1. Deloitte Consulting S.p.A.
Agriculture and Agro-Industry in Slovak Republic
Banks’ role in supporting agriculture and food industry
Bratislava, November 16th
, 2010

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Forewords
Efficient use of capital is a Bank strategic goal
Support agriculture and food firms able to attract EU funds means mainly to
comply with regulation
successfully manage consensus
generate more value for the bank and for the client
Basel 2/3
Liquidity and
Capital
shortage
Pressure from
stockholders,
stakeholders and
communities
Value creation
driver

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A (very) simplified exercise
YE P/L Statement YE P/L Statement
Sales 5,000 Sales 5,000
1st Pillar contribution 0 1st Pillar contribution 3,000
Production cost (monetary) (4,100) Production cost (monetary) (4,100)
Production cost (non monetary) (400) Production cost (non monetary) (400)
Net interest income (loss) (50) Net interest income (loss) (20)
Other items and tax (450) Other items and tax (830)
Net income 0 Net income 2,650
Pillar 2
Pillar 1
YE Financial Statement
Assets Liabilities and NAV
Cash & Sight deposits 0Providers 1,000
Client receivables 1,500Banks (sight accounts) 2,000
Warehouse 2,000Banks (mid/long term loans) 5,000
Investments 6,000
Other shareholders funds 0
Equity and ret. earnings 1,500
Net income 0
Total 9,500 Total 9,500
YE Financial Statement
Assets Liabilities and NAV
Cash & Sight deposits 2,650Providers 1,000
Client receivables 1,500Banks (sight accounts) 2,000
Warehouse 2,000Banks (mid/long term loans) 2,000
Investments 6,000
Other shareholders funds 3,000
Equity and ret. earnings 1,500
Net income 2,650
12,150 12,150

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A (very) simplified exercise
Score calculation
a Financial P/L (50) (20)
b Sales 5,000 8,000
c Operating P/L 500 3,500
d Cash flow 400 3,050
e Working capital 500 3,150
f Other shareholders funds 0 3,000
g Current liabilities 3,000 3,000
index 1 (a/b) -1.00% -0.25%
index 2 (a/d) -12.50% -0.66%
index 3 (d/c) 80.00% 87.14%
index 4 (f/e) 0.00% 95.24%
index 5 (g/b) 60.00% 37.50%
Score 4.45144 6.13719
PD 1.15274% 0.21563%
LGD 45% 45%
EL 0.51873% 0.09703%
Capital at Risk (1.000) 55.15 18.94
Basis point delta 42
Marginal value creation (CoC = 7.5%) 2.72
Better rating – Lower expected loss
Additional value to share