REG - Alpha Bank A.E. - Half-year Report <Origin Href="QuoteRef">ACBr.AT</Origin> - Part 9
31/08/2017 18:16
- Part 9: For the preceding part double click ID:nRSe5112Ph
Banking Corporate Banking 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 before impairment losses and provisions to cover credit risk (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
Profit/(losses) after income tax 124.8
Assets 31.12.2016 24,556.7 17,221.5 84.8 11,578.9 6,960.7 60,402.6
Liabilities 31.12.2016 22,729.6 6,438.5 876.2 21,495.5 137.8 51,677.5
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". Any result is presented in "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.
The table below presents the Bank's loans, which are managed by the non perfoming loan divisions of Retail banking and
Wholesale banking, according to the internal procedures of the Bank, and they are included in the operating segments under
"Retail banking" and "Corporate banking" assets.
30.6.2017 31.12.2016
Balance before Impairment Accumulated Impairment Balance after Impairment Balance before Impairment Accumulated Impairment Balance after Impairment
Mortgages 7,732,369 2,347,510 5,384,859 7,655,203 2,032,511 5,622,692
Consumer loans 4,312,369 2,400,266 1,912,103 4,336,599 2,394,214 1,942,385
Corporate loans 13,388,711 6,916,769 6,471,942 13,704,057 7,686,799 6,017,258
Total 25,433,449 11,664,545 13,768,904 25,695,859 12,113,524 13,582,335
22. 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
pe-ripheral Eurozone countries.
i. Exposure to the Greek State
The table below presents the Bank's total exposure in Greek Government securities:
30.6.2017 31.12.2016
Portfolio Nominal Carrying amount Nominal Carrying amount
value value
Available for sale 3,864,301 3,539,949 3,965,219 3,409,677
Trading 5,591 4,715 2,861 2,256
Total 3,869,892 3,544,664 3,968,080 3,411,933
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 carrying amount of public entities securities on 30.6.2017 amounted to E 107.4 million (31.12.2016: E 140
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
30.6.2017 31.12.2016
Carrying amount Carrying amount
Derivative financial instruments - assets 319,387 342,737
Derivative financial instruments - liabilities (45,648) (69,299)
Derivative financial liabilities from public sector entities amounted to E 5.4 million as at 30.6.2017 (31.12.2016: E 8.4
million assets).
The Bank's exposure in loans granted to public sector entities/organizations as at 30.6.2017 amounted to E 1,135.5 million
(31.12.2016: E 1,112 million). The Bank for the above receivables has recognized impairment amounted to E 48.3 million as
at 30.6.2017 (31.12.2016: E 49.1 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) as at 30.6.2017 amounted to E 695.3 million
(31.12.2016: E 720.6 million). For these loans the Bank has recognized impairment amounted to E 122.7 million as at
30.6.2017 (31.12.2016: E 149.2 million).
Off balance sheet exposure
30.6.2017 31.12.2016
Nominal Fair Value Nominal Fair Value
value value
Greek Government Treasury Bills received as guarantee for financing 56,100 55,999 56,373 57,162
ii. Exposure to other peripheral Eurozone countries debt
The Bank as at 30.6.2017 had no exposure to securities issued by Cyprus, Spain, Italy, Portugal and Ireland.
