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2023 Annual Report as per FSA Regulation 5/2018
Annual Report
For the year ended at 31st of December 2023
This yearly report is prepared in accordance with FSA Regulation no.5 / 2018 for the period ended as at 31
December 2023.
Date of Report:
Name of the legal entity:
06 Martie 2024
UniCredit Bank S.A.
Corporate address:
Romania, Bucharest, no. 1F, Expozitiei Bd., 1st District
Corporate Contact Details:
Tel +40 21 200 2000
Website: www.unicredit.ro
Email: infocenter@unicredit.ro
Trade Register Registration Number:
J40/7706/1991
Sole Registration Code:
RO361536
Bank Register No:
RB-PJR - 40 - 011/1999
Subscribed and paid-up share capital:
RON 455,219,478.30
The regulated capital market on which the
issued bonds are traded:
Bursa de Valori Bucuresti (BVB) - Bucharest Stock
Exchange (www.bvb.ro)
Main characteristics of the bonds issued by
UniCredit Bank S.A.:
18,350 corporate bonds having a nominal value of RON
10,000/bond, market symbol UCB24 (ISIN
ROUCTBDBC048).
(https://www.bvb.ro/FinancialInstruments/Details/Finan
cialInstrumentsDetails.aspx?s=UCB24)
977 corporate bonds having a nominal value of RON
500,000/bond, market symbol UCB27 (ISIN
RO3WU5H09299).
https://www.bvb.ro/FinancialInstruments/Details/Finan
cialInstrumentsDetails.aspx?s=UCB27
960 corporate bonds having a nominal value of RON
500,000/bond, market symbol UCB28 (ISIN
ROG0M1EGXBN8).
https://www.bvb.ro/FinancialInstruments/Details/Finan
cialInstrumentsDetails.aspx?s=UCB28
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2023 Annual Report as per FSA Regulation 5/2018
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2023 Annual Report as per FSA Regulation 5/2018
Contents:
I. The annual report in accordance with Financial Supervision Authority Regulation 5/2018
1. Analysis of the Bank’s activity ....................................................................................................... 4
1.1. Company’s presentation .......................................................................................................................... 4
1.1.1. Main results of the Group’s activity and significant transactions ................................................. 4
1.1.2. Assessment of the Bank's technical level...................................................................................... 5
1.1.3. Assessment of the technical and material supply activity (internal and external sources) .......... 5
1.1.4. Assessment of sales activity .......................................................................................................... 5
1.1.5. Assessment of the Banks’ respectively Group’s personnel and related aspects .......................... 8
1.1.6. Assessment of the issuer activity on the enviroment ................................................................... 9
1.1.7. Assessment of research and development ................................................................................... 9
1.1.8. Assessment of the business of the company on risk management .............................................. 9
1.1.9. Main events, factors of uncertainty that can affect the Group’s liquidity compared to previous
year ......................................................................................................................................................... 13
1.1.10. Integrity and Corporate Social Responsibility ................................ Error! Bookmark not defined.
2. Tangible and intangible assets of the Group ............................................................................... 15
3. Capital Market for the bonds issued by the Bank/Group ............................................................ 15
4. Changes which impact the Shareholders equity and Management of the Group ...................... 16
4.1. Changes in the administration of the Group ....................................................................................... 16
4.2. Increase of share capital. Changes in the shareholders’ equity of the Bank ................................. 17
5. Consolidated and separate financial statements ........................................................................ 19
5.1. Assets, Liabilities and Equity statements ............................................................................................. 19
5.2. Income statement ................................................................................................................................... 23
5.3. Cash flow statements.............................................................................................................................. 25
6. ANNEXES ...................................................................................................................................... 28
6.1. Changes in the Constitutive Deed
6.2. List of Bank’s subsidiaries and its controlled entities
6.3. Related parties’ lists
6.4. Statements of the Supervisory Board and Management Board members regarding direct or
indirect interests in entities
6.5. Annexes related to the members of the Supervisory Board and Management Board CVs
6.6. Annexes related to changes in Supervisory Board and Management Board composition
6.7. Compliance statement
6.8. Financial statements and auditor’s report
II. Consolidated and individual financial statements as of December 31, 2023
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2023 Annual Report as per FSA Regulation 5/2018
1. Analysis of the Bank’s activity
1.1 Company’s presentation
UniCredit Bank S.A. (the „Bank”) is part of UniCredit Group SpA, which owns 13 banks in Europe and serves
over 15 million customers worldwide, being one of the main financial institutions in Romania. The Bank
provides retail and commercial banking services in Romanian Lei (“RON”) and foreign currency for private
individuals and companies. These include: accounts opening, domestic and international payments, foreign
exchange transactions, working capital finance, medium and long term credit facilities, retail loans, bank
guarantees, letter of credits and documentary collections.
UniCredit Bank S.A. (the “Bank”), having its current registered office is in Bucharest, 1F Expozitiei
Boulevard, District 1, Romania. The Bank was established as a Romanian commercial bank as Banca
Comerciala Ion Tiriac S.A. in 1991, which merged with HVB Bank Romania SA on 01.09.2006, resulting Banca
Comerciala HVB Tiriac S.A. As a result of the merger by absorption of the former UniCredit Romania S.A. (the
absorbed bank) by Banca Comerciala HVB Tiriac S.A. (the absorbing bank), the Bank is licensed by the
National Bank of Romania to conduct banking activities.
UniCredit Bank S.A. is a joint stock company incorporated in 1991, registered with the Trade Register
Bucharest under number J40/7706/1991, sole registration number (CUI) RO361536, registered with the
Banking Register under number RB-PJR-40-011/1999, having EUID ROONRCJ40/7706/1991
(http://www.bnro.ro/files/d/RegistreBNR/InstitCredit/ban1_raport.html ).
As of 31 December 2023, UniCredit Group (the “Group”) consists of UniCredit Bank S.A. (the “Bank”)
as parent company, and its subsidiaries, UniCredit Consumer Financing IFN S.A. (“UCFIN”), UniCredit
Leasing Corporation IFN S.A (“UCLC”) and UniCredit Insurance Broker S.R.L (“UCIB“). Further details
are available in the Reporting entity note presented in the notes to the consolidated and individual
financial statements for the period ended 31 December 2023.
The businesses of the subsidiaries and the percentage stake of the Bank in its subsidiaries are presented
within the consolidated and individual financial statements, prepared in accordance with IFRS, as endorsed
by EU for the period year ended at 31 December 2023.
As at 31 December 2023 the Group carried out its activity in Romania through its Head Office located
in Bucharest and through its network, having 168 branches/Bank 166 branches (31 December 2022:
Group 164 branches/Bank 162 branches) in Bucharest and in the country.
1.1.1 Main results of the Group’s activity and significant transactions
For UniCredit Group, the 2023 was marked by a positive evolution of the activity, based on the
Romanian economy re-opening in the post-pandemic context and private consumption recovery.
Throughout this period, the focus was set on consolidating the market position and risk management
- the solid position on the market allowing the Group to continue to contribute to the recovery of the
economy and to offer its clients high quality products and services.
UniCredit Group Romania has obtained a consolidated net profit of RON mil 1,438 in 2023 (UniCredit
Bank: RON mil 1,294), a increase of 44.14% (UniCredit Bank: 47.20%) compared with the same period
of the previous year generated by the increase in net interest income.
UniCredit Group Romania had registered in 2023 RON mil 3,200 consolidated operational income,
increasing by 26.01% compared with the year 2022, on the back of higher net fee and commission
income and net interest income, following the increase of commercial volumes and interest rates. The
operational expenses in amount of RON mil 1,202, registered an increase of 8.14% as compared with
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2023 Annual Report as per FSA Regulation 5/2018
previous year, mainly due to the increase of the expenses with the contribution to the resolution fund
and of various other expenses impacted by higher inflation (including salary expenses).
UniCredit Romania Group's financial indicators show a solid position: the annualized return on equity
(ROE) at 16.38% and annualized return on assets (ROA) reached 1.93% at the end of 2023. Cost-income
ratio was at 37.57%.
1.1.2. Evaluation of the technical level of the Bank
Digitisation of banking services forms the backbone of UniCredit's strategy, with the ambition of being
a truly digital bank, powered by data and new technological solutions in every endeavor we undertake.
The Bank is constantly improving and developing its digital offer, capitalizing on digital opportunities
to better understand customers' behaviors and expectations, to provide them with faster and more
efficient solutions that anticipate and answer their needs.
Thus, the efforts to develop and promote the most innovative digital solutions, functionalities and
alternative channels continued in 2023. UniCredit Bank customers can choose from numerous digital
functionalities, and the Online Banking and Mobile Banking applications represent efficient, simple
and intuitive channels of remote interaction with the Bank.
Last but not least, the Ioana voice guide from UniCredit Bank Contact Center is part of the bank's
digital transformation strategy and offers private individual clients an improved and intuitive
interaction experience with the bank.
The digitalization trend also continued both within UniCredit Consumer Financing IFN SA, with an
emphasis on simplified digital flows meant to improve customers’ experience, and UniCredit Leasing
Corporation IFN SA.).
1.1.3. Assessment of the technical and material supply activity (internal and external sources)
The technical and material provisioning activity is not significant for the Bank and for the Group.
1.1.4. Evaluation of the sales activities
In 2023, the Bank continued to support the real economy in Romania and to be a reliable partner for
its clients, offering quick support to the business environment, through instruments appropriate to
the context and to offer special financing conditions in terms of costs and requested guarantees, in
the context the various guarantee conventions of which it is a part.
Specifically, the bank continued:
- to offer small and medium-sized companies access to financing under advantageous conditions,
which benefit from a guarantee of 60% of the loan value, through the SME Initiative (eng.: SME
Initiative), in order to establish new companies, expand the current activity, consolidate the activity ,
or the realization of new projects, including by approaching new markets. It is a guarantee instrument
accessed by UniCredit Bank from the European Union, the program being financed by the EU through
FEADR and Horizon 2020 and administered by the European Investment Fund and the European
Investment Bank;
- to offer agricultural clients financing for working capital and investments, with a 50% Fund of Funds
guarantee, with amounts from FEADR, through the National Program for Agriculture and Rural
Development, together with amounts from the national budget;
- to make available to micro-enterprises a financing program in lei for current expenses with a
maximum value of 25,000 euros (equivalent in lei), which benefits from a guarantee of 80% of the
loan value through the EaSI guarantee (instrument accessed by UniCredit Bank from EU through the
European Investment Fund, part of the European Investment Bank Group);
- to implement credit facilities with a Cultural and Creative Sector guarantee through the European
Investment Fund.
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2023 Annual Report as per FSA Regulation 5/2018
An important direction in the bank's activity was the participation in the local risk sharing schemes
provided by the Romanian state, in order to offer support to companies affected by the consequences
of the pandemic and the Russia-Ukraine war. In this sense, credit facilities were granted using own
funds and state guarantees to companies from numerous sectors of activity, such as production,
construction, agriculture, food industry, IT, transport and others, as follows:
- continued the SME IINVEST PLUS Program, through its six components: IMM Invest Romania, AGRO
IMM Invest, IMM PROD, GARANT CONSTRUCT, RURAL INVEST and INNOVATION, under the Ukrainian
Temporary Framework state aid scheme.
At the same time, UniCredit continued to be the partner bank for the implementation of the Grants
for working capital programs granted to entities in the agri-food sector, Start-up Nation and Femeia
Antreprenor managed by the Ministry of Entrepreneurship and Tourism, facilitating access to non-
refundable financial aid, essential in this period. The bank continued to be active and proactive in
supporting small and medium-sized companies and to grant numerous financings to those sectors of
activity with positive evolution, such as agriculture, food industry, IT, chemical industry,
pharmaceutical, health, electronics.
At the same time, in order to improve its clients' access to financing, the Bank signed several guarantee
agreements with the European Investment Fund, for accessing the Sustainability, Innovation and
Digitization, Cultural and Creative Sector, Skills and Education guarantees, these benefiting from the
support of the InvestEU Fund, but also the Sustainability and Competitiveness guarantees within the
National Resilience and Recovery Program.
In the Corporate area, the support offered to companies in the process of gradual transition to the
green economy and the implementation of changes with a positive impact on the environment
continued to be of maximum interest. Besides this, in the public administration sector, UniCredit Bank
won a series of tenders for the contracting of loans to finance several investments of local interest,
aimed at ensuring our cities the image of true European cities. Special support was also given to
strategic investments for the development of the country's regions, key components of the National
Recovery and Resilience Plan of Romania.
UniCredit acted as Joint Holder of the Subscription Register within the Hydroelectric Public Sale Offer
at the Bucharest Stock Exchange, the largest Initial Public Offer (IPO) in Romania to date and one of
the largest in Europe in 2023 A transaction of such magnitude required proper preparation and effort,
UniCredit being involved through numerous colleagues from the Group but also through the valuable
and essential contribution of colleagues from the Corporate division.
The product area was under constant attention, new functionalities being added to the internet
banking application, BusinessNet for legal entity customers, so that companies have permanent access
and control over the portfolio of issued debit cards and have the possibility to make payments directly
in an extensive list of currencies (over 90 new currencies).
UniCredit's expertise and commitment to offer clients the highest quality services and solutions on
the Romanian market were also recognized in 2023 through numerous distinctions. One of these is
the designation of UniCredit Bank as "Corporate Bank of the Year" at the Financial Leaders Hall of
Fame Gala 2023, organized by Business Arena magazine, a distinction offered both for the results
recorded in 2023 and for the important transactions in which the bank was involved but, especially,
for the appreciation enjoyed by the Corporate team from Romanian clients.
At the same time, UniCredit Bank launched in 2023 a new functionality in the internet banking
application, BusinessNet for legal entity clients - issuing and reissuing debit cards 100% online -
offering companies permanent access and control over the portfolio of issued debit cards.
UniCredit Bank continues to be a reliable partner of its clients, individuals, providing them with
financial solutions appropriate to their needs for purchasing a home or optimizing the costs of a real
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2023 Annual Report as per FSA Regulation 5/2018
estate purchase loan by refinancing loans. In an economic context in which the increase in the ROBOR
and IRCC indicators led to significant increases in loan rates, we observe a significant dynamic in the
demand for mortgage refinancing. Customers are looking for solutions to transform loans with
variable interest into ones with fixed interest, so that they can shelter themselves from interest rate
variations for a period of time. At the same time, the increase in inflation and the decrease in
purchasing power, as well as the increase in interest rates in the market, have affected the budget of
Romanian consumers, causing them to reduce their expenses and look for more advantageous
alternatives. UniCredit Bank understood this need of the clients and adjusted its financing offer so as
to have in its portfolio an extremely competitive product, easy to access, with optimized costs for the
client and additional benefits.
Because we relied on those products built around the actual needs of customers, we had a very good
evolution of the segment of loans intended for the purchase of homes, with the total volume of
mortgage sales registering a significant increase in 2023 compared to 2022.
One of the main priorities of 2023 was the implementation of the local ESG strategy. In accordance
with Group strategy, we adopted local objectives for both green financing and social financing, and
we supported our clients in the transition to a more sustainable and fair economy.
We continued to finance businesses in the green energy field, renewable energy and energy efficiency,
while green mortgage loans for individuals continued to be one of the most requested products. Part
of our ESG strategy are the financial and entrepreneurial education programs for high school students
with a technical profile. More than 35,000 students completed the financial education and job training
courses in 2023, and 340 of them participated in the 10 urban entrepreneurship camps, where they
learned how to develop a business plan and how to find financing.
UniCredit Consumer Financing IFN S.A.
In 2023, UniCredit Consumer Financing accelerated the expansion of commercial activity, the volume
of new loans being 54% higher than in the previous year. The balance of consumer loans was at a
historical maximum, increasing by 30% compared to 2022. These achievements were the result of
both the constant attention to provide customers with competitive financing solutions through a
simplified lending process, as well as of the continuous expansion of distribution channels. In addition,
the offer of financing through loans for personal needs has been constantly adapted to the needs of
clients, being offered interest reductions in the case of income collection in accounts opened at
UniCredit Bank or the purchase of life insurance.
Regarding credit cards, customers benefited from the advantages offered in the interest-free
installments campaigns, carried out on a recurring basis. Efforts to simplify, digitize and improve the
customer experience were also continued through the new facility to access a 100% digital credit card,
directly from the Mobile Banking application and to divide transactions into installments, also through
the mobile application. The expansion of the commercial activity took place in parallel with the careful
management of the credit risk and the constant improvement of the operational efficiency.
UniCredit Leasing
In 2023, UniCredit Leasing celebrated 21 years of existence and the 16th consecutive year in which it
is the leader of the financial leasing industry. The company continued to focus on sustainability
projects (ESG) and financing structures. Thus, the "GoGreen" project continued in 2023 by maintaining
competitive offers to encourage the purchase of electric and hybrid vehicles, but also through
structures dedicated to green energy, whether we are talking about standard products addressed to
the customer segment in the prosumer category or through financing in - a personalized approach to
green projects of medium or large sizes. Digitization has been and will continue to be a priority for
UniCredit Leasing, and it is not a simple project, but a digital journey that we travel together with our
clients.
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2023 Annual Report as per FSA Regulation 5/2018
UniCredit's expertise and commitment to offer clients the highest quality services and solutions on
the Romanian market were also recognized in 2023 through numerous distinctions. Within the 14th
edition of the "Voted Product of the Year®" competition, an international concept that rewards
innovative products, the Personal Achievements Loan 100% Mobile from UniCredit Consumer
Financing was selected as 2023 Product of the Year for Innovation in the NBFC Loans category. The
strong position of UniCredit in Romania was also recognized by the prestigious Euromoney Trade
Finance Survey, which again appointed UniCredit Bank in Romania with top honours in both 'Best
Service' ranking, which assesses levels of customer service, and 'Market Leader' ranking, which
combines penetration, percentage of business and turnover data to create an overall ranking of the
best trade finance banks. UniCredit Leasing was recognized as "Leasing Company of the Year" by the
well-known Romanian economic magazine Piata Financiara and Finmedia, in a gala dedicated to the
profile market, and on the occasion of the Top Bankers Gala, also organized by Piata Financiara and
Finmedia, UniCredit received the "Best branches for loans and savings" distinction.. Last but not least,
during the Biz Sustainability Awards Gala, UniCredit Bank received “The Community Hero Award from
Biz Magazine, being recognized for the last 20 years of involvement in Romanian communities for our
projects in the fields of Arts, Culture, Education & Social and for being among “those who believe in
the power of good and invest to strengthen the communities in which they operate”.
The final of 2023 brought further valuable recognition for the Bank - both as part of the UniCredit
Group and through its entities in Romania. Thus, UniCredit Group was named the “Best sub-custodian
bank” in Central and Eastern Europe at the annual awards of Global Finance magazine, and then "Bank
of the Year" globally in 2023 at the annual ceremony organized by The Banker in London. In Romania,
UniCredit Bank was named "Corporate Bank of the Year" at the Financial Leaders Hall of Fame Gala
2023, organised by Business Arena magazine, while UniCredit Leasing received the award for "Leasing
Company of the Year 2023"; UniCredit Leasing also received the "Best in Leasing" recognition at the
Piața Financiară Awards Gala for its performance in 2023. UniCredit Bank also received the Excellence
Award from the Professional Association of Real Estate Agents in Romania (APAIR) for being
committed to supporting real estate education for over 5 years. The Haute Coulture Gala organized
by Biz magazine brought one last award at the end of the year - UniCredit received The Power of Art
award, being recognized for supporting as a main partner the most important exhibition ever
organized in Romania, the Picasso Effect.
1.1.5. Assessment of the Banks’ respectively Group’s personnel and related aspects
As of 31 December 2023, UniCredit Bank S.A. had 2,964 full-time employees, and consolidated with
UniCredit Leasing Corporation IFN S.A and UniCredit Consumer Financing IFN S.A had 3,296 full-time
employees.
UniCredit Bank S.A. is permanently concerned with the training and professional development of the
employees, organizing courses both for the improvement of the technical knowledge and of the specific
competences of the banking activity.
In respect of the trade union aspect, 1,416 (48% employees of the Bank) are members of the Trade Union.
Description of the relationship reports between management and employees, and any conflictual
elements related to these reports.
The annual performance evaluation represents the completion of a continuous dialogue process that
takes place throughout the year between the manager and the employees. A correct understanding
of performance and expectations helps employees to identify the right path to reaching their
maximum potential, in the most efficient way possible: Performance Evaluation.
Meanwhile, within the organization, professional training courses have been held for development of
the managerial competences of managers, which aimed mainly at aspects related to employees’
motivation, providing feedback, efficient management and organisation of teams, as well as activities
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2023 Annual Report as per FSA Regulation 5/2018
regarding the improvement of performance and employees productivity, motivation, their
commitment and cooperation between employees, as well as between managers and employees.
1.1.6. Assessment of the issuer activity on the enviroment
There are no (existing or future) litigations regarding the breach of environment protection legislation.
1.1.7. Assessment of research and development
The research and development activity of UniCredit Bank Group, including the know-how received
from UniCredit Spa Group, was mainly directed to improvement of efficiency and productivity of:
• Products and services offered to customers;
• Risks management systems;
• Internal control systems;
• Financial accounting systems;
• Management information system;
• IT systems;
• Human resources management programs;
• Decision making systems.
1.1.8. Assessment of the business of the company on risk management
UniCredit Bank S.A. continued to carefully analyze the actual and potential risks, reflecting the
appropriate level of provisioning and capital requirements calculation.
UniCredit Bank S.A. aimed to develop a holistic framework for the management of significant risks –
credit risk, market risk, operational risk, liquidity risk, reputational risk, business risk, strategic risks
and real estate investment risk – taking into account the correlations and interdependences between
different risk types.
The main risks to which the UniCredit Group is exposed are:
1.1.8.1. The foreign exchange risk
UniCredit Group is exposed to foreign exchange risk, as a consequence of its foreign exchange
transactions performed in foreign currencies, respectively of the mix of currencies in which the assets
and the liabilities are denominated.
The main foreign currencies held by UniCredit Group are EUR and USD. UniCredit Bank S.A strictly
monitors and manages the foreign currency position and monitors the exposure to the internal limits
set by internal procedures.
1.1.8.2. Interest risk
UniCredit Group faces interest rate risk that could be a result of exposure to unfavourable fluctuations
on the market. The change of the interest rates on the market directly influences the income and
expenses related to the financial assets and liabilities bearing variable interests, as well as the effective
value of those bearing fixed interest rate.
Interest rate fluctuations can be a source of profit and increase in the value of shareholders'
investment, but, at the same time they can pose a threat to the bank's revenues and capital. Variable
interest rates influence the level of income through the effect on interest income and expenses as
well as on other operating expenses and income that are sensitive to changes in rates; at the same
time, they have an effect on the value generated by the bank by causing variations in the net present
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2023 Annual Report as per FSA Regulation 5/2018
value of assets, liabilities and off-balance sheet items. In this regard, UniCredit Bank S.A has
implemented risk management processes, which keep the interest rate risk within prudential limits.
Interest rate risk management outside the trading portfolio aims to optimize, in a normal market
scenario, the risk return profile and create long-term value while reducing the negative impact on
bank and regulatory capital gains from interest rate volatility.
UniCredit Bank S.A. monitors the exposure to interest rate risk through a system of indicators and
associated limits: duration gap, basis point value, the VaR component of the interest rate outside the
trading book, the sensitivity of net interest income and the change in economic value
1.1.8.3. Credit risk
UniCredit Group is exposed to credit risk representing the risk of negative impact on revenues
generated by debtors not fulfilling the contractual obligations of loans granted on short, medium or
long run.
UniCredit Group manages this risk through a set of comprehensive measures, both at transaction and
debtor, and at global level, related to:
• Strict evaluation of debtors’ creditworthiness and of credit applications;
• Continuous monitoring of the exposures in order to identify any changes that may affect
negatively the overall risk position, in order to adopt the most appropriate solutions for
preventing/reducing the potential losses;
• Computation of expected credit loss (ECL), in accordance with the legislation in force on
international financial reporting standards (IFRS9) and in conjunction with the provisions of
UniCredit Group policies;
• Capital allocation for unexpected credit risk losses, in accordance with regulatory requirements
and UniCredit Group SpA regulations.
