REG - Alpha Bank A.E. - Half-year Report <Origin Href="QuoteRef">ACBr.AT</Origin> - Part 2
30/08/2016 18:25
- Part 2: For the preceding part double click ID:nRSd4619Ia
Albania SH.A. 15,863 20,946 205 109
Leasing companies
1. Alpha Leasing A.E. 199,449 8,898 2,468 87
2. ABC Factors A.E. 444,376 483 11,378 52,463
Investment Banking
1. Alpha Finance A.E.Π.Ε.Υ. 140 14,555 459 276 56
2. SSIF Alpha Finance Romania S.A. 15
3. Alpha Ventures Α.Ε. 35,919 3 160
4. Alpha A.E. Ventures Capital Management - ΑΚΕS 2,081 13 8
5. Emporiki Ventures Capital Developed Markets Ltd
6. Emporiki Ventures Capital Emerging Markets Ltd 394
α. subsidiaries
Amounts in thousants of euro
Name Assets Liabilities Income Expenses Letters of guarantee and other guarantees
Asset Management
1. Alpha Asset Management Α.Ε.D.Α.Κ. 11,744 41,107 13,838 160
Insurance
1. Alpha Insurance Agents Α.Ε. 4,990 7,017 4,990 25
2. Alphalife A.A.E.Z. 393 593 583 990
Real estate and hotel
1. Alpha Astika Akinita Α.Ε 334 58,398 500 2,750
2. Ionian Hotel Enterprises Α.Ε. 67,347 5,658 861 146
3. Oceanos Α.Τ.Ο.Ε.Ε. 2,749 11
4. Emporiki Development and Real EstateManagement A.E. 48,712 253
5. Alpha Real Estate Bulgaria E.O.O.D.
6. Chardash Trading E.O.O.D. 290
7. Alpha Investment Property Chalandriou Α.Ε. 19,254 22,514 173 4
8. Alpha Investment Property Attikis Α.Ε. 6,377 1 83
9. Alpha Investment Property Attikis II Α.Ε. 612
10. Alpha Investment Property Amarousion ΙΑ.Ε. 1,530 19,493 12 4
11. Alpha Investment Property Amarousion ΙΙΑ.Ε. 478 13,173 4 2
12. Stockfort Ltd 23,369 3 215
13. AGI-RRE Zeus S.R.L. 31,649 301
14. AGI-RRE Poseidon S.R.L. 13,041 124
15. AGI-BRE Participations 1 E.O.O.D. 4,623 52
16. AGI-BRE Participations 2 E.O.O.D. 8,811 91
17. AGI-BRE Participations 2BG E.O.O.D. 2,014 28
18. AGI-BRE Participations 3 E.O.O.D. 19,736 179
19. AGI-BRE Participations 4 E.O.O.D.
20. APE Fixed Assets Α.Ε. 7
21. HT-1 E.O.O.D. 317 8
22. SC Carmel Residential S.R.L. 6,759 123
23. AGI - RRE Hera S.R.L. 12,248 119
24. Alpha Investment Property Neas Kifisias Α.Ε. 3,361 900 27
25. Alpha Investment Property Kallirois Α.Ε. 588 988 5
26. Alpha Investment Property Leivadias Α.Ε. 4,506 153 91
27. Asmita Gardens S.R.L.
28. Alpha Investment Property Kefalariou Α.Ε. 20
29. Ashtrom Residents S.R.L. 9,735
30. AGI-BRE Participations 5 E.O.O.D.
31. Cubic Center Development S.A. 27,569
32. Alpha Investment Property Neas Erythreas Α.Ε. 10,000 1,571
33. Anaplasis Plagaias Α.Ε. 15,068 703
34. Alpha Real Estate Services S.R.L. 10
Special purpose and holding entities
1. Alpha Credit Group Plc 9,014
2. Alpha Group Jersey Ltd 21 15,273 15,542
3. Alpha Group Investments Ltd 24,921
4. Ionian Holdings Α.Ε. 56,034 332,614 56,034 1,431
5. Ionian Equity Participations Ltd 775 424
6. Emporiki Group Finance Plc 1,289
7. AGI - RRE Participations 1 Ltd 1,157
8. Alpha Group Ltd 263,863 36
9. Katanalotika Plc 1,187
10. Epihiro Plc 1,253
11. Irida Plc 331,982 44,784 444
12. Pisti 2010-1 Plc 142
13. Alpha Shipping Finance Ltd 5 257,530 2,333 6,541
14. Umera Ltd 417,354 22,257 773 38 9,660
15. AGI-RRE Poseidon Ltd 38,006 317
α. subsidiaries
Amounts in thousants of euro
Name Assets Liabilities Income Expenses Letters of guarantee and other guarantees
16. AGI-BRE Participations 4 Ltd 3,381 85
17. AGI-RRE Artemis Ltd 1,731
18. Zerelda Ltd 1
19. AGI-Cypre Ermis Ltd 1,750,754 44,211 14,050 315,916
20. AGI-SRE Ariadni DOO 21,697
21. AGI-CYPRE ALAMINOS LTD 8,356 3
22. AGI-CYPRE TOCHINI LTD 1,287
23. AGI-CYPRE MAZOTOS LTD 7,410
Other companies
1. Kafe Alpha A.E. 170 8 142
