REG - Alpha Bank A.E. - Annual Financial Report <Origin Href="QuoteRef">ACBr.AT</Origin> - Part 8
31/03/2017 07:10
- Part 8: For the preceding part double click ID:nRSe0956Bg
(2,097) 943 (1,154)
Employee defined benefit and insurance funds 76,352 (8,224) 2,101 (649) 69,580
Valuation of derivatives 184,269 (26,491) (7,595) 150,183
Effective interest rate 1,939 9,970 11,909
Valuation of liabilities to credit institutions and other borrowed funds due to fair value hedge (53,693) 3,202 (50,491)
Valuation/impairment of bonds and other securities 119,498 21,009 (62,322) 78,185
Tax losses carried forward 461,046 12,020 17,770 (2,334) 488,502
Other temporary differences 97,810 2,601 533 402 52 101,398
Exchange differences from translating and hedging of foreign operations 3,614 (256) 3,358
Total 3,663,944 769,890 533 (44,041) (13,054) 52 4,377,324
The amount of E 17,770 which is recognized in Equity in the category "Tax losses carried forward" relates to Bank's share
capital increase expenses which according to Law 4308/14 (Greek Accounting Standards) are recognized in the tax results of
the year.
24. Other assets
31.12.2016 31.12.2015
Tax advances and withholding taxes 431,164 468,016
Deposit and Investment Guarantee Fund 625,417 613,377
Assets obtained from auctions 191,227 197,904
Prepaid expenses 20,550 42,693
Accrued income 3,831 4,129
Other 178,270 182,514
Total 1,450,459 1,508,633
Hellenic Deposit and Investment Guarantee Fund included in other assets relates to the Bank's participation in assets of
investment and deposit cover scheme. The above figure consists of:
1. the amount contributed relating to investment cover scheme and
2. the difference between the regular annual contribution of credit institutions resulting from the application of article
6 of Law 3714/2008 "Borrowers protection and other regulations", which raised the amount of deposits covered from Deposit
Guarantee scheme from E 20 thousands to E 100 thousands per each depositor.
The above difference is included according to Law4370/7.3.2016 Deposit Gurantee Scheme (incorporating Directive
2014/49/EE), Deposit and Investment Guarantee Fund and other regulations in a special group of assets, whose elements are
owned in common by the participant credit institutions, according to the participation percentage of each one.
On 31.12.2016 the Group measured its fixed assets classified in other assets at the lowest value between the carrying
amount and its fair value. In cases where the fair value was less than the carrying amount, an impairment loss was
recognized which amounted to E 6.6 million in total and is included in "Other expenses" of the Income Statement. On
31.12.2015 the relevant impairment loss amounted to E 1.8 million. The fair value of fixed assets is calculated in
accordance with the methods mentioned in note 1.8 and are classified in terms of fair value hierarchy in Level 3, since
they have made use of research inputs, assumptions and inputs relating to properties of relevant characteristics and
therefore encompass a wide range of non-observable market inputs. The capitalization rate used was between 7.0% and 8.5%.
The account balance "Other" of the comparative period has been restated due to the completion of the valuation of the
acquired subsidiary company (note 49).
Liabilities
25. Due to banks
31.12.2016 31.12.2015
Deposits:
- Current accounts 35,304 112,482
- Term deposits
Central Banks 18,331,086 24,404,828
Other credit institutions 21,053 17,408
Cash collateral for derivative margin account and repurchase agreements 25,465 56,960
Sale and repurchase agreements (Repos) 411,914 269,292
Borrowing funds 277,404 252,123
Deposits on demand:
- Other credit institutions 3,351 2,270
Total 19,105,577 25,115,363
Eurosystem funding decreased by E 6.1 billion mainly due to the sale of EFSF bonds through the PSPP programme (note 18),
new repurchase agreements (Repos) and the increase in customer deposits.
In June 2016, the European Central Bank carried out a new program of targeted long term refinancing operations (TLTRO-II)
with a four year duration. The Bank participates in this program with an amount of E 1.5 billion.
26. Due to customers (including debt securities in issue)
31.12.2016 31.12.2015
Deposits:
- Current accounts 9,046,299 8,336,028
- Saving accounts 9,447,093 9,911,144
- Term deposits 14,217,085 12,952,678
Debt securities in issue 78,675 94,155
Sale and repurchase agreements (Repos) 46,112 46,140
Deposits on demand 32,687 28,773
32,867,951 31,368,918
Cheques payable 78,165 65,348
Total 32,946,116 31,434,266
27. Debt securities in issue and other borrowed funds
i. Issues guaranteed by the Greek State (Law 3723/2008)
Under the programme for the enhancement of the Greek's economy liquidity, according to Law 3723/2008, during 2016, the Bank
proceeded to the issuance of senior debt securities guaranteed by the Greek Government amounting to E 6.15 billion while
the maturities/redemptions for the same period amounted to E 14.37 billion.