• Regular monitoring of the credit risk profile, in order to ensure compliance with the tolerance
limits defined in accordance with the risk management strategy and the Bank’s risk appetite;
In respect of ensuring a prudent management for credit counterparty risk, the UniCredit Bank S.A.
deals with international banks with adequate ranking based on specific assessment criteria and strict
internal rules. There are specific limits for the transactions with other banks related to deposits and
foreign currency exchanges.
1.1.8.4. Liquidity risk
The liquidity risk is the probability of UniCredit Group falling short of its due payments resulting from
its contractual relations with clients and third parties. Under normal conditions of market functioning,
the liquidity risk may materialize also through the need for UniCredit Bank S.A to pay a premium over
market rates to be able to access liquidity.
Among the main potential generators of liquidity risk, the Bank distinguishes between liquidity
mismatch risk/refinancing risk, liquidity contingency risk, market liquidity risk.
Management of liquidity risk
In line with UniCredit Group’s liquidity framework, the main goal of the overall liquidity management
is to keep the liquidity exposure at such a level that UniCredit Bank S.A is able to honour its payment
obligations on an on-going basis, but also during a crisis without jeopardizing its franchise value or its
brand’s name.
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2023 Annual Report as per FSA Regulation 5/2018
Hence, two main operating models for the liquidity management are defined: going concern liquidity
management and the contingent liquidity management.
From a liquidity risk governance perspective, the Bank has two type of operational structures:
managing bodies acting as strategic decision taking functions and operational units acting as operative
liquidity management functions, i.e. Finance, Financial Risk, Markets-Treasury.
In accordance with the strategic goal of self-sufficient funding, the Group’s liquidity and funding
strategy is centred on:
• achieving a well-diversified customer funding base;
• development of strategic funding through own bonds issues and covered bonds issues;
• development of relations with various international financial institutions and foreign banks for
special financing programs.
The liquidity cost benefit allocation is an important part of the liquidity management framework.
Liquidity is a scarce resource and accordingly a proper management of costs and benefits is essential
in order to support sound and sustainable business models. Therefore, the Bank has put in place a
proper mechanism for internal funds’ transfer pricing.
Exposure to liquidity risk
Key indicators used by UniCredit Bank S.A. for measuring liquidity risk are:
• the daily short-term liquidity report, through which cash inflows and outflows mainly coming from
inter-bank transactions are monitored;
• the structural liquidity ratios/gaps, used to assess the proportion of medium-long term assets
sustained with stable funding;
• regulatory indicators: UniCredit Bank S.A has to comply with the limits imposed by National Bank
of Romania, such as the liquidity indicator calculated according to NBR Regulation no. 25/2011
and the Liquidity coverage ratio, calculated according with to the provisions of Regulation
575/2013 and Regulation no. 61/2015;
• other key indicators for the management of liquidity and funding needs used to assess the liquid
assets, the concentration of funding and the way in which loans to customers are sustained by
commercial funds.
UniCredit Group sets the limit and triggers levels for the main indicators used to measure the liquidity
risk and, in case a breach is observed or anticipated, specific requested actions are taken for correcting
the structure of the asset and liability mix of UniCredit Bank S.A.
Regular stress testing assessments are performed in order to evaluate the liquidity position of
UniCredit Group. In case of a deteriorating position, liquidity stress tests are one of the main metrics
in order to support management’s decisions before and also during stress situations. Liquidity stress
test results are useful in order to assess the “right” sizing and composition of a liquidity buffer on a
regular basis. As such, liquidity stress testing serves as an essential tool of assessment of the liquidity
risk in an on-going basis, rather than in a crisis situation only.
1.1.8.5. Operational risk
Operational risk means the risk of loss resulting either from the use pf inadequate or failed internal
processes, people and systems or from external events. Operational risk includes legal risk, but
excludes strategic and reputational risk.
Legal risk is the risk of losses as a result of fines, penalties and sanctions for which the credit institution
is liable due to failure to apply or deficiently applying legal or contractual provisions, as well as due to
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2023 Annual Report as per FSA Regulation 5/2018
the fact that contractual rights and obligations of the bank and / or counterparty are not appropriately
provided.
The operational risk management framework within UniCredit Bank S.A. is well structured and
involves relevant factors in promoting a culture favorable to communication, management and
control of operational risk. Operational risk, including all its sub categories, is managed in accordance
with the requirements of the regulatory framework that includes the identification, assessment,
mitigation, reporting and control of operational risks.
For certain subcategories of operational risk (e.g.: IT risk, fraud risk, risk associated with outsourced
activities, conduct risk or legal risk), the framework includes regulations and tools specially designed
for administration and control, as well as the permanent involvement of organizational structures with
specific responsibilities assigned in this regard.
The framework is supported by the existence of an independent function dedicated to operational
risk, by a structure of relevant committees and by a system of reporting operational risk to the
Management of the Bank.
The operational risk management system is integrated into the internal processes defined for the
management of significant risks. The main tools used for identification, assessment, monitoring,
mitigation, reporting of operational risk, are: loss data collection and analysis, risk indicators
monitoring, scenario analysis, Permanent Workgroup analyses, evaluations of processes and activities
from the perspective of operational risk, mitigation actions definition (independently or as part of the
previously mentioned tools), management and Group reporting. Moreover, products, projects and
internal regulations are analyzed before approval and implementation and feedback and advice is
provided by all relevant areas within the Bank.
1.1.8.6. Reputational Risk
Reputational risk is the current or prospective risk to earnings and capital arising from adverse
perception of the image of the Bank on the part of customers, counterparties, shareholders/investors,
regulators or employees (stakeholders).
In particular, it is the risk arising from negative perception of customers, counterparties, shareholders,
investors, debt-holders, market analysts, other relevant parties (such as civil society - NGOs, media,
etc) or regulators that can adversely affect the ability to maintain existing, or establish new business
relationships and continued access to sources of funding.
UniCredit Bank S.A. has implemented a series of policies, processes, methods, specific indicators and
systems for controlling the reputational risk, in order to evaluate, monitor, reduce and report
periodically to relevant bodies.
1.1.8.7. Business Risk
Business risk is defined as adverse, unexpected changes in business volume and/or margins that are
not due to credit, market and operational risks. It can lead to serious losses in earnings, thereby
diminishing the market value of a company.
Business risk can result above all from a serious deterioration in the market environment, changes in
the competitive situation or customer behavior, but may also result from changes in the legal
framework.
1.1.8.8. Real Estate Risk
Real Estate Risk is defined as potential losses in market value resulting from market fluctuations of
UniCredit Bank’s own real estate portfolio.
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2023 Annual Report as per FSA Regulation 5/2018
1.1.8.9. Strategic Risk
The risk of suffering potential losses due to decisions or radical changes in the business environment,
improper implementation of decisions, lack of responsiveness to changes in the business
environment, with negative impact on the risk profile and consequently on capital, earnings as well as
the overall direction and scope of a bank on the long term.
1.1.8.10. Risk of Excessive Leverage
Risk of excessive leverage represents the risk resulting from the Bank’s vulnerability due to leverage
or contingent leverage that may require unintended corrective measures to its business plan,
including distressed selling of assets which might result in losses or in valuation adjustments to its
remaining assets.
1.1.8.11. Inter-concentration Risk
Within UniCredit Bank S.A., the following approaches relating to concentration risk are applicable:
• Intra-risk concentration risk is considered in the risk management processes for each significant
risk
• The risk of inter-concentration is considered both in the risk management processes for individual
risks and integrated when performing stress testing and evaluation of capital adequacy
1.1.9. Main events, factors of uncertainty that can affect the Group’s liquidity compared to previous
year
The Romanian economy grew by about 1.4%yoy in 2023, at a significantly slower pace as compared
to 4.6% recorded in 2022. The supply-chain bottlenecks and the prolongation of the conflict in the
region, which determined the increase of the energy and food prices, as well as the lower external
demand, weigh down on Romania’s industrial output and exports. Among the sectors that performed
well in 2023, the main contributors to GDP growth were the agriculture, IT&C services and
constructions, while two important sectors, manufacturing and retail trade, had a negative
contribution to GDP. In 2023, the investments became the main contributor to GDP growth, while
consumption had a lower contribution, affected by the high inflation and interest rates. The net
exports had a positive contribution to GDP, while the inventories had a significant negative
contribution.
The investments had been supported by the EU funds available under the Recovery and Resilience
Fund (RRF), locally named the National Recovery and Resilience (PNRR). Within PNRR, Romania can
access up to EUR 29.2bn during 2021-2027 period, approx. EUR 2bn in grants and EUR 1bn in loans
every six months, the equivalent of 2% of GDP each year. Until present, Romania received about EUR
9bn as pre-financing (loans and grants) and another amount of EUR 2.6bn should be received in 2024.
In our baseline scenario, we revised slightly down the forecast for the economic growth to around 3%
in 2024. The investments should remain the main growth driver, sustained by the large amount of EU
funds available, while the private consumption is expected to recover helped by the real wage growth,
the higher pensions and the government transfers.
The government plans to cut the budget deficit by 2024 closer to the 3% of GDP target agreed with
the European Union, will be postponed, the fiscal tightening being possible only after the elections.
We are expecting the budget deficit to decline to 6% of GDP in 2024 and 4.6% of GDP in 2025. We are
estimating the public debt will increase moderately to above 50% of GDP, by about 1pp per year, in
2024 and 2025, with Romania preserving the investment grade rating.
In Romania, the annual inflation increased significantly starting 4Q 2021, triggered by several supply-
side shocks at the global level, the liberalization of the local electricity market for household
consumers in July 2021 and the war between Russia and Ukraine, which started in February 2022,
events that strongly disturbed the global energy and commodities markets. The headline inflation
14
2023 Annual Report as per FSA Regulation 5/2018
increased rapidly in the first half of 2022 reaching a maximum of 16.8% in November 2022. In 2023
the local energy and food market improved to a certain degree following the better conditions in the
supply chains, the lower oil price (down at an avg. 79 USD/barrel in December), as well as the
legislative cap on energy and basic food prices introduced by the government. The annual inflation
declined to a single digit starting July 2023 and to 6.6%yoy in December 2023, due to a base effect of
food and energy prices.
Romania was among the most affected countries in CEE region by the increase in the food prices, due
to a high weight of food in the consumer basket (over 30%). The food prices remained in double digits
by the end of September 2023 (+10.4%yoy), then declined below 6% in December 2023. In H2 2023
the disinflation process benefited by a base effect and also by the EGO adopted by the government in
June 2023 introducing a 20% cap on the retailers’ profit margins for 14 basic food products, applicable
starting August 1st, 2023 and prolonged by December 31st, 2023. Moreover, the government
increased the gross minimum monthly wage to RON 3,300 starting October 1st, 2023.
We expect the annual inflation to remain quite high, above 6.0% in December 2024, remaining outside
the target band (2.5% +/-1pp) over the next two years, as the consumer demand will remain quite
strong in the election year 2024 and after elections, in 2025, we are expecting tax rises and higher
electricity prices once the capping expires.
Aiming to fight the exceptionally high inflation, BNR tightened the monetary policy, by gradually
increasing the key rate starting October 2021, from the record low 1.25%, up to 7.00% in January 2023.
We expect NBR to start the rate cuts in 2H 2024, only if the government has a credible path to the
fiscal adjustment. While we expect 1pp in cuts to 6% this year, the scope is narrowing the longer it
takes to reduce the budget deficit.
Even if the NBR starts cutting later than its regional peers, financial conditions will not be tighter
because the Romanian central bank allowed interbank rates to fall close to the overnight deposit rate
of 6% by allowing excess liquidity to remain in the market.
The main interbank money market rates continued to decline gradually in 2023 up to 6.22% (Dec
average), supported by the easing of liquidity conditions. We are expecting to further decline by about
1pp by the end of 2024. The yields on government securities declined by about 2pp in 2023 to an 6.2%
average for 10Y state securities triggered by the improvement in the global financial market sentiment
and in the risk perception towards the region.
The EUR-RON exchange rate depreciated to an average 4.9465 in 2023 as compared to an average
4.9303 in 2022, while it ended the year on a depreciation trend, at an average above 4.97 in
November and December. The Romanian leu remains one of the most stable currencies in CEE,
supported by the Central Bank’s policy, which is using the exchange rate as an anti-inflationary anchor.
In 2024, we expect EUR-RON to move into a 5.00-5.10 range, returning to 0.1 RON depreciation per
year, once the inflation is on a clear downward path. Romania’s structural imbalances, respectively
the high current account and fiscal deficits, are in favor of a gradual depreciation of the national
currency. We expect the current account deficit to decline at 6.4% of GDP in 2023 and 5.2% of GDP in
2024 (vs. 9.3% of GDP in 2022).On the deposits’ side, the total savings of the residents slowed down
to 7.1% as of November 2022 (vs. 13.4%yoy in 2021), as both the private individuals and companies
spent part of their savings due to high inflation.
Lending slowed down in 2023 at 6.5%yoy, from 12.1% in 2022, due to both components, the RON
lending at 5.8%yoy (vs. 6.6%yoy in 2022), while the foreign currency decelerated to 7.9%yoy (vs.
26.7%yoy in 2022 when it was stimulated by the post-pandemic recovery of the economy). The pace
of lending to companies halved at 11%yoy (vs. +20.2% in 2022), while the one of the loans to
individuals was 3 times slower at 1.4%yoy in 2023 (vs. 4.3%yoy in 2022). On the deposits’ side, the
total savings of the residents accelerated to 11.8%, from 7.1% in 2022, fully due to RON deposits
stimulated by the higher interest rates, while the foreign currency deposits declined. Both the deposits
15
2023 Annual Report as per FSA Regulation 5/2018
from private individuals and from companies accelerated to about 12%yoy.
The NPL ratio at the banking sector level remained on a declining trend, at 2.61% as of September
2023 (vs. 2.82% as of September 2022).
2. Tangible and intangible assets of the Group
2.1. Presentation and analysis of the effects on the financial position of the Group regarding the
capital expenditures, current or in advanced, compared to those related to the same reporting
period of the previous year
Tangible and intangible assets of the UniCredit Romania Group (net amount) were in the amount of
RON mio 850 as of 31 December 2023 (including assets representing right of use from IFRS 16),
compared to RON mio 742 as of 31 December 2022, relatively stable evolution.
2.2. Description of the location and characteristics of production capacities owned by the Bank
As of 31 December 2023, UniCredit Bank S.A owned the following buildings in which it is performing
its activity through its branches: Bucuresti („Norilor”, „Victoria”, „Traian”, „SMBU”, „SMB2”, ”Magheru”,
branches), „Calafat”, „Focsani”, „Satu-Mare”, „Craiova”, „Pitesti”, „Oradea”, „Piatra Neamt”, etc..
2.3. Mention of potential problems related to property rights over the Bank's tangible assets
There are no problems related to property rights.
3. Capital Market for the bonds issued by the Bank/Group
3.1. Description of the market in Romania and other countries on where the issued bonds are
traded
In July 2017, UniCredit Bank S.A issued RON denominated medium and long term bonds listed on the
Bucharest Stock Exchange with a nominal value of 10,000 RON/bond and maturities in 2020, 2022 and
2024. As of 31.12.2023 there is one remaining bond out of the three instruments issued in 2017.
• Symbol UCB24, ISIN ROUCTBDBC048, number of instruments 18,350, floating rate ROBOR 6M +
1.05%, interest coupon half-yearly payable and redemption date on 15 July 2024. Out of 14
interest coupons of this bond issue, the first 12 coupons have been paid to the bond holders.
In December 2022, UniCredit Bank S.A issued 977 RON denominated medium and long term bonds
with a nominal value of 500,000 RON per piece and listed on the Bucharest Stock Exchange in January
2023:
• Symbol UCB27, ISIN RO3WU5H09299, number of instruments of 977, coupon rate 9.07% and a
maturity of 5 years.
In November 2023, UniCredit Bank S.A issued 960 RON denominated medium and long term bonds
with a nominal value of 500,000 RON per piece and listed on the Bucharest Stock Exchange in
December 2023:
• Symbol UCB28, ISIN ROG0M1EGXBN8, number of instruments of 960, coupon rate 7.82% and a
maturity of 5 years.
Information regarding the bonds presented above can be foundon the Bucharest Stock Exchange
website:
https://www.bvb.ro/FinancialInstruments/Details/FinancialInstrumentsDetails.aspx?s=UCB24
https://www.bvb.ro/FinancialInstruments/Details/FinancialInstrumentsDetails.aspx?s=UCB27
BVB - Obligatiuni UCB28 UniCredit Bank bonds
16
2023 Annual Report as per FSA Regulation 5/2018
3.2. Description of the way the Bank settle the obligations to the holders of those securities
The coupon payments are made in accordance with the provisions of the Chapter „Bonds terms and
conditions”, paragraph 9 Payments in the „BONDS ISSUE PROSPECTUS” published on the Financial
Supervision Authority’s website.
(http://www.asfromania.ro) – direct link:
(http://www.asfromania.ro/supraveghere/supraveghere-capital/emitenti-capital-supraveghere/oferte-
publice-capital-supraveghere/prospecte-amendamente/1891-prospectele-amendamentele-certificatele-
pentru-ofertele-de-vanzare-aprobate-de-a-s-f-c-n-v-m).
UniCredit Bank S.A. signed in August 2017 Service Contracts with the Central Depository and has the
status of paying agent for its own issued bonds.
3.3. Description of the Bank’s policy regarding dividends
General Meeting of Shareholders approved the proposal for the distribution of the Bank's net profit
for the year 2023 in the amount of 1,294 RON, calculated and presented in the Consolidated and
Individual Financial Statements prepared in accordance with the International Financial Reporting
Standards applicable to credit institutions based on the Order issued by the Governor of the National
Bank of Romania no. 27/2010, as follows:
a. the establishment of a reserve in the amount of 40,149,449.00 lei related to the profit reinvested in the 2023
financial year, for which the Bank applied the profit tax exemption, in accordance with art. 22 of Law no.
227/2015 regarding the Fiscal Code;
b. the distribution of dividends in the amount of 963,004,128.91 lei, which will be paid no later than June 30,
2024, proportional to each shareholder's share in the Bank's paid-up capital;
the reinvestment of the remaining net profit in a total amount of 290,722,676.84 lei in order to increase the
capital base and the solvency rate of the Bank in the amount of 40,149 thousand lei to the reinvested profit
reserve (exempted from paying the profit tax according to art. 22 of Law 227/2015).
Reserves for general banking risks include amounts set aside for future losses and other unforeseen
risks or contingencies. These reserves are not distributable.
4. Changes which impact the Shareholders equity and Management of the Bank
4.1. Changes in the administration of the Bank
On 17
th
of April 2008, General Meeting of Shareholders adopted the dual tier governance system, through
which the management of UniCredit Bank SA is ensured by the Management Board, respectively by
Supervisory Board, Management Board members not being able to be in the same time members of the
Supervisory Board.
Presentation of the Supervisory Board members as of 31 December 2023
1. Pasquale Giamboi - Chairman of Supervisory Board;
2. Zeynep Nazan Somer Ozelgin - Member of Supervisory Board;
3. Huseyin Faik Acikalin - Member of Supervisory Board;
4. Riccardo Roscini - Vice-Chairman of Supervisory Board;
5. Graziana Mazzone - Member of Supervisory Board.
6. Teodora Aleksandrova Petkova - Member of Supervisory Board
Presentation of the Management Board members as of 31 December 2023
1. Alina Mihaela Lupu - Executive President (CEO), President of Management Board;
17
2023 Annual Report as per FSA Regulation 5/2018
2. Feza Tan - First Executive Vice-President, Member of Management Board;
3. Andrei Bratu - Executive Vice-President, Member of Management Board;
4. Cengiz Arslan - Executive Vice-President, Member of Management Board;
5. Antoaneta Curteanu - Executive Vice-president, Member of Management Board;
6. Raluca-Mihaela Popescu-Goglea - Executive Vice-president, Member of Management Board;
7. Dimitar Todorov - Executive Vice-president, Member of Management Board;
During 2023, there have been the following changes in the governing bodies of UniCredit Bank regarding:
Changes in Supervisory Board composition between 01.01.2023-31.12.2023:
• Approval, by OGSM held on 21.02.2023, of the prolongation of:
o the mandate of Mr. Riccardo Roscini as member of the Supervisory Board (currently holding
the position of Vice-Chairman of Supervisory Board) for a period of 3 (three) years, starting
with February 21, 2023 until February 21, 2026.
o the mandate of Mrs. Zeynep Nazan Somer Ozelgin as member of the Supervisory Board for
a period of 3 (three) years, starting with February 21, 2023 until February 21, 2026.
o the mandate of Mrs. Graziana Mazzone as member of the Supervisory Board for a period of
3 (three) years, starting with February 21, 2023 until February 21, 2026
• Approval, by OGSM held on 27.03.2023 of Mrs. Tina Pogagic’s appointment as member of the
Supervisory Board of the Bank for a mandate of 3 years, from 27.03.2023 until 27.03.2026
• Acknowledgement, by SB held on 02.11.2023, of the candidacy withdrawal of Mrs. Tina Pogacic
from the position as designated Member of the Supervisory Board of UniCredit Bank S.A.(following
her withdrawal from the candidacy for the position as designated member of the Supervisory
Board of UniCredit Bank S A, due to personal reasons.
Changes in Management Board composition between 01.01.2023-31.12.2023:
• Acknowledgement, by SB held on 06.04.2023, of the termination of the mandate of Mr. Rasvan
Radu as CEO, starting with 17.04.2023
• The approval, by SB held on 03.03.2023, of the prolongation of the Management Board mandate
starting from 17
th
of April 2023 until 17
th
of April 2026
• The approval, by SB held on 03.03.2023 of the prolongation, starting from 17
th
of April 2023 until
17
th
of April 2026, of the following Members of the Management Board:
Name
Role in Management Board
Coordinated Division
Mrs. Feza Tan
First Executive Vice-President
Deputy CEO
Mr. Andrei-Florin Bratu
Executive Vice-President
Risks Management
Mrs. Raluca Popescu-Goglea
Executive Vice-President
Corporates
Mrs. Antoaneta Curteanu
Executive Vice-President
Retail
Mrs. Diana Ciubotariu
Executive Vice-President
Legal
Mr. Dragos Birlog
Executive Vice-President
Compliance
Mr. Dimitar Todorov
Executive Vice-President
CFO
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2023 Annual Report as per FSA Regulation 5/2018
• Acknowledgement, by SB held on 03.03.2023, of the termination of the mandate of Mr. Carlo
Driussi as Member of the Bank’s Management Board, Executive Vice-President (Chief Operating
Office), as of April 17, 2023, following expiry of his mandate
• The appointment, by SB held on 03.03.2023, of Mr. Cengiz Arslan as a new Member of
Management Board, Executive Vice-President, COO
• The approval, by SB held on 29.06.2023, of the change, starting on 01.08.2023, of Mrs. Diana
Ciubotariu, from the position of Member of the Board, Executive Vice President, Coordinator of
the Legal Division to the key position of Director of the Legal Department
• The approval, by SB held on 29.06.2023, of the change, starting on 01.08.2023, of Mr. Dragoș-
Marian Bîrlog from the position of Member of the Board, Executive Vice President, Coordinator of
the Compliance Division to the key position of Director of the Compliance Division
• Appointment by SB held on 29.06.2023 of Mrs. Mihaela-Alina Lupu as Executive President of
Management Board of UniCredit Bank S.A. (CEO).
There are no litigations or administrative proceedings in the Bank’s records regarding the members of the
Supervisory Board or the Management Board of UniCredit Bank.
4.2. Increase of share capital. Changes in the shareholders’ equity of the Bank
As of December 31 2023, the share capital of UniCredit Bank S.A. is of RON 455,219,478.30, consisting of
48,948,331 ordinary shares (same number as for 31 December 2022), with a face value of RON 9.30 /share
and a share premium of RON 75.93 /share. The total value of the share premium is RON thousands 621,680.
As of December 31, 2023, UniCredit Bank SpA, the main shareholder of UniCredit Bank S.A. owns 98.63%
of UniCredit Bank S.A. social capital (same as in 31 December 2022).
