ČESKÁ EXPORTNÍ BANKA
ANNUAL FINANCIAL REPORT 2023
23This version is an English translation of the Czech annual report. Only the Czech
version of the report is legally binding.
The Czech statutory annual report is available at:
hps://www.ceb.cz/o-bance/vyrocni-zpravy/
23=
introduction of new products to support
export-oriented companies
a 37 % increase in the volume
of provided products
to CZK 6.8 billion
2023 – the most commercially successful
year in the last 9 years
CZK 974 million – CEB‘s highest profit before
tax since its foundation in 1995
significant support to strategic
segments of economy
reduction in non-performing
receivables to 1% of the volume
of loan principles
successful cooperation
with the commercial banking sector
3
Introduction by the Chairman
of the Board of Directors
Dear shareholders, dear business partners,
despite the many challenges it brought, 2023 was one of the most successful
years for Česká exportní banka, a.s. (CEB) in its nearly 30-year history in
many aspects. In the past year, CEB continued in the process of transforming
itself into a modern and active financial institution, oering solutions and
value to its clients and partners.
The continuously deteriorating international security situation, weak growth
in international trade, price volatility of inputs and raw materials, falling
demand, and persistent inflationary pressures created an environment that
negatively influenced Czech export suppliers and exporters in 2023.
Despite the above limitations, CEB managed to meet its strategic goals
in 2023. In connection with the amendment to Act No. 58/1995 Coll.
on Insurance and Financing of Exports with State Support, the Bank
introduced completely new products supporting the increase of international
competitiveness of Czech export-oriented companies in the first quarter of
2023. Thus, CEB is now able to support Czech companies whose exports
comprise at least a quarter of their annual sales and which want to reinforce
their international competitiveness. In 2023, the newly introduced products
comprised almost 40% of granted loans. The CEB's product oer is thus
similar to that of foreign export banks and agencies that support exports
in competing economies.
Overall, in 2023 CEB provided supported financing products totalling
CZK 6.8 billion to support Czech export-oriented companies, Czech
exporters, and Czech investors expanding abroad, which is 37% more
year-on-year. In terms of the financial volume of signed contracts, this is
the best result in the last nine years. Furthermore, the Bank succeeded in
reducing the volume of non-performing receivables to only 1% of the total
amount of credit portfolio principals at the end of 2023. The increase in the
volume of deals connected with the development of market interest rates
and a responsible approach to the Bank's operating costs were reflected
in improved return ratios and profit exceeding our expectations for 2023
and amounting to nearly CZK 1 billion before tax, historically CEB‘s highest
profit before tax since its foundation in 1995.
4
The strategic direction of CEB is fully in line with the premises of the newly
approved export strategy of the Czech Republic for 2023–2033. This
includes support for strategic sectors of the economy, ESG transition, growth
segments of the economy with high added value and, finally, companies
reinforcing their international competitiveness through investments abroad.
Close cooperation between CEB and the commercial banking sector,
especially in the area of club and syndicated financing, remains an important
aspect in meeting the needs of Czech export-oriented companies.
2023 was also crucial for CEB’s future. In November 2023, the Government
of the Czech Republic decided to start the integration process between CEB
and the National Development Bank (NDB). The aim of this process is to
create a group with strong capital to provide support for small and medium-
sized enterprises, export, and infrastructure project financing as well as to
significantly increase the lending and guarantee capacity of the NDB by tens
of billions of crowns without additional costs for the state budget. CEB, as
a wholly owned subsidiary of NDB, will continue to operate as a regulated
bank and export credit agency (ECA) specialising in export financing. This
is good news for the Czech economy on its journey of transformation into an
economy built on innovation, added value, final products, and environmental
responsibility.
Dear shareholders, dear business partners, I would like to thank you for your
cooperation in 2023. At the same time, I would like to thank the employees
of Česká exportní banka, a.s. for their work, eort, and determination to
continue transforming CEB into a modern financial institution.
Ing. Daniel Krumpolc
Chairman of the Board of Directors and CEO
5
KPMG Česká republika Audit, s.r.o., a Czech limited liability company and a member firm of
the KPMG global organization of independent member firms
affiliated with KPMG
International Limited, a private English company limited by guarantee.
Recorded in the Commercial Register kept by the
Municipal Court in Prague, Section C, Insert No. 24185
Identification No. 49619187
VAT No. CZ699001996
ID data box: 8h3gtra
KPMG Česká republika Audit, s.r.o.
Pobřežní 1a
186 00 Praha 8
Czech Republic
+420 222 123 111
www.kpmg.cz
This document is an unsigned English translation of the Czech independent auditor’s report that we issued on
26 March 2024 on the statutory financial statements included in the annual financial report of Česká exportní
banka, a.s., prepared in accordance with the provisions of Commission Delegated Regulation (EU) 2019/815
of 17 December 2018 supplementing Directive 2004/109/EC of the European Parliament and of the Council
with regard to regulatory technical standards on the specification of a single electronic reporting format (“the
ESEF Regulation”), related to the financial statements. The accompanying annual financial report does not
represent a statutory annual financial report. Consequently, neither it nor this copy of the auditor’s report is a
legally binding document. We did not audit the consistency of the accompanying annual financial report with
the statutory and legally binding annual financial report under the ESEF Regulation in Czech, and therefore
we do not provide an opinion on the accompanying annual financial report.
Independent Auditor’s Report
to the Shareholders of Česká exportní banka, a.s.
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements of Česká exportní banka, a.s (“the Company”),
prepared in accordance with IFRS Accounting Standards as adopted by the European Union, which comprise
the statement of financial position as at 31 December 2023, the income statement, the statement of
comprehensive income, the statement of changes in equity and the cash flow statement for the year then
ended, and notes to the financial statements, comprising material accounting policies and other explanatory
information. Information about the Company is set out in Note 1 to the financial statements.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of the
Company as at 31 December 2023, and of its financial performance and its cash flows for the year then ended
in accordance with IFRS Accounting Standards as adopted by the European Union.
Basis for Opinion
We conducted our audit in accordance with the Act on Auditors, Regulation (EU) No. 537/2014 of the
European Parliament and of the Council, and Auditing Standards of the Chamber of Auditors of the Czech
Republic, consisting of International Standards on Auditing (ISAs), which may be supplemented and amended
by relevant application guidelines. Our responsibilities under those regulations are further described in the
Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent
of the Company in accordance with the Act on Auditors and the Code of Ethics adopted by the Chamber of
Auditors of the Czech Republic, and we have fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
6
KPMG Česká republika Audit, s.r.o., a Czech limited liability company and a member firm of
the KPMG global organization of independent member firms
affiliated with KPMG
International Limited, a private English company limited by guarantee.
Recorded in the Commercial Register kept by the
Municipal Court in Prague, Section C, Insert No. 24185
Identification No. 49619187
VAT No. CZ699001996
ID data box: 8h3gtra
KPMG Česká republika Audit, s.r.o.
Pobřežní 1a
186 00 Praha 8
Czech Republic
+420 222 123 111
www.kpmg.cz
This document is an unsigned English translation of the Czech independent auditor’s report that we issued on
26 March 2024 on the statutory financial statements included in the annual financial report of Česká exportní
banka, a.s., prepared in accordance with the provisions of Commission Delegated Regulation (EU) 2019/815
of 17 December 2018 supplementing Directive 2004/109/EC of the European Parliament and of the Council
with regard to regulatory technical standards on the specification of a single electronic reporting format (“the
ESEF Regulation”), related to the financial statements. The accompanying annual financial report does not
represent a statutory annual financial report. Consequently, neither it nor this copy of the auditor’s report is a
legally binding document. We did not audit the consistency of the accompanying annual financial report with
the statutory and legally binding annual financial report under the ESEF Regulation in Czech, and therefore
we do not provide an opinion on the accompanying annual financial report.
Independent Auditor’s Report
to the Shareholders of Česká exportní banka, a.s.
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements of Česká exportní banka, a.s (“the Company”),
prepared in accordance with IFRS Accounting Standards as adopted by the European Union, which comprise
the statement of financial position as at 31 December 2023, the income statement, the statement of
comprehensive income, the statement of changes in equity and the cash flow statement for the year then
ended, and notes to the financial statements, comprising material accounting policies and other explanatory
information. Information about the Company is set out in Note 1 to the financial statements.
In our opinion, the accompanying financial statements give a true and fair view of the financial position of the
Company as at 31 December 2023, and of its financial performance and its cash flows for the year then ended
in accordance with IFRS Accounting Standards as adopted by the European Union.
Basis for Opinion
We conducted our audit in accordance with the Act on Auditors, Regulation (EU) No. 537/2014 of the
European Parliament and of the Council, and Auditing Standards of the Chamber of Auditors of the Czech
Republic, consisting of International Standards on Auditing (ISAs), which may be supplemented and amended
by relevant application guidelines. Our responsibilities under those regulations are further described in the
Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent
of the Company in accordance with the Act on Auditors and the Code of Ethics adopted by the Chamber of
Auditors of the Czech Republic, and we have fulfilled our other ethical responsibilities in accordance with
these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit
of the financial statements of the current period. These matters were addressed in the context of our audit of
the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.
Impairment allowances for loans to customers and provisions for guarantees provided to customers
As at 31 December 2023, gross loans and advances to customers amount to CZK 19,459 million and related
impairment allowance amounts to CZK 243 million; financial guarantees issued amount to CZK 2,418 million
and related impairment provision amounts to CZK 52 million (as at 31 December 2022, loans and advances
to customers amount to CZK 16,013 million and related impairment allowance amounts to CZK 211 million;
financial guarantees issued amount to CZK 1,814 million and related impairment provision amounts to CZK
33 million).
Refer to the following notes to the financial statements: 2 (Accounting policies), 3 (Risk management), 10
(Loss from impairment of financial instruments), 13 (Loans and receivable at amortized costs) and 20
(Provisions).
The key audit matter
The Company’s management makes significant judgments and complex assumptions when estimating
expected credit losses (“the Expected Credit Losses”, “ECLs”) in respect of loans and advances to
customers (together “Loans”, “exposures”) and financial guarantees issued („Guarantees“).
For the purposes of estimating the Expected Credit Losses, the Loans and Guarantees are assigned to one
of three stages in line with the requirements of IFRS 9 Financial instruments. Stage 1 and Stage 2 comprise
performing exposures, with Stage 2 being exposures with a significant increase in credit risk since
origination. Stage 3 are exposures in default. The assessment of whether a loan experienced a significant
increase in credit risk or is in default requires use of quantitative criteria (such as internal rating), qualitative
criteria and judgment.
Once the exposures are allocated to Stages, key judgements and assumptions relevant to the measurement
of ECLs for Stage 1 Loans and Guarantees comprise:
• Exposure at default (EAD), determined as gross carrying amount decreased by the value of any
underlying collateral (primarily created by insurance contracts, bank guarantees or cash);
• Expected loss ratio, estimated using a statistical model relying on historical internal data about defaults
of loans and related losses;
• Upscale factor reflecting forward-looking information (FLI), determined by means of a statistical model
based on selected macroeconomic indicators.
ECLs for Stage 2 and Stage 3 Loans and Guarantees are determined on an individual basis by discounting
the probability-weighted projections of estimated future cash flows. The key judgments and assumptions
therein comprise:
• Probabilities assigned to cash flow projections;
• Estimated amounts and timing of future cash repayments, including cash flows from any underlying
collateral.
Due to the above complexities, coupled with the need to consider the effects of the current volatile economic
conditions (such as the inflation, energy cost and economic recession), on the measurement of ECLs, the
area required our increased attention in the audit and as such was determined to be a key audit matter.
19,429
7
How the matter was addressed in our audit
Our procedures, performed, where applicable, with the assistance from our own credit risk and information
technology (IT) audit specialists, included, among others:
We critically assessed the Company‘s loan impairment policies, methods and models, and the processes
related to estimating ECLs. As part of the procedure, we assessed the process of determination of internal
ratings of borrowers and identifying indicators of default and significant increase in credit risk, and allocating
of Loans and Guarantees to Stages. We also inspected and assessed the development and validation
documentation for internal rating and ECL models, including the Company’s retrospective testing of major
model inputs.
We tested the design, implementation and operating effectiveness of selected IT-based and manual controls
over the disbursement of loans and the receipt of borrowers’ repayments and their matching to scheduled
loan instalments. We also tested design and implementation of selected controls over the ECL
measurement.
We assessed whether the definition of default and staging criteria were applied consistently and in line with
the requirements of the financial reporting standards.
For a sample of exposures, we critically assessed, by reference to the underlying loan files and inquires of
loan officers and credit risk personnel, the existence of any triggers for classification to Stage 2 or Stage 3.
For a sample of Stage 1 secured exposures, we challenged the realizable value of collateral, by reference to
the underlying collateral agreements (for non-cash collateral) or evidence supporting balances of cash
serving as collateral. For a sample of Stage 1 unsecured exposures, we challenged the EAD parameter, the
expected loss ratio and upscale factor assigned to these exposures, also considering the FLI, which we
independently evaluated.
For impairment allowances calculated individually (Stage 2 and Stage 3), for a risk-based sample of loans,
we challenged the Company’s cash flow projections and key assumptions used therein, by reference to the
respective loan files and inquiries of the Company’s credit risk personnel. We also evaluated the collateral
values by reference to underlying terms of collateral agreements or evidence supporting balances of cash
collateral.
We evaluated whether in its ECL measurement the Company appropriately considered the effects of the
market disruption resulting from the actual economic conditions.
We examined whether the Company’s loan impairment and credit risk-related disclosures in the financial
statements appropriately address the relevant quantitative and qualitative information required by the
applicable financial reporting framework.
Other Information
In accordance with Section 2(b) of the Act on Auditors, other information is defined as information included in
the annual financial report (“the annual report”) other than the financial statements and our auditor’s report.
The statutory body is responsible for the other information.
Our opinion on the financial statements does not cover the other information. In connection with our audit of
the financial statements, our responsibility is to read the other information and, in doing so, consider whether
the other information is materially inconsistent with the financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated. In addition, we assess whether the other information
has been prepared, in all material respects, in accordance with applicable laws and regulations, in particular,
whether the other information complies with laws and regulations in terms of formal requirements and the
8
How the matter was addressed in our audit
Our procedures, performed, where applicable, with the assistance from our own credit risk and information
technology (IT) audit specialists, included, among others:
We critically assessed the Company‘s loan impairment policies, methods and models, and the processes
related to estimating ECLs. As part of the procedure, we assessed the process of determination of internal
ratings of borrowers and identifying indicators of default and significant increase in credit risk, and allocating
of Loans and Guarantees to Stages. We also inspected and assessed the development and validation
documentation for internal rating and ECL models, including the Company’s retrospective testing of major
model inputs.
We tested the design, implementation and operating effectiveness of selected IT-based and manual controls
over the disbursement of loans and the receipt of borrowers’ repayments and their matching to scheduled
loan instalments. We also tested design and implementation of selected controls over the ECL
measurement.
We assessed whether the definition of default and staging criteria were applied consistently and in line with
the requirements of the financial reporting standards.
For a sample of exposures, we critically assessed, by reference to the underlying loan files and inquires of
loan officers and credit risk personnel, the existence of any triggers for classification to Stage 2 or Stage 3.
For a sample of Stage 1 secured exposures, we challenged the realizable value of collateral, by reference to
the underlying collateral agreements (for non-cash collateral) or evidence supporting balances of cash
serving as collateral. For a sample of Stage 1 unsecured exposures, we challenged the EAD parameter, the
expected loss ratio and upscale factor assigned to these exposures, also considering the FLI, which we
independently evaluated.
For impairment allowances calculated individually (Stage 2 and Stage 3), for a risk-based sample of loans,
we challenged the Company’s cash flow projections and key assumptions used therein, by reference to the
respective loan files and inquiries of the Company’s credit risk personnel. We also evaluated the collateral
values by reference to underlying terms of collateral agreements or evidence supporting balances of cash
collateral.
We evaluated whether in its ECL measurement the Company appropriately considered the effects of the
market disruption resulting from the actual economic conditions.
We examined whether the Company’s loan impairment and credit risk-related disclosures in the financial
statements appropriately address the relevant quantitative and qualitative information required by the
applicable financial reporting framework.
Other Information
In accordance with Section 2(b) of the Act on Auditors, other information is defined as information included in
the annual financial report (“the annual report”) other than the financial statements and our auditor’s report.
The statutory body is responsible for the other information.
Our opinion on the financial statements does not cover the other information. In connection with our audit of
the financial statements, our responsibility is to read the other information and, in doing so, consider whether
the other information is materially inconsistent with the financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated. In addition, we assess whether the other information
has been prepared, in all material respects, in accordance with applicable laws and regulations, in particular,
whether the other information complies with laws and regulations in terms of formal requirements and the
procedure for preparing the other information in the context of materiality, i.e. whether any non-compliance
with those requirements could influence judgments made on the basis of the other information.
Based on the procedures performed, to the extent we are able to assess it, we report that:
• the other information describing matters that are also presented in the financial statements is, in all
material respects, consistent with the financial statements; and
• the other information has been prepared in accordance with applicable laws and regulations.
In addition, our responsibility is to report, based on the knowledge and understanding of the Company
obtained in the audit, on whether the other information contains any material misstatement. Based on the
procedures we have performed on the other information obtained, we have not identified any material
misstatement.
Responsibilities of the Statutory Body, Supervisory Board and Audit Committee for the Financial
Statements
The statutory body is responsible for the preparation and fair presentation of the financial statements in
accordance with IFRS Accounting Standards as adopted by the European Union and for such internal control
as the statutory body determines is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the statutory body is responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the statutory body either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
The Supervisory Board is responsible for overseeing the Company’s financial reporting process. The Audit
Committee is responsible for monitoring the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with the above regulations will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
As part of an audit in accordance with the above regulations, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the statutory body.
• Conclude on the appropriateness of the statutory body’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
9
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Company to cease to continue as a going
concern.
•Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in
a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were
of most significance in the audit of the financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not
be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
In compliance with Article 10(2) of Regulation (EU) No. 537/2014 of the European Parliament and of
the Council, we provide the following information in our independent auditor’s report, which is required in
addition to the requirements of International Standards on Auditing:
Appointment of Auditor and Period of Engagement
We were appointed as the auditors of the Company by the General Meeting of Shareholders on 29 April 2021
and our uninterrupted engagement has lasted for 3 years.
Consistency with Additional Report to Audit Committee
We confirm that our audit opinion on the financial statements expressed herein is consistent with
the additional report to the Audit Committee of the Company, which we issued on 25 March 2024 in
accordance with Article 11 of Regulation (EU) No. 537/2014 of the European Parliament and of the Council.
Provision of Non-audit Services
We declare that no prohibited services referred to in Article 5 of Regulation (EU) No. 537/2014 of
the European Parliament and of the Council were provided.
Report on Compliance with the ESEF Regulation
We have undertaken a reasonable assurance engagement on the compliance of financial statements included
in the annual report with the provisions of Commission Delegated Regulation (EU) 2019/815 of 17 December
2018 supplementing Directive 2004/109/EC of the European Parliament and of the Council with regard to
regulatory technical standards on the specification of a single electronic reporting format (“the ESEF
Regulation”), related to the financial statements.
10
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Company to cease to continue as a going
concern.
•Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in
a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were
of most significance in the audit of the financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not
be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
In compliance with Article 10(2) of Regulation (EU) No. 537/2014 of the European Parliament and of
the Council, we provide the following information in our independent auditor’s report, which is required in
addition to the requirements of International Standards on Auditing:
Appointment of Auditor and Period of Engagement
We were appointed as the auditors of the Company by the General Meeting of Shareholders on 29 April 2021
and our uninterrupted engagement has lasted for 3 years.
Consistency with Additional Report to Audit Committee
We confirm that our audit opinion on the financial statements expressed herein is consistent with
the additional report to the Audit Committee of the Company, which we issued on 25 March 2024 in
accordance with Article 11 of Regulation (EU) No. 537/2014 of the European Parliament and of the Council.
Provision of Non-audit Services
We declare that no prohibited services referred to in Article 5 of Regulation (EU) No. 537/2014 of
the European Parliament and of the Council were provided.
Report on Compliance with the ESEF Regulation
We have undertaken a reasonable assurance engagement on the compliance of financial statements included
in the annual report with the provisions of Commission Delegated Regulation (EU) 2019/815 of 17 December
2018 supplementing Directive 2004/109/EC of the European Parliament and of the Council with regard to
regulatory technical standards on the specification of a single electronic reporting format (“the ESEF
Regulation”), related to the financial statements.
Responsibilities of the Statutory Body
The Company‘s statutory body is responsible for the preparation of financial statements that comply with the
ESEF Regulation. This responsibility includes:
•the design, implementation and maintenance of internal control relevant to the application of the ESEF
Regulation;
•the preparation of financial statements included in the annual report in the applicable XHTML format.
Auditor’s Responsibilities
Our responsibility is to express an opinion on whether the financial statements included in the annual report
comply, in all material respects, with the ESEF Regulation based on the evidence we have obtained. We
conducted our reasonable assurance engagement in accordance with International Standard on Assurance
Engagements 3000 (Revised), Assurance Engagements Other than Audits or Reviews of Historical Financial
Information (“ISAE 3000”).
The nature, timing and extent of procedures selected depend on the auditor’s judgment. Reasonable
assurance is a high level of assurance, but is not a guarantee that an assurance engagement conducted in
accordance with the above standard will always detect any existing material non-compliance with the ESEF
Regulation.
Our selected procedures included:
•obtaining an understanding of the requirements of the ESEF Regulation;
•obtaining an understanding of the Company’s internal control relevant to the application of the ESEF
Regulation;
•identifying and assessing the risks of material non-compliance with the ESEF Regulation, whether due
to fraud or error; and
•based on the above, designing and performing procedures to respond to the assessed risks and to
obtain reasonable assurance for the purpose of expressing our conclusion.
The objective of our procedures was to evaluate whether the financial statements included in the annual
report were prepared in the applicable XHTML format.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
conclusion.
Conclusion
In our opinion, the Company’s financial statements for the year ended 31 December 2023 included in the
annual report are, in all material respects, in compliance with the ESEF Regulation.
Statutory Auditor Responsible for the Engagement
Jindřich Vašina is the statutory auditor responsible for the audit of the financial statements of Česká exportní
banka, a.s. as at 31 December 2023, based on which this independent auditor’s report has been prepared.
Prague
26 March 2024
KPMG Česká republika Audit, s.r.o.
Registration number 71
Signed by
Jindřich Vašina
Partner
Registration number 2059
0Contents
Introduction by the Chairman of the Board of Directors 3
Auditor's opinion 5
Key indicators 13
1 Profile of Česká exportní banka, a.s. 15
1.1 History and Development of Česká exportní banka, a.s. 15
1.2 The issuer’s registered oce and legal status,
legal regulations governing the issuer’s activities 16
1.3 Disclosed documents 17
1.4 Information on environmental, social, and corporate governance,
employment relations and other information about Česká exportní banka, a.s. 18
1.4.1 General aspects and international regulation 18
1.4.2 Environmental, social, and corporate governance (ESG) 18
1.4.3 Employment relations 19
1.4.4 Other 20
1.5 Administrative, management and supervisory bodies of CEB and their commiees 20
1.6 Organisational scheme of Česká exportní banka, a.s. 26
1.7 Declaration of no conflicts of interest 26
2 Annual report 29
2.1 Business activities of Česká exportní banky, a.s. 29
2.1.1 Export financing 29
2.1.2 Development in the credit portfolio balance and structure 35
2.1.3 Newly introduced products and activities 37
2.2 Financial results, balance of assets and liabilities 39
2.3 Strategic targets of Česká exportní banka, a.s. in the business and financial area 43
2.4 Risks to which the Bank is exposed, objectives and methods of risk management 44
2.4.1 Credit risk 45
2.4.2 Market risk 46
2.4.3 Refinancing risk 46
2.4.4 Liquidity risk 47
2.4.5 Operational risk 47
2.4.6 Capital adequacy and capital requirements 47
2.4.7 Risk factors potentially aecting the capacity of the Bank to meet its
obligations to investors arising from securities 48
2.5 Corporate governance report 48
2.5.1 Information on codes 48
2.5.2 Shareholder rights 50
2.5.3 Internal control system 50
2.5.4 Description of the decision procedures of the Bank's bodies and commiees 50
2.5.5 Remuneration of persons with managing powers 53
2.5.6 Authorised auditors 56
2.5.7 Court and arbitration proceedings 56
2.5.8 Contracts of significance 56
2.6 Provision of information pursuant to Act No. 106/1999 Coll., on Free Access to Information 56
3 Financial statements 59
4 Report on relations 123
4.1
Structure of relations between the Controlling Entities and the Controlled Entity and relations
Between the Controlled Entity and entities controlled by the same Controlling Entity 123
4.2 Role of the Controlled Entity 123
4.3 Method and means of control 123
4.4 List of acts undertaken in the reporting period 124
4.5 List of mutual contracts between the Controlled Entity and the Controlling Entity
or between the Controlled Entities (Exportní garanční a pojišťovací společnost, a.s.) 124
4.6 Advantages and disadvantages arising from relations between the Controlling Entities
and the Controlled Entity and between the Controlled Entity and entities controlled
by the same Controlling Entity 127
13
) Categories including the comparable period are disclosed in accordance with the definitions
of the Financial Reporting Standards (FINREP) and are also in compliance with IFRS.
) Ratios are published on a quarterly basis on the Bank’s web pages and are calculated according to the below definitions:
Return on average assets (ROAA)
Net profit for the reporting period divided by average total assets.
Average total assets: sum total of monthly amounts of total assets at year-end X- to year-end X divided by .
Return on average equity (ROAE)
Net profit for the reporting period divided by average Tier capital.
Average Tier capital: sum total of monthly amounts of Tier capital at year-end X- to year-end X divided by .
Total capital ratio
Capital at year-end divided by total risk exposures at year-end.
Assets per employee
Total assets for the reporting period divided by average headcount.
Administrative expenses per employee
Administrative expenses for the reporting period divided by average headcount.
Net profit per employee
Net profit for the reporting period divided by average headcount.
Key indicators
01
unit
Financial results )
Net interest income CZK million
Net fee and commission income CZK million
Operating income CZK million ()
Impairment of assets CZK million
Total operating costs CZK million () ()
Income tax CZK million ()
Net profit CZK million
Balance sheet
Total assets CZK million
Receivables from parties other than credit institutions at amortised cost CZK million
Receivables from credit institutions at amortised cost CZK million
Total financial liabilities to other customers at amortised cost CZK million
Total financial liabilities to credit institutions at amortised cost CZK million
Financial liabilities from issued bonds CZK million
Total equity CZK million
Ratios )
Return on average assets (ROAA) , ,
Return on average equity (ROAE) , ,
Total capital ratio , ,
Assets per employee CZK million , ,
Administrative expenses per employee CZK million (,) (,)
Net profit per employee CZK million , ,
Other information
Average headcount employees
Headcount (as at December) employees
Guarantees issued CZK million
Loan commitments CZK million
Rating – long-term payables
Standard & Poor’ s -AA- AA-
14
Profile of
Česká exportní banka, a.s.
01
15 1 Profile of Česká exportní banka, a.s.
1 Profile of Česká exportní banka, a.s.
1 The banking licence replaced the permit issued by the Czech National Bank to Česká exportní banka, a.s., based on which CEB was
allowed to operate as a bank; the permit was issued on 6 February 1995 and changes to it were made on 27 June 1996.
2 Act No. 256/2004 Coll., on Capital Market Undertakings
1.1 History and Development of Česká exportní banka, a.s.
Česká exportní banka, a.s. (“CEB”) is recorded in the Commercial Register maintained by the Municipal
Court in Prague, file No. B 3042. Its primary objective is to support Czech exports and export-oriented
companies as stipulated by Act No. 58/1995 Coll., on Insurance and Financing of Exports with State
Support, as amended. The nature of the support has developed since 1995 from the provision of basic
concessional financing to today’s comprehensive services of supported financing. CEB’s export support
is implemented through banking services and transactions within the scope of the banking licence.
Based on a banking licence1 issued by the Czech National Bank under Ref. No. 2003/3966/520 dated
19. September 2003, amended by the decision of the Czech National Bank under Ref. No. 2003/4067/520
dated 30 September 2003, under Ref. No. 2005/3982/530 dated 16 December 2005, under Ref. No.
2011/141/570 dated 6 January 2011 and under Ref. No. 2013/6197/570 dated 27 May 2013, the principal
business activities of CEB are defined as follows:
i. Pursuant to Section 1 (1) of Act No. 21/1992 Coll., on Banks
a) Acceptance of deposits made by general public
b) Provision of loans.
ii. Pursuant to Pursuant to Section 1 (3) of Act No. 21/1992 Coll., on Banks
a) Investing in securities on the Bank’s own account, in the following scope:
• Investing in negotiable securities issued by the Czech Republic, the Czech National Bank and
foreign governments
• Investing in foreign bonds and mortgage bonds
•
Investing in securities issued by legal entities with registered oces in the territory of the
Czech Republic.
c) Payment systems and clearing
e) Provision of guarantees
f) Opening of leers of credit
g) Collection services
h) Investment services under special regulation2 comprising:
• Major investment services
— Pursuant to Section 4 (2) (a) of the Act on Capital Market Undertakings – receiving and
giving instructions on investment instruments, specifically investment instruments pursuant
to Section 3 (1) (d) of this Act
—
Pursuant to Section 4 (2) (b) of the Act on Capital Market Undertakings – implementation
of instructions related to investment instruments on the account of clients, specifically
investment instruments pursuant to Section 3 (1) (d) of this Act
—
Pursuant to Section 4 (2) (a) of the Act on Capital Market Undertakings – trading of
investment instruments, on the Bank’s account, specifically investment instruments
pursuant to Section 3 (1) (a) of this Act, with the exception of shares and other securities
representing an equity investment in a company or another legal entity, specifically
investment instruments pursuant to Section 3 (1) (c) and (d) of the Act on Capital Market
Undertakings
—
Pursuant to Section 4 (2) (e) of the Act on Capital Market Undertakings – investment
advisory on investment instruments, specifically instruments pursuant to Section 3 (1) (d)
of this Act.