2. Alpha Supporting Services Α.Ε. 31,196 280 3,398
3. Real Car Rental A.E. 46
4. Zerelda Ltd 1
5. Evisak Α.Ε. 885 3
6. Emporiki Management Α.Ε. 15 1,985 24 7
7. Alpha Bank Notification Services Α.Ε. 5 382 6 150
Β. JOINT VENTURES
1. APE Commercial Property Α.Ε. 4 13,652 1 62
2. APE Investment Property Α.Ε. 149,262 6,918 2,456 24
3. Alpha ΤΑΝΕΟΑ.Κ.Ε.S. 425
4. Rosequeens Properties S.R.L. 5,398 400
5. Aktua Hellas Holdings S.A. 21
C. ASSOCIATES
1. AEDEP Thessalias and Stereas Ellados 60
2. Banking Information Systems Α.Ε. 288
3. Olganos Α.Ε. 3,044 5
Total 5,394,764 1,815,717 122,740 18,810 795,351
c. Other related party transactions
The outstanding balances and the corresponding results are analyzed as follows:
Amounts in thousants of euro
Assets Liabilities Income Expenses
Employees Supplementary Funds - ΤΑP 2,345 16
Hellenic Financial Stability Fund - HFSF 5
Athens, 30 August 2016
THE CHAIRMAN
OF THE BOARD OF DIRECTORS
VASILEIOS T. RAPANOS
I.D. No ΑΙ 666242
Interim Consolidated Financial Statements as at 30.6.2016
Interim Consolidated Income Statement
(Amounts in thousands of Euro)
From 1 January to From 1 April to
Note 30.6.2016 30.6.2015* 30.6.2016 30.6.2015*
Interest and similar income 1,382,951 1,524,439 677,464 763,387
Interest expense and similar charges (416,644) (567,545) (194,099) (281,459)
Net interest income 966,307 956,894 483,365 481,928
Fee and commission income 182,447 194,511 94,063 96,380
Commission expense (23,677) (33,347) (13,869) (18,984)
Net fee and commission income 158,770 161,164 80,194 77,396
Dividend income 1,120 545 529 520
Gains less losses on financial transactions 2 60,038 35,962 56,999 10,005
Other income 27,275 30,576 14,921 16,979
88,433 67,083 72,449 27,504
Total income 1,213,510 1,185,141 636,008 586,828
Staff costs (258,481) (263,471) (129,026) (129,888)
Provision for voluntary separation scheme (31,480) (487)
General administrative expenses 3 (247,089) (237,329) (128,847) (120,486)
Depreciation and amortization (49,495) (51,537) (23,632) (25,921)
Other expenses (16,274) (2,208) (12,706) (1,311)
Total expenses (602,819) (554,545) (294,698) (277,606)
Impairment losses and provisions to cover credit risk 4 (604,828) (2,098,842) (349,710) (1,672,696)
Share of profit/(loss) of associates and joint ventures (1,967) (3,987) (506) (1,997)
Profit/(loss) before income tax 3,896 (1,472,233) (8,906) (1,365,471)
Income tax 5 (24,447) 309,358 (9,540) 318,579
Profit/(loss) after income tax from continuing operations (20,551) (1,162,875) (18,446) (1,046,892)
Profit/(Loss) after income tax from discontinued operations 26 1,607 (89,208) 1,666 (89,353)
Profit/(loss), after income tax (18,944) (1,252,083) (16,780) (1,136,245)
Profit/(loss) attributable to:
Equity owners of the Bank
- from continuing operations (20,650) (1,163,042) (18,502) (1,046,923)
- from discontinued operations 1,607 (89,208) 1,666 (89,353)
(19,043) (1,252,250) (16,836) (1,136,276)
Non-controlling interests
- from continuing operations 99 167 56 31
Earnings/(losses) per share:
Basic and diluted (E per share) 6 (0.01) (4.90) (0.01) (4.45)
Basic and diluted from continuing operations (E per share) 6 (0.01) (4.55) (0.01) (4.10)
Basic and diluted from discontinued operations (E per share) 6 0.00 (0.35) 0.00 (0.35)
* The figures of the Interim Consolidated Income Statement of the comparative periods have been restated due to
modification of the presentation of legal expenses, the finalization of the Bulgaria Branch transfer terms and the
presentation of Alpha Bank Skopje as a discontinued operation (notes 26 and 28).
