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					Aik banka ad Niš




        NOTES




           31.12.2010 Year
 1.    ESTABLISHMENT AND OPERATIONS OF THE BANK

 Agro-industrial commercial bank AIK Banka AD Nis (hereinafter: "Bank") was established in the Treaty
 establishing the 10th August 1993. Year. Its operations and organization of the Bank into line with the Law on
 Banks and Other Financial Institutions 1995th year and the Commercial Court in Nis is registered as a joint
 resolution 1291/95 of 22 Fi June 1995. year.


 The Bank is registered in the Republic of Serbia to provide payment, credit and deposit activities at home and
 abroad, and in accordance with the Banking Act is to operate on the principles of liquidity, safety and profitability.

 The Bank's headquarters in Nis, Nikola Pasic 42nd Street The Bank conducts its business through its head office
 and branches in Nis, Nis, Belgrade, Novi Sad, Kragujevac, Krusevac, Leskovac,
 Jagodina, Zajecar           Kraljevo, Cacak, Uzice, Novi Pazar,         Pancevo, Pozarevac, Sabac,
 Valjevo, Smederevo,          Zrenjanin, Vrbas, Sombor, Subotica
 for a total 21filijale, and 39 branch offices throughout Serbia and    24 counters

 At 31 December 2010. The Bank had 478 employees, and the average number zposlenih based on hours of
 work in 2010 amounted to 480 (the repentant 2009th godinebilo of 481 employee and the average number of
 employees was 463).
 Tax Identification Number Bank 100,618,836th


 2. BASIS OF PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS

2.1.    Basis of Preparation and presentation of reports fiiaisijskih

 The Bank maintains records and prepares financial statements in accordance with the Accounting and Auditing of
 the Republic of Serbia (Official Gazette 46/2006, 111/2009), the Banking Act (Official Gazette 107/05, 91/10) and
 other relevant by issued by National Bank of Serbia, as well as other relevant legislation in the Republic of Serbia.


 In accordance with the Accounting and Auditing of legal persons and entrepreneurs in the Republic of Serbia shall
 prepare and present financial statements in accordance with legal, professional and internal regulations, with the
 professional regulations include applicable framework for the preparation of the financial statements (the
 "Framework") , International Accounting Standards (IAS), International Financial Reporting Standards (IFRS) and
 interpretations that are part of the standard, or the text of IAS and IFRS, which has been implemented, does not
 include grounds for concluding, illustrating examples, guidance, feedback, the opposite opinion, elaborated
 examples and other supplementary material.




 Changes to existing standards and translation of new IFRS and interpretations that are an integral part of the
 standards issued by the International Accounting Standards Board and IASB IFRS by 1 January 2009. year, were
 formally adopted following the decision of the Minister of Finance no. 401-00-1380/2010-16 and published in the
 Official Gazette of RS 77/2010. Amended or issued IFRS standards and interpretations, after this date, been
 translated and published, and therefore have not been applied in preparing these financial statements.


 The accompanying financial statements have been prepared in the format prescribed by the forms and contents of the
 Financial Statements for Banks ("Official Gazette. Gazette, no. 74/08, 3 / 09, 12/09 and 5 / 10), which provides for
 the application of a set of financial statements, which form and content did not comply with those stipulated in the
 revised IAS 1 - Presentation of Financial Statements, whose application is mandatory for accounting periods starting
 at 1 January 2009. year.

                                                       1
2.2.

The Bank is in the preparation of these financial statements applied accounting policies described in Note 3
which are based on accounting, banking and tax laws of the Republic of Serbia.

The financial statements are presented in thousands. The dinar is the official reporting currency in the
Republic of Serbia.

The accompanying financial statements present fairly in all material respects, the financial position of banks as of
31.12.2010, as a result of its operations, changes in equity and cash flows for the year ended on that date.

2.2.     Standards and iiteriretacije who are irimeii

On the day of publication of these financial statements below the standards are implemented in the
Republic of Serbia.

-   IAS 1 - Presentation of Financial Statements (effective from 1 January 2009.)
-   IAS 23 - Borrowing Costs (effective from 1 January 2009.)
-   IFRS 8 - Operating Segments (effective from 1 January 2009.)
-   IFRS 3 - Business Combinations and IAS 27 - Consolidated and Separate Financial Statements (effective
    from 1 July 2009.)
-   Amendments to IFRS 2 - Share-Based Payment - Vesting Conditions and Cancellations (effective
    1. January 2009. years);
-   Amendments to IAS 32 - Financial Instruments: Presentation and IAS 1 - Presentation of Financial Statements
    (effective from 1 January 2009.) Amendments to IAS 39 - Financial Instruments: Recognition and
    Measurement (effective from 1 July 2009.)

-   Amendments to IFRS 1 - First-time Adoption of International Financial Reporting Standards and IAS 27 -
    Consolidated and Separate Financial Statements (effective from 1 January 2009.)

-   Improvements to International Accounting Standards 2008th (Effective from 1 January 2009.)

-   IFRIC 15 - Agreements for construction of residential and commercial properties (effective from 1 January
    2009.)
-   Improvements to IFRS 1 - First-time Adoption of International Financial Reporting Standards (effective from
    1 July 2009.)
-   IFRIC 17 - Distribution of non-cash assets to owners (effective from 1 July 2009).

-   IFRIC 13 - Customer Loyalty Program (effective July 1, 2008.)
-   IFRIC 14 - IAS 19 - The Limit on Defined Benefit Asset, Minimum Funding Requirements and their
    Interaction (effective 1 January 2008.)
-   IFRIC 16 - Hedges of a Net Investment in a Foreign Operation (effective from 1 October 2008.).

The Bank is in the preparation of these financial statements applied accounting policies described in Note 3
which are based on accounting, banking and tax laws of the Republic of Serbia.

The financial statements are presented in thousands. The dinar is the official reporting currency in the
Republic of Serbia.

The accompanying financial statements present fairly in all material respects, the financial position of banks as of
31.12.2010, as a result of its operations, changes in equity and cash flows for the year ended on that date.

                                                      2
2.3.     Uioredni iodaci

The financial statements are presented comparative data for 2 years, for the current year 2010 and the previous
2009th year, in order to provide information about dynamic trends.


2.4.     Using irocenjivanja

Presentation of financial statements requires management of the Bank to make best estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and revenues and expenses during the reporting period. These estimates and
assumptions are based on information available as of the financial statements.




 3.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES


 3.1 Income and expenses and interest income and fees
Income and expense recognized in the income statement for all financial instruments that bear interest, based on
interest expense using the effective yield method. Income and expenses are recorded in the income statement in the
period to which they relate in accordance with the principle of income and expenses and terms of contractual
relationships that are defined by contract of the Bank and the client. Bank stops expressing interest income at the
time of Court procedure claims. Interest accrued on this account is recorded as suspended interest in off balance
sheet, in accordance with the applicable Rules of the Chart of Accounts.
Fees related to approved loans, guarantees and letters of credit shall be stored and recognized as revenue in
proportion to the elapsed time of the loan or guarantees and letters.
3.2. Foreign Exchange
Transactions denominated in foreign currencies are translated into RSD at the average exchange rate in the
interbank foreign exchange market, prevailing at the transaction date.
Funds in foreign currencies at the balance sheet date are translated into RSD at the average exchange rate in the
interbank foreign exchange market that was in force on that date. Net gains or losses arising from transactions in
foreign currency and in the translation of balance sheet items denominated in foreign currencies are credited or
charged to the income statement as gains or losses from exchange rate differences.

3.3. Fixed assets and intangible assets
Fixed assets and intangible assets as at 31 December 2010. The stated at cost less depreciation.

Depreciation is provided evenly on the cost of fixed assets by applying the following annual rates in order to
completely write off the assets over their useful lives:
                                            Buildings                                            1.30%
                                            Computer Accessories                                 20.00%
                                            Furniture and equipment                              11.00%-20.00%
                                            Motor vehicles                                       15.50%
                                             Software                                            20.00%
The calculation of depreciation of fixed assets commences when the assets are put into use.
Bank Buildings include investment property used by the Bank for the purpose of earning income from the
issuance of the objects. Investment properties are stated at cost less accumulated depreciation.

3.4.    Loans

                                                        3
Loans are stated at the balance sheet at the amount of investments, net of principal outstanding principal and
accumulated depreciation, which is based on an assessment of specific risks identified for individual loans and the
risk of that experience shows that are contained in the portfolio. Loans in RSD, which he contracted from the risk of
tying the exchange rate against EUR or binding to the growth of retail prices, are revalued in accordance with the
contract signed for each loan. The effects of this revaluation are recorded in favor or against the revenue and
expenses from revaluation of assets.

 Write-offs of uncollectible receivables is based on a court decision, settlement or interested parties on the basis
 of decisions of the Management Board and with the consent of the Shareholders.

3.5.      Securities held to maturity
Hartaje of securities held to maturity are securities for which there is an intention and ability to hold to maturity.
Securities held to maturity are notes and bonds of old foreign currency savings. All securities are initially recorded
at cost. At the balance sheet securities held to maturity investments are carried at amortized cost with a deduction for
provisions for potential losses.

3.6.      Securities available for sale
Securities available for sale include securities that can not be classified as financial assets held for trading or as
financial assets held to maturity. These securities are financial instruments that can be sold for the purpose of
providing liquidity or changes in equity prices and the like. Securities available for sale consist of securities that are
initially reclassified as shares in banks and other legal entities. Equity shares listed on stock exchanges are initially
measured at fair value, and those that are not quoted on the stock market, and when the circumstances are such that
the fair value can not be determined pouzano are recognized by amortšovanoj values, based on information from
persons in whose capital investment has been made.


3.7.      Securities traded
Securities traded securities are held for profit from trading in a short period of time. Securities are initially measured
at cost, while at the balance sheet at fair value.


  3.8.   Tangible assets acquired napltom claims
 Tangible assets acquired napltom receivables represent the real estate which was initially set up a mortgage to the
 bank, based on security investments, which the bank took over the collection of receivables.
They are valued in the books at a price equal to the gross value of loans that charge from material values, which is
 lower than market prices, set by the suskih Appraisers, and the devaluation was not necessary, except for the hotel
 "freedom" in Pancevo, whose value devaluation has been reduced to market price.


3.9.      Impairment of financial assets
At each balance sheet date the Bank assesses whether there is objective evidence of impairment of an asset or group
of assets. It is believed that the financial asset or group of assets impaired if, and only if there is objective evidence
of impairment resulting from one or more events that occurred after initial recognition of assets and the event (or
events) affect the estimated future cash flows of a financial asset or group of financial means that reliably estimated.

Evidence of impairment may include indications that the borrower or group of borrowers facing significant
financial difficulty, default or delinquency in interest or principal, the likelihood that there will be bankruptcy or
other financial reorganization and where the data show that there was a measurable decrease in future cash flows
such as changes in arrears or economic conditions that correlate with defaults conditions.


 a)    Loans and advances

                                                        4
Assessment of impairment of loans and advances made by the Bank's internal model of classification (by ERNST-
UOUNG) using methods and techniques defined methodology for calculating corrections vrednsoti balance sheet
assets and provisions for losses on off-balance sheet items of the Bank .. At each balance sheet date and the end of
each quarter, the Bank assesses whether there is objective evidence of impairment of an asset or group of assets.
Evidence of impairment may include indications that the borrower or group of borrowers facing significant
financial difficulty, default or delinquency in interest or principal, the likelihood that there will be bankruptcy or
other financial reorganization and where the data show that there was a measurable decrease in future cash flows
such as changes in arrears or economic conditions that correlate with defaults conditions, and that the bank should
take appropriate measures in the collection of its claims of the debtor. Credit risk assessment is done on an
individual and group basis.

Idividualno estimated impairment of non-performing loan portfolio of the Bank with debtors who have
obligations to the Bank over 6 million.
 Are assessed collectively for impairment performing part of the portfolio for companies and entrepreneurs (ie Loans
that are not in default) as well as non-performing part of the portfolio (tj.kredita who are in default) for debtors who
have obligations to Bank under 6 million RSD tj.ispod amount to be determined depending on the balance sheet of
the Bank's evaluation of impairment as well as for debtors where there was no increase credit risk. _U Purpose of a
collective evaluation of impairment, financial assets are grouped into segments depending on the number of days of
real delays in settlement of obligations to the Bank and an internal application used to determine whether there has
been a obzvređenja. Financial asset or group of assets are obezvređeniako and only if there is objective evidence of
impairment resulting from one or more events that occurred after initial recognition of assets and the event (or
events) affect the estimated future cash flows of a financial asset or group of financial assets that can be reliably
estimate.


If there is objective evidence that there was a loss due to impairment, the amount of the loss is measured as the
difference between the carrying amount and the present value of future cash flows (excluding future expected
credit losses that have not yet been incurred).
The carrying value of the asset is reduced through the use of an allowance account and the loss is recognized in the
income statement. Loans together with the associated allowance are written off when there is no realistic prospect
that funding in the future recovery and when the collateral has been realized or has been transferred to the Bank. If,
during the next year, there is a decrease or increase the amount of recognized impairment loss previously
recognized impairment loss is increased or reduced by adjusting the allowance account.

The present value of expected future cash flows is discounted at the original contractual interest rate. The
calculation of present value of estimated future cash flows of a collateralized financial asset reflects the cash flows
that may result from the realization of collateral, less costs for obtaining and selling the collateral, whether it is
likely that there will be a process of realization of the collateral or not.


In accordance with the regulations of the National Bank of Serbia, the bank also needed to allocate rezervzu for
potential losses. Loans, deposits and other exposure in accordance with the Decision on the classification of NBS
are classified in categories A, B, C, D and E, and depending on the assessment of collection, number of days of
delay, the financial position of the client and the quality of collaterals, each potraživannje classified into various
categories. The estimated amount of reserves for potential losses is calculated by applying the percentages range
from 1% to 2% of loans classified in category A, from 5% to 15% of loans classified as category B, from 20% to
35% on placement category V, from 40% to 75% on loans from categories D and 100% in category D investments.

The difference amount of special reserves for potential losses calculated in accordance with the National Bank of
Serbia on the classification of balance sheet assets and off-balance and the amount of the allowance balance sheet
assets and provisions for losses on off-balance sheet items, which are calculated in accordance with internally
adopted methodology, on the special account in the reserves for potential losses.


                                                       5
 f)     Investments in securities held to maturity
 The Bank assesses individually to determine whether there is objective evidence of impairment of investment
 securities held to maturity. If there is objective evidence that there had been incurred, the amount of loss from
 impairment is measured as the difference between the carrying amount and the present value of estimated future cash
 flows. Asset's carrying amount is reduced and the amount of loss recognized in the income statement. If, in the
 subsequent year, the reduced amount of the estimated impairment of an event that is due and after the recognition of
 impairment, any previously recognized impairment loss is reduced and credited to income.


 s)     Vrednostiraspoložive stock for sale (equity)
 When it comes to securities available for sale, the Bank assesses at each balance sheet date whether there is
 objective evidence that the investment is impaired. When there is evidence of impairment, the cumulative loss,
 valued as the difference between purchase price and the current fair value, less any impairment loss of investment,
 previously recognized in the income statement, is removed from equity and recognized in the income success, and
 in favor revalorizicionih reserves, ie. directly to equity.

 N)    Securities traded
 For securities traded also made an assessment of the balance sheet date whether there is objective evidence of their
 impairment. If there has been impairment, impairment of securities that are traded shall be charged to the income
 statement and increase the value of these securities in which the previously recognized impairment is also
 recognized through the income statement.

3.10.    Cash and cash equivalents
The cash flow statement, cash and cash equivalents includes cash, current accounts with the NBS, including the
required reserves in RSD and in accounts at other banks.

3.11.   Means and ioslovima in behalf of a third person's
Assets managed on behalf of third parties, managed by the Bank for a fee are not included in the balance
sheet.

3.12.     Income Taxes

            Current-and iorez tax
 Income tax is an amount calculated by applying the tax rate of 10% on the profit before tax, after deduction of the
 effects of permanent differences that the prescribed tax rate reduced to an effective tax rate. The final amount of
 liabilities for income tax determined by applying the statutory income tax rate on the tax base established Tax
 returns.
 Law on Corporate Profit Republic of Serbia does not allow any tax losses in the current period to be used to recover
 taxes paid in previous periods. However, losses of the items reported in the income tax can be used to reduce the tax
 base in future periods, but not more than ten years.
            Deferred tax iorez
 Deferred income tax is calculated using the liability method, for the balance sheet for temporary differences arising
 between the tax bases of assets and liabilities and their carrying values. Applicable tax rate on the balance sheet date
 or the tax rates that are after that date to take effect, are used to determine deferred income tax expense. Deferred
 tax liabilities and pribnaju as gains and losses from the effects of temporary differences in accordance with IAS 12
            Indirect iorezi and doirinosi
 Indirect taxes and contributions include various taxes and contributions paid by national and local regulations.

3.13. Benefits zaioslenih
 In accordance with the regulations prevailing in Serbia, the Bank pays contributions to state funds that protect the
 social security of workers. These are contributions paid by employees of the Bank calculates the prescribed rates,
 withheld from gross salary and paid by funds.

                                                       6
The Bank also calculates and contributions for employees paid by the employer and paid by the funds.
In accordance with the Labor Law, the Bank paid employees retirement pension, in accordance with its laws and
pay for the actual jubilee 10, 20, 30 and 40 years in the Bank. Long-term liabilities Provisions for retirement
benefits and jubilee awards in accordance with IAS 19, represents the present value of expected future payments
determined by measuring the actuarial.