16 1 Profile of Česká exportní banka, a.s.
• Additional investment services
— Pursuant to Section 4 (3) (a) of the Act on Capital Market Undertakings – escrow and
administration of investment instruments including the relating services, specifically
investment instruments pursuant to Section 3 (1) (a), (c) and (d) of this Act
— Pursuant to Section 4 (3) (c) of the Act on Capital Market Undertakings – advisory on
the capital structure, industrial strategies and related issues, advisory and services on
company transformations and company transfers.
l) Provision of banking information
m) Trading on the Bank’s own account or on the client’s account in foreign currencies that are not
investment instruments and in gold to the extent of the following:
• Trading on the Bank’s own account in foreign bonds
• Trading on the Bank’s own account in funds denominated in foreign currencies
• Trading on the Bank’s own account or on its clients’ account in negotiable securities issued
by foreign governments
•
Trading on the Bank’s own account or on its clients’ account in monetary rights and obligations
derived from the above-mentioned foreign currencies
• Trading on its clients’ account in funds denominated in foreign currencies; and
p) Activities directly related to the activities mentioned in Česká exportní banka, a.s.’s banking licence.
Summary of activities the performance or provision of which was limited or eliminated by the Czech
National Bank during 2023: No activities have been limited or eliminated.
1.2 The issuer’s registered oce and legal status, legal regulations
governing the issuer’s activities
Registered oce: Praha 1, Vodičkova 701/34, post code 111 21
Legal form: joint stock company
Corporate ID: 63078333
Telephone: +420222841100
Fax: +420224211266
E-mail: ceb@ceb.cz
internet: www.ceb.cz
The principal EU and Czech legal regulations under which CEB performed its activities in 2023:
Act No. 110/2019 Coll. on Personal Data Protection;
Act No. 250/2016 Coll. on Liability for Administrative Oences and Related Procedures;
Act No. 370/2017 Coll. on System of Payments;
Act No. 21/1992 Coll. on Banks;
Act No. 280/2009 Coll. on the Tax Procedure Code;
Act No. 190/2004 Coll. on Bonds ;
Act No. 235/2004 Coll. on Value Added Tax;
Act No. 253/2008 Coll. on Certain Measures against Money Laundering and Terrorism Financing;
17 1 Profile of Česká exportní banka, a.s.
Act No. 69/2006 Coll. on the Implementation of International Sanctions;
Act No. 256/2004 Coll. on Capital Market Undertakings;
Act No.499/2004 Coll. on Archiving and Record Management;
Act No. 563/1991 Coll. on Accounting;
Act No. 89/2012 Coll. Civil Code;
Act No. 90/2012 Coll. on Business Corporations and Cooperatives
(Act on Business Corporations);
Act No. 58/1995 Coll. on Insurance and Financing of Exports with State Support;
Act No. 229/2002 Coll. on the Financial Arbiter;
Act No. 586/1992 Coll. on Income Taxation;
Act No. 589/1992 Coll. on Social Security Contributions and Contributions
to the State Employment Policy;
Act No. 592/1992 Coll. on Public Health Insurance;
Act No. 93/2009 Coll. on Auditors;
Act No. 304/2013 Coll. on Public Registers of Legal Entities and Natural Persons;
Act No. 408/2010 Coll. on Financial Collateral;
Regulation (EU) No. 2016/679 General Data Protection Regulation (GDPR) Regulation (EU)
No. 596/2014 on Market Abuse;
Regulation (EU) No. 575/2013 on prudential requirements for credit institutions and investment firms
and related implementing regulations of the European Commission;
Regulation (EU) No. 648/2012 on OTC derivatives, central counterparties and trade repositories
(EMIR); and
Regulation (EU) No. 1233/2011 of the European Parliament and of the Council on the application
of certain guidelines in the field of ocially supported export credits.
These regulations represent the primary legislative framework for CEB’s activities. In addition to the
aforementioned regulations, CEB’s activities have to comply with various other decrees, government
regulations or implementing regulations, guidelines and other documents issued by EU bodies.
1.3 Disclosed documents
CEB’s Articles of Association in Czech are publicly available, and the hard-copy version thereof can be
inspected in the Bank’s registered oce. The electronic version of the Bank’s Articles of Association in
Czech is publicly available in the Collection of Deeds of the Commercial Register file No. B 3042/SL 186/
MSPH of the Municipal Court in Prague.
On the website of the Commercial Register and Collection of Deeds, the updated version of CEB’s Articles
of Association is available under the following address: hps://or.justice.cz/.
In addition, CEB’s website (www.ceb.cz) makes publicly available all documents and information on its
activities, through which it meets its informational obligation arising from the relevant legal regulations
that the Bank is to follow in performing its business.
18 1 Profile of Česká exportní banka, a.s.
1.4 Information on environmental, social, and corporate
governance, employment relations and other information
about Česká exportní banka, a.s.
1.4.1 General aspects and international regulation
CEB is not a member of any group and has no organisational branch abroad.
Act No. 58/1995 Coll., on Insurance and Financing of Exports with State Support, authorised the Bank to
finance exports with state support in line with international rules of public support applied in financing
state-supported export loans with a maturity period of at least two years (predominantly with the OECD
Consensus and WTO).
Under Section 8 (1) (c) of Act No. 58/1995 Coll., on Insurance and Financing of Exports with State Support,
the state is held liable for the obligations of CEB arising from payments of funds received by CEB and for
obligations arising from other CEB’s operations on the financial markets.
No specific event that could have a material impact on the evaluation of CEB’s solvency has occurred
since the last publication of the Annual Report of CEB as an issuer of securities.
When providing export loans with a maturity period of at least two years, CEB complies with the procedures
set out in OECD Council Recommendation on Common Approaches for Ocially Supported Export Credits
and Environmental and Social Due Diligence (2016) providing guidance on the application of some rules
in state-supported export credits. In accordance with these rules, CEB requires all financed projects
to be assessed by an independent external expert, an ESIA opinion (Environmental and Social Impact
Assessment) to be prepared and the relevant conditions resulting from this opinion, if any, to be included
into the contractual documentation concluded with the client.
CEB continues to fully respect the obligations arising for the Czech Republic from the OECD guidelines
to combat bribery of foreign public ocials in international business transactions, specifically the “OECD
Council Recommendation on Bribery and Ocially Supported Export Credits” (2019). CEB uses this
document as its primary basis when formulating requirements for exporters and evaluating compliance
with the conditions of fight against corruption in specific export transactions.
1.4.2 Environmental, social, and corporate governance (ESG)
CEB has the potential to positively influence environmental, social, and corporate governance (ESG) in
two ways:
1) first by deciding to whom it will provide financing and for what projects; and
2) second by the way it manages its business, how it deals with its clients, employees, and other stakeholders.
From risk analyses and the existing approach, a new ESG framework strategy for CEB has emerged,
comprising both a general and risk management strategy. The general strategy, approved by the general
meeting, obliges CEB to:
1) meet the ESG concept in its own operational activities;
2) emphasise in its business strategy companies gradually implementing the sustainability concept
or responsible behaviour in relation to ESG in their activities, including decarbonisation, greening and
reduction of energy intensity (i.e., support ESG transition). A definition of ESG risk and the basic manner
of managing it has been added to the risk management strategy.
19 1 Profile of Česká exportní banka, a.s.
To beer assess the environmental impacts of CEB's operations and where improvements could be made,
an independent company, CI3, s.r.o., was asked to calculate CEB's carbon footprint. All direct emission
sources were included in the calculation in accordance with the GHG Protocol, namely natural gas, fuel,
refrigerants (Scope 1), and indirect emissions from consumption of electrical energy (Scope 2). In addition,
selected items from Scope 3 were included. The calculation of full Scope 3, i.e., on CEB's client portfolio,
will only be possible in the coming years once the relevant input data has been obtained.
Further, targets until 2030 have been set in all three ESG areas, specifically aiming at carbon footprint
reduction, a responsible approach to employees, aracting talent, engaging with volunteering activities
and the eective use of membership in ESG- and sustainability-related associations. The set internal
ESG targets are also reflected in the approved CEB Strategy for the period from 2024 to 2026, which
incorporates them into the updated section on human resource management.
Non-financial reporting obligations arising from European regulations, in particular the Corporate
Sustainability Reporting Directive (CSRD) and the regulation on prudential requirements for credit
institutions (CRR), which CEB is preparing to comply with, were also analysed in detail.
In relation to clients, the client approach to ESG issues has also been added to the approval procedure for
new business cases. On a voluntary basis, CEB has joined parts of the "Synesgy" initiative created by an
external company to collect ESG information from clients so that it is uniform, comparable, and provided
only once for all participating banks.
Beyond the above, CEB's further strategy to implement ESG targets in 2024 will comprise:
•
collaboration with Exportní garanční a pojištovací společnost, a.s. (“EGAP”) to organise joint ESG
events and activities leading to energy savings at the headquarters of both companies – reducing the
carbon footprint;
• further analyses and implementation of regulatory and reporting requirements;
• more detailed seings for assessing the risk profile of clients from an ESG perspective;
• the progressive implementation of activities leading to the fulfilment of defined objectives, especially
in the field of human resource management;
• publishing more information on CEB's approach to ESG issues.
The Supervisory Board and the Audit Commiee of CEB were informed in detail about all CEB ESG
activities implemented in 2023 and planned for 2024 and beyond.
1.4.3 Employment relations
CEB’s employment relations are concluded in line with Act No. 262/2006 Coll., the Labour Code, as
amended. They include employment contracts, agreements to complete a job and agreements to perform
work.
Members of the Board of Directors, the Supervisory Board and the Audit Commiee perform their functions
based on contracts on holding the oce concluded in line with Section 59 et seq. of Act No. 90/2012
Coll., on Business Corporations and Cooperatives (Act on Business Corporations). CEB’s regulations
specify further provisions on specific areas concerning employment relations and executive functions in
its internal policies (statutory standards, guidelines, internal policies, codes, strategies). These include in
particular the following internal policies: CEB’s Articles of Association, Work Rules, Employee’s Code of
Ethics, Organisation Code, Occupational Health and Safety and Fire Protection, Remuneration and Work
Performance Management, Business Trips and Travel Compensation, Hiring and Selecting Employees,
Employee Education Process, Principles of Remuneration of Members of Corporate Bodies, Summary
Principles of Remuneration of CEB Employees (‘Risk Takers’), Human Resource Management Principles.
20 1 Profile of Česká exportní banka, a.s.
1.4.4 Other
CEB does not make any research and development investments on its own account. As part of the
permied version of the Loan to Finance Export Manufacturing product, CEB oers Czech manufacturers
the option of financing the implementation of new results of research and development into production,
i.e., commercialisation of tangible results of research and development in connection with exports. In
2023, this version of the Loan to Finance Export Manufacturing product was not provided. Historically,
CEB records three loans provided under this version of the product in the aggregate nominal value of
the principal of CZK 1,088 million.
In compliance with Section 41 (a) of Act No. 21/1992 Coll., on Banks, CEB contributes to the system of
insurance of receivables from deposits and contributes to the Deposit Insurance Fund in the scope defined
by law. The contributions to the system amounted to CZK 16,615 in 2023.
CEB, as a securities trader, is obliged to contribute to the Deposit Guarantee Fund of the Securities Traders
in compliance with Act No. 265/2004 Coll., on Capital Market Undertakings. In compliance with Section
129 (2) of the Act, the contribution of CEB amounted to CZK 10,000 in 2023.
Since 2016, CEB has been obliged to contribute to the Crisis Resolution Fund in compliance with the relevant
provisions of the Act on Recovery and Resolution in the Financial Market (predominantly Sections 209
and 214). The contribution for 2023 as stipulated by the Czech National Bank amounted to CZK 8,177,897.
1.5 Administrative, management and supervisory bodies of CEB
and their commiees
General Meeting – the supreme body of CEB that decides by the majority of present shareholders on the
issues that are entrusted to its authority by Act No. 90/2012 Coll., and the Bank’s Articles of Association.
Supervisory Board – supervises the performance of the Board of Directors’ activities and the performance
of CEBs business activities and presents its opinions to the General Meeting.
Supervisory Board as at 31 December 2023
Chairman
Ing. Petr Knapp Substitute member and Chairman
from 18 November 2021 to 21 December 2021,
Member and Chairman since 21 December 2021
Vice-Chairman
prof. PhDr. Petr Teplý, Ph.D Member from 23 June 2014 to 23 June 2019,
re-elected as member since 24 June 2019,
Vice-Chairman since 24 August 2021
Members
Ing. Miroslav Zámečník Member from 24 April 2017 to 24 April 2022,
Substitute member from 24 November 2022
to 22 December 2022,
Member since 22 December 2022
Ing. Ivan Duda Member since 24 June 2021
Ing. Dušan Hradil Member since 1 August 2021
21 1 Profile of Česká exportní banka, a.s.
Board of Directors – the Bank’s statutory body, manages the operations of the Bank, acts on its behalf,
ensures the business management including accounting, and takes decisions related to all bank issues
unless otherwise stipulated by law or by Articles of Association defined as competences of the General
Meeting or the Supervisory Board. The Board of Directors makes decisions that may be subject to the
Supervisory Board’s additional approval in accordance with the Bank’s Articles of Association.
Board of Directors as at 31 December 2023
Chairman
Ing. Daniel Krumpolc
Chairman of the Board of Directors/Chief
Executive Ocer in charge of the Export
Financing Division
Member, Chairman and Chief Executive Ocer
from 1 March 2022
Vice-Chairman
Ing. Emil Holan
Vice-Chairman of the Board of Directors
in charge of the Risk Management Division
Member from 1 August 2018 to 1 August 2023,
Vice-Chairman from 2 July 2020 to 1 August 2023,
Substitute member and Vice-Chairman since
2 August 2023,
Member and Vice-Chairman since
31 October 2023
Members
Ing. Jiří Schneller
Member of the Board of Directors,
in charge of the Finance and Operations Division
/position vacant from 11 March 2023
to 31 May 2023/
Member from 21 December 2020 to 10 March 2023
Ing. Petr Hejduk
Member of the Board of Directors,
in charge of the Finance and Operations Division
Substitute member from 1 June 2023
to 31 October 2023,
Member since 31 October 2023
Nomination Commiee – an advisory commiee of the CEB Supervisory Board established by a decision
of the Board of Directors dated 8 June 2022 with eect from 9 June 2022. The status of the Nomination
Commiee is regulated by the Rules of Procedure of the Nomination Commiee – SN 21.
Chairman
Ing. Petr Knapp Chairman since 9 June 2022
Members
Prof. PhDr. Petr Teplý, Ph.D. Member since 23 June 2022
Ing. Ivan Duda Member since 23 June 2022
Mgr. Veronika Peřinová Member since 7 July 2022
Ing. Daniel Krumpolc Member since 9 June 2022
Mgr. Ondřej Zemina Member since 9 June 2022
22 1 Profile of Česká exportní banka, a.s.
Audit Commiee– set up by a decision of the General Meeting of Česká exportní banka, a.s., held on
10 December 2009 and eective as of 4 January 2010. The Audit Commiee focuses mostly on the
process of preparing the Bank’s financial statements, evaluates the eectiveness of the internal controls
of the Bank, the internal audit and/or risk management systems. It monitors the procedure of obligatory
audit of the financial statements and recommends the statutory auditor.
Audit Commiee as at 31 December 2023
Chairman
Ing. Petr Kříž, FCCA Member since 22 December 2022,
Chairman since 21 February 2023
Other Decision-Making Bodies of CEB
Within the scope of its activities, the Board of Directors set up the following decision-making bodies:
Credit Commiee– a permanent decision-making and advisory body of the Board of Directors for deciding
on and evaluating all issues related to selected transactions and credit risk management, and the advisory
body of the leading employees of CEB. The Credit Commiee is part of the management and control
system of the Bank. Since 1 July 2018, this decision-making body has assumed certain competencies of
the Board of Directors, such as negotiating and approving business cases.
The composition of the Credit Commiee in 2023 was as follows:
Chairman
Ing. Emil Holan
Vice-Chairman of the Board of Directors in charge
of the Risk Management Division
Vice-Chairman
Ing. Daniel Krumpolc
Chairman of the Board of Directors/Chief Executive Ocer
in charge of the Export Financing Division
Members
Ing. Jiří Schneller
Member of the Board of Directors,
in charge of the Finance and Operations Division
/position vacant since 1 June 2023/
Until 10 March 2023
Ing. Petr Hejduk
Member of the Board of Directors,
in charge of the Finance and Operations Division
Since 1 June 2023
Members
Ing. Radovan Odstrčil Member since 29 April 2020
Ing. Stanislav Staněk
Member from 29 April 2019 to 29 April 2023
re-elected on 30 April 2023
23 1 Profile of Česká exportní banka, a.s.
Assets and Liabilities Management Commiee (ALCO) – permanent decision-making and advisory
body of the Board of Directors for deciding on and evaluating all issues related to the management of
assets and liabilities, minimisation of market risks related to banking transactions and operations of Česká
exportní banka, a.s. on financial markets, and as an advisory body for CEB's managers. ALCO is a part of
the management and control system of CEB.
The composition of ALCO in 2023 was as follows:
Chairman
Ing. Daniel Krumpolc
Chairman of the Board of Directors/Chief Executive
Ocer in charge of the Export Financing Division
Vice-Chairman
Ing. Emil Holan
Vice-Chairman of the Board of Directors
in charge of the Risk Management Division
Members
Ing. Jiří Schneller
Member of the Board of Directors,
in charge of the Finance and Operations Division
/position vacant since 1 June 2023/
Until 10 March 2023
Ing. Petr Hejduk
Member of the Board of Directors,
in charge of the Finance and Operations Division
Since 1 June 2023
Ing. Miloš Welser
Senior Manager of Export Financing Development and Strategy
Ing. David Franta, MBA
Director of Treasury
Members on behalf of Risk Management Division
PhDr. Václav Fišer
Director of the Credit Risk Management and Loan Analysis Section since 30 September 2023
Risk Manager Senior
Ing. Jiří Jeřábek
Risk Manager Senior
Members on behalf of Export Financing
Ing. Miloš Welser
Senior Manager of Export Financing Development and Strategy
Ing. Miroslav Stříbrný
Director of the Export Financing Division
continued on next page
24 1 Profile of Česká exportní banka, a.s.
The Information Technologies Development Commiee (ITDC)– permanent decision-making and
advisory body of the Board of Directors of CEB dealing with issues in relation to ICT management. ITDC
is part of the management and control system of the Bank.
The composition of ITDC in 2023 was as follows:
Chairman
Ing. Jiří Schneller
Member of the Board of Directors,
in charge of the Finance and Operations Division
/position vacant since 1 June 2023/
Until 10 March 2023
Ing. Petr Hejduk
Member of the Board of Directors,
in charge of the Finance and Operations Division
Since 1 June 2023
Vice-Chairman
Ing. Emil Holan
Vice-Chairman of the Board of Directors
in charge of the Risk Management Division
Members
Ing. Jan Bukovský
ICT Security Inspector
Ing. Hana Vondráčková
Credit Methodologist
Ing. Petr Jindrák
Director of the Banking IS Development Section
Ing. Dagmar Zelisková
Statistics Analyst
Bc. Miloslav Svoboda
Director of the Banking IS Operations Section
Members
Ing. Roman Somol, MBA
Head of the Enterprise Risk Management department
Ing. František Jakub, Ph.D.
Director of the Finance and Accounting Section
25 1 Profile of Česká exportní banka, a.s.
Operational Risk Management Commiee (ORCO)– The Operational Risk Management Commiee
is a permanent decision-making and advisory body of the Board of Directors for all decision-making
procedures and assessment of operational risks and an advisory body of Česká exportní banka, a.s.'s
managers. ORCO is part of the management and control system of CEB.
The composition of ORCO in 2023 was as follows:
Chairman
Ing. Emil Holan
Vice-Chairman of the Board of Directors
in charge of the Risk Management Division
Vice-Chairman
Ing. Jiří Schneller
Member of the Board of Directors,
in charge of the Finance and Operations Division
/position vacant since 1 June 2023/
Until 10 March 2023
Ing. Petr Hejduk
Member of the Board of Directors,
in charge of the Finance and Operations Division
Since 1 June 2023
Members
Ing. Roman Somol, MBA
Head of the Enterprise Risk Management department
Ing. Miloš Welser
Senior Manager of Export Financing Development and Strategy
Ing. František Jakub, Ph.D.
Director of the Finance and Accounting Section
Mgr. Ondřej Zemina
Head of the Compliance department
Bc. Miloslav Svoboda
Director of the Banking IS Operations section
26 1 Profile of Česká exportní banka, a.s.
1.6 Organisational scheme of Česká exportní banka, a.s.
1.7 Declaration of conflicts of interest
The members of the Bank’s bodies, commiees and councils declare that:
(a) They have not abused their position in the Bank or the information that they had in place to gain
profit that could not otherwise have been gained, either for themselves or for other persons;
(b) They have not concluded any transactions using the investment instruments of the Bank’s clients
on their own account or on the account of a person closely related to them;
(c) They have not provided instructions or recommendations to other persons related to the transactions
with investment instruments of the Bank’s clients that could be used by the persons in trading
with the investment instruments on their own account; and
(d) They have avoided all activities that may potentially expose them to a conflict of interest.
Úsek Odbor Oddělení
Provoz bankovních
informačních systémů (4020)
Bezpečnost ICT (4003)
Vnitřní správa (4021)
Vnitřní audit (0400)
Úsek řízení rizik (2000)
Náměstek generálního ředitele
Řízení bankovních rizik (2010)
Restrukturalizace a vymáhání
pohledávek (1020)
Platební styk (4002)
Účetnictví (4042)
Úsek exportního financování (3000)
Ředitel úseku
Exportní financování (3010)
Trade Finance (3050)
Řízení lidských
zdrojů (0120)
Kancelář (0101) Strategie
a komunikace (0130)
Úsek GŘ (0100)
Generální ředitel
Treasury (0160)
Finance (4041)
Právní odbor (0140)
Správa obchodů (4030)
Finance a účetnictví (4040)
Rozvoj bankovních
informačních systémů (4010)
Řízení úvěrového rizika
a úvěrové analýzy (2020)
Úsek financí a provozu (4000)
Náměstek generálního ředitele
Výbor pro auditDozorčí rada
Představenstvo
Compliance (0500)
Organizační struktura České exportní banky, a.s. k 31. 12. 2023
Audit Commiee
Board of Directors
Supervisory Board
CEO Division (0100)
Chairman of the Board
Risk Management (2000)
Member of the Board Sales and Export Financing (3000)
Division Director Finance and Operations (4000)
Member of the Board
Internal Audit (0400)
Corporate Secretary (0101) Human Resources (0120) Strategy and
Communication (0130) Treasury (0160)
Compliance (0500)
Enterprise Risk Management
(2010)
Payment (4002)
Finance (4041)
Accounting (4042)
Facility (4021)
ICT Security (4003)
Credit Risk Management
(2020)
Restructuring and Debt
Recovery (1020)
Business Adminstration
(4030)
Export Financing (3010) Finance and Accounting
(4040) Legal (0140)
Banking IS Development
(4010)
Banking IS Operations
(4020)
Trade Finance (3050)
Organizational structure of Česká exportní banka, a.s., valid from 31 December 2023
Division Section Department
27
Annual report
0
2
28 2 Annual report
We managed to continue in the process of
transforming CEB into a modern and active
financial institution, oering solutions and
value to its clients. CEB's product oer
is now similar to that of foreign export
banks and agencies that support exports
in competing economies. In 2023, new
products for export-oriented companies
comprised nearly 40 per cent of newly
closed contracts. Partially thanks to this, we
recorded the best business result for the
last nine years and generated the highest
profit since the foundation of the Bank.
Ing. Daniel Krumpolc
Chairman of the Board of Directors and Chief Executive Ocer
of Česká exportní banka, a.s.
29 2 Annual report
2 Annual report
2.1 Business activities of Česká exportní banka, a.s.
2.1.1 Export financing
Complying with the Czech Republic’s national economic strategic objectives in export support, CEB’s
principal business activity is export financing realised through products included in CEB’s product portfolio
in accordance with the definitions stipulated in Act No. 58/1995 Coll., on Insurance and Financing of Exports
with State Support (“Act No. 58/1995 Coll.”). A significant change was introduced by the Amendment to Act
No. 58/1995 Coll., as amended by Act No. 363/2022 Coll., eective from 1 December 2022, which extended
the export support concept to include support for increasing the international competitiveness of Czech
export-oriented companies, and the subsequent introduction of related products in CEB’s product oer at
the beginning of March 2023.
CEB’s long-term strategy is to use its supported financing products and products to increase the international
competitiveness to fill the market gap in export financing identified by Czech companies as applicants for
supported financing in their roles of manufacturers for export, exporters, export-oriented companies, or
foreign investors. The nature of the Czech export companies’ demand in 2023 reflected their specific needs
when realising export contracts, reinforcing their international competitiveness, or entering foreign markets
via foreign investments.
In 2023, growth in international trade remained low and its volume was reduced due to a decline in global
demand and the redirection of some trade flows. The factors behind this outcome were due to lower
international trade intensity given the higher share of consumption in domestic demand, but also to the
stabilisation of some factors related to the waning impact of the COVID-19 pandemic that contributed to the
growth in international trade in 2022. Companies continued to reduce their inventories of finished goods and
raw materials, partly due to weakening demand and partly due to the declining risk of supply disruptions.
These external influences naturally also had an impact on Czech exports, which were reduced in 2023.
Czech exports were aected by the stagnation of the eurozone economy as a whole in 2023; export-oriented
industrial production was particularly aected, with businesses facing a decline in new orders due to the
slowdown in global demand growth, inflationary pressures, and tighter financial conditions. For Czech
exports, the eects were particularly noticeable in the volume of exports of Czech intermediate products
to Germany, one of their key target markets.
Industrial production in the advanced countries stagnated at its pre-COVID-19 levels, and the manufacturing
industry saw a continued decline in its output. The Czech Republic failed to return to its 2019 pre-COVID-19
level. The domestic economy experienced a mild recession in 2023 and economic activity did not meet our
expectations, with one important export sector – the production of machinery and equipment – changing
from a steadily growing sector to a sector with the highest negative contribution during the second half
of 2023. The sector was still impacted by exports of assembled products that had to be stored or were
unfinished in the previous period.
During 2023, Czech export-oriented companies were exposed to inflationary pressures and price shocks
due to negative developments in the international security situation, particularly in the case of the oil price
reacting to the Hamas aack on Israel. The increase in the price of natural gas in Europe compared to other
parts of the world had a negative impact, which further negatively impacted the competitiveness of especially
the energy-intensive Czech industry. The continued Russian aggression against Ukraine had a persistent
negative impact on several Czech export-oriented companies for which these two export territories had
been important in prior periods.
30 2 Annual report
Growth in external demand and a return of export dynamics to long-term balanced levels are forecast for
2024. While the future development of Czech exporters of intermediate goods will be strongly correlated with
the demand of their long-term foreign customers, those Czech exporters who export final goods will benefit
significantly from the already existing diversification and the possibility of changing export destinations
according to the development of the economic situation in the export destination countries.
The new "Export Strategy of the Czech Republic for 2023–2033" approved by the Government of the Czech
Republic in July 2023 is crucial for the further direction of CEB's activities as one of the instruments of the
Czech Republic's national economic policy. This strategy emphasises both the concept of supporting export-
oriented companies and reinforcing the ambitions of Czech exporters, including improving their positions in
supply chains, and the need to oer products and services to Czech investors expanding abroad.
For 2024, international eorts to build a greener global economy can be expected to continue to stimulate
demand for environmentally sustainable products, while at the same time providing an impetus to reduce
demand for high carbon footprint goods and fossil fuels. Here, new opportunities should arise for both
Czech exporters and CEB to export innovative products and solutions. Between 2024 and 2026, CEB in
cooperation with other institutions in the system of state support for export and business and the commercial
banking sector, and in line with its medium-term strategy, will focus on supporting the increase of the added
value of the export-oriented sectors of the economy, the international competitiveness of Czech exports
and the international expansion of Czech investors in foreign markets, with an emphasis on supporting
companies in their transition to meeting the EU taxonomy and ESG objectives, thereby ensuring their future
competitiveness and aractiveness.
Evaluation of CEB’s results for 2023
As mentioned in the previous section, in insurance and export financing with state support, the possibilities
of export support have been expanded to include support for increasing the international competitiveness
of Czech export-oriented companies. The role of CEB in 2023 thus consisted not only in supporting
Czech exporters, export producers, and investors abroad with guarantee and credit products linked to
the existence of a specific export contract or a specific investment abroad, but also in supporting Czech
export-oriented companies with products to reinforce their international competitiveness. Although the
macroeconomic situation aecting Czech exports was not positive, CEB recorded an increase in the
satisfied demand for its products, while respecting CEB's conservative requirements for an acceptable
risk profile of transactions. For the Czech export sector, CEB strives to be a partner in both good and
more dicult times, responding flexibly to its needs in various aspects of the business and the life cycle
of business entities in the following areas:
• reinforcement of international competitiveness in the investment and operational area;
•
realisation of foreign business cases of Czech investors and credit financing of the needs of their
companies based abroad that meet the criteria defined in Act No. 58/1995 Coll.;
• acquisition of foreign contracts (non-payment guarantee as a necessary condition for the conclusion
of an export contract);
•
financing of the implementation of export contracts by loans for Czech manufacturers of goods intended
for export or exporters;
• acceleration of collections through purchases of receivables or loans provided to foreign customers.
In providing its products, CEB applies a non-discriminatory and non-preferential policy in relation to
Czech applicants for supported financing, in combination with a conservative policy of assessing the
creditworthiness of the entities and the risks of transactions, industries and territories as well as their limits.
