REG - Alpha Bank A.E. - Half-year Report <Origin Href="QuoteRef">ACBr.AT</Origin> - Part 3
31/08/2017 18:15
- Part 3: For the preceding part double click ID:nRSe5112Pb
applied the going concern principle for the preparation of the financial statements as at 30.6.2017. For the
application of this principle, the Group takes into consideration current economic developments in order to make
estimations 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 unstable economic environment in Greece and abroad
and to the liquidity levels of the Hellenic Republic and the banking system, as specifically analysed in Note 1.31.1 of the
annual financial statements as at 31.12.2016. In addition, regarding the progress of the Hellenic Republic financial
support program, it is noted that within June the second assessment of the program was completed and the partial
disbursement of the third installment amounting to E 8.5 billion was approved. The first disbursement of E 7.7 billion took
place in July and covered public debt servicing needs by an amount of E 6.9 billion and clearance of amounts in arrears due
from the Hellenic Republic to individuals by an amount of E 0.8 billion. The second disbursement ofE 0.8 billion will be
made under the condition that the Hellenic Republic will contribute using its own economic recourses to the arrears
clearance effort. The completion of the second evaluation, the disbursement of installments and the successful issue by the
Hellenic Republic, in July of the current year, of a five year bond of E3 billion, which is the first step for the gradual
return to the markets, are expected to contribute to the decrease of uncertainty, the enhancement of business community and
investors confidence and consequently, to the return of the economy to positive growth rates.
Based on the above and taking into account the Group's high capital adequacy (note 25) as well as the amount of available
eligible collaterals through which liquidity is obtained through the mechanisms of the eurosystem, the Group estimates that
the conditions for the application of the going concern principle for the preparation of its financial statements are met.
1.2.2 Estimation of the Group's exposure to the Hellenic Republic
The Group's total exposure to Greek Government securities and loans related to the Hellenic Republic is presented in note
23. The main uncertainties regarding the estimations for the recoverability of the Group's total exposure relate to the
debt service capacity of the Hellenic Republic, which, in turn, is affected by the development of the macroeconomic
environment in Greece and the Eurozone as well as by the levels of liquidity of the Hellenic Republic.
As far as debt sustainability is concerned and in accordance with the relevant framework set out by the Eurogroup of
9.5.2016, in the meeting of the same body held in 24.5.2016 measures for enhancing the Greek debt sustainability were
broadly described, separately for the short, the medium and the long term. In accordance with this framework, based on the
baseline scenario, the gross financing needs of the Greek government should be less than the 15% of GDP after the
completion of the program in the medium term while subsequently they should be less than the 20% of GDP. The Eurogroup of
15.6.2017 confirmed the above target. From the above measures of debt relief only the short-term have been specified and
put in place.
Following the successful completion of the program for the financial support of the Hellenic Republic, and to the degree
deemed necessary, the medium term measures for the Greek debt will be put in place. The specification of these measures
will be validated at the end of the program by the Eurogroup so that debt sustainability is ensured. In a long term horizon
and in the case of an unexpected unfavorable scenario additional measures for the debt could be applied.
Finally, within July of the current year, the Hellenic Republic issued a five year bond of an amount of E 3 billion. The
issuance of the bond and the fact that it was successfully covered are the first steps for the Hellenic Republic to
gradually regain access to the financial markets to cover its financing needs.
Based on the above, the Group has not recognized impairment losses on the Greek Government securities that it held as at
30.6.2017, however, it assesses the developments relating to the Greek Government debt in conjunction with the market
conditions and it reviews its estimations for the recoverability of its total exposure at each reporting date.
1.2.3 Recoverability of deferred tax assets
The Group recognizes deferred tax assets to the extent that it is probable that it will have sufficient future taxable
profit available, against which, deductible temporary differences and tax losses carried forward can be utilized.
The amount of deferred tax assets recognized in the consolidated financial statements as at 30.6.2017 has not changed
significantly compared to the respective amount as at 31.12.2016. Therefore, what is stated in note 1.31.3 of the annual
financial statements of 31.12.2016 regarding the main categories of deferred tax assets recognized is also applicable to
these financial statements. In addition, regarding the methodology applied for the recoverability assessment, what is
stated in the aforementioned note of the annual financial statements is also applicable, taking also into consideration the
elements that formed the result of the current period.
