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CURRENT TOPIC
BANKS’ CASH FLOW STATEMENTS
BIATEC, Volume XII, 12/2004
Monitoring the cash flows of a business
entity is one of the modern methods of finan-
cial analysis. The method of monitoring cash
flows was established in the Fifties of the last
century in the USA. Gradually its use has
spread to a series of other advanced market
economies where a statement on changes in
the financial situation is compiled.
Business entities in Slovakia having the
duty to have their closing of accounts audi-
ted and to publish data on these are also
under the obligation to prepare a cash flow
statement. In fulfilling this obligation they are
governed by Measure of the Ministry of
Finance of the SR No 4455/2003-92 of 31
March 2003 as later amended, laying down
the details of the arrangement, designation
and content delimitation of items of an indi-
vidual closing of accounts and scope of data
from these individual closing of accounts
that need be published. The Measure stipu-
lates methods and the content of the cash
flow statement, though it fails to stipulate
neither the specific method nor the fixed
structure of cash flow statement. The choice
of a method for reporting cash flows and the
structure of individual fields of activity is
conditional upon the subjective approach of
the business entity compiling the statement.
As regards banks and branches of foreign
banks (hereinafter simply “banks”), issues of
the compilation of the closing of accounts
and the publication of information are gover-
ned by Measure of the Ministry of Finance
SR No 21832/2002-92. According to this
Measure however banks are not obliged to
compile, in the framework of an individual
closing of accounts, a cash flow statement.
Despite this some banks do so and include
a cash flow statement in the framework of
their individual closing of accounts and
annual reports. The statement shows chan-
ges in their assets and the financing sources
for a certain period.
Table 1 presents the current solution of
the structure of the cash flow statement,
using an indirect method. It contains data of
the Slovak banking sector for the period
BANKS’ CASH FLOW STATEMENTS
RNDr. Jozef Pleška, CSc.
Balance as at
DifferenceActivity
31.12.2003 01.01.2003
Operating activity
Depreciation 31 790 635 29 275 106 2 515 529
Provisions 34 006 513 33 020 474 986 039
Economic result 34 577 036 22 167 087 12 409 949
Cash and cash equivalent 15 217 054 14 245 934 -971 120
Accounts of central banks/at central banks -12 662 312
Assets 132 434 809 123 963 796 -8 471 013
Liabilities 9 098 251 13 289 550 -4 191 299
Accounts of banks / at other banks 33 784 387
Assets 60 708 620 94 625 585 33 916 965
Liabilities 87 331 302 87 463 880 -132 578
Receivables and liabilities towards clients -37 287 267
Assets 383 516 754 332 757 070 -50 759 684
Liabilities 662 986 023 649 513 606 13 472 417
Securities issued by the accounting unit 18 728 117 8 333 109 10 395 008
Accounts of state bodies,
territorial authorities and funds 4 141 261
Assets 11 637 891 11 357 338 -280 553
Liabilities 42 105 364 37 683 550 4 421 814
Securities intended for sale 39 632 111 44 596 161 4 964 050
Securities intended for trading 97 249 962 69 097 537 -28 152 425
Accruals 1 012 332
Assets 1 128 573 2 352 820 1 224 247
Liabilities 4 070 210 4 282 125 -211 915
Other operating activity -1 016 916
Assets 15 347 513 9 997 768 -5 349 745
Liabilities 19 569 751 15 236 922 4 332 829
Cash flows from operating activity -9 881 485
Investment activity
Financial investment 221 854 255 213 372 617 -8 481 638
Tangible/Intangible assets 61 388 198 59 352 172 -2 036 026
Branches and representative offices 30 566 268
Assets 11 127 115 14 940 358 3 813 243
Liabilities 42 449 356 15 696 331 26 753 025
Cash flows from investment activity 20 048 604
Financial activity
Reserves 9 723 515 21 345 906 -11 622 391
Reserve funds and other funds
set aside from profit 9 733 181 9 189 653 543 528
Registered capital and capital funds 45 073 601 44 161 857 911 744
Cash flows from financial activity -10 167 119
Table 1 BANK’S CASH FLOW STATEMENT
Reporting bank: banks excl. NBS
Start of period 31.12.2003 End of period 01.01.2003
[in SKK thousands]