In 2023, CEB continued its growth trajectory started in 2021. During 2023, CEB’s volume of supported
financing to Czech producers of goods intended for export, exporters, export-oriented companies, and
31 2 Annual report
investors investing abroad reached a total volume of CZK 6,837 million (Figure 1), which represents
a year-on-year increase of 36.74 % compared to the result of 2022, a year of significant growth. In terms
of numbers, CEB provided a total of 503 products in 2023 to support 19 Czech exporters, Czech producers
of goods intended for export, export-oriented companies, and Czech investors investing abroad.
Apart from the volumes reported, CEB also initiated / processed 16 export leers of credit in the total
volume of approximately CZK 5,262.59 milion, based on the requirements of 10 Czech exporters and their
foreign customers.
In 2023, the Bank’s transactions comprising insurance from EGAP represented approximately 8.21%
of the volume of CEB’s new products and 0.99% of the number of newly concluded contracts.
The Czech crown equivalent of the total volume drawn from loan contracts and purchased receivables
amounted to CZK 6,505 million in 2023.
From a territorial point of view, CEB’s support provided to Czech exporters and investors investing
abroad for the purpose of a successful realisation of their export contracts and investments abroad
that they were able to obtain and carry out in 2023 resulted in a relatively wide range of export target
countries according to the share of volumes of provided products. Given the nature of the product for the
support of the international competitiveness of export-oriented companies, where the parameter is not
the identification of export territory, but the share of export sales in total sales, the Czech Republic has
newly been recorded in the summary of countries as the registered oce of export-oriented companies
exporting to a number of territories (Table 1).
Volume of signed contracts between 1996 and 2023 (CZK million) – Figure 1
0
10000
20000
30000
40000
50000
8 702
5 813
2 770
15 413
19 213
27 736
15 626
9 813
17 281
19 164
19 933
19 415
20 513
25 109
43 787
25 766
26 249
8 519
10 026
4 039
2 025
4 299
5 610
3 752
989
2 120
5 000
6 837
Zdroj: ČEB
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
Source: CEB
32 2 Annual report
In terms of the number of contracts, the structure of the products provided (Figure 2) shows a substantial
proportion of products supporting accelerated collection from completed supplies, thanks to which the
dominant product in terms of frequency is the purchase of receivables, accounting for 92.05%, followed
by the non-payment guarantee with a share of 6.16%.
In terms of the volume of provided products (Figure 3), the newly launched product, the Direct Loan for
Increasing the International Competitiveness of Export-Oriented Companies, holds a dominant position
in CEB's results for 2023; the total volume of these loans was CZK 2,730.89 million (corresponding to
39.94% of the total volume of newly concluded contracts). The Direct Loan for Foreign Investments
product for two significant Czech groups operating on an international scale placed second with a share
of 25.59% and a volume of CZK 1,749.76 million. This trend towards reinforcing the positions of Czech
investments abroad in the form of direct loans for foreign investments fully complies with the conclusions
formulated in the export strategy of the Czech Republic and the strategy of support for export and the
internationalisation of companies for the 2023 to 2033 period.
The remaining 34.46% of the volume of provided products comprises:
• products relating to the acceleration of collections, specifically purchases of receivables and direct
export customer loans totalling CZK 1,714.21 million;
•
products relating to the acquisition and implementation of export contracts of the non-payment
guarantee type totalling CZK 642 million.
Share of export target countries by volume of new contracts concluded in
2023 – Table
Share of the supported financing products in the number of products provided in 2023 – Figure 2
Czech Republic , Hungary ,
Italy , Cyprus ,
Germany , Rwanda ,
Indonesia , Egypt ,
Republic of Kosovo , Kazakhstan ,
Senegal , Nigeria ,
Bulgaria , Vietnam ,
Mauritius , India ,
Algeria , Source: CEB
0,40% Přímý vývozní odběratelský úvěr
0,40% Přímý úvěr na investice v zahraničí
0,99% Přímý úvěr na zvyšování
mezinárodní konkurenceschopnosti
6,16% Neplatební záruka
92,05% Odkup dílčí
Zdroj: ČEB
Source: CEB
Direct export customer loan
Direct loan for foreign investments
Direct loan for increasing
international competitiveness
Non-payment guarantee
Partial purchase
33 2 Annual report
In terms of currency structure (Figure 4), the dominant currency in 2023 was again the euro with a share
of 72.49 %, followed by the Czech crown with a share of 18.52% thanks to the interest of Czech companies
in financing in CZK. The US dollar placed third with a share of 8.99%.
In a year-on-year comparison (Figure 5), we can clearly see the success of products for financing the
international competitiveness of export-oriented companies, which since their launch in March 2023 went
from zero to a volume of over CZK 2,730.89 million. Significant growth was also recorded in the purchases
of receivables, whose volume more than doubled year-on-year, which shows their contribution to the
acceleration of collection of Czech export companies. Although the volume of loans for foreign investments
for 2023 recorded a decline of approximately 45%, it is still a significant achievement continuing from
2022. Given the trends of prior years, the increase in the volume of export customer loans was a success.
Currency structure of new transactions volume in 2023 – Figure 4
Share of the supported financing products in the volume of products (in CZK) provided in 2023 –
Figure 3
8,99% USD
18,52% CZK
72,49% EUR
Zdroj: ČEB
Source: CEB
8,13% Přímý vývozní odběratelský úvěr
9,39% Neplatební záruka
16,94% Odkup dílčí
25,59% Přímý úvěr na investice v zahraničí
39,94% Přímý úvěr na zvyšování mezinárodní
konkurenceschopnosti
Zdroj: ČEB
Source: CEB
Direct export customer loan
Non-payment guarantee
Partial purchase
Direct loan for foreign investments
Direct loan for increasing international
competitiveness
34 2 Annual report
In terms of the number of products, in a year-on-year comparison (Figure 6) the most significant continued
increase is in the number of purchases of receivables, partly due to a wider use of framework agreements
for purchases of receivables, which has considerably boosted the flexibility in providing this product and
significantly accelerated services provided to Czech exporters.
Another important product in terms of the number of concluded contracts was the non-payment guarantee,
which helps Czech exporters gain export contracts and is of key importance for their success in international
trade.
Year-on-year comparison of the development of the volume of new products (CZK million) – Figure 5
Year-on-year comparison of the development of the number of new products (pcs) – Figure 6
Zdroj: ČEB
0
500
1000
1500
2000
2500
3000
3500
1 749
642
1 158
0
556
2 730
3 184
879
558
235
114
25
3
0
2022 2023
Přímý úvěr
na zvyšování
mezinárodní
konkurenceschopnosti
Potvrzení
akreditivu
Přímý vývozní
dodavatelský
úvěr
Přímý vývozní
odběratelský
úvěr
Úvěr na
financování
výroby pro vývoz
Odkup
pohledávek
Neplatební
záruka
Přímý úvěr
na investice
v zahraničí
0
0
Source: CEB
Direct loan
for foreign
investments
Non
Payment
guarantee
Purchase of
receivables
Loan to
finance export
manufacturing
Direct
export
customer
loan
Direct export
supplier loan
Confirmation
of a leer of
credit
Direct loan
for increasing
international
competitiveness
Zdroj: ČEB
0
100
200
300
400
500
2
31
463
0
2
0
0
5
4
72
408
4
2
4
1
0
Přímý úvěr
na zvyšování
mezinárodní
konkurenceschopnosti
Potvrzení
akreditivu
Přímý vývozní
dodavatelský
úvěr
Přímý vývozní
odběratelský
úvěr
Úvěr na
financování
výroby pro vývoz
Odkup
pohledávek
Neplatební
záruka
Přímý úvěr
na investice
v zahraničí
2022 2023
Zdroj: ČEB
0
500
1000
1500
2000
2500
3000
3500
1 749
642
1 158
0
556
2 730
3 184
879
558
235
114
25
3
0
2022 2023
Přímý úvěr
na zvyšování
mezinárodní
konkurenceschopnosti
Potvrzení
akreditivu
Přímý vývozní
dodavatelský
úvěr
Přímý vývozní
odběratelský
úvěr
Úvěr na
financování
výroby pro vývoz
Odkup
pohledávek
Neplatební
záruka
Přímý úvěr
na investice
v zahraničí
0
0
Direct loan
for foreign
investments
Non
Payment
guarantee
Purchase of
receivables
Loan to
finance export
manufacturing
Direct
export
customer
loan
Direct export
supplier loan
Confirmation
of a leer of
credit
Direct loan
for increasing
international
competitiveness
Source: CEB
35 2 Annual report
2.1.2 Development in the credit portfolio balance and structure
The total principal amount of provided loans and purchased receivables increased year-on-year by CZK
3,253 million to CZK 19,257 million, i.e., by 20.3% as at 31 December 2023 (Figure 7).
The main factors for this development are higher volumes of new contracts concluded in 2022 and 2023,
a significantly higher use of loans of CZK 6,505 million in 2023, and partly also a mild weakening of the
exchange rate of the Czech crown to the euro.
As at 31 December 2023, the total principal amount of provided loans and purchased receivables
represented 57% of total assets.
In terms of the currency structure of the principal amount of provided loans, based on a translation to
CZK, the dominant currency as in previous years was the euro (Figure 8). The share of loans denominated
in EUR was 81.59% as at 31 December 2023, and their share increased by 23.90% year-on-year due to
the significantly positive balance between the volume of drawing and paying the loans.
The share of loans denominated in USD of the total principal amount of provided loans equals 14.85%,
which is a 13.96% decrease year-on-year due to negative balance between the volume of drawing and
paying the loans. CZK appears again in the currency structure of the principal amount of provided loans
after two years with a share of 3.56% as a result of the realised purchases of receivables denominated
in CZK.
Loan balance (principal) 1996–2023 (CZK million)
– Figure 7
Zdroj: ČEB
3 675
7 732
8 481
12 642
18 721
18 106
18 970
21 071
22 222
20 241
17 797
23 824
32 348
40 797
56 968
66 219
68 523
82 363
86 072
79 933
71 083
54 440
46 060
37 769
30 644
22 964
16 004
19 257
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
Source: CEB
36 2 Annual report
Looking at the structure of the principal of provided loans by the contractual maturity of loans (Figure 9),
the share of short-term loans increased by 38.15% year-on-year and reached 8.97%, which is related to
the newly provided loans to reinforce international competitiveness of export-oriented companies with
a 12-month maturity and with the increase in the volume of purchased short-term receivables. From a
year-on-year perspective, the structure remained without any significant changes in other categories.
Long-term loan products provided in previous periods continue to dominate significantly.
Loan portfolio – currency structure – development of shares over the years – Figure 8
Loan portfolio – broken down by contractual maturity as at 31 December 2023 – Figure 9
Zdroj: ČEB
0
20%
40%
60%
80%
100%
2023/12
2022/12
2021/12
2020/12
2019/12
2018/12
2017/12
2016/12
2015/12
2014/12
2013/12
2012/12
2011/12
2010/12
2009/12
2008/12
2007/12
CZK USD EUR Source: CEB
Zdroj: ČEB
76,82% dlouhodobý (více než 5 roků)
6,81% střednědobý (více než 4 roky až 5 roků včetně)
3,80% střednědobý (více než 2 roky až 4 roky včetně)
3,60% střednědobý (více než 1 rok až 2 roky včetně)
8,97% krátkodobý (do 1 roku včetně)
Source: CEB
Medium-term (1–2 years)
Medium-term (2–4 years)
Medium-term (4–5 years)
Short-term (up to 1 year)
Long-term (more than 5 years)
37 2 Annual report
2.1.3 Newly introduced products and activities
In compliance with the objectives of the economic policy of the Czech Republic and the newly approved
export strategy of the Czech Republic 2023–2033, CEB’s mission as a specialised banking institution is to
support increases in the added value of export-oriented economy sectors, the international competitiveness
of the Czech export, and the international expansion of Czech investors in foreign markets. As the
domestic Export Credit Agency (ECA), CEB oers products and services to Czech producers and exporters
that allow them to be part of the competition for specific contracts on the international market under
conditions comparable to those of foreign competitors from OECD countries. The Bank oers products
and services to Czech foreign investors that allow for the internationalisation of their business activities
through investments on international markets.
CEB's product oer is derived primarily from the provisions of Act No. 58/1995 Coll. on Insurance and
Financing of Exports with State Support. The core supported financing products provided by CEB mainly
include short-term and long-term export loans, loans for the funding export production, loans for foreign
investments, and bank guarantees, and purchase of receivables. These products mainly focus on the “life
cycle” of the export transactions, i.e., on the activities connected with the existence of a specific export
contract (with the exception of loans for foreign investments and guarantees for a bid).
One of CEB's long-term strategic objectives is to further develop its product portfolio and adjust its
product range to be comparable with developed foreign Export Credit Agencies (ECAs), which must be
considered CEB's main competitors. In this context, the past two years can be described as breakthrough
years. Thanks to intensive cooperation of the Ministry of Industry and Trade, the Ministry of Finance,
professional associations, chambers, and associations representing the interests of export-oriented
companies, CEB, and EGAP, an amendment to Act No. 58/1995 Coll., as amendment by Act No. 363/2022
Coll., was prepared and approved. It came into eect on 1 December 2022. This amendment enables the
Bank to oer product solutions for meeting the needs in the field of investments in increasing export
capabilities, export potential and international competitiveness of Czech export-oriented companies.
The ability to maintain and further increase the international competitiveness of Czech export-oriented
companies (i.e., not first-time exporters but companies with export experience) is of key importance with
regard to the challenges to which the Czech open and export-oriented economy is exposed. In March
2023, CEB introduced brand new products aimed at supporting Czech export-oriented companies whose
export comprises at least one fourth of their annual sales and which want to strengthen their international
competitiveness. The newly introduced products make it possible to meet the needs of export-oriented
companies in areas such as investments in automation and digitalisation, energy intensity reduction,
production greening, purchase of key raw materials and subcontracts. In 2023, the newly introduced
products comprised almost 40% of the loans granted. The CEB's product oer is now similar to that of
foreign export banks and agencies that support exports in competing economies.
Despite the above-mentioned significant change of CEB's product oer, it is essential that the Bank remains
active in this area. CEB will therefore continue to analyse and propose other directions and options for
extending the product oer in cooperation with business organisations, chambers, and associations, and
to further specify its services. In servicing the segment of small and medium-sized enterprises (SMEs),
CEB will cooperate with the National Development Bank (NDB) to eectively cover the needs of export-
oriented SMEs.
38 2 Annual report
The support of strategic economy sectors
such as the energy, nuclear power, aviation,
and the defence and security industries
ranks highly among our priorities. We are not
in competition with the commercial banking
sector, but we complement it in many cases.
We are prepared to oer clients a solution
where commercial banks cannot oer one
due to corporate policies. We are by no
means a bank of last resort. We only finance
creditworthy transactions with a good credit
profile.
Ing. Daniel Krumpolc
Chairman of the Board of Directors and Chief Executive Ocer
of Česká exportní banka, a.s.
39 2 Annual report
2.2 Financial results, balance of assets and liabilities
Balance of assets and liabilities
The Bank’s total assets amounted to CZK 33,856 million at the end of 2023, which represents a year-on-
year increase of 4.3%. The balance sheet structure has been stable in the long term. The balance sheet
items are derived from the planned estimate of the development in asset transactions to which liabilities
are adjusted.
Liabilities and equity
The Bank finances its business activities mainly through liabilities in the form of issued bonds, payables
to credit institutions, and to entities other than credit institutions, which represent over 70% of the total
volume of its liabilities.
The key source of funding are bonds issued in EUR. As at 31 December 2023, they amounted to
CZK 15,913 million. The volume of issues thus increased by 2.6% year-on-year.
Liabilities to credit institutions in the form of loans received from banks amounted to CZK 5,508 million,
which is a year-on-year increase of 1.3%. The volume of deposits received from entities other than credit
institutions was CZK 2,407 million, which is a year-on-year decrease of 1.4%.
Other liabilities of CZK 650 million mainly include financial collaterals accepted as a security
(CZK 506 million) and liabilities from leases of oce premises (CZK 53 million). As at 31 December 2023,
provisions of CZK 189 million mainly included provisions for issued guarantees of CZK 52 million, provisions
for loan commitments of CZK 42 million, and provisions for litigation of CZK 75 million.
The Bank reported equity in the total volume of CZK 9,096 million. Equity comprised a reserve fund
and other special funds (export risk fund) of CZK 2,695 million, retained earnings of CZK 608 million,
and 2023 profit to be distributed of CZK 800 million. Share capital remained unchanged at a level of
CZK 5,000 million.
LIABILITIES AND EQUITY
(in CZK million) Year-on-year
index in
Financial liabilities at amortised cost ,
of which: Payables to credit institutions ,
Payables to entities other than credit institutions ,
Payables from issued debt securities ,
Other liabilities ,
Provisions ,
Current tax liabilities ,
Total liabilities ,
Share capital ,
Revaluation reserve () () ,
Retained earnings or accumulated loss from prior periods -
Reserve funds ,
Other special funds ,
Profit or loss for the year ,
Total equity ,
Total liabilities ,
40 2 Annual report
Assets
Assets primarily include loans and other receivables at amortised cost, which amounted to
CZK 30,032 million as at 31 December 2023 and accounted for 89% of total assets. Of this amount,
CZK 19,186 million are receivables from entities other than credit institutions, which increased by 21.4%
year-on-year, mainly due to a higher volume of loan transactions concluded in the prior two years and
the use of loans in 2023 of CZK 6,505 million. Receivables due from credit institution comprising cash
deposited on fixed-term accounts of Czech government treasury opened at Czech National Bank of
CZK 6,184 million, fixed-term accounts with other credit institutions of CZK 3,024 million and reverse
repurchase agreements with the Czech National Bank of CZK 1,637 million, increased by 11% in 2023 to
CZK 10,846 million.
Part of funds from equity and temporarily available funds were allocated to high-quality and liquid local
and foreign securities in the past. The volume of the Bank's liquidity reserve held in securities totalled
CZK 1,129 million at year-end, i.e., a decrease of 44%.
In accordance with the amendment to Act No. 58/1995 Coll., on Insurance and Financing of Exports with
State Support, eective since the end of April 2020, the Bank deposits available funds denominated
in EUR and non-invested equity funds denominated in CZK predominantly on accounts of Czech
government treasury maintained by the Czech National Bank. At Czech government treasury was deposited
CZK 456 million (of which CZK 453 million in EUR and CZK 3 in CZK) on its current accounts and
CZK 6,184 million on its fixed-term accounts maturing within one year.
Total equity and liabilities 2023
Development in principal categories of liabilities and equity in 2023 / 2022
Zdroj: ČEB
15 516
2 442
5 435
8 285
795
15 913
2 407
5 508
9 096
932
Jiné závazky
Vlastní kapitál celkem
Závazky vůči
úvěrovým institucím
Závazky vůči
neúvěrovým institucím
Závazky z emitovaných
dluhových cenných papírů
2023 2022
Payables from issued
debt securities
Payables to entities other
than credit institutions
Payables to
credit institutions
Total equity
Other liabilities
Source: CEB
Zdroj: ČEB
3% Jiné závazky
27% Vlastní kapitál celkem
16% Závazky vůči úvěrovým institucím
7% Závazky vůči neúvěrovým institucím
47% Závazky z emitovaných dluhových cenných papírů
Source: CEB
Other liabilities
Payables to entities other than credit institutions
Payables to credit institutions
Total equity
Payables from issued debt securities
41 2 Annual report
Cash, deposits with central banks, and other deposits repayable on demand of CZK 613 million thus mainly
include money deposited on CZK and EUR current accounts of Czech government treasury maintained
by Czech National Bank, and money on nostro accounts of other banks used for payments.
Other assets totalling CZK 1,962 million mainly include expected insurance payments for assigned loans
(CZK 1,942 million).
Assets 2023
ASSETS
(in CZK million) Year-on-year
index in
Cash in hand, deposits with the central banks and other deposits
repayable on demand ,
Debt securities at fair value recognised in Other comprehensive
income ,
Financial assets at amortised cost ,
of which: Debt securities at amortised cost ,
Loans and receivables at amortised cost ,
of which: Receivables from credit institutions ,
Receivables from entities other than credit institutions ,
Property, plant and equipment ,
Intangible assets ,
Other assets ,
Deferred tax asset ,
Total assets ,
8% Jiné
2% Dluhové cenné papíry v naběhlé hodnotě
1% Dluhové cenné papíry v reálné hodnotě
32% Pohledávky vůči úvěrovým institucím
57% Pohledávky vůči neúvěrovým institucím
Zdroj: ČEB
Source: CEB
Debt securities at fair value
Debt securities at amortised cost
Other
Receivables from credit institutions
Receivables from entities other than credit institutions
42 2 Annual report
Result of operations
In 2023, the Bank generated profit before tax of CZK 974 million. After considering the preliminary current
income tax, the Bank generated profit after tax of CZK 800 million, which is a year-on-year increase of 25%.
As part of its business activities, the Bank reported interest income of CZK 1,644 million in 2023, a year-
on-year increase of 82%, which correlates with the growing volume of interest-bearing assets, in particular
loans (as at 31 December 2023, the loan principal amount was CZK 19,257 million, a year-on-year increase
of 20%). The increase has been caused by higher volumes of provided loans and their drawings, growing
market interest rates, and higher income from funds deposited at Czech government treasury. Interest
income from provided loans, including purchases of receivables, amounted to CZK 1,065 million, from
interbank deposits, including those at Czech government treasury, of CZK 389 million, and from reverse
repo transactions with the Czech National Bank of CZK 132 million.
Interest expense amounted to CZK 532 million, a year-on-year increase of 111 %, which was primarily
increased by higher market interest rates. The expenses mainly relate to raising funds on the financial
markets, especially in the form of foreign currency bond issues. Net interest income amounted to
CZK 1,112 million, which is a year-on-year increase of 71%.
Net fee and commission income amounted to CZK 31 million, which is a year-on-year decline of 16% despite
higher income from issued guarantees. The decline results from lower fee income from loan agreements.
Another component of the profit/loss is the profit from financial operations of CZK 2 million.
The Bank incurred operating expenses for its operation of CZK 306 million, which is 1% more than in
2022. In addition to administrative expenses of CZK 256 million, operating expenses include depreciation/
amortisation of tangible and intangible assets of CZK 37 million and other operating expenses of
CZK 13 million. Other operating expenses mainly include expenses incurred in the collection of risky
receivables of CZK 2 million in 2023, and an unrecoverable portion of VAT.
Impairment losses on financial assets reached a positive amount (i.e. gain) of CZK 133 million while
the cost of loss allowances amounted to CZK 24 million. The profit is than generated by income
from wrien-o/ sold receivables. At the same time, provisions for loan and guarantee portfolio of
CZK 1 million were released. The low creation of loss allowances and provisions was also caused by resolving
the portfolio of risky receivables, whose volume of principal amounts declined to CZK 201 million as at
31 December 2023 and their share in the total portfolio amounted to just 1.04%.
Development in principal categories of assets in 2023 / 2022
Zdroj: ČEB
15 802
9 773
1 234
776
4 888
19 186
10 846
230
899
2 695
Jiné
Dluhové cenné papíry
v naběhlé hodnotě
Dluhové cenné papíry
v reálné hodnotě
Pohledávky vůči
úvěrovým institucím
Pohledávky vůči
neúvěrovým institucím
2023 2022
Receivables from entities
other than credit institutions
Receivables from credit
institutions
Debt securities at fair
value
Debt securities
at amortised cost
Other
Source: CEB
43 2 Annual report
2.3 Strategic targets of Česká exportní banka, a.s. in the business
and financial area
CEB’s strategic targets in the business and financial area are primarily as follows:
•
to be actively involved in the transformation of the Czech economy into an economy built on innovation,
added value, final products, and environmental responsibility;
•
to support transactions with a good credit profile, and thus contribute to the compliance with the
Export Strategy of the Czech Republic for the 2023 to 2033 period, in particular in the market gap to
increase the volume of supported export and investments under the conditions of achieving adequate
profitability without impacting the Czech state budget;
•
to support strategic segments of the economy, including the defence and security industry and
nuclear power industry, which have largely limited access to financing due to the corporate policies
of commercial banks;
•
to support the traditional segments of the aviation industry, transportation, energy industry, and
infrastructure, as well as industrial companies in their transition from the role of a subcontractor to
the role of the final product producer;
•
to support companies gradually implementing a sustainability concept or responsible behaviour in relation
to environmental, social, and corporate governance (ESG) in their activities, including decarbonisation,
greening and reduction of energy intensity (i.e. support ESG transition);
•
to support growth segments of the economy with high added value, such as ICT, software, e-commerce,
health care sector, biomedicine, environmental solutions, logistics, food industry, and agriculture (the
4.0 trend in industry);
The loss arising from the operation of long-term supported export financing in line with Act No. 58/1995
Coll. is covered by subsidies from the state budget. In 2023, the Bank did not assert its claim to the
subsidy; instead, it generated a profit from this activity of CZK 831.7 million, which is part of the Bank’s
total profit before tax.
PROFIT/LOSS
(in CZK million) Year-on-year
index in
Interest income ,
of which: Interest income calculated using the eective
interest rate ,
Interest expense () () ,
Net interest income ,
Fee and commission income ,
Fee and commission expense () () ,
Net profit/loss from financial transactions including state
subsidy () -
Other operating income ,
Other operating costs () () ,
Administrative expenses () () ,
Depreciation and amortisation () () ,
Modification gains and losses ,
Impairment losses on financial assets not reported at fair
value through P/L or their reversal ,
Provisions for provided guarantees and commitments or
their reversal () -
Other provisions or their reversal ,
Profit or (loss) before tax ,
Income tax () -
Profit or loss for the reporting period ,
44 2 Annual report
•
to deepen its role of a competence centre in export financing, to strengthen the expertise of the
institution, and specialised know-how in customer loans, financing of security industry, sovereign
debtors, structured, acquisition and trade finance;
• to supplement the commercial banking sector’s oer in specific segments and transactions with its
products and services;
• to act as a reliable partner of commercial banks in club and syndicated financing;
•
to develop relations with foreign banks, entities supporting export, export agencies, and other
professional or sector-specific foreign organisations and partners as part of territorial diversification
of export outside the European Union;
• to generate profit before tax and maintain the bank's capital adequacy in relation to regulatory limits,
in particular for capital ratios and large exposures;
• in connection with business activities, to achieve such volume of principals of loan products, which
can generate sucient income.
In 2024, CEB’s activities, its business, and financial position will be primarily aected by the below
factors:
•
the geopolitical situation, the deteriorating security situation threatening the functioning of global
supply and customer chains, and the availability and price of raw materials;
•
ongoing changes in the global economy, including the shortening of supply chains, an increasing
emphasis on strategic self-suciency, raw material and subcontracting security, the risk of protectionism,
the key role of the sustainability concept (ESG), and the ongoing digitalisation and automation;
•
the results of the presidential election in the US and EU elections to the European Parliament aecting
the economic and security policy and regulation (e.g., in ESG issues);
• the development of the Czech economy and business environment following measures relating to;
•
the consolidation of public finances and the monetary policy of the Czech National Bank and European
central bank;
• the implementation of relevant procedures in the risk management system in compliance with ESG
regulations governing environmental, social, and corporate governance;
• the increase in the share of digital technologies in servicing clients as part of streamlining the bank's
internal processes;
•
the implementation of Resolution No. 909 of 29 November 2023 by which the Government of the Czech
Republic decided to initiate the integration process of the National Development Bank and Česká
exportní banka, a.s., based on which CEB is to become a wholly-owned subsidiary of the National
Development Bank (as of May 2026).
2.4 Risks to which the Bank is exposed, objectives and methods of
risk management
Risk factors
The risk management concept in the Bank in all risk management segments builds on the rules of prudent
operation determined by the regulator. In its risk management, the Bank traditionally adheres to the
principle of a limited risk profile, which is based on the system of internal limits for individual types of
risks, products, and debtors.
The risk management process in the Bank is independent of its business units. The executive unit for risk
management is the Risk Management Division. The Credit Risk Management and Loan Analysis Section
has been charged with managing credit risk in relation to assessing the credit risk of counterparties and
performing analyses of individual transactions. The Banking Risk Management Department manages
credit risk at the portfolio level, market risks, operational risks, liquidity risks and concentration risks. The
risk management process is supervised by the Bank’s Board of Directors, which is regularly informed
45 2 Annual report
about risk exposures. The Board of Directors determines and regularly assesses the acceptable level
of risk, including credit risk, market risk, operational risk, concentration risk and the risk of liquidity and
excessive leverage.
In order to comply with the statutory duty in the planning and on-going maintenance of the internally
determined capital in the amount, structure and distribution that is sucient to cover all risks to which
the Bank is or may be exposed, the Bank maintains the Internal Capital Adequacy Assessment Process
(ICAAP). Methods used to assess and measure individual risks included in the ICAAP that are used
by the Bank in relation to its risk profile are approved by the Board of Directors. Quantifiable risks are
assessed in the form of internally determined capital needs. Other risks as part of the ICAAP are covered
by qualitative measures in risk management, organisation of processes and control mechanisms (Code
of Ethics, communication policy, etc.). The internal capital adequacy in 2023 was sucient to cover the
risks to which the Bank is exposed.
The Bank makes use of the Internal Liquidity Adequacy Assessment Process (ILAAP) system. The system
is used to meet the requirements for maintaining a reliable and specific framework for the management
of liquidity and financing risks, including the process of identifying, measuring, and reviewing liquidity
and financing risks.
During 2023, the Bank did not exceed the limit for large exposures. At the end of 2023, the Bank did not
exceed any regulatory limit.
Individual types of risks are managed by the Bank in line with applicable legislation, the Bank’s regulations
and the best practice.
