delivered during 2013
In the same period the Suspicious Transactions and Know Your Customer training courses were held in this segment by means of e-learning which were received by as many as 8663 of employees during 2013 The training courses were provided for by the current regulations and internal acts of the Bank and were aimed at informing the employees and refreshing their knowledge of the obligation of collecting information about each customer and completing appropriate questionnaires In addition the training informed the employees about the new processes that were implemented as well as about mandatory observance of all duties relating to knowing monitoring and reporting suspicious transactions of customers
The Rulebook on Relations with Political Parties prescribes the obligation of the Bank to refrain from granting donations and sponsorship tobull Political parties and any organisations related to thembull Political movements and their organisational unitsbull Trade union organisationsbull Competent authorities and institutions
The prohibition of granting donations and sponsorship to the above organisations aims at the protection against any grants that would result in a privileged position to the Bank or unfair decisions in favour of the Bank
The Compliance Office as well as the relevant organisational units of the Bank are committed to the regulation of processes and the definition of procedures and their operating rules as well as practice which efficiently prevent the violation of applicable regulations The Compliance Office also provides support to the highest bodies of the Bank in monitoring the compliance risk The compliance risk assessment process is constant Through semi-annual reporting these risks are identified and priority measures for their elimination or mitigation are determined ie the level of efficiency of the existing compliance controls is assessed
The Internal Audit provides direct support to the highest bodies of the Bank in monitoring the compliance with and adequacy of the rules contained in the Bankrsquos bylaws If it identifies critical issues during its activity the Internal Audit informs the relevant organisational units and the highest bodies of the Bank with the aim of determining adequate measures for risk mitigation and the method of their implementation
Protection of Health and Safety
Occupational health and safety at Banca Intesa are regulated in accordance with international directives recommendations and positive laws of the Republic of Serbia
During 2013 an assessment was made of the situation regarding occupational health and safety and the risk level for 207 facilities at which work is performed A schedule of elimination of recorded risks to the health of Bank employees was defined and implemented according to priorities and the budget planned In connection with this risk assessment documents were updated as well
When it comes to physical security three robberies were recorded in 2013 versus two a year earlier and investments in technical protection systems continued
Risk Management in Supply Chain
Supplier Check
The Procurement Unit and the organisational part in charge of procurement are obliged to evaluate the received supplier bids by applying the methods of qualitative and quantitative analysis as well as to align the bid evaluation criteria prior to inviting the bidders to submit offers by combining specific criteria one of which is the Compliance of Bidderrsquos Operations with the Corporate Social Responsibility Principles
20
Health and Safety Risk Assessment
In accordance with the Procurement Policy members of Intesa Sanpaolo Group are expected to include the parameters of assessment of environmental protection and occupational health protection in their procurement process giving priority to the use of recycled paper highly energy efficient products and environment-friendly technical equipment
Group members must include special provisions in the procurement contracts they conclude with their suppliers These provisions provide for the obligation of suppliers to comply with the principles specified in the Intesa Sanpaolo Rules for the Environmental and Energy Policy Constant checks are performed in the countries where legal measures regarding environmental protection were adopted in order to ensure compliance
In the area of personnel training and spreading the awareness of the importance of these issues the training of the employees who directly communicate with suppliers must include fields related to corporate social responsibility as well as to the responsibility for environmental protection
21
CUSTOMERS
Banca Intesa built its leading position in the market of Serbia and the status of stable and reliable partner by fostering trust in the relations with its customers The strengthening of relations with customers is based on constant improvement of the quality of products and services proceeding from specific needs of each segment as well as on full respect for the principles of equality and availability of products and services Key aspects of doing business with customers are the following
bull SUPPORT TO ECONOMY AND AGRICULTUREbull FINANCIAL INCLUSION AND EDUCATIONbull CUSTOMER SATISFACTION
SUPPORT TO ECONOMY AND AGRICULTURE
Banca Intesa continued to provide support to the economy and the agricultural sector in 2013 as well focusing on the development of entrepreneurship and self-employment particularly in the SME segment as well as on the improvement of public infrastructure
Support to the Public Sector
Banca Intesa offered loans from the credit line of the German Development Bank (KfW) to the public sector for financing infrastructure projects and the procurement of equipment in the following areas water management sewerage and wastewater management solid waste management environmental protection and pollution control transport infrastructure public transport and communication systems infrastructure facilities fostering economic development and other social and utility services During 2013 Banca Intesa granted 11 loans totalling 852 million euros while the total value of the project is 47 million euros
Development of Entrepreneurship
Banca Intesa supported the programme of measures of the Government of the Republic of Serbia for encouraging SMEs and entrepreneurs through subsidised loans for liquidity and working assets in 2013 as well The Bankrsquos commitment to provide continuously support to its customers in this segment is also demonstrated by the fact that the Government of the Republic of Serbia implements its programme of measures for the fifth consecutive time During 2013 the Bank granted 414 subsidised loans to SMEs totalling 562 billion dinars which accounted for 107 of the total loans to the SME sector The small business sector was granted 186 billion dinars and 1347 loans which accounted for 15 of the number of loans and 16 of the total loan disbursements to this segment
In cooperation with the National Bank of Serbia and the Kingdom of Denmark the Bank launched the Local Economic Development in the Balkans (LEDIB) programme intended for enterprises entrepreneurs and registered farms from the small business segment with the aim of improving local economic development creating new jobs strengthening organisational capacities introducing new eco-friendly technologies and other favourable impacts on the overall development The credit line was intended for the Nišava Pčinja Toplica Jablanica and Pirot Districts and in 2013 the Bank granted 39 loans totalling 505208 euros under this programme which accounted for 04 of the number of loans and 05 of the total loan disbursements to the small business segment At the same time from the credit line of the European Fund for Southeast Europe (EFSE) which supports enterprises and registered farms through investments and loans for working assets 227 million euros were granted in the small business segment which accounted for 22 of loan disbursements in the segment
With the aim of supporting the promotion and strengthening of womenrsquos entrepreneurship Banca Intesa helped the Association of Businesswomen in Serbia in the organisation of an international conference entitled New Age Woman Entrepreneur New Opportunities for Recovery of Economy in the Region The event contributed
22
to further positioning of Banca Intesa as a bank that actively supports entrepreneurship in the country as part of its efforts to contribute to economic recovery and growth For this purpose the Bank also has in its offer loans for women entrepreneurs in Vojvodina in the form of start-up loans for unemployed women and women who have had a business for up to three years The Bank granted 8 loans totalling 98 million dinars under this programme during 2013 which accounted for a 3 share in the number of loans and a 1 share in the total investment loan disbursements in the small business segment
Promotion of Agricultural Sector
Taking into account that the agricultural sector is very specific because it has a special social as well as environmental importance in addition to economic importance for many years Banca Intesa has been encouraging development and investing in projects and individuals that encourage with their activities further rural development and contribute to an increase in the competitiveness of domestic agriculture
Aware of the great economic potential of this industry as part of the LEDIB programme the Bank granted eight loans to registered farms in 2013 totalling 76219 euros which accounted for 02 of the number of loans and 03 of the total loan disbursements to this customer segment In addition in cooperation with the Guarantee Fund of the Autonomous Province of Vojvodina long-term loans for purchasing new agricultural machinery and equipment were available to customers During 2013 the Bank granted 82 loans of this type totalling 219 million euros which accounted for a 15 share in the number of loans and a 25 share in the total investment loan disbursements in the agricultural segment
In addition on the occasion of the 80th International Agricultural Fair in Novi Sad the Bank prepared a special credit offer intended for owners of registered farms which included the Intesa Farmer dinar loan for financing spring works as well as the Intesa Farmer loan for purchasing agricultural machinery During 2013 22 loans were granted for purchasing tractors and agricultural machinery totalling 341 million dinars which accounted for a 4 share in the number of loans and a 3 share in the total amount of agricultural investment loan disbursements
Banka Intesa launched the Intesa Farmer of the Year project to contribute in yet another way to the promotion of agricultural production in the country and to the strengthening of its competitiveness As part of the project the Bank awarded the most successful farmers in four categories ndash Intesa Crop Farmer Intesa Vegetable Grower Intesa Fruit Grower and Intesa Livestock Breeder and all winners won a trip to Germany to visit the international agricultural fair in Berlin The criteria based on which the Committee selected the winners of the title Intesa Farmer of the Year were the annual results achieved in agricultural production application of modern technologies in production activities the number of household members engaged in the production as well as the minimum three-year cooperation with the Bank which included a loan and regular settlement of their financial obligations
FINANCIAL INCLUSION AND LITERACY
Banka Intesa believes that the availability of financial products to all segments of society is an essential precondition for sustainable development In line with this position the Bank added to its offer specific products that promote financial inclusion and provide support during economic crisis to the most vulnerable social groups such as the elderly or youth as well as to solving broader social problems such as housing availability or health care services
Responding to the Needs of the Community
In 2013 Banca Intesa included in its offer the Intermezzo Cash Loan a new model of cash loan which offers to its users as a unique benefit in the domestic market a possibility of postponing the payment of monthly instalment up to five times during the repayment period Moreover as an additional functionality the Intermezzo loan includes insurance against job loss with no additional cost to the customer The Bank believes that the repayment flexibility provided by this loan model offers citizens unique support in the market at a time when they estimate that they need it most In 2013 Banca Intesa granted 11256 Intermezzo cash loans totalling 198 million euros which accounted for 235 of the total amount of cash loans disbursed during the year
Banca Intesa was the first in the Serbian market to offer loans to pensioners aged up to 74 years The Senior Cash Loans were designed specifically to fit the needs of senior citizens and they also include life insurance which is included in the cost of loan during the entire repayment period During the previous year 19774 loans were granted totalling 239 million euros which accounted for 284 of the total cash loans granted in 2013
23
In 2012 as support to citizens in financing medical services the Intesa Vita programme of consumer and cash loans was developed which includes loans for in vitro fertilisation harvesting and storage of stem cells DNA analysis dental services medical spa and wellness treatments as well as for purchasing baby supplies In 2013 the programme was extended to new purposes - laser vision correction vein operation and purchase of medical aids and 28 loans were granted totalling 126345 euros which accounted for 8 of the total cash loans granted during the year In this unique way the Bank provides the citizens with the possibility of taking care of their health in a responsible and timely manner without suddenly burdening their home budgets
Moreover the Bank continued to provide subsidised housing loans in 2013 as well in order to provide support to young married couples in solving their housing problems granting 224 loans totalling 864 million euros which was 205 of the total housing loans granted during the year At the same time 6544 refinancing loans with insurance against job loss or disability in case of an accident were granted totalling 146 million euros which enabled the customers to service their outstanding liabilities towards Banca Intesa and other banks and which accounted for 173 of the Bankrsquos total cash loans granted during the year
Banca Intesa introduced the Visa Classic Paralympic and Visa Electron Paralympic cards the first charity payment cards in the country in cooperation with the Paralympic Committee of Serbia This was the first initiative aimed at establishing a stable and independent mechanism for long-term assistance to athletes with disabilities and developing paralympic sport in the country During 2013 8345 Visa Classic Paralympic and Visa Electron Paralympic cards were issued which accounted for 14 of all cards issued during the year The Bank also provides debit cards for students which enable free account opening and maintenance for all students who opted for an Intesa Visa Electron Easy Travel Card (ETC) or a Maestro ISIC Card of Banca Intesa of which 4048 were issued in 2013 accounting for 18 of the debit cards issued during the year
Constantly striving to promote savings in 2013 the Bank introduced a new savings model the Month by Month Savings which provides customers with a possibility of reaching higher amounts of savings with lower monthly allocations The product enables saving in dinars and euros at a very attractive interest rate while the customers also have an opportunity to set the payment date and amount themselves
Financial Education
In 2013 as well Banca Intesa remained true to its commitment to support actively financial education by improving customer knowledge Thus in cooperation with Banca IMI SpA a member of Intesa Sanpaolo Group another Intesa Academia workshop was organised this time on the subject of advanced financing and risk management instruments so that Banca Intesarsquos customers could find out more about the possibilities of financing in the international and domestic bond markets and about hedging products for successful management of market risks The workshop brought together the leading world experts in the areas of financing and risk management as well as the most successful customers of the Bank In order to assist its customers in the SME segment in getting informed in more detail about the regulations relating to loan approval and collection Banca Intesa took part in the working breakfast on the subject Security Instruments and Their Collection as the Condition for Financing Company Growth held at the premises of the Serbian Association of Managers On this occasion the legal framework was presented about which enterprises should also get informed in order to know that documentation they will need if they opt for bank loans
At the same time the Factoring Department designed and launched an initiative of organising factoring workshops at the Bankrsquos regional centres Factoring workshops are an interactive form of cooperation and communication with customers with the focus on understanding the term and essence of factoring themselves With the support of regional centres a total of 27 factoring workshops were organised in 22 cities in two cycles in late 2012 and in early 2013 which were attended by nearly 300 corporate customers
As a member of the United Nations Global Compact and its Working Group on CSR in Banking and Finance Banca Intesa works together with the other members on the implementation of projects in the area of financial education which is the main goal of this Group One of the projects actively supported by the Bank is the cooperation with seven secondary schools of economics from six cities in Serbia where there is a ldquobank clerkrdquo educational profile in the area of thematic lectures for teachers and students The Bank representatives gave three lectures during 2013
24
CUSTOMER SATISFACTION
Banca Intesa believes that it is only through an open dialogue with its customers that it can truly understand their needs and expectations and build a long-term partner relationship with them
Meeting the Needs of Customers
Ever since 2008 Banca Intesa has been conducting surveys of its customersrsquo satisfaction with the Bankrsquos products and services in accordance with the methodology of the European Customer Satisfaction Index (ECSI) as part of its initiative named Listening 100 This is a continuous process analyses are made based on the results obtained in the survey and actions are proposed accordingly for improving the customer satisfaction The surveys are repeated at six-monthannual intervals in order to collect feedback from the customersrsquo perspective for the measures taken for the purpose of improving the satisfaction index as well as identifying the directions for further improvement
Looking at the results of the customer satisfaction survey at the end of 2013 a conclusion arises that among other things the basis of good results is a positively rated staff treatment of customers The ECSI as well as the Loyalty indices are stable with a high percentage of customers who stated they would remain Banca Intesa customers in the following 12 months Attempting to encourage its customers to express their opinions in the previous year the Bank clearly communicated the improvements implemented so far based on their suggestions
During 2013 as well Banca Intesa continued to increase the number of branches equipped with the Queue Management System (QMS) which covered approximately 40 per cent of active customers at the end of the year In addition to having a positive impact on customer satisfaction the QMS expansion made it possible to obtain the data necessary for better analysis and organisation of branch operation In addition free internet access via Wi-Fi and daily newspapers were made available to customers at the largest branches
As part of its efforts to improve further customer satisfaction in 2013 Banca Intesa implemented training of over 1500 employees both in its branch network and at its headquarters The training which was implemented as a continuation of the Education 100 programme initiated in 2011 was held on the subject of managing customer satisfaction but also their entire experience in each contact with the Bank
In addition to its efforts to improve its approach to customers and recognising the importance of two-way communication the Bank developed efficient mechanisms for collecting and recording customer feedback The Bank responds to all complaints sent to the Bank via formal complaints mechanisms and does so within the statutory time limit and in accordance with the decision of the National Bank of Serbia Each customer may also personally contact unit employees and if the customer is not satisfied with the answer received heshe can apply to the National Bank of Serbia as the second-instance body with the possibility of mediation The following are available to customers
bull Phone line +381 11 310 88 88bull E-mail kontaktbancaintesarsbull Fax +381 11 310 88 55bull Personal contact ie submitting a written complaint in personbull Contact form on the official website of the Bankbull Bank corporate accounts on social networks (Facebook and Twitter)bull Postal address of the Customer Satisfaction Management Unit Omladinskih brigada 90b 11070 New Belgrade
Transparent Advertising
Lasting relationships based on trust require communication that enables customers to understand clearly the characteristics and value of Banca Intesa products and services Therefore the Bank strives to contribute to the simplification of its products in communication
In its advertising the Bank clearly specifies all customer costs and all of them are included when calculating the effective interest rate which is always clearly and visibly shown as well as representative examples that contain all data in accordance with the Law on the Protection of Financial Service Consumers which demonstrates full transparency when it comes to Bank pricing policy
25
The Bank also strives to formulate the agreements so that they are simple to understand minimising possible misunderstandings and ambiguity by providing clear and exhaustive information It informs its customers in a timely manner of any changes in the agreements and their terms
Data Security
The protection of customer security as well as their assets and confidential information is not only Banca Intesarsquos primary duty but also the basis of the relationship of trust that the Bank wants to reinforce with its customers The protection of persons their assets and valuables as well as a multitude of data and internal organisational processes fully meets the criteria of reliability continuity and confidentiality In addition to its legal obligations Banca Intesa complies with the criteria of absolute transparency in informing its customers of their rights to privacy and the way it treats their personal information
In 2013 Banca Intesa did not find any founded complaint in connection with the violation of customer privacy or any disclosure leakage or theft of customer information
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
11
12 RELATION WITH STAKEHOLDERS
DIALOGUE WITH STAKEHOLDERS
Dialogue with stakeholders is the beginning of continuous progress achieved by carefully monitoring the demands and needs of stakeholders and harmonising them with the Bankrsquos strategy The dialogue is achieved by using different techniques as part of the Bankrsquos regular activities and is a precondition for preparing the materiality matrix and eventually the Sustainability Report
Stakeholder map is based on the international methodology for stakeholder engagement the AA1000 Standard (Institute of Social and Ethical Accountability)
MATERIALITY
Sustainability Report 2013 focuses on the topics that proved to be the most important ones for stakeholders and also for the business of Intesa Sanpaolo and hence of Banca Intesa following the GRI methodology and the AA1000 Standard In accordance with the needs analysis conducted two priority issues stood out which are presented in the table These issues are also present at the local level
STAKEHOLDER MAP
GROUP ENGAGEMENT MECHANISM
CUSTOMERS
Focus groupBenchmarking surveysMeetings workshops seminarsSatisfaction survey Handling and analysis of complaints applications and suggestions
EMPLOYEESEmployee satisfaction surveyTraining and evalution Meetings with trade union
COMMUNITYMeetings with CSosWorking groups working bodies
SUPPLIERSSupplier information form Csr questionnaireRegular communication in tender process
ENVIRONMENTMeetings CSosWorking groups working bodies
CUSTOMERS EMPLOYEES COMMUNITY SUPPLIERS ENVIRONMENT
INDIVIDUALSSMALL BUSINESS
SMESLARGE CORPORATES
LOCAL GOVERNMENTSCONSUMER ASSOCIATIONSBUSINESS ASSOCIATIONSPUBLIC ADMINISTRATION
MANAGERSOFFICERS
EMPLOYEES
LOCAL AND NATIONAL PUBLIC
INSTITUTIONS (REGULATORYBODIES LOCAL GOVERNMENT
ETC)CSOS
MEDIA
DOMESTICFOREIGN
ENVIRONMENTALORGANISATIONS
FUTURE GENERATIONS
12
CUSTOMERS EMPLOYEES SUPPLIERS COMMUNITY ENVIRONMENT
Development of service model and channel in accordance with the
customersrsquo needs
Employee training and professional development
Fair treatment of suppliers Promotion of culture and artsOptimisation of natural
resource utilisation
Product and service qualityMerit recognition
and rewardingCooperation and relations
with suppliersSupport to youth education
and developmentReduction of greenhouse
gas emission
Customer satisfaction Employee protectionPromotion and observance
of ethical and environmental standards in supply chain
Fight against poverty and social exclusion
Support to customers for energy efficiency
improvement
Access to loans for corporatesSafe and healthy
work environment
Strengthening the SME sectorInvolving employees
in company life
Financial inclusion of vulnerable social groups
Work-life balance
Support to customers having financial problems
13
2 Sustainability
14
21 GENERATED ECONOMIC VALUE
Generation of economic value an efficient governance system and careful management of business risks characterise Banca Intesarsquos business model based on transparency and integrity These elements as well as the care for employees environment and the quality of service it provides to its customers are of key importance for the progress for which the Bank strives as a responsible stakeholder in the community in which it operates
MARKET POSITION
According to the official data of the National Bank of Serbia as of December 31 2013 Banca Intesa is the leader in all business segments
DIRECT AND INDIRECT ECONOMIC VALUE GENERATED
2012 2013
Net assets 3635 3727
Customer loans 2363 2404
Customer deposits 2300 2388
Equity 792 863
in million euros
EmploymentStable partner of the government
Reliable support to the economy
Support to the communityTotal income and
expenditure
Banca Intesa employs 3039 people
As an active partner of the government Banca
Intesa supports economic development initiatives
of the Government
Banca Intesa cooperates with 406 suppliers
Banca Intesa participated in numerous community
support projects and implemented 106 donor activities
Total economic value generated by Banca Intesa was RSD 20695651000
The Bank directly provides 3039 jobs and it paid
RSD 193711289679 into the budget of Serbia as taxes and contributions on wages and pensions
The budget of Serbia received 80629605186 dinars in the form of regular tax payments
WithRSD 67069271910EUR 2056318466
USD 73719631GBP 1012544
allocated for procurement it indirectly affects the
stability of business and jobs in its supplier chain
The investment in the community amounted
to RSD 22381000 through donations to the
local community RSD 10000000 through
investment in infrastructure and RSD 299812329 through volunteering
The economic value distributed through operating
costs and personnel expenses and liabilities to the Government and the community amounted to RSD 1116382182660
Banca Intesa continued to post good business results in 2013 as well confirming its leading position in the banking sector of Serbia despite difficult business conditions The Bankrsquos total loans to corporate and retail customers reached 2365 million euros while deposits totalled 2387 million euros The business network consisted of 192 branches 3 mortgage loan centres and 5 mortgage loan offices In addition Banca Intesa had the most developed network of POS terminals and ATMs with 12751 active POS terminals and 255 ATMs
In the retail segment total loans amounted to 667 million euros while deposits increased to 1436 million euros at the end of 2013 Banca Intesa reaffirmed its leading position in e-banking and payment card business during 2013 as well with around 14 million debit and credit cards issued At the same time small business loans reached 126 million euros while loans granted to farmers amounted to 37 million euros
In the corporate segment at the end of 2013 Banca Intesa had a loan portfolio of 1728 million euros continuing the growth from the previous years Corporate deposits were at the level of 968 million euros while the bankrsquos market share in total corporate deposits of the banking sector was 206 at the end of December 2013
Owing to the increase in all key items a net income of 238 million euros was posted Net profit after tax was 76 million euros at the end of December 2013
15
1 ECONOMIC VALUE GENERATED 2012 2013
Interest income 31340971 29588778
Interest expenses -11790051 -9598939
Fee and commission income 7890743 8175478
Fee and commission expenses -2292104 -2648138
Net profit on sale of securities atfair value through profit and loss 1008 590
Net profit on sale of securitiesavailable for sale 49855 4332
Net profit on sale of equity investments 434 0
Net exchange rate loss -13263673 356204
Dividends and share income 2925 1527
Other operating income 554540 676132
Net expenses on indirectly written-off of placements and provisions 1 -5415518 -6935326
Operating and other expenses 2 -189518 -532659
Gains from changes in value of assets and liabilities 31390752 12172042
Losses from changes in value of assets and liabilities -16188419 -10564372
TOTAL ECONOMIC VALUE GENERATED 22091945 20695651
2 ECONOMIC VALUE DISTRIBUTED
21 Operating costs 3
Costs of material -487362 -475379
Building and equipment maintenance costs -753215 -798584
Office and equipment lease costs -934768 -930657
Costs of intellectual services -369026 -315092
Advertising -355296 -280923
Costs of business travel and training of employees 3 -93716 -92586
Other operating costs 3 -2098067 -2130715
TOTAL OPERATING COSTS -5091449 -5023936
22 Employee expenses 3
Wages and salaries -3312415 -3223372
Taxes and contributions on wages and wage benefits 3 -1997940 -1937113
Cost of employees transportation 3 -76490 -84139
Costs of remuneration for temporary and occasional work -5861 -4569
Costs of employees education not related to their job 3 -3157 -6094
Other personnel expenses -172859 -55922
TOTAL INCOME AND EXPENSES
TOTAL EMPLOYEE EXPENSES -5568723 -5311209
23 Expenses related to liabilities to the government
Income tax -830548 -623097
Indirect taxes and duties 3 -161352 -183199
TOTAL EXPENSES RELATED TO LIABILITES TO THE GOVERNMENT -991900 -806296
24 Community-related expenses
Donations and corporate social responsibility 3 -33204 -22381
TOTAL COMMUNITY-RELATED EXPENSES -33204 -22381
TOTAL ECONOMIC VALUE DISTRIBUTED -11685276 -11163822
3 ECONOMIC VALUE RETAINED 4 10406668 95318291 The item differs from the income statement in the annual report in that the Provisions for Employee Benefits Legal Disputes and Restructuring are excluded 2 The item differs from the income statement in the annual report in that the Operating Costs are presented in the section Economic Value Distributed in several segments stated while Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation is not presented within Other Operating Expenses3 The items differ from the income statement in the annual report in that a part of the Operating Costs is reclassified into the following segments Employee Expenses Expenses Related to Liabilities to the Government and Community-Related Expenses4 This represents BIBrsquos profit net of the Provisions for Employee Benefits Legal Disputes and Restructuring the Gains and Losses on Deferred Tax Assets and Liabilities the Depreciation Costs and the Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation
16
22 GOVERNANCE IN BANCA INTESA
CORPORATE GOVERNANCE
Shareholders of Banca Intesa ad Beograd ndash ownership structure Intesa Sanpaolo Holding International SA 7779 Intesa Sanpaolo SPA 1521 International Finance Institution (IFC) 700 The governance of the Banca Intesa joint stock company is organised as a two-tier system
The Bankrsquos Board of Directors consists of five members elected by the General Meeting of Shareholders upon the shareholdersrsquo proposal including the Board Chairman The term of office of Board members is three years with a possibility of re-election The Chairman of the Board of Directors of Banca Intesa is Massimo Malagoli and its members are Ivan Šramko Arthur Philippe Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Executive Board of Banca Intesa consists of six members including the President The term of office of Executive Board members is three years with a possibility of re-election The President of the Executive Board of Banca Intesa is Draginja Đurić the Deputy President of the Executive Board is Marco Capellini and Board members are Darko Popović Head of Retail and Small Business Division Slađana Jelić Head of the Corporate Banking Division Dragica Mihajlović Head of the Financial Management and Treasury Division and Marko Marković Head of the Operations Management Division
Women account for 20 of the members of the Board of Directors and 50 of the members of the Executive Board of Banca Intesa
The Bankrsquos Audit Committee consists of five members including the Chairman The term of office of Committee members is three years with a possibility of re-election The Committee Chairman is Giovanni Bergamini and its members are Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Chairman of the Board of Directors as a governance body does not have a direct executive role given that Banca Intesa organised as a joint stock company with a two-tier governance system delegates executive roles to the Executive Board as a management body that organises the Bankrsquos operations and performs daily monitoring of the activities of the Bank employees while the Board of Directors makes strategic decisions aimed at the Bankrsquos compliance takes care of and is responsible for the accuracy of all reports financial condition and operating results of the Bank addressed to the Bankrsquos shareholders the public and the National Bank of Serbia
In line with the Law on Banks and other regulations members of the Board of Directors are appointed and dismissed by the General Meeting of Shareholders while members of the Executive Board are appointed and dismissed by the Bankrsquos Board of Directors Domestic regulations list conditions that members of the Executive Board and the Board of Directors must meet in order to get prior approval of the regulatory body ie the National Bank of Serbia without which they cannot become members of these boards This includes among other things good business reputation and appropriate qualifications In addition appropriate experience in finance is also required for at least three members of the Board of Directors while at least one member of the Board of Directors must have active knowledge of Serbian and reside in the territory of the Republic of Serbia After obtaining the approval the appointed person is registered with the Business Registers Agency as well
Banca Intesa provided in its bylaws for the mechanisms and channels of direct e-mail communication with its parent group Intesa Sanpaolo with the aim of respecting the individual and dignity of each employee as well as the values proclaimed by the Code of Ethics The Bankrsquos shareholders ie the General Meeting of Shareholders participate in and directly impact the work of the Board of Directors as a governance body in the following ways
bull The General Meeting of Shareholders adopts the business policy and strategy of the Bankbull The General Meeting of Shareholders adopts the Articles of Association and the amendments to the Memorandum and Articles of Associationbull The General Meeting of Shareholders appoints and dismisses the Chairman and members of the Board of
17
Directorsbull The General Meeting of Shareholders appoints and dismisses the external auditorbull The General Meeting of Shareholders considers and adopts the annual report of the Board of Directors
The adopted remuneration policy for the entire human resources of the Group including the variable components is based on equality merit and sustainability of results The guidelines for defining the management remuneration policy are based on objective elements and parameters resulting from the assessment of organisational positions as well as performance and potential with the aim of creating an integrated system for the members of management thus helping their professional development The policy provides for remuneration in the form of benefits which is also based on financial instruments and linked to the results of the company ndash which corresponds to the level of assumed risk and is regulated so as to avoid giving benefits that in the long term are not in accordance with the Grouprsquos interests Based on the performance indicators closely linked with the long-term goals the benefit determination systems are based among other things on the principle of symmetry with the amounts of paid benefits being based on the results achieved at the Group business sector and individual levels and therefore being capable of decreasing significantly and even reaching zero if the minimum indicators that reflect the Group profitability are not achieved also taking into account the risks assumed and the capital used
When it comes to conflicts of interest Banca Intesa has prescribed in accordance with the provisions of the Law on Banks as well as with its bylaws and those of its parent Group an obligation for members of the Board of Directors and the Executive Board to submit a written statement of conflict of interest to the Bankrsquos Board of Directors within one month from the day of taking office The members of the Board of Directors and the Executive Board are obliged in accordance with the bylaws regulating transactions with related parties and the conflict of interest to submit once a year completed standard questionnaires whose content is designed by the parent Group and which contain information relevant for establishing any conflict of interest
One of the methods of sustainability control at Banca Intesa is the power of the Board of Directors as a governance body to set up an integrated risk management system at the Bank and the supervision of this system while the Executive Board identifies the risks to which Banca Intesa is exposed and controls these risks in accordance with the approved policies and procedures The Board of Directors gives approval to the Bankrsquos exposure to one or a group of related parties of over 10 or to an increase in the exposure to over 20 of Bank equity adopts internal audit plan and programme considers external and internal audit reports sets up the internal control system defines the internal organisation and organisational structure of the Bank that ensures the division of duties authority and responsibilities of its employees in a manner that prevents conflict of interest and ensures a transparent and documented process of decision making and implementation decides on disposing with the Bankrsquos fixed assets and the stakes and shares that the Bank has in other legal entities
The work of the Executive Board is evaluated through the MBO (Management by Objectives) system which is based on setting measurable objectives based on which the annual performance is monitored
RISK MANAGEMENT
Risk management is an integral part of the corporate governance of Banca Intesa based on which it is estimated whether the Bank can achieve its business targets in the way consistent not only with the law but also with the public interest safety of people as well as the factors of the natural and social environment Therefore the access to risk management also implies broader social consequences of Bank activity in the environment and in the market
Controlling Socio-environmental Risks in the Governance Process
By a decision of the Executive Board the Bank appointed the persons responsible for environmental protection with the aim of establishing an Environmental Management System ndash EMS and ensuring compliance with the rules of environmental protection and corporate social responsibility in lending operations so that the system would be fully applied until the final collection of all loan instalments A Senior Environmental Management Officer (Deputy President of the Executive Board) and an Environmental Management Coordinator (compliance risk management specialist) were appointedThe Environmental Management Coordinator with the approval of the Senior Environmental Management Officer informs the Executive Board the Asset Quality Committee and the Credit Committee of any significant increase in the level of socio-environmental risks in individual Bank customers particularly in customers with high credit exposure
18
and prepares reports on socio-environmental risks for international development banks towards which the Bank has such reporting obligation
The responsible organisational unit of the Bank monitors risks through the process of assessing loan applications taking into account the criteria related to lending to all customers engaged in production and service activities and the criteria related to environmental risk management
Management of Socio-environmental Risks in Lending
Adequate management and control of socio-environmental risks are essential preconditions for generating reliable and sustainable value and for protecting the Bankrsquos financial stability as well as its reputation
Socio-environmental Risk Management
The Socio-environmental Risk Management Procedure regulates the risk monitoring process in the area of environmental protection employee health and safety and the Bankrsquos social responsibility (protection of cultural heritage fundamental human rights and personal integrity) This Procedure regulates the credit process with regard to socio-environmental risks when approving a credit product to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1000000 euros or higher including the requested new product in case of a credit product from a credit line or other funds approved to the Bank by an international development bank and approval of a long-term credit product funded from other sources The Procedure regulates the rules classified by business lineprocess in the process of socio-environmental risk management
Equator Principles
The Implementation of the Equator Principles for Project Financing procedure applies when preparing and implementing project financing and advisory services in connection with project financing where the investment value of the project is 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes in these facilities can create significant environmental andor social impacts or significantly change the natural environment The goal of the Equator principles is to identify and assess risks and perform risk management based on the criteria defined by the principles with the aim of adhering to the principle of sustainability of natural resources human health human rights cultural heritage and biodiversity
Armaments
The sensitive sectors that the Bank monitors with special attention include armament production and trade In accordance with the relevant bylaw of its parent Group the Policy of Not Financing of Armaments in 2011 Banca Intesa adopted the Procedure for the Performance of Transactions Related to Armament Production and Trade which regulates the identification and preparation of the summary of the customers engaged in armament and military equipment production and trade the monitoring of transactions and loan applications of the customers engaged in armament and military equipment production and trade the approval of transactions and loan applications related to armament and military equipment production and trade in accordance with the Policy of Not Financing of Armaments as well as the preparation of reports on the transactions related to armament and military equipment production and trade
Reputational Risk Management
The Bank attaches great importance to reputational risks that are assessed as part of the compliance control system which is within the competence of the Compliance Office Banca Intesa believes that the standards in this area as well as the business ethics are the cornerstone of banking operations which by their nature are based on trust Bylaws such as the Code of Ethics policies and other define that any non-compliance with the bylaws the principles and values contained in them as well as with external regulations (laws and secondary legislation) exposes the Bank to a certain level of reputational risks
Fight Against Corruption and Compliance
The internal regulatory source that governs the system for control and mitigation of corruption risks comprises the Code of Ethics the Code of Conduct the Rulebook on Relations with Political Parties and the following Bank procedures the Procedure for the Prevention of Internal Fraud and Abuse at the Bank and the Employment Termination Procedure
19
The Code of Conduct prescribes in detail the rules in connection with receiving and giving gifts and the measures prescribed in the event of corruption are related to the violation of work duties so the measures stipulated by external regulations ie the Labour Law (eg compensation for damage employee suspension or termination) but also the Criminal Code may be pronounced against an employee Based on the Legal Department records no proceedings were initiated against Banca Intesa ad Beograd in connection with corruption since no complaints or notices prior to complaint were delivered during 2013
In the same period the Suspicious Transactions and Know Your Customer training courses were held in this segment by means of e-learning which were received by as many as 8663 of employees during 2013 The training courses were provided for by the current regulations and internal acts of the Bank and were aimed at informing the employees and refreshing their knowledge of the obligation of collecting information about each customer and completing appropriate questionnaires In addition the training informed the employees about the new processes that were implemented as well as about mandatory observance of all duties relating to knowing monitoring and reporting suspicious transactions of customers
The Rulebook on Relations with Political Parties prescribes the obligation of the Bank to refrain from granting donations and sponsorship tobull Political parties and any organisations related to thembull Political movements and their organisational unitsbull Trade union organisationsbull Competent authorities and institutions
The prohibition of granting donations and sponsorship to the above organisations aims at the protection against any grants that would result in a privileged position to the Bank or unfair decisions in favour of the Bank
The Compliance Office as well as the relevant organisational units of the Bank are committed to the regulation of processes and the definition of procedures and their operating rules as well as practice which efficiently prevent the violation of applicable regulations The Compliance Office also provides support to the highest bodies of the Bank in monitoring the compliance risk The compliance risk assessment process is constant Through semi-annual reporting these risks are identified and priority measures for their elimination or mitigation are determined ie the level of efficiency of the existing compliance controls is assessed
The Internal Audit provides direct support to the highest bodies of the Bank in monitoring the compliance with and adequacy of the rules contained in the Bankrsquos bylaws If it identifies critical issues during its activity the Internal Audit informs the relevant organisational units and the highest bodies of the Bank with the aim of determining adequate measures for risk mitigation and the method of their implementation
Protection of Health and Safety
Occupational health and safety at Banca Intesa are regulated in accordance with international directives recommendations and positive laws of the Republic of Serbia
During 2013 an assessment was made of the situation regarding occupational health and safety and the risk level for 207 facilities at which work is performed A schedule of elimination of recorded risks to the health of Bank employees was defined and implemented according to priorities and the budget planned In connection with this risk assessment documents were updated as well
When it comes to physical security three robberies were recorded in 2013 versus two a year earlier and investments in technical protection systems continued
Risk Management in Supply Chain
Supplier Check
The Procurement Unit and the organisational part in charge of procurement are obliged to evaluate the received supplier bids by applying the methods of qualitative and quantitative analysis as well as to align the bid evaluation criteria prior to inviting the bidders to submit offers by combining specific criteria one of which is the Compliance of Bidderrsquos Operations with the Corporate Social Responsibility Principles
20
Health and Safety Risk Assessment
In accordance with the Procurement Policy members of Intesa Sanpaolo Group are expected to include the parameters of assessment of environmental protection and occupational health protection in their procurement process giving priority to the use of recycled paper highly energy efficient products and environment-friendly technical equipment
Group members must include special provisions in the procurement contracts they conclude with their suppliers These provisions provide for the obligation of suppliers to comply with the principles specified in the Intesa Sanpaolo Rules for the Environmental and Energy Policy Constant checks are performed in the countries where legal measures regarding environmental protection were adopted in order to ensure compliance
In the area of personnel training and spreading the awareness of the importance of these issues the training of the employees who directly communicate with suppliers must include fields related to corporate social responsibility as well as to the responsibility for environmental protection
21
CUSTOMERS
Banca Intesa built its leading position in the market of Serbia and the status of stable and reliable partner by fostering trust in the relations with its customers The strengthening of relations with customers is based on constant improvement of the quality of products and services proceeding from specific needs of each segment as well as on full respect for the principles of equality and availability of products and services Key aspects of doing business with customers are the following
bull SUPPORT TO ECONOMY AND AGRICULTUREbull FINANCIAL INCLUSION AND EDUCATIONbull CUSTOMER SATISFACTION
SUPPORT TO ECONOMY AND AGRICULTURE
Banca Intesa continued to provide support to the economy and the agricultural sector in 2013 as well focusing on the development of entrepreneurship and self-employment particularly in the SME segment as well as on the improvement of public infrastructure
Support to the Public Sector
Banca Intesa offered loans from the credit line of the German Development Bank (KfW) to the public sector for financing infrastructure projects and the procurement of equipment in the following areas water management sewerage and wastewater management solid waste management environmental protection and pollution control transport infrastructure public transport and communication systems infrastructure facilities fostering economic development and other social and utility services During 2013 Banca Intesa granted 11 loans totalling 852 million euros while the total value of the project is 47 million euros
Development of Entrepreneurship
Banca Intesa supported the programme of measures of the Government of the Republic of Serbia for encouraging SMEs and entrepreneurs through subsidised loans for liquidity and working assets in 2013 as well The Bankrsquos commitment to provide continuously support to its customers in this segment is also demonstrated by the fact that the Government of the Republic of Serbia implements its programme of measures for the fifth consecutive time During 2013 the Bank granted 414 subsidised loans to SMEs totalling 562 billion dinars which accounted for 107 of the total loans to the SME sector The small business sector was granted 186 billion dinars and 1347 loans which accounted for 15 of the number of loans and 16 of the total loan disbursements to this segment
In cooperation with the National Bank of Serbia and the Kingdom of Denmark the Bank launched the Local Economic Development in the Balkans (LEDIB) programme intended for enterprises entrepreneurs and registered farms from the small business segment with the aim of improving local economic development creating new jobs strengthening organisational capacities introducing new eco-friendly technologies and other favourable impacts on the overall development The credit line was intended for the Nišava Pčinja Toplica Jablanica and Pirot Districts and in 2013 the Bank granted 39 loans totalling 505208 euros under this programme which accounted for 04 of the number of loans and 05 of the total loan disbursements to the small business segment At the same time from the credit line of the European Fund for Southeast Europe (EFSE) which supports enterprises and registered farms through investments and loans for working assets 227 million euros were granted in the small business segment which accounted for 22 of loan disbursements in the segment
With the aim of supporting the promotion and strengthening of womenrsquos entrepreneurship Banca Intesa helped the Association of Businesswomen in Serbia in the organisation of an international conference entitled New Age Woman Entrepreneur New Opportunities for Recovery of Economy in the Region The event contributed
22
to further positioning of Banca Intesa as a bank that actively supports entrepreneurship in the country as part of its efforts to contribute to economic recovery and growth For this purpose the Bank also has in its offer loans for women entrepreneurs in Vojvodina in the form of start-up loans for unemployed women and women who have had a business for up to three years The Bank granted 8 loans totalling 98 million dinars under this programme during 2013 which accounted for a 3 share in the number of loans and a 1 share in the total investment loan disbursements in the small business segment
Promotion of Agricultural Sector
Taking into account that the agricultural sector is very specific because it has a special social as well as environmental importance in addition to economic importance for many years Banca Intesa has been encouraging development and investing in projects and individuals that encourage with their activities further rural development and contribute to an increase in the competitiveness of domestic agriculture
Aware of the great economic potential of this industry as part of the LEDIB programme the Bank granted eight loans to registered farms in 2013 totalling 76219 euros which accounted for 02 of the number of loans and 03 of the total loan disbursements to this customer segment In addition in cooperation with the Guarantee Fund of the Autonomous Province of Vojvodina long-term loans for purchasing new agricultural machinery and equipment were available to customers During 2013 the Bank granted 82 loans of this type totalling 219 million euros which accounted for a 15 share in the number of loans and a 25 share in the total investment loan disbursements in the agricultural segment
In addition on the occasion of the 80th International Agricultural Fair in Novi Sad the Bank prepared a special credit offer intended for owners of registered farms which included the Intesa Farmer dinar loan for financing spring works as well as the Intesa Farmer loan for purchasing agricultural machinery During 2013 22 loans were granted for purchasing tractors and agricultural machinery totalling 341 million dinars which accounted for a 4 share in the number of loans and a 3 share in the total amount of agricultural investment loan disbursements
Banka Intesa launched the Intesa Farmer of the Year project to contribute in yet another way to the promotion of agricultural production in the country and to the strengthening of its competitiveness As part of the project the Bank awarded the most successful farmers in four categories ndash Intesa Crop Farmer Intesa Vegetable Grower Intesa Fruit Grower and Intesa Livestock Breeder and all winners won a trip to Germany to visit the international agricultural fair in Berlin The criteria based on which the Committee selected the winners of the title Intesa Farmer of the Year were the annual results achieved in agricultural production application of modern technologies in production activities the number of household members engaged in the production as well as the minimum three-year cooperation with the Bank which included a loan and regular settlement of their financial obligations
FINANCIAL INCLUSION AND LITERACY
Banka Intesa believes that the availability of financial products to all segments of society is an essential precondition for sustainable development In line with this position the Bank added to its offer specific products that promote financial inclusion and provide support during economic crisis to the most vulnerable social groups such as the elderly or youth as well as to solving broader social problems such as housing availability or health care services
Responding to the Needs of the Community
In 2013 Banca Intesa included in its offer the Intermezzo Cash Loan a new model of cash loan which offers to its users as a unique benefit in the domestic market a possibility of postponing the payment of monthly instalment up to five times during the repayment period Moreover as an additional functionality the Intermezzo loan includes insurance against job loss with no additional cost to the customer The Bank believes that the repayment flexibility provided by this loan model offers citizens unique support in the market at a time when they estimate that they need it most In 2013 Banca Intesa granted 11256 Intermezzo cash loans totalling 198 million euros which accounted for 235 of the total amount of cash loans disbursed during the year
Banca Intesa was the first in the Serbian market to offer loans to pensioners aged up to 74 years The Senior Cash Loans were designed specifically to fit the needs of senior citizens and they also include life insurance which is included in the cost of loan during the entire repayment period During the previous year 19774 loans were granted totalling 239 million euros which accounted for 284 of the total cash loans granted in 2013
23
In 2012 as support to citizens in financing medical services the Intesa Vita programme of consumer and cash loans was developed which includes loans for in vitro fertilisation harvesting and storage of stem cells DNA analysis dental services medical spa and wellness treatments as well as for purchasing baby supplies In 2013 the programme was extended to new purposes - laser vision correction vein operation and purchase of medical aids and 28 loans were granted totalling 126345 euros which accounted for 8 of the total cash loans granted during the year In this unique way the Bank provides the citizens with the possibility of taking care of their health in a responsible and timely manner without suddenly burdening their home budgets
Moreover the Bank continued to provide subsidised housing loans in 2013 as well in order to provide support to young married couples in solving their housing problems granting 224 loans totalling 864 million euros which was 205 of the total housing loans granted during the year At the same time 6544 refinancing loans with insurance against job loss or disability in case of an accident were granted totalling 146 million euros which enabled the customers to service their outstanding liabilities towards Banca Intesa and other banks and which accounted for 173 of the Bankrsquos total cash loans granted during the year
Banca Intesa introduced the Visa Classic Paralympic and Visa Electron Paralympic cards the first charity payment cards in the country in cooperation with the Paralympic Committee of Serbia This was the first initiative aimed at establishing a stable and independent mechanism for long-term assistance to athletes with disabilities and developing paralympic sport in the country During 2013 8345 Visa Classic Paralympic and Visa Electron Paralympic cards were issued which accounted for 14 of all cards issued during the year The Bank also provides debit cards for students which enable free account opening and maintenance for all students who opted for an Intesa Visa Electron Easy Travel Card (ETC) or a Maestro ISIC Card of Banca Intesa of which 4048 were issued in 2013 accounting for 18 of the debit cards issued during the year