INCOME STATEMENT
2. Net interest income
From 1 January to From 1 April to
30.6.2017 30.6.2016 30.6.2017 30.6.2016
Interest and similar income
Due from banks 277 6,921 185 7,604
Loans and advances to customers 1,103,214 1,158,506 553,755 569,068
Trading securities 136 108 59 46
Available for sale securities 112,228 117,332 56,183 58,348
Held to maturity securities 372 2,179 142 1,397
Loans and receivables securities 749 4,819 326 2,030
Derivative financial instruments 48,441 69,877 25,366 27,881
Other 6,341 7,081 3,631 3,215
Total 1,271,758 1,366,823 639,647 669,589
Interest and similar expense
Due to banks (102,967) (153,900) (50,858) (75,195)
Due to customers (91,774) (102,344) (46,236) (47,926)
Debt securities in issue and other borrowed funds (7,717) (44,298) (2,356) (18,960)
Derivative financial instruments (52,557) (71,634) (26,876) (29,785)
Other (40,638) (41,857) (19,716) (20,958)
Total (295,653) (414,033) (146,042) (192,824)
Net interest income 976,105 952,790 493,605 476,765
During the first Semester of 2017, net interest income was increased due to the reduction of securities issued by the Bank,
that are guaranteed by the Greek Government, according to the Law 3723/2008, amounting to E 5.2 billion and the reduction
of borrowing cost.
3. Gains less losses on financial transactions
From 1 January to From 1 April to
30.6.2017 30.6.2016 30.6.2017 30.6.2016
Foreign exchange differences 7,153 5,816 2,714 2,400
Trading securities
- Bonds 726 515 397 385
- Shares 188 (148) 139 9
Investment securities:
- Bonds 33,466 13,930 29,177 10,126
- Shares 467 79,761 692 76,378
- Other securities 2,329 (1,592) 2,084 (2,722)
From sale of holdings 1,415 (1,695) 1,810 (1,705)
From sales of loans 3,346 10,876 289 10,876
Derivative financial instruments 28,371 (20,644) 8,699 (7,968)
Other financial instruments (36,718) (27,070) (38,747) (31,000)
Total 40,743 59,749 7,254 56,779
Current period's "Gains less losses on financial transactions" were affected mainly by:
• Loss of E 37.3 million included in the account "Other financial instruments" arising from a fair value measurement, at
the initial recognition, of the Group's financial assets in the context of loans and receivables restructuring.
• Gains of E 33.5 million included in the account "Bonds" of investment portfolio as a result of the sale of Greek Bonds
amounting to E 20.8 million. An amount of E 12.7 million concerns the disposal of other Corporate bonds.
• Gains of E 30 million included in the account "Derivative financial instruments" concern the Credit Valuation
Adjustment of transactions with the Greek Government due to the reduce of its credit margin.
The "Gains less losses from financial transactions" from financial transactions of the first semester of 2016 were affected
mainly by :
• the acquisition of the shares of Visa Europe from Visa Inc. in the context of which the Group recognized in the account
"shares of Investment Securities" the amount of E 55.6 million. This amount consists of the cash received at the closing of
the transaction and the recognition of the present value of the deferred payment on the third anniversary.
• recognition at a fair value of E 16.3 million of preference shares of Visa Inc. that the Group acquired under with the
above transaction in credit of "Gains less losses on financial transactions".
• Losses amounting to E 36.4 million in caption "Other financial instruments" concern the valuation of Ionian Hotel
Enterprises A.E. due to its reclassification as asset held for sale. (note 27)
4. Staff costs
From 1 January to From 1 April to
30.6.2017 30.6.2016 30.6.2017 30.6.2016
Wages and salaries 168,866 180,763 84,903 90,273
Social security contribution 48,591 50,012 24,193 24,674
Common insurance fund of Bank employees 1,314 661
Employee defined benefit obligation of Group 2,135 3,654 1,067 1,674
Other charges 16,949 16,807 9,227 8,753
Total 236,541 252,550 119,390 126,035
The caption of Staff Costs amounted to E 236.5 million for first semester of 2017 compared to E 252.6 million of the first
semester of 2016 mainly due to the reduction of personnel following the implementation of a separation scheme.
The total number of Group's employees as at 30.6.2017 stood at 11,923 (30.6.2016: 13,569 out of which 936 are employed in
Alpha Bank Srbija A.D. which was classified as discontinued operations) out of which 8,896 (30.6.2016:9,661) were employed
in Greece and 3,027 (30.6.2016:3,908) were employed abroad.