2.4.1 Credit risk
Credit risk, i.e. the risk of losses owing to a counterparty’s default in meeting its obligations under a credit
agreement based on which the Bank has become the contractual party’s creditor, is managed by the
following credit risk evaluation system:
• Debtor’s risk management
— Assessing and monitoring the debtor’s credit rating and determining the debtor’s internal rating
— Monitoring the relations of entities and the structure of financially related entities
— Determining the limit applicable to the debtor or a financially related group of entities
— Monitoring credit exposure with respect to entities or financially- or otherwise-related groups of
entities
— Classifying receivables, and creation of loss allowances and provisions.
• Transaction risk management
—
Assessing and monitoring specific transaction risks, particularly in terms of the quality of collateral
and determining the acceptable level of collateral
— Regular on-site visits.
• Portfolio credit risk management
— Monitoring portfolio credit risk
— Regular stress testing of portfolio credit risk
— Determining limits to mitigate portfolio credit risk.
• Credit risk concentration management
— Concentration risk in CEB principally arises from credit risk concentration
— Monitoring credit risk concentration in terms of the debtor’s country of the registered oce and
industry
— Seing limits to mitigate credit risk concentration.
46 2 Annual report
To minimise credit risk in providing supported financing, CEB employs standard banking credit risk
mitigation techniques, such as EGAP credit risk insurance. At present, CEB uses no credit derivatives to
minimise credit risk.
For credit risk and concentration risk, CEB maintains an established management system that monitors
the exposures on a daily basis, comparing them against limits designated by the regulator or derived
from acceptable risk levels.
The results of credit portfolio analyses, including the results of the stress testing of portfolio credit risk,
are submied, on a regular basis, to the senior managers in charge of risk management.
2.4.2 Market risk
Market risk is the risk of suering losses owing to changes in market factors, i.e. market prices, exchange
rates and interest rates on financial markets. Market risk management in CEB is a process that includes
defining, measuring and an on-going review of the application of limits, and analysing and regularly
reporting individual risks to CEB’s Treasury, commiees, and management so as to manage negative
financial impacts potentially resulting from these changes in market prices.
CEB is not exposed to risk on shares and commodity risk. To manage foreign currency risk and interest
rate risk, CEB uses the following methods:
• Interest rate risk management
— GAP analysis
— Change in Net Interest Income – NII.
• Currency risk management
— Analysis of currency sensitivity factors.
• Aggregate market risk management
—
Economic Value of Equity (EVE) – CEB uses the standard method (according to the Interest rate risk
in the banking book standard of April 2016 prepared by Basel Commiee on Banking Supervision,
respecting the update to regulations issued by the European Banking Authority on market risks –
the document EBA/GL/2018/02 Guidelines on the management of interest rate risk arising from
non-trading book activities).
To minimise currency and interest rate risks, CEB currently uses forward and swap transactions.
To manage market risk, CEB maintains an established management system that monitors risk exposure
on a daily basis, comparing it against limits derived from acceptable risk levels.
2.4.3 Refinancing risk
To monitor refinancing risk, the Bank measures the impact on the Bank’s profit/loss account of increased
interest expenses arising from an increased credit spread that the Bank would have to incur to become
suciently liquid during the global downturn. The above measurement also serves to manage the impact
of the risk of credit interest rate spread.
Refinancing risk is managed by means of a suitable funding structure, mainly in terms of maturities and
volumes of funds.
47 2 Annual report
2.4.4 Liquidity risk
To manage liquidity risk, CEB maintains an established management system that monitors the liquidity
status and outlook on a daily basis, comparing them against the limits set. The basic pre-condition of
liquidity risk management involves securing survival for at least two months.
• Liquidity risk is managed by:
—
Measuring and comparing the inflow and outflow of cash, i.e., monitoring net cash flows for a period
at least five working days in advance
— Measuring and limiting the minimum survival period in individual significant currencies and in total
for the Bank
— Quarterly measurements using stress scenarios
— Maintaining the liquidity coverage ratio
— Maintaining the net stable funding ratio
— Gap analyses that measure the maximum cumulated outflow of cash in individual currencies and
time gaps.
CEB maintains a sucient liquidity reserve predominantly in the form of highly liquid securities and
exposures to the Czech National Bank. To deal with liquidity problems under extraordinary circumstances,
CEB has emergency plans in place. In 2023, CEB had no problems ensuring sucient liquidity.
2.4.5 Operational risk
CEB manages the risk of losses arising from the inappropriateness or failure of internal processes, human
error, failures of systems, the impact of external events (e.g. natural disasters), and the breach of or
non-compliance with legal regulations. The key tool CEB uses to manage its operational risk is the early
warning system, which is based on a system of risk indicators and warning limits that signal the greater
probability of the occurrence of certain operational risks.
In 2023, the Bank updated its assessment of operational risks in the individual divisions on an on-going
basis in the form of self-assessment.
The instances of operational risks were not significant in terms of the volume, amount and impact on
Bank's operations in 2023.
2.4.6 Capital adequacy and capital requirements
CZK million
Capital
Tier (T) capital
Common equity tier (CET) capital
CET capital instruments
Accumulated other comprehensive income (OCI) and other provisions
Retained earnings
Adjustments of the CET capital due to the utilisation of prudential filters
(-) Other intangible assets
Other temporary adjustments of the CET capital
Other deductions from the CET capital – methodology changes (transition to IFRS )
48 2 Annual report
CZK million
Risk
exposures
Capital
requirement
TOTAL
Total risk-weighted exposures in respect of credit risk under STA
Exposures to central governments or central banks
Exposures to institutions
Exposures to corporates
Exposures in default
Other exposures
Total risk exposures in respect of position, foreign currency and commodity risks
– currency transactions
Total risk exposures in respect of operational risk – BIA
Risk exposures in respect of credit valuation adjustment
– standardised method
CZK million
Capital ratios
CET capital ratio ,
Surplus () / shortage (-) of the CET capital
T capital ratio ,
Surplus () / shortage (-) of the T capital
Total capital ratio ,
Total capital surplus () / shortage (-)
Total capital ratio SREP (TSCR) 15,600%
TSCR – comprising CET1 capital 8,775%
TSCR – comprising T1 capital 11,700%
Overall capital requirement (OCR) 19,983%
OCR – comprising CET1 capital 13,158%
OCR – comprising T1 capital 16,083%
Overall capital requirement (OCR) and the recommended capital planning reserve (P2G)) 19,983%
OCR and P2G – comprising CET1 capital 13,158%
OCR and P2G – comprising T1 capital 16,083%
2.4.7 Risk factors potentially aecting the capacity of the Bank to meet its
obligations to investors arising from securities
The Bank’s ability to meet its obligations from issued bonds to investors is unconditionally and irrevocably
guaranteed by the state pursuant to Act No. 58/1995 Coll., on Insurance and Financing Exports with State
Support.
2.5 Corporate governance report
2.5.1 Information on codes
The Corporate Governance Code of Česká exportní banka, a.s. (KOD 01) (the “Code”) is based on
the OECD principles. Deviations from the Code’s principles are disclosed in the text. The Corporate
49 2 Annual report
Governance Code of Česká exportní banka, a.s. is publicly available in Czech on CEB’s website:
hps://www.ceb.cz/o-bance/kodexy/.
The Bank’s principles of corporate governance build on the OECD general principles of corporate
governance whereby neither the Bank’s legal position nor the shareholder structure are modified by the
main principles. CEB’s governance is based on the main pillars listed below:
Fair Treatment of Shareholders
The Bank honours the rule of the equal treatment of shareholders of the same class, pursuant to Act No.
90/2012 Coll., on Business Corporations and Cooperatives (the Business Corporations Act). CEB is aware of
the risk of potential misuse of the information on its activities, particularly information on the transactions
being prepared, both by its employees and members of the Board of Directors and the Supervisory Board.
CEB has issued, and permanently monitors adherence to, the Employee Code of Ethics (KOD 02), which
is available at CEB’s website: hps://www.ceb.cz/o-bance/kodexy.
CEB considers it crucial that the entire decision-making be not influenced by the potential interests of
persons with the decision-making powers who are engaged in the decision-making process, i.e. Board of
Directors or Supervisory Board members. Should this be the case, these persons are therefore obliged
to announce, prior to the commencement of the decision-making process, that they have an interest in
its result, and abstain from taking part in the decision-making process.
Disclosures and Transparency
CEB meets the statutory reporting duty, under which primary emphasis is placed upon a timely, accessible,
and balanced disclosures concerning CEB's current activities as well as anticipated development. The
information is rendered to the business community, public administration bodies, employees, and other
stakeholders. Providing the aforementioned information on a regular basis is considered by CEB to be
an ecient instrument not only for meeting its statutory obligations but mainly for establishing a good
reputation. With respect to information disclosures, CEB strictly adheres to the relevant statutory provisions
concerning bank and business secrets.
Responsibility of the Board of Directors and Supervisory Board of CEB
The exact definition of the powers of the Board of Directors and the Supervisory Board is part of the
Bank’s Articles of Association, which are available in the Collection of Deeds of the Commercial Register
held by the Municipal Court in Prague. The Board of Directors’ composition, manner of decision-making
and powers are provided for by the Bank’s Articles of Association. The Bank’s Board of Directors has the
responsibility towards the shareholders for:
a) the strategic management of CEB reflected in the security, business and HR policies, the risk
management strategy, the remuneration policy and the compliance policy, with senior managers
responsible for their implementation;
b) the establishment and assessment of the management and control system, and for permanently
maintaining its functionality, eectiveness and eciency;
c) statutory compliance of the management and control system and for providing related activities
with due professional care;
d) establishing principles of human resources management including the requirements for qualification,
experience and knowledge for individual positions and the manner in which they are to be
demonstrated and verified.
50 2 Annual report
The Supervisory Board’s composition, manner of decision-making and powers are provided for by the
Bank’s Articles of Association. The Supervisory Board oversees the exercise of the Board of Directors’
powers as well as realisation of CEB's business activities. In particular, the Supervisory Board:
a) supervises as to whether the management and control system is functional and ecient and
performs the system’s regular assessment;
b) regularly debates the strategic direction of CEB as well as maers concerning the regulation of
the risks to which CEB is or may be exposed;
c) participates in directing; planning and assessing the internal audit activities and assesses
compliance;
d) approves and regularly assesses the summary remuneration principles for selected groups of
employees whose activities significantly aect CEB's overall risk profile.
Pursuant to Act No. 93/2009, on Auditors, the Bank has established the Audit Commiee whose position
and powers are provided for by the Bank’s Articles of Association.
2.5.2 Shareholder rights
The Bank’s shares have been issued in the registered book-entry form and are not tradeable. The list of
shareholders replaces the records of book-entered securities maintained by the Central Depositary in
the Central Records of Securities. One vote belongs to every million of CEB's share nominal value; a total
of 5,000 votes are divided among all CEB's shares. At least two thirds of CEB’s shares must be held by
the Czech Republic, which executes the shareholder rights through the Ministry of Finance of the Czech
Republic. The exercise of the voting right by a shareholder is carried out mainly by voting at the General
Meeting– in person, in representation or by voting per rollam (outside of the General Meeting). Similar
provisions are included in the publicly available Articles of Association of CEB.
2.5.3 Internal control system
The internal control system fully complies with the statutory requirements. It also includes the risk
management, compliance, and internal audit rules. The internal control functions have further powers to
eectively execute their functions. A significant element of the Internal control system is also to ensure
and regularly assess the credibility and professional competences of the members of the Bank's bodies
and persons holding the key oces. The eectiveness of the management and control system of the
Bank is assessed by the internal audit division on annual basis.
2.5.4 Description of the decision procedures of the Bank's bodies and commiees
General Meeting
The General Meeting takes place at least once a year, however no later than four months from the end
of the reporting period and has a quorum if the shareholders present hold shares in the total nominal
value greater than 50% of the CEB’s share capital. If the General Meeting does not have a quorum, the
Board shall call a substitute General Meeting in compliance with the relevant provisions of the special
legal regulation.
The General Meeting votes by acclamation unless the General Meeting decides otherwise. The General
Meeting adopts decisions by a majority of the votes of the present shareholders, unless special legal
regulations or the Articles of Association require a larger majority. Changes to the Articles, increases or
decreases in the registered capital and the dissolution of CEB with liquidation is decided are decided
51 2 Annual report
upon by the General Meeting if approved by the votes of at least two-thirds of the present shareholders.
At General Meetings, proposals presented by the convenor of the General Meeting are voted on first and
subsequently other proposals and counterproposals are voted on in the order as submied.
The state exercises its shareholder’s rights by means of the Ministry of Finance.
Supervisory Board
The Supervisory Board consists of five members.
Meetings of the Supervisory Board are convened by its Chairman or Vice-Chairman as necessary usually
once a month. The Supervisory Board has a quorum if at least three of its members are present, with
resolutions adopted by a majority of all of its members. Each member has one vote. In the event of a tied
vote, the Chairman does not have the casting vote. Minutes are taken on all meetings of the Supervisory
Board and are to be signed by the Chairman of the Supervisory Board; a list of aendees is aached to
the minutes.
Supervisory Board meetings via technical means are admissible; adoption of resolutions outside the
meeting (per rollam) is admissible subject to a prior consent by all members of the Supervisory Board.
Board of Directors
The Board of Directors consists of three members.
Meetings of the Board of Directors are convened by its Chairman or an authorised Vice-Chairman as
necessary, usually once a month. The Board of Directors has a quorum, if an absolute majority of its
members is present. The Board of Directors decides by resolutions adopted by a majority of votes of its
members. Each member of the Board of Directors has one vote. Minutes are taken on the course of the
Board of Directors’ meeting and its resolutions and are to be signed by the Chairman of the Board of
Directors and the minute- taker; a list of aendees is aached to the minutes.
Meetings of the Board of Directors via technical means are admissible; adoption of resolutions outside
the meeting (per rollam) is admissible subject to a prior consent by all members of the Board of Directors.
Audit Commiee
The Audit Commiee consists of three members.
Meetings of the Audit Commiee take place as necessary, at least four times a year. If necessary, the
Chairman of the Audit Commiee, or the authorised member of the Audit Commiee if the Chairman is
not present, will operatively convene an extraordinary meeting. The Audit Commiee has a quorum if an
absolute majority of its members is present.
Resolutions of the Audit Commiee are adopted by an absolute majority of the votes of all members. Each
member has one vote. Minutes are taken on all meetings of the Audit Commiee and are to be signed by
the Chairman of the Audit Commiee; a list of aendees is aached to the minutes. In urgent cases that
cannot be delayed, the Audit Commiee may initiate a per rollam resolution.
Audit Commiee meetings via technical means are admissible; adoption of resolutions outside the meeting
(per rollam) is admissible subject to a prior consent by all members of the Audit Commiee.
52 2 Annual report
Credit Commiee
The Credit Commiee consists of seven members.
Credit Commiee meetings take place as necessary, usually once a week. The Credit Commiee has a
quorum if at least four of its members are present, of which at least two are members of the Board of
Directors and two are members of the Risk Management Division. A resolution is adopted if approved by
the votes of an absolute majority of the members present, provided that the proposal was voted for by
two members of the Board of Directors and two members of the Risk Management Division. Each member
has one vote. The Credit Commiee arrives at conclusions by the voting of its members in respect of
individual items on the agenda.
In urgent cases that cannot be delayed the Credit Commiee may make a per rollam resolution. The per
rollam resolution is adopted if at least four members of the Credit Commiee approve it and if it was
voted for by two members of the Board of Directors and two members of the Risk Management Division.
Assets and Liabilities Management Commiee (ALCO)
The ALCO consists of seven members.
ALCO meetings take place as needed, usually once a month. The ALCO has a quorum if at least four of its
members are present, of which one is the Chairman or the Vice-Chairman of the ALCO and, simultaneously,
at least one representative of the CEO’s Division, one representative of the Finance and Operations Division
and one member of the Risk Management Division are present. Each ALCO member has one vote.
The ALCO adopts conclusions by the voting of its members on individual issues of the agenda. A proposal
presented by the ALCO Chairman, or by the ALCO Vice-Chairman, if the Chairman is not present, is
voted on first and subsequently counterproposals are voted on in the order as submied. A resolution is
adopted if approved by an absolute majority of the votes of the ALCO members present. If the resolution
concerns selected issues specified in the ALCO Rules of Procedure, it may be adopted only if the Head
of the Banking Risk Management department who is a member of the ALCO approves it.
In urgent cases that cannot be delayed, the ALCO Chairman, or the Vice-Chairman if the Chairman is not
present, may initiate a per rollam resolution. The per rollam resolution is adopted if it is approved by an
absolute majority of all ALCO members. If the resolution concerns selected issues specified in the ALCO
Rules of Procedure, it may be adopted only if the Head of the Banking Risk Management department who
is a member of the ALCO approves it.
Information Technologies Development Commiee (ITDC)
The ITDC consists of seven members.
ITDC meetings are convened by the ITDC’s Chairman, or the Vice-Chairman if the Chairman is not present.
The ITDC has a quorum if at least four of its members are present. Each ITDC member has one vote.
A resolution is adopted if approved by an absolute majority of the votes of the ITDC members present.
In the event of a tied vote, the Chairman has the casting vote.
In urgent cases that cannot be delayed, the ITDC Chairman, or the Vice-Chairman if the Chairman is not
present, may initiate a per rollam resolution. The per rollam resolution is adopted if at least four ITDC
members agree with its adoption.
53 2 Annual report
Operational Risk Management Commiee (ORCO)
The ORCO consists of seven members.
The ORCO has a quorum if at least four of its members are present, of which one is an ORCO member
for the Risk Management Division.
Each ORCO member has one vote. Conclusions on each issue on the agenda are voted on individually.
A proposal presented by the ORCO Chairman is voted on first and subsequently counterproposals are
voted on in the order as submied. A resolution is adopted if approved by an absolute majority of votes
of the ORCO members present and if at least one ORCO member for the Risk Management Division voted
for adopting the resolution.
In urgent cases that cannot be delayed, the ORCO Chairman, or the Vice-Chairman if the Chairman is not
present, may initiate a per rollam resolution. The per rollam resolution is adopted if at least four ORCO
members approve its adoption and if the ORCO Chairman and at least one ORCO member for the Risk
Management Division voted for adopting the resolution.
2.5.5 Remuneration of persons with managing powers
With regard to the application of the proportionality principle, CEB has not set up a Remuneration Commiee
and no part of remuneration is paid out in non-cash instruments to persons with managing powers.
In 2023, CEB regarded the members of the Board of Directors and the members of the Supervisory Board
as having managing powers. The Chairman of the Board of Directors is also the CEO, and the members
of the Board of Directors also hold the positions of Deputy CEOs.
Board of Directors
The Board of Directors is the statutory body managing the activities of CEB and acting on its behalf.
Members of the Board of Directors hold the positions of the CEO and Deputy CEOs for the respective
areas of the Bank’s activities they are entrusted with (refer to Section 1.5 Administrative, management
and supervisory bodies of CEB and related commiees). Members of the Board of Directors perform their
duties with due managerial care, carefully and with the necessary knowledge. They are remunerated in line
with the Contract on Holding the Oce of a Member the Board of Directors concluded in compliance with
the relevant provisions of Act No. 90/2012 Coll., on Business Corporations and Cooperatives, as amended,
which is concluded for five years. This Contract provides for the rights and obligations of contractual
parties in respect of holding the oce of a member or of CEB’s Board of Directors. The Contract was
approved by CEB’s Supervisory Board/General Meeting. The amount of remuneration of the members of
the Board of Directors is approved by the General Meeting.
60% of total annual remuneration of a member of the Board of Directors in charge of managing CEB
(Chief Executive Ocer) is a fixed component and 40% is a variable component; 50% of total annual
remuneration of a member of the Board of Directors in charge of the Finance and Operations Division is
a fixed component and 50% is a variable component; 62.5% of total annual remuneration of a member
of the Board of Directors in charge of the Risk Management Division is a fixed component and 37.5% is
a variable component. The remuneration of the CEO and Deputy CEOs was paid out in the form of the
base component, which was the remuneration for the performed work. The amount of the remuneration
was approved by the General Meeting in compliance with CEB’s Articles of Association. The remuneration
policy for the members of CEB’s Board of Directors, referred to as the Principles of Remunerating Managers
54 2 Annual report
and Members of Bodies, is defined and approved by the General Meeting. The variable component of
the remuneration of the CEO and Deputy CEOs is derived from assessing their performance, which is
measured against defined performance criteria, Bank-wide and individual. The Bank-wide performance
criteria are always set for the calendar year and approved by the General Meeting and subsequently
assessed by CEB’s Supervisory Board. The Bank-wide performance criteria include financial indicators
(for 2023: modified cost/income ratio, administrative expenses and amortisation/depreciation), business
indicators (for 2023: total volume of new transactions, volume of loans drawn), and portfolio and risk
indicators (for 2023: proportion of NPL to the Bank’s aggregate portfolio, the balance of loss allowances
and provisions for loan portfolio and guarantees in Stage II and III). The assessment of the performance
criteria listed above is made once a year after the termination of the assessed year, utilising the results
of the assessment as of 31 December of the relevant year.
Furthermore, 50% of the variable component of the remuneration granted for the assessed year is
paid out to the members of the Board of Directors by the 10th day of the month following the month in
which the entitlement to the variable remuneration component was decided by the Supervisory Board
and the payment of the other 50% of the variable component is postponed. The deferred portion of the
remuneration’s variable component is evenly distributed over the 4-year deferral period and the same
amount is paid out each year during this period. The claim for such payment always arises from the
assessment of the defined financial and non-financial indicators of CEB’s performance and based on
the methodology for retrospective assessment of the quality of loan production (malus methodology).
CEB’s Supervisory Board
CEB’s Supervisory Board is a control body, supervising the exercise of powers of CEB’s Board of Director
in performing the Bank’s business activities.
The Supervisory Board has five members. As at 31 December 2023, the Supervisory Board had all five
members performing their duties. Its member are elected by the General Meeting and include persons
proposed by shareholders. They are remunerated in line with the Contract on Holding the Oce of a
Member of CEB’s Supervisory Board in compliance with the relevant provisions of Act No. 90/2012 Coll.,
on Business Corporations and Cooperatives, as amended, which is concluded for a functional period of five
years. The Contract provides for the rights and obligations of contractual parties in respect of holding the
oce of a member of CEB’s Supervisory Board. The Contract on Holding the Oce of a Member of CEB’s
Supervisory Board was approved by the General Meeting. The amount of remuneration of the members
of CEB’s Supervisory board are approved by the General Meeting. The remuneration for performing the
duties of a member of the Supervisory Board was paid out providing that the member was not subject
to the limitation specified in Section 303 of Act No. 262/2006 Coll., the Labour Code, as amended, or a
similar limitation defined in the relevant legal regulation. The total amount of the annual remuneration of
the members of the Supervisory Board in 2023 is broken down into the base component and the variable
component, which make up 80% and 20%, respectively.
The remuneration of the members of the Supervisory Board was paid out in the form of the base component
which was the remuneration for the performed work. The remuneration policy for the members of the
Supervisory Board, referred to as the Principles of Remunerating Managers and Members of Bodies, is
defined and approved by General Meeting. The variable component of the remuneration of the members
of the Supervisory Board is derived from assessing the performance of their activities, which is measured
based on meeting the defined performance criteria. The individual performance criteria are always set
for a calendar year and approved and subsequently assessed by the General Meeting. The performance
criteria are divided into six areas: CEB’s strategy (for 2023: Discussion on the proposed Export Strategy
of the Czech Republic for 2023–2033 / Updated CEB Strategy for 2024–2026, extended to include the
SME segment), CEB IT Strategy (for 2023: Discussion on the proposed CEB IT Strategy for 2024–2025
in connection with the business strategy), financial and business plan 2024 (for 2023: active participation
in preparing and negotiating the financial and business plan for 2024), remuneration system (for 2023:
active participation in negotiating the K.O. criteria, bank-wide KPIs as well as individual KPIs of Risk
55 2 Annual report
Given that the Bank does not control any other entities, the individuals specified in the table above received
no income in cash or in kind from controlled entities.
Income received by executives with managing powers in cash and in kind for 2023
Income received by persons with managing
powers from the issuer (CEB) in CZK thousand
Member of CEB’s Board
of Directors
Members of CEB’s
Supervisory Board
Other persons with
managing powers
In cash
In kind
Total
Takers of group I and approval of KPIs of Risk Takers of group II in line with the Supervisory Board’s
schedule of KPI approval) and control system (for 2023: checking the fulfilment of tasks of the Board of
Directors and Supervisory Board members set by the Supervisory Board, checking the fulfilment of the
Czech National Bank’s remedial measures). The assessment of performance criteria is made once a year,
after the termination of the assessed year, utilising the results of the assessment as of 31 December of
the relevant year.
100% of the variable component of the remuneration granted for the assessed year is paid out to the
members of the Supervisory Board by the 10th day of the month following the month in which the
entitlement to the variable remuneration component was decided upon by the General Meeting.
Diversity Policy
CEB does not formally apply a diversity policy to its Board of Directors and Supervisory Board as the
stang of these bodies is fully under the control of the General Meeting. The second reason is the fact
that CEB is a bank having the state as the direct majority shareholder (84%), its shareholder rights are
exercised by the Ministry of Finance and the HR policy is entirely under the control of the state represented
by the above ministry, which selects candidates in line with the state’s idea of CEB’s activities, involving
the support of Czech export and Czech exporters as principal business activities in accordance with Act
No. 58/1995 Coll., On Insurance and Financing of Exports with State Support.
There is no discrimination of candidates in the recruitment process. Selection of candidates for both
bodies takes place in line with Act No. 353/2019 Coll., on the Selection of Members of Management and
Supervisory Bodies of Legal Entities with State Participation (Nomination Act), as amended. The selection
commiee, appointed by the Ministry of Finance, primarily assesses qualifications of candidates, both
in terms of professional and managerial experience and in terms of education. The winner (nominee) is
subsequently presented to the government’s Commiee for Personnel Nominations, which either does
or does not recommend the proposed nomination.
Candidates must also adhere to general guidelines for assessing the suitability of members of a management
body and persons in key positions determined by the EBA, such as evaluation of experience, reputation,
or prudential requirements. In June 2022, a Nomination Commiee was newly established to make these
assessments as an advisory body to CEB's Supervisory Board. The status of this commiee is defined
in the Rules of procedure of CEB's Nomination Commiee.
56 2 Annual report
2.5.6 Authorised auditors
In a 2021 tender, the Bank selected KPMG Česká republika Audit, s.r.o., with its registered oce at the
address stated below, to be its auditor.
Pobřežní 648/1a
186 00 Praha 8
The contract was signed for the period from 2021 to 2024.
Statutory audit of the annual financial statements
Other assurance services
Other non-audit services
Total
In 2023, the CEB's auditor provided, besides the statutory audit of the financial statements, other assurance
services in the amount of CZK 150 thousand for the verification of the amount of ocially supported
financing, and other non-audit services in the amount of CZK 1,561 thousand for assurances given in
connection with newly issued bonds. Further, CEB paid CZK 50 thousand for the participation of its
employees in public training held by KPMG Česká republika, s. r. o.
2.5.7 Court and arbitration proceedings
CEB is involved in disputes related to the collection of receivables, especially legal disputes as part of
individual insolvency proceedings with CEB’s debtors. The financial impacts of the outcomes of these
proceedings represent only potential income for CEB (not an expense), but given their size, their eect
on CEB’s operating profit or financial situation is insignificant. Most of the disputes that CEB is involved
in are proceedings held on behalf of CEB but on the account of EGAP due to the relations between CEB
and EGAP arising from insurance agreements.
2.5.8 Contracts of significance
During 2023, CEB concluded no significant contracts (except for the contracts concluded as part of the
issuer’s regular business transactions) that could establish any liability or claim which would be significant
with regard to CEB's ability as the issuer to meet its obligations arising from issued bonds towards the
securities holders.
2.6 Provision of information pursuant to Act No. 106/1999 Coll., on
Free Access to Information
Number of requests for information filed, and of decisions to dismiss the request issued
One request for information was filed and two decision to dismiss the request were issued in 2023.
Number of appeals filed against the decisions
One appeal against the decisions was filed in 2023.
57 2 Annual report
After the appeal, Česká exportní banka, a.s. partially complied with the request, against which the party
appealed again. The case is currently being dealt with by the Oce for Personal Data Protection.
Copy of significant parts of each court judgements reviewing the lawfulness of the legally bound
person’s decision to dismiss the request for information, with an overview of all expenses incurred
by the legally bound person in connection with the judicial proceeding, including costs of its own
employees and costs of legal representation
No judgements concerning the exercising of the right to information were issued in 2023.
Number of exclusive licences provided, including a reasoning of the need to provide an exclusive licence
No exclusive licences have been provided so far.
Number of complaints filed under Section 16a, reasons for their filing and a brief description of how
they were seled
No complaints under Section 16a of the Act on Free Access to Information were filed in 2023.
Further information on the application of the Act
In accordance with Section 5 (3) of the Act on Free Access to Information, information provided is also
published on the website on
In Prague, on 26 March 2024
Ing. Daniel Krumpolc
Chairman of the Board of Directors
Ing. Emil Holan
Vice-Chairman of the Board of Directors
58
Financial statements
0
3
59 3 Financial Statements
Income statement 61
Statement of comprehensive income 61
Statement of financial position 62
Statement of changes in equity 63
Cash flow statement 64
Reconciliation of cash flows from financing activities 65
1 General information 66
2 Accounting policies 66
(a) Basis of presentation 66
(b) Foreign currency translation 67
(c) Derivative financial instruments 68
(d) Interest income and expense 68
(e) Fee and commission income 68
(f) Financial assets 69
(g) Impairment of financial assets 70
(h) Agreements for the purchase and resale of securities 71
(i) Property, plant and equipment and intangible assets 71
(j) Leases 72
(k) Cash and cash equivalents 72
(l) Employee benefits 72
(m) Taxation and deferred income tax 73
(n) Financial liabilities 73
(o) Share capital 73
(p) Segment reporting 73
(q) State subsidy 74
(r) Provisions 74
(s) Guarantees and loan commitments 74
(t) Collateral and guarantees received 75
3 Risk management 75
(a) Strategy for using financial instruments 75
(b) Credit risk 76
(c) Market risk 94
(d) Currency risk 95
(e) Interest rate risk 96
(f) Liquidity Risk 97
(g) Fair values of financial assets and liabilities 100
(h) Capital management 101
4 Critical accounting estimates and judgements in applying accounting policies 102
(a) Impairment losses on financial assets, loan commitments,
guarantees and contractual assets 102
(b) Assessment of the business model and contractual cash flows 103
(c) State subsidy 103
(d) Income taxes 104
5 Operating segments 104
ČESKÁ EXPORTNÍ BANKA, A.S.
FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH INTERNATIONAL
FINANCIAL REPORTING STANDARDS AS ADOPTED BY THE EUROPEAN UNION
FOR THE YEAR ENDED 31 DECEMBER 2023
Contents
3 Financial statements
60 3 Financial Statements
6 Net interest income 105
7 Fee and commission net income 106
8 Net profit or (loss) on financial operations including state subsidy 106
9 Administrative expenses, depreciation/amortisation and other operating costs 107
10 Net profit from impairment of financial instruments and wrien-o receivables 108
11 Income tax 108
12 Cash in hand, cash with the central bank and other deposits repayble on demand 109
13 Loans and receivables at amortised cost 110
14 Debt securities 111
15 Property, plant and equipment 112
16 Intangible assets 113
17 Other assets 113
18 Financial liabilities at amortised cost 113
19 Other liabilities 115
20 Provisions 116
21 Deerred income taxes 117
22 Share capital 117
23 Revaluation reserve 118
24 Reserves 118
25 Related party transactions 119
26 Subsequent events 121
61 3 Financial Statements
Statement of comprehensive income
Prepared in accordance with International Financial Reporting Standards as adopted by the European
Union
Income statement
Prepared in accordance with International Financial Reporting Standards as adopted by the European
Union
The notes are an integral part of the financial statements.
(MCZK) Note
Interest income
of which: Interest income calculated using the eective interest rate method
Interest expense () ()
Net interest income
Fee and commission income
Fee and commission expense () ()
Net profit or (loss) on financial operations, including state subsidy ()
Other operating income
Other operating expenses () ()
Administrative expenses () ()
Depreciation and amortisation () ()
Modification gains and losses
Impairment losses on financial assets not reported at fair value through P/L
or their reversal
Provisions for commitments and guarantees or their reversal ()
Other provisions or their reversal
Profit or (loss) before tax
Income tax expense ()
Profit or (loss) for the year
(MCZK) Note
Profit or (loss) for the year
Items that may be subsequently reclassified to profit of loss
Total change in OCI from revaluation of financial assets ()
Other comprehensive income (OCI) ()
Total comprehensive income
62 3 Financial Statements
The notes are an integral part of the financial statements.
Statement of financial position
Prepared in accordance with International Financial Reporting Standards as adopted by the European
Union
(MCZK) Note
ASSETS
Cash in hand, cash with the central bank and other deposits repayable
on demand
Debt securities at fair value recognised in OCI b,
Financial assets at amortised cost
Debt securities at amortised cost b,
Loans and receivables at amortised cost b,
Property, plant and equipment
Intangible assets
Other assets
Deferred tax assets
Total assets
LIABILITIES AND EQUITY
Financial liabilities measured at amortised cost
Other liabilities
Provisions b,
Current tax liabilities
Total liabilities
Share capital
Revaluation reserve () ()
Retained earnings or accumulated loss from prior periods
Reserve funds
Other special funds
Profit or (loss) for the year
Total equity
Total liabilities and equity
63 3 Financial Statements
Statement of changes in equity
Prepared in accordance with International Financial Reporting Standards as adopted by the European
Union
The notes are an integral part of the financial statements.
(MCZK) Note Share
capital
Retained
earnings
Reserve
fund
Export risk
reserve
Revaluation
reserve Total
December ()
Total change in OCI
from revaluation of
financial assets
() ()
Profit or (loss)
for the year
Total comprehensive
income ()
Transfer to other
special funds ()
Transfer to reserve
fund ()
At December ()
Total change in OCI
from revaluation of
financial assets
Profit or (loss)
for the year
Total comprehensive
income
Transfer to other
special funds
Transfer to reserve
fund ()
At December ()
64 3 Financial Statements
Cash flow statement
Prepared in accordance with International Financial Reporting Standards as adopted by the European
Union
The notes are an integral part of the financial statements.
(MCZK) Note
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received
Interest paid () ()
Net fee and commission received ()
Net trading and other net income received ()
Net income from collateral
Payments to employees and suppliers () ()
(Income tax paid) received adjustment to income tax ()
(Other taxes paid) received adjustment to other taxes
Net cash flows from operating activities before changes in operating assets
and liabilities
CHANGES IN OPERATING ASSETS AND LIABILITIES
Decrease (increase) in loans to banks ()
Decrease (increase) in loans to customers ( )
Decrease (increase) in other liabilities ()
Increase (decrease) in liabilities due to banks ()
Increase (decrease) in liabilities due to customers ()
Net cash flows from operating activities ( )
CASH FLOWS FROM INVESTMENT ACTIVITIES
Purchase of property, plant and equipment and intangible assets () ()
Purchase of securities () ()
Proceeds from matured securities
Net cash flows from investment activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issued bonds
Repayments of issued bonds ( ) ( )
Lease payments () ()
Net cash flows from financing activities ( )
Eect of exchange rate changes on cash and cash equivalents () ()
Net increase in cash and cash equivalents ()
Cash and cash equivalents at the beginning of the year
Allowances for cash equivalents ()
Cash and cash equivalents at the end of the year
65 3 Financial Statements
Reconciliation of cash flows from financing activities
Note Issued
bonds Leases
At December ,
Outflow ( ) ()
Other non-monetary changes ()
Eect of exchange rate changes ()
At December ,
Inflow
Outflow ( ) ()
Other non-monetary changes
Eect of exchange rate changes
At December ,
The notes are an integral part of the financial statements.
66 3 Financial Statements
1 General information
Česká exportní banka, a.s. (the “Bank”) was established on 1 March 1995 and its registered address is
Vodičkova 34/701, Prague 1. The Bank does not have any branches in the Czech Republic or abroad.
The Bank is authorised to provide banking services, which predominantly comprise accepting deposits
from the public and granting loans and guarantees in Czech crowns and foreign currencies, issuing
leers of credit, clearing and payment operations, trading on its own account with financial instruments
denominated in foreign currencies, with securities issued by foreign governments, with foreign bonds and
securities issued by the Czech government and the provision of investment services.
The activities of the Bank are primarily governed by Act No. 21/1992 Coll., on Banks, as amended, Act
No. 256/2004 Coll., on Capital Market, as amended, Act No. 58/1995 Coll., on Insurance and Financing
Exports with State Subsidies (“Act No. 58/1995 Coll.”), and Act No. 90/2012 Coll., on Business Corporations
and Cooperatives (Act on Business Corporations), as amended. Concurrently, the Bank is subject to the
Czech National Bank’s regulatory requirements.
The principal objective of the Bank is to provide financing of Czech exports and investments abroad
supported by the Czech state in accordance with the European Union law and international rules – mainly
through the provision of credit facilities and guarantees. The general meeting of the Bank makes decisions
about profit allocation and in accordance with the articles of association the profit is primarily used to
contribute to the statutory reserve, export risk reserve or to other funds established by the Bank.
Pursuant to Act No. 58/1995 Coll., the provision of ocially supported financing by the Bank is conditioned
by the existence of collateral, unless export credit risk is insured by Exportní garanční a pojišťovací
společnost, a.s. (“EGAP”).
Pursuant to Act No. 58/1995 Coll., the Czech state is liable for the obligations of the Bank arising from
the repayment of funds obtained by the Bank and for obligations arising from other transactions by the
Bank in the financial markets. The condition for providing ocially supported financing is the fact that at
least two thirds of the Bank’s share capital is owned by the Czech state.
Standard & Poor’s confirmed the credit rating of “AA-” with stable outlook for non-current liabilities in
foreign currency. The Bank’s issued bonds are listed on the Luxembourg Stock Exchange (Société de
le Bourse de Luxembourg).
2 Accounting policies
The principal accounting policies applied in the preparation of these financial statements are set out
below. These policies have been consistently applied to all the years presented, unless stated otherwise.
(a) Basis of presentation
The Bank’s financial statements have been prepared as stand-alone financial statements in accordance with
International Financial Reporting Standards as adopted by the European Union (“EU IFRS”). The financial
statements have been prepared under the historical cost convention modified for financial instruments and
under the accrual and matching principle with transactions recorded in the period in which they actually
occur. Financial instruments remeasured at fair value are carried at fair value at the reporting date. The
financial statements consist of the statement of financial position, statement of comprehensive income,
statement of changes in equity, cash flow statement, and notes containing accounting policies and other
material events.
67 3 Financial Statements
Newly applied amendments to the existing standards the application of which had a significant impact
on the financial statements
None of the newly applied amendments to the existing standards had a significant impact on the financial
statements for the year ended 31 December 2023.
Newly applied amendments to the existing standards the application of which had no significant
impact on the financial statements
• IFRS 17 – Insurance Contracts, eective date: 1 January 2023
•
Amendments to IFRS 17 – Initial Application of IFRS 17 and IFRS 9 – Comparative Information, eective
date: simultaneously with the eective date of IFRS 17
• Amendments to IAS 1 – Disclosure of Accounting Policies, eective date: 1 January 2023
• Amendments to IAS 8 – Definition of Accounting Estimates, eective date: 1 January 2023
•
Amendments to IAS 12 – Deferred Tax related to Assets and Liabilities arising from a Single Transaction
(issued in May 2021) eective date: 1 January 2023
•
Amendments to IAS 12 – International Tax Reform – Pillar Two Model Rules, eective date:
1 January 2023.
These amendments to the existing standards had no significant impact on the amounts or disclosures in
the financial statements of the Bank.
Amendments to the existing standards that are not yet eective and have been adopted by the
European Union
At the date of approval of these financial statements, the following amendments to the existing standards
were issued by IASB and adopted by the European Union, but are not yet eective.
• Amendments to IFRS 16 Lease Liability in a Sale and Leaseback, eective date: 1 January 2024
• Amendments to IAS 1 – Classification of Liabilities as Current or Non-Current, postponement of the
eective date to 1 January 2024
•
Amendments to IAS 1 – Non-current Liabilities with Covenants (issued in October 2022), eective
date: 1 January 2024.
Standards and interpretations that are not yet eective and have not been adopted by the European
Union
At the date of approval of these financial statements, the following standards and amendments to the
existing standards were issued by the IASB but not yet adopted by the European Union:
• Amendments to IFRS 10 and IAS 28 – Sales or Contributions of Assets between an Investor and its
Associate or Joint Venture; the eective date has been postponed by IASB
•
Amendments to IAS 7 and IFRS 7 – Supplier Finance Arrangements; the eective date: 1 January 2024
• Amendments to IAS 21 – Lack of Exchangeability; the eective date: 1 January 2025.
The Bank expects that the adoption of the above standards and amendments to existing standards in the
period of their first-time application will have no significant impact on the financial statements of the Bank.
(b) Foreign currency translation
Functional and presentation currency
The financial statements of the Bank are presented in Czech crowns which is also the Bank’s functional
currency (i.e., the currency of the primary economic environment where the Bank operates).
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
68 3 Financial Statements
(c) Derivative financial instruments
The Bank does not trade derivatives with the aim of generating profit; however, in respect of certain
contracts contracted as hedges, the Bank does not apply the hedge accounting principles. This usually
relates to derivative instruments whose primary goal relates to currency risk hedging. The gains or
losses from these derivatives are reported in the income statement under “Net profit or (loss) on financial
operations, including state subsidy”.
(d) Interest income and expense
Interest income and expense for all interest-bearing financial instruments are recognized under ‘Interest
income’ and ‘Interest expense’ in the income statement using the eective interest rate method, with the
exception of interest on derivatives hedging interest rate risks. Interest on financial instruments at fair
value through profit or loss (FVTPL) that do not function as eective hedging instruments is part of gains
and losses arising from changes in fair value reported under “Net profit or (loss) on financial operations,
including state subsidy”.
The eective interest rate method is a method of calculating the gross amortised cost of a financial asset
or financial liability and allocating the interest income or interest expense until maturity of the relevant
asset or liability. The eective interest rate is the rate that discounts estimated future cash flows over the
expected life cycle of the financial instrument, or a shorter period (if relevant), to the gross amortised cost
of the financial asset or financial liability. In determining the eective interest rate, the Bank estimates cash
flows considering all the contractual terms of the financial instrument but without reflecting credit losses.
Calculation of the eective interest rate includes all fees and payments made between or received by
parties to the contract that are an integral part of the eective interest rate, transaction costs, commitment
commissions and all other premiums or discounts. For credit-impaired financial assets, interest income is
recognized at amortised cost using the eective interest rate adjusted for credit risk, i.e., at gross amortised
cost decreased by allowances. Positive interest expense determined on the basis of negative interest
rates are included in “Interest income” and negative interest income in “Interest expense”.
(e) Fee and commission income
Fees and commissions directly relating to the provision of the loan are included in the eective interest
rate. Fees and commissions which are not part of the eective interest rate are generally recognized on
an accruals basis when the service is provided.
Commitment commissions for providing loan commitments are also included in the eective interest rate
as the Bank assumes that all provided loan commitments will be drawn. Commitment commissions for
loans that will not be drawn are recognized as revenue on the date on which the liability is derecognized.
Advisory and service fees are reported based on the appropriate service contracts and they are recognized
in income as the Bank fulfils its liabilities.
The foreign exchange rates of Czech crowns to principal foreign currencies were as follows:
EUR USD
December , ,
December , ,
at the dates of the transactions. Foreign exchange gains and losses resulting from the selement of such
transactions and from the translation of monetary assets and liabilities in foreign currencies are reported in
the income statement as “Net profit or (loss) on financial operations, including state subsidy”.
69 3 Financial Statements
(f) Financial assets
The Bank classifies its financial assets upon their initial recognition based on the Bank’s business model
and based on the assessment of the contractual cash flows of the financial assets.
The Bank applies a mixed business model. The objective of the main business model is to obtain contractual
cash flows, which are the principal and interest on outstanding principal. As part of the main business
model, the Bank deposits the funds provided to it from the state budget, in particular subsidies to cover
loss from the provision of ocially supported financing, funds to increase the share capital, funds to
refinance loans taken out or to repay debt securities issued, and insurance benefits received from an
export insurance company, in its bank accounts subordinated to the Treasury and held with the Czech
National Bank in under the Act on Budget Rules. The Bank also uses these accounts to deposit temporarily
available funds in those currencies for which current accounts under the Treasury can be opened and
maintained. The Bank’s supplementary business model is the holding of an asset with the purpose of
obtaining contractual cash flows from the principal and interest as well as selling the asset.
The financial asset is measured at amortised costs (AC) if it is:
a) Held as part of the main business model whose objective is to hold financial assets in order
to obtain contractual cash flows; and
b) Contractual terms and conditions of the financial asset set specific dates of cash flows composed
exclusively of payments of the principal and interest on the unpaid portion of the principal.
The financial asset is measured at fair value through other comprehensive income (FVOCI) if it is:
a) Held as part of the supplementary business model whose objective is achieved by collecting
contractual cash flows as well as by the sale of the asset; and
b) Contractual terms and conditions of the financial asset set specific dates of cash flows composed
exclusively of payments of the principal and interest on the unpaid portion of the principal.
Financial assets that do not meet the above conditions are measured at fair value through profit or loss
(FVTPL). The Bank does not arrange any financial assets held for trading. The Bank does not hold any
equity interests in assets.
The assessment of the relation to the business model is based on past experience, goals to be met, the
assessment method and management of risks and expected benefits.
The characteristics of contractual cash flows are assessed in respect of whether they are solely payments
of the principal and interest. For arrangements concerning interest, it is assessed whether they are
consistent with basic contractual arrangements, i.e., whether the interest only includes credit risk, time
value for money and other basic risks and profit margins.
Financial assets can be reclassified only if the business model is changed.
Initial recognition of financial assets
All purchases and sales of financial assets or liabilities, except for derivatives, are recognized as at the
selement date. The selement date means the date of the delivery of the underlying asset related to
the financial instrument. Loans and receivables are recognized as at the date of providing the funds to
the client. Upon initial recognition, financial assets are measured at fair value through profit or loss. For
financial assets not measured at FVTPL, the fair value is increased or decreased upon initial recognition
by transaction costs that are directly related to the acquisition of the financial asset.
Upon the purchase of a financial asset, there is no dierence arising between the recognized fair value
of the financial asset recognized by the Bank and the fair value using valuation methods.
70 3 Financial Statements
Valuation of financial assets as at the balance sheet date
Financial assets at amortised cost (AC) predominantly include provided loans and other receivables and
part of purchased bonds. The amortised cost consists of the acquisition cost less principal payments,
including any discount/premium, less an allowance for expected credit losses and accrued interest
calculated using the eective interest rate. Impairment in the form of expected credit losses is presented
in the income statement.
Bonds at fair value through other comprehensive income (FVOCI) are remeasured at fair value after initial
recognition. These are bonds held to generate cash flows and for sale, where the cash flows consist of
principal and interest payments. Gains and losses arising from changes in fair values are reported directly
through equity until the financial asset is derecognized. Impairment is recognized in equity through profit
or loss. However, the interest calculated using the eective interest rate method is reported in the income
statement under “Interest income”.
In determining the fair value of quoted investments at level 1 as at the balance sheet date, the Bank uses
the current quoted oer prices. If the market is not active for a specific financial asset, the Bank determines
the fair value using valuation techniques (level 2). The Bank uses quoted supply and demand market rates
as input values for the measurement of the fair values of financial assets or liabilities.
As of the balance sheet date, management of the Bank assessed the used valuation techniques to ensure
that they suciently reflect the current market conditions including the relative liquidity of the market
and credit spreads.
Derecognition of financial assets
Financial assets are derecognized when rights for the collection of cash flows cease to exist or when the
Bank transfers all risks and benefits arising from their ownership. The dierence between the carrying
amount of the financial asset (or its part) that ceased to exist or was transferred to another party, and
the payment made is recognized in profit or loss.
(g) Impairment of financial assets
The Bank creates allowances and provisions for expected credit losses in respect of financial assets at
amortised cost, bonds at fair value through other comprehensive income, provided financial guarantees,
provided loan commitments and receivables arising from contractual assets.
As of the date of initial recognition the Bank assesses whether the credit risk has increased, i.e., the risk
that the Bank will incur a loss caused by a failure of the counterparty to meet its obligations. If the credit
risk has not increased (stage 1), the Bank calculates allowances and provisions in the amount of twelve-
month expected credit losses (ECL) for each reporting date. Twelve-month ECL are a part of lifetime
credit losses that correspond to expected credit losses arising from a failure of the financial instrument
that may occur within 12 months from the date of recognition.
If a material increase in credit risk occurs (stage 2) from the initial recognition, the Bank recognises an
allowance or provision in the amount of lifetime expected credit losses. Lifetime expected credit losses
involve estimated credit losses arising from any failure to meet commitments during the estimated lifetime
of financial assets.
Financial assets are impaired (stage 3) if one or more events occurs having an adverse impact on the
expected future cash flows related to the financial assets. For purchased or originated credit-impaired
(POCI) assets, allowances are reported only as the accumulated change in expected credit losses for the
period since the initial recognition.
Allowances decrease the value of the financial asset at amortised cost (AC) in the balance sheet. Allowances
71 3 Financial Statements
against financial assets at fair value through other comprehensive income (FVOCI) are recognized through
other comprehensive income. Provisions for credit losses on loan commitments and provided guarantees
are reported in the balance sheet under “Provisions”.
The calculation of expected credit loss (ECL) is based on the undistorted and probability-weighted amount
that is the result of various scenarios, includes the time value of money and is based on adequate and
demonstrable information that is available without incurring disproportionate costs. Credit losses are
defined as a dierence between all contractual cash flows payable to an entity under the relevant contract
and all cash flows that are expected to be collected by the entity (i.e., all cash deficits), discounted by
the original eective interest rate (or by the eective interest rate adjusted for credit risk in respect of
purchased or originated credit- impaired financial assets).
The policies and assumptions used for the quantification of expected credit loss are described in Note 3b).
Write-os
Write-o is made upon realisation of collateral or if the Bank no longer has adequate expectations
that the value of the financial asset as a whole or its part will be recovered.
Such situations may include:
•
liquidation of the debtor without a legal successor (deletion of a legal entity from the Commercial
Register, termination of inheritance proceedings after the death of an individual without heirs, and
failure to satisfy the claim from the inheritance), and there is no collateral for the receivable that is
recoverable from third parties
• a final court decision on the non-existence of the receivable
• termination of the receivable by other legal means, including the replacement of the original debt by
the debt specified in the restructuring plan and the subsequent fulfilment of the restructuring plan by
the debtor
• the final termination of insolvency or similar proceedings against the debtor or the final dismissal of
the insolvency petition for lack of assets of the debtor and there is no third-party collateral or rights
and assets for the receivable that could be realized
• assignment of the receivable
•
the uncollectibility or financial ineciency of any further recovery; i.e., it is clear from the circumstances
of the case that any further recovery of the risk receivable or part thereof would not be successful (e.g.,
if enforcement proceedings have been unsuccessful in recovering the receivable or part thereof, or if
the debtor has successfully pleaded the limitations statute), or if the cost of recovery would exceed
the expected return in relation to the amount of the receivable.
If the receivable has not been extinguished and the receivable, although uncollectible, continues to exist
legally and all recovery actions have not yet been completed, it is wrien o in the o-balance sheet and
continues to be accounted for in the o-balance sheet records.
(h) Reverse sale-and-repurchase agreements
Financial assets purchased under reverse sale-and-repurchase agreements (reverse repo operations) are
considered to be loans granted to other banks or customers. They are classified in accordance with the
Bank's business model and the characteristics of the negotiated cash flows as AC or FVOCI.
The dierence between the purchase and sale prices is treated as interest and accrued over the term of
the agreement using the eective interest rate method.
(i) Property, plant and equipment and intangible assets
All property, plant and equipment and intangible assets are stated at historical cost less accumulated
72 3 Financial Statements
depreciation and amortisation or loss allowances. Historical cost includes expenditures that are directly
aributable to the acquisition of the assets.
Acquired software licences are capitalised on the basis of the costs incurred to acquire and bring to use
the specific software. Depreciation and amortisation of property, plant and equipment and intangible
assets is calculated using the straight-line method over their estimated useful lives, as follows:
Technical improvements are included in the asset’s carrying amount only when it is probable that future
economic benefits associated with the item will flow to the Bank and the cost of the item can be measured
reliably. Repair and maintenance costs are charged to the income statement when incurred.
Property, plant and equipment and tangible assets under construction are not depreciated until relevant
assets are completed and put into use. The net book value of assets and their useful lives are monitored,
and adjusted as appropriate at each balance sheet date.
If the asset’s carrying amount is greater than its estimated recoverable amount, an allowance is created
for the asset. The estimated recoverable amount is the higher of the asset’s fair value including the costs
of sale and the value in use.
(j) Leases
The Bank is involved in lease arrangements only as a lessee. In accordance with the standard, the Bank
decided not to apply the right-of-use asset and lease liability for short-term and low-value leases. In such
a case, lease payments are recognized on a straight-line basis over the lease term in the income statement.
The identified fixed or material right-of-use asset is measured at cost in the value of the initial recognition
of the lease liability, payments made until the inception of the lease, direct costs, and estimated costs
of cancellation of the lease. The right-of-use asset is expensed over the estimated lease term. The lease
liability is measured at the inception of the lease at the present value of the future payments, using the
interest rate implicit in the lease, or the incremental borrowing rate of the lessee.
(k) Cash and cash equivalents
Cash is defined as cash and receivables from credit institutions repayable on demand, including balances
on the minimum mandatory reserves account. The Bank considers cash equivalents to be short-term and
highly liquid receivables from credit institutions with original maturities of 3 months or less that are readily
convertible into known amounts of cash and for which the risk of changes in value is not significant.
(l) Employee benefits
The Bank recognizes a provision for deferred bonuses and other long-term employment benefits, i.e.,
retirement bonuses. This provision is created by the sum of liabilities under these benefits at the balance
sheet date. The plan of other long-term benefits does not have any proceeds from assets. The present
value of the provision is calculated on the basis of the incremental approach which takes into account
estimated employee fluctuation.
Period
Motor vehicles years
Furniture and fixtures to years
Oce and IT technology to years
Other oce equipment to years
Software to years
73 3 Financial Statements
(m) Taxation and deferred income tax
Deferred income tax is recognized using the full balance sheet liability method. It is determined based on
temporary dierences between the tax and net book value of assets and liabilities.
Deferred income tax is determined using the tax rates that have been enacted at the balance sheet date
and relate to the period in which the realisation of the deferred tax asset or selement of the deferred
tax liability are expected.
Deferred tax related to the revaluation of items which are charged directly to equity is also charged directly
to equity and subsequently recognized in the income statement together with the deferred gain or loss.
Deferred tax assets are recognized where it is probable that future taxable profit will be available against
which the temporary dierences can be utilised.
Income tax payable is recognized, pursuant to applicable tax regulations in the Czech Republic, as an
expense in the period in which taxable profits are generated.
(n) Financial liabilities
Initial recognition of financial liabilities
Upon initial recognition, financial liabilities are measured at fair value. For financial liabilities not measured
at FVTPL, the fair value upon initial recognition is increased or decreased by the transaction costs directly
related to the acquisition of the financial liabilities.
The fair value of a financial liability as at the acquisition date is generally its transaction price.
Valuation of financial liabilities as at the balance sheet date
The category of financial liabilities at amortised cost (AC) includes payables to banks, to customers, issues
of own bonds and other financial liabilities. A derivative embedded in a contract on a financial liability is
separated and recognized separately if the economic features of the embedded derivative and the related
risks are not closely related to the economic features of the host contract, a separate instrument with the
same conditions as the embedded derivative would satisfy the definition of a derivative and the hybrid
contract is not measured at fair value through profit or loss.
Derecognition of financial liabilities
Financial liabilities are derecognized as soon as they cease to exist, i.e., when the liability is cancelled,
seled, or ceases to be eective. The dierence between the carrying amount of the financial liability that
ceased to exist or was transferred to another party and the payment made is recognized in profit or loss.
(o) Share capital
Ordinary shares are classified as equity in the amount recorded in the Commercial Register. Other costs
directly aributable to the issue of new shares are shown as a deduction of retained earnings, net of tax.
(p) Segment reporting
Operating segments are reported in accordance with the internal reports regularly prepared and presented
to the Bank’s Board of Directors consisting of a group of managers authorised to make decisions on funds
to be allocated to individual segments and to assess their performance.
74 3 Financial Statements
The Bank records two operating segments which are derived from the special purpose for which the
Bank was established by the state, i.e., the operation of ocially supported financing in accordance with
Section 6 (1) of Act No. 58/1995 Coll., through independent accounting sets (circles):
• Separate set (circle) 001 – set of financing without ties to the state budget, operating activities, and
other relating activities in accordance with the banking licence; and
• Separate set (circle) 002 – set of ocially supported financing eligible for subsidy.
(q) State subsidy
In accordance with Act No. 58/1995 Coll., the Bank receives subsidies from the state budget to cover
losses resulting from the provision of supported financing.
The subsidy is provided for the loss arising from the balance of legally defined expense and income item
for certain business cases arising from the provision of supported financing.
The income from the state subsidy is recognized in the income statement in the period in which the loss
occurs. The title to the state subsidy is recognized in other receivables when the subsidy is virtually certain.
(r) Provisions
Provisions are recognized when the Bank has a present legal or constructive obligation resulting from past
events, it is likely that an outflow of resources will be required to sele the obligation, and the amount has
been reliably estimated. In addition, the Bank creates provisions for expected credit losses from issued
financial guarantees and provided loan commitments in accordance with IFRS 9.
(s) Guarantees and loan commitments
The Bank also acts as an issuer of guarantees. Bank guarantee contracts are contractual relationships
stipulating that the issuer will provide a payment to the beneficiary, subject to events disclosed in the
leer of guarantee. Such guarantees are granted by the Bank based on the requirement of the exporter.
Bank guarantees are initially recognized in the financial statements at fair value on the date the guarantee
was given. Subsequently, the Bank’s liabilities under such guarantees are measured at the higher of (i)
expected credit losses, or (ii) remaining unaccrued amounts upon initial recognition. Allowances are
recognized against receivables from outstanding fees.
The Bank also enters into contingent financial relationships by granting loan commitments. Loan
commitments are included in the accounting records when all conditions precedent set in the loan
agreement have been met. Pursuant to the loan agreement, the Bank is bound to provide a loan, or draw
the loan for the benefit of the debtor when the conditions precedent have been met. The conditions
precedent usually include an eective insurance policy. Before the conditions precedent have been met,
signed loan agreements are recorded solely in the information system of the Bank. Loan commitments
are initially measured at fair value which is usually the present value of fees for the provision of the
commitment. Assuming that the provision of the loan commitment is probable, these fees are accrued
using the eective interest rate and recognized in income over the term of the liability. Subsequently, loan
commitments are measured at the higher of expected credit losses, or the remaining unaccrued amounts
reported upon first recognition. Allowances are recognized against receivables from outstanding fees.
Provisions representing expected credit losses are created for guarantees and loan commitments
in accordance with the requirements of IFRS 9.
75 3 Financial Statements
(t) Collateral and guarantees received
The Bank also receives guarantees issued by other banks and other collateral from other customers as a
means of security. An important component of contingent assets is the insurance of export credit risks
arranged by or in favour of the Bank. The collateral is taken into account in assessing the risks of loans.