Interim Consolidated Balance Sheet
(Amounts in thousands of Euro)
Note 30.6.2016 31.12.2015*
ASSETS
Cash and balances with Central Banks 1,486,533 1,730,327
Due from banks 2,121,309 1,976,273
Trading securities 8 2,590 2,779
Derivative financial assets 839,166 793,015
Loans and advances to customers 7 45,495,962 46,186,116
Investment securities
- Available for sale 8 5,644,128 5,794,484
- Held to maturity 8 44,746 79,709
- Loans and receivables 8 3,683,411 4,289,482
Investments in associates and joint ventures 10,582 45,771
Investment property 9 628,290 623,662
Property, plant and equipment 10 823,731 860,901
Goodwill and other intangible assets 11 366,224 345,151
Deferred tax assets 4,421,863 4,398,176
Other assets 1,520,955 1,508,633
67,089,490 68,634,479
Assets held for sale 26 282,429 663,063
Total Assets 67,371,919 69,297,542
LIABILITIES
Due to banks 12 23,417,669 25,115,363
Derivative financial liabilities 1,659,398 1,550,529
Due to customers (including debt securities in issue) 31,667,039 31,434,266
Debt securities in issue and other borrowed funds 13 320,444 400,729
Liabilities of current income tax and other taxes 26,437 38,192
Deferred tax liabilities 23,213 20,852
Employee defined benefit obligations 14 87,674 108,550
Other liabilities 902,905 910,623
Provisions 15 335,968 298,458
58,440,747 59,877,562
Liabilities related to assets held for sale 26 9,322 366,781
Total Liabilities 58,450,069 60,244,343
EQUITY
Equity attributable to equity owners of the Bank
Share capital 16 461,064 461,064
Share premium 10,790,870 10,790,870
Reserves 189,762 300,086
Amounts recognized directly in equity for held for sale items (122) 8,834
Retained earnings 16 (2,558,915) (2,546,885)
8,882,659 9,013,969
Non-controlling interests 24,059 23,998
Hybrid securities 17 15,132 15,232
Total Equity 8,921,850 9,053,199
Total Liabilities and Equity 67,371,919 69,297,542
* The figures of the Consolidated Balance Sheet of the comparative period have been restated due to the completion of
the valuation of net assets of acquired subsidiary company (note 28).
Interim Consolidated Statement of Comprehensive Income
(Amounts in thousands of Euro)
Note From 1 January to From 1 April to
30.6.2016 30.6.2015* 30.6.2016 30.6.2015*
Profit/(loss), after income tax, recognized in the income statement (18,944) (1,252,083) (16,780) (1,136,245)
Other comprehensive income recognized directly in equity:
Amounts that may be reclassified to the income statement
Net change in available for sale securities' reserve (20,838) (328,119) 73,668 (127,829)
Net change in cash flow hedge reserve (127,695) 63,745 (28,443) 153,944
Exchange differences on translating and hedging the net investment in foreign operations (1,901) 596 1,199 (1,749)
Change in the share of other comprehensive income of associates and joint ventures 101 101
Income tax 5 38,635 62,563 (15,862) (15,295)
Amounts that may be reclassified to the income statement from continuing operations (111,799) (201,114) 30,562 9,172
Amounts that may be reclassified to the income statement from discontinued operations (40) 39 7 (10)
Amounts that may not be reclassified to the income statement - - - -
Total of other comprehensive income recognized directly in equity, after income tax 5 (111,839) (201,075) 30,569 9,162
Total comprehensive income for the period, after income tax (130,783) (1,453,158) 13,789 (1,127,083)
Total comprehensive income for the period attributable to:
Equity owners of the Bank
- from continuing operations (132,411) (1,364,207) 12,123 (1,037,816)
- from discontinued opearations 1,567 (89,169) 1,626 (89,314)
(130,844) (1,453,376) 13,749 (1,127,130)
Non controlling interests
-from continuing operations 61 218 40 47
* The figures of the Consolidated Statement of Comprehensive Income of the comparative period have been restated due to
the finalization of the Bulgaria Branch transfer terms, the completion of the valuation of net assets of acquired
subsidiary company and the presentation of Alpha Bank Skopje as a discontinued operation (notes 26 and 28).