The total balance of senior debt securities guaranteed by the Greek Government on 31.12.2016 amounts to E 1 billion
(31.12.2015: E 9.22 billion).
These securities are not included in the "Debt securities in issue and other borrowed funds", as they are held by the
Group.
ii. Covered bonds *
Covered bonds are not included in caption "Debt securities in issue and other borrowed funds" as these securities are held
by the Group.
The total balance of covered bonds on 31.12.2016 amounts to E 5 million.
iii. Senior debt securities
Balance 1.1.2016 29,742
Changes for the period 1.1 - 31.12.2016
Maturities/Repayments (4,128)
Fair value change 38
Accrued interest 1,262
Foreign exchange differences (80)
Balance 31.12.2016 26,834
This variation is mainly due to an early redemption of senior debt security of a nominal value of USD 3 million that took
place on 23.5.2016.
iv. Liabilities from the securitization of shipping loans
Balance 1.1.2016 340,272
Changes for the period 1.1 - 31.12.2016
Maturities/Repayments (95,195)
Accrued interest 8,507
Foreign exchange differences (1,264)
Balance 31.12.2016 252,320
The Bank proceeded in a shipping loan securitization transaction, transferring them to the fully consolidated Special
Purpose Entity, Alpha Shipping Finance Ltd which in turn raised funding from third parties. The liability of the Group to
third parties on 31.12.2016, amounts to E 252.3 million.
v. Liabilities from the securitization of corporate loans (SMEs)
Balance 1.1.2016 -
Changes for the period 1.1 - 31.12.2016
New issues 319,899
Accrued interest 154
Balance 31.12.2016 320,053
During the year, the Bank proceeded with the securitization of SME's loans, transferring the aforementioned loans to the
fully consolidated special purpose entity, Alpha Proodos Designated Activity Company (D.A.C), which in turn raised funding
from third parties. The liability of the Group to third parties on 31.12.2016 amounts to E 320 million.
vi. Liabilities from the securitization of other loans
Liabilities arising from the securitization of consumer loans, corporate loans and credit cards are not included in "Debt
securities in issue and other borrowed funds" since these securities of nominal value E 4.2 billion have been issued by
special purpose entities and held by the Bank.
------------------------------------------
* Financial disclosures regarding covered bonds issues, as determined by the 2620/28.8.2009 directive of Bank of Greece
are published at the Bank's website.
vii. Subordinated debt
1. Subordinated loans (Lower Tier II, Upper Tier II)
Balance 1.1.2016 100,270
Changes for the period 1.1 - 31.12.2016
(Repurchases)/sales (17,552)
Maturities/repayments (367)
Accrued interest (13)
Balance 31.12.2016 82,338
2. Convertible bond loan
Balance 1.1.2016 24,600
Changes for the period 1.1 - 31.12.2016
Fair value change (10,605)
Balance 31.12.2016 13,995
The convertible bond concerns bond issuance with nominal value E 150 million issued by the Bank on 1.2.2013 under an
agreement with Credit Agricole SA for the acquisition of former Emporiki Bank. The decrease in the liability from the
convertible bond at the amount of E 10.6 million was recognized in Gains less losses on financial transactions.
The convertible bond matured on 1.2.2017 (note 50).
Total of debt securities in issue and other borrowed funds 695,540
Of the above debt securities in issue amounting to E 695,540 an amount of E 78,675 (31.12.2015: E 94,155) held by Group
customers has been reclassified to "Due to customer". Therefore, the balance of "Debt securities in issue held by
institutional investors and other borrowed funds" on 31.12.2016, amounts to E 616,865 (31.12.2015: E 400,729).
28. Liabilities for current income tax and other taxes
31.12.2016 31.12.2015
Current income tax 9,328 10,492
Other taxes 24,450 27,700
Total 33,778 38,192
29. Employee defined benefit obligations
The total amounts recognized in the financial statements for defined benefit obligations are presented in the table below:
Balance Sheet - Liabilities
31.12.2016 31.12.2015
Bank employee's indemnity provision due to retirement in accordance with Law 2112/1920 78,597 70,643
TAP - Lump sum benefit 0 27,445
Savings program guarantee 4,225 2,556
Plans for Diners (pension and health care) 6,305 5,172
Group employees in Greece indemnity provision due to retirement in accordance with Law 2112/1920 2,701 2,519
Alpha Bank Srbija employee's indemnity provision due to retirement 0 215
Total Liabilities 91,828 108,550
Income statement
Expenses/(Income)
From 1 January to
31.12.2016 31.12.2015
Bank employee's indemnity provision due to retirement in accordance with Law 2112/1920 7,118 4,068
TAP - Lump sum benefit 3,972 3,987
Savings program guarantee 206 41
Plans for Diners (pension and health care) 141 118
Group employees in Greece indemnity provision due to retirement in accordance with Law 2112/1920 702 669
Total 12,139 8,883
Balance Sheet item and Income Statement amounts are analyzed per fund and type of benefit as follows:
i. Bank
a. Employee indemnity due to retirement in accordance with Law 2112/1920
The employment contracts of the employees are considered open term employee contracts and when cancelled, the provisions of
Law 2112/1920 and Law 3198/1955 apply, as amended by Law 4093/2012, which provide a lump sum benefit payment.