Accepted guarantees and insurance are an integral part of the loan. The Bank considers them in the
calculation of expected credit losses.
3 Risk management
(a) Strategy for using financial instruments
The Bank provides export financing products, especially credit products and trade finance products
in accordance with Act No. 58/1995 Coll., on Insurance and Financing Exports with State Subsidies, as
amended, and related regulations.
The Bank funds export loans through the use of debt securities issues in EMTN and ECP programmes
and long-term bank borrowings; short-term borrowings from the interbank market and customer deposits
are used as additional sources of funding. The Bank also uses customer deposits as loan security.
Under amendment to Act No. 58/1995 Coll. Eective from April 2020, the Bank does not invest funds in
securities on the financial market unless such investment is necessary to ensure compliance with regulatory
risk management rules. The Bank deposits temporarily available funds in its bank accounts subordinated
to the Treasury and maintained with the Czech National Bank under the Act on Budget Rules. It uses
interbank market transactions for currencies in which accounts under the Treasury cannot be maintained,
for the purpose of short-term liquidity management or as a standard tool to hedge instruments or positions
against interest rate and currency risk.
The Bank’s strategy does not involve generating profit from trading with financial instruments that arises
from changes in interest and exchange rates. For this reason, the Bank did not establish any trading
portfolio.
The Bank trades only on its own account with approved investment instruments stated in the Bank’s List
of permied products.
The Bank shall enter into financial market transactions only with eligible counterparties that do not require
to be treated as professional customers. The Bank neither provides investment services to its customers,
including custody and administration services for investment instruments, nor oers the possibility of
investing in investment vehicles.
The Board places trading limits on the level of exposure that can be taken in relation to all daily market
positions. With the exception of specific hedging arrangements, foreign exchange and interest rate
exposures are normally oset by entering into reverse positions, thereby controlling the variability in the
net cash amounts required to liquidate market positions. The Bank uses selected derivatives for the fair
value hedging to minimise the impact of changes in fair value on the income statement.
The Bank hedges part of its existing interest rate risk resulting from any potential decrease in the fair
value of assets or increase in the fair value of liabilities denominated both in CZK and foreign currencies
using interest rate swaps, FX derivatives and cross currency interest rate swaps.
In 2023 and in 2022, the Bank did not reclassify any securities.
76 3 Financial Statements
(b) Credit risk
The Bank is exposed to credit risk, which is the risk that a counterparty will be unable to repay amounts
in full when they fall due. The exposure results from individual products of the Bank provided under
supported export financing and from the Bank’s operations on money and capital markets.
The Bank has established a system of approval authorities, depending on the amount of the total limit
for the customer or economically connected group of debtors. In the organisational structure, credit risk
management and control are part of the Risk Management section for which the relevant Board member
is responsible.
Credit risk measurement
The Bank assesses the probability of default of individual counterparties on an individual basis with the
use of rating models. The Bank has developed rating models for assessing the risk level of corporate
customers and risks of banks. The rating models are subject to validation and are updated as and when
necessary.
Overview of internal rating grades
The Bank’s financial assets are classified into 3 risk stages (Stage I - III) and the special POCI category.
• Stage I includes financial assets for initial recognition (excluding POCI) and financial assets for which
the credit risk has not significantly increased from initial recognition to the reporting date.
•
Stage II includes financial assets for which credit risk has increased significantly from initial recognition
to the reporting date, but which are not credit-impaired until the reporting date.
• Stage III includes financial assets that are credit-impaired at the reporting date (default).
•
Financial assets classified as POCI include financial assets that are impaired at the date of initial
recognition.
Significant increase in credit risk
At each reporting date, the Bank has to assess whether or not the credit risk related to the financial asset
has significantly increased since initial recognition.
Rating
value
Level of
risk Description Conversion to the rating
of Standard&Poor’s
Very low
Entities with this rating have a very high credit quality. The financial situation
is very stable and other economic factors are highly favourable. The ability
to meet its obligations on time is very high.
from AAA to AA-
Low
Entities with this rating have a high credit quality. The financial situation is
stable and other economic factors are favourable. The ability to meet its
obligations on time is high.
from Ato A-
Lower
Entities with this rating have a very good credit quality. The financial situa-
tion is above average and other economic factors are very satisfactory. The
ability to meet its obligations on time is very good.
from BBB to BBB-
Medium
Entities with this rating have a good credit quality. The financial situation is
acceptable and other economic factors are satisfactory. The ability to meet
its obligations on time is good.
from BB to BB-
Higher
Entities with this rating have a lower credit quality. The financial situation is
slightly deteriorated, and other economic factors are slightly below average.
The ability to meet its obligations on time is lower.
from B to B-
High
Entities with this rating have a lower credit quality. The financial situation is
deteriorated, and other economic factors are below average. The ability to
meet its obligations on time is lower.
from CCC to CCC-
Very high
Entities with this rating have a low credit quality. The financial situation is
unstable and other economic factors are highly below average. The ability to
meet its obligations on time is uncertain.
from CC to C-
DDefault
Entities with this rating have a very low credit quality. The financial situation
is highly unstable and other economic factors are unfavourable. The ability
to meet its obligations on time is unlikely or impossible.
default
77 3 Financial Statements
The assessment of whether there has been a significant increase in credit risk since initial recognition
is based on all reasonable and demonstrable information available to the Bank without unreasonable
expenses or eort. These include historical information, information on future prospects and credit risk
assessment over the estimated useful life of the financial asset, including information on the circumstances
that led to the potential modification. The assessment whether there has been a significant increase in
credit risk since initial recognition is based on a significant increase in the probability of default since
initial recognition rather than on the events that have occurred. In assessing the credit risk, the Bank
takes into account the current projections of the customer’s economic situation and available information
on the anticipated market developments and the economy of the whole country. For receivables in the
portfolio of assets on the money and capital markets, the Bank anticipates that the credit risk is low due
to the high rating of counterparties. This is ensured by a policy applied at the decision-making level when
approving credit limits, which are re-assessed every 12 months.
The portfolio of receivables from loans, loan commitments, issued guarantees and trade receivables, which
arise solely from the Bank’s customers, the Bank regularly monitors and assessed the following red flags:
• The debtor has not complied with its non-financial contractual obligations towards the Bank for more
than six months (e.g., establishing a subsequent security, financial and non-financial covenants);
•
The beneficiary of the guarantee issued by the Bank sent the Bank a request for extending a guarantee
(extend or pay);
• A modification of the financial asset has been performed; the impact of the decrease in the present
value of future cash flows after and before modification calculated using the original eective interest
rate is less than 5 %;
• Insolvency or similar bankruptcy proceedings in line with foreign legal regulations have been initiated
against the debtor because of an insignificant receivable, which may lead to the declaration of bankruptcy
and a petition for the commencement of such proceedings has not been dismissed or rejected or the
proceedings have not been suspended within 30 days from commencement;
• Legal disputes concerning material amounts (higher than 10% of the net book value of the debtor’s
assets);
• Actual or anticipated changes that may considerably modify the debtor’s ability to pay its liabilities,
such as
—
the eect of significant changes in macroeconomic variables (e.g., GDP development, inflation,
significant change in the exchange rate, adverse development of the prices of key commodities,
decreasing the country’s rating by 2 notches or more)
— or other significant negative information related to the business case or the debtor (e.g., adverse
changes in market, financial, economic and technology conditions);
A significant increase in credit risk (SICR) is acknowledged no later than when:
• A receivable is past due by more than 30 days;
• The debtor’s internal rating when compared to the initial recognition has deteriorated as follows:
Rating upon initial recognition Deterioration
– by notches
– by notches
by notch
• Payments are made by the guarantor if it was not known when the business case was approved that
payments would be sent by the guarantor rather than the debtor;
• The principal in a guarantee issued by the Bank does not meet the conditions of the guarantee, with
the Bank anticipating the beneficiary’s request to extend the guarantee (“extend or pay”); and
•
A statement of another creditor or the investigative, prosecuting, and adjudicating bodies indicates that
criminal proceedings have commenced against the debtor or members of the statutory body because
of a property crime commied in relation to their business activity.
78 3 Financial Statements
Debtor’s default
The event of default has been defined in the Bank based on historical experience for various types
of financial instruments.
Debtor’s default refers to a situation when at least one of the following conditions has been met:
• A receivable or its major portion is past its due date for more than 90 days;
•
With respect to the debtor, an insolvency petition was dismissed, or the insolvency or similar proceedings
were discontinued due to insucient debtor’s property;
• The debtor intends to enter into, or has entered into, liquidation;
•
Bankruptcy of the debtor has been identified or declared, or the bankruptcy or similar proceedings have
commenced under foreign legislation, resulting in a loss or restriction of the debtor’s disposition rights;
• The court has issued a decision on the invalidity or non-existence of the debtor (legal person), or the
debtor (an individual) has passed away;
• Enforcement of a judgement concerning the sale of the debtor’s assets or distraint, including judicial
lien, has been ordered based on a final and conclusive judgement of the court or an administrative
authority;
• The Bank had to make payments for the debtor under provided guarantees; and
—
The debtor has not paid such receivable within 90 days from the deadline specified by the
accompanying loan agreement concluded for performance under a guarantee (or within 90 days
from the deadline for performance defined by the Bank if the accompanying agreement is not
concluded, or the deadline is not defined therein) and, simultaneously, the Bank has not agreed on
a payment schedule with the debtor in order to sele the Bank’s receivable arising in relation to
payments made for the debtor under provided guarantees; or
—
probability that the debtor cannot sele such receivable without the use of security is more than 50%;
• The Bank expects the receivable to be repaid, at least partially, from collateral liquidation;
•
An exposure under probation1 where additional forbearance measures are granted or where the exposure
becomes more than 30 days past due.
Recognition of allowances and provisions
Recognition of allowances and provisions is based on the expected credit loss (ECL), which is expressed
as the weighted average of credit losses. For Stage I assets, the 12-month ECL is used to quantify the
allowances and provisions representing the expected credit losses incurred due to a financial instrument
default that may occur within twelve months from the reporting date. The modelling and subsequent
calculation of loan allowances does not result in the segmentation of the loan portfolio.
The Bank uses the portfolio approach to determine the ECL in segments of receivables from loans, o-
balance sheet products and trade receivables in Stage 1. The collectively determined probability of loss
determined based on an analysis of prior periods is applied to exposure at default (EAD), where EAD is
the gross carrying amount of the exposure net of all accepted collateral. The Bank uses only recoverable
collateral in the calculation, selected on the basis of historical experience and with respect to the exposure
to the foreign legal environment. The resulting recognition of allowances and provisions is allocated to
individual financial assets.
In the segment of receivables of the money and capital markets bearing low credit risk, the Bank uses an
individual approach to quantify ECL. The ECL quantification is based on the probability of loss applied
to exposure at default (EAD), i.e., the unsecured portion of the receivable.
For portfolio-significant exposures, the Bank includes forward-looking information (FLI) in the form of a
coecient for the expected macroeconomic outlook of the debtor’s country in the calculation of expected
credit losses (ECL). This coecient is calculated individually for Russia, Slovakia, Turkey, Indonesia,
1 Note: A period of 2 years, starting from the date on which the non-performing exposure was classified as performing exposure.
79 3 Financial Statements
Senegal, and Azerbaijan, where the Bank has significant exposure. The calculation included expertly
selected macroeconomic variables – GDP growth, government debt, oil price, exchange rate and inflation.
For Stage 2, Stage 3 and POCI assets, the calculation of allowances and provisions uses the lifetime
ECL, which are the expected credit losses that arise from all possible failures to meet commitments over
the expected life of the financial instrument. The Bank uses an individual approach and the method of
probability-weighted estimated cash flow scenarios, which also consider FLI. Estimated cash flows are
determined by evaluators using the estimated cash flow scenarios.
At the same time, the following applies:
• It is always required to use at least two scenarios with a non-zero weight, with the sum of individual
weights being 100%;
• The only exception is when the receivable is insured by a loan insurance company and the insurance
company issued a statement as regards insurance payments – in such a case, only one scenario will
be used, i.e., cash flows will be based on the payments of premium and reductions (if any) – based on
a declaration of the loan insurance company;
•
For Stage 2 receivables, scenarios reflecting the possibility of default must be used (and thus the
possibility of insurance payments by a loan insurance company if applicable) based on boundary
values of the probability of default as per rating;
•
For Stage 3 receivables and if the insurance payment receivable is expected to be paid with a probability
of > 50%, a scenario reflecting the possibility of reduction of insurance payments by the insurance
company may be used until the insurance company’s statement on insurance payments is received.
No financial asset of the Bank was arranged or originated as credit impaired (POCI).
Russian invasion of Ukraine
In connection with the Russian invasion of Ukraine, the Bank transferred all receivables from Russian and
Ukrainian borrowers that were recorded in performing exposures to non-performing exposures in 2022.
As all receivables were collected according to existing payment schedules in 2022, the Bank reclassified
receivables from Russian borrowers and ranked them again among performing exposures. The Bank did
not record any financial losses from Russian borrowers arising from the Russia-Ukraine conflict. The only
real impact is thus the failure to recover receivables from borrowers based in Ukraine, where the Bank
collects insurance payments from EGAP and is likely to incur a temporary loss equal to insurance excess.
We expect that all receivables from Ukrainian borrowers will be paid after the conflict has ended.
The Bank is consistently monitoring the financial situation of all borrowers in its portfolio in connection
with deteriorating economic conditions, especially with respect to the inflation development. The Bank
did not identify any significant credit risk deterioration for any of its borrowers for the above reasons.
Impacts are identified in tables illustrating the development of exposures and adjustments.
ESG
In 2023, the Bank carefully monitored the approval of the European Corporate Sustainability Reporting
Directive (CSRD) in accordance with the European Sustainability Reporting Standards (ESRS) in the
context of future compliance with reporting obligations. The Bank’s risk management strategy includes
the newly introduced definition of the ESG risk. Types of risks were defined for all three ESG parts, i.e., the
environment, social impact, and corporate governance. CEB perceives ESG risks as part of other kinds of
risks, in particular, the credit risk, liquidity risk, and reputational risk.
The Risk Management Division consistently identifies, measures, monitors and takes measures to reduce
these risks considering the ESG aspect.
80 3 Financial Statements
Given the nature of CEB, which is a specialised bank institution intended to provide financing in accordance
with the conditions of Act No. 58/1995 Coll., on Insurance and Financing Exports with State Support, the
reputational and strategic risk, including ESG aspects following from the Bank’s own activities, are not
measured separately. These risks are managed by qualitative procedures.
From the perspective of the client portfolio, the Bank assesses what impact the ESG area has on clients’
business continuity and their financial ability to aect CEB’s credit exposure. In this connection, the Bank
made an assessment of approximately 50% debtors from its portfolio in 2023.
The Bank also cooperates with an external company in the preparation of questionnaires for clients
focusing on the assessment of ESG aspects.
81 3 Financial Statements
Exposures by level of credit risk
(MCZK)
Carrying
amount
(gross)
Carrying amount (gross) Allowances
Stage
Stage
Stage
Stage
Stage
Stage
Debt securities at fair value recognized in OCI
Government institutions
Financial assets at amortised cost () () ()
Debt securities at amortised cost ()
Government institutions ()
Credit institutions
Loans and receivables at amortised cost () () ()
Central banks ()
Government institutions ()
Credit institutions ()
Non-financial corporations () () ()
Other receivables ()
(MCZK)
Carrying
amount
(gross)
Carrying amount (gross) Allowances
Stage
Stage
Stage
Stage
Stage
Stage
Debt securities at fair value recognized in OCI ()
Government institutions ()
Financial assets at amortised cost () () ()
Debt securities at amortised cost ()
Government institutions ()
Credit institutions
Loans and receivables at amortised cost () () ()
Central banks ()
Government institutions ()
Credit institutions
Non-financial corporations () () ()
Other receivables ()
(MCZK)
Carrying amount (gross) Established provisions
Stage
Stage
Stage
Stage
Stage
Stage
Provided loan commitments total ()
Non-financial corporations () ()
Provided financial guarantees total () () ()
Non-financial corporations () () ()
O-balance sheet positions total () () ()
(MCZK)
Carrying amount (gross) Established provisions
Stage
Stage
Stage
Stage
Stage
Stage
Provided loan commitments total () ()
Government institutions
Non-financial corporations () ()
Provided financial guarantees total () () ()
Non-financial corporations () () ()
O-balance sheet positions total () () ()
82 3 Financial Statements
In 2023, reclassification from Stage 1 to Stage 2 was made for three receivables, but primarily for one new
transaction of CZK 671 million for which deterioration of financial situation was observed. Loss allowances
of CZK 57 million were subsequently established in Stage 2 for this transaction. Two receivables were
reclassified from Stage 2 to Stage 3 due to payment complications with Russian debtors. Both exposures
were paid in 2023. Stage 3 also saw a reduction in some older impaired loans that were recorded on the
balance sheet in the amount of expected insurance payments.
The item “Creation of new assets” in Stage 1 primarily includes short-term exposures at the Czech National
Bank of CZK 7,837 million. The rest are deposits with other banks of CZK 3,026 million, and newly granted
loans of CZK 2,511 million.
Development of balance sheet exposures by level of credit risk
Movements between stages of loans and receivables at gross amortised cost
Allowances for impairment of loans and receivables at amortised cost
(MCZK) Stage Stage Stage Total
December
Transfer from Stage ()
Transfer from Stage ()
Transfer from Stage
Changes in ongoing transactions (repayments)/drawing and
accrued interest ()
Creation of new assets
Fully paid-up transactions ( ) () () ( )
Wrien-o transactions () ()
Exchange rate gains or losses
December
(MCZK) Stage Stage Stage Total
December () () () ()
Transfer from Stage ()
Transfer from Stage ()
Transfer from Stage
Changes in allowances () () ()
Creation of allowances for newly created assets () ()
Release of allowances for derecognized assets
Exchange rate gains or losses () () () ()
December () () () ()
83 3 Financial Statements
In 2022, receivables from Russian and Ukrainian borrowers of CZK 1,353 million were reclassified from
Stage 1 to Stage 2 due to the military conflict in Ukraine. Subsequently, CZK 3,147 million were reclassified
to Stage 3 following the announcement of sanctions. Thus, all receivables from Russian borrowers that
had previously been in Stage 2 were reclassified to Stage 3. With respect to the successful recovery of
outstanding payments, receivables from Russian entities of CZK 2,253 million were transferred back to
Stage 2 after the expiry of the minimum verification period. An increased risk due to these events was
mainly identified in Stage 2.
An insured impaired receivable of CZK 4,214 million gross was assigned in 2022. The terms of the
assignment contract resulted in the use of already created allowances in Stage 3 of CZK 385 million.
The item “Creation of new assets” in Stage 1 primarily includes short-term exposures at the Czech National
Bank of TCZK 8,762 million. The rest are deposits with other banks and newly granted loans. The creation
of allowances for newly created assets was also aected by rating agencies increasing the Czech Republic’s
PD due to inflation developments and the external political and economic situation.
Movements between stages of loans and receivables at gross amortised cost
Allowances for impairment of loans and receivables at amortised cost
(MCZK) Stage Stage Stage Total
December
Transfer from Stage ( )
Transfer from Stage ( )
Transfer from Stage ( )
Changes in ongoing transactions (repayments)/drawing and
accrued interest () ( ) () ( )
Creation of new assets
Fully paid-up transactions ( ) () ( )
Wrien-o transactions ( ) ( )
Exchange rate gains or losses () () () ()
December
(MCZK) Stage Stage Stage Total
December () () () ()
Transfer from Stage
Transfer from Stage ()
Transfer from Stage ()
Changes in allowances () () ()
Creation of allowances for newly created assets () ()
Release of allowances for derecognized assets
Write-os
Exchange rate gains or losses
December () () () ()
84 3 Financial Statements
In 2023, the highest items in the amount of newly created o-balance sheet positions in Stage 1 comprised
four loan commitments of CZK 2,542 million and two financial guarantees of CZK 711 million. One loan
drawdown of CZK 1,447 million stands out among terminated positions in Stage 1. In Stage 2, we can see
the drawdown of loan commitments for a significant long-term business case where there is an ongoing
drawdown and repayment of the loan.
Movements between stages of o-balance sheet positions
Provisions
Development of o-balance sheet exposures by level of credit risk
Movements between stages of o-balance sheet positions
(MCZK) Stage Stage Stage Total
At December
Transfer from Stage ()
Transfer from Stage
Transfer from Stage
Changes in ongoing transactions
(drawing or derecognition) / increase () () ()
Creation of new o-balance sheet positions
Termination (drawing or derecognition) ( ) ( ) ( )
Exchange rate gains or losses () ()
At December
(MCZK) Stage Stage Stage Total
At December () () () ()
Transfer from Stage
Transfer from Stage
Transfer from Stage
Changes in provisions
(Creation of provisions for newly created positions) () ()
Release of provisions for derecognized positions
Exchange rate gains or losses
At December () () () ()
(MCZK) Stage Stage Stage Total
At December
Transfer from Stage ()
Transfer from Stage
Transfer from Stage
Changes in ongoing transactions
(drawing or derecognition) / increase () () ()
Creation of new o-balance sheet positions
Termination (drawing or derecognition) () ()
Exchange rate gains or losses () () ()
At December
85 3 Financial Statements
The issued guarantees were transferred from Stage 1 to Stage 2 mainly due to the military conflict in Ukraine.
Provisions
Classification by internal rating
(MCZK) Stage Stage Stage Total
At December () () () ()
Transfer from Stage ()
Transfer from Stage
Transfer from Stage
Changes in provisions ()
(Creation of provisions for newly created positions) () ()
Release of provisions for derecognized positions
Exchange rate gains or losses
At December () () () ()
(MCZK)
Carrying
amount
(gross)
Carrying amount (gross) Allowances or Provisions
Internal
rating
Stage
Stage
Stage
Stage
Stage
Stage
Highest credit quality ()
Debt securities at amortised cost ()
Highest credit quality ()
High credit quality ()
Very good credit quality ()
Good credit quality ()
Quality requiring prudence () ()
Unsatisfactory ()
Default of project D ()
Loans and receivables
at amortised cost () () ()
Financial assets at
amortised cost () () ()
Highest credit quality
Debt securities at fair value
recognized in OCI
High credit quality ()
Very good credit quality ()
Good credit quality ()
Quality requiring prudence () ()
Provided loan commitments () ()
High credit quality ()
Very good credit quality ()
Good credit quality ()
Quality requiring prudence ()
Default of project D ()
Provided financial guarantees () () ()
86 3 Financial Statements
Performing and non-performing exposures
A non-performing exposure is an exposure that meets at least one of the criteria below:
a) It is overdue by more than 90 days;
b) The debtor has been assessed by the Bank as a client that will probably be unable to repay all its
liabilities without using collateral, whereby the existence of an exposure past its due date or the
number of days past the due date are not taken into account; and
c) The exposure is in probation period for which other forbearance is provided or which is more than
30 days overdue.
Such an exposure is always classified by the Bank as Stage 3 or POCI.
(MCZK)
Carrying
amount
(gross)
Carrying amount (gross) Allowances or Provisions
Internal
rating
Stage
Stage
Stage
Stage
Stage
Stage
Highest credit quality ()
Very good credit quality
Debt securities at amortised cost ()
Highest credit quality ()
High credit quality
Very good credit quality ()
Good credit quality ()
Quality requiring prudence () ()
Vulnerable
Unsatisfactory ()
Default of project D ()
Loans and receivables
at amortised cost () () ()
Financial assets at
amortised cost () () ()
Highest credit quality ()
Very good credit quality
Debt securities at fair value
recognized in OCI ()
Very good credit quality ()
Good credit quality ()
Quality requiring prudence () ()
Provided loan commitments () ()
High credit quality
Very good credit quality ()
Good credit quality ()
Quality requiring prudence () ()
Default of project D ()
Provided financial guarantees () () ()
87 3 Financial Statements
Performing and non-performing balance sheet exposures not due and overdue
Performing and non-performing exposures with forbearance
Exposures with forbearance refer to exposures for which the debtor is facing or is likely to face diculties
in meeting its financial obligations and, as a consequence, the Bank has changed the conditions of the loan
contract. These new conditions are more favourable towards the debtor or are more favourable than those
oered to debtors with a similar risk profile at that time. The assessment of exposures with forbearance
focuses on whether the exposure has been classified as performing before granting the forbearance or
whether it would be classified as non-performing when contracting conditions have changed.
The Bank recognizes interest income on receivables with forbearance of CZK 585 million
(2022 – CZK 237 million).
(MCZK)
Financial assets at amortised cost with
forbearance
Carrying amount Carrying amount (gross) Allowances
Stage Stage Stage Stage Stage Stage
Financial assets at amortised cost with
forbearance ()
(MCZK)
Financial assets at amortised cost with
forbearance
Carrying amount Carrying amount (gross) Allowances
Stage Stage Stage Stage Stage Stage
Financial assets at amortised cost with
forbearance () () ()
(MCZK)
Carrying amount (gross)
Total Performing exposures Non-performing exposures
Days-past-due interval
days
days
days
days
days
days
days
year
year
years
years
Debt securities at amortised cost
Loans and receivables at amortised cost
Financial assets at amortised cost
Debt securities at fair value recognized in OCI
Performing and non-performing exposures
in total
(MCZK)
Carrying amount (gross)
Total Performing exposures Non-performing exposures
Days-past-due interval
days
days
days
days
days
days
days
year
year
years
years
Debt securities at amortised cost
Loans and receivables at amortised cost
Financial assets at amortised cost
Debt securities at fair value recognized in OCI
Performing and non-performing exposures
in total
88 3 Financial Statements
Credit risk management
The Bank structures the levels of credit risk exposures by seing limits for the volume of acceptable
risk in relation to one debtor or a group of debtors, a geographical segment, industry focus or another
significant concentration with a common risk factor.
Proportion of exposures with forbearance to total exposure
Modified contractual cash flows
(MCZK)
Performing and
non-performing
exposures in
total
Exposures with
forbearance
(net)
Share in per-
forming and
non-performing
exposures
Performing and
non-performing
exposures in
total
Exposures
with forbea-
rance (net)
Share in per-
forming and
non-performing
exposures
Government institutions ,
Credit institutions ,
Non-financial
corporations , ,
Loans and receivables
at amortised cost , ,
Debt securities at
amortised cost ,
Debt securities at fair
value recognized in OCI ,
Performing and
non-performing
exposures in total
, ,
(MCZK)
Receivables at amortised cost in stages and before modification
Modification gains and losses
Gross carrying amount of receivables in stages and transferred
to stage during the reporting period
89 3 Financial Statements
Maximum credit exposure
(MCZK)
Total exposure value
Balance
sheet
positions
O-balan-
ce sheet
position
Total
exposure Insurance
Financial
guarantees
received
Cash
collateral
Securities
in
REVREPO
Total
collateral
Cash in hand, cash with the
central bank and other depo-
sits repayable on demand
Debt securities at fair value
recognised in OCI
Balance-sheet exposures
at amortised cost and
o-balance sheet exposures
Exposures from credit
institutions
of which: Stage
of which: Stage
Exposures from other
customers
of which: Stage
of which: Stage
of which: Stage
Debt securities
Other financial assets
Total exposure
(MCZK)
Total exposure value
Balance
sheet
positions
O-balan-
ce sheet
position
Total
exposure Insurance
Financial
guarantees
received
Cash
collateral
Securities
in
REVREPO
Total
collateral
Cash in hand, cash with the
central bank and other depo-
sits repayable on demand
Debt securities at fair value
recognised in OCI
Balance-sheet exposures
at amortised cost and
o-balance sheet exposures
Exposures from credit
institutions
of which: Stage
Exposures from other
customers
of which: Stage
of which: Stage
of which: Stage
Debt securities
Other financial assets
Total exposure
90 3 Financial Statements
Derivative financial instruments
The credit risk resulting from open derivative positions is managed within the overall trading limits for
individual debtors, by both amount and term. The credit risk arising from these instruments usually is not
subject to pledge or other guarantees. In other cases, financial collateral is used in the form of received
deposit bearing the basic interest rate of the respective currency.
The credit risk from derivative positions is minimised by the Bank by selecting credible counterparties and
regularly monitoring their financial situation. The derivatives were arranged with counterparties based in
the OECD countries (or with credible domestic counterparties) and having long-term “A” ratings or beer
from international rating agencies.
Other financial assets
For the purposes of credit risk management of other financial assets, the same approach is applied as in
the case of credit risk management of loans.
O-balance sheet exposures
O-balance sheet exposures primarily involve provided loan commitments and financial guarantees. Loan
commitments represent the unused portion of approved credit facilities in the form of loans. With regard
to credit risk arising from loan commitments, the Bank is exposed to the risk of potential loss as equal to
the aggregate amount of unused loan commitments. Losses may be mitigated as not all exposures will
be used.
Concentration of credit risk
The Bank has set a system for the management of limits for individual debtors and economically connected
groups of debtors with regard to the debtor’s territory and industry to ensure that engagement limits
stipulated by regulation are nor exceeded. The credit risk is decreased by way of hedging instruments,
predominantly including the insurance of export risks, cash collateral, securities received as a collateral
in repo transactions.