4.        RISK MANAGEMENT POLICIES




Risk management processes are critical to the continuing profitability of the Bank and each individual in the
Bank, in its domain, responsible for the exposure. The Bank is exposed to credit risk, liquidity risk and market
risk. The Bank is also subject to influence operational risk.


Independent risk control process does not include business risks such as changes in the environment, technology
and industry. The Bank monitored through the strategic planning process.

Board of Directors are responsible for identifying and controlling risks. However, the Bank established a
separate organizational unit - Department of Risk Management, responsible for monitoring and controlling risk.
Also, boards, as separate independent bodies, within their jurisdiction, are responsible for managing and
monitoring risks.

Upraeni Board and Executive Committee
Board of Directors and Executive Committee are responsible for the overall risk management, approval of strategy
and risk management principles, as well as the implementation of the principles, framework, policies and limits.
They are responsible for making and monitoring of relevant decisions about risk.


Sector upraeljanje risk
Risk Management Department identifies, measures, assesses and manages risks to which the Bank is exposed in
its operations. The sector is responsible for implementing and maintaining procedures related to risk, which
provides independent control process. This unit also provides complete coverage of risk in the system for
measuring and reporting on risk.

Committee on upraeljanje aktieom and pasieom
Committee on Asset and Liability Management monitors the Bank's exposure to risks arising from the structure
of its balance sheet claims and liabilities and off-balance sheet items and propose measures to manage interest
rate risk and, in particular, liquidity risk. Also, he is primarily responsible for funding and liquidity.

Upraeljanje risks and systems izeeštaeanja
The Bank's risks are measured using a method that reflects the losses that may arise in normal circumstances,
current operations and expected losses, which are based estimate of the ultimate losses on the basis of likely events.
Models using the probability derived from the available current and historical data, adjusted to reflect the economic
environment.


                                                      7
Monitoring and controlling risks is primarily based on the establishment of procedures and limits. These limits
reflect the business strategy and market environment of the Bank, and the level of risk that the Bank is willing to
accept. The Bank constantly monitors and measures the capacity of the overall risk by taking into account the
overall exposure to all risk types and activities. Information gathered from all its activities are examined and
processed in order to identify, analyze and control new risks. This information is presented and explained to the
Board of Directors and Executive Committee. The reports contain the total credit exposure, forecast investments,
deviations from the set limit, the measurement of market risk, liquidity ratios and risk profile changes. Over the
Bank's quarterly review the adequacy of allowance for indirect. The Committee on Asset and Liability
Management also submits quarterly reports on the risks which contains all the necessary information to evaluate
and draw conclusions about the risks to which the Bank is exposed. The daily report shall be submitted to the
Executive Board of the Bank and the relevant directors to limit utilization of market, liquidity, foreign exchange
risks and other significant information.




4.1.    Credit risk


Bank loan approval is subject to credit risk, which is a possibility that the borrower become unable to partially or
fully pay the obligation at maturity.

In the implementation of credit policy, the Bank adheres to certain principles established by the Decision of credit
and other banking services and thereby protect against excessive exposure to credit risk. The bank manages and
controls credit risk by establishing limits the amount of risk it is willing to accept for some customers, the level of
groups of interrelated legal and natural persons, as well as among segments of customers, types of work that is
funded by a loan from the Bank, the industries to which they belong Bank account holders with constantly
monitoring the level izoženosti those risks.

The Bank has established a process of monitoring the quality of loans to ensure timely identification of potential
changes in the creditworthiness of counterparties, including regular review of security. Limits in relation to clients is
provided using the credit risk classification system, which classifies each customer by a credit rating. Classification
of customers is subject to regular consideration. The process of monitoring the quality of loan enables the Bank to
estimate potential losses as a result of the risks incurred and to take corrective measures. Credit proposal is based on
analysis of the financial statements of the client, data on debt based on reports from Credit Bureau and the data
obtained from the clients themselves, data from the RIR and the liquidity account, business or business plan ...
Analyzing the structure operating income and expenses, cost and profitability, the development of net working
capital, financial stability, liquidity, impairment of asset positions, turnover ratio of certain categories of assets, and
cash flows. Analyzed, too, quality guarantors, the value and marketability of mortgages, the value of and quoting
Harry shares (taken as a pledge) of the Exchange, and the value and competitiveness of goods given in pledge.




The Bank constantly monitors the financial condition and operations of the borrower and controlling the proper
use of resources if the same contracted with the client - a borrower.

Risks for potential liabilities related to credit risk
The Bank issues guarantees and letters of credit to its customers and, based on a contingent liability to make
payment to third parties. In this way the Bank is exposed to risks related to credit risk, which could be overcome by
the same control processes and procedures that. Bank in the same way watching the exposure to credit risk in
issuing guarantees or letters of credit opened and in extending credit.


Collateral and other means of protection against credit risk

                                                        8
The amount and type of collateral required depends on an assessment of credit risk of each customer. The
main types of collateral are as follows:
     - For commercial loans: mortgage on real estate, inventories and receivables, deposits, securities of other
         persons, pledge on shares, pledge of goods, equipment.
     - For loans to households: a mortgage on real estate and deposits, and the mortgage loans and insurance by
          the National Corporation for Housing Loan Insurance.
The Bank also uses the guarantee (jointly and severally guarantee) from parent companies for lending
subsidiaries.
Management monitors the market value of collateral, requests additional collateral in accordance with the
agreements. Also, the management takes into account the market value of collateral when reviewing the adequacy of
allowance for impairment losses. In accordance with the policies of the Bank taken as collateral for sale in the
ordinary course of business. In this way, reduce or settle outstanding amounts due from customers.



Assessment obezeređenja

The impairment losses of balance and off-potraživnja The Bank in accordance with its accounting policy and
methodology for calculating the allowance for the internal model and the Guidelines for Implementation
Methodology IAS 39 (by ERNST-UOUNG).
The main factors are taken into account when assessing impairment include: whether the delay in servicing of
principal or interest due, the perceived weakness in the cash flows of customers, existence of a deteriorating credit
rating, as well as the terms of the contract. The Bank assesses impairment at the individual client and group
evaluation of certain claims ..


Assessment obezeređenja loans and advances to banks and individuals praenim

The impairment losses of loans and advances to banks and corporate clients, based on the division of the Bank's
loan portfolio at the performing portfolio (loans that are not in default) and non-performing portfolio (loans that are
in default). Default loans are loans above the threshold of materiality that are burned in delay for more than 90 days
from the date of filing of accounts due and the due date specified by the host contract and the annex thereto (if it
exists) to shift part of maturity. Materiality threshold for legal entities and entrepreneurs is determined by the iznosz
of 10,000 RSD per individual placement or the client if they have an obligation to the Bank under a single plsmanu.
The Bank assesses individually impaired receivables from non-performing portfolio of clients who have obligations
to the Bank over 6 million NT with cil ^ em to determine whether there is objective evidence of impairment of
financial assets that are individually significant. Collective assessment of impairment is the Bank for financial assets
that are in the performing portfolio and the financial resources that are in non-performing portfolio and the amount
under 6 milionRSD per client.


Individual assessment of impairment is based on an estimate of the expected time of payment, when taking into
account the time intervals for assessment of potential damage-impairment claims. This estimate is based on
reducing the influx of loan repayment and interest on sadađšnju value of future cash flows and discounting them
using the agreed-discount interest rate stated on an annual basis. Estimated state individual updates of values as
opposed to total estimate represents the present value of future cash flows and overall status of all claims per course
credit partiji.Procena expected time of collection and assessment of the percentage of the realization of real estate
taken as collateral claims, depends on the type of real estate, the mortgage bvaničnim order entered in the land
register, the location at which it is located, the market's current economic strength and interest from potential
buyers and others.

Idividualno estimated impairment of non-performing loan portfolio of the Bank with debtors who have
obligations to the Bank over 6 million.


                                                       9
The present value of expected future cash flows are discounted using the effective interest rate contracted financial
asset (for financial resources for which the same has been calculated in accordance with the laws of the Republic of
Serbia) or application of contractual nominal interest rate is calculated at an annual rate (for the financially assets
which are not calculated effective interest rate) or the NBS discount rate for loans in which the effective interest rate
or nominal rate calculated at an annual rate less than the Discount rate. The calculation of present value of
estimated future cash flows of a collateralized financial asset reflects the cash flows that may result from the
realization of collateral.


 That group. collectively assessed impairment performing loan portfolio of the Bank, and its non-performing loan
 portfolio of debtors who have obligations towards the Bank under 6 million. and for debtors where there was no
 increase credit risk.
Collective assessment of impairment performing loans is based on determining the probability that it will incur
default (PD) and assess the loss in the event of default (LDG). Collective assessment of impairment of non-
performing portfolio is based on the estimated loss in case of default, because the default has occurred. PD is
estimated by looking at claims that are not in default during a period of time and calculation of percent of claims that
enter into default during that period. The Bank made its loan portfolio segmentation based on the number of days of
delay in settlement of obligations. Probability of default in period to identify the loss is estimated using the transition
matrix. These matrices show the transition of clients from different groups performing portfolio in default in the
period between two dates. Loss given default and (LGD), the amount of loans that are not reimbursed, investments
that do not return to regular status and placements that can not napaltom compensation claims.


Risk assessment of guarantees and letters of credit is determined by applying the average rate guarantees and letters
of the fallen at the expense of their bank balance on the day of impairment. The average rate is calculated as the
ratio of guarantees and letters of the fallen at the expense of banks (including the initial state) in relation to the total
issued guarantees and letters of credit on the basis of data for the previous period of 12 months back from the day of
reckoning.
Exceptions are the guarantees and letters of credit fixed 100% in the past, and those claims that are covered by
deposit as collateral for securing the applicable provisions of the rate of 0%.


For other off-balance sheet exposures, provisions are estimated at the level of the client using the weighted average
rate of the allowance receivable balance estimated for the underlying client. For off-balance sheet exposures to
customers who do not have balance sheet exposure provision is calculated using the rate of performing loans
without delay.


Assessment impairment of loans to households

Assessment of impairment of loans to individuals and holders of registered farms is based on the division of
portfolios of performing portfolio (loans that are not in default) and non-performing portfolio (loans that are in
default). Default occurs when claims are material (in the population that is the amount above 1,000 RSD) west in
delay longer than 90 days. Provisions for performing portfolio is based on a collective assessment of impairment,
and non-performing portfolio: the individual assessment of clients which exceed 6 million NT, and the collective
assessment of the holders of not more than 6 million USD. Assessment of impairment for entrepreneurs is viewed
in the same way as for corporate clients.

Individually assessed for impairment based on an estimate of the expected time of collection, and is based on
reducing the influx of loan repayment and interest on the present value of future cash flows discounted using their
contractual / discount interest rate stated on an annual basis. Estimated state individual impairment assessment of
the difference of the total present value of future cash flows and overall status of all claims under the credit party.
Estimate of the expected time of collection and the percentage of the value of collateral that will be charged is done
depending on the type of collateral (a type of real estate, deposit), the legal basis on which they are based, real
estate and location dr.faktora.


                                                        10
Collective assessment of impairment performing loans to individuals and to legal persons based on the
determination of the probability that it will incur default (PD) and assess the loss in the event of default (LDG),
except that the placement of individuals PD estimates by type of loan products with similar credit risk profile, and
then each group product is divided into segments based on the delay, and on that basis to calculate the amounts are
not recoverable. Migration matrix for loans to individuals and holders of registered farms are based on the parties.


Estimation of the provision of off balance sheet risk exposure from guarantees to citizens is in the same way as for
corporate clients. Contingent liabilities that the bank may terminate unconditionally and without notice, are not
valued.




4.2.    Foreign currency risk

Currency risk is the risk that the valuation of assets and liabilities due to foreign currency fluctuations. The Bank
has set limits on positions by currency, and positions are monitored on a daily basis.


The principle of protection against foreign exchange risk of the Bank to achieve and maintain foreign currency
liabilities to the extent of foreign currency or foreign currency liabilities. This ratio is reconciled from the
maturities of foreign currency assets and liabilities.




4.3.      Liquidity risk

Liquidity risk is the risk that the Bank will not be able to settle within its due obligations. In order to reduce or limit
this risk, the Bank seeks to diversify its sources of funding, to manage the assets of reviewing its liquidity, and
monitors future cash flows and daily liquidity. This includes an assessment of expected cash flows and availability
of high grade collateral that may be of use to ensure additional funds, if required.

The Bank is exposed to daily requests for withdrawal by customers, affecting the funds available from current
accounts, deposits, withdrawal of credit. The Bank does not need to maintain the level of funds that would come out
to meet all the requirements to potential, estimating that the minimum level of reinvestment of funds due can be
safely predicted.


The Bank's management considers the daily report on the status of bank accounts and deposits. Empirically
determining the critical days for the Bank's liquidity, or the dates of significant outflows. Based on the
identification of available funds and daily needs, the decision on use of funds.

The Bank expects that not all contingencies and irrevocable commitments will be withdrawn before their maturity.




4.4.      Risk of changes in interest rates

The risk to interest rates arises from the possibility that changes in market interest rates affect both the fair value
of financial instruments.


                                                        11
 The Bank is exposed to interest rate risk as the maturity mismatches of assets and liabilities, which were
 agreed fixed interest rate.



4.5.       Capital Management

 The Bank's management regularly monitors the Bank's capital adequacy ratios and other performance indicators
 prescribed by the National Bank of Serbia and submit quarterly reports to the National Bank of Serbia on actual
 indicators. Banking Act of the Republic of Serbia stipulates that banks must maintain minimum capital in the
 amount of dinar equivalent of 10 million euros at the official average exchange rate, capital adequacy ratio of at
 least 12%, and that the scope and structure of its operations in accordance with the performance decision on risk
 management (Official Gazette no. 129/2007, 63/2008 and 112/2008) and the Decision on Capital ("Official Gazette.
 Gazette No. 129/2007 and 63/2008).




       5. INCOME AND EXPENSES
                                                                                                     Thousands of RSD
                                                                                   Year 2010                Year 2009
       Interest income
       For loans:
        - in RSD (700)                                                              9,741,136                 10,082,748
        - in foreign currency (705)                                                   170,960                    287,553
                                                                                    9,912,096                 10,370,301
       For deposits:
        - in RSD (701)                                                                246,809                   233,040
        - in foreign currency (706)                                                   271,365                   189,063
                                                                                      518,174                   422,103
       Securities issued - in RSD (702):
        - NBS bills in repo transactions                                              279,046                    453,491
       - Government Bills                                                             146,118                    244,431
        - bill                                                                        752,560                    627,945
        - RS Bonds                                                                     30,657                          0
                                                                                    1,208,381                  1,325,867
       From other investments:
        - in RSD (703)                                                                109,620                     44,684
        - in foreign currency (708)                                                         0                          0
                                                                                      109,620                     44,684
                                                                                   11,748,271                 12,162,955

       Interest expense

       In respect of loans in RSD: (gr.600) for deposits:                             -170,191                  -166,790
        - In RSD (gr.601 603) - Foreign
        currency (gr.606)                                                           -1,623,844                -2,488,876
                                                                                    -3,312,527                -1,889,711
                                                                                    -4,936,371                -4,378,587
                                                                                    -5,106,562                -4,545,377
       Net interest income
                                                                                     6,641,709                 7,617,578

                  a)   Interest income

                                                                                                     Thousands of RSD
       Deposits with National Bank of Serbia                                       Year 2010                Year 2009
                                                                                     176,812                   152,933
                                                            12
Placements with banks                                    308,626            288,410
Loans and advances to customers                       10,054,452         10,395,745
Interest on securities:
 - Bills of the NBS repo transactions                    279,046            453,491
- Government Bills                                       146,118            244,431
 - Bill                                                  752,560            627,945
 - RS bonds                                               30,657                  0
                                                      11,748,271         12,162,955

           5) Interest expense
                                                                   Thousands of RSD
                                                      Year 2010           Year 2009
Deposits and loans                                      621,765             512,363
Deposits and loans to customers                       4,484,797           4,033,014
                                                      5,106,562           4,545,377



6. INCOME AND EXPENSES AND COMMISSIONS
                                                                   Thousands of RSD
                                                      Year 2010           Year 2009
 Fee and commission income:
  - By credit card transactions                          76,859              86,991
  - Payments                                            384,353             422,357
  - Other fees                                          398,454             283,555
                                                        859,666             792,903
Fee and commission income:
  - By credit card transactions                           -4,310             -1,957
  - Payments                                            -123,818           -178,476
                                                        -128,128           -180,433

Net fee and commission income                           731,538             612,470



7. OTHER OPERATING INCOME
                                                                   Thousands of RSD
                                                      Year 2010           Year 2009
Revenues from the lease of office space (7461000)       160,355              48,958
Revenue expenses refund. (746 d)                         26,630              14,496
Gains from the sale of material and property (761)      338,498                   0
Of liabilities (762)                                     65,313              10,702
Other income                                              7,406              29,002
                                                        598,202             103,158