5. General Administrative expenses
From 1 January to From 1 April to
30.6.2017 30.6.2016 30.6.2017 30.6.2016
Operating leases of buildings 19,927 21,196 9,868 10,497
Rent and maintenance of EDP equipment 10,726 9,794 4,681 4,886
EDP expenses 14,075 14,504 7,309 7,486
Marketing and advertisement expenses 11,197 10,604 6,683 6,226
Telecommunications and postage 9,342 11,633 4,261 5,932
Third party fees 32,806 21,239 13,866 11,800
Consultants fees 4,406 3,376 1,763 1,503
Contribution to the Deposit guarantee fund - Investment fund and Solvency Fund 26,496 33,110 12,044 12,251
Insurance 4,979 6,674 2,439 2,977
Consumables 1,869 2,941 929 1,396
Electricity 4,754 5,428 2,618 2,130
Third party fees for customer acquisition 23 15 10 11
Taxes (VAT, real estate etc) 40,007 35,167 21,489 18,088
Services from collection agencies 16,795 13,193 8,417 8,636
Building and equipment maintenance 3,622 4,340 1,891 2,341
Security 5,745 6,138 2,913 3,380
Cleaning fees 2,158 2,644 1,162 1,436
Commission for the amount of Deferred Tax Asset guaranteed by the Greek State (Note 7) 8,666 4,333
Other 43,488 37,960 23,059 24,369
Total 261,081 239,956 129,735 125,345
General administrative expenses for the first semester of 2017 present an increase compared to the previous period, mainly
due to intensified debt collection activities which led to an increase in the account "Third party fees" and "Services from
collection agencies".
Moreover, the results of the first semester of 2017 were burdened by E 8.7 million, which relates to the annual commission
attributed to the amount of deferred tax asset, guaranteed by the Greek State, according to the article 82 of Law
4472/19.5.2017, out of which E 5.8 million relates to the commission for the year 2016. According to the Law, the
respective commission is paid within 6 months from the end of the taxable period, starting from 30.6.2017.
6. Impairment losses and provisions to cover credit risk
From 1 January to From 1 April to
30.6.2017 30.6.2016 30.6.2017 30.6.2016
Impairment losses on loans and advances to customers (note 9) 476,924 620,806 223,733 360,616
Provisions to cover credit risk relating to off balance sheet items (note 16) (1,671) 557 (222) 38
Recoveries (11,857) (15,438) (6,874) (10,615)
Total 463,396 605,925 216,637 350,039
7. Income tax
In accordance with Article 1 par. 4 of Law 4334/2015 "Urgent prerequisites for the negotiation and conclusion of an
agreement with the European Stability Mechanism (ESM)" the corporate income tax rate for legal entities is 29% after 1
January 2015, from 26% that was in force.
For the Bank's subsidiaries and branches operating in other countries, the applicable nominal tax rates for accounting
periods 2016 and 2017 are as follows:
Cyprus 12.5
Bulgaria 10
Serbia 15
Romania 16
FYROM 10
Albania 15
Jersey 10
United Kingdom 19* (from 1.4.2017)
Ireland 12.5
In accordance with article 65A of Law 4174/2013, from 2011 the statutory auditors and audit firms conducting statutory
audits to a Societe Anonyme, are obliged to issue an Annual Tax Certificate on the compliance on tax issues. This tax
certificate is submitted to the entity being audited within the first 10 days of the 10th month after the end of the
audited financial year, as well as electronically to the Ministry of Finance, no later than the end of the 10th month after
the end of the audited financial year. In accordance with article 56 of Law 4410/3.8.2016 for the fiscal years from
1.1.2016 onwards, the issuance of tax certificate is rendered optional. Intention of the companies of the Group is to
continue receiving a tax certificate. For fiscal years 2011 up to 2015 the Bank and its local subsidiaries have obtained
the relevant tax certificate without any qualifications on the tax issues covered, whereas for year 2016 the Bank is
expected to receive tax certificate without any qualifications.
The income tax in the income statement from continuing operations is analysed in the table below, while the income tax from
discontinued operations is presented in note 27:
From 1 January to From 1 April to
30.6.2017 30.6.2016 30.6.2017 30.6.2016
Current 11,004 6,817 6,813 3,745
Deferred 45,764 17,638 21,906 5,801
Total 56,768 24,455 28,719 9,546
Deferred tax recognized in the income statement is attributable to temporary differences, the effect of which is analyzed
in the table below:
From 1 January to From 1 April to
30.6.2017 30.6.2016 30.6.2017 30.6.2016
Debit difference of Law 4046/2012 22,277 22,277 11,138 11,139
Debit difference of Law 4465/2017 1,264 1,264
Write-offs, depreciation and impairment of fixed assets 6,044 6,660 4,740 3,301
Valuation/impairment of loans (65,574) (60,449) (47,154) (47,171)
Valuation of loans due to hedging (110) (640) (48) (348)
Employee defined benefit obligations and insurance funds 18,960 25,199 (257) 6,161
Valuation of derivatives 14,684 (6,053) 7,897 (2,569)
Effective interest rate 760 (279) 325 (87)
Fair value change of liabilities to credit institutions and other borrowed funds due to fair value hedge (39,501) 3,471 (29) 2,264
Valuation/impairment of bonds, participations and other securities 104,069 10,561 94,100 9,857
Tax losses carried forward 12,088 23,952 (34,761) 22,929
Other temporary differences (29,197) (7,061) (15,309) 325
Total 45,764 17,638 21,906 5,801
According to article 5 of Law 4303/17.10.2014 "Ratification of the Legislative Act Emergency legislation to replenish the
General Secretary of Revenue upon early termination of office (A 136) and other provisions", deferred tax assets of legal
entities supervised by the Bank of Greece, under article 26 paragraphs 5, 6 and 7 of Law 4172/2013 that have been or will
be recognized and are due to the debit difference arising from the PSI and the accumulated provisions and other general
losses due to credit risk, with respect to existing amounts up to 31 December 2014, are converted into final and settled
claims against the State, if, the accounting result for the period, after taxes is a loss according to the audited and
approved financial statements by the Ordinary Shareholders' General Meeting.