The amounts recognized in the balance sheet are as follows:
31.12.2016 31.12.2015
Present value of defined obligations 78,597 70,643
Liability/(Asset) 78,597 70,643
The amounts recognized in the income statement are as follows:
From 1 January to
31.12.2016 31.12.2015
Current service cost 2,082 1,965
Net interest cost resulted from net asset/liability 1,760 1,295
Past service cost 2,343
Settlement/Curtailment/Termination (gain)/loss 933 808
Total (included in staff costs) 7,118 4,068
The movement in the present value of the defined benefit obligation is as follows:
2016 2015
Opening balance 70,643 65,023
Current service cost 2,082 1,965
Interest cost 1,760 1,295
Benefits paid (7,225) (1,600)
Settlement/Curtailment/Termination (gain)/loss 933 808
Past service cost 2,343
Actuarial (gain)/loss - financial assumptions 8,690 3,576
Actuarial (gain)/loss - experience assumptions (629) (424)
Closing balance 78,597 70,643
The amounts recognized directly in equity during the year are analyzed as follows:
31.12.2016 31.12.2015
Change in liability gain/(loss) due to changes in financial and demographic assumptions (8,690) (3,576)
Change in liability gain/(loss) due to experience adjustments 629 424
Total actuarial gain/(loss) recognized in Equity (8,061) (3,152)
The movement in the obligation in the balance sheet is as follows:
2016 2015
Opening balance 70,643 65,023
Benefits paid (7,225) (1,600)
Loss /(Gain) recognized in Income Statement 7,118 4,068
Loss/(Gain) recognized in equity 8,061 3,152
Closing balance 78,597 70,643
b. Supplementary Pension Fund (TAP) of former Alpha Credit Bank Employees
The obligation to the Supplementary Pension Fund (TAP) of former Alpha Credit Bank employees, after it was absorbed by the
Common Insurance Fund of Bank Employees for the supplementary pension (Article 10, Law 3620/2007) is restricted to paying a
lump sum benefit to retiring employees, which is guaranteed by the Bank. On 18.11.2013 the Bank signed a new operational
agreement with the Association of Personnel, whereby the amount paid by the Supplementary Pension Fund, will not exceed the
difference between the amount corresponding to the overall lump sum provision, according to the statute of the
Supplementary Pension Fund (TAP), and the amount of compensation that the Bank must pay, according to the current labor
legislation, on the termination of employment contracts. This adjustment is not affected by a potential reduction of the
compensation amount in the future.
On 20.05.2016 the General Meeting of the representatives of TAP members decided the liquidation of TAP under the terms of
the agreement signed on 21.04.2016 between the Bank, the staff association and TAP. Based on the decision, contribution
from TAP were returned to its members along with their returns according to the articles of association. This resulted in
the settlement of the respective obligation.
The amounts included in the balance sheet are as follows:
31.12.2016 31.12.2015
Present value of defined obligation 62,947
Fair value of plan assets (35,502)
Liability/(asset) - 27,445
The amounts included in the income statement are as follows:
From 1 January to
31.12.2016 31.12.2015
Current service cost 1,155 2,651
Net interest cost resulted from net asset/liability 284 354
General expenses 2 5
Total of current service cost 1,441 3,010
Settlement/Curtailment/Termination (gain)/loss 2,531 977
Total (included in staff costs) 3,972 3,987
The movement in the present value of the defined benefit obligation is as follows:
2016 2015
Opening balance 62,947 82,475
Current service cost 1,155 2,651
Interest cost 654 1,179
Employee contributions 124 366
Benefits paid (72,125) (26,357)
Contributions paid directly by the Fund - (230)
Settlement/curtailment/termination loss/(gain) 2,531 977
Actuarial (gain)/loss - financial assumptions - 1,983
Actuarial (gain)/loss - experience adjustments 4,714 (97)
Closing balance - 62,947
The movement in the fair value of plan assets is as follows:
2016 2015
Opening balance 35,502 53,245
Expected return 370 825
Employee contributions 124 366
Bank's contributions 31,417
Benefits paid (72,125) (26,357)
Expenses (2) (5)
Actuarial (losses) / gains 4,714 7,428
Closing balance - 35,502
The amounts recognized directly in equity during the year are analyzed as follows:
2016 2015
Change in liability gain/(loss) due to changes in financial and demographic assumptions (1,983)
Change in liability gain/(loss) due to experience adjustments (4,714) 97
Return on plan assets excluding amounts included in income statement 4,714 7,428
Total actuarial gain/(loss) recognized in equity - 5,542
The movement of the liability/(asset) in the balance sheet is as follows:
2016 2015
Opening balance 27,445 29,230
Benefits paid directly by the Bank (230)
Bank's contributions (31,417)
Loss/(Gain) recognized in Income Statement 3,972 3,987
Loss/(Gain) recognized in Equity (5,542)
Closing balance - 27,445
c. Guarantee of the minimum benefit for newly insured employees (after 1993) that were hired up to 31.12.2004 and joined
the new Bank's savings plan
For employees hired by the Bank and insured from 1.1.1993 until 31.12.2004 the final amount to be received upon retirement
has, according to the provisions of the insurance plan, as minimum limit the benefit as defined in Law 2084/1992 and the
Cabinet Act 2/39350/0022/2.3.99.
