School of Economics and Business

University of Sarajevo

THE AVALANCHE OF BOBAR BANK IN B&H

Research Paper in Subject Financial Market and Institutions

Students:
Lamija Becarevic 72449 Professor: Muharem Karamujic
Lea-Marija Bevanda 72456 Assistant: Mirza Krso

October, 2016
Abstract

This research paper has a goal to investigate the influence and different consequences financial
institutions may have on their customers. Moreover the focus is on the human judgment and
behaviour of regulation bodies of a country, in particular Bosnia and Herzegovina. The
qualitative and qvantitative data used, is relevant and not biased. The chosen concentration is
adequate towards the topical area: „Why Do Financial Institutions Exist?“, due to the fact that a
research of a specific bank and its role in the system is performed. Banks have a critical role in
the economy. Components of this research paper include an introduction, explanation of the
topical area, topic and its theoretical background, methodology and the analysis of relevant data,
followed with a conclusion. Throughout this research paper we are going to analyze the impact of
a financial institution, Bobar bank, on its surroundings.
 TABLE OF CONTENT

Abstract ....................................................................................................................................... 1
Introduction ................................................................................................................................. 2
Theoretical background ............................................................................................................... 3
Hypothesis................................................................................................................................... 4
Description of the hypothesis: .............................................................................................. 4
Bobar bank Bijeljina - Basics....................................................................................................... 5
‘Brotherhood’ Economy .......................................................................................................... 5
Robbery of the decade ............................................................................................................. 5
Methodology ............................................................................................................................... 6
Type of Research Approach ..................................................................................................... 6
Data Collection Method ........................................................................................................... 6
Analysis ...................................................................................................................................... 7
Audit for Bobar Bank .............................................................................................................. 7
Indices for Bobar Bank ............................................................................................................ 8
Effects on the DIA ................................................................................................................. 11
Effects on the Government and Country ................................................................................ 12
Conclusion ................................................................................................................................ 15
Bibliography.............................................................................................................................. 16
Appendices ................................................................................................................................ 17
Appendix 1) Balance sheet of Bobar bank on the day 30/06/2014 ..................................... 17
Appendix 2) Ration Analysis and calculation .................................................................... 19
 CONTENT OF FIGURES

Figure 1 Bobar Bank Balance Sheet ............................................................................................. 7

Figure 2 Comparison of Indices (Self-made graph) ...................................................................... 9
Figure 3 Licence to work taken away - DIA B&H (official DIA webpage) ................................ 11
Figure 4 The liabilities till today (official DIA webpage) ........................................................... 12
Figure 5 Spider graph of democracy .......................................................................................... 13
Figure 6 Bobar bank deponents.................................................................................................. 14

CONTENT OF TABLES

Table 1 Coverage of the total correction of receivables and loans in absolute values .................... 9
Table 2 Credit potential data ...................................................................................................... 10
Table 3 Financial indicators ....................................................................................................... 10
Introduction

It is not so common that we deal with our own country. Usually we always investigate and learn
about other big forces but often forget what is right around us. The economic strength of Bosnia
and Herzegovina is nothing compared to some others but problems that its financial institutions
face with is real and alike in other countries.

Our general concentration was about the existence of financial institution, but throughout this
paper we will see how it is when financial institutions seem as non-existent due to bias
performance. This is the main reason why we choose this topic, as we wanted to see how
economy indeed works here on our domestic market. Even though the topical area is overly wide,
by focusing on one bank, Bobar bank from Republic of Srpska, we will be able to keep the track.

First of all we have to mention the theoretical importance of balance in economy, where every
plus needs its minus. The de-leveraging of balance sheets and losses of capital at lot of financial
institutions serve as a drag force on the economy. As "financial headwinds" become more severe
the real economy is more weakened. A loan is an asset for the bank's balance sheet. If a bank has
a reduction in its capital value, it must make steps in order to shrink the asset side and by that to
restore it's wanted capital-to-assets ratio. Better said it restricts its capacity of lending and make a
"credit crunch".

As it said; it must take steps, and this is how it goes in theory, but in Bosnia and Herzegovina...