Constantly striving to promote savings in 2013 the Bank introduced a new savings model the Month by Month Savings which provides customers with a possibility of reaching higher amounts of savings with lower monthly allocations The product enables saving in dinars and euros at a very attractive interest rate while the customers also have an opportunity to set the payment date and amount themselves
Financial Education
In 2013 as well Banca Intesa remained true to its commitment to support actively financial education by improving customer knowledge Thus in cooperation with Banca IMI SpA a member of Intesa Sanpaolo Group another Intesa Academia workshop was organised this time on the subject of advanced financing and risk management instruments so that Banca Intesarsquos customers could find out more about the possibilities of financing in the international and domestic bond markets and about hedging products for successful management of market risks The workshop brought together the leading world experts in the areas of financing and risk management as well as the most successful customers of the Bank In order to assist its customers in the SME segment in getting informed in more detail about the regulations relating to loan approval and collection Banca Intesa took part in the working breakfast on the subject Security Instruments and Their Collection as the Condition for Financing Company Growth held at the premises of the Serbian Association of Managers On this occasion the legal framework was presented about which enterprises should also get informed in order to know that documentation they will need if they opt for bank loans
At the same time the Factoring Department designed and launched an initiative of organising factoring workshops at the Bankrsquos regional centres Factoring workshops are an interactive form of cooperation and communication with customers with the focus on understanding the term and essence of factoring themselves With the support of regional centres a total of 27 factoring workshops were organised in 22 cities in two cycles in late 2012 and in early 2013 which were attended by nearly 300 corporate customers
As a member of the United Nations Global Compact and its Working Group on CSR in Banking and Finance Banca Intesa works together with the other members on the implementation of projects in the area of financial education which is the main goal of this Group One of the projects actively supported by the Bank is the cooperation with seven secondary schools of economics from six cities in Serbia where there is a ldquobank clerkrdquo educational profile in the area of thematic lectures for teachers and students The Bank representatives gave three lectures during 2013
24
CUSTOMER SATISFACTION
Banca Intesa believes that it is only through an open dialogue with its customers that it can truly understand their needs and expectations and build a long-term partner relationship with them
Meeting the Needs of Customers
Ever since 2008 Banca Intesa has been conducting surveys of its customersrsquo satisfaction with the Bankrsquos products and services in accordance with the methodology of the European Customer Satisfaction Index (ECSI) as part of its initiative named Listening 100 This is a continuous process analyses are made based on the results obtained in the survey and actions are proposed accordingly for improving the customer satisfaction The surveys are repeated at six-monthannual intervals in order to collect feedback from the customersrsquo perspective for the measures taken for the purpose of improving the satisfaction index as well as identifying the directions for further improvement
Looking at the results of the customer satisfaction survey at the end of 2013 a conclusion arises that among other things the basis of good results is a positively rated staff treatment of customers The ECSI as well as the Loyalty indices are stable with a high percentage of customers who stated they would remain Banca Intesa customers in the following 12 months Attempting to encourage its customers to express their opinions in the previous year the Bank clearly communicated the improvements implemented so far based on their suggestions
During 2013 as well Banca Intesa continued to increase the number of branches equipped with the Queue Management System (QMS) which covered approximately 40 per cent of active customers at the end of the year In addition to having a positive impact on customer satisfaction the QMS expansion made it possible to obtain the data necessary for better analysis and organisation of branch operation In addition free internet access via Wi-Fi and daily newspapers were made available to customers at the largest branches
As part of its efforts to improve further customer satisfaction in 2013 Banca Intesa implemented training of over 1500 employees both in its branch network and at its headquarters The training which was implemented as a continuation of the Education 100 programme initiated in 2011 was held on the subject of managing customer satisfaction but also their entire experience in each contact with the Bank
In addition to its efforts to improve its approach to customers and recognising the importance of two-way communication the Bank developed efficient mechanisms for collecting and recording customer feedback The Bank responds to all complaints sent to the Bank via formal complaints mechanisms and does so within the statutory time limit and in accordance with the decision of the National Bank of Serbia Each customer may also personally contact unit employees and if the customer is not satisfied with the answer received heshe can apply to the National Bank of Serbia as the second-instance body with the possibility of mediation The following are available to customers
bull Phone line +381 11 310 88 88bull E-mail kontaktbancaintesarsbull Fax +381 11 310 88 55bull Personal contact ie submitting a written complaint in personbull Contact form on the official website of the Bankbull Bank corporate accounts on social networks (Facebook and Twitter)bull Postal address of the Customer Satisfaction Management Unit Omladinskih brigada 90b 11070 New Belgrade
Transparent Advertising
Lasting relationships based on trust require communication that enables customers to understand clearly the characteristics and value of Banca Intesa products and services Therefore the Bank strives to contribute to the simplification of its products in communication
In its advertising the Bank clearly specifies all customer costs and all of them are included when calculating the effective interest rate which is always clearly and visibly shown as well as representative examples that contain all data in accordance with the Law on the Protection of Financial Service Consumers which demonstrates full transparency when it comes to Bank pricing policy
25
The Bank also strives to formulate the agreements so that they are simple to understand minimising possible misunderstandings and ambiguity by providing clear and exhaustive information It informs its customers in a timely manner of any changes in the agreements and their terms
Data Security
The protection of customer security as well as their assets and confidential information is not only Banca Intesarsquos primary duty but also the basis of the relationship of trust that the Bank wants to reinforce with its customers The protection of persons their assets and valuables as well as a multitude of data and internal organisational processes fully meets the criteria of reliability continuity and confidentiality In addition to its legal obligations Banca Intesa complies with the criteria of absolute transparency in informing its customers of their rights to privacy and the way it treats their personal information
In 2013 Banca Intesa did not find any founded complaint in connection with the violation of customer privacy or any disclosure leakage or theft of customer information
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
12
CUSTOMERS EMPLOYEES SUPPLIERS COMMUNITY ENVIRONMENT
Development of service model and channel in accordance with the
customersrsquo needs
Employee training and professional development
Fair treatment of suppliers Promotion of culture and artsOptimisation of natural
resource utilisation
Product and service qualityMerit recognition
and rewardingCooperation and relations
with suppliersSupport to youth education
and developmentReduction of greenhouse
gas emission
Customer satisfaction Employee protectionPromotion and observance
of ethical and environmental standards in supply chain
Fight against poverty and social exclusion
Support to customers for energy efficiency
improvement
Access to loans for corporatesSafe and healthy
work environment
Strengthening the SME sectorInvolving employees
in company life
Financial inclusion of vulnerable social groups
Work-life balance
Support to customers having financial problems
13
2 Sustainability
14
21 GENERATED ECONOMIC VALUE
Generation of economic value an efficient governance system and careful management of business risks characterise Banca Intesarsquos business model based on transparency and integrity These elements as well as the care for employees environment and the quality of service it provides to its customers are of key importance for the progress for which the Bank strives as a responsible stakeholder in the community in which it operates
MARKET POSITION
According to the official data of the National Bank of Serbia as of December 31 2013 Banca Intesa is the leader in all business segments
DIRECT AND INDIRECT ECONOMIC VALUE GENERATED
2012 2013
Net assets 3635 3727
Customer loans 2363 2404
Customer deposits 2300 2388
Equity 792 863
in million euros
EmploymentStable partner of the government
Reliable support to the economy
Support to the communityTotal income and
expenditure
Banca Intesa employs 3039 people
As an active partner of the government Banca
Intesa supports economic development initiatives
of the Government
Banca Intesa cooperates with 406 suppliers
Banca Intesa participated in numerous community
support projects and implemented 106 donor activities
Total economic value generated by Banca Intesa was RSD 20695651000
The Bank directly provides 3039 jobs and it paid
RSD 193711289679 into the budget of Serbia as taxes and contributions on wages and pensions
The budget of Serbia received 80629605186 dinars in the form of regular tax payments
WithRSD 67069271910EUR 2056318466
USD 73719631GBP 1012544
allocated for procurement it indirectly affects the
stability of business and jobs in its supplier chain
The investment in the community amounted
to RSD 22381000 through donations to the
local community RSD 10000000 through
investment in infrastructure and RSD 299812329 through volunteering
The economic value distributed through operating
costs and personnel expenses and liabilities to the Government and the community amounted to RSD 1116382182660
Banca Intesa continued to post good business results in 2013 as well confirming its leading position in the banking sector of Serbia despite difficult business conditions The Bankrsquos total loans to corporate and retail customers reached 2365 million euros while deposits totalled 2387 million euros The business network consisted of 192 branches 3 mortgage loan centres and 5 mortgage loan offices In addition Banca Intesa had the most developed network of POS terminals and ATMs with 12751 active POS terminals and 255 ATMs
In the retail segment total loans amounted to 667 million euros while deposits increased to 1436 million euros at the end of 2013 Banca Intesa reaffirmed its leading position in e-banking and payment card business during 2013 as well with around 14 million debit and credit cards issued At the same time small business loans reached 126 million euros while loans granted to farmers amounted to 37 million euros
In the corporate segment at the end of 2013 Banca Intesa had a loan portfolio of 1728 million euros continuing the growth from the previous years Corporate deposits were at the level of 968 million euros while the bankrsquos market share in total corporate deposits of the banking sector was 206 at the end of December 2013
Owing to the increase in all key items a net income of 238 million euros was posted Net profit after tax was 76 million euros at the end of December 2013
15
1 ECONOMIC VALUE GENERATED 2012 2013
Interest income 31340971 29588778
Interest expenses -11790051 -9598939
Fee and commission income 7890743 8175478
Fee and commission expenses -2292104 -2648138
Net profit on sale of securities atfair value through profit and loss 1008 590
Net profit on sale of securitiesavailable for sale 49855 4332
Net profit on sale of equity investments 434 0
Net exchange rate loss -13263673 356204
Dividends and share income 2925 1527
Other operating income 554540 676132
Net expenses on indirectly written-off of placements and provisions 1 -5415518 -6935326
Operating and other expenses 2 -189518 -532659
Gains from changes in value of assets and liabilities 31390752 12172042
Losses from changes in value of assets and liabilities -16188419 -10564372
TOTAL ECONOMIC VALUE GENERATED 22091945 20695651
2 ECONOMIC VALUE DISTRIBUTED
21 Operating costs 3
Costs of material -487362 -475379
Building and equipment maintenance costs -753215 -798584
Office and equipment lease costs -934768 -930657
Costs of intellectual services -369026 -315092
Advertising -355296 -280923
Costs of business travel and training of employees 3 -93716 -92586
Other operating costs 3 -2098067 -2130715
TOTAL OPERATING COSTS -5091449 -5023936
22 Employee expenses 3
Wages and salaries -3312415 -3223372
Taxes and contributions on wages and wage benefits 3 -1997940 -1937113
Cost of employees transportation 3 -76490 -84139
Costs of remuneration for temporary and occasional work -5861 -4569
Costs of employees education not related to their job 3 -3157 -6094
Other personnel expenses -172859 -55922
TOTAL INCOME AND EXPENSES
TOTAL EMPLOYEE EXPENSES -5568723 -5311209
23 Expenses related to liabilities to the government
Income tax -830548 -623097
Indirect taxes and duties 3 -161352 -183199
TOTAL EXPENSES RELATED TO LIABILITES TO THE GOVERNMENT -991900 -806296
24 Community-related expenses
Donations and corporate social responsibility 3 -33204 -22381
TOTAL COMMUNITY-RELATED EXPENSES -33204 -22381
TOTAL ECONOMIC VALUE DISTRIBUTED -11685276 -11163822
3 ECONOMIC VALUE RETAINED 4 10406668 95318291 The item differs from the income statement in the annual report in that the Provisions for Employee Benefits Legal Disputes and Restructuring are excluded 2 The item differs from the income statement in the annual report in that the Operating Costs are presented in the section Economic Value Distributed in several segments stated while Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation is not presented within Other Operating Expenses3 The items differ from the income statement in the annual report in that a part of the Operating Costs is reclassified into the following segments Employee Expenses Expenses Related to Liabilities to the Government and Community-Related Expenses4 This represents BIBrsquos profit net of the Provisions for Employee Benefits Legal Disputes and Restructuring the Gains and Losses on Deferred Tax Assets and Liabilities the Depreciation Costs and the Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation
16
22 GOVERNANCE IN BANCA INTESA
CORPORATE GOVERNANCE
Shareholders of Banca Intesa ad Beograd ndash ownership structure Intesa Sanpaolo Holding International SA 7779 Intesa Sanpaolo SPA 1521 International Finance Institution (IFC) 700 The governance of the Banca Intesa joint stock company is organised as a two-tier system
The Bankrsquos Board of Directors consists of five members elected by the General Meeting of Shareholders upon the shareholdersrsquo proposal including the Board Chairman The term of office of Board members is three years with a possibility of re-election The Chairman of the Board of Directors of Banca Intesa is Massimo Malagoli and its members are Ivan Šramko Arthur Philippe Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Executive Board of Banca Intesa consists of six members including the President The term of office of Executive Board members is three years with a possibility of re-election The President of the Executive Board of Banca Intesa is Draginja Đurić the Deputy President of the Executive Board is Marco Capellini and Board members are Darko Popović Head of Retail and Small Business Division Slađana Jelić Head of the Corporate Banking Division Dragica Mihajlović Head of the Financial Management and Treasury Division and Marko Marković Head of the Operations Management Division
Women account for 20 of the members of the Board of Directors and 50 of the members of the Executive Board of Banca Intesa
The Bankrsquos Audit Committee consists of five members including the Chairman The term of office of Committee members is three years with a possibility of re-election The Committee Chairman is Giovanni Bergamini and its members are Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Chairman of the Board of Directors as a governance body does not have a direct executive role given that Banca Intesa organised as a joint stock company with a two-tier governance system delegates executive roles to the Executive Board as a management body that organises the Bankrsquos operations and performs daily monitoring of the activities of the Bank employees while the Board of Directors makes strategic decisions aimed at the Bankrsquos compliance takes care of and is responsible for the accuracy of all reports financial condition and operating results of the Bank addressed to the Bankrsquos shareholders the public and the National Bank of Serbia
In line with the Law on Banks and other regulations members of the Board of Directors are appointed and dismissed by the General Meeting of Shareholders while members of the Executive Board are appointed and dismissed by the Bankrsquos Board of Directors Domestic regulations list conditions that members of the Executive Board and the Board of Directors must meet in order to get prior approval of the regulatory body ie the National Bank of Serbia without which they cannot become members of these boards This includes among other things good business reputation and appropriate qualifications In addition appropriate experience in finance is also required for at least three members of the Board of Directors while at least one member of the Board of Directors must have active knowledge of Serbian and reside in the territory of the Republic of Serbia After obtaining the approval the appointed person is registered with the Business Registers Agency as well
Banca Intesa provided in its bylaws for the mechanisms and channels of direct e-mail communication with its parent group Intesa Sanpaolo with the aim of respecting the individual and dignity of each employee as well as the values proclaimed by the Code of Ethics The Bankrsquos shareholders ie the General Meeting of Shareholders participate in and directly impact the work of the Board of Directors as a governance body in the following ways
bull The General Meeting of Shareholders adopts the business policy and strategy of the Bankbull The General Meeting of Shareholders adopts the Articles of Association and the amendments to the Memorandum and Articles of Associationbull The General Meeting of Shareholders appoints and dismisses the Chairman and members of the Board of
17
Directorsbull The General Meeting of Shareholders appoints and dismisses the external auditorbull The General Meeting of Shareholders considers and adopts the annual report of the Board of Directors
The adopted remuneration policy for the entire human resources of the Group including the variable components is based on equality merit and sustainability of results The guidelines for defining the management remuneration policy are based on objective elements and parameters resulting from the assessment of organisational positions as well as performance and potential with the aim of creating an integrated system for the members of management thus helping their professional development The policy provides for remuneration in the form of benefits which is also based on financial instruments and linked to the results of the company ndash which corresponds to the level of assumed risk and is regulated so as to avoid giving benefits that in the long term are not in accordance with the Grouprsquos interests Based on the performance indicators closely linked with the long-term goals the benefit determination systems are based among other things on the principle of symmetry with the amounts of paid benefits being based on the results achieved at the Group business sector and individual levels and therefore being capable of decreasing significantly and even reaching zero if the minimum indicators that reflect the Group profitability are not achieved also taking into account the risks assumed and the capital used
When it comes to conflicts of interest Banca Intesa has prescribed in accordance with the provisions of the Law on Banks as well as with its bylaws and those of its parent Group an obligation for members of the Board of Directors and the Executive Board to submit a written statement of conflict of interest to the Bankrsquos Board of Directors within one month from the day of taking office The members of the Board of Directors and the Executive Board are obliged in accordance with the bylaws regulating transactions with related parties and the conflict of interest to submit once a year completed standard questionnaires whose content is designed by the parent Group and which contain information relevant for establishing any conflict of interest
One of the methods of sustainability control at Banca Intesa is the power of the Board of Directors as a governance body to set up an integrated risk management system at the Bank and the supervision of this system while the Executive Board identifies the risks to which Banca Intesa is exposed and controls these risks in accordance with the approved policies and procedures The Board of Directors gives approval to the Bankrsquos exposure to one or a group of related parties of over 10 or to an increase in the exposure to over 20 of Bank equity adopts internal audit plan and programme considers external and internal audit reports sets up the internal control system defines the internal organisation and organisational structure of the Bank that ensures the division of duties authority and responsibilities of its employees in a manner that prevents conflict of interest and ensures a transparent and documented process of decision making and implementation decides on disposing with the Bankrsquos fixed assets and the stakes and shares that the Bank has in other legal entities
The work of the Executive Board is evaluated through the MBO (Management by Objectives) system which is based on setting measurable objectives based on which the annual performance is monitored
RISK MANAGEMENT
Risk management is an integral part of the corporate governance of Banca Intesa based on which it is estimated whether the Bank can achieve its business targets in the way consistent not only with the law but also with the public interest safety of people as well as the factors of the natural and social environment Therefore the access to risk management also implies broader social consequences of Bank activity in the environment and in the market
Controlling Socio-environmental Risks in the Governance Process
By a decision of the Executive Board the Bank appointed the persons responsible for environmental protection with the aim of establishing an Environmental Management System ndash EMS and ensuring compliance with the rules of environmental protection and corporate social responsibility in lending operations so that the system would be fully applied until the final collection of all loan instalments A Senior Environmental Management Officer (Deputy President of the Executive Board) and an Environmental Management Coordinator (compliance risk management specialist) were appointedThe Environmental Management Coordinator with the approval of the Senior Environmental Management Officer informs the Executive Board the Asset Quality Committee and the Credit Committee of any significant increase in the level of socio-environmental risks in individual Bank customers particularly in customers with high credit exposure
18
and prepares reports on socio-environmental risks for international development banks towards which the Bank has such reporting obligation
The responsible organisational unit of the Bank monitors risks through the process of assessing loan applications taking into account the criteria related to lending to all customers engaged in production and service activities and the criteria related to environmental risk management
Management of Socio-environmental Risks in Lending
Adequate management and control of socio-environmental risks are essential preconditions for generating reliable and sustainable value and for protecting the Bankrsquos financial stability as well as its reputation
Socio-environmental Risk Management
The Socio-environmental Risk Management Procedure regulates the risk monitoring process in the area of environmental protection employee health and safety and the Bankrsquos social responsibility (protection of cultural heritage fundamental human rights and personal integrity) This Procedure regulates the credit process with regard to socio-environmental risks when approving a credit product to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1000000 euros or higher including the requested new product in case of a credit product from a credit line or other funds approved to the Bank by an international development bank and approval of a long-term credit product funded from other sources The Procedure regulates the rules classified by business lineprocess in the process of socio-environmental risk management
Equator Principles
The Implementation of the Equator Principles for Project Financing procedure applies when preparing and implementing project financing and advisory services in connection with project financing where the investment value of the project is 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes in these facilities can create significant environmental andor social impacts or significantly change the natural environment The goal of the Equator principles is to identify and assess risks and perform risk management based on the criteria defined by the principles with the aim of adhering to the principle of sustainability of natural resources human health human rights cultural heritage and biodiversity
Armaments
The sensitive sectors that the Bank monitors with special attention include armament production and trade In accordance with the relevant bylaw of its parent Group the Policy of Not Financing of Armaments in 2011 Banca Intesa adopted the Procedure for the Performance of Transactions Related to Armament Production and Trade which regulates the identification and preparation of the summary of the customers engaged in armament and military equipment production and trade the monitoring of transactions and loan applications of the customers engaged in armament and military equipment production and trade the approval of transactions and loan applications related to armament and military equipment production and trade in accordance with the Policy of Not Financing of Armaments as well as the preparation of reports on the transactions related to armament and military equipment production and trade
Reputational Risk Management
The Bank attaches great importance to reputational risks that are assessed as part of the compliance control system which is within the competence of the Compliance Office Banca Intesa believes that the standards in this area as well as the business ethics are the cornerstone of banking operations which by their nature are based on trust Bylaws such as the Code of Ethics policies and other define that any non-compliance with the bylaws the principles and values contained in them as well as with external regulations (laws and secondary legislation) exposes the Bank to a certain level of reputational risks
Fight Against Corruption and Compliance
The internal regulatory source that governs the system for control and mitigation of corruption risks comprises the Code of Ethics the Code of Conduct the Rulebook on Relations with Political Parties and the following Bank procedures the Procedure for the Prevention of Internal Fraud and Abuse at the Bank and the Employment Termination Procedure
19
The Code of Conduct prescribes in detail the rules in connection with receiving and giving gifts and the measures prescribed in the event of corruption are related to the violation of work duties so the measures stipulated by external regulations ie the Labour Law (eg compensation for damage employee suspension or termination) but also the Criminal Code may be pronounced against an employee Based on the Legal Department records no proceedings were initiated against Banca Intesa ad Beograd in connection with corruption since no complaints or notices prior to complaint were delivered during 2013
In the same period the Suspicious Transactions and Know Your Customer training courses were held in this segment by means of e-learning which were received by as many as 8663 of employees during 2013 The training courses were provided for by the current regulations and internal acts of the Bank and were aimed at informing the employees and refreshing their knowledge of the obligation of collecting information about each customer and completing appropriate questionnaires In addition the training informed the employees about the new processes that were implemented as well as about mandatory observance of all duties relating to knowing monitoring and reporting suspicious transactions of customers
The Rulebook on Relations with Political Parties prescribes the obligation of the Bank to refrain from granting donations and sponsorship tobull Political parties and any organisations related to thembull Political movements and their organisational unitsbull Trade union organisationsbull Competent authorities and institutions
The prohibition of granting donations and sponsorship to the above organisations aims at the protection against any grants that would result in a privileged position to the Bank or unfair decisions in favour of the Bank
The Compliance Office as well as the relevant organisational units of the Bank are committed to the regulation of processes and the definition of procedures and their operating rules as well as practice which efficiently prevent the violation of applicable regulations The Compliance Office also provides support to the highest bodies of the Bank in monitoring the compliance risk The compliance risk assessment process is constant Through semi-annual reporting these risks are identified and priority measures for their elimination or mitigation are determined ie the level of efficiency of the existing compliance controls is assessed
The Internal Audit provides direct support to the highest bodies of the Bank in monitoring the compliance with and adequacy of the rules contained in the Bankrsquos bylaws If it identifies critical issues during its activity the Internal Audit informs the relevant organisational units and the highest bodies of the Bank with the aim of determining adequate measures for risk mitigation and the method of their implementation
Protection of Health and Safety
Occupational health and safety at Banca Intesa are regulated in accordance with international directives recommendations and positive laws of the Republic of Serbia
During 2013 an assessment was made of the situation regarding occupational health and safety and the risk level for 207 facilities at which work is performed A schedule of elimination of recorded risks to the health of Bank employees was defined and implemented according to priorities and the budget planned In connection with this risk assessment documents were updated as well
When it comes to physical security three robberies were recorded in 2013 versus two a year earlier and investments in technical protection systems continued
Risk Management in Supply Chain
Supplier Check
The Procurement Unit and the organisational part in charge of procurement are obliged to evaluate the received supplier bids by applying the methods of qualitative and quantitative analysis as well as to align the bid evaluation criteria prior to inviting the bidders to submit offers by combining specific criteria one of which is the Compliance of Bidderrsquos Operations with the Corporate Social Responsibility Principles
20
Health and Safety Risk Assessment
In accordance with the Procurement Policy members of Intesa Sanpaolo Group are expected to include the parameters of assessment of environmental protection and occupational health protection in their procurement process giving priority to the use of recycled paper highly energy efficient products and environment-friendly technical equipment
Group members must include special provisions in the procurement contracts they conclude with their suppliers These provisions provide for the obligation of suppliers to comply with the principles specified in the Intesa Sanpaolo Rules for the Environmental and Energy Policy Constant checks are performed in the countries where legal measures regarding environmental protection were adopted in order to ensure compliance
In the area of personnel training and spreading the awareness of the importance of these issues the training of the employees who directly communicate with suppliers must include fields related to corporate social responsibility as well as to the responsibility for environmental protection
21
CUSTOMERS
Banca Intesa built its leading position in the market of Serbia and the status of stable and reliable partner by fostering trust in the relations with its customers The strengthening of relations with customers is based on constant improvement of the quality of products and services proceeding from specific needs of each segment as well as on full respect for the principles of equality and availability of products and services Key aspects of doing business with customers are the following
bull SUPPORT TO ECONOMY AND AGRICULTUREbull FINANCIAL INCLUSION AND EDUCATIONbull CUSTOMER SATISFACTION
SUPPORT TO ECONOMY AND AGRICULTURE
Banca Intesa continued to provide support to the economy and the agricultural sector in 2013 as well focusing on the development of entrepreneurship and self-employment particularly in the SME segment as well as on the improvement of public infrastructure
Support to the Public Sector
Banca Intesa offered loans from the credit line of the German Development Bank (KfW) to the public sector for financing infrastructure projects and the procurement of equipment in the following areas water management sewerage and wastewater management solid waste management environmental protection and pollution control transport infrastructure public transport and communication systems infrastructure facilities fostering economic development and other social and utility services During 2013 Banca Intesa granted 11 loans totalling 852 million euros while the total value of the project is 47 million euros
Development of Entrepreneurship
Banca Intesa supported the programme of measures of the Government of the Republic of Serbia for encouraging SMEs and entrepreneurs through subsidised loans for liquidity and working assets in 2013 as well The Bankrsquos commitment to provide continuously support to its customers in this segment is also demonstrated by the fact that the Government of the Republic of Serbia implements its programme of measures for the fifth consecutive time During 2013 the Bank granted 414 subsidised loans to SMEs totalling 562 billion dinars which accounted for 107 of the total loans to the SME sector The small business sector was granted 186 billion dinars and 1347 loans which accounted for 15 of the number of loans and 16 of the total loan disbursements to this segment
In cooperation with the National Bank of Serbia and the Kingdom of Denmark the Bank launched the Local Economic Development in the Balkans (LEDIB) programme intended for enterprises entrepreneurs and registered farms from the small business segment with the aim of improving local economic development creating new jobs strengthening organisational capacities introducing new eco-friendly technologies and other favourable impacts on the overall development The credit line was intended for the Nišava Pčinja Toplica Jablanica and Pirot Districts and in 2013 the Bank granted 39 loans totalling 505208 euros under this programme which accounted for 04 of the number of loans and 05 of the total loan disbursements to the small business segment At the same time from the credit line of the European Fund for Southeast Europe (EFSE) which supports enterprises and registered farms through investments and loans for working assets 227 million euros were granted in the small business segment which accounted for 22 of loan disbursements in the segment
With the aim of supporting the promotion and strengthening of womenrsquos entrepreneurship Banca Intesa helped the Association of Businesswomen in Serbia in the organisation of an international conference entitled New Age Woman Entrepreneur New Opportunities for Recovery of Economy in the Region The event contributed
22
to further positioning of Banca Intesa as a bank that actively supports entrepreneurship in the country as part of its efforts to contribute to economic recovery and growth For this purpose the Bank also has in its offer loans for women entrepreneurs in Vojvodina in the form of start-up loans for unemployed women and women who have had a business for up to three years The Bank granted 8 loans totalling 98 million dinars under this programme during 2013 which accounted for a 3 share in the number of loans and a 1 share in the total investment loan disbursements in the small business segment
Promotion of Agricultural Sector
Taking into account that the agricultural sector is very specific because it has a special social as well as environmental importance in addition to economic importance for many years Banca Intesa has been encouraging development and investing in projects and individuals that encourage with their activities further rural development and contribute to an increase in the competitiveness of domestic agriculture
Aware of the great economic potential of this industry as part of the LEDIB programme the Bank granted eight loans to registered farms in 2013 totalling 76219 euros which accounted for 02 of the number of loans and 03 of the total loan disbursements to this customer segment In addition in cooperation with the Guarantee Fund of the Autonomous Province of Vojvodina long-term loans for purchasing new agricultural machinery and equipment were available to customers During 2013 the Bank granted 82 loans of this type totalling 219 million euros which accounted for a 15 share in the number of loans and a 25 share in the total investment loan disbursements in the agricultural segment
In addition on the occasion of the 80th International Agricultural Fair in Novi Sad the Bank prepared a special credit offer intended for owners of registered farms which included the Intesa Farmer dinar loan for financing spring works as well as the Intesa Farmer loan for purchasing agricultural machinery During 2013 22 loans were granted for purchasing tractors and agricultural machinery totalling 341 million dinars which accounted for a 4 share in the number of loans and a 3 share in the total amount of agricultural investment loan disbursements
Banka Intesa launched the Intesa Farmer of the Year project to contribute in yet another way to the promotion of agricultural production in the country and to the strengthening of its competitiveness As part of the project the Bank awarded the most successful farmers in four categories ndash Intesa Crop Farmer Intesa Vegetable Grower Intesa Fruit Grower and Intesa Livestock Breeder and all winners won a trip to Germany to visit the international agricultural fair in Berlin The criteria based on which the Committee selected the winners of the title Intesa Farmer of the Year were the annual results achieved in agricultural production application of modern technologies in production activities the number of household members engaged in the production as well as the minimum three-year cooperation with the Bank which included a loan and regular settlement of their financial obligations
FINANCIAL INCLUSION AND LITERACY
Banka Intesa believes that the availability of financial products to all segments of society is an essential precondition for sustainable development In line with this position the Bank added to its offer specific products that promote financial inclusion and provide support during economic crisis to the most vulnerable social groups such as the elderly or youth as well as to solving broader social problems such as housing availability or health care services
Responding to the Needs of the Community
In 2013 Banca Intesa included in its offer the Intermezzo Cash Loan a new model of cash loan which offers to its users as a unique benefit in the domestic market a possibility of postponing the payment of monthly instalment up to five times during the repayment period Moreover as an additional functionality the Intermezzo loan includes insurance against job loss with no additional cost to the customer The Bank believes that the repayment flexibility provided by this loan model offers citizens unique support in the market at a time when they estimate that they need it most In 2013 Banca Intesa granted 11256 Intermezzo cash loans totalling 198 million euros which accounted for 235 of the total amount of cash loans disbursed during the year
Banca Intesa was the first in the Serbian market to offer loans to pensioners aged up to 74 years The Senior Cash Loans were designed specifically to fit the needs of senior citizens and they also include life insurance which is included in the cost of loan during the entire repayment period During the previous year 19774 loans were granted totalling 239 million euros which accounted for 284 of the total cash loans granted in 2013
23
In 2012 as support to citizens in financing medical services the Intesa Vita programme of consumer and cash loans was developed which includes loans for in vitro fertilisation harvesting and storage of stem cells DNA analysis dental services medical spa and wellness treatments as well as for purchasing baby supplies In 2013 the programme was extended to new purposes - laser vision correction vein operation and purchase of medical aids and 28 loans were granted totalling 126345 euros which accounted for 8 of the total cash loans granted during the year In this unique way the Bank provides the citizens with the possibility of taking care of their health in a responsible and timely manner without suddenly burdening their home budgets
Moreover the Bank continued to provide subsidised housing loans in 2013 as well in order to provide support to young married couples in solving their housing problems granting 224 loans totalling 864 million euros which was 205 of the total housing loans granted during the year At the same time 6544 refinancing loans with insurance against job loss or disability in case of an accident were granted totalling 146 million euros which enabled the customers to service their outstanding liabilities towards Banca Intesa and other banks and which accounted for 173 of the Bankrsquos total cash loans granted during the year
Banca Intesa introduced the Visa Classic Paralympic and Visa Electron Paralympic cards the first charity payment cards in the country in cooperation with the Paralympic Committee of Serbia This was the first initiative aimed at establishing a stable and independent mechanism for long-term assistance to athletes with disabilities and developing paralympic sport in the country During 2013 8345 Visa Classic Paralympic and Visa Electron Paralympic cards were issued which accounted for 14 of all cards issued during the year The Bank also provides debit cards for students which enable free account opening and maintenance for all students who opted for an Intesa Visa Electron Easy Travel Card (ETC) or a Maestro ISIC Card of Banca Intesa of which 4048 were issued in 2013 accounting for 18 of the debit cards issued during the year
Constantly striving to promote savings in 2013 the Bank introduced a new savings model the Month by Month Savings which provides customers with a possibility of reaching higher amounts of savings with lower monthly allocations The product enables saving in dinars and euros at a very attractive interest rate while the customers also have an opportunity to set the payment date and amount themselves
Financial Education
In 2013 as well Banca Intesa remained true to its commitment to support actively financial education by improving customer knowledge Thus in cooperation with Banca IMI SpA a member of Intesa Sanpaolo Group another Intesa Academia workshop was organised this time on the subject of advanced financing and risk management instruments so that Banca Intesarsquos customers could find out more about the possibilities of financing in the international and domestic bond markets and about hedging products for successful management of market risks The workshop brought together the leading world experts in the areas of financing and risk management as well as the most successful customers of the Bank In order to assist its customers in the SME segment in getting informed in more detail about the regulations relating to loan approval and collection Banca Intesa took part in the working breakfast on the subject Security Instruments and Their Collection as the Condition for Financing Company Growth held at the premises of the Serbian Association of Managers On this occasion the legal framework was presented about which enterprises should also get informed in order to know that documentation they will need if they opt for bank loans
At the same time the Factoring Department designed and launched an initiative of organising factoring workshops at the Bankrsquos regional centres Factoring workshops are an interactive form of cooperation and communication with customers with the focus on understanding the term and essence of factoring themselves With the support of regional centres a total of 27 factoring workshops were organised in 22 cities in two cycles in late 2012 and in early 2013 which were attended by nearly 300 corporate customers
As a member of the United Nations Global Compact and its Working Group on CSR in Banking and Finance Banca Intesa works together with the other members on the implementation of projects in the area of financial education which is the main goal of this Group One of the projects actively supported by the Bank is the cooperation with seven secondary schools of economics from six cities in Serbia where there is a ldquobank clerkrdquo educational profile in the area of thematic lectures for teachers and students The Bank representatives gave three lectures during 2013
24
CUSTOMER SATISFACTION
Banca Intesa believes that it is only through an open dialogue with its customers that it can truly understand their needs and expectations and build a long-term partner relationship with them
Meeting the Needs of Customers
Ever since 2008 Banca Intesa has been conducting surveys of its customersrsquo satisfaction with the Bankrsquos products and services in accordance with the methodology of the European Customer Satisfaction Index (ECSI) as part of its initiative named Listening 100 This is a continuous process analyses are made based on the results obtained in the survey and actions are proposed accordingly for improving the customer satisfaction The surveys are repeated at six-monthannual intervals in order to collect feedback from the customersrsquo perspective for the measures taken for the purpose of improving the satisfaction index as well as identifying the directions for further improvement
Looking at the results of the customer satisfaction survey at the end of 2013 a conclusion arises that among other things the basis of good results is a positively rated staff treatment of customers The ECSI as well as the Loyalty indices are stable with a high percentage of customers who stated they would remain Banca Intesa customers in the following 12 months Attempting to encourage its customers to express their opinions in the previous year the Bank clearly communicated the improvements implemented so far based on their suggestions
During 2013 as well Banca Intesa continued to increase the number of branches equipped with the Queue Management System (QMS) which covered approximately 40 per cent of active customers at the end of the year In addition to having a positive impact on customer satisfaction the QMS expansion made it possible to obtain the data necessary for better analysis and organisation of branch operation In addition free internet access via Wi-Fi and daily newspapers were made available to customers at the largest branches
As part of its efforts to improve further customer satisfaction in 2013 Banca Intesa implemented training of over 1500 employees both in its branch network and at its headquarters The training which was implemented as a continuation of the Education 100 programme initiated in 2011 was held on the subject of managing customer satisfaction but also their entire experience in each contact with the Bank
In addition to its efforts to improve its approach to customers and recognising the importance of two-way communication the Bank developed efficient mechanisms for collecting and recording customer feedback The Bank responds to all complaints sent to the Bank via formal complaints mechanisms and does so within the statutory time limit and in accordance with the decision of the National Bank of Serbia Each customer may also personally contact unit employees and if the customer is not satisfied with the answer received heshe can apply to the National Bank of Serbia as the second-instance body with the possibility of mediation The following are available to customers
bull Phone line +381 11 310 88 88bull E-mail kontaktbancaintesarsbull Fax +381 11 310 88 55bull Personal contact ie submitting a written complaint in personbull Contact form on the official website of the Bankbull Bank corporate accounts on social networks (Facebook and Twitter)bull Postal address of the Customer Satisfaction Management Unit Omladinskih brigada 90b 11070 New Belgrade
Transparent Advertising
Lasting relationships based on trust require communication that enables customers to understand clearly the characteristics and value of Banca Intesa products and services Therefore the Bank strives to contribute to the simplification of its products in communication
In its advertising the Bank clearly specifies all customer costs and all of them are included when calculating the effective interest rate which is always clearly and visibly shown as well as representative examples that contain all data in accordance with the Law on the Protection of Financial Service Consumers which demonstrates full transparency when it comes to Bank pricing policy
25
The Bank also strives to formulate the agreements so that they are simple to understand minimising possible misunderstandings and ambiguity by providing clear and exhaustive information It informs its customers in a timely manner of any changes in the agreements and their terms
Data Security
The protection of customer security as well as their assets and confidential information is not only Banca Intesarsquos primary duty but also the basis of the relationship of trust that the Bank wants to reinforce with its customers The protection of persons their assets and valuables as well as a multitude of data and internal organisational processes fully meets the criteria of reliability continuity and confidentiality In addition to its legal obligations Banca Intesa complies with the criteria of absolute transparency in informing its customers of their rights to privacy and the way it treats their personal information
In 2013 Banca Intesa did not find any founded complaint in connection with the violation of customer privacy or any disclosure leakage or theft of customer information
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
13
2 Sustainability
14
21 GENERATED ECONOMIC VALUE
Generation of economic value an efficient governance system and careful management of business risks characterise Banca Intesarsquos business model based on transparency and integrity These elements as well as the care for employees environment and the quality of service it provides to its customers are of key importance for the progress for which the Bank strives as a responsible stakeholder in the community in which it operates
MARKET POSITION
According to the official data of the National Bank of Serbia as of December 31 2013 Banca Intesa is the leader in all business segments
DIRECT AND INDIRECT ECONOMIC VALUE GENERATED
2012 2013
Net assets 3635 3727
Customer loans 2363 2404
Customer deposits 2300 2388
Equity 792 863
in million euros
EmploymentStable partner of the government
Reliable support to the economy
Support to the communityTotal income and
expenditure
Banca Intesa employs 3039 people
As an active partner of the government Banca
Intesa supports economic development initiatives
of the Government
Banca Intesa cooperates with 406 suppliers
Banca Intesa participated in numerous community
support projects and implemented 106 donor activities
Total economic value generated by Banca Intesa was RSD 20695651000
The Bank directly provides 3039 jobs and it paid
RSD 193711289679 into the budget of Serbia as taxes and contributions on wages and pensions
The budget of Serbia received 80629605186 dinars in the form of regular tax payments
WithRSD 67069271910EUR 2056318466
USD 73719631GBP 1012544
allocated for procurement it indirectly affects the
stability of business and jobs in its supplier chain
The investment in the community amounted
to RSD 22381000 through donations to the
local community RSD 10000000 through
investment in infrastructure and RSD 299812329 through volunteering
The economic value distributed through operating
costs and personnel expenses and liabilities to the Government and the community amounted to RSD 1116382182660
Banca Intesa continued to post good business results in 2013 as well confirming its leading position in the banking sector of Serbia despite difficult business conditions The Bankrsquos total loans to corporate and retail customers reached 2365 million euros while deposits totalled 2387 million euros The business network consisted of 192 branches 3 mortgage loan centres and 5 mortgage loan offices In addition Banca Intesa had the most developed network of POS terminals and ATMs with 12751 active POS terminals and 255 ATMs
In the retail segment total loans amounted to 667 million euros while deposits increased to 1436 million euros at the end of 2013 Banca Intesa reaffirmed its leading position in e-banking and payment card business during 2013 as well with around 14 million debit and credit cards issued At the same time small business loans reached 126 million euros while loans granted to farmers amounted to 37 million euros
In the corporate segment at the end of 2013 Banca Intesa had a loan portfolio of 1728 million euros continuing the growth from the previous years Corporate deposits were at the level of 968 million euros while the bankrsquos market share in total corporate deposits of the banking sector was 206 at the end of December 2013
Owing to the increase in all key items a net income of 238 million euros was posted Net profit after tax was 76 million euros at the end of December 2013
15
1 ECONOMIC VALUE GENERATED 2012 2013
Interest income 31340971 29588778
Interest expenses -11790051 -9598939
Fee and commission income 7890743 8175478
Fee and commission expenses -2292104 -2648138
Net profit on sale of securities atfair value through profit and loss 1008 590
Net profit on sale of securitiesavailable for sale 49855 4332
Net profit on sale of equity investments 434 0
Net exchange rate loss -13263673 356204
Dividends and share income 2925 1527
Other operating income 554540 676132
Net expenses on indirectly written-off of placements and provisions 1 -5415518 -6935326
Operating and other expenses 2 -189518 -532659
Gains from changes in value of assets and liabilities 31390752 12172042
Losses from changes in value of assets and liabilities -16188419 -10564372
TOTAL ECONOMIC VALUE GENERATED 22091945 20695651
2 ECONOMIC VALUE DISTRIBUTED
21 Operating costs 3
Costs of material -487362 -475379
Building and equipment maintenance costs -753215 -798584
Office and equipment lease costs -934768 -930657
Costs of intellectual services -369026 -315092
Advertising -355296 -280923
Costs of business travel and training of employees 3 -93716 -92586
Other operating costs 3 -2098067 -2130715
TOTAL OPERATING COSTS -5091449 -5023936
22 Employee expenses 3
Wages and salaries -3312415 -3223372
Taxes and contributions on wages and wage benefits 3 -1997940 -1937113
Cost of employees transportation 3 -76490 -84139
Costs of remuneration for temporary and occasional work -5861 -4569
Costs of employees education not related to their job 3 -3157 -6094
Other personnel expenses -172859 -55922
TOTAL INCOME AND EXPENSES
TOTAL EMPLOYEE EXPENSES -5568723 -5311209
23 Expenses related to liabilities to the government
Income tax -830548 -623097
Indirect taxes and duties 3 -161352 -183199
TOTAL EXPENSES RELATED TO LIABILITES TO THE GOVERNMENT -991900 -806296
24 Community-related expenses
Donations and corporate social responsibility 3 -33204 -22381
TOTAL COMMUNITY-RELATED EXPENSES -33204 -22381
TOTAL ECONOMIC VALUE DISTRIBUTED -11685276 -11163822
3 ECONOMIC VALUE RETAINED 4 10406668 95318291 The item differs from the income statement in the annual report in that the Provisions for Employee Benefits Legal Disputes and Restructuring are excluded 2 The item differs from the income statement in the annual report in that the Operating Costs are presented in the section Economic Value Distributed in several segments stated while Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation is not presented within Other Operating Expenses3 The items differ from the income statement in the annual report in that a part of the Operating Costs is reclassified into the following segments Employee Expenses Expenses Related to Liabilities to the Government and Community-Related Expenses4 This represents BIBrsquos profit net of the Provisions for Employee Benefits Legal Disputes and Restructuring the Gains and Losses on Deferred Tax Assets and Liabilities the Depreciation Costs and the Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation
16
22 GOVERNANCE IN BANCA INTESA
CORPORATE GOVERNANCE
Shareholders of Banca Intesa ad Beograd ndash ownership structure Intesa Sanpaolo Holding International SA 7779 Intesa Sanpaolo SPA 1521 International Finance Institution (IFC) 700 The governance of the Banca Intesa joint stock company is organised as a two-tier system
The Bankrsquos Board of Directors consists of five members elected by the General Meeting of Shareholders upon the shareholdersrsquo proposal including the Board Chairman The term of office of Board members is three years with a possibility of re-election The Chairman of the Board of Directors of Banca Intesa is Massimo Malagoli and its members are Ivan Šramko Arthur Philippe Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Executive Board of Banca Intesa consists of six members including the President The term of office of Executive Board members is three years with a possibility of re-election The President of the Executive Board of Banca Intesa is Draginja Đurić the Deputy President of the Executive Board is Marco Capellini and Board members are Darko Popović Head of Retail and Small Business Division Slađana Jelić Head of the Corporate Banking Division Dragica Mihajlović Head of the Financial Management and Treasury Division and Marko Marković Head of the Operations Management Division
Women account for 20 of the members of the Board of Directors and 50 of the members of the Executive Board of Banca Intesa
The Bankrsquos Audit Committee consists of five members including the Chairman The term of office of Committee members is three years with a possibility of re-election The Committee Chairman is Giovanni Bergamini and its members are Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Chairman of the Board of Directors as a governance body does not have a direct executive role given that Banca Intesa organised as a joint stock company with a two-tier governance system delegates executive roles to the Executive Board as a management body that organises the Bankrsquos operations and performs daily monitoring of the activities of the Bank employees while the Board of Directors makes strategic decisions aimed at the Bankrsquos compliance takes care of and is responsible for the accuracy of all reports financial condition and operating results of the Bank addressed to the Bankrsquos shareholders the public and the National Bank of Serbia