8. INCOME AND EXPENSE INDIRECT WRITE-OFF
LOANS AND PROVISIONS

a) Items of the benefit / (charges) income                         Thousands of RSD
                                                      Year 2010           Year 2009
Losses balance sheet items:
 - Interest and fees                                    -700,942          -1,101,818
 - Loans and deposits                                 -4,611,368          -6,267,737
 - Securities (excluding treasury shares)               -141,691            -448,735
 - Shares (participation)                                   -522                   0
 - Other investments                                    -286,359            -379,100
 - Other assets                                           -8,369                -909
                                                      -5,749,251          -8,198,299
Provisions for off-balance                              -524,500            -354,273
Provisions for Long-term benefits of employees           -13,515              -2,444
                                                 13
 Losses from suspension of interest                                                                 0                                  0
                                                                                           -6,287,266                         -8,555,016
 Revenue Impairment of balance sheet items:
  - Interest and fees                                                                        291,481                            147,963
  - Loans and deposits                                                                     3,003,474                          4,566,214
  - Securities (excluding treasury shares)                                                   114,718                            254,904
  - Shares (participation)                                                                         0                                  0
  - Other investments                                                                        198,162                            325,716
  - Other assets                                                                               2,706                              8,135
                                                                                           3,610,541                          5,302,932
 Reversal of provisions formed against
 off-balance sheet items                                                                      356,904                        722,426
 Income from litigation                                                                       338,794                              0
 Provisions formed for employee benefits                                                       11,210                              0
 Income from collection of suspended interest                                                   1,822                          1,497
                                                                                            4,319,271                      6,026,855
 Net impairment losses and provisions                                                      -1,967,995                     -2,528,161

 b) Structure of provision (state)
                                                                                                             Thousands of RSD
                                                                                            31. 12. 2010           31. 12. 2009
 Interest and fees                                                                            1,528,023                   1,155,091
 Loans and deposits                                                                           9,143,056                   7,640,492
 Securities                                                                                     641,472                     614,499
 Participation                                                                                   19,795                      19,273
 Other investments                                                                              821,631                     756,358
 Other assets                                                                                   107,879                     102,224
                                                                                             12,261,856                  10,287,937


 c) Changes in allowance for impairment
                                                                             Equity
                               Interest, fees                            Investmen
                                    and         Loans and     Securities ts                   Other          Other                   Total
                                                                         (Interests )
                               commissions       deposits                                  Placements. assets.
                                                               (Note.1         (Note           (Note.19
                                 (Note.15)       (Note.16)        7)         .18)               )       (Note.21)

 At 1 January 2009.                  218,856     5,938,969       420,668       19,273           702,978         109,446           7,410,190
 Charge for the year                1,101,818     6,267,737       448,735                       379,100                909         8,198,299
 Reversal of allowance
 for impairment                      -147,963    -4,566,214      -254,904                       -325,716             -8,135        -5,302,932
 Write-off, and transfer to,
 suspended interest.                  -17,620                                                           -4               4           -17,620

 At 1 January 2010.                1,155,091     7,640,492       614,499       19,273           756,358         102,224          10,287,937
 Charge for the year                  700,942     4,611,368       141,691          522          286,359               8369         5,749,251
 Reversal of allowance
 for impairment                      -291,481    -3,003,474      -114,718              0        -198,162             -2,706        -3,610,541
 Write-off, and transfer to,
 suspended interest.                  -36,529      -105,330              0             0         -22,924                 -8         -164,791

 Balance at the end of 2010        1,528,023     9,143,056       641,472       19,795           821,631         107,879          12,261,856

g) Provision for estimated losses

Based on the categorization of investments established in accordance with regulations of the National Bank of Serbia on
31 December 2010. The calculation of the special reserve for estimated losses on the bank's exposure to credit risk:
                                                                                          in thousands




                                                    14
                                                                                       31. 12. 2010           31. 12. 2009
Special reserve for potential losses determined as per the
 National Bank of Serbia requirements with respect to:
  - balance sheet exposures                                                             24,631,071             18,890,881
  - off-balance sheet exposures                                                          1,483,599                478,990
                                                                                        26,114,671             19,369,871
Allowances for impairment and provisions determined in
accordance with the internally adopted methodology
 (IAS 39):
  - allowance for impairment of balance sheet items                                    -12,261,856             -10,287,937
  - provision for losses contingent on off-balance sheet items                            -651,665                -484,069
                                                                                       -12,913,521             -10,772,006
Provisions determined in accordance with the internal
 methodology exceeding the amount of provision
 as per the NBS Decision                                                                   699,615                828,716
 Special reserve for potential losses                                                   13,900,765              9,426,581
 Reserve for potential losses formed in prior years                                     -9,426,581             -4,573,104
Additional provision for potential losses to be set
 aside as appropriation of retained earnings                                              4,474,184             4,853,477

In accordance with the National Bank of Serbia on the classification of balance sheet assets and off-balance, the difference
amount of special reserves for potential losses calculated in accordance with this decision and the amount of the allowance
balance sheet assets and provisions for losses on off-balance sheet items, which are calculated in accordance with
internally adopted methodology , recorded in a special account in the reserves for potential losses.
The amount of missing special reserves for potential losses the Bank will allocate the burden of
accumulated profits, according to the Decision of the Bank.




                                                    15
9. WAGES, SALARIES AND OTHER PERSONNEL EXPENSES

                                                                          Thousands of RSD
                                                                          Year 2010        Year 2009
Salaries (630)                                                             304,979           326,366
Benefits (631)                                                             112,528           116,009
Taxes and contributions                                                    152,500           148,423
(632,633)
Other staff costs (634,635)                                                   38,401             104,284
                                                                           608,408               695,082




10. OPERATING AND OTHER BUSINESS EXPENSES
                                                                                       Thousands of RSD
                                                                          Year 2010           Year 2009
Materials (640D)                                                             77,513               99,124
Servicing (640D)                                                            41,178                39,811
Rentals (6410.6461)                                                         187,693             158,943
PTT and Telecommunications. services (6411, 6438002)                        118,821             116,976
Maintenance and security (6413)                                             110,746             119,584
Marketing and advertising (6412)                                             86,360               91,242
Donations and Sponsorship (6433)                                            25,997                62,984
Entertainment (6435)                                                        31,459                25,811
Audit and expertise expenses (6434)                                          16,455                9,553
Insurance premium (6437)                                                    217,243             120,820
Membership fee (64380000)                                                    10,990               12,204
Court and other fees (64385, 6439006)                                        29,374               14,436
Brokerage fees and cost of Securities Commission (6438604,
6438704)                                                                     15,983               13,885
Costs of keeping the property (64388000)                                    100,961               71,762
Cost of acquisition of material values                                      67,895                17,356
(64389006,643891,6460)
Costs due to additional employee insurance and disability financing
(6439d)                                                                      17,916               17,230

Other intangible costs                                                      26,045                30,511
Taxes and contributions (644.645)                                          258,747               141,167
Additional expenses due to credit return obligations
(668,004)                                                                   160,100                    0
Other expenses (66D)                                                        78,947                16,970
                                                                          1,680,423            1,180,369
11. NET INCOME PROPERTY VALUATION                                     AND LIABILITIES
                                                                                   Thousands of RSD
                                                                         Year 2010        Year 2009
Approaches on the basis of valuation:
 - Loans and receivables (770)                                           6,902,660              4206756
 - Securities (771)                                                           0.00                50677
 - Liabilities (772)                                                       236,764               101651
                                                                         7,139,424             4,359,084
Losses from the valuation:
  - Loans and receivables (670)                                          -2,532,320           -1,004,349
  - Securities (671)                                                        -22,050                    0
  - Liabilities (672)                                                      -800,746             -567,443
  - tangible assets received in lieu of debt settlement (673)                     0              -12,820
                                                                         -3,355,116           -1,584,612
Net income                                                               3,784,308             2,774,472

                                                 16
12. INCOME TAX

a)   Income tax components
                                                                                       Thousands of RSD
                                                                              31. 12. 2010         31. 12. 2009
Current tax                                                                      -610,478             -585,599
Deferred tax                                                                        2,860                1,290
                                                                                 -607,618             -584,309

b) Reconciliation of income tax, profit before tax and prescribed tax rates
                                                                                        Thousands of RSD
                                                                              31. 12. 2010         31. 12. 2009
Profit before tax                                                               6,198,450            6,163,772
Income tax calculated at a rate of 10%                                            619,845              616,375
Tax effects of expenses not recognized for tax purposes                             -1,870                6,721
.
Tax credits for capital expenditures                                               -7,489              -22,268
Tax credits for employees hired on open-end basis                                       0              -15,229
Tax effect of income from dividends                                                    -8                    0
Effects of changes in temporary differences on property and
equipment                                                                          -2,860                -1,290
Other income is not taxed                                                               0                     0
                                                                                 607,618               584,309

v.   Deferred tax liabilities
                                                                                       Thousands of RSD
                                                                              31. 12. 2010         31. 12. 2009
Temporary differences in property, equipment and intangible
assets                                                                              6,874                 9,734
Temporary differences arising on remeasurement of AFS
securities                                                                          2,347                3,569
                                                                                    9,221               13,303

g. Changes in deferred tax liabilities
                                                                                        Thousands of RSD
                                                                              31. 12. 2010         31. 12. 2009
Balance at January 1                                                               13,303               16,363
(Decrease)/increase in deferred tax liabilities based on:
- temporary differences in property, equipment and intangible
assets                                                                             -2,860                -1,290
temporary differences arising on remeasurement of AFS
securities                                                                         -1,222                -1,770
Balance at December 31, 2010                                                        9,221               13,303




                                               17
 13. CASH AND CASH EQUIVALENTS

                                                                                                  Thousands of RSD
                                                                31. December 2010.               31. December 2009.
 In RSD:
  - - gyro account (000)                                                   3,106,903                          7,398,331
  - Cash in hand (001)                                                       709,213                            796,462
  - Republic of Serbia treasury bills                                              0                          1,539,075

                                                                           3,816,116                          9,733,868
 In foreign currency:
  - Foreign currency accounts with other banks (0500)                        154,432                             54,889
  - Regular foreign currency accounts with foreign                           939,422                            786,931
 banks (0501)
  - Cash in hand (051)                                                       923,861                          1,517,097
                                                                           2,017,715                          2,358,917
                                                                           5,833,831                          12,092,785



In accordance with the National Bank of Serbia on mandatory reserves of banks with the NBS, the dinar
bank reserve requirement calculation basis:
- at a rate of 5% - the portion of dinar base comprised of the CSD;
- at a rate of 25% - on the part of the dinar base comprised of liabilities in RSD, foreign currency clause
indexed;
- at a rate of 25% - on liabilities in foreign currency from the foreign exchange deposits and loans.

Of calculated reserve requirements according to the calculation of 17 December 2010th years (based on the
average balance of deposits from novemra) amounted to 73,285,581 thousand (for the same period from
December 2009.: 7,567,587 thousand).

According to this calculation the bank was obliged to December maintain average daily balance of bank account
in the amount of calculated reserve dinar to the next calculation, ie up to 17.01.2011.

 Bank during the period 18.12.2010 to 17.01.2011 on the bank account held by the average daily balance
above the amount calculated dinar reserve

The Bank in 2010 did not use the reserve funds for the purpose of maintaining liquidity.

The average interest rate on the dinar reserves allocated in 2010. amounted to 2.5% per annum.




                                                   18
 14. REVOCABLE DEPOSITS AND LOANS
                                                                                            Thousands of RSD
                                                             31. December 2010.            31. December 2009.
 In RSD:
   - Liquidity surpluses deposited                                               0                      300,000
 with NBS (010)
   - Placements with NBS arising from repurchase
   transactions (013)                                                   4,000,000                     2,200,000
                                                                        4,000,000                     2,500,000
 In foreign currency:
   - Obligatory reserves held with NBS (060)                           16,219,755                     8,904,919
                                                                       20,219,755                    11,404,919

At 31 December 2010. year, funds in accounts at National Bank of Serbia has been deposited surplus liquidity.
The interest rate on deposit excess liquidity with the National Bank of Serbia in 2010. year ranged from 5.5% to
9% per annum.

Obligatory reserve a minimum reserve of foreign currency allocated in accordance with the National Bank of
Serbia on mandatory reserves of banks with the National Bank of Serbia (Official Gazette. Gazette
RS No. 12/2010 and 78/2010, which states that calculate the foreign currency reserve at a rate of 25% of the
average daily balance of foreign currency assets during the previous calendar month. National Bank of Serbia does
not pay interest on required reserve currency, the 01jula 2005.

At 31 December 2010. year, required reserves in the currency was in line with the National Bank.




15. RECEIVABLES ARISING FROM INTEREST, FEES AND COMMISSIONS, TRADE,
 FAIR VALUE ADJUSTMENTS OF DERIVATIVES AND OTHER RECEIVABLES

                                                                                              Thousands of RSD
                                                              31. December 2010.             31. December 2009.
Interest receivables:
  - In RSD                                                               3,061,023                      2,423,645
  - In foreign currency                                                     58,385                         47,499
                                                                         3,119,408                      2,471,144

 Allowance for impairment of interest receivables:
  - In RSD                                                              -1,475,800                     -1,116,246
  - In foreign currency                                                    -34,838                        -29,092
                                                                        -1,510,638                     -1,145,338


Fee and commission receivables in RSD                                       37,633                         24,238
Allowance for impairment of fee and commission
receivables                                                                -17,342                          -9,707
                                                                            20,291                         14,531

Receivables from selling tangible assets                                        49                                 49
Allowance for impairment of receivables from
selling tangibles:                                                              -43                            -46
 Net                                                                              6                              3


                                                   19
 16. LOANS AND DEPOSITS
                                                                                                    In thousands of RSD.
                                                                     31. December 2010.               31. December 2009.
 Deposits               (LDC 11+21)
 Long-term deposits.- Banks. (LDC 111)                                                187                               187
 Long-term deposits - Customers. (LDC 113) - din                                       69                                69
 Short-term deposits.- Banks. (LDC 211) - Val                                  36,503,629                        18,132,572
 Short-term deposits - Customers (LDC 213) - Val                                   16,625                            16,625
                                                                               36,520,510                        18,149,453
 Allowance for impairment of deposit                                                 -187                              -187
                                                                               36,520,323                        18,149,266
 Loans                    (Kto 10 20)
 Short-term loans::
   - Banks (k.108800B)                                                              9,608                             9,608
   - Customers     (10d)                                                       44,202,549                        35,323,381
 Long-term loans to customers in dinars                                        23,647,598                        16,871,086
 Short-term loans to customers in foreign currency                              1,127,854                         1,326,347
 Long-term loans to customers in foreign currency                                 305,874                           415,088
                                                                               69,293,483                        53,945,510
 Allowance for impairment of loans                                             -9,142,869                        -7,640,306
                                                                               60,150,614                        46,305,204
 Net                                                                           96,670,937                        64,454,470

Short-term deposits in foreign currency to domestic banks were granted for the period O / N up to a year, at an
interest rate per annum from 0.5 to 5% annually. And to provide long-term deposits (13 months) interest rate ranged
up to 6 % per annum.

Short-term loans to banks in RSD, overnajt up to 7 days, were approved at an interest rate of 6.1 to 12% per year.

Short-term loans in RSD have been granted to legal entities and businesses up to 12
months with the prevailing nominal rates ranging from 6% to 29% per annum (effective
interest rate of 7% to 34%), and the long-term loans in RSD (indexed in foreign currency)
legal entities and entrepreneurs, mostly in the range of 5% -15% per annum (effective interest rate of 6.5% to 16.5%).

Nominal interest rates on short-term loans to legal entities in foreign currency, mostly ranged in
ranging from 4% to 15% per annum (effective interest rate in the range 4.5% -20%), and the
long-term loans to corporate customers in foreign currencies, mostly in the range of 4% to 12% pa
level (the effective interest rate in the range 4.5% -14%).

Entrepreneurs are granted loans under the conditions that apply to legal persons.

Short-term investments in RSD, individuals have been granted to the effective interest rate of 20.27% to
36.19% a year, a dinar investments in foreign currency, have been granted to the effective interest rate of 4.59
to 19.78% a year.

Short-term investments in RSD holders ragistrovanih farms, were approved with the effective interest rate of
15% to 29.46% a year.

Long-term investments in RSD have been granted to individuals with the effective interest rate of 23.14% to
36.13% (subsidized cash and purpose at a rate of 8.04%), and the dinar investments in foreign currency, the
effective interest rate of 4 , 66% to 18.93% god.išnje.


Long-term investments in RSD (in foreign currency), holders of registered polloprivrednih farms, were
approved with the effective interest rate of 4.71% to 17.89% a year.


                                                           20
17. SECURITIES (EXCLUDING SOPS. SHARES)
                                                                                          Thousands of RSD
                                                             31. December 2010.          31. December 2009.
Securities at fair value through profit and loss:

 - shares of Agrobanka A.D., Beograd                                      160,421                      80,404

Securities held-to-maturity:
In RSD:
 - bills of exchange issued by other corporate
 customers                                                               3,749,033                  3,552,081
Republic of Serbia treasury bills                                          627,062                    845,677
 - Bonds issued by other companies                                          15,197                     15,197
Allowance for impairment                                                  -641,472                   -614,499
                                                                         3,749,820                  3,798,456
In foreign currency:
 - Foreign currency savings bonds                                          35,203                      31,998
                                                                         3,945,444                  3,910,858




Changes in the allowances for impairment of securities are as follows:
                                                                                     In thousands     RSD
                                                                             2,010                      2,009
At 1 January                                                               614,499                    420,668
Allowances for impairment during the year (Note 8)                         141,691                    448,735
Reversal of allowances for impairment (Note 8)                            -114,718                   -254,904

At 31 December                                                             641,472                   614,499




                                                    21
 18. EQUITY INVESTMENTS
 (INTERESTS)                                                                                 Thousands of RSD
                                                               31. December 2010.           31. December 2009.
 Shares that are not listed on the Stock Exchange                         49,659                      658,808
 Investments listed on Stock Exchange                                     41,376                        54,266
                                                                          91,035                      713,074
 Allowance for impairment                                                -19,795                       -19,273
                                                                          71,240                      693,801

Provisions for equity refers to the devaluation of participation that is not listed on berzi.Obezvređivanje was based
on the estimates based on information provided by izdavoca shares and other findings.
Other investments in shares listed on stock exchanges are recorded at fair value. Review of fair value is done
periodically, and the effects of price fluctuations are directly reflected as changes in equity.



