REG - Alpha Bank A.E. - Half-year Report <Origin Href="QuoteRef">ACBr.AT</Origin> - Part 8
30/08/2016 18:25
- Part 8: For the preceding part double click ID:nRSd4619Ig
Impairment losses for the period from continuing operations (note 5) 1,972,610
Impairment losses for the period from discontinued operations 174
Transfer of accumulated provisions to assets held for sale (110,626)
Change in present value of impairment losses from continuing operations 215,326
Change in present value of impairment losses from discontinued operations 1,435
Foreign exchange differences 8,678
Loans written-off during the period (101,198)
Balance 30.6.2015 8,930,849
Changes for the period 1.7 - 31.12.2015
Impairment losses for the period from continuing operations 721,391
Transfer of accumulated provisions from assets held for sale 6,936
Change in present value of impairment losses from continuing operations 259,607
Foreign exchange differences 219
Loans written-off during the period (141,761)
Balance 31.12.2015 9,777,241
Changes for the period 1.1 - 30.6.2016
Impairment losses for the period (note 5) 526,803
Transfer of accumulated provisions to assets held for sale (100,000)
Change in present value of impairment losses 217,243
Foreign exchange differences (893)
Loans written-off during the period (414,327)
Balance 30.6.2016 10,006,067
9. Trading and investment securities
a. Trading securities
Securities held for trading amounted to E 1.2 million on 30.6.2016 (31.12.2015: E 1.9 million) out of which Greek
government bonds E 1.2 million (31.12.2015: E 1.9 million).
b. Available for sale
The available for sale portfolio amounted to E 4.6 billion as at 30.6.2016 (31.12.2015: E 4.9 billion). These amounts
include securities issued by the Greek State amounted to E 3.6. billion as at 30.6.2016 (31.12.2015: E 3.8 billion) out of
which E 1.8 billion (31.12.2015: E 2.1 billion) related to Greek Government treasury bills.
The Bank during the first semester of 2016 has recognized impairment losses for shares amounting to E 1,314 and for mutual
funds amounting to E 1,143 which are included in caption "Gains less losses on financial transactions".
c. Held to maturity
The held to maturity portfolio amounts to E 9.4 million as at 30.6.2016 (31.12.2015: E 2.8 million).
d. Loans and receivables
Loans and receivables include bonds issued by the European Financial Stability Facility (E.F.S.F.) at a nominal value of
E 3,960,544 received by the Bank as a result of the share capital increase which was completed on 6.6.2013 and of nominal
value of E 284,628 which were transferred to the Bank from the Hellenic Financial Stability Fund for the undertaking of
customer deposits from the former Cooperative Banks of West Macedonia, Evia and Dodecanese in December 2013.
These bonds under the original contract could only be used as collateral to obtain liquidity from the Eurosystem or from
interbank counterparties in repo agreements. 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, conducted by ECB, for the bonds issued by central governments, special bodies-securities issuers and European
supranational institutions of the Eurozone (Public Sector Purchase Programme - PSPP). 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. During the first
semester of 2016, the Bank conducted sale transactions of EFSF securities at a nominal value of E 595 million, under the
PSPP program.
The total book value of these bonds on 30.6.2016 was E 3.7 billion. (31.12.2015: E 4.3 billion.).
10. Investments in subsidiaries, associates and joint ventures
1.1-30.6.2016 1.7-31.12.2015 1.1-30.6.2015
Subsidiaries
Opening balance 2,017,859 2,011,693 2,015,422
Additions 69,720 35,000 33,955
Disposals (41,113)
Transfer due to reclassification to assets held for sale (35,245) (26,753)
Valuation of investments due to fair value hedge (1) (4,916) (2,081) 3,429
Closing balance 2,047,418 2,017,859 2,011,693
Associates
Opening balance 631 631 631
Closing balance 631 631 631
Joint ventures
Opening balance 68,896 56,930 56,636
Additions 6,022 11,966 344
Disposals (50)
Transfer due to reclassification to assets held for sale (61,944)
Closing balance 12,974 68,896 56,930
Total 2,061,023 2,087,386 2,069,254
Additions represent: share purchases, participation in share capital increases and acquisitions of shares due to mergers.
Disposals represent: sales of shares, return of capital, proceeds arising from the liquidation of companies, contributions
in kind and impairments.
The additions in subsidiaries amounting to E 69,720 relate to the participation of the Bank to the share capital increase
of its subsidiary company Alpha Group Investments Ltd. (note 27).