In line with the Law on Banks and other regulations members of the Board of Directors are appointed and dismissed by the General Meeting of Shareholders while members of the Executive Board are appointed and dismissed by the Bankrsquos Board of Directors Domestic regulations list conditions that members of the Executive Board and the Board of Directors must meet in order to get prior approval of the regulatory body ie the National Bank of Serbia without which they cannot become members of these boards This includes among other things good business reputation and appropriate qualifications In addition appropriate experience in finance is also required for at least three members of the Board of Directors while at least one member of the Board of Directors must have active knowledge of Serbian and reside in the territory of the Republic of Serbia After obtaining the approval the appointed person is registered with the Business Registers Agency as well
Banca Intesa provided in its bylaws for the mechanisms and channels of direct e-mail communication with its parent group Intesa Sanpaolo with the aim of respecting the individual and dignity of each employee as well as the values proclaimed by the Code of Ethics The Bankrsquos shareholders ie the General Meeting of Shareholders participate in and directly impact the work of the Board of Directors as a governance body in the following ways
bull The General Meeting of Shareholders adopts the business policy and strategy of the Bankbull The General Meeting of Shareholders adopts the Articles of Association and the amendments to the Memorandum and Articles of Associationbull The General Meeting of Shareholders appoints and dismisses the Chairman and members of the Board of
17
Directorsbull The General Meeting of Shareholders appoints and dismisses the external auditorbull The General Meeting of Shareholders considers and adopts the annual report of the Board of Directors
The adopted remuneration policy for the entire human resources of the Group including the variable components is based on equality merit and sustainability of results The guidelines for defining the management remuneration policy are based on objective elements and parameters resulting from the assessment of organisational positions as well as performance and potential with the aim of creating an integrated system for the members of management thus helping their professional development The policy provides for remuneration in the form of benefits which is also based on financial instruments and linked to the results of the company ndash which corresponds to the level of assumed risk and is regulated so as to avoid giving benefits that in the long term are not in accordance with the Grouprsquos interests Based on the performance indicators closely linked with the long-term goals the benefit determination systems are based among other things on the principle of symmetry with the amounts of paid benefits being based on the results achieved at the Group business sector and individual levels and therefore being capable of decreasing significantly and even reaching zero if the minimum indicators that reflect the Group profitability are not achieved also taking into account the risks assumed and the capital used
When it comes to conflicts of interest Banca Intesa has prescribed in accordance with the provisions of the Law on Banks as well as with its bylaws and those of its parent Group an obligation for members of the Board of Directors and the Executive Board to submit a written statement of conflict of interest to the Bankrsquos Board of Directors within one month from the day of taking office The members of the Board of Directors and the Executive Board are obliged in accordance with the bylaws regulating transactions with related parties and the conflict of interest to submit once a year completed standard questionnaires whose content is designed by the parent Group and which contain information relevant for establishing any conflict of interest
One of the methods of sustainability control at Banca Intesa is the power of the Board of Directors as a governance body to set up an integrated risk management system at the Bank and the supervision of this system while the Executive Board identifies the risks to which Banca Intesa is exposed and controls these risks in accordance with the approved policies and procedures The Board of Directors gives approval to the Bankrsquos exposure to one or a group of related parties of over 10 or to an increase in the exposure to over 20 of Bank equity adopts internal audit plan and programme considers external and internal audit reports sets up the internal control system defines the internal organisation and organisational structure of the Bank that ensures the division of duties authority and responsibilities of its employees in a manner that prevents conflict of interest and ensures a transparent and documented process of decision making and implementation decides on disposing with the Bankrsquos fixed assets and the stakes and shares that the Bank has in other legal entities
The work of the Executive Board is evaluated through the MBO (Management by Objectives) system which is based on setting measurable objectives based on which the annual performance is monitored
RISK MANAGEMENT
Risk management is an integral part of the corporate governance of Banca Intesa based on which it is estimated whether the Bank can achieve its business targets in the way consistent not only with the law but also with the public interest safety of people as well as the factors of the natural and social environment Therefore the access to risk management also implies broader social consequences of Bank activity in the environment and in the market
Controlling Socio-environmental Risks in the Governance Process
By a decision of the Executive Board the Bank appointed the persons responsible for environmental protection with the aim of establishing an Environmental Management System ndash EMS and ensuring compliance with the rules of environmental protection and corporate social responsibility in lending operations so that the system would be fully applied until the final collection of all loan instalments A Senior Environmental Management Officer (Deputy President of the Executive Board) and an Environmental Management Coordinator (compliance risk management specialist) were appointedThe Environmental Management Coordinator with the approval of the Senior Environmental Management Officer informs the Executive Board the Asset Quality Committee and the Credit Committee of any significant increase in the level of socio-environmental risks in individual Bank customers particularly in customers with high credit exposure
18
and prepares reports on socio-environmental risks for international development banks towards which the Bank has such reporting obligation
The responsible organisational unit of the Bank monitors risks through the process of assessing loan applications taking into account the criteria related to lending to all customers engaged in production and service activities and the criteria related to environmental risk management
Management of Socio-environmental Risks in Lending
Adequate management and control of socio-environmental risks are essential preconditions for generating reliable and sustainable value and for protecting the Bankrsquos financial stability as well as its reputation
Socio-environmental Risk Management
The Socio-environmental Risk Management Procedure regulates the risk monitoring process in the area of environmental protection employee health and safety and the Bankrsquos social responsibility (protection of cultural heritage fundamental human rights and personal integrity) This Procedure regulates the credit process with regard to socio-environmental risks when approving a credit product to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1000000 euros or higher including the requested new product in case of a credit product from a credit line or other funds approved to the Bank by an international development bank and approval of a long-term credit product funded from other sources The Procedure regulates the rules classified by business lineprocess in the process of socio-environmental risk management
Equator Principles
The Implementation of the Equator Principles for Project Financing procedure applies when preparing and implementing project financing and advisory services in connection with project financing where the investment value of the project is 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes in these facilities can create significant environmental andor social impacts or significantly change the natural environment The goal of the Equator principles is to identify and assess risks and perform risk management based on the criteria defined by the principles with the aim of adhering to the principle of sustainability of natural resources human health human rights cultural heritage and biodiversity
Armaments
The sensitive sectors that the Bank monitors with special attention include armament production and trade In accordance with the relevant bylaw of its parent Group the Policy of Not Financing of Armaments in 2011 Banca Intesa adopted the Procedure for the Performance of Transactions Related to Armament Production and Trade which regulates the identification and preparation of the summary of the customers engaged in armament and military equipment production and trade the monitoring of transactions and loan applications of the customers engaged in armament and military equipment production and trade the approval of transactions and loan applications related to armament and military equipment production and trade in accordance with the Policy of Not Financing of Armaments as well as the preparation of reports on the transactions related to armament and military equipment production and trade
Reputational Risk Management
The Bank attaches great importance to reputational risks that are assessed as part of the compliance control system which is within the competence of the Compliance Office Banca Intesa believes that the standards in this area as well as the business ethics are the cornerstone of banking operations which by their nature are based on trust Bylaws such as the Code of Ethics policies and other define that any non-compliance with the bylaws the principles and values contained in them as well as with external regulations (laws and secondary legislation) exposes the Bank to a certain level of reputational risks
Fight Against Corruption and Compliance
The internal regulatory source that governs the system for control and mitigation of corruption risks comprises the Code of Ethics the Code of Conduct the Rulebook on Relations with Political Parties and the following Bank procedures the Procedure for the Prevention of Internal Fraud and Abuse at the Bank and the Employment Termination Procedure
19
The Code of Conduct prescribes in detail the rules in connection with receiving and giving gifts and the measures prescribed in the event of corruption are related to the violation of work duties so the measures stipulated by external regulations ie the Labour Law (eg compensation for damage employee suspension or termination) but also the Criminal Code may be pronounced against an employee Based on the Legal Department records no proceedings were initiated against Banca Intesa ad Beograd in connection with corruption since no complaints or notices prior to complaint were delivered during 2013
In the same period the Suspicious Transactions and Know Your Customer training courses were held in this segment by means of e-learning which were received by as many as 8663 of employees during 2013 The training courses were provided for by the current regulations and internal acts of the Bank and were aimed at informing the employees and refreshing their knowledge of the obligation of collecting information about each customer and completing appropriate questionnaires In addition the training informed the employees about the new processes that were implemented as well as about mandatory observance of all duties relating to knowing monitoring and reporting suspicious transactions of customers
The Rulebook on Relations with Political Parties prescribes the obligation of the Bank to refrain from granting donations and sponsorship tobull Political parties and any organisations related to thembull Political movements and their organisational unitsbull Trade union organisationsbull Competent authorities and institutions
The prohibition of granting donations and sponsorship to the above organisations aims at the protection against any grants that would result in a privileged position to the Bank or unfair decisions in favour of the Bank
The Compliance Office as well as the relevant organisational units of the Bank are committed to the regulation of processes and the definition of procedures and their operating rules as well as practice which efficiently prevent the violation of applicable regulations The Compliance Office also provides support to the highest bodies of the Bank in monitoring the compliance risk The compliance risk assessment process is constant Through semi-annual reporting these risks are identified and priority measures for their elimination or mitigation are determined ie the level of efficiency of the existing compliance controls is assessed
The Internal Audit provides direct support to the highest bodies of the Bank in monitoring the compliance with and adequacy of the rules contained in the Bankrsquos bylaws If it identifies critical issues during its activity the Internal Audit informs the relevant organisational units and the highest bodies of the Bank with the aim of determining adequate measures for risk mitigation and the method of their implementation
Protection of Health and Safety
Occupational health and safety at Banca Intesa are regulated in accordance with international directives recommendations and positive laws of the Republic of Serbia
During 2013 an assessment was made of the situation regarding occupational health and safety and the risk level for 207 facilities at which work is performed A schedule of elimination of recorded risks to the health of Bank employees was defined and implemented according to priorities and the budget planned In connection with this risk assessment documents were updated as well
When it comes to physical security three robberies were recorded in 2013 versus two a year earlier and investments in technical protection systems continued
Risk Management in Supply Chain
Supplier Check
The Procurement Unit and the organisational part in charge of procurement are obliged to evaluate the received supplier bids by applying the methods of qualitative and quantitative analysis as well as to align the bid evaluation criteria prior to inviting the bidders to submit offers by combining specific criteria one of which is the Compliance of Bidderrsquos Operations with the Corporate Social Responsibility Principles
20
Health and Safety Risk Assessment
In accordance with the Procurement Policy members of Intesa Sanpaolo Group are expected to include the parameters of assessment of environmental protection and occupational health protection in their procurement process giving priority to the use of recycled paper highly energy efficient products and environment-friendly technical equipment
Group members must include special provisions in the procurement contracts they conclude with their suppliers These provisions provide for the obligation of suppliers to comply with the principles specified in the Intesa Sanpaolo Rules for the Environmental and Energy Policy Constant checks are performed in the countries where legal measures regarding environmental protection were adopted in order to ensure compliance
In the area of personnel training and spreading the awareness of the importance of these issues the training of the employees who directly communicate with suppliers must include fields related to corporate social responsibility as well as to the responsibility for environmental protection
21
CUSTOMERS
Banca Intesa built its leading position in the market of Serbia and the status of stable and reliable partner by fostering trust in the relations with its customers The strengthening of relations with customers is based on constant improvement of the quality of products and services proceeding from specific needs of each segment as well as on full respect for the principles of equality and availability of products and services Key aspects of doing business with customers are the following
bull SUPPORT TO ECONOMY AND AGRICULTUREbull FINANCIAL INCLUSION AND EDUCATIONbull CUSTOMER SATISFACTION
SUPPORT TO ECONOMY AND AGRICULTURE
Banca Intesa continued to provide support to the economy and the agricultural sector in 2013 as well focusing on the development of entrepreneurship and self-employment particularly in the SME segment as well as on the improvement of public infrastructure
Support to the Public Sector
Banca Intesa offered loans from the credit line of the German Development Bank (KfW) to the public sector for financing infrastructure projects and the procurement of equipment in the following areas water management sewerage and wastewater management solid waste management environmental protection and pollution control transport infrastructure public transport and communication systems infrastructure facilities fostering economic development and other social and utility services During 2013 Banca Intesa granted 11 loans totalling 852 million euros while the total value of the project is 47 million euros
Development of Entrepreneurship
Banca Intesa supported the programme of measures of the Government of the Republic of Serbia for encouraging SMEs and entrepreneurs through subsidised loans for liquidity and working assets in 2013 as well The Bankrsquos commitment to provide continuously support to its customers in this segment is also demonstrated by the fact that the Government of the Republic of Serbia implements its programme of measures for the fifth consecutive time During 2013 the Bank granted 414 subsidised loans to SMEs totalling 562 billion dinars which accounted for 107 of the total loans to the SME sector The small business sector was granted 186 billion dinars and 1347 loans which accounted for 15 of the number of loans and 16 of the total loan disbursements to this segment
In cooperation with the National Bank of Serbia and the Kingdom of Denmark the Bank launched the Local Economic Development in the Balkans (LEDIB) programme intended for enterprises entrepreneurs and registered farms from the small business segment with the aim of improving local economic development creating new jobs strengthening organisational capacities introducing new eco-friendly technologies and other favourable impacts on the overall development The credit line was intended for the Nišava Pčinja Toplica Jablanica and Pirot Districts and in 2013 the Bank granted 39 loans totalling 505208 euros under this programme which accounted for 04 of the number of loans and 05 of the total loan disbursements to the small business segment At the same time from the credit line of the European Fund for Southeast Europe (EFSE) which supports enterprises and registered farms through investments and loans for working assets 227 million euros were granted in the small business segment which accounted for 22 of loan disbursements in the segment
With the aim of supporting the promotion and strengthening of womenrsquos entrepreneurship Banca Intesa helped the Association of Businesswomen in Serbia in the organisation of an international conference entitled New Age Woman Entrepreneur New Opportunities for Recovery of Economy in the Region The event contributed
22
to further positioning of Banca Intesa as a bank that actively supports entrepreneurship in the country as part of its efforts to contribute to economic recovery and growth For this purpose the Bank also has in its offer loans for women entrepreneurs in Vojvodina in the form of start-up loans for unemployed women and women who have had a business for up to three years The Bank granted 8 loans totalling 98 million dinars under this programme during 2013 which accounted for a 3 share in the number of loans and a 1 share in the total investment loan disbursements in the small business segment
Promotion of Agricultural Sector
Taking into account that the agricultural sector is very specific because it has a special social as well as environmental importance in addition to economic importance for many years Banca Intesa has been encouraging development and investing in projects and individuals that encourage with their activities further rural development and contribute to an increase in the competitiveness of domestic agriculture
Aware of the great economic potential of this industry as part of the LEDIB programme the Bank granted eight loans to registered farms in 2013 totalling 76219 euros which accounted for 02 of the number of loans and 03 of the total loan disbursements to this customer segment In addition in cooperation with the Guarantee Fund of the Autonomous Province of Vojvodina long-term loans for purchasing new agricultural machinery and equipment were available to customers During 2013 the Bank granted 82 loans of this type totalling 219 million euros which accounted for a 15 share in the number of loans and a 25 share in the total investment loan disbursements in the agricultural segment
In addition on the occasion of the 80th International Agricultural Fair in Novi Sad the Bank prepared a special credit offer intended for owners of registered farms which included the Intesa Farmer dinar loan for financing spring works as well as the Intesa Farmer loan for purchasing agricultural machinery During 2013 22 loans were granted for purchasing tractors and agricultural machinery totalling 341 million dinars which accounted for a 4 share in the number of loans and a 3 share in the total amount of agricultural investment loan disbursements
Banka Intesa launched the Intesa Farmer of the Year project to contribute in yet another way to the promotion of agricultural production in the country and to the strengthening of its competitiveness As part of the project the Bank awarded the most successful farmers in four categories ndash Intesa Crop Farmer Intesa Vegetable Grower Intesa Fruit Grower and Intesa Livestock Breeder and all winners won a trip to Germany to visit the international agricultural fair in Berlin The criteria based on which the Committee selected the winners of the title Intesa Farmer of the Year were the annual results achieved in agricultural production application of modern technologies in production activities the number of household members engaged in the production as well as the minimum three-year cooperation with the Bank which included a loan and regular settlement of their financial obligations
FINANCIAL INCLUSION AND LITERACY
Banka Intesa believes that the availability of financial products to all segments of society is an essential precondition for sustainable development In line with this position the Bank added to its offer specific products that promote financial inclusion and provide support during economic crisis to the most vulnerable social groups such as the elderly or youth as well as to solving broader social problems such as housing availability or health care services
Responding to the Needs of the Community
In 2013 Banca Intesa included in its offer the Intermezzo Cash Loan a new model of cash loan which offers to its users as a unique benefit in the domestic market a possibility of postponing the payment of monthly instalment up to five times during the repayment period Moreover as an additional functionality the Intermezzo loan includes insurance against job loss with no additional cost to the customer The Bank believes that the repayment flexibility provided by this loan model offers citizens unique support in the market at a time when they estimate that they need it most In 2013 Banca Intesa granted 11256 Intermezzo cash loans totalling 198 million euros which accounted for 235 of the total amount of cash loans disbursed during the year
Banca Intesa was the first in the Serbian market to offer loans to pensioners aged up to 74 years The Senior Cash Loans were designed specifically to fit the needs of senior citizens and they also include life insurance which is included in the cost of loan during the entire repayment period During the previous year 19774 loans were granted totalling 239 million euros which accounted for 284 of the total cash loans granted in 2013
23
In 2012 as support to citizens in financing medical services the Intesa Vita programme of consumer and cash loans was developed which includes loans for in vitro fertilisation harvesting and storage of stem cells DNA analysis dental services medical spa and wellness treatments as well as for purchasing baby supplies In 2013 the programme was extended to new purposes - laser vision correction vein operation and purchase of medical aids and 28 loans were granted totalling 126345 euros which accounted for 8 of the total cash loans granted during the year In this unique way the Bank provides the citizens with the possibility of taking care of their health in a responsible and timely manner without suddenly burdening their home budgets
Moreover the Bank continued to provide subsidised housing loans in 2013 as well in order to provide support to young married couples in solving their housing problems granting 224 loans totalling 864 million euros which was 205 of the total housing loans granted during the year At the same time 6544 refinancing loans with insurance against job loss or disability in case of an accident were granted totalling 146 million euros which enabled the customers to service their outstanding liabilities towards Banca Intesa and other banks and which accounted for 173 of the Bankrsquos total cash loans granted during the year
Banca Intesa introduced the Visa Classic Paralympic and Visa Electron Paralympic cards the first charity payment cards in the country in cooperation with the Paralympic Committee of Serbia This was the first initiative aimed at establishing a stable and independent mechanism for long-term assistance to athletes with disabilities and developing paralympic sport in the country During 2013 8345 Visa Classic Paralympic and Visa Electron Paralympic cards were issued which accounted for 14 of all cards issued during the year The Bank also provides debit cards for students which enable free account opening and maintenance for all students who opted for an Intesa Visa Electron Easy Travel Card (ETC) or a Maestro ISIC Card of Banca Intesa of which 4048 were issued in 2013 accounting for 18 of the debit cards issued during the year
Constantly striving to promote savings in 2013 the Bank introduced a new savings model the Month by Month Savings which provides customers with a possibility of reaching higher amounts of savings with lower monthly allocations The product enables saving in dinars and euros at a very attractive interest rate while the customers also have an opportunity to set the payment date and amount themselves
Financial Education
In 2013 as well Banca Intesa remained true to its commitment to support actively financial education by improving customer knowledge Thus in cooperation with Banca IMI SpA a member of Intesa Sanpaolo Group another Intesa Academia workshop was organised this time on the subject of advanced financing and risk management instruments so that Banca Intesarsquos customers could find out more about the possibilities of financing in the international and domestic bond markets and about hedging products for successful management of market risks The workshop brought together the leading world experts in the areas of financing and risk management as well as the most successful customers of the Bank In order to assist its customers in the SME segment in getting informed in more detail about the regulations relating to loan approval and collection Banca Intesa took part in the working breakfast on the subject Security Instruments and Their Collection as the Condition for Financing Company Growth held at the premises of the Serbian Association of Managers On this occasion the legal framework was presented about which enterprises should also get informed in order to know that documentation they will need if they opt for bank loans
At the same time the Factoring Department designed and launched an initiative of organising factoring workshops at the Bankrsquos regional centres Factoring workshops are an interactive form of cooperation and communication with customers with the focus on understanding the term and essence of factoring themselves With the support of regional centres a total of 27 factoring workshops were organised in 22 cities in two cycles in late 2012 and in early 2013 which were attended by nearly 300 corporate customers
As a member of the United Nations Global Compact and its Working Group on CSR in Banking and Finance Banca Intesa works together with the other members on the implementation of projects in the area of financial education which is the main goal of this Group One of the projects actively supported by the Bank is the cooperation with seven secondary schools of economics from six cities in Serbia where there is a ldquobank clerkrdquo educational profile in the area of thematic lectures for teachers and students The Bank representatives gave three lectures during 2013
24
CUSTOMER SATISFACTION
Banca Intesa believes that it is only through an open dialogue with its customers that it can truly understand their needs and expectations and build a long-term partner relationship with them
Meeting the Needs of Customers
Ever since 2008 Banca Intesa has been conducting surveys of its customersrsquo satisfaction with the Bankrsquos products and services in accordance with the methodology of the European Customer Satisfaction Index (ECSI) as part of its initiative named Listening 100 This is a continuous process analyses are made based on the results obtained in the survey and actions are proposed accordingly for improving the customer satisfaction The surveys are repeated at six-monthannual intervals in order to collect feedback from the customersrsquo perspective for the measures taken for the purpose of improving the satisfaction index as well as identifying the directions for further improvement
Looking at the results of the customer satisfaction survey at the end of 2013 a conclusion arises that among other things the basis of good results is a positively rated staff treatment of customers The ECSI as well as the Loyalty indices are stable with a high percentage of customers who stated they would remain Banca Intesa customers in the following 12 months Attempting to encourage its customers to express their opinions in the previous year the Bank clearly communicated the improvements implemented so far based on their suggestions
During 2013 as well Banca Intesa continued to increase the number of branches equipped with the Queue Management System (QMS) which covered approximately 40 per cent of active customers at the end of the year In addition to having a positive impact on customer satisfaction the QMS expansion made it possible to obtain the data necessary for better analysis and organisation of branch operation In addition free internet access via Wi-Fi and daily newspapers were made available to customers at the largest branches
As part of its efforts to improve further customer satisfaction in 2013 Banca Intesa implemented training of over 1500 employees both in its branch network and at its headquarters The training which was implemented as a continuation of the Education 100 programme initiated in 2011 was held on the subject of managing customer satisfaction but also their entire experience in each contact with the Bank
In addition to its efforts to improve its approach to customers and recognising the importance of two-way communication the Bank developed efficient mechanisms for collecting and recording customer feedback The Bank responds to all complaints sent to the Bank via formal complaints mechanisms and does so within the statutory time limit and in accordance with the decision of the National Bank of Serbia Each customer may also personally contact unit employees and if the customer is not satisfied with the answer received heshe can apply to the National Bank of Serbia as the second-instance body with the possibility of mediation The following are available to customers
bull Phone line +381 11 310 88 88bull E-mail kontaktbancaintesarsbull Fax +381 11 310 88 55bull Personal contact ie submitting a written complaint in personbull Contact form on the official website of the Bankbull Bank corporate accounts on social networks (Facebook and Twitter)bull Postal address of the Customer Satisfaction Management Unit Omladinskih brigada 90b 11070 New Belgrade
Transparent Advertising
Lasting relationships based on trust require communication that enables customers to understand clearly the characteristics and value of Banca Intesa products and services Therefore the Bank strives to contribute to the simplification of its products in communication
In its advertising the Bank clearly specifies all customer costs and all of them are included when calculating the effective interest rate which is always clearly and visibly shown as well as representative examples that contain all data in accordance with the Law on the Protection of Financial Service Consumers which demonstrates full transparency when it comes to Bank pricing policy
25
The Bank also strives to formulate the agreements so that they are simple to understand minimising possible misunderstandings and ambiguity by providing clear and exhaustive information It informs its customers in a timely manner of any changes in the agreements and their terms
Data Security
The protection of customer security as well as their assets and confidential information is not only Banca Intesarsquos primary duty but also the basis of the relationship of trust that the Bank wants to reinforce with its customers The protection of persons their assets and valuables as well as a multitude of data and internal organisational processes fully meets the criteria of reliability continuity and confidentiality In addition to its legal obligations Banca Intesa complies with the criteria of absolute transparency in informing its customers of their rights to privacy and the way it treats their personal information
In 2013 Banca Intesa did not find any founded complaint in connection with the violation of customer privacy or any disclosure leakage or theft of customer information
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
14
21 GENERATED ECONOMIC VALUE
Generation of economic value an efficient governance system and careful management of business risks characterise Banca Intesarsquos business model based on transparency and integrity These elements as well as the care for employees environment and the quality of service it provides to its customers are of key importance for the progress for which the Bank strives as a responsible stakeholder in the community in which it operates
MARKET POSITION
According to the official data of the National Bank of Serbia as of December 31 2013 Banca Intesa is the leader in all business segments
DIRECT AND INDIRECT ECONOMIC VALUE GENERATED
2012 2013
Net assets 3635 3727
Customer loans 2363 2404
Customer deposits 2300 2388
Equity 792 863
in million euros
EmploymentStable partner of the government
Reliable support to the economy
Support to the communityTotal income and
expenditure
Banca Intesa employs 3039 people
As an active partner of the government Banca
Intesa supports economic development initiatives
of the Government
Banca Intesa cooperates with 406 suppliers
Banca Intesa participated in numerous community
support projects and implemented 106 donor activities
Total economic value generated by Banca Intesa was RSD 20695651000
The Bank directly provides 3039 jobs and it paid
RSD 193711289679 into the budget of Serbia as taxes and contributions on wages and pensions
The budget of Serbia received 80629605186 dinars in the form of regular tax payments
WithRSD 67069271910EUR 2056318466
USD 73719631GBP 1012544
allocated for procurement it indirectly affects the
stability of business and jobs in its supplier chain
The investment in the community amounted
to RSD 22381000 through donations to the
local community RSD 10000000 through
investment in infrastructure and RSD 299812329 through volunteering
The economic value distributed through operating
costs and personnel expenses and liabilities to the Government and the community amounted to RSD 1116382182660
Banca Intesa continued to post good business results in 2013 as well confirming its leading position in the banking sector of Serbia despite difficult business conditions The Bankrsquos total loans to corporate and retail customers reached 2365 million euros while deposits totalled 2387 million euros The business network consisted of 192 branches 3 mortgage loan centres and 5 mortgage loan offices In addition Banca Intesa had the most developed network of POS terminals and ATMs with 12751 active POS terminals and 255 ATMs
In the retail segment total loans amounted to 667 million euros while deposits increased to 1436 million euros at the end of 2013 Banca Intesa reaffirmed its leading position in e-banking and payment card business during 2013 as well with around 14 million debit and credit cards issued At the same time small business loans reached 126 million euros while loans granted to farmers amounted to 37 million euros
In the corporate segment at the end of 2013 Banca Intesa had a loan portfolio of 1728 million euros continuing the growth from the previous years Corporate deposits were at the level of 968 million euros while the bankrsquos market share in total corporate deposits of the banking sector was 206 at the end of December 2013
Owing to the increase in all key items a net income of 238 million euros was posted Net profit after tax was 76 million euros at the end of December 2013
15
1 ECONOMIC VALUE GENERATED 2012 2013
Interest income 31340971 29588778
Interest expenses -11790051 -9598939
Fee and commission income 7890743 8175478
Fee and commission expenses -2292104 -2648138
Net profit on sale of securities atfair value through profit and loss 1008 590
Net profit on sale of securitiesavailable for sale 49855 4332
Net profit on sale of equity investments 434 0
Net exchange rate loss -13263673 356204
Dividends and share income 2925 1527
Other operating income 554540 676132
Net expenses on indirectly written-off of placements and provisions 1 -5415518 -6935326
Operating and other expenses 2 -189518 -532659
Gains from changes in value of assets and liabilities 31390752 12172042
Losses from changes in value of assets and liabilities -16188419 -10564372
TOTAL ECONOMIC VALUE GENERATED 22091945 20695651
2 ECONOMIC VALUE DISTRIBUTED
21 Operating costs 3
Costs of material -487362 -475379
Building and equipment maintenance costs -753215 -798584
Office and equipment lease costs -934768 -930657
Costs of intellectual services -369026 -315092
Advertising -355296 -280923
Costs of business travel and training of employees 3 -93716 -92586
Other operating costs 3 -2098067 -2130715
TOTAL OPERATING COSTS -5091449 -5023936
22 Employee expenses 3
Wages and salaries -3312415 -3223372
Taxes and contributions on wages and wage benefits 3 -1997940 -1937113
Cost of employees transportation 3 -76490 -84139
Costs of remuneration for temporary and occasional work -5861 -4569
Costs of employees education not related to their job 3 -3157 -6094
Other personnel expenses -172859 -55922
TOTAL INCOME AND EXPENSES
TOTAL EMPLOYEE EXPENSES -5568723 -5311209
23 Expenses related to liabilities to the government
Income tax -830548 -623097
Indirect taxes and duties 3 -161352 -183199
TOTAL EXPENSES RELATED TO LIABILITES TO THE GOVERNMENT -991900 -806296
24 Community-related expenses
Donations and corporate social responsibility 3 -33204 -22381
TOTAL COMMUNITY-RELATED EXPENSES -33204 -22381
TOTAL ECONOMIC VALUE DISTRIBUTED -11685276 -11163822
3 ECONOMIC VALUE RETAINED 4 10406668 95318291 The item differs from the income statement in the annual report in that the Provisions for Employee Benefits Legal Disputes and Restructuring are excluded 2 The item differs from the income statement in the annual report in that the Operating Costs are presented in the section Economic Value Distributed in several segments stated while Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation is not presented within Other Operating Expenses3 The items differ from the income statement in the annual report in that a part of the Operating Costs is reclassified into the following segments Employee Expenses Expenses Related to Liabilities to the Government and Community-Related Expenses4 This represents BIBrsquos profit net of the Provisions for Employee Benefits Legal Disputes and Restructuring the Gains and Losses on Deferred Tax Assets and Liabilities the Depreciation Costs and the Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation
16
22 GOVERNANCE IN BANCA INTESA
CORPORATE GOVERNANCE
Shareholders of Banca Intesa ad Beograd ndash ownership structure Intesa Sanpaolo Holding International SA 7779 Intesa Sanpaolo SPA 1521 International Finance Institution (IFC) 700 The governance of the Banca Intesa joint stock company is organised as a two-tier system
The Bankrsquos Board of Directors consists of five members elected by the General Meeting of Shareholders upon the shareholdersrsquo proposal including the Board Chairman The term of office of Board members is three years with a possibility of re-election The Chairman of the Board of Directors of Banca Intesa is Massimo Malagoli and its members are Ivan Šramko Arthur Philippe Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Executive Board of Banca Intesa consists of six members including the President The term of office of Executive Board members is three years with a possibility of re-election The President of the Executive Board of Banca Intesa is Draginja Đurić the Deputy President of the Executive Board is Marco Capellini and Board members are Darko Popović Head of Retail and Small Business Division Slađana Jelić Head of the Corporate Banking Division Dragica Mihajlović Head of the Financial Management and Treasury Division and Marko Marković Head of the Operations Management Division
Women account for 20 of the members of the Board of Directors and 50 of the members of the Executive Board of Banca Intesa
The Bankrsquos Audit Committee consists of five members including the Chairman The term of office of Committee members is three years with a possibility of re-election The Committee Chairman is Giovanni Bergamini and its members are Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Chairman of the Board of Directors as a governance body does not have a direct executive role given that Banca Intesa organised as a joint stock company with a two-tier governance system delegates executive roles to the Executive Board as a management body that organises the Bankrsquos operations and performs daily monitoring of the activities of the Bank employees while the Board of Directors makes strategic decisions aimed at the Bankrsquos compliance takes care of and is responsible for the accuracy of all reports financial condition and operating results of the Bank addressed to the Bankrsquos shareholders the public and the National Bank of Serbia
In line with the Law on Banks and other regulations members of the Board of Directors are appointed and dismissed by the General Meeting of Shareholders while members of the Executive Board are appointed and dismissed by the Bankrsquos Board of Directors Domestic regulations list conditions that members of the Executive Board and the Board of Directors must meet in order to get prior approval of the regulatory body ie the National Bank of Serbia without which they cannot become members of these boards This includes among other things good business reputation and appropriate qualifications In addition appropriate experience in finance is also required for at least three members of the Board of Directors while at least one member of the Board of Directors must have active knowledge of Serbian and reside in the territory of the Republic of Serbia After obtaining the approval the appointed person is registered with the Business Registers Agency as well
Banca Intesa provided in its bylaws for the mechanisms and channels of direct e-mail communication with its parent group Intesa Sanpaolo with the aim of respecting the individual and dignity of each employee as well as the values proclaimed by the Code of Ethics The Bankrsquos shareholders ie the General Meeting of Shareholders participate in and directly impact the work of the Board of Directors as a governance body in the following ways
bull The General Meeting of Shareholders adopts the business policy and strategy of the Bankbull The General Meeting of Shareholders adopts the Articles of Association and the amendments to the Memorandum and Articles of Associationbull The General Meeting of Shareholders appoints and dismisses the Chairman and members of the Board of
17
Directorsbull The General Meeting of Shareholders appoints and dismisses the external auditorbull The General Meeting of Shareholders considers and adopts the annual report of the Board of Directors
The adopted remuneration policy for the entire human resources of the Group including the variable components is based on equality merit and sustainability of results The guidelines for defining the management remuneration policy are based on objective elements and parameters resulting from the assessment of organisational positions as well as performance and potential with the aim of creating an integrated system for the members of management thus helping their professional development The policy provides for remuneration in the form of benefits which is also based on financial instruments and linked to the results of the company ndash which corresponds to the level of assumed risk and is regulated so as to avoid giving benefits that in the long term are not in accordance with the Grouprsquos interests Based on the performance indicators closely linked with the long-term goals the benefit determination systems are based among other things on the principle of symmetry with the amounts of paid benefits being based on the results achieved at the Group business sector and individual levels and therefore being capable of decreasing significantly and even reaching zero if the minimum indicators that reflect the Group profitability are not achieved also taking into account the risks assumed and the capital used
When it comes to conflicts of interest Banca Intesa has prescribed in accordance with the provisions of the Law on Banks as well as with its bylaws and those of its parent Group an obligation for members of the Board of Directors and the Executive Board to submit a written statement of conflict of interest to the Bankrsquos Board of Directors within one month from the day of taking office The members of the Board of Directors and the Executive Board are obliged in accordance with the bylaws regulating transactions with related parties and the conflict of interest to submit once a year completed standard questionnaires whose content is designed by the parent Group and which contain information relevant for establishing any conflict of interest
One of the methods of sustainability control at Banca Intesa is the power of the Board of Directors as a governance body to set up an integrated risk management system at the Bank and the supervision of this system while the Executive Board identifies the risks to which Banca Intesa is exposed and controls these risks in accordance with the approved policies and procedures The Board of Directors gives approval to the Bankrsquos exposure to one or a group of related parties of over 10 or to an increase in the exposure to over 20 of Bank equity adopts internal audit plan and programme considers external and internal audit reports sets up the internal control system defines the internal organisation and organisational structure of the Bank that ensures the division of duties authority and responsibilities of its employees in a manner that prevents conflict of interest and ensures a transparent and documented process of decision making and implementation decides on disposing with the Bankrsquos fixed assets and the stakes and shares that the Bank has in other legal entities
The work of the Executive Board is evaluated through the MBO (Management by Objectives) system which is based on setting measurable objectives based on which the annual performance is monitored
RISK MANAGEMENT
Risk management is an integral part of the corporate governance of Banca Intesa based on which it is estimated whether the Bank can achieve its business targets in the way consistent not only with the law but also with the public interest safety of people as well as the factors of the natural and social environment Therefore the access to risk management also implies broader social consequences of Bank activity in the environment and in the market
Controlling Socio-environmental Risks in the Governance Process
By a decision of the Executive Board the Bank appointed the persons responsible for environmental protection with the aim of establishing an Environmental Management System ndash EMS and ensuring compliance with the rules of environmental protection and corporate social responsibility in lending operations so that the system would be fully applied until the final collection of all loan instalments A Senior Environmental Management Officer (Deputy President of the Executive Board) and an Environmental Management Coordinator (compliance risk management specialist) were appointedThe Environmental Management Coordinator with the approval of the Senior Environmental Management Officer informs the Executive Board the Asset Quality Committee and the Credit Committee of any significant increase in the level of socio-environmental risks in individual Bank customers particularly in customers with high credit exposure
18
and prepares reports on socio-environmental risks for international development banks towards which the Bank has such reporting obligation
The responsible organisational unit of the Bank monitors risks through the process of assessing loan applications taking into account the criteria related to lending to all customers engaged in production and service activities and the criteria related to environmental risk management
Management of Socio-environmental Risks in Lending
Adequate management and control of socio-environmental risks are essential preconditions for generating reliable and sustainable value and for protecting the Bankrsquos financial stability as well as its reputation
Socio-environmental Risk Management
The Socio-environmental Risk Management Procedure regulates the risk monitoring process in the area of environmental protection employee health and safety and the Bankrsquos social responsibility (protection of cultural heritage fundamental human rights and personal integrity) This Procedure regulates the credit process with regard to socio-environmental risks when approving a credit product to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1000000 euros or higher including the requested new product in case of a credit product from a credit line or other funds approved to the Bank by an international development bank and approval of a long-term credit product funded from other sources The Procedure regulates the rules classified by business lineprocess in the process of socio-environmental risk management
Equator Principles
The Implementation of the Equator Principles for Project Financing procedure applies when preparing and implementing project financing and advisory services in connection with project financing where the investment value of the project is 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes in these facilities can create significant environmental andor social impacts or significantly change the natural environment The goal of the Equator principles is to identify and assess risks and perform risk management based on the criteria defined by the principles with the aim of adhering to the principle of sustainability of natural resources human health human rights cultural heritage and biodiversity
Armaments
The sensitive sectors that the Bank monitors with special attention include armament production and trade In accordance with the relevant bylaw of its parent Group the Policy of Not Financing of Armaments in 2011 Banca Intesa adopted the Procedure for the Performance of Transactions Related to Armament Production and Trade which regulates the identification and preparation of the summary of the customers engaged in armament and military equipment production and trade the monitoring of transactions and loan applications of the customers engaged in armament and military equipment production and trade the approval of transactions and loan applications related to armament and military equipment production and trade in accordance with the Policy of Not Financing of Armaments as well as the preparation of reports on the transactions related to armament and military equipment production and trade
Reputational Risk Management
The Bank attaches great importance to reputational risks that are assessed as part of the compliance control system which is within the competence of the Compliance Office Banca Intesa believes that the standards in this area as well as the business ethics are the cornerstone of banking operations which by their nature are based on trust Bylaws such as the Code of Ethics policies and other define that any non-compliance with the bylaws the principles and values contained in them as well as with external regulations (laws and secondary legislation) exposes the Bank to a certain level of reputational risks
Fight Against Corruption and Compliance
The internal regulatory source that governs the system for control and mitigation of corruption risks comprises the Code of Ethics the Code of Conduct the Rulebook on Relations with Political Parties and the following Bank procedures the Procedure for the Prevention of Internal Fraud and Abuse at the Bank and the Employment Termination Procedure
19
The Code of Conduct prescribes in detail the rules in connection with receiving and giving gifts and the measures prescribed in the event of corruption are related to the violation of work duties so the measures stipulated by external regulations ie the Labour Law (eg compensation for damage employee suspension or termination) but also the Criminal Code may be pronounced against an employee Based on the Legal Department records no proceedings were initiated against Banca Intesa ad Beograd in connection with corruption since no complaints or notices prior to complaint were delivered during 2013
In the same period the Suspicious Transactions and Know Your Customer training courses were held in this segment by means of e-learning which were received by as many as 8663 of employees during 2013 The training courses were provided for by the current regulations and internal acts of the Bank and were aimed at informing the employees and refreshing their knowledge of the obligation of collecting information about each customer and completing appropriate questionnaires In addition the training informed the employees about the new processes that were implemented as well as about mandatory observance of all duties relating to knowing monitoring and reporting suspicious transactions of customers
The Rulebook on Relations with Political Parties prescribes the obligation of the Bank to refrain from granting donations and sponsorship tobull Political parties and any organisations related to thembull Political movements and their organisational unitsbull Trade union organisationsbull Competent authorities and institutions
The prohibition of granting donations and sponsorship to the above organisations aims at the protection against any grants that would result in a privileged position to the Bank or unfair decisions in favour of the Bank
The Compliance Office as well as the relevant organisational units of the Bank are committed to the regulation of processes and the definition of procedures and their operating rules as well as practice which efficiently prevent the violation of applicable regulations The Compliance Office also provides support to the highest bodies of the Bank in monitoring the compliance risk The compliance risk assessment process is constant Through semi-annual reporting these risks are identified and priority measures for their elimination or mitigation are determined ie the level of efficiency of the existing compliance controls is assessed
The Internal Audit provides direct support to the highest bodies of the Bank in monitoring the compliance with and adequacy of the rules contained in the Bankrsquos bylaws If it identifies critical issues during its activity the Internal Audit informs the relevant organisational units and the highest bodies of the Bank with the aim of determining adequate measures for risk mitigation and the method of their implementation
Protection of Health and Safety
Occupational health and safety at Banca Intesa are regulated in accordance with international directives recommendations and positive laws of the Republic of Serbia
During 2013 an assessment was made of the situation regarding occupational health and safety and the risk level for 207 facilities at which work is performed A schedule of elimination of recorded risks to the health of Bank employees was defined and implemented according to priorities and the budget planned In connection with this risk assessment documents were updated as well
When it comes to physical security three robberies were recorded in 2013 versus two a year earlier and investments in technical protection systems continued
Risk Management in Supply Chain
Supplier Check
The Procurement Unit and the organisational part in charge of procurement are obliged to evaluate the received supplier bids by applying the methods of qualitative and quantitative analysis as well as to align the bid evaluation criteria prior to inviting the bidders to submit offers by combining specific criteria one of which is the Compliance of Bidderrsquos Operations with the Corporate Social Responsibility Principles
20
Health and Safety Risk Assessment
In accordance with the Procurement Policy members of Intesa Sanpaolo Group are expected to include the parameters of assessment of environmental protection and occupational health protection in their procurement process giving priority to the use of recycled paper highly energy efficient products and environment-friendly technical equipment
Group members must include special provisions in the procurement contracts they conclude with their suppliers These provisions provide for the obligation of suppliers to comply with the principles specified in the Intesa Sanpaolo Rules for the Environmental and Energy Policy Constant checks are performed in the countries where legal measures regarding environmental protection were adopted in order to ensure compliance
In the area of personnel training and spreading the awareness of the importance of these issues the training of the employees who directly communicate with suppliers must include fields related to corporate social responsibility as well as to the responsibility for environmental protection
21
CUSTOMERS
Banca Intesa built its leading position in the market of Serbia and the status of stable and reliable partner by fostering trust in the relations with its customers The strengthening of relations with customers is based on constant improvement of the quality of products and services proceeding from specific needs of each segment as well as on full respect for the principles of equality and availability of products and services Key aspects of doing business with customers are the following
bull SUPPORT TO ECONOMY AND AGRICULTUREbull FINANCIAL INCLUSION AND EDUCATIONbull CUSTOMER SATISFACTION
SUPPORT TO ECONOMY AND AGRICULTURE
Banca Intesa continued to provide support to the economy and the agricultural sector in 2013 as well focusing on the development of entrepreneurship and self-employment particularly in the SME segment as well as on the improvement of public infrastructure
Support to the Public Sector
