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Komercni Banka (KMCA)

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Tuesday 30 April, 2002

Komercni Banka

Annual Report 3/16

Komercni Banka
30 April 2002

Annual Report 2001, part 3/16

Profit and Loss Account

As at 31 December 2001, net interest income reached CZK 13.0 billion which
represents a growth of 5.7 % year on year. This represents a good performance in
a declining interest rate environment. The result reflects the fact that the
interest paid fell at a faster rate (decline by 9.8 %) than interest received
(decline by 3.3 %). Interest income in 2001 was affected by the market interest
rate cuts to which the Bank responded by cutting its own rates. The Reference
Rate of Komercni banka fell year on year from 6.0 % to 4.6 % as at 31 December
2001.

The net interest margin remained on a steady level and as at the end of 2001 it
stood at 3.64 %.



Net fees and commissions of CZK 8.4 billion represent a year on year growth of
16.9 %. The results in 2000 were negatively impacted by fees connected with a
specific guarantee for a portfolio of loss loans and its early termination in
the total amount of CZK 523 million. Excluding the effect of this one-off
transaction on the results of 2000, the net fees and commissions grew by 9 %
year on year.

Net fees and commissions include non-exchange rate fees and commissions for
services and operations provided for clients or banks, or from transactions with
securities. From 1 January 2001 net fees and commissions also include the
foreign exchange spread achieved by the Bank on clean and documentary payments
and from the conversion of foreign exchange. Management considers that such
income to be recurring and to represent in substance fee or commission based
business. Figures from 2000 have been reclassified to ensure comparability.

The main engine of the growth was fees and commissions received from banking
services and operations for clients which rose from CZK 5.2 billion (2000) to
the present CZK 6.3 billion, that is, by 20 %. The Bank experienced significant
growth in payment card fees, and loan administration fees.



Net profit on financial operations stood at CZK 1.6 billion as at 31 December
2001. As in 2000 when they exceeded CZK 1.5 billion, they were boosted by
one-time gains. In the last quarter of 2001, the Bank sold its shares in Ceska
pojistovna, a. s., and Ceska zbrojovka, a. s., of 9.99 % and 69.42 % of the
registered capital respectively. Both transactions generated a capital gain of
CZK 456 million. The result was further influenced by unrealised gains from
bonds in the portfolio of securities available for sale.



Other income, which grew by 10.2 % year on year and as at 31 December 2001
amounted to CZK 875 million, comprises dividend receipts from subsidiaries and
associates (CZK 222 million), exceptional net income (CZK 363 million) and other
income (CZK 290 million). Exceptional net income comprised income from the write
back or write-off of receivables and payables from payment operations performed
in early nineties in connection with the transition to the new payment system.

In 2001, the share of non-interest income in the total income of the Bank
continued to grow; as at 31 December 2001 it stood at 45.4 %.



Total costs excluding restructuring costs have increased by 2.7% year on year to
reach the total of CZK 13.3 billion.



Administrative expenses in 2001 reached CZK 11.0 billion, representing a year on
year growth of 3.9 %. Of the total volume, personal costs were CZK 5.9 billion
and other administrative expenses were CZK 5.1 billion. Personnel costs grew by
12 % year on year. In 2001 they were affected by bonuses to the Remedial
Management Division which administers and collects the portfolio of
non-performing assets. The bonus component of the personnel costs is very much
performance driven and represent a change in employee remuneration philosophy
introduced by the Bank in the second half of 2000. Other administrative expenses
on the other hand fell by 4.1 %.



Depreciation and other provisions in 2001 stood at CZK 2.4 billion, which
translated as a decline of 2.5 % compared to the year 2000.



Exceptional restructuring costs stood at CZK 1.8 billion as at 31 December 2001
- more than the double the charge in the previous year. Costs relating to the
restructuring comprise costs of severance and compensation associated with
reducing staff numbers, costs of disposal of redundant buildings and early
termination of leases and costs reflecting the impairment of under-utilised
leasehold improvements on leased premises.