23. Disclosures relevant to the fair value of financial instruments
Fair value of financial instruments measured at amortized cost
30.6.2017 31.12.2016
Fair value Carrying amount Fair value Carrying amount
Financial Assets
Loans and advances to customers 38,959,627 39,160,698 40,069,490 40,261,524
Investment securities
- Held to maturity 96 318 9,042 9,342
- Loans and receivables 1,963,832 1,919,723 2,743,600 2,682,655
Financial Liabilities
Due to customers 28,890,408 28,911,752 28,987,263 29,009,979
Debt securities in issue * 400,540 427,245 532,580 584,764
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
adjustments for credit risk. 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 the above mentioned 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
30.6.2017
Level 1 Level 2 Level 3 Total
Fair value
Derivative financial assets 3,872 547,678 18,347 569,897
Securities held for trading
- Bonds and treasury bills 4,715 4,715
- Shares 307 307
Available for sale securities
- Bonds and treasury bills 4,070,403 606,172 55,368 4,731,943
- Shares 42,379 16,193 19,241 77,813
- Other variable yield securities 5,769 5,769
Derivative financial liabilities 1,147,201 1 1,147,202
31.12.2016
Level 1 Level 2 Level 3 Total
Fair value
Derivative financial assets 4,224 634,852 5,360 644,436
Securities held for trading
- Bonds and treasury bills 2,256 2,256
- Shares 609 609
Available for sale securities
- Bonds and treasury bills 3,746,897 490,055 40,307 4,277,259
- Shares 49,305 14,589 11,742 75,636
- Other variable yield securities 7,152 7,152
Derivative financial liabilities 1,337,558 1 1,337,559
Convertible bond 13,995 13,995
--------------------------------
* On 31.12.2016 ,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. This convertible bond matured on 1.2.2017.
The tables above present the fair value hierarchy of financial instruments which are measured at fair value based on the
inputs used for the fair value measurement.
Securities traded in an active market and exchange-traded derivatives are classified as Level 1.
The derivatives and 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.
In Level 3 are classified securities and derivatives whose fair value is estimated using significant unobservable inputs.
Shares whose fair value is assessed based on calculations are classified either in Level 2 or Level 3, depending on the
extent of the contribution of unobservable data to the estimation of their fair value. The fair value of both non listed
shares and shares not traded in an active market is determined based either on multiples valuation method or on the
estimations made by the Bank which relate to the future profitability of the issuer, taking into account the expected
growth rate of its operations, as well as the weighted average rate of capital return which is used as discount rate.
In particular, with respect to investments with listed shares for which the market price has not been used, the market was
considered inactive because the number of daily transactions was low, whilst no transactions were incurred at a substantial
number of daily sessions. On the basis of the above and after taking into account the fact that the main shareholders hold
a high share of voting rights resulting to low degree of diversification in the Athens Stock Exchange over time, the market
price of the shares was not considered to be representative of their fair value and the Bank determined the fair value
using the multiples method. These shares were classified at Level 3 and their fair value stood at E 5 million.
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 collaterals's endowement and settlement
of derivatives. If the non observable inputs are significant, the fair value that arises is classified as Level 3 or
otherwise as Level 2.
Regarding derivatives, credit valuation adjustments (CVA) are estimated in order to account for the credit risk of the
counterparty inherent in OTC derivative transactions. In order to consider the bilateral nature of counterparty risk, the
Bank estimates bilateral credit valuation adjustments (BCVA) for the OTC derivatives held on a counterparty level taking
into consideration netting and collateral agreements in force. BCVA is calculated across all counterparties with a material
effect on the respective derivative fair values taking into consideration the default probability of both the counterparty
and Bank, the impact of first to default, the expected OTC derivative exposure and loss given default of the counterparty
and of Bank and the specific characteristics of netting and collateral agreements in force.
Collaterals are simulated along with the derivative portfolio exposure over the life of the related instruments.
Calculations performed depend largely on observable market data. Market quoted counterparty and Bank's CDS spreads are used
in order to derive the respective probability of default, a market standard recovery rate is assumed for developed market
counterparties, correlations between market data are taken into account and a series of simulations is performed to model
the portfolio exposure over the life of the related instruments. In the absence of quoted market data, counterparty
probability of default and loss given default are provided by the Bank's internal credit and facility rating systems.