Banca Intesa offered loans from the credit line of the German Development Bank (KfW) to the public sector for financing infrastructure projects and the procurement of equipment in the following areas water management sewerage and wastewater management solid waste management environmental protection and pollution control transport infrastructure public transport and communication systems infrastructure facilities fostering economic development and other social and utility services During 2013 Banca Intesa granted 11 loans totalling 852 million euros while the total value of the project is 47 million euros
Development of Entrepreneurship
Banca Intesa supported the programme of measures of the Government of the Republic of Serbia for encouraging SMEs and entrepreneurs through subsidised loans for liquidity and working assets in 2013 as well The Bankrsquos commitment to provide continuously support to its customers in this segment is also demonstrated by the fact that the Government of the Republic of Serbia implements its programme of measures for the fifth consecutive time During 2013 the Bank granted 414 subsidised loans to SMEs totalling 562 billion dinars which accounted for 107 of the total loans to the SME sector The small business sector was granted 186 billion dinars and 1347 loans which accounted for 15 of the number of loans and 16 of the total loan disbursements to this segment
In cooperation with the National Bank of Serbia and the Kingdom of Denmark the Bank launched the Local Economic Development in the Balkans (LEDIB) programme intended for enterprises entrepreneurs and registered farms from the small business segment with the aim of improving local economic development creating new jobs strengthening organisational capacities introducing new eco-friendly technologies and other favourable impacts on the overall development The credit line was intended for the Nišava Pčinja Toplica Jablanica and Pirot Districts and in 2013 the Bank granted 39 loans totalling 505208 euros under this programme which accounted for 04 of the number of loans and 05 of the total loan disbursements to the small business segment At the same time from the credit line of the European Fund for Southeast Europe (EFSE) which supports enterprises and registered farms through investments and loans for working assets 227 million euros were granted in the small business segment which accounted for 22 of loan disbursements in the segment
With the aim of supporting the promotion and strengthening of womenrsquos entrepreneurship Banca Intesa helped the Association of Businesswomen in Serbia in the organisation of an international conference entitled New Age Woman Entrepreneur New Opportunities for Recovery of Economy in the Region The event contributed
22
to further positioning of Banca Intesa as a bank that actively supports entrepreneurship in the country as part of its efforts to contribute to economic recovery and growth For this purpose the Bank also has in its offer loans for women entrepreneurs in Vojvodina in the form of start-up loans for unemployed women and women who have had a business for up to three years The Bank granted 8 loans totalling 98 million dinars under this programme during 2013 which accounted for a 3 share in the number of loans and a 1 share in the total investment loan disbursements in the small business segment
Promotion of Agricultural Sector
Taking into account that the agricultural sector is very specific because it has a special social as well as environmental importance in addition to economic importance for many years Banca Intesa has been encouraging development and investing in projects and individuals that encourage with their activities further rural development and contribute to an increase in the competitiveness of domestic agriculture
Aware of the great economic potential of this industry as part of the LEDIB programme the Bank granted eight loans to registered farms in 2013 totalling 76219 euros which accounted for 02 of the number of loans and 03 of the total loan disbursements to this customer segment In addition in cooperation with the Guarantee Fund of the Autonomous Province of Vojvodina long-term loans for purchasing new agricultural machinery and equipment were available to customers During 2013 the Bank granted 82 loans of this type totalling 219 million euros which accounted for a 15 share in the number of loans and a 25 share in the total investment loan disbursements in the agricultural segment
In addition on the occasion of the 80th International Agricultural Fair in Novi Sad the Bank prepared a special credit offer intended for owners of registered farms which included the Intesa Farmer dinar loan for financing spring works as well as the Intesa Farmer loan for purchasing agricultural machinery During 2013 22 loans were granted for purchasing tractors and agricultural machinery totalling 341 million dinars which accounted for a 4 share in the number of loans and a 3 share in the total amount of agricultural investment loan disbursements
Banka Intesa launched the Intesa Farmer of the Year project to contribute in yet another way to the promotion of agricultural production in the country and to the strengthening of its competitiveness As part of the project the Bank awarded the most successful farmers in four categories ndash Intesa Crop Farmer Intesa Vegetable Grower Intesa Fruit Grower and Intesa Livestock Breeder and all winners won a trip to Germany to visit the international agricultural fair in Berlin The criteria based on which the Committee selected the winners of the title Intesa Farmer of the Year were the annual results achieved in agricultural production application of modern technologies in production activities the number of household members engaged in the production as well as the minimum three-year cooperation with the Bank which included a loan and regular settlement of their financial obligations
FINANCIAL INCLUSION AND LITERACY
Banka Intesa believes that the availability of financial products to all segments of society is an essential precondition for sustainable development In line with this position the Bank added to its offer specific products that promote financial inclusion and provide support during economic crisis to the most vulnerable social groups such as the elderly or youth as well as to solving broader social problems such as housing availability or health care services
Responding to the Needs of the Community
In 2013 Banca Intesa included in its offer the Intermezzo Cash Loan a new model of cash loan which offers to its users as a unique benefit in the domestic market a possibility of postponing the payment of monthly instalment up to five times during the repayment period Moreover as an additional functionality the Intermezzo loan includes insurance against job loss with no additional cost to the customer The Bank believes that the repayment flexibility provided by this loan model offers citizens unique support in the market at a time when they estimate that they need it most In 2013 Banca Intesa granted 11256 Intermezzo cash loans totalling 198 million euros which accounted for 235 of the total amount of cash loans disbursed during the year
Banca Intesa was the first in the Serbian market to offer loans to pensioners aged up to 74 years The Senior Cash Loans were designed specifically to fit the needs of senior citizens and they also include life insurance which is included in the cost of loan during the entire repayment period During the previous year 19774 loans were granted totalling 239 million euros which accounted for 284 of the total cash loans granted in 2013
23
In 2012 as support to citizens in financing medical services the Intesa Vita programme of consumer and cash loans was developed which includes loans for in vitro fertilisation harvesting and storage of stem cells DNA analysis dental services medical spa and wellness treatments as well as for purchasing baby supplies In 2013 the programme was extended to new purposes - laser vision correction vein operation and purchase of medical aids and 28 loans were granted totalling 126345 euros which accounted for 8 of the total cash loans granted during the year In this unique way the Bank provides the citizens with the possibility of taking care of their health in a responsible and timely manner without suddenly burdening their home budgets
Moreover the Bank continued to provide subsidised housing loans in 2013 as well in order to provide support to young married couples in solving their housing problems granting 224 loans totalling 864 million euros which was 205 of the total housing loans granted during the year At the same time 6544 refinancing loans with insurance against job loss or disability in case of an accident were granted totalling 146 million euros which enabled the customers to service their outstanding liabilities towards Banca Intesa and other banks and which accounted for 173 of the Bankrsquos total cash loans granted during the year
Banca Intesa introduced the Visa Classic Paralympic and Visa Electron Paralympic cards the first charity payment cards in the country in cooperation with the Paralympic Committee of Serbia This was the first initiative aimed at establishing a stable and independent mechanism for long-term assistance to athletes with disabilities and developing paralympic sport in the country During 2013 8345 Visa Classic Paralympic and Visa Electron Paralympic cards were issued which accounted for 14 of all cards issued during the year The Bank also provides debit cards for students which enable free account opening and maintenance for all students who opted for an Intesa Visa Electron Easy Travel Card (ETC) or a Maestro ISIC Card of Banca Intesa of which 4048 were issued in 2013 accounting for 18 of the debit cards issued during the year
Constantly striving to promote savings in 2013 the Bank introduced a new savings model the Month by Month Savings which provides customers with a possibility of reaching higher amounts of savings with lower monthly allocations The product enables saving in dinars and euros at a very attractive interest rate while the customers also have an opportunity to set the payment date and amount themselves
Financial Education
In 2013 as well Banca Intesa remained true to its commitment to support actively financial education by improving customer knowledge Thus in cooperation with Banca IMI SpA a member of Intesa Sanpaolo Group another Intesa Academia workshop was organised this time on the subject of advanced financing and risk management instruments so that Banca Intesarsquos customers could find out more about the possibilities of financing in the international and domestic bond markets and about hedging products for successful management of market risks The workshop brought together the leading world experts in the areas of financing and risk management as well as the most successful customers of the Bank In order to assist its customers in the SME segment in getting informed in more detail about the regulations relating to loan approval and collection Banca Intesa took part in the working breakfast on the subject Security Instruments and Their Collection as the Condition for Financing Company Growth held at the premises of the Serbian Association of Managers On this occasion the legal framework was presented about which enterprises should also get informed in order to know that documentation they will need if they opt for bank loans
At the same time the Factoring Department designed and launched an initiative of organising factoring workshops at the Bankrsquos regional centres Factoring workshops are an interactive form of cooperation and communication with customers with the focus on understanding the term and essence of factoring themselves With the support of regional centres a total of 27 factoring workshops were organised in 22 cities in two cycles in late 2012 and in early 2013 which were attended by nearly 300 corporate customers
As a member of the United Nations Global Compact and its Working Group on CSR in Banking and Finance Banca Intesa works together with the other members on the implementation of projects in the area of financial education which is the main goal of this Group One of the projects actively supported by the Bank is the cooperation with seven secondary schools of economics from six cities in Serbia where there is a ldquobank clerkrdquo educational profile in the area of thematic lectures for teachers and students The Bank representatives gave three lectures during 2013
24
CUSTOMER SATISFACTION
Banca Intesa believes that it is only through an open dialogue with its customers that it can truly understand their needs and expectations and build a long-term partner relationship with them
Meeting the Needs of Customers
Ever since 2008 Banca Intesa has been conducting surveys of its customersrsquo satisfaction with the Bankrsquos products and services in accordance with the methodology of the European Customer Satisfaction Index (ECSI) as part of its initiative named Listening 100 This is a continuous process analyses are made based on the results obtained in the survey and actions are proposed accordingly for improving the customer satisfaction The surveys are repeated at six-monthannual intervals in order to collect feedback from the customersrsquo perspective for the measures taken for the purpose of improving the satisfaction index as well as identifying the directions for further improvement
Looking at the results of the customer satisfaction survey at the end of 2013 a conclusion arises that among other things the basis of good results is a positively rated staff treatment of customers The ECSI as well as the Loyalty indices are stable with a high percentage of customers who stated they would remain Banca Intesa customers in the following 12 months Attempting to encourage its customers to express their opinions in the previous year the Bank clearly communicated the improvements implemented so far based on their suggestions
During 2013 as well Banca Intesa continued to increase the number of branches equipped with the Queue Management System (QMS) which covered approximately 40 per cent of active customers at the end of the year In addition to having a positive impact on customer satisfaction the QMS expansion made it possible to obtain the data necessary for better analysis and organisation of branch operation In addition free internet access via Wi-Fi and daily newspapers were made available to customers at the largest branches
As part of its efforts to improve further customer satisfaction in 2013 Banca Intesa implemented training of over 1500 employees both in its branch network and at its headquarters The training which was implemented as a continuation of the Education 100 programme initiated in 2011 was held on the subject of managing customer satisfaction but also their entire experience in each contact with the Bank
In addition to its efforts to improve its approach to customers and recognising the importance of two-way communication the Bank developed efficient mechanisms for collecting and recording customer feedback The Bank responds to all complaints sent to the Bank via formal complaints mechanisms and does so within the statutory time limit and in accordance with the decision of the National Bank of Serbia Each customer may also personally contact unit employees and if the customer is not satisfied with the answer received heshe can apply to the National Bank of Serbia as the second-instance body with the possibility of mediation The following are available to customers
bull Phone line +381 11 310 88 88bull E-mail kontaktbancaintesarsbull Fax +381 11 310 88 55bull Personal contact ie submitting a written complaint in personbull Contact form on the official website of the Bankbull Bank corporate accounts on social networks (Facebook and Twitter)bull Postal address of the Customer Satisfaction Management Unit Omladinskih brigada 90b 11070 New Belgrade
Transparent Advertising
Lasting relationships based on trust require communication that enables customers to understand clearly the characteristics and value of Banca Intesa products and services Therefore the Bank strives to contribute to the simplification of its products in communication
In its advertising the Bank clearly specifies all customer costs and all of them are included when calculating the effective interest rate which is always clearly and visibly shown as well as representative examples that contain all data in accordance with the Law on the Protection of Financial Service Consumers which demonstrates full transparency when it comes to Bank pricing policy
25
The Bank also strives to formulate the agreements so that they are simple to understand minimising possible misunderstandings and ambiguity by providing clear and exhaustive information It informs its customers in a timely manner of any changes in the agreements and their terms
Data Security
The protection of customer security as well as their assets and confidential information is not only Banca Intesarsquos primary duty but also the basis of the relationship of trust that the Bank wants to reinforce with its customers The protection of persons their assets and valuables as well as a multitude of data and internal organisational processes fully meets the criteria of reliability continuity and confidentiality In addition to its legal obligations Banca Intesa complies with the criteria of absolute transparency in informing its customers of their rights to privacy and the way it treats their personal information
In 2013 Banca Intesa did not find any founded complaint in connection with the violation of customer privacy or any disclosure leakage or theft of customer information
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
15
1 ECONOMIC VALUE GENERATED 2012 2013
Interest income 31340971 29588778
Interest expenses -11790051 -9598939
Fee and commission income 7890743 8175478
Fee and commission expenses -2292104 -2648138
Net profit on sale of securities atfair value through profit and loss 1008 590
Net profit on sale of securitiesavailable for sale 49855 4332
Net profit on sale of equity investments 434 0
Net exchange rate loss -13263673 356204
Dividends and share income 2925 1527
Other operating income 554540 676132
Net expenses on indirectly written-off of placements and provisions 1 -5415518 -6935326
Operating and other expenses 2 -189518 -532659
Gains from changes in value of assets and liabilities 31390752 12172042
Losses from changes in value of assets and liabilities -16188419 -10564372
TOTAL ECONOMIC VALUE GENERATED 22091945 20695651
2 ECONOMIC VALUE DISTRIBUTED
21 Operating costs 3
Costs of material -487362 -475379
Building and equipment maintenance costs -753215 -798584
Office and equipment lease costs -934768 -930657
Costs of intellectual services -369026 -315092
Advertising -355296 -280923
Costs of business travel and training of employees 3 -93716 -92586
Other operating costs 3 -2098067 -2130715
TOTAL OPERATING COSTS -5091449 -5023936
22 Employee expenses 3
Wages and salaries -3312415 -3223372
Taxes and contributions on wages and wage benefits 3 -1997940 -1937113
Cost of employees transportation 3 -76490 -84139
Costs of remuneration for temporary and occasional work -5861 -4569
Costs of employees education not related to their job 3 -3157 -6094
Other personnel expenses -172859 -55922
TOTAL INCOME AND EXPENSES
TOTAL EMPLOYEE EXPENSES -5568723 -5311209
23 Expenses related to liabilities to the government
Income tax -830548 -623097
Indirect taxes and duties 3 -161352 -183199
TOTAL EXPENSES RELATED TO LIABILITES TO THE GOVERNMENT -991900 -806296
24 Community-related expenses
Donations and corporate social responsibility 3 -33204 -22381
TOTAL COMMUNITY-RELATED EXPENSES -33204 -22381
TOTAL ECONOMIC VALUE DISTRIBUTED -11685276 -11163822
3 ECONOMIC VALUE RETAINED 4 10406668 95318291 The item differs from the income statement in the annual report in that the Provisions for Employee Benefits Legal Disputes and Restructuring are excluded 2 The item differs from the income statement in the annual report in that the Operating Costs are presented in the section Economic Value Distributed in several segments stated while Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation is not presented within Other Operating Expenses3 The items differ from the income statement in the annual report in that a part of the Operating Costs is reclassified into the following segments Employee Expenses Expenses Related to Liabilities to the Government and Community-Related Expenses4 This represents BIBrsquos profit net of the Provisions for Employee Benefits Legal Disputes and Restructuring the Gains and Losses on Deferred Tax Assets and Liabilities the Depreciation Costs and the Direct Write-offs of Investment in Shares of Other Legal Entities Due to Liquidation
16
22 GOVERNANCE IN BANCA INTESA
CORPORATE GOVERNANCE
Shareholders of Banca Intesa ad Beograd ndash ownership structure Intesa Sanpaolo Holding International SA 7779 Intesa Sanpaolo SPA 1521 International Finance Institution (IFC) 700 The governance of the Banca Intesa joint stock company is organised as a two-tier system
The Bankrsquos Board of Directors consists of five members elected by the General Meeting of Shareholders upon the shareholdersrsquo proposal including the Board Chairman The term of office of Board members is three years with a possibility of re-election The Chairman of the Board of Directors of Banca Intesa is Massimo Malagoli and its members are Ivan Šramko Arthur Philippe Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Executive Board of Banca Intesa consists of six members including the President The term of office of Executive Board members is three years with a possibility of re-election The President of the Executive Board of Banca Intesa is Draginja Đurić the Deputy President of the Executive Board is Marco Capellini and Board members are Darko Popović Head of Retail and Small Business Division Slađana Jelić Head of the Corporate Banking Division Dragica Mihajlović Head of the Financial Management and Treasury Division and Marko Marković Head of the Operations Management Division
Women account for 20 of the members of the Board of Directors and 50 of the members of the Executive Board of Banca Intesa
The Bankrsquos Audit Committee consists of five members including the Chairman The term of office of Committee members is three years with a possibility of re-election The Committee Chairman is Giovanni Bergamini and its members are Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Chairman of the Board of Directors as a governance body does not have a direct executive role given that Banca Intesa organised as a joint stock company with a two-tier governance system delegates executive roles to the Executive Board as a management body that organises the Bankrsquos operations and performs daily monitoring of the activities of the Bank employees while the Board of Directors makes strategic decisions aimed at the Bankrsquos compliance takes care of and is responsible for the accuracy of all reports financial condition and operating results of the Bank addressed to the Bankrsquos shareholders the public and the National Bank of Serbia
In line with the Law on Banks and other regulations members of the Board of Directors are appointed and dismissed by the General Meeting of Shareholders while members of the Executive Board are appointed and dismissed by the Bankrsquos Board of Directors Domestic regulations list conditions that members of the Executive Board and the Board of Directors must meet in order to get prior approval of the regulatory body ie the National Bank of Serbia without which they cannot become members of these boards This includes among other things good business reputation and appropriate qualifications In addition appropriate experience in finance is also required for at least three members of the Board of Directors while at least one member of the Board of Directors must have active knowledge of Serbian and reside in the territory of the Republic of Serbia After obtaining the approval the appointed person is registered with the Business Registers Agency as well
Banca Intesa provided in its bylaws for the mechanisms and channels of direct e-mail communication with its parent group Intesa Sanpaolo with the aim of respecting the individual and dignity of each employee as well as the values proclaimed by the Code of Ethics The Bankrsquos shareholders ie the General Meeting of Shareholders participate in and directly impact the work of the Board of Directors as a governance body in the following ways
bull The General Meeting of Shareholders adopts the business policy and strategy of the Bankbull The General Meeting of Shareholders adopts the Articles of Association and the amendments to the Memorandum and Articles of Associationbull The General Meeting of Shareholders appoints and dismisses the Chairman and members of the Board of
17
Directorsbull The General Meeting of Shareholders appoints and dismisses the external auditorbull The General Meeting of Shareholders considers and adopts the annual report of the Board of Directors
The adopted remuneration policy for the entire human resources of the Group including the variable components is based on equality merit and sustainability of results The guidelines for defining the management remuneration policy are based on objective elements and parameters resulting from the assessment of organisational positions as well as performance and potential with the aim of creating an integrated system for the members of management thus helping their professional development The policy provides for remuneration in the form of benefits which is also based on financial instruments and linked to the results of the company ndash which corresponds to the level of assumed risk and is regulated so as to avoid giving benefits that in the long term are not in accordance with the Grouprsquos interests Based on the performance indicators closely linked with the long-term goals the benefit determination systems are based among other things on the principle of symmetry with the amounts of paid benefits being based on the results achieved at the Group business sector and individual levels and therefore being capable of decreasing significantly and even reaching zero if the minimum indicators that reflect the Group profitability are not achieved also taking into account the risks assumed and the capital used
When it comes to conflicts of interest Banca Intesa has prescribed in accordance with the provisions of the Law on Banks as well as with its bylaws and those of its parent Group an obligation for members of the Board of Directors and the Executive Board to submit a written statement of conflict of interest to the Bankrsquos Board of Directors within one month from the day of taking office The members of the Board of Directors and the Executive Board are obliged in accordance with the bylaws regulating transactions with related parties and the conflict of interest to submit once a year completed standard questionnaires whose content is designed by the parent Group and which contain information relevant for establishing any conflict of interest
One of the methods of sustainability control at Banca Intesa is the power of the Board of Directors as a governance body to set up an integrated risk management system at the Bank and the supervision of this system while the Executive Board identifies the risks to which Banca Intesa is exposed and controls these risks in accordance with the approved policies and procedures The Board of Directors gives approval to the Bankrsquos exposure to one or a group of related parties of over 10 or to an increase in the exposure to over 20 of Bank equity adopts internal audit plan and programme considers external and internal audit reports sets up the internal control system defines the internal organisation and organisational structure of the Bank that ensures the division of duties authority and responsibilities of its employees in a manner that prevents conflict of interest and ensures a transparent and documented process of decision making and implementation decides on disposing with the Bankrsquos fixed assets and the stakes and shares that the Bank has in other legal entities
The work of the Executive Board is evaluated through the MBO (Management by Objectives) system which is based on setting measurable objectives based on which the annual performance is monitored
RISK MANAGEMENT
Risk management is an integral part of the corporate governance of Banca Intesa based on which it is estimated whether the Bank can achieve its business targets in the way consistent not only with the law but also with the public interest safety of people as well as the factors of the natural and social environment Therefore the access to risk management also implies broader social consequences of Bank activity in the environment and in the market
Controlling Socio-environmental Risks in the Governance Process
By a decision of the Executive Board the Bank appointed the persons responsible for environmental protection with the aim of establishing an Environmental Management System ndash EMS and ensuring compliance with the rules of environmental protection and corporate social responsibility in lending operations so that the system would be fully applied until the final collection of all loan instalments A Senior Environmental Management Officer (Deputy President of the Executive Board) and an Environmental Management Coordinator (compliance risk management specialist) were appointedThe Environmental Management Coordinator with the approval of the Senior Environmental Management Officer informs the Executive Board the Asset Quality Committee and the Credit Committee of any significant increase in the level of socio-environmental risks in individual Bank customers particularly in customers with high credit exposure
18
and prepares reports on socio-environmental risks for international development banks towards which the Bank has such reporting obligation
The responsible organisational unit of the Bank monitors risks through the process of assessing loan applications taking into account the criteria related to lending to all customers engaged in production and service activities and the criteria related to environmental risk management
Management of Socio-environmental Risks in Lending
Adequate management and control of socio-environmental risks are essential preconditions for generating reliable and sustainable value and for protecting the Bankrsquos financial stability as well as its reputation
Socio-environmental Risk Management
The Socio-environmental Risk Management Procedure regulates the risk monitoring process in the area of environmental protection employee health and safety and the Bankrsquos social responsibility (protection of cultural heritage fundamental human rights and personal integrity) This Procedure regulates the credit process with regard to socio-environmental risks when approving a credit product to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1000000 euros or higher including the requested new product in case of a credit product from a credit line or other funds approved to the Bank by an international development bank and approval of a long-term credit product funded from other sources The Procedure regulates the rules classified by business lineprocess in the process of socio-environmental risk management
Equator Principles
The Implementation of the Equator Principles for Project Financing procedure applies when preparing and implementing project financing and advisory services in connection with project financing where the investment value of the project is 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes in these facilities can create significant environmental andor social impacts or significantly change the natural environment The goal of the Equator principles is to identify and assess risks and perform risk management based on the criteria defined by the principles with the aim of adhering to the principle of sustainability of natural resources human health human rights cultural heritage and biodiversity
Armaments
The sensitive sectors that the Bank monitors with special attention include armament production and trade In accordance with the relevant bylaw of its parent Group the Policy of Not Financing of Armaments in 2011 Banca Intesa adopted the Procedure for the Performance of Transactions Related to Armament Production and Trade which regulates the identification and preparation of the summary of the customers engaged in armament and military equipment production and trade the monitoring of transactions and loan applications of the customers engaged in armament and military equipment production and trade the approval of transactions and loan applications related to armament and military equipment production and trade in accordance with the Policy of Not Financing of Armaments as well as the preparation of reports on the transactions related to armament and military equipment production and trade
Reputational Risk Management
The Bank attaches great importance to reputational risks that are assessed as part of the compliance control system which is within the competence of the Compliance Office Banca Intesa believes that the standards in this area as well as the business ethics are the cornerstone of banking operations which by their nature are based on trust Bylaws such as the Code of Ethics policies and other define that any non-compliance with the bylaws the principles and values contained in them as well as with external regulations (laws and secondary legislation) exposes the Bank to a certain level of reputational risks
Fight Against Corruption and Compliance
The internal regulatory source that governs the system for control and mitigation of corruption risks comprises the Code of Ethics the Code of Conduct the Rulebook on Relations with Political Parties and the following Bank procedures the Procedure for the Prevention of Internal Fraud and Abuse at the Bank and the Employment Termination Procedure
19
The Code of Conduct prescribes in detail the rules in connection with receiving and giving gifts and the measures prescribed in the event of corruption are related to the violation of work duties so the measures stipulated by external regulations ie the Labour Law (eg compensation for damage employee suspension or termination) but also the Criminal Code may be pronounced against an employee Based on the Legal Department records no proceedings were initiated against Banca Intesa ad Beograd in connection with corruption since no complaints or notices prior to complaint were delivered during 2013
In the same period the Suspicious Transactions and Know Your Customer training courses were held in this segment by means of e-learning which were received by as many as 8663 of employees during 2013 The training courses were provided for by the current regulations and internal acts of the Bank and were aimed at informing the employees and refreshing their knowledge of the obligation of collecting information about each customer and completing appropriate questionnaires In addition the training informed the employees about the new processes that were implemented as well as about mandatory observance of all duties relating to knowing monitoring and reporting suspicious transactions of customers
The Rulebook on Relations with Political Parties prescribes the obligation of the Bank to refrain from granting donations and sponsorship tobull Political parties and any organisations related to thembull Political movements and their organisational unitsbull Trade union organisationsbull Competent authorities and institutions
The prohibition of granting donations and sponsorship to the above organisations aims at the protection against any grants that would result in a privileged position to the Bank or unfair decisions in favour of the Bank
The Compliance Office as well as the relevant organisational units of the Bank are committed to the regulation of processes and the definition of procedures and their operating rules as well as practice which efficiently prevent the violation of applicable regulations The Compliance Office also provides support to the highest bodies of the Bank in monitoring the compliance risk The compliance risk assessment process is constant Through semi-annual reporting these risks are identified and priority measures for their elimination or mitigation are determined ie the level of efficiency of the existing compliance controls is assessed
The Internal Audit provides direct support to the highest bodies of the Bank in monitoring the compliance with and adequacy of the rules contained in the Bankrsquos bylaws If it identifies critical issues during its activity the Internal Audit informs the relevant organisational units and the highest bodies of the Bank with the aim of determining adequate measures for risk mitigation and the method of their implementation
Protection of Health and Safety
Occupational health and safety at Banca Intesa are regulated in accordance with international directives recommendations and positive laws of the Republic of Serbia
During 2013 an assessment was made of the situation regarding occupational health and safety and the risk level for 207 facilities at which work is performed A schedule of elimination of recorded risks to the health of Bank employees was defined and implemented according to priorities and the budget planned In connection with this risk assessment documents were updated as well
When it comes to physical security three robberies were recorded in 2013 versus two a year earlier and investments in technical protection systems continued
Risk Management in Supply Chain
Supplier Check
The Procurement Unit and the organisational part in charge of procurement are obliged to evaluate the received supplier bids by applying the methods of qualitative and quantitative analysis as well as to align the bid evaluation criteria prior to inviting the bidders to submit offers by combining specific criteria one of which is the Compliance of Bidderrsquos Operations with the Corporate Social Responsibility Principles
20
Health and Safety Risk Assessment
In accordance with the Procurement Policy members of Intesa Sanpaolo Group are expected to include the parameters of assessment of environmental protection and occupational health protection in their procurement process giving priority to the use of recycled paper highly energy efficient products and environment-friendly technical equipment
Group members must include special provisions in the procurement contracts they conclude with their suppliers These provisions provide for the obligation of suppliers to comply with the principles specified in the Intesa Sanpaolo Rules for the Environmental and Energy Policy Constant checks are performed in the countries where legal measures regarding environmental protection were adopted in order to ensure compliance
In the area of personnel training and spreading the awareness of the importance of these issues the training of the employees who directly communicate with suppliers must include fields related to corporate social responsibility as well as to the responsibility for environmental protection
21
CUSTOMERS
Banca Intesa built its leading position in the market of Serbia and the status of stable and reliable partner by fostering trust in the relations with its customers The strengthening of relations with customers is based on constant improvement of the quality of products and services proceeding from specific needs of each segment as well as on full respect for the principles of equality and availability of products and services Key aspects of doing business with customers are the following
bull SUPPORT TO ECONOMY AND AGRICULTUREbull FINANCIAL INCLUSION AND EDUCATIONbull CUSTOMER SATISFACTION
SUPPORT TO ECONOMY AND AGRICULTURE
Banca Intesa continued to provide support to the economy and the agricultural sector in 2013 as well focusing on the development of entrepreneurship and self-employment particularly in the SME segment as well as on the improvement of public infrastructure
Support to the Public Sector
Banca Intesa offered loans from the credit line of the German Development Bank (KfW) to the public sector for financing infrastructure projects and the procurement of equipment in the following areas water management sewerage and wastewater management solid waste management environmental protection and pollution control transport infrastructure public transport and communication systems infrastructure facilities fostering economic development and other social and utility services During 2013 Banca Intesa granted 11 loans totalling 852 million euros while the total value of the project is 47 million euros
Development of Entrepreneurship
Banca Intesa supported the programme of measures of the Government of the Republic of Serbia for encouraging SMEs and entrepreneurs through subsidised loans for liquidity and working assets in 2013 as well The Bankrsquos commitment to provide continuously support to its customers in this segment is also demonstrated by the fact that the Government of the Republic of Serbia implements its programme of measures for the fifth consecutive time During 2013 the Bank granted 414 subsidised loans to SMEs totalling 562 billion dinars which accounted for 107 of the total loans to the SME sector The small business sector was granted 186 billion dinars and 1347 loans which accounted for 15 of the number of loans and 16 of the total loan disbursements to this segment
In cooperation with the National Bank of Serbia and the Kingdom of Denmark the Bank launched the Local Economic Development in the Balkans (LEDIB) programme intended for enterprises entrepreneurs and registered farms from the small business segment with the aim of improving local economic development creating new jobs strengthening organisational capacities introducing new eco-friendly technologies and other favourable impacts on the overall development The credit line was intended for the Nišava Pčinja Toplica Jablanica and Pirot Districts and in 2013 the Bank granted 39 loans totalling 505208 euros under this programme which accounted for 04 of the number of loans and 05 of the total loan disbursements to the small business segment At the same time from the credit line of the European Fund for Southeast Europe (EFSE) which supports enterprises and registered farms through investments and loans for working assets 227 million euros were granted in the small business segment which accounted for 22 of loan disbursements in the segment
With the aim of supporting the promotion and strengthening of womenrsquos entrepreneurship Banca Intesa helped the Association of Businesswomen in Serbia in the organisation of an international conference entitled New Age Woman Entrepreneur New Opportunities for Recovery of Economy in the Region The event contributed
22
to further positioning of Banca Intesa as a bank that actively supports entrepreneurship in the country as part of its efforts to contribute to economic recovery and growth For this purpose the Bank also has in its offer loans for women entrepreneurs in Vojvodina in the form of start-up loans for unemployed women and women who have had a business for up to three years The Bank granted 8 loans totalling 98 million dinars under this programme during 2013 which accounted for a 3 share in the number of loans and a 1 share in the total investment loan disbursements in the small business segment
Promotion of Agricultural Sector
Taking into account that the agricultural sector is very specific because it has a special social as well as environmental importance in addition to economic importance for many years Banca Intesa has been encouraging development and investing in projects and individuals that encourage with their activities further rural development and contribute to an increase in the competitiveness of domestic agriculture
Aware of the great economic potential of this industry as part of the LEDIB programme the Bank granted eight loans to registered farms in 2013 totalling 76219 euros which accounted for 02 of the number of loans and 03 of the total loan disbursements to this customer segment In addition in cooperation with the Guarantee Fund of the Autonomous Province of Vojvodina long-term loans for purchasing new agricultural machinery and equipment were available to customers During 2013 the Bank granted 82 loans of this type totalling 219 million euros which accounted for a 15 share in the number of loans and a 25 share in the total investment loan disbursements in the agricultural segment
In addition on the occasion of the 80th International Agricultural Fair in Novi Sad the Bank prepared a special credit offer intended for owners of registered farms which included the Intesa Farmer dinar loan for financing spring works as well as the Intesa Farmer loan for purchasing agricultural machinery During 2013 22 loans were granted for purchasing tractors and agricultural machinery totalling 341 million dinars which accounted for a 4 share in the number of loans and a 3 share in the total amount of agricultural investment loan disbursements
Banka Intesa launched the Intesa Farmer of the Year project to contribute in yet another way to the promotion of agricultural production in the country and to the strengthening of its competitiveness As part of the project the Bank awarded the most successful farmers in four categories ndash Intesa Crop Farmer Intesa Vegetable Grower Intesa Fruit Grower and Intesa Livestock Breeder and all winners won a trip to Germany to visit the international agricultural fair in Berlin The criteria based on which the Committee selected the winners of the title Intesa Farmer of the Year were the annual results achieved in agricultural production application of modern technologies in production activities the number of household members engaged in the production as well as the minimum three-year cooperation with the Bank which included a loan and regular settlement of their financial obligations
FINANCIAL INCLUSION AND LITERACY
Banka Intesa believes that the availability of financial products to all segments of society is an essential precondition for sustainable development In line with this position the Bank added to its offer specific products that promote financial inclusion and provide support during economic crisis to the most vulnerable social groups such as the elderly or youth as well as to solving broader social problems such as housing availability or health care services
Responding to the Needs of the Community
In 2013 Banca Intesa included in its offer the Intermezzo Cash Loan a new model of cash loan which offers to its users as a unique benefit in the domestic market a possibility of postponing the payment of monthly instalment up to five times during the repayment period Moreover as an additional functionality the Intermezzo loan includes insurance against job loss with no additional cost to the customer The Bank believes that the repayment flexibility provided by this loan model offers citizens unique support in the market at a time when they estimate that they need it most In 2013 Banca Intesa granted 11256 Intermezzo cash loans totalling 198 million euros which accounted for 235 of the total amount of cash loans disbursed during the year
Banca Intesa was the first in the Serbian market to offer loans to pensioners aged up to 74 years The Senior Cash Loans were designed specifically to fit the needs of senior citizens and they also include life insurance which is included in the cost of loan during the entire repayment period During the previous year 19774 loans were granted totalling 239 million euros which accounted for 284 of the total cash loans granted in 2013
23
In 2012 as support to citizens in financing medical services the Intesa Vita programme of consumer and cash loans was developed which includes loans for in vitro fertilisation harvesting and storage of stem cells DNA analysis dental services medical spa and wellness treatments as well as for purchasing baby supplies In 2013 the programme was extended to new purposes - laser vision correction vein operation and purchase of medical aids and 28 loans were granted totalling 126345 euros which accounted for 8 of the total cash loans granted during the year In this unique way the Bank provides the citizens with the possibility of taking care of their health in a responsible and timely manner without suddenly burdening their home budgets
Moreover the Bank continued to provide subsidised housing loans in 2013 as well in order to provide support to young married couples in solving their housing problems granting 224 loans totalling 864 million euros which was 205 of the total housing loans granted during the year At the same time 6544 refinancing loans with insurance against job loss or disability in case of an accident were granted totalling 146 million euros which enabled the customers to service their outstanding liabilities towards Banca Intesa and other banks and which accounted for 173 of the Bankrsquos total cash loans granted during the year
Banca Intesa introduced the Visa Classic Paralympic and Visa Electron Paralympic cards the first charity payment cards in the country in cooperation with the Paralympic Committee of Serbia This was the first initiative aimed at establishing a stable and independent mechanism for long-term assistance to athletes with disabilities and developing paralympic sport in the country During 2013 8345 Visa Classic Paralympic and Visa Electron Paralympic cards were issued which accounted for 14 of all cards issued during the year The Bank also provides debit cards for students which enable free account opening and maintenance for all students who opted for an Intesa Visa Electron Easy Travel Card (ETC) or a Maestro ISIC Card of Banca Intesa of which 4048 were issued in 2013 accounting for 18 of the debit cards issued during the year
Constantly striving to promote savings in 2013 the Bank introduced a new savings model the Month by Month Savings which provides customers with a possibility of reaching higher amounts of savings with lower monthly allocations The product enables saving in dinars and euros at a very attractive interest rate while the customers also have an opportunity to set the payment date and amount themselves
Financial Education
In 2013 as well Banca Intesa remained true to its commitment to support actively financial education by improving customer knowledge Thus in cooperation with Banca IMI SpA a member of Intesa Sanpaolo Group another Intesa Academia workshop was organised this time on the subject of advanced financing and risk management instruments so that Banca Intesarsquos customers could find out more about the possibilities of financing in the international and domestic bond markets and about hedging products for successful management of market risks The workshop brought together the leading world experts in the areas of financing and risk management as well as the most successful customers of the Bank In order to assist its customers in the SME segment in getting informed in more detail about the regulations relating to loan approval and collection Banca Intesa took part in the working breakfast on the subject Security Instruments and Their Collection as the Condition for Financing Company Growth held at the premises of the Serbian Association of Managers On this occasion the legal framework was presented about which enterprises should also get informed in order to know that documentation they will need if they opt for bank loans
At the same time the Factoring Department designed and launched an initiative of organising factoring workshops at the Bankrsquos regional centres Factoring workshops are an interactive form of cooperation and communication with customers with the focus on understanding the term and essence of factoring themselves With the support of regional centres a total of 27 factoring workshops were organised in 22 cities in two cycles in late 2012 and in early 2013 which were attended by nearly 300 corporate customers
As a member of the United Nations Global Compact and its Working Group on CSR in Banking and Finance Banca Intesa works together with the other members on the implementation of projects in the area of financial education which is the main goal of this Group One of the projects actively supported by the Bank is the cooperation with seven secondary schools of economics from six cities in Serbia where there is a ldquobank clerkrdquo educational profile in the area of thematic lectures for teachers and students The Bank representatives gave three lectures during 2013
24
CUSTOMER SATISFACTION
Banca Intesa believes that it is only through an open dialogue with its customers that it can truly understand their needs and expectations and build a long-term partner relationship with them
Meeting the Needs of Customers
Ever since 2008 Banca Intesa has been conducting surveys of its customersrsquo satisfaction with the Bankrsquos products and services in accordance with the methodology of the European Customer Satisfaction Index (ECSI) as part of its initiative named Listening 100 This is a continuous process analyses are made based on the results obtained in the survey and actions are proposed accordingly for improving the customer satisfaction The surveys are repeated at six-monthannual intervals in order to collect feedback from the customersrsquo perspective for the measures taken for the purpose of improving the satisfaction index as well as identifying the directions for further improvement
Looking at the results of the customer satisfaction survey at the end of 2013 a conclusion arises that among other things the basis of good results is a positively rated staff treatment of customers The ECSI as well as the Loyalty indices are stable with a high percentage of customers who stated they would remain Banca Intesa customers in the following 12 months Attempting to encourage its customers to express their opinions in the previous year the Bank clearly communicated the improvements implemented so far based on their suggestions
During 2013 as well Banca Intesa continued to increase the number of branches equipped with the Queue Management System (QMS) which covered approximately 40 per cent of active customers at the end of the year In addition to having a positive impact on customer satisfaction the QMS expansion made it possible to obtain the data necessary for better analysis and organisation of branch operation In addition free internet access via Wi-Fi and daily newspapers were made available to customers at the largest branches
As part of its efforts to improve further customer satisfaction in 2013 Banca Intesa implemented training of over 1500 employees both in its branch network and at its headquarters The training which was implemented as a continuation of the Education 100 programme initiated in 2011 was held on the subject of managing customer satisfaction but also their entire experience in each contact with the Bank
In addition to its efforts to improve its approach to customers and recognising the importance of two-way communication the Bank developed efficient mechanisms for collecting and recording customer feedback The Bank responds to all complaints sent to the Bank via formal complaints mechanisms and does so within the statutory time limit and in accordance with the decision of the National Bank of Serbia Each customer may also personally contact unit employees and if the customer is not satisfied with the answer received heshe can apply to the National Bank of Serbia as the second-instance body with the possibility of mediation The following are available to customers
bull Phone line +381 11 310 88 88bull E-mail kontaktbancaintesarsbull Fax +381 11 310 88 55bull Personal contact ie submitting a written complaint in personbull Contact form on the official website of the Bankbull Bank corporate accounts on social networks (Facebook and Twitter)bull Postal address of the Customer Satisfaction Management Unit Omladinskih brigada 90b 11070 New Belgrade
Transparent Advertising
Lasting relationships based on trust require communication that enables customers to understand clearly the characteristics and value of Banca Intesa products and services Therefore the Bank strives to contribute to the simplification of its products in communication
In its advertising the Bank clearly specifies all customer costs and all of them are included when calculating the effective interest rate which is always clearly and visibly shown as well as representative examples that contain all data in accordance with the Law on the Protection of Financial Service Consumers which demonstrates full transparency when it comes to Bank pricing policy
25
The Bank also strives to formulate the agreements so that they are simple to understand minimising possible misunderstandings and ambiguity by providing clear and exhaustive information It informs its customers in a timely manner of any changes in the agreements and their terms
Data Security
The protection of customer security as well as their assets and confidential information is not only Banca Intesarsquos primary duty but also the basis of the relationship of trust that the Bank wants to reinforce with its customers The protection of persons their assets and valuables as well as a multitude of data and internal organisational processes fully meets the criteria of reliability continuity and confidentiality In addition to its legal obligations Banca Intesa complies with the criteria of absolute transparency in informing its customers of their rights to privacy and the way it treats their personal information
In 2013 Banca Intesa did not find any founded complaint in connection with the violation of customer privacy or any disclosure leakage or theft of customer information
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
16
22 GOVERNANCE IN BANCA INTESA
CORPORATE GOVERNANCE
Shareholders of Banca Intesa ad Beograd ndash ownership structure Intesa Sanpaolo Holding International SA 7779 Intesa Sanpaolo SPA 1521 International Finance Institution (IFC) 700 The governance of the Banca Intesa joint stock company is organised as a two-tier system
The Bankrsquos Board of Directors consists of five members elected by the General Meeting of Shareholders upon the shareholdersrsquo proposal including the Board Chairman The term of office of Board members is three years with a possibility of re-election The Chairman of the Board of Directors of Banca Intesa is Massimo Malagoli and its members are Ivan Šramko Arthur Philippe Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Executive Board of Banca Intesa consists of six members including the President The term of office of Executive Board members is three years with a possibility of re-election The President of the Executive Board of Banca Intesa is Draginja Đurić the Deputy President of the Executive Board is Marco Capellini and Board members are Darko Popović Head of Retail and Small Business Division Slađana Jelić Head of the Corporate Banking Division Dragica Mihajlović Head of the Financial Management and Treasury Division and Marko Marković Head of the Operations Management Division
Women account for 20 of the members of the Board of Directors and 50 of the members of the Executive Board of Banca Intesa
The Bankrsquos Audit Committee consists of five members including the Chairman The term of office of Committee members is three years with a possibility of re-election The Committee Chairman is Giovanni Bergamini and its members are Paolo Sarcinelli and Nevenka Žarkić Joksimović
The Chairman of the Board of Directors as a governance body does not have a direct executive role given that Banca Intesa organised as a joint stock company with a two-tier governance system delegates executive roles to the Executive Board as a management body that organises the Bankrsquos operations and performs daily monitoring of the activities of the Bank employees while the Board of Directors makes strategic decisions aimed at the Bankrsquos compliance takes care of and is responsible for the accuracy of all reports financial condition and operating results of the Bank addressed to the Bankrsquos shareholders the public and the National Bank of Serbia
In line with the Law on Banks and other regulations members of the Board of Directors are appointed and dismissed by the General Meeting of Shareholders while members of the Executive Board are appointed and dismissed by the Bankrsquos Board of Directors Domestic regulations list conditions that members of the Executive Board and the Board of Directors must meet in order to get prior approval of the regulatory body ie the National Bank of Serbia without which they cannot become members of these boards This includes among other things good business reputation and appropriate qualifications In addition appropriate experience in finance is also required for at least three members of the Board of Directors while at least one member of the Board of Directors must have active knowledge of Serbian and reside in the territory of the Republic of Serbia After obtaining the approval the appointed person is registered with the Business Registers Agency as well
Banca Intesa provided in its bylaws for the mechanisms and channels of direct e-mail communication with its parent group Intesa Sanpaolo with the aim of respecting the individual and dignity of each employee as well as the values proclaimed by the Code of Ethics The Bankrsquos shareholders ie the General Meeting of Shareholders participate in and directly impact the work of the Board of Directors as a governance body in the following ways