At 31 December 2010. the Bank has equity investments following legal entities.


                                                                                             In thousands

                                                      31. December 2010.             31. December 2009.

 Equity investments up to 10%:
  - Tržište novca a.d., Beograd                                        267                              347
  - Univerzal banka a.d., Beograd                                   11,357                           21,097
  - OTP banka Srbija a.d., Novi Sad                                 16,128                           16,128
  - Marfin Bank a.d., Beograd                                          115                              115
  - PB Agrobanka a.d., Beograd                                          50                               57
   - Hypo Alpe-Adria Bank a.d., Beograd,                                 0                             986
   - AMS Osiguranje a.d., Beogard                                      700                             806
   - Politika a.d., Beograd                                         13,026                          15,076
   - BetraTrans a.d., Beograd                                           57                              57
   - Šar holding                                                    19,050                          19,050
  - Plava tačka a.d. – in liquidation                                  745                             223
  - Agroživ a.d., Pančevo                                                0                         609,593
                                                                    61,495                         683,535
 Equity shares above 10%:
  - AIK Savings and Credit Organization
 (Štedno kreditna organizacija AIK,
 Vranje)                                                            29,080                           29,080
   - AIK Company                                                       418                              418

 Small Business Development Center in
 Niš                                                                    41                              41
  - AIK Invest d.o.o.- in liquidation, Niš                               0                               0
                                                                    29,539                          29,539
                                                                    91,034                         713,074




                                                     22
Participation Hupo Alpe Adria Bank was sold by value of 986 thousand RSD, and in the unsuccessful
reorganization Aroziva participation is canceled and returned to the previous status of receivables on credit
basis.




 19. OTHER INVESTMENTS (kto 16 26)
                                                                                               Thousands of RSD
                                                               31. December 2010.             31. December 2009.
 Receivables based on payments on guarantees,
 bills of exchange and letters of credit
 (K.163+ 263+265)                                                           826,224                       612,999
 Short-term dinar placements with public entities.
 (164 )                                                                     861,867                      2,619,430
 Receivables from banks based citizen cheques                                34,722                         13,403
 (1680_B)
 Receivables from payment cards, not matured                              3,114,764                      3,498,315
 (K.168006 + 168007)
 Short-term dinar placements with corporate
 entities (16,802 G)                                                               0                      310,404
 Long-term dinar placements with public entities.
 (K.16812.F)                                                                730,743                       994,928
 Receivables from payment cards, matured (k.
 1688.)                                                                     474,830                        393,879
 Other investments                                                           33,694                         40,867
                                                                          6,076,844                      8,484,225
 Allowance for impairment
 based on:
   - payments on guarantees, bills of exchange                             -423,989                       -446,543
 and letters of credit. (k.1693, 2693)
   - short-term dinar placements with public entities                        -16,183                       -44,268
 (1694 )
   - receivables from banks based citizen cheques.
   (16980.B)                                                                    -888                          -498
     - receivables from payment cards, not matured                          -119,223                       -93,341

                                                     23
          (K.1698006. 1,698,007th)
             - short-term dinar placements with corporate entities                         0                      -9,082
          . (169802.G)
             - long-term dinar placements with public entities                      -11,838                      -16,814
          . (k.169812.F)
             - receivables from payment cards, matured (k. 16988.)                 -193,224                     -116,778
             - Other investments (169d, 269d)                                       -56,286                      -29,034
                                                                                   -821,631                     -756,358

          Net                                                                     5,255,213                    7,727,867

Short-term investments in RSD, public enterprises from 861,867 million RSD were based on claims of the contract fee and
relate mainly to:
      - DP Novi Sad - Gas for a total of 368,587 million RSD (11.5% one-time charges,
          back in installments - the last in August 2011.)
      - PUC HEATING ZRENJANIN totaling 217,153 million
          RSD (11.5% one-time fees, return in installments - the last in August 2011.) - HEATING PUC PANČEVO a total of
      97,262 million RSD (11.5% one-time fees, return in installments - the last in November 2011 . years);
      -   DEPARTMENT OF ROADS ŠAPCA a total of 79,979 million RSD (11.5% one-time fees, return in installments -
           the last in December 2011.)
      -   GAS - FEROMONT AD for a total of 40,461 million RSD (fee 10% off, returning in installments - the latest in
          March 2011.).
Long-term investments in RSD, public enterprises from 730,743 mln RSD claims of "Public Roads of Serbia":
     -    in the amount of 331,642 million RSD, according to the claims of the contract and loan agreement travel industry
          businesses (loans matured 30.06.2010., interest rate 1.415%, konf.metod, monthly);
     -    in the amount of 399,101 million RSD, according to the claims of the contract and loan agreement travel industry
          companies (based on reprogramming the 5 years, with the return in annual installments and the interest rate equal to
          the quarterly BELIBOR increased by 4 percentage points annually);




                                                             24
20.                                          FIXED ASSETS, INVESTMENT PROPERTY AND INTANGIBLE ASSETS



                                                                                                                                                      Thousands of RSD
                                                                                Land and.             Equipment and             Invest.          Total     Intangible
                                                                              Buildings                   other assets         Property.                     assets
  Acquisition value
  Balance, 1 January 2010. The                                                        579,874                        849,322      522,580      1,951,776        79,993
  Transfers                                                                                                                     1,404,583      1,404,583
  Increase                                                                                                           171,602                     171,602        14,488
  Disposals                                                                             -2,264                        -1,157               0       -3,421            0
  Balance, 31 December 2010. The                                                      577,610                      1,019,767    1,927,163      3,524,540        94,481
  Provisions for:
  Balance, 1 January 2010. The                                                          48,625                       441,700       44,582       534,907         33,160
  Amortization                                                                           6,584                       120,163        6,794       133,541         15,938
  Disposals                                                                               -304                          -596                       -900
  Transfers                                                                                                                                           0
  Balance, 31 December 2010. The                                                        54,905                       561,267       51,376       667,548         49,098

  Present value, 31 December 2010. g                                                  522,705                        458,500    1,875,787      2,856,992        45,383

  Present value, 31 December 2009. g                                                  531,249                        407,622      477,998      1,416,869        46,833


  At 31 December 2010. The Bank has no fixed assets encumbered by mortgage, to ensure regular repayment of borrowings.




                                                                               25
        21. OTHER ASSETS




                                                                                              Thousands of RSD
                                                                 31. December 2010.          31. December 2009.
  Other receivables: (03, 09, 304)
     - Advances for current assets (k.030, 090)                                 5,604                       5,504
     - Advances for fixed assets (k.031) -                                     15,731                      16,607
     - Receivables from Beogradska Banka a.d.- in
     bankruptcy.                                                               92,300                      92,300
     - Tangible assets received in lieu of debt settlement
  . (k.304) .                                                               4,572,905                   4,555,041
     - Other receivables in dinars.                                           133,080                      22,194
     - Other receivables in foreign currency                                    2,906                       5,522
                                                                            4,822,526                   4,697,168
  Allowance for impairment of other receivables:
   - Receivables from Beogradska Banka a.d.- in
   bankruptcy.                                                                -92,300                     -92,300
    - Other receivables in dinars. (LDC 039309)                               -15,363                      -8,454
    - Other receivables in foreign currency. (LDC 099)                           -216                      -1,470
                                                                             -107,879                    -102,224
 Prepayments::
    - Deferred interest receivables in
 . dinars (190.191) -                                                         137,775                      44,178
    - Prepaid interest on savings deposits
 placed by retail customers (192)                                             193,624                   1,680,736
    - Prepaid rental expenses (194)                                             8,284                       7,271
    - Deferred receivables for interest accrued
 in foreign currency (290)                                                      1,235                       5,608
                                                                              340,918                   1,737,793
  net                                                                       5,055,565                   6,332,737


The rest of the net assets Dinar funds accounted for 5,051,640 hillada RSD, the currency with 3.925 hil ^ ada CSD




                                                      26
 22. TRANSACTION DEPOSITS

                                                                                               Thousands of RSD
                                                                 December 31, 2010            December 31, 2009
 In RSD:
   - Banks and other financial institutions                                    201,817                      239,496
   - Public Enterprises                                                        379,607                      673,629
   - Other companies                                                         1,619,992                    2,340,524
   - Entrepreneurs                                                             192,655                      179,841
   - Population                                                                528,453                      521,091
   - Foreign legal entities                                                         79                          186
   - Public Sector                                                             126,943                      108,084
   - Other customers                                                           191,522                      116,048
                                                                             3,241,068                    4,178,899
 In foreign currency:
   - Banks and other financial institutions                                     16,063                      294,416
   - Public Enterprises                                                         22,348                       16,061
   - Other companies                                                           863,867                      574,418
   - Entrepreneurs                                                              12,003                        8,878
   - Population                                                                282,038                      216,772
   - Foreign legal entities                                                        384                       62,368
   - Public Sector                                                               9,486                          346
   - Other customers                                                            75,368                       11,451
                                                                             1,281,557                    1,184,710
                                                                             4,522,625                    5,363,609




On transaction deposits The Bank pays interest ranging from 3% to 12% per annum.

On sight deposits in RSD, public sector, the Bank does not pay interest. Also, the bank pays no interest in any
transaction in foreign currency deposits of the public sector, or foreign legal entities.


On sight deposits in RSD Bank pays interest at a rate of 3% per year.

Transaction deposits in foreign currencies are non-interest bearing.




                                                       27
23. OTHER DEPOSITS

The structure of deposits by sector and currency is shown in the following table:
                                                                                                          Thousands of RSD
                                            31. December 2010. The                           31. December 2009. The
                                                 In Foreign.                                     In Foreign
                                       In RSD     Currency. Total                      In RSD    Currency               Total
Savings deposits:
Population                           3,172,335     59,186,594     62,358,929           560,989    35,267,962     35,828,951
Foreign individuals                    299,470        533,861        833,331               116       456,011          456,127
                                     3,471,805    59,720,455      63,192,260          561,105    35,723,973     36,285,078
Deposits from
of loans:
Banks and other financial
Organization                           118,341        147,697        266,038               200         1,588            1,788
Other enterprises                      469,979       202,879         672,858           314,108       175,694          489,802
Entrepreneurs                           17,798               0        17,798             2,553            0             2,553
Population                                 644        846,243        846,887             1,440       945,828          947,268
Public sector                             2,826              0         2,826             4,758            0             4,758
Other customers                           2,045              0         2,045                 0            0                0

                                      611,633      1,196,819       1,808,452          323,059     1,123,110      1,446,169
Designated deposits:
Banks and other financial
Organization                              8,631             16         8,647             1,475          498             1,973
Other enterprises                       47,249             538        47,787            76,496          813            77,309
Entrepreneurs                               12             906          918                  9         1,045            1,054
Population                              12,887            1,558       14,445            26,293         1,415           27,708
Foreign individuals                          4               0             4                 0            0                0
Public sector                              693               0           693             1,405            0             1,405
Other customers                            284             431           715             1,372            2             1,374
                                        69,760         3,449         73,209           107,050         3,773           110,823

Other deposits:
Banks and other financial
Organization                         5,830,433      1,114,902      6,945,335         4,489,575       138,012      4,627,587
Other enterprises                    7,452,923      2,672,744     10,125,667         7,078,530     3,799,493     10,878,023
Entrepreneurs                           19,129          7,986         27,115            22,953         6,465           29,418
Population                                 283               0           283                88            0               88
Foreign individuals                      1,316               0         1,316             1,476            0             1,476
Public sector                        1,220,244              39     1,220,283         4,551,151            0       4,551,151
Other customers                       2,965,242      306,646       3,271,888           462,094        50,616          512,710
                                   17,489,570      4,102,317      21,591,887    16,605,867        3,994,586     20,600,453
Total other deposits               21,642,768     65,023,040      86,665,808        17,597,081   40,845,442     58,442,523




                                                     28
The effective interest rate on savings deposits of individuals amounted to savings of EUR mostly from 0.5% to 1.2% (2% early this
year), a savings of CHF was 1.4% by October 2010, and then reduced to 0.15% annually, and savings in U.S. dollars was 1.8% by
October 2010 and then decreased to 0.25% per year.

The effective interest rate on term deposits in the currency up to one year ranged from 2% - 7.25% per annum on deposits in EUR, a
1.5% -2% annual savings in CHF, as well as a , 9% -2.6% per annum on deposits in U.S. dollars.


The effective interest rate on term deposits in RSD to one year ranged from 6% to 12% per annum.

The effective interest rate on term deposit in CURRENCY over one year (from 13 to 36 months) ranged from 6.5% to 8% per
annum on deposits in EUR.

The effective interest rate on term deposits in RSD over a year (at 13 and 15 months) was 14% and 15% per annum.

The effective interest rate on a dedicated local and foreign currency deposits (collateral for the approved loans), ranged mainly
from 0.5% to 8% per annum in USD (a very interest-free collateral, as well as special purpose deposit with the effective interest
rate of 9.06% per year-saving from last year with the payment of interest in advance, which is the portion of separated and on the
2010 year), or 0.5% -15% per year in rates.

Foreign currency deposits for cover for the transfer of non-interest bearing.

Short-term dinar deposits from banks deposited for periods of one to 12 months at an interest rate that ranged
annually from 4.5% to 12%.

Short-term dinar deposits from public enterprises have been deposited for a period of one to 12 months at an interest
rate that varied annually from 8% to 14.4%.

Short-term dinar deposits from the public sector have been deposited at the time of the adapted version to 12 months
at an interest rate that ranged annually from 8.1% to 11.5%.


 Other deposits presented per separated products, maturity and currency:
                                                                                                             Thousands of RSD
                                            31. December 2010. The                              31. December 2009. The
                                                     Foreign                                               Foreign
                                      In RSD       currency.              total          In RSD          currency.            total
 Savings deposits:
 (LDC 402, 502)
 Short-term                         360,828      33,602,202        33,963,030           561,105       34,332,624       34,893,729
 Long-term                        3,110,977      26,118,253        29,229,230                 0        1,391,349        1,391,349
                                  3,471,805      59,720,455        63,192,260           561,105       35,723,973       36,285,078
 Deposits -
 collateral against
 loans approved:
 (LDC 403, 503)
 Short-term                          148,299        178,713            327,012           41,489          275,464          316,953
 Long-term                           463,334      1,018,106          1,481,440          281,570          847,646        1,129,216
                                     611,633      1,196,819          1,808,452          323,059        1,123,110        1,446,169
 Special purpose
 deposits: (kto
 404, 504)
 Short-term                           69,760           3,449            73,209          107,050             3,773         110,823
                                      69,760           3,449            73,209          107,050             3,773         110,823
 Other deposits:
 (LDC 405, 505)
 Short-term                      17,434,006       3,986,269        21,420,275        16,585,314        3,946,642       20,531,956
 Long-term                            55,564        116,048            171,612           20,553           47,944            68,497
                                 17,489,570       4,102,317        21,591,887        16,605,867        3,994,586       20,600,453
 total                           21,642,768      65,023,040        86,665,808        17,597,081       40,845,442       58,442,523

                                                                  29
  24. BORROWINGS
                                                                                                Thousands of RSD
                                                                  December 31, 2010            December 31, 2009
  In RSD:
  Short-term borrowings:
    - Hypo Alpe-Adria Bank a.d., Beograd                                      2,109,964                    1,917,776
    - Raiffeisen Bank a.d., Beograd                                                   0                      480,000
      - Erste Bank a.d., Novi Sad                                                     0                      380,000
     - Banca Intesa a.d., Beograd                                                     0                      920,000
                                                                              2,109,964                    3,697,776


  Ost.finansijske obav. (LDC 409, 509)                                          10,195                         91,445
                                                     total                    2,120,159                    3,789,221

Short-term borrowings in RSD from the Hypo Alpe Adria Bank is taken within 14 days, with interest of
5.5% per year.




  25. PROVISIONS
                                                                                                 Thousands of RSD
                                                                  December 31, 2010            December 31, 2009

  Provision for litigation                                                           0                         338,794
  Provisions for losses on off-balance sheet items                             651,665                         484,069
  Provisions for retirement benefits and jubilee
  awards                                                                        13,515                          11,781
  Other provisions                                                                   0                           6,970
                                                                               665,180                         841,614


  Movements in provisions during the year,:                                                    Thousands of RSD
                                                                              Provisions for
                                                           Provisions for       Retirement
                                                           Losses on Off-      Benefits and
                                            Provisions for Balance Sheet          Jubilee          Other
                                             Litigations            Items          Awards       Provisions           Total
  Balance, 1 January 2009.                           338,794        852,222           9,886         3,960        1,204,862

  New provisions      (Note.8 and 10)                      0        354,273          2,444          3,010          359,727
  Discharged (Note 8)                                      0       -722,426           -549              0         -722,975
  Balance, 31 December 2009.                         338,794        484,069         11,781          6,970          841,614

  Balance, 1 % year 2010                             338,794        484,069         11,781          6,970          841,614
  New provisions      (Note.8 and 10)                      0        524,500         13,515              0          538,015
  Discharged (Note 8)                                -338794       -356,904        -11,210          -6970         -713,878
  Severance payments paid by                                                          -571
  book.                                                                                                                  -571
  Balance, 31 December 2010. The                             0      651,665         13,515                 0       665,180

In the course of 2010 abolished the provision in dispute bailiffs in income because the company AIK NIS, Ltd withdrew the
complaint.