A breakdown of BCVA per counterparty sectors and counter party credit quality (as defined for presentation purposes of the
table "Analysis of neither past due nor impaired Loans and Advances to customers") is given below:
30.6.2017 31.12.2016
Counterparty Sector
Corporate (8,028) (7,874)
Sovereign (40,789) (71,084)
30.6.2017 31.12.2016
Counterparty Credit Quality
Strong (347)
Satisfactory (41,191) (72,337)
Watch List (higher Risk) (7,279) (6,621)
The Bank used the discount cash flow method to assess the contingent sale price of Ionian Hotel Enterprises S.A., which
reached the amount of E 4.5 million and was classified to"Other assets". The above method used was based to a business plan
submitted by Ionian Hotel Enterprises S.A. Net present value of discounted cash flows amounted to E 9.7 million on
30.6.2017. Taking into account that the cost for preferred shares' acquisition of Ionian Hotel Enterprises S.A. amounts to
E 5.2 million, the estimated fair value of sales price as of 30.6.2017 amounted to E 4.5 million. The above valuation is
classified to Level 3 as for the estimation of fair value unobservable inputs were used.
Finally, the valuation of the convertible bond was based on its estimated share price at the maturity date of the bond, as
reflected in the Bank's business plan, which is an unobservable market parameter.
The Bank recognizes the transfer between fair value hierarchy Levels at the end of each reporting period.
Within the period, E 1 million of Greek corporate bonds were transferred from Level 1 to Level 2 as the liquidity margin
(bid-ask spread) exceeded the limit set out for the characterization of market as an active one.
The table below presents the valuation methods used for the measurement of Level 3 fair value:
30.6.2017
Total Fair Value Fair Value Valuation Method Significant non-observable inputs
Derivative Financial Assets 18,347 3,588 Discounted cash flows with interest rates being the underlying instrument, taking into account the The probability of default and the loss given default of the counterparty (BCVA adjustment) is calculated using an internal model
counterparty's credit risk
14,594 Discounted option taking into account the counterparty's credit risk Credit Spread
165 Discounted cashflows with interest rates being the underlying instrument Assessment of the adequacy of reserves for the payment of hybrid securities dividends
Available for sale bonds 55,368 55,368 Based on issuer price- Market prices adjusted due to low market activity - Discounted cash flows with Issuer Price - Adjustment due to low market activity - Credit Spread / Bond yields and Share prices
estimation of credit risk - Discounted cash flows with estimation of bond yields and estimation of
share prices as a result of expected restructuring
Available for sale shares 19,241 19,241 Discounted cash flows - Multiples valuation method Future profitability of the issuer
Derivative Financial Liabilities 1 1 Discounted cash flows with interest rates being the underlying instrument Assessment of the adequacy of reserves for the payment of hybrid securities dividends
31.12.2016
Total Fair Value Fair Value Valuation Method Significant non-observable inputs
Derivative Financial Assets 5,360 5,226 Discounted cash flows with interest rates being the underlying instrurments, taking into account the counterparty's credit risk The probability of default and the loss given default of the counterparty (BCVA adjustment)is calculated with an internal model
134 Discounted cashflows with interest rates being the underlying instrument Valuation of reserve adequacy for payment of hybrid securities' dividends
Available for sale bonds 40,307 40,307 Based on issuer price Price
Available for sale shares 11,742 11,742 Discounted cash flows - Multiples valuation method - Future profitability of the issuer
Derivative Financial Liabilities 1 1 Discounted cash flows with interest rates being the underlying instrurments Assessment of the adequacy of reserves for the payment of hybrid securities dividends
Convertible bond loan 13,995 13,995 Discounted cash flows Multiples valuation method Estimation of issuer's stock market price
Material unobservable inputs that were used for the valua-tion of Ionian Hotel Enterprises S.A. contingent sale price,
which amounted to E 4.5 million, is the cost of equity for both Ionian Hotel Enterprises S.A. and the Bank. The table below
presents changes in financial instruments that are estimated in fair value and classified as Level 3:
30.6.2017
Assets Liabilities
Available for sale securities Derivative Financial Assets Derivative Financial Liabilities Convertible Bond
Opening balance 1.1.2017 52,049 5,360 (1) (13,995)
Total gain or loss recognized in the income statement 9,630 14,324 1,790
Total gain or loss recognized directly in equity 2,633
Purchases/issues 8,100
Sales/repayments/settlements/redemptions (20,764) (961) 12,205
Transfers to Level 3 from Level 2 22,971 482
Transfers from Level 3 to Level 2 (10) (858)
Balance 30.6.2017 74,609 18,347 (1) -
Amounts included in the income statement and relate to financial instruments included in the balance sheet at the end of the reporting period 1.1 - 30.6.2017 1,424 14,324
During the period, a bond was transferred from Level 2 to Level 3 amounting to E 23 million, since non observable
parameters were used for valuation purposes. In addition, during the period, a bond was transferred from Level 3 to Level 2
amounting to E 10, since observable parameters were used for valuation purposes. Finally, in the context of the debt
restructuring of a certain borrower, the Bank acquired the option to purchase a stake in its share capital for a symbolic
price through the exercise of a call option. This option was recognized as a derivative with a fair value of E 14,594.
