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Publication of the Annual Report for the financial year 2018

In accordance with the Rules of Ljubljanska borza, d.d., Ljubljana, and applicable law, Družba za upravljanje terjatev bank, d.d. (“BAMC”), Davčna ulica 1, Ljubljana, hereby issues the audited annual report for the financial year 2018.

BAMC continued performing well in 2018. With its earnings after tax reaching 57.7 million EUR and cash generated in the amount of 228.0 million EUR, it both increased its economic return on equity (EROE) and overshot the statutory target of cash generated. Through active cost management, BAMC was successful in lowering costs below the planned level, despite its shrinking portfolio of assets, where BAMC’s current portfolio still contains the most complex cases. BAMC thus reached all the required KPIs in 2018, as prescribed by the Government of the Republic of Slovenia’s BAMC Operational Guidelines.

In 2018, BAMC generated revenues from sales and repayments from credit management operations in the amount of €228 million, equivalent to 11.1% of the transferred value of all assets. In the absence of large transactions, cash generated was spread out relatively evenly throughout the year, while cumulatively BAMC has generated over 1.5 billion EUR over the five years since the first assets were transferred into its management.

The level of net profit generated in 2018 amounted to 57.7 million EUR, where BAMC’s capital was increased to 199.9 million EUR, while the EROE (i.e. the average annual return on invested equity with adjustments) amounted to 28.9%, well above the 8.0% target required by law.

The balance sheet total decreased by 13.4%, which is a reflection of the overall liquidation of its asset portfolios, of which the largest decrease was in the credit portfolio, followed by equity and real estate. Besides real estate sales, the size of the real estate asset portfolio was mainly affected by takeovers of real estate assets into BAMC ownership, which BAMC can justify with the 14.7 million EUR’s gross margin generated in subsequent sales of such real estate in 2018.

Through successful sale of its assets, BAMC was able to make an early repayment of an additional 28.3 million EUR’s worth of principal on the bank loans raised, in addition to making 153.3 million EUR’s worth of regular repayments under the existing repayment schedules.

KPMG Slovenija, d.o.o., Železna cesta 8a, Ljubljana, performed the audit of the 2018 financial statements, and issued an unqualified opinion on 8 July 2019. The audited annual report was reviewed and approved by the board of directors on 12 July 2019, and sent to the Government of the Republic of Slovenia acting in the capacity of the general meeting, for adoption. The Government of the Republic of Slovenia has not yet adopted the annual report.

BAMC’s audited 2018 Annual Report is available on the company website, http://dutb.eu.

BAMC management

Date: 17.07.2019

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