The growth of total revenues improved the Cost / Income Ratio (excluding
restructuring costs) from 59.4 % in 2000 to the present 55.9 %. With the
restructuring costs included, the ratio is unchanged and was 63.3 % for the year
ended 31 December 2001.

In 2001, the Bank created provisions and reserves for loan losses, for
securities and for investments in subsidiaries and associates.



Net creation of provisions and reserves for loan losses in 2001 amounted to CZK
2.9 billion. The significant year on year fall (63.6 %) was largely due to the
positive impact of the State Guarantee.



Provisions for asset backed securities (CBOs) amounted to almost CZK 2 billion
as at 31 December 2001. They were created based on the estimate of the net
recoverable value of these assets and reflect changes in market conditions in
the markets of the underlying assets since the purchase of the portfolio. CBOs
denominated in USD were purchased by the Bank in the last quarter of 2000 and in
the first half of 2001. All securities of this type are in the 'available for
sale' portfolio (see Securities available for sale).

The balance of provisions for investments in subsidiaries and associates was CZK
498 million, representing a year on year growth by CZK 350 million. The balance
reflects the losses incurred by Komercni pojistovna, a. s. the Group's insurance
subsidiary in the year ended 31 December 2001.



Balance Sheet

Assets

The balance of cash and balances with the central bank fell compared to the
year-end 2000 by 11.6 % to CZK 18.2 billion. This development was driven by the
operating needs of the Bank and also by the required volume of obligatory
minimum reserves with the Central Bank which, as at the end of the year, stood
at CZK 6,1 billion. The average volume of obligatory minimum reserves has
increased due to the larger volume of the Bank's primary deposits by 6.7 % year
on year. The obligatory minimum reserves bear, as of July 2001, interest equal
to the rate for CNB repurchase operations, which was 4.75 % p.a. as at 31
December 2001.



Due from financial institutions increased during the course of 2001 by 26.9 % to
CZK 155.6 billion. Substantially all these additional funds are placed with the
CNB and with other banks.

As of 31 December 2001, the Bank decided to show separately the amount due from
Ceska konsolidacni agentura (Czech Consolidation Agency) on the face of the
balance sheet. Ceska konsolidacni agentura was established by Act No. 239/2001
Coll. as a legal successor of Konsolidacni banka. The amount due from this
institution originates from the re-financing of the purchase of non-performing
assets of Komercni banka in 1999 and 2000. The reduction in the balance - to CZK
 49.8 billion reflects repayments that began in August 2001.

The volume of net loans and advances to customers at the year-end 2001 stood at
CZK 135.2 billion, representing an increase of 6.5% year on year. This was also
influenced by the dynamics of the retail loan segment - in 2001 the mortgage
loans alone grew by 38.5 % to CZK 14.2 billion, and consumer loans by 43.3 % to
CZK 6.0 billion.

Loans classified as standard represent an increasing volume of the loan
portfolio - year on year they grew by 38.7 %. Moreover, the proportion of loans
under special review fell by 22.7 %. The trend resulted in the reduction of the
share of classified loans in the total loans to clients - from the original 33.7
 % to 24.2 %. The main drivers of the positive development are the intensive
effort of the Remedial Management Division and continuing enhancement of the
Bank's credit procedures. The total volume of reserves and provisions for loan
losses as at the year-end 2001 amounted to CZK 23.8 billion, including general
reserves for loan losses of CZK 8.8 billion. The Bank further refined its
provisioning and collateral valuation policies during 2001 and this is reflected
in the volume of provisions held as at the year end date.

Provisions and reserves created for the coverage of losses from classified loans
made up, as at the end of 2001, 48.3 % of the classified loans, and including
the impact of the State Guarantee, coverage of the portfolio of loans under
special review was 63.6 %.

