NOVA KREDITNA BANK MARIBOR D.D. - Supervisors of Nova KBM approved the start of an internal audit...

| | POLISH FINANCIAL SUPERVISION AUTHORITY | | | | | | | | | | |
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| | | | | UNI - EN REPORT No | 29 | / | 2012 | | | | |
| | Date of issue: | 2012-07-13 | | | | | | | | | |
| | Short name of the issuer | | | | | | | | | | |
| | NOVA KREDITNA BANK MARIBOR D.D. | | | | | | | | | | |
| | Subject | | | | | | | | | | |
| | Supervisors of Nova KBM approved the start of an internal audit and adopted the revised 2012 plan | | | | | | | | | | |
| | Official market - legal basis | | | | | | | | | | |
| | Unofficial market - legal basis | | | | | | | | | | |
| | Contents of the report: | | | | | | | | | | |
| | In compliance with the Ljubljana Stock Exchange Rules and the applicable legislation, Nova KBM d.d., Maribor, hereby makes the following announcement: At its yesterday's meeting, the Supervisory Board of Nova KBM approved the start of an internal audit, the findings of which will be used by the Management Board to adopt further measures for the improvement of the Bank?s performance. The Supervisory Board consented to the revised 2012 business policy and financial plan of the Bank, which was prepared mainly as a result of deteriorated economic conditions, as evidenced also by the forecasts of higher inflation and lower GDP in Slovenia published by the Institute of Macroeconomic Analysis and Development (IMAD). The supervisors consented to the proposal of the Audit Committee to appoint Deloitte Revizija d.o.o. for the audit of the 2012 financial statements of the Bank and the Group. The final decision in this regard will be taken at the Shareholders' Meeting in August. Upon taking up his position in April
this year, Aleš Hauc, President of the Bank's Management Board, said that an audit of the Bank's current financial position would be carried out. Besides, the activities related to the Bank's capital raising and the sale of the non-current assets of the Nova KBM Group are already in progress, in accordance with the ruling made by the Shareholders' Meeting in June. The Supervisory Board today requested the Management Board to implement additional measures to improve the performance of the Bank. ?We are determined to improve the performance of the Bank. Notwithstanding the difficult market conditions, the Bank remains a well-capitalised, solvent, stable and reliable financial institution. In addition to our regular work, we need to carefully review our past operations and adopt measures to eliminate any irregularities that might be detected. We will strive to implement a vision that will bring additional value to our shareholders and customers. Future operations of the Bank must be built on strong and sound
foundations, so we need to clean the portfolio of bad loans and ensure conditions for growth and development. In addition, we will start drafting a new strategy of the Bank to adapt its operations to the changed market conditions?, pointed out the President of the Management Board. Operations of the Bank are still affected by adverse economic and financial conditions and general uncertainty. The year 2011 saw a record of 675 bankruptcy proceedings initiated in Slovenia. This negative trend is continuing into 2012, with as much as 330 bankruptcy proceedings started in the first six months. The gradual cleaning of the loan portfolio has a negative effect on the results as well. Considering these factors, the Management and the Supervisory Board do not realistically expect the 2012 year-end results to be favourable. Therefore, the supervisors consented to the revised 2012 business policy and financial plan, and emphasised that, in view of the current market conditions, it was a responsible and well thought-out
decision of the Management Board to propose some changes to the 2012 plan. Amendments to the plan have been made as a result of IMAD changing its forecast of last September, which served as the basis for formulating the 2012 business plan of the Bank and the Group. According to last year's forecast, the Slovene GDP growth in 2012 was expected to be 2.0% and the average rate of inflation was set at 1.9%. In April 2012, IMAD issued a new economic report for Slovenia, forecasting a negative GDP growth of 0.9%, with the inflation rate standing at 2.0%. Based on these changes, the Management Board had to revise the business plan for both the Bank and the Group. As a result of high impairment losses and lower than projected dividend income, interest income and fee and commission income, the Bank expects to report a loss of ?77 million from continuing operations and a net loss of ?69.8 million for the financial year 2012, according to the revised plan. The Bank's total assets are projected to reach ?4.6 billion by
the end of the year, which is 0.2% less than originally planned. A drop in deposits and loans from the non-banking sector and a decrease in investments in subsidiaries, associates and joint ventures will contribute the most to a fall in the total assets. Since the June Shareholders' Meeting decided not to appoint the proposed auditor, the Management Board shall convene another Shareholders' Meeting by the end of August, in accordance with applicable legislation. The Supervisory Board agreed to propose to the Shareholders' Meeting to appoint Deloitte Revizija d.o.o. as the certified auditor for the audit of the 2012 financial statements of the Bank and the Group. The Supervisory Board was also informed that the Shareholders' Meeting will take place in August and that the notice of the Shareholders' Meeting is expected to be published by the end of this week. The term of office of the current Supervisory Board members expires on 14 July, so this was the last meeting of the Supervisory Board in its present
formation. The constitutive meeting of the new Supervisory Board, appointed at the last Shareholders' Meeting, will be held as soon as possible. This announcement will be available on the Bank's website (www.nkbm.si) as from 13 July 2012. | | | | | | | | | | |
| | Annexes | | | | | | | | | | |
| | File | Description | | | | | | | | | |

REPORT
INFORMATION ABOUT THE ENTITY
SIGNATURE OF PERSONS REPRESENTING THE COMPANY

| | | NOVA KREDITNA BANKA MARIBOR D.D. | | | | | |
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| | | (fullname of the issuer) | | | | | |
| | | NOVA KREDITNA BANK MARIBOR D.D. | | Banki (ban) | | | |
| | | (short name of the issuer) | | (sector according to clasification of the WSE in Warsow) | | | |
| | | 2505 | | Maribor | | | |
| | | (post code) | | (city) | | | |
| | | Vita Kraigherja | | 4 | | | |
| | | (street) | | (number) | | | |
| | | +386 2 229 22 90 | | +386 2 229 43 33 | | | |
| | | (phone number) | | | (fax) | | |
| | | (e-mail) | | | (web site) | | |
| | | SI94314527 | | 586058000 | | | |
| | | (NIP)
| | | (REGON) | | |

REPORT
INFORMATION ABOUT THE ENTITY
SIGNATURE OF PERSONS REPRESENTING THE COMPANY

REPORT
INFORMATION ABOUT THE ENTITY
SIGNATURE OF PERSONS REPRESENTING THE COMPANY