31.12.2016
Assets Liabilities
Available for sale securities Derivative Financial Assets Derivative Financial Liabilities Convertible
Bond
Opening balance 1.1.2016 32,263 3,530 - (24,600)
Total gain or loss recognized in the income statement (131) (112) (1) 9,300
Total gain or loss recognized directly in equity 3,086
Purchases/issues 335
Sales/repayments/settlements (773) (177)
Transfers to Level 3 from Level 2 17,949 3,672 (1,570)
Balance 30.6.2016 52,729 6,913 (1,571) (15,300)
Changes for the period 1.7 - 31.12.2016
Total gain or loss recognized in the income statement 1,028 (690) 119 1,305
Total gain or loss recognized directly in equity 1,285
Purchases/issues 80
Sales/repayments/settlements (2,141) (355) 638
Transfers to Level 3 from Level 2 852
Transfers from Level 3 to Level 1 (932)
Transfers from Level 3 to Level 2 (1,360) 813
Balance 31.12.2016 52,049 5,360 (1) (13,995)
Amounts included in the income statement and relate to financial instruments included in the balance sheet at the end of the reporting period 1.1 - 30.6.2016 (131) (112) (1) 9,300
During the prior year a transfer of a subordinated security from Level 2 to Level 3 took place amounting to E 17.9 million,
as for the calculation of it's fair value adjusted market prices were used due to the low market activity of the security.
A transfer of shares from Level 3 to Level 1 occurred amounting to E0.9 million as for their valuation observable market
price was used. A transfer of derivatives from Level 2 to Level 3 occurred as the probability of default and loss given
default of the counterparty calculated due to the credit risk (BCVA adjustment) and calculated through an internal model,
significantly affected the valuation. On 31.12.2016 the above parameter did not contribute significantly in the final
valuation of those derivatives resulting in getting transferred back at Level 2.
Sensitivity analysis for Level 3 financial instruments whose valuation was based on significant non-observable data as of
30.6.2017 is presented in the following table:
Significant non-observable inputs Significant Total effect in Income Statement Total effect in Equity
non-observable inputs change
Favourable Variation Unfavourable Variation Favourable Variation Unfavourable Variation
Derivative Financial Assets The probability of default and the loss given default of the counterparty (BCVA adjustment) is calculated using an internal model Increase the probability of default through reduction of credit ratings by 2 grades / Increase the loss given default by 10% (760)
Assessment of the adequacy of reserves for the payment of hybrid securities dividends Increase the probability of dividend payments to 100% (122)
Credit Spread Increase credit risk's spread by 10% (851)
Available for sale bonds Issuer price / Adjustment due to low market activity / Credit spread / Bond yields and share prices Variation +/-10% in issuer's price, -/+ 10% in the adjustment due to low market activity and estimated credit risk, -/+ 10% in estimated yield and additionally +/-10% in estimated shares price 1,878 (1,859)
Available for sale shares Future profitability of the Issuer Variation +/- 10% in P/B and EV/Sales ratios (multiples valuation method) (89) 619 (530)
Total (1,822) 2,497 (2,389)
As far as Ionian Hotel Enterprises S.A. contingent sale price is concerned, according to the sensitivity analysis performed
and fluctuation to 0.50% in cost of equity, the range in sale price is at a minimum value of E 4.06 million and at a
maximum value of E 4.54 million.