The State Guarantee issued to the Bank in December 2000 continues to protect the
recoverable value of a substantial proportion of the Bank's non-performing
assets. The guarantee was issued for selected balance sheet and off-balance
sheet assets whose volume at the end of 2000 was, in nominal terms, CZK 60.9
billion. In 2001, the volume of these assets has been reduced by 38.9 % to CZK
37.2 billion, largely due to the operations and activities of the Remedial
Management Division.

The State Guarantee was issued for the coverage of aggregate losses up to the
maximum amount of CZK 20.0 billion. At the end of 2001, the Bank had reserves of
CZK 4,500 million which is the amount the Bank estimates it will contribute to
the expected overall losses from the guaranteed portfolio which are currently
estimated at CZK 24,500 million, that is an amount comparable to the end of
2000.

The implementation of IAS 39 required the Bank to allocate its trading and
investment securities into three separate portfolios: securities held for
trading, available for sale securities and securities held to maturity.

The volume of securities held for trading fell year on year to CZK 3.7 billion.
This development is mainly driven by decline in the volume of treasury bills
issued by the CNB.

In 2001, securities available for sale increased in volume by 12.4 % to CZK 33.5
billion, due to the transfer of the asset backed securities (CBO) from the
portfolio held to maturity in the last quarter of 2001. The Bank's shareholdings
in Ceska pojistovna, a. s., and Ceska zbrojovka, a. s., were sold in the last
quarter of 2001(see Net profit on financial operations).

The volume of the investments held to maturity has declined sharply - from the
past CZK 11.7 billion to the present CZK 960 million comprising bonds issued by
both corporates and banks.

The volume of investments in subsidiaries and associates fell by 24.7 % year on
year to the present CZK 1.2 billion, chiefly due to the creation of provisions
and reserves against investments in Komercni pojistovna and ALL IN, the latter
in liquidation as of 1 April 2001. Furthermore, the Bank sold its holding in
company Bankovni institut. Investments in Ceskomoravska zarucni a rozvojova
banka and Burza cennych papiru Praha (the Prague Stock Exchange) were
transferred to the available for sale portfolio.



Liabilities

The amounts owed to financial institutions declined year on year by 26.7 % to
CZK 28.9 billion.

As at the end of December 2001, the Bank held amounts owed to customers of CZK
316.8 billion, representing a year on year increase of 10.1 %, primarily due to
the growing volume of current account deposits (19.1% year on year) and fixed
term deposits (an increase of 13 %). In the second half of 2001, the positive
trend in the volume as well as the number of deposits has been clearly visible.

The volume of certificated debt was stable in 2001. As at 31 December 2001 it
amounted to CZK 27.8 billion. Of this volume, 74.4 % were bonds and 25.6 % were
mortgage bonds.



Shareholders' equity of the Bank amounted to CZK 23.6 billion as at 31 December
2001, showing a 16.8 % increase year on year. As at the year-end, own funds made
up 5.6 % of the total assets of the Bank.



Expected Development of the Financial Situation



The Bank's new management has developed and is implementing a 3 years strategic
plan which intends to position the Bank as a major provider of a broad range of
financial services in the Czech market.

The completion of this plan, strongly and closely supported by the main
shareholder, Societe Generale, together with the expected trends of the market,
should lead to positive commercial and financial trends in the next few years.



Shares and Shareholders



Shareholder Structure

The share capital of Komercni banka, a. s., legitimately entered in the
Commercial Register on 11 February 2000, is CZK 19,004,926 thousand and is made
up of 38,009,852 ordinary shares in the nominal value of CZK 500 (ISIN:
CZ0008019106).

As at the end of 2001, the number of shareholders was 61,660 corporate entities
and private individuals.

The Bank of New York ADR Department administers Global Depository Receipts (GDR)
traded on the London Stock Exchange and in the PORTAL system (market of the
National Association of Securities Dealers, Inc.) in the USA which make up 6.45
% of the share capital of the Bank.