As of December 31, 2023, the Shareholders structure was as follows:
Shareholder
Shares’ number
Value (RON)
%
UniCredit S.p.A.
48,277,621
448,981,875,30
98,6298
Romanian Individuals
624,468
5,822,292,90
1,2758
Romanian Legal Entities
21,606
200,935,80
0,0441
Foreign Individuals
17,296
160,852,80
0,0353
Foreign Legal Entities
7,340
68,262,00
0,0150
TOTAL
48,948,331
455,219,478,30
100,0000
The shareholders’ structure of the Bank is as follows:
%
31.12.2023
31.12.2022
UniCredit SpA
98.63
98.63
Others investors
1.37
1.37
Total
100.00
100.00
The structure of the capital is as follows:
RON thousands
31.12.2023
31.12.2022
Statutory social capital
455,219
455,219
IAS 29 – Hyperinflation effect
722,529
722,529
Social capital as per IFRS
1,177,748
1,177,748
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2023 Annual Report as per FSA Regulation 5/2018
5. Consolidated and separate financial statements
5.1. Assets, Liabilities and Equity statements
The structure and the evolution of the main categories of assets, liabilities and equity of the UniCredit Group are presented below:
Group
Bank
In RON thousands
31.12.2023
31.12.2022
31.12.2021
31.12.2023
31.12.2022
31.12.2021
Assets:
Cash and cash equivalents
20,106,053
16,456,169
11,269,108
20,105,745
16,455,940
11,269,028
Financial assets at fair value through profit or loss
97,712
214,714
259,355
97,712
214,714
259,355
Derivatives assets designated as hedging instruments
242,560
310,229
12,249
242,560
310,229
12,249
Placements with banks at amortized cost
142,096
399,455
493,611
142,096
399,455
493,611
Loans and advances to customers at amortized cost
36,196,421
32,849,251
29,395,410
33,892,452
31,054,544
27,427,573
Net lease receivables
4,305,696
3,788,693
3,635,303
7,300
11,342
-
Held-to-maturity investments
9,647,214
8,856,966
7,950,629
9,647,214
8,856,966
7,950,629
Other financial assets at amortized cost
558,257
319,475
241,250
497,953
250,620
209,956
Financial assets at fair value through other comprehensive
income
2,026,525
1,922,518
1,677,415
2,016,760
1,920,172
1,675,069
Investment in subsidiaries
-
-
-
143,116
143,116
143,116
Property and equipment
171,348
179,752
194,583
169,000
176,415
186,624
Right of use assets
254,151
199,230
168,672
242,889
181,355
162,870
Intangible assets
424,876
362,782
300,752
406,108
344,366
284,598
Current tax assets
22,059
8,109
568
-
-
-
Deferred tax assets
57,961
163,726
142,887
49,686
73,999
59,683
Other assets
419,432
175,767
218,841
51,504
50,866
41,138
Total assets
74,672,361
66,206,836
55,960,633
67,712,095
60,444,099
50,175,499
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2023 Annual Report as per FSA Regulation 5/2018
Group
Bank
In RON thousands
31.12.2023
31.12.2022
31.12.2021
31.12.2023
31.12.2022
31.12.2021
Equity:
Share capital
1,177,748
1,177,748
1,177,748
1,177,748
1,177,748
1,177,748
Share premium
621,680
621,680
621,680
621,680
621,680
621,680
Cash flow hedging reserve
(6,506)
(7,501)
(33,407)
(6,506)
(7,501)
(33,407)
Reserve on financial assets at fair value through other
comprehensive income
(13,185)
(108,424)
(10,389)
(19,416)
(108,424)
(10,389)
Revaluation reserve on property and equipment
22,500
17,177
14,122
22,500
17,177
14,122
Other reserves
432,942
399,973
365,616
432,942
399,973
365,616
Retained earnings
6,369,744
4,981,500
4,262,398
5,633,921
4,374,995
3,761,449
Group
Bank
In RON thousands
31.12.2023
31.12.2022
31.12.2021
31.12.2023
31.12.2022
31.12.2021
Liabilities:
Financial liabilities at fair value through profit or loss
120,253
176,965
32,129
120,253
176,966
32,129
Derivatives liabilities designated as hedging instruments
202,404
262,514
66,812
202,404
262,514
66,812
Deposits from banks
1,240,982
1,050,418
666,990
1,240,982
1,050,418
666,990
Loans from banks
6,406,673
5,653,932
3,995,917
584,966
849,329
570,921
Deposits from customers
50,955,312
45,310,940
39,985,660
51,002,566
45,404,198
40,069,143
Debt securities issued
4,002,296
3,502,834
2,491,879
4,002,296
3,502,834
1,014,391
Other financial liabilities at amortized cost
1,185,038
1,307,973
508,155
1,149,294
1,239,449
434,967
Subordinated liabilities
952,073
945,604
944,183
842,632
836,761
835,325
Lease liabilities
255,803
198,403
168,791
250,414
193,362
164,895
Current tax liabilities
18,736
24,969
41,468
18,546
24,969
35,135
Provisions
206,162
250,064
220,124
226,903
250,737
216,201
Other non-financial liabilities
346,087
279,645
293,778
207,970
176,914
171,771
Total liabilities
65,891,819
58,964,261
49,415,886
59,849,226
53,968,451
44,278,680
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2023 Annual Report as per FSA Regulation 5/2018
Total equity for parent company
8,604,923
7,082,153
6,397,768
7,862,869
6,475,648
5,896,819
Non-controlling interest
175,619
160,422
146,979
-
-
-
Total equity
8,780,542
7,242,575
6,544,747
7,862,869
6,475,648
5,896,819
Total liabilities and equity
74,672,361
66,206,836
55,960,633
67,712,095
60,444,099
50,175,499
22
2023 Annual Report as per FSA Regulation 5/2018
At the end of 2023, total assets of the Group were RON thousands 74,672,361, compared to RON thousands
66,206,836 as of 31 December 2022 (increase by 12.79%).
The main significant changes (increase/decrease) within the UniCredit Group assets were for the following
categories:
• Loans and advances to customers: increase by RON thousands 3,347,170 (+10.20%) from RON thousands
32,849,251 in December 2022 to RON thousands 36,196,421 in December 2023.
• Financial assets at fair value through other comprehensive income: increase by RON thousands 104,007
(5.40%) from RON thousands 1,922,518 in December 2022 to RON thousands 2,026,525 in December 2023.
• Cash and cash equivalents: increase by RON thousands 3,649,884 (+22.20%) from RON thousands
16,456,169 in December 2022 to RON thousands 20,106,053 in December 2023.
• Net lease receivables: increase by RON thousands 517,003 (+13.60%) from RON thousands 3,788,693 in
December 2022 to RON thousands 4,305,696 in December 2023.
• Financial assets at fair value through profit or loss: decrease by RON thousands 117,002 (-54.50%) from
RON thousands 214,714 in December 2022 to RON thousands 97,712 in December 2023.
The main significant changes (increase/decrease) of Group liabilities/equity positions were for the following
categories:
• Derivatives liabilities designated as hedging instruments: decrease by RON thousands 60,110 (-22.90%)
from RON thousands 262,514 as at 31 December 2022 to RON thousands 202,404 as at 31 December 2023.
• Deposits from banks: increase by RON thousands 190,564 (+18.10%) from RON thousands 1,050,418 at 31
December 2022 to RON thousands 1,240,982 at 31 December 2023.
• Loans from banks and other financial institutions at amortized cost: increase by RON thousands 752,741
(+13.30%) from RON thousands 5,653,932 at 31 December 2022 to RON thousands 6,406,673 at 31
December 2023.
• Deposits from customers: increase by RON thousands 5,644,372 (+12.50%) from RON thousands
45,310,940 at 31 December 2022 to RON thousands 50,955,312 at 31 December 2023.
• Debt securities issued: increase by RON thousands 499,462 (+14.30%) from RON thousands 3,502,834 in
31 December 2022 to RON thousands 4,002,296 at 31 December 2023.
• Other financial liabilities at amortized cost: decrease by RON thousands 122,935) (9.40%) from 1,307,973
at 31 December 2022 to RON thousands 1,185,038 at 31 December 2023.
• Lease liabilities: increase by RON thousands 57,400 (+28,90%) from RON thousands 198,403 (31 December
2022) to RON thousands 255,803 (31 December 2023).
• Provisions: decrease by RON thousands 43,902 (-17,60%) from RON thousands 250,064 at 31 December
2022 to RON thousands 206,162 at 31 December 2023.
23
2023 Annual Report as per FSA Regulation 5/2018
5.2. Income statement
Income statement for UniCredit Group and UniCredit Bank S.A. is presented below:
Group
Bank
In RON thousands
2023
2022
2021
2023
2022
2021
Interest income using EIR
3,720,308
2,428,686
1,563,024
3,399,485
2,158,078
1,266,445
Other interest income
246,577
142,630
130,503
15
10
-
Interest expense
(1,859,985)
(897,030)
(327,379)
(1,584,043)
(772,856)
(202,677)
Net interest income
2,106,900
1,674,286
1,366,148
1,815,457
1,385,232
1,063,768
Fee and commission income
827,876
680,157
574,290
749,236
621,832
519,788
Fee and commission expense
(334,880)
(252,427)
(187,107)
(316,951)
(237,423)
(173,517)
Net fee and commission income
492,996
427,730
387,183
432,285
384,409
346,271
Net income from instruments at fair value through profit and
loss
424,639
347,676
325,423
424,701
347,795
325,436
Net gain/(loss) from foreign exchange
85,044
46,155
14,577
65,217
23,494
(7,760)
Fair value adjustments in hedge accounting
(7,616)
10,799
(651)
(7,616)
10,799
(651)
Net gain/(loss) from derecognition of financial assets
measured at amortised cost
93,229
20,596
1,286
83,005
8,759
851
Net gain/(loss) from derecognition of financial assets
measured at FVTOCI
(11,979)
-
28,879
(11,979)
-
28,879
Dividend income
3,868
3,196
2,229
3,868
33,184
2,229
Other operating income
12,540
8,780
9,451
12,780
12,577
10,680
Operating income
3,199,621
2,539,218
2,134,525
2,817,718
2,206,249
1,769,703
Personnel expenses
(566,521)
(525,288)
(467,557)
(500,259)
(463,572)
(412,116)
Depreciation and impairment of tangible assets
(105,279)
(109,209)
(100,520)
(96,996)
(100,048)
(92,663)
Amortization and impairment of intangible assets
(63,272)
(60,946)
(58,813)
(56,700)
(55,166)
(53,946)
Other administrative costs
(434,778)
(398,782)
(343,527)
(400,423)
(370,212)
(316,629)
Other operating costs
(32,262)
(17,355)
(38,329)
(21,549)
(11,072)
(10,711)
24
2023 Annual Report as per FSA Regulation 5/2018
Group
Bank
In RON thousands
2023
2022
2021
2023
2022
2021
Operating expenses
(1,202,112)
(1,111,580)
(1,008,746)
(1,075,927)
(1,000,070)
(886,065)
Net impairment losses on financial instruments
(293,577)
(276,609)
(186,984)
(212,789)
(187,669)
(118,814)
Losses on modification of financial assets
65
207
(123)
65
207
(123)
Net operating income
1,703,997
1,151,236
938,672
1,529,067
1,018,717
764,701
Net impairment losses on non-financial assets
(449)
9,842
(11,449)
(449)
9,842
(11,449)
Net provision gains/ (losses)
(967)
4,108
25,917
(99)
(2,163)
921
Net gains/(loss) from other activities
-
-
(325)
-
-
78
Profit before tax
1,702,581
1,165,186
952,815
1,528,519
1,026,396
754,251
Income tax expense
(264,198)
(167,287)
(147,164)
(234,643)
(147,156)
(114,945)
Net profit for the year
1,438,383
997,899
805,651
1,293,876
879,240
639,306
Attributable to:
-
-
-
Equity holders of the parent company
1,423,187
984,455
779,531
-
-
-
Non-controlling interests
15,196
13,444
26,120
-
-
-
Net profit for the year
1,438,383
997,899
805,651
1,293,876
-
-
25
2023 Annual Report as per FSA Regulation 5/2018
5.3. Cash flow statements
The structure of cash flows is summarized by the statement of cash flows:
Group
Bank
In RON thousands
2023
2022
2021
2023
2022
2021
Operating activities
Profit / (Loss) before taxation
1,702,581
1,165,186
952,815
1,528,519
1,026,396
754,251
Adjustments for non-cash items:
Depreciation and amortization of property, plant and
equipment and of intangible assets
168,551
169,822
159,333
153,696
155,212
146,609
Net impairment losses on financial assets
407,734
312,009
271,479
301,957
222,485
203,562
Fair value (gain)/loss on derivatives and other financial assets
held for trading
40,765
47,281
1,797
40,765
47,281
1,797
Other items for which the cash effects are investing or
financing
45,948
53,013
101,433
16,719
993
17,775
Accrued interest and unwinding effect
100,116
45,926
88,901
78,224
44,914
82,598
Impairment of assets and provisions
(17,053)
88,976
70,829
(18,716)
21,531
35,283
FX impact
(46,283)
32,250
104,958
(56,691)
32,348
110,226
Other non–cash items
45,961
(70,168)
(26,957)
11,861
(29,511)
9,528
Operating profit before changes in operating
assets and liabilities
2,448,320
1,844,295
1,724,588
2,056,334
1,521,649
1,361,629
Change in operating assets:
(Decrease)/Increase in financial assets at fair value through
profit and loss
52,115
102,023
208,686
52,115
102,023
208,686
Acquisition of debt instruments at amortized cost
(740,261)
(861,100)
(1,767,886)
(740,261)
(861,100)
(1,767,886)
(Decrease)/Increase in loans and advances to banks
255,982
95,485
(276,750)
255,982
95,001
(280,887)
(Decrease)/Increase in loans and advances to customers
(3,689,868)
(3,762,234)
(4,427,580)
(3,073,840)
(3,855,224)
(5,347,061)
26
2023 Annual Report as per FSA Regulation 5/2018
Group
Bank
In RON thousands
2023
2022
2021
2023
2022
2021
(Decrease)/Increase in lease investments
(548,075)
(183,508)
(246,588)
(7,260)
(11,305)
-
(Increase)/Decrease in other assets
(474,512)
(73,222)
(66,513)
(250,562)
(41,669)
(76,810)
Change in operating liabilities:
(Increase)/Decrease in deposits from banks
187,563
382,540
71,938
187,563
382,540
71,938
(Decrease)/Increase in deposits from customers
5,299,988
5,224,225
3,678,686
5,467,316
5,161,250
3,445,611
(Increase)/Decrease in other liabilities
(81,045)
815,331
(30,213)
(88,664)
810,943
(25,085)
Income tax paid
(256,056)
(203,123)
(115,570)
(233,293)
(157,269)
(79,516)
Net cash from/ (used in) operating activities
2,454,151
3,380,712
(1,247,202)
3,625,430
3,146,839
(2,489,381)
Investing activities
(Decrease)/Increase in financial assets at fair value through
other comprehensive income
359,980
(354,592)
1,217,176
359,980
(354,592)
1,217,176
Proceeds on disposal of property, plant and equipment
1,243
246
-
1,243
171
-
Acquisition of property, plant and equipment and intangible
assets
(139,653)
(140,026)
(127,820)
(132,617)
(135,356)
(120,730)
Loss from sale of equity investments
-
-
(724)
-
-
-
Dividends received
4,305
3,463
2,301
4,305
33,451
2,301
Net cash used in investing activities
(134,911)
(490,909)
1,090,933
(127,875)
(456,326)
1,098,747
Financing activities
Dividends paid
(704)
(231,745)
(229)
(704)
(231,745)
(229)
Proceeds from bonds issued
480,000
2,751,896
544,401
480,000
2,751,896
544,401
Payments of bonds issued
-
(1,768,432)
(8,279)
-
(280,500)
-
Repayments of loans from financial institutions
(3,349,718)
(1,347,756)
(2,341,878)
(264,648)
(218,175)
(216,317)
Drawdowns from loans from financial institutions
4,265,962
2,914,975
894,284
-
492,947
-
Repayment of the lease liabilities
(82,492)
(73,630)
(64,523)
(79,988)
(70,135)
(62,429)
Net cash from/ (used in) financing activities
1,313,048
2,245,308
(976,224)
134,660
2,444,288
265,426
Net increase/(decrease) in cash and cash
equivalents
3,632,288
5,135,111
(1,132,493)
3,632,215
5,134,801
(1,125,208)
Cash and cash equivalents at 1 January - gross
value
16,459,052
11,270,506
12,242,063
16,458,822
11,270,425
12,234,872
Effect of foreign exchange rate changes
20,848
53,435
160,936
20,842
53,596
160,761
27
2023 Annual Report as per FSA Regulation 5/2018
Group
Bank
In RON thousands
2023
2022
2021
2023
2022
2021
Cash and cash equivalents at 31 December - gross
value
20,112,188
16,459,052
11,270,506
20,111,879
16,458,822
11,270,425
Impairment allowance
(6,135)
(2,883)
(1,398)
(6,134)
(2,882)
(1,397)
Cash and cash equivalents at 31 December -net
value
20,106,053
16,456,169
11,269,108
20,105,745
16,455,940
11,269,028
Cash flow from operating activities include:
Interest received
3,809,279
2,420,080
1,661,460
3,300,754
2,052,992
1,273,694
Interest paid
(1,523,852)
(706,784)
(306,797)
(1,276,291)
(619,477)
(200,734)
28
2023 Annual Report as per FSA Regulation 5/2018
6. ANNEXES
There are attached to the present report the following documents:
6.1. Changes in the Constitutive Deed
In the meeting of 27.03.2023, the Extraordinary General Meeting of Shareholders of UniCredit Bank S.A.
decided:
-The amendment of art. 2 of the Articles of Incorporation of the Bank, which will have the following content:
“The Bank is incorporated as a Romanian closed joint-stock company, which carries out its activity under the
applicable laws of Romania and the provisions herein.“
-The amendment of art. 6 of the Articles of Incorporation of the Bank, which will have the following content:
“The Bank has been established for an undetermined period of time. The General Meeting of Shareholders
may decide to terminate the Bank's activity in accordance with applicable law.”
The amendment of art. 30 of the Articles of Incorporation of the Bank, which will have the following content:
“30.1. In its current operations and in relation with third parties, the Bank will be bound by the signatures
of any two members of the Management Board or by two employees empowered to this effect by any two
members of the Management Board.
30.2. Without prejudice to the above, the Bank may be engaged, in certain operations and in the carrying on
of certain relations with third parties, by the signature of a single employee designated: by the Management
Board, by two members of the Management Board or by two employees of the Bank authorized for this
purpose (i) if and as provided from time to time in the internal regulations of the Bank and (ii) only with
regards to those operations and relations whose typology will be established with the unanimous consent
of the Management Board members and confirmed by the agreement of the Supervisory Board.”
6.2. List of Bank’s subsidiaries and its controlled entities
The list of subsidiaries and of entities controlled by the Bank as of 31 December 2023 is presented in the
Annex 2.
6.3. Related parties’ lists
The list of related parties is presented in the Annex 3.
6.4. Statements of the Supervisory Board and Management Board members regarding direct or
indirect interests in entities
The statements of the Supervisory Board and Management Board members regarding direct or indirect
interests in entities are presented in the Annex 4.
6.5. Annexes related to the members of the Supervisory Board and Management Board CVs
The CVs of the members of the Supervisory Board and Management Board are presented in the Annex 5.
6.6. Annexes related to changes in Supervisory Board and Management Board composition
The changes related to the Supervisory Board and Management Board composition are presented in the
Annex 6.
6.7. Compliance statement
Statement of the Management Board Members that have assumed the responsibility for the preparation of
the Consolidated Financial Statements as of 31 December 2023.
6.8. Financial statements and auditor’s report
Consolidated Financial Statements as of 31 December 2023 prepared in accordance with IFRS as
endorsed by European Union and audited by the external independent auditor KPMG Audit SRL.
29
2023 Annual Report as per FSA Regulation 5/2018
Mrs. Mihaela Lupu Mr. Dimitar Todorov
Chief Executive Officer Executive Vice-President
UniCredit Bank S.A.
Management Board’s report
Consolidated and Separate
for the financial year ended 31 December 2023
2
Convenience translation in English of the original Romanian version
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
Content
1. General presentation ..................................................................................................................... 3
2. 2023 Activity Overview ................................................................................................................... 3
3. Consolidated and separate financial statements of UniCredit Bank S.A. as at 31 December 2023 ......... 7
4. Equity accounts and profit distribution .......................................................................................... 17
5. Forecast related to the future macroeconomic environment ........................................................... 18
6. Research and development activity ............................................................................................... 20
7. Risk Management ........................................................................................................................ 20
8. Corporate Governance ................................................................................................................. 25
9. Non-financial declaration.............................................................................................................. 33
10. Communication calendar for 2024................................................................................................. 38
11. Members of the Management Board of the Bank, UCFIN and UCLC during 2023 ............................... 39
12. Conclusion .................................................................................................................................. 40
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
3
Convenience translation in English of the original Romanian version
1. General presentation
UniCredit Group (the “Group”) consists of UniCredit Bank S.A. (the “Bank”) as parent company, and
its subsidiaries, UniCredit Consumer Financing IFN S.A. (“UCFIN”), UniCredit Leasing Corporation IFN
S.A (“UCLC”) and UniCredit Insurance Broker S.R.L (“UCIB“). Further details are available in the
Reporting entity note presented in the Notes to the consolidated and individual financial statements
for the period ended 31 December 2023.
UniCredit Bank S.A. (the “Bank”), is having its current registered office is in Bucharest, 1F Expozitiei
Boulevard, District 1, Romania. The Bank was established as a Romanian commercial bank, Banca
Comerciala Ion Tiriac S.A. in 1991, which merged with HVB Bank Romania SA on 01.09.2006,
resulting Banca Comerciala HVB Tiriac S.A. As a result of the merger by absorption of the former
UniCredit Romania S.A. (the absorbed bank) by Banca Comerciala HVB Tiriac S.A. (the absorbing
bank), the Bank is licensed by the National Bank of Romania to conduct banking activities.
The Bank provides retail and commercial banking services in Romanian Lei (“RON”) and in foreign
currency for private individuals and companies. These are including: current accounts opening,
domestic and international payments, foreign exchange transactions, working capital finance,
medium and long term credit facilities, retail loans, bank guarantees, letter of credits and
documentary collections.
UniCredit Bank S.A. is directly controlled by UniCredit SpA (Italy), with registered office in Milano,
Piazza Gae Aulenti, 3.
The Group is exercising direct and indirect control over the following subsidiaries:
• UniCredit Consumer Financing IFN S.A.(“UCFIN”), having its current registered office at 1F
Expozitiei Boulevard, 6th floor, District 1, Bucharest, Romania, provides consumer finance loans
to individuals. The Bank has a shareholding of 50.1% in UCFIN since January 2013.
• UniCredit Leasing Corporation IFN ("UCLC"), having its headquarters in 1F Expozitiei Boulevard,
1st, 7th and 8th floor, District 1, Bucharest, Romania, provides financial leasing services to
corporate clients and individuals. UCLC, the former associate, has become the Bank's subsidiary
since April 2014 when the Bank obtained indirect control of 99.95% (direct control: 99.90%). The
Bank's indirect controlling interest as of 31 December 2020 is 99.98% (direct control: 99.96%), as
a result of the merger of UniCredit Leasing Romania SA ("UCLRO") with UCLC, finalized in June
2015, the date when UCLRO was absorbed by UCLC.
• UniCredit Insurance Broker S.R.L. (“UCIB”), having its current registered office in 1F Expozitiei
Boulevard, 8th floor, District 1, Bucharest, Romania, intermediates insurance policies related to
leasing activities to legal entities and individuals, and became a subsidiary of the Bank beginning
with 31 December 2020. The Bank has an indirect controlling interest of 99.98% through UCLC,
which owns 100% UCIB.
As of 31 December 2023 the Group carried out its activity in Romania through the Head Office
located in Bucharest and its network of 168 branches/Bank 166 branches (31 December 2022: Group
164 branches/Bank 162 branches) in Bucharest and in the country.