                                                             30
26. OTHER LIABILITIES
                                                                         Thousands of RSD
                                                          December 31, 2010     December 31, 2009
Other liabilities:
 - accounts payable in dinars (430                                     42,349                35,910
 - advances received in dinars (431)                                    1,136                27,508
 - liabilities for issued guarantees and other sureties
 (433)                                                                    320                   325
 - liabilities arising from assets managed in the name                  6,744                 8,638
and for the account of customers. (436).
- liabilities arising from ceded receivables (4374) -                       0               208,281

                                                                     1,095,060                      0

-Received state funds for mortgage interest subsidies
(437,709) - Mill
- Other liabilities to employees (445) - din                                68               76,416
 - other liabilities in dinars, (437d, 438.439)                         65,874               73,476
 - other liabilities in foreign currency (53)                              966                1,169
                                                                     1,212,517              431,723
Accruals:

  - accrued interest payable in dinars. (490)                          89,363                36,437
-Other prepayment costs of the future period (491) Din                  4,345
  - accrued interest payable in foreign currency.
 (590) -                                                              740,036               135,544
    - interest charged in advance.
(492d)                                                                146,075               179,976
    - accrued fee and commission income
 (492d)                                                               273,494               377,000
    - interest on Republic of Serbia bills charged in
advance                                                                 17,504               21,837
  - fee on guarantees issued paid in advance (494)                      42,804               13,937
                                                                     1,313,621              764,731
                                                 total               2,526,138             1,196,454
31
 27.   EQUITY


   The Bank's capital consists of: equity capital, reserves, share premium and accumulated profits.



                                                                                            Thousands of RSD
                                                                 December 31, 2010       December 31, 2009
  Share capital:
  Ordinary shares                                                          15,857,218                 15,857,218
  Preferred shares                                                          2,375,423                  2,375,423
                                                                           18,232,641                 18,232,641
  Share premium and                                                         7,157,924                  7,157,924
  Reserves from profit                                                     13,165,376                  8,091,898
  Revaluation reserve                                                          21,353                     32,339
  Unrealized losses on securities available-for-sale                             -229                       -223
   Retained earnings:
     - Previous years                                                               0                          0
     - Current year                                                         5,590,832                  5,579,463
                                                                            5,590,832                  5,579,463
                                                                           44,167,897                 39,094,042


Shareholder structure

 Shareholder structure as at 31 December 2010. year, with the participation of over 1%, is shown in the following
table:

                                                                              Share capital                 %
                                                                                                    Participat
                                                                              in thousands. RSD            ion
  AGRICULTURAL BANK OF GREECE                                                             3,800,500      20.84
  925 - UNICREDITBANK OF SERBIA-VIENNA
  476KFN150714P                                                                               992,422        5.44
  NATIONAL BANK OF GREECE SA, GREECE                                                          902,793        4.95
  Venturer MANAGEMENT AG                                                                      664,687        3.65
  UNICREDIT BANK SERBIA JSC-476K119107                                                        630,530        3.46
  EPS BELGRADE                                                                                810,084        4.44
  EAST CAPITAL ASSET MANAG.                                                                   539,469        2.96
  AIDA Asset Association AKTINGESELLSCHAFT                                                    525,770        2.88
  ZB INVEST DOO UPR.INVEST.FOND.                                                              493,136        2.70
  HUGO 345K000004-ALPE-ADRIA-BANK AD BEOGRAD
  CUSTODY ACCOUNT-                                                                            519,235       2.85
  E Templeton. M. SMALL CAP FUND                                                              399,714       2.19
  Franklin Templeton INVESTMENT                                                               377,823       2.07
  SEE CAPITAL GROUP AG                                                                        344,991       1.89
  SUNOKO DOO NOVI SAD                                                                         324,115       1.78
  Globos osiguranje ad Beograd                                                                341,939       1.88
  Other                                                                                     6,565,433      36.02
  Total                                                                                    18,232,643     100.00

 Capital adequacy and performance indicators prescribed by the Law on Banks

 The Bank is required to maintain minimum capital adequacy ratio of 12% established by the National Bank of
 Serbia.

 At 31 December 2010. year, according to the calculation of the Bank, all indicators of business, or the scope
 and structure of risk assets were within their prescribed.


                                                         32
   28. OFF-BALANCE SHEET ITEMS                                                       Thousands of RSD
                                                              December 31, 2010      December 31, 2009
Managed on behalf of third parties                                        652,789                587,695
Commitments and contingent liabilities                                 15,090,839             11,260,557
Accepted sureties for liabilities                                       2,058,170              2,517,822
Other off-balance sheet items                                          95,781,854             75,184,840
                                                                      113,583,652             89,550,914

a) Managed on behalf of third parties
Managed funds in dinars
  - Short term                                                            114,002                111,023
  - Long-term                                                             538,787                473,182
Managed funds in
foreign currency:                                                               0                  3,490
                                                                          652,789                587,695
b)      Contingent liabilities assumed
Financial guarantees:
- in RSD (LDC 9100)                                                     3,581,956              3,304,352
- In foreign currency (9150)                                            2,116,006              1,874,735
Performance guarantees:
- In RSD (LDC 9101)                                                     5,651,370              3,561,756
- In foreign currency (9151)                                              141,153                117,709
Issued sureties and acceptances (9102)                                     18,938                 16,105
                                                                       11,509,423              8,874,657
Uncovered letters of credit (LDC 9155)                                    429,544                291,880
Undrawn credit lines (LDC 913)                                          3,142,737              2,084,884
                                                                       15,081,704             11,251,421
           Own a guarantee (LDC 914)                                        9,135                  9,136
                                                                       15,090,839             11,260,557

Irrevocable commitments relating to the unused loan commitments that can not be canceled
unilaterally to: overdrafts, revolving loans to businesses, multi-purpose revolving loans, buying and
selling foreign exchange from banks for ^ ard transactions, and other irrevocable commitments.
Irrevocable commitments generally have fixed dates when stress or other provisions relating to
expiration. Since irrevocable commitments may expire without withdrawal of credit by customers, the
total contracted amount does not necessarily represent future cash requirements. The Bank monitors the
maturity of the assumed liabilities based on irrevocable unused loans for long-term commitments have a
greater degree of credit risk than short-term commitments.

                                                          December 31, 2010         December 31, 2009
c) Accepted Sureties for Liabilities
Received a guarantee to the Bank (LDC 911)                                    0                         0
Securities received as collaterals (LDC 932)                          2,058,170                 2,517,822
                                                                      2,058,170                 2,517,822
d) Other off-balance sheet items
Suspended interest (LDC 930)                                            145,082                   140,712
Pledges on movables received as
collaterals (LDC 9330)                                               19,748,847                 5,654,916
Received mortgages (LDC 9331)                                        69,829,121                64,011,220
Undrawn revocable credit
arrangements. (LDC 9333)                                              4,134,922                 3,835,764
Other                                                                 1,923,882                 1,542,228
                                                                     95,781,854                75,184,840


                                                 33
29.   RELATED PARTIES



a)    Business relationships with members of the Board
Business relationships and relation with members of the Board are based on the usual
market conditions
                                                                                                                          in thousands
                                                                                                         (RSD.)              (RSD.)
Executive compensation                                                                                      2010              2009
Members of the Executive Board                                                                                -60,208            -65,332
Board Members                                                                                                 -75,392            -57,961
Agg. Executive compensation                                                                                  -135,600           -123,293


                                                                                                      Income. (Rash)      Income. (Rash)
Other relationships with members of the Board                       31.12.2010         31.12.2009          2010               2009
Overdrafts, credit                                                                             108                                    30
Cards, cash and consumer loans                                              9,208              940                                   135
Mortgage loans                                                             11,599            3,090                4,298              241
Deposits                                                                  318,060          241,748                                -7,712
Other liabilities                                                           6,936               11            -17,055               -314
Total relationships with members of the Board                             345,803          245,897            -12,757             -7,620


5) The transactions with related parties
У their daily business, the Bank realized a business transaction with shareholders and other related parties, under
normal market conditions.
The following table shows the status of claims and liabilities arising from business relationships with related parties as
at the balance sheet date:
                                                                                    gross exposure
                                                                 Balance sheet               sheet
31. December 2010. The                                          gross exposure            exposure                Total       Liabilities
Staff                                                                    330,677            52,997            383,674            414,361
Other individuals                                                         86,826             46,185           133,011          1,012,484
Corporates *                                                             409,659          1,127,679         1,537,338            206,755
                                                                         827,162          1,226,861         2,054,023          1,633,600
31. December 2009. The
Staff                                                                    225,658            71,576            297,324            439,572
Other individuals                                                         92,011            50,369            142,380            644,759
Corporates *                                                             284,833           521,376            806,209             63,577
                                                                         602,502           643,321          1,245,913          1,147,908




                                                                  34
AFFILIATED COMPANIES
                                                    Off-balance
                                    Balance sheet         sheet
31. December 2010. g               gross exposure        exposure       Total    Liabilities   Income    Expenses
FSH MAHIPROTEIN CLOSED AD
POZEGA                                         0              500         500         3,825       784
MK COMMERCE DOO NOVI SAD                       0           73,033      73,033              7    18,087      9,932
MK GROUP LTD BELGRADE                     211,001         897,446    1,108,447        6,711     46,370     45,490
AGROUNIJA AD INVIJA                            0          149,843     149,843            11      1,902        105
SUNOKO DOO NOVI SAD                            0                0            0     158,504      65,347     26,899
NEW AD VOJVODINA MILOŠEVO                  52,749               0       52,749            4      8,112      2,438
AD GRANEHPORT PANCEVO                          0                0            0      16,376      38,185      9,851
DILL MAH DOO BEOGRAD                       87,800             527      88,327         1,786     26,981      3,372
PARMONS DOO NOVI SAD                       38,901               0       38,901             0     6,932          0
FLOP SZR SABAC                               212              289         501              1        62         -8
GAVRILOVIC ENGINEERING CACAK                 399              657       1,056           214        76           9
Radulaška DRAGAN, SZTR
Radulaška BECEJ MAIN 76                      209              435         644           216        159         69
SINGLE DOO NIS                               105                0         105            33       109         31
ICC PROFESSIONAL LLC                         105                0         105              0      607           0
EMCO LTD VALJEVO                            3,936             332        4,268             0     1,095         26
MDM DRINA DOO BELGRADE BATAJNICA            1,859               0       1,859              0      503         832
PANONIJA COMMERCE                           5,262               0        5,262        4,508      1,656       788
MAKEL ELECTRIC LTD PANCEVO                     0                0            0        5,532       235           0
Vujanovic-PETROVIC GROUP LTD
NOVI SAD                                    6,882           3,802      10,684            24        63         192
ANVELA SUPER MARKET                          239              815       1,054              1      206         44
OTHER                                          0                0            0        9,002      1,262          0
total                                     409,659        1,127,679   1,537,338     206,755     218,733    100,070

31. December 2009. g
ICC PROFESSIONAL LLC                        1,063               0        1,063             0      282        356
ANVELA SUPER MARKET                          608              351         959              1       119         13
FLOP SZR SABAC                                 3              450         453              2        69         24
SZ OFFICE BELGRADE                          2,048               0       2,048              2     1,370        150
SINGLE DOO NIS                               306                0         306            74       163          23
EMCO LTD VALJEVO                            4,055               0        4,055          122      1,002          2
PROINKOM BELGRADE                              0                0            0          159          9        107
"ATRIUM LLC                                    0                0            0          191          8        196
MASINAC-LEADER                                 0                0            0          212         50        53
MILDEPROM DOO NIS                              0                0            0          251         24          3
MASINAC-AGENCY ACTION                          0                0            0          258         62         22
MK COMMERCE DOO                            95,894          44,003     139,897           281     22,061      4,316
Vujanovic-PETROVIC GROUP, USA                  0                0            0          302          2          0
AD GRANEHPORT PANCEVO                     102,989           5,000     107,989         1,793     13,369      3,959
BDD M & V INVESTMENTS AD                       0                0            0        1,832          7          2
SUNOKO DOO NOVI SAD                            0                0            0        3,841     30,801         77
MK GROUP LTD BELGRADE                          5          470,604     470,609         7,027     21,594     58,619
MK MOUNTAIN RESORT                             0                0            0        4,661       218      11,272
MAH DILL AD BEOGRAD                        77,860             468       78,328       10,724     12,644     11,445
MAKEL ELECTRIC LTD PANCEVO                     0                0            0       31,268       510          41
OTHER                                           2             500         502           576     59,636     12,581

total                                     284,833         521,376     806,209        63,577    164,000    103,261


                                                    35
 30. CREDIT RISK

 30.1. The maximum exposure to credit risk
 The table below represents the maximum credit risk exposure collateral or other credit rating increase
 credit securities. Exposure is based on the carrying value of the balance sheet.


                                                                                                   Thousands of RSD
                                                                      31. December 2010.            31. December 2009.


 Interest, fee and commission receivables                                       3,157,039                     2,495,424
 Loans and advances to banks                                                   36,683,764                    18,149,197
 Loans and advances to customers (including
 credit cards)                                                                 75,282,020                    62,429,981
 Securities at fair value through profit and loss                                 160,421                           80,404
 Securities held-to-maturity in dinars                                          3,764,231                     4,444,952
 Securities available-for-sale and equity
 investments (interests)                                                           91,034                         713,074
 Other balance sheet assets                                                     2,957,489                         146,935
                                                                             122,095,998                     88,459,967


 Guarantees and sureties                                                       11,509,423                     8,874,658
 Letters of credit without coverage                                               429,544                         291,881
 Irrevocable loan facilities                                                    3,142,735                     2,094,022
 Undrawn revocable loan facilities                                              4,134,922                     3,826,625
 Maximum gross exposure
   off-balance sheet items                                                     19,216,624                    15,087,186




In the case of financial instruments at fair value (market value), indicated amounts represent the current credit
risk exposure, but not the maximum risk exposure that could arise in the future as a result of changes in value.

Concentration of risk is managed by setting limits in relation to individual clients, as well as the geographic
and industrial diversification.

The following table shows the credit risk to groups of customers. Gross balance sheet assets and off-balance
sheet items for which the established credit risk is presented without lowering effects of risk on the basis of
collateral or other hedging instruments.




                                                      36
 30.2.                On-balance sheet credit exposure
risk                                                                                                                           Not
                                                                                                                            Impaired           Not
                                                                                                                             Loans,         Impaired
                                                                                                        Individual          (portfolio       Loans,
                                                                                         Individually   Allowance             based         (portfolio           Portfolio                          Total
                                                                         Individually     Impaired          for            allowance)         based               Based                           Allowance
                                                   Neither due            Impaired         and        Impairmen                not         allowance)         allowance for                           for
PORTFOLIO - 31 12 2010                           nor impaired          not Matured       Matured           t               Matured         Matured           Impairment     Total Gross         Impairment       Total Net

1. BANK                                                30,142,876            6,687,724            14,256        127,097                                                           36,844,856           127,097       36,717,759
2. COMPANY                                                2,770,665            462,972        15,838,488      9,188,646      49,229,651          4,993,739       1,919,217        73,295,515        11,107,863       62,187,652
3. ENTREPRENEURS                                                                 8,409           184,363         46,540         480,084             27,324          25,960           700,180            72,500          627,680
TOTAL Corpor:                                          32,913,541            7,159,105        16,037,107      9,362,283      49,709,735          5,021,063       1,945,177       110,840,551        11,307,460       99,533,091
4. Retail STANDARD LOANS                                                                          7,691             259       4,633,183           137,835          164,748         4,778,709           165,007        4,613,702
5. Retail MORTGAGE LOANS                                                       28,702             8,738          11,204       1,627,146            10,495           43,212         1,675,081            54,416        1,620,665
6. Retail AGRICULTURAL LOANS                                                    5,275               961           3,117         435,175            59,693          173,031           501,104           176,148          324,956
7. Retail CREDIT CARDS                                                                                                        3,108,298           465,862          308,379         3,574,160           308,379        3,265,781
8. Retail CURRENT ACCOUNT OVERDRAFT                                                                                             201,176            73,898           41,424           275,074            41,424         233,650
9. Retail OTHER                                                                                 196,933         188,878           2,187               743              348           199,863           189,226             10,637
TOTAL RETAIL:                                                                  33,977           214,323         203,458      10,007,165           748,526          731,142        11,003,991           934,600       10,069,391
Raspoloz.za securities sales and participation             160,422             91,034                 -          19,795               -                 -                 -          251,456            19,795          231,661

Total                                                  33,073,963            7,284,116        16,251,430      9,585,536      59,716,900          5,769,589       2,676,319       122,095,998        12,261,855      109,834,143


                                                                                                                                                                NEOBEZVR.        (33,073,963)
                                                                                                                                                                                 89,022,035
                                                                                                                                                                                (122,095,998)

30.2.    Balance sheet exposure to credit risk
                                                                               Gross assets                Correction             Gross assets                Correction                         in thousands
                                                 Neither due            Individually Impaired.             Individually.      Collective allowance.           Collective        Total               Total            Net
                                                                             not                                                not
PORTFOLIO - 31 12 2009                           nor impaired           Matured.       Matured             Impaired        Matured.          Matured          allowance.        Gross             correction      31.12.2009