Shareholder structure of KB
Statement from the Securities Register                    Proportion of total shareholders   Proportion of share capital
as at 31 December 2001

Number of shareholders                         61,660                         100.00 %                         100.00 %
- of which: corporate entities                    331                           0.54 %                          84.54 %
private individuals                            61,256                          99.34 %                           6.06 %
unidentified shareholder accounts registered       73                           0.12 %                           9.40 %
Corporate entities                                331                         100.00 %                          84.54 %
- of which: from the Czech Republic               249                          75.23 %                           6.16 %
from other countries                               82                          24.77 %                          78.38 %
Private individuals                            61,256                         100.00 %                           6.06 %
- of which: from the Czech Republic            56,072                          91.54 %                           5.87 %
from other countries                            5,184                           8.46 %                           0.19 %



Major shareholders of Komercni banka, a. s., with over 5% of the share capital
as at 31 December 2001

Shareholder                                                                                 Proportion of share capital
Societe Generale S.A.                                                                                           60.00 %
The Bank of New York ADR Department 1)                                                                           6.45 %



1) With the permission of the Czech National Bank, The Bank of New York ADR
Department is the holder of those shares for which Global Depository Receipts
(GDR) were issued and which are in the possession of a significant number of
foreign investors.



Out of the total share capital of the Bank of CZK 19,004,926,000 (38,009,852
shares in the nominal value of CZK 500), Societe Generale S.A. holds 60 %, the
remaining shares are held by corporate entities and private individuals. The
following table shows the development in the number of shares:

                                    31 December 1999             31 December 2000               31 December 2001
Number of shares                       19,004,926                   38,009,852                     38,009,852
Share nominal value                     CZK 500                      CZK 500                        CZK 500



With the exception of the share incentive scheme for the management (see Notes
to the Unconsolidated Financial Statements according to CAS, note no. 31 Related
parties), Komercni banka, a. s., does not have any other scheme allowing the
Bank's employees to participate in the share capital of the company.



KB Share Trading

In comparison with other Czech stock in 2001, shares of Komercni banka ranked
amongst the most profitable investment. Last year, the shares grew by 13.6 % or
from CZK 912 to CZK 1,036 per share in absolute terms. To compare, the Prague
Stock Exchange measured by the PX 50 Index fell by 15.0 %. Komercni banka has a
long tradition of being one of the most liquid stocks on the exchange. In 2001,
KB shares with their traded volume of CZK 30.6 billion ranked second after Cesky
Telecom shares. Global Depository Receipts of Komercni banka followed suit and
their price rose by 13.8 % in 2001.





Major Decisions and Results of General Meetings of Komercni banka, a. s.,

Held in 2001



In the year 2001, three General Meetings of Komercni banka, a. s., were held.



On 28 March 2001, the first General Meeting was held. Shareholders approved a
change of the shares incentive program and an amendment to the Articles of
Association of the Bank and confirmed Mr. Karel Kopp as a member of the Bank's
Supervisory Board.



The second - Annual General Meeting was held on 20 June 2001. Shareholders
approved the financial statements of Komercni banka, a. s., for 2000, showing a
net loss after tax according to the Czech Accounting Standards (CAS) of CZK
149,336,000. Shareholders passed a resolution that the loss from 2000 would be
covered from funds from profit in the amount of CZK 149,336,000.

The General Meeting approved:

a) the Board of Director's report on the business activities of the Bank and the
state of its assets for 2000;

b) the consolidated financial statements of Komercni banka for 2000;

c) acquisition of the Bank's own ordinary shares under precisely defined
conditions;

d) an amendment to the Bank's Articles of Association;

e) emoluments of members of the Bank's statutory bodies and the agreement on
performance of an office in the Bank's statutory bodies.