The amounts included in the balance sheet are analyzed as follows:
31.12.2016 31.12.2015
Present value of defined obligation 4,225 2,556
Liability/(asset) 4,225 2,556
The amounts included in the income statement are analyzed as follows:
From 1 January to
31.12.2016 31.12.2015
Current service cost 142 30
Net interest cost resulted from the net asset/liability 64 11
Total (included in staff costs) 206 41
The movement in the present value of liability is as follows:
2015 2015
Opening balance 2,556 547
Current service cost 142 30
Interest cost 64 11
Actuarial (gain)/loss - financial assumptions 1,631 1,947
Actuarial (gain)/loss - experience adjustments (168) 21
Closing balance 4,225 2,556
The amounts recognized directly in equity during the year are analyzed as follows:
2016 2015
Change in liability gain/(loss) due to changes in assumptions (1,631) (1,947)
Change in liability gain/(loss) due to experience adjustments 168 (21)
Total actuarial gain/(loss) recognized in Equity (1,463) (1,968)
The movement in the obligation is as follows:
2016 2015
Opening balance 2,556 547
Loss/(Gain) recognized in income statement 206 41
Loss/(Gain) recognized in equity 1,463 1,968
Closing balance 4,225 2,556
d. Supplementary Pension Fund and Health Care of Diners
The Bank guarantees from 30.9.2014, date of acquisition of Diners Club Hellas S.A. the Supplementary Pension Fund and
Health Care Plan of the company, which is managed by an independent insurance company. On 2.6.2015, the merger via
absorption of the company was completed. These plans cover the pensioners and those who have retired and have the right to
receive suplementary penion in the future.
The amounts included in the balance sheet are analyzed as follows:
31.12.2016 31.12.2015
Present value of defined obligation 9,727 8,941
Fair value of plan assets (3,422) (3,769)
Liability/(asset) 6,305 5,172
The amounts included in the income statement are analyzed as follows:
From 1 January to
31.12.2016 31.12.2015
Net interest cost resulted from the net asset/liability 130 113
General expenses 11 5
Total (included in staff costs) 141 118
The movement in the present value of benefits is as follows:
2016 2015
Opening balance 8,941 9,766
Interest cost 220 192
Benefits paid directly by the Bank (13) (11)
Benefits paid (336) (329)
Actuarial (gain)/loss - financial assumptions 1,000 (825)
Actuarial (gain)/loss - experience adjustments (85) 148
Closing balance 9,727 8,941
The movement in the fair value of plan assets is as follows:
2016 2015
Opening balance 3,769 4,099
Expected return 90 79
Benefits paid (336) (329)
Expenses (11) (5)
Actuarial losses (90) (75)
Closing balance 3,422 3,769
The amounts recognized directly in equity during the year are analyzed as follows:
2016 2015
Change in liability gain/(loss) due to financial and demographic assumptions (1,000) 825
Change in liability gain/(loss) due to experience adjustments 85 (148)
Return on plan assets excluding amounts included in income statement - gain / (loss) (90) (75)
Total actuarial gain/(loss) recognized in equity (1,005) 602
The movement of the liability/(asset) in the balance sheet is as follows:
2016 2015
Opening balance 5,172 5,667
Benefits paid directly by the Bank (13) (11)
(Gain)/loss recognized in Income Statement 141 118
(Gain)/loss recognized in Equity 1,005 (602)
Closing balance 6,305 5,172
The results of the abovementioned valuations are based on the assumptions of the actuarial studies.