The inclusion in the Law is implemented by the approval of the General Meeting of Shareholders, relates to tax assets
arising from 2016 onwards and refers to tax period of 2015 onwards, whereas it is envisaged the end of inclusion in the law
with the same procedure and after obtaining relevant approval from the Regulatory Authority.
According to article 4 of Law 4340/1.11.2015 "Recapitalization of financial institutions and other provisions of the
Ministry of Finance" the above were amended regarding the time of the application which is postponed for a year. In
addition, the amount of deferred tax asset which is included to the legislation according to article 5 of Law
4303/17.10.2014 and relates to accumulated provisions and other general losses due to credit risk, is limited to the amount
related to the provisions for credit risk, which were accounted until 30.6.2015.
--------------------------------
* Until 31.3.2017 the tax rate was 20%.
According to article 43 of Law 4465/4.4.2017 "Integration of Directive 2014/92/EU of the European Parliament and Council
held on 23.7.2014 for the comparability of charges related to payment accounts, the change of payment account and the
access to payment accounts with basic characteristics and other provisions, into national law", the articles 27 and 27a of
the Income Tax Code were amended (Law 4172/2013).
According to the new legislation, the debit difference, that will arise from the write-off of debtors' debts and the loss
from the sale of loans of the legal entities supervised by the Bank of Greece, is recognised as a deduction from gross
income and is amortized over a period of 20 years. The deferred tax asset which will be recognized from the abovementioned
debit difference as well as of any accounting write-offs of loans or credits, not converted into debit difference until the
end of the year when the accounting write-off took place, are converted into a final and settled claim against the State,
based on the abovementioned terms and conditions.
The total amount of deferred tax asset from (a) the debit difference from the write-off of debtors' debts and the sale of
loans, (b) the temporary differences from any accounting write-off of loans and credits and (c) the temporary differences
from acccumulated provisions and other lossses due to credit risk, is limited to the total tax amount related to
accumulated provisions and other losses due to credit risk, recognised until 30.6.2015.
This amendment ensures that the loan write-offs and disposals, aiming to decrease the non performing loans, will not result
in the loss of regulatory capital.
The above apply from 1.1.2016.
As at 30.6.2017 the amount of deferred tax assets which is estimated to be within the scope of the aforementioned Law is
E 3,318 million (31.12.2016: E 3,342 million).
According to article 82 of Law 4472/19.5.2017 "Public Pension Provisions and amendment of provisions of Law 4387/2016,
measures for the implementation of budgetary targets and reforms, social support measures and labor regulations, Mediumterm
Fiscal Strategy Framework 2018-2021 and other provisions" credit institutions and other entities that fall under the
provisions of article 27A of Law 4172/2013, are required to pay an annual commission to the Greek State for the amount of
the guaranteed deferred tax asset that results from the differrence between the tax rate currently in force (29%) and the
tax rate that was in force until 31.12.2014 (26%).
On first application of the above, the commission is paid until 30.6.2017.
Additionally, article 14 of the aforementioned law provides a reduction in the tax rate, from 29% currently in force, to
26%, implied to profits from business activity acquired by legal entities keeping double-entry books. This reduction refers
to income earned in the tax year beginning on 1.1.2019, provided that according to the estimation of the International
Monetary Fund and the European Commission there is no divergence from the medium-term budgetary targets. With explicit
reference to the law, this reduction does not apply to credit institutions for which the tax rate remains 29%.
During 2016, the Bank recognized deferred tax assets of E 84.4 million relating to the impairment of the Bank's investment
in the subsidiary, Alpha Bank Srbija A.D. The loss from the sale of the investment in a foreign subsidiary is recognized as
deductible from the gross expenses during the year upon the finalization of the disposal, in accordance with article 124 of
Law 4446/22.12.2016 "Bankruptcy Code, Administration Justice, Duties-Fees, Voluntary Disclosure of Previous Years' Taxable
Income, Online Transactions, Amendments of Law 4270/2014 and other provisions". The sale of the subsidiary was completed
during the first semester of 2017.