Interim Consolidated Statement of Changes in Equity
(Amounts in thousands of Euro)
Note Share Capital Share Reserves Retained earnings Total Non controlling interests Hybrid securities Total
Premium Equity
Balance 1.1.2015 3,830,718 4,858,216 105,687 (1,142,801) 7,651,820 23,266 31,464 7,706,550
Changes for the period
1.1 - 30.6.2015
Profit for the period, after income tax (1,252,250) (1,252,250) 167 (1,252,083)
Other comprehensive income recognized directly in equity, after income tax (201,126) (201,126) 51 (201,075)
Total comprehensive income for the period, after income tax - - (201,126) (1,252,250) (1,453,376) 218 - (1,453,158)
(Purchases), (redemptions)/sales of hybrid securities, after income tax 1,010 1,010 (1,729) (719)
Appropriation to reserves 1,599 (1,599) - -
Balance 30.6.2015 3,830,718 4,858,216 (93,840) (2,395,640) 6,199,454 23,484 29,735 6,252,673
Changes for the period -
1.7 - 31.12.2015
Profit for the period, after income tax (119,464) (119,464) 93 (119,371)
Other comprehensive income recognized directly in equity, after income tax 401,839 3,045 404,884 (36) 404,848
Total comprehensive income for the period, after income tax - - 401,839 (116,419) 285,420 57 - 285,477
Decrease of ordinary shares nominal value (3,754,104) 3,754,104 - -
Share capital increase paid in cash 232,825 1,319,344 1,552,169 1,552,169
Share capital increase through capitalization of financial receivables 151,625 859,206 1,010,831 1,010,831
Share capital increase expenses, after income tax (43,506) (43,506) (43,506)
Effect due to change of the income tax rate for share capital increase expenses 6,261 6,261 6,261
Purchases/sales and change of ownership interests in subsidiaries (457) (457) 457 -
(Purchases), (redemptions)/sales of hybrid securities, after income tax 3,797 3,797 (14,503) (10,706)
Appropriation to reserves 921 (921) - -
Balance 31.12.2015 461,064 10,790,870 308,920 (2,546,885) 9,013,969 23,998 15,232 9,053,199
(Amounts in thousands of Euro)
Note Share Capital Share Reserves Retained earnings Total Non controlling interests Hybrid securities Total
Premium Equity
Balance 1.1.2016 461,064 10,790,870 308,920 (2,546,885) 9,013,969 23,998 15,232 9,053,199
Changes for the period
1.1 - 30.6.2016
Profit for the period, after income tax (19,043) (19,043) 99 (18,944)
Other comprehensive income recognized directly in equity, after income tax (111,801) (111,801) (38) (111,839)
Total comprehensive income for the period, after income tax - - (111,801) (19,043) (130,844) 61 - (130,783)
Share capital increase expenses, after income tax (689) (689) (689)
(Purchases)/sales and change of ownership interests in subsidiaries (8,794) 8,794 - -
(Purchases), (redemptions)/sales of hybrid securities, after income tax 60 60 (100) (40)
Appropriation of reserves 1,315 (1,315) - -
Other 163 163 163
Balance 30.6.2016 461,064 10,790,870 189,640 (2,558,915) 8,882,659 24,059 15,132 8,921,850
* The figures of the Consolidated Statement of Changes in Equity of the comparative period have been restated due the
completion of the valuation of net assets of acquired subsidiary company (note 28).