1. BANK                                                8,054,659            10,119,214           105,201        122,969               -                  -                -       18,279,074           122,969       18,156,105
2. COMPANY                                             1,110,168             2,133,375        12,929,364      7,832,652      41,060,605          2,096,384       1,540,460        59,329,896         9,373,112       49,956,784
3. ENTREPRENEURS                                                   -            66,657           158,112         67,138         332,518             21,413          19,673           578,700            86,811          491,889
TOTAL Corpor:                                          9,164,827            12,319,246        13,192,677      8,022,759      41,393,123          2,117,797       1,560,133        78,187,670         9,582,892       68,604,778
4. Retail STANDARD LOANS                                           -           34,491            10,426          21,513       3,073,297            70,045           89,624         3,188,259           111,137        3,077,122
5. Retail MORTGAGE LOANS                                           -            7,944             6,563           4,843       1,447,448             6,400           23,506         1,468,355            28,349        1,440,006
6.   Retail AGRICULTURAL LOANS                                     -               -                  -               -         549,956            27,457          131,306           577,413           131,306          446,107
7.   Retail CREDIT CARDS                                           -               -              1,431           1,431       3,491,378           378,796          201,512         3,871,605           202,943        3,668,662
8.   Retail CURRENT ACCOUNT OVERDRAFT                              -               -                  -               -         207,708            48,021           26,977           255,729            26,977          228,752
9.   Retail OTHER                                                  -               -            193,220         184,131           1,715             2,927              929           197,862           185,060           12,802
TOTAL RETAIL:                                                    -             42,435           211,640         211,918       8,771,502           533,646          473,854         9,559,223           685,772        8,873,451
Raspoloz.za securities sales and participation            693,801              19,273                 -          19,273               -                 -                 -          713,074            19,273          693,801

Total                                                  9,858,628            12,380,954        13,404,317      8,253,950      50,164,625          2,651,443       2,033,987        88,459,967        10,287,937       78,172,030
37
30.2. Off-balance
exposure to credit
risk
                                                 31. December of 2010.                               31. December 2009.
Off-balance sheet items                         Total                         %              Total                          %
                                            Exposure      Provisions        Risk         Exposure       Provisions        Risk

Legal entities                            14,946,442         648,343      4.34%        11,119,673         481,656         4.33
Entrepreneurs                                138,082           3,322      2.41%            84,691           2,413         2.85
Individuals                                4,132,100               0      0.00%         3,882,822               0         0.00
Total off-balance                         19,216,624         651,665     3.39%         15,087,186         484,069         3.21




  30.3. Individual and group impaired loans and advances to customers by segment, according to IAS

   The invalidation of the claims made on the basis of credit risk, provided by the sst INDIVIDUAL assessment looks at each claim, and the group estimates are determined
   by the average credit risk of devaluation.

  The good assets categorized as receivables from customers in which:
  - Estimated financial condition as satisfactory or does not indicate a significant deterioration in the future although there are some problems in the business.
  - where no and do not expect major problems in the collection,
  - claims secured by a first class security services,
  - claims provided adequate means of security,
  - Receivables from customers in which the index of total debt is less than 0.85%, and - potraž.od debtor
  liabilities are settled, and exceptionally with no lag longer than 60 days.

  The risk assets are classified as receivables due from the debtor:
  - Whose financial situation is not satisfactory, or are the problems in business - the cash flows are not
  adequate and there is no maturity match of assets and liabilities,
  - their claims are settled with a lag over 61 days but less than 180 days
  - and Receivables. of illiquid and insolvent debtors and debtors who do business with the loss.

  The bad assets are categorized claims of the debtor:
  - in liquidation or bankruptcy;
  - claims on debtors who settle their obligations with lag longer than 181 days
  - claims with dubious or controversial legal basis,
  - proceeds paid by the Bank potražibanja not alienate, or put into the business within one year from the date of acquisition, and receivables for which collection is very problematic
                                                                                                 38
30.3. Individual and group impaired loans and advances to customers by segment, according to IAS - continued
                                                                                                                                                                                            in thousands
   CATEGORY                         BANK                            Corporates                    ENTREPRENEURS                                Retail                          TOTAL

                        Gross         Allowance for         Gross        Allowance for         Gross         Allowance for      Gross       Allowance for         Gross           Allowance for
31. 12. 2010.         Balance        Impairment..         Balance       Impairment..         Balance        Impairment..      Balance      Impairment..         Balance          Impairment..
Pass

CATEGORY A             6,574,530                   0       16,172,648             322,329         353,798             6,575    8,355,890            82,080      31,456,866                        410,984
CATEGORY B                28,112                 338       21,539,555             779,421          22,394               631      731,674            30,594      22,321,735                        810,984
                       6,602,642                 338       37,712,203            1,101,750        376,192             7,206    9,087,564           112,674      53,778,601                       1,221,968
Assets:                                                                                                                                                                  0                              0
CATEGORY V                   426                 195       16,115,834             670,293          73,461             1,551      285,835            42,498      16,475,556                        714,537
CATEGORY G                                                  2,016,492              75,457          44,101             2,519      494,486           137,232       2,555,079                        215,208
                             426                 195       18,132,326             745,750         117,562             4,070      780,321           179,730      19,030,635                        929,745

Substandard Assets:                                                                                                                                                      0                            0
CATEGORY D               126,564              126,564      14,743,703            9,260,363        206,426            61,225    1,136,106           642,196      16,212,799                   10,090,348
   Assets that
  Classification.      6,729,632              127,097      70,588,232         11,107,863          700,180            72,501   11,003,991           934,600      89,022,035                   12,242,061


                                                                                                                                                                 122,095,998       Gross Total
                                                                                                                                                                             undue
                                                                                                                                                                  33,073,963 neobezvredjeni
                                                                                                                                                                  89,022,035 impaired
31. 12. 2009
Pass

CATEGORY A             9,823,766                  67        7,949,678             245,749         295,607             6,061    6,924,653            65,284      24,993,704                        317,161
CATEGORY B                17,560                  12       22,252,159             784,498           3,960               145      925,359            31,150      23,199,038                        815,805
                       9,841,326                  79       30,201,837             1030247         299,567              6206    7,850,012                96434   48,192,742                       1,132,966
Assets:
CATEGORY V                      2                     2    13,123,114             385,176          54,997             1,552      418,601            53,736      13,596,714                         440,466
CATEGORY G                                                  2,658,105             940,107         196,736            56,861      453,759           118,444       3,308,600                       1,115,412
                                2                     2     15781219              1325283         251733              58413      872360             172180       16905314                        1,555,878

Substandard Assets:
CATEGORY D               383,087              122,953      12,255,945            7,036,790         27,400            22,192      836,851           417,158      13,503,283                       7,599,093
   Assets that
  Classification.      10,224,415             123,034      58,239,001            9,392,320        578,700            86,811    9,559,223           685,772      78,601,339                 10,287,937 ^




                                                                                             39
                   Default in Collection of Matured
     30.4.         Balance Sheet Assets
                                                                                                                                                                                                               in thousands

Due assets as of 31.12.2010. The                          30 days         from 31 to 60             from 61 to 90    from 91 to 180           from 181 to 360        from 1 to 5 years    over 5 years                Total
Loans to legal entities                                       2,260,478             1,730,361             465,082              1,873,283                2,283,627            9,984,249           190,934              18,788,015
Loans to entrepreneurs                                           4,699              455.09235                1,050                    1,025                 3,238              185,849            42.058                196,360
Loans to individuals                                            39,808                    17,246           11,258                 25,996                  36,497                90,081          4528.146                225,414
Payment Cards                                                  158,066                    13,980             9,982                32,428                  77,421               183,252            213.64                475,343
Other investments                                               58,850              8740.5805                4,701                 2,888                  15,529               320,497          167,727                  578,933
Guarantees and backing at the expense of the bank               12,648                      0                7,641                55,166                  84,164               578,091                0                  737,711
Notes and bonds                                                281,821                  99710                    0                 8,397                   1,000               600,095           28,222                1,019,245
Balance due as of 12/31/2010 g.                               2,816,371             1,870,493             499,714              1,999,184                2,501,477           11,942,114          391,666               22,021,019
Than that covered by mortgage and deposit                     1,081,483               304,810             324,461              1,292,358                1,765,384            6,926,943         29524.09               11,724,963
% Coverage                                                      38.40%                16.30%              64.93%                 64.64%                   70.57%               58.00%            7.54%                   53.24%
                                                                                                                               N
                                                                                                                     D A     AND                 A C D E HE
                                                                            from 31 to                                  from 91 to               from 181 to
Due assets as of 31.12.2009.                        30 days                        60              from 61 to 90              180                       360         from 1 to 5 years     over 5 years        Total

Loans to legal entities                                       2,531,323               303,773             441,316                723,095               4,391,671             5,183,017           199,675              13,773,870
Loans to entrepreneurs                                            4,502                    47               1,082                  41885                  111356                 7,421                                   166,293
Loans to individuals                                             22,004                12,776               9,137                 18,901                   22,950               35,026                   97              120,891
Payment Cards                                                  187,984                    16,352           11,499                 27,533                  58,785                93,673                                  395,826
Other investments                                              134,768                      937            20,366                 5,332                     17349                37,962          142765                 359,479
Guarantees and backing at the expense of the bank                9,084                      165           133,460                 67987                    63,990               323932                                  598,618
Notes and bonds                                                  3,550                                                            7,283                   137045               477,708            15,197                640,783
Balance due as 31.12.2009                                     2,893,215               334,050             616,860                892,016                4,803,146            6,158,739           357,734              16,055,760
Than that covered by mortgage and deposit                     1,710,674               257,726             356,035                766,258                2,828,450            3,813,784                                 9,732,926
% Coverage                                                      59.13%                77.15%              57.72%                 85.90%                   58.89%               61.92%             0.00%                  60.62%



The total amount of loans due at the end of 2010 amounted to 22,109,954 thousand and the same, compared to the year 2009, in absolute terms increased by more than 6 billion
RSD, or 37.71%

Compared to the year 2009 has been increased and the amount due loans are secured by mortgages - in the absolute amount of approximately 2 billion

It is notable that in two consecutive years have seen a shift in the distribution of delay, which is justified if we take an environment in which banks are operating, as well as
problems that include the real sector, which are largely dependent on global economic crisis. The study notes that in 2010. was dominated kašnena ranging from 1 to 5 years.
Such developments are not surprising because the activation and implementation of security requires a certain time limits.



                                                                                                            40
   30.5.      The fair value of collateral
                                                                                                   Thousands of RSD
                                                                                  31. December            31. December
                                                                               2010                       2009
   Deposits to secure placements                                                       5,244,204              3,554,729
   Received a mortgage to secure loans                                                28,266,254             24,128,778
   Guarantees and sureties collateralizing liabilities                                         0                      0
   Pledges in shares collateralizing placements                                        2,058,171              2,517,824


Bank as a mortgaged property whose value is taken, the assessment authorized appraiser, must be in ratio
of 1 to 1.1 and more than the ranking.

Properties used as collateral are living spaces, family and residential buildings, office buildings, business premises
and land depending on location and future investments namene.Kod corporate focus is on: business premises, business
premises and land (agricultural and građebinskom ) and for loans to households emphasis is on residential premises
(flats, family houses) built or under construction when the same item purchase from the Bank loan.


In taking the pledge of securities, The Bank monitors the price of securities used as collateral security. The value of
the collateral in the actions taken with the same value underpriced by at least 30% of the price at which it traded on
the Exchange on the day of contracting the pledge.




30.6. Restructured loans

Restructuring of loans are made to borrowers who, due to deteriorating financial condition are unable to regularly
pay their debts to the Bank, but with the immediate acceptance of the financial consolidation of the debtor.

Agreement on the restructuring of loans significantly change conditions compared to the previous placement and all
claims of the debtor shall be replaced with a new placement. Substantial changes in conditions considered in
particular: the extension of principal or interest payments, reducing interest rates, changes in valuation methods.
Restructuring of investments acceptable to the Bank only if the loans that are otherwise difficult to be collected, and
the restructuring of loans by financial consolidation program allows you to within an acceptable to the Bank,
substantially improving the financial situation of the debtor, by a high security payment loans in the agreed amount
and in new maturities, additional collateral in the form of guarantors - disburser, pristupioca debt or pledge of assets
and mobile - fixed the debtor or third parties, and improving asset quality, and thus affect the credit ratings from the
standpoint of potential risks, the recovery of loans and restructuring of the rest.


During the restructuring of loans the Bank made a financial analysis of the debtor and if it estimates that the borrower
after the loan restructuring generate cash flows that will be sufficient to repay principal and interest shall be decided
on the procedure of restructuring loans.
During 2010, there were no restrukturinja placement.




                                                           41
30.7.        Tangible assets acquired from the collection of receivables


Initial state 01.01.2010.g. materijlanih shares acquired collection of claims from previous years amounted to 4,555,042. dinaraa
thousands of which is in the buildings and land 4,552,023 thousand in movable assets (7 cars) 3018 thousand.

1) In 2010, the bank sold the material values as follows:
-   Objects taken from the Universal Holding knjig.vrednosti 142,137 hill.din.što is 1.5 million. EUR. Sold for approximately
2.8 million.
-   Ugost.turist.preduz objects. SPLIT EČKA books, vred.142.137 hilj.din.što is 1.5 million. EUR, were sold for approximately
       1.7 million.
-      Polj.zemljište downloaded from AGROSTAN a PLUS N. SADm kljig.vred. 285,955 hilj.din.što is 2.96 m EUR. Sold for
approximately 4 million.

2) Part of the material assets acquired collection of claims in the previous year, the bank reclassified to investment property,
issued by the rental income and gains, which are:
-      Objects taken from''TRANSPORT''IMPEKS NIS, the location of 12th February bb, Nis, in the amount of 617,165
thousand. Which is 6.5 mln EUR, a facility''and''SUPERMARKET PEVAC in attractive location
у ul.Vojvode Muscles 36 Nis into valuable. 69.229 hill.din.što as a hill.EUR 734.4.
-      Objects taken from''RODI9 M & B INVEST Novi Sad,''''ELNOS Sentandrejski time - amounting to 245 604 hill
din.
-      Objects taken from''STOTEKS and Novi Sad, in the amount of 472.584 hill. din.

3) in 2010. year ^ bit on the activities of women naplatei claims preubimanjem material values as follows:
- KERI Kesen and administrative buildings in Vrbas from FIGRAD in the value of 231.330 hill. Din.što is 2.332 m EUR.
- Office building-market Odzaci of FIGRAD in the value of 32,002 thousand. What is 322.6 hill.din.
- The building of the textile industry in Prijepolje of Lj Miodragovića, worth hill.din 2188. Which is 21.5 thous.
- Apartment in ul.Teodora Dreiser in Belgrade (HABIT FARM-A) in the value of 116,189 is 1.1 million hilj.din.što. EUR.
- Residential and commercial building from Luton to Belgrade Duro Jaksic No.8 into valuable. 253,504 hill.din. and 2.4 million.
- ALEXANDER''Hotel''in Vrnjacka Spa of (product trade finans,) in a hard. of 295,755 thousand. and 2.8 million.

- Njiva Jakovci 2 acres and 8 acres of EUROLUKSPETROL ELP-16 in the amount of 134,327 hilj.din.što is a 1.27 m EUR. -
Form''of''Krčevina EUROLUKSPETROL ELP-15 in the amount of 210,779 thousand. What is a 2.0 m EUR.
- Residential and commercial building''Lake''Žunji KNI9, amounting to 162,218 thousand. Which is 1.25 million. EUR.
- Posl.objekat in Drajzera, 27, Belgrade, (of Habit farm) worth 316,880 hill. Din. Which is 2.98 m EUR.
- Posl.zgrade''Vit Bel''NIŠ, in Nis, worth 114,680 thousand. What is a 1.07 m EUR.
- Two bedroom apartment in ul.Cara Dusan br.87 Novi Sad, in the amount of 5020 thousand. Din. Which is 47.0
thousand. EUR. Of personal property (cars) in 2010, the protad a car, so they are able to rest six in total
knjigovodstvenenoj worth 2.5 million RSD.

Condition of material values acquired collection of claims of 31.12.10.godine iznosi.4.572.905 thousand. All material values that
are acquired collection of claims, is estimated by the authorized procenitenja.


Fair values are in all cases, higher than book value.
The Bank intends to be in the future sells materijalnin value, while the funds back into operation, by which time
certain material assets leased to generate income.