A reconciliation between the effective and nominal tax rate is provided below:
From 1 January to
30.6.2017 30.6.2016
% %
Profit/(loss) before income tax 174,755 (347)
Income tax (nominal tax rate) 35.57 62,162 94.81 (329)
Increase/(decrease) due to:
Non taxable income (0.43) (747) (11,252)
Non deductible expenses 1.69 2,954 11,708
Other tax adjustments (4.35) (7,601) 24,328
Income tax (effective tax rate) 32.48 56,768 - 24,455
From 1 April to
30.6.2017 30.6.2016
% %
Profit/(loss) before income tax 99,462 (10,775)
Income tax (weighted average nominal tax rate) 34.29 34,103 33.69 (3,630)
Increase/(decrease) due to:
Tax losses carried forward (0.50) (493) (10,899)
Adjustments Tax rates 1.69 1,685 40.02 (4,312)
Other tax adjustments (6.61) (6,576) 28,387
Income tax (effective tax rate) 28.87 28,719 9,546
The nominal tax rate is the weighted average nominal tax rate which is calculated using the income tax ratio on earnings
before taxes, for each of the Group's subsidiaries.
Income tax of other comprehensive income recognized directly in Equity
From 1 January to
30.6.2017 30.6.2016
Before income tax Income tax After Before income tax Income tax After
income tax income tax
Amounts that may be reclassified to the Income Statement
Net change in available for sale securities' reserve 234,821 (67,561) 167,260 (20,838) 3,543 (17,295)
Net change in cash flow hedge reserve 50,608 (14,676) 35,932 (127,695) 37,126 (90,569)
Foreign exchange differences on translating and hedging the net investment in foreign operations 71,753 (445) 71,308 (1,941) (2,034) (3,975)
Total 357,182 (82,682) 274,500 (150,474) 38,635 (111,839)
Amounts that may not be reclassified to the Income Statement
Net change in actuarial gains / (losses) of defined benefit obligations 4 (1) 3
Total 357,186 (82,683) 274,503 (150,474) 38,635 (111,839)
From 1 April to
30.6.2017 30.6.2016
Before income tax Income tax After Before income tax Income tax After
income tax income tax
Amounts that may be reclassified to the Income Statement
Net change in available for sale securities' reserve 207,210 (58,814) 148,396 73,668 (22,090) 51,578
Net change in cash flow hedge reserve 25,193 (7,306) 17,887 (28,443) 7,976 (20,467)
Foreign exchange differences on translating and hedging the net investment in foreign operations 72,656 (440) 72,216 1,206 (1,748) (542)
Total 305,059 (66,560) 238,499 46,431 (15,862) 30,569
Amounts that may not be reclassified to the Income Statement
Net change in actuarial gains / (losses) of defined benefit obligations 29 (9) 20
Total 305,088 (66,569) 238,519 46,431 (15,862) 30,569
On the above appendix, the tax from discontinued opera-tions is nill (30.6.2016 : debit tax E 8)
During the first semester of 2017, "Retained earnings" includes a credit tax amount of E 79 which relates to the share
capital increase which took place on 23.2.2017.
During the first semester of 2016, "Retained earnings" includes a credit tax amount of E 281 which derives from the share
capital increase expenses which were recognized in the same account and relates to the share capital increase which took
place during 2015.
8. Earnings/(losses) per share
a. Basic
Basic earnings/(losses) per share are calculated by dividing the profit/(losses) after income tax attributable to ordinary
equity owners of the Bank, by the weighted average number of outstanding ordinary shares, after deducting the weighted
average number of treasury shares held by the Bank during the period.
b. Diluted
Diluted earnings/(losses) per share is calculated by adjusting the weighted average number of ordinary shares outstanding
to the presumed conversion amount of all dilutive potential ordinary shares. The Bank does not have any dilutive potential
ordinary shares and consequently the basic and dilutive earnings/(losses) per share should not differ.