2
Theoretical background

A financial institution is something merely every adult person stumbles across on a regular basis.
We need this establishment in order to conduct any financial transaction, from taking out loans,
depositing money or simply exchanging currencies. All-the-time available loans encourage
customers to spend, and this influences economic growth, which is the main reason for the
support of government they get. The financial institution we are going to focus on is a
commercial bank, which according to theory is primarily obliged to accept deposits and offer
security and convenience for the customers. So the main purpose lies in offering safety, from
thefts or accidents, to clients for keeping their money at banks rather than in a wallet or at home.
Banks financial transactions are underwritten by lending its credibility and reputation to the
transaction. When it comes to the dishonesty cost we are going to use the Lemon model to make
a few comments. The lemons problem, that was examined by George Akerlof in his paper called
"The Market for Lemons", refers to the issue of asymmetrical information that exists due to
unequal amounts of information that seller and buyer in order to make an transaction. Imagine an
institution which sells goods honestly or dishonestly. In this situation on side, usually the seller
has more knowledge about the products true value. The Lemon theory states that dishonest
dealings drive out from the market the honest/ legitimate ones. So the price of dishonesty is not
just in the quantity by which the client is cheated but moreover by the loss of driving legitimate
companies out of existence, including the cost for the whole country.

How do strong financial institutions function?

Let us shortly overlook and compare the financial institutions of the world’s biggest economic
force. The United States has handful different agencies of the national level that control the
banking system.

For example there is one overlooking the holding and saving institutions (OTS), then one for
regulation of federal branches and national banks of non-USA banks (OCC), one for credit union
(NCUA) and lot of others. But most importantly there is FDIC, the Federal Deposit Insurance
Corporation, which is a separate agency that tests and oversees the banking institutions of the
whole States. As we can see the tree of these financial institutions is widely spread, but once is
sure they all have defined duties and are overlooked by others in order to prevent unregulations.
The question is, is the same situation in our country?

3
Hypothesis

‘Financial losses, as a burden for nation, occur when the Regulation is not of a required level.‘

Description of the hypothesis:

This topic is of crucial importance not only for our country but also for us as individuals. We
have to know how our country functions and how it should function. When it comes to the
problem of Bobar bank there is an explanation we decided to state in order to explain the causes
of its failure and we are going to ‘test’ it. There are several reasons why banks can have serious
financial issues and sometimes fail. In our case, we could assign some of them to the bad
outcome of the Bobar bank. For example giving out bad and uncovered loans, some funding
issues and regulatory issues. But more than anything else here we came across the problem of
making inappropriate loans to the insiders of Bobar bank. This means that enormously large
loans, that could not be covered by the Banks capital or any other source, were given to
politically influential persons and persons inside the bank who were on its head position.
Especially in this situation illegal activities are undertaken in order to cover the loss or to make it
seem as covered which in the end makes everyone else get in a bad situation. The interaction of
uncertainty and quality differences is the basic issue to the existence of important institutions. We
are going to give structure to the saying that undeveloped countries business is difficult or more
precisely to determine the economic price of dishonesty. For the underdeveloped countries,
business dishonesty is a huge problem. It is not just about the consequence of the money loss, but
moreover about the cost on the country, citizens thrust and the whole economic efficiency which
should be the focus of financial institutions. But in a country that is ruled by politics more than
anything other it is hard to always act for the benefit of the environment and people. It is hard to
run away from the political influence.

People are the caring pillars of a country and when they get confronted with financial losses, so
does the country. When central bodies are not regulated and do not play fair, the country will
surely lose.

4
Bobar bank Bijeljina - Basics

It was the first case of this nature in B&H.

‘Brotherhood’ Economy

The beginning of Bobar's end was in September 2014, when the owner Gavrilo Bobar died,
tycoon of the RS. Bobar's very good relationship with Dodik supposedly enabled him to achieve
"the American dream in B&H" and to become "the all-powerful citizen of RS" after the war. Few
weeks after his death, Bobar's empire began creaking. The bank suffered from a lack of liquidity,
which for the opposition accursed the ruling parties, SNSD in particular. The consequences were
catastrophic. In June 2014 total amount of Banks deposits, from 450 clients, was 251.372.602
BAM. Deposit Insurance Agency would insure those up to 50.000, so 95 million BAM, but the
not insured part of 160 million BAM was of great treat.