2. 2023 Activity Overview
In 2023, the Bank continued to support the real economy in Romania and to be a reliable partner for
its clients, offering quick support to the business environment, through instruments appropriate to
4
Convenience translation in English of the original Romanian version
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
the context and to offer special financing conditions in terms of costs and requested guarantees, in
the context the various guarantee conventions of which it is a part.
Specifically, the bank continued:
- to offer small and medium-sized companies access to financing under advantageous conditions,
which benefit from a guarantee of 60% of the loan value, through the SME Initiative (eng.: SME
Initiative), in order to establish new companies, expand the current activity, consolidate the activity ,
or the realization of new projects, including by approaching new markets. It is a guarantee
instrument accessed by UniCredit Bank from the European Union, the program being financed by
the EU through FEADR and Horizon 2020 and administered by the European Investment Fund and
the European Investment Bank;
- to offer agricultural clients financing for working capital and investments, with a 50% Fund of Funds
guarantee, with amounts from FEADR, through the National Program for Agriculture and Rural
Development, together with amounts from the national budget;
- to make available to micro-enterprises a financing program in lei for current expenses with a
maximum value of 25,000 euros (equivalent in lei), which benefits from a guarantee of 80% of the
loan value through the EaSI guarantee (instrument accessed by UniCredit Bank from EU through the
European Investment Fund, part of the European Investment Bank Group);
- to implement credit facilities with a Cultural and Creative Sector guarantee through the European
Investment Fund.
An important direction in the bank's activity was the participation in the local risk sharing schemes
provided by the Romanian state, in order to offer support to companies affected by the
consequences of the pandemic and the Russia-Ukraine war. In this sense, credit facilities were
granted using own funds and state guarantees to companies from numerous sectors of activity, such
as production, construction, agriculture, food industry, IT, transport and others, as follows:
- continued the SME IINVEST PLUS Program, through its six components: IMM Invest Romania, AGRO
IMM Invest, IMM PROD, GARANT CONSTRUCT, RURAL INVEST and INNOVATION, under the
Ukrainian Temporary Framework state aid scheme.
At the same time, UniCredit continued to be the partner bank for the implementation of the Grants
for working capital programs granted to entities in the agri-food sector, Start-up Nation and Femeia
Antrepenor managed by the Ministry of Entrepreneurship and Tourism, facilitating access to non-
refundable financial aid, essential in this period. The bank continued to be active and proactive in
supporting small and medium-sized companies and to grant numerous financings to those sectors of
activity with positive evolution, such as agriculture, food industry, IT, chemical industry,
pharmaceutical, health, and electronics.
In order to improve its clients' access to financing, the Bank signed several guarantee agreements
with the European Investment Fund, for accessing the Sustainability, Innovation and Digitization,
Cultural and Creative Sector, Skills and Education guarantees, these benefiting from the support of
the InvestEU Fund, but also the Sustainability and Competitiveness guarantees within the National
Resilience and Recovery Program.
In the Corporate area, the support offered to companies in the process of gradual transition to the
green economy and the implementation of changes with a positive impact on the environment
continued to be of maximum interest. Besides this, in the public administration sector, UniCredit
Bank won a series of tenders for the contracting of loans to finance several investments of local
interest, aimed at ensuring our cities the image of true European cities. Special support was also
given to strategic investments for the development of the country's regions, key components of the
National Recovery and Resilience Plan of Romania.
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
5
Convenience translation in English of the original Romanian version
UniCredit acted as Joint Holder of the Subscription Register within the Hydroelectric Public Sale Offer
at the Bucharest Stock Exchange, the largest Initial Public Offer (IPO) in Romania to date and one of
the largest in Europe in 2023. A transaction of such magnitude required proper preparation and
effort, UniCredit being involved through numerous colleagues from the Group but also through the
valuable and essential contribution of colleagues from the Corporate division.
The product area was under constant attention, new functionalities being added to the internet
banking application, BusinessNet for legal entity customers, so that companies have permanent
access and control over the portfolio of issued debit cards and have the possibility to make
payments directly in an extensive list of currencies (over 90 new currencies).
At the same time, UniCredit Bank launched in 2023 a new functionality in the internet banking
application, BusinessNet for legal entity clients - issuing and reissuing debit cards 100% online -
offering companies permanent access and control over the portfolio of issued debit cards.
UniCredit Bank continues to be a reliable partner of its clients, individuals, providing them with
financial solutions appropriate to their needs for purchasing a home or optimizing the costs of a real
estate purchase loan by refinancing loans. In an economic context in which the increase in the
ROBOR and IRCC indicators led to significant increases in loan rates, we observe a significant
dynamic in the demand for mortgage refinancing. Customers are looking for solutions to transform
loans with variable interest into ones with fixed interest, so that they can shelter themselves from
interest rate variations for a period of time. At the same time, the increase in inflation and the
decrease in purchasing power, as well as the increase in interest rates in the market, have affected
the budget of Romanian consumers, causing them to reduce their expenses and look for more
advantageous alternatives. UniCredit Bank understood this need of the clients and adjusted its
financing offer so as to have in its portfolio an extremely competitive product, easy to access, with
optimized costs for the client and additional benefits.
Because we relied on those products built around the actual needs of customers, we had a very
good evolution of the segment of loans intended for the purchase of homes, with the total volume
of mortgage sales registering a significant increase in 2023 compared to 2022.
One of the main priorities of 2023 was the implementation of the local ESG strategy. In accordance
with Group strategy, we adopted local objectives for both green financing and social financing, and
we supported our clients in the transition to a more sustainable and fair economy.
We continued to finance businesses in the green energy field, renewable energy and energy
efficiency, while green mortgage loans for individuals continued to be one of the most requested
products. Part of our ESG strategy are the financial and entrepreneurial education programs for high
school students with a technical profile. More than 35,000 students completed the financial
education and job training courses in 2023, and 340 of them participated in the 10 urban
entrepreneurship camps, where they learned how to develop a business plan and how to find
financing.
UniCredit Consumer Financing IFN S.A.
In 2023, UniCredit Consumer Financing accelerated the expansion of commercial activity, the
volume of new loans being 54% higher than in the previous year. The balance of consumer loans was
at a historical maximum, increasing by 30% compared to 2022. These achievements were the result
of both the constant attention to provide customers with competitive financing solutions through a
simplified lending process, as well as of the continuous expansion of distribution channels. In
addition, the offer of financing through loans for personal needs has been constantly adapted to the
needs of clients, being offered interest reductions in the case of income collection in accounts
opened at UniCredit Bank or the purchase of life insurance.
6
Convenience translation in English of the original Romanian version
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
Regarding credit cards, customers benefited from the advantages offered in the interest-free
installments campaigns, carried out on a recurring basis. Efforts to simplify, digitize and improve the
customer experience were also continued through the new facility to access a 100% digital credit
card, directly from the Mobile Banking application and to divide transactions into installments, also
through the mobile application. The expansion of the commercial activity took place in parallel with
the careful management of the credit risk and the constant improvement of the operational
efficiency.
UniCredit Leasing
In 2023, UniCredit Leasing celebrated 21 years of existence and the 16th consecutive year in which it
is the leader of the financial leasing industry. The company continued to focus on sustainability
projects (ESG) and financing structures. Thus, the "GoGreen" project continued in 2023 by
maintaining competitive offers to encourage the purchase of electric and hybrid vehicles, but also
through structures dedicated to green energy, whether we are talking about standard products
addressed to the customer segment in the prosumer category or through financing in - a
personalized approach to green projects of medium or large sizes. Digitization has been and will
continue to be a priority for UniCredit Leasing, and it is not a simple project, but a digital journey
that we travel together with our clients.
UniCredit's expertise and commitment to offer clients the highest quality services and solutions on
the Romanian market were also recognized in 2023 through numerous distinctions. Within the 14th
edition of the "Voted Product of the Year®" competition, an international concept that rewards
innovative products, the Personal Achievements Loan 100% Mobile from UniCredit Consumer
Financing was selected as 2023 Product of the Year for Innovation in the NBFC Loans category. The
strong position of UniCredit in Romania was also recognized by the prestigious Euromoney Trade
Finance Survey, which again appointed UniCredit Bank in Romania with top honours in both 'Best
Service' ranking, which assesses levels of customer service, and 'Market Leader' ranking, which
combines penetration, percentage of business and turnover data to create an overall ranking of the
best trade finance banks. UniCredit Leasing was recognized as "Leasing Company of the Year" by the
well-known Romanian economic magazine Piata Financiara and Finmedia, in a gala dedicated to the
profile market, and on the occasion of the Top Bankers Gala, also organized by Piata Financiara and
Finmedia, UniCredit received the "Best branches for loans and savings" distinction.. Last but not
least, during the Biz Sustainability Awards Gala, UniCredit Bank received “The Community Hero
Award from Biz Magazine, being recognized for the last 20 years of involvement in Romanian
communities for our projects in the fields of Arts, Culture, Education & Social and for being among
“those who believe in the power of good and invest to strengthen the communities in which they
operate”.
The final of 2023 brought further valuable recognition for the Bank - both as part of the UniCredit
Group and through its entities in Romania. Thus, UniCredit Group was named the “Best sub-
custodian bank” in Central and Eastern Europe at the annual awards of Global Finance magazine,
and then "Bank of the Year" globally in 2023 at the annual ceremony organized by The Banker in
London. In Romania, UniCredit Bank was named "Corporate Bank of the Year" at the Financial
Leaders Hall of Fame Gala 2023, organised by Business Arena magazine, while UniCredit Leasing
received the award for "Leasing Company of the Year 2023"; UniCredit Leasing also received the
"Best in Leasing" recognition at the Piața Financiară Awards Gala for its performance in 2023.
UniCredit Bank also received the Excellence Award from the Professional Association of Real Estate
Agents in Romania (APAIR) for being committed to supporting real estate education for over 5 years.
The Haute Coulture Gala organized by Biz magazine brought one last award at the end of the year -
UniCredit received The Power of Art award, being recognized for supporting as a main partner the
most important exhibition ever organized in Romania, the Picasso Effect.
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
7
Convenience translation in English of the original Romanian version
In 2023, the main performance indicators of UniCredit Bank Group evolved as follows:
• Total assets increased by 12.79%, up to RON thousands 74,672,361;
• Net profit: increased by 44.14%, mainly due to increase in net interest income;
• Customer loan portfolio (including lease receivables) increased by 10.2% compared to 2022.
UniCredit Bank Group had a solid financial position in 2023:
Indicator (%)
Group
Bank
2023
2022
2023
2022
ROE
16.38%
13.78%
16.46%
13.58%
ROA
1.93%
1.51%
1.91%
1.45%
Solvency ratio
1
22.79%
21.00%
27.34%
23.29%
Cost/Income ratio
37.57%
43.78%
38.18%
45.33%
Loans to deposits
83.85%
77.86%
69.57%
63.98%
Loan portfolio provision coverage
5.00%
6.07%
4.48%
5.53%
As of 31 December 2023, total assets of the UniCredit Bank Group are RON 74,672,361 thousands
(Bank: RON 67,712,095 thousands). The net profit for 2023 is RON 1,438,383 thousands (Bank: RON
1,293,876 thousands), out of which non-controlling interest amounts to RON 15,196 thousands.
During 2023, the members of the Management Board acted in accordance with statutory laws and
regulations in force and ruling UniCredit Bank Group and Bank’s regulations. The Supervisory Board
and Management Board members also acted according to their responsibilities as defined in the
Constitutive Act of the Bank and within the limits of their competences assigned by the General
Shareholders Meeting. The Management Board has acted under the supervision and control of the
Supervisory Board.
The activity of the Management Board as the main decision making corporate body in the Bank has
been consistently and efficiently supported by staff of the Bank, in accordance with their
responsibilities and competences operating in compliance with their authorities and set of
responsibilities.
The Management Board has coordinated the Bank’s activity and has taken all necessary measures
for the proper management of it, in compliance with the Constitutive Act of UniCredit Bank.
The Bank’s main subsidiaries are non-banking financial institutions, which are governed in a two
tiered system by Management Board and Supervisory Board. The members of the Management
Board acted in accordance with statutory laws and regulations in force and ruling UniCredit Bank
Group and Bank’s regulations. The Supervisory Board and Management Board members also acted
according to their responsibilities as defined in the Constitutive Act of the Bank and within the limits
of their competences assigned by the General Shareholders Meeting. The Management Board has
acted under the supervision and control of the Supervisory Board.
3. Consolidated and separate financial statements of UniCredit Bank S.A. as at 31 December 2023
3.1. Legal framework
The separate financial statements of UniCredit Bank S.A and the consolidated financial statements of
the UniCredit Bank Group have been prepared in accordance with International Financial Reporting
Standards (“IFRS”) as endorsed by the European Union and with the provisions of Order 27/2010
1
KPI’s include non-controlling interests
8
Convenience translation in English of the original Romanian version
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
issued by National Bank of Romania, for approval of accounting regulations in accordance with
International Financial Reporting Standards as endorsed by European Union, with subsequent
changes.
The duties stipulated by law, related to the organization and management of the accounting activity,
including the accounting principles (prudence, permanence of methods, continuity, independence,
intangibility, non-compensation, separate evaluation of assets and liabilities’, materiality, substance
over form) have been followed. The provisions of the Accounting Law no. 82/1991, with subsequent
changes, the accounting regulations and the methods stipulated by regulations in force, were abided
by the Bank.
The annual consolidated and separate financial statements of UniCredit Bank Group is audited by
KPMG Audit SRL.
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
9
Convenience translation in English of the original Romanian version
3.2. The Consolidated Statement of financial position
The IFRS Consolidated Statement of financial position of UniCredit Bank SA as of 31.12.2023 is presented below:
Group
Bank
In RON thousands
2023
2022
2023/
2022
(%)
2023
2022
2023/
2022 (%)
Assets:
Cash and cash equivalents
20,106,053
16,456,169
22.2%
20,105,745
16,455,940
22.2%
Financial assets at fair value through profit or loss
97,712
214,714
-54.5%
97,712
214,714
-54.5%
Derivatives assets designated as hedging instruments
242,560
310,229
-21.8%
242,560
310,229
-21.8%
Loans and advances to customers at amortized cost
36,196,421
32,849,251
10.2%
33,892,452
31,054,544
9.1%
Net lease receivables
4,305,696
3,788,693
13.6%
7,300
11,342
-35.637%
Loans and advances to banks at amortized cost
142,096
399,455
-64.4%
142,096
399,455
-64.4%
Other financial assets at amortized cost
558,257
319,475
74.7%
497,953
250,620
98.7%
Financial assets at fair value through other comprehensive income
2,026,525
1,922,518
5.4%
2,016,760
1,920,172
5.0%
Debt instruments at amortized cost
9,647,214
8,856,966
8.9%
9,647,214
8,856,966
8.9%
Investment in subsidiaries
143,116
143,116
0.0%
Property, plant and equipment
171,348
179,752
-4.7%
169,000
176,415
-4.2%
Right of use assets
254,151
199,230
27.6%
242,889
181,355
33.9%
Intangible assets
424,876
362,782
17.1%
406,108
344,366
17.9%
Current tax assets
22,059
8,109
172.0%
-
-
0.0%
Deferred tax assets
57,961
163,726
-64.6%
49,686
73,999
-32.9%
Other assets
419,432
175,767
138.6%
51,504
50,866
1.3%
Total assets
74,672,361
66,206,836
12.79%
67,712,095
60,444,099
12.0%
10
Convenience translation in English of the original Romanian version
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
Group
Bank
In RON thousands
2023
2022
2023/
2022 (%)
2023
2022
2023/
2022 (%)
Liabilities:
Financial liabilities at fair value through profit or loss
120,253
176,965
-32.0%
120,253
176,966
-32.0%
Derivatives liabilities designated as hedging instruments
202,404
262,514
-22.9%
202,404
262,514
-22.9%
Deposits from banks
1,240,982
1,050,418
18.1%
1,240,982
1,050,418
18.1%
Loans from banks and other financial institutions at amortized cost
6,406,673
5,653,932
13.3%
584,966
849,329
-31.1%
Deposits from customers
50,955,312
45,310,940
12.5%
51,002,566
45,404,198
12.3%
Debt securities issued
4,002,296
3,502,834
14.3%
4,002,296
3,502,834
14.3%
Other financial liabilities at amortized cost
1,185,038
1,307,973
-9.40%
1,149,294
1,239,449
-7.3%
Subordinated liabilities
952,073
945,604
0.7%
842,632
836,761
0.7%
Lease liabilities
255,803
198,403
28.9%
250,414
193,362
29.5%
Current tax liabilities
18,736
24,969
-25.0%
18,546
24,969
-25.7%
Provisions
206,162
250,064
-17.6%
226,903
250,737
-9.5%
Other non-financial liabilities
346,087
279,645
23.8%
207,970
176,914
17.6%
Total liabilities
65,891,819
58,964,261
11.7%
59,849,226
53,968,451
10.9%
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
11
Convenience translation in English of the original Romanian version
Group
Bank
In RON thousands
2023
2022
2023/
2022 (%)
2023
2022
2023/
2022 (%)
Equity
Share capital
1,177,748
1,177,748
0.0%
1,177,748
1,177,748
0.0%
Share premium account
621,680
621,680
0.0%
621,680
621,680
0.0%
Cash flow hedging reserve
(6,506)
(7,501)
-13.3%
(6,506)
(7,501)
-13.3%
Reserve on financial assets at fair value through other comprehensive
income
(13,185)
(108,424)
-87.8%
(19,416)
(108,424)
-82.1%
Revaluation reserve on property, plant and equipment
22,500
17,177
31.0%
22,500
17,177
31.0%
Other reserves
432,942
399,973
8.2%
432,942
399,973
8.2%
Retained earnings
6,369,744
4,981,500
27.9%
5,633,921
4,374,995
28.8%
Total equity for parent company
8,604,923
7,082,153
21.5%
7,862,869
6,475,648
21.4%
Non-controlling interest
175,619
160,422
9.5%
-
-
0.0%
Total equity
8,780,542
7,242,575
21.2%
7,862,869
6,475,648
21.4%
Total liabilities and equity
74,672,361
66,206,836
12.8%
67,712,095
60,444,099
12.0%
A more detailed explanation on several captions of the Statement of Financial Position is presented below.
12
Convenience translation in English of the original Romanian version
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
3.3. Assets
Cash and due from Central Banks - The balance of current accounts with the National Bank of
Romania represents the minimum reserve maintained in accordance with the National Bank of
Romania requirements. As at 31 December 2023, the minimum reserve level was at the level of as
8% (31 December 2022: 8%) for liabilities to customers in RON and 5% for liabilities to customers in
foreign currency (31 December 2022: 5%), both with residual maturity less than 2 years from the
end of reporting period and for liabilities with the residual maturity longer than 2 years with
reimbursement, transfer and anticipated withdrawals clause or 0% for all the other liabilities
included in the calculation.
Loans and advances to customers and net lease receivables are in amount of RON 40,502,117
thousands for the Group (Bank: RON 33,899,752 thousands), corresponding to 55.24% of total assets
(Bank: 50.06%).
The outstanding loans balance as at 31.12.2023 is distributed as follows:
Group
Bank
2023
2022
2023
2022
Corporate
59.70%
62.0%
76.24%
77.2%
SME
14.50%
14.1%
1.89%
1.80%
Private Individual
25.73%
23.8%
21.80%
20.8%
Private Banking
0.06%
0.10%
0.07%
0.10%
Term loans granted to customers are classified according to the remaining maturity into the
following time buckets:
Up to 1 Year
1 Year to 5 Years
Over 5 Years
Group
2023
41.3%
36.7%
22.1%
2022
45.3%
33.2%
21.6%
Bank
2023
40.6%
35.6%
23.8%
2022
44.5%
33.0%
22.5%
Loans are collateralized mainly by mortgages, assignments of receivables, pledges, corporate
guarantees from parent company and letters of guarantee.
The high-level risk structure of the loan portfolio (including individuals and companies) at the end of
2023 and 2022 is as follows:
Group
Bank
2023
2022
2023
2022
Neither past due nor impaired
88.10%
88.3%
86.80%
94.0%
Past due but not impaired
5.39%
10.7%
5.43%
5.20%
Other impaired loans
0.40%
0.40%
0.30%
0.30%
Individually significant
impaired loans
0.56%
0.60%
0.52%
0.50%
Other assets of RON 419,432 thousands increased by 139% compared with December 2022 (Group
level).
In RON thousands
Group
Bank
2023
2022
2023
2022
Sundry debtors
19,957
25,619
19,927
25,619
Prepaid Expenses
342,517
138,320
36,376
29,373
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
13
Convenience translation in English of the original Romanian version
3.4. Liabilities
Deposits and loans from banks balance is RON 7,647,655 thousands (Bank RON 1,825,948
thousands), representing 11.61% of total liabilities and equity.
In RON thousands
Group
Bank
2023
2022
2023
2022
Deposits
Term deposits
881,358
416,407
881,358
416,407
Sight deposits
359,624
634,011
359,624
634,011
Total deposits
1,240,982
1,050,418
1,240,982
1,050,418
Loans
Commercial Banks
5,671,409
4,731,665
-
-
Multilateral development
banks
735,264
922,267
584,966
849,329
International financial
institutions
-
-
-
-
Total borrowings
6,406,673
5,653,932
584,966
849,329
Total
7,647,655
6,704,350
1,825,948
1,899,747
The balance of deposits from customers is totaling RON 50,955,312 thousands at Group level (Bank
RON 51,002,566 thousands), representing 68% of total liabilities and equity. At the end of 2023
almost 63% of deposits are payable on demand.
In RON thousands
Group
Bank
2023
2022
2023
2022
Term deposits
17,993,000
13,044,326
18,013,196
13,064,379
Payable on demand
31,956,699
31,304,532
31,988,882
31,377,356
Collateral deposits
1,005,603
962,041
1,000,478
962,422
Certificates of deposits
10
41
10
41
Total
50,955,312
45,310,940
51,002,566
45,404,198
Other non-financial liabilities balance is RON 346,087 thousands include:
In RON thousands
Group
Bank
2023
2022
2023
2022
Deferred income
214,810
162,804
105,094
84,004
Payable to state budget
43,644
42,093
40,049
38,443
Payable to employees
68,621
60,256
61,293
53,011
Other
19,012
14,492
1,534
1,456
Total other non-financial
liabilities
346,087
279,645
207,970
176,914
Provisions of RON 206,162 thousands are split by type as presented below:
In RON thousands
Group
Bank
2023
2022
2023
2022
Provision for financial
97,769
150,028
124,949
155,432
Inventories
9,772
8,364
47
1,823
Other
59,606
15,850
7,574
6,437
Less impairment for sundry
debtors
(12,420)
(12,386)
(12,420)
(12,386)
Total other non-financial
assets
419,432
175,767
51,504
50,866
14
Convenience translation in English of the original Romanian version
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
guarantees
Provision for legal disputes
8,276
13,723
6,248
11,714
Provision for off-balance
commitments
86,528
80,788
82,696
78,137
Other provisions
13,589
5,525
13,010
5,454
Total
206,162
250,064
226,903
250,737
Subordinated loans of RON 952,073 thousands represent the outstanding balance of subordinated
loans borrowed from UniCredit SPA (88.5%) and UniCredit Bank Austria AG (11.5%).
In RON thousands
Group
Bank
2023
2022
2023
2022
UniCredit SPA
842,632
836,761
842,632
836,761
UniCredit Bank Austria AG
109,441
108,843
-
-
Total
952,073
945,604
842,632
836,761
3.5. Off-balance-sheet exposures
The outstanding off-balance-sheet gross exposure at Group level at the end of 2023 totaling RON
24,227,219 thousands is presented below, 89.90% representing exposures to non-banking
customers and 46% revocable commitments (Bank: RON 23,538,348 thousands, of which 48%
revocable commitments).