The third General Meeting of 2001 which was held on 8 October 2001 approved the
amendment to the Articles of Association and personal changes in the Supervisory
Board. Shareholders were informed that the following persons resigned on their
membership in the Supervisory Board of Komercni banka: Karel Kopp, Jiri Havel,
Petr Dvorak, Martin Fassmann, Jan Juchelka, Filip Marco, Radek Pokorny and Marie
Klucova. Shareholders then elected following new members of the Supervisory
Board: Didier Alix, Jean-Louis Mattei, Severin Cabannes, Jan Juchelka, Petr
Laube and Christian Poirier. The newly elected Supervisory Board consists of 9
members as per the Articles of Association.


Statutory Bodies and Organisation Structure of Komercni banka, a. s.

Board of Directors



Alexis Raymond JUAN, Chairman of the Board of Directors and Chief Executive
Officer

Born in 1943 in Algeria. He obtained his Doctorate (PhD) at the Faculty of
Public Law in Paris and he is graduated from at the Institute for Political
Sciences in Grenoble. He joined Societe Generale in 1968 and held many positions
within the Societe Generale Group in many of its locations world-wide. He helped
to set up and develop several branches or subsidiaries abroad: SG branch in
Tokyo (1973 - 1976), Korean French Banking Corporation in Seoul (1978 - 1980 as
the managing director) and a SG branch in Athens (1980 - 1984). In 1984 - 1987,
he was the deputy CEO of SG, UK. In 1987 - 1998, he was the director of SG
distribution network, both on the regional and the national level. In 1998 he
became a member of the General Management Committee. On 5 October 2001 he was
elected a Member of the Board of Directors of Komercni banka, a. s., and its
chairman. He was appointed the Chief Executive Officer on 9 October 2001.







Peter PALECKA, Vice-Chairman of the Board of Director and Chief Executive,
Corporate Secretary

Born in 1959, graduated from the University of Economics, Bratislava, majoring
in commerce, in 1982. After a career in the private sector, he held the position
of the Head of Strategic Planning Department and between 1990 - 1992 of the
Director of the Multilateral Trade Policy Division at the Federal Ministry of
Foreign Trade. In the period between 1992 - 1994, he was a Permanent
Representative of the Czech and Slovak Federal Republic to GATT and in the four
following years as a Permanent Representative of the Czech Republic to the World
Trade Organisation (WTO). Since 1995, he has been a WTO arbitrator at
international panels for trade disputes between the EU, USA, Canada and other
countries. He joined Komercni banka in 1998. Until October 1999 he managed the
Group Strategy and Privatisation unit. In October 1999 he was appointed by the
Komercni banka Supervisory Board as a member of the KB Board of Directors in
charge of KB strategy and privatisation. In May 2000 he became a Vice-Chairman
of the KB Board of Directors and the Senior Deputy Chief Executive. On 5 October
2001 he resigned on his position in the KB Board of Directors and on the same
day he was elected a member and later the Vice-Chairman of the Board of
Directors of Komercni banka. On 9 October 2001 he was appointed the Chief
Executive, Corporate Secretary.





Patrice Cheroutre, Member of the Board of Directors and  Chief Executive, Risk
Management

Born in 1951 in Bailleul, France. Graduated from Ecole Centrale, Lille (1974),
majoring in hydromechanics which was also his postgraduate major. In addition,
he graduated from several other courses. In Societe Generale, he studied
investment banking, banking and finance. Until 1987 he worked in industrial
corporations - Thomson Group and Alcatel Group to name but a few. He joined
Societe Generale in 1987 as a technical consultant. Later he held several
management positions in the SG Group: Director of Securities Trading and
Administration (1989 - 1992), Managing Director of Societe Generale Canada (1992
- 1995), Managing Director of SGBM Societe Generale Marocaine de Benques,
Morocco (1995 - 1998) and Managing Director of SG Asia Credit Ltd & Bangkok
International Banking Facility (1998 - 2000). He has been working in the Czech
Republic since 2000 when he become the head of Societe Generale, Prague branch,
employing 150 of staff. On 5 October 2001 he was elected a Member of the Board
of Directors of Komercni banka. On 9 October 2001 he was appointed the   Chief
Executive, Risk Management.