Robbery of the decade

The subject of "Bobar bank" is the most complex subject of financial crime in the post-Dayton
Bosnia and Herzegovina and represents a decisive step of Prosecutor's Office and law
enforcement agencies in the fight against illegal expenditure of public funds and illegal
enrichment of individuals.

More than 300 million BAM of Bobar bank ended up in the accounts of the Swiss Falcone
Private Bank (deals with the management of the assets of private clients and wealthy families)
and Russian Euroaksis bank (Bank of mixed ownership, where the majority owners come from
Serbia), held by persons from Bosnia and Herzegovina. Bobar Bank established foreign currency
deposits with several foreign banks - Serbia, Slovenia, Montenegro and in several other countries.
Subsequently, several companies from Bosnia and Herzegovina, namely the Republic of Srpska,
have raised millions of loans from the same banks, as collateral for the loan repayment served the
mentioned Bobar bank deposits. The money from the loans that B&H Companies received from
these banks, were automatically transferred to the accounts of Falcone Private Bank in
Switzerland and Euroaksis banks in Russia. After the companies have pulled out the money from
foreign banks, they would cease to repay loans, and banks would settle their claims from the
Bobar bank deposits.

5
Methodology

Type of Research Approach

Our research was of qualitative and quantitative nature. From the side of qualitative research, lot
of descriptive information was needed, because that was the basic lead for us in order to find
numbers that underwrite those statements. This kind of approach was also crucial as we wanted
to firstly understand the psychological effect that this case had on the depositors and citizens in
general. On the other side there was a plenty of statistical analysis that showed how lack of
regulation influenced on the numerical status of the Bank. Mostly there was use of knowledge
gathered in accounting and use of several formulas for financial indicators. Throughout the paper
we compared two additional banks (Bank of Srpska and Sparkasse) with Bobar bank or to even
more clarify the situation in which it was and its position.

Data Collection Method

It was given great care that all the information about this topic comes from well-known sources.
Video clips of news, when this case was popular, were watched from the web site of TV-channel
N1 and Al Jazeera. Important input information was gathered watching a film, called
„Isisavanje“, about the Bobar bank made by „Zurnal.info“. When it comes to the basic
information about the failure of Bobar bank we used web pages ad „Slobodna Bosna“ or „BiH
banke Biznis“. The numerical data was obtained from the official sites of Central Bank of B&H
and the Deposit Insurance Agency in B&H. The Figures for the amount of deposit liability and
the Table 5 with Bobar depositors were also found on the page of DIA B&H. For the most of the
written statements some comments of economic analysts and politic leaders were taken, as for
example Dragan Cavic, Dragan Miljevic... Some formulas for indicators calculation were found
online on the site for corporate finance and others were mentioned in the economic reports. We
made our own graphs and some tables to represent and analyze the collected data, by using
Microsoft Excel 2010. Figure 1 were created using data from balance sheet and income
statement, on the official website of Bobar bank. Lot of conclusions throughout the analysis stage
was made using data from the Appendix 1 and 2. This was also used to represent Figure 2. The
annual report of an external auditor (Deloitte) gave us an insight in the objective Balance sheet
status which we used for data comparison and so was Table 1 made. Graphs are made as line and
bar charts, depending on which would better present the information. The Spider graph for
corruption and B&H was found on the USA page called freedomhouse.org.

6
Analysis

Dragan Čavić from the NDP claimed that the institution was ruined due to reckless as well as
generous lending to participants of the establishment. Over this issue, the Banking Agency of RS
was closing eyes, and was not allowed to do their job because of the enormous political pressure
from the top of the SNSD. That loans had become bad debts as people acted believing that the
bank belonged to them so they did as they pleased. What is maybe more serious is that, even
though it is known that the institution was the center of genuine malpractice, a jurisdictional
discussion between the RS Attorney and the Attorney in Bijeljina: none of them was willing to
investigate the case, claiming it was outside from its legal powers. After it the Attorney of
Republika Srpska referred the case back to the National Attorney of B&H, which then became
the issue of Sarajevo. It is hilarious how no one wanted to take the responsibility for this affair.