The transfer of subsidiary due to reclassification to assets held for sale amounting to E 35,245 relates to the subsidiary
APE Fixed Assets A.E. which on 30.6.2016 met the conditions required by IFRS 5, as presented in detail in note 25.
The additions in joint ventures amounting to E 6,022 relate to:
a. E 5,926 to the joint venture Aktua Hellas Holdings AE with costs related with its establishment.
b. E 45 to the participation of the Bank to the share capital increase of the same joint venture (note 27) and
c. E 51 to the participation of the Bank to the share capital increase of ALPHA-TANEO AKES (note 27).
The transfer of joint ventures to assets held for sale amounting to E 61,944 relates to the joint ventures APE Commercial
Property and APE Investment Property amounting to E 50,150 and E 11,794 respectively, which on 30.6.2016 met the conditions
required by IFRS 5, as presented in detail in note 25.
(1) The Bank uses FX swaps and money market loans to hedge the foreign exchange risk of its investments in subsidiaries
abroad.
11. Investment property
Land - Buildings
Balance 1.1.2015
Cost 46,149
Accumulated depreciation and impairment losses (14,210)
1.1.2015 - 30.6.2015
Net book value 1.1.2015 31,939
Reclassification of investment assets from discontinued operations to "Asset held for sale" (1,268)
Additions from continuing operations 5
Reclassification to "Other Assets" (939)
Depreciation charge for the period from continuing operations (186)
Depreciation charge for the period from discontinued operations (9)
Net book value 30.6.2015 29,542
Balance 30.6.2015
Cost 43,845
Accumulated depreciation and impairment losses (14,303)
1.7.2015 - 31.12.2015
Net book value 1.7.2015 29,542
Additions 2
Impairments (546)
Depreciation charge for the period from continuing operations (185)
Net book value 31.12.2015 28,813
Balance 31.12.2015
Cost 43,847
Accumulated depreciation and impairment losses (15,034)
1.1.2016 - 30.6.2016
Net book value 1.1.2016 28,813
Additions 32
Reclassification to "Other Assets" (361)
Depreciation charge for the period (183)
Net book value 30.6.2016 28,301
Balance 30.6.2016
Cost 43,470
Accumulated depreciation and impairment losses (15,169)
During the current period there was no significant variation in investment property.
In 2015, an impairment loss amounting to E 546 was recognized, in order for the carrying amount of investment property not
to exceed their recoverable amount as at 31.12.2015, as estimated by certified valuators. The impairment amount was
recorded in "Other Expenses".
12. Property, plant and equipment
Land and Buildings Leased Equipment Equipment Total
Balance 1.1.2015
Cost 984,065 784 383,690 1,368,539
Accumulated depreciation and impairment losses (306,185) (144) (332,625) (638,954)
1.1.2015 - 30.6.2015
Net book value 1.1.2015 677,880 640 51,065 729,585
Reclassification of assets from discontinued operations to "Assets held for sale" (3,583) (2,349) (5,932)
Additions 2,905 8,371 11,276
Additions from discontinued operations 127 70 197
Disposals/write-offs (633) (13) (646)
Disposals/write-offs from discontinued operations (120) (25) (145)
Reclassification to "Other Assets" (5,778) (18) (5,796)
Reclassification from "Other Assets" 18 18
Depreciation charge for the period from continuing operations (9,030) (54) (6,962) (16,046)
Depreciation charge for the period from discontinued operations (349) (241) (590)
Net book value 30.6.2015 661,420 568 49,934 711,922
Balance 30.6.2015
Cost 965,235 753 378,082 1,344,070
Accumulated depreciation and impairment losses (303,815) (185) (328,148) (632,148)
1.7.2015 - 31.12.2015
Net book value 1.7.2015 661,420 568 49,934 711,922
Additions 3,079 5,219 8,298
Impairments (1,061) (1,061)
Disposals/write-offs (1,796) (11) (1,807)
Reclassification to "Other Assets" (8,328) (450) (8,778)
Reclassification from "Other Assets" 1 1
Reclassification from "Equipment" to "Land and buildings" 5 (5)
Depreciation charge for the period from continuing operations (9,084) (53) (7,591) (16,728)
Net book value 31.12.2015 644,235 515 47,097 691,847
Balance 31.12.2015
Cost 954,445 752 361,921 1,317,118
Accumulated depreciation and impairment losses (310,210) (237) (314,824) (625,271)
1.1.2016 - 30.6.2016
Net book value 1.1.2016 644,235 515 47,097 691,847
Additions 2,907 9,460 12,367
Disposals/write-offs (753) (9) (762)
Reclassification to "Other Assets" (3,302) (3,302)
Reclassification from "Leased equipment" to "Equipment" (467) 467
Depreciation charge for the period (8,496) (44) (7,311) (15,851)
Net book value 30.6.2016 634,591 4 49,704 684,299
Balance 30.6.2016
Cost 951,003 8 367,818 1,318,829
Accumulated depreciation and impairment losses (316,413) (4) (318,114) (634,531)
During the current period there was no significant variation in property, plant and equipment.