The principal actuarial assumptions used for the above mentioned defined benefit plans are as follows:
31.12.2016 31.12.2015
Discount rate 1.8% 2.5%
Inflation rate 1.5% 1.8%
Return on plan assets 2.0% 2.5%
Future salary growth 1.8% 1.8%
Future pension growth 0% 0%
The discount rate was based on the iBoxx Euro Corporate AA+ adopted to the characteristics of the programs.
The average duration per program is depicted in the table below:
31.12.2016 31.12.2015
Bank employee's indemnity provision due to retirement in accordance with Law 2112/1920 17.7 17.9
TAP - Lump sum benefit - 13.0
Saving program guarantee 19.5 20.0
Plans for Diners (pension and health care) 16.3 17.1
The table below presents the sensitivity of the obligations of the above programs on the financial assumptions:
Percentage variation
in liability (%)
Increase in discount rate by 0.5% (8.2)
Decrease in discount rate by 0.5% 9.1
Increase in future salary growth rate by 0.5% 9.0
Decrease in future salary growth rate by 0.5% (8.3)
ii. Group companies
The employees of the Greek subsidiaries with open ended employment contracts receive a lump sum payment on retirement,
which is defined by Law 2112/1920 as modified by Law 4093/2012. For subsidiary Alpha Bank Srbija A.D., the employees
receive a lump sum payment on retirement, which equals two salaries of the Serbian Government from 2014 compared to three
salaries applied in prior year as a result of the change of the respective law.
The total amounts recognized in the financial statements regarding the defined benefit obligations are analyzed as
follows:
Balance Sheet - Liabilities
31.12.2016 31.12.2015
Bank's employees indemnity of greek subsidiaries due to retirement in accordance with 2,701 2,519
Law 2112/1920
Alpha Bank Srbija employees indemnity provision due to retirement 215
Total Liabilities 2,701 2,734
Income Statement
Expenses/(Income)
From 1 January to
31.12.2016 31.12.2015
Bank's employees indemnity of greek subsidiaries due to retirement in accordance with 702 669
Law 2112/1920
Total 702 669
The liability on 31.12.2016 which concerns Alpha Bank Srbija employee's indemnity has been transferred to the liabilities
related to assets held for sale, while the respective results of 2016 and 2015 have been incorporated in profit/(loss) from
discontinued operations (note 47).
The amount of actuarial gain/losses that was recognized in equity for the defined benefit programs of the Group companies'
amounts to E 160 loss for 2016 against E 83 loss for 2015.
30. Other liabilities
31.12.2016 31.12.2015
Liabilities to third parties 80,732 70,209
Liabilities to Insurance Funds 67,281 131,911
Brokerage services 9,387 28,140
Deferred income 5,410 8,594
Accrued expenses 60,172 61,215
Liabilities to merchants from credit cards 271,339 285,042
Other 384,864 325,512
Total 879,185 910,623
The account balance "Other" of the comparative year have been restated due to the completion of the valuation of the
acquired subsidiary company (note 49).
31. Provisions
31.12.2016 31.12.2015
Insurance 219,530 168,818
Provisions to cover credit risk and other provisions 102,174 129,640
Total 321,704 298,458
a. Insurance
31.12.2016 31.12.2015
Life insurance
Unearned premiums 218,996 168,629
Outstanding claim reserves 534 189
Total 219,530 168,818
b. Provisions to cover credit risk and other provisions
Balance 1.1.2015 80,501
Changes for the period 1.1 - 31.12.2015
Reclassification of provision from Bulgaria branch and Ionian Hotel Enterpises to "Liabilities related assets held for sale" (834)
Provisions to cover credit risk relating to off-balance sheet items from continuing operations (note 10) (10,806)
Provisions to cover credit risk relating to off-balance sheet items from discontinued operations 98
Provisions from pending legal cases and other contingent liabilities of continuing operations (Note 9) 1,921
Provisions from pending legal cases and other discontinued operations 179
Other provisions for companies consolidated for the first time 2,444
Other provisions used during the year (8,063)
Provision for voluntary separation scheme of Alpha Bank AE 64,300
Foreign exchange differences (100)
Balance 31.12.2015 129,640
Changes for the period 1.1 - 31.12.2016
Reclassification of provision from Alpha Bank Srbija A.D. to "Liabilities related assets held for sale" (1,139)
Provisions to cover credit risk relating to off-balance sheet items (note 10) (1,357)
Used provision for Alpha Bank A.E. separation scheme (35,262)
Provisions from legal cases and other contingent liabilities (note 9) 16,000
Other provisions 785
Other provisions used for companies consolidated for the first time in 2015 (2,444)
Other provisions used during the year (4,092)
Foreign exchange differences 43
Balance 31.12.2016 102,174
The amounts of the provisions from pending legal cases and other contingent liabilities are included in "Other Expenses" of
the income statement.