Audit for Bobar Bank

It have been many years of tolerating illegality in Bobar bank. The drawing of money began in
2009 when the first 57000 BAM were taken. Even though their balance sheet presented an
absolute increase, as seen on the Figure 1.

Bobar Bank Balance Sheet

400.000.000,00
350.000.000,00
300.000.000,00
250.000.000,00
200.000.000,00
150.000.000,00
100.000.000,00 Assets
50.000.000,00 Liability and Equity
0,00

Figure 1 Bobar Bank Balance Sheet

7
In the opinion of tn external auditor in 2013, revenues of Bobar bank were, unlawfully, increased
by more than 17 million BAM, although they had a direct order from the RS Banking Agency
that these revenues cannot be credited. According to the findings of an independent auditor, the
loss of the bank was supposed to be close to 16 million BAM, instead there was a profit of 1.4
BAM shown. More precisely the Income statement (available on Bobar bank web page), for a
period 01.01.2013.- 31.12.2013 shows total profit 1,414,395BAM. While the balance sheet on a
day 31.12.2013, from the same source, as also presented on the Figure 1, shows total assets in
amount of 342,127,763 BAM and total liabilities and equity in amount of 342,127,763 BAM.

In Bobar bank there were several malversations for which we know about, but of course cannot
be seen on the first look from the readily available data. First of all ther was an issue of common
shares at the end of 2013 in the amount of 10 million, of which two related parties Bobar
Autosemberija and Universal Bijeljina paid 5.760.000 BAM.

Secondly they made an additional increase in capital through the issuance of preferred shares in
January 2014 in the amount of 4,876,000 BAM, of which two are related parties „Bobar
Autosemberija“ and „BMD Janja Bijeljina“ paid 3,049,000 BAM.

Thirdly there was found evidence of an illegal attempt to increase income of the bank, in amount
of 6 million, in the way that the Bobar Bank sold a real estate to a related company of the Bobar
group and only on the basis of the contract of sale, although the money was never paid into the
account of the Bank.

Indices for Bobar Bank

Based on five indicators presented in the ratio analysis („http://raskovic.net/index.php/utisak-
utisci/89-racio-analiza-finansijskog-sektora/130-racia-analiza-stabilnost-bankarskog-sektora-
republike-srpske“) of balance sheet of resident and non-resident banks in the Republic of Srpska,
on the 30/06/2014, we're going to observe how the Bobar bank was placed and where was the
lack of regulation. The performance of Bobar bank Bijeljina was obviously under the approvable
level, (see Apprendix 1 & 3. for detailed calculation).

In the first colum (4) we have the Capital adequacy ratio, which needs to be more than 8%. The
Figure 2. shows that this indicator does not satisfy two banks operating in the market of the
Republic of Srpska but most importantly there is Bobar bank with value ratios of 7.48% or
0.0748.

8
Figure 2 Comparison of Indices (Self-made graph)

The second coloum (6) represents the Participation of capital in the liabilities of banks and should
be at least than 20%. Due to the fact that none of the banks in the Republic of Srpska exceeds the
value of 20% for this ratio as it should it is alowed to make a limit correction and define that this
ratio should be at least 12%. Bobar bank still has the value ratio of 10.79%. Then we have a
coloumn (7) with Investments in fixed assets. The indices here should be maximally 20%. The
Figure 2. identifies that Bobar bank has a punching of this indicator with 31.67% and this means
that a large part of the bank's capital is immobilized (trapped in fixed assets) and makes it
increases the risk of the bank's liquidity and risk to cover deposits in the case of a sudden demand
for repayment by the side of depositors. This, in turn, means that unnecessary personal assets of
the bank are blocked and are not operationally useful in the long run. From the ratio (12) we can
see how banks own funds have representation in the total placements. Bobar banka with a value
ratio of 13.02% is among the ones with the lowest coverage of total loans from its own resources
and the largest risk to cover the deposit. And finally last column (13), this a standpoint of
coverage of the total correction of receivables and loans. In this case it would be better
understandable if we look at this indicator in absolute values in BAM, on the table below.