In RON thousands
Group
Bank
2023
2022
2023
2022
Off balance sheet exposures to
nonbanking customers
21,780,442
20,022,882
21,091,571
19,418,231
Off balance sheet exposures to
banks
2,446,777
2,173,822
2,446,777
2,173,822
Total
24,227,219
22,196,704
23,538,348
21,592,053
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
15
Convenience translation in English of the original Romanian version
3.6. Consolidated Profit and loss account
2023 Consolidated and Separate IFRS Income Statement of UniCredit Bank is presented below:
Group
Bank
In RON thousands
2023
2022
2023/
2022
(%)
2023
2022
2023/
2022
(%)
Interest income using EIR
3,720,308
2,428,686
53.2%
3,399,485
2,158,078
57.5%
Other interest income
246,577
142,630
72.9%
15
10
50.0%
Interest expense
(1,859,985)
(897,030)
107.3%
(1,584,043)
(772,856)
105.0%
Net interest income
2,106,900
1,674,286
25.8%
1,815,457
1,385,232
31.1%
Fee and commission income
827,876
680,157
21.7%
749,236
621,832
20.5%
Fee and commission expense
(334,880)
(252,427)
32.7%
(316,951)
(237,423)
33.5%
Net fee and commission income
492,996
427,730
15.3%
432,285
384,409
12.5%
Net income from instruments at fair value through profit
and loss
424,639
347,676
22.1%
424,701
347,795
22.1%
Net gain/(loss) from foreign exchange
85,044
46,155
84.3%
65,217
23,494
177.6%
Fair value adjustments in hedge accounting
(7,616)
10,799
-170.5%
(7,616)
10,799
-170.5%
Net gain/(loss) from derecognition of financial assets
measured at amortised cost
93,229
20,596
352.7%
83,005
8,759
847.7%
Net gain/(loss) from derecognition of financial assets
measured at FVTOCI
(11,979)
-
100.0%
(11,979)
-
100.0%
Dividend income
3,868
3,196
21.0%
3,868
33,184
-88.3%
Other operating income
12,540
8,780
42.8%
12,780
12,577
1.6%
Operating income
3,199,621
2,539,218
26.01%
2,817,718
2,206,249
27.7%
Personnel expenses
(566,521)
(525,288)
7.8%
(500,259)
(463,572)
7.9%
Depreciation and impairment of tangible assets
(105,279)
(109,209)
-3.6%
(96,996)
(100,048)
-3.1%
Amortization and impairment of intangible assets
(63,272)
(60,946)
3.8%
(56,700)
(55,166)
2.8%
Other administrative costs
(434,778)
(398,782)
9.0%
(400,423)
(370,212)
8.2%
16
Convenience translation in English of the original Romanian version
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
Group
Bank
In RON thousands
2023
2022
2023/
2022
(%)
2023
2022
2023/
2022
(%)
Other operating costs
(32,262)
(17,355)
85.9%
(21,549)
(11,072)
94.6%
Operating expenses
(1,202,112)
(1,111,580)
8.14%
(1,075,927)
(1,000,070)
7.6%
Net impairment losses on financial instruments
(293,577)
(276,609)
6.1%
(212,789)
(187,669)
13.4%
Losses on modification of financial assets
65
207
-68.6%
65
207
-68.6%
Net operating income
1,703,997
1,151,236
48.0%
1,529,067
1,018,717
50.1%
Net impairment losses on non-financial assets
(449)
9,842
-104.6%
(449)
9,842
-104.6%
Net provision gains/ (losses)
(967)
4,108
-124%
(99)
(2,163)
-95%
Net gains/(loss) from other activities
-
-
100.0%
-
-
100.0%
Profit before tax
1,702,581
1,165,186
46.1%
1,528,519
1,026,396
48.9%
Income tax expense
(264,198)
(167,287)
57.9%
(234,643)
(147,156)
59.5%
Net profit for the year
1,438,383
997,899
44.14%
1,293,876
879,240
47.2%
Attributable to:
Equity holders of the parent company
1,423,187
984,455
44.6%
-
-
100.0%
Non-controlling interests
15,196
13,444
13.0%
-
-
100.0%
Net profit for the year
1,438,383
997,899
44.14%
1,293,876
879,240
47.2%
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
17
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4. Equity accounts and profit distribution
4.1. Equity accounts of the Bank as of 31 December 2023
As of 31 December 2023, the Bank’s equity is in amount of RON 7,862,869 thousands and the
composition is presented below:
In RON thousands
Bank
Paid-in capital
455,219
Hyperinflation effect – IAS 29
722,529
Subscribed Share capital
1,177,748
Share premium
621,680
Cash flow hedge reserve
(6,506)
Reserve on financial assets at fair value through other
comprehensive income
(19,416)
Revaluation reserve on property and equipment
22,500
Other reserves
432,942
- Statutory general banking risks
115,785
- Statutory legal reserve
91,044
- Effect of hyperinflation – IAS 29
19,064
- Actuary profit/loss
-205
- Other reserves
207,254
Retained earnings
4,340,045
Net profit for the period
1,293,876
Total equity of the Bank
7,862,869
At 31 December 2023 the paid-in capital of the Bank was RON 455,219,478.30, split into 48,948,331
shares at RON 9.3 per value each. The structure of the Bank’s shareholders as at 31 December 2023 is
the following:
Shareholder
Shares’ number
Value (RON)
%
UniCredit S,p,A,
48,277,621
448,981,875,30
98,6298
Romanian Individuals
624,468
5,807,522,40
1,2758
Romanian Legal Entities
21,606
200,935,80
0,0441
Foreign Individuals
17,296
160,852,80
0,0353
Foreign Legal Entities
7,340
68,262,00
0,0150
TOTAL
48,948,331
455,219,478,30
100,0000
4.2. Profit distribution
The net profit of the Bank for the financial year ended at 31 December 2023, in amount of RON
1,293,876 will be distributed according to the law. Thus, the Supervisory Board proposes to the
General Meeting of Shareholders the distribution of the profit related to the year 2023 in the
amount of 1,293,876,254.75 lei, calculated and presented in the Consolidated and Individual
Financial Statements prepared in accordance with the International Financial Reporting Standards
applicable to credit institutions based on the Order issued by the Governor of the National Bank of
Romania no. 27/2010 with subsequent amendments and additions, as follows:
a. the establishment of a reserve in amount of 40,149,449.00 lei related to the profit reinvested in
the 2023 financial year, for which the Bank applied the profit tax exemption, in accordance with art.
22 of Law no. 227/2015 regarding the Fiscal Code;
b. the distribution of dividends in the amount of 963,004,128.91 lei, proportional to each
shareholder's share in the Bank's paid-up capital;
c. the reinvestment of the remaining net profit, in amount of 290,722,676.84 lei, in order to increase
18
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Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
the capital base and the solvency rate of the Bank.
5. 5. Forecast related to the future macroeconomic environment
The Romanian economy grew by about 1.4%yoy in 2023, at a significantly slower pace as compared
to 4.6% recorded in 2022. The supply-chain bottlenecks and the prolongation of the conflict in the
region, which determined the increase of the energy and food prices, as well as the lower external
demand, weigh down on Romania’s industrial output and exports. Among the sectors that
performed well in 2023, the main contributors to GDP growth were the agriculture, IT&C services
and constructions, while two important sectors, manufacturing and retail trade, had a negative
contribution to GDP. In 2023, the investments became the main contributor to GDP growth, while
consumption had a lower contribution, affected by the high inflation and interest rates. The net
exports had a positive contribution to GDP, while the inventories had a significant negative
contribution.
The investments had been supported by the EU funds available under the Recovery and Resilience
Fund (RRF), locally named the National Recovery and Resilience (PNRR). Within PNRR, Romania can
access up to EUR 29.2bn during 2021-2027 period, approx. EUR 2bn in grants and EUR 1bn in loans
every six months, the equivalent of 2% of GDP each year. Until present, Romania received about EUR
9bn as pre-financing (loans and grants) and another amount of EUR 2.6bn should be received in
2024. In our baseline scenario, we revised slightly down the forecast for the economic growth to
around 3% in 2024. The investments should remain the main growth driver, sustained by the large
amount of EU funds available, while the private consumption is expected to recover helped by the
real wage growth, the higher pensions and the government transfers.
The government plans to cut the budget deficit by 2024 closer to the 3% of GDP target agreed with
the European Union, will be postponed, the fiscal tightening being possible only after the elections.
We are expecting the budget deficit to decline to 6% of GDP in 2024 and 4.6% of GDP in 2025. We
are estimating the public debt will increase moderately to above 50% of GDP, by about 1pp per year,
in 2024 and 2025, with Romania preserving the investment grade rating.
In Romania, the annual inflation increased significantly starting 4Q 2021, triggered by several supply-
side shocks at the global level, the liberalization of the local electricity market for household
consumers in July 2021 and the war between Russia and Ukraine, which started in February 2022,
events that strongly disturbed the global energy and commodities markets. The headline inflation
increased rapidly in the first half of 2022 reaching a maximum of 16.8% in November 2022. In 2023
the local energy and food market improved to a certain degree following the better conditions in the
supply chains, the lower oil price (down at an avg. 79 USD/barrel in December), as well as the
legislative cap on energy and basic food prices introduced by the government. The annual inflation
declined to a single digit starting July 2023 and to 6.6%yoy in December 2023, due to a base effect of
food and energy prices.
Romania was among the most affected countries in CEE region by the increase in the food prices,
due to a high weight of food in the consumer basket (over 30%). The food prices remained in double
digits by the end of September 2023 (+10.4%yoy), then declined below 6% in December 2023. In H2
2023 the disinflation process benefited by a base effect and also by the EGO adopted by the
government in June 2023 introducing a 20% cap on the retailers’ profit margins for 14 basic food
products, applicable starting August 1st, 2023 and prolonged by December 31st, 2023. Moreover,
the government increased the gross minimum monthly wage to RON 3,300 starting October 1st,
2023.
We expect the annual inflation to remain quite high, above 6.0% in December 2024, remaining
outside the target band (2.5% +/-1pp) over the next two years, as the consumer demand will remain
quite strong in the election year 2024 and after elections, in 2025, we are expecting tax rises and
higher electricity prices once the capping expires.
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
19
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Aiming to fight the exceptionally high inflation, BNR tightened the monetary policy, by gradually
increasing the key rate starting October 2021, from the record low 1.25%, up to 7.00% in January
2023. We expect NBR to start the rate cuts in 2H 2024, only if the government has a credible path to
the fiscal adjustment. While we expect 1pp in cuts to 6% this year, the scope is narrowing the longer
it takes to reduce the budget deficit.
Even if the NBR starts cutting later than its regional peers, financial conditions will not be tighter
because the Romanian central bank allowed interbank rates to fall close to the overnight deposit
rate of 6% by allowing excess liquidity to remain in the market.
The main interbank money market rates continued to decline gradually in 2023 up to 6.22% (Dec
average), supported by the easing of liquidity conditions. We are expecting to further decline by
about 1pp by the end of 2024. The yields on government securities declined by about 2pp in 2023 to
an 6.2% average for 10Y state securities triggered by the improvement in the global financial market
sentiment and in the risk perception towards the region.
The EUR-RON exchange rate depreciated to an average 4.9465 in 2023 as compared to an average
4.9303 in 2022, while it ended the year on a depreciation trend, at an average above 4.97 in
November and December. The Romanian leu remains one of the most stable currencies in CEE,
supported by the Central Bank’s policy, which is using the exchange rate as an anti-inflationary
anchor. In 2024, we expect EUR-RON to move into a 5.00-5.10 range, returning to 0.1 RON
depreciation per year, once the inflation is on a clear downward path. Romania’s structural
imbalances, respectively the high current account and fiscal deficits, are in favor of a gradual
depreciation of the national currency. We expect the current account deficit to decline at 6.4% of
GDP in 2023 and 5.2% of GDP in 2024 (vs. 9.3% of GDP in 2022).On the deposits’ side, the total
savings of the residents slowed down to 7.1% as of November 2022 (vs. 13.4%yoy in 2021), as both
the private individuals and companies spent part of their savings due to high inflation.
Lending slowed down in 2023 at 6.5%yoy, from 12.1% in 2022, due to both components, the RON
lending at 5.8%yoy (vs. 6.6%yoy in 2022), while the foreign currency decelerated to 7.9%yoy (vs.
26.7%yoy in 2022 when it was stimulated by the post-pandemic recovery of the economy). The pace
of lending to companies halved at 11%yoy (vs. +20.2% in 2022), while the one of the loans to
individuals was 3 times slower at 1.4%yoy in 2023 (vs. 4.3%yoy in 2022). On the deposits’ side, the
total savings of the residents accelerated to 11.8%, from 7.1% in 2022, fully due to RON deposits
stimulated by the higher interest rates, while the foreign currency deposits declined. Both the
deposits from private individuals and from companies accelerated to about 12%yoy.
The NPL ratio at the banking sector level remained on a declining trend, at 2.61% as of September
2023 (vs. 2.82% as of September 2022).
The above prognosis (i.e. inflation, GDP) represent latest available prognosis and differ from the
prognosis considered in the process of expected credit losses estimate (forward-looking
incorporation) of the Bank.
The update of the expected credit losses with forward-looking information has been performed by
the Bank in the normal course of business and ended in November 2023, having as reference the
latest available prognosis available as of that moment.
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Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
6. Research and development activity
The research and development activity of UniCredit Bank Group, including the know-how received
from UniCredit Spa Group, was mainly directed to improvement of efficiency and productivity of:
• Products and services offered to customers;
• Risks management systems;
• Internal control systems;
• Financial accounting systems;
• Management information system;
• IT systems;
• Human resources management programs;
• Decision making systems.
7. Risk Management
The UniCredit Bank Group developed a solid risk culture at all Bank’s levels, business lines and
subsidiaries. UniCredit Bank established a comprehensive and independent risk management
function under direct supervision of the management body, having personnel with relevant
experience, adequate to the Bank’s risk appetite, and able to play a significant role in the processes
of identification, measurement and assessment of risks.
Within the risk management processes, the Internal Capital Adequacy Assessment Process (“ICAAP”)
has an important role being focused on the development and maintenance of sound internal
procedures and systems which allow the evaluation of the bank capital adequacy, respectively,
ensuring the balance between the assumed risks and the available capital. ICAAP is an integral part
of management and decision-making processes.
The risk management framework is clearly and transparently transposed in internal norms,
procedures, manuals and codes of conduct, distinctively mentioning the standards applicable for all
employees and those applicable only to specific categories of employees.
The strategic objectives on significant risk management are achieved through the following:
• Definition and setting of basic principles and respective limits regarding risk management;
• An organizational structure specialized and with focus on risk management;
• Specific strategies and techniques for risk measuring and monitoring.
Based on the internal analysis performed with the Holding guidance, UniCredit Bank S.A. identified
the following significant risks:
1. Credit risk
2. Market risk and Interest Rate Risk in the Banking Book (IRRBB)
3. Liquidity risk
4. Operational risk
5. Reputational risk
6. Business risk
7. Real estate risk
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
21
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8. Strategic risk
9. Risk of excessive leverage.
10. Compliance risk
11. Inter-concentration risk
Other risks considered to have major impact on the bank patrimony are the risks associated with
outsourcing activities.
The final responsibility for risks assessment belongs exclusively to the Bank, that critically assesses its
risks without relying solely on external valuations.
The strategy and the significant risk management policies, established at the Bank level, are
reviewed periodically.
Unicredit Bank S.A. has implemented a well-defined and documented reporting framework,
including regular and transparent reporting mechanisms, so that the management body and all
relevant units within the institution benefit on time by accurate and concise reports, through risk
management advisory committees, established by the Bank.
The reports to be submitted to the management body and to the relevant units, and other relevant
information related to the identification, measurement or evaluation and monitoring of risks are
summarized in the implemented reporting framework.
Unicredit Bank S.A. defines periodically the risk appetite, respectively the level of risk that UniCredit
Bank S.A. is prepared to accept in pursuit of its strategic objectives and business plan, taking into
account the interest of its customers (e.g. depositors, policyholders) and shareholders as well as
capital and other requirements.
The Management body reviews and approves the risk appetite on a yearly basis to ensure its
consistency with the UniCredit Group’s Strategy, business environment and stakeholder
requirements, as defined in the budget process.
Unicredit Bank S.A. regularly monitors the actual risk profile and examines it in relation to the credit
institution's strategic objectives and tolerance / risk appetite for assessing the effectiveness of the
risk management framework. Evaluation and monitoring of the risk profile is done through
indicators established within risk appetite.
7.1. Credit risk
UniCredit Bank Group is exposed to credit risk representing the risk of negative impact on revenues
generated by debtors not fulfilling the contractual obligations of loans granted on short, medium or
long run.
UniCredit Bank Group manages this risk through a set of comprehensive measures, both at
transaction and debtor, and at global level, related to:
• Identifying, measurement and adequately management both of credit risk in general, and sub-
categories of credit risk in particular;
• Adequate credit risk management by applying risk mitigation techniques and by optimizing risk-
weighted assets;
• Periodically monitoring of credit products in order to identify high-risk products and take specific
measures to reduce the risk;
22
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Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
• Monitoring, based on its polices and processes of the counterparties risk profiles to which the
Bank grants credits, and any other factor that can trigger the default, including the foreign
currency risk for unhedged borrowers.
• Set up of the flow of expected credit loss (ECL) under IFRS9 (credit risk provisions) in UniCredit
Bank in accordance with the legislation in force on international financial reporting standards
and in conjunction with the provisions contained in the policies of UniCredit Bank Group;
• Capital allocation for credit risk unexpected losses in accordance with the regulatory and
UniCredit Bank Group regulations;
• Regular monitoring of the credit risk profile of the Bank in order to ensure framing the specific
indicators for measuring credit risk within the limits established in risk appetite framework.
7.2. Market risk and Interest risk
UniCredit Bank S.A faces interest rate risk that could be a result of exposure to unfavorable
fluctuations on the market. The change of the interest rates on the market directly influences the
income and expenses related to the financial assets and liabilities bearing variable interests, as well
as the effective value of those bearing fixed interest rate.
For the financial receivables and financial liabilities in RON, UniCredit Bank S.A. aims to correlate the
current interest rates on the market and to obtain a positive interest margin.
For the financial assets and liabilities denominated in other currencies than RON, Unicredit Bank S.A.
and its subsidiaries aim to maintain a positive net position. Most of the interest-earning assets and
interest-bearing liabilities in foreign currencies have variable interest rates which could be
exchanged at the Bank initiative or that are related to a reference variable interest rate on the inter-
banking market.
Unicredit Bank S.A. monitors the exposure to interest rate risk by using a system of indicators and
associated limits: duration gap, basis point value, VaR component for the interest rate risk in the
banking book, net interest income sensitivity and economic value sensitivity. The two indicators: net
interest income sensitivity and economic value sensitivity are included in the Bank’s risk appetite.
7.3. Liquidity risk
The liquidity risk is the probability of the bank falling short of its due payments resulting from its
contractual relations with clients and third parties. Under normal conditions of market functioning,
the liquidity risk may materialize also through the need for the bank to pay a premium over market
rates to be able to access liquidity. Among the main potential generators of liquidity risk, the Bank
distinguishes between liquidity mismatch risk/refinancing risk; liquidity contingency risk; market
liquidity risk.
Management of liquidity risk
In line with the UniCredit Bank Group’s liquidity framework, the main goal of the overall liquidity
management is to keep the liquidity exposure at such a level that UniCredit Bank S.A is able to honor
its payment obligations on an on-going basis, but also during a crisis without jeopardizing its
franchise value or its brand’s name.
Hence, two main operating models for the liquidity management are defined: going concern liquidity
management and the contingent liquidity management.
From a liquidity risk governance perspective, the Bank has two layers of governance bodies:
managing bodies acting as strategic decision taking functions and operational units acting as
operative liquidity management functions, i.e. Finance, Financial Risk, and Markets – Treasury
respectively.
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
23
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In accordance with the strategic goal of self-sufficient funding, the Bank’s liquidity and funding
strategy is centered on:
• encouraging sticky client deposits;
• development of strategic funding through own bonds issues;
The liquidity cost/benefit allocation is an important part of the liquidity management framework.
Liquidity is a scarce resource and accordingly a proper management of costs and benefits is essential
in order to support sound and sustainable business models. Therefore, the Bank has put in place a
proper mechanism for internal funds transfer pricing.
Exposure to liquidity risk
Key indicators used by UniCredit Bank S.A. for measuring liquidity risk are:
• the daily short-term liquidity report, through which cash inflows and outflows mainly coming
from inter-bank transactions are monitored;
• the structural liquidity ratios/gaps, used to assess the proportion of medium-long term assets
sustained with stable funding;
• regulatory indicators: UniCredit Bank S.A has to comply with the limits imposed by National Bank
of Romania, such as the liquidity indicator calculated according to NBR Regulation no. 25/2011
and the, Liquidity coverage ratio; calculated according with to the provisions of Regulation (EU)
575/2013, as amended by Regulation (EU) no. 61/2015.
• other key indicators for the management of liquidity and funding needs used to assess, the
concentration of funding and the way in which loans to customers are sustained by commercial
funds.
UniCredit Bank S.A. sets the limit and triggers levels for the main indicators used to measure the
liquidity risk and in case a breach is observed or anticipated, specific requested actions are taken for
correcting the structure of the asset and liability mix of UniCredit Bank S.A.
Regular stress testing assessments are performed in order to evaluate the liquidity position of
UniCredit Bank S.A. In case of a deteriorating position, liquidity stress tests are one of the main
metrics in order to support management’s decisions before and also during stress situations. In
particular, liquidity stress test results are useful in order assess the “right” sizing and composition of
a liquidity buffer on a regular basis. As such, liquidity stress testing serves as an essential tool of
assessment of the liquidity risk in an on-going basis, rather than in a crisis situation only.
7.4. Operational risk
Operational risk means the risk of loss resulting either from the use pf inadequate or failed internal
processes, people and systems or from external events. Operational risk includes legal risk, but
excludes strategic and reputational risk.
Legal risk is the risk of losses as a result of fines, penalties and sanctions for which the credit
institution is liable due to failure to apply or deficiently applying legal or contractual provisions, as
well as due to the fact that contractual rights and obligations of the bank and / or counterparty are
not appropriately provided.
The operational risk management framework within UniCredit Bank S.A. is well structured and
involves relevant factors in promoting a culture favorable to communication, management and
control of operational risk. Operational risk, including all its sub categories, is managed in
accordance with the requirements of the regulatory framework that includes the identification,
assessment, mitigation, reporting and control of operational risks.
24
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Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
For certain subcategories of operational risk (e.g.: IT risk, fraud risk, risk associated with outsourced
activities, conduct risk or legal risk), the framework includes regulations and tools specially designed
for administration and control, as well as the permanent involvement of organizational structures
with specific responsibilities assigned in this regard.
The framework is supported by the existence of an independent function dedicated to operational
risk, by a structure of relevant committees and by a system of reporting operational risk to the
Management of the Bank.
The operational risk management system is integrated into the internal processes defined for the
management of significant risks. The main tools used for identification, assessment, monitoring,
mitigation, reporting of operational risk, are: loss data collection and analysis, risk indicators
monitoring, scenario analysis, Permanent Workgroup analyses, evaluations of processes and
activities from the perspective of operational risk, mitigation actions definition (independently or as
part of the previously mentioned tools), management and Group reporting. Moreover, products,
projects and internal regulations are analyzed before approval and implementation and feedback
and advice is provided by all relevant areas within the Bank.
7.5. Compliance risk
Within a complex legal framework, UniCredit Bank Group is subject also to compliance risk, defined
as the actual or future risk to impact the profits and capital, which may lead to fines, claims and/or
cancellation of contracts or which may affect the reputation of a credit institution, as a result of
breaching or non-compliance with its own rules and standards, agreements, recommended practices
or ethical standards.
In order to meet the legal requirements compliance function, supported Management Board to
manage the conformity risk. It also gives support to identify, evaluate, monitor and report the
compliance risk associated to different activities, including consultancy regarding compliance with
legal internal and UniCredit SPA requirements.
7.6. Reputational Risk
Reputational risk is the current or prospective risk to earnings, capital or liquidity caused by the
damage of the Bank’s reputation . In particular, it is the risk arising from negative perception on the
part of customers, counterparties, shareholders, investors, debt-holders, market analysts, other
relevant parties (such as civil society - NGOs, media, etc) or regulators that can adversely affect the
ability to maintain existing, or establish new, business relationships and continued access to sources
of funding. Reputational risk is triggered by business relationships with clients / partners, different
situations/ incidents involving reputational risk or transactions connected with reputational risk
sensitive sectors.