Matus PULL, Member of the Board of Directors and  Chief Executive, Corporate
Banking

Born in Bratislava in 1949. Graduated from the University of Economics, Prague
in 1972. Joined Fincom, a foreign trade company. Between 1977 - 1982 he worked
at the Head Office of the State Bank of Czechoslovakia. From 1982 he was with
the Prague branch of Societe Generale: until 1992 as the Head of the SG office,
then a member of the Societe Generale Komercni banka management, resp. Societe
Generale Prague Branch. On 5 October 2001 he was elected a Member of the Board
of Directors of Komercni banka. On 9 October 2001 he was appointed the Chief
Executive, Corporate Banking.





Tomas SPURNY, Member of the Board of Directors and  Chief Executive, Finance and
Corporate Planning */

Born in 1965 in Prague. Graduated from the Stern School of Business, an arm of
the New York University. Obtained his finance MBA degree in 1994 at the Columbia
University, New York. Between 1985 - 1989, he worked with London Star Limited,
specialising in strategy formulation and design of tools for management of
exchange rate and interest rate risks. In years 1989 - 1990, he was studying a
comprehensive banking course at the Manufacturers Hannover Trust. He spent the
following years developing models for derivatives trading for the European
American Bank. Between 1994 - 1999 he held various positions in McKinsey &
Company consultancy, namely in the area of consulting services for financial
institutions in the banking sector, specialising in risk management, mergers and
acquisitions and corporate governance. In 1999 he became the Chief Executive and
Member of the Board of Directors of CCS, Ceska spolecnosti pro platebni karty,
Prague, where he was in charge, amongst other things, of the formulation and
implementation of the growth strategy for this largest non-bank issuer of
payment cards in the Czech Republic. In May 2000, the Supervisory Board of
Komercni banka elected him a Member of the Board of Directors. He was
responsible primarily for finance and risk management. On 5 October 2001 he
resigned on his position in the KB Board of Directors and on the same day he was
elected a Member of the Board of Directors of Komercni banka. On 9 October 2001
he was appointed the Chief Executive, Finance and Corporate Planning.

*/ As at 30 April 2002 he resigned from his position in the Bank



Radovan Vavra, chairman of the Board of Directors and Chief Executive Officer
(until 5 October 2001)


Jiri Huml, Member of the Board of Directors and Deputy Chief Executive (until 5
October 2001)


Radomir Lasak, Member of the Board of Directors and Deputy Chief Executive
(until 5 October 2001)


David Svojitka, Member of the Board of Directors and Deputy Chief Executive
(until 5 October 2001)


Michal Vetrovsky, Member of the Board of Directors and Deputy Chief Executive
(until 5 October 2001)



Supervisory Board


Didier ALIX, Chairman of the Supervisory Board (since 8 October 2001)



Jean-Louis MATTEI, Vice-Chairman of the Supervisory Board (since 8 October 2001)



Severin Cabannes, Member of the Supervisory Board (since 8 October 2001)



Jan Juchelka, Member of the Supervisory Board (since 31 May 1999 until 8 October
2001, 10 a.m., re-elected 8 October 2001)



Pavel Krejci */, Member of the Supervisory Board (since 27 May 2001)



Jan Kucera */, Member of the Supervisory Board (since 27 May 2001)



Petr Laube, Member of the Supervisory Board (since 8 October 2001)



Christian Poirier, Member of the Supervisory Board (since 8 October 2001)



Miroslava Smidova */, Member of the Supervisory Board (since 27 May 2001)





Karel Kopp, Chairman of the Supervisory Board (until 8 October 2001, 10 a.m.)



Jiri Havel, Vice-Chairman of the Supervisory Board (until 8 October 2001, 10
a.m.)



Petr Dvorak, Member of the Supervisory Board (until 8 October 2001, 10 a.m.)