Table 1 Coverage of the total correction of receivables and loans in absolute values

Indicator/Bank Bank of Bobar bank Sparkasse

Srpska

Capital 25,469,920 36,746,776 119.596.845

Value Correction 64,634,271 35,980,248 80.655.531

Total -39,164,351 766,528 38,941,314

9
Bobar Banka Bijeljina had the following values in its Balance Sheet, as at 30/06/2014: The
capital amounts to 36,746,776 and value correction for receivables and loans amounted to
35,980,248, as seen from Table 1. From the analysis of the ratio of coverage of the total value
correction of receivables and loans it can be identified that 97.92% of the capital, Bobar bank
must sacrifice for the settlement of receivable balances and capital investments. It follows that
Bobar bank remains with 2.08% of the capital base for future business performance. The figures
were clear, something was wrong but still Regulative bodies around the Bank claimed that
everything is all right and coverd any further trace.
Table 2 Credit potential data

Bank/indicator Financial Credit Credit and Trade risk

potential potential other assets
placements *Loans & deposits
/ total assets

Bobar bank 340,393,933 282,114,859 282,578,238 0,6709

In the first part of the Table 2 it is shown the size of the credit potential and size of loans of
Bobar bank, (See Apprendix 2 for detailed calculation). The financial potential of banks is equal
to the total balance sheet liabilities and amounts to 340,393,933, while the credit ability of the
Bank was 282 114 859 BAM and loan placements 282 160 819 BAM. So one thing is sure that
the right control would prevent this imbalance.
Table 3 Financial indicators

Bank/indicator Shareholder Capital- Debt/asset Write-offs Capital /

Equity To-Asset ratio receivables Total loans
Ratio / Total loans

Bobar bank 0,1139 0,1118 0,8493 0,1273 0,1302

These indicators represent the financial structure (See Apprendix 2 for detailed calculation). The
last two indicators show that the write-offs to total loans amounted to 12.72%. On the other hand
the value of the bank's capital in relation to net assets amounted to slightly more than 11%.

When we look at published reports of the external auditors for Bobar bank in the period from
2007 to 2012, we see that for almost all years there was an unqualified opinion, but with an
emphasis on operations with related parties. With Bobar Bank it is particularly specific that a
year before the collapse of the bank was characterized by deposit growth of public and state
institutions. Public and state institutions should have based on available public published reports
of banks, to make a risk assessment of investments in such banks and not to invest resources in

10
them, in order to reduce their own exposure to risk. Credit losses, concealing the audit report,
false reporting of income of 11 million - are just some of the reasons for the deterioration of
Bobar Bank. But, above all, dealing with related parties over the allowed limit. The collapse of
Bobar Bank has confirmed the shortcomings of early detection of problems in banks and timely
action. There was no right supervision who would be allowed and qualified to react and warn
others. The regulations of B&H became privatized and were „working“ for the bank.

Effects on the DIA

There was a dark moment during this colapse where clients did not know will any money be paid
out as several roomers occured that there is no enough money in the DIA fund. In that
circumstance all the liabilities would fall on the burden of the govnerment budget. Luckily this
was soon denied but also argued that a great portion of DIA reserves were decreased now and
another situation as this one would bring them a step before bancrupcy. The Agency collected
from the 2002 till the 2015 about 280 mill BAM from which a half was given for the liqvidation
case of two banks in Republic of Srpska.

Figure 3 Licence to work taken away - DIA B&H (official DIA webpage)

The process of insured deposits payment started on the 19/01/2015 with the total liability in
amount of 86,6 mill BAM for 21.400 deponents. Concluding with the 28/06/2016, 85,4 million
BAM (98,4% from the original debt) for 14.500 (68%) deponents was settled out.

The first payment from the side of DIA went faster than recommended by law regulations and
above 85% of clients were paid in the first 10 working days. Due to the fast reaction of the

11
Deposit Insurance Agency of B&H an important amount of public pressure and pressure on the
banks was avoided. The money was kept in the banking channels and the confidence in the work
of DIA was increased and confirmed.

