REG - Alpha Bank A.E. - Half-year Report <Origin Href="QuoteRef">ACBr.AT</Origin> - Part 8
31/08/2017 18:16
- Part 8: For the preceding part double click ID:nRSe5112Pg
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 (note 6).
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 disposal 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 disposal of the
subsidiary was completed during the first semester of 2017.
Income tax of other comprehensive income recognized directly in Equity
From 1 January to
30.6.2017 30.6.2016
Before income tax Income After income tax Before income tax Income After income tax
tax tax
Amounts that may be reclassified to the Income Statement
Net change in available for sale securities' reserve 222,935 (64,437) 158,498 13,470 (3,906) 9,564
Net change in cash flow hedge reserve 51,427 (14,914) 36,513 (128,790) 37,349 (91,441)
Total 274,362 (79,351) 195,011 (115,320) 33,443 (81,877)
During the first semester of 2017, a tax credit of E 79, which resulted from share capital increase expenses on 23.2.2017,
is presented in the account "Retained earnings".
In the first semester of 2016, a tax amounting to E 281, which resulted from share capital increase expenses is presented
in the account "Retained earnings" and is related to an increase of the share capital realized in the year 2015.
9. 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 of the period, after deducting the
weighted average number of treasury shares held by the Bank during the same period.
b. Diluted
Diluted earnings/(losses) per share are 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 there is no reason for the basic and dilutive earnings/(losses) per share to differ.
From 1 January to
30.6.2017 30.6.2016
Profit/(loss) attributable to Equity owners of the Bank 211,920 124,775
Weighted average number of outstanding ordinary shares 1,541,665,288 1,536,881,200
Basic and diluted earnings/(losses) per share (in E ) 0.1375 0.0812
From 1 January to
30.6.2017 30.6.2016
Profit/(loss) from continuing operations attributable to Equity owners of the Bank 211,920 124,542
Weighted average number of outstanding ordinary shares 1,541,665,288 1,536,881,200
Basic and diluted earnings/(losses) per share (in E ) 0.1375 0.0810
From 1 January to
30.6.2017 30.6.2016
Profit/(loss) from discontinued operations attributable to Equity owners of the Bank 233
Weighted average number of outstanding ordinary shares 1,536,881,200
Basic and diluted earnings/(losses) per share (in E ) - 0.0002
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
10. Loans and advances to customers
30.6.2017 31.12.2016
Individuals
Mortgages
- Non-securitized 16,097,018 16,231,470
Consumer:
- Non-securitized 3,624,542 3,546,181
- Securitized 1,131,631 1,272,572
Credit cards:
- Non-securitized 677,420 680,502
- Securitized 536,406 540,376
Total 22,067,017 22,271,101
Companies:
Corporate loans:
- Non-securitized 24,249,040 25,474,333
- Securitized 2,419,236 2,514,014
Other receivables 311,786 387,432
49,047,079 50,646,880
Less: (9,886,381) (10,385,356)
Allowance for impairment losses *
Total 39,160,698 40,261,524
The Bank has proceeded in securitization of consumer, corporate loans and credit cards 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 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 17 ii).
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* In addition to the allowance of impairment losses regarding loans and advances to customers, a provision of E 6,818
(31.12.2016: E 299,128) has been recorded to cover credit risk relating to off-balance sheet items. Thus, the total
provision recorded to cover credit risk amounts to E 9,893,199 (31.12.2016: E 10,684,484).
Allowance for impairment losses
Balance 1.1.2016 9,777,241
Changes for the period 1.1 - 30.6.2016
Impairment losses for the period (note 7) 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 (414,327)
Balance 30.6.2016 10,006,067
Changes for the period 1.7 - 31.12.2016
Impairment losses for the period from continuing operations 654,294
Utilization of provisions for other movements (16,425)
Disposal of impaired loans (1,693)
Change in present value of impairment losses 107,586
Foreign exchange differences 6,092
Loans written-off (370,565)
Balance 31.12.2016 10,385,356
Changes for the period 1.1 - 30.6.2017
Impairment losses for the period (note 7) 362,943
Transfer of accumulated provisions to Investments in subsidiaries, associates and joint ventures (note 12) (212,152)
Disposal of impaired loans (9,183)
Change in present value of impairment losses 120,343
Foreign exchange differences (10,484)
Loans written-off (750,442)
Balance 30.6.2017 9,886,381
In the context of the capital restructuring of its subsidiary AGI Cypre Ermis Ltd the Bank during the first semester of
2017 reclassified to accumulated impairment of its subsidiaries the amount of E 212,152 that corresponds to existing
impairment of Loans and advances to customers (note 12).