24. Capital adequacy
The policy of the Bank is to maintain a strong capital base, in order to ensure the Bank's development, and the trust of
depositors, shareholders, markets and business partners.
Share capital increases are conducted following resolutions of the General Meeting of Shareholders or of the Board of
Directors, in accordance with the Articles of Incorporation and the relevant laws.
The Bank is allowed to purchase treasury shares, as permitted under the applicable laws.
The capital adequacy is supervised by the Single Supervisory Mechanism (SSM) of the European Central Bank (ECB), to which
reports are submitted on a quarterly basis. The minimum capital requirements regarding Common Equity Tier I (CET1), Tier 1
and Capital Adequacy Ratios of the Bank are stipulated by Bank of Greece (BoG) Executive Committee Acts.
The Capital Adequacy Ratio compares the Bank's regulatory capital with the risks that the Bank undertakes (Risk Weighted
Assets-RWAs). Regulatory capital includes CET1 capital (share capital, reserves, minority interests), additional Tier 1
capital (hybrid securities) and Tier 2 capital (subordinated debt). RWAs include the credit risk of the banking book, the
market risk of the trading portfolio and operational risk.
Since January 1, 2014 EU directive 2013/36/EU dated 26 June 2013 incorporated into law 4261/2014 along with the EU
regulation 575/2013/EU, dated 26 June 2013 "CRD IV" came into force which gradually introduce the new capital adequacy
framework (Basel III) for credit institutions.
According to the above regulatory framework, the Bank follows the transitional arrangements in force for the calculation of
capital ratios. Moreover:
• Besides the 8% Capital Adequacy Ratio limit, there are limits of 4.5% for the CET1 ratio and 6% for the Tier 1 ratio.
• The gradual maintenance, from 1.1.2016 until 31.12.2019, of capital buffers additional to the CET1 Capital, is
required. In particular:
▫ Since 1.1.2017 a capital conservation buffer of 1.25% exists, which will gradually rise to 2.5% by 31.12.2019.
▫ The Bank of Greece through Executive Committee Acts set the following capital buffers:
- A countercyclical capital buffer rate for the first nine months of 2017, standing at "zero percent" (0%) (Executive
Committee Act 107/ 19.12.2016, 115/15.3.2017 & 119/15.6.2017).
- Other systemically important institutions (O-SII) buffer for 2017 standing at "zero percent" (0%) (Executive Committee
Act 104/18.11.2016).
These limits should be met both on a standalone and on a consolidated basis.
30.6.2017 31.12.2016
(estimation)
Common Equity Tier I 18.4% 17.3%
Tier I 18.4% 17.3%
Capital adequacy ratio 18.4% 17.3%
25. Related - party transactions
The Bank enters into a number of transactions with related parties in the normal course of business. These transactions are
performed at arms length and are approved by the Bank's committees.
α. The outstanding balances of the Bank's transactions with key management personnel consisting of members of the Bank's
Board of Directors and Executive Committee, their close family members and the entities controlled by them, as well as, the
results related to these transactions are as follows:
30.6.2017 31.12.2016*
Assets
Loans and advances to customers 1,299 1,320
Liabilities
Due to customers 5,058 6,256
Employee defined benefit obligations 265 260
Total 5,323 6,516
Letters of guarantee and approved limits 2,317 2,315
-----------------------------
* Certain amounts from the comparative period have been restated in order to be comparable.