UniCredit Bank S.A has implemented a series of policies, processes, methods, specific indicators and
systems for controlling the reputational risk, in order to evaluate, monitor, reduce and report
periodically to relevant bodies.
For reputational risk transactions under the scope of specific reputational risk policies or which by
their nature involves reputational risk (like weapons/defense industry, nuclear energy, water
infrastructure (dam), mining, coal sector, oil & gas sector, etc. ), the working flow established in
specific procedures is followed, which implies going through the assessment process and decision
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
25
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taking by the competent approval level for reputational risk according to regulations in force,
obtaining non-binding opinion (NBO) from Group (if the case).
7.7. Business Risk
Business risk is defined as adverse, unexpected changes in business volume and/or margins that are
not due to credit, market and operational risks. It can lead to serious losses in earnings, thereby
diminishing the market value of a company.
Business risk can result above all from a serious deterioration in the market environment, changes in
the competitive situation or customer behavior, but may also result from changes in the legal
framework.
7.8. Real Estate Risk
Real Estate Risk is defined as potential losses due to fluctuations in the market value of the real
estate investment portfolio held by the Group's/ UniCredit Bank’s.
7.9 Strategic Risk
The strategic risk is the risk of suffering potential losses due to decisions or radical changes in the
business environment, improper implementation of decisions, lack of responsiveness to changes in
the business environment, with negative impact on the risk profile and consequently on capital,
earnings as well as the overall direction and scope of a bank on the long run.
7.10 Risk of Excessive Leverage
Risk of excessive leverage represents the risk resulting from the Bank’s vulnerability due to leverage
or contingent leverage that may require unintended corrective measures to its business plan,
including distressed selling of assets which might result in losses or in valuation adjustments to its
remaining assets.
7.11 Inter-concentration Risk
Within the Bank, the following approaches relating to concentration risk are applicable
• Intra-concentration risk is considered in the risk management processes for each significant risk
• The risk of inter-concentration is considered both in the risk management processes for
individual risks and integrated when performing stress testing and evaluation of capital
adequacy
8. Corporate Governance
UniCredit Bank Group is responsible for the existence of a rigorous management framework
designed to include at least the following aspects:
• organizational structure and organization;
• business model and related strategy;
• the Bank’s management, respectively: attributions and responsibilities, its composition and
functioning, including the establishment, composition, procedures and responsibilities of the
committees of the Bank’s management in its supervisory function;
• the culture regarding the risks and the conduct in carrying out the activity;
26
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Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
• internal control and related mechanisms, respectively: the risk management framework and
internal control functions, the policy of approving new products and significant changes to
existing products, processes and systems;
• managing the continuity of the activity;
• transparency requirements.
UniCredit Bank S.A. has a comprehensive range of internal regulations regarding management of the
business.
8.1. UniCredit Bank’s corporate governance
Corporate governance statement
UniCredit Bank S.A., as a two tier governed bank, operates in a corporate governance framework
that respects all the legal and regulatory requirements of the Romanian legal framework, UniCredit
Bank Group rules, and the best international practices in the field.
Corporate governance of the bank is the set of rules and processes that establish the relationship
between shareholders, management, clients, employees, suppliers and other parties involved in
defining the bank's objectives, how they are met, and monitoring the performance of the bank. This
highlights the efficiency of management systems, namely the role of the Supervisory Board and the
Management Board, the responsibilities and remuneration of the members of these structures, the
credibility of the financial statements and the efficiency of the control functions.
The governance principles are defined in the:
• Constitutive Act;
• Internal functioning and organization regulation of the bank;
• The Bank's management framework (CAR);
• Management Board regulation (Annex to CAR) and Supervisory Board regulation (Annex to CAR);
• Regulations of the Committees subordinated to the Supervisory Board (Annexes to CAR);
• Regulations of the Committees subordinated the Management Board.
The sections below include details of the main features of internal control, risk management systems
in relation to the financial reporting process, the manner in which the general meeting of
shareholders or associates takes place and its key attributions, the rights of shareholders or
associates and the structure and how to operate the administrative, management and supervisory
bodies and their committees.
8.1.1. General Shareholders’ Meeting (‘GSM’)
The General Shareholders’ Meeting is constituted as the supreme authority of the Bank.
The rights, responsibilities and working methods of the GSM are established in the Constitutive Act
of the Bank and they are carried out in compliance with the applicable Romanian laws and
regulations.
The detailed tasks and responsibilities are set forth in the Bank’s Constitutive Act.
The General Shareholders’ Meeting could delegate a part of its competences to Supervisory Board
and Management Board in the cases mentioned in the Constitutive Act and in compliance with the
applicable laws.
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
27
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The roles and responsibilities are detailed in the specific regulation/rule of procedure.
The Ordinary General Meetings of the Shareholders shall be convened at least once a year, within
maximum 5 months since the financial year end in accordance with the legal requirements, and at
any time it is needed to make decisions in its area of responsibility, in accordance with the provisions
of law or the Constitutive Act.
Extraordinary General Meeting of Shareholders shall be convened whenever decisions in its
responsibilities must be adopted.
The Ordinary General Meeting of Shareholders shall:
• discuss, approve or modify the annual financial statements, based upon the reports of the
Management Board, Supervisory Board and financial auditor, and shall approve the dividends;
• appoint and revoke the Supervisory Board members;
• appoint and revoke the financial auditor;
• establish the minimum duration of the financial audit contract following the proposal of the
Supervisory Board;
• approve the remuneration of the Bank’s Supervisory Board’ members;
• express its opinion about the Management Board’s activity;
• approve the budget of income and expenses, and the program of activity for the next financial
year as established by the Management Board and after preapproval by the Supervisory Board.
The conduct of General Meetings Shareholders is in accordance with legal requirements of the
applicable laws regarding capital market, with a special attention to meet the rights and obligations
of the shareholders.
8.1.2. Supervisory Board
The Supervisory Board is the statutory body of the Bank responsible for supervision and control of
the Bank, in supervising the exercise of powers by the Management Board and the conduct of the
Bank’s business activities.
The Supervisory Board shall supervise the financial and business activities of the Bank and shall
control the observance of the provisions of the Constitutive Act and of any relevant legal provisions
by the Bank’s management bodies. The Supervisory Board shall further review the annual financial
statements including the proposal for the distribution of profits, and the annual report prior to
submitting them to the Ordinary General Meeting of Shareholders for approval.
The competences of the Supervisory Board are established by the Constitutive Act the Rules of
Procedure of SB (Annex to management Framework) - and the Romanian laws and regulations in
force.
The Supervisory Board acted in 2023 through the Audit Committee, Remuneration Committee, Risk
Administration Committee, Nomination Committee.
8.1.3. Management Board
The Management Board is the statutory body responsible for current management of the Bank.
The Management Board is the statutory body of the Bank which is responsible for the management
and execution of all activities of the Bank, including monitoring and control of the business
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Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
objectives of the Bank. The Management Board takes decisions on any matters of the Bank, unless
such decisions are reserved to other bodies according to legal regulations or this Constitutive Act.
The Management Board manages and coordinates collectively the Bank’s activity in accordance with
the competences assigned by the Constitutive Act and the Rules of Procedure of the Management
Board.
The members of the Management Board are appointed and/or revoked by the Supervisory Board.
The mechanism of the functioning of Management Board’s meetings is described in the Rules of
Procedure regarding the preparation and holding of the Management Board’s meetings.
Both Supervisory Board and Management Board operate through specialized committees, whose
role is to assist the management structure in specific areas.
8.1.4. Committees subordinated to Supervisory Board
Committees subordinated to Supervisory Board are:
• Audit Committee
• Remuneration Committee
• Nomination Committee
• Risk Administration Committee
8.1.4.1. Audit Committee
The Audit Committee is directly subordinated to the Supervisory Board.
The Audit Committee is a consulting body of the Supervisory Board, with specialized attributions.
The Audit Committee will be composed of 3 elected non-executive members of the Supervisory
Board. The members of the Audit Committee and the Chairman will be elected by the Supervisory
Board.
The roles, responsibilities and functioning mechanisms of the Audit Committee are detailed in the
Audit Committee Regulation/rule of procedure.
8.1.4.2. Remuneration Committee
The Remuneration Committee is directly subordinated to the Supervisory Board.
The Remuneration Committee is set up to:
• determine the compensation (fixed and variable part) to be paid to each of the Bank’s
Management Board members, as well as Heads of Audit, Compliance and Risk Management;
• approve the terms and conditions of the management contracts to be concluded between the
Bank and the members of the Management Board;
• approve the goals of the Management Body and Head of Audit, Compliance and Risk
Management.
The Remuneration Committee consists of 3 members, appointed by the Supervisory Board from
among its members and who exercise this function as long as they are also members of the
Supervisory Board. The Chairman of the Remuneration Committee is appointed by the Supervisory
Board from among the members of the Remuneration Committee and must be independent.
The roles and responsibilities and functioning mechanisms of the Remuneration Committee are
detailed in the Remuneration Committee Rules of Procedure.
8.1.4.3. Nomination Committee
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The Nomination Committee is a permanent committee established by the Supervisory Board having
as main duties:
• to identify and recommend to the Supervisory/Management Board, for approval, candidates to
occupy the vacant seats within the management body;
• to assess the balance of knowledge, skills, diversity and experience within the management
body;
• to assess on a regular basis, but at least once a year, the structure, size, composition and
performance of the management body and to make recommendations to the management body
with respect to any changes;
• to assess on a regular basis, but at least once a year, the knowledge, skills and experience of
each member of the management body and of the management body as a whole and report to
the management body accordingly;
• to decide with respect to a target concerning the representation of the male or female gender,
poorly represented in the structure of the management body and draw up a policy concerning
the means for increasing the number of these individuals in the structure of the management
body in order to achieve the target concerned.
The nomination committee consists of 3 (three) members, appointed by the Supervisory Board from
its members that exercise this position as long as they are of the Supervisory Board. The roles,
responsibilities and functioning mechanisms of the Nomination Committee are detailed in the
specific Regulation.
8.1.4.4. Risk Management Committee
Risk Management Committee is directly subordinated to the Supervisory Board. Risk Management
Committee is a permanent committee of UniCredit Bank having a consultative and support function
to the Management Body.
The RMC shall be composed of 3 (three) members, appointed by the Supervisory Board from its
members that exercise this position as long as they are of the Supervisory Board.
The roles, responsibilities and functioning mechanisms of the Committee are detailed in the specific
regulation.
8.1.5. Committees subordinated to Management Board
Committees subordinated to Management Board are:
• Risk Management Operative Committee;
• Transactional Committee, with two sessions: (i) Credit Subcommittee and (ii) Special Credit
Subcommittee;
• Financial Risk Committee, with two sessions; (i) ALCO Subcommittee and (ii) Market Risk
Subcommittee;
• Projects & Expenses Committee, with two sessions: (i) Project Subcommittee and (ii) Cost
Subcommittee;
• Occupational Safety and Health Committee;
• Crisis Committee and working teams;
• Non-Financial Risk Committee, with two sessions: (i) ICT, Security and Cyber Risk and
Subcommittee (ii) Reputational Risk. Subcommittee;
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Management Board’s consolidated and separate report
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The organization, composition, functioning and attributions of these committees are described in
the Organization and Functioning Regulation and in specific documents (rules of procedure).
Activities of the most important committees subordinated to the Management Board are bellow.
8.1.5.1 Risk Management Operative Committee
Risk Management Operative Committee has a consultative role, its mission being to analys the
aspects regarding the risks (including risk of conduct and risk of fraud), other than those subject to
the responsibilities of other committees. Also issue consultative decisions, opinions and
recommendations to the Management Board in connection with the analysed aspects, including in
connection with the outsourcing process of some activities of the Bank and the management of the
non-performing exposures’ portfolio.
8.1.5.2 Transactional Committee, with two sessions: (i) Credit Subcommittee and (ii) Special Credit
Subcommittee
Transactional Committee has a decision-making role and is the main approval authority in relation to
individual credit exposures / credit lending transactions, based on the delegated powers based on
the delegated authorities of the Directorate, within the limits established by it, in with respect to all
segments of their bank customers, its main mission being organized in order to analyse, approve,
recommend, approve and / or reject applications for loan applications and related Memoirs for
changes to previously approved transactions, including attributions related to:
• Validation of clients’ transfer to Restructuring and Workout Departments;
• Arbitration in cases of disagreements between different departments/ organizational structures
related with the transfer of a customer to / from Restructuring / Workout Department
(according to specific procedures);
• Validation of clients’ transfer from Restructuring or Workout classification to Performing
classification;
• Approval of credit risk provisions and write-offs for restructuring and workout
clients/exposures.
Transactional Committee meets in two sessions:
• Credit Sub-Committee (for performing exposures)
• Special Credit Sub-Committee (for non performing exposures).
and is structured on several levels of decision, regulated in the Rules of Procedure of the Committee.
8.1.5.3 Financial Risk Committee, with two sessions; (i) ALCO Subcommittee and (ii) Market Risk
Subcommittee
The Financial Risk Committee has a consultative or decision-making role, depending on the aspects
that form the object of its analysis and based on the competence delegated by the Management
Board, its mission being to:
• ensure the adequate administration of the bank balance sheet, in a proactive manner
• to monitor the financial risk position in order to optimize the bank's profit within the approved
risk limits
• advise strategies, policies, methodologies for market risk, counterparty credit risk, liquidity risk,
FX and banking book interest rate risks, fund transfer pricing, minimum margins in the
customer business and setting limits accordingly
• advise the Funding Plan and Contingency Funding Plan and evaluate the impact of transactions
significantly affecting the overall financial risk portfolio profile
• approve market risk limits, liquidity and interest rates, as well as new Treasury products
(subject to the approval of the Management Board)
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
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• approve the internal transfer prices, including methodological aspects, as well as the external
prices of the products
• any other aspects related to Financial Risk, Treasury or Strategic Finance
8.1.5.4 Projects & Expenses Committee, with two sessions: (i) Project Subcommittee and (ii) Cost
Subcommittee
Project & Expenses Committee has a consultative or decision-making role, depending on the
subjects submitted for analysis according to its responsibilities and based on the competence
delegated by the MB, regarding to the all projects at the Bank’s level and related costs, as well as the
non-HR costs (OPEX) and capital expenditure (CAPEX) of the Bank and of the UniCredit Subsidiaries.
Project & Expense Committee meets within two sessions:
• Project Sub-Committee Session (involved in issues related to the management of the bank's
portfolio of projects, including the initiation and monitoring of project implementation. This
CPC session will also approve project costs, according to the delegated approval powers) and;
• Cost Sub-Committee (having a decision-making role, approving OPEX costs and capital
expenditures (CAPEX), according to the delegated approval powers, other than those related to
projects, while ensuring operational monitoring, estimation and optimization of OPEX and
CAPEX costs, both for the Bank but and for its subsidiaries).
8.1.5.5. Crisis Committee and working teams
The Crisis Committee has a decision-making role, based on the competence delegated by the MB,
both the Crisis Committee and the related work teams being established by decision of the MB, their
mission being to coordinate and ensure operational support in crisis situations, adopt the necessary
operational decisions.
8.1.5.6 Non-Financial Risk Committee, with two sessions: (i) ICT, Security and Cyber Risk and
Subcommittee (ii) Reputational Risk. Subcommittee
NFRC has an advisory role, with the possibility to issue opinions, as appropriate, on major incidents
affecting ICT and information security services, as well as on the reputational risks associated with
lending or non-lending cases / initiatives / transactions.
NFRC meets within two sessions:
• NFRC - ICT, Security, Cyber Risk Sub-Committee involved in the analysis of major incidents
affecting ICT services in the reference area, as well as those with potential major impact, in
order to identify and take corrective action to effectively resolve ongoing incidents and to
prevent new incidents and, and to monitor information security management in all areas
defined by internal regulations and group policies),
• NFRC - Reputational Risk Sub-Committee - having the role of analyzing and issuing of opinions in
relation to the reputational risk associated with credit cases / initiatives / transactions, as well as
for non-credit activities and it is involved with priority, before any other committee / other
official decision. For the lending activity, the opinion issued within this sub-committee is
followed by the decision on reputational risk, the analysis of the lending opportunity and the
final lending decision, according to the established decision-making powers. For transactions
other than lending, the opinion of this sub-committee is requested before the analysis and
approval of the respective transaction.
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Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
8.1.6 Internal Control
The UniCredit Bank’s internal control is based on:
• the existence of the Internal Control framework
• the existence of the independent internal control function.
In the internal control functions, which must be independent, are included:
• risk management function, being composed by risk control function on each business line;
• compliance function and
• internal audit function.
The internal control framework is adapted at individual level to the specifics of the activity, to the
complexity and to the related risks, taking into account the organization of the UCB Group.
Internal control afferent framework represent the framework that ensure the development effective
and efficient operations, prudent development of the activity, identification, measurement and
mitigation of risks, credibility of financial and non-financial information reported internally and
externally, sound administrative and accounting procedures, compliance with the applicable legal
framework, including supervisory requirements, as well as the credit institution's internal policies,
processes, rules and decisions.
The internal control framework covers all structures of the Bank as a whole, including the activities
of all operational units, support and control functions.
Internal control functions submit periodically to the Bank’s management, official reports on the
major deficiencies identified. These reports include, for any new major deficiency identified, the
relevant risks involved, an impact assessment, recommendations and remedial measures to be
taken.
8.2. Corporate Governance UniCredit Bank’s subsidiaries (UCFIN and UCLC)
UniCredit Bank S.A., as a parent credit institution, takes into account and balances the interests of all
its subsidiaries and analyses the way in which those interests concur to the common objective and
interests of the whole UniCredit Bank Group, on long term.
8.2.1. UniCredit Consumer Financing IFN SA
Committees subordinated to Supervisory Board are:
• Audit Committee;
• Risk Management Committee.
Committees subordinated to Management Board are:
• Transactions Committee
• Financial Risks Committee
• The Projects Committee
• Safety and Health at Work Committee
• Crisis Committee
• The Non-Financial Risks Committee (with the ICT, Security and Cyber Risk subcommittee and the
Reputational Risk Subcommittee).
8.2.2. UniCredit Leasing Corporation
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Committees subordinated to Supervisory Board are:
• Audit Committee;
• Risk Management Committee.
Committees subordinated to Management Board are:
• The Transactions Committee, with: a) the Credit Subcommittee and b) the Special Credit
Subcommittee;
• Crisis Committee
• Health and Safety Committee at Work;
• Remarketing and Asset Management Committee;
• Reputational Risk Committee;
• The Non-Financial Risks Committee with: a) ICT, Security and Cyber Risk Subcommittee and b)
Reputational Risk Subcommittee.
9. Non-financial declaration
In this chapter, the Group presents information on the development, performance and position of
the UniCredit Bank Group and its impact on aspects related to environment protection, social and
personnel, human rights, the fight against corruption and bribery.
9.1. Short description of business strategy
In its activity, the Bank continues to actively target the following areas:
• Profitability: revenues, net profit and ROAC (Return on Allocated Capital), through an adequate
mix of business actions;
• Customers: net active customer growth and customer experience;
• Cost discipline: continuous attention to efficiency, simplification and digitization; being even
more disciplined with respect to cost management is crucial for the sustainability of our current
business model;
• Risk discipline: constant focus on risk management and mitigation of high risk exposures;
• Maintain strong capital position and improve funding self-sufficiency, by achievement of a well-
diversified commercial base;
• Compliance and compliance culture, as a prerequisite to maintain high reputation;
• Our People, on which the Bank keeps investing, also by ensuring continuous trainings and career
growth opportunities.
9.2. Protection of the environment
The UniCredit Bank Group is compliant with the applicable legal framework regarding the
environmental protection and is concerned to decrease the impact of its operational activities on
environment.
9.3. Social and HR activity
Learning & Development
Throughout 2023, various actions were implemented in line with HR strategy:
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Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
• Seniority Gifts: We gladly celebrated loyalty of 601 colleagues that reached 5, 10, 15, 20 and 25
years in the Group.
• Sales Branch Managers Program (Retail & Corporate): the pilot launched in November 2021 for
Branch Managers from Retail and Corporate with the direct involvement of Regional Managers
from Retail and Corporate to define the concept and align it with the current business strategy.
In Module I – Sales Manager over 200 colleagues participated. In 2023, Module 2 - Sales Leader
took place during 14 sessions in which more than 200 colleagues participated.
• Onboarding program for the Retail and Corporate Network: permanent updating and delivery of
training programs for the Retail and Corporate sales force for a smooth accommodation in the
role by knowing the relevant products, flows and procedures.
• Growth Program for the Retail Network: increasing the technical skills for colleagues in the retail
network, with an emphasis on product and service updates, procedural changes, key KYC and
anti-fraud aspects, the use of technical applications, development of customer relations.
• Unlock your potential: program delivered quarterly and developed in the Retail Network for
Relationship Manager Individuals and Micro colleagues who did not perform as expected in the
last 2 quarters.
• Grow to lead: The program targets colleges with managerial potential, offering them
opportunities for personal and professional growth, accelerating their development and giving
them visibility on a wider scale, with the aim of preparing them for future more complex
managerial roles. The program was open for registration to all colleagues, then a structured
selection process followed, after which we identified 42 colleagues who started this learning
journey.
• Internal Trainers Community: Trainers in the community delivered for approx. 50 colleagues per
month courses on Time Management, Maximizing personal and professional efficiency;
Rediscover the value of feedback, Emotional intelligence, Public Speaking, First Time Manager,
Design Thinking; Agile
• Achieve Program: 1 to 1 coaching program, open registration to all colleagues in the company. In
2023, 35 colleagues benefited from six individual coaching sessions delivered by our internal
coaching team.
• Team coaching: we support teams by organizing team coaching sessions with the aim of
improving collaboration within them, supporting the clarification of roles in the team,
constructive decision-making and performance in accordance with organizational objectives. In
2023, there were two such interventions (approx. 20 colleagues) within UniCredit teams
supported by colleagues from the internal coaching team.
• ESG Programs: In 2023, we increased the level of awareness of the ESG impact through over 200
colleagues participating in sessions held at local or group level, some of them also obtaining
accredited international certifications.
• Financial education: two webinars on Financial Education open for participation to all colleagues.
• Other specific trainings for colleagues: Start Invest – Sales Opportunities, Esign, MIFID,
Bancassurance, various specific technical trainings depending on the role.
• E-learning platforms: In 2023 we simplified our activity by adopting a unique e-learning platform
that ensures a consistent approach to mandatory courses. At the same time, we implemented
the global online platform, PLUS [People Learning and UpSkilling], an aggregator of over 30
external learning platforms, which brings together over 60,000 internal and external training
resources.
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
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• The performance management process: ensuring a unitary process in which each employee is
evaluated and rewarded periodically based on meritocracy principles.
• Bonus allocation methodology: clear and consistent principles, unified across all legal entities;
• Salary review process: based on predefined criteria.
• Closer to the academic environment. In 2023, UCB continued to improve relationship with
universities and student associations across the country.
• Internship program: we continued the internship program in 2023, offering students the
opportunity to start a career in the financial and banking field through a mixed learning
experience consisting of both theoretical and practical parts. The program aims to support the
successful transition of students to the business environment. The entire program is viewed
through a developmental lens and we assist interns as they develop professionally, focusing on
increasing their skills.
• Organizational culture: we continued to implement initiatives that support our organizational
culture through local and group events dedicated to the promotion and consolidation of
UniCredit Culture and Values, DE&I masterclasses, dedication page available on the open
Intranet with the aim of encouraging collaboration and facilitating communication between
different teams and departments and many others.
• Diversity, Equity and Inclusion - EDGE certification: in 2023 we obtained the global EDGE
certification, which demonstrates our commitment to Diversity, Equity and Inclusion as a driver
of sustainable success within our organization.
• In order to bring balance between personal and professional life, we have developed a series of
initiatives such as: fairs, discounts, blood donation campaigns, sports and internal events
(dedicated to the end of the year, March 8, kids day, summer challenge).
• WeCare program: developed with the aim of discussing topics related to well-being and
emotional support. 12 live webinars were organized that gathered approximately 300
participants per session.