In the context of non - perfoming loans' management, the Bank proceeded within the first semester of 2017 in loans' write
off amounting to E 750 million.
11. Trading and investment securities
a. Trading securities
Securities held for trading amounted to E 5 million on 30.6.2017 (31.12.2016: E 2.9 million) out of which Greek Government
Bonds E 4.7 million (31.12.2016: E 2.3 million).
b. Available for sale
The available for sale portfolio amounted to E 4,815.5 mil-lion as at 30.6.2017 (31.12.2016: E 4,360 million). These
amounts include securities issued by the Greek State amounted to E 3,539.9 million as at 30.6.2017 (31.12.2016: E 3,409.7
million) out of which E 1,397.9 million (31.12.2016: E 1,478.4 million) relates to Greek Government treasury bills.
Additionally, the available for sale portfolio includes bonds issued by European Financial Stability Facility (EFSF), with
a book value of E 406.1 million (31.12.2016: E 0 million), out of which an 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 E220.8 from placements in secondary market .
The Bank during the first semester of 2017 has recognized impairment losses for other bonds amounting to E 1.2 million and
for shares amounting to E 31 which are included in the caption "Gains less losses on financial transactions".
On 26.7.2017, the Bank 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.
c. Held to maturity
The held to maturity portfolio amounts to E 318 as at 30.6.2017 (31.12.2016: E 9.3 million). The variation between the
comparative periods is mainly attributed to the maturity of a bank bond with a carrying amount of E 9 million.
d. Loans and receivables
Loans and receivables include bonds issued by the European EFSF which 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 EFSF, the Hellenic Financial Stability Fund (HFSF) and the Bank was
revised. The revision refers to the terms of use of the above securities. The revision states that the Bank may participate
with the EFSF bonds in the purchase program, 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 issuance could be purchased until the completion of
the program in March 2017. Until 23.1.2017, the Bank conducted sale transactions of EFSF securities bonds with a 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 nominal
value E 185.2 million was reclassified in the available for sale portfolio. On 30.6.2017 the book value of the loan and
receivables portfolio stood at E 1,919.7 million. (31.12.2016: E 2,682.7 million).
12. Investments in subsidiaries, associates and joint ventures
1.1-30.6.2017 1.7-31.12.2016 1.1-30.6.2016
SUBSIDIARIES
Opening balance 1,800,990 2,047,418 2,017,859
Additions 729,164 69,720
Disposals (512,516) (139,083)
Transfer due to reclassification to assets held for sale (105,000) (35,245)
Valuation of investments due to fair value hedge * (1,986) (2,345) (4,916)
Closing balance 2,015,652 1,800,990 2,047,418
ASSOCIATES
Opening balance 631 631 631
Reclassified from joint ventures 6,540
Disposals (324)
Closing balance 6,847 631 631
JOINT VENTURES
Opening balance 13,634 12,974 68,896
Additions 660 6,022
Reclassified to associates (6,540)
Transfer due to reclassification to assets held for sale (61,944)
Closing balance 7,094 13,634 12,974
Total 2,029,593 1,815,255 2,061,023
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 729,164, relate to the subsidiary company AGI Cypre Ermis Ltd by an amount of
E 704,164, as analyzed below, and E 25,000 to the participation of the Bank in the share capital increase of its subsidiary
company Alphalife A.A.E.Z.
---------------------------
* The Bank uses FX swaps and money market loans to hedge the foreign exchange risk of its investments in subsidiaries
abroad.