From 1 January to From 1 April to
30.6.2017 30.6.2016 30.6.2017 30.6.2016
Profit/(loss) attributable to Equity owners of the Bank 49,570 (19,043) 1,438 (16,836)
Weighted average number of outstanding ordinary shares 1,541,665,228 1,536,881,200 1,541,665,228 1,536,881,200
Basic and diluted earnings/(losses) per share (inE ) 0.0322 (0.0124) 0.0009 (0.0110)
From 1 January to From 1 April to
30.6.2017 30.6.2016 30.6.2017 30.6.2016
Profit/(loss) from continuing operations attributable to Equity owners of the Bank 118,027 (24,901) 70,805 (20,377)
Weighted average number of outstanding ordinary shares 1,541,665,228 1,536,881,200 1,541,665,228 1,536,881,200
Basic and diluted earnings/(losses) per share from continuing operations (in E) 0.0766 (0.0162) 0.0459 (0.0133)
From 1 January to From 1 April to
30.6.2017 30.6.2016 30.6.2017 30.6.2016
Profit/(loss) from discontinued operations attributable to Equity owners of the Bank (68,457) 5,858 (69,367) 3,541
Weighted average number of outstanding ordinary shares 1,541,665,228 1,536,881,200 1,541,665,228 1,536,881,200
Basic and diluted earnings/(losses) per share from discontinued operations (in E) (0.0444) 0.0038 (0.0450) 0.0023
On 23.2.2017, as a result of exercising the conversion right of all bondholders, the Bank increased its share capital, due
to the conversion of the total convertible bond that was issued on 1.2.2013, under the agreement with Credit Agricole SA
for the acquisition of former Emporiki Bank.
From the conversion, 6,818,181 new common shares were issued representing 0.44% of total shares, which were taken under
consideration for the the calculation of the weighted average number of outstanding ordinary shares of the period 1.1 -
30.6.2017.
ASSETS
9. Loans and advances to customers
30.6.2017 31.12.2016
Individuals
Mortgages 19,538,962 19,670,133
Consumer:
- Non-securitized 4,126,012 4,041,109
- Securitized 1,131,631 1,272,572
Credit cards:
- Non-securitized 714,923 718,425
- Securitized 536,406 540,376
Other 943 705
Total 26,048,877 26,243,320
Companies:
Corporate loans:
- Non-securitized 26,128,711 26,595,645
- Securitized 2,419,237 2,514,014
Finance leases (Leasing):
- Non-Securitized 367,850 347,810
- Securitized 325,788 324,773
Factoring 472,959 528,618
Total 29,714,545 30,310,860
Other receivables 344,095 412,833
56,107,517 56,967,013
Less: Allowance for impairment losses * (12,322,167) (12,558,253)
Total 43,785,350 44,408,760
The Bank and Alpha Leasing S.A. have proceeded in securitization of consumer, corporate loans, credit cards and finance
leases through special purpose entities controlled by them.
Based on the contractual terms and structure of the above transactions (e.g. allowance of guarantees or/and credit
enhancement or due to the Bank owing the bonds issued by the special purpose entities), the Bank and Alpha Leasing A.E.
retained in all cases the risks and rewards deriving from the securitized portfolios.
As at 30.6.2017 mortgage loans included loans amounting to E 15.1 million (31.12.2016: E 15.5 million) that have been
granted as collateral in the covered bonds program of the Bank. On 30.6.2017 the above mentioned covered bonds amounted to
E 5 million (31.12.2016: E 5 million) (note 15).
----------------------------------
* In addition to the allowance for impairment losses regarding loans and advances to customers, a provision of E 1,358
(31.12.2016: E 3,195) has been recorded to cover credit risk relating to off-balance sheet items. The total provision
recorded to cover credit risk amounts to E 12,323,525 (31.12.2016: E 12,561,448).
Allowance for impairment losses
Balance 1.1.2016 12,021,755
Impairment losses for the period from continuing operations (note 6) 620,806
Impairment losses for the period from discontinued operations (991)
Transfers of accumulated provisions to assets held for sale (99,975)
Sales of impaired loans (8,596)
Change in present value of the allowance account 261,047
Foreign exchange differences (6,209)
Loans written-off during the period (467,387)
Balance 30.6.2016 12,320,450
Changes for the period 1.7. - 31.12.2016
Impairment losses for the period for continued operations 572,942
Impairment losses for the period for discontinued operations 3,204
Transfers of accumulated provisions to assets held for sale (73,818)
Utilization of accumulated provisions for other movements (16,425)
Sales of impaired loans (9,199)
Change in present value of the allowance account 152,788
Foreign Exchange differences 14,102
Loans written-off during the period (405,791)
Balance 31.12.2016 12,558,253
Changes for the period 1.1. - 30.6.2017
Impairment losses for the period (note 6) 476,924
Transfers of accumulated provisions from assets held for sale 3,417
Sales of impaired loans/Disposal of subsidiaries (51,717)
Change in present value of the allowance account 171,170
Foreign exchange differences (28,042)
Loans written-off during the period (807,838)
Balance 30.6.2017 12,322,167
In the context of management of non performing loans, the Group proceeded during the first semester of 2017 in loans'
write-offs of E 808 million.