bull The General Meeting of Shareholders adopts the business policy and strategy of the Bankbull The General Meeting of Shareholders adopts the Articles of Association and the amendments to the Memorandum and Articles of Associationbull The General Meeting of Shareholders appoints and dismisses the Chairman and members of the Board of
17
Directorsbull The General Meeting of Shareholders appoints and dismisses the external auditorbull The General Meeting of Shareholders considers and adopts the annual report of the Board of Directors
The adopted remuneration policy for the entire human resources of the Group including the variable components is based on equality merit and sustainability of results The guidelines for defining the management remuneration policy are based on objective elements and parameters resulting from the assessment of organisational positions as well as performance and potential with the aim of creating an integrated system for the members of management thus helping their professional development The policy provides for remuneration in the form of benefits which is also based on financial instruments and linked to the results of the company ndash which corresponds to the level of assumed risk and is regulated so as to avoid giving benefits that in the long term are not in accordance with the Grouprsquos interests Based on the performance indicators closely linked with the long-term goals the benefit determination systems are based among other things on the principle of symmetry with the amounts of paid benefits being based on the results achieved at the Group business sector and individual levels and therefore being capable of decreasing significantly and even reaching zero if the minimum indicators that reflect the Group profitability are not achieved also taking into account the risks assumed and the capital used
When it comes to conflicts of interest Banca Intesa has prescribed in accordance with the provisions of the Law on Banks as well as with its bylaws and those of its parent Group an obligation for members of the Board of Directors and the Executive Board to submit a written statement of conflict of interest to the Bankrsquos Board of Directors within one month from the day of taking office The members of the Board of Directors and the Executive Board are obliged in accordance with the bylaws regulating transactions with related parties and the conflict of interest to submit once a year completed standard questionnaires whose content is designed by the parent Group and which contain information relevant for establishing any conflict of interest
One of the methods of sustainability control at Banca Intesa is the power of the Board of Directors as a governance body to set up an integrated risk management system at the Bank and the supervision of this system while the Executive Board identifies the risks to which Banca Intesa is exposed and controls these risks in accordance with the approved policies and procedures The Board of Directors gives approval to the Bankrsquos exposure to one or a group of related parties of over 10 or to an increase in the exposure to over 20 of Bank equity adopts internal audit plan and programme considers external and internal audit reports sets up the internal control system defines the internal organisation and organisational structure of the Bank that ensures the division of duties authority and responsibilities of its employees in a manner that prevents conflict of interest and ensures a transparent and documented process of decision making and implementation decides on disposing with the Bankrsquos fixed assets and the stakes and shares that the Bank has in other legal entities
The work of the Executive Board is evaluated through the MBO (Management by Objectives) system which is based on setting measurable objectives based on which the annual performance is monitored
RISK MANAGEMENT
Risk management is an integral part of the corporate governance of Banca Intesa based on which it is estimated whether the Bank can achieve its business targets in the way consistent not only with the law but also with the public interest safety of people as well as the factors of the natural and social environment Therefore the access to risk management also implies broader social consequences of Bank activity in the environment and in the market
Controlling Socio-environmental Risks in the Governance Process
By a decision of the Executive Board the Bank appointed the persons responsible for environmental protection with the aim of establishing an Environmental Management System ndash EMS and ensuring compliance with the rules of environmental protection and corporate social responsibility in lending operations so that the system would be fully applied until the final collection of all loan instalments A Senior Environmental Management Officer (Deputy President of the Executive Board) and an Environmental Management Coordinator (compliance risk management specialist) were appointedThe Environmental Management Coordinator with the approval of the Senior Environmental Management Officer informs the Executive Board the Asset Quality Committee and the Credit Committee of any significant increase in the level of socio-environmental risks in individual Bank customers particularly in customers with high credit exposure
18
and prepares reports on socio-environmental risks for international development banks towards which the Bank has such reporting obligation
The responsible organisational unit of the Bank monitors risks through the process of assessing loan applications taking into account the criteria related to lending to all customers engaged in production and service activities and the criteria related to environmental risk management
Management of Socio-environmental Risks in Lending
Adequate management and control of socio-environmental risks are essential preconditions for generating reliable and sustainable value and for protecting the Bankrsquos financial stability as well as its reputation
Socio-environmental Risk Management
The Socio-environmental Risk Management Procedure regulates the risk monitoring process in the area of environmental protection employee health and safety and the Bankrsquos social responsibility (protection of cultural heritage fundamental human rights and personal integrity) This Procedure regulates the credit process with regard to socio-environmental risks when approving a credit product to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1000000 euros or higher including the requested new product in case of a credit product from a credit line or other funds approved to the Bank by an international development bank and approval of a long-term credit product funded from other sources The Procedure regulates the rules classified by business lineprocess in the process of socio-environmental risk management
Equator Principles
The Implementation of the Equator Principles for Project Financing procedure applies when preparing and implementing project financing and advisory services in connection with project financing where the investment value of the project is 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes in these facilities can create significant environmental andor social impacts or significantly change the natural environment The goal of the Equator principles is to identify and assess risks and perform risk management based on the criteria defined by the principles with the aim of adhering to the principle of sustainability of natural resources human health human rights cultural heritage and biodiversity
Armaments
The sensitive sectors that the Bank monitors with special attention include armament production and trade In accordance with the relevant bylaw of its parent Group the Policy of Not Financing of Armaments in 2011 Banca Intesa adopted the Procedure for the Performance of Transactions Related to Armament Production and Trade which regulates the identification and preparation of the summary of the customers engaged in armament and military equipment production and trade the monitoring of transactions and loan applications of the customers engaged in armament and military equipment production and trade the approval of transactions and loan applications related to armament and military equipment production and trade in accordance with the Policy of Not Financing of Armaments as well as the preparation of reports on the transactions related to armament and military equipment production and trade
Reputational Risk Management
The Bank attaches great importance to reputational risks that are assessed as part of the compliance control system which is within the competence of the Compliance Office Banca Intesa believes that the standards in this area as well as the business ethics are the cornerstone of banking operations which by their nature are based on trust Bylaws such as the Code of Ethics policies and other define that any non-compliance with the bylaws the principles and values contained in them as well as with external regulations (laws and secondary legislation) exposes the Bank to a certain level of reputational risks
Fight Against Corruption and Compliance
The internal regulatory source that governs the system for control and mitigation of corruption risks comprises the Code of Ethics the Code of Conduct the Rulebook on Relations with Political Parties and the following Bank procedures the Procedure for the Prevention of Internal Fraud and Abuse at the Bank and the Employment Termination Procedure
19
The Code of Conduct prescribes in detail the rules in connection with receiving and giving gifts and the measures prescribed in the event of corruption are related to the violation of work duties so the measures stipulated by external regulations ie the Labour Law (eg compensation for damage employee suspension or termination) but also the Criminal Code may be pronounced against an employee Based on the Legal Department records no proceedings were initiated against Banca Intesa ad Beograd in connection with corruption since no complaints or notices prior to complaint were delivered during 2013
In the same period the Suspicious Transactions and Know Your Customer training courses were held in this segment by means of e-learning which were received by as many as 8663 of employees during 2013 The training courses were provided for by the current regulations and internal acts of the Bank and were aimed at informing the employees and refreshing their knowledge of the obligation of collecting information about each customer and completing appropriate questionnaires In addition the training informed the employees about the new processes that were implemented as well as about mandatory observance of all duties relating to knowing monitoring and reporting suspicious transactions of customers
The Rulebook on Relations with Political Parties prescribes the obligation of the Bank to refrain from granting donations and sponsorship tobull Political parties and any organisations related to thembull Political movements and their organisational unitsbull Trade union organisationsbull Competent authorities and institutions
The prohibition of granting donations and sponsorship to the above organisations aims at the protection against any grants that would result in a privileged position to the Bank or unfair decisions in favour of the Bank
The Compliance Office as well as the relevant organisational units of the Bank are committed to the regulation of processes and the definition of procedures and their operating rules as well as practice which efficiently prevent the violation of applicable regulations The Compliance Office also provides support to the highest bodies of the Bank in monitoring the compliance risk The compliance risk assessment process is constant Through semi-annual reporting these risks are identified and priority measures for their elimination or mitigation are determined ie the level of efficiency of the existing compliance controls is assessed
The Internal Audit provides direct support to the highest bodies of the Bank in monitoring the compliance with and adequacy of the rules contained in the Bankrsquos bylaws If it identifies critical issues during its activity the Internal Audit informs the relevant organisational units and the highest bodies of the Bank with the aim of determining adequate measures for risk mitigation and the method of their implementation
Protection of Health and Safety
Occupational health and safety at Banca Intesa are regulated in accordance with international directives recommendations and positive laws of the Republic of Serbia
During 2013 an assessment was made of the situation regarding occupational health and safety and the risk level for 207 facilities at which work is performed A schedule of elimination of recorded risks to the health of Bank employees was defined and implemented according to priorities and the budget planned In connection with this risk assessment documents were updated as well
When it comes to physical security three robberies were recorded in 2013 versus two a year earlier and investments in technical protection systems continued
Risk Management in Supply Chain
Supplier Check
The Procurement Unit and the organisational part in charge of procurement are obliged to evaluate the received supplier bids by applying the methods of qualitative and quantitative analysis as well as to align the bid evaluation criteria prior to inviting the bidders to submit offers by combining specific criteria one of which is the Compliance of Bidderrsquos Operations with the Corporate Social Responsibility Principles
20
Health and Safety Risk Assessment
In accordance with the Procurement Policy members of Intesa Sanpaolo Group are expected to include the parameters of assessment of environmental protection and occupational health protection in their procurement process giving priority to the use of recycled paper highly energy efficient products and environment-friendly technical equipment
Group members must include special provisions in the procurement contracts they conclude with their suppliers These provisions provide for the obligation of suppliers to comply with the principles specified in the Intesa Sanpaolo Rules for the Environmental and Energy Policy Constant checks are performed in the countries where legal measures regarding environmental protection were adopted in order to ensure compliance
In the area of personnel training and spreading the awareness of the importance of these issues the training of the employees who directly communicate with suppliers must include fields related to corporate social responsibility as well as to the responsibility for environmental protection
21
CUSTOMERS
Banca Intesa built its leading position in the market of Serbia and the status of stable and reliable partner by fostering trust in the relations with its customers The strengthening of relations with customers is based on constant improvement of the quality of products and services proceeding from specific needs of each segment as well as on full respect for the principles of equality and availability of products and services Key aspects of doing business with customers are the following
bull SUPPORT TO ECONOMY AND AGRICULTUREbull FINANCIAL INCLUSION AND EDUCATIONbull CUSTOMER SATISFACTION
SUPPORT TO ECONOMY AND AGRICULTURE
Banca Intesa continued to provide support to the economy and the agricultural sector in 2013 as well focusing on the development of entrepreneurship and self-employment particularly in the SME segment as well as on the improvement of public infrastructure
Support to the Public Sector
Banca Intesa offered loans from the credit line of the German Development Bank (KfW) to the public sector for financing infrastructure projects and the procurement of equipment in the following areas water management sewerage and wastewater management solid waste management environmental protection and pollution control transport infrastructure public transport and communication systems infrastructure facilities fostering economic development and other social and utility services During 2013 Banca Intesa granted 11 loans totalling 852 million euros while the total value of the project is 47 million euros
Development of Entrepreneurship
Banca Intesa supported the programme of measures of the Government of the Republic of Serbia for encouraging SMEs and entrepreneurs through subsidised loans for liquidity and working assets in 2013 as well The Bankrsquos commitment to provide continuously support to its customers in this segment is also demonstrated by the fact that the Government of the Republic of Serbia implements its programme of measures for the fifth consecutive time During 2013 the Bank granted 414 subsidised loans to SMEs totalling 562 billion dinars which accounted for 107 of the total loans to the SME sector The small business sector was granted 186 billion dinars and 1347 loans which accounted for 15 of the number of loans and 16 of the total loan disbursements to this segment
In cooperation with the National Bank of Serbia and the Kingdom of Denmark the Bank launched the Local Economic Development in the Balkans (LEDIB) programme intended for enterprises entrepreneurs and registered farms from the small business segment with the aim of improving local economic development creating new jobs strengthening organisational capacities introducing new eco-friendly technologies and other favourable impacts on the overall development The credit line was intended for the Nišava Pčinja Toplica Jablanica and Pirot Districts and in 2013 the Bank granted 39 loans totalling 505208 euros under this programme which accounted for 04 of the number of loans and 05 of the total loan disbursements to the small business segment At the same time from the credit line of the European Fund for Southeast Europe (EFSE) which supports enterprises and registered farms through investments and loans for working assets 227 million euros were granted in the small business segment which accounted for 22 of loan disbursements in the segment
With the aim of supporting the promotion and strengthening of womenrsquos entrepreneurship Banca Intesa helped the Association of Businesswomen in Serbia in the organisation of an international conference entitled New Age Woman Entrepreneur New Opportunities for Recovery of Economy in the Region The event contributed
22
to further positioning of Banca Intesa as a bank that actively supports entrepreneurship in the country as part of its efforts to contribute to economic recovery and growth For this purpose the Bank also has in its offer loans for women entrepreneurs in Vojvodina in the form of start-up loans for unemployed women and women who have had a business for up to three years The Bank granted 8 loans totalling 98 million dinars under this programme during 2013 which accounted for a 3 share in the number of loans and a 1 share in the total investment loan disbursements in the small business segment
Promotion of Agricultural Sector
Taking into account that the agricultural sector is very specific because it has a special social as well as environmental importance in addition to economic importance for many years Banca Intesa has been encouraging development and investing in projects and individuals that encourage with their activities further rural development and contribute to an increase in the competitiveness of domestic agriculture
Aware of the great economic potential of this industry as part of the LEDIB programme the Bank granted eight loans to registered farms in 2013 totalling 76219 euros which accounted for 02 of the number of loans and 03 of the total loan disbursements to this customer segment In addition in cooperation with the Guarantee Fund of the Autonomous Province of Vojvodina long-term loans for purchasing new agricultural machinery and equipment were available to customers During 2013 the Bank granted 82 loans of this type totalling 219 million euros which accounted for a 15 share in the number of loans and a 25 share in the total investment loan disbursements in the agricultural segment
In addition on the occasion of the 80th International Agricultural Fair in Novi Sad the Bank prepared a special credit offer intended for owners of registered farms which included the Intesa Farmer dinar loan for financing spring works as well as the Intesa Farmer loan for purchasing agricultural machinery During 2013 22 loans were granted for purchasing tractors and agricultural machinery totalling 341 million dinars which accounted for a 4 share in the number of loans and a 3 share in the total amount of agricultural investment loan disbursements
Banka Intesa launched the Intesa Farmer of the Year project to contribute in yet another way to the promotion of agricultural production in the country and to the strengthening of its competitiveness As part of the project the Bank awarded the most successful farmers in four categories ndash Intesa Crop Farmer Intesa Vegetable Grower Intesa Fruit Grower and Intesa Livestock Breeder and all winners won a trip to Germany to visit the international agricultural fair in Berlin The criteria based on which the Committee selected the winners of the title Intesa Farmer of the Year were the annual results achieved in agricultural production application of modern technologies in production activities the number of household members engaged in the production as well as the minimum three-year cooperation with the Bank which included a loan and regular settlement of their financial obligations
FINANCIAL INCLUSION AND LITERACY
Banka Intesa believes that the availability of financial products to all segments of society is an essential precondition for sustainable development In line with this position the Bank added to its offer specific products that promote financial inclusion and provide support during economic crisis to the most vulnerable social groups such as the elderly or youth as well as to solving broader social problems such as housing availability or health care services
Responding to the Needs of the Community
In 2013 Banca Intesa included in its offer the Intermezzo Cash Loan a new model of cash loan which offers to its users as a unique benefit in the domestic market a possibility of postponing the payment of monthly instalment up to five times during the repayment period Moreover as an additional functionality the Intermezzo loan includes insurance against job loss with no additional cost to the customer The Bank believes that the repayment flexibility provided by this loan model offers citizens unique support in the market at a time when they estimate that they need it most In 2013 Banca Intesa granted 11256 Intermezzo cash loans totalling 198 million euros which accounted for 235 of the total amount of cash loans disbursed during the year
Banca Intesa was the first in the Serbian market to offer loans to pensioners aged up to 74 years The Senior Cash Loans were designed specifically to fit the needs of senior citizens and they also include life insurance which is included in the cost of loan during the entire repayment period During the previous year 19774 loans were granted totalling 239 million euros which accounted for 284 of the total cash loans granted in 2013
23
In 2012 as support to citizens in financing medical services the Intesa Vita programme of consumer and cash loans was developed which includes loans for in vitro fertilisation harvesting and storage of stem cells DNA analysis dental services medical spa and wellness treatments as well as for purchasing baby supplies In 2013 the programme was extended to new purposes - laser vision correction vein operation and purchase of medical aids and 28 loans were granted totalling 126345 euros which accounted for 8 of the total cash loans granted during the year In this unique way the Bank provides the citizens with the possibility of taking care of their health in a responsible and timely manner without suddenly burdening their home budgets
Moreover the Bank continued to provide subsidised housing loans in 2013 as well in order to provide support to young married couples in solving their housing problems granting 224 loans totalling 864 million euros which was 205 of the total housing loans granted during the year At the same time 6544 refinancing loans with insurance against job loss or disability in case of an accident were granted totalling 146 million euros which enabled the customers to service their outstanding liabilities towards Banca Intesa and other banks and which accounted for 173 of the Bankrsquos total cash loans granted during the year
Banca Intesa introduced the Visa Classic Paralympic and Visa Electron Paralympic cards the first charity payment cards in the country in cooperation with the Paralympic Committee of Serbia This was the first initiative aimed at establishing a stable and independent mechanism for long-term assistance to athletes with disabilities and developing paralympic sport in the country During 2013 8345 Visa Classic Paralympic and Visa Electron Paralympic cards were issued which accounted for 14 of all cards issued during the year The Bank also provides debit cards for students which enable free account opening and maintenance for all students who opted for an Intesa Visa Electron Easy Travel Card (ETC) or a Maestro ISIC Card of Banca Intesa of which 4048 were issued in 2013 accounting for 18 of the debit cards issued during the year
Constantly striving to promote savings in 2013 the Bank introduced a new savings model the Month by Month Savings which provides customers with a possibility of reaching higher amounts of savings with lower monthly allocations The product enables saving in dinars and euros at a very attractive interest rate while the customers also have an opportunity to set the payment date and amount themselves
Financial Education
In 2013 as well Banca Intesa remained true to its commitment to support actively financial education by improving customer knowledge Thus in cooperation with Banca IMI SpA a member of Intesa Sanpaolo Group another Intesa Academia workshop was organised this time on the subject of advanced financing and risk management instruments so that Banca Intesarsquos customers could find out more about the possibilities of financing in the international and domestic bond markets and about hedging products for successful management of market risks The workshop brought together the leading world experts in the areas of financing and risk management as well as the most successful customers of the Bank In order to assist its customers in the SME segment in getting informed in more detail about the regulations relating to loan approval and collection Banca Intesa took part in the working breakfast on the subject Security Instruments and Their Collection as the Condition for Financing Company Growth held at the premises of the Serbian Association of Managers On this occasion the legal framework was presented about which enterprises should also get informed in order to know that documentation they will need if they opt for bank loans
At the same time the Factoring Department designed and launched an initiative of organising factoring workshops at the Bankrsquos regional centres Factoring workshops are an interactive form of cooperation and communication with customers with the focus on understanding the term and essence of factoring themselves With the support of regional centres a total of 27 factoring workshops were organised in 22 cities in two cycles in late 2012 and in early 2013 which were attended by nearly 300 corporate customers
As a member of the United Nations Global Compact and its Working Group on CSR in Banking and Finance Banca Intesa works together with the other members on the implementation of projects in the area of financial education which is the main goal of this Group One of the projects actively supported by the Bank is the cooperation with seven secondary schools of economics from six cities in Serbia where there is a ldquobank clerkrdquo educational profile in the area of thematic lectures for teachers and students The Bank representatives gave three lectures during 2013
24
CUSTOMER SATISFACTION
Banca Intesa believes that it is only through an open dialogue with its customers that it can truly understand their needs and expectations and build a long-term partner relationship with them
Meeting the Needs of Customers
Ever since 2008 Banca Intesa has been conducting surveys of its customersrsquo satisfaction with the Bankrsquos products and services in accordance with the methodology of the European Customer Satisfaction Index (ECSI) as part of its initiative named Listening 100 This is a continuous process analyses are made based on the results obtained in the survey and actions are proposed accordingly for improving the customer satisfaction The surveys are repeated at six-monthannual intervals in order to collect feedback from the customersrsquo perspective for the measures taken for the purpose of improving the satisfaction index as well as identifying the directions for further improvement
Looking at the results of the customer satisfaction survey at the end of 2013 a conclusion arises that among other things the basis of good results is a positively rated staff treatment of customers The ECSI as well as the Loyalty indices are stable with a high percentage of customers who stated they would remain Banca Intesa customers in the following 12 months Attempting to encourage its customers to express their opinions in the previous year the Bank clearly communicated the improvements implemented so far based on their suggestions
During 2013 as well Banca Intesa continued to increase the number of branches equipped with the Queue Management System (QMS) which covered approximately 40 per cent of active customers at the end of the year In addition to having a positive impact on customer satisfaction the QMS expansion made it possible to obtain the data necessary for better analysis and organisation of branch operation In addition free internet access via Wi-Fi and daily newspapers were made available to customers at the largest branches
As part of its efforts to improve further customer satisfaction in 2013 Banca Intesa implemented training of over 1500 employees both in its branch network and at its headquarters The training which was implemented as a continuation of the Education 100 programme initiated in 2011 was held on the subject of managing customer satisfaction but also their entire experience in each contact with the Bank
In addition to its efforts to improve its approach to customers and recognising the importance of two-way communication the Bank developed efficient mechanisms for collecting and recording customer feedback The Bank responds to all complaints sent to the Bank via formal complaints mechanisms and does so within the statutory time limit and in accordance with the decision of the National Bank of Serbia Each customer may also personally contact unit employees and if the customer is not satisfied with the answer received heshe can apply to the National Bank of Serbia as the second-instance body with the possibility of mediation The following are available to customers
bull Phone line +381 11 310 88 88bull E-mail kontaktbancaintesarsbull Fax +381 11 310 88 55bull Personal contact ie submitting a written complaint in personbull Contact form on the official website of the Bankbull Bank corporate accounts on social networks (Facebook and Twitter)bull Postal address of the Customer Satisfaction Management Unit Omladinskih brigada 90b 11070 New Belgrade
Transparent Advertising
Lasting relationships based on trust require communication that enables customers to understand clearly the characteristics and value of Banca Intesa products and services Therefore the Bank strives to contribute to the simplification of its products in communication
In its advertising the Bank clearly specifies all customer costs and all of them are included when calculating the effective interest rate which is always clearly and visibly shown as well as representative examples that contain all data in accordance with the Law on the Protection of Financial Service Consumers which demonstrates full transparency when it comes to Bank pricing policy
25
The Bank also strives to formulate the agreements so that they are simple to understand minimising possible misunderstandings and ambiguity by providing clear and exhaustive information It informs its customers in a timely manner of any changes in the agreements and their terms
Data Security
The protection of customer security as well as their assets and confidential information is not only Banca Intesarsquos primary duty but also the basis of the relationship of trust that the Bank wants to reinforce with its customers The protection of persons their assets and valuables as well as a multitude of data and internal organisational processes fully meets the criteria of reliability continuity and confidentiality In addition to its legal obligations Banca Intesa complies with the criteria of absolute transparency in informing its customers of their rights to privacy and the way it treats their personal information
In 2013 Banca Intesa did not find any founded complaint in connection with the violation of customer privacy or any disclosure leakage or theft of customer information
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
17
Directorsbull The General Meeting of Shareholders appoints and dismisses the external auditorbull The General Meeting of Shareholders considers and adopts the annual report of the Board of Directors
The adopted remuneration policy for the entire human resources of the Group including the variable components is based on equality merit and sustainability of results The guidelines for defining the management remuneration policy are based on objective elements and parameters resulting from the assessment of organisational positions as well as performance and potential with the aim of creating an integrated system for the members of management thus helping their professional development The policy provides for remuneration in the form of benefits which is also based on financial instruments and linked to the results of the company ndash which corresponds to the level of assumed risk and is regulated so as to avoid giving benefits that in the long term are not in accordance with the Grouprsquos interests Based on the performance indicators closely linked with the long-term goals the benefit determination systems are based among other things on the principle of symmetry with the amounts of paid benefits being based on the results achieved at the Group business sector and individual levels and therefore being capable of decreasing significantly and even reaching zero if the minimum indicators that reflect the Group profitability are not achieved also taking into account the risks assumed and the capital used
When it comes to conflicts of interest Banca Intesa has prescribed in accordance with the provisions of the Law on Banks as well as with its bylaws and those of its parent Group an obligation for members of the Board of Directors and the Executive Board to submit a written statement of conflict of interest to the Bankrsquos Board of Directors within one month from the day of taking office The members of the Board of Directors and the Executive Board are obliged in accordance with the bylaws regulating transactions with related parties and the conflict of interest to submit once a year completed standard questionnaires whose content is designed by the parent Group and which contain information relevant for establishing any conflict of interest
One of the methods of sustainability control at Banca Intesa is the power of the Board of Directors as a governance body to set up an integrated risk management system at the Bank and the supervision of this system while the Executive Board identifies the risks to which Banca Intesa is exposed and controls these risks in accordance with the approved policies and procedures The Board of Directors gives approval to the Bankrsquos exposure to one or a group of related parties of over 10 or to an increase in the exposure to over 20 of Bank equity adopts internal audit plan and programme considers external and internal audit reports sets up the internal control system defines the internal organisation and organisational structure of the Bank that ensures the division of duties authority and responsibilities of its employees in a manner that prevents conflict of interest and ensures a transparent and documented process of decision making and implementation decides on disposing with the Bankrsquos fixed assets and the stakes and shares that the Bank has in other legal entities
The work of the Executive Board is evaluated through the MBO (Management by Objectives) system which is based on setting measurable objectives based on which the annual performance is monitored
RISK MANAGEMENT
Risk management is an integral part of the corporate governance of Banca Intesa based on which it is estimated whether the Bank can achieve its business targets in the way consistent not only with the law but also with the public interest safety of people as well as the factors of the natural and social environment Therefore the access to risk management also implies broader social consequences of Bank activity in the environment and in the market
Controlling Socio-environmental Risks in the Governance Process
By a decision of the Executive Board the Bank appointed the persons responsible for environmental protection with the aim of establishing an Environmental Management System ndash EMS and ensuring compliance with the rules of environmental protection and corporate social responsibility in lending operations so that the system would be fully applied until the final collection of all loan instalments A Senior Environmental Management Officer (Deputy President of the Executive Board) and an Environmental Management Coordinator (compliance risk management specialist) were appointedThe Environmental Management Coordinator with the approval of the Senior Environmental Management Officer informs the Executive Board the Asset Quality Committee and the Credit Committee of any significant increase in the level of socio-environmental risks in individual Bank customers particularly in customers with high credit exposure
18
and prepares reports on socio-environmental risks for international development banks towards which the Bank has such reporting obligation
The responsible organisational unit of the Bank monitors risks through the process of assessing loan applications taking into account the criteria related to lending to all customers engaged in production and service activities and the criteria related to environmental risk management
Management of Socio-environmental Risks in Lending
Adequate management and control of socio-environmental risks are essential preconditions for generating reliable and sustainable value and for protecting the Bankrsquos financial stability as well as its reputation
Socio-environmental Risk Management
The Socio-environmental Risk Management Procedure regulates the risk monitoring process in the area of environmental protection employee health and safety and the Bankrsquos social responsibility (protection of cultural heritage fundamental human rights and personal integrity) This Procedure regulates the credit process with regard to socio-environmental risks when approving a credit product to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1000000 euros or higher including the requested new product in case of a credit product from a credit line or other funds approved to the Bank by an international development bank and approval of a long-term credit product funded from other sources The Procedure regulates the rules classified by business lineprocess in the process of socio-environmental risk management
Equator Principles
The Implementation of the Equator Principles for Project Financing procedure applies when preparing and implementing project financing and advisory services in connection with project financing where the investment value of the project is 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes in these facilities can create significant environmental andor social impacts or significantly change the natural environment The goal of the Equator principles is to identify and assess risks and perform risk management based on the criteria defined by the principles with the aim of adhering to the principle of sustainability of natural resources human health human rights cultural heritage and biodiversity
Armaments
The sensitive sectors that the Bank monitors with special attention include armament production and trade In accordance with the relevant bylaw of its parent Group the Policy of Not Financing of Armaments in 2011 Banca Intesa adopted the Procedure for the Performance of Transactions Related to Armament Production and Trade which regulates the identification and preparation of the summary of the customers engaged in armament and military equipment production and trade the monitoring of transactions and loan applications of the customers engaged in armament and military equipment production and trade the approval of transactions and loan applications related to armament and military equipment production and trade in accordance with the Policy of Not Financing of Armaments as well as the preparation of reports on the transactions related to armament and military equipment production and trade
Reputational Risk Management
The Bank attaches great importance to reputational risks that are assessed as part of the compliance control system which is within the competence of the Compliance Office Banca Intesa believes that the standards in this area as well as the business ethics are the cornerstone of banking operations which by their nature are based on trust Bylaws such as the Code of Ethics policies and other define that any non-compliance with the bylaws the principles and values contained in them as well as with external regulations (laws and secondary legislation) exposes the Bank to a certain level of reputational risks
Fight Against Corruption and Compliance
The internal regulatory source that governs the system for control and mitigation of corruption risks comprises the Code of Ethics the Code of Conduct the Rulebook on Relations with Political Parties and the following Bank procedures the Procedure for the Prevention of Internal Fraud and Abuse at the Bank and the Employment Termination Procedure
19
The Code of Conduct prescribes in detail the rules in connection with receiving and giving gifts and the measures prescribed in the event of corruption are related to the violation of work duties so the measures stipulated by external regulations ie the Labour Law (eg compensation for damage employee suspension or termination) but also the Criminal Code may be pronounced against an employee Based on the Legal Department records no proceedings were initiated against Banca Intesa ad Beograd in connection with corruption since no complaints or notices prior to complaint were delivered during 2013
In the same period the Suspicious Transactions and Know Your Customer training courses were held in this segment by means of e-learning which were received by as many as 8663 of employees during 2013 The training courses were provided for by the current regulations and internal acts of the Bank and were aimed at informing the employees and refreshing their knowledge of the obligation of collecting information about each customer and completing appropriate questionnaires In addition the training informed the employees about the new processes that were implemented as well as about mandatory observance of all duties relating to knowing monitoring and reporting suspicious transactions of customers
The Rulebook on Relations with Political Parties prescribes the obligation of the Bank to refrain from granting donations and sponsorship tobull Political parties and any organisations related to thembull Political movements and their organisational unitsbull Trade union organisationsbull Competent authorities and institutions
The prohibition of granting donations and sponsorship to the above organisations aims at the protection against any grants that would result in a privileged position to the Bank or unfair decisions in favour of the Bank
The Compliance Office as well as the relevant organisational units of the Bank are committed to the regulation of processes and the definition of procedures and their operating rules as well as practice which efficiently prevent the violation of applicable regulations The Compliance Office also provides support to the highest bodies of the Bank in monitoring the compliance risk The compliance risk assessment process is constant Through semi-annual reporting these risks are identified and priority measures for their elimination or mitigation are determined ie the level of efficiency of the existing compliance controls is assessed
The Internal Audit provides direct support to the highest bodies of the Bank in monitoring the compliance with and adequacy of the rules contained in the Bankrsquos bylaws If it identifies critical issues during its activity the Internal Audit informs the relevant organisational units and the highest bodies of the Bank with the aim of determining adequate measures for risk mitigation and the method of their implementation
Protection of Health and Safety
Occupational health and safety at Banca Intesa are regulated in accordance with international directives recommendations and positive laws of the Republic of Serbia
During 2013 an assessment was made of the situation regarding occupational health and safety and the risk level for 207 facilities at which work is performed A schedule of elimination of recorded risks to the health of Bank employees was defined and implemented according to priorities and the budget planned In connection with this risk assessment documents were updated as well
When it comes to physical security three robberies were recorded in 2013 versus two a year earlier and investments in technical protection systems continued
Risk Management in Supply Chain
Supplier Check
The Procurement Unit and the organisational part in charge of procurement are obliged to evaluate the received supplier bids by applying the methods of qualitative and quantitative analysis as well as to align the bid evaluation criteria prior to inviting the bidders to submit offers by combining specific criteria one of which is the Compliance of Bidderrsquos Operations with the Corporate Social Responsibility Principles
20
Health and Safety Risk Assessment
In accordance with the Procurement Policy members of Intesa Sanpaolo Group are expected to include the parameters of assessment of environmental protection and occupational health protection in their procurement process giving priority to the use of recycled paper highly energy efficient products and environment-friendly technical equipment
Group members must include special provisions in the procurement contracts they conclude with their suppliers These provisions provide for the obligation of suppliers to comply with the principles specified in the Intesa Sanpaolo Rules for the Environmental and Energy Policy Constant checks are performed in the countries where legal measures regarding environmental protection were adopted in order to ensure compliance
In the area of personnel training and spreading the awareness of the importance of these issues the training of the employees who directly communicate with suppliers must include fields related to corporate social responsibility as well as to the responsibility for environmental protection
21
CUSTOMERS
Banca Intesa built its leading position in the market of Serbia and the status of stable and reliable partner by fostering trust in the relations with its customers The strengthening of relations with customers is based on constant improvement of the quality of products and services proceeding from specific needs of each segment as well as on full respect for the principles of equality and availability of products and services Key aspects of doing business with customers are the following
bull SUPPORT TO ECONOMY AND AGRICULTUREbull FINANCIAL INCLUSION AND EDUCATIONbull CUSTOMER SATISFACTION
SUPPORT TO ECONOMY AND AGRICULTURE
Banca Intesa continued to provide support to the economy and the agricultural sector in 2013 as well focusing on the development of entrepreneurship and self-employment particularly in the SME segment as well as on the improvement of public infrastructure
Support to the Public Sector
Banca Intesa offered loans from the credit line of the German Development Bank (KfW) to the public sector for financing infrastructure projects and the procurement of equipment in the following areas water management sewerage and wastewater management solid waste management environmental protection and pollution control transport infrastructure public transport and communication systems infrastructure facilities fostering economic development and other social and utility services During 2013 Banca Intesa granted 11 loans totalling 852 million euros while the total value of the project is 47 million euros
Development of Entrepreneurship
Banca Intesa supported the programme of measures of the Government of the Republic of Serbia for encouraging SMEs and entrepreneurs through subsidised loans for liquidity and working assets in 2013 as well The Bankrsquos commitment to provide continuously support to its customers in this segment is also demonstrated by the fact that the Government of the Republic of Serbia implements its programme of measures for the fifth consecutive time During 2013 the Bank granted 414 subsidised loans to SMEs totalling 562 billion dinars which accounted for 107 of the total loans to the SME sector The small business sector was granted 186 billion dinars and 1347 loans which accounted for 15 of the number of loans and 16 of the total loan disbursements to this segment
In cooperation with the National Bank of Serbia and the Kingdom of Denmark the Bank launched the Local Economic Development in the Balkans (LEDIB) programme intended for enterprises entrepreneurs and registered farms from the small business segment with the aim of improving local economic development creating new jobs strengthening organisational capacities introducing new eco-friendly technologies and other favourable impacts on the overall development The credit line was intended for the Nišava Pčinja Toplica Jablanica and Pirot Districts and in 2013 the Bank granted 39 loans totalling 505208 euros under this programme which accounted for 04 of the number of loans and 05 of the total loan disbursements to the small business segment At the same time from the credit line of the European Fund for Southeast Europe (EFSE) which supports enterprises and registered farms through investments and loans for working assets 227 million euros were granted in the small business segment which accounted for 22 of loan disbursements in the segment
With the aim of supporting the promotion and strengthening of womenrsquos entrepreneurship Banca Intesa helped the Association of Businesswomen in Serbia in the organisation of an international conference entitled New Age Woman Entrepreneur New Opportunities for Recovery of Economy in the Region The event contributed
22
to further positioning of Banca Intesa as a bank that actively supports entrepreneurship in the country as part of its efforts to contribute to economic recovery and growth For this purpose the Bank also has in its offer loans for women entrepreneurs in Vojvodina in the form of start-up loans for unemployed women and women who have had a business for up to three years The Bank granted 8 loans totalling 98 million dinars under this programme during 2013 which accounted for a 3 share in the number of loans and a 1 share in the total investment loan disbursements in the small business segment
Promotion of Agricultural Sector
Taking into account that the agricultural sector is very specific because it has a special social as well as environmental importance in addition to economic importance for many years Banca Intesa has been encouraging development and investing in projects and individuals that encourage with their activities further rural development and contribute to an increase in the competitiveness of domestic agriculture
Aware of the great economic potential of this industry as part of the LEDIB programme the Bank granted eight loans to registered farms in 2013 totalling 76219 euros which accounted for 02 of the number of loans and 03 of the total loan disbursements to this customer segment In addition in cooperation with the Guarantee Fund of the Autonomous Province of Vojvodina long-term loans for purchasing new agricultural machinery and equipment were available to customers During 2013 the Bank granted 82 loans of this type totalling 219 million euros which accounted for a 15 share in the number of loans and a 25 share in the total investment loan disbursements in the agricultural segment
In addition on the occasion of the 80th International Agricultural Fair in Novi Sad the Bank prepared a special credit offer intended for owners of registered farms which included the Intesa Farmer dinar loan for financing spring works as well as the Intesa Farmer loan for purchasing agricultural machinery During 2013 22 loans were granted for purchasing tractors and agricultural machinery totalling 341 million dinars which accounted for a 4 share in the number of loans and a 3 share in the total amount of agricultural investment loan disbursements
Banka Intesa launched the Intesa Farmer of the Year project to contribute in yet another way to the promotion of agricultural production in the country and to the strengthening of its competitiveness As part of the project the Bank awarded the most successful farmers in four categories ndash Intesa Crop Farmer Intesa Vegetable Grower Intesa Fruit Grower and Intesa Livestock Breeder and all winners won a trip to Germany to visit the international agricultural fair in Berlin The criteria based on which the Committee selected the winners of the title Intesa Farmer of the Year were the annual results achieved in agricultural production application of modern technologies in production activities the number of household members engaged in the production as well as the minimum three-year cooperation with the Bank which included a loan and regular settlement of their financial obligations
FINANCIAL INCLUSION AND LITERACY
Banka Intesa believes that the availability of financial products to all segments of society is an essential precondition for sustainable development In line with this position the Bank added to its offer specific products that promote financial inclusion and provide support during economic crisis to the most vulnerable social groups such as the elderly or youth as well as to solving broader social problems such as housing availability or health care services
Responding to the Needs of the Community
In 2013 Banca Intesa included in its offer the Intermezzo Cash Loan a new model of cash loan which offers to its users as a unique benefit in the domestic market a possibility of postponing the payment of monthly instalment up to five times during the repayment period Moreover as an additional functionality the Intermezzo loan includes insurance against job loss with no additional cost to the customer The Bank believes that the repayment flexibility provided by this loan model offers citizens unique support in the market at a time when they estimate that they need it most In 2013 Banca Intesa granted 11256 Intermezzo cash loans totalling 198 million euros which accounted for 235 of the total amount of cash loans disbursed during the year
Banca Intesa was the first in the Serbian market to offer loans to pensioners aged up to 74 years The Senior Cash Loans were designed specifically to fit the needs of senior citizens and they also include life insurance which is included in the cost of loan during the entire repayment period During the previous year 19774 loans were granted totalling 239 million euros which accounted for 284 of the total cash loans granted in 2013
23
In 2012 as support to citizens in financing medical services the Intesa Vita programme of consumer and cash loans was developed which includes loans for in vitro fertilisation harvesting and storage of stem cells DNA analysis dental services medical spa and wellness treatments as well as for purchasing baby supplies In 2013 the programme was extended to new purposes - laser vision correction vein operation and purchase of medical aids and 28 loans were granted totalling 126345 euros which accounted for 8 of the total cash loans granted during the year In this unique way the Bank provides the citizens with the possibility of taking care of their health in a responsible and timely manner without suddenly burdening their home budgets
Moreover the Bank continued to provide subsidised housing loans in 2013 as well in order to provide support to young married couples in solving their housing problems granting 224 loans totalling 864 million euros which was 205 of the total housing loans granted during the year At the same time 6544 refinancing loans with insurance against job loss or disability in case of an accident were granted totalling 146 million euros which enabled the customers to service their outstanding liabilities towards Banca Intesa and other banks and which accounted for 173 of the Bankrsquos total cash loans granted during the year
Banca Intesa introduced the Visa Classic Paralympic and Visa Electron Paralympic cards the first charity payment cards in the country in cooperation with the Paralympic Committee of Serbia This was the first initiative aimed at establishing a stable and independent mechanism for long-term assistance to athletes with disabilities and developing paralympic sport in the country During 2013 8345 Visa Classic Paralympic and Visa Electron Paralympic cards were issued which accounted for 14 of all cards issued during the year The Bank also provides debit cards for students which enable free account opening and maintenance for all students who opted for an Intesa Visa Electron Easy Travel Card (ETC) or a Maestro ISIC Card of Banca Intesa of which 4048 were issued in 2013 accounting for 18 of the debit cards issued during the year
Constantly striving to promote savings in 2013 the Bank introduced a new savings model the Month by Month Savings which provides customers with a possibility of reaching higher amounts of savings with lower monthly allocations The product enables saving in dinars and euros at a very attractive interest rate while the customers also have an opportunity to set the payment date and amount themselves
Financial Education
In 2013 as well Banca Intesa remained true to its commitment to support actively financial education by improving customer knowledge Thus in cooperation with Banca IMI SpA a member of Intesa Sanpaolo Group another Intesa Academia workshop was organised this time on the subject of advanced financing and risk management instruments so that Banca Intesarsquos customers could find out more about the possibilities of financing in the international and domestic bond markets and about hedging products for successful management of market risks The workshop brought together the leading world experts in the areas of financing and risk management as well as the most successful customers of the Bank In order to assist its customers in the SME segment in getting informed in more detail about the regulations relating to loan approval and collection Banca Intesa took part in the working breakfast on the subject Security Instruments and Their Collection as the Condition for Financing Company Growth held at the premises of the Serbian Association of Managers On this occasion the legal framework was presented about which enterprises should also get informed in order to know that documentation they will need if they opt for bank loans
At the same time the Factoring Department designed and launched an initiative of organising factoring workshops at the Bankrsquos regional centres Factoring workshops are an interactive form of cooperation and communication with customers with the focus on understanding the term and essence of factoring themselves With the support of regional centres a total of 27 factoring workshops were organised in 22 cities in two cycles in late 2012 and in early 2013 which were attended by nearly 300 corporate customers
As a member of the United Nations Global Compact and its Working Group on CSR in Banking and Finance Banca Intesa works together with the other members on the implementation of projects in the area of financial education which is the main goal of this Group One of the projects actively supported by the Bank is the cooperation with seven secondary schools of economics from six cities in Serbia where there is a ldquobank clerkrdquo educational profile in the area of thematic lectures for teachers and students The Bank representatives gave three lectures during 2013