The disposals in subsidiaries amounting to E 512,516 relate to:
• return of capital arising from the subsidiary Emporiki Development and Real Estate Management S.A. amounting to
E 28,652 and
• impairment of the subsidiary AGI Cypre Ermis Ltd amounting to E 483,864.
The Bank, in the first semester of 2017, in the context of the capital restructuring of its subsidiary AGI Cypre Ermis Ltd,
capitalised the subsidiary by the amount of E 704 million with an equal reduction of part of the loan granted by the Bank
to the company. On the basis of the above and in the context of the impairment test of its investment in AGI Cypre Ermis
Ltd, the Bank transferred to the accumulated impairment of subsidiaries the amount of E 483,864, out of which, an amount of
E 212,152 corresponds to the existing impairment on loans and advances to customers (note 10) and an amount of E 271,712
that corresponds to existing provisions for letters of guarantee granted by the bank to its subsidiary.These letters of
guarantee were cancelled in accordance with the terms of the companys capital restructuring (note 18).
Bank's participation in Cepal Holdings SA (former Aktua Hellas Holdings S.A.) reclassified from joint ventures to
associates following the company's shareholders' agreement signed during the the second quarter of 2017 and following the
amedments in the company's Articles of association on 4.5.2017.
The disposals in associates amounting to E 324 relate mainly to a disposal of a stake of approximately 2.2% in Cepal
Holdings S.A. (former Aktua Hellas Holdings S.A.).
During the current period the Bank acquired 47.04% of the share capital of the company Famar S.A. at a price of four euro
and seventy cents. This acquisition of the shares by the Bank as well as by three other Greek banks, lenders of the
company, took place within the context of the French prebankruptcy procedure, that Famar S.A. entered into with a view to
its restructuring. At the same time, the banks and a loan management company entered into an agreement, which determines
the way of decision making regarding the management of Famar S.A., in order to maximize the recovery potential of the value
of the loans granted to the company by the Greek banks. In addition, it is noted that according to Famar's S.A. Articles of
Association, there are corporate issues for which decision making is based on the number of shareholders instead of the
percentage of shares held. The company's shares are pledged for loans granted by the aforementioned Greek banks to the
previous shareholder of Famar S.A, both before and after the restructuring agreement. The Bank assessed the above and
classified the participation in Famar S.A. investments in associates.
13. Investment property
Land - Buildings
Balance 1.1.2016
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)
1.7.2016 - 31.12.2016
Net book value 1.7.2016 28,301
Additions 1
Impairments (289)
Depreciation charge for the period (177)
Net book value 31.12.2016 27,836
Balance 31.12.2016
Cost 43,471
Accumulated depreciation and impairment losses (15,635)
1.1.2017 - 30.6.2017
Net book value 1.1.2017 27,836
Depreciation charge for the period (176)
Net book value 30.6.2017 27,660
Balance 30.6.2017
Cost 43,471
Accumulated depreciation and impairment losses (15,811)
During the current period there was no significant variation in investment property.
In 2016, an impairment loss amounting to E 289 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 impairment amount was
recorded in "Other Expenses".
No impairment was recognized for the period ended on 30.6.2017.
14. Property, plant and equipment
Land and Buildings Leased Equipment Equipment Total
Balance 1.1.2016
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 951,004 8 367,818 1,318,830
Accumulated depreciation and impairment losses (316,413) (4) (318,114) (634,531)
1.7.2016 - 31.12.2016
Net book value 1.7.2016 634,591 4 49,704 684,299
Additions 4,122 8,496 12,618
Impairments (3,956) (3,956)
Disposals/write-offs (788) (14) (802)
Reclassification to "Other Assets" (734) (734)
Reclassification from "Leased Equipment" to "Land and buildings" (4) 4
Depreciation charge for the period (8,610) (6,945) (15,555)
Net book value 31.12.2016 624,625 - 51,245 675,870
Balance 31.12.2016
Cost 951,390 373,058 1,324,448
Accumulated depreciation and impairment losses (326,765) (321,813) (648,578)
1.1.2017 - 30.6.2017
Net book value 1.1.2017 624,625 51,245 675,870
Additions 2,368 7,266 9,634
Disposals/write-offs (1,166) (12) (1,178)
Reclassification to "Other Assets" (5,867) (5,867)
Depreciation charge for the period (8,339) (6,846) (15,185)
Net book value 30.6.2017 611,621 - 51,653 663,274
Balance 30.6.2017
Cost 940,771 379,358 1,320,129
Accumulated depreciation and impairment losses (329,150) (327,705) (656,855)
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 590,554 as at 30.6.2017
(31.12.2016: E 600,348).