Figure 4 The liabilities till today (official DIA webpage)

The DIA did its obligations but the problem which occurred was in deposits of amount larger
than 500000 BAM. They had to be settled from the bankruptcy estate. The liquidation
arrangement planned that 56% of 140 mill deposits would be paid out. This directly mined that
more than 60 mill deposits form legal and physical persons would go bust forever. After the fall
of Bobar bank, experts said that he banking sector status was liquid and well capitalized.

Effects on the Government and Country

The fall in investment and liquidity drives down employment, governments tax revenues and
decreases investor and clients confidence. Banking crises are of a dramaticaly, bad effect on the
whole economy, often resulting in financial or economic crisis of that economic system.

The crucial factor for a well functioning financial system of its market and institutions is a
democraticaly and legaly regulated country. As we can see on the spider Figure 5, from year
2015, Bosnia and Herzegovina is not performing very well. On the scale ranging between 1
(highest level) and 7 (lowest level), our country has an average of 4 as the level of democratic
progress.

12
Figure 5 Spider graph of democracy

Bobar bank failure affected our public spending budget, as some of its biggest clients were state-
owned firms, such as the state lottery, power utilities and as well as local authorities of Brcko and
Trebinje.

As we can see on the Table 4, city of Trebinje had lost 5.2 million in Bobar bank. The indirect
negative consequences for the city and citizens of Trebinje was the impossibility of placing funds
for stimulating employment and job creation. Also the inability to use earmarked funds - IPA
funds, funds intended for social protection, fire protection... The loss of faith in the ability of the
local community developed by potential investors, etc. Brcko district had the Bobar bank block
its 22 million, which significantly shooked the financial stability of the district. And these are just
a few examples of the consequences that the depositors and govnerment had.

Not so long ago Bosnian leaders planned to start debating final conditions required for an
urgently required IMF loan. Our Prime Minister Zvizdic said that IMF wants us to have a tougher
banking regulations, plus a possible formation of a single state regulatory authority, that will
supervise banks activities. It is sure that this would prevent problems as the Bobar bank had,
which definitely have not helped us in this „IMF“ direction.

13
Figure 6 Bobar bank deponents

14
Conclusion

Banks in B&H and its money have become, as Bosnians would say „Alajbegove slamarice“. We
could notice, through the case, that it turned out that the system tried to protect themselves first
even when they were returning the money. We are witnessing a series of brutal robberies and
inexplicable lightness of those who would have to respond to this crime. Embezzlements of
leading persons damaged institutions of B&H and the entity, municipalities, companies and
citizens. It can be seen how great the necessity for regulating the financial flows on the national
level is. In order to prevent any other illegal doings this is crucial. Indirectly this was a robbery
by the side of the political party and other people that were involved. The main point we should
keep in mind is the transparency of work. Banks usually are very open countermining inside
operating information, but in many cases nowadays it occurs that that information is manipulated
and misgiven.

One thing is sure – There is no space for politics among banks – as we could see on the example
of the Bobar bank. The banking sector is crucial part of the financial-institution network which
makes up a civil society. Thus the evidence of corruption of B&H banks, and the given violate of
public trust in those institutions, affects our democracy. Definitely, the actual crisis we are faced
with is not a financial but more a moral one. With this conclusion we support the addressed
hypothesis and are sure that not only financial losses but many other things could be prevented if
the government bodies would be regulated, and all of it in the favor of the people.

15
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srpske-propalo-240-miliona-km-javnih-sredstava-i/ (Accessed: 18 October 2016).
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16
Appendices

Appendix 1) Balance sheet of Bobar bank on the day 30/06/2014

Position Bruto Value Correction Netto
Assets
000 do Cash and cash equivalents
9.379.099 9.379.099
009 in domestic currency
050 do Cash and cash equivalents
8.616.749 8.616.749
059 in foreign currency
010 do Deposits and loans in
23.073.109 23.073.109
019 domestic currency
Receivables for interest
020 do
and transaction fee in 20.111.311 10.602.614 9.508.697
029
domestic currency
Receivables for interest
080 do
and transaction fee in 436.920 19.501 417.419
089
foreigncurrency
100 do Given loans and deposits
153.890.809 10.973.566 142.917.243
109 in domestic currency
Given loans and deposits
112 do
with contracted protection 33.954.056 2.919.196 31.025.860
119
in domestic currency
200 do Given loans and deposits
47.909.793 1.285.771 46.624.022
209 in foreign currency
120 do
Placements of securities 6.507.931 76.019 6.431.912
129
Due securities and current
180 do maturity long-term
54.008.811 9.813.923 44.194.888
189 securities in domestic
currency
Due placements and
280 do current portion of long-
1.518.047 59.850 1.458.197
289 term loans in foreign
currency
300 do
Basic bank assets 14.767.024 3.669.113 11.097.911
303 ..