24
CUSTOMER SATISFACTION
Banca Intesa believes that it is only through an open dialogue with its customers that it can truly understand their needs and expectations and build a long-term partner relationship with them
Meeting the Needs of Customers
Ever since 2008 Banca Intesa has been conducting surveys of its customersrsquo satisfaction with the Bankrsquos products and services in accordance with the methodology of the European Customer Satisfaction Index (ECSI) as part of its initiative named Listening 100 This is a continuous process analyses are made based on the results obtained in the survey and actions are proposed accordingly for improving the customer satisfaction The surveys are repeated at six-monthannual intervals in order to collect feedback from the customersrsquo perspective for the measures taken for the purpose of improving the satisfaction index as well as identifying the directions for further improvement
Looking at the results of the customer satisfaction survey at the end of 2013 a conclusion arises that among other things the basis of good results is a positively rated staff treatment of customers The ECSI as well as the Loyalty indices are stable with a high percentage of customers who stated they would remain Banca Intesa customers in the following 12 months Attempting to encourage its customers to express their opinions in the previous year the Bank clearly communicated the improvements implemented so far based on their suggestions
During 2013 as well Banca Intesa continued to increase the number of branches equipped with the Queue Management System (QMS) which covered approximately 40 per cent of active customers at the end of the year In addition to having a positive impact on customer satisfaction the QMS expansion made it possible to obtain the data necessary for better analysis and organisation of branch operation In addition free internet access via Wi-Fi and daily newspapers were made available to customers at the largest branches
As part of its efforts to improve further customer satisfaction in 2013 Banca Intesa implemented training of over 1500 employees both in its branch network and at its headquarters The training which was implemented as a continuation of the Education 100 programme initiated in 2011 was held on the subject of managing customer satisfaction but also their entire experience in each contact with the Bank
In addition to its efforts to improve its approach to customers and recognising the importance of two-way communication the Bank developed efficient mechanisms for collecting and recording customer feedback The Bank responds to all complaints sent to the Bank via formal complaints mechanisms and does so within the statutory time limit and in accordance with the decision of the National Bank of Serbia Each customer may also personally contact unit employees and if the customer is not satisfied with the answer received heshe can apply to the National Bank of Serbia as the second-instance body with the possibility of mediation The following are available to customers
bull Phone line +381 11 310 88 88bull E-mail kontaktbancaintesarsbull Fax +381 11 310 88 55bull Personal contact ie submitting a written complaint in personbull Contact form on the official website of the Bankbull Bank corporate accounts on social networks (Facebook and Twitter)bull Postal address of the Customer Satisfaction Management Unit Omladinskih brigada 90b 11070 New Belgrade
Transparent Advertising
Lasting relationships based on trust require communication that enables customers to understand clearly the characteristics and value of Banca Intesa products and services Therefore the Bank strives to contribute to the simplification of its products in communication
In its advertising the Bank clearly specifies all customer costs and all of them are included when calculating the effective interest rate which is always clearly and visibly shown as well as representative examples that contain all data in accordance with the Law on the Protection of Financial Service Consumers which demonstrates full transparency when it comes to Bank pricing policy
25
The Bank also strives to formulate the agreements so that they are simple to understand minimising possible misunderstandings and ambiguity by providing clear and exhaustive information It informs its customers in a timely manner of any changes in the agreements and their terms
Data Security
The protection of customer security as well as their assets and confidential information is not only Banca Intesarsquos primary duty but also the basis of the relationship of trust that the Bank wants to reinforce with its customers The protection of persons their assets and valuables as well as a multitude of data and internal organisational processes fully meets the criteria of reliability continuity and confidentiality In addition to its legal obligations Banca Intesa complies with the criteria of absolute transparency in informing its customers of their rights to privacy and the way it treats their personal information
In 2013 Banca Intesa did not find any founded complaint in connection with the violation of customer privacy or any disclosure leakage or theft of customer information
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
18
and prepares reports on socio-environmental risks for international development banks towards which the Bank has such reporting obligation
The responsible organisational unit of the Bank monitors risks through the process of assessing loan applications taking into account the criteria related to lending to all customers engaged in production and service activities and the criteria related to environmental risk management
Management of Socio-environmental Risks in Lending
Adequate management and control of socio-environmental risks are essential preconditions for generating reliable and sustainable value and for protecting the Bankrsquos financial stability as well as its reputation
Socio-environmental Risk Management
The Socio-environmental Risk Management Procedure regulates the risk monitoring process in the area of environmental protection employee health and safety and the Bankrsquos social responsibility (protection of cultural heritage fundamental human rights and personal integrity) This Procedure regulates the credit process with regard to socio-environmental risks when approving a credit product to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1000000 euros or higher including the requested new product in case of a credit product from a credit line or other funds approved to the Bank by an international development bank and approval of a long-term credit product funded from other sources The Procedure regulates the rules classified by business lineprocess in the process of socio-environmental risk management
Equator Principles
The Implementation of the Equator Principles for Project Financing procedure applies when preparing and implementing project financing and advisory services in connection with project financing where the investment value of the project is 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes in these facilities can create significant environmental andor social impacts or significantly change the natural environment The goal of the Equator principles is to identify and assess risks and perform risk management based on the criteria defined by the principles with the aim of adhering to the principle of sustainability of natural resources human health human rights cultural heritage and biodiversity
Armaments
The sensitive sectors that the Bank monitors with special attention include armament production and trade In accordance with the relevant bylaw of its parent Group the Policy of Not Financing of Armaments in 2011 Banca Intesa adopted the Procedure for the Performance of Transactions Related to Armament Production and Trade which regulates the identification and preparation of the summary of the customers engaged in armament and military equipment production and trade the monitoring of transactions and loan applications of the customers engaged in armament and military equipment production and trade the approval of transactions and loan applications related to armament and military equipment production and trade in accordance with the Policy of Not Financing of Armaments as well as the preparation of reports on the transactions related to armament and military equipment production and trade
Reputational Risk Management
The Bank attaches great importance to reputational risks that are assessed as part of the compliance control system which is within the competence of the Compliance Office Banca Intesa believes that the standards in this area as well as the business ethics are the cornerstone of banking operations which by their nature are based on trust Bylaws such as the Code of Ethics policies and other define that any non-compliance with the bylaws the principles and values contained in them as well as with external regulations (laws and secondary legislation) exposes the Bank to a certain level of reputational risks
Fight Against Corruption and Compliance
The internal regulatory source that governs the system for control and mitigation of corruption risks comprises the Code of Ethics the Code of Conduct the Rulebook on Relations with Political Parties and the following Bank procedures the Procedure for the Prevention of Internal Fraud and Abuse at the Bank and the Employment Termination Procedure
19
The Code of Conduct prescribes in detail the rules in connection with receiving and giving gifts and the measures prescribed in the event of corruption are related to the violation of work duties so the measures stipulated by external regulations ie the Labour Law (eg compensation for damage employee suspension or termination) but also the Criminal Code may be pronounced against an employee Based on the Legal Department records no proceedings were initiated against Banca Intesa ad Beograd in connection with corruption since no complaints or notices prior to complaint were delivered during 2013
In the same period the Suspicious Transactions and Know Your Customer training courses were held in this segment by means of e-learning which were received by as many as 8663 of employees during 2013 The training courses were provided for by the current regulations and internal acts of the Bank and were aimed at informing the employees and refreshing their knowledge of the obligation of collecting information about each customer and completing appropriate questionnaires In addition the training informed the employees about the new processes that were implemented as well as about mandatory observance of all duties relating to knowing monitoring and reporting suspicious transactions of customers
The Rulebook on Relations with Political Parties prescribes the obligation of the Bank to refrain from granting donations and sponsorship tobull Political parties and any organisations related to thembull Political movements and their organisational unitsbull Trade union organisationsbull Competent authorities and institutions
The prohibition of granting donations and sponsorship to the above organisations aims at the protection against any grants that would result in a privileged position to the Bank or unfair decisions in favour of the Bank
The Compliance Office as well as the relevant organisational units of the Bank are committed to the regulation of processes and the definition of procedures and their operating rules as well as practice which efficiently prevent the violation of applicable regulations The Compliance Office also provides support to the highest bodies of the Bank in monitoring the compliance risk The compliance risk assessment process is constant Through semi-annual reporting these risks are identified and priority measures for their elimination or mitigation are determined ie the level of efficiency of the existing compliance controls is assessed
The Internal Audit provides direct support to the highest bodies of the Bank in monitoring the compliance with and adequacy of the rules contained in the Bankrsquos bylaws If it identifies critical issues during its activity the Internal Audit informs the relevant organisational units and the highest bodies of the Bank with the aim of determining adequate measures for risk mitigation and the method of their implementation
Protection of Health and Safety
Occupational health and safety at Banca Intesa are regulated in accordance with international directives recommendations and positive laws of the Republic of Serbia
During 2013 an assessment was made of the situation regarding occupational health and safety and the risk level for 207 facilities at which work is performed A schedule of elimination of recorded risks to the health of Bank employees was defined and implemented according to priorities and the budget planned In connection with this risk assessment documents were updated as well
When it comes to physical security three robberies were recorded in 2013 versus two a year earlier and investments in technical protection systems continued
Risk Management in Supply Chain
Supplier Check
The Procurement Unit and the organisational part in charge of procurement are obliged to evaluate the received supplier bids by applying the methods of qualitative and quantitative analysis as well as to align the bid evaluation criteria prior to inviting the bidders to submit offers by combining specific criteria one of which is the Compliance of Bidderrsquos Operations with the Corporate Social Responsibility Principles
20
Health and Safety Risk Assessment
In accordance with the Procurement Policy members of Intesa Sanpaolo Group are expected to include the parameters of assessment of environmental protection and occupational health protection in their procurement process giving priority to the use of recycled paper highly energy efficient products and environment-friendly technical equipment
Group members must include special provisions in the procurement contracts they conclude with their suppliers These provisions provide for the obligation of suppliers to comply with the principles specified in the Intesa Sanpaolo Rules for the Environmental and Energy Policy Constant checks are performed in the countries where legal measures regarding environmental protection were adopted in order to ensure compliance
In the area of personnel training and spreading the awareness of the importance of these issues the training of the employees who directly communicate with suppliers must include fields related to corporate social responsibility as well as to the responsibility for environmental protection
21
CUSTOMERS
Banca Intesa built its leading position in the market of Serbia and the status of stable and reliable partner by fostering trust in the relations with its customers The strengthening of relations with customers is based on constant improvement of the quality of products and services proceeding from specific needs of each segment as well as on full respect for the principles of equality and availability of products and services Key aspects of doing business with customers are the following
bull SUPPORT TO ECONOMY AND AGRICULTUREbull FINANCIAL INCLUSION AND EDUCATIONbull CUSTOMER SATISFACTION
SUPPORT TO ECONOMY AND AGRICULTURE
Banca Intesa continued to provide support to the economy and the agricultural sector in 2013 as well focusing on the development of entrepreneurship and self-employment particularly in the SME segment as well as on the improvement of public infrastructure
Support to the Public Sector
Banca Intesa offered loans from the credit line of the German Development Bank (KfW) to the public sector for financing infrastructure projects and the procurement of equipment in the following areas water management sewerage and wastewater management solid waste management environmental protection and pollution control transport infrastructure public transport and communication systems infrastructure facilities fostering economic development and other social and utility services During 2013 Banca Intesa granted 11 loans totalling 852 million euros while the total value of the project is 47 million euros
Development of Entrepreneurship
Banca Intesa supported the programme of measures of the Government of the Republic of Serbia for encouraging SMEs and entrepreneurs through subsidised loans for liquidity and working assets in 2013 as well The Bankrsquos commitment to provide continuously support to its customers in this segment is also demonstrated by the fact that the Government of the Republic of Serbia implements its programme of measures for the fifth consecutive time During 2013 the Bank granted 414 subsidised loans to SMEs totalling 562 billion dinars which accounted for 107 of the total loans to the SME sector The small business sector was granted 186 billion dinars and 1347 loans which accounted for 15 of the number of loans and 16 of the total loan disbursements to this segment
In cooperation with the National Bank of Serbia and the Kingdom of Denmark the Bank launched the Local Economic Development in the Balkans (LEDIB) programme intended for enterprises entrepreneurs and registered farms from the small business segment with the aim of improving local economic development creating new jobs strengthening organisational capacities introducing new eco-friendly technologies and other favourable impacts on the overall development The credit line was intended for the Nišava Pčinja Toplica Jablanica and Pirot Districts and in 2013 the Bank granted 39 loans totalling 505208 euros under this programme which accounted for 04 of the number of loans and 05 of the total loan disbursements to the small business segment At the same time from the credit line of the European Fund for Southeast Europe (EFSE) which supports enterprises and registered farms through investments and loans for working assets 227 million euros were granted in the small business segment which accounted for 22 of loan disbursements in the segment
With the aim of supporting the promotion and strengthening of womenrsquos entrepreneurship Banca Intesa helped the Association of Businesswomen in Serbia in the organisation of an international conference entitled New Age Woman Entrepreneur New Opportunities for Recovery of Economy in the Region The event contributed
22
to further positioning of Banca Intesa as a bank that actively supports entrepreneurship in the country as part of its efforts to contribute to economic recovery and growth For this purpose the Bank also has in its offer loans for women entrepreneurs in Vojvodina in the form of start-up loans for unemployed women and women who have had a business for up to three years The Bank granted 8 loans totalling 98 million dinars under this programme during 2013 which accounted for a 3 share in the number of loans and a 1 share in the total investment loan disbursements in the small business segment
Promotion of Agricultural Sector
Taking into account that the agricultural sector is very specific because it has a special social as well as environmental importance in addition to economic importance for many years Banca Intesa has been encouraging development and investing in projects and individuals that encourage with their activities further rural development and contribute to an increase in the competitiveness of domestic agriculture
Aware of the great economic potential of this industry as part of the LEDIB programme the Bank granted eight loans to registered farms in 2013 totalling 76219 euros which accounted for 02 of the number of loans and 03 of the total loan disbursements to this customer segment In addition in cooperation with the Guarantee Fund of the Autonomous Province of Vojvodina long-term loans for purchasing new agricultural machinery and equipment were available to customers During 2013 the Bank granted 82 loans of this type totalling 219 million euros which accounted for a 15 share in the number of loans and a 25 share in the total investment loan disbursements in the agricultural segment
In addition on the occasion of the 80th International Agricultural Fair in Novi Sad the Bank prepared a special credit offer intended for owners of registered farms which included the Intesa Farmer dinar loan for financing spring works as well as the Intesa Farmer loan for purchasing agricultural machinery During 2013 22 loans were granted for purchasing tractors and agricultural machinery totalling 341 million dinars which accounted for a 4 share in the number of loans and a 3 share in the total amount of agricultural investment loan disbursements
Banka Intesa launched the Intesa Farmer of the Year project to contribute in yet another way to the promotion of agricultural production in the country and to the strengthening of its competitiveness As part of the project the Bank awarded the most successful farmers in four categories ndash Intesa Crop Farmer Intesa Vegetable Grower Intesa Fruit Grower and Intesa Livestock Breeder and all winners won a trip to Germany to visit the international agricultural fair in Berlin The criteria based on which the Committee selected the winners of the title Intesa Farmer of the Year were the annual results achieved in agricultural production application of modern technologies in production activities the number of household members engaged in the production as well as the minimum three-year cooperation with the Bank which included a loan and regular settlement of their financial obligations
FINANCIAL INCLUSION AND LITERACY
Banka Intesa believes that the availability of financial products to all segments of society is an essential precondition for sustainable development In line with this position the Bank added to its offer specific products that promote financial inclusion and provide support during economic crisis to the most vulnerable social groups such as the elderly or youth as well as to solving broader social problems such as housing availability or health care services
Responding to the Needs of the Community
In 2013 Banca Intesa included in its offer the Intermezzo Cash Loan a new model of cash loan which offers to its users as a unique benefit in the domestic market a possibility of postponing the payment of monthly instalment up to five times during the repayment period Moreover as an additional functionality the Intermezzo loan includes insurance against job loss with no additional cost to the customer The Bank believes that the repayment flexibility provided by this loan model offers citizens unique support in the market at a time when they estimate that they need it most In 2013 Banca Intesa granted 11256 Intermezzo cash loans totalling 198 million euros which accounted for 235 of the total amount of cash loans disbursed during the year
Banca Intesa was the first in the Serbian market to offer loans to pensioners aged up to 74 years The Senior Cash Loans were designed specifically to fit the needs of senior citizens and they also include life insurance which is included in the cost of loan during the entire repayment period During the previous year 19774 loans were granted totalling 239 million euros which accounted for 284 of the total cash loans granted in 2013
23
In 2012 as support to citizens in financing medical services the Intesa Vita programme of consumer and cash loans was developed which includes loans for in vitro fertilisation harvesting and storage of stem cells DNA analysis dental services medical spa and wellness treatments as well as for purchasing baby supplies In 2013 the programme was extended to new purposes - laser vision correction vein operation and purchase of medical aids and 28 loans were granted totalling 126345 euros which accounted for 8 of the total cash loans granted during the year In this unique way the Bank provides the citizens with the possibility of taking care of their health in a responsible and timely manner without suddenly burdening their home budgets
Moreover the Bank continued to provide subsidised housing loans in 2013 as well in order to provide support to young married couples in solving their housing problems granting 224 loans totalling 864 million euros which was 205 of the total housing loans granted during the year At the same time 6544 refinancing loans with insurance against job loss or disability in case of an accident were granted totalling 146 million euros which enabled the customers to service their outstanding liabilities towards Banca Intesa and other banks and which accounted for 173 of the Bankrsquos total cash loans granted during the year
Banca Intesa introduced the Visa Classic Paralympic and Visa Electron Paralympic cards the first charity payment cards in the country in cooperation with the Paralympic Committee of Serbia This was the first initiative aimed at establishing a stable and independent mechanism for long-term assistance to athletes with disabilities and developing paralympic sport in the country During 2013 8345 Visa Classic Paralympic and Visa Electron Paralympic cards were issued which accounted for 14 of all cards issued during the year The Bank also provides debit cards for students which enable free account opening and maintenance for all students who opted for an Intesa Visa Electron Easy Travel Card (ETC) or a Maestro ISIC Card of Banca Intesa of which 4048 were issued in 2013 accounting for 18 of the debit cards issued during the year
Constantly striving to promote savings in 2013 the Bank introduced a new savings model the Month by Month Savings which provides customers with a possibility of reaching higher amounts of savings with lower monthly allocations The product enables saving in dinars and euros at a very attractive interest rate while the customers also have an opportunity to set the payment date and amount themselves
Financial Education
In 2013 as well Banca Intesa remained true to its commitment to support actively financial education by improving customer knowledge Thus in cooperation with Banca IMI SpA a member of Intesa Sanpaolo Group another Intesa Academia workshop was organised this time on the subject of advanced financing and risk management instruments so that Banca Intesarsquos customers could find out more about the possibilities of financing in the international and domestic bond markets and about hedging products for successful management of market risks The workshop brought together the leading world experts in the areas of financing and risk management as well as the most successful customers of the Bank In order to assist its customers in the SME segment in getting informed in more detail about the regulations relating to loan approval and collection Banca Intesa took part in the working breakfast on the subject Security Instruments and Their Collection as the Condition for Financing Company Growth held at the premises of the Serbian Association of Managers On this occasion the legal framework was presented about which enterprises should also get informed in order to know that documentation they will need if they opt for bank loans
At the same time the Factoring Department designed and launched an initiative of organising factoring workshops at the Bankrsquos regional centres Factoring workshops are an interactive form of cooperation and communication with customers with the focus on understanding the term and essence of factoring themselves With the support of regional centres a total of 27 factoring workshops were organised in 22 cities in two cycles in late 2012 and in early 2013 which were attended by nearly 300 corporate customers
As a member of the United Nations Global Compact and its Working Group on CSR in Banking and Finance Banca Intesa works together with the other members on the implementation of projects in the area of financial education which is the main goal of this Group One of the projects actively supported by the Bank is the cooperation with seven secondary schools of economics from six cities in Serbia where there is a ldquobank clerkrdquo educational profile in the area of thematic lectures for teachers and students The Bank representatives gave three lectures during 2013
24
CUSTOMER SATISFACTION
Banca Intesa believes that it is only through an open dialogue with its customers that it can truly understand their needs and expectations and build a long-term partner relationship with them
Meeting the Needs of Customers
Ever since 2008 Banca Intesa has been conducting surveys of its customersrsquo satisfaction with the Bankrsquos products and services in accordance with the methodology of the European Customer Satisfaction Index (ECSI) as part of its initiative named Listening 100 This is a continuous process analyses are made based on the results obtained in the survey and actions are proposed accordingly for improving the customer satisfaction The surveys are repeated at six-monthannual intervals in order to collect feedback from the customersrsquo perspective for the measures taken for the purpose of improving the satisfaction index as well as identifying the directions for further improvement
Looking at the results of the customer satisfaction survey at the end of 2013 a conclusion arises that among other things the basis of good results is a positively rated staff treatment of customers The ECSI as well as the Loyalty indices are stable with a high percentage of customers who stated they would remain Banca Intesa customers in the following 12 months Attempting to encourage its customers to express their opinions in the previous year the Bank clearly communicated the improvements implemented so far based on their suggestions
During 2013 as well Banca Intesa continued to increase the number of branches equipped with the Queue Management System (QMS) which covered approximately 40 per cent of active customers at the end of the year In addition to having a positive impact on customer satisfaction the QMS expansion made it possible to obtain the data necessary for better analysis and organisation of branch operation In addition free internet access via Wi-Fi and daily newspapers were made available to customers at the largest branches
As part of its efforts to improve further customer satisfaction in 2013 Banca Intesa implemented training of over 1500 employees both in its branch network and at its headquarters The training which was implemented as a continuation of the Education 100 programme initiated in 2011 was held on the subject of managing customer satisfaction but also their entire experience in each contact with the Bank
In addition to its efforts to improve its approach to customers and recognising the importance of two-way communication the Bank developed efficient mechanisms for collecting and recording customer feedback The Bank responds to all complaints sent to the Bank via formal complaints mechanisms and does so within the statutory time limit and in accordance with the decision of the National Bank of Serbia Each customer may also personally contact unit employees and if the customer is not satisfied with the answer received heshe can apply to the National Bank of Serbia as the second-instance body with the possibility of mediation The following are available to customers
bull Phone line +381 11 310 88 88bull E-mail kontaktbancaintesarsbull Fax +381 11 310 88 55bull Personal contact ie submitting a written complaint in personbull Contact form on the official website of the Bankbull Bank corporate accounts on social networks (Facebook and Twitter)bull Postal address of the Customer Satisfaction Management Unit Omladinskih brigada 90b 11070 New Belgrade
Transparent Advertising
Lasting relationships based on trust require communication that enables customers to understand clearly the characteristics and value of Banca Intesa products and services Therefore the Bank strives to contribute to the simplification of its products in communication
In its advertising the Bank clearly specifies all customer costs and all of them are included when calculating the effective interest rate which is always clearly and visibly shown as well as representative examples that contain all data in accordance with the Law on the Protection of Financial Service Consumers which demonstrates full transparency when it comes to Bank pricing policy
25
The Bank also strives to formulate the agreements so that they are simple to understand minimising possible misunderstandings and ambiguity by providing clear and exhaustive information It informs its customers in a timely manner of any changes in the agreements and their terms
Data Security
The protection of customer security as well as their assets and confidential information is not only Banca Intesarsquos primary duty but also the basis of the relationship of trust that the Bank wants to reinforce with its customers The protection of persons their assets and valuables as well as a multitude of data and internal organisational processes fully meets the criteria of reliability continuity and confidentiality In addition to its legal obligations Banca Intesa complies with the criteria of absolute transparency in informing its customers of their rights to privacy and the way it treats their personal information
In 2013 Banca Intesa did not find any founded complaint in connection with the violation of customer privacy or any disclosure leakage or theft of customer information
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
19
The Code of Conduct prescribes in detail the rules in connection with receiving and giving gifts and the measures prescribed in the event of corruption are related to the violation of work duties so the measures stipulated by external regulations ie the Labour Law (eg compensation for damage employee suspension or termination) but also the Criminal Code may be pronounced against an employee Based on the Legal Department records no proceedings were initiated against Banca Intesa ad Beograd in connection with corruption since no complaints or notices prior to complaint were delivered during 2013
In the same period the Suspicious Transactions and Know Your Customer training courses were held in this segment by means of e-learning which were received by as many as 8663 of employees during 2013 The training courses were provided for by the current regulations and internal acts of the Bank and were aimed at informing the employees and refreshing their knowledge of the obligation of collecting information about each customer and completing appropriate questionnaires In addition the training informed the employees about the new processes that were implemented as well as about mandatory observance of all duties relating to knowing monitoring and reporting suspicious transactions of customers
The Rulebook on Relations with Political Parties prescribes the obligation of the Bank to refrain from granting donations and sponsorship tobull Political parties and any organisations related to thembull Political movements and their organisational unitsbull Trade union organisationsbull Competent authorities and institutions
The prohibition of granting donations and sponsorship to the above organisations aims at the protection against any grants that would result in a privileged position to the Bank or unfair decisions in favour of the Bank
The Compliance Office as well as the relevant organisational units of the Bank are committed to the regulation of processes and the definition of procedures and their operating rules as well as practice which efficiently prevent the violation of applicable regulations The Compliance Office also provides support to the highest bodies of the Bank in monitoring the compliance risk The compliance risk assessment process is constant Through semi-annual reporting these risks are identified and priority measures for their elimination or mitigation are determined ie the level of efficiency of the existing compliance controls is assessed
The Internal Audit provides direct support to the highest bodies of the Bank in monitoring the compliance with and adequacy of the rules contained in the Bankrsquos bylaws If it identifies critical issues during its activity the Internal Audit informs the relevant organisational units and the highest bodies of the Bank with the aim of determining adequate measures for risk mitigation and the method of their implementation
Protection of Health and Safety
Occupational health and safety at Banca Intesa are regulated in accordance with international directives recommendations and positive laws of the Republic of Serbia
During 2013 an assessment was made of the situation regarding occupational health and safety and the risk level for 207 facilities at which work is performed A schedule of elimination of recorded risks to the health of Bank employees was defined and implemented according to priorities and the budget planned In connection with this risk assessment documents were updated as well
When it comes to physical security three robberies were recorded in 2013 versus two a year earlier and investments in technical protection systems continued
Risk Management in Supply Chain
Supplier Check
The Procurement Unit and the organisational part in charge of procurement are obliged to evaluate the received supplier bids by applying the methods of qualitative and quantitative analysis as well as to align the bid evaluation criteria prior to inviting the bidders to submit offers by combining specific criteria one of which is the Compliance of Bidderrsquos Operations with the Corporate Social Responsibility Principles
20
Health and Safety Risk Assessment
In accordance with the Procurement Policy members of Intesa Sanpaolo Group are expected to include the parameters of assessment of environmental protection and occupational health protection in their procurement process giving priority to the use of recycled paper highly energy efficient products and environment-friendly technical equipment
Group members must include special provisions in the procurement contracts they conclude with their suppliers These provisions provide for the obligation of suppliers to comply with the principles specified in the Intesa Sanpaolo Rules for the Environmental and Energy Policy Constant checks are performed in the countries where legal measures regarding environmental protection were adopted in order to ensure compliance
In the area of personnel training and spreading the awareness of the importance of these issues the training of the employees who directly communicate with suppliers must include fields related to corporate social responsibility as well as to the responsibility for environmental protection
21
CUSTOMERS
Banca Intesa built its leading position in the market of Serbia and the status of stable and reliable partner by fostering trust in the relations with its customers The strengthening of relations with customers is based on constant improvement of the quality of products and services proceeding from specific needs of each segment as well as on full respect for the principles of equality and availability of products and services Key aspects of doing business with customers are the following
bull SUPPORT TO ECONOMY AND AGRICULTUREbull FINANCIAL INCLUSION AND EDUCATIONbull CUSTOMER SATISFACTION
SUPPORT TO ECONOMY AND AGRICULTURE
Banca Intesa continued to provide support to the economy and the agricultural sector in 2013 as well focusing on the development of entrepreneurship and self-employment particularly in the SME segment as well as on the improvement of public infrastructure
Support to the Public Sector
Banca Intesa offered loans from the credit line of the German Development Bank (KfW) to the public sector for financing infrastructure projects and the procurement of equipment in the following areas water management sewerage and wastewater management solid waste management environmental protection and pollution control transport infrastructure public transport and communication systems infrastructure facilities fostering economic development and other social and utility services During 2013 Banca Intesa granted 11 loans totalling 852 million euros while the total value of the project is 47 million euros
Development of Entrepreneurship
Banca Intesa supported the programme of measures of the Government of the Republic of Serbia for encouraging SMEs and entrepreneurs through subsidised loans for liquidity and working assets in 2013 as well The Bankrsquos commitment to provide continuously support to its customers in this segment is also demonstrated by the fact that the Government of the Republic of Serbia implements its programme of measures for the fifth consecutive time During 2013 the Bank granted 414 subsidised loans to SMEs totalling 562 billion dinars which accounted for 107 of the total loans to the SME sector The small business sector was granted 186 billion dinars and 1347 loans which accounted for 15 of the number of loans and 16 of the total loan disbursements to this segment
In cooperation with the National Bank of Serbia and the Kingdom of Denmark the Bank launched the Local Economic Development in the Balkans (LEDIB) programme intended for enterprises entrepreneurs and registered farms from the small business segment with the aim of improving local economic development creating new jobs strengthening organisational capacities introducing new eco-friendly technologies and other favourable impacts on the overall development The credit line was intended for the Nišava Pčinja Toplica Jablanica and Pirot Districts and in 2013 the Bank granted 39 loans totalling 505208 euros under this programme which accounted for 04 of the number of loans and 05 of the total loan disbursements to the small business segment At the same time from the credit line of the European Fund for Southeast Europe (EFSE) which supports enterprises and registered farms through investments and loans for working assets 227 million euros were granted in the small business segment which accounted for 22 of loan disbursements in the segment
With the aim of supporting the promotion and strengthening of womenrsquos entrepreneurship Banca Intesa helped the Association of Businesswomen in Serbia in the organisation of an international conference entitled New Age Woman Entrepreneur New Opportunities for Recovery of Economy in the Region The event contributed
22
to further positioning of Banca Intesa as a bank that actively supports entrepreneurship in the country as part of its efforts to contribute to economic recovery and growth For this purpose the Bank also has in its offer loans for women entrepreneurs in Vojvodina in the form of start-up loans for unemployed women and women who have had a business for up to three years The Bank granted 8 loans totalling 98 million dinars under this programme during 2013 which accounted for a 3 share in the number of loans and a 1 share in the total investment loan disbursements in the small business segment
Promotion of Agricultural Sector
Taking into account that the agricultural sector is very specific because it has a special social as well as environmental importance in addition to economic importance for many years Banca Intesa has been encouraging development and investing in projects and individuals that encourage with their activities further rural development and contribute to an increase in the competitiveness of domestic agriculture
Aware of the great economic potential of this industry as part of the LEDIB programme the Bank granted eight loans to registered farms in 2013 totalling 76219 euros which accounted for 02 of the number of loans and 03 of the total loan disbursements to this customer segment In addition in cooperation with the Guarantee Fund of the Autonomous Province of Vojvodina long-term loans for purchasing new agricultural machinery and equipment were available to customers During 2013 the Bank granted 82 loans of this type totalling 219 million euros which accounted for a 15 share in the number of loans and a 25 share in the total investment loan disbursements in the agricultural segment
In addition on the occasion of the 80th International Agricultural Fair in Novi Sad the Bank prepared a special credit offer intended for owners of registered farms which included the Intesa Farmer dinar loan for financing spring works as well as the Intesa Farmer loan for purchasing agricultural machinery During 2013 22 loans were granted for purchasing tractors and agricultural machinery totalling 341 million dinars which accounted for a 4 share in the number of loans and a 3 share in the total amount of agricultural investment loan disbursements
Banka Intesa launched the Intesa Farmer of the Year project to contribute in yet another way to the promotion of agricultural production in the country and to the strengthening of its competitiveness As part of the project the Bank awarded the most successful farmers in four categories ndash Intesa Crop Farmer Intesa Vegetable Grower Intesa Fruit Grower and Intesa Livestock Breeder and all winners won a trip to Germany to visit the international agricultural fair in Berlin The criteria based on which the Committee selected the winners of the title Intesa Farmer of the Year were the annual results achieved in agricultural production application of modern technologies in production activities the number of household members engaged in the production as well as the minimum three-year cooperation with the Bank which included a loan and regular settlement of their financial obligations
FINANCIAL INCLUSION AND LITERACY
Banka Intesa believes that the availability of financial products to all segments of society is an essential precondition for sustainable development In line with this position the Bank added to its offer specific products that promote financial inclusion and provide support during economic crisis to the most vulnerable social groups such as the elderly or youth as well as to solving broader social problems such as housing availability or health care services
Responding to the Needs of the Community
In 2013 Banca Intesa included in its offer the Intermezzo Cash Loan a new model of cash loan which offers to its users as a unique benefit in the domestic market a possibility of postponing the payment of monthly instalment up to five times during the repayment period Moreover as an additional functionality the Intermezzo loan includes insurance against job loss with no additional cost to the customer The Bank believes that the repayment flexibility provided by this loan model offers citizens unique support in the market at a time when they estimate that they need it most In 2013 Banca Intesa granted 11256 Intermezzo cash loans totalling 198 million euros which accounted for 235 of the total amount of cash loans disbursed during the year
Banca Intesa was the first in the Serbian market to offer loans to pensioners aged up to 74 years The Senior Cash Loans were designed specifically to fit the needs of senior citizens and they also include life insurance which is included in the cost of loan during the entire repayment period During the previous year 19774 loans were granted totalling 239 million euros which accounted for 284 of the total cash loans granted in 2013
23
In 2012 as support to citizens in financing medical services the Intesa Vita programme of consumer and cash loans was developed which includes loans for in vitro fertilisation harvesting and storage of stem cells DNA analysis dental services medical spa and wellness treatments as well as for purchasing baby supplies In 2013 the programme was extended to new purposes - laser vision correction vein operation and purchase of medical aids and 28 loans were granted totalling 126345 euros which accounted for 8 of the total cash loans granted during the year In this unique way the Bank provides the citizens with the possibility of taking care of their health in a responsible and timely manner without suddenly burdening their home budgets
Moreover the Bank continued to provide subsidised housing loans in 2013 as well in order to provide support to young married couples in solving their housing problems granting 224 loans totalling 864 million euros which was 205 of the total housing loans granted during the year At the same time 6544 refinancing loans with insurance against job loss or disability in case of an accident were granted totalling 146 million euros which enabled the customers to service their outstanding liabilities towards Banca Intesa and other banks and which accounted for 173 of the Bankrsquos total cash loans granted during the year
Banca Intesa introduced the Visa Classic Paralympic and Visa Electron Paralympic cards the first charity payment cards in the country in cooperation with the Paralympic Committee of Serbia This was the first initiative aimed at establishing a stable and independent mechanism for long-term assistance to athletes with disabilities and developing paralympic sport in the country During 2013 8345 Visa Classic Paralympic and Visa Electron Paralympic cards were issued which accounted for 14 of all cards issued during the year The Bank also provides debit cards for students which enable free account opening and maintenance for all students who opted for an Intesa Visa Electron Easy Travel Card (ETC) or a Maestro ISIC Card of Banca Intesa of which 4048 were issued in 2013 accounting for 18 of the debit cards issued during the year
Constantly striving to promote savings in 2013 the Bank introduced a new savings model the Month by Month Savings which provides customers with a possibility of reaching higher amounts of savings with lower monthly allocations The product enables saving in dinars and euros at a very attractive interest rate while the customers also have an opportunity to set the payment date and amount themselves
Financial Education
In 2013 as well Banca Intesa remained true to its commitment to support actively financial education by improving customer knowledge Thus in cooperation with Banca IMI SpA a member of Intesa Sanpaolo Group another Intesa Academia workshop was organised this time on the subject of advanced financing and risk management instruments so that Banca Intesarsquos customers could find out more about the possibilities of financing in the international and domestic bond markets and about hedging products for successful management of market risks The workshop brought together the leading world experts in the areas of financing and risk management as well as the most successful customers of the Bank In order to assist its customers in the SME segment in getting informed in more detail about the regulations relating to loan approval and collection Banca Intesa took part in the working breakfast on the subject Security Instruments and Their Collection as the Condition for Financing Company Growth held at the premises of the Serbian Association of Managers On this occasion the legal framework was presented about which enterprises should also get informed in order to know that documentation they will need if they opt for bank loans
At the same time the Factoring Department designed and launched an initiative of organising factoring workshops at the Bankrsquos regional centres Factoring workshops are an interactive form of cooperation and communication with customers with the focus on understanding the term and essence of factoring themselves With the support of regional centres a total of 27 factoring workshops were organised in 22 cities in two cycles in late 2012 and in early 2013 which were attended by nearly 300 corporate customers
As a member of the United Nations Global Compact and its Working Group on CSR in Banking and Finance Banca Intesa works together with the other members on the implementation of projects in the area of financial education which is the main goal of this Group One of the projects actively supported by the Bank is the cooperation with seven secondary schools of economics from six cities in Serbia where there is a ldquobank clerkrdquo educational profile in the area of thematic lectures for teachers and students The Bank representatives gave three lectures during 2013
24
CUSTOMER SATISFACTION
Banca Intesa believes that it is only through an open dialogue with its customers that it can truly understand their needs and expectations and build a long-term partner relationship with them
Meeting the Needs of Customers
Ever since 2008 Banca Intesa has been conducting surveys of its customersrsquo satisfaction with the Bankrsquos products and services in accordance with the methodology of the European Customer Satisfaction Index (ECSI) as part of its initiative named Listening 100 This is a continuous process analyses are made based on the results obtained in the survey and actions are proposed accordingly for improving the customer satisfaction The surveys are repeated at six-monthannual intervals in order to collect feedback from the customersrsquo perspective for the measures taken for the purpose of improving the satisfaction index as well as identifying the directions for further improvement
Looking at the results of the customer satisfaction survey at the end of 2013 a conclusion arises that among other things the basis of good results is a positively rated staff treatment of customers The ECSI as well as the Loyalty indices are stable with a high percentage of customers who stated they would remain Banca Intesa customers in the following 12 months Attempting to encourage its customers to express their opinions in the previous year the Bank clearly communicated the improvements implemented so far based on their suggestions
During 2013 as well Banca Intesa continued to increase the number of branches equipped with the Queue Management System (QMS) which covered approximately 40 per cent of active customers at the end of the year In addition to having a positive impact on customer satisfaction the QMS expansion made it possible to obtain the data necessary for better analysis and organisation of branch operation In addition free internet access via Wi-Fi and daily newspapers were made available to customers at the largest branches
As part of its efforts to improve further customer satisfaction in 2013 Banca Intesa implemented training of over 1500 employees both in its branch network and at its headquarters The training which was implemented as a continuation of the Education 100 programme initiated in 2011 was held on the subject of managing customer satisfaction but also their entire experience in each contact with the Bank
In addition to its efforts to improve its approach to customers and recognising the importance of two-way communication the Bank developed efficient mechanisms for collecting and recording customer feedback The Bank responds to all complaints sent to the Bank via formal complaints mechanisms and does so within the statutory time limit and in accordance with the decision of the National Bank of Serbia Each customer may also personally contact unit employees and if the customer is not satisfied with the answer received heshe can apply to the National Bank of Serbia as the second-instance body with the possibility of mediation The following are available to customers
bull Phone line +381 11 310 88 88bull E-mail kontaktbancaintesarsbull Fax +381 11 310 88 55bull Personal contact ie submitting a written complaint in personbull Contact form on the official website of the Bankbull Bank corporate accounts on social networks (Facebook and Twitter)bull Postal address of the Customer Satisfaction Management Unit Omladinskih brigada 90b 11070 New Belgrade
Transparent Advertising
Lasting relationships based on trust require communication that enables customers to understand clearly the characteristics and value of Banca Intesa products and services Therefore the Bank strives to contribute to the simplification of its products in communication
In its advertising the Bank clearly specifies all customer costs and all of them are included when calculating the effective interest rate which is always clearly and visibly shown as well as representative examples that contain all data in accordance with the Law on the Protection of Financial Service Consumers which demonstrates full transparency when it comes to Bank pricing policy
25
The Bank also strives to formulate the agreements so that they are simple to understand minimising possible misunderstandings and ambiguity by providing clear and exhaustive information It informs its customers in a timely manner of any changes in the agreements and their terms
Data Security
The protection of customer security as well as their assets and confidential information is not only Banca Intesarsquos primary duty but also the basis of the relationship of trust that the Bank wants to reinforce with its customers The protection of persons their assets and valuables as well as a multitude of data and internal organisational processes fully meets the criteria of reliability continuity and confidentiality In addition to its legal obligations Banca Intesa complies with the criteria of absolute transparency in informing its customers of their rights to privacy and the way it treats their personal information
In 2013 Banca Intesa did not find any founded complaint in connection with the violation of customer privacy or any disclosure leakage or theft of customer information
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
20
Health and Safety Risk Assessment
In accordance with the Procurement Policy members of Intesa Sanpaolo Group are expected to include the parameters of assessment of environmental protection and occupational health protection in their procurement process giving priority to the use of recycled paper highly energy efficient products and environment-friendly technical equipment
Group members must include special provisions in the procurement contracts they conclude with their suppliers These provisions provide for the obligation of suppliers to comply with the principles specified in the Intesa Sanpaolo Rules for the Environmental and Energy Policy Constant checks are performed in the countries where legal measures regarding environmental protection were adopted in order to ensure compliance
In the area of personnel training and spreading the awareness of the importance of these issues the training of the employees who directly communicate with suppliers must include fields related to corporate social responsibility as well as to the responsibility for environmental protection
21
CUSTOMERS
Banca Intesa built its leading position in the market of Serbia and the status of stable and reliable partner by fostering trust in the relations with its customers The strengthening of relations with customers is based on constant improvement of the quality of products and services proceeding from specific needs of each segment as well as on full respect for the principles of equality and availability of products and services Key aspects of doing business with customers are the following
bull SUPPORT TO ECONOMY AND AGRICULTUREbull FINANCIAL INCLUSION AND EDUCATIONbull CUSTOMER SATISFACTION
SUPPORT TO ECONOMY AND AGRICULTURE
Banca Intesa continued to provide support to the economy and the agricultural sector in 2013 as well focusing on the development of entrepreneurship and self-employment particularly in the SME segment as well as on the improvement of public infrastructure
Support to the Public Sector
Banca Intesa offered loans from the credit line of the German Development Bank (KfW) to the public sector for financing infrastructure projects and the procurement of equipment in the following areas water management sewerage and wastewater management solid waste management environmental protection and pollution control transport infrastructure public transport and communication systems infrastructure facilities fostering economic development and other social and utility services During 2013 Banca Intesa granted 11 loans totalling 852 million euros while the total value of the project is 47 million euros
Development of Entrepreneurship
Banca Intesa supported the programme of measures of the Government of the Republic of Serbia for encouraging SMEs and entrepreneurs through subsidised loans for liquidity and working assets in 2013 as well The Bankrsquos commitment to provide continuously support to its customers in this segment is also demonstrated by the fact that the Government of the Republic of Serbia implements its programme of measures for the fifth consecutive time During 2013 the Bank granted 414 subsidised loans to SMEs totalling 562 billion dinars which accounted for 107 of the total loans to the SME sector The small business sector was granted 186 billion dinars and 1347 loans which accounted for 15 of the number of loans and 16 of the total loan disbursements to this segment
In cooperation with the National Bank of Serbia and the Kingdom of Denmark the Bank launched the Local Economic Development in the Balkans (LEDIB) programme intended for enterprises entrepreneurs and registered farms from the small business segment with the aim of improving local economic development creating new jobs strengthening organisational capacities introducing new eco-friendly technologies and other favourable impacts on the overall development The credit line was intended for the Nišava Pčinja Toplica Jablanica and Pirot Districts and in 2013 the Bank granted 39 loans totalling 505208 euros under this programme which accounted for 04 of the number of loans and 05 of the total loan disbursements to the small business segment At the same time from the credit line of the European Fund for Southeast Europe (EFSE) which supports enterprises and registered farms through investments and loans for working assets 227 million euros were granted in the small business segment which accounted for 22 of loan disbursements in the segment