91 3 Financial Statements
Breakdown by geographic segment
(MCZK)
Carrying amount
(gross) Carrying amount (gross) Allowances
() Stage Stage Stage Stage Stage Stage
Czech Republic , ()
European
Investment Bank ,
Debt securities at
amortised cost ()
Azerbaijan , ()
Czech Republic , () ()
Indonesia , ()
Russia , () ()
Slovak Republic , ()
Switzerland ,
Turkey , ()
Ukraine , ()
France , ()
Other administrative
expenses , () () ()
Loans and receivables
at amortised cost , () () ()
Financial assets at
amortised cost () () ()
Czech Republic ,
Debt securities at
fair value recognized
in OCI
(MCZK)
Carrying amount
(gross) Carrying amount (gross) Allowances
() Stage Stage Stage Stage Stage Stage
Czech Republic , ()
European
Investment Bank ,
Debt securities at
amortised cost ()
Azerbaijan ,
Czech Republic , ()
Indonesia , ()
Russia , () ()
Slovak Republic , ()
Switzerland ,
Turkey , ()
Ukraine , ()
Other , () () ()
Loans and receivables
at amortised cost , () () ()
Financial assets at
amortised cost () () ()
Czech Republic , ()
Slovak Republic ,
Debt securities at
fair value recognized
in OCI
, ()
92 3 Financial Statements
Breakdown by industry
(MCZK)
Carrying
amount
(gross)
Carrying amount (gross) Allowances
() Stage Stage Stage Stage Stage Stage
International deve-
lopment banks and
organisations
,
Public administration
and defence , ()
Debt securities at
amortised cost , ()
Processing industry , () () ()
Production and distri-
bution of electricity,
gas, heat, and air
, () () ()
Transport
and warehousing , ()
Banking and
insurance industry , ()
Public administration
and defence , ()
Other , () () ()
Loans and receivables
at amortised cost , () () ()
Financial assets at
amortised cost () () ()
Public administration
and defence ,
Debt securities at fair
value recognized in OCI ,
93 3 Financial Statements
(MCZK)
Carrying
amount
(gross)
Carrying amount (gross) Allowances
() Stage Stage Stage Stage Stage Stage
International deve-
lopment banks and
organisations
,
Public administration
and defence , ()
Debt securities at
amortised cost , ()
Processing industry , () ()
Production and distri-
bution of electricity,
gas, heat, and air
, () () ()
Transport
and warehousing ,
Banking and
insurance industry , ()
Public administration
and defence , ()
Other , () () ()
Loans and receivables
at amortised cost , () () ()
Financial assets at
amortised cost () () ()
Public administration
and defence , ()
Debt securities at fair
value recognized in OCI , ()
94 3 Financial Statements
(c) Market risk
The Bank is exposed to market risks. Market risks arise from open positions in interest rate and currency
products, all of which are exposed to general and specific market movements. The Bank uses GAP analysis
to track the spread of interest rate risk in individual currencies over time, estimating the impact of interest
rate changes on the Bank’s short-term earnings (change in NII - Net Interest Income) and the model of
changes of Economic Value of Equity (EVE) to estimate the market risk of its positions and the maximum
expected loss based on standard shock market change scenarios (according to the European Banking
Authority’s document Guidelines on the management of interest rate risk arising from non-trading book
activities EBA/GL/2018/02). The Board sets limits on the acceptable value of risk, from which all market
risks limits are derived. Current utilisation of the limits is monitored on a daily basis by risk management.
The Bank uses the EVE method, which calculates the maximum possible change in the economic value
of the Bank’s capital in applying standard shock scenarios of changes in the interest rate and exchange
rate. The Bank has not been exposed to risks stemming from non-linear instruments. All EVE changes
are summarised in the table below.
The first table shows EVE values, specifically the average, high, and low EVE values for the period,
broken down into individual components of this indicator (interest rate and currency risk) and total. They
characterise the levels of three sets of values that make up the daily total change of EVE for all trading
days of the period under review, then the daily currency and interest rate component of this indicator.
The second table contains the EVE values for a given trading day, again structured as per the interest
* The values reported with the negative sign represent the negative impact while those with the positive sign represent the positive
impact of shock scenarios.
EVE values
(MCZK)* months to December months to December
EVE Average High Low Average High Low
Interest rate risk () () () () () ()
Currency risk () () () ()
Total EVE () () () () () ()
(MCZK) * December December
EVE
Interest rate risk
Parallel up (plus bps)
Parallel down (minus bps) () ()
Increase of short-term rates
Decrease of short-term rates () ()
Steepener (short-term rates down
and long-term rates up) () ()
Flaener (short-term rates up and
long-term rates down)
Maximum () ()
Currency risk
Parallel up
Parallel down () ()
Maximum () ()
Total EVE () ()
95 3 Financial Statements
rate and currency components. The impact of the application of each shock scenario is also presented
in each of these components: six interest rate and two currency scenarios. Interest rate shock scenarios
are taken from the EBA document mentioned above, currency shock scenarios are defined as the change
in EVE with a percentage change in the relevant spot FX rate, and have been calibrated based on the
historical behaviour of FX rates. We consider the following FX rate changes: a shift of +30% USD/+15%
EUR is considered for the CZK depreciation scenario; a shift of -25% USD/-15% EUR applies to the CZK
appreciation scenario.
The Bank conducts quarterly stress testing of the impact of material changes in financial markets on the
level of market exposure. Under the EVE method, so-called stress scenarios based on standard shock
scenarios for day-to-day management of the interest rate and currency risks are used to modify them to
capture an even greater movement of market factors.
(d) Currency risk
The Bank is exposed to the eects of fluctuations in the prevailing foreign exchange rates on its financial
position and cash flows. Currency risk is managed using the currency sensitivity and EVE change analyses,
for which limits are defined to mitigate potential exposure. If the total net currency position is greater
than 2% of capital, the size of the open currency position is reflected in the capital adequacy requirement
which is allocated to this risk by the Bank.
The table below summarises the Bank’s exposure to currency risk. Included in the table are the Bank’s
assets and liabilities at carrying amounts, categorised by currency. The net foreign currency position
also includes exposure to currency risk arising from FX derivatives that are used primarily to reduce the
balance sheet currency risk of the Bank.
Concentration of assets, liabilities and o-balance sheet items
(MCZK) CZK EUR USD Other Total
December
ASSETS
Cash in hand, cash with the central bank and
other deposits repayable on demand
Debt securities at fair value recognized in OCI
Financial assets at amortised cost
Property, plant and equipment
Intangible assets
Tax assets
Other assets
Total assets
LIABILITIES
Financial liabilities measured at amortised cost
Provisions
Tax liabilities
Other liabilities
Total liabilities
Net balance sheet position ()
Net currency position ()
96 3 Financial Statements
(e) Interest rate risk
The Bank is exposed to interest rate risk as its interest-bearing assets and liabilities have dierent
re-fixing or maturity dates. For floating rate instruments, the Bank is exposed to basis risk, which arises
from the dierences in methods of adjusting individual types of interest rates, primarily EURIBOR and, if
relevant, PRIBOR. Interest rate risk is managed using interest rate GAP analysis, analysis of the change in
net interest income (NII) and change in EVE. For NII and EVE, change indicators a set of limits is defined
to mitigate potential exposure. Interest rate risk management aims at minimising the sensitivity of the
Bank to interest rate fluctuations.
Interest rate gap
(MCZK) CZK EUR USD Other Total
December
ASSETS
Cash in hand, cash with the central bank and
other deposits repayable on demand
Debt securities at fair value recognized in OCI
Financial assets at amortised cost
Property, plant and equipment
Intangible assets
Tax assets
Other assets
Total assets
LIABILITIES
Financial liabilities measured at amortised cost
Provisions
Tax liabilities
Other liabilities
Total liabilities
Net balance sheet position
Net currency position
(MCZK)
M M - M M - M M - Y Y - Y Y - Y Y - Y Y - Y Y - Y Y Total
Assets CZK
Liabilities
Assets EUR
Liabilities
Assets USD
Liabilities
Assets Total
Liabilities Total
Accu-
mulated
GAP
97 3 Financial Statements
Assets and liabilities (e.g., principal and interest), including o-balance sheet items, enter the time basket
in the nominal amount (i.e., without discounting), with floating-rate instruments entering the position on
the date of the next revaluation and fixed-rate instruments on the maturity date.
In accordance with the risk management strategy approved by the Board, the Bank optimises the structure
of its sources of finance comprising bond issues and syndicated loans so that no significant dierences
between the duration of its interest-sensitive assets and liabilities arise.
Interest rate derivatives are used for mitigating the dierence between the interest rate sensitivity of
assets and liabilities. These transactions are conducted in accordance with the risk management policies
approved by the Board of Directors and the use of hedge accounting rules approved by the ALCO to
reduce the interest rate risk of the Bank.
Interest Rate Benchmark Reform
The Bank continues to use benchmark interest rates PRIBOR or EURIBOR for loans denominated in
CZK or EUR bearing a floating interest rate. The Bank transitioned to using 3M TERM SOFR for loans
denominated in USD bearing a floating interest rate. The Bank adjusted all relevant contractual relation
to reflect the new reality. As for derivatives, the Bank decided not to accede to the ISDA IBOR Fallbacks
Supplement and to deal with individual transactions bilaterally. The transfer to new benchmark rates did
not have material impact on the Bank’s financial statements.
(f) Liquidity Risk
Liquidity risk arises from dierent types of financing the Bank’s activities and the management of its
positions. It includes both the risk of the Bank’s ability to finance its assets by way of instruments with
appropriate maturity and the Bank’s ability to liquidate/sell its assets at a favourable price in a favourable
time frame.
The Bank's liquidity risk management uses its own methods for measuring and monitoring net cash flows
and liquidity positions. The dierences between the inflow and outflow of funds are measured by a liquidity
gap analysis which determines the liquidity positions for dierent time baskets (gaps). GAP is composed
of undiscounted cash flows in nominal amounts of principal and accessories (interest, commitment
commissions, etc.). Fixed maturity inflows and outflows are based on contractual arrangements; liquidity
assumptions for inflows and outflows are the expected maturities of products without fixed contractual
maturities (current and nostro accounts, insurance claims). The liquidity provision is stated at the fair
value of highly liquid securities and receivables from the CNB.
(MCZK)
M M - M M - M M - Y Y - Y Y - Y Y - Y Y - Y Y - Y Y Total
Assets CZK
Liabilities
Assets EUR
Liabilities
Assets USD
Liabilities
Assets Total
Liabilities Total
Accu-
mulated
GAP
98 3 Financial Statements
Liquidity gap
Liquidity development in the currency structure of CZK, EUR, USD and in the total for the Bank is monitored
at several levels, i.e. at the level of the standard and the alternative scenarios and three stress scenarios
that quantify the impact on liquidity in the event of a reputational crisis, market crisis and combined crisis.
The individual scenarios are the basis for regular analysis of survival time. The bank has set a minimum
requirement for the survival of at least two months according to the standard scenario. The Bank has
also determined a system of early warning indicators designed to capture negative trends and to run a
response to an identified situation. Sucient liquidity is controlled by a system of limits and is managed
with the help of on- balance sheet (e.g. cash, liquid securities at FVOCI, issued bonds, loans taken from
banks) and o-balance sheet transactions (foreign exchange swaps, currency interest rate swaps). The
fundraising plan is regularly reviewed by the Bank in response to the current development of liquidity
risk, financial markets, etc.
The Bank has access to diversified sources of financing. These sources comprise issued bonds, bilateral
or club loans from domestic as well as international financial markets and other deposits received from
other banks and customers. This diversification gives flexibility to the Bank and limits its dependence on
one source of finance. On a regular basis, the Bank assesses the liquidity risk, predominantly by monitoring
changes in the financing structure. In compliance with its liquidity risk management strategy, the Bank
also maintains a sucient liquidity reserve primarily composed of cash deposited with the central bank as
well as highly liquid government securities and bonds of the financial institutions of the European Union.
The regulatory liquidity coverage ratio (LCR) has a minimum required compliance level of 100%. The Bank
reported an LCR of 4,533% as at 31 December 2023 (3,557% as at 31 December 2022).
The regulatory net stable funding ratio (NSFR) (NSFR) has a minimum required level of 100%. The Bank
reported an NSFR of 157% as at 31 December 2023 (161% as at 31 December 2022).
(MCZK)
Up to month – months – months – years Over years Total
Fixed maturity inflows
Inflows – liquidity assumptions
Liquidity reserve
Total inflows
Fixed maturity outflows
Outflows – liquidity assumptions
Capital
Total outflows
Accumulated GAP
(MCZK)
Up to month – months – months – years Over years Total
Fixed maturity inflows
Inflows – liquidity assumptions
Liquidity reserve
Total inflows
Fixed maturity outflows
Outflows – liquidity assumptions
Capital
Total outflows
Accumulated GAP
99 3 Financial Statements
Maturity of non-derivative financial liabilities
The provided financial guarantees are non-payment guarantees unlikely to be called within one month
due to their nature, the negligible frequency with which they have been called in the past and the credit
risk. Therefore, the final expiry date when the guarantees can be called is applied.
The Bank’s liquidity is stabilised and resources due can be easily replaced by new medium and long-term
resources.
The stated values are based on contractual non-discounted cash flows.
(MCZK) Up to month – months – months – years Over years Total
At December
Financial liabilities to credit
institutions at amortised cost
Financial liabilities to other
customers at amortised cost
Issued debt securities at
amortised cost
Lease liabilities
Total financial liabilities at
amortised cost
Provided loan commitments
Provided financial guarantees
(MCZK) Up to month – months – months – years Over years Total
K. prosinci
At December
Financial liabilities to credit
institutions at amortised cost
Financial liabilities to other
customers at amortised cost
Issued debt securities at
amortised cost
Lease liabilities
Total financial liabilities at
amortised cost
Provided loan commitments
Provided financial guarantees
100 3 Financial Statements
(g) Fair values of financial assets and liabilities
The following table summarises the carrying amounts and fair values of those financial assets and liabilities
not presented on the Bank’s balance sheet at their fair values. The yield curves used in calculating fair
values are sourced from the Refinitiv system. The fair value of loans classified in level 2 and level 3 is
equal to the carrying amount.
Debt securities of government and central banks are all quoted and measured at level 1, issued debt
securities are measured at level 2. All other financial assets and liabilities are measured at fair value within
the level 2, with the exception of receivables and liabilities from customers. Receivables and liabilities
from customers are measured at level 3.
Loans to credit institutions
Loans to credit institutions include interbank deposits and other receivables from banks. The fair value of
floating rate deposits and overnight deposits is equal to their carrying amount. The estimated fair value of
deposits with a fixed interest rate is based on discounted cash flows based on the prevailing yield curve
for the respective remaining maturity.
Loans to other customers and securities measured at amortised cost
The estimated fair value of loans and securities held until maturity represents the discounted amount
of estimated future cash flows. Expected cash flows are discounted using prevailing interest rates for
loans and securities with similar credit risk and remaining maturity, considering credit spreads of relevant
financial instruments at year-end, including the existing credit security.
Payables to banks and customers
The estimated fair value of deposits with unspecified maturity, which includes interest-free deposits, is
an amount repayable on demand. The estimated fair value of deposits bearing fixed interest and other
borrowings without a quoted market price is based on discounted cash flows using the prevailing yield
curve for the respective remaining maturity.
(MCZK)
Carrying amount Fair value
FINANCIAL ASSETS
Deposits with the central bank
Deposits with credit institutions
Loans to credit institutions
Total receivables from credit
institutions
Receivables from other customers
Debt securities at amortised cost
FINANCIAL LIABILITIES
Financial liabilities to credit
institutions at amortised cost
Financial liabilities to other customers
at amortised cost
Issued debt securities at amortised
cost
101 3 Financial Statements
Liabilities from issued bonds
Liabilities from issued bonds are measured using a model of discounted cash flow model using current rates.
(h) Capital management
The aim of the Bank with respect to capital management is to comply with the regulatory requirements
in the area of capital adequacy and to maintain sucient capital in order to strengthen the development
of ocially supported financing provided pursuant to Act No. 58/1995 Coll.
The Bank uses the standardised approach based on an external rating to calculate the capital requirement
for the credit risk of the investment portfolio, i.e. to calculate risk-weighted exposures. The risk weighting
is based on the exposure category and credit quality. Exposure classes and risk weights when using
the standardised approach are defined by Regulation of the European Parliament and the Council (EU)
No 575/2013 of 26 June 2013 on prudential requirements for banks and investment firms and amending
Regulation (EU) No. 648/2012.
Credit quality is determined based on external rating, which was set by the rating agency, registered
in accordance with Regulation (EC) No. 1060/2009 of the European Parliament and of the Council of
16 September 2009 on credit rating agencies and included in the list of agencies for credit assessment
maintained for this purposes by the European Securities and Markets Authority (ESMA) or by an export
credit agency, which publishes reviews and complies with OECD methodology for classifying countries.
When calculating risk weighted exposures, the Bank considers methods of decreasing credit risk, such
as pledging property as collateral (financial collateral) or individual security of exposures (insurance and
other guarantees).
The Bank has created and used a system of internally set capital (SVSK) in order to fulfil its statutory
duties in the area of planning and continuously maintaining internally set capital in the amount, structure
and distribution, so that the risks, which could threaten the Bank, are suciently covered.
SVSK is established to reflect the Bank’s nature of a specialised bank institution directly and indirectly
owned by the state intended to provide financing or ocially supported financing and related services
pursuant to Act No. 58/1995 Coll. and with respect to the scope and complexity of activities resulting
from operating ocially supported financing and related services and corresponding risks.
Oseing of financial instruments
(MCZK)
Gross amounts
of financial
assets
Gross amounts of
financial liabilities
accounted for
Net amounts of finan-
cial assets reported in
the balance sheet
Pledged
securities
Cash
collateral Net amount
Receivable from
reverse repo
transaction
(MCZK)
Gross amounts
of financial
assets
Gross amounts of
financial liabilities
accounted for
Net amounts of financial
assets reported in the
balance sheet
Pledged
securities Cash
collateral Net amount
Receivable from
reverse repo
transaction
102 3 Financial Statements
The Board of Directors approved the SVSK concept in the form of a capital management strategy which
defines the key goals, principles, parameters and limits of SVSK, including the methods used to evaluate
and measure each risk undertaken by the Bank.
Quantifiable risks within SVSK are assessed in the form of internally set capital requirements. Other risks
within SVSK are covered by qualitative measures in risk management and organisation of processes and
controls (code of ethics, code of corporate governance, etc.).
In 2023 and 2022, the Bank met all regulatory requirements for capital adequacy.
The Bank has determined regulatory capital according to the BASEL 3 rules codified in Regulation (EU)
No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements
for credit institutions and investment firms and amending Regulation (EU) No 648/2012.
4 Critical accounting estimates and judgements in applying
accounting policies
The Bank makes estimates and assumptions that aect the reported amounts of assets and liabilities.
Estimates and judgements are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the current
circumstances.
(a) Impairment losses on financial assets, loan commitments, guarantees and
contractual assets
To measure the expected credit loss, a system was developed that included workflows, models and inputs
into the information system. Critical areas include methodologies to regulate default, significant increase
in credit risk (SICR), probability of loss (PL) loss, exposure at loss (EAD) and macroeconomic models.
The Bank continuously checks and verifies these models and inputs into information systems. For the
purposes of determining impairment losses, a system is in place for ongoing and periodic monitoring of
credit exposures and reporting of changes in the credit risk to the management.
The assessment of a significant increase in credit risk leading to the recognition of allowances and
provisions in the amount of lifetime expected credit loss is subject to expert estimates and assessment by
the Bank’s management. This assessment compares the change in credit risk upon initial recognition and
at the reporting date. The Bank uses various observable and verifiable events that are available without
incurring undue costs to indicate prospects for the future.
Regulatory capital
(MCZK)
Paid-up share capital registered in the Commercial Register
Funds from profit
Accumulated other comprehensive income () ()
Retained earnings
Other intangible assets ()
Adjustments of capital due to the use of prudential filters ()
Initial capital (Tier )
Capital
103 3 Financial Statements
(b) Assessment of the business model and contractual cash flows
The Bank’s business model
The Bank’s business model is a strategy set out by the Bank’s management, which formulates the objectives
of financial asset management. In stating the Bank’s business model, the Bank’s management worked
with the frequency, timing and value of transactions, cash flow characteristics, and expectations related
to future sales. The Bank applies a mixed business model. In the main business model, the Bank provides
export financing products, especially credit products and trade finance products in accordance with Act
No. 58/1995 Coll., on Insurance and Financing Exports with State Subsidies, as amended, and related
regulations. The objective of the main business model is to obtain contractual cash flows, which are the
principal and interest on outstanding principal. The Bank’s supplementary business model is the holding
of an asset with the purpose of obtaining contractual cash flows from the principal and interest as well
as selling the asset. The Bank does not arrange any financial assets or financial liabilities held for trading.
For instruments measured at amortised cost (AC), the objective is to collect cash flows representing a
principal and interest. It is assumed that sales will occur rarely and in insignificant volumes, or only in
situations such as:
a) Reduction in the credit quality of the asset’s issuer, sale of assets with increased credit risk;
b) Sales shortly (3 months) before maturity;
c) Unforeseen urgent financial needs of the Bank as a result of the occurrence of an extraordinary
event defined in the emergency plan and/or danger to the liquidity management limits under
stress scenarios, i.e. the securing of the Bank’s financial needs in the event of an emergency
situation and medium-term liquidity problems;
d) Compliance with regulatory limits for credit risk management if these sales are infrequent, or they
are frequent but their value is not material taken separately/together.
For financial assets at fair value through other comprehensive income (FVOCI), the intentions of the
business model are met by collecting principal and interest as well as by sales. Sales may also occur in
the event of:
a) Securing the financial needs of the Bank in the event of an emergency situation and/or threats
to liquidity management limits under stress scenarios and temporary or short-term liquidity
problems;
b) Reduced need to hold the liquidity buer with respect to compliance with the LCR regulatory
limits or acceptable liquidity risk levels for measuring the survival time;
c) Verifying the marketability/liquidity of the asset on the market or testing the functionality of the
emergency plan for extraordinary situations in managing the liquidity of the Bank;
d) As part of the provision of syndication products.
Contractual cash flows
When deciding on the classification of financial assets, it is important to assess whether the contract
determines dates for specific cash flow that consist solely of principal and interest payments (SPPI). In order
to assess whether the contractual cash flows are in line with the basic credit arrangement, a procedure
has been developed that is performed by the Bank upon initial recognition. Deviations from the standard
model of payments of principal and interest for classifying an asset as AC or FVOCI are assessed by the
ALCO based on significance and frequency.
Instruments that do not meet the SPPI test are measured at fair value through profit or loss (FVTPL).
(c) State subsidy
When recognising a state subsidy taking into account the principles of Act No. 58/1995 Coll., which
was designed to support Czech export through supported financing rather than to promote the Bank
as an entity owned by the state, the Bank assessed the subsidy in accordance with IAS 20 as a subsidy
104 3 Financial Statements
reported in income compensating a portion of expenses rather than as a transaction with the owner with
an impact on equity.
(d) Income taxes
The Bank is subject to Czech income tax in compliance with eective regulations. The Bank recognizes
liabilities in the amount of anticipated tax assessments based on estimates. Where the final tax liability
diers from the anticipated amounts, the resulting dierences have an impact on the tax expense and
the deferred tax liability in the period in which the assessment is made.
5 Operating segments
Providing supported financing is broken down into financing with and without links to the state budget.
The Bank predominantly assesses performance of its operating segments according to interest income,
interest expense, impairment losses on loans and the amount of provided/received loans.
Circle 001 includes operating activities, financing not eligible for a subsidy and other related activities in
accordance with banking licence and the resulting income and expenses. All these activities are carried
out under market conditions, without direct links to the state budget.
Circle 002 includes all activities relating to supported financing which are eligible for a subsidy from the
state budget, and the resulting income and expenses.
At the end of 2022, an amendment was made to Act No. 58/1995 Coll., adjusting the activities of the Bank.
As for subsidies, certain income and expense items were excluded from the subsidy formula, e.g., gains/
losses from derivatives, which are insignificant in 2023.
(MCZK)
circle circle Total circle circle Total
Interest income
Interest expense () () () () () ()
Impairment losses on loans () ()
Creation of provisions or reversal () ()
Other changes due to the
amendment to the act on
supported financing
000(7) 70
Loss/profit before income tax
Income tax () ()
Net profit for the year ()
Loans and receivables at
amortised cost
Total assets
Financial liabilities measured at
amortised cost
Total liabilities and equity
105 3 Financial Statements
Interest on liabilities comprise interest income from bonds issued in the period of negative interest rates.
The line item “Other interest – leases” includes interest expense assessed for the lease liability using
a reviewed eective interest rate of 5.94% p.a.
Interest expense is calculated using the eective interest rate with the exception of interest from
hedging of CZK 0 million (2022 – CZK 5 million) and interest from finance leases of CZK 1 million
(2022 – CZK 1 million).
6 Net interest income
Revenue from core activities of the Bank as per geographic segment
(MCZK)
Interest
income
Fee and
commission
income
Total Interest
income
Fee and
commission
income
Total
Czech Republic
Slovak Republic
Indonesia
Russia
Azerbaijan
France
Turkey
Other
Total interest income and fees
(MCZK)
Interest income from loans to credit institutions
of which: Interest on non-performing loans
Interest income from loans to other customers
of which: Interest on non-performing loans
Interest income from interbank deposits
Interest income from CNB loans – repos
Interest income from current accounts with other banks
Interest income from loans and receivables at amortised cost
Interest on debt securities at fair value recognized in the OCI
Interest on debt securities at amortised cost
Interest on liabilities
Other interest income
Interest income
Interest expense from received bank loans () ()
Interest expense from term deposits () ()
Interest expense from current accounts ()
Interest expense from issued bonds () ()
Interest expense from financial liabilities at amortised cost () ()
Interest expense on hedging derivatives ()
Other interest – leases () ()
Interest expense () ()
Net interest income
106 3 Financial Statements
7 Fee and commission net income
8 Net profit or (loss) on financial operations including state
subsidy
The Bank did not qualify for a subsidy for a loss from ocially supported financing in 2023 or in 2022.
(MCZK)
Fees and commissions from loan agreements
Fees and commissions from payments
Fees and commissions from guarantees
Fee and commission income
Fees for guarantees () ()
Fee for security operations () ()
Fees and commissions for rating () ()
Fee and commission expense () ()
Net fee and commissions income
(MCZK)
Profit or (loss) on derivative transactions with currency instruments ()
Profit or (loss) on financial assets and liabilities held for trading ()
Foreign exchange gains or losses ()
Net profit or (loss) from financial transactions including state
subsidy ()
107 3 Financial Statements
9 Administrative expenses, depreciation/amortisation and other
operating costs
In 2023, the income of members of the Board of Directors and the Supervisory Board amounted to
CZK 21 million (2022 – CZK 22 million). Sta costs also include provisions for bonuses and employee
benefits.
The provision for bonuses for groups of employees having an influence on the Bank’s overall risk profile
the payment of which is deferred and depends on the financial results and other criteria in future years
amounted to CZK 11 million (2022 – CZK 11 million). The provision for social security and health insurance
relating to these deferred bonuses of CZK 4 million (2022 – CZK 4 million) was created. Provisions for
employee benefits (the sum of provisions for long-term employee benefits, untaken holidays, severance
pays, etc.), including social security and health insurance, decreased by CZK 1 million to CZK 5 million.
Depreciation/amortisation of fixed assets includes amortisation of the right-of-use assets under a lease
of CZK 10 million (2022 – CZK 17 million).
Number of employees
Average recorded number of employees
Board and Supervisory Board
(MCZK) Note
Salaries and emoluments () ()
Social security and health insurance costs () ()
Other sta costs ()
Sta costs () ()
Information technology () ()
Contribution to the Financial market guarantee system () ()
Other administrative expenses () ()
Total administrative expenses () ()
Depreciation of property, plant and equipment () ()
Software amortisation () ()
Depreciation and amortisation () ()
Cost of debt collection () ()
Value added tax () ()
Other operating expenses () ()
Total operating costs () ()
108 3 Financial Statements
10 Net impairment gain from financial instruments and wrien-o
receivables
11 Income tax
The item “Net wrien-o receivables” primarily comprises income from insurance payments for receivables
sold in prior periods of CZK 148 million (2022 – CZK 56 million) and the proceeds related to previously
wrien-o receivables of CZK 8 million (2022 – CZK 38 million).
Tax non-deductible expenses primarily include the creation of provisions for the payment of bonuses to
employees and deferred bonuses to members of the Board of Directors, including the related social security
and health insurance contributions, of CZK 46 million. Income not liable to tax primarily comprises items
of the use of provisions for the payment of bonuses to employees and members of the Board of Directors,
including the related social security and health insurance contributions, of CZK 41 million and a decrease
in loan loss allowances of CZK 44 million. In 2022, tax non-deductible expenses primarily included the
write-o of receivables of CZK 562 million. Income not liable to tax primarily comprised items of the use
The tax charge from the Bank’s profit before tax can be analysed as follows:
The income tax consists of:
(MCZK)
(Creation) / release of allowances – Stage ()
(Creation) / release of allowances for loans to credit institutions ()
(Creation) / release of allowances – Stage () ()
(Creation) / release of allowances – Stage () ()
(Creation) / release of allowances – Stage
(Creation) / release of allowances for receivables to other customers () ()
Net wrien-o receivables from other customers
Net wrien-o receivables
Net impairment gain from financial instruments and wrien-o receivables
(MCZK)
Income tax for the current period – current () ()
Income tax for the prior period – current
Deferred income tax ()
Realisation of tax receivable arising from additional tax
Income tax ()
(MCZK)
Profit before income tax
Income tax at rate () ()
Eect of tax non-deductible expenses () ()
Eect of income not liable to tax
Income tax for prior periods
Income tax – subtotal (,) () (, ) ()
Realisation of tax receivable arising from additional tax
Income tax (, ) () ,
109 3 Financial Statements
of allowances for the wrien-o of receivables amounting to CZK 556 million. In 2022, a provision for
additional tax of CZK 190 million based on the Specialised Tax Oce’s review for 2014 was released as
the Appellate Financial Directorate annulled the Specialised Tax Oce’s decision on additional tax and
the entire proceeding was terminated upon a final judgement.
12 Cash in hand, cash with the central bank and other deposits
repayble on demand
The item ‘Cash in hand, cash with the central bank and other deposits repayable on demand’ includes
deposits with banks repayable on demand, including balances on the account of minimum mandatory
reserves.