• Internal survey: survey launched in November 202, open participation of all employees from all
entities, with the aim of taking the pulse of the organization. The answers provided will
contribute to our future actions, so that we continue to strengthen ourselves as a cohesive,
united community, in which we rely on each other and in which we choose to do things with
integrity, responsibility and care for those around us.
9.4 Diversity on company boards
Size: the number of members of the Management body must be adequate to the Bank’s/its subsidiaries’
size and organizational complexity in order to ensure effective oversight of all their operations as concerns
management and control.
Educational and professional background: the competent bodies within the Bank and its
subsidiaries assess the adequacy and suitability of their Management body members based on criteria
provided by local applicable legislation and also based on internal/group rules of procedure, where
applicable.
In terms of professional qualifications, the members of the governing bodies must have a good reputation
and knowledge, abilities and experience adequate to the operational complexity and size of the Bank/its
subsidiary and they must devote sufficient time and resources to discharging their duties and must act the
company’s interest and consistently with the objectives of sound and prudent management.
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Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
The Management body’s members are selected according to technical competence, adequate seniority,
with the observance of the representativeness and independence requirements, to be able to ensure a
constructive dialog within the body of the management body to which they belong; the composition of
the Management body reflects in its entirety a wide range of professional experience.
Age: Management body of the Bank and of its subsidiaries contains a balanced gender mix of people
with various ages, from people in their 40s to people in their 60s.
Code of conduct: Management body of the Bank/its subsidiaries promotes high professional and
ethical standard. The Management body’s members are required by internal relevant policies to avoid
conflicts of interests and to abstain from participating in the taking of a decision related to which they are
in a situation of conflict of interests.
Gender balance: for the purpose of increasing the number of women on the management body and with
the aim of reaching at least one third of the members of the boards, the Bank and its subsidiaries adopted
the promotion of women in the management body as best practice within their companies, in line with
the best practice within the Group.
9.5 Environmental, Social & Governance (ESG) Risks
In the last years, UniCredit Bank has undertaken several actions to integrate progressively climate
and environmental risks into the risk management framework through the two types of risks:
transition risk and physical risk, by establishing specific methodologies and applying international
regulatory standards in force.
In order to incorporate and adequately assume the risk generated by climate change, the Bank has
increased the level of granularity with regards the “steering signals” related to the relevant activity
sectors, considering that the impact generated can be different from one subcategory to another
within the same industry. The credit risk strategy defined at the industry level also includes the
impact of climate and environmental risk within the "steering signals".
In order to incorporate and adequately assume the risk generated by climate change, the Bank has
implemented a credit risk strategy in which it incorporate climate and environmental risks through
dedicated signals (“steering signals”) which reflect the level of transition risk, on specific sectors (eg.
the fossil fuel sub-industry).
Regarding physical risk, UniCredit Bank has evaluated the potential losses to the immovable real
estate collateral portfolio, as result of extreme and acute climate events.
Also from the same perspective, within the lending process, the Bank implemented starting with
2022 a transition risk assessment questionnaire for Corporate clients that have an exposure larger
than 50 mio. EUR, in order to assess vulnerability and potential economic impact on Corporate
customers with significant exposures.
The questionnaire was designed in order to evaluate the exposure to transition risk, on three key
dimensions: the level of the current exposure, the level of the future vulnerability and the economic
impact.
Doing so, UniCredit Bank take into consideration several topics that may lead to increased credit risk,
for example the income of the counterparties and the value of assets that are subject to the
transition to a low-carbon economy or production processes that are subject to significant changes
to minimize the effects of pollution. This methodology supposes:
• Filling a questionnaire addresses both high-emission and low-emission customers;
• Generating of a climate and environmental risk score table that determines the main KPIs and
identifies the position of the counterparty in one of the four risk areas (low, medium-low,
medium-high, high) of the transition evaluation matrix.
Management Board’s consolidated and separate report
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Starting from 2024, this enviromental score will be integrated into the credit evaluation process
within transactional credit committees.
In addition, the Bank collects the energy performance certificates related to the real estate
properties established as guarantees in its favour, in order to store the necessary information and to
comply with the regulatory requirements in the field.
In terms of physical risk, the Bank focuses on improving the methodology for assessing vulnerable
portfolios and mitigating related risks, periodically collecting information on existing guarantees in
the portfolio and exposing them in geographically vulnerable sectors to physical risk.
9.6 Key non-financial performance indicators relevant for the entity's specific activity
In accordance with the requirements of Delegated Regulation (EU) 2021/2178 supplementing
Regulation (EU) 2020/852, the Bank is obliged to publish information on sustainable economic
activities from the point of view of the environment and by specifying the methodology for
complying with this obligation provision of information.
The main activity of credit institutions is the provision of financing to the real economy and
investment in it. Credit institutions' exposures to the enterprises they finance or invest in are
reflected as assets on the credit institutions' balance sheet. The main key performance indicator for
credit institutions subject to the reporting obligations set out in Articles 19a and 29a of Directive
2013/34/EU should therefore be the green asset ratio (GAR), which indicates the proportion of
exposures related to activities aligned to the taxonomy in relation to the total assets of the
respective credit institutions.
GAR refers to the Bank's main lending and investment activities, including loans, receivables and
debt securities, as well as their equity holdings, to reflect the extent to which these institutions
finance activities aligned to the taxonomy.
Additionally, the Bank provides financial guarantees, which gives rise to off-balance sheet exposures.
To allow investors and the public to assess the proportion of economic activities aligned to the
taxonomy carried out by credit institutions, for these off-balance sheet exposures, the Bank provides
information on the proportion of economic activities aligned to the taxonomy in the obligations
whose execution it guarantees.
Thus, the Bank has prepared the following information for the reporting date of December 31, 2023:
• The share in total assets of exposures to the central bank and public administration:
RON Thousands
Accounting value (RON
thousands)
Loans and advances granted to central banks
10,293,818
Loans and advances granted to public administrations
1,840,210
Debt securities granted to public administrations
11,650,323
Total exposure to central banks and public administrations
23,784,351
Total assets
67,712,095
The ratio of exposures to central banks and public administrations in total
assets
35%
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Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
The share in total assets of the exposures regarding ineligible and eligible activities from the point of
view of taxonomy:
RON Thousands
Accounting value (RON
thousands)
Loans granted for eligible activities
1,829,000
Loans granted for ineligible activities
31,990,643
Total loans and advances granted to clients
33,892,452
Total assets
67,712,095
The rate of loans granted for eligible activities in total assets
2.70%
The rate of loans granted for ineligible activities in total assets
47.25%
The share of derivative financial instruments in total assets
Derivative financial instruments for trading
76,984
Total assets
67,712,095
The rate of derivative financial instruments
0.11%
• Green Financing
UniCredit is focused on delivering a positive and sustainable transition to green energy. In doing this,
UniCredit has a consistent and comprehensive methodology for the classification and reporting of
UniCredit’s ESG offering. It serves as a basis to further improve UniCredit’ sustainability targets and
metrics, to deliver in its commitment to support sustainable economic growth and the transition to a
more inclusive, equitable society and a low-carbon economy.
Green Financing includes loan instruments used to finance or re-finance, in whole or in part, projects
with specific and well identified objectives that should provide positive environmental benefits.
At the end of 2023, the loans towards individuals/households in the form of Green Mortgage for the
finance or re-finance the acquisition of a residential green building, with Energy Performance
Certificate (EPC) class “A”, increased up to a level of 906 million RON exposure. With regard to
companies, UniCredit reached at the level of 923 million RON directed to finance:
o construction, acquisition or revamping of facilities generating energy from renewable energy
sources;
o waste reduction;
o acquisition and ownership of green buildings;
o other green projects.
10. Communication calendar for 2024
The Bank prepares every year a financial communication schedule, for information of their shareholders;
this schedule will be published also on Bucharest Stock Market site.
The schedule for 2024 is the following:
Annual General Shareholders’ Meeting (GSM) for 2023 local financial results
approval
11.04.2024
Presentation of the separate and consolidated financial results for the 2023
year, on the official website of the Bank
16.04.2024
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
39
Convenience translation in English of the original Romanian version
Presentation of the half-yearly report and the consolidated financial results
for the first half of 2024, on the official website of the Bank
23.08.2024
11. Members of the Management Board of the Bank, UCFIN and UCLC during 2023
Members of the Management Board of the Bank, the parent company:
1. Catalin Rasvan Radu - Executive President (CEO), Chairman of the Management Board, until
17.04.2023 (when his mandate expired);
2. Mihaela Alina Lupu- Executive President (CEO), Chairman of the Management Board – starting
with 13.10.2023 ;
3. Andrei Bratu - member of the Management Board (Risk Management), starting with 01.01.2019;
extended mandate starting with April 17, 2023 until April 17, 2026;
4. Carlo Driussi, - Executive Vice-President (COO), member of the Management Board, until
17.04.2023 (when his mandate expired);
5. Feza Tan - Executive First Vice-President, (Deputy CEO), member of the Management Board,
staring 26.11.2021; extended mandate starting with April 17, 2023 until April 17, 2026.
6. Antoaneta Curteanu - Executive Vice-President (Retail), member of the Management Board
starting 25.11.2019; extended mandate starting with April 17, 2023 until April 17, 2026.
7. Diana Ciubotariu - Executive Vice-President (Legal), member of the Management Board starting
03.03.2021; mandate terminated starting with 01.08.2023 (change of position).
8. Dragos Birlog - Executive Vice-President (Compliance), member of the Management Board
starting 15.06.2021; mandate terminated starting with 01.08.2023 (change of position).
9. Cengiz Arslan - Executive Vice-President (COO) – starting with 24.07.2023;
10. Mihaela Raluca Popescu-Goglea- Executive Vice-President (CORPORATE) - extended mandate
starting with April 17, 2023 until April 17, 2026.
11. Dimitar Todorov - Executive Vice-President (FINANCE)- extended mandate starting with April 17,
2023 until April 17, 2026.
Members of the Management Board of UCFIN, the subsidiary:
1. Sorin Dragulin - President of the Management Board, starting 01.05.2021;
2. Adela Ticmeanu – Member of the Management Board, starting with 16.06.2023
3. Adrian Nesu – Member of the Management Board starting with 16.06.2023
4. Ani Cirstea - Member of the Management Board, until 18.04.2023;
5. Daniel Ghiulea - Member of the Management Board, starting with 01.06.2018
6. Alexandru Avram – Member of the Management Board starting with 20.06.2022.
Members of the Management Board of UCLC, the subsidiary:
1. Daniela Bodirca - President of Management Board, starting 01.01.2019;
2. Claudia Mocanu - Vice-President of the Management Board, starting 01.03.2020;
3. Laura Madalina Gramanschi - Vice-President of the Management Board, starting 18.04.2023;
4. Razvan-Florin Vedel - Vice-President of the Management Board, starting 01.06.2021 - mandate
ended on 18.04.2023;
40
Convenience translation in English of the original Romanian version
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
5. Loredana-Elena Nedelcu-Popescu - Vice-President of the Management Board, starting
16.03.2020;
6. Daniela Panaitescu - Vice-President of the Management Board, starting 01.12.2016.
In their activity, the Management Board members acted in compliance with specific economic
legislation in force, norms and regulations issued by National Bank of Romania, Group rules and
internal rules and regulations of UniCredit Bank SA.
The Management Board members’ activity had as primary goal the effective and efficient
management of the Bank’s patrimony in full compliance with the law and statutory regulations.
In conclusion, the main focus of the Management Board members was on:
• Strong financial standing of the UniCredit Bank Group, including solid capital base and liquidity;
• Prudent risk management, including credit, market and operational risks;
• Strict and effective internal control of activity and operations, carried out in accordance with the
legal provisions in force;
• Value added of all types of businesses, geographies and operations;
• Completion of the targets set in the budget;
• Business sustainability;
• Corporate social responsibility;
• Increase the productivity and efficiently functioning organizational structure of the Bank,
focused on rendering qualitative and competitive banking services and products to the clients of
the Bank;
• Increased efficiency of logistical organization and infrastructure;
• Higher automation and systems development, through improvement of banking software
performances, risk management and specialized applications in order to satisfy the bank’s
operating needs, acting accounting and legal requirements, and enhance decision making
process;
• Continuous development and professional training of the bank’s employees.
12. Conclusion
Although the market conditions and the local and international economic environment continued to
be challenging, in 2023 UniCredit Bank Group proved to be one of the Unicredit Group's growth
engines in Eastern Europe, having remarkable results.
The future development objectives will continue to focus on a more rapid growth of operations in
retail, alongside with the strengthening of corporate activity. The Group continues to focus on
delivering of value-added services, on risk management, profitability, productivity and strengthening
of market position through higher service quality, enriching the range of products and services, as
well as strict compliance with the acting laws and by-laws. Last but not least, the Group remains
consistent with its mission of being close to its clients and supporting them in accomplishing the
things that matter to them.
Management Board’s consolidated and separate report
for the financial period ended 31 December 2023
41
Convenience translation in English of the original Romanian version
Mrs. Mihaela Lupu Mr. Dimitar Todorov
Chief Executive Officer Executive Vice-President
UniCredit Bank S.A.
Consolidated and Separate
Financial Statements
for the financial year ended
31 December 2023
prepared in accordance with International
Financial Reporting Standards as endorsed
by European Union and with the provisions
of Order 27/2010 issued by National Bank
of Romania
Contents
Consolidated and separate statement of comprehensive income ...................................................................................................................... 1
Consolidated and separate statement of financial position ................................................................................................................................ 3
Consolidated and separate statement of changes in shareholders’ equity ......................................................................................................... 5
Consolidated and separate statement of cash flows ......................................................................................................................................... 13
Notes to financial statements ........................................................................................................................................................................... 16
1. REPORTING ENTITY ............................................................................................................................................................................................ 16
2. BASIS OF PREPARATION .................................................................................................................................................................................... 18
3. MATERIAL ACCOUNTING POLICIES .................................................................................................................................................................... 21
4. RISK MANAGEMENT .......................................................................................................................................................................................... 63
5. USE OF ESTIMATES AND JUDGEMENTS ........................................................................................................................................................... 157
6. ACCOUNTING CLASSIFICATION AND FAIR VALUE OF FINANCIAL ASSETS/LIABILITIES ...................................................................................... 172
7. NET INTEREST INCOME .................................................................................................................................................................................... 178
8. NET FEES AND COMMISSIONS INCOME .......................................................................................................................................................... 179
9. NET INCOME FROM TRADING AND OTHER FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT AND LOSS .................................... 179
10. DIVIDENDS INCOME ........................................................................................................................................................................................ 181
11. PERSONNEL EXPENSES .................................................................................................................................................................................... 181
12. DEPRECIATION AND AMORTISATION .............................................................................................................................................................. 186
13. OTHER ADMINISTRATIVE COSTS ...................................................................................................................................................................... 186
14. OTHER OPERATING EXPENSES ......................................................................................................................................................................... 187
15. NET IMPAIRMENT LOSSES ON FINANCIAL INSTRUMENTS ............................................................................................................................... 187
16. NET PROVISIONS LOSSES ................................................................................................................................................................................. 187
17. INCOME TAX .................................................................................................................................................................................................... 188
18. CASH AND CASH EQUIVALENTS ....................................................................................................................................................................... 189
19. DERIVATIVE ASSETS/LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS.................................................................................................. 189
20. LOANS AND ADVANCES TO BANKS .................................................................................................................................................................. 192
21. LOANS AND ADVANCES TO CUSTOMERS ......................................................................................................................................................... 193
22. NET FINANCIAL LEASE RECEIVABLES ................................................................................................................................................................ 196
23. FINANCIAL ASSETS HELD AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME................................................................................ 199
24. FINANCIAL ASSETS (DEBT INSTRUMENTS) AT AMORTIZED COST .................................................................................................................... 201
25. INVESTMENTS IN SUBSIDIARIES ...................................................................................................................................................................... 203
26. PROPERTY, PLANT AND EQUIPMENT ............................................................................................................................................................... 205
27. INTANGIBLE ASSETS ......................................................................................................................................................................................... 209
28. DEFERRED TAX ASSETS AND LIABILITIES .......................................................................................................................................................... 211
29. OTHER FINANCIAL AND NON-FINANCIAL ASSETS ............................................................................................................................................ 214
30. DERIVATIVES ASSETS/LIABILITIES DESIGNATED AS HEDGING INSTRUMENTS.................................................................................................. 216
31. DEPOSITS FROM BANKS .................................................................................................................................................................................. 218
32. LOANS FROM BANKS AND OTHER FINANCIAL INSTITUTIONS .......................................................................................................................... 219
33. DEBTS ARISING FROM FINANCING ACTIVITIES ................................................................................................................................................ 219
34. DEPOSITS FROM CUSTOMERS ......................................................................................................................................................................... 221
35. DEBT SECURITIES ISSUED ................................................................................................................................................................................. 221
36. SUBORDINATED LIABILITIES ............................................................................................................................................................................. 223
37. PROVISIONS ..................................................................................................................................................................................................... 224
38. OTHER LIABILITIES ........................................................................................................................................................................................... 224
39. ISSUED CAPITAL ............................................................................................................................................................................................... 225
40. OTHER RESERVES ............................................................................................................................................................................................. 225
41. RELATED PARTY TRANSACTIONS ..................................................................................................................................................................... 227
42. COMMITMENTS AND CONTINGENCIES ........................................................................................................................................................... 229
43. OPERATING SEGMENTS ................................................................................................................................................................................... 233
44. IFRS 16 - „LEASE” (GROUP AS LESSEE) ............................................................................................................................................................. 241
45. SUBSEQUENT EVENTS ..................................................................................................................................................................................... 247
Management Board’s Report ..................................................................................................................................................................... 1-37
Indpendent auditor’s report
CONSOLIDATED AND SEPARATE STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 December 2023
The accompanying notes form an integral part of these consolidated and separate financial statements.
Convenience translation in English of the original Romanian version.
1
Group | Bank | ||||
In RON thousands | Note | 31.12.2023 | 31.12.2022 | 31.12.2023 | 31.12.2022 |
Interest income using effective interest rate | 3,399,485 | 2,158,078 | |||
method | |||||
Other interest income | 15 | 10 | |||
Interest expense | ( | ( | (1,584,043) | (772,856) | |
Net interest income | 7 | 1,815,457 | 1,385,232 | ||
Fee and commission income | 749,236 | 621,832 | |||
Fee and commission expense | ( | ( | (316,951) | (237,423) | |
Net fee and commission income | 8 | 432,285 | 384,409 | ||
Net income from instruments at fair value through profit and loss | 9 | 424,701 | 347,795 | ||
Net gain/(loss) from foreign exchange | 65,217 | 23,494 | |||
Fair value adjustments in hedge accounting | ( | (7,616) | 10,799 | ||
Net gain/(loss) from derecognition of financial assets measured at amortised cost | 83,005 | 8,759 | |||
Net gain/(loss) from derecognition of financial assets measured at FVTOCI | ( | (11,979) | - | ||
Dividend income | 10 | 3,868 | 33,184 | ||
Other operating income | 12,780 | 12,577 | |||
Operating income | 2,817,718 | 2,206,249 | |||
Personnel expenses | 11 | ( | ( | (500,259) | (463,572) |
Depreciation and impairment of tangible | 12 | ( | ( | (96,996) | (100,048) |
assets | |||||
Amortization and impairment of intangible assets | 12 | ( | ( | (56,700) | (55,166) |
Other administrative costs | 13 | ( | ( | (400,423) | (370,212) |
Other operating costs | 14 | ( | ( | (21,549) | (11,072) |
Operating expenses | ( | ( | (1,075,927) | (1,000,070) | |
Net impairment losses on financial | 15 | ( | ( | (212,789) | (187,669) |
instruments | |||||
Losses on modification of financial assets | 65 | 207 | |||
Net operating income | 1,529,067 | 1,018,717 | |||
Net impairment losses on non-financial | ( | (449) | 9,842 | ||
assets | |||||
Net provision gains/ (losses) | 16 | ( | (99) | (2,163) | |
Profit before tax | 1,528,519 | 1,026,396 | |||
Income tax expense | 17 | ( | ( | (234,643) | (147,156) |
Net profit for the reporting period | 1,293,876 | 879,240 | |||
Attributable to: | |||||
Equity holders of the parent company | - | - | |||
Non-controlling interests | - | - |
CONSOLIDATED AND SEPARATE STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 December 2023
The accompanying notes form an integral part of these consolidated and separate financial statements.
Convenience translation in English of the original Romanian version.
2
Group | Bank | ||||
In RON thousands | Note | 31.12.2023 | 31.12.2022 | 31.12.2023 | 31.12.2022 |
Other comprehensive income, net of tax: | |||||
Items that will not be reclassified | |||||
subsequently to profit or loss: | |||||
Re-measurement of defined benefit liability | ( | (1,520) | 2,268 | ||
Revaluation of property, plant and equipment | 28iii) | 5,280 | 2,061 | ||
Movement in investment revaluation | 28i) | 6,534 | 8,729 | ||
reserve for equity instruments at FVTOCI | |||||
Income tax relating to items that will not be reclassified subsequently to profit or loss | ( | ( | (760) | (767) | |
Total items that will not be reclassified subsequently to profit | 9,534 | 12,291 | |||
or loss | |||||
Items that may be reclassified | |||||
subsequently to profit or loss: | |||||
Movement in reserve for debt | |||||
instruments at FVTOCI: | |||||
Gains/(losses) arising during the period | 28i) | ( | 87,284 | (125,436) | |
Reclassification of (gains)/losses | 28i) | 11,979 | - | ||
included in profit or loss | |||||
Net changes in cash flow hedging | |||||
reserve: | |||||
Gains/(losses) arising during the period | 28ii) | 1,119 | 29,686 | ||
Reclassification of (gains)/losses | 28ii) | 66 | 1,154 | ||
included in profit or loss | |||||
Income tax relating to items that may be reclassified subsequently to profit or loss | ( | (15,933) | 15,136 | ||
Total items that may be reclassified | ( | 84,515 | (79,460) | ||
subsequently to profit or loss | |||||
Other comprehensive income, net of tax | ( | 94,049 | (67,169) | ||
Total comprehensive income | 1,387,925 | 812,071 | |||
Attributable to: | |||||
Shareholders of parent – company | - | - | |||
Non-controlling interests | - |
-
The consolidated and separate financial statements were approved by the Management Board on March 06,
2024 and were signed on its behalf by:
Mrs. Mihaela Lupu Mr. Dimitar Todorov
Chief Executive Officer Executive Vice-President
CONSOLIDATED AND SEPARATE STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 31 December 2023
The accompanying notes form an integral part of these consolidated and separate financial statements.
Convenience translation in English of the original Romanian version.
3
Group | Bank | ||||
In RON thousands | Note | 31.12.2023 | 31.12.2022 | 31.12.2023 | 31.12.2022 |
Assets: | |||||
Cash and cash equivalents | 18 | 20,105,745 | 16,455,940 | ||
Financial assets at fair value through profit | 19 | 97,712 | 214,714 | ||
or loss | |||||
Derivatives assets designated as hedging | 30 | 242,560 | 310,229 | ||
instruments | |||||
Loans and advances to banks at amortized | 20 | 142,096 | 399,455 | ||
cost | |||||
Loans and advances to customers at amortized cost | 21 | 33,892,452 | 31,054,544 | ||
Net lease receivables | 22 | 7,300 | 11,342 | ||
Debt instruments at amortized cost | 24 | 9,647,214 | 8,856,966 | ||
Other financial assets at amortized cost | 29 | 497,953 | 250,620 | ||
Financial assets at fair value through other comprehensive income | 23 | 2,016,760 | 1,920,172 | ||
Investment in subsidiaries | 25 | 143,116 | 143,116 | ||
Property, plant and equipment | 26 | 169,000 | 176,415 | ||
Right of use assets | 44 | 242,889 | 181,355 | ||
Intangible assets | 27 | 406,108 | 344,366 | ||
Current tax assets | - | - | |||
Deferred tax assets | 28 | 49,686 | 73,999 | ||
Other assets | 29 | 51,504 | 50,866 | ||
Total assets | 67,712,095 | 60,444,099 | |||
Liabilities: | |||||
Financial liabilities at fair value through profit or loss | 19 | 120,253 | 176,966 | ||
Derivatives liabilities designated as hedging | 30 | 202,404 | 262,514 | ||
instruments | |||||
Deposits from banks | 31 | 1,240,982 | 1,050,418 | ||
Loans from banks | 32 | 584,966 | 849,329 | ||
Deposits from customers | 34 | 51,002,566 | 45,404,198 | ||
Debt securities issued | 35 | 4,002,296 | 3,502,834 | ||
Other financial liabilities at amortized cost | 38 | 1,149,294 | 1,239,449 | ||
Subordinated liabilities | 36 | 842,632 | 836,761 | ||
Lease liabilities | 44 | 250,414 | 193,362 | ||
Current tax liabilities | 18,546 | 24,969 | |||
Provisions | 37 | 226,903 | 250,737 | ||
Other non-financial liabilities | 38 | 207,970 | 176,914 | ||
Total liabilities | 59,849,226 | 53,968,451 |
CONSOLIDATED AND SEPARATE STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 31 December 2023
The accompanying notes form an integral part of these consolidated and separate financial statements.