Interim Consolidated Statement of Cash Flows
(Amounts in thousands of Euro)
From 1 January to
Note 30.6.2016 30.6.2015*
Cash flows from continuing operating activities
Profit/(loss) before income tax 3,896 (1,472,233)
Adjustments for gains/(losses) before income tax for:
Depreciation/ impairment of fixed assets 9,10 27,400 29,114
Amortization of intangible assets 11 22,095 22,423
Impairment losses from loans, provisions and staff leaving indemnity 641,523 2,140,817
(Gains)/losses from investing activities (69,292) 34,524
(Gains)/losses from financing activities 31,017 54,269
Share of (profit)/loss of associates and joint ventures 1,967 3,987
658,606 812,901
Net (increase)/decrease in assets relating to continuing operating activities:
Due from banks (225,373) 867,113
Trading securities and derivative financial assets (45,962) 217,710
Loans and advances to customers 298,866 (849,764)
Other assets 2,562 (90,108)
Net increase /(decrease) in liabilities relating to continuing operating activities:
Due to banks (1,697,694) 11,092,339
Derivative financial liabilities (18,826) (58,901)
Due to customers 229,900 (11,632,986)
Other liabilities 18,010 (67,689)
Net cash flows from continuing operating activities before taxes (779,911) 290,615
Income taxes and other taxes paid (18,076) (30,601)
Net cash flows from continuing operating activities (797,987) 260,014
Net cash flows from discontinued operating activities (21,270) 10,551
Cash flows from continuing investing activities
Investments in associates and joint ventures (98) (344)
Acquisitions during the period 9,151
Amounts received from disposal of subsidiary 15,392
Dividends received 1,120 560
Acquisitions of fixed and intangible assets (97,824) (42,692)
Disposals of fixed and intangible assets 44,176 6,318
Net (increase)/decrease in investement securities 663,048 (255,253)
Net cash flows from continuing investing activities 610,422 (266,868)
Net cash flows from discontinued investing activities (24,390) 6,933
Cash flows from continuing financing activities
Receipts of debt securities in issue and other borrowed funds 577
Repayments of debt securities in issue and other borrowed funds (82,194) (89,451)
(Purchases)/sales of hybrid securities (15) (467)
Share capital increase expenses (970)
Net cash flows from continuing financing activities (82,602) (89,918)
Effect of exchange rate differences on cash and cash equivalents (24,489) 1,843
Net increase/(decrease) in cash flows from continuing activities (294,656) (94,929)
Net increase/(decrease) in cash flows from discontinued activities (45,660) 17,484
Cash and cash equivalents at the beginning of the period 1,328,133 1,194,244
Cash and cash equivalents at the end of the period 987,817 1,116,799
* The figures of the Interim Consolidated Statement of Cash Flows of the comparative period has been restated due to the
finalization of the Bulgaria Branch transfer terms and the presentation of Alpha Bank Skopje as a discontinued operation
(notes 26 and 28).
Notes to the Interim Consolidated Financial Statements
General Information
The Alpha Bank Group, which includes companies in Greece and abroad, offers the following services: corporate and retail
banking, financial services, investment banking and brokerage services, insurance services, real estate management, hotel
services.
The parent company of the Group is Alpha Bank A.E. which operates under the brand name Alpha Bank. The Bank's resistered
office is 40 Stadiou Street, Athens and is listed in the General Commercial Register with registration number 223701000
(ex. societe anonyme registration number 6066/06/B/86/05). The Bank's duration is until 2100 but may be extended by the
General Meeting of Shareholders.
In accordance with article 4 of the Articles of Incorporation, the Bank's objective is to engage, on its own account or on
behalf of third parties, in Greece and abroad, independently or collectively, including joint ventures with third parties,
in any and all (main and secondary) operations, activities, transactions and services allowed to credit institutions, in
conformity with whatever rules and regulations (domestic, community, foreign) may be in force each time. In order to serve
this objective, the Bank may perform any kind of action, operation or transaction which, directly or indirectly, is
pertinent, complementary or auxiliary to the purposes mentioned above.
The tenure of the Board of Directors which was elected by the Ordinary General Meeting of Shareholders on 27.6.2014 expires
in 2018.