The finance lease receivables by duration are as follows:
30.6.2017 31.12.2016
Up to 1 year 336,281 324,206
From 1 year to 5 years 220,371 202,472
Over 5 years 220,454 237,799
777,106 764,477
Non accrued finance lease income (83,468) (91,894)
Total 693,638 672,583
The net amount of finance lease receivables by duration is analyzed as follows:
30.6.2017 31.12.2016
Up to 1 year 322,566 309,997
From 1 year to 5 years 185,952 165,083
Over 5 years 185,120 197,503
Total 693,638 672,583
10. Investment and held for trading securities
i. Held for trading securities
Securities held for trading amounted to E 7.3 million on 30.6.2017 (31.12.2016: E 4.7 million) out of which Greek
government bonds E 4.7 million (31.12.2016: E2.3 million).
ii. Investment securities
a. Available for sale
The available for sale portfolio amounted to E 5,670.7 million as at 30.6.2017 (31.12.2016: E 5,217.1 million). These
amounts include securities issued by the Greek State that amounted to E 3,757.8 million as at 30.6.2017 (31.12.2016:
E 3,589.7 million) of which E 1,420.4 million (31.12.2016: E 1,510.8 million) related to Greek Government treasury bills.
In addition, the available for sale portfolio includes bonds issued by the European Financial Stability Facility (EFSF),
with a book value of E 415.2 million (31.12.2016: E 9.2 million), out of which amount of E 185.3 million relates to the
exchange of loan portfolio with the EFSF, in the context of the implementation of short-term measures for public debt
relief and E229.9 from placements in secondary market .
The Group during the first semester of 2017 has recognized impairment losses for other bonds amounting to E 1.8 million,
for shares amounting to E 203 and for mutual funds amounting to E 87 which are included in "Gains less losses on financial
transactions".
On 26.7.2017, the Group participated in the new issue of a five-year Greek government bond with a start date on 1.8.2017,
maturity date on 1.8.2022 and a 4.625% yield, by exchanging a bond with a nominal value of E 440 million, of a 5-year
duration, maturity on 17.4.2019 and a fixed price of 102,6% of its nominal value.
b. Held to maturity
The held to maturity portfolio amounts to E 21.4 million as at 30.6.2017 (31.12.2016: E 45 million). The variation between
the comparative periods is mainly attributed to the maturity of a bank bond with a carrying amount of E 10 million and due
to recall corporate bonds carrying value amounting to E 9.2 million
c. Loans and receivables
Loans and receivables include bonds issued by the European Financial Stability Facility (E.F.S.F.)
These bonds under the original contract could only be used as collateral to obtain liquidity from the Eurosystem or from
interbank counterparties in repos.
In April 2016 the subscription agreement between the European Financial Stability Fund (EFSF), the Hellenic Financial
Stability Fund (HFSF) and the Bank was revised. The revision refers to the terms of use of the above bonds. The revision
states that the Bank may participate with the EFSF bonds in the purchase programme for the bonds issued by central
governments, special bodies securities issuers and European supranational institutions of the Eurozone (Public Sector
Purchase Programme - PSPP) conducted by ECB. According to the ECB's decision, a total up to 50% of each EFSF issue can be
purchased until the completion of the program in March 2017.
Until 23.01.2017, the Bank conducted sale transactions of EFSF securities at a nominal value of E 140 million, under the
PSPP program.
In the context of the implementation of short-term measures for public debt relief, the European Stability Mechanism (ESM),
the EFSF, the HFSF, the Greek State and the four Greek systemic banks signed a bond exchange agreement in March 2017.
Under this agreement, floating rate bonds issued by EFSF and held by the Banks are gradually exchanged with long-term fixed
rate bonds issued by EFSF with equal nominal value, which will be repurchased within one month from EFSF against cash. For
the use of long-term fixed rate bonds the same restrictions apply to these of floating-rate bonds, i.e. they consist
eligible instruments for providing financing from the Eurosystem and the participation of the ECB's bond purchase program
(PSPP) and can be pledged as collateral under repurchase transactions with interbank counterparties.
During the first semester of 2017 and under this agreement, the Bank exchanged floating rate bonds of nominal value E 614.8
million, issued by EFSF, with equal in nominal value bonds, of fixed coupon, issued by EFSF, with a maturity of 30 years.
Out of these bonds EFSF repurchased bonds with a nominal value of E 429.6 million whilst the remaining bond of E 185.2
million nominal value was reclassified in the available for sale portfolio. On 30.06.2017 the book value of the loans and
receivables portfolio stood at E 1,919.7 million. (31.12.2016: E 2,682.7 million).