With the aim of supporting the promotion and strengthening of womenrsquos entrepreneurship Banca Intesa helped the Association of Businesswomen in Serbia in the organisation of an international conference entitled New Age Woman Entrepreneur New Opportunities for Recovery of Economy in the Region The event contributed
22
to further positioning of Banca Intesa as a bank that actively supports entrepreneurship in the country as part of its efforts to contribute to economic recovery and growth For this purpose the Bank also has in its offer loans for women entrepreneurs in Vojvodina in the form of start-up loans for unemployed women and women who have had a business for up to three years The Bank granted 8 loans totalling 98 million dinars under this programme during 2013 which accounted for a 3 share in the number of loans and a 1 share in the total investment loan disbursements in the small business segment
Promotion of Agricultural Sector
Taking into account that the agricultural sector is very specific because it has a special social as well as environmental importance in addition to economic importance for many years Banca Intesa has been encouraging development and investing in projects and individuals that encourage with their activities further rural development and contribute to an increase in the competitiveness of domestic agriculture
Aware of the great economic potential of this industry as part of the LEDIB programme the Bank granted eight loans to registered farms in 2013 totalling 76219 euros which accounted for 02 of the number of loans and 03 of the total loan disbursements to this customer segment In addition in cooperation with the Guarantee Fund of the Autonomous Province of Vojvodina long-term loans for purchasing new agricultural machinery and equipment were available to customers During 2013 the Bank granted 82 loans of this type totalling 219 million euros which accounted for a 15 share in the number of loans and a 25 share in the total investment loan disbursements in the agricultural segment
In addition on the occasion of the 80th International Agricultural Fair in Novi Sad the Bank prepared a special credit offer intended for owners of registered farms which included the Intesa Farmer dinar loan for financing spring works as well as the Intesa Farmer loan for purchasing agricultural machinery During 2013 22 loans were granted for purchasing tractors and agricultural machinery totalling 341 million dinars which accounted for a 4 share in the number of loans and a 3 share in the total amount of agricultural investment loan disbursements
Banka Intesa launched the Intesa Farmer of the Year project to contribute in yet another way to the promotion of agricultural production in the country and to the strengthening of its competitiveness As part of the project the Bank awarded the most successful farmers in four categories ndash Intesa Crop Farmer Intesa Vegetable Grower Intesa Fruit Grower and Intesa Livestock Breeder and all winners won a trip to Germany to visit the international agricultural fair in Berlin The criteria based on which the Committee selected the winners of the title Intesa Farmer of the Year were the annual results achieved in agricultural production application of modern technologies in production activities the number of household members engaged in the production as well as the minimum three-year cooperation with the Bank which included a loan and regular settlement of their financial obligations
FINANCIAL INCLUSION AND LITERACY
Banka Intesa believes that the availability of financial products to all segments of society is an essential precondition for sustainable development In line with this position the Bank added to its offer specific products that promote financial inclusion and provide support during economic crisis to the most vulnerable social groups such as the elderly or youth as well as to solving broader social problems such as housing availability or health care services
Responding to the Needs of the Community
In 2013 Banca Intesa included in its offer the Intermezzo Cash Loan a new model of cash loan which offers to its users as a unique benefit in the domestic market a possibility of postponing the payment of monthly instalment up to five times during the repayment period Moreover as an additional functionality the Intermezzo loan includes insurance against job loss with no additional cost to the customer The Bank believes that the repayment flexibility provided by this loan model offers citizens unique support in the market at a time when they estimate that they need it most In 2013 Banca Intesa granted 11256 Intermezzo cash loans totalling 198 million euros which accounted for 235 of the total amount of cash loans disbursed during the year
Banca Intesa was the first in the Serbian market to offer loans to pensioners aged up to 74 years The Senior Cash Loans were designed specifically to fit the needs of senior citizens and they also include life insurance which is included in the cost of loan during the entire repayment period During the previous year 19774 loans were granted totalling 239 million euros which accounted for 284 of the total cash loans granted in 2013
23
In 2012 as support to citizens in financing medical services the Intesa Vita programme of consumer and cash loans was developed which includes loans for in vitro fertilisation harvesting and storage of stem cells DNA analysis dental services medical spa and wellness treatments as well as for purchasing baby supplies In 2013 the programme was extended to new purposes - laser vision correction vein operation and purchase of medical aids and 28 loans were granted totalling 126345 euros which accounted for 8 of the total cash loans granted during the year In this unique way the Bank provides the citizens with the possibility of taking care of their health in a responsible and timely manner without suddenly burdening their home budgets
Moreover the Bank continued to provide subsidised housing loans in 2013 as well in order to provide support to young married couples in solving their housing problems granting 224 loans totalling 864 million euros which was 205 of the total housing loans granted during the year At the same time 6544 refinancing loans with insurance against job loss or disability in case of an accident were granted totalling 146 million euros which enabled the customers to service their outstanding liabilities towards Banca Intesa and other banks and which accounted for 173 of the Bankrsquos total cash loans granted during the year
Banca Intesa introduced the Visa Classic Paralympic and Visa Electron Paralympic cards the first charity payment cards in the country in cooperation with the Paralympic Committee of Serbia This was the first initiative aimed at establishing a stable and independent mechanism for long-term assistance to athletes with disabilities and developing paralympic sport in the country During 2013 8345 Visa Classic Paralympic and Visa Electron Paralympic cards were issued which accounted for 14 of all cards issued during the year The Bank also provides debit cards for students which enable free account opening and maintenance for all students who opted for an Intesa Visa Electron Easy Travel Card (ETC) or a Maestro ISIC Card of Banca Intesa of which 4048 were issued in 2013 accounting for 18 of the debit cards issued during the year
Constantly striving to promote savings in 2013 the Bank introduced a new savings model the Month by Month Savings which provides customers with a possibility of reaching higher amounts of savings with lower monthly allocations The product enables saving in dinars and euros at a very attractive interest rate while the customers also have an opportunity to set the payment date and amount themselves
Financial Education
In 2013 as well Banca Intesa remained true to its commitment to support actively financial education by improving customer knowledge Thus in cooperation with Banca IMI SpA a member of Intesa Sanpaolo Group another Intesa Academia workshop was organised this time on the subject of advanced financing and risk management instruments so that Banca Intesarsquos customers could find out more about the possibilities of financing in the international and domestic bond markets and about hedging products for successful management of market risks The workshop brought together the leading world experts in the areas of financing and risk management as well as the most successful customers of the Bank In order to assist its customers in the SME segment in getting informed in more detail about the regulations relating to loan approval and collection Banca Intesa took part in the working breakfast on the subject Security Instruments and Their Collection as the Condition for Financing Company Growth held at the premises of the Serbian Association of Managers On this occasion the legal framework was presented about which enterprises should also get informed in order to know that documentation they will need if they opt for bank loans
At the same time the Factoring Department designed and launched an initiative of organising factoring workshops at the Bankrsquos regional centres Factoring workshops are an interactive form of cooperation and communication with customers with the focus on understanding the term and essence of factoring themselves With the support of regional centres a total of 27 factoring workshops were organised in 22 cities in two cycles in late 2012 and in early 2013 which were attended by nearly 300 corporate customers
As a member of the United Nations Global Compact and its Working Group on CSR in Banking and Finance Banca Intesa works together with the other members on the implementation of projects in the area of financial education which is the main goal of this Group One of the projects actively supported by the Bank is the cooperation with seven secondary schools of economics from six cities in Serbia where there is a ldquobank clerkrdquo educational profile in the area of thematic lectures for teachers and students The Bank representatives gave three lectures during 2013
24
CUSTOMER SATISFACTION
Banca Intesa believes that it is only through an open dialogue with its customers that it can truly understand their needs and expectations and build a long-term partner relationship with them
Meeting the Needs of Customers
Ever since 2008 Banca Intesa has been conducting surveys of its customersrsquo satisfaction with the Bankrsquos products and services in accordance with the methodology of the European Customer Satisfaction Index (ECSI) as part of its initiative named Listening 100 This is a continuous process analyses are made based on the results obtained in the survey and actions are proposed accordingly for improving the customer satisfaction The surveys are repeated at six-monthannual intervals in order to collect feedback from the customersrsquo perspective for the measures taken for the purpose of improving the satisfaction index as well as identifying the directions for further improvement
Looking at the results of the customer satisfaction survey at the end of 2013 a conclusion arises that among other things the basis of good results is a positively rated staff treatment of customers The ECSI as well as the Loyalty indices are stable with a high percentage of customers who stated they would remain Banca Intesa customers in the following 12 months Attempting to encourage its customers to express their opinions in the previous year the Bank clearly communicated the improvements implemented so far based on their suggestions
During 2013 as well Banca Intesa continued to increase the number of branches equipped with the Queue Management System (QMS) which covered approximately 40 per cent of active customers at the end of the year In addition to having a positive impact on customer satisfaction the QMS expansion made it possible to obtain the data necessary for better analysis and organisation of branch operation In addition free internet access via Wi-Fi and daily newspapers were made available to customers at the largest branches
As part of its efforts to improve further customer satisfaction in 2013 Banca Intesa implemented training of over 1500 employees both in its branch network and at its headquarters The training which was implemented as a continuation of the Education 100 programme initiated in 2011 was held on the subject of managing customer satisfaction but also their entire experience in each contact with the Bank
In addition to its efforts to improve its approach to customers and recognising the importance of two-way communication the Bank developed efficient mechanisms for collecting and recording customer feedback The Bank responds to all complaints sent to the Bank via formal complaints mechanisms and does so within the statutory time limit and in accordance with the decision of the National Bank of Serbia Each customer may also personally contact unit employees and if the customer is not satisfied with the answer received heshe can apply to the National Bank of Serbia as the second-instance body with the possibility of mediation The following are available to customers
bull Phone line +381 11 310 88 88bull E-mail kontaktbancaintesarsbull Fax +381 11 310 88 55bull Personal contact ie submitting a written complaint in personbull Contact form on the official website of the Bankbull Bank corporate accounts on social networks (Facebook and Twitter)bull Postal address of the Customer Satisfaction Management Unit Omladinskih brigada 90b 11070 New Belgrade
Transparent Advertising
Lasting relationships based on trust require communication that enables customers to understand clearly the characteristics and value of Banca Intesa products and services Therefore the Bank strives to contribute to the simplification of its products in communication
In its advertising the Bank clearly specifies all customer costs and all of them are included when calculating the effective interest rate which is always clearly and visibly shown as well as representative examples that contain all data in accordance with the Law on the Protection of Financial Service Consumers which demonstrates full transparency when it comes to Bank pricing policy
25
The Bank also strives to formulate the agreements so that they are simple to understand minimising possible misunderstandings and ambiguity by providing clear and exhaustive information It informs its customers in a timely manner of any changes in the agreements and their terms
Data Security
The protection of customer security as well as their assets and confidential information is not only Banca Intesarsquos primary duty but also the basis of the relationship of trust that the Bank wants to reinforce with its customers The protection of persons their assets and valuables as well as a multitude of data and internal organisational processes fully meets the criteria of reliability continuity and confidentiality In addition to its legal obligations Banca Intesa complies with the criteria of absolute transparency in informing its customers of their rights to privacy and the way it treats their personal information
In 2013 Banca Intesa did not find any founded complaint in connection with the violation of customer privacy or any disclosure leakage or theft of customer information
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
21
CUSTOMERS
Banca Intesa built its leading position in the market of Serbia and the status of stable and reliable partner by fostering trust in the relations with its customers The strengthening of relations with customers is based on constant improvement of the quality of products and services proceeding from specific needs of each segment as well as on full respect for the principles of equality and availability of products and services Key aspects of doing business with customers are the following
bull SUPPORT TO ECONOMY AND AGRICULTUREbull FINANCIAL INCLUSION AND EDUCATIONbull CUSTOMER SATISFACTION
SUPPORT TO ECONOMY AND AGRICULTURE
Banca Intesa continued to provide support to the economy and the agricultural sector in 2013 as well focusing on the development of entrepreneurship and self-employment particularly in the SME segment as well as on the improvement of public infrastructure
Support to the Public Sector
Banca Intesa offered loans from the credit line of the German Development Bank (KfW) to the public sector for financing infrastructure projects and the procurement of equipment in the following areas water management sewerage and wastewater management solid waste management environmental protection and pollution control transport infrastructure public transport and communication systems infrastructure facilities fostering economic development and other social and utility services During 2013 Banca Intesa granted 11 loans totalling 852 million euros while the total value of the project is 47 million euros
Development of Entrepreneurship
Banca Intesa supported the programme of measures of the Government of the Republic of Serbia for encouraging SMEs and entrepreneurs through subsidised loans for liquidity and working assets in 2013 as well The Bankrsquos commitment to provide continuously support to its customers in this segment is also demonstrated by the fact that the Government of the Republic of Serbia implements its programme of measures for the fifth consecutive time During 2013 the Bank granted 414 subsidised loans to SMEs totalling 562 billion dinars which accounted for 107 of the total loans to the SME sector The small business sector was granted 186 billion dinars and 1347 loans which accounted for 15 of the number of loans and 16 of the total loan disbursements to this segment
In cooperation with the National Bank of Serbia and the Kingdom of Denmark the Bank launched the Local Economic Development in the Balkans (LEDIB) programme intended for enterprises entrepreneurs and registered farms from the small business segment with the aim of improving local economic development creating new jobs strengthening organisational capacities introducing new eco-friendly technologies and other favourable impacts on the overall development The credit line was intended for the Nišava Pčinja Toplica Jablanica and Pirot Districts and in 2013 the Bank granted 39 loans totalling 505208 euros under this programme which accounted for 04 of the number of loans and 05 of the total loan disbursements to the small business segment At the same time from the credit line of the European Fund for Southeast Europe (EFSE) which supports enterprises and registered farms through investments and loans for working assets 227 million euros were granted in the small business segment which accounted for 22 of loan disbursements in the segment
With the aim of supporting the promotion and strengthening of womenrsquos entrepreneurship Banca Intesa helped the Association of Businesswomen in Serbia in the organisation of an international conference entitled New Age Woman Entrepreneur New Opportunities for Recovery of Economy in the Region The event contributed
22
to further positioning of Banca Intesa as a bank that actively supports entrepreneurship in the country as part of its efforts to contribute to economic recovery and growth For this purpose the Bank also has in its offer loans for women entrepreneurs in Vojvodina in the form of start-up loans for unemployed women and women who have had a business for up to three years The Bank granted 8 loans totalling 98 million dinars under this programme during 2013 which accounted for a 3 share in the number of loans and a 1 share in the total investment loan disbursements in the small business segment
Promotion of Agricultural Sector
Taking into account that the agricultural sector is very specific because it has a special social as well as environmental importance in addition to economic importance for many years Banca Intesa has been encouraging development and investing in projects and individuals that encourage with their activities further rural development and contribute to an increase in the competitiveness of domestic agriculture
Aware of the great economic potential of this industry as part of the LEDIB programme the Bank granted eight loans to registered farms in 2013 totalling 76219 euros which accounted for 02 of the number of loans and 03 of the total loan disbursements to this customer segment In addition in cooperation with the Guarantee Fund of the Autonomous Province of Vojvodina long-term loans for purchasing new agricultural machinery and equipment were available to customers During 2013 the Bank granted 82 loans of this type totalling 219 million euros which accounted for a 15 share in the number of loans and a 25 share in the total investment loan disbursements in the agricultural segment
In addition on the occasion of the 80th International Agricultural Fair in Novi Sad the Bank prepared a special credit offer intended for owners of registered farms which included the Intesa Farmer dinar loan for financing spring works as well as the Intesa Farmer loan for purchasing agricultural machinery During 2013 22 loans were granted for purchasing tractors and agricultural machinery totalling 341 million dinars which accounted for a 4 share in the number of loans and a 3 share in the total amount of agricultural investment loan disbursements
Banka Intesa launched the Intesa Farmer of the Year project to contribute in yet another way to the promotion of agricultural production in the country and to the strengthening of its competitiveness As part of the project the Bank awarded the most successful farmers in four categories ndash Intesa Crop Farmer Intesa Vegetable Grower Intesa Fruit Grower and Intesa Livestock Breeder and all winners won a trip to Germany to visit the international agricultural fair in Berlin The criteria based on which the Committee selected the winners of the title Intesa Farmer of the Year were the annual results achieved in agricultural production application of modern technologies in production activities the number of household members engaged in the production as well as the minimum three-year cooperation with the Bank which included a loan and regular settlement of their financial obligations
FINANCIAL INCLUSION AND LITERACY
Banka Intesa believes that the availability of financial products to all segments of society is an essential precondition for sustainable development In line with this position the Bank added to its offer specific products that promote financial inclusion and provide support during economic crisis to the most vulnerable social groups such as the elderly or youth as well as to solving broader social problems such as housing availability or health care services
Responding to the Needs of the Community
In 2013 Banca Intesa included in its offer the Intermezzo Cash Loan a new model of cash loan which offers to its users as a unique benefit in the domestic market a possibility of postponing the payment of monthly instalment up to five times during the repayment period Moreover as an additional functionality the Intermezzo loan includes insurance against job loss with no additional cost to the customer The Bank believes that the repayment flexibility provided by this loan model offers citizens unique support in the market at a time when they estimate that they need it most In 2013 Banca Intesa granted 11256 Intermezzo cash loans totalling 198 million euros which accounted for 235 of the total amount of cash loans disbursed during the year
Banca Intesa was the first in the Serbian market to offer loans to pensioners aged up to 74 years The Senior Cash Loans were designed specifically to fit the needs of senior citizens and they also include life insurance which is included in the cost of loan during the entire repayment period During the previous year 19774 loans were granted totalling 239 million euros which accounted for 284 of the total cash loans granted in 2013
23
In 2012 as support to citizens in financing medical services the Intesa Vita programme of consumer and cash loans was developed which includes loans for in vitro fertilisation harvesting and storage of stem cells DNA analysis dental services medical spa and wellness treatments as well as for purchasing baby supplies In 2013 the programme was extended to new purposes - laser vision correction vein operation and purchase of medical aids and 28 loans were granted totalling 126345 euros which accounted for 8 of the total cash loans granted during the year In this unique way the Bank provides the citizens with the possibility of taking care of their health in a responsible and timely manner without suddenly burdening their home budgets
Moreover the Bank continued to provide subsidised housing loans in 2013 as well in order to provide support to young married couples in solving their housing problems granting 224 loans totalling 864 million euros which was 205 of the total housing loans granted during the year At the same time 6544 refinancing loans with insurance against job loss or disability in case of an accident were granted totalling 146 million euros which enabled the customers to service their outstanding liabilities towards Banca Intesa and other banks and which accounted for 173 of the Bankrsquos total cash loans granted during the year
Banca Intesa introduced the Visa Classic Paralympic and Visa Electron Paralympic cards the first charity payment cards in the country in cooperation with the Paralympic Committee of Serbia This was the first initiative aimed at establishing a stable and independent mechanism for long-term assistance to athletes with disabilities and developing paralympic sport in the country During 2013 8345 Visa Classic Paralympic and Visa Electron Paralympic cards were issued which accounted for 14 of all cards issued during the year The Bank also provides debit cards for students which enable free account opening and maintenance for all students who opted for an Intesa Visa Electron Easy Travel Card (ETC) or a Maestro ISIC Card of Banca Intesa of which 4048 were issued in 2013 accounting for 18 of the debit cards issued during the year
Constantly striving to promote savings in 2013 the Bank introduced a new savings model the Month by Month Savings which provides customers with a possibility of reaching higher amounts of savings with lower monthly allocations The product enables saving in dinars and euros at a very attractive interest rate while the customers also have an opportunity to set the payment date and amount themselves
Financial Education
In 2013 as well Banca Intesa remained true to its commitment to support actively financial education by improving customer knowledge Thus in cooperation with Banca IMI SpA a member of Intesa Sanpaolo Group another Intesa Academia workshop was organised this time on the subject of advanced financing and risk management instruments so that Banca Intesarsquos customers could find out more about the possibilities of financing in the international and domestic bond markets and about hedging products for successful management of market risks The workshop brought together the leading world experts in the areas of financing and risk management as well as the most successful customers of the Bank In order to assist its customers in the SME segment in getting informed in more detail about the regulations relating to loan approval and collection Banca Intesa took part in the working breakfast on the subject Security Instruments and Their Collection as the Condition for Financing Company Growth held at the premises of the Serbian Association of Managers On this occasion the legal framework was presented about which enterprises should also get informed in order to know that documentation they will need if they opt for bank loans
At the same time the Factoring Department designed and launched an initiative of organising factoring workshops at the Bankrsquos regional centres Factoring workshops are an interactive form of cooperation and communication with customers with the focus on understanding the term and essence of factoring themselves With the support of regional centres a total of 27 factoring workshops were organised in 22 cities in two cycles in late 2012 and in early 2013 which were attended by nearly 300 corporate customers
As a member of the United Nations Global Compact and its Working Group on CSR in Banking and Finance Banca Intesa works together with the other members on the implementation of projects in the area of financial education which is the main goal of this Group One of the projects actively supported by the Bank is the cooperation with seven secondary schools of economics from six cities in Serbia where there is a ldquobank clerkrdquo educational profile in the area of thematic lectures for teachers and students The Bank representatives gave three lectures during 2013
24
CUSTOMER SATISFACTION
Banca Intesa believes that it is only through an open dialogue with its customers that it can truly understand their needs and expectations and build a long-term partner relationship with them
Meeting the Needs of Customers
Ever since 2008 Banca Intesa has been conducting surveys of its customersrsquo satisfaction with the Bankrsquos products and services in accordance with the methodology of the European Customer Satisfaction Index (ECSI) as part of its initiative named Listening 100 This is a continuous process analyses are made based on the results obtained in the survey and actions are proposed accordingly for improving the customer satisfaction The surveys are repeated at six-monthannual intervals in order to collect feedback from the customersrsquo perspective for the measures taken for the purpose of improving the satisfaction index as well as identifying the directions for further improvement
Looking at the results of the customer satisfaction survey at the end of 2013 a conclusion arises that among other things the basis of good results is a positively rated staff treatment of customers The ECSI as well as the Loyalty indices are stable with a high percentage of customers who stated they would remain Banca Intesa customers in the following 12 months Attempting to encourage its customers to express their opinions in the previous year the Bank clearly communicated the improvements implemented so far based on their suggestions
During 2013 as well Banca Intesa continued to increase the number of branches equipped with the Queue Management System (QMS) which covered approximately 40 per cent of active customers at the end of the year In addition to having a positive impact on customer satisfaction the QMS expansion made it possible to obtain the data necessary for better analysis and organisation of branch operation In addition free internet access via Wi-Fi and daily newspapers were made available to customers at the largest branches
As part of its efforts to improve further customer satisfaction in 2013 Banca Intesa implemented training of over 1500 employees both in its branch network and at its headquarters The training which was implemented as a continuation of the Education 100 programme initiated in 2011 was held on the subject of managing customer satisfaction but also their entire experience in each contact with the Bank
In addition to its efforts to improve its approach to customers and recognising the importance of two-way communication the Bank developed efficient mechanisms for collecting and recording customer feedback The Bank responds to all complaints sent to the Bank via formal complaints mechanisms and does so within the statutory time limit and in accordance with the decision of the National Bank of Serbia Each customer may also personally contact unit employees and if the customer is not satisfied with the answer received heshe can apply to the National Bank of Serbia as the second-instance body with the possibility of mediation The following are available to customers
bull Phone line +381 11 310 88 88bull E-mail kontaktbancaintesarsbull Fax +381 11 310 88 55bull Personal contact ie submitting a written complaint in personbull Contact form on the official website of the Bankbull Bank corporate accounts on social networks (Facebook and Twitter)bull Postal address of the Customer Satisfaction Management Unit Omladinskih brigada 90b 11070 New Belgrade
Transparent Advertising
Lasting relationships based on trust require communication that enables customers to understand clearly the characteristics and value of Banca Intesa products and services Therefore the Bank strives to contribute to the simplification of its products in communication
In its advertising the Bank clearly specifies all customer costs and all of them are included when calculating the effective interest rate which is always clearly and visibly shown as well as representative examples that contain all data in accordance with the Law on the Protection of Financial Service Consumers which demonstrates full transparency when it comes to Bank pricing policy
25
The Bank also strives to formulate the agreements so that they are simple to understand minimising possible misunderstandings and ambiguity by providing clear and exhaustive information It informs its customers in a timely manner of any changes in the agreements and their terms
Data Security
The protection of customer security as well as their assets and confidential information is not only Banca Intesarsquos primary duty but also the basis of the relationship of trust that the Bank wants to reinforce with its customers The protection of persons their assets and valuables as well as a multitude of data and internal organisational processes fully meets the criteria of reliability continuity and confidentiality In addition to its legal obligations Banca Intesa complies with the criteria of absolute transparency in informing its customers of their rights to privacy and the way it treats their personal information
In 2013 Banca Intesa did not find any founded complaint in connection with the violation of customer privacy or any disclosure leakage or theft of customer information
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
22
to further positioning of Banca Intesa as a bank that actively supports entrepreneurship in the country as part of its efforts to contribute to economic recovery and growth For this purpose the Bank also has in its offer loans for women entrepreneurs in Vojvodina in the form of start-up loans for unemployed women and women who have had a business for up to three years The Bank granted 8 loans totalling 98 million dinars under this programme during 2013 which accounted for a 3 share in the number of loans and a 1 share in the total investment loan disbursements in the small business segment
Promotion of Agricultural Sector
Taking into account that the agricultural sector is very specific because it has a special social as well as environmental importance in addition to economic importance for many years Banca Intesa has been encouraging development and investing in projects and individuals that encourage with their activities further rural development and contribute to an increase in the competitiveness of domestic agriculture
Aware of the great economic potential of this industry as part of the LEDIB programme the Bank granted eight loans to registered farms in 2013 totalling 76219 euros which accounted for 02 of the number of loans and 03 of the total loan disbursements to this customer segment In addition in cooperation with the Guarantee Fund of the Autonomous Province of Vojvodina long-term loans for purchasing new agricultural machinery and equipment were available to customers During 2013 the Bank granted 82 loans of this type totalling 219 million euros which accounted for a 15 share in the number of loans and a 25 share in the total investment loan disbursements in the agricultural segment
In addition on the occasion of the 80th International Agricultural Fair in Novi Sad the Bank prepared a special credit offer intended for owners of registered farms which included the Intesa Farmer dinar loan for financing spring works as well as the Intesa Farmer loan for purchasing agricultural machinery During 2013 22 loans were granted for purchasing tractors and agricultural machinery totalling 341 million dinars which accounted for a 4 share in the number of loans and a 3 share in the total amount of agricultural investment loan disbursements
Banka Intesa launched the Intesa Farmer of the Year project to contribute in yet another way to the promotion of agricultural production in the country and to the strengthening of its competitiveness As part of the project the Bank awarded the most successful farmers in four categories ndash Intesa Crop Farmer Intesa Vegetable Grower Intesa Fruit Grower and Intesa Livestock Breeder and all winners won a trip to Germany to visit the international agricultural fair in Berlin The criteria based on which the Committee selected the winners of the title Intesa Farmer of the Year were the annual results achieved in agricultural production application of modern technologies in production activities the number of household members engaged in the production as well as the minimum three-year cooperation with the Bank which included a loan and regular settlement of their financial obligations
FINANCIAL INCLUSION AND LITERACY
Banka Intesa believes that the availability of financial products to all segments of society is an essential precondition for sustainable development In line with this position the Bank added to its offer specific products that promote financial inclusion and provide support during economic crisis to the most vulnerable social groups such as the elderly or youth as well as to solving broader social problems such as housing availability or health care services
Responding to the Needs of the Community
In 2013 Banca Intesa included in its offer the Intermezzo Cash Loan a new model of cash loan which offers to its users as a unique benefit in the domestic market a possibility of postponing the payment of monthly instalment up to five times during the repayment period Moreover as an additional functionality the Intermezzo loan includes insurance against job loss with no additional cost to the customer The Bank believes that the repayment flexibility provided by this loan model offers citizens unique support in the market at a time when they estimate that they need it most In 2013 Banca Intesa granted 11256 Intermezzo cash loans totalling 198 million euros which accounted for 235 of the total amount of cash loans disbursed during the year
Banca Intesa was the first in the Serbian market to offer loans to pensioners aged up to 74 years The Senior Cash Loans were designed specifically to fit the needs of senior citizens and they also include life insurance which is included in the cost of loan during the entire repayment period During the previous year 19774 loans were granted totalling 239 million euros which accounted for 284 of the total cash loans granted in 2013
23
In 2012 as support to citizens in financing medical services the Intesa Vita programme of consumer and cash loans was developed which includes loans for in vitro fertilisation harvesting and storage of stem cells DNA analysis dental services medical spa and wellness treatments as well as for purchasing baby supplies In 2013 the programme was extended to new purposes - laser vision correction vein operation and purchase of medical aids and 28 loans were granted totalling 126345 euros which accounted for 8 of the total cash loans granted during the year In this unique way the Bank provides the citizens with the possibility of taking care of their health in a responsible and timely manner without suddenly burdening their home budgets
Moreover the Bank continued to provide subsidised housing loans in 2013 as well in order to provide support to young married couples in solving their housing problems granting 224 loans totalling 864 million euros which was 205 of the total housing loans granted during the year At the same time 6544 refinancing loans with insurance against job loss or disability in case of an accident were granted totalling 146 million euros which enabled the customers to service their outstanding liabilities towards Banca Intesa and other banks and which accounted for 173 of the Bankrsquos total cash loans granted during the year
Banca Intesa introduced the Visa Classic Paralympic and Visa Electron Paralympic cards the first charity payment cards in the country in cooperation with the Paralympic Committee of Serbia This was the first initiative aimed at establishing a stable and independent mechanism for long-term assistance to athletes with disabilities and developing paralympic sport in the country During 2013 8345 Visa Classic Paralympic and Visa Electron Paralympic cards were issued which accounted for 14 of all cards issued during the year The Bank also provides debit cards for students which enable free account opening and maintenance for all students who opted for an Intesa Visa Electron Easy Travel Card (ETC) or a Maestro ISIC Card of Banca Intesa of which 4048 were issued in 2013 accounting for 18 of the debit cards issued during the year
Constantly striving to promote savings in 2013 the Bank introduced a new savings model the Month by Month Savings which provides customers with a possibility of reaching higher amounts of savings with lower monthly allocations The product enables saving in dinars and euros at a very attractive interest rate while the customers also have an opportunity to set the payment date and amount themselves
Financial Education
In 2013 as well Banca Intesa remained true to its commitment to support actively financial education by improving customer knowledge Thus in cooperation with Banca IMI SpA a member of Intesa Sanpaolo Group another Intesa Academia workshop was organised this time on the subject of advanced financing and risk management instruments so that Banca Intesarsquos customers could find out more about the possibilities of financing in the international and domestic bond markets and about hedging products for successful management of market risks The workshop brought together the leading world experts in the areas of financing and risk management as well as the most successful customers of the Bank In order to assist its customers in the SME segment in getting informed in more detail about the regulations relating to loan approval and collection Banca Intesa took part in the working breakfast on the subject Security Instruments and Their Collection as the Condition for Financing Company Growth held at the premises of the Serbian Association of Managers On this occasion the legal framework was presented about which enterprises should also get informed in order to know that documentation they will need if they opt for bank loans
At the same time the Factoring Department designed and launched an initiative of organising factoring workshops at the Bankrsquos regional centres Factoring workshops are an interactive form of cooperation and communication with customers with the focus on understanding the term and essence of factoring themselves With the support of regional centres a total of 27 factoring workshops were organised in 22 cities in two cycles in late 2012 and in early 2013 which were attended by nearly 300 corporate customers
As a member of the United Nations Global Compact and its Working Group on CSR in Banking and Finance Banca Intesa works together with the other members on the implementation of projects in the area of financial education which is the main goal of this Group One of the projects actively supported by the Bank is the cooperation with seven secondary schools of economics from six cities in Serbia where there is a ldquobank clerkrdquo educational profile in the area of thematic lectures for teachers and students The Bank representatives gave three lectures during 2013
24
CUSTOMER SATISFACTION
Banca Intesa believes that it is only through an open dialogue with its customers that it can truly understand their needs and expectations and build a long-term partner relationship with them
Meeting the Needs of Customers
Ever since 2008 Banca Intesa has been conducting surveys of its customersrsquo satisfaction with the Bankrsquos products and services in accordance with the methodology of the European Customer Satisfaction Index (ECSI) as part of its initiative named Listening 100 This is a continuous process analyses are made based on the results obtained in the survey and actions are proposed accordingly for improving the customer satisfaction The surveys are repeated at six-monthannual intervals in order to collect feedback from the customersrsquo perspective for the measures taken for the purpose of improving the satisfaction index as well as identifying the directions for further improvement
Looking at the results of the customer satisfaction survey at the end of 2013 a conclusion arises that among other things the basis of good results is a positively rated staff treatment of customers The ECSI as well as the Loyalty indices are stable with a high percentage of customers who stated they would remain Banca Intesa customers in the following 12 months Attempting to encourage its customers to express their opinions in the previous year the Bank clearly communicated the improvements implemented so far based on their suggestions
During 2013 as well Banca Intesa continued to increase the number of branches equipped with the Queue Management System (QMS) which covered approximately 40 per cent of active customers at the end of the year In addition to having a positive impact on customer satisfaction the QMS expansion made it possible to obtain the data necessary for better analysis and organisation of branch operation In addition free internet access via Wi-Fi and daily newspapers were made available to customers at the largest branches
As part of its efforts to improve further customer satisfaction in 2013 Banca Intesa implemented training of over 1500 employees both in its branch network and at its headquarters The training which was implemented as a continuation of the Education 100 programme initiated in 2011 was held on the subject of managing customer satisfaction but also their entire experience in each contact with the Bank
In addition to its efforts to improve its approach to customers and recognising the importance of two-way communication the Bank developed efficient mechanisms for collecting and recording customer feedback The Bank responds to all complaints sent to the Bank via formal complaints mechanisms and does so within the statutory time limit and in accordance with the decision of the National Bank of Serbia Each customer may also personally contact unit employees and if the customer is not satisfied with the answer received heshe can apply to the National Bank of Serbia as the second-instance body with the possibility of mediation The following are available to customers
bull Phone line +381 11 310 88 88bull E-mail kontaktbancaintesarsbull Fax +381 11 310 88 55bull Personal contact ie submitting a written complaint in personbull Contact form on the official website of the Bankbull Bank corporate accounts on social networks (Facebook and Twitter)bull Postal address of the Customer Satisfaction Management Unit Omladinskih brigada 90b 11070 New Belgrade
Transparent Advertising
Lasting relationships based on trust require communication that enables customers to understand clearly the characteristics and value of Banca Intesa products and services Therefore the Bank strives to contribute to the simplification of its products in communication
In its advertising the Bank clearly specifies all customer costs and all of them are included when calculating the effective interest rate which is always clearly and visibly shown as well as representative examples that contain all data in accordance with the Law on the Protection of Financial Service Consumers which demonstrates full transparency when it comes to Bank pricing policy
25
The Bank also strives to formulate the agreements so that they are simple to understand minimising possible misunderstandings and ambiguity by providing clear and exhaustive information It informs its customers in a timely manner of any changes in the agreements and their terms
Data Security
The protection of customer security as well as their assets and confidential information is not only Banca Intesarsquos primary duty but also the basis of the relationship of trust that the Bank wants to reinforce with its customers The protection of persons their assets and valuables as well as a multitude of data and internal organisational processes fully meets the criteria of reliability continuity and confidentiality In addition to its legal obligations Banca Intesa complies with the criteria of absolute transparency in informing its customers of their rights to privacy and the way it treats their personal information
In 2013 Banca Intesa did not find any founded complaint in connection with the violation of customer privacy or any disclosure leakage or theft of customer information
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
23
In 2012 as support to citizens in financing medical services the Intesa Vita programme of consumer and cash loans was developed which includes loans for in vitro fertilisation harvesting and storage of stem cells DNA analysis dental services medical spa and wellness treatments as well as for purchasing baby supplies In 2013 the programme was extended to new purposes - laser vision correction vein operation and purchase of medical aids and 28 loans were granted totalling 126345 euros which accounted for 8 of the total cash loans granted during the year In this unique way the Bank provides the citizens with the possibility of taking care of their health in a responsible and timely manner without suddenly burdening their home budgets
Moreover the Bank continued to provide subsidised housing loans in 2013 as well in order to provide support to young married couples in solving their housing problems granting 224 loans totalling 864 million euros which was 205 of the total housing loans granted during the year At the same time 6544 refinancing loans with insurance against job loss or disability in case of an accident were granted totalling 146 million euros which enabled the customers to service their outstanding liabilities towards Banca Intesa and other banks and which accounted for 173 of the Bankrsquos total cash loans granted during the year
Banca Intesa introduced the Visa Classic Paralympic and Visa Electron Paralympic cards the first charity payment cards in the country in cooperation with the Paralympic Committee of Serbia This was the first initiative aimed at establishing a stable and independent mechanism for long-term assistance to athletes with disabilities and developing paralympic sport in the country During 2013 8345 Visa Classic Paralympic and Visa Electron Paralympic cards were issued which accounted for 14 of all cards issued during the year The Bank also provides debit cards for students which enable free account opening and maintenance for all students who opted for an Intesa Visa Electron Easy Travel Card (ETC) or a Maestro ISIC Card of Banca Intesa of which 4048 were issued in 2013 accounting for 18 of the debit cards issued during the year
Constantly striving to promote savings in 2013 the Bank introduced a new savings model the Month by Month Savings which provides customers with a possibility of reaching higher amounts of savings with lower monthly allocations The product enables saving in dinars and euros at a very attractive interest rate while the customers also have an opportunity to set the payment date and amount themselves
Financial Education
In 2013 as well Banca Intesa remained true to its commitment to support actively financial education by improving customer knowledge Thus in cooperation with Banca IMI SpA a member of Intesa Sanpaolo Group another Intesa Academia workshop was organised this time on the subject of advanced financing and risk management instruments so that Banca Intesarsquos customers could find out more about the possibilities of financing in the international and domestic bond markets and about hedging products for successful management of market risks The workshop brought together the leading world experts in the areas of financing and risk management as well as the most successful customers of the Bank In order to assist its customers in the SME segment in getting informed in more detail about the regulations relating to loan approval and collection Banca Intesa took part in the working breakfast on the subject Security Instruments and Their Collection as the Condition for Financing Company Growth held at the premises of the Serbian Association of Managers On this occasion the legal framework was presented about which enterprises should also get informed in order to know that documentation they will need if they opt for bank loans
At the same time the Factoring Department designed and launched an initiative of organising factoring workshops at the Bankrsquos regional centres Factoring workshops are an interactive form of cooperation and communication with customers with the focus on understanding the term and essence of factoring themselves With the support of regional centres a total of 27 factoring workshops were organised in 22 cities in two cycles in late 2012 and in early 2013 which were attended by nearly 300 corporate customers
As a member of the United Nations Global Compact and its Working Group on CSR in Banking and Finance Banca Intesa works together with the other members on the implementation of projects in the area of financial education which is the main goal of this Group One of the projects actively supported by the Bank is the cooperation with seven secondary schools of economics from six cities in Serbia where there is a ldquobank clerkrdquo educational profile in the area of thematic lectures for teachers and students The Bank representatives gave three lectures during 2013
24
CUSTOMER SATISFACTION
Banca Intesa believes that it is only through an open dialogue with its customers that it can truly understand their needs and expectations and build a long-term partner relationship with them
Meeting the Needs of Customers
Ever since 2008 Banca Intesa has been conducting surveys of its customersrsquo satisfaction with the Bankrsquos products and services in accordance with the methodology of the European Customer Satisfaction Index (ECSI) as part of its initiative named Listening 100 This is a continuous process analyses are made based on the results obtained in the survey and actions are proposed accordingly for improving the customer satisfaction The surveys are repeated at six-monthannual intervals in order to collect feedback from the customersrsquo perspective for the measures taken for the purpose of improving the satisfaction index as well as identifying the directions for further improvement
Looking at the results of the customer satisfaction survey at the end of 2013 a conclusion arises that among other things the basis of good results is a positively rated staff treatment of customers The ECSI as well as the Loyalty indices are stable with a high percentage of customers who stated they would remain Banca Intesa customers in the following 12 months Attempting to encourage its customers to express their opinions in the previous year the Bank clearly communicated the improvements implemented so far based on their suggestions
During 2013 as well Banca Intesa continued to increase the number of branches equipped with the Queue Management System (QMS) which covered approximately 40 per cent of active customers at the end of the year In addition to having a positive impact on customer satisfaction the QMS expansion made it possible to obtain the data necessary for better analysis and organisation of branch operation In addition free internet access via Wi-Fi and daily newspapers were made available to customers at the largest branches
As part of its efforts to improve further customer satisfaction in 2013 Banca Intesa implemented training of over 1500 employees both in its branch network and at its headquarters The training which was implemented as a continuation of the Education 100 programme initiated in 2011 was held on the subject of managing customer satisfaction but also their entire experience in each contact with the Bank
In addition to its efforts to improve its approach to customers and recognising the importance of two-way communication the Bank developed efficient mechanisms for collecting and recording customer feedback The Bank responds to all complaints sent to the Bank via formal complaints mechanisms and does so within the statutory time limit and in accordance with the decision of the National Bank of Serbia Each customer may also personally contact unit employees and if the customer is not satisfied with the answer received heshe can apply to the National Bank of Serbia as the second-instance body with the possibility of mediation The following are available to customers
bull Phone line +381 11 310 88 88bull E-mail kontaktbancaintesarsbull Fax +381 11 310 88 55bull Personal contact ie submitting a written complaint in personbull Contact form on the official website of the Bankbull Bank corporate accounts on social networks (Facebook and Twitter)bull Postal address of the Customer Satisfaction Management Unit Omladinskih brigada 90b 11070 New Belgrade
Transparent Advertising
Lasting relationships based on trust require communication that enables customers to understand clearly the characteristics and value of Banca Intesa products and services Therefore the Bank strives to contribute to the simplification of its products in communication
In its advertising the Bank clearly specifies all customer costs and all of them are included when calculating the effective interest rate which is always clearly and visibly shown as well as representative examples that contain all data in accordance with the Law on the Protection of Financial Service Consumers which demonstrates full transparency when it comes to Bank pricing policy
25
The Bank also strives to formulate the agreements so that they are simple to understand minimising possible misunderstandings and ambiguity by providing clear and exhaustive information It informs its customers in a timely manner of any changes in the agreements and their terms
Data Security
The protection of customer security as well as their assets and confidential information is not only Banca Intesarsquos primary duty but also the basis of the relationship of trust that the Bank wants to reinforce with its customers The protection of persons their assets and valuables as well as a multitude of data and internal organisational processes fully meets the criteria of reliability continuity and confidentiality In addition to its legal obligations Banca Intesa complies with the criteria of absolute transparency in informing its customers of their rights to privacy and the way it treats their personal information
In 2013 Banca Intesa did not find any founded complaint in connection with the violation of customer privacy or any disclosure leakage or theft of customer information
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
24
CUSTOMER SATISFACTION
Banca Intesa believes that it is only through an open dialogue with its customers that it can truly understand their needs and expectations and build a long-term partner relationship with them
Meeting the Needs of Customers
Ever since 2008 Banca Intesa has been conducting surveys of its customersrsquo satisfaction with the Bankrsquos products and services in accordance with the methodology of the European Customer Satisfaction Index (ECSI) as part of its initiative named Listening 100 This is a continuous process analyses are made based on the results obtained in the survey and actions are proposed accordingly for improving the customer satisfaction The surveys are repeated at six-monthannual intervals in order to collect feedback from the customersrsquo perspective for the measures taken for the purpose of improving the satisfaction index as well as identifying the directions for further improvement
Looking at the results of the customer satisfaction survey at the end of 2013 a conclusion arises that among other things the basis of good results is a positively rated staff treatment of customers The ECSI as well as the Loyalty indices are stable with a high percentage of customers who stated they would remain Banca Intesa customers in the following 12 months Attempting to encourage its customers to express their opinions in the previous year the Bank clearly communicated the improvements implemented so far based on their suggestions