The Board of Directors as at 30.6.2016 consists of:
CHAIRMAN (Non Executive Member)
Vasileios T. Rapanos
VICE CHAIRMAN (Non Executive Independent Member)
Pavlos A. Apostolides **/****
EXECUTIVE MEMBERS
MANAGING DIRECTOR
Demetrios P. Mantzounis
EXECUTIVE DIRECTORS AND GENERAL MANAGERS
Spyros N. Filaretos (COO)
Artemios Ch. Theodoridis
George C. Aronis
NON-EXECUTIVE MEMBERS
Efthimios O. Vidalis
Ioanna E. Papadopoulou ****
NON-EXECUTIVE INDEPENDENT MEMBERS
Evangelos J. Kaloussis */***
Ioannis K. Lyras */**
Ibrahim S. Dabdoub **
Shahzad A. Shahbaz ***/****
Jan A. Vanhevel */***
NON-EXECUTIVE MEMBER
(in accordance with the requirements of Law 3723/2008)
Marica S. Ioannou - Frangakis
NON-EXECUTIVE MEMBER
(in accordance with the requirements of Law 3864/2010)
Panagiota S. Iplixian */**/***/****
SECRETARY
George P. Triantafyllides
At its meeting held on 28.7.2016, the Board of Directors of Alpha Bank elected Mr. Richard R. Gildea as Member of the Board
of Directors of the Bank, for the remainder of its tenure, in replacement of Mrs Ioanna E. Papadopoulou who resigned.
* Member of the Audit Committee
** Member of the Remuneration Committee
*** Member of the Risk Management Committee
**** Member of Corporate Governance and Nominations Committee
The Ordinary General Meeting of Shareholders of 30.6.2016 has appointed for the fiscal year 2016 KPMG Certified Auditors
A.E. as Certified auditors of the Bank, by the following:
a. Principal Auditors: Nikolaos E. Vouniseas
John A. Achilas
b. Substitute Auditors: Michael A. Kokkinos
Anastasios E. Panayides
The Bank's shares are listed in the Athens Stock Exchange since 1925 and are ranked among the companies with the higher
market capitalization. Additionally, the Bank's share is included in a series of international indices, such as MSCI
Emerging Markets Index, the FTSE All World, the Stoxx Europe 600 and FTSE Med 100.
Apart from the Greek listing, the shares of the Bank are listed in the London Stock Exchange in the form of international
certificates (GDRs) and they are traded over the counter in New York (ADRs).
Total common shares in issue as at 30 June 2016 were 1,536,881,200.
In Athens Stock Exchange are traded 1,367,706,054 common shares of the Bank, while the Hellenic Financial Stability Fund
("HFSF") possesses the remaining 169,175,146 common, registered, voting, paperless shares or percentage equal to 11.01% on
the total of common shares issued by the Bank. The exercise of the voting rights for the shares of HFSF is subject to
restrictions according to the article 7a of Law 3864/2010.
In addition, on the Athens Exchange there are 1,141,734,167 warrants that are traded each one incorporating the right of
the holder to purchase 0,148173663047785 new shares owned by the HFSF.
During the first semester of 2016, the average daily volume per session for shares was E 20,970,465 and for warrants
E 6,500.
The credit rating of the Bank performed by three international credit rating agencies is as follows:
• Moody's: Caa3
• Fitch Ratings: RD
• Standard & Poor's: SD (from 2.8.2016 CCC+)
According to Law 4374 published in 1 April 2016, the obligation to publish quarterly financial statements for the first and
third quarter of the financial year, pursuant to the provisions of Article 6 of Law. 3556/2007 before its amendment, was
abolished.
Furthermore, according to No.8/754/14.04.2016 decision of the Hellenic Capital Market Commission with subject "Special
Topics Periodic Reporting according to Law. 3556/2007", the obligation to publish Data and Information arising from the
quarterly and semi-annual financial statements, as previously stated by the No. 4/507/28.4.2009 decision of the Hellenic
Capital Market Commission Board of Directors, was abolished.
The financial statements have been approved by the Board of Directors on 30 August 2016.
Accounting Policies Applied
1.1 Basis of presentation
The Group has prepared the condensed interim financial statements as at 30.6.2016 in accordance with International
Accounting Standard (IAS) 34, Interim Financial Reporting, as it has been adopted by the European Union. The financial
statements have been prepared on the historical cost basis. As an exception, some assets and liabilities are measured at
fair value. Those assets are mainly the following:
- Securities held for trading
- Derivative financial instruments
- Available for sale securities
- The convertible bond issued by the Bank which is included in "Debt securities in issue held by institutional investors
and other borrowed funds"
The financial statements are presented in Euro, rounded to the nearest thousand, unless otherwise indicated.
