30th August 2007

12th General Meeting of Shareholders of the NLB

The NLB in 2006: record growth in operations and profit

Today, on 30 August, the representatives of the NLB owners gathered at the 12th regular General Meeting of Shareholders. They acknowledged the NLB's Annual Report for the previous business year and the report prepared by the NLB's Supervisory Board and adopted the proposed distribution of profit in the amount of 183.3 million EUR. 31.6 million EUR will be distributed among the shareholders which means that the dividend per share will total as much as 4.11 EUR (SIT 984.94). Considering the results achieved by the NLB and the profit growth in 2006, the dividend is by almost 63% higher than in 2005 and almost 3-times higher than in 2004 (1.5 EUR).

A total of 95.04% shareholder votes were present at the General Meeting. The representatives of the shareholders present at the General Meeting of Shareholders unanimously passed all the proposed resolutions. They appointed four new members of the Supervisory Board of the NLB, namely: Katja Bozic, MSc, Iztok Bricl, Marko Rus and Matic Tasic, DSc. Thus, the new NLB Supervisory Board shall again consist of eleven members.

In his report, the President of the Management Board Marjan Kramar emphasised that following the very good operating results achieved in 2006, those achieved in 2007 are even better, which is a proof that the NLB is a great opportunity for all the shareholders, and in particular the owners and the investors which expressed their willingness to support further development of the NLB by deciding on the increase in the capital of the Bank. In view of the ambitious development plan of the NLB Group, such and similar opportunities for the owners and the investors will probably occur also in the future.  

Report by the Supervisory Board

In this report, the Chairman of the Supervisory Board of NLB d.d., Ziga Lavric, MSc, emphasised that working on the Supervisory Board was a great challenge, since he believes that his supervisory function not only contributed to the assurance of efficient and effective operations of the NLB but was extended also to the entire NLB Group - Slovenia's largest international financial institution.

The Supervisory Board worked in accordance with the established principles of corporate governance, taking into account the interests of the owners, clients and employees who are considered the Bank's most valuable capital.  Expert support to decision-making was provided to the Supervisory Board by four expert committees: Audit Committee, Development Committee, Risk Committee and Remuneration Committee. Their recommendations which were based on discussions of individual segments of operation contributed considerably to the quality of the work of the entire Supervisory Board.

With its decisions, the Supervisory Board actively supported further growth and development of the Bank and the NLB Group within the set development strategy which characterised the previous period. The extremely dynamic expansion was followed by the period of consolidating and harmonising the operations within the NLB Group, particularly on the markets of SE Europe.

Together with the Bank's employees, the Management Board not only achieved but also exceeded the goals set for 2006, including the successful transition to the euro.  The Supervisory Board paid special attention to this very project since the role of the NLB as the largest Slovene commercial bank was crucial for a successful introduction of the euro.

Report by the Management Board

In the report of the Management Board, the President of the Management Board Marjan Kramar underlined that the NLB achieved high growth in the volume of operations and profit last year. Its total assets grew to 10,415 million EUR while the pre-tax profit at the end of the year totalled 100.7 million EUR. In 2004, the Bank's total assets amounted to "merely" 7,780 million EUR and its pre-tax profit to 57.6 million EUR.

In line with the adopted development strategy the NLB improved all its key performance indicators last year, particularly its cost-efficiency and profitability. While the profitability in 2004 was 10.4%, it grew to 15.8% in 2006. The NLB's successful performance was also confirmed by the international rating agency Moody's which increased the Bank's credit rating by two grades to Aa3.

The trend of excellent results continues to improve in 2007 when the results recorded so far are even better. In the first six months, the NLB recorded pre-tax profit amounting to almost 110.3 million EUR and increased its total assets to 11,700 million EUR.

In the framework of a detailed development strategy, the NLB Group has expanded considerably by the end of 2006 to 59 members so that it now operates in 16 countries or 18 markets.  The NLB Group's 8189 employees service more than 3 million clients. In no more than three years (2004-2007) the NLB acquired six banks, established 13 companies and merged six banks into three. The processes of consolidation, harmonisation and standardisation are underway in the NLB Group, the aim of which is to make the Group even more transparent and rationally organised, and consequently more efficient. Also in the future, the NLB Group will focus on the banking services the range of which is complemented by other financial services - factoring, leasing, insurance and asset management. The domestic, Slovene market remains the most important market, the root from which the NLB's strength grows. The SE European markets are the second focus of the Group, with their immense growth potential, while the markets of the Russian Federation are also becoming more and more interesting.

Net distributable profit for the shareholders and to reserves

The General Meeting of Shareholders adopted the resolution proposed by the Management Board and the Supervisory Board, namely, that 40% of the profit earned in 2006 be allocated to dividends. It was thus decided that the net distributable profit of the NLB for 2006 in total amount of 183,301,637.73 EUR be allocated to the payments to shareholders in the amount of 31,573,709.96 EUR which means 4.11 EUR (SIT 984.94) gross per share. The major part of the generated profit in the amount of 151,578,865.64 EUR will be allocated to the establishment of other profit reserves.

Four new members of the Supervisory Board of the NLB

Four new members wereappointed to the Supervisory Board of the NLB in place of those four who resigned. The following new members have been appointed: Katja Bozic, MSc, Iztok Bricl, Marko Rus and Matic Tasic, DSc. Thus, the new NLB Supervisory Board shall again consist of eleven members.

NLB Public Relations