In 2016, an impairment loss of E 3,956 was recognized in caption "Other Expenses".
15. Goodwill and other intangible assets
Software Banking rights Other Total
Balance 1.1.2016
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)
1.7.2016 - 31.12.2016
Net book value 1.7.2016 232,411 89,652 322,063
Additions 31,903 31,903
Amortization for the period (10,894) (9,146) (20,040)
Net book value 31.12.2016 253,420 80,506 333,926
Balance 31.12.2016
Cost 515,055 1,785 138,339 655,179
Accumulated amortization and impairment losses (261,635) (1,785) (57,833) (321,253)
1.1.2017 - 30.6.2017
Net book value 1.1.2017 253,420 80,506 333,926
Additions 26,285 26,285
Amortization for the period (12,234) (9,146) (21,380)
Net book value 30.6.2017 267,471 71,360 338,831
Balance 30.6.2017
Cost 541,279 1,785 138,339 681,403
Accumulated amortization and impairment losses (273,808) (1,785) (66,979) (342,572)
The additions of the first semester of 2017 mainly concern acquisitions of user rights for computer applications.
LIABILITIES
16. Due to Banks
30.6.2017 31.12.2016
Deposits:
- Current accounts 59,527 59,210
- Term deposits:
Central Banks 15,030,475 18,331,086
Other credit institutions 179,216 125,546
Cash collateral for derivative margin account 34,543 25,465
Sale of repurchase agreements (Repos) 2,390,220 612,449
Borrowing funds 291,374 274,952
Other liabilities to credit institutions 4,293
Total 17,985,355 19,433,001
Bank's deposits from Eurosystem decreased by E 3.3 billion during the first semester of 2017 mainly due to the signing of
new repurchase agreements (Repos), the sale of EFSF bonds through the PSPP programme (note 11), other bonds and the
reduction of subsidiaries funding.
In June 2016, ECB carried out a new program of targeted long term refinancing operations (TLTRO-II) with a four year
duration. The Bank participated initially in this programme with an amount of E 1 billion, while in June 2017 its
participation amounted to E 3.1 billion.
The caption "Borrowed funds" includes liabilities due to European Investment Bank.
17. 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 Bank proceeded
in the first semester of 2017 to the issuance of senior debt securities guaranteed by the Greek State amounting to E 300
million whilst the maturities/redemptions for the same period amounted to E 1.3 billion.
The Bank does not hold any position in senior debt securities guaranteed by the Greek State as at 30.6.2017 (31.12.2016:
E 1 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 *
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 30.6.2017 amounts to E 5 million.
In the context of the existing program of direct covered bonds issuance of amount E 8 billion, the Bank issued, on
2.8.2017, a bond with a nominal value of E 1 billion collateralized with mortgage loans of an amount E 1.2 billion,
maturity date on 23.10.2018 and bearing an interest rate corresponding to Euribor 3 months plus a margin of 1.2%. The
issuance that is wholly purchased by the Bank, is used as collateral in financing operations.
iii. Senior debt securities
Balance 1.1.2017 26,834
Changes for the period 1.1 - 30.6.2017
Maturities/Repayments (17,719)
Accrued interest 326
Balance 30.6.2017 9,441
---------------------------
* Financial disclosures regarding covered bond issues, as determined by the 2620/28.8.2009 Act of the Bank of Greece
have been published on the Bank's website.