Martin Fassmann, Member of the Supervisory Board (until 8 October 2001, 10 a.m.)



Jarmila Hanakova */, Member of the Supervisory Board (until 26 May 2001)



Jan Hanousek, Member of the Supervisory Board (until 14 June 2001)



Marie Klucova */, Member of the Supervisory Board (until 5 October 2001)



Antonin Kolacek */, Member of the Supervisory Board (until 26 May 2001)



Filip Marco, Member of the Supervisory Board (until 8 October 2001, 10 a.m.)



Pavel Pafko */, Member of the Supervisory Board (until 26 May 2001)



Radek Pokorny, Member of the Supervisory Board (until 8 October 2001, 10 a.m.)



*/ elected by KB employees



Executive Committee



The Executive Committee - the new element in the Bank's organisation installed
by the new organisation model of Societe Generale, the parent company - has a
mandate bestowed by the Articles of Association to decide in all important
matters of the Bank's everyday operations. Its members are appointed by the
Board of Directors. The Articles of Association provide that its members are, in
addition to appointed senior managers of the bank, also the Chief Executive
Officer and other members of the Board of Directors of the Bank. The Executive
Committee began to operate on 1 November 2001.

As at 31 December 2001, the Bank was organised in 11 units managed by the Chief
Executive Officer and other Chief Executives. The scope of authority of the
individual members of the Executive Committee or of the units reporting to them
respectively, is as follows:





Alexis Raymond Juan, Chairman of the Board of Directors and Chief Executive
Officer

directly manages divisions Internal Audit and Control and Strategy and CEO
Office and Senior Executive Directors whose respective scope of authority is
demarcated as follows:





Peter Palecka, Vice-Chairman of the Board of Directors and Chief Executive,
Corporate Secretary

manages unit of Corporate Secretary which is sub-devided into divisions Human
Resources, Legal, Financial Group Management and Communication. Independent
departments exist for other activities: Organisation, Financial Group
Administration and Support, Compliance and IT security.





Patrice Cheroutre, Member of the Board of Directors and Chief Executive, Risk
Management and

Pascal Dupont, Senior Executive Director

manages the unit of Risk Management which is sub-divided into divisions
according to the respective agendas: Credit Risk Management, Credit
Underwriting, Market Risk Management, Remedial Management and the Macroanalysis
department.





Matus Pull, Member of the Board of Directors and Chief Executive, Corporate
Banking

manages the unit of Corporate Banking which is sub-divided into divisions
according to the respective agendas: Business Division Prague and Corporate
Banking.





Tomas Spurny, Member of the Board of Directors and Chief Executive, Finance and
Corporate Planning */ and

Michal Herman, Senior Executive Director

manage the unit of Finance and Corporate Planning which is sub-divided into
divisions according to the respective agendas: Accounting, Tax, KB FG Financial
Management, Controlling, Investor Relations, ALM.



*/ As at 30 April 2002 he resigned from his position in the Bank



Marek Stefanowicz, Senior Executive Director

manages the unit of Investment banking which is sub-divided into divisions
according to the respective agendas: Financial Markets, Corporate Finance, Asset
Management, Treasury and Management Support.





Jiri Huml, Senior Executive Director */

manages the unit of IT and Operations which is sub-divided into divisions
according to the respective agendas: Payment Services, Project Development and
Management, IT and Support Services.





Andre Leger, Senior Executive Director

manages the unit of Marketing a retail, which is sub-divided into divisions
according to the respective agendas: Marketing and Segments, Loans and Deposit
and Investment Products.





Phillippe Delacarte, Senior Executive Director

manages the unit of Small and Medium Enterprises which is, according to the
respective agendas, sub-divided into the Trade Finance division and an
independent department which manages the relations of the Euroinfocentre in
Hradec Kralove to the EIC network.





Michel Fenot, Senior Executive Director and

Radomir Lasak, Senior Executive Director **/

manages the unit of Distribution Network which centralises the sale of all
products of the Bank which are sold through business divisions and their
branches.