On 31.12.2016 the balance of provisions to cover credit risk relating to off-balance sheet items amounts to E 3.2 million
(31.12.2015: E 4.7 million) and other provisions to E 99 million (31.12.2015:E 124.9 million) out of which:
• an amount of E 38.6 million relates to pending legal cases (31.12.2015: E 29 million).
• an amount of E 29 million relates to the balance of provision for voluntary separation scheme of Alpha Bank A.E., that
had been accounted on 31.12.2015 at the amount of E 64.3 million. Alpha Bank A.E. recorded that provision within the
context of the implementation of the updated restructuring plan and its relevant commitments. During 2016, it was decided
to utilize a part of the relevant provision in the context of a consensual separation scheme.
During the year, Alpah Bank Cyprus performed a voluntary separation scheme, aiming to achieve substantial benefit in
operational costs. The Group recognized during the first quarter a provision of amount E 31 million for the expected cost,
which has been used during the second quarter for the compensations. The final cost amounted to E 31.7 million.
Finally, the prior year balance was restated, due to the recognition of the relevant provision related to the valuation of
the acquired subsidiary's net assets as mentioned in note 49.
This provision has been fully considered during the current year.
Equity
32. Share capital
The Bank's share capital on 31.12.2015 and 31.12.2016 is analysed as follows:
Changes for the period from 1.1.2015 to 31.12.2015 (units)
Opening balance of shares as at 1.1.2015 Reverse split Capitalization of special reserve Share capital increase in cash Share capital increase through capitalization of money claims Balance of shares as at 31.12.2015/ 31.12.2016 Paid-in capital as at 31.12.2015/ 31.12.2016
a. Ordinary shares
Number of ordinary shares 12,769,059,858.00 (12,513,678,660.84) 2.84 255,381,200.00 76,614
Share capital increase 776,084,586.00 505,415,414.00 1,281,500,000.00 384,450
Total 12,769,059,858.00 (12,513,678,660.84) 2.84 776,084,586.00 505,415,414.00 1,536,881,200.00 461,064
On 24.11.2015 the following took place:
a) increase the nominal value of each ordinary, registered, with voting rights, non-paper share issued by the Bank from
E 0.30 to E 15.00,by reverse split, with a respective decrease of the total number of shares at a ratio of 50 old shares to
1 new ordinary, with voting rights share,
b) increase of share capital of the Bank, with capitalization of part of special reserve of the Bank with an amount of
E 42.6 by the virtue of the paragraph 4a of the article 4 of the Codified Law 2190/1920, in order to create an integer
number of shares,
c) decrease, by the virtue of the paragraph 4a of the article 4 of the Codified Law 2190/1920, of the share capital of the
Bank by an amount of E 3,754,103,640 as a result of the decrease of the nominal value of each ordinary, non-paper ,
registered, with voting rights share issued by the Bank from E 15.00 to E 0.30 with a respective increase of special
reserve of the Bank, by virtue of the paragraph 4a of the article 4 of the Codified Law 2190/1920, and
d) increase of the share capital of the Bank for an amount E 1,010,830,828.00 through capitalization of the monetary claims
in the context of the voluntary exchange of securities that participated in the liability management exercise and payment
in cash of an amount of E 1,552,169,172.00 via a private placement.
The increase of the share capital aimed to the coverage in full of its total recapitalization requirement under the adverse
scenario of the Single Supervisory Mechanism comprehensive assessment
Following the above, the Bank's share capital as at 31.12.2015 amounts to E 461,064,360.00 divided to 1,536,881,200
ordinary, registered, with voting rights shares with nominal value of E 0.30 and a share premium of E 10,790,869,872.46.
The number of the ordinary shares that the Hellenic Financial Stability Fund (HFSF) held at 31.12.2015 was 169,175,146.
There was no change in the Bank's share capital during 2016.
Finally, with the decision of the Board of Directors on 23.2.2017, the Bank proceeded with a share capital increase due to
a bond's conversion as mentioned in note 50.
Regarding the process of warrant's exercise on the shares of Hellenic Financial Stability Fund, held on 15.6.2015, 13,800
warrants were exercised by the common shareholders which corresponded to 102,239 ordinary shares. The exercise of warrants
did not affect the Bank's share capital but the number of shares owned by the Hellenic Financial Stability Fund. During
2016 no warrants on the shares of Hellenic Financial Stability Fund were exercised.
33. Share premium
Opening balance 1.1.2015 4,858,216
Decrease of nominal value of common shares from E 15 to E 0.30 3,754,104
Share capital increase - share premium on issuance of ordinary shares 2,178,550
Balance 31.12.2015 / 31.12.2016 10,790,870
On 24.11.2015 following the share capital increase and the issuance of 1,281,500,000 new ordinary shares with a nominal
amount of E 0.30 and an offer price of E 2, the total difference of E 2,178.5 million between the nominal value and the
shares' offer price increased the caption "Share Premium".