From 1 January to
30.6.2017 30.6.2016*
Income
Interest and similar income 24 58
Fee and commission income 1 67
Total 25 125
Expenses
Interest expense and similar charges 10 28
Fees paid to key management and close family members 1,858 1,753
Total 1,868 1,781
b. The outstanding balances with the Bank's subsidiaries, joint ventures and associates as well as the results related to
these transactions are as follows:
i. Subsidiaries
30.6.2017 31.12.2016
Assets
Due from banks 1,158,622 1,355,378
Derivative financial assets 499 10,112
Loans and advances to customers 2,378,071 3,186,755
Available for sale securities 382,627 365,899
Other assets 37,886 2,769
Total 3,957,705 4,920,913
Liabilities
Due to banks 817,030 358,694
Due to customers 993,030 979,120
Derivative financial liabilities 11,064 1,333
Debt securities in issue and other borrowed funds 420,378 534,160
Other liabilities 20,725 5,702
Total 2,262,227 1,879,009
Letters of guarantee and other guarantees 427,248 780,870
In addition to the financing of the Bank's subsidiaries companies, which have issued bond loans, from the Bank, guarantees
have been given for the issuance of these bond loans amounted to E 15,542 on 30.6.2017 (31.12.2016: E 15,542).
From 1 January to
30.6.2017 30.6.2016
Income
Interest and similar income 31,516 34,777
Fee and commission income 7,645 6,743
Dividend income 35,161 75,307
Gains less losses on financial transactions 10,315 1,096
Other income 2,167 1,955
Total 86,804 119,878
Expenses
Interest expense and similar charges 12,595 10,831
Commission expense 1,436 1,289
General administrative expenses 9,012 6,604
Total 23,043 18,724
-------------------------
* Certain amounts from the comparative period have been restated in order to be comparable.
ii. Joint ventures
30.6.2017 31.12.2016
Assets
Loans and advances to customers 176,434 175,135
Other assets 6
Total 176,434 175,141
Liabilities
Due to customers 20,624 21,551
From 1 January to
30.6.2017 30.6.2016
Income
Interest and similar income 1,256 2,851
Fee and commission income 5 1
Other income 1 5
Total 1,262 2,857
Expenses
Interest expense and similar charges 36 86
iii. Associates
30.6.2017 31.12.2016
Assets
Loans and advances to customers 54,653 54,240
Other Assets 544
Total 55,197 54,240
Liabilities
Due to customers 11,781 924
From 1 January to
30.6.2017 30.6.2016
Income
Interest and similar income 420 5
Fee and commission income 2
Other income 12
Total 434 5
Expenses
Interest expense and similar charges 375
c. The Employees Supplementary Fund maintains deposits with the Bank amounting to E 181 (31.12.2016: E 296). Interest
expense for the period related to deposits amounts to E 1 (30.06.2016: E 16).
d. The Hellenic Financial Stability Fund (HFSF) exercises significant influence on the Bank. In particular, according to
Law 3864/2010 and the Relationship Framework Agreement ("RFA") as of 23.11.2015, which replaced the previous of 2013, HFSF
has representation in the Board of Directors and in other significant Committees of the Bank. Therefore, according to IAS
24, HFSF and its related entities are considered related parties for the Bank.
The outstanding balances and the results related to these transactions are analyzed as follows:
From 1 January to
30.6.2017 30.6.2016
Income
Fee and commission income 5 5
26. Assets held for sale and discontinued operations
The Bank, under the approved by the European Committee Restructuring Plan (note 39 of the financial statements as of
31.12.2016) and the fulfillment of the relevant commitment relating to the deleveraging of part of the assets of its
international activities, proceeded to the sale of the operations of its branch in Bulgaria, to the sale of Alpha Bank A.D.
Skopje, Alpha Bank Srbija A.D. and Ionian Hotel Enterprises S.A.. The Bank also initiated the sale of APE Fixed Assets
S.A., APE Commercial Property S.A. and APE Investment Property S.A.