The accounting policies applied by the Group in preparing the condensed interim financial statements are consistent with
those stated in the published financial statements for the year ended on 31.12.2015, after taking into account the
following amendments to standards which were issued by the International Accounting Standards Board (IASB), adopted by the
European Union and applied on 1.1.2016:
• Amendment to International Financial Reporting Standard 11 "Joint Arrangements": Accounting for acquisition of
interests in joint operations (Regulation 2015/2173/24.11.2015)
• Amendment to International Accounting Standard 1 "Presentation of Financial Statements": Disclosure Initiative
(Regulation 2015/2406/18.12.2015)
• Amendment to International Accounting Standard 16 "Property, Plant and Equipment" and to International Accounting
Standard 38 "Intangible Assets": Clarification of Acceptable Methods of Depreciation and Amortization (Regulation
2015/2231/2.12.2015)
• Amendment to International Accounting Standard 16 "Property, Plant and Equipment" and to International Accounting
Standard 41 "Agriculture": Bearer Plants (Regulation 2015/2113/23.11.2015)
• Amendment to International Accounting Standard 27 "Separate Financial Statements": Equity Method in Separate Financial
Statements (Regulation 2015/2441/ 18.12.2015)
• Improvements to International Accounting Standards - cycle 2012-2014 (Regulation 2015/2343/15.12.2015)
The adoption of the above amendments by the Group, an analysis of which is presented in note 1.1 of the Group Financial
Statements as at 31.12.2015, had no impact on its financial statements.
The adoption by the European Union, by 31.12.2016, of new standards, interpretations or amendments, which have been issued
or may be issued during the year by the International Accounting Standards Board (IASB), and their mandatory or optional
adoption for periods beginning on or after 1.1.2016, may affect retrospectively the periods presented in these interim
financial statements.
1.2 Estimates, decision making criteria and significant sources of uncertainty
The Group, in the context of applying accounting policies and preparing financial statements in accordance with the
International Financial Reporting Standards, makes estimates and assumptions that affect the amounts that are recognized as
income, expenses, assets or liabilities. The use of estimates and assumptions is an integral part of recognizing amounts in
the financial statements that mostly relate to the following:
Fair value of assets and liabilities
For assets and liabilities traded in active markets, the determination of their fair value is based on quoted, market
prices. In all other cases the determination of fair value is based on valuation techniques that use observable market data
to the greatest extent possible. In cases where there is no observable market data, the fair value is determined using data
that are based on internal estimates and assumptions eg. determination of expected cash flows, discount rates, prepayment
probabilities or potential counterparty default.
Impairment losses of financial assets
The Group, when performing impairment tests on loans and advances to customers, makes estimates regarding the amount and
timing of future cash flows. Given that these estimates are affected by a number of factors such as the financial position
of the borrower, the net realizable value of any collateral or the historical loss ratios per portfolio, actual results may
differ from those estimated. Similar estimates are used in the assessment of impairment losses of securities classified as
available for sale or held to maturity.
Impairment losses of non - financial assets
The Group, at each year end balance sheet date, assesses for impairment non - financial assets, and in particular property,
plant and equipment, investment property, goodwill and other intangible assets, as well as its investments in associates
and joint ventures. Internal estimates are used to a significant degree to determine the recoverable amount of the assets,
i.e. the higher between the fair value less costs to sell and the value in use.
Income Tax
The Group recognizes assets and liabilities for current and deferred tax, as well as the related expenses, based on
estimates concerning the amounts expected to be paid to or recovered from tax authorities in the current and future
periods. Estimates are affected by factors such as the practical implementation of the relevant legislation, the
expectations regarding the existence of future taxable profit and the settlement of disputes that might exist with tax
authorities etc. Future tax audits, changes in tax legislation and the amount of taxable profit actually realised may
result in the adjustment of the amount of assets and liabilities for current and deferred tax and in tax payments other
than those recognized in the financial statements of the Group. Any adjustments are recognized within the year that they
become final.