34. Reserves
Reserves are analyzed as follows:
a. Statutory reserve
31.12.2016 31.12.2015
Statutory reserve 529,700 535,767
According to the Bank's article of association (article 26), the Bank is required to transfer 5% of its annual profit after
tax to a statutory reserve, until this reserve amounts to one third of its share capital. This reserve can only be used to
offset losses according to article 44 of Codified Law 2190/1920.
For the remaining companies of the Group the statutory reserve is established according to local regulations.
b. Available for sale securities reserve
2016 2015
Opening balance 1.1 30,705 (126,104)
Changes for the period 1.1 - 31.12
Net change in fair value of available for sale securities, after income tax 109,691 17,875
Fair value of available for sale securities transferred to profit and loss (36,199) 138,934
Reclassification to reserves relating to assets held for sale (1,559)
Total 71,933 156,809
Balance 31.12 102,638 30,705
c. Other reserves
2016 2015
Balance 1.1 (142,179) (186,897)
Change in cash flow hedge reserve after income tax (39,198) 44,718
Balance 31.12 (181,377) (142,179)
d. Exchange differences on translating and hedging the net investment in foreign operations
2016 2015
Balance 1.1 (115,179) (114,871)
Change in exchange differences on translating and hedging the net investment in foreign operations (5,046) (268)
Reclassification to reserves relating to assets held for sale 70,016 (40)
Balance 31.12 (50,209) (115,179)
e. Share of other comprehensive income of associates and joint ventures
2016 2015
Balance 1.1 (234) 313
Change in the share of other comprehensive income of associates and joint ventures (547)
Reclassification to reserves relating to assets held for sale 122
Balance 31.12 (112) (234)
Total reserves (a+b+c+d+e) 400,640 308,880
Reserves relating to assets held for sale
2016 2015
Opening balance 1.1 40 -
Changes for the period 1.1 - 31.12
Exchange differences on translating and hedging the net investment in foreing operations (70,016) 40
Available for sale securities reserve 1,559
Share of other comprehensive income of associates and joint ventures (122)
Transfer in comprehensive income available for sale securities reserve (40)
Total (68,619) 40
Balance 31.12 (68,579) 40
35. Retained earnings
a. Due to the accumulated losses for the year 2015 and after taking into account article 44a of Codified Law 2190/1920, the
Ordinary General Meeting of Shareholders on 30.6.2016 decided the non distribution of dividend to ordinary shareholders of
the Bank.
b. Since the above are valid for 2016 the Bank's Board of Directors will suggest the non distribution of dividend to the
Ordinary General Meeting of the shareholders of the Bank.
c. "Retained Earnings" as of 31.12.2016 includes expenses concerning the share capital increase, amounting to E 0.7 million
net of income tax (31.12.2015: E 43.5 million.).
36. Hybrid securities
31.12.2016 31.12.2015
Perpetual with 1st call option on 18.2.2015 and per year 15,232 15,232
Securities held by Group companies (100)
Total 15,132 15,232
Additional Information
37. Contingent liabilities and commitments
a) Legal issues
The Group, in the ordinary course of business, is a defendant in claims from customers and other legal proceedings. In the
context of managing the operational risk events and on the basis of the accounting principles followed, the Group records
all the filed lawsuits or similar actions performed by third parties against the Group and considers any possibility of
their success, as well as the possible outcome.
For cases where there is a significant probability of a negative outcome, and the result may be sufficiently estimated, the
Group creates a provision that is included in the Balance Sheet under the caption "Provisions". On 31.12.2016 the amount of
the provision stood at E38.6 million.
For cases where according to their progress and the evaluation of the Legal department on December 31, 2016, a negative
outcome is not probable or the potential outflow cannot be estimated reliably due to the complexity of the cases, the time
period they will last and the uncertainty of their outcome, the Group has not recognized a provision. As of 31.12.2016 the
legal claims against the Bank for the above cases amounts to E270.3 million.
According to the estimations of the legal department, the ultimate settlement of these matters is not expected to have a
material effect on the financial position or the operations of the Group.
b. Tax issues
Alpha Bank has been audited by the tax authorities for the years up to and including 2009. For 2010, a tax audit is
currently in progress. For 2011 up to 2015 a tax certificate with no qualifications has been issued. Former Emporiki Bank
has been audited by the tax authorities for the years up to and including 2008. For the years 2011 up to 2013 a tax
certificate with no qualifications.