iv. Liabilities from the securitization of shipping loans
Balance 1.1.2017 227,487
Changes for the period 1.1 - 30.06.2017
Maturities/Repayments (71,249)
Accrued interest 3,651
Foreign exchange differences (14,300)
Balance 30.6.2017 145,589
The Bank proceeded to a shipping loan securitization transaction, transferring them to the Special Purpose Entity, Alpha
Shipping Finance Ltd, which in turn raised funding from third parties. The liability to the special purpose entity on
30.6.2017 which relates with the securitized shipping loans amounts to E 146 million.
v. Liabilities from the securitization of corporate loans (SMEs)
Balance 1.1.2017 289,160
Changes for the period 1.1 - 30.06.2017
New issues 39,977
Maturities/Repayments (75,436)
Accrued interest 2,582
Balance 30.6.2017 256,283
In prior year, the Bank proceeded with the securitization of SME's loans, transferring the aforementioned loans to the
fully consolidated special purpose entity, Proodos Designated Activity Company (D.A.C.), which in turn raised funding from
third parties and the Bank.
The liability of the Bank to the special purpose entity as at 30.6.2017 amounts to E256 million.
vi. Liabilities from the securitization of other loans
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.
vii. Subordinated debt
Balance 1.1.2017 26,006
Changes for the period 1.1 - 30.6.2017
Maturities/Repayments (25,308)
Accrued interest (47)
Balance 30.6.2017 651
The variance mainly relates to the maturity of subordinated debt of E 25.3 million.
viii. Hybrid securities
Balance 1.1.2017 15,277
Changes for the period 1.1 - 30.6.2017
Accrued interest 4
Balance 30.6.2017 15,281
ix. Convertible bond loan
Balance 1.1.2017 13,995
Changes for the period 1.1 - 30.6.2017
Maturity (12,205)
Fair value change (1,790)
Balance 30.6.2017 -
The Bank issued a convertible bond with nominal value of E 150 million on 1.2.2013 under an agreement with Credit Agricole
SA for the acquisition of Emporiki Bank.
The convertible bond matured on 1.2.2017, and the Bank proceeded to a share capital increase on 23.2.2017 following the
exercise of the conversion right from the total bondholders, (note 19).
Total of debt securities in issue and other borrowed funds, not held by the Bank, as at 30.6.2017 427,245
18. Provisions
Balance 1.1.2016 410,446
Changes for the period 1.1 - 30.6.2016
Other provisions 2,620
Other provisions used (3,094)
Provisions to cover credit risk relating to off-balance sheet items (note 7) 3,210
Balance 30.6.2016 413,182
Changes for the period 1.7 - 31.12.2016
Other provisions 5,296
Other provisions used (953)
Use of provision for separation scheme (35,262)
Provisions to cover credit risk relating to off-balance sheet items 925
Balance 31.12.2016 383,188
Changes for the period 1.1 - 30.6.2017
Other provisions 6,546
Other provisions used (2,306)
Provisions to cover credit risk relating to off-balance sheet items (292,310)
Use of provision for separation scheme (754)
Balance 30.6.2017 94,364
The amounts of other provisions charged to the profit and loss account are included in "Other Expenses" of the income
statement.
The Bank, during the first semester of 2017, and in the context of the capital restructuring of its subsidiary AGI Cypre
Ermis Ltd reclassified to accumulated impairment on subsidiaries' the amount of E 271,712, that corresponds to the existing
provisions for letters of guarantee granted by the Bank to its subsidiary and which were cancelled, in the context of the
capital restructuring of its subsidiary (note 12).
On 30.6.2017 the balance of provisions to cover credit risk relating to off-balance sheet items amounts to E 6.8 million
(31.12.2016: E 299.1 million) and other provisions to E 87.5 million (31.12.2016: E 84.1 million) out of which:
• An amount of E 32.4 million (31.12.2016: E 29 million) relates to pending legal cases.
• An amount of E 28.3 million (31.12.2016: Eon concerning guarantees provided on behalf of the Greek State.
• Deposits pledged to credit institutions amounting to E 1.1 billion which have been provided as guarantee for derivative
transactions.