17
 Equity and Liabilities
400 do Liabilities for deposits and
165.928.170
409 loans in domestic currency
500 do Liabilities for deposits and
85.444.432
509 loans in foreign currency
Liabilities for interest and
420 do
transasction fee in 110.254
422
domestic currency
Liabilities for interest and
520 do
transasction fee in foreign 819
522
currency
Liabilities based on income
and transaction fee foreign 200.700
currency
Liabilities for current
490 do
liabilities in domestic 32.887.936
499
currency
Liabilities for current
590 do
liabilities in foreign 11.988.322
599
currency
Action capital 45.423.500
Total capital 36.746.776
Loss of current yeas -13.768.772

Total equity and liabilities 340.393.933

Out of balance equity
17.137.479
and liabilities

Jovo (2014) Pilot-project ili kako da se prevaziđe finansijska kriza? Available at:
http://raskovic.net/index.php/utisak-utisci/89-racio-analiza-finansijskog-sektora/130-
racia-analiza-stabilnost-bankarskog-sektora-republike-srpske (Accessed: 18 October
2016)

18
Appendix 2) Ration Analysis and calculation

Bank/indicator 4 >8% 6 >20% 7 <20% 12 13

UniCredit 0,1202 0,1591 0,1223 0,1834 0,4253
Pavlović 0,0937 0,1396 0,4325 0,2075 0,1943
Nova banka 0,0614 0,0786 0,3320 0,0947 0,4363
HypoAlpe 0,0983 0,1806 0,2530 0,2715 0,7413
adria
SBER bank 0,1064 0,1571 0,1275 0,1953 0,2229
MF banka 0,0879 0,1185 0,0932 0.1562 0,2057
Banka Srpske 0,0566 0,1056 0,4994 0,1524 2,5377
Bobar banka 0,0748 0,1079 0,3167 0,1302 0,9792
Intesa 0,1033 0,1456 0,1106 0,1745 0,4568
Sanpaolo
ProCredit 0,0993 0,1192 0,4036 0,1522 0,7250
Raiffeisen 0,0885 0,1358 0,2920 0,1993 0,5809
Sparkasse 0,0983 0,1212 0,3137 0,1520 0,6744
UniCredit d.d. 0.1038 0,1600 0,1058 0,2120 0,5030

 Capital adequacy ratio = Net capital / total risk assets = 36,746,776 / 328,757,359 * 0.6709 *
100 = 7.50%
 Capital-To-Asset = Capital / Net Assets = 0,1118
 Loans and deposits / total assets = 220,567,125 / 328,757,359 = 67.09%
 The share capital in the liabilities of banks= Equity/ Liabilities = 36,746,776 / 340,393,933 =
10.79%
 Investments in fixed assets = Assets/ Equity = 11,636,574 / 36,746,776 = 32%
 Shareholders' equity / total assets = 45,423,500 / 398,767,843 = 11.4%
 Equity / Net Assets = 36,746,776 / 328,757,359 = 11.17%
 Debt/asset ratio = Total Liabilities / Total Assets = 303,647,157 / 398,767,843 = 76.15% or
303 647 157/357 531 412 = 85%
 Total write-offs of receivables / total loans = 35,866,310 / 282,160,819 = 12.72%
 Equity / Total placements = 36,746,776 / 282,160,819 = 13.02%

Jovo (2014) Pilot-project ili kako da se prevaziđe finansijska kriza? Available at:
http://raskovic.net/index.php/utisak-utisci/113-bobar-banka-analiticki-pokazatelji-bilansa-
stanja (Accessed: 18 October 2016).

19