Jan Kubalek, Senior Executive Director

manages the unit Alternative Distribution Channels which consists of the
division Direct Banking.





Karel Vasak, Senior Executive Director

manages the Human Resources division subordinated to the unit of Peter Palecka,
Chief Executive, Corporate Secretary



*/ As at 30 April 2002 he resigned from his position in the Bank

**/ As at 31 January 2002 he resigned from his position in the Bank



Committees of Komercni banka, a. s.



Asset and Liability Management Committee (ALCO)



The Asset and Liability Management Committee makes decisions on behalf of the
Board of Directors in the area of asset and liability management. It develops
frameworks for individual financial management and risk management divisions,
according to the Societe Generale standards. It acts as an arbitrator in the
area of financial management and risk management.

Composition of the Asset and Liability Management Committee (ALCO)

The committee consists of the Chairman of the Board of Directors and Chief
Executive Officer (Chairman), ExCo member in charge of finance and corporate
planning (Vice-Chairman), six members of the Executive Committee (Risk
Management, Investment Banking, Distribution Network, Marketing and Retail,
Finance and Planning) and three division directors (Financial Markets, Market
Risk Management, ALM). Meetings of the committee are attended by an observer
from the Societe Generale Paris Headquarters (DEVL).





Committee for Information Security (CIS)



The committee was created as an advisory body to the Chief Executive Officer. It
co-ordinates efforts in the area of IT systems security, but the responsibility
is still with the specialist units. It proposes policy documents to the Board of
Directors, strictly enforcing the principles of conceptual management, IT
systems security according to the principles approved by the Board of Directors,
etc.

Composition of the Committee for Information Security

The committee is chaired by the Corporate Secretary. The Director of Internal
Audit and Control Division (Vice-Chairman), two division directors (IT, Support
Services), Director of the Compliance Department and Director of the IS / IT
Audit Departments are the members.





Communication Committee (ComCom)



Based on powers bestowed by the Board of Directors, the Communication Committee
is the approval authority for the area of communication with respect to the
strategies of the Bank and the Financial Group. Furthermore, it discusses
documents in the scope of its mandate and decides on their implementation. In
exceptional circumstances, the committee has the right to make recommendations
to the Board of Director for approval.

Composition of the Communication Committee (ComCom)

The committee consists of the Chairman of the Board of Directors and Chief
Executive Officer (Chairman), Corporate Secretary, two ExCo members (Marketing
and Retail, Finance and Planning) and three division directors (Communication,
Strategy and CEO Office, Strategic and Operational Marketing).



Credit Risk Management Committee (CRMC)



Activities of the Credit Risk Management Committee focus on the area of credit
risk management within the Bank's Financial Group. It discusses relevant
documents and has the right to decide on their implementation. In exceptional
circumstances (especially in situations when the new measures could impact on
the Bank's profit), the committee is required to present a document to the Board
of Directors.

Composition of the Credit Risk Management Committee (CRMC)

The committee consists of the Member of the Board of Directors responsible for
risk management (Chairman), his deputy (Vice-Chairman), two ExCo members
(Distribution Network, Finance), five division directors (Credit Risk
Management, Credit Assesment, Market Risk Management, Remedial Management,
Internal Audit and Control) and the Director of the Scoring and Management
Department.



Investment Committee (IC)



It enters into contractual relations obliging the Bank to purchase materials,
reserves, services and other items, prepares monthly investment plans for
individual divisions, above the scope laid down in the Statute of the committee.
Furthermore, it reviews amendments to existing contracts, especially if the
amendment could increase the total costs.

Composition of the Investment Committee (IC)

The committee consists of the Member of the Board of Directors responsible for
finance and corporate planning (Chairman), the ExCo member responsible for IT
and operations (Vice-Chairman) and five ExCo members (IT and Operations,
Investment Banking, Distribution Network, Finance, Support Services, Marketing
and Retail).





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