11. Investment property
Land-Buildings
Balance 1.1.2016
Cost 800,910
Accumulated depreciation and impairment losses (177,248)
1.1.2016 - 30.6.2016
Net book value 1.1.2016 623,662
Additions 40,481
Reclassification from "Property, plant and equipment" 25,314
Reclassification to "Assets held for sale" (40,233)
Foreign exchange differences (101)
Disposals/Write-offs (14,368)
Depreciation charge for the period from continuing operations (6,393)
Depreciation charge for the period from discontinued operations (72)
Net book value 30.6.2016 628,290
Balance 30.6.2016
Cost 802,219
Accumulated depreciation and impairment losses (173,929)
1.7.2016 - 31.12.2016
Net book value 1.7.2016 628,290
Additions 35,588
Additions from companies consolidated for the first time in 2016 11,907
Reclassification from "Property, plant and equipment" (2)
Reclassification of investment assets of discontinued operations to "Assets held for sale" (6,302)
Foreign exchange differences (438)
Disposals/Write-offs (16,216)
Depreciation charge for the period from continuing operations (6,544)
Impairment losses (32,191)
Net book value 31.12.2016 614,092
Balance 31.12.2016
Cost 800,527
Accumulated depreciation and impairment losses (186,435)
1.1.2017 - 30.6.2017
Net book value 1.1.2017 614,092
Additions 24,728
Reclassification from "Property, plant and equipment" 28
Reclassification to "Property, plant and equipment" (1,377)
Foreign exchange differences (393)
Disposals/Write-offs (20,876)
Subsidiary disposal (3,700)
Depreciation charge for the period from continuing operations (6,570)
Impairment losses (239)
Net book value 30.6.2017 605,693
Balance 30.6.2017
Cost 821,711
Accumulated depreciation and impairment losses (216,018)
During the current period there was no significant variation in investment property.
In 2016, an impairment loss amounting to E 32.2 million was recognized, in order for the carrying amount of investment
property not to exceed their recoverable amount as at 31.12.2016, as estimated by certified valuators.
The additions from companies consolidated for the first time in 2016 relate mainly to investment property which were
obtained as collateral for loans and acquired by the Group in the context of its credit risk methodology.
12. Property, plant and equipment
Land and Buildings Leased Equipment Equipment Total
Balance 1.1.2016
Cost 1,169,294 4,090 472,059 1,645,443
Accumulated depreciation and impairment losses (376,667) (2,649) (405,226) (784,542)
1.1.2016 - 30.6.2016
Net book value 1.1.2016 792,627 1,441 66,833 860,901
Foreign exchange differences (450) (48) (498)
Additions 3,428 10,710 14,138
Disposals/Write-offs (1,199) (3) (57) (1,259)
Reclassification to "Investment property" (25,314) (25,314)
Reclassification from/to "Other assets" and to "Assets held for sale" (3,379) (467) 544 (3,302)
Depreciation charge for the period from continuing operations (10,291) (179) (9,580) (20,050)
Depreciation charge for the period from discontinued operations (627) (258) (885)
Net book value 30.6.2016 754,795 792 68,144 823,731
Balance 30.6.2016
Cost 1,135,677 3,334 475,766 1,614,777
Accumulated depreciation and impairment losses (380,882) (2,542) (407,622) (791,046)
1.7.2016 - 31.12.2016
Net book value 1.7.2016 754,795 792 68,144 823,731
Foreign exchange differences 164 (1) 11 174
Additions 6,646 71 9,704 16,421
Additions from companies consolidated for the first time in 2016 278 278
Disposals/Write-offs (1,841) (29) (1,870)
Reclassification from "Investment property" 2 2
Reclassification to "Assets held for sale" 227 258 485
Reclassification of assets from discontinued operations to "Assets held for sale" (19,579) (1,387) (20,966)
Reclassification from/to "Property, plant and equipment" (77) (471) 548
Reclassification to "Other assets" (656) 467 (544) (733)
Depreciation charge for the period from continuing operations (10,313) (137) (9,165) (19,615)
Impairment losses (3,818) - (121) (3,939)
Net book value 31.12.2016 725,550 721 67,697 793,968
Balance 31.12.2016
Cost 1,097,399 3,389 462,904 1,563,692
Accumulated depreciation and impairment losses (371,849) (2,668) (395,207) (769,724)
1.1.2017 - 30.6.2017
Net book value 1.1.2017 725,550 721 67,697 793,968
Foreign exchange differences 111 1
- More to follow, for following part double click ID:nRSe5112PdRecent news on Alpha Services and Holdings SA
See all newsREG - Morgan StanleyEurope - Stabilisation Notice
AnnouncementREG - Morgan StanleyEurope - Stabilisation Notice
AnnouncementREG - Beyond Housing Ltd - Annual Financial Report
AnnouncementREG - Nomura Fin. Prducts - Post Stab Notice- Alpha (NFPE) EUR 500M 27.06.2023
AnnouncementREG - Nomura Fin. Prducts - Stabilisation Notice
Announcement