                                                                  42
   30.8.         Geographic concentration
                                                                                                                     Thousands of RSD
                                                                                                           European                    Total
   2010                                                                               Serbia                  Union                    2010

   Interest and fees                                                               3,157,039                                       3,157,039
   Loans and advances to banks                                                     6,721,023               29,962,741             36,683,764
   Loans and advances to customers                                                75,282,020                                      75,282,020
   Securities at fair value through profit or loss                                   160,421                                         160,421
   Securities held to maturity                                                     3,764,231                                       3,764,231
   Securities available for sale                                                      91,034                                          91,034
   Other                                                                           2,957,489                                       2,957,489

   Maximum exposure per balance sheet assets                                      92,018,978               30,077,020            122,095,998

   Guarantees and backing                                                         11,509,423                         0            11,509,423
   Uncovered Letters                                                                 429,544                                         429,544
   Irrevocable lines of credit                                                     3,142,735                                       3,142,735
   Undrawn revocable loan facilities                                               4,134,922                                       4,134,922
   Maximum exposure per off-balance sheet items                                   19,216,624                         0            19,216,624


   Total exposure                                                                111,235,602               30,077,020            141,312,622


                                                                                                           European                    Total
   2009                                                                               Serbia                  Union                    2009

   Interest and fees                                                               2,495,424                                       2,495,424
   Loans and advances to banks                                                    10,094,538                8,054,659             18,149,197
   Loans and advances to customers                                                62,429,981                                      62,429,981
   Securities at fair value through profit or loss                                    80,404                                          80,404
   Securities held to maturity                                                     4,444,952                                       4,444,952
   Securities available for sale                                                     713,074                                         713,074
   Other                                                                             146,935                                         146,935

   Maximum exposure per balance sheet assets                                      80,405,308                8,054,659             88,459,967

   Guarantees and backing                                                          8,874,658                         0             8,874,658
   Uncovered Letters                                                                 291,881                                         291,881
   Irrevocable lines of credit                                                     2,094,022                                       2,094,022
   Undrawn revocable loan facilities                                               3,826,625                                       3,826,625

   Maximum exposure per off-balance sheet items                                   15,087,186                         0            15,087,186


   Total exposure                                                                 95,492,494                8,054,659            103,547,153




Pplasmani the European Union as of 31 December 2010 relate to the Commerzbank AG FRANFUKR 249th million euros and $ 8 million, and
Deutsche Bank depouit FRANFURT 29 million, which is the total equivalent of 29,962,741 thousand, and the state of 31.12.2009 was deposited
with Commerce Bank in Frankfurt iunosu of 84 million, it was 8,054,659 RSD ..




                                                                      43
30.9.      Country Risk

Country risk is the risk of negative effects on the financial result and capital of the Bank's inability to collect receivables from
these entities for reasons which are a consequence of political, economic or social conditions in the country of origin of such
persons. Limits its exposure to country risk are determined individually by country of origin of the debtor, and in the assessment
and measurement of risk the bank uses the internationally defined and accepted standards for risk assessment of the country. The
Bank conducts adopted internal policies and procedures for risk management of the country to protect its business from the
aforementioned risks.




 30.10.    Credit Risk Concentration per Separate Industries
The following table presents the Bank's gross exposure categorized by the sectoral structure of clients:

            Credit risk on balance sheet and off-balance sheet assets


                                             31. December 2010. The                                  31. December 2009. The
                                             Maximum gross exposure                        Maximum gross exposure
                                         Balance    off-balance                                     off-balance
                                           sheet          sheet                Total Balance sheet        sheet                    total

Finance, leasing,                                                                       19,872,701        94,108
and pension funds                       42,396,842         1,052,398      43,449,240                                          19,966,809

Agriculture, hunting, forestry,           4,578,631          297,010       4,875,641         3,882,754         170,987         4,053,741
water management and fishing                                                                14,112,649        2,820,345
industry                                16,121,818         4,116,438     20,238,256                                           16,932,994
Production and delivery of
electricity, gas and water                                                                    2,879,605            251,942
Ore and stone extraction and
processing industry                      1,733,581           220,228       1,953,809                                           3,131,547
Civil engineering                       12,859,941         3,307,087      16,167,028         7,467,421        2,326,092        9,793,513
Trade                                   17,165,269         2,558,007      19,723,276        19,999,231        2,611,115       22,610,346
Services, tourism,
accommodation
traffic and communications                4,774,219        1,811,611       6,585,830          5,486,804       1,372,329        6,859,133
Education, health and
Social Work                                                                         0          666,914              54,335      721,249
Real estate activities, public
services and other public utilities       2,960,232          670,714       3,630,946          2,787,148       1,373,217        4,160,365
Entrepreneurs                               700,047          138,082         838,129            578,701          84,691          663,392
State administration (public                                                                    567,116             156
Sector)                                  4,579,363           818,906       5,398,269                                             567,272
Retail clients                          10,417,975         4,094,218      14,512,193          8,894,945       3,848,369       12,743,314
Foreign natural persons                     11,785             5,967          17,752              1,718             192            1,910
Private households                         576,838            31,915         608,753            664,075          34,261          698,336
Other activities                         3,219,457            94,043       3,313,500            598,185          45,047          643,232

                                       122,095,998        19,216,624    141,312,622         88,459,967       15,087,186      103,547,153


* NAP0MENA:
 Data on the credit exposure on balance sheet assets and off balance sheet items in the sectoral structure formed
on the basis of data from USSPO.




                                                                  44
 31. CURRENCY RISK

 The following table presents the Bank's foreign exchange risk by knjigovodsstvenoj carried at values and
 currencies. Positions with foreign currency are included in the dinar currency position.

                                                                                                             in thousands
                                                                    Other          Total            Local
 ASSETS                                EUR         USD        CHF currency           FX       Currencies               Total

 Cash and cash
 Equivalents                       1,553,964    148,472     286,799   28,480    2,017,715        3,816,116          5,833,831
 Callable deposits and
 Loans                            16,219,755                                   16,219,755        4,000,000         20,219,755
 Interest, fee and
 commission receivables               23,547                                       23,547        1,605,520          1,629,067

 Loans and deposits               37,074,581    653,986                        37,728,567       58,942,370         96,670,937
 .
 Securities                           35,203                                       35,203        3,910,241          3,945,444
 Equity investments (interests)                                                         0           71,240             71,240
 Other investments                   130,519                                      130,519        5,124,694          5,255,213
 Intangible assets                                                                      0           45,383             45,383
 Property, equipment
 and investment                                                                         0        2,856,992          2,856,992
 Other assets                          4,740       1,799          6        4        6,549        5,049,016          5,055,565

 Total assets                     55,042,309    804,257     286,805   28,484   56,161,855       85,421,572        141,583,427

 LIABILITIES
 Transaction deposits              1,174,161      85,145     19,691    2,559    1,281,556        3,241,069          4,522,625
 Other deposits                   63,825,246   1,083,012    114,629      153   65,023,040       21,642,768         86,665,808
 Borrowings                            9,298         899                           10,197        2,109,962          2,120,159
 Interest,
 fee and commission
 payables.                            24,733           5        48                 24,786           72,539            97,325
 Provisions                                                                             0          665,180           665,180
 Taxes and
 payables                                                                               0           13,006            13,006
 Income taxes and
 dividends payable                                                                      0          796,068           796,068

 Deferred tax liabilities                                                               0            9,221              9,221
 Other liabilities                   738,984       1,670       349                741,003        1,785,135          2,526,138
 Total liabilities                65,772,422   1,170,731    134,717    2,712   67,080,582       30,334,948         97,415,530

 Net Foreign Currency Exposure
  - At 31 December                      -
 2010.                         10,730,113       -366,474    152,088   25,772   -10,918,727      55,086,624         44,167,897
  - At 31 December                                      -
 2009.                            -9,393,988   2,037,471    117,355   24,849   -11,289,255      50,383,297         39,094,042


At 31 December 2010, total assets in RSD, which is contracted by the risks attaching to the exchange rate against foreign
currencies amounted to 40,919,859 thousand and is shown in the Dinaric sub-balance.


Total liabilities indexed to foreign currency amounting to 7,657,889 thousand is also shown in the Dinaric sub-balance.

In the period under AIK banka ad, Niš has managed its business policy to protect itself from changes in exchange rates.
The principle of the risks of changes in exchange rates was to establish and maintain foreign currency claims (foreign
assets) at the volume of foreign liabilities (foreign currency liabilities). This ratio is complying with the views maturities
of foreign currency
and receivables, which is secured to the Bank
у terms of fluctuations of foreign exchange, foreign exchange losses on foreign currency exchange gain offset
obligations arising from foreign currency.

                                                                 45
32. INTEREST RATE RISK

Risk exposure of interest rates at 31 December 2010. is shown in the following table:

                                                                                                                                      in thousands

                                             to 1             1 to 3             3 to 6      6 до 12         over      Non-interest         Total

                                          months           months             months        months         1 year

ASSETS
Cash and cash
Equivalents                                 3,106,903                                                                 2,726,928          5,833,831

Callable deposits and loans                 4,000,000                                                                16,219,755         20,219,755

Dived. interest, fees.                      1,629,067                                                                         0          1,629,067

Loans and deposits                        44,748,977           618,694     10,111,780     20,745,583    19,015,173    1,430,730         96,670,937
Stock value. (Without
sopst.akc.)                                   879,834          675,460         611,149     1,578,967      200,034                        3,945,444
Shares (participation)                                                                                                   71,240             71,240
Other investments                           3,103,729                                                                 2,151,484          5,255,213

Intangible assets                                                                                                       45,383             45,383
Property, equipment
and investment property                                                                                               2,856,992          2,856,992
Other assets                                                                                                          5,055,565          5,055,565

Total assets                               57,468,510        1,294,154     10,722,929     22,324,550    19,215,207   30,558,077       141,583,427

LIABILITIES

Transaction deposits                          882,556                                                                 3,640,069          4,522,625
Other deposits                              3,373,480       12,347,431        6,761,164   32,624,912    31,067,098     491,723          86,665,808

Borrowings                                  2,109,964                                                                   10,195           2,120,159

Interest, fee and commission
payables                                                                                                                97,325             97,325
Provisions                                                                                                             665,180            665,180
Taxes                                                                                                                   13,006             13,006
Liabilities from income distribution                                                                                   796,068            796,068

Deferred tax liabilities                                                                                                 9,221              9,221
Other liabilities                                                                                                     2,526,138          2,526,138

Total liabilities                           6,366,000       12,347,431        6,761,164   32,624,912    31,067,098    8,248,925         97,415,530
Net risk exposure to interest rate risk

At 31 12. 2010                             51,102,510      -11,053,277        3,961,765   -10,300,362   11,851,891   22,309,152         44,167,897


At 31 12. 2009th                           30,051,962       -7,735,542        1,790,153   -12,322,416   11,178,760   16,131,125         39,094,042




                                                                         46
 33.      LIQUIDITY RISK

 Liquidity risk on balance sheet assets

 In the national table below summarizes the maturity of assets and liabilities from the date due until the date
 of balance sheet, or by remaining maturity:
                                                                                                            Thousands of RSD
                                                                           3 months      from 1 to 5       over 5
                                        up to 1 month     to 3 months         1 year          years        years        Total
 ASSETS
 Cash and cash equivalents.                  5,833,831                                                                    5,833,831
 Callable deposits. and loans               20,219,755                                                                   20,219,755
 Interest, fee and commission
 receivables                                 1,629,067                                                                    1,629,067
 Loans and deposits                         42,205,701         752,423     33,457,931       8,814,874   11,440,008       96,670,937
 Securities (without your own.
 share)                                        679,638         728,688      2,337,414        199,704                      3,945,444
 Interest (stake)                               71,240                                                                      71,240
 Other investments                           3,701,313                        507,133       1,001,045      45,722         5,255,213
 Intangible assets                              45,383                                                                      45,383
 Property, equipment and
 investment property                         2,856,992                                                                    2,856,992
 Other assets                                5,055,565                                                                    5,055,565
 Total assets                               82,298,485       1,481,111     36,302,478     10,015,623    11,485,730      141,583,427
 LIABILITIES
 Transaction deposits                        4,522,625                                                                    4,522,625
 Other deposits                              3,765,839      12,349,749     39,443,824     30,580,095      526,301        86,665,808
 Borrowings                                  2,120,159                                                                    2,120,159
 Interest, fee and commission
 payables                                       97,325                                                                      97,325
 Provisions                                    665,180                                                                     665,180
 Tax payables                                   13,006                                                                      13,006
 Liabilities from income distribution          796,068                                                                     796,068
 Deferred tax liabilities                        9,221                                                                        9,221
 Other liabilities                           2,526,138                                                                    2,526,138
 Total liabilities                          14,515,561      12,349,749     39,443,824     30,580,095      526,301        97,415,530
 Maturity mismatch:
 At 31 12. 2010th g.                        67,782,924      -10,868,638     -3,141,346    -20,564,472   10,959,429       44,167,897
 At 31 12. 2009th g.                        40,561,690      -11,280,722     -6,642,363      6,426,317   10,029,120       39,094,042




Liquidity risk on off balance sheet items
                                                                                                            Thousands of RSD


                                                                          3 months       from 1 to 5       over 5
                                                                                              years         years              Total


                                        up to 1 month    1 to 3 months     to 1 year                                           Total
 31. December 2010. The
 Irrevocable commitments                   3,606,698        3,360,972     5,171,354         2,750,506     192,172          15,081,702
 Revocable commitments                        18,525           10,292        45,211        4,060,891                2       4,134,921
 Total                                     3,625,223        3,371,264     5,216,565        6,811,397      192,174          19,216,623


 31. December 2009. The
 Irrevocable commitments                   2,696,097        2,999,100     3,449,685         1,862,295     244,247          11,251,424

 Revocable commitments                       204,346           85,537        87,263         3,458,590          27           3,835,763
                                                                     47
34. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

Fair value of financial instruments is the amount for which an asset could be exchanged or a liability settled,
between knowledgeable, willing parties in the course of the transaction. Given that there is sufficient market
experience for certain financial instruments, it is necessary to estimate fair value based on current economic
conditions and specific risks that can bind to a specific instrument.

The fair value of loans with variable interest rate and the deposit is approximately equal to knjigovodstenoj
value of financial assets reported at the balance sheet.

Placements with banks, including those with fixed interest rates, have agreed on a clause that due to
changes in market conditions, the Bank may change the terms of lending.

For demand deposits, and deposits with remaining maturities of less than one year, it is assumed that
the estimated fair value does not deviate significantly from their carrying values reported in the
balance.

For fair value of borrowings with variable interest rate stated at amortized cost, it is assumed that
approximates the carrying value of these obligations at the reporting date.

Value in the financial statements reflect a realistic position financially and material situation of the bank, and in
the circumstances are valid and useful for the purposes of financial reporting by accounting regulations of the
Republic of Serbia.



35.       SENSITIVITY ANALYSIS
35.1      Sensitivity analysis (currency risk)
Impact of exchange rate changes ranging from 10% to 10% compared to the rates given below
                                                                                    Changes in exchange rate
 31. December 2010. The                                   Foreign                     10%                 -10%
                                                        Currencies
 ASSETS
 Cash and cash equivalents                                     2,017,715                201,772               -201,772
 Callable deposits and loans                                 16,219,755               1,621,976              -1,621,976
 Interest, fee and commission receivables                         23,547                  2,355                  -2,355
 Loans and deposits                                          37,728,567               3,772,857              -3,772,857
 Securities (excluding own shares)                                35,203                  3,520                  -3,520
 Shares (participation)                             0                                         0                       0
 Other investments                                              130,519                  13,052                 -13,052
 Other assets                                                     6,549                   654.9                    -655

 TOTAL ASSETS                                                56,161,855               5,616,186              -5,616,186

 LIABILITIES
 Transaction deposits                                         1,281,556                 128,156                -128,156
 Other deposits                                              65,023,040               6,502,304              -6,502,304
 Borrowings                                                      10,197                  1019.7                 -1019.7
 Liabilities.                                                    24,786                   2,479                  -2,479
 Other liabilities                                              741,003                  74,100                 -74,100

 TOTAL LIABILITIES                                           67,080,582               6,708,058              -6,708,058
 % Net foreign currency position and
 At 31 December of 2010.                                    -10,918,727              -1,091,873              1,091,873
 Net foreign currency position
  At 31 December 2009.                                       -11,289,255             -1,128,926               1,128,926

At 31 December 2010. year, assuming all other parameters unchanged, the change rate of other currencies in relation to rates of
10% and 10%, the Bank's profit would be reduced or increased by 1,128,926 thousand.


                                                                48
35.2. Sensitivity analysis (interest rate)

 During the process of risk management of interest rate, the Bank performs a sensitivity analysis of changes of assets
 and liabilities with variable interest rates.
 It is important to emphasize that, regardless of market developments, it is never possible to equate the movement of
 lending and deposit rates. This is because the lending rates have a significant impact and other forms of risk, so that
 rates are a kind of active resistance in the situation where a decline in rates, especially rates on deposits and external
 sources to the Bank.

 Hypothetically, assuming that it is identical movement of active and passive interest rate risk, interest rate could be
 represented by the following tabular presentation.


                                   Statutrani                        Promenakamanet            stope                          thousand
                                                               Foreign
                                                              currency             Local currency               Total         Total
                                                           receivables and           receivables and                         Reduced.
                                                                 liabilities               liabilities        Increase in       in
                             Foreign           Local                                                           interest.     interest.
  31. December
  In 2010.                 currency       currency            4%           -4%          4%             -4 %       rates

  ASSETS
  Interest, fee and
  Commission
  receivables                   23,547      1,605,520         942          -942      64,221        -64,221         65,163       -65,163
  Loans and
  deposits                  37,728,567     58,942,370   1,509,143     -1,509,143   2,357,695    -2,357,695      3,866,837 -3,866,837

  Other investments            130,519      5,124,694       5,221         -5,221    204,988       -204,988        210,209     -210,209

  Total                     37,882,633     65,672,584   1,515,305     -1,515,305   2,626,903    -2,626,903      4,142,209 -4,142,209

  LIABILITIES
  Other deposits            66,304,596     24,883,837   2,652,184     -2,652,184    995,353       -995,353      3,647,537 -3,647,537
  Borrowings                    10,197      2,109,962         408          -408      84,398        -84,398         84,806       -84,806
  Interest,
  Fees                          24,786        72,539          991          -991       2,902         -2,902           3,893       -3,893

  Total                     66,339,579     27,066,338   2,653,583     -2,653,583   1,082,654    -1,082,654      3,736,237 -3,736,237



  Net exposure
  31.12.2010                -28,456,946    38,606,246   -1,138,278    1,138,278    1,544,250    -1,544,250        405,972     -405,972



  Net exposure
  31.12.2009                -22,458,036    28,244,190    -898,321       898,321    1,129,768    -1,129,768        231,446     -231,446



 It is assumed that interest rates in "extreme" move in the direction of growth / decline by 400 BP, which would
 have impact on business results, and in extreme cases and the Bank's capital. Reducing interest rates for 400Bp
 would lead to a reduction in operating results of the Bank for 406 million RSD, while for the same amount
 increased the score in the event of a jump in interest rates. Having regard to the achieved operating results of the
 Bank for 2010, we concluded that the Bank is exposed to interest rates.