Minimum mandatory reserves are set up as 2% of the Bank’s liabilities from the deposits and loans received
from other customers and of issued debt securities held by these entities which have a maturity shorter
than two years, recorded at the end of the calendar month preceding the month in which the relevant
period commences. The set amount of minimum mandatory reserves is measured against the average
balances on the minimum mandatory reserves account for the maintenance period starting on the first
Thursday of the month and ending on the Wednesday before the first Thursday of the following month.
The funds in the minimum mandatory reserves account are available daily and used to provide operational
liquidity. The regulator's requirements are complied with on a monthly basis.
For cash flow statement purposes, “Cash and cash equivalents” include “Cash in hand, cash with the
central bank and other deposits repayable on demand”, as well as selected receivables with a maturity
of less than 3 months from acquisition.
For ECL calculation purposes, all financial assets included in cash and cash equivalents are classified in
Stage 1.
(MCZK)
Cash in hand, cash with the central bank and other deposits
repayable on demand (net)
Receivables from the central bank due within months
Receivables from other credit institutions due within months
Cash equivalents
Loss allowances () ()
Cash equivalents (net)
Cash and cash equivalents
(MCZK)
Cash with the central bank
of which Accounts of cash reserves with the central bank 32 41
Other deposits repayable on demand
Cash in hand, cash with the central bank and other deposits
repayable on demand
Loss allowances () ()
Cash in hand, cash with the central bank and other deposits
repayable on demand (net)
110 3 Financial Statements
13 Loans and receivables at amortised cost
At the end of 2023, the receivables wrien-o and in the process of hard collection amounted to
CZK 10,742 million (2022 – CZK 10,615 million). Generally, these receivables represent receivables where
the Bank acts as an agent in the process of hard collection under obligations from insurance contracts.
Loans and receivables from credit institutions at amortised cost
(MCZK)
Receivables included in cash equivalents
Other receivables from credit institutions
Loss allowances for receivables () ()
Total loans and receivables from credit institutions at amortised
cost
Receivables from other customers
Loss allowances for receivables () ()
Total loans and receivables from other customers at amortised
cost
Total loans and receivables at amortised cost
Remaining maturity:
Short-term loans and receivables
Long-term loans and receivables
(MCZK)
Loans provided to the central bank
Deposits with the central bank
Loans and receivables from the central bank
Deposits with other credit institutions
Purchased receivables from other credit institutions
Loans and receivables from other credit institutions
Loss allowances for loans and receivables to credit institutions () ()
Total loans and receivables from credit institutions at amortised
cost
Remaining maturity:
Short-term receivables from credit institutions
Long-term receivables from credit institutions
111 3 Financial Statements
Loans and receivables from other customers at amortised cost
14 Debt securities
State coupon bonds and bonds of international development banks are usually purchased for the portfolio
of debt securities. Most of the current portfolio comprises bonds issued by the Czech Ministry of Finance.
All investment securities in the Bank's portfolio are, according to IFRS 9, categorized as Stage 1. All
securities are listed.
(MCZK)
Pre-export loan
Export loan
Investment loan
Operating loan
Purchase of receivables
Receivables from parties other than
credit institutions at amortised cost
Loss allowances for receivables () ()
Total receivables from other customers at amortised cost
Remaining maturity:
Short-term receivables from other customers
Long-term receivables from other customers
(MCZK)
Carrying
amount Carrying amount (gross) Allowances
Stage Stage Stage Stage Stage Stage
Debt securities at fair value
recognized in OCI
Debt securities at amortised cost ()
(MCZK)
Carrying
amount Carrying amount (gross) Allowances
Stage Stage Stage Stage Stage Stage
Debt securities at fair value
recognized in OCI ()
Debt securities at amortised cost ()
112 3 Financial Statements
15 Property, plant and equipment
The Bank uses an operating lease with a notice period of one year. In 2023, the cost of lease amounted
to CZK 11 million (2022 – CZK 18 million). The expected residual lease period as at 1 January 2023 was
2 years. Eective from 2024, the lease was increased by 5% due to the development of inflation. As of
1 January 2024, the expected residual lease period was adjusted to five years. The right-of-use asset
was measured at CZK 52 million as at 1 January 2024.
Classification of debt securities by residual maturity
Remaining maturity:
Debt securities at fair value recognised in Other comprehensive
income – short-term
Debt securities at fair value recognised in Other comprehensive
income – long-term
Debt securities at amortised cost – short-term
Debt securities at amortised cost – short-term
(MCZK) Right-of-use Oce
equipment
Motor
vehicles
Assets under
construction Total
Cost
At January
Additions
Modification () ()
Disposals () () () ()
At December
Additions
Modification
Disposals () () () ()
At December
Accumulated depreciation
At January () () () ()
Additions () () ()
Modification
Disposals
At December () () () ()
Additions () () ()
Modification
Disposals
At December () () () ()
Closing net book value
At December
At December
113 3 Financial Statements
16 Intangible assets
17 Other assets
18 Financial liabilities at amortised cost
Total financial liabilities at amortised cost
(MCZK)
Intangible assets
Cost at January
Additions
Disposals/transfers () ()
Cost at December
Accumulated amortisation at January () ()
Additions () ()
Disposals/transfers
Accumulated amortisation at December () ()
Net book amount at January
Net book amount at December
(MCZK)
Expected insurance payments for assigned loans
Prepayments and accrued income
Other receivables gross
Allowance for other receivables () ()
Total other assets
Remaining maturity:
Current other assets
Non-current other assets
(MCZK)
Financial liabilities to credit institutions at amortised cost
Financial liabilities to other customers at amortised cost
Issued debt securities at amortised cost
Total financial liabilities at amortised cost
Remaining maturity:
Short-term payables at amortised cost
Long-term payables at amortised cost
114 3 Financial Statements
Financial liabilities to credit institutions at amortised cost
Financial liabilities to other customers at amortised cost
Financial liabilities at amortised cost arising from issued debt securities
Escrow accounts are deposits from customers held as a form of cash security for provided credit facilities.
(MCZK)
Borrowings
Total financial liabilities to credit institutions at amortised cost
Remaining maturity:
Total short-term payables to credit institutions
Total long-term payables to credit institutions
(MCZK)
Current accounts
Term deposits
Escrow accounts
Total financial liabilities to other customers at amortised cost
Remaining maturity:
Short-term payables to other customers
Long-term payables to other customers
(MCZK)
ISIN Currency Issue date Maturity date Amortised cost
XS EUR November November
XS EUR April March
XS EUR October October
XS EUR May May
XS EUR June June
XS EUR June June
XS EUR June June
XS EUR November November
Issued debt securities at amortised cost
Remaining maturity:
Current
Non-current
115 3 Financial Statements
The Bank is entitled to early redeem bond XS2353477685 in the nominal value of EUR 100 million as at
the coupon payment date of 17 June 2025.
Bonds issued by the Bank are listed on the Luxembourg Stock Exchange.
Lease liabilities relate to the lease of a building based on a contract for an indefinite period. At the beginning
of 2023, lease liabilities were measured at CZK 21 million. Annual lease of CZK 11 million was paid on a
straight-line basis at the beginning of each quarter. At the end of 2023, the expected lease period was
reassessed and extended to 2028. At the same time, the lease was increased by 5% eective from 2024.
The revised borrowing interest rate was set at 3.7 % Liabilities from short-term leases and low-value leases
were immaterial as at both 1 January 2023 and 31 December 2023.
19 Other liabilities
(MCZK)
Lease liabilities
Accruals and deferrals
Tax liabilities
Liabilities to dierent creditors
of which financial collateral
Total other liabilities
(MCZK)
ISIN Currency Issue date Maturity date Amortised cost
XS EUR April April
XS EUR October October
XS EUR April April
XS EUR June June
XS EUR June June
XS EUR May May
XS EUR November November
Issued debt securities at amortised cost
Remaining maturity:
Current
Non-current
116 3 Financial Statements
In 2020, the Bank created a provision for penalties and interest on late payments of CZK 118 million in
relation to the potential additional corporate tax liability resulting from a tax inspection completed in
July 2021. This provision was released in 2022 as the Appellate Financial Directorate annulled the
Specialised Tax Oce’s decision on additional tax and the entire proceeding was terminated upon a final
judgement. Together with this provision, the provision for tax liability was released as shown in table No. 11.
In 2021, the Bank created a provision for legal costs of litigations conducted abroad of CZK 75 million.
Considering the circumstances of the case and the legal environment, the provision was estimated at the
upper limit of the possible range, with the final amount to be decided by the local court.
20 Provisions
(MCZK) Note
Provisions for financial guarantees
At January
Creation / (reversal) of provision b ()
Exchange rate gains or losses ()
At December
Provisions for loan commitments
At January
Creation / (reversal) of provision b ()
Exchange rate gains or losses () ()
At December
Provisions for deferred compensation including insurance payments
At January
Creation of provision
Release of provision ()
Usage of provision () ()
At December
Provisions for employee benefits
At January
Creation of provision
Release of provision () ()
Usage of provision ()
At December
Provision for penalty and default interest
At January
Creation of provision
Release of provision ()
At December
Provisions for litigations
At January
Creation of provision
Usage of provision
Exchange rate gains or losses ()
At December
Total provisions
117 3 Financial Statements
21 Deerred income taxes
22 Share capital
Deferred income tax for 2023 is calculated using a tax rate for years of expected use of the deferred tax
in the amount of 21% for 2024 and the following years. In 2022, a tax rate of 19% was used.
The movement on the deferred income tax account is as follows:
Pursuant to Act No. 58/1995 Coll., the Czech Republic must own at least two thirds of the Bank's shares.
Shareholder’s rights of the Czech Republic are exercised by the Ministry of Finance of the Czech Republic.
All issues of the Bank’s shares are ordinary shares and are not associated with any special rights.
Deferred income tax assets and liabilities incurred for items shown below:
Deferred income tax assets and liabilities are oset if there is a legally enforceable right to oset tax assets
against tax liabilities. A deferred tax asset is created for items that are expected to have a sucient tax
base for their application in subsequent taxation periods.
(MCZK)
Change in the deferred tax on the debt securities at FV recognized in the OCI
Deferred tax on property, plant and equipment and intangible assets
Deferred tax on provisions for employee benefits
Deferred tax on provisions for litigation
Net deferred income tax asset/(liability)
(MCZK)
Number of shares Nominal value
per share
Total nominal
value Share
Czech Republic
Czech Republic
Czech Republic total ,
EGAP
EGAP
EGAP total ,
Total ,
(MCZK) Note
Net deferred income tax asset as at January
Change in provisions for employee benefits ()
Change in provisions for litigation
Total deferred tax asset presented in the income statement ()
Change in the deferred tax on the debt securities at
FV recognized in the OCI ()
Net deferred income tax asset as at January
118 3 Financial Statements
23 Revaluation reserve
24 Reserves
Reserve fund
Based on the Articles of Association, the Bank is required to set aside a reserve in equity from profit. The
Bank allocates 5% of net profit to the reserve until 20% of share capital is achieved. This reserve can
be used exclusively to cover losses. In 2023, it increased by CZK 32 million (2022 – CZK 18 million) by
allocating the 2022 profit. The closing balance of the reserve was CZK 852 million (2022 – CZK 820 million).
Other special funds
As part of other special funds from profit, the Bank primarily creates the export risk fund, which
is predominantly intended for covering the Bank’s losses. In 2022, the fund was increased
by CZK 340 million, a share of the 2021 profit distribution. The balance of the fund amounts
to CZK 1,843 million (2022 – CZK 1,843 million). In 2023, the Bank's General Meeting did not decided on
how to use the 2022 profit of CZK 608 million.
(MCZK)
Number of shares Nominal value
per share
Total nominal
value Share
Czech Republic
Czech Republic
Czech Republic total ,
EGAP
EGAP
EGAP total ,
Total ,
(MCZK) Note
Debt securities at fair value recognized in OCI
At January () ()
Changes in fair value ()
Deferred tax ()
Total change ()
At December () ()
119 3 Financial Statements
25 Related party transactions
The Bank provides specialised services supporting export activities in accordance with Act No. 58/1995
Coll. This Act also determines the shareholders’ structure. The Bank is fully controlled by the Czech
Republic, which owns 84% of the Bank’s share capital directly and 16% of the share capital indirectly via
EGAP, which is fully owned by the Czech Republic.
Related-party transactions are concluded within ordinary business transactions. Related parties are
identified based on the criteria of IAS 24.
Transactions with related parties are entered into under arm’s length conditions. All fees related
to collaterals and guarantees received, including insurance premiums, are borne by the debtors.
Balances with entities controlled by the same controlling entity (the Czech Republic) or having
significant influence
(MCZK)
Ministry of
Finance of the
Czech Republic
Exportní garanč-
ní a pojišťovací
společnost, a.s.
Czech
National
Bank
Národní
rozvojová
banka a.s.
Total
Cash with the central bank and deposits
repayable on demand
Loans and receivables at amortised cost
Debt securities at amortised cost
Debt securities at fair value recognised
in OCI
Right of use
Other receivables
Expected insurance payments for assig-
ned loans
Financial liabilities measured at amortised
cost ( ) ( )
Lease liabilities () ()
Interest expense () ()
Interest income
Net profit or (loss) on financial operations,
including state subsidy, including aribu-
table exchange rate gains or losses
() ()
Right-of-use asset depreciation () ()
Impairment losses on financial assets
not reported at fair value through P/L
(or reversal)
Received guarantees and loan securities,
receivables and loan commitments ( ) ( )
Received collaterals – securities ( ) ( )
*) positive numbers – assets/contingent liabilities and income; negative numbers – liabilities/contingent assets and expenses.
120 3 Financial Statements
Salaries and bonuses paid to members of the Board of Directors and the Supervisory Board are disclosed
in Note 9. The Bank does not record any other items of receivables or liabilities in respect of members of
the Board of Directors and the Supervisory Board.
Balances with entities controlled by the same controlling entity (the Czech Republic) or having
significant influence
(MCZK)
Ministry of
Finance of the
Czech Republic
Exportní garanč-
ní a pojišťovací
společnost, a.s.
Czech
National
Bank
Národní
rozvojová
banka a.s.
Total
Cash with the central bank and deposits
repayable on demand
Loans and receivables at amortised cost
Debt securities at amortised cost
Debt securities at fair value recognised
in OCI
Right of use
Other receivables
Expected insurance payments from
assigned loans
Financial liabilities measured at amortised
cost ( ) ( )
Lease liabilities () ()
Interest expense () ()
Interest income
Net profit or (loss) on financial operations,
including state subsidy, including aribu-
table exchange rate gains or losses
() () () ()
Right-of-use asset depreciation () ()
Impairment losses on financial assets
not reported at fair value through P/L (or
reversal)
() () ()
Received guarantees and loan securities,
receivables and loan commitments ( ) ( )
Received collaterals – securities ( ) ( )
*) positive numbers – assets/contingent liabilities and income; negative numbers – liabilities/contingent assets and expenses.
121 3 Financial Statements
26 Subsequent events
Date of preparation: 26 March 2024
Signed on behalf of the Bank’s Board of Directors:
Ing. Daniel Krumpolc
Chairman of the Board of Directors
and CEO
Ing. Emil Holan
Member of the Board of Directors
and Deputy CEO
The Company’s management is not aware of any events that have occurred since the balance sheet date
that would have any material impact on the financial statements as at 31 December 2023.
122
Report on relations
04
123 4 Report on relations
4 Report of relations for the period from
1 January to 31 December 2023
prepared in accordance with Section 82 (1) of Act No. 90/2012 Coll., on Corporations and Cooperatives
(Act on Corporations), as amended
Company name: Česká exportní banka, a.s. (the “Bank”)
Registered oce: Praha 1, Vodičkova 701/34, post code 111 21
Corporate ID: 63078333
Tax ID: CZ63078333
Recorded in the Register of Companies: Municipal Court in Prague, Section B, File 3042
4.1 Structure of relations between the Controlling Entities and the
Controlled Entity and relations between the Controlled Entity
and Entities controlled by the same Controlling Entity
4.2 Role of the Controlled Entity
Act No. 58/1995 Coll., on Insurance and Financing of Exports with State Support, authorises the Bank
primarily to finance exports with state support in line with international rules on state aid applied in
financing export credits with maturity exceeding two years (predominantly the “OECD Consensus”) and
the WTO’s policies
In compliance with Section 8 (1) (c) of Act No. 58/1995 Coll., on Insurance and Financing Exports with
State Support, the state is held liable for the Bank’s obligations arising from payments of funds received
by the Bank and for obligations arising from the Bank’s other transactions on the financial markets.
4.3 Method and means of control
The controlling entity of the Bank is the state. The state performs its shareholder rights directly through
the ministry referred to below and indirectly through Exportní garanční a pojišťovací společnost, a.s.
(Export Guarantee and Insurance Corporation).
Česká exportní banka, a.s.
Ministerstvo financí ČR 84 %Exportní garanční a pojišťovací společnost, a.s. 16 %
For information on other related parties, refer to Appendix
Ministry of Finance of the Czech Republic 84%
124 4 Report on relations
Individual shareholders exercise their rights primarily through the following bodies:
General Meeting – the supreme body of the Bank that decides through the majority of present shareholders
on the issues that are entrusted into its competencies by Act No. 90/2012 Coll., on Business Corporations
and Cooperatives (the Act on Business Corporations), as amended, and the Bank’s Articles of Association;
and
Supervisory Board – the control body of the Bank that supervises the activities of the Board of Directors
and business activities of the Bank and presents its statements to the General Meeting.
4.4 List of acts undertaken in the reporting period
The Bank undertook no acts regarding assets that exceed 10% of the equity of the controlled entity as
identified on the basis of the most recent set of financial statements, at the initiative or in the interest of
the controlling entity or entities controlled by it.
4.5 List of mutual contracts between the Controlled Entity and the
Controlling Entity or between the controlled entities (Exportní
garanční a pojišťovací společnost, a.s.)
Agreement on the Insurance of Export Credit Risks
1. Insurance contract No. 202002727 of 31 June 2023
2. Insurance contract No. 107011812 of 27 September 2023
Amendments to Individual Insurance Contracts
1. Amendment No. 01 of 14 November 2023 to insurance contract No. 202002727
2. Amendment No. 05 of 16 August 2023 to insurance contract No. 107011182
3. Amendment No. 05 of 16 August 2023 to insurance contract No. 107011171
4. Amendment No. 05 of 16 August 2023 to insurance contract No. 107011204
5. Amendment No. 05 of 16 August 2023 to insurance contract No. 107011248
6. Amendment No. 05 of 16 August 2023 to insurance contract No. 107011193
7. Amendment No. 05 of 16 August 2023 to insurance contract No. 107011259
8. Amendment No. 05 of 16 August 2023 to insurance contract No. 107011226
9. Amendment No. 05 of 16 August 2023 to insurance contract No. 107011237
10. Amendment No. 05 of 22 February 2023 to insurance contract No. 107011272
11. Amendment No. 06 of 22 December 2023 to insurance contract No. 107011272
Composition of shareholders and their share in voting rights
. State – Czech Ministry of Finance of shares
having its registered oce at Letenská , Praha , post code , corporate ID votes
. Exportní garanční apojišťovací společnost, a.s. of shares
having its registered oce at Letenská , Praha , post code , corporate ID votes
125 4 Report on relations
Characteristics of the contracts/amendments Number
New limit insurance contracts, type Bf
New limit insurance contracts, type D
Amendments to limit insurance contracts, type Bf
Amendments to insurance contracts, type D
Amendments to insurance contracts, type Z
Total new one-time and limit insurance contracts and amendments
Insurance rulings on the limit insurance contracts, type Bf, issued in
Insurance rulings on the limit insurance contracts, type D, issued in
Total new insurance rulings and their amendments issued to limit insurance con-
tracts (including rulings on limit insurance contracts concluded in prior years)
Total new insurance contracts, amendments to insurance contracts concluded in
and insurance rulings on insurance agreements concluded in (including
rulings on limit insurance contacts concluded in prior years)
Insurance contracts and amendments to insurance contracts with CEB concluded
between 1 January and 31 December 2023
12. Amendment No. 09 of 5 January 2023 to insurance contract No. 135006637
13. Amendment No. 10 of 17 May 2023 to insurance contract No. 135006637
14. Amendment No. 11 of 22 September 2023 to insurance contract No. 135006637
15. Amendment No. 12 of 26 October 2023 to insurance contract No. 135006637
16. Amendment No. 09 of 5 December 2023 to insurance contract No. 137001926
17. Amendment No. 13 of 5 December 2023 to insurance contract No. 137001915
18. Amendment No. 10 of 5 December 2023 to insurance contract No. 135005164
19. Amendment No. 09 of 5 December 2023 to insurance contract No. 133004824
20. Amendment No. 13 of 5 December 2023 to insurance contract No. 133004813
Insurance Rulings
1. Insurance ruling No. 04 of 3 March 2023 March 2023 to insurance contract No. 202002705
2. Insurance ruling No. 01 of 8 August 2023 to insurance contract No. 202002727
3. Insurance ruling No. 07 of 13 February 2023 to insurance contract No. 107011755
4. Insurance ruling No. 08 of 13 February 2023 to insurance contract No. 107011755
5. Insurance ruling No. 09 of 18 April 2023 to insurance contract No. 107011755
6. Insurance ruling No. 01 of 18 October 2023 to insurance contract No. 107011812
7. Insurance ruling No. 02 of 18 October 2023 to insurance contract No. 107011812
8. Insurance ruling No. 03 of 18 October 2023 to insurance contract No. 107011812
9. Insurance ruling No. 04 of 30 October 2023 to insurance contract No. 107011812
10. Insurance ruling No. 05 of 30 October 2023 to insurance contract No. 107011812
11. Insurance ruling No. 06 of 30 October 2023 to insurance contract No. 107011812
12. Insurance ruling No. 07 of 30 October 2023 to insurance contract No. 107011812
126 4 Report on relations
Contracts with EGAP concluded and eective in the period from 1 January 2023 to 31 December 2023
•
Lease agreement dated 9 December 2022 and eective from 1 January 2023, Amendment No. 1 to the
lease agreement dated 26 September 2023
• Amendment No. 4 to the agreement on establishing deposit accounts and on rules and conditions for
making term deposits with an individual interest rate on deposit accounts dated 17 June 2022
• Agreement on establishing deposit accounts and on rules and conditions for making term deposits
with an individual interest rate on deposit accounts dated 1 December 2005
• Amendment No. 1 to the agreement on establishing deposit accounts and on rules and conditions for
making term deposits with an individual interest rate on deposit accounts dated 15 August 2018
• Amendment No. 2 to the agreement on establishing deposit accounts and on rules and conditions for
making term deposits with an individual interest rate on deposit accounts dated 17 April 2019
• Amendment No. 3 to the agreement on establishing deposit accounts and on rules and conditions for
making term deposits with an individual interest rate on deposit accounts dated 30 September 2020
• Agreement on commercial current accounts No. 21684 dated 23 April 2014
• Amendment No. 1 to the agreement on commercial current accounts No. 21684 dated 10 August 2020
•
Amendment No. 2 to the agreement on commercial current accounts No. 21684 dated 7 October 2020
• Framework agreement on trading on the financial market dated 4 April 2014
• Agreement to change the currency of insurance benefit under insurance agreement No. 107008291
dated 18 December 2023
•
Cooperation agreement in insuring business cases – pre-export loans against the risk of being subject
to default and on bank guarantees against the risk of their utilisation, provided to SMEs dated 26 June
2008
• Agreement on the protection and non-disclosure of confidential information between CEB, a.s. and
EGAP, a.s. dated 11 November 2015
• Cooperation agreement in providing support to SMEs between CEB, a.s., CMZRB, a.s., EGAP, a.s. and
Raieisenbank a.s. dated 10 December 2009
• Cooperation agreement in providing support to SMEs between CEB, a.s., CMZRB, a.s., EGAP, a.s. and
KB, a.s. dated 6 October 2009
Contracts with the Ministry of Finance of the Czech Republic concluded and eective in the period
from 1 January 2023 to 31 December 2023
• Agreement on rules and conditions for the provision of loans between CEB, a.s. and the Ministry of
Finance of the Czech Republic dated 17 February 2010
• Framework agreement on trading on the financial market dated 12 March 2020
•
Agreement on the protection and non-disclosure of confidential information between CEB, a.s. and the
Ministry of Finance of the Czech Republic dated 21 June 2023
Characteristics of the contracts Number
One-time insurance contract, type If
One-time insurance contracts, type Z
One-time insurance contracts, type D
Total one-time insurance contracts in eect as at December
Limit insurance contracts, type Bf, including insurance rulings on those contracts
Limit insurance contracts, type D, including insurance rulings on those contracts
Total limit insurance contracts and insurance rulings issued to limit insurance
contracts (including rulings on limit insurance contracts concluded in prior years) in
eect as at December
Total number of insurance contracts (including insurance rulings on limit insurance
contracts) which were in eect as at December
Insurance contracts with CEB eective as at 31 December 2023 (including contracts concluded in 2023)
127 4 Report on relations
All of the above agreements were concluded under arm’s length conditions and the Bank suered no
detriment arising therefrom.
The state, as the controlling entity, did not adopt any measures, which would cause detriment to the
Bank in the most recent reporting period. During the reporting period, the Bank did not adopt any other
measures at its own will or in the interest or at the initiative of other related parties, other than those
referred to above.
4.6 Advantages and disadvantages arising from relations between
the Controlling Entities and the Controlled Entity and between
the Controlled Entity and entities controlled by the same Cont-
rolling Entity
The relations between the Bank and the shareholders give rise to clear benefits taking the following form:
•
more eective approach to the process of amending the legislation that defines the terms and conditions
of supported financing in order to meet the current needs of Czech exporters and export suppliers
during export transactions and the terms and conditions for supporting the export-oriented companies
in strengthening their international competitiveness;
•
more ecient cooperation with key ministries (such as the Ministry of Industry and Trade, the Ministry
of Foreign Aairs, and the Ministry of Defence) in fulfilling the state’s pro-export policy priorities;
• possibility of obtaining rating at the sovereign level;
• more eective use of economic diplomacy tools in the interest of Czech exporters;
•
close coordination of institutions within the system of state support for export and business and
connecting support for innovations and new technologies with the support for business, export, and
internationalisation.
In Prague, on 26 March 2024
Ing. Daniel Krumpolc
Chairman of the Board of Directors
Ing. Emil Holan
Vice-Chairman of the Board of Directors
128 4 Report on relations
List of Joint Stock Companies Controlled by Shareholders Holding an Equity Investment between
40% and 100% Ministry of Finance of the Czech Republic 1 2
1 IMOB a.s. in liquidation
2 GALILEO REAL, k.s. in liquidation
ČEPRO, a.s.
IČ: 60193531
Majetková účast / Podíl: 100.00
MERO ČR, a.s.
IČ: 60193468
Majetková účast
Podíl: 100.00
MUFIS a.s.
IČ: 60196696
Majetková účast
Podíl: 49.00
IMOB a.s.
IČ: 60197901
Majetková účast ¹
Podíl: 100.00
ČEZ, a.s.
IČ: 45274649
Majetková účast / Podíl: 69.78
Letiště Praha, a.s.
IČ: 28244532
Majetková účast / Podíl: 100.00
SEVEROČESKÉ
MLÉKÁRNY, a.s. TEPLICE
IČ: 48291749
Majetková účast / Podíl: 40.78
Majetková účast / Podíl: 84.00
Majetková účast / Podíl: 16.00
PRISKO a.s.
IČ: 46355901
Majetková účast / Podíl: 100.00
THERMAL-F, a.s.
IČ: 25401726
Majetková účast / Podíl: 100.00
GALILEO REAL, k.s.
IČ: 26175291
Majetková účast ² / Podíl: 100.00
Kongresové centrum
Praha, a.s.
IČ: 63080249
Majetková účast
Podíl: 54.35
Výzkumný a zkušební
letecký ústav, a.s.
IČ: 00010669
Majetková účast
Podíl: 100.00
HOLDING KLADNO a.s.
„v likvidaci“
IČ: 45144419
Majetková účast
Podíl: 96.85
Česká exportní banka, a.s.
IČ: 63078333
Majetková účast / Podíl: 100.00
Ministerstvo financí České republiky
IČ: 00006947
Exportní garanční a pojišťovací společnost, a.s.
IČ: 45279314
Ministry of Finance of the Czech Republic
Corporate ID: 00006947
Ownership interest / Share:: 84.00
Ownership interest / Share::
100.00
Ownership interest / Share::
100.00
Ownership interest / Share::
100.00
Ownership interest / Share:
100.00
Ownership interest
Share:: 100.00
Ownership interest
Share:: 54.35
Ownership interest
Share:: 100.00
Ownership interest Share:
96.85
Ownership interest
Share:: 49.00
Ownership interest
Share: 100.00
Ownership interest / Share::
69.78
Ownership interest / Share:
100.00
Ownership interest / Share::
40.78
Ownership interest / Share:: 100.00
Exportní garanční a pojišťovací společnost, a.s.
Corporate ID: 45279314
Česká exportní banka, a.s.
Corporate ID: 63078333
ČEPRO, a.s. Corporate ID:
60193531
MERO ČR, a.s. Corporate
ID: 60193468
Kongresové centrum
Praha, a.s.
Corporate ID: 63080249
PRISKO a.s. Corporate ID:
46355901
THERMAL-F, a.s. Corporate ID:
25401726
GALILEO REAL, k.s.
Corporate ID: 26175291
Výzkumný a zkušební
letecký ústav, a.s.
Corporate ID: 00010669
HOLDING KLADNO a.s.
“in liquidation“ Corporate
ID: 45144419
MUFIS a.s. Corporate ID:
60196696
IMOB a.s. Corporate ID:
60197901
ČEZ, a.s. Corporate ID:
45274649
Letiště Praha, a.s.
Corporate ID: 28244532
SEVEROČESKÉ MLÉKÁRNY,
a.s. TEPLICE Corporate ID:
48291749
Ownership interest / Share:: 16:00