The carrying amount of owned land and buildings included in the above balances amounts to E 608,027 as at 30.6.2016
(31.12.2015: E 614,844).
In 2015, an impairment loss of E 1,061 was recognized in caption "Other Expenses".
13. Goodwill and other intangible assets
Software Banking rights Other Total
Balance 1.1.2015
Cost 385,793 1,785 115,342 502,920
Accumulated amortization and impairment losses (221,775) (1,785) (18,009) (241,569)
1.1.2015 - 30.6.2015
Net book value 1.1.2015 164,018 97,333 261,351
Reclassification of assets of discontinued operations to "Assets held for sale" (3,352) (3,352)
Additions 22,586 22,586
Additions from discontinued operations 74 74
Additions from the acquisition of Diners 22,995 22,995
Amortization for the period from discontinued operations (153) (153)
Amortization for the period from continuing operations (7,799) (10,113) (17,912)
Net book value 30.6.2015 175,374 - 110,215 285,589
Balance 30.6.2015
Cost 401,708 1,785 138,267 541,760
Accumulated amortization and impairment losses (226,334) (1,785) (28,052) (256,171)
1.7.2015 - 31.12.2015
Net book value 1.1.2015 175,374 110,215 285,589
Additions 34,439 72 34,511
Amortization for the period from continuing operations (8,790) (11,489) (20,279)
Net book value 31.12.2015 201,023 - 98,798 299,821
Balance 31.12.2015
Cost 441,920 1,785 138,339 582,044
Accumulated amortization and impairment losses (240,897) (1,785) (39,541) (282,223)
1.1.2016 - 30.6.2016
Net book value 1.1.2016 201,023 98,798 299,821
Additions 41,484 41,484
Amortization for the period (10,096) (9,146) (19,242)
Net book value 30.6.2016 232,411 - 89,652 322,063
Balance 30.6.2016
Cost 483,404 1,785 138,339 623,528
Accumulated amortization and impairment losses (250,993) (1,785) (48,687) (301,465)
The additions of the first semester of 2016 mainly concern acquisitions of user rights for computer applications.
The amount reported as "Additions from the acquisition of Diners" in the first semester of 2015 relates to the recognition
of an intangible asset regarding the customer relationships from the acquired operation of credit cards, whose useful life
was estimated at 7 years.
Liabilities
14. Due to Banks
30.6.2016 31.12.2015
Deposits:
- Current accounts 74,597 126,267
- Term deposits:
Central Banks 22,671,358 24,404,828
Other credit institutions 134,207 62,821
Cash collateral for derivative margin account 28,703 56,960
Sale of repurchase agreements (Repos) 665,802 269,292
Borrowing funds 249,558 250,469
Total 23,824,225 25,170,637
Eurosystem funding decreased by E 1.7 billion during the first semester of 2016 mainly due to the sale of EFSF bonds
through the PSPP programme (note 9) and new repurchase agreements (Repos).
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 the above program with an amount of E 1 billion.
15. Debt securities in issue and other borrowed funds
i. Issues quaranteed by the Greek State (Law 3723/2008)
Under the programme for the enhancement of the Greek's economy's liquidity, according to Law 3723/2008, the first semester
of 2016 the Bank proceeded to the issuance of senior debt securities guaranteed by the Greek State amounted to E 5.15
billion while the maturities/redemptions for the same period amounted to E 9.22 billion.
The total balance of senior debt securities guaranteed by the Greek State as at 30.6.2016 amounts to E 5.15 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
Bank.
ii. Covered bonds (1)
Covered bonds are not included in caption "Debt securities in issue and other borrowed funds" as these securities are held
by the Bank.
The total balance of covered bonds as at 30.6.2016 amounts to E 5 million.
iii. Senior debt securities
Balance 1.1.2016 29,742
Changes for the period 1.1 - 30.6.2016
Maturities/Repayments (2,873)
Fair value change 38
Accrued interest (7)
Foreign exchange differences (81)
Balance 30.6.2016 26,819
On 23.5.2016 an early redemption of senior debt security with a nominal value of USD 3 million took place.