 Compared to the year 2009 the Bank reduced the interest-bearing assets sensitive to changes in interest rates, so
 further reduce the impact of changes in interest rates on earnings.




                                                                49
36.       CAPITAL MANAGEMENT




In accordance with the Decision on the capital adequacy of banks, defined by the National Bank of Serbia
(Official Gazette RS, No. 129/2007 and 63/2008) shall be determined by the method of calculating the Bank's
capital adequacy ratio and the capital. The basic capital is defined by the aforementioned

decision and must be at least 50% of the capital of the Bank.

The following table shows the calculated amounts of capital, additional capital and total capital, and the
calculation of capital adequacy as at 31 December 2009. year:


                                                                                     Thousands of RSD
                                                                     December 31, 2010        December 31, 2009


 Core capital                                                                     36,252,564                 31,179,086
 Additional capital                                                                2,324,502                   2,335,494
                                                                                  38,577,066                 33,514,580
 Deducted from equity                                                             -4,503,225                  -4,882,558
 Equity                                                                           34,073,841                 28,632,022

Total risk balance sheet                                                          93,195,126                 77,885,757
Total risk off-balance sheet assets                                               10,141,215                  7,964,432

Total risk assets                                                                103,336,341                 85,850,189


Capital adequacy ratio as of December 31                                                  32                         32




Minimum capital adequacy ratio for banks is 12%.

At 31 December 2010. year, the Bank's capital adequacy ratio was above the statutory minimum.

The Bank is required to scope and structure of its operations with the performance by the Banking Act
and the regulations of the National Bank of Serbia.




                                                           50
     37. ECONOMIC CRISIS AND ITS IMPACT ON BUSINESS ACTIVITY




The economic crisis is still present and the economic recovery is still neibvestan. Bank and in 2010 operated
under difficult and uncertain economic conditions., And the impact of the crisis on its operations is not possible
to fully predict ..

Bank in 2010, as in previous years, had no problem in maintaining liquidity, despite the constant prisiutne
insolvency clients with which it operates, and above all thanks to the available domestic capital.

The Bank has used its advantages: it is still a local bank (the bank with majority domestic share capital), business-
autonomous (no majority shareholder), a political independent, and its business aktivnosst create priority on
maintaining liquidity and achieving profit margins of established patterns of lending activities which by its
estimate less risky. It also has tightened lending criteria and assessing their creditworthiness of potential
borrowers, has increased its security instruments, shorten the terms of use. The Bank has systematically and
continuously reduced their exposure to specific customers and prestruktuirala loans to less risky customers (the
public sector, state) and the purchase of government securities.




In order to achieve a profit within the projected limits and maintain the integrity of its capital, the Bank is in the
fourth quarter of 2010. was significantly reduced its lending activity, and it significantly more, and a business
focused on debt collection, whose effects have led to an increase in total assets of the Bank.

Starting from the negative effects of financial crisis on the real sector of economy, government measures to
mitigate the economic crisis, which is slow to realize, the main task of the Bank is in reviving business growth and
development credit and deposit activities with simultaneous optimization of potential business risk (risk
management) .




                                                             51
38.       Segment reporting (IFRS 8)


  38.1.        ITEM BANK INCOME BY SEGMENT
                                                                                                                                                   in h and lj and d a m a
                                                                             2 0   10                                                   2 0 09
                                                    Retail                                                          Retail
                                                                 Corporate                                                        Corporate
                                                   Operations                             Other           Total    Operations                      Other        Total
                                                                 Operations                                                      Operations
               BILANSUSPEHA



  Net interest income                               -1,742,453       7,331,591          1,052,571      6,641,709      -451013       8,077,912        -9,321     7,617,578

  Net income from fees and commissions.                64,926          648,697               17915       731,538       76,943        577,803        -42,276       612,470

  Net income from sale of securities                                                           753          753         2,261                 0            0        2,261
  Net ac. / (Rash.) on foreign exchange
  difference                                                                                 -1151,834 -1151,834                                   -399,712      -399,712

  Other income                                                                            598,281        598,281                                   103,159        103,159
  Net losses on impairment and
  provisions                                          -248,810    -1,804,137                 84,951    -1967,997      -118,175     -2,407,542        -2,444    -2,528,161
 Salaries and wedges
  Expenditures                                                                           -608,408       -608,408                                   -695,082      -695,082

 Depreciation expense                                                                    -149,477       -149,477                                   -142,844      -142,844

  Operating expenses and other business expenses                                        -1,680,423    -1,680,423                                     -1180,369 -1180,369
  Net gains on the valuation
  of assets and liabilities                            10,264        3,374,272            399,772      3,784,308       36,380       2,316,962       421130      2,774,472

  Profit before taxation                            -1,916,073    ?, 550.423            1,435,899      6,198,450     -453,604      8,565,135      1,947,759     6,163,772

  Income tax and deferred tax                                                                           -607,618                                                 -584,309

  Net income                                                                                           5,590,832                                                5,579,463




                                                                                        52
38.2. Bank’s Asset/Liability Position per Separate Operating Segments
                                                                                                                                                                     in thousands
                                                                           3 1.   1 2.    2 0 10                                             3 1. 12.   2009
                                                           Retail   Corporate                                              Retail   Corporate
         BALANCE SHEET                                Operations    Operations             Other        Total         Operations    Operations            Other      Total

            ASSETS
Cash and cash
Equivalents                                                                               5,833,831       5,833,831                                     12,092,785     12,092,785
Callable deposits and loans                                                              20,219,755      20,219,755                                     11,404,919     11,404,919
Interest, fee and
commission receivables                                    21,665         14 513 85          156,017       1,629,067        16,939        1,226,572          96,829      1,340,340
Loans and deposits                                     6,773,763        46,116,992       43,780,182      96,670,937     5,177,072       40,796,404      18,480,994     64,454,470
Securities value. (Without
Own shares)                                                              3,121,739          823,705       3,945,444        31997          3,798,457         80,404      3,910,858
Shares (participation)                                                      14,509           56,731          71,240                        625,184          68,617        693,801
Other investments                                      3,271,546         1,699,795          283,872       5,255,213    3,677,590          3,907,441        142,836      7,727,867
Intangible assets                                                                            45,383          45,383                                         46,833         46,833
Property, equipment and
investment property                                                                       2,856,992       2,856,992                                       1416,869       1416,869
Other assets                                                1775            85,405        4,968,385       5,055,565           859            10,140      6,321,738      6,332,737
Total assets                                          10,068,749        52,489,825       79,024,853     141,583,427    8,904,457        50,364,198      50,152,824   109,421,479
LIABILITIES
Transaction deposits                                     810,491         3,303,093          409,041       4,522,625      799,979         4,455,155         108,475      5,363,609
Other deposits                                        64,063,405        14,627,535        7,974,868      86,665,808   37,261,619        14,953,766       6,318,582     58,533,967
Borrowings                                                                                2,120,159       2,120,159                                      3,697,776      3,697,776
Interest, fee and commission payables                     25,214            39,108           33,003          97,325        43,938           58,078          39,155        141171
Provisions                                                                                  665,180         665,180             0          841,614               0         841,14
Taxes                                                                                        13,006          13,006                                         12,977         12,977
Liabilities from income distribution                                                        796,068         796,068                                        526,566        526,566
Deferred tax liabilities                                                                      9,221           9,221                                         13,303         13,303
Other liabilities                                         26,887             35,040       2,464,211       2,526,138        21745           260,416         914,293       1196 ,454
Total liabilities                                     64,925,997        18,004,776       14,484,757      97,415,530   38,127,281        20,569,029      11,631,127    70,327,437
EQUITY
Share and other capital                                                                  25,390,565      25,390,565                                     25,390,565     25,390,565
Reserves                                                                                 13,165,376      13,165,376                                      8,091,898      8,091,898
Revaluation reserve                                                                          21353            21353                                         32,339         32,339
Unrealized losses on securities available-for-sale.                                                            -229                                                          -223
Retained earnings                                                                         5,590,832       5,590,832                                      5,579,463      5,579,463
Total equity                                                                             44,167,897      44,167,897                                     39,094,042     39,094,042

Total liabilities                                     64,925,997        18,004,776       58,652,654     141,583,427   38,127,281        20,569,029      50,725,169   109,421,479




                                                                                                   53
39.           Geographical segments

391.          Bank’s Income Position per Geographical Segments                                                                       in thousands
                                                    Regional.       Regional.        Regional.        Regional.                           Total
                                                     Center          Center           New Center       Center
                   INCOME STATEMENT                   Nis           Belgrade           Sad           Kragujevac      Switchboard        Bank
                               2010
Net interest income                                     1364,129         -17,866         1,840,294        394,220        3,060,932       6,641709
Net income from fees and commissions.                     272,485        177,124           145,024         41,880           95,025         731538
Net income from sale of securities                            753                                                                0             753
Net foreign exchange gains and losses                  -1,102,505      -1,933,747         -754,934        -470,077       3,109,429      -1151,834
Other income                                               25,468          19,475           36,599           5,957         510,782         598,281
Net losses on impairment and
provisions.                                             -481,902           -99,014      -1,007,547        -355,621         -23,913      -1967,997
Staff costs                                             -112,112         -154,898         -134,488         -63,656        -143,254       -608,408
Depreciation expense                                                                                                      -149,477       -149,477
Operating expenses and other business expenses          -196,044         -418,803         -226,785        -103,528        -735,263     -1,680,423
other business expenses
liabilities                                              799,428         814,162         1,105,556        370,603         694,559       3,784,308
Profit before taxation                                   569,700       -1,613,567        1,003,719        -180,222       6,418,820     6,198,450
Income tax                                                                                                                              -607,618
Net income                                                                                                                             5,590,832

                         2009
Net interest income                                      871,635         347,058         2,244,947        564,369        3,589,569      7,617,578
Net income from fees and commissions.                    208,019         174,977           122,341         25,278           81,855        612,470
Net income from sale of securities                                                                                           2,261          2,261
Net foreign exchange gains and losses                   -485,050         -820,017         -295,969        -172,684        1374,008       -399,712
Other income                                              36,432            9,289            3,283           3,954          50,201        103,159
Net losses on impairment and provisions
provisions.                                              422,417          612,220       -1,709,464        -713,055      -1,140,279     -2,528,161
Staff costs                                             -112,745         -163,941         -145,512         -68,816        -204,068       -695,082
Depreciation                                                                                                              -142,844        -142844
Operating expenses and other business expenses          -146,459         -309,792         -197,834         -83,712        -442,572      -1180,369
other business expenses
liabilities                                              638,325         583,517          713,764         224,418         614,448       2,774,472

Profit before taxation                                 1,432,574         433,311          735,556         -220,248       3,782,579     6,163,772
Income tax                                                                                                                               -584,309
Net income                                                                                                                             5,579,463



                                                                        54
                                                                                                                                                     in h and lj and d a
39.2. Bank's asset position by geographic segments                                                                                                                  ma
                                                                     Regional.     Regional.      Regional.         Regional.                           3112.2010.
                                                                                    Center         New Center        Center                               Total
                BALANCE SHEET                                        Centre Nis    Belgrade         Sad            Kragujevac       Switchboard           Bank
ASSETS
Cash and cash equivalents                                               495,532         502,06          419,386         215,551         4,200,756            5,833,831
Callable deposits and loans                                                                                                            20,219,755           20,219,755
Interest, fee and commission
receivables,                                                             239,069       284,386          582,276          160,201          363,135            1,629,067
Loans and deposits                                                    12,129,020    14,011,395       14,871,779        4,042,668       51,616,075            96,70,937
Securities (excluding own shares)                                        782,284    1075,91           1,094,363           20,356          972,750            3,945,444
Shares (participation)                                                    71,239                                                                1               71,240
Other investments                                                    1451138          1,634,704        1,557,562        480,542           131267             5,255,213
Intangible assets                                                                                                                          45,383               45,383
Property, plant and equipment
Property                                                                                                                                2,856,992            2,856,992
Other assets                                                             71,571         200,098          77,575          26,929         4,79 ,3 92           5,055,565
               Total assets                           3112 . 2010.   15,239,853      17,708,880      18,602,941        4,946,247       85,085,506         141,583,427
LIABILITIES
Transaction deposits                                                   1089,741       1,515,584        1,350,466         296,237          270,597            4,522,625
Other deposits                                                       19,230,388      38,390,084       15,520,117       8,765,141        4,760,078            86,65,808
Borrowings                                                                  304              16                                11       2,119,828             2,120,159
Interest, fee and commission payables                                    17,178           56,26          15,730             3,187           4,04                 97,325
Provisions                                                               77,687         194,836         194,709            26,00          171,348              665,180
Taxes                                                                     8,911             413             362               171            3,149               13,006
Liabilities from income distribution                                          0                                                           796,068              796,068
Deferred tax liabilities                                                      0                                                              9,221                9,221
Other liabilities                                                       346,942       1,597,169         340,909          145,224           95,894             2,526,138
Total liabilities                                                    20,771,151     41,754,728       17,422,293        9,236,571        8,230,787           97,415,530
EQUITY
Share and other capital                                                                                                                25,390,565           25,390,565
Reserves                                                                                                                                8,091,898           13,165,376
Revaluation reserve                                                                                                                        32,339                21353
Unrealized losses on securities available-for-sale.                                                                                          -223                  -229
Retained earnings                                                                                                                       5,579,463            5,590,832
Total equity                                                                                                                          44,167,897            44,167,897
                  Total liabilities                   3112 . 2010.   20,771,151     41,754,728       17,422,293        9,236,571       52,398,684         141,583,427




                                                                                       55
                    INCOME STATEMENT
                                                     Regional.           Regional.        Regional.        Regional.                       3112.2009
                                                      Center              Center           New Center       Center                           Total
                                                       Nis               Belgrade           Sad           Kragujevac      Switchboard        Bank
ASSETS

Cash and cash equivalents                                672,705             493,872           777,216          369,766       9,779,226       12,092,785
Revocable deposits and loans
                                                                                                                             11,404,919       11,404,919
Interest, fee and commission receivables
                                                           83,113            130,139           475,784          113,815        537,489         1,340,340
Loans and advances to customers
                                                        8,254,739           7,025,013        13,051,633       4,231,057      31,892,028       64,454,470
Securities
                                                         742,596             843,672           932,872           31,641        1360,077        3,910,858
Equity investments (interests)                                                                                                  693,801          693,801
Other placements
                                                        2,243,536           3,357,084         1,535,927         553,141         38,179         7,727,867
Intangible assets                                                                                                               46,833            46,833
Property, equipment and investment property
                                                                                                                               1416,869     1 4 1 6,8 69
Other assets                                             468,366             639,049           423,661          232,886       4,568,775        6 ,332,737
Total assets at 31.12. 2009
                                                      12,465,055          12,488,829        17,197,093        5,532,306      61,738,196      109,421,479
LIABILITIES

Transaction deposits                                    1,322,321           2,065,262          1477,532         299,334        199,160          5,3 63,09
Other deposits
                                                       12,335,055          25,374,883        12,601,888       5,217,544       3,004,597       58,533,967
Borrowings
                                                                                                                              3,697,776        3,697,776
Interest, fee and commission payables                      28,963             65,346            36,900            5,534           4,428          141171
Provisions
                                                          374,650            116,066           130,585           21050         199,263           841,14
Income taxes payable                                        8,538                    59             25             116            4,239           12,977
Tax and dividend payables                                                                                                      52 6,5 66       52 6, 5 66
Deferred tax liabilities
                                                                                                                                 13,303           13,303
Other liabilities                                        308,723             267,077           395,424           49,430         175,800     1 1 9 6 ,454
Total liabilities
                                                      14,378,250          27,888,693        14,642,354        5,593,008       7,825,132       70,327,437
EQUITY
Share and other capital
                                                                                                                             25,390,565       25,390,565
Reserves
                                                                                                                              8,091,898        8,091,898
Revaluation reserves                                                                                                             32,339           32,339
Unrealized losses on securities available-for-sale
                                                                                                                                   -223             -223
Retained earnings
                                                                                                                              5,579,463        5,579,463
Total Equity                                                                                                                 39,094,042       39,094,042
Total Liabilities at 31.12.2009
                                                      14,378,250          27,888,693        14,642,354        5,593,008      46,919,174      109,421,479

             al liabilities 31st 12. 2009
                                                                    56
    40.    EXCHANGE RATES

    Exchange rates determined in the interbank meeting applied for the calculation of
    the balance sheet into RSD at 31 December 2010. and 2009. for the major
    currencies are:


                                      31. December      31. December
                                      2010.             2009.

     USD                                      79.2802            66.7285
     EUR                                     105.4982            95.8888
     GBP                                     122.4161           107.2582
     CHF                                      84 4458            64.4631




Sneža Zivkovic




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