During 2013 as well Banca Intesa continued to increase the number of branches equipped with the Queue Management System (QMS) which covered approximately 40 per cent of active customers at the end of the year In addition to having a positive impact on customer satisfaction the QMS expansion made it possible to obtain the data necessary for better analysis and organisation of branch operation In addition free internet access via Wi-Fi and daily newspapers were made available to customers at the largest branches
As part of its efforts to improve further customer satisfaction in 2013 Banca Intesa implemented training of over 1500 employees both in its branch network and at its headquarters The training which was implemented as a continuation of the Education 100 programme initiated in 2011 was held on the subject of managing customer satisfaction but also their entire experience in each contact with the Bank
In addition to its efforts to improve its approach to customers and recognising the importance of two-way communication the Bank developed efficient mechanisms for collecting and recording customer feedback The Bank responds to all complaints sent to the Bank via formal complaints mechanisms and does so within the statutory time limit and in accordance with the decision of the National Bank of Serbia Each customer may also personally contact unit employees and if the customer is not satisfied with the answer received heshe can apply to the National Bank of Serbia as the second-instance body with the possibility of mediation The following are available to customers
bull Phone line +381 11 310 88 88bull E-mail kontaktbancaintesarsbull Fax +381 11 310 88 55bull Personal contact ie submitting a written complaint in personbull Contact form on the official website of the Bankbull Bank corporate accounts on social networks (Facebook and Twitter)bull Postal address of the Customer Satisfaction Management Unit Omladinskih brigada 90b 11070 New Belgrade
Transparent Advertising
Lasting relationships based on trust require communication that enables customers to understand clearly the characteristics and value of Banca Intesa products and services Therefore the Bank strives to contribute to the simplification of its products in communication
In its advertising the Bank clearly specifies all customer costs and all of them are included when calculating the effective interest rate which is always clearly and visibly shown as well as representative examples that contain all data in accordance with the Law on the Protection of Financial Service Consumers which demonstrates full transparency when it comes to Bank pricing policy
25
The Bank also strives to formulate the agreements so that they are simple to understand minimising possible misunderstandings and ambiguity by providing clear and exhaustive information It informs its customers in a timely manner of any changes in the agreements and their terms
Data Security
The protection of customer security as well as their assets and confidential information is not only Banca Intesarsquos primary duty but also the basis of the relationship of trust that the Bank wants to reinforce with its customers The protection of persons their assets and valuables as well as a multitude of data and internal organisational processes fully meets the criteria of reliability continuity and confidentiality In addition to its legal obligations Banca Intesa complies with the criteria of absolute transparency in informing its customers of their rights to privacy and the way it treats their personal information
In 2013 Banca Intesa did not find any founded complaint in connection with the violation of customer privacy or any disclosure leakage or theft of customer information
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
25
The Bank also strives to formulate the agreements so that they are simple to understand minimising possible misunderstandings and ambiguity by providing clear and exhaustive information It informs its customers in a timely manner of any changes in the agreements and their terms
Data Security
The protection of customer security as well as their assets and confidential information is not only Banca Intesarsquos primary duty but also the basis of the relationship of trust that the Bank wants to reinforce with its customers The protection of persons their assets and valuables as well as a multitude of data and internal organisational processes fully meets the criteria of reliability continuity and confidentiality In addition to its legal obligations Banca Intesa complies with the criteria of absolute transparency in informing its customers of their rights to privacy and the way it treats their personal information
In 2013 Banca Intesa did not find any founded complaint in connection with the violation of customer privacy or any disclosure leakage or theft of customer information
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
26
EMPLOYEES
Banca Intesa believes that successful companies share the same vision of professional advancement business ethics and motivating work environment with their employees Wishing to reinforce the team spirit and the feeling of unity the Bank fosters and promotes its core values so that its employees understanding their importance would adopt them and integrate them in their everyday activities
Satisfaction in the work environment is achieved and maintained by open daily dialogue with the Bank encouraging its employees to express their individuality respecting the uniqueness of each individual and the context in which they work Within Banca Intesarsquos strong identity the employees have an opportunity to realise their professional and personal ambitions aware that the Bank seeks to recognise their potentials and direct their talents towards further development Carefully listening to its employees the Bank has identified primary areas of action
bull EQUAL OPPORTUNITIESbull HUMAN RESOURCE DEVELOPMENTbull EMPLOYEE SATISFACTION
EQUAL OPPORTUNITIES
Wishing to promote equality as one of its seven core values Banca Intesa bases its employment and HR management procedures on the principles of objectivity and consistent conduct preventing protectionism abuse or discrimination based on gender ethnicity religion political beliefs language age disability or trade union membership All Bank employees are covered by the Collective Bargaining Agreement and the employee structure is dominated by women of the total of 3039 persons employed with the Bank at the end of 2013 female employees accounted for 708 of employees and as much as 41 of senior management
The number of employees in Belgrade includes all employees at the Bank Headquarters located in Belgrade as well as all branch network employees in the Belgrade Regional Centre
Employees in other locations are the Bank Headquarters employees located in Novi Sad as well as all the branch network employees in all towns in Serbia in which the Bank operates (which include all branches in 4 Regional Centres RC Novi Sad RC Kragujevac RC Užice RC Niš
The Bank does not employ third parties
2012 2013
TOTAL NUMBER OF EMPLOYEES BY
CATEGORY AND GENDER
Managers Officers Employees Managers Officers Employees
M F M F M F M F M F M F
26 20 167 264 722 1935 23 16 166 261 698 1875
Total 46 431 2657 39 427 2573
TOTAL NUMBER OF EMPLOYEES BY BUSINESS LOCATION
2012 2013
M F M F
Belgrade 459 963 464 969
Other locations 456 1256 423 1183
Total 915 2219 887 2152
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
27
TOTAL NUMBER OF EMPLOYEES BY TYPE OF EMPLOYMENT CONTRACT
2012 2013
M F M F
Under fixed-term employment contract 29 56 31 40
Under permanent employment contract 886 2163 856 2112
Total 915 2219 887 2512
EMPLOYMENT CONTRACT TYPE BY LOCATION
2012 2013
Under fixed-term employment contract
Under permanent employment contract
Under fixed-term employment contract
Under permanent employment contract
Belgrade 12 1410 39 1394
Other locations 73 1639 32 1574
Total 85 3049 71 2968
2012 2013
M F M F
Employee gender structure 2920 7080 2919 7081
Management gender structure 5652 4348 5897 4103
2012 2013
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Under 30 years of age
30 - 50 years of age
Over 50 years of age
Employee age structure 976 7547 1477 777 7723 15
Management age structure 8478 1522 6667 3333
All Bank employees are guaranteed equal opportunities for professional development improvement and advancement by applying the criteria of objectivity and transparency in assessment and remuneration In this the evaluation of employee skills work technologies and potential involves recognising their merits and respecting diversity in order to strengthen their motivation and reward excellent performance During 2013 9345 of Bank employees underwent performance evaluation
In accordance with the law the Bank grants all its employees the right to maternity leave and as a responsible employer supports the work-life balance guaranteeing to all its employees return to their job As many as 9926 of the 270 persons who took maternity leave during 2013 returned to their posts after the expiry of their maternity leave
2012 2013
Total number of employees who exercised their right to maternity leave
287 270
Rate of return to work after the end of maternity leave
9965 9926
Rate of remaining in employment 12 months after returning to work
9617 9547
In terms of employment type there are no part-time employees in the Bank
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
28
HUMAN RESOURCE DEVELOPMENT
Within the stimulating work environment Banca Intesa strives to enable optimal professional development and personal advancement of all its employees The results of a customer satisfaction survey showed that customers highly rank and value employee expertise primarily in the sales network The level of employee knowledge and skills is in direct correlation with performance so Banka Intesa set the importance of constant employee development and improvement high on its priority scale As many as 91000 hours in total of e-learning and classroom training were conducted at the Bank during 2013
The Bank guarantees equal opportunities for professional development and improvement It provides its employees with support and financial assistance in skill improvement through internal and external training also supporting study leaves Training programmes are based on individual needs based on the conviction that respecting the needs expressed by the employees is vital for the design and efficiency of the training process In accordance with this the email address obukabancaintesars is at their disposal to which they may send their proposals if there are any topics that they consider to be particularly useful and the Bank strives to organise the most demanded training courses among them
EMPLOYEE TURNOVER 2012 2013
New employees Male Female Male Female
60 74 60 60
Total number of new employees 134 120
Left the Bank 63 137 88 127
lt30 8 26 10 14
30 - 50 35 51 55 71
gt50 20 60 23 42
Total number of employees who left the Bank
200 215
Employee turnover 638 707
2012 2013
M F M F
Total number of training hours by gender 16065 317625 264225 64825
Average number of training hours per year by gender
1756 1431 2979 3012
2012 2013
Total number of training hours by
employee category
Managers Officers Employees Managers Officers Employees
720 11025 360825 6075 183425 722975
Average number of training hours per employee
1565 2558 1358 1585 4296 281
The division into employee categories is taken from the Bankrsquos HR system
One of the special opportunities within Intesa Sanpaolo Group is the process of International Mobility which is considered an important factor in the professional development of the most talented resources and presents the way to expand the competences and the best practice In accordance with such commitment in 2011 Intesa Sanpaolo in cooperation with SDA Bocconi University launched a training programme named Executive Programme in Banking Management which was successfully completed in 2013 The programme was attended by four Banca Intesa employees to whom the training also provided an opportunity to exchange their experiences and share their knowledge with their colleagues from Italy and other Group member banks Demonstrating that it is not just a one-time activity new shorter programmes have already been organised for all participants in order to ensure continuity all in accordance with the long-term approach of Intesa Sanpaolo to talent development within the Group and the opportunities of developing international career
The employee turnover rate was 707 in 2013 In this period 215 employees left the Bank while 120 persons were employed
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
29
The Business Network Development Programme created with the aim of improving personal as well as professional development of employees began with a strategic workshop named Building Intesa Connections setting the foundation for a systemic approach to business The workshops and training courses that followed were designed as highly interactive and based on real business situations The Programme is divided into three modules - professional managerial and soft skills courses with over 15 subjects covered through training courses and workshops but also through e-knowledge In addition all managers receive useful articles relating to management topics every other week Internal trainers who know the Bank and its employees best and who can answer all questions of participants in the most adequate way were in charge of the largest part of the Programme All colleagues whose special potential was recognised have a possibility of attending specialised external programmes and training courses The need for development and learning is universal for all employees therefore such programmes will expand in the future through structured programmes as well as through open courses that may be useful and interesting to colleagues of different profiles and at different posts
In addition to planning carefully the retirement of its employees who are ending their working life the Bank pays retirement bonus taking into account their age and years of service
EMPLOYEE SATISFACTION
Satisfaction Survey
The employee satisfaction survey at the Intesa Sanpaolo Group level was conducted in 2013 for the fourth consecutive year The survey was conducted in the following segments overall perception of the Bank management customers job satisfaction and ISP Group The survey included 896 Banca Intesa employees who according to the results perceive the Bank as a stable financial institution a bank of confidence and the market leader The average rating of this by the employees is the highest compared to the other Group members who participated in the survey In addition the Bank stands out among the other members by the best rating that the representatives of the Bank top management received Moreover the survey showed that a great majority of employees are of the opinion that the customers are satisfied with their relations with the Bank and are very satisfied and more satisfied than dissatisfied with their job
In addition to the employee benefits guaranteed by the law including the right to health care maternity leave retirement bonus and disability benefit the Bank provides its employees with vacation allowance meal allowance as well as transport allowance Banca Intesa employees enjoy preferential loan conditions private health insurance under more favourable conditions as well as special benefits and discounts when shopping at various stores and travel agencies with which the Bank has business cooperation
Internal Communication
Banca Intesa believes that communication is good and of high quality only when it is two-way It contributes to building a more humane work environment in which opinions and diversity are respected
In accordance with such commitment in 2013 the Bank launched an internal campaign named The Floor Is Yours with the aim of improving corporate culture increasing employee satisfaction and motivation as well as their active involvement in the processes at the Bank The campaign began with video clips in which the top management and the Bank management spoke about what was good at Banca Intesa and afterwards all employees were invited to put their ideas suggestions proposals and criticism in specially dedicated locked boxes The boxes are opened and the answers to the employeesrsquo questions are presented on the Bankrsquos internal portal as well as in the internal magazine
The We Are Our Stories campaign launched at the level of International Subsidiary Bank Division (ISBD) was also implemented last year The goal of the campaign was the improvement of customer relations through authentic stories and anecdotes from the branches and offices where Intesa Sanpaolo operates All stories participating in the competition were published on wwwweareintesasanpaologroupcom and all members of the winning teams were presented awards
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
30
Employee Volunteering
Wishing to promote corporate volunteering values and integrate all its activities in this segment of corporate social responsibility in 2013 Banca Intesa launched a corporate volunteering programme entitled Intesa from the Heart This coordinated programme approach is aimed at ensuring the success and increasing the efficiency of volunteering enabling all Bank employees to contribute to the community in which they live and work by donating their time talent and knowledge thereby reaffirming once again the position of Banca Intesa as a company that operates while taking care of the community
The programme was launched with a volunteering campaign of the Bank management during which the improvement was made to the protected nature reserve Carska Bara near Zrenjanin known for its abundant flora and fauna Nearly 40 representatives of the Bank management participated in cleaning the banks of invasive plant species painting childrens playground wooden benches and tables at the resort as well as marking seedlings on the Eco Trail thus promoting environmental responsibility and the values of social engagement by personal example
As part of the Intesa from the Heart programme in 2013 the Bank participated for the third consecutive year in the fifth volunteering campaign Our Belgrade organised by the Business Leaders Forum in cooperation with Smart Kolektiv non-profit organisation and the Institute for Sustainable Communities and with support of the US Agency for International Development (USAID) and the City of Belgrade With nearly 80 employees joining the largest city corporate volunteering campaign Banca Intesa was the company with the greatest number of volunteers The Bank employees dedicated their time to children from the Moša Pijade Home for Children without Parental Care to small children with special needs from the J J Zmaj Home as well as to the youth from the Drop-in Centre for Street Children The Our Belgrade campaign involved over 250 volunteers and 100 beneficiaries from different social care institutions and organisations with 195 kilograms of food products as well as 500 kilograms of clothes collected in cooperation with the Bank
In addition as part of the corporate volunteering programme and in cooperation with the Trag Foundation a campaign of assistance to vulnerable elderly persons was launched within which Banca Intesa donated not only social aid packages containing staple foodstuffs and home care products to members of senior clubs in Novi Sad Niš and Kragujevac but also the time of its 60 employees who delivered the packages to their senior citizens and socialised with them
The year ended with the traditional volunteering campaign Wrap a Gift and Make a Child Smile within which the Bank employees prepared over 1200 New Yearrsquos gifts totalling around 12 million dinars for children without parental care and youth with special needs in five towns of Serbia The Bank employees delighted the students of seven special educational institutions and the beneficiaries of three homes for children without parental care in Belgrade Veternik Kraljevo Užice and Vranje with sweets toys school kits personal hygiene kits and other interesting items
Care for Children of Employees
As a member of the Intesa Sanpaolo Group in 2013 for the ninth consecutive time Banca Intesa made it possible for the children of its employees to spend their summer vacation in a small place of Follonica Tuscany A record number of children of Bank employees as many as 79 had an opportunity to meet their peers from Italy and other countries to spend time socialising with them and to build their independence
Through cooperation with the Intercultura international education exchange foundation Banca Intesa supported the one-year programme of education abroad in 2013 as well The Programme is intended for secondary school students aged 15 to 18 years who are easily adaptable to changes curious and open to cultural and other diversity Two children of Banca Intesa employees completed the previous school year in Italy and used the opportunity to learn Italian live in a different cultural environment and gain new experiences
Committed to investing not only in childrenrsquos education but also in their physical development in 2013 for the seventh consecutive year Banca Intesa made it possible for the children of its employees to participate in the free Milan Junior football school which was organised in Belgrade A total of 150 children aged 8 to 14 years had an opportunity to learn tactical football tricks working with the coaches of the trophy-winning football club A C Milan as well as to attend special technical and sports training
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
31
COMMUNITY
In 2013 as in the previous years Banca Intesa sought to respond in different ways to the needs of the broader social community by being active in corporate philanthropy strengthening social inclusion and developing its own CSR projects
As the leading bank in the domestic market Banca Intesa is aware that it has an additional responsibility of contributing to resolving social problems which is why its core commitment is to base its CSR activities on real needs of the community The focus of Bank activities includes projects implemented in the following areas
bull HERITAGE PRESERVATION AND CULTURE PROMOTIONbull SOCIAL INCLUSIONbull SUPPORT TO CHILDREN AND YOUTH
In 2013 Banca Intesa was presented for its contribution to the community with the Planeta Biznis (Business Planet) award of the Ekonometar and Magazin Biznis business magazines as the bank that invested the highest amount of funds in the development of society and local community in the previous year This is the second consecutive Planeta Biznis award that Banca Intesa won for its contribution to the community in which it operates In 2012 Draginja Đurić was presented the Business Planet award for successful management of the bank that invested the highest amount of funds in CSR programmes during 2011
HERITAGE PRESERVATION AND CULTURE PROMOTION
In 2011 Banca Intesa launched The Place I Love project wishing to contribute to promoting cultural and historical heritage and cultural diversity as well as to raising awareness of the importance of their preservation The project was launched with the aim of creating a database of the sites of special sentimental value to the citizens of Serbia and reconstructing three sites or spatial units that win the accompanying competition The competition was a way to map by involving citizens the sites of special value to them regardless of whether they had been officially recognised as cultural monuments There were 1300 of such sites Owing to the votes of citizens three sites were selected to be reconstructed using the Bank funds totalling 30 million dinars
The Place I Love project is implemented with the support of the Ministry of Culture the Cultural Heritage Preservation Institute of Serbia and the Europa Nostra Serbia non-profit organisation and is currently in the final stage of reconstruction and conservation works The reconstruction was completed of the Town Walls in Novi Pazar one of the three sites that had won the largest number of citizensrsquo votes in the open competition In addition a memorandum of cooperation was signed between Banca Intesa the Ministry of Culture the Capital Investment Fund of Vojvodina and the City of Novi Sad by which an agreement was made to implement the project of reconstructing the Belgrade Gate in Petrovaradin and a memorandum of cooperation is also expected to be signed for the start of the work on the project of improvement and placement of a memorial at the site of the remains of the National Library of Serbia in Kosančićev Venac
The final stage of the project implementation also included two initiatives organised in cooperation with the Art History Department of the Faculty of Philosophy University of Belgrade During 2013 projects were implemented that had won the student competition as part of the course where students mastered the knowledge and skills of project management using The Place I Love project as an example with the task of designing mini-projects that would contribute not only to the physical reconstruction of the winning sites of the Place I Love project but also to making them come to life and useful to the community
Thus Awakening of the Walls a spectacular living history performance about the construction of the fortress of the Turkish military leader Isa Bey Isahović at the site of the present city of Novi Pazar the first settlement in this part of Serbia was held on the Novi Pazar fortress walls after the completion of their reconstruction The second project was the I Read You Read literary festival held at Kosančićev Venac at the site where the National Library of Serbia
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
32
was in 1941 before the bombing of Belgrade in World War II The festival included a competition in reciting poetry childrens workshops book exchange and a prize photography contest and all activities were directed at promoting books and reading culture
Banca Intesa won the VIRTUS Award for supporting the most innovative project for The Place I Love initiative The Bank recognised innovativeness as a means for generating common value added by integrating it in all aspects of its business including CSR activities and initiatives as the only way of responding in a dynamic environment to increasingly high expectations of its customers employees investors but also the broader social community As a member of the Society for the Construction of Saint Savarsquos Cathedral in Belgrade Banca Intesa provided support to the completion of construction works on Saint Sava Temple which considerably helped the fulfilment of the 2013 work plan contributing at the same time to further promotion of Serbia and enhancement of its cultural and historical heritage considering that Saint Savarsquos Cathedral is the largest Orthodox building in the Balkans
The numerous activities by which Banca Intesa helps the preservation of the countryrsquos cultural and historical heritage also include support to the Studenica monastery for restoration and preservation of frescoes The Studenica monastery is one of the largest and richest Serbian Orthodox monasteries most famous for its collection of the 13th and 14th-century Byzantine frescoes The Studenica monastery was declared a cultural monument of exceptional importance in 1979 and is under the protection of the Republic of Serbia UNESCO included this monastery in the World Heritage list in 1986
Moreover the exhibition of the National Library of Serbia entitled Classics Are Always IN was organised with the Bankrsquos support This event was aimed at promoting prominent Serbian writers of the 19th and 20th centuries such as Jovan Jovanović Zmaj Ivo Andrić Miloš Crnjanski and Desanka Maksimović and excerpts from their most popular works were presented to the visitors on this occasion
At the same time certain theatrical events such as the 126th traditional Smederevo Autumn and the 22nd Zoran Radmilović Days festival in Zaječar were organised with the Bankrsquos financial support In addition Banca Intesa also provided support to promoting domestic musical creativity so the Bank was one of the friends of the 48th festival of secular and sacred music Mokranjac Days dedicated to Stevan Stojanović Mokranjac the greatest Serbian composer and conductor
SOCIAL INCLUSION
In addition to its specially developed products Banca Intesa seeks to provide support to senior citizens through different forms of assistance as well As part of its corporate volunteering programme Intesa from the Heart in 2013 the Bank established a partnership with the Trag Foundation wishing to assist socially vulnerable senior persons throughout the country to whom it provided 250 aid packages containing staple foodstuffs and home cleaning products In cooperation with Trag the Bank identified partners in the local community in Novi Sad Niš and Kragujevac and the needs of senior citizens living in retirement homes organised logistical infrastructure and prepared a budget plan A total of 60 members of Banca Intesa volunteering club actively participated in the project giving away 120 volunteer hours to socialising with the senior club members
Standing out among the other activities with which the Bank supports the oldest segment of the population is the support to the Niš Senior Movement in implementing the project of organising a ten-day international art colony in Niš where 20 local and international painters from Greece Bulgaria Slovenia and other countries had an opportunity to spend some time socialising with senior citizens teaching them how to paint In addition as part of the art colony the 20 painters made some 50 paintings that were sold later and the funds were used to improve further the work of the Senior Movement
Promoting the active aging concept and social integration of senior people in 2013 Banca Intesa launched another interesting initiative a literary competition entitled Senior Love It is a competition for the best love stories of senior citizens whose authors were rewarded by the Bank with romantic trips to Verona the Laško Thermal Spa and Zlatibor The right to participate in the competition was given to citizens aged over 55 years regardless of whether they were Banca Intesa customers or not The Senior Love project was implemented in cooperation with the most widely read weekly in Serbia the Blic Žena magazine which published one story selected by the editorial staff in each issue until mid-January 2014
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
33
The Bankrsquos social inclusion activities also include integration of children without parental care youth with disabilities as well as ethnic minorities As part of the traditional volunteering project Wrap a Gift and Make a Child Smile Banca Intesa employees prepared New Yearrsquos gifts for children with special needs and children without parental care The project which was implemented for the fifth consecutive year produced the best results so far The volunteers collected almost 1200 gifts and took them to children in six schools one nursery and three homes for children without parental care with whom they spent a day A total of 1260 volunteer hours were invested in this project
In addition in 2013 the Bank continued its traditional cooperation with the LiceUlice magazine and organised the sale of this magazine in its offices in order to help the beneficiaries of the Childrenrsquos Drop-in Centre in Krfska Street earn their monthly allowance because half the income generated from the sale is the sellersrsquo earnings while the rest of the funds is used for preparing the next magazine issues but also for organising educational workshops at which the beneficiaries of the Drop-in Centre and the other social institutions with which the magazine cooperates receive professional training learn English and alike In addition to money the Bank employees also donated for the first time sweets clothes personal hygiene products and school kits
Banca Intesa also assisted the Forum of Youth with Disabilities in opening the Inclusion and Innovation Centre the first and only of its kind in Belgrade The project is aimed at contributing to improving the status of persons with disabilities through social entrepreneurship and social inclusion At the same time a donation was provided to the Roma Cultural Centre for the implementation of the Invisible Roma of Serbia project which was oriented towards preventive protection in combating human trafficking It is implemented through special theatrical performances in the Romani language in Roma settlements which depict everyday situations with the aim of educating people on how to understand better the potential hazards how to avoid them and how to report them
SUPPORT TO CHILDREN AND YOUTH
Investment in children and youth their development education and upbringing is the most important investment to Banca Intesa and the care of them is the only safe road to building a better and more advanced society Going beyond the financial contribution as the only form of support the Bank initiatives in this area are based on training and experience exchange at the international level as well as on talent promotion
Prove Yourself 100 a student competition in the preparation of projects in customer satisfaction management demonstrates such commitment The aim of the Prove Yourself 100 project is to encourage in a special way the creativity of students and innovative approach in preparing projects in customer satisfaction management as well as to establish an annual student award for excellent ideas that contribute to promoting and developing this area of business The project is implemented in seven countries in which Intesa Sanpaolo operates through the International Subsidiary Bank Division (ISBD) and afterwards the winning teams of local competitions compete at the international level Thus the three teams from Serbia that won the 2012 competition took part in the international competition in Italy in 2013 and one of them won at the international level as well in the area of implementation
Moreover as a member of the UNICEF Friends Club a programme of permanent monthly donors Banca Intesa seeks to contribute to raising awareness that children are a concern of every individual every company and the entire community The Club also strives to highlight the need for care of the youngest and enable as many people as possible to support the activities of this organisation with regular monthly donations regardless of their amount and thus help create better conditions for life and development of children in the country The Bank also invited its customers to contribute to the work of the Fund by opening a standing order which they can use to make monthly payments or a one-time donation supporting the UNICEF programme in Serbia without any commission The Bank actively informs its customers of the ways in which they can give cash donations to the Fund as well as of the benefits it offers to them in the implementation of these philanthropic activities
Owing to the development of modern e-commerce services of Banca Intesa all people of good will whether they are citizens of Serbia or another country in the world can quickly easily and efficiently donate funds to those in greatest need The Bank established cooperation with several major non-profit associations and foundations in the country such as UNICEF Naša Srbija humanitarian organisation the Divac Foundation Trag Foundation Nasleđe Otaca (Fathersrsquo Heritage) Foundation as well as the University Childrenrsquos Hospital in Tiršova Street Belgrade Donations are accepted through their respective websites The online acceptance and processing of donations is a pioneering endeavour in the domestic banking sector which confirms in yet another way Banca Intesarsquos determination to integrate CSR into all segments of its business
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
34
As part of its activities relating to supporting education in 2013 the Bank also supported the celebration of the 80th anniversary of the Sixth Belgrade Grammar School one of the most reputable schools in the city whose students were many public figures who achieved success in many areas ranging from arts and culture to economics science and politics In addition to its support to high school students in the same year the Bank supported education of university students as well as already proven experts as part of the scientific event XXVI Conference of the Kopaonik School of Natural Law Every year this school is attended by nearly three thousand participants from the country and abroad from European as well as non-European countries and it is under UNESCOrsquos moral auspices
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
35
SUPPLIERS
Aware of the importance of impact of its decisions when it comes to the selection of and cooperation with suppliers Banca Intesa seeks to manage its position of a contracting party responsibly and build and maintain permanent relations based on trust and identification of common values Recognising that its responsibility towards the environment and society also spreads along the supply chain the Bank seeks to develop a responsible attitude in its suppliers which implies awareness of the economic social environmental and ethical risks and opportunities that may arise as a result of their activities For this purpose the Bank adopted the Policy on Procurement and the Procedure for the Procurement of Goods and Services which together with the Code of Ethics make the basis of its relations with suppliers in the following primary aspects
bull TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTIONbull PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
TRANSPARENCY AND EQUALITY IN SUPPLIER SELECTION
Within the context of broader impacts the responsibility of Banca Intesa towards suppliers is reflected in its efforts to empower the companies that make up its supply chain With RSD 67069271910 EUR 2056318466 USD 73719631 and GBP 1012544 allocated to procurement costs in 2013 the Bank contributed to the stability and sustainability of operation of these companies as well as the local community It bases its supplier selection decisions on the criteria of professionalism and competence taking into account the compatibility and capacities of potential partners relative to the size and needs of the Bank The selection of suppliers is implemented through objective and transparent procedures and is based on clear criteria and the principle of equality
One of the criteria that the Bank takes into account when evaluating the received bids is the supplier compliance with the CSR principles clearly demonstrating its commitment to valuing responsibility and ethical conduct as equally important elements when selecting its partners The Procurement Unit and the organisational part responsible for procurement are obliged to evaluate received bids applying the methods of qualitative and quantitative analysis and to agree on the bid evaluation criteria prior to inviting offers by combining the following criteria
bull Offered pricebull Quality ie the compliance of the characteristics of tendered goodsservices with the required characteristicsbull Term of deliverybull Payment terms and methodbull Warranty periodbull Servicingmaintenance during and after the warranty periodbull Compliance of bidderrsquos business activities with the principles of corporate social responsibilityibull Existence and level of cooperation with the Bank andor Intesa Sanpaolo group membersbull Other conditions
In addition due attention is paid to constant improvement and observance of relevant policies and procedures regulating the relations with suppliers especially in order to avoid any potential conflict of interest This matter is further defined within the Code of Ethics as well about which the employees who are in direct contact with suppliers are informed in detail They are expected to be guided by the principles of transparency and equality above all in the selection process and then to consider any other advantages of the tendered goods and services as well In accordance with the Policy on Procurement and the Procedure for the Procurement of Goods and Services the responsibility of the employees in the Real Estate and Procurement Management Department is to report any potential conflict of interest implement the provision that provides that the activities of procurement of goods and services between the Bank and its employees as well as their family members are prohibited avoid any kind of contact that goes beyond business customs unless they are authorised to do so by their superiors
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
36
When it comes to procurement 2013 was marked by a dynamic process change as part of implementing the projects of strategic and operational importance within the Bank The project of centralising the procurement process at the level of Intesa Sanpaolo Group included harmonising the procurement process with the defined model of the parent Bank and centralising all procurement functions applying the solution that works at the Group level Important aims of this project include the streamlining and homogenisation of organisation of the procurement process application of economies of scale and harmonisation of accounting and administrative procurement activities at the Intesa Sanpaolo level The creation and maintenance of a central database on procurement will enable easier monitoring fast and comprehensive reporting as well as minimising the risks relating to these business processes
PROMOTING SUSTAINABILITY IN THE SUPPLY CHAIN
In order to contribute to the promotion of sustainability as a necessary element of business and thus directly raise the standards in its value chain Banka Intesa seeks to direct the policies and practices of its suppliers and contractors towards environmental protection and respect of human and labour rights in the market as well as in the community
The Bank made an important step in this direction in 2012 when it adopted a new Procedure for the Procurement of Goods and Services which in addition to stipulating CSR as one of the criteria in supplier selection introduces a questionnaire containing questions related to corporate social responsibility The Questionnaire on Corporate Social Responsibility formulated by the Bank as part of its invitation letter to potential suppliers includes detailed information concerning five primary fields of corporate social responsibility corporate governance market work environment environmental protection and local community In this way the Bank has an opportunity to contribute to education and raising awareness of its suppliers when it comes to corporate social responsibility in addition to having insight in their existing practices The Bank encourages the suppliers that base their business activities on environmental and social sustainability and adopt measures and instruments necessary for minimising the negative impacts caused by their activities
In addition to other general terms and conditions of cooperation contracts with suppliers contain articles concerning the application of technical measures fire protection measures as well as occupational health and safety measures in accordance with the current legislation
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
37
Energy savings 2012 2013
kWh 487000 26308152
GJ 17532 947091
ENVIRONMENT
Aware of the importance of its impacts on the sustainability of the social and natural environment Banca Intesa identified environmental protection as an important aspect of its social responsibility In addition to committing to continuously spreading the best practices concerning environmental responsibility through the implementation of international principles such as the United Nations Global Compact or the Equator Principles the Bank is committed to finding innovative solutions in the following areas
bull RESPONSIBLE RESOURCE MANAGEMENTbull RESPONSIBLE FINANCING
The Bankrsquos direct impacts on the environment are linked with responsible resource management in everyday activities and the Bank believes that investments based on socio-environmental criteria are necessary to achieve harmonious and sustainable development In addition to offering ethical and environmentally acceptable products to its customers the Bank particularly supports a higher commitment of customers and broader community to environmental protection and their sensitisation to this important issue
RESPONSIBLE RESOURCE MANAGEMENT
The most important impacts of the financial sector on the environment are reflected in energy consumption emissions and generation of paper electronic and electrical waste Although these are relatively small impacts Banca Intesa undertakes resolute activities with the aim of reducing its direct impacts on the environment
In order to contribute to the promotion and development of the environmental responsibility concept the Bank continued to implement its Environmental Protection and Energy Efficiency Policy applying the best standards and identifying innovative and efficient solutions in this area The core principles on which the Policy is based are waste reduction and improvement of energy efficiency and performance as well as paying attention to the impacts that the Bank decisions have on the environment and society for the purpose of preventing managing and where possible reducing the environmental impacts caused by the Bankrsquos direct or indirect activities
For the second consecutive year Intesa Sanpaolo was included in the Italian 100 CDLI (Climate Disclosure Leadership Index) an indicator that selects the companies that have demonstrated an efficient strategic approach to carbon footprint reduction and a great commitment to complete and transparent reporting This commendation comes from the non-profit international organisation Carbon Disclosure Project (CDP) which represents 722 institutional investors with assets under management (AUM) worth 87000 billion dollars
Owing to the continuation of the existing initiatives and successful implementation of new initiatives in 2013 Banca Intesa achieved considerable savings when it comes to energy and paper consumption The introduction of an automatic mechanism for remote shutdown of all computers at the end of the working day proved to be efficient not only for making savings but also for promoting responsible energy consumption and encouraging rational use of energy within the Bank
In order to raise further its employeesrsquo awareness when it comes to this topic Banca Intesa invited them to join the largest global voluntary initiative for the preservation of nature and environment An Hour for Our Planet which the Bank itself supported by turning off the illuminated signs at all its branches as well as the decorative lighting on its office buildings In 2013 the initiative was joined by hundreds of millions of people in over 7000 cities in 152 countries around the world In the same year the lights in Serbia were turned off in 59 cities while over 40 civil society organisations and 37 schools organised local events
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
38
During 2013 the Bank reduced its energy and water consumption relative to 2012
Total energy consumption refers to indirect energyThe data on total energy and water consumption refer to all administrative buildings and the entire business network in Serbia and were estimated based on the costs specified in utility (electricitywater) bills
When it comes to reducing paper consumption the Bank continued to implement the Printing Consolidation Project which includes active promotion of double-sided and black-and-white printing The project was launched with the aim of achieving an estimated reduction in paper consumption of 20 at the annual level In addition 2013 was marked by two new initiatives that achieved considerable savings Although the Bankrsquos internal magazine Espresso had previously been printed only on recycled paper as part of its efforts to reduce further its paper consumption the Bank switched to an electronic version of the magazine which brought savings of 6025 kg of paper In addition the Bank switched from daily printing of press clippings to electronic versions of daily press clipping reports which brought savings of 1125 kg of paper
In order to contribute to reducing its impacts in transport as well Banca Intesa improved its fleet which in 2013 comprised new-generation vehicles that only use the Euro Premium BMB 95 and Euro Diesel fuels which are in compliance with the Euro 5 European quality standards
Environmental Protection Culture
Environmental protection is an important part of Banca Intesa corporate volunteering The Intesa from the Heart corporate volunteering programme which the Bank launched in 2013 in order to integrate all its volunteering initiatives within a single umbrella programme began with a large campaign for cleaning and preservation of the Carska Bara nature reserve Banca Intesa volunteers participated in a traditional campaign Our Belgrade organised by the Business Leaders Forum
RESPONSIBLE FINANCING
When it comes to responsible investment the Bank strives to strengthen further its potential in cooperation with relevant international financial institutions in order to contribute to improving the operation of the private and public sectors believing that rational energy consumption is of strategic importance for its customers as well as for the domestic economy and society at large The Bankrsquos strategic approach to this topic is based on operating policies and risk management procedures concerning the environment Efficient use of tools for managing social and economic risks is ensured through a system based on risk level assessment and by focusing on the customer activities that will most likely have a negative impact on social values or the environment as well as on the activities whose consequences could be the most serious
The Socio-environmental Risk Management Procedure regulates the credit process when approving loans to corporates and entrepreneurs to which the Bankrsquos credit exposure is at the level of 1 million euros or higher including the requested new product in case of credit products from a credit line or other funds approved to the Bank by international development banks and when approving long-term credit products funded from other sources
In 2013 Banca Intesa also adopted the Implementation of the Equator Principles in Project Financing procedure which applies when preparing and implementing project financing and related advisory services where
2012 2013
Total energy consumption kWh 1313630800 1312929600
Total water consumption m3 8707400 86380
Total recycled paper waste in kg
2011 2012 2013
37 60 74
Total recycled electronic and electrical waste in kg
2011 2012 2013
18950 33000 22560
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
39
the investment value of the project is at the level of 10 million dollars or higher both for new projects and for all project financing intended for the expansion or improvement of existing facilities where changes can create significant environmental andor social impacts or significantly change the natural environment
The Equator principles are a set of international standards applying to project financing in the amount of 10 million dollars or higher and providing the criteria for their classification based on different risk levels together with appropriate tools for managing such risks Intesa Sanpaolo adopted the Equator Principles in 2007 and has since been seeking to support their application in the countries in which it operates
In 2013 Banca Intesa continued to finance energy efficiency projects in Serbia in all segments and signed new credit lines for this purpose
In the retail segment the Bank continued to grant loans from the Green for Growth Southeast Europe BV Amsterdam (GGF) credit line for financing the works and purchase of equipment that will improve energy efficiency of buildings provided that minimum 20 savings must be achieved The funds may be used for improving thermal insulation in walls for installing energy efficient windows boilers and district heating systems as well as other modern energy saving solutions The credit line agreement was signed in 2012 and 332 loans were granted in 2013 totalling 802245 euros which accounted for 51 of the total consumer loans granted during the year
The funds from the GGF credit line are also available to customers in the segment of small businesses and registered farms These loans are intended for purchasing the goods and services that provide energy savings and enable the customers to replace doors and windows insulate walls and roofs replace heating systems and improve heat distribution During 2013 the Bank granted six loans from the GGF credit line totalling 1034 million dinars which accounted for 07 of the number of loans and 05 of the amount of investment loans granted in the segment of small business and agriculture The results of such type of loans are visible through annual savings made in energy and CO2 emission totalling 4239 MWh in primary energy and 64 tyear in CO2 emission
The Central European Development Forum (CEDEF) under the institutional auspices of the Provincial Secretariat for Energy and Mineral Resources and in cooperation with the Vojvodina Chamber of Commerce and the Srbijašume Public Enterprise and with Banca Intesarsquos support organised the second investment conference Biomass ndash Opportunities and Challenges The conference organised as part of the International Agricultural Fair in Novi Sad was aimed at giving a greater incentive to biomass-related projects improving the investment climate emphasising great potential of Serbia and placing in focus the increasingly important field of investment in green energy Banca Intesa also took an active part in the Conference and the experiences and plans of the Bank and Intesa Sanpaolo regarding the financing of projects concerning energy efficiency and renewable energy sources were presented to the participants
In addition in 2013 the Bank signed a credit line agreement with the European Bank for Reconstruction and Development (EBRD) for financing energy efficiency and renewable energy sources-related projects of small and medium-sized enterprises and the public sector The new line includes the projects of purchasing reconstructing or developing fixed assets (buildings equipment) financing the construction of small renewable energy facilities the projects of energy efficiency in buildings and the credit line provides an EU grant (5 to 15 of the investment) in the event of successful project implementation
In addition in 2013 the Bank also finished the negotiations with the KfW on a credit line for financing projects concerning energy efficiency and environmental protection in the public sector This credit line provides funds for project financing including modernisation of street lighting energy efficiency for pumping facilities for water supply sewerage systems energy from waste water waste heat flows replacement of vehicles used for municipal services expansion of sewerage network waste water treatment ndash new facilities and addition expansion rehabilitation of existing facilities water supply network protection of groundwater resources or water intake points solid waste management projects The credit line also includes a donation of the European Union in the event of successful project implementation amounting to 20 of the loan amount
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
40
3 GRI contens and indicators
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
41
GRI INDEXGENERAL DATA
1 STRATEGY AND ANALYSIS
11 FOREWORD BY PRESIDENT OF BANCA INTESA EXECUTIVE BOARD 3
12 STRATEGIC APPROACH KEY IMPACTS RISKS AND OPPORTUNITIES IN THE CONTEXT OF SUSTAINABILITY 7
2 COMPANY PROFILE
21 NAME OF THE ORGANIZATION 6
22 PRIMARY BRANDS PRODUCTS SERVICES 6
23 OPERATIONAL STRUCTURE 6
24 LOCATION OF ORGANIZATIONS HEADQUARTERS 6
25 NUMBER OF COUNTRIES WHERE THE ORGANIZATION OPERATES 6
26 NATURE OF OWNERSHIP AND LEGAL FORM 16
27 MARKETS SERVED 6
28 SCALE OF THE ORGANIZATION 6 14
29 SIGNIFICANT CHANGES DURING THE REPORTING PERIOD REGARDING SIZE STRUCTURE OR OWNERSHIP
210 AWARDS RECEIVED IN THE REPORTING PERIOD 6 31 32
3 REPORT PARAMETERS
31 REPORTING PERIOD 4
32 DATE OF MOST RECENT PREVIOUS REPORT 4
33 REPORTING CYCLE 4
34 CONTACT PERSON FOR QUESTIONS REGARDING THE REPORT 4
35REPORT PREPARATION METHODOLOGY RELEVANCE MATERIALITY AND DEFINING CONTENT REPORTINGPRINCIPLES AND MATERIALITY MATRIX 4 11 12
36 BOUNDARIES OF THE REPORT 4 6
37 LIMITATIONS ON THE SCOPE OR BOUNDARY OF THE REPORT
38 MEASUREMENT AND CALCULATION TECHNIQUES 4
39SIGNIFICANT CHANGES FROM PREVIOUS REPORTING PERIODS IN THE SCOPE BOUNDARY OR MEASUREMENT METHODS APPLIED IN THE REPORT
310 REPORT VERIFICATION
4 GOVERNANCE COMMITMENTS AND STAKEHOLDER ENGAGEMENT
GOVERNANCE
41GOVERNANCE STRUCTURE TERM OF OFFICE AND COMPOSITION OF THE HIGHEST GOVERNANCEBODY AND ITS INCLUDING COMMITTEES 16
42 PERCENTAGE OF WOMEN IN THE GOVERNANCE BODIES 16
43 GOVERNANCE AND EXECUTIVE FUNCTION OF THE PRESIDENT OF THE HIGHEST GOVERNANCE BODY 16
44MECHANISMS FOR SHAREHOLDERS AND EMPLOYEES TO PROVIDE COMMUNICATION WITHTHE HIGHEST GOVERNANCE BODY 16
45LINKAGE BETWEEN COMPENSATION FOR MEMBERS OF THE EXECUTIVE BOARDSENIOR MANAGERS AND THE COMPANYS PERFORMANCE 17
46 EXISTING PROCEDURES TO PREVENT CONFLICTS OF INTEREST 17
47 PROCEDURES FOR APPOINTING MEMBERS OF THE BOARD OF DIRECTORS AND EXECUTIVE BOARD 16
48 INTERNAL POLICIES AND STRATEGIES 10 18-20
49 HOW SUPERVISORY BODY CHECKS SUSTAINABILITY MANAGEMENT 17
410 HOW TO EVALUATE THE HIGHEST GOVERNANCE BODYrsquoS OWN PERFORMANCE 17
COMMITMENTS TO EXTERNAL INITIATIVES
411 SUSTAINABILITY RISK MANAGEMENT IN THE SCOPE OF PRECAUTIONARY APPROACH OF THE UNITED NATIONS 17-20
412 COMMITMENTS TO EXTERNAL INITIATIVES 7 8 9
413 MEMBERSHIPS IN ASSOCIATIONS 8
STAKEHOLDER ENGAGEMENT
414 LIST OF STAKEHOLDER GROUPS ENGAGED 11
415 PROCESS FOR DEFINING STAKEHOLDER GROUPS 11
416 APPROACHES TO STAKEHOLDER ENGAGEME 11
417 MAIN TOPICS INITIATED BY STAKEHOLDERS 12
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
42
PAGE 2012 2013
ECONOMIC PERFORMANCE ndash MANAGEMENT APPROACH 7 14
EC 1 C Total income and expenses 15
EC 8 C
Development and impact of infrastructureinvestments and services provided primarilyfor public benefit through commercial in-kindor pro bono engagement 14
ENVIRONMENT ndash MANAGEMENT APPROACH 37
EN 4 CIndirect energy consumption by primarysource 38
NO ESTIMATE FOR PRIMARY ENERGY SOURCES
EN 5 ADEnergy saved due to conservation andefficiency improvements 37
EN 8 C Total water withdrawal by source 38
EN 26 CInitiatives to mitigate environmental impactsof products and services and extent of impactmitigation 18 38 39
SOCIETY
LABOUR PRACTICES AND DECENT WORKndash MANAGEMENT APPROACH 26
LA 1 C Total workforce 26 27
LA 2 C Total number and rate of employee turnover 28
LA 3 AD Benefits provided to full-time employees 29
LA 4 CPercentage of employees covered by collective bargaining agreements 26
LA 10 C Total hours of training by employee category 28
LA 11 AD
Programs for skills management andlifelong learning that support the continuedemployability of employees and assist them inmanaging career endings 28 29
LA 12 ADPercentage of employees receiving regular performance and career development reviews 27
LA 13 C
Composition of governance bodies and breakdown of employees per category according to gender age group minority group membership and other indicators of diversity 27
LA 15 CReturn to work and retention rates after parental leave by gender 27
HUMAN RIGHTS ndash MANAGEMENT APPROACH 7 18 26 36
HR 11 CNumber of grievances related to human rights filed addressed and resolved through formal grievance mechanisms 10 24
SOCIAL COMMUNITY ndash MANAGEMENT APPROACH 18 31
SO 3 CPercentage of employees trained in organizationrsquos anti-corruption policies and procedures 19
SO 4 C Actions taken in response to incidents of corruption 19
SO 6 ADTotal value of financial and in-kind contributions to political parties politicians and related institutions 19
PRODUCT RESPONSIBILITY ndash MANAGEMENT APPROACH 21
PR 3 CType of product and service information required by procedures and percentage of significant products and services subject to such information requirements 24 25
PR 5 ADPractices related to customer satisfaction including results of surveys measuring customer satisfaction 24
PR 8 ADTotal number of substantiated complaints regarding breaches of customer privacy and losses of customer data 25
MANAGEMENT APPROACH AND GRI INDICATORS
FINANCIAL SERVICES SECTOR SUPPLEMENT (FSSS) - PRODUCT AND SERVICE IMPACT
FS 7 CMonetary value of products and services designed to deliver a specific social benefit for each business line broken down by purpose 21-23
FS 8 CMonetary value of products and services designed to deliver a specific environmental benefit for each business line broken down by purpose 39
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR
43
THE LEVEL OF MEETING THE INDICATORS IN ACCORDANCE WITH THE GRI METHODOLOGY
FULLY MET PARTLY MET
NOT MET
INDICATOR RELEVANCE LEVEL IN ACCORDANCE WITH THE GRI METHODOLOGY
C - CORE INDICATOR AD - ADDITIONAL INDICATOR