Chairman's message

Let me kindly offer to your attention GIRO Zrt.’s 2009 Annual Report which contains a brief and concise, yet substantial, overview of our Company’s results in 2009, allowing you to follow the year’s developments in payment traffic within the financial sector, as well as to draw conclusions concerning the tendencies that may affect you and your company.

The economic slowdown had a major impact on the 2009 operations of our Company as well. In the clearing service the number of credit transfers grew by only 2%, in contrast with previous years’ increases of 6–10% and we have to speak about decline if we separate the public sector from the private one.

Findings are even more remarkable when analysing the average amounts of payment per transaction. In that respect, it is natural that amounts transferred are becoming smaller as transaction numbers rise, yet in 2009, the total HUF amount in credit transfers dropped much faster than the normal rate. This drop is a good indicator of declining economic performance. Unfortunately, data on January and February 2010 suggest a continuing negative trend.

GIRinfO Data Processing Service, our other major service business, was also affected by the shrinking lending and leasing market. In this business line, the number of transactions fell to two thirds of that in the previous year.

We have good news nevertheless. Our financial assets produced an outstandingly high yield, while we managed to keep costs well within the target. It is important to note that as of early 2009, we have reduced our clearing fees substantially, by 15%.

A final court ruling was adopted in favour of our Company in an employment litigation pending for over five years, as a result of which we have been able to release the substantial provisions set aside for that purpose.
One of the successes of the year was the smooth replacement of our 15-year-old clearing platform as a result of our colleagues’ persistent work. As of the clearing day of 2 November, the new application has been used for the settlement of interbank payments.

Another success was the full completion of the tasks set for GIRO Zrt. and BISZ Zrt. our fully-owned subsidiary to achieve synergy effects. This major effort which involved organisational, HR, investment, training and a number of other aspects will have a positive impact on our efficiency for the years to come.

Our professionals provided major contributions to the Hungarian SEPA Association as well as to the SEPA Payment Schemes Working Group of the European Payments Council (EPC), and also gave a large number of presentations and attended conferences to address various payments system issues.
An intimate reception was held in November to celebrate the 20th anniversary of our Company and 15 years of clearing service.  Guests included representatives of our clearing members and our supervisory authorities, professionals who had participated in the establishment of electronic clearing in Hungary, and our key suppliers that contribute to our daily successes on a continuous basis.

In May 2009, GIRO Zrt.’s ISO supervisory audit was carried out. The audit report confirms the transparent, regulated and customer-focused operations of our Company and the outstanding standards of our Quality Management System. The audit placed particular emphasis on the environmental awareness of our operations.

With the help of figures, text, diagrams and the GIRO spirit, the following pages guide you through the events taking place at our Company in 2009.

As Chairman of the Board of Directors, I wish to take the opportunity to thank the Board members for their work in 2009. Many decisions had to be made during the year, and the results prove that discussing, developing and adopting the appropriate resolutions was a worthwhile effort.
I also wish to thank the Supervisory Board for their work. Members performed their duty conscientiously, greatly supporting the development of our Company.
And not least, let me thank my colleagues for their tremendous work. The implementation of a large IT system is always an enormous task, which they completed with great care and enthusiasm despite all the effort it had taken.

I wish GIRO, ourselves and the entire payments sector further success in 2010.

Péter Legeza
Chairman and CEO

Budapest, March 2010

Dear Reader,

I believe that all of GIRO Zrt.’s shareholders should be proud of the performance of the Company in 2009, a year when the entire national economy was afflicted by the economic crisis.

First of all, an account should be given of the InterGIRO1 project launched three years ago for the modernisation of the clearing system, which went live on the clearing day of 2 November. It should also be pointed out that the project was implemented successfully with significant savings compared with its original budget, and went live without any interruptions in the clearing service. On this occasion, allow me to thank the management and every employee of the Company for their attitude towards the project, which made the seamless implementation of the new clearing engine a success.
However, there is more work to do. 2010 will see the launch of the InterGIRO2 project, the objectives of which include the preparation of the new clearing engine for SEPA compliant operations as well as the implementation of intraday clearing as set forth in mid-term plans for payments. Although a final deadline for the implementation of this latter functionality has yet to be set by decision makers, it is expected that both GIRO Zrt. and clearing members will be required to make serious preparations over the next two years.
In 2009, another on-going project in the field of administration was completed successfully, as part of which efficient use was also made of the synergies between GIRO Zrt. and BISZ Zrt.

In connection with business operations, it is to be noted that in 2009, an especially challenging year, the fee reduction introduced at the beginning of the year and the system of fee discounts led to a 20% decrease of sales revenue, leaving over HUF 1bn with clearing members. At the same time, our profit before tax was HUF 225mn over the target, owing partly to our investment policy and successful asset management, and partly to significant cost cuts, while the volume of transactions fell 1.1% short of the target.

Based on the foregoing, the Supervisory Board considers the operations of the Company reassuring despite adverse economic environment.

Mária Kovács
Chairwoman of the Supervisory Board

Budapest, March 2010