Convenience translation in English of the original Romanian version.
4
Group | Bank | ||||
In RON thousands | Note | 31.12.2023 | 31.12.2022 | 31.12.2023 | 31.12.2022 |
Equity | |||||
Share capital | 39 | 1,177,748 | 1,177,748 | ||
Share premium account | 39 | 621,680 | 621,680 | ||
Cash flow hedging reserve | ( | ( | (6,506) | (7,501) | |
Reserve on financial assets at fair value through other comprehensive income | ( | ( | (19,416) | (108,424) | |
Revaluation reserve on property, plant and equipment | 22,500 | 17,177 | |||
Other reserves | 40 | 432,942 | 399,973 | ||
Retained earnings | 5,633,921 | 4,374,995 | |||
Total equity for parent company | 7,862,869 | 6,475,648 | |||
Non-controlling interest | - | - | |||
Total equity | 7,862,869 | 6,475,648 | |||
Total liabilities and equity | 67,712,095 | 60,444,099 |
The consolidated and separate financial statements were approved by the Management Board on March 06,
2024 and were signed on its behalf by:
Mrs. Mihaela Lupu Mr. Dimitar Todorov
Chief Executive Officer Executive Vice-President
CONSOLIDATED AND SEPARATE STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 December 2023
The accompanying notes form an integral part of these consolidated and separate financial statements.
Convenience translation in English of the original Romanian version.
5
CONSOLIDATED AND SEPARATE STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 December 2023 | |||||||||||
31.12.2023 | Group | ||||||||||
Reserve on financial | assets at fair | Cash | Revaluation | Non- | |||||||
in RON thousands | Share | value through | flow | of property, | Other | Share | Retained | Total | Controlling | Total | |
capital | other | hedging | plant and | reserves | premium | earnings | Interest | ||||
reserve | equipment | ||||||||||
comprehensive | |||||||||||
income | |||||||||||
Balance at 31 | ( | ( | |||||||||
December 2022 | |||||||||||
Comprehensive income for the year | |||||||||||
Net profit for the year** | |||||||||||
Other comprehensive income net of tax | |||||||||||
Revaluation of property, plant and equipment, net of tax | |||||||||||
Net change in fair value of financial assets through other comprehensive income, net of tax | |||||||||||
Net change in cash flow hedging reserve, net of tax | |||||||||||
Actuarial gains/(losses) on Total other | ( | ( | ( | ||||||||
comprehensive income | ( | ||||||||||
Total comprehensive income for the year | ( | ||||||||||
Transactions with shareholders | |||||||||||
Transfer to other reserves* | ( | ||||||||||
Other movements | ( | ( | ( | ||||||||
Balance at 31 | ( | ( | |||||||||
December 2023 | The accompanying notes form an integral part of these consolidated and separate financial statements. | Convenience translation in English of the original Romanian version. | |||||||||
6 |
CONSOLIDATED AND SEPARATE STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 December 2023
The accompanying notes form an integral part of these consolidated and separate financial statements.
Convenience translation in English of the original Romanian version.
7
* According to the decision of the General Meeting of Shareholders of 27 March 2023, it was decided to allocate a part of the Bank's net profit for 2022 (879,240 RON thousands) to the reinvested profit
reserve (exempt from the payment of the profit tax according to art. 22 of Law 227/2015) of an amount of 34,246 RON thousands and to reinvest of the net profit remained undistributed amounting to
844,994 RON thousands.
** Of the 2023 profit, the Bank will propose to Supervisory Board and General Shareholders’ Meeting the distribution in 2024 of an amount of 40,149 RON thousands to the reinvested profit reserve (exempt
from the payment of the profit tax according to art. 22 of Law 227/2015).
The consolidated and separate financial statements were approved by the Management Board on March 06, 2024 and were signed on its behalf by:
Mrs. Mihaela Lupu
Mr. Dimitar Todorov
Chief Executive Officer
Executive Vice-President
CONSOLIDATED AND SEPARATE STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 December 2022
The accompanying notes form an integral part of these consolidated and separate financial statements.
Convenience translation in English of the original Romanian version.
8
31.12.2022 | Group | |||||||||
Reserve on | Cash | Revaluation | ||||||||
Share | financial | flow | of property, | Other | Share | Retained | Non- | |||
in RON thousands | capital | assets at fair | hedging | plant and | reserves | premium | earnings | Total | Controlling | Total |
value through | reserve | equipment | Interest | |||||||
other | ||||||||||
Balance at 31 December 2021 | ( comprehensive | ( | ||||||||
Comprehensive income for the year | ||||||||||
Net profit for the year** | income | |||||||||
Other comprehensive income net of tax | ||||||||||
Revaluation of property, plant and equipment, net of tax | ||||||||||
Net change in fair value of financial assets through other comprehensive income, net of tax | ( | ( | ( | |||||||
Net change in cash flow hedging reserve, net of tax | ||||||||||
Actuarial gains/(losses) on defined benefit liability/pension plans | ||||||||||
Total other comprehensive income | ( | ( | ( | |||||||
Total comprehensive income for the year | ( | |||||||||
Transactions with Transfer to other reserves* | ( | |||||||||
Dividends distributed* | ( | ( | ( | |||||||
Other movements | ( | |||||||||
Balance at 31 December 2022 | ( | ( |
* According to the decisions of the General Meeting of Shareholders of 06 April 2022 and of 21 October 2022, it was decided to allocate a part of the Bank's net profit for 2021 (639,306 RON thousands) in
the form of dividends amounting to 233,859 RON thousands, to the reinvested profit reserve (exempt from the payment of the profit tax according to art. 22 of Law 227/2015) of an amount of 32,452 RON
thousands, and to reinvest of the net profit remained undistributed amounting to 372,995 RON thousands.
** Of the 2022 profit, the Bank proposed to Supervisory Board and General Shareholders’ Meeting to allocate a part of the Bank's net profit for 2022 (879,240 RON thousands) to the reinvested profit
reserve (exempt from the payment of the profit tax according to art. 22 of Law 227/2015) of an amount of 34,246 RON thousands and to reinvest of the net profit remained undistributed amounting to
844,994 RON thousands.
The consolidated and separate financial statements were approved by the Management Board on March 06, 2024 and were signed on its behalf by:
Mrs. Mihaela Lupu
Mr. Dimitar Todorov
Chief Executive Officer
Executive Vice-President
CONSOLIDATED AND SEPARATE STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 December 2023
The accompanying notes form an integral part of these consolidated and separate financial statements.
Convenience translation in English of the original Romanian version.
9
31.12.2023
Bank
In RON thousands
Share
capital
Reserve on
financial
assets at fair
value
through
other
comprehensi
ve income
Cash flow
hedging
reserve
Revaluati
on of
property,
plant and
equipmen
t
Other
reserves
Share
premium
Retained
earnings
Total
Balance at 31 December 2022
1,177,748
(108,424)
(7,501)
17,177
399,973
621,680
4,374,995
6,475,648
Comprehensive income for the year
Net profit for the year**
-
-
-
-
-
-
1,293,876
1,293,876
Other comprehensive income net of tax
Revaluation of property, plant and equipment, net of
tax
-
-
-
5,323
-
-
-
5,323
Net change in fair value of financial assets through
other comprehensive income, net of tax
-
89,008
-
-
-
-
-
89,008
Net change in cash flow hedging reserve, net of tax
-
-
995
-
-
-
-
995
Actuarial gains/(losses) on defined benefit
liability/pension plans
-
-
-
-
(1,277)
-
-
(1,277)
Total other comprehensive income
-
89,008
995
5,323
(1,277)
-
-
94,049
Total comprehensive income for the year
-
89,008
995
5,323
(1,277)
-
1,293,876
1,387,925
Transactions with shareholders
Transfer to other reserves*
-
-
-
-
34,246
-
(34,246)
-
Other movements
-
-
-
-
-
-
(704)
(704)
Balance at 31 December 2023
1,177,748
(19,416)
(6,506)
22,500
432,942
621,680
5,633,921
7,862,869
* According to the decision of the General Meeting of Shareholders of 27 March 2023, it was decided to allocate a part of the Bank's net profit for 2022 (879,240 RON thousands) to the reinvested profit
reserve (exempt from the payment of the profit tax according to art. 22 of Law 227/2015) of an amount of 34,246 RON thousands and to reinvest of the net profit remained undistributed amounting to
844,994 RON thousands.
** Of the 2023 profit, the Bank will propose to Supervisory Board and General Shareholders’ Meeting the distribution in 2024 of an amount of 40,149 RON thousands to the reinvested profit reserve (exempt
from the payment of the profit tax according to art. 22 of Law 227/2015).
CONSOLIDATED AND SEPARATE STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 December 2023
The accompanying notes form an integral part of these consolidated and separate financial statements.
Convenience translation in English of the original Romanian version.
10
The consolidated and separate financial statements were approved by the Management Board on March 06, 2024 and were signed on its behalf by:
Mrs. Mihaela Lupu
Mr. Dimitar Todorov
Chief Executive Officer
Executive Vice-President
CONSOLIDATED AND SEPARATE STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 December 2022
The accompanying notes form an integral part of these consolidated and separate financial statements.
Convenience translation in English of the original Romanian version.
11
31.12.2022
Bank
In RON thousands
Share
capital
Reserve on
financial
assets at fair
value through
other
comprehensive
income
Cash flow
hedging
reserve
Revaluation
of property,
plant and
equipment
Other
reserves
Share
premium
Retained
earnings
Total
Balance at 31 December 2021
1,177,748
(10,389)
(33,407)
14,122
365,616
621,680
3,761,449
5,896,819
Comprehensive income for the year
Net profit for the year**
-
-
-
-
-
-
879,240
879,240
Other comprehensive income net of tax
Revaluation of property, plant and equipment,
net of tax
-
-
-
3,055
-
-
-
3,055
Net change in fair value of financial assets
through other comprehensive income, net of tax
-
(98,035)
-
-
-
-
-
(98,035)
Net change in cash flow hedging reserve, net of
tax
-
-
25,906
-
-
-
-
25,906
Actuarial gains/(losses) on defined benefit
liability/pension plans
-
-
-
-
1,905
-
-
1,905
Total other comprehensive income
-
(98,035)
25,906
3,055
1,905
-
-
(67,169)
Total comprehensive income for the
year
-
(98,035)
25,906
3,055
1,905
-
879,240
812,071
Transactions with shareholders
Transfer to other reserves*
-
-
-
-
32,452
-
(32,452)
-
Dividends distributed*
-
-
-
-
-
-
(233,859)
(233,859)
Other movements
-
-
-
-
-
-
617
617
Balance at 31 December 2022
1,177,748
(108,424)
(7,501)
17,177
399,973
621,680
4,374,995
6,475,648
* According to the decisions of the General Meeting of Shareholders of 06 April 2022 and of 21 October 2022, it was decided to allocate a part of the Bank's net profit for 2021 (639,306 RON thousands) in
the form of dividends amounting to 233,859 RON thousands, to the reinvested profit reserve (exempt from the payment of the profit tax according to art. 22 of Law 227/2015) of an amount of 32,452 RON
thousands, and to reinvest of the net profit remained undistributed amounting to 372,995 RON thousands.
** Of the 2022 profit, the Bank proposed to Supervisory Board and General Shareholders’ Meeting to allocate a part of the Bank's net profit for 2022 (879,240 RON thousands) to the reinvested profit
reserve (exempt from the payment of the profit tax according to art. 22 of Law 227/2015) of an amount of 34,246 RON thousands and to reinvest of the net profit remained undistributed amounting to
844,994 RON thousands.
The consolidated and separate financial statements were approved by the Management Board on March 06, 2024 and were signed on its behalf by:
Mrs. Mihaela Lupu
Mr. Dimitar Todorov
Chief Executive Officer
Executive Vice-President
CONSOLIDATED AND SEPARATE STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 December 2022
The accompanying notes form an integral part of these consolidated and separate financial statements.
Convenience translation in English of the original Romanian version.
12
CONSOLIDATED AND SEPARATE STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 December 2023
The accompanying notes form an integral part of these consolidated and separate financial statements.
Convenience translation in English of the original Romanian version.
13
Group | Bank | ||||
In RON thousands | Not | 31.12.2023 | 31.12.202 | 31.12.2023 | 31.12.202 |
e | 2*Restat | 2*Restat | |||
ed | ed | ||||
Profit for the reporting period before tax | 17 | 1,528,519 | 1,026,396 | ||
Adjustments for non-cash items: | |||||
Depreciation and amortization of property, plant and equipment and of intangible assets | 12 | 153,696 | 155,212 | ||
Net impairment losses on financial | 301,957 | 222,485 | |||
instruments | |||||
Fair value (gain)/loss on derivatives and other financial assets held for trading | 40,765 | 47,281 | |||
Other items for which the cash effects are investing or financing | 16,719 | 993 | |||
Accrued interest and unwinding effect | 78,224 | 44,914 | |||
Impairment of assets and provisions | ( | (18,716) | 21,531 | ||
FX impact | ( | (56,691) | 32,348 | ||
Other non–cash items | ( | 11,861 | (29,511) | ||
Operating profit before changes in operating assets and liabilities | 2,056,334 | 1,521,649 | |||
Change in operating assets: | |||||
Decrease in financial assets at fair value through profit and loss | 52,115 | 102,023 | |||
Acquisition of debt instruments at amortized cost | ( | ( | (740,261) | (861,100) | |
Decrease in loans and advances to banks | 255,982 | 95,001 | |||
(Increase) in loans and advances to customers | ( | ( | (3,073,840) | (3,855,224) | |
(Increase) in lease investments | ( | ( | (7,260) | (11,305) | |
(Increase) in other assets | ( | ( | (250,562) | (41,669) | |
Change in operating liabilities: | |||||
Increase in deposits from banks | 187,563 | 382,540 | |||
Increase in deposits from customers | 5,467,316 | 5,161,250 | |||
Increase/(Decrease) in other liabilities | ( | (88,664) | 810,943 | ||
Income tax paid | ( | ( | (233,293) | (157,269) | |
Net cash from operating activities | 3,625,430 | 3,146,839 | |||
Investing activities | |||||
Proceeds on disposal of financial assets at fair value through other comprehensive income | 359,980 | 74,146 | |||
Acquisition of financial assets at fair value through other comprehensive income | ( | ( | (360,786) | (428,738) | |
Proceeds on disposal of property, plant | 1,243 | 171 | |||
and equipment | |||||
Acquisition of property, plant and equipment and intangible assets | ( | ( | (132,617) | (135,356) | |
Dividends received | 4,305 | 33,451 | |||
Net cash used in investing | ( | ( | (127,875) | (456,326) | |
activities |
* The comparative information has been restated as described in note 3.
CONSOLIDATED AND SEPARATE STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 December 2023
The accompanying notes form an integral part of these consolidated and separate financial statements.
Convenience translation in English of the original Romanian version.
14
.
Group | Bank | ||||
In RON thousands | Not | 31.12.2023 | 31.12.202 | 31.12.2023 | 31.12.202 |
e | 2*Restat | 2*Restat | |||
ed | ed | ||||
Financing activities | |||||
Dividends paid | ( | ( | (704) | (231,745) | |
Proceeds from bonds issued | 480,000 | 2,751,896 | |||
Payments of bonds issued | ( | - | (280,500) | ||
Repayments of loans from banks | ( | ( | (264,648) | (218,175) | |
Drawdowns from loans from banks | - | 492,947 | |||
Repayment of the lease liabilities | 44 | ( | ( | (79,988) | (70,135) |
Net cash from financing activities | 134,660 | 2,444,288 | |||
Net increase in cash and cash | 3,632,215 | 5,134,801 | |||
equivalents | |||||
Cash and cash equivalents at 1 | 16,458,822 | 11,270,42 | |||
January - gross value | 6 | 5 | |||
Effect of foreign exchange rate changes | 20,842 | 53,596 | |||
Cash and cash equivalents at 31 | 18 | 20,111,879 | 16,458,82 | ||
December - gross value | 2 | 2 | |||
Impairment allowance | ( | ( | (6,134) | (2,882) | |
Cash and cash equivalents at 31 | 18 | 20,105,745 | 16,455,94 | ||
December -net value | 9 | 0 | |||
* The comparative information has been restated as described in note 3. | |||||
Cash flow from operating activities include: | Group | Bank | |||
In RON thousands | Not | 31.12.2023 | 31.12.202 | 31.12.2023 | 31.12.202 |
e | 2*Restat | 2*Restat | |||
ed | ed | ||||
Interest received | 3,809,279 | 2,420,080 | 3,300,754 | 2,052,992 | |
Interest paid | (1,523,852) | (706,784) | (1,276,291) | (619,477) |
* The comparative information has been restated as described in note 3.
The consolidated and separate financial statements were approved by the Management Board on March 06,
2023 and were signed on its behalf by:
Mrs. Mihaela Lupu Mr. Dimitar Todorov
Chief Executive Officer Executive Vice-President
CONSOLIDATED AND SEPARATE STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 December 2023
The accompanying notes form an integral part of these consolidated and separate financial statements.
Convenience translation in English of the original Romanian version.
15
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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16
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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17
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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19
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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21
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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62
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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151
4. RISK MANAGEMENT (continued)
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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152
4. RISK MANAGEMENT (continued)
f) Strategic risk
Strategic risk is part of the risks which are evaluated qualitatively within the evaluation process of risks initiated
by UniCredit Group and by the Bank.
Strategic risk is analysed taking into account the following:
• risk of changes in the business environment;
• risk of unsatisfactory implementation of decision;
• risk of lack of reaction.
The following three parameters are analyzed for the above risks: probability, severity and exposure.
The Group has implemented internal regulations and specific mechanisms for managing strategic risk.
g) Compliance risk
In accordance with the legal provisions and UniCredit Group policies, the management of compliance risk is
performed by Compliance Function within UniCredit Bank SA through:
• providing advice on the provisions of the legal and regulatory framework and on the standards the Bank
needs to meet;
• assessing the possible impact of any changes of the legal and regulatory framework on the Bank’s activities;
• verifying that new products and procedures are in compliance with the regulatory framework;
• performing second level controls in the areas under Compliance Function’s competence, based on specific
control methodologies;
• evaluating, measuring and monitoring of compliance risk in the areas under Compliance Function’s
competence, as well as through appropriate reporting to the governing bodies of the Bank;
• managing the relationship with regulatory authorities, either directly by Compliance Function, or together
with other functions within the Bank.
h) Taxation risk
The Group is committed to ensure sustainable performance of tax risk management maintaining an efficient,
effective and transparent tax function within the organization. The Group strictly complies with the legal norms
regarding taxes and duties. Differences between IFRS accounting treatment and fiscal requirements have been
carefully identified and analysed, resulting in proper recognition of deferred tax effects in the financial
statements.
The Group is focused permanently on monitoring the transfer price risks, including the proper documentation
of intragroup transactions, through a proactive approach. Tax liabilities of the Group are opened to a general
tax inspection for a period of five years.
i) Environmental, social and governance factors (ESG)
Environmental, social and governance (ESG) factors are key factors in measuring the sustainability and social
impact of a financial institution. ESG factors are those environmental, social or governance elements that can
have a positive effect or negative impact on the bank's financial performance or solvency.
In the last years, UniCredit Bank has undertaken several actions to integrate progressively climate and
environmental risks into the risk management framework through the two types of risks: transition risk and
physical risk, by establishing specific methodologies and applying international regulatory standards in force.
Regarding the financial performance of borrowers, the issues associated with climate change can materialize
in the following risks:
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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153
• physical risk generated by the physical effects of climate change;
• transition risk generated by the transition to a low carbon economy and resistance to climate change.
4. RISK MANAGEMENT (continued)
i) Environmental, social and governance factors (ESG) (continued)
In order to incorporate and adequately assume the risk, generated by climate change, the Bank has increased
the level of granularity related to each sectors, at the level of each industry, considering that the impact
generated may be different from one subcategory to another within the same industry.
The credit risk strategy defined at the industry level also includes the impact of climate and environmental risk
within the "steering signals".
In order to incorporate and adequately assume the risk generated by climate change, the Bank has
implemented a credit risk strategy in which it incorporate climate and environmental risks through dedicated
signals (“steering signals”) which reflect the level of transition risk, on specific sectors (eg. the fossil fuel sub-
industry).
Regarding physical risk, UniCredit Bank has evaluated the potential losses to the immovable real estate
collateral portfolio, as result of extreme and acute climate events.
Also from the same perspective, within the lending process, the Bank implemented a climate and
environmental transition risk assessment questionnaire, in order to assess climate, environmental vulnerability
and potential economic impact on Corporate customers with significant exposures.
The questionnaire was designed in order to evaluate the exposure to transition risk, on three key dimensions:
the level of the current exposure, the level of the future vulnerability and the economic impact.
Doing so, UniCredit Bank take into consideration several topics that may lead to increased credit risk, for
example the income of the counterparties and the value of assets that are subject to the transition to a low-
carbon economy or production processes that are subject to significant changes to minimize the effects of
pollution. This methodology supposes:
• Filling a questionnaire addresses both high-emission and low-emission customers;
• Generating of a climate and environmental risk score table that determines the main KPIs and identifies
the position of the counterparty in one of the four risk areas (low, medium, high, very high) of the transition
evaluation matrix.
The environmental score resulting from filling the questionnaire is integrated into the credit evaluation process
within the credit decisions for the above-mentioned types of clients, starting with January 2024.
For the rest of Corporate customers, the environmental score will be implement starting with September 2024.
In addition, the Bank has initiated the action of collecting the energy performance certificates related to the
real estate properties established as guarantees in its favor, in order to store the necessary information and to
comply with the regulatory requirements in the field.
In terms of physical risk, the Bank focuses on improving the methodology for assessing vulnerable portfolios
and mitigating related risks, periodically collecting information on existing guarantees in the portfolio and
exposing them in geographically vulnerable sectors to physical risk.
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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155
4. RISK MANAGEMENT (continued)
j) Capital management (continued)
k) Turnover
The Group has started to apply the requirements of NBR Regulation No 5/2013 regarding prudential
requirements for credit institutions since January 2014.
The Group turnover at 2023 is RON thousands 5,346,779 (2022: RON thousands 3,648,931), which is computed
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
Convenience translation in English of the original Romanian version.
156
and presented in accordance with provisions of art. 644 of the above mentioned Regulation no 5/2013 and
consists of Operating income items excluding interest expense and fee expense.
The Bank turnover at 2023 is RON thousands 4,669,914 (2022: RON thousands 3,206,012), which is computed
and presented in accordance with provisions of art. 644 of the above mentioned Regulation no 5/2013 and
consists of Operating income items excluding interest expense and fee expense.
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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171
5. USE OF ESTIMATES AND JUDGEMENTS (continued)
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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172
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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177
8
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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178
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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179
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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180
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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181
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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187
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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189
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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197
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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198
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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199
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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200
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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202
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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203
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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204
25. INVESTMENTS IN SUBSIDIARIES (continued)
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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205
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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208
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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212
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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214
28. DEFERRED TAX ASSETS AND LIABILITIES (continued)
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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215
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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217
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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218
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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219
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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221
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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223
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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224
Group
Bank
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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225
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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226
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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227
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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229
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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233
42. COMMITMENTS AND CONTINGENCIES (continued)
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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240
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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242
NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 December 2023
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247