Bank's branch in Bulgaria
On 17.7.2015, the Bank and Eurobank, issued a joint statement, announcing their agreement, in main terms, for the transfer
of operations of the Bulgaria branch to Eurobank's subsidiary in Bulgaria (PostBank). On 6.11.2015 the Bank and Postbank
signed the relevant contract, finalizing the terms of the transfer which include a transfer price of 1 Euro and a partial
undertaking of Branch's debt obligations by the buyer. The transfer was completed on 1.3.2016.
From 30.6.2015 the assets of Bulgaria Branch, and its directly related liabilities, met the qualification requirements as
"Held for sale" in accordance with IFRS 5, as at that date the management had decided to sell the unit and was already in
the process of negotiations with the prospective buyer. In addition, the Bulgaria Branch is considered a separate
geographical area of operations for the Bank which is included in the South Eastern Europe for reporting purposes per
operating segment. After the classification of the Bulgarian Branch, which is the only company in the banking sector
whereby the Bank operates in Bulgaria, as asset held for sale, its activities are classified as "discontinued operations"
by the Bank.
Therefore, on 31.12.2015 for reporting purposes, the Bank valued the assets and liabilities of Bulgaria Branch at the
lowest price between the book value and fair value less selling costs recognizing the difference which was amounted to
E 34,007 as loss in the caption "Profit/(loss) after tax income from discontinued operations" in the Income Statement.
On 1.3.2016 the disposal and transfer of shares was completed and the Bank adjusted prior recorded loss arising from the
disposal of the Branch based on the ultimate value of the Branch's net assets as of that date.
Income Statement and Statement of Comprehensive Income
The following table presents the results of the Bulgaria Branch for the period from 1.1.2016 to the disposal date. It is
noted that the results and cash flows arising from the Bulgaria Branch are presented as "discontinued operations" in both
the Income Statement and the Statement of Cash Flows.
From 1 January to
30.6.2017 30.6.2016
Interest and similar income 3,123
Interest expense and similar charges (592)
Net interest income 2,531
Fee and commission income 841
Commission expense (74)
Net fee and commission income 767
Gains less losses on financial transactions 64
Other income 78
142
Total income 3,440
Staff costs (1,574)
General administrative expenses (2,581)
Depreciation (397)
Other expenses (29)
Total expenses before impairment losses and provisions to cover credit risk (4,581)
Impairment losses and provisions to cover credit risk 1,563
Profit/(loss) before income tax 422
Income tax
Profit/(loss), after income tax 422
Difference due to valuation at fair value
Loss from the disposal after income tax (189)
Net profit/(loss) after income tax from discontinued operations 233
The amount of cash and cash equivalent of the Bulgaria Branch, which was transferred at the disposal, amounted to E 9,942.
Investment in subsidiary Alpha Bank AD Skopje
The Bank, during the fourth quarter of 2015, began the process of selling its subsidiary Alpha Bank Skopje (ABS). ABS is
the smallest subsidiary of the Group in the Balkans and it has a small presence in the local market in Skopje (market share
<2%). As part of this process, investors, which were shortlisted from a broader investor list, were invited to submit their
bids for the acquisition of the 100% of the ABS shares and of the 100% of the hybrid instrument (subordinated loan) granted
to the ABS by the parent company (both of them consist the "Perimeter Transaction"). The disposal was completed on
10.5.2016 for a total amount of E 3.2 million.
Based on the above on 31.12.2015 the Bank's participation in the subsidiary and the hybrid instrument satisfy the
conditions for classification as "held for sale" in accordance with IFRS 5.
Investment in companies APE Fixed Assets ΑΕ, APE Commercial Property ΑΕ, APE Investment Property AE
Sale consultants were engaged in June 2016 and the liquidation procedure of the Bank's participations in APE Fixed Assets
AE, APE Commercial Property AE and APE Investment Property AE initiated. APE Fixed Assets AE is a Bank's subsidiary, while
APE Commercial Property
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