• Deposits pledged to credit institutions amounting to E 0.04 billion that were given as letters of credit or letters of
guarantee issued by the Bank in order to facilitate clients' imports.
• Deposits of E 6.2 million were pledged to the Resolution Fund as irrevocable payment commitment for a part of 2016 and
2017 contribution. The commitment has to be fully secured by cash as decided by the Single Resolution Board.
• Due from banks:
i. amount of E 0.5 billion pledged to central banks for liquidity purposes.
ii. amount of E 0.34 billion given to foreign subsidiaries as collateral for credit risk.
• Loans and advances to customers:
i. an amount of nominal value of E 21.2 billion pledged to Central Banks for liquidity purposes.
ii. a carrying amount of E 2.78 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, whilst an amount of E 0.37 billion has been given as collateral for
repurchase agreements (repo).
iii. a carrying amount of E 0.5 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 entity which amount to E 0.2 billion on
30.6.2017.
iv. a carrying amount of E 0.6 billion which relates to corporate loans, has been securitized for the issuance of the
special purpose entities' bonds which on 30.6.2017 amounted to E 0.6 billion out of which an amount of E 0.3 billion is
held by the Bank.
v. amount of nominal value E0.2 billion, which relates to corporate loans, has been given as collateral in terms of other
acts of lending.
• Securities held for trading and investment securities portfolio:
i. an amount of nominal value of E 3.89 billion of Greek Government securities, out of which a nominal amount of E 3.34
billion has been pledged to central banks for liquidity purposes, a nominal amount of E 0.01 billion has been pledged for
other loan facilities whilst a nominal amount of E0.54 billion has been given as collateral for repurchase agreements
(repo).
ii. an amount of nominal value E 2.31 billion relates to securities issued by the EFSF that: a) they were received by the
Bank from the HFSF in the context of its participation to the Bank's share capital increase that was completed on 6.6.2013,
b) they were received by the Bank from the HFSF in order to cover the difference between the values of assets and
liabilities transferred from Cooperative Banks, c) they have been acquired in the secondary market and (d) they have been
acquired in the context of the implementation of short-term measures for public debt relief, out of which an amount of
nominal value of E0.66 billion has been pledged to Central Banks with the purpose to participate in main refinancing
operations and an amount of nominal value of E 1.65 billion has been given as collateral for repurchase agreements (repo).
iii. an amount of nominal value of E 0.47 billion, that relates to bonds issued from the securitization of receivables of
finance leases of a Group's entity, has been pledged to Central Banks for liquidity purposes.
iv. an amount of E 0.21 billion of other corporate securities has been given as a collateral for repo agreements.
v. an amount of E0.08 billion which relates to bonds issued by third parties, has been given to Central Banks for
liquidity purposes.
21. Operating segments
(Amounts in million of Euro)
1.1 - 30.6.2017
Retail Banking Corporate Banking Asset Management/Insurance Investment Banking/ Treasury South Eastern Europe Other Total
Net interest income 480.4 314.2 (1.2) 43.6 14.7 851.7
Net fee and commission income 51.3 56.5 18.6 10.5 136.9
Other income 4.4 (35.1) 0.9 79.4 35.7 85.3
Total income 536.1 335.6 18.3 133.5 50.4 1,073.9
Total expenses before impairment losses and provisions to cover credit risk (337.6) (68.6) (7.3) (7.9) (31.5) (452.9)
Impairment losses (436.3) 81.7 (354.6)
Profit/(losses) before income tax (237.8) 348.7 11.0 125.6 18.9 266.4
Income tax (54.5)
Profit/(losses) after income tax from continuing operations 211.9
Profit/(losses) after income tax from discontinued operations -
Profit/(losses) after income tax 211.9
Assets 30.6.2017 23,965.2 16,590.2 70.3 10,923.9 6,960.1 58,509.7
Liabilities 30.6.2017 22,324.7 6,545.2 731.3 19,690.9 73.6 49,365.7
(Amounts in million of Euro)
1.1 - 30.6.2016
Retail
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