Employee defined benefit obligations
Defined benefit obligations are estimated based on actuarial valuations that incorporate assumptions regarding discount
rates, future changes in salaries and pensions, as well as the return on any plan assets. Any change in these assumptions
will affect the amount of obligations recognized.
Provisions and contingent liabilities
The Group recognises provisions when it estimates that it has a present legal or constructive obligation that can be
estimated reliably, and it is almost certain that an outflow of economic benefits will be required to settle the
obligation. In contrast, when it is probable that an outflow of resources will be required, or when the amount of liability
cannot be measured reliably, the Group does not recognise a provision but it provides disclosures for contingent
liabilities, taking into consideration their materiality. The estimation for the probability of the outflow as well as for
the amount of the liability are affected by factors which are not controlled by the Group, such as court decisions, the
practical implementation of the relevant legislation and the probability of default of the counterparty, for those cases
which are related to the exposure to off-balance sheet items.
The estimates and judgments applied by the Group in making decisions and in preparing the financial statements are based on
historical information and assumptions which at present are considered appropriate. The estimates and judgments are
reviewed on an ongoing basis in order to take into account current conditions, and the effect of any changes is recognized
in the period in which the estimates are revised.
1.2.1 Going concern principle
The Group applied the going concern principle for the preparation of the financial statements as at 30.6.2016. For the
application of this principle, the Group takes into consideration current economic developments in order to make
projections for future economic conditions of the environment in which it operates. The main factors that cause
uncertainties regarding the application of this principle relate to the adverse economic environment in Greece and abroad
and to the liquidity levels of the Hellenic Republic and the banking system.
Specifically, the high degree of uncertainty that characterizes the internal economic environment in recent years, as a
result of the prolonged recession of the Greek economy, led to a significant deterioration in the creditworthiness of
corporate and individuals, to an increase of non performing loans and therefore to the recognition of significant
impairment losses by the Bank and by the Greek banking system in general. Additionally, during the first semester of the
previous year, the internal economic environment was adversely affected by the uncertainties that were created during the
negotiations of the Hellenic Republic with the European Commission, the European Central Bank and the International
Monetary Fund for the financing of the Hellenic Republic, a fact that led to significant outflows of deposits, to the
imposition of capital controls and of a bank holiday which was announced on 28.6.2015 and lasted until 19.7.2015. Capital
controls remain in place until the date of approval of the financial statements, while the detailed provisions for their
application are amended where appropriate by the adoption of a legislative act.
At the same time the liquidity needs of Greek banks continue to be mostly satisfied by the emergency liquidity mechanisms
of the Bank of Greece.
The completion, in the third quarter of 2015, of the negotiations of the Hellenic Republic for the coverage of the
financing needs of the Greek economy, led to an agreement for new financial support by the European Stability Mechanism.
The agreement provided for the coverage of the financing needs of the Hellenic Republic for the medium-term period, under
the condition that economic reforms are made, while additionally it provided for the allocation of resources to cover the
recapitalization needs of the banks as a result of their assessment by the Single Supervisory Mechanism. With respect to
the Bank specifically, a recapitalization of a total amount of E 2,563 million took place in the fourth quarter of 2015,
exclusively from private funds, as further analyzed in note 42 of the annual financial statements as at 31.12.2015.
In June of the current year the first evaluation of the Hellenic Republic financial support program was completed and the
partial disbursement of the second installment of the program, amounting to E 10.3 billion, was approved. The first
disbursement of E 7.5 billion took place in June and covered the short-term public debt servicing needs as well as the
clearance of part of amounts overdue by the Hellenic Republic. The remaining amount of E 2.8 billion is expected to be
disbursed within the second semester of 2016, provided that a series of prerequisite actions are completed. The completion
of the first evaluation and the disbursement of installments are expected to contribute to the enhancement of the real
economy and the improvement of investment prospects. The above, combined with the continuation of reforms and the measures
described in the Eurogroup statement for the enhancement of the sustainability of the Greek debt (note 1.2.2), are expected
to contribute to the gradual improvement of the economic environment in Greece and to the return of the economy to positive
growth rates.
In parallel to the above the Bank, in the context of its strategy to address the issue of non performing loans, is taking a
series of actions and initiatives, as specifically mentioned in the relevant section of the Board of Director's Semi-annual
Management Report, which, combined with the changes in the legislative framework, are expected to contribute to the
effective
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