(1) Financial disclosures regarding covered bond issues, as determined by the 2620/28.08.2009 Act of the Bank of Greece
have been published on the Bank's website.
iv. Liabilities from the securitization of shipping loans
Balance 1.1.2016 310,268
Changes for the period 1.1 - 30.6.2016
Maturities/Repayments (44,438)
Accrued interest 4,441
Foreign exchange differences (15,083)
Balance 30.6.2016 255,188
The Bank proceeded to 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 to the special
purpose entity on 30.6.2016 which relates with the securitized shipping loans amounts to E 255.2 million.
v. Liabilities from the securitization of other loans
Additional liabilities arising from the securitisation 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 3.7 billion have been
issued by special purpose entities and are held by the Bank.
vi. Subordinated debt
Balance 1.1.2016 26,382
Changes for the period 1.1 - 30.6.2016
Accrued interest (8)
Balance 30.6.2016 26,374
vii. Hybrid securities
Balance 1.1.2016 15,239
Changes for the period 1.1 - 30.6.2016
Accrued interest 34
Balance 30.6.2016 15,273
viii. Convertible bond loan
Balance 1.1.2016 24,600
Changes for the period 1.1 - 30.6.2016
Fair value change (9,300)
Balance 30.6.2016 15,300
The convertible bond concerns to 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 valuation of the liability from the
convertible bond was recognized in "Gains less losses on financial transactions" and amounted to E 9.3 million gain.
Total of debt securities in issue and other borrowed funds, not held by the Bank, as at 30.6.2015 338,954
16. Employee defined benefit obligations
The decrease of defined benefit obligations by E 20.9 million compared to 31.12.2015 relates mainly to the partial payment
of a recognized liability to the Employees Supplementary Funds (TAP) of former Alpha Credit Bank. More specifically, on
20.5.2016 the General Meeting of the representatives of TAP's members decided the liquidation of TAP under the terms of the
agreement signed on 21.4.2016 between the Bank, the Staff Association and TAP. Within this context the Bank paid in the
second quarter of 2016 an amount of E 24 million to TAP and the relevant liability amounts to E 4.8 million against E 27.4
million as at 31.12.2015. The final settlement of the liability is estimated that will take place during the current year.
17. Provisions
Balance 1.1.2015 333,520
Changes for the period 1.1 - 30.6.2015
Other provisions from continuing operations 1,016
Other provisions from discontinued operations 26
Other provisions used from continuing operations (4,624)
Other provisions used from discontinued operations (186)
Provisions to cover credit risk relating to off-balance sheet items from continuing operations (note 5) 4,725
Provisions to cover credit risk relating to off-balance sheet items from discontinued operations 3
Reclassification of provisions from Bulgaria Branch to "Liabilities related to assets held for sale" (623)
Balance 30.6.2015 333,857
Changes for the period 1.7 - 31.12.2015
Other provisions from continuing operations 6,209
Reversal of other provisions (6,048)
Other provisions used from continuing operations (2,033)
Provision for Voluntary Separation Scheme 64,300
Provisions to cover credit risk relating to off-balance sheet items from continuing operations 14,161
Balance 31.12.2015 410,446
Changes for the period 1.1 - 30.6.2016
Other provisions 2,620
Other provisions used during the period (3,094)
Provisions to cover credit risk relating to off-balance sheet items (note 5) 3,210
Balance 30.6.2016 413,182
The amounts of other provisions charged to the profit and loss account are included in "Other Expenses" of the income
statement.
On 30.6.2016 the balance of provisions to cover credit risk relating to off-balance sheet items amounts to E 298.2 million
(31.12.2015: E 295 million) and other provisions to E 114.9 million (31.12.2015: E 115.4 million) out of which E 24.7
million (31.12.2015: E 26.8 million) relates to pending legal cases and an amount of E 64.3 million relates to provision of
voluntary separation scheme.
Equity
18. Share capital and Retained earnings
a.Share capital
On 30.6.2016 the Bank's share capital amounts to E 461,064,360, divided to 1,536,881,200 shares, out of which:
a) 1,367,706,054 common, registered, voting, non-paper shares of nominal value E 0.30 each
b) 169,175,146 common, registered, voting, pursuant to restrictions of the article 7a of Law 3864/2010, non paper shares
owned by the Hellenic Financial Stability Fund of nominal value E 0.30 each.
b. Retained earnings
Since in 2015 there were no distributable profits, in accordance with article 44a of Codified Law 2190/1920, the Ordinary
General Meeting of Shareholders on 30.6.2016 decided the non-distribution of dividends to ordinary shareholders of the
Bank.
Additional Information
19. Contingent liabilities and commitments
a. Legal issues
The Bank, in the ordinary course of business, is defendant in claims from customers and other legal proceedings. 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 Bank.
The Bank on 30.6.2016 has recorded a provision for pending legal cases amounting to E 24.7 million (31.12.2015:
E 26.8 million) which is included in the caption "Provisions" in Balance Sheet.
b. Tax issues
Alpha Bank has been audited by the tax authorities for the years up to and including 2009. For the years 2011 up to 2014 it
has obtained a tax certificate with no qualifications whereas for year 2015 is expected to obtain a tax certificate without
any qualifications. 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 it has obtained a tax certificate with no qualifications.
The Bank's branches in London and Bulgaria have been audited by the tax authorities for the years 2013 and 2015
respectively. Former Emporiki Bank's Cyprus branch has not been audited by the tax authorities since the commencement of
its operations (year 2011), until its deletion from Department of Registrar of Companies of Cyprus (August 2015), meanwhile
it has ceased its operations since September 2014.
On 2.6.2015, the merger via absorption of Diners Club of Greece A.E.P.P was completed. The Company has been audited by the
tax authorities for the years up to and including 2010. For the years 2011 up to 2013 it has obtained a tax certificate
with no qualifications.
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.
c. Operating leases
The Bank as lessee
The Bank has various obligations with respect to leases of buildings which are used as branches or for administrative
purposes.
The duration of the lease agreements is initially for twelve years with a renewal or extension option according to the
lease agreements. The policy of the Bank is to renew these contracts.
The minimum future lease payments are:
30.6.2016 31.12.2015
Less than one year 31,144 32,553
Between one and five years 81,116 84,840
Over than five years 84,777 86,496
Total 197,037 203,889
The total lease expenses, for the first semester of 2016, relating to rental of buildings amounted to E 15,875 (first
semester of 2015: E 16,734) and are included in "General administrative expenses".
The Bank as a lessor
The Bank's receivables from leases relate to leases from buildings either to group companies or third parties.
The minimum future lease revenues are:
30.6.2016 31.12.2015
Less than one year 3,514 3,394
Between one and five years 8,028 7,770
Over than five years 7,030 6,717
Total 18,572 17,881
The lease revenues for the first semester of 2016 amounted to E 1,708 (first semester of 2015: E 1,665) and are included in
"Other income".
d. Off balance sheet liabilities
The Bank pursuant to its normal operations, is bound by contractual commitments, that in the future may result to changes
in its asset structure. These commitments are monitored in off balance sheet accounts and relate to letters of credit,
letters of guarantee, undrawn credit facilities and credit limits, as well as guarantees provided for bonds issued by
subsidiaries and other guarantees to subsidiaries.
In addition, contingent liabilities for the Bank arise from undrawn loan commitments and credit limits that may not be
fulfilled immediately or may be partly fulfilled as long as the agreed upon requirements are fulfilled by counterparties.
The outstanding balances are as follows:
30.6.2016 31.12.2015
Letters of credit 20,787 21,938
Letters of guarantee and other guarantees 4,245,032 4,525,710
Guarantees relating to bonds issued by subsidiaries of the Bank 15,542 15,542
Letters of credit are used to facilitate trading activities and relate to the financing of contractual agreements for the
transfer of goods domestically or abroad, by undertaking the direct payment on behalf of the third party bound by the
agreement on behalf of the Bank's client. Letters of credit, as well as letters of guarantee, are commitments under
specific terms and are issued by the Bank for the purpose of ensuring that its clients will fulfill the terms of their
contractual obligations.
The liability from limits that can not be recalled (committed) in case where counterparties fail to meet their contractual
obligations as at 30.6.2016 amounts to E 354.8 million (31.12.2015: E 211.2 million) and are included in the calculation of
risk weighted assets.
e. Assets pledged
Assets pledged, as at 30.6.2016 are analyzed as follows:
• Deposits pledged amounting to E 0.3 billion concerning the Bank's obligation to maintain deposits in the Bank of
Greece, corresponding to 1% of total customer deposits.
• Deposits pledged amounting to E 0.2 billion concerning guarantees provided on behalf of the Greek State.
• Deposits pledged to credit institutions amounting to E 1.3 billion which have been provided as guarantee for derivative
transactions.
• Deposits pledged to credit institutions amounting to E 0.06 billion, were given as letters of credit or letters of
guarantee issued by the Bank in order to facilitate clients' imports.
• Deposits of E 3 million were pledged to the Resolution Fund as irrevocable payment commitment for a part of 2016
contribution. The commitment has to be fully secured by cash as decided by the Single Resolution Board.
• Due from banks:
i. amount of E 0.8 billion pledged to central banks for liquidity purposes.
ii. amount of E 0.35 billion given to foreign subsidiaries as collateral for credit risk.
• Loans and advances to customers:
i. amount of nominal value of E 22.8 billion pledged to Central Banks for liquidity purposes.
ii. a carrying amount of E 2.8 billion, which relates to corporate, consumer loans and credit cards, has been securitized
for the issuance of Special Purpose Entities' bonds of a nominal value of E 3.7 billion, which are held by the Bank and
pledged to Central Banks for liquidity purposes.
iii. a carrying amount of E 0.6 billion, which relates to shipping loans, has been securitized for the issuance of
securities for the purpose of financing the Bank through a Special Purpose Entitiy, which amounts to E 0.3 billion at
30.6.2016.
iv. an amount of nominal value of E 0.1 billion has been pledged for other loan facilities.
• Securities held for trading and investment securities portfolio:
i. an amount of nominal value of E 3.54 billion of Greek government securities, out of which a nominal amount of E 3.5
billion has been pledged to central banks for liquidity purposes, and a nominal amount of E 0.04 billion has been pledged
for other loan facilities.
ii. an amount of nominal value of E 3.65 billion relates to securities issued by the European Financial Stability Facility
(EFSF), received from the Bank by the HFSF in the context of: a) its participation to the share capital increase that was
completed on 6.6.2013, and, b) due to the coverage of the difference between the values of assets and liabilities
transferred from Cooperative Banks, out of which an amount of E 3.39 billion is pledged as collateral to Central Banks for
participation in main refinancing operations and an amount of E 0.26 billion has been given as collateral for other loan
facilities.
iii. An amount of nominal value of E 0.5 billion relates to bonds issued from the securitization of receivables of finance
leases of a Group's entity, has been pledged to Central Banks in order for the Bank to participate in main refinancing
operations.
iv. An amount of E 0.4 billion of other corporate securities has been given as a collateral for repo agreements.
In addition an amount of nominal value of E 5.2 billion that relates to securities issued under the guarantee of the Greek
State in accordance with Law 3723/2008 and are held by the Bank, has been pledged by a) an amount of E 5 billion as
collateral to Central Banks for liquidity purposes and b) an amount of E 0.2 billion has been given as collateral for other
loan facilities.
20. Operating segments
(Amounts in million of Euro)
1.1 - 30.6.2016
Retail Banking CorporateBanking Asset Management/Insurance Investment Banking/ Treasury South Eastern Europe Other Total
Net interest income 504.4 341.6 0.9 (33.9) 10.3 823.3
Net fee and commission income 53.9 63.1 12.6 2.2 131.8
Other income 3.3 2.2 0.5 20.1 103.6 129.7
Total income 561.6 406.9 14.0 (11.6) - 113.9 1,084.8
Total expenses (329.9) (63.1) (7.3) (8.2) - (26.3) (434.8)
Impairment losses (166.0) (354.7) (520.7)
Profit/(losses) before income tax 65.7 (10.9) 6.7 (19.8) - 87.6 129.3
Income tax (4.7)
Profit / (losses) after income tax from continuing operations 124.6
Profit/(losses) after income tax from discontinued operations 0.2 0.2
Net profit/(losses) after income tax 124.8
Assets 30.6.2016 24,763.7 18,039.9 126.0 13,366.0 7,035.8 63,331.4
Liabilities 30.6.2016 22,322.4 5,990.2 599.5 25,865.0 94.1 54,871.2
(Amounts in million of Euro)
1.1 - 30.6.2015
Retail Banking CorporateBanking Asset Management/Insurance Investment Banking/ Treasury South Eastern Europe Other Total
Net interest income 484.6 346.9 2.4 (49.9) 0.4 784.4
Net fee and commission income 53.2 61.0 23.0 (6.3) 130.9
Other income 2.7 3.6 0.7 39.4 (66.3) (19.9)
Total income 540.5 411.5 26.1 (16.8) - (65.9) 895.4
Total expenses (328.2) (60.4) (8.7) (8.4) - (15.6) (421.3)
Impairment losses (1,068.0) (898.7) (1,966.7)
Negative goodwill from acquisitions 48.2 48.2
Profit/(losses) before income tax (855.7) (547.6) 17.4 (25.2) - (33.3) (1,444.4)
Income tax 335.8
Profit / (Losses) after income tax from continuing operations (1,108.6)
Profit/( losses) after income tax from discontinued operations (89.3) (89.3)
Profit/( losses) after income tax (1,197.9)
Assets 31.12.2015 24,753.6 19,187.6 63.6 13,421.4 444.6 7,122.2 64,993.0
Liabilities 31.12.2015 22,575.7 5,818.7 522.2 27,070.1 338.8 249.4 56,574.9
i. Retail Banking
Includes all individuals (retail banking customers), professionals, small and very small companies except for those whose
relationship management is performed by branches abroad (South Eastern Europe).
The Bank, through its extended branch network, offers all types of deposit products (deposits/ savings accounts, working
capital/ current accounts, investment facilities/ term deposits, Repos, Swaps), loan facilities (mortgages, consumer,
corporate loans, letters of guarantee) and debit and credit cards of the above customers.
ii. Corporate Banking
Includes all medium-sized and large companies, multinational companies, corporations managed by the Corporate Banking
Division and shipping companies. The Bank offers working capital facilities, corporate loans, and letters of guarantee of
the abovementioned corporations.
iii. Asset Management/Insurance
Consists of a wide range of asset management services
offered through the Bank's private banking units. Additionally, a wide range of insurance products to individuals and
companies is provided.
iv. Investment Banking/Treasury
Includes stock exchange, advisory and brokerage services relating to capital markets, and also investment banking
facilities, offered by the Bank. It also includes the activities of the Dealing Room in the interbank market (FX Swaps,
Bonds, Futures, IRS, Interbank placements - Loans etc.).
v. South Eastern Europe
The Bank's branch in Bulgaria, included in this segment, is presented in caption "Profit/(losses) from discontinued
operations".
vi. Other
This segment consists of administration departments of the Bank and income and expenses that are not related to its
operating activities or are non recurring and are due to external factors.
21. Exposure in credit risk from debt issued by the peripheral Eurozone countries
Due to the prolonged turmoil in the Eurozone countries, and the issues which the Greek economy faces, concerning the
service of public debt, the Bank monitors the credit risk from its exposure to the Greek State as well as the remaining
peripheral Eurozone countries.
i. Exposure to the Greek State
The table below presents the Bank's total exposure in Greek Government securities:
30.6.2016 31.12.2015
Portofolio Nominal value Carrying amount Nominal value Carrying amount
Available for sale 4,289,577 3,595,503 4,537,722 3,831,479
Trading 1,790 1,234 2,783 1,888
Total 4,291,367 3,596,737 4,540,505 3,833,367
All Greek Government securities are classified in Level 1 based on the quality of inputs used for the estimation of their
fair value.
In addition the public entities securities on 30.6.2016 amounted to E 150.6 million (31.12.2015: E 150.7 million.).
The Bank's exposure to Greek State credit risk from other financial instruments, excluding securities and loans and
advances is depicted in the table below:
On balance sheet exposure
30.6.2016 31.12.2015
Carrying amount Carrying amount
Derivative financial instruments - assets 420,151 362,700
Derivative financial instruments - liabilities (164,984) (271,711)
Derivative financial assets from public sector entities amounted to E 6.5 million on 30.6.2016 (31.12.2015: E 16.6 million
liabilities).
The Bank's exposure in loans granted to public sector entities/organizations on 30.6.2016 amounted to E 1,309 million
(31.12.2015: E 1,297.6 million). The Bank for the above receivables has recognized impairment amounted to E 43.4 million as
at 30.6.2016 (31.12.2015: E 42.1 million).
In addition the balance of Bank's loans guaranteed by the Greek State (directly guaranteed by Greek government, loans
guaranteed by TEMPE, loans guaranteed by Common Ministerial Decisions) on 30.6.2016 amounted to E 749.3 million
(31.12.2015: E 764 million). For these loans the Bank has recognized impairment amounted to E 149 million as at 30.6.2016
(31.12.2015: E 144.3 million).
ii. Exposure to other peripheral Eurozone countries debt
The Bank as at 30.6.2016 had no exposure to bonds issued by Cyprus, Italy, Portugal and Ireland.
22. Disclosures relevant to the fair value of financial instruments
Fair value of financial instruments measured at amortized cost
30.6.2016 31.12.2015
Fair Carrying amount Fair Carrying amount
value value
Assets
Loans and advances to customers 40,900,548 40,988,044 41,493,462 41,558,014
Investment securities
- Held to maturity 9,018 9,379 2,561 2,823
- Loans and receivables 3,761,683 3,683,411 4,364,715 4,289,482
Liabilities
Due to customers 27,669,491 27,689,554 27,724,167 27,733,679
Debt securities in issue (1) 282,155 323,654 332,014 381,631
The table above presents the fair value and the carrying amount of financial instruments which are measured at amortized
cost.
The fair value of loans is estimated based on the interbank market yield curves by adding a liquidity premium and spread
per loan category and business unit for the expected loss. The fair value of deposits is estimated based on the interbank
market yield curves by deducting customer's spread depending on the type of deposit. In both of these cases, the future
cash flows (floating rate) are calculated based on the implied forward rates until their maturity.
The fair value of held to maturity securities and debt securities in issue is calculated using market prices, as long as
the market is active. In all other cases as well as for the loans and receivables portfolio the discounted cash flows
method is used and all significant variables are based either on observable market data or on a combination of observable
and unobservable market data.
The fair value of other financial assets and liabilities which are recorded at amortized cost does not differ materially
from the respective carrying amount.
Hierarchy of financial instruments measured at fair value
30.6.2016
Level 1 Level 2 Level 3 Total Fair value
Derivative financial assets 4,616 830,349 6,913 841,878
Securities held for trading
- Bonds and treasury bills 1,234 1,234
Available for sale securities
- Bonds and treasury bills 3,853,712 654,492 39,342 4,547,546
- Shares 32,598 13,168 13,387 59,153
- Other variable yield securities 6,047 6,047
Derivative financial liabilities 1,672,404 1,571 1,673,975
Convertible bond 15,300 15,300
31.12.2015
Level 1 Level 2 Level 3 Total Fair value
Derivative financial assets 6,661 784,280 3,530 794,471
Securities held for trading
- Bonds and treasury bills 1,888 1,888
Available for sale securities
- Bonds and treasury bills 4,086,826 651,470 19,460 4,757,756
- Shares 113,142 12,803 125,945
- Other variable yield securities 7,190 7,190
Derivative financial liabilities 1,556,555 1,556,555
Convertible bond 24,600 24,600
(1) Debt securities in issue do not include the convertible bond loan issued by the Bank in the context of the agreement
with Credit Agricole S.A. regarding the acquisition of Emporiki Bank since this security is measured at fair value.
The tables above present the fair value of financial instruments which are measured at fair value in hierarchy levels based
on inputs used for the fair value measurement. Securities traded in an active market and exchange-traded derivatives are
classified as Level 1.
The available for sale securities whose fair value is calculated based on non-binding market prices provided by
dealers-brokers or on the application of the income approach methodology using interest rates and credit spreads which are
observable in the market, are classified as Level 2. Level 3 classification includes securities whose fair value is
estimated using significant unobservable inputs.
The fair value of non listed shares, as well as shares not traded in an active market is determined based on the
estimations made by the Bank which relate to the future profitability of the issuer after taking into account the expected
growth rate of its operations, as well as the weighted average rate of capital return which is used as a discount rate.
Given that the above parameters are mainly non observable, the valuation of these shares is classified as Level 3.
On 30.6.2016 the Bank classified in the available for sale securities portfolio the preference shares of Visa Inc. which
the Bank received through the acquisition of Visa Europe by Visa Inc. (note 3). In order to determine their fair value the
Bank used the conversion rate into ordinary shares and the current stock price of the ordinary share by taking into
consideration the sale restrictions. The abovementioned shares were classified as level 2 securities, as the non-observable
inputs used are insignificant in the calculation of the final fair value.
For the valuation of over the counter derivatives income approach methodologies are used: discounted cash flow models,
option-pricing models or other widely accepted valuation models. Valuations are checked on a daily basis with the
respective prices of the counterparty banks in the context of the daily process of provision of collaterals and settlement
of derivatives. If the non-observable inputs are significant, the fair value that arises is classified into Level 3 or
otherwise in Level 2.
Finally, the valuation of the convertible bond loan was based on the estimated share price at the maturity date of the
bond, as reflected in the Bank's business plan, which is unobservable market parameter.
The Bank recognizes the transfer between fair value
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