Alpha Bank's branches in London and Bulgaria have been audited by the tax authorities for 2013 and 2015 respectively. For
the Bulgaria Branch, a tax audit for the year 2016 is in progress. The branch of former Emporiki Bank in Cyprus has not
been audited by the tax authorities since the commencement of its operations (year 2011) until its deletion from the
department of Registrar of companies of Cyprus (August 2015), meanwhile it has ceased its operations since September of
2014.
On 30.9.2014, the acquisition of the Retail Banking operations of Citibank International Plc (CIP) in Greece was completed.
The acquisition does not affect the tax liabilities of the Bank since any obligations against the State until the date of
acquisition remain with CIP.
On 2.6.2015, the merges via absorption of Diners Club of Greece A.E.P.P was completed. Diners Club of Greece A.E.P.P. has
been audited by the tax authorities for the years up to and including 2010. The years 2011, 2012, 2013 a tax certificate
with no qualifications was issued.
Additional taxes and penalties may be imposed for the unaudited years due to the fact that some expenses may not be
recognized as deductible by the tax authorities.
The Group's subsidiaries have been audited by the tax authorities up to and including the year indicated in the table
below:
Name Year
Banks
1. Alpha Bank London Ltd (voluntary settlement of tax obligation) 2014
2. Alpha Bank Cyprus Ltd (tax audit is in progress for years from 2008 - 2011) 2007
3. Alpha Bank Romania S.A. 2006
4. Alpha Bank A.D. Skopje (the company was transferred on 10.5.2016) 2009
5. Alpha Bank Srbija A.D. 2004
6. Alpha Bank Albania SH.A. 2011
Leasing Companies
1. Alpha Leasing A.E. ** 2010
2. Alpha Leasing Romania IFN S.A. 2007
3. ABC Factors A.E.** (tax audit is in progress for year 2010) 2009
Investment Banking
1. Alpha Finance A.E.P.Å.Õ. **/*** 2009
2. SSIF Alpha Finance Romania S.A. 2002
---------------------------------------------
** These companies received tax certificate for the years 2011 until 2015 without any qualification (note 11).
*** These companies have been audited by the tax authorities up to and including 2009 in accordance with Law 3888/2010
which relates to voluntary settlement for the unaudited tax years.
Name Year
3. Alpha Á.Å. Investment Holdings **/*** 2009
4. Alpha Á.Å. Ventures Capital Management - ÁÊÅS **/*** 2009
5. Emporiki Ventures Capital Developed Markets Ltd 2007
6. Emporiki Ventures Capital Emerging Markets Ltd 2008
Asset Management
1. Alpha Asset Management Á.Å.D.Á.Ê. **/*** 2009
2. ABL Independent Financial Advisers Ltd (voluntary settlement of tax obligation) 2014
Insurance
1. Alpha Insurance Agents Á.Å. **/*** 2009
2. Alpha Insurance Brokers S.R.L. 2005
3. Alphalife A.A.E.Z. **/*** (tax audit is in progress for 2010) 2009
Real Estate and Hotel
1. Alpha Astika Akinita Á.Å.** (tax audit is in progress for 2010) 2009
2. Ionian Hotel Enterprises Á.Å.** (the company was transferred on 16.12.2016 and tax audit is in progress for 2011) 2010
3. Oceanos Á.Ô.Ï.Å.Å. **/*** 2009
4. Emporiki Development and Real Estate Management Á.Å. 2008
5. Alpha Real Estate D.O.O. Beograd 2008
6. Alpha Astika Akinita D.O.O.E.L. Skopje (the company was transferred on 21.10.2016) 2005
7. Alpha Real Estate Bulgaria E.O.O.D. (commencement of operation 2007) *
8. Chardash Trading E.O.O.D. (commencement of operation 2006) *
9. Alpha Real Estate Services S.R.L. (commencement of operation 1998) *
10 Alpha Investment Property Chalandriou Á.Å. (commencement of operation 2012) * *
11. Alpha Investment Property Attikis Á.Å. (commencement of operation 2012) * *
12. Alpha Investment Property Attikis ÉÉ Á.Å. (commencement of operation 2012) * *
13. Alpha Investment Property Amaroussion É Á.Å. (commencement of operation 2012) * *
14. Alpha Investment Property Amaroussion ÉÉ Á.Å. (commencement of operation 2012) * *
15. AGI-RRE Participations 1 S.R.L. (commencement of operation 2010) *
16. AGI-BRE Participations 1 E.O.O.D. (commencement of operation 2012) *
17. Stockfort Ltd (commencement of operation 2010) *
18. Romfelt Real Estate SA (commencement of operation 1991) *
19. AGI-RRE Zeus S.R.L. (commencement of operation 2012) *
20. AGI-RRE Athena S.R.L. (commencement of operation 2012) *
21. AGI-RRE Poseidon S.R.